Los Angeles v. Los Angeles City Water Co.

177 U.S. 558, 20 S. Ct. 736, 44 L. Ed. 886, 1900 U.S. LEXIS 1826

• Court: Supreme Court of the United States
• Decided: May 14, 1900
• Docket: 148
• Status: Published

Opinion

Mr. Justice McKenna,

after stating the ease, delivered the opinion of the court.

The Circuit Court decided that the provision of the contract executed by the city and Griffin, Beandry and hazard constituted a contract, and the ordinance of the city regulating the rates of appellees impaired it. Against this conclusion the appellant contends: (i) The contract only purports to bind the city in its corporate capacity — the city as landlord and owner, and not as a governmental agent of the State. (2) The city did not have power to bind the State; (3) the provision of the contract, restraining the city from granting any other franchise, if it created an exclusive franchise, invalidated the whole contract; (J) the act of 1870, purporting to ratify the contract of 1868, is unconstitutional and void; (5) the water company has no power under its charter to collect water rates except as prescribed by the constitution and statutes of the State; (6) by acquiescing in the regulations of rates ever since 1880 the company is estopped from claiming equitable relief, and is guilty of laches; (7) the water rates established by the ordinance are not shown to be lower than those charged in 1868, or, if lower, that the revenue of the company is reduced; (8) if the ordinance is invalid, it is void on its face, and there is, therefore; no cloud on the company’s title; (9) the company violated the contract by taking water from the Los Angeles River, and, therefore, is not entitled to specific performance.

We will consider these contentions in their order.

1. The contract only purports to bind the city in its corporate capacity — the city as landlord and owner, and not as governmental agent, of the State.

The argument to support the contention, succinctly stated, is that the right to regulate rates came from the contract, not from the law. In other words, it was reserved from the contract and was a virtual granting back by the lessees of the proprietary right, which would have otherwise passed by the lease, leaving, however, all municipal powers intact.

The provision of the contract is as follows: “ Always provided, that the mayor and common council of said city shall have, and do reserve, the right to regulate the water rates charged by said parties of the second part, or their assigns, provided that they shall not so reduce such water rates, or so fix the price thereof, to be less than those now charged by the parties of the second part for water.”

The municipal powers of the city provided in the act of incorporation, among others, were: “ To make by-laws or ordinances, . ; . to make regulations to prevent and extinguish fires, ... to .provide for supplying the city with water.”

It is not denied that the city had power to regulate rates. Indeed, it is insisted that it was so constantly its duty that-it could not be contracted away. It was not a power, therefore, necessary to be granted by the con tract,and the distinction between the propidetary-right and the municipal right, made by appellants, would have been idle to observe. To have limited the right of - regulation to the city in one capacitj'-, and left it unrestrained in the other, would have been useless, and such in-' tention cannot be attributed to the parties. We think, therefore, the power to regulate rates was an existent power, not granted by the contract, but reserved from it, with a single limitation — the limitation that it should not be exercised to reduce rates below what was then charged. Undoubtedly there was a contractual element; it was not, however, in granting the-power of regulation, but in the limitation upon it. Whether the limitation -was and is valid is another consideration.

2. The city did not have the power to bind the State.

This contention as expressed is very comprehensive, and seems to deny the competency of the State to give the city the power to bind it. We do not, however, understand counsel as so contending, nor could they. Walla Walla v. Walla Walla Water Company, 172 U. S. 1; see also People v. Stephens, 62 Cal. 209. We understand the argument to be that the power, if not expressly given, will not be presumed unless necessarily or fairly implied in or incident .to other powers expressly given — not simply convenient, but indispensable to them. In other words, the rule of strict construction is invoked against the grant of such power to the city.

The rule is familiar. It has often been announced by this court, and quite lately in Citizens' Street Railway v. District Railway, 171 U. S. 48.

The effect of the rule in the case at bar we are not required to determine if the act of April 2, 1870, c. 437, Stats. 1869-70, 635, ratifying the contract is valid.

