after making the foregoing statement, delivered, the opinion of the court.
It is contended on behalf of the appellee that the original decree of May 18, 1904, finally disposed of all the issues between the parties, including the right of the city to make rates for water consumption to private consumers under the authority of the act of March 19, 1904, and that the present controversy is foreclosed by the decree in the former case.
While it is true that the decree is very broad, we cannot agree to the contention of the appellee that it finally disposed of the matter now in controversy. When the case was first here, reported in
An' examination of the record in the former case shows that the only testimony' taken in the case, as to the reasonableness of the-rates charged to private consumers, was on behalf of the company, and tended to show that the rates charged were reasonable, and if it could be said that the pleadings put in issue the reasonableness of the rátes then charged, was the right of the city to regulate rates under a subsequent law of the State necessarily involved and concluded? The determination of issues as to the right of injunction against the city building its own works, or denying liability of refusing to pay' the rentals contracted for, and a finding that existing rates were reasonable, did not necessarily conclude a controversy which might thereafter arise, as to the right of the city to fix rates when the legislature of Mississippi should pass a law for that purpose, giving the city the right to regulate the same. It is to be remembered that when the bill was filed in the original case no such law had been passed; that when the act of March, 1904, went into effect the case was nearly ready for final decree, and the city passed its ordinances long аfter the beginning of the suit, and shortly before' that decree. No supplemental bill was filed, but after the decree, in January, 1905, the present independent suit was brought, with a view to enjoifiing the proposed action of the city, in enforcing ordinances regulating the rates by charges other than those contained in-the contract.
Upon the.appeal, the question seems to have been argued by the city as though made in the case, thоugh the brief on behalf of the appellee, contends that the act of 1904 was not *508 involved. But a decree must be read in the light of the .issues involved in the pleadings and the relief sought, and we are of opinion that the matters now litigated were not involved in or disposed of in the former case) and that when properly construed the decree does not finally dispose of the right of . the city to regulate rates under a law passed аfter the contract went into effect and long'after the bill was filed in the case^
Holding, then, that the plea of res judicata must be denied, had the city authority, under the charter of Vicksburg, passed in 1886, to make a binding contract, fixing maximum rates-for water supply to private consumers for a definite period, thirty years in the present case? The grant of legislative power upon its face is unrestricted, and' authorizes the city “ to provide for the erection and maintenances of a system of waterworks to supply said city with water, and to that end to contract with a party or Darties who shall build and operate waterworks.”
That a State may, in matters of proprietary rights, exclude itself from the right to make regulations of this , kind, or authorize municipal corporations to do so, when the power is clearly conferred, has been too. frequently declared to admit of doubt.
Los Angeles
v.
Los Angeles City Water Company,
In the latter case this court, following the construction of the Supreme Court of Illinois, held that where'a city council was authorized to contract with any person or corporation to construct and maintain waterworks at such a rate as- may be fixed by ordinance.for a period not exceeding thirty years, the words “fixed by ordinance” being capable of application so as to make one ordinance endure for .the period of thirty years, for whiсh the contract was made, or to give the right to pass ordinances from time to time regulating rates, the latter construction was adopted. '
*509 In the cases generally in this court it will be found that, in.determining the matter of contract, the local decisions have been given much weight and, ordinarily, followed. As this is a Mississippi contract, and the power was exercised under the authority of an act of the legislature' of that State, we naturally look to the decisions of' the courts of that State, particularly to such as had given construction to similar charters at the time the contract was made, with a view to determining the extent of the power conferred.
