146 Ill. 139 | Ill. | 1893
delivered the opinion of the Court:
As we understand the bill, the complainant bases his right to the relief prayed for upon two grounds, (1) that the ordinance of March 18, 1889, provides for the imposition and collection Of water rates and taxes in excess of the actual cost of maintaining and operating its water works, and is therefore unjust, oppressive and unreasonable; and (2) that the provisions of the ordinance are unjustly and unequally enforced, so as to compel the complainant to pay more than his just proportion of the water rates or taxes collected by the city.
It will be noticed, as bearing upon the first of these grounds of complaint, that there is no allegation of any exorbitance or unfairness in the rates fixed by the ordinance, when the cost of constructing, as well as of maintaining and operating the water works, is taken into consideration. The contention is, that, as the city was authorized by law to construct the water works and pay the cost of the same by general taxation, and has paid such cost in that manner in part, it is bound to maintain and operate the works for the sole benefit of those who may choose to use the water thus furnished, and has no legal right or power to charge therefor rates which will produce a revenue in excess of what is necessary to defray the current expenses of their operation and maintenance.
The second ground of complaint does not proceed upon the theory that there is any inequality or improper discrimination, either as between different classes of consumers, or between individuals of the same class, arising from the provisions of the ordinance itself. It is alleged that the ordinance diminishes, to some extent, the rates previously charged to small consumers, and very largely increases those previously charged to large consumers, but it is not alleged that as thus modified, the rates charged to small consumers are relatively too low, or that those charged to large consumers are relatively too high., The city council having, in the exercise of its legislative discretion, seen fit to make these changes in the rates previously charged, a presumption arises, which the bill in no way attempts to rebut, that previous charges were unequal and unjust, and that under the system formerly prevailing, small consumers had been charged somewhat more and large consumers very much less, than the relative rates which ought fairly and justly to be imposed upon them.
It is not claimed that the imposition of meter rates upon large consumers is,not entirely equitable as between the different individuals of that class. The amount of the actual consumption being precisely ascertained by the use of meters, the rates to be charged are accordingly proportioned to the amount of water consumed by each, a system of fixing rates too manifestly just and equitable to require discussion. It is true, the shedule of meter rates is based upon a sliding scale of prices, the price per 1000 gallons consumed being considerably diminished as the amount is increased, but this is a matter to which the complainant can not be heard to object, as the amount of water consumed by him seems to be sufficiently large to bring him within the operation of the lowest rate fixed by the schedule. Nor is it $hown that the adoption of a different method for fixing the rates to be paid by small consumers, viz., by charging them fixed rates according to the number of rooms in the buildings to which water is supplied, is, in its operation, unjust or inequitable to large consumers. There is no allegation that small consumers are not thereby in fact required to pay for the water consumed by them, rates relatively as high as those imposed upon large consumers by charging them meter rates.
The substantial complaint then is, that the city and its officers are enforcing the ordinance against him according to its terms, thus compelling him to pay meter rates for the water supplied to his brewery from the water works, and that while doing so, they have neglected to enforce the.ordinance as against various of the other large consumers, and that the inequality and injustice alleged arises from that cause. He is therefore seeking, not to .have the city required to enforce the ordinance against all consumers alike, but to have its enforcement as against himself restrained by injunction.
One theory upon which the bill proceeds, and the one upon which much reliance seems to be placed, is, that the imposition upon consumers of water supplied from the city water works of rates or taxes therefor, is an exercise of the taxing poYv'er, and is therefore controlled by the constitutional limi- ■ tation which requires taxes to be uniform in respect to persons and property within the jurisdiction of the body imposing the same. This we think is a misapprehension. Taxes are the enforced prop.ortional contribution from persons and properly, levied by the State by virtue of its sovereignty, for the support of government, and for all public needs, and they are therefore justly and properly subjected to the rule of uniformity. But water rates are imposed and collected merely as the compensation or equivalent to be paid by those who choose to receive and use the water, for the commodity thus furnished them by the city. No one is compelled to receive or use the water so as to be under obligation to pay for it, except at bis own election, and when he does receive and use it, with knowledge of the rates charged by the city therefor he by implication agrees to pay those rates, and his obligation to make payment rests upon contract, rather than upon an exercise by the State of the taxing power.