It reads as follows:

“ An act to ratify certain acts and ordinances of the mayor and common council of the city of Los Angeles.

“ The people of the State of California, represented in senate and assembly, do enact as follows:

“Section 1. The following acts, contracts and ordinances of the mayor and common council of the city of Los Angeles are hereby ratified arid confirmed : The contract and lease for the care and maintenance of the Los Angeles City Water Works, entered into and made between the mayor and common council of the city of Los Angeles, on the one part, and John S. Griffin, Prudent Beandry and Solomon Lazard, on the other part, dated the twentieth (20th) day of July, eighteen hundred and sixty-eight (1868 ;) and also the ordinance confirmatory of the same, passed July the twenty-second (22d), eighteen hundred and sixty-eight, which contract and ordinance are recorded in the office of the county recorder of Los Angeles County, in book one of miscellaneous records, pages four hundred and twenty-eight (428) to four hundred and thirty-one (431;) (here follows certain other ordinances and deeds not affecting the contract in question.) ”

Appellants assert that the act violates the following provision of the constitution of the State:

“ Corporations may be formed under general laws, but shall not be created by special act, except for municipal purposes. All general laws and special acts passed pursuant to this section may be altered from time to time or repealed.”

At the time of the passage of the act of 1870, the contract of 1868 had been assigned to the water company, and the facts show that it was applied for and procured on behalf of Griffin, Beandry and Lazard, and other persons, with the intention of forming a corporation to execute its provisions, and for such purpose they and other persons organized under the laws of the State the Los Angeles City Water Company, the appellee. It is hence argued that the act of 1870 confers franchises on the company by a special act instead of by a general law, and thereby infringes the constitutional provision, and against the existence of such power in the legislature the following cases are cited: Low v. City of Marysville, 5 Cal. 214; San Francisco v. Spring Valley Water Works, 48 Cal. 493; Orville & Virginia Railroad Co. v. Plumas County, 37 Cal. 354; Spring Valley Water Works v. Bryant, 52 Cal. 132; San Francisco v. Spring Valley Water Works, 53 Cal. 608; San Francisco v. Spring Valley Water Works, 48 Cal. 493.

Of these cases, only Low v. City of Marysville and Orville & Virginia Railroad Co. v. Plumas County were decided before the passage of the act of 1870.

It was held in Low v. City of Marysville that the legislature was prohibited from conferring upon a municipal corporation powers other than governmental by a special act. Chief Justice Murray said: “ . . . for as it would have been a violation of the constitution to create a corporation by special act, for any other than municipal purposes, it follows that it would be equally unconstitutional to confer special power on a corporation already created. In other words, it would be doing, by two acts, that which the legislature could only do by one; and corporations for almost- every purpose might be created by special act by first incorporating the stockholders as a municipal body.” . • -

But in California State Telegraph Co. v. Alta Telegraph Co., 22 Cal. 398, decided at July term, 1863, a contrary doctrine was announced- It was held that the legislature could grant exclusive franchises and privileges to persons or corporations; that if granted to a person they could be assigned to a corporation, and that a corporation could receive from the legislature a direct grant of special privileges and franchises. The case necessarily involved all of those propositions.

The right and privilege passed on were granted by an act of the legislature, and consisted of the exclusive right to O. E. Allen and Clark Burnham to construct and put in operation a telegraph line from San Francisco to the city of Marysville. They assigned the right to the California State Telegraph Company. The court said : “ The case presents the following questions for our adjudication: 1st, is the act of May 3, 1852, granting certain exclusive privileges to Allen and Burnham, constitutional? 2d, have the plaintiffs the power or right to' purchase, hold and enjoy these exclusive privileges ? ”

Both propositions were answered in the affirmative. Of the second the court said:

“ The next and most important question is whether the plaintiff, a corporation, had the power to purchase and hold the special privileges granted by the act to Allen & Burnham. It is not disputed that those grantees had power to sell and convey, for the act specially makes the grant to them or ‘ their assigns,’ thus clearly making the privileges assignable. But it is urged that the clause in the constitution which prohibits the legislature from creating a private corporation by special act equally prohibits them from conferring any powers or privileges of a corporate character by special law; and that all the powers and privileges which a corporation can exercise or hold must be derived from a general law, applicable alike to all- corporations.

