Citizens' Water Co. v. Bridgeport Hydraulic Co.

| Conn. | Feb 25, 1887

Pardee, J.

This is a proceeding for the condemnation of rights in land and water by virtue of eminent domain.

The plaintiff is a corporation chartered hi 1886 by the legislature of this state, with the right to supply water to the city of Bridgeport, borough of West Stratford, and town of Fairfield, with power to take all property and rights in property necessary therefor by power of eminent domain.

The defendant is a corporation chartered in 1857 by the legislature of this state, for the purpose of supplying water to the city of Bridgeport and its vicinity, with like power. It procured these rights, completed its works, and during many years last past it has supplied and now supplies that city with water.

The plaintiff has instituted these proceedings for the purpose of .condemning to its own use certain land and water rights now owned by the defendant, and proposes to lay pipes in the streets of the city for the distribution and sale of water.

The defendant denies the right of the plaintiff to take any of its land or water rights, or to use the streets of the city for such purpose.

In its answer the defendant says, in effect, that on May 5th, 1858, one Nathaniel Green made a written proposition to the city of Bridgeport concerning the supply of water to it, of which proposition the following sentencé Avas a part: “ The city shall give me and such persons as I may associate with me, or any company to be hereafter incorporated or they may assign to, the sole and exclusive right, subject to the legal rights of any person or persons or corporations now existing, of laying down pipes in the streets, highways and avenues of said city, for supplying the city and inhabitants ■with water, so long as a full and pure supply is furnished.”

The answer proceeds to say that “thereupon said city, by its common council, accéptecl said proposition, and gave to said Green and Ms assigns tbe sole and exclusive right and privilege of laying down pipes for the introduction and distribution of water in said city, by the following resolution :—

“ ‘ Resolved, That the sole and exclusive right and privilege of laying down pipes in the public streets, avenues and highways of the city of Bridgeport, for the purpose of introducing and distributing water in said city, subject however to the right of any other person, persons or corporations now existing, be and is hereby granted to Nathaniel Green, and such other individuals as he may associate with him for that purpose, or to any company to which he or they may assign the rights and privileges hereby conferred, and which may hereafter be incorporated on application to the legislature of this state. Provided nevertheless, and this resolution is on condition, that said Nathaniel Green, his associates, or said incorporated company, shall supply said city and the inhabitants thereof with a full and ample supply of pure water for all public, mechanical and domestic, and all other ordinary uses and purposes, and in all respects comply with the proposition made by him and hereto annexed and made part of this resolution; and if the said Green, his associates or said corporation shall fail to supply said city and its inhabitants with a full supply of pure water for the purposes aforesaid, or shall fail to fulfill and perform all the stipulations, agreements and specifications in said proposition, then all the rights, privileges and powers hereby conferred shall cease and determine.’

“ Shortly thereafter, and in the year 1853, the Bridgeport Water Company was incorporated by the legislature of this state, and reference to the charter of said Water Company, as appears upon page 1356, vol. 4, of the Private Laws of this state, is hereby made. Said Bridgeport Water-Company acquired all the rights, powers, privileges and immunities which said Nathaniel Green or his associates had possessed or acquired, including the right to the sole and exclusive use of the public streets, etc., of the city of Bridgeport, for the purpose of laying pipes therein to conduct water into and about said city. Said charter was granted and accepted upon the faith of the proposition of said Nathaniel Green, and said resolution of said common council, hereinbefore referred to.

“ In the year 1857 tliis defendant was incorporated by an act of the legislature of this state, reference to which act, as appears upon page 135, vol. 5, of the Private Laws of tins state, is hereby made, and this defendant thereupon acquired and became possessed of, and entered upon the enjoyment and use of, all the rights, property, powers, privileges and immunities which had belonged or appertained to said Bridgeport Water Company or said Nathaniel Green or his associates. Said charter was granted and accepted upon the faith of the proposition of said Nathaniel Green and said resolution of said common council.