In Vreeland v. Jersey City, 43 N. J. L., 135, the statute, after providing that the board of public works should regulate the distribution of water and the prices which those using it should pa;7, required them from time to time to fix a sum to-be annually assessed upon vacant lots abutting upon streets in which water mains were laid, and lots with buildings thereon in which water was not taken, and it was held that no liability could rest upon any property owners except those using the water to pay the rates imposed. The rates imposed upon other property were held not to be sustainable, either as special assessments or as general taxes. They were not valid as special assessments, since there was no limitation by which the imposition by the board was restricted to an amount representing the actual and positive benefits to the lots, nor were they valid as a general tax, for the reason that the imposition was not uniform upon all the property within the jurisdiction of the city. But in Vreeland v. O’Neil, 36 N. J. Eq. 399, and Vreeland v. Jersey City, 37 E. J. Eq. 574, the question was presented as to the validity of the rates imposed under the same statute for water actually used, and it was held that, as the terms upon which the water was proposed to be furnished were public and well known, persons applying for a supply of water would be presumed to have assented thereto, and thus become liable to pay the required rates upon the ground of an implied contract. To same effect see Provident Institution v. Jersey City, 113 U. S. 506.
The business of furnishing the inhabitants of a city with water by means of water works so constructed as to bring the water from some permanent source of supply and distribute it by means of pipes laid in the streets to the residences and places of business of those desiring to obtain their water supply in that manner, though not an exercise of the powers of sovereignty is undoubtedly a business which is public in its nature, and belongs to that class of occupations or enterprises upon which a public interest is impressed. The business carried on by common carriers, telegraph companies and gas companies are examples of the same class. The business being one which is impressed with a public use, may, where proper legislative authority is given, be carried on directly by the municipal corporation, or it may be carried on by a private corporation, acting under a proper franchise granted to it for that purpose. But when a municipal corporation undertakes to construct and operate water works, it does so in the exercise of its private and not of its governmental functions. Thus, as said by Judge Dillon: “A city may be expressly authorized in its discretion to erect a public wharf and charge tolls, for its use, or to supply its inhabitants with water or gas, charging them therefor and making a profit thereby. In one sense such powers are public in their nature, because conferred for public advantage. In another sense they may be considered private, because they as such as may be and often are, conferred upon individuals and private corporations, and result in a special advantage or benefit to the municipality, as distinct from the public at large.” 1 Dillon on Mun. Corp. sec. 27.
“A municipal corporation which supplies its inhabitants with gas or water does so in its capacity of a private corporation, and not in the exercise of its powers of local sovereignty. If this power is granted to a borough or city, it is a special private franchise, made as well for the private emolument and advantage of the city as for the public good. In separating the two powers—public and private—regard must be had to the object of the legislature in conferring them. If granted for public purposes exclusively, they belong to the corporate body in its public, political or municipal character; but if the grant was for purposes of private advantages and emolument, though the public may derive a common benefit therefrom, the corporation quo ad hoc is to be regarded as a private company. It stands upon the same footing as would any individual or body of persons, upon whom the like special franchises had been conferred.” Appeal of Brumm, 12 Atlantic Reporter, 855. To same effect see, Western Savings Fund Society v. City of Philadelphia, 31 Pa. St. 175; Bailey v. Mayor, etc., of New York, 3 Hill, 531.
The complainant however has attempted to distinguish the present case from those to which the foregoing authorities apply, by alleging that the water works in question were not erected by the city for purposes of speculation or profit, or of deriving therefrom a revenue by the sale of water to its citizens, but only for the purpose of supplying water from the Mississippi River for the use of itself and its inhabitants. Even admitting that such was the policy of the city and its officers at the time they embarked upon the enterprise of building water works and supplying the people of the city with water, we are unable to see how that fact can have the legal significance claimed for it. It would go only to the motives upon which the city acted in the matter, and would have no bearing upon its right to change its policy whenever it saw fit to do so. Its power to build and maintain water works and furnish water to its inhabitants for a consideration is derived from and is governed solely by the statute, and even though the intention of the city and its officers may have heen to furnish water to the people of the city at the mere cost of maintaining and operating the works, and to charge no rates which would result in accumulating a surplus revenue, the city is not bound to persist in that policy, but is at liberty at any time to abandon it and impose reasonable rates and charges, although by so doing a revenue may be realized.