“It is clear that the constitution prohibits the legislature from ‘ creating ’ corporations by special act, except for municipal purposes; and it is equally clear that this prohibition extends only to their ‘ creation.’ There is nothing in the language used which either directly or impliedly prohibits the legislature from directly granting to a corporation, already in existence and created under the general laws, special privileges in the nature of a franchise, by a special act, or prohibiting a corporation from purchasing or holding such franchises, which may have been granted to others. To give the constitution any such effect we would be compelled to interpolate terms not used, and which cannot be implied without a perversion of the language employed. To give it such a construction we would have to make it read thus: ‘ Corporations may be formed, and other franchises and special privileges granted, under general laws, but shall not be created or granted by special act, except for municipal purposes.’ If such had been the meaning intended by the framers of the constitution, they could have easily expressed it in apt words. The language used by them is clear, and they well knew that it included but one of a numerous class of franchises, the subjects of legislative grant, and that a regulation of one could not by any reasonable implication be extended to others not mentioned.”

And the learned justice who delivered the opinion of the court concluded the discussion by saying: “ I hold, then, that the plaintiffs, as a corporation, were capable of receiving a grant of these special privileges directly from the legislature, and of purchasing them from the grantees.”

There was an implied recognition of the same doctrine in Spring Valley Water Works v. San Francisco, 22 Cal. 434.

But it is urged by appellants that Orville & Virginia Railroad Co. v. Plumas County, (decided in April, 1868,) held “ that the legislature could not authorize the county to grant special privileges to a private corporation, and this was confirmed in Waterloo Turnpike Co. v. Cole, 51 Cal. 384, (decided in 1876).” The latter case Ave may disregard, as .it Avas decided subsequently to the act of 1870. The former case did not decide as contended, nor AAras the point involved in it. The action Avas mandamus to compel the county to subscribe to the capital stock of the railroad company under an act of the legislature directing the supervisors of the county to meet at a designated day and take and subscribe to the capital stock of the railroad company.

The defence Avas not Avant of .power in the legislature to direct the subscription — not Avant of power in the company to receive it because it Avas a corporation, but Avant of power to receive because it Avas not a corporation. Against this it was urged that thé act of the legislature recognized the company as a corporation. To the contention the court replied: “But it is claimed that the existence of the corporation is recognized by the act requiring the county to subscribe to the stock of the company. Admitting such to be the case, that will not overcome the difficulty, for a corporation of this character cannot be created by legislative recognition ; the constitution (art. IV, sec. 31,) prohibiting the creation of corporations, except for municipal purposes, otherwise than by general laws.”

It follows, therefore, that at the time of the contract of 1868 and of the passage of the ratifying act of 1870 it was established by the decision of the highest court of the State that the constitution of the State permitted a grant of special franchises to persons and corporations, and permitted the latter to receive assignments of them from such persons or grants'of them directly from the legislature. This law was part of the contract of 1868, as confirmed by the act of 1870, and could not be affected by subsequent decisions. Rowan et al. v. Runnels, 5 How. 134; Ohio Life Ins. &c Trust Co. v. Debolt, 16 How. 416; Havemeyer v. Iowa County, 3 Wall. 294; Chicago v. Sheldon, 9 Wall. 50; Olcott v. The Supervisors, 16 Wall. 678; McCullough v. Virginia, 172 U. S. 102. Nor by the new constitution of 1879. New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650; Fisk v. Jefferson Police Jury, 116 U. S. 131; St. Tammany Water Works v. New Orleans Water Works, 120 U. S. 64.