“ This defendant, relying upon the powers and privileges granted to it by its said charter, has expended and invested large sums of money, amounting to more than five hundred thousand dollars, in permanent improvements, for the purpose of carrying out the object of its incorporation, and has acquired and now holds the property mentioned in this application, to be used in connection with its other property and rights, for the furtherance of said purpose and object, and particularly as a reservoir and water supply. And therefore, the defendant says, the act of the General Assembly incorporating the plaintiff impairs the obligation of the contract contained in the charter of the defendant, and is in violation of the constitution of the United States and void.

“ This defendant denies that the plaintiff, under its act of incorporation, has any right or power to take for its purposes the estate of this defendant, described in said application, or to appropriate to itself the water of said Mill River or its tributaries, now belonging to this defendant, or to take, or impair in any way, any of the franchises that belong to this defendant by its charter.”

The question presented is—Could the legislature of 1886 give the plaintiff the right to lay pipes in the streets of the city of Bridgeport for the distribution and sale of water ?

It is the claim of the defendant that, if it should concede that the grant by the common council of the exclusive use of the streets was not of itself effective, because of want of power to make it, nevertheless, it has such exclusive use, for the reason that, in the cited extracts from its charter, the legislature has, both in intention and expression, recognized and confirmed the grant by the city, and made it as effective as if the city had the power to make it, and as if the legislature had made it in the most direct and explicit words. We think the claim of the defendant is well founded.

The sixteenth section of the charter of the Bridgeport Water Company provides that “this act shall be subject to be altered, amended or repealed at the pleasure of the General Assembly.” The seventeenth section is as follows:— “If said company shall fail to comply with and in all respects to perform the terms, conditions, stipulations and provisions contained in the proposition of said Nathaniel Green relative to supplying said city with water, on file in the office of the city clerk of said city, reference thereto being had, then all the rights, powers and privileges conferred by this act shall cease and determine.” The sixteenth and seventeenth sections of the defendant’s charter are respectively in the same words.

The eighth section authorizes the defendant to lay pipes in any street in said city or vicinity, “ under the direction and by the consent and agreement of the mayor, aldermen and common council of the city and selectmen of the town of Bridgeport.”

The seventeenth section is in effect this:—There is a written proposition from Nathaniel Green to the common council of the city of Bridgeport, now on file in the office of the city clerk, in which he offers to supply water if the city will give him the exclusive use of the streets. The city has in form granted such use upon the terms expressed by a vote of the common council; the legislature has knowledge of the proposition, and makes it a part of this section by a reference thereto. It has knowledge of the attempted grant by the city of the exclusive use of the streets ; the legislature recognizes and confirms that grant by saying to the corporation that if it does not perform every promise by which Nathaniel Green obtained it from the city, its exclusive right to bring water into the city shall terminate; and if, and so long as, it does perform,.that right shall continue. In and by the proposition of Nathaniel Green, the obligation to supply water and the compensating right to the use of the streets are made niter-dependent and inseparable. The common council did not undertake to separate them; its proviso makes express reference to the proposition; of course to all of its terms. The seventeenth section of the charter is in meaning wholly, in words partly, a re-statement of the proviso, and is legislative reference to and recognition of the vote, and of the proposition and all of its terms. It is not to be imputed to the legislature that it intended to impose upon it all the burdens of the proposition and withhold every advantage. If the charter had granted in so many words the exclusive use of the streets of Bridgeport, there must have followed all the limitations contained in his proposition, and in the proviso of the city, word for word; but the same effect was produced by a shorter process—by a reference to the documents.