It is a rule of the eommon law, that parties carrying on business which is public in its nature or which is impressed with a public interest, can not select their patrons arbitrarily, but must serve all who apply on equal terms, and at reasonable rates, but this is as far as the rules of the common 'law seem to have gone. They do not require absolute uniformity of rates nor forbid discrimination by performing the service for one at rates lower than those exacted of others. The most familiar illustration of pursuits of this character is that of a common carrier, and the well recognized rule is, that while the carrier cannot select his patrons arbitrarily, and must furnish equal facilities to all and on equal terms, he is not forbidden to take one customer’s goods at an unreasonably low rate, or to confer on that customer other practical advantages in the transportation to which competitors and the general public arh not admitted. Schouler on Bailments and Carriers, sec. 380; Hutchinson on Carriers, sec. 447. The same rule doubtless, where no statutory restriction has intervened, is equally applicable to all other kinds of business which have become affected with a public interest, such as that ordinarily carried on by telegraph or gas companies, the construction and maintenance of public wharves, or the maintenance and operation of water works in cities. And in the case of water works, we are unable to see why any different rule in this respect should apply when the works are owned and operated by the city, from those which prevail where the business is carried on by a private corporation.
The provisions of the statute in relation to water works may be found in article 10 of the general law in relation to the incorporation of cities and villages (1 Starr & Curtis’ Stat. 508) and in the “Act authorizing cities, incorporated towns and villages to construct and maintain water works,” approved April 15, 1873, and subsequent amendments thereto. 1 Starr & Curtis’ Stat. 544. By these statutes municipal corporations are authorized to provide for a supply of water for a fire protection and for the use of their inhabitants, by the erection, construction and maintenance of water works, and for that purpose, they are authorized to acquire the necessary real estate by purchase or condemnation, and to defray the expense of constructing and maintaining ihe works by general taxation, or to a certain extent by special assessment, and to borrow money and issue municipal bonds therefor.
By section 4, of the act last above referred to, power is given to the proper municipal authorities to make and enforce all needful rules and regulations in the erection, construction and management of the water works and for the use of the water thereby supplied, and to tax, assess and collect from the inhabitants of the municipality such tax, rent or rates for the use and benefit of water used or supplied to them by such water works, as to such authorities shall seem just and expedient. By section 6 of the same act, it is provided that the income received from such water works from water taxes, rents or rates, shall be kept in a separate fund, and shall first be applied to the payment and discharge of the costs, interest on bonds or money borrowed and used in the construction of the waterworks and running expenses thereof, the surplus to be applied in such manner as the municipal authorities may direct.
We find nothing .in the ordinance in question in this case which seems to us to contravene either the rules of the common law or the provisions of the statute. There is no allegation that the water rates charged to the complainant are in themselves unreasonable or extortionate, in the sense of being anything more than a just and fair equivalent for the water supplied to him from the water works, nor is any provision' of the ordinance pointed out which is in itself unreasonable, or which the city council had not under the statutes above referred to, a clear authority to pass.
The inequality complained of is one which arises solely from the neglect of the city officers to enforce the ordinance against other consumers, and whatever may be the appropriate remedy for such neglect, or the means, if any, which the law provides for compelling the city officers to enforce the ordinance against all to which it applies alike, it is very clear that their failure to collect from others the full amount of their water rates cannot have the effect of discharging the complainant from his obligation to pay the rates imposed upon him by the ordinance. The case is not like one where several are under legal obligation to make up a fund of a definite amount by contributing thereto in fixed proportions, and where one is not liable to make good deficiencies caused by the default of the others. The city is entitled to collect the full amount due from all, whatever the aggregate may be, and its failure to -collect from part can have no effect upon the liability of the others.
In no point of view has the complainant shown himself entitled to,the relief prayed for in his bill, and the judgment of the Appellate Court reversing the decree and directing that the bill be dismissed at the complainant’s costs for want of equity will be affirmed.
Judgment affirmed.