Village of Virginia Gardens v. City of Miami Springs, 64-430

• Decision Date: 26 January 1965
• Docket Number: No. 64-430,64-430
• Citation: 171 So.2d 199
• Parties: VILLAGE OF VIRGINIA GARDENS, a Municipal corporation, Appellant, v. The CITY OF MIAMI SPRINGS, a Municipal corporation, Appellee.
• Court: Florida District Court of Appeals

Page 199

171 So.2d 199

VILLAGE OF VIRGINIA GARDENS, a Municipal corporation, Appellant, v. The CITY OF MIAMI SPRINGS, a Municipal corporation, Appellee.

No. 64-430.

District Court of Appeal of Florida, Third District.

Jan. 26, 1965.

Rehearing Denied Feb. 16, 1965.

James T. Gordon, Miami, for appellant.

W. J. Huffman, Miami Springs, Scott, McCarthy, Preston & Steel and Phillip Goldman, Miami, for appellee.

Before BARKDULL, C. J., and TILLMAN PEARSON and CARROLL, JJ.

TILLMAN PEARSON, Judge.

The appellant and the appellee are cities in Dade County. The appellant, Village of Virginia Gardens, owns its water distribution system but buys its water from the appellee, City of Miami Springs. In 1950 the two cities entered into a contract whereby the appellee agreed to supply the water at a basic rate of 25 cents per 1,000 gallons, but the contract provided that it could be terminated by either party upon giving 60 days' notice. In 1959 the appellee, Miami Springs, increased the rate so that the price charged its municipal customer, Virginia Gardens, was the same as that charged its individual customers.

The appellant, Virginia Gardens, brought its complaint in chancery against the appellee, Miami Springs, in February 1964. The complaint set forth the contract and alleged that the rate now charged is exorbitant, confiscatory and unreasonable and prayed for a declaratory decree as to (1) what governmental agency, if any, should assume jurisdiction of the dispute; (2) in the alternative, that the chancellor determine a reasonable rate or the reasonableness of the rate being charged, and grant the plaintiff a judgment for the amount of the excessive charges since 1959. The complaint was dismissed and this appeal followed.

The Village of Virginia Gardens urges that the chancellor had jurisdiction of the controversy and should have determined it. Appellant relies upon § 167.57 Fla.Stat. F.S.A. which is as follows:

'The corporate authorities of any city, town or village, now or hereafter incorporated under any general or special law of this state, in which any individual, company or corporation has been, or may hereafter be, authorized by such city, town or village to supply water to such city, town or village and the inhabitants thereof, may prescribe by ordinance maximum rates and charges for the supply of water furnished by such individual, company or corporation to such city, town or village and the inhabitants thereof, such charges to be just and reasonable; provided, that this section shall not be construed as to impair the validity of any valid contract heretofore entered into between any city, town or village and any person, firm or corporation for the supply of water to such city, town or village or its inhabitants, but this section shall not be held to validate any contract heretofore made.'

This section is a grant of legislative power to municipalities and by its terms applies only to the power of the city to set the maximum rate to be charged within the city to the residents thereof. It has no relation to the relief prayed for by the appellant.

By statute (Chapter 367 Fla.Stat.) the State of Florida has delegated to the Florida Public Utilities Commission the legislative right to determine rates to be charged by a public utility supplying water. However, such a public utility as defined by § 367.02(7) Fla .Stat., F.S.A. does not include a utility owned or operated by an incorporated city.

The common law requires that a public utility should supply its customers at reasonable rates. City of Tampa v. Tampa Waterworks Co., 45 Fla. 600, 34 So. 631 (1903). A public utility may fix its own rates so long as the rates are reasonable and not discriminatory and not otherwise provided by law. Miami Bridge Co. v. Miami Beach Ry., 152 Fla. 458, 12 So.2d 438 (1943); Tampa Electric Co. v. Cooper, 153 Fla. 81, 14 So.2d 388 (1943). A court of equity may determine if a rate set by a public utility is reasonable and strike down an unreasonable rate but it may not fix rates. Miami Bridge Co. v. Miami Beach Ry., supra; Cooper v. Tampa Electric Co., 154 Fla. 410, 17 So.2d 785 (1944).

We thus reach the question of whether the defendant city is acting as a public utility in supplying water to the plaintiff city for distribution by the plaintiff city to its residents. We think that this question must be answered adversely to the appellant under authority of the definition of a public utility set forth in Higgs v . City of Fort Pierce, Fla.App.1960, 118 So.2d 582. The court in the Higgs case adopted the definition of a public utility set forth in Southern Ohio Power Co. v. Public Utilities Commission, 1924, 110 Ohio St. 246, 143 N.E. 700, 34 A.L.R. 171:

'To constitute a ...