By the sixteenth section the legislature reserved to itself absolute power to recall the franchise at any time, and for no other reason than that it pleased so to do. No words can add to the force of these; they exhaust the subject. For what purpose and with what meaning did it add the seventeenth section? The plaintiff’s brief argues that “ this section simply said that the company should perform some public service for the rights conferred, as is always required in every charter.” But this explanation does not meet the case. The legislature had already taken the highest security from the grantee, namely, poAver over its life, that it should perform its duty. Moreover, it was a matter of no concern to the state whether the grantee should exercise the franchise given to it or not. The state had. neither desire nor power to compel it to build water works; it only granted the privilege of doing so if the grantee saw fit to exercise it; if the franchise should be used, the state would be satisfied; if it should not be used, it would lapse for non-user, and the state -yvould be equally well satisfied. Up to the seventeenth section the grant was of a privilege, and nothing more, as is usual in such charters—to be accepted or rejected, at the pleasure of the grantee. It is true that the charter does not use the words: “ This is a grant of the exclusive right to use the streets of the city of Bridgeport for the sale of water.” But the intention to confirm the attempted grant by the city of such power may be found in other words in another connection. If, for instance, the legislature had been dealing with petitioners for the exclusive right to construct a railroad across the state, we might expect to find such exclusive right, if granted, very distinctly expressed; the legislature would be dealing with the subject in. the first instance, and under a sense of responsibility for the imposition of a monopoly upon an unwilling state. In the case at bar the matter concerned a single city; that city, to the knowledge of the legislature, had expressed its desire to come-under this monopoly; had invited it to the possession of its streets; in form, had come under an absolute obligation to surrender such possession-upon a consideration satisfactory to itself. Under such circumstances the legislature was not called to such precision-of expression as would be appropriate if the exact measure of the grant had not elsewhere been expressed by all parties affected by it, as would be appropriate if it was granting, and not merely confirming. There was no reason why the legislature should be more careful for the interest of the-city than the city had been for itself; no reason why it should withhold in behalf of the city that which it desired to sell. And legislative consent that the corporation should have that degree of monopoly which the community to be affected by it desired that it should have, may be found in words other than those of the most absolute certainty. Having retained, the power of life over the corporation, the subsequent requirement that its franchise should revert to the state if it did not keep every promise embodied in the written proposition referred to, can have no other reason for being, either in legislative or judicial understanding, than for the purpose of declaring its counterpart, namely, that if, and as long as, it does keep them, the franchise shall not be recalled. Upon the pleadings we are to assume that the promises have been kept. And in the proposition, the right of the city to have pure water stands upon no other or higher ground than its obligation to permit an exclusive use of its streets. Indeed, inasmuch as Nathaniel Green had power to bind himself to furnish water for a specified consideration, if the city had possessed power to bind itself in the manner proposed, there would have been no reason for the interference of the legislature in the matter; the contract between an individual and the city would of necessity have been left to the parties, or to judicial arbitrament if they had disagreed. In the want of power upon the part of the city to give to Nathaniel Green a binding obligation to do what it desired to do, is found the only reason for the existence of the seventeenth section: to give the needed legislative sanction to the city’s desire to grant, and to its act of granting, the exclusive use of the streets in return for the supply of water. The legislature having in effect authorized the city to make a contract which it desired to make, will not, cannot, now relieve it. Although the state is no party to, and has no interest whatever in, the subject matter of a contract, if it volunteers to invest a creature of its own, otherwise powerless, with power to make it, the legislature is thereafter concluded in reference to it; it is, as a lawful contract between two natural persons of full legal capacity, sacred from any interference other than judicial construction. And to this extent the seventeenth is a limitation upon the sixteenth section. The plaintiff’s charter is legislative permission to destroy a lawful contract between the city of Bridgeport and the deféndant. Such permission is of no force.

The plaintiff has pressed upon, us the consideration that a decision of this case in behalf of the defendant is the protection of a monopoly, and that a monopoly is odious. But this argument forgets the fact that it is the judicial duty to preserve contracts inviolate, rather than destroy monopolies. Communities may endure monopolies, but they cannot endure the violation of contracts. And it is to be borne in mind that the proposition of Nathaniel Green required him to supply the future city of Bridgeport with an ample supply of water as cheaply as the same should be supplied by any private corporation in any city; and as there may be in some city competition between private corporations in this business, the monopoly has this extent, namely, the city of Bridgeport, without competition, is to have water as cheaply as any other city is able to get it under competition. Moreover, as we have seen, before the business had been subjected to the test of trial, and when its possibilities were unrevealed, the city desired to have Nathaniel Green take the burden of doubt, and promised to assume the burden of monopoly. And at the end of five years of actual trial there remained to it space for repentance for having granted the exclusive use of its streets and an opportunity to rid itself of the burden; it omitted to avail itself of the right, presumably because the monopoly was more burdensome to the possessor than to the public. Tins omission may well be a source of regret, but it is not a legal reason for annulling a contract.

There is error in the judgment complained of.

In this opinion the other judges concurred, except Carpenter, J., who dissented.