While the case now before us was pending, Griffith .and others, citizens of Vicksburg, filed a bill, setting forth the city ordinances of 1903 and 1904, and asking to have them established and maintained and an injunction granted against enforcing charges for higher rates, and upon appeal the case went to the Supreme Court of Mississippi, and is reported in
“We decline to follow the decision in Griffin v. Goldsboro Water Company (N. C.),30 S. E. 319 ; 41 L. R. A. 240, in holding that while a water -company which accepts an ordinance by which a maximum rate is fixed is bound, and cannot exceed the same because of its contract, yet such rates are not binding upon consumers, who have a right to litigate against unreasonable charges. This holding, it seems to us, practically denies the power of a company, under a- contract embodied in its charter giving the power, so to fix a rate as to bind a private consumer at all. It opéns a-never-ending and limitless field of litigation. It is well settled that the courts cannot,fix.a rate; and if, proceeding duly under statutes enacted for that purpose, the municipality .cannot do so. or authorize the com *510 pany by contract to do so, and thereby bind the citizens, then there is-no authority by which it can be done.
“ It is not a matter open to serious discussion in this State, since the. decision by this court in the case of Stone v. Railroad Company, 62 Mississippi, 607,52 Am. Rep. 193 , decided at the April term, 1885, and before the act of 1886 (Laws 1886, p. 694, c. 358), amending the charter of Vicksburg, was enacted, that a quasi-puhlic corporation may have a contract right to fix rates within a certain designated maximum, and that the rates so fixed are matter of contract guaranteed by the contraсt clauses of' the United States Constitution. In-that decision the court was manifestly directing its observations to the binding character of the rates as between "the company and the shippers; otherwise, the decision was practically meaningless and without point. The philosophy of the situation is simple. Granting that the company is lawfully invested with authority to fix its rate, then such rate being so fixed by it within the maximum limit allowed by the charter, or allowed by the duly authorized ordinance, is- by the courts presumed to be reasonable;' and it is not. permissible for each individual citizen, in every controversy that may arise, to have that question, once passed upon by the lawfully constituted public authorities charged with power in the premises, reopened and litigated anew.” .
The case to which the court refers in the preceding extract, Stone v. The Railroad Company, 62 Mississippi, 607, as having been decided prior to the enаctment of the' charter of Vicksburg under which the contract in question was made, did not directly- involve the question of authorizing municipal corporations to make such contracts, but did maintain, after an exhaustive consideration - of the subject, that, a grant to a railroad company, in the charter, óf a right to fix rates within maximum limits named, was a contract, within the meaning of the Federal and" state constitutions, which could not be violated by a subsеquent attempt to prescribe different rates, and held that the railroad company's grant was not a renun- *511 eiation of the legislative power to secure reasonable rates, but rather an exercise of that power, and, when- rights were thus conferred, to' that extent there was a renunciation of the right of the State- to control the subject. In-the course of the discussion the learned judge, speaking for the court, said:
"The рower to contract is an essential attribute of sovereignty and is of prime importance. Its exercise has, been productive of incalculable benefits to society, however great may be the evils incident to its injudicious employment. It cannot be denied merely because of its liability to abuse. The power to contract implies the power to make a valid contract. . .. .' The right • to grant charters includes ' the right to grant such as will be upheld. Conferring power on the grantee of the franchise to fix rates of compensation at discretion, or within prescribed limits fixed by the charter,has been the common practice of the legislatures of the States of the United States from an early period of their history. The right of the corporators to exercise the powers conferred by the act of incorporation, whether to fix rates themsеlves or to take those fixed by their charter and to rest securely on its provisions in this respect,-has hitherto been 'generally regarded as indisputable.
“ A grant in general terms of authority to fix rates is not a renunciation of the right of legislative control só as to secure reasonable rates. Such a grant evinces merely a purpose to confer power to exact compensation which shall be just and reasonable.
* * * * * ‡ :!« *
“If the grant can be interpreted without ascribing to the legislature an intent to part with any power, it will be done. 'Only what is plainly parted with is gone. Fixing rates in a charter is a specification of what is reasonable — an exclusion of tacit or implied conditions on the subject. It is an essential part of the contract of incorporation, the most important condition of its existence, the inducing cause of its acceptancе.”
*512 We are referred to other cases in Mississippi which, deal directly with the extent of the power conferred upon municipal corporations in charters in.general terms, some of which we may notice.