The subsequent decisions of the Supreme Court of the State have not been uniform. San Francisco v. Spring Valley Water Works unqualifiedly overruled California. State Telegraph Co. v. Alta Telegraph Co., but People v. Stamford, 77 Cal. 360, restored its doctrine to the extent, at least, of holding that the constitutional provision that “ corporations may be formed by general laws, but shall not be created by special act,” only prohibits the creation of corporations and conferring powers upon them by legislative enactment, and does not prohibit “ the assignment of a franchise to a legally organized corporation by persons having the lawful right to exercise and transfer them.” See also San Luis Water Co. v. Estrada, 117 Cal. 168.

There are expressions in the latter case which, it is urged, notwithstanding the modification by it and by People v. Stanford of the doctrine of San Francisco v. Spring Valley Water Works, make that doctrine applicable to the case at bar. The San Luis Water Company was a corporation, and was formed for the purpose of furnishing the town of San Luis Obispo and the inhabitants thereof Avith pure fresh Avater.

By an act of the legislature, entitled “ An act to provide for the introduction of good and pure water into the town of San Luis Obispo,” approved March 28,1S72, a franchise was granted for that purpose to M. A. Benrimo, C. W. Dana and W. W. Hays. The San Luis Water Company claimed to be the assignee of the franchise. The assignment was. attacked on the ground that it was invalid under the constitution of the State. The court said: “The precise point made is, that the power to supply a city Avith Avater cannot be conferred directly or indirectly upon a private corporation by special act.”

And further : “ The grant to Benrimo and his associates was also to their assigns. There can be no doubt but that they might, by the terms of the grant, sell or assign the franchise. It seems to me too plain to require argument that the purchase by the plaintiff was strictly and directly Avithin its powers and contributed necessarily and directly to its objects and purposes.” But the learned commissioner avIio delivered the opinion also said : “ If any connection could be traced between the plaintiff and the passage of the special act of 3872, or it appeared that the act Avas obtained for the purpose of evading the constitutional inhibition, I could see how the case of San Francisco v. Spring Valley Water Works, supra, might apply. But, in vieAv of the facts in this case, I cannot regard the article of the constitution mentioned or the case last cited as having any application here.” But this is not a decision that the case would apply. And if it is a concession of strength in the argument it is not a concession of conclusive strength.

We are not concerned, hoAvever, to reconcile the cases decided since 1870, and Ave have only mentioned them to present fully the contention of appellants. The cases prior to that time, as Ave have seen, made the obligation of the contract of 1S68, and determined the poAver of the legislature to ratify it. And there seems to have been no question of this power. Besides legislative recognition, besides recognition by many acts of the city, the contract has received judicial recognition. Taxation upon the property acquired to execute it has been sustained. Los Angeles v. Los Angeles Water Works Co., 49 Cal. 638. It Avas interpreted, and under its provisions the company denied com pensation for water used in sprinkling the streets of the city. Los Angeles Water Co. v. Los Angeles, 55 Cal. 176. An ordinance was declared void imposing a license upon the company for doing business in the city. Los Angeles v. Los Angeles Water Co., 61 Cal. 65. Its right to take more than ten inches of water from the river was sustained in Los Angeles v. Los Angeles Water Co., 121 Cal. 368.

The case in 61 Cal. 65, was heard in department and in banc, and the contract received careful consideration. The.judgment of the trial court was for the water company, and department 2 of the Supreme Court, affirming it, said :

“ The court was correct in its judgment. The plaintiff had already reserved a sum to be paid by defendant for the privilege of vending water for domestic purposes, and it could not change its contract in the manner proposed. The privileges granted by the lease and the. ordinance of 1868 were already vested in the defendant as strongly as they could be by a license under the ordinance of 1879. A license is a grant of permission or authority. The defendant already had permission and authority granted by ordinance' and ratified by the legislature. The city cannot, during the term of the lease, of its own motion, increase the amount to be paid for the privileges granted.