In Light, Heat & Water Company v. City of Jackson, 73. Mississippi, 598, the city of Jackson had filed its bill, under- ' taking to annul a contract, binding the city to pay for water for a period of twenty years, at a price and rate fixed in a certain ordinance, on the ground that it was ultra vires and without authority from the legislature. In that case the. authority conferred was in general, terms, authorizing the city to contract with' any reliable corporation, association or individual for' supplying the city of Jackson with water and electric or gas lights from year to year. Under authority of this general' power the city undertook to make a contract with the Light, Heat and Power Company of Jackson, contracting for the furnishing of water to thе public at certain annual rentals for. á period of twenty years, and fixing a . certain, rate for annual rentals to private consumers. The' Supreme Court of Mississippi dealt directly with the question: Was the contract made between the city and cdmpany and set forth in the bill invalid for want of power in the city to contract for a series of years?. And the court said:
“In view of the nature and .character of the subject-matter of the contract which the board of mayor and aldermen of the city of Jackson was authorized to make by the third section of the act of February 29th, 1888, we think the. contract entered into with the appellant was within the. delegation of power so far as the time of its duration is involved; . . •. We know that the machinery, mains and appliances required for supplying the city with water are costly to begin with, and are relatively of little value’if removed when once located. Permanency of the plant is essential to the realization of any profit in the enterprise,, and in cities having no greater population than that of Jackson the use of water for municipal . purposes would probably be a prerequisite to secure the inv *513 estment of the capital'necessary to the construction of the plant. The words ‘from year to year’ relied upon by the appellеe as limiting the power of the officers of the city to the making of the annual contracts, derived much of their significance from the subject and nature of.the thing contracted for, the character of the body on which the power is conferred, the end to the attainment of whieh the power is to be exercised,- and the- éxtent to which-such • powers for such purposes are usually conferred. ' .
“A few days after the act was passed, a commission was appointed by the legislature to contract, for water for the state ' institutions, .situated in arid near the city, for the term ofs twenty-five years. In this act powor was conferred upon all municipalities to enter into contracts for a term not exceeding twenty-five years, for supplies of water, on a two-thirds-affirmative vote' of the qualified electors, but the act provided that it should not apply-to municipalities, whose charters already conferred the power of making contracts for water.
**!« *?> *1» ’ a. •t* »J>
“ A contract made by the authorities of á municipality with a.water company for supplying the city with water for a period of twenty years, is within the power conferred on them by an act of the legislature authorizing them to contract with any reliable, corporation for supplying the city''with water from year to year, in view of. the purposе of . the delegation of power, the nature of the body on which it was conferred, the subject-matter - of the contract, the large outlay' for machinery and appiiarices, the- profit of which was• dependent upori the permanency of the enterprise, and the cotemporarieous legislation, from .which the-intent to authorize a, contract , of as great duration' as twenty-five years is deducible.”
' Again, in the case of Reid v. Trowbridge, 78 Mississippi, 542, the mayоr and aldermen of "the. city of Vicksburg’had been authorized, in. general terms, to: provide for the. lighting of said city by electric light'or other method.' Under this general power the city iriade a contract with the Vicksburg Railroad, *514 Power and Manufacturing Company for lighting the streets by electricity, at a given rental' per annum, for one hundred and twenty-five lights, for a period of ten years. The taxpayers of the city of Vicksburg filed a bill to enjoin the carrying out of the contract, alleging that the city had' no authority to make such .a contract without -submitting it to a vote of the people under the act of March, 1888, passed subsequent to the charter, requiring submission to -a vote of the people, that the contract was unreasonablé and oppressive, and that the council had acted arbitrarily and without exercising discretion in awarding it. The court held that the act of 1888 had no applicatioñ to the case, and, speaking of the general terms of .the charter auuiorizing a contract for lighting purposes, said:
“The intent, of the legislature to confer the power without restriction appears to. us to be too plain, from the collocation and order and sequence of the sections and article of the charter act, to admit of obscuration by learned- argument' about original power. The vеry last legislative action on the subject, that in the municipal charter of the Code of 1892/shows that the lawmakers thought the-power to be one-to be conferred' or prohibited, because it expressly confers it on cities'and towns aUd prohibits its exercise by villages.
tij «U «2* c* *1* 4* 4« •J*
“ It is claimed now that the last clause of section 1 of the first quoted of the above acts, that approved March 10, 1888, applied to and modified the charter оf the city of Vicksburg so .as to make the contract here in controversy void because not submitted to vote. In order- to this result it is claimed, that, in the charter of Vicksburg, it is.not ‘otherwise provided,’ because the charter expressly- confers the power, without restriction, on the municipal board at any ‘regular or special meeting.’ Besides, in construing the section of the act secondly above quoted, this court expressly so held in the case of Light &c. Co. v. Jackson, 73 Mississippi, 644. If-the precise point was not made, the omission is quite significant of the opinion of the eminent counsel for. appellee in that case *515 that there was nothing'in it. Aside from'this, the question was at the very root of the cause,, and was considered and decided, and it is the exact question'in .the case át bar, except that this case is somewhat stronger in favor of the power than the case decided. . .....
“By seсtion 3 of-the act of February 29, 1888, the Jackson board was 'hereby authorized and.empowered to contract,’ etc.,, while by the Vicksburg charter act, the board was au-' thorized to so contract ' át any regular, or special meeting.’ We presume that no charter .then .existent ‘otherwise-provided’ .by an. express' prohibition of electric lighting without vote. The gránt’of the power: without restriction is to ‘otherwise provide.’.”
And the court held thаt “under ^this power the. municipal authorities-had the right to make' the- contract for electric-’ lights without advertising-for bids and-without submitting..the matter to a popular" vole, and the power was not taken ' away by the act' of -March, 188.8. . .
In this case the. leárned judge, speáking' for the-'court, further said;' . - -
'“Within its charter powers, the board has a discretion in-. depehd.ent .of courts, 'and ho exercise of it .will be held void ..for unreasonableness, unless so gross- as to strongly suggest fraud or corruption. The people elect their cóüncil, and. .the-courts, are not chosen members.of it.”
- In the light of' these 'decisions,, and others might .be cited, -. we "reach the-conclusion'that,' under a broad grant óf power, .. -.conferring, without restriction or-limitation, upon the city of • Vicksburg the' right -to make a- contract for a supply of water, it was withiif the" right of tlie city-couhcily in the-: exercise of.’., this power,-to'make a binding contract,-fixing'á maximum-rate at-which' water should be supplied to the., inhabitants of the city for a limited term of year's, and, .in the, absence/of a showing ' -..óf urireasonábienéss':“so gross,”, as'-the- court of-Mississippi has, said,' “.as -to strongly suggest, fraud'-.or porruptibn/’this action of the. councjl is .binding,- and-for the-timé- limited puts-.the *516 right beyond legislative or municipal alteration to the prejudice of the. other contracting party.
While we, therefore, reach the conclusion that thе former case did not adjudicate the, matter, we think the contract in this respect was within, the power of the council and cannot be violated consistently with the contract rights of the company by the subsequent ordinances of the city.
In this case the Circuit Court rendered a final decree practically upon the bill and answer. No testimony was taken, and all that was before the court was the bill, answer and exhibits. We think the decree goes too far in enjoining the city from interfering with, the contract right of the company to charge the rates fixed thereby, in view of the allegations of the answer, that the rates charged by the company exceeded those named in section' 13 of the ordinance of 1886.
The decree should be modified, so as to enjoin interference on the part of the city during the term of this* contract, with the right of the company to charge rates not in excess of fifty cents a thousand gallons to private consumers, as set forth in the ordinance.
With this modification, the decree will be
Affirmed.