“ It is hardly necessary to say that the point made by the appellant, that neither the city nor the legislature can grant or alienate any of the rights of sovereignty, has no application to this case.” .

The court in bano, through its Chief Justice, approved this language, and after quoting cases, said:

“The authorities of the city'of Los Angeles by a contract (the validity of which has not been challenged by either party) and for certain valuable considerations therein expressed, granted to the defendant’s assignors the privilege of supplying the city of Los'Angeles and the inhabitants thereof with fresh water for domestic purposes, with the right to receive the rents and profits thereof to their own use; ” and after citing cases to show that the exaction of the license would impair the obligation of the contract, concluded as follows :

“ The principles enunciated in the foregoing cases are emi nently. sound and just, and are directly applicable to the case we are now considering. The city of Los Angeles, by its solemn contract, and for various considerations therein stated, gave to the party under whom defendant claims the privilege of introducing, distributing and selling water to the inhabitants of that city on certain terms and conditions, which defendant has complied with, and it was not within the power of the city authorities, by ordinance or otherwise, afterward to impose additional burdens as a condition to the exercise of the rights and privileges granted.”

3. The provision of the contract, restraining the city from granting any other franchise, if it created an exclusive franchise, invalidated the whole contract, i. The act of 1S70, purporting to ratify the contract of 1S68, is unconstitutional and void. 5. The water company has no power under its charter to collect water rates except as prescribed by the constitution and statutes of the State.

These contentions are dependent upon the same reasoning as the preceding one, and do not require a separate discussion.

6. By acquiescing in the regulations of rates ever since 1880 the company is estopped from claiming equitable relief and is guilty of laches.

There was no such acquiescence as estopped the water company from contesting the ordinance of the city. The facts are that in 1880 the city passed an ordinance to be in effect one year, establishing water rates, and passed one every year thereafter, including 1897, when the one in controversy was passed. The rates established by the ordinances were less than those adopted in 1870, and the latter are claimed to have been not higher than the rates charged in 18G8. The company collected the rates established by the ordinances, except those established in 1896 and 1897. A suit was brought by the companj^ to set aside the ordinance of 1896, and that of 1897 is assailed in the case at bar. These ordinances fixed the rates at less than they had been fixed before. The company has also every year since 1882 filed a statement with the city council, showing the names of the consumers of water, the rates paid and the expenditures made for supplying water for tfte preceding year, The company always protested against the right of the city to demand statements, and claimed to make them solely for its information. The company also in 1882 protested against the power of the city to fix rates on any other basis that that of the contract of 1868. The city therefore cannot claim to have been deceived by the action of the company in collecting the rates established prior to 1896. They were less, it is stipulated, than those of 1870, but how much less we are not informed. It is true we are not informed how much less those fixed in 1896 and 1897 are than those of the prior years. They are less, “ less than they had ever been fixed before,” is the stipulation ; and they will, according to the stipulation, produce more then fifty thousand dollars less revenue than those of 1870.

Acquiescence in a regulation which, all things considered, may not have been injurious, does not preclude a contest of that which is injurious. It must be remembered that the contract did not forbid all regulation, but only regulation beyond a certain limit. There was no concession of a power to go beyond that limit, but constant protest against it; and when its exercise did go beyond that limit, producing injury not balanced by other considerations, the right to restrain it would naturally be, and Ave think, could legally be, exerted. As we have said, there aves no concealment, no misleading, no injury, no change of condition, no circumstance Avhich could invoke the doctrine of estoppel or of laches. Appellants, however, assert there was, and claim that the acquiescence of the Avater company Ava's induced by the fear that the city Avould prevent the unlimited use of the river water — a use beyond the ten inches claimed to be alloAved by the contract, and a use again'st other and proprietary rights of the city. Of the latter the record does not enable us to form a judgment. Of the former the Supreme Court of the State (124 Cal. supra) has decided against the contention of the city. We approve the decision and hereafter quote its language. The appellants’ inference, therefore, is Avithout the support of anything in the record.

7. The Avater rates established by the ordinance are not shown to be loAArer than those charged in 1868, or,, if iQAyer, that the revenue- of the company is reduced,

To sustain this contention it is claimed by appellants that there is no testimony in the record to show that the rates established in 1897 were lower than those charged in 1868. Appellants say:

“ The only thing which complainants rely on to establish this fact is the recital in the report of a committee of the council appointed .in 1870 for the purpose of agreeing with the water company upon a schedule of water rates to be charged, in which it stated (by the joint committee) ‘ that they have established water rates and charges for domestic purposes, taking as a guide, as near as can be, the charges and rates for domestic purposes charged in July, 1868. That your committee have also fixed the rates and charges for other reasonable objects and purposes, and report as follows.’ ”

It is urged this is not a statement that the rates fixed in 1870 were equal to those of 1868; indeed, that they may have been higher. And it is also urged there is a distinction made between rates for domestic purposes and rates for “ other reasonable objects and purposes,” which may mean not domestic purposes, and as to these it does not appear upon what they were based.

We are not disposed to dwell long on these claims. It is incredible that the city should have demanded statements from the company yearly; have passed ordinances yearly, and provoked and endured an expensive litigation to establish rates higher than or the same as those which already existed. If statements and ordinances were necessary in fulfilment of the duty of the city under the constitution of the State, neither controversy or litigation was necessary, nor would either have ensued.

It is-urged under this head that it is not shown that the income of the water companj" is less under the rates fixed by the city than under those of 1868. The showing would be irrelevant. The contract concerns rates, not income, and the power of the city over them under the contract.

8. If the ordinance is invalid, it is void on its face, and there is, therefore, no cloud on the company’s title.

The contention is that “if the contract of 1868 is valid, and the ordinance of 1897 reduces the income of the company below that which it should receive, the ordinance is void on its face as being in conflict with the Federal Constitution, and is no cloud on complainants’ title.”

It is hence deduced that the water company has adequate legal remedies, and cannot resort to an equitable one.

We concur with the learned trial judge that the ordinance is not void on its face. As said by him—

'£ In the case at bar, however, the ordinance upon its face is valid, 88 Fed. Rep. 747, 748, and its invalidity appears only when considered in connection with the contract of July the 22d, 1868, and evidence showing what the water rates were at that date. While the court" takes judicial notice of the ratifying act of April 2, 1870, still, since the provisions of the contract of July the 22d, 1868, are not embodied in said act, I am not sure that said provisions are matters of judicial knowledge, although such seems to be the ruling of the court, (one of the justices dissenting,) in Brady v. Page, 59 Cal. 52. Conceding, however, that the court will take judicial notice of all the provisions of said contract, still the one in question simply provides that water rates shall not be reduced below the rates then charged, without indicating what those rates were, and therefore the invalidity of the ordinance appears, not upon its face, but only in connection with extraneous evidence of what the rates were in July, 1S68, and for this reason complainants have adduced that evidence in the present case.”

And further —

“ The defendants must either submit to the terms of the ordinance, or incur unusually onerous expenditures. It is reasonably certain that if, with the ordinance standing, they were to undertake the collection of rates in excess of those prescribed in the ordinance, they would be resisted at every point by the consumers of water, and thus be driven to innumerable actions at law. Besides, should they, in any instance, succeed in collecting, without an action, a higher rate than the ordinance prescribes, it is equally certain that they would thereby bring upon themselves protracted and heavy litigation, having for its object forfeiture of their entire system of works. Surely these injuries are irreparable, and actions at law, so far from being adequate to the exigencies of the situation, are, as complainants, in their brief, forcibly put it, mere mockeries of a remedy.”

9. The company violated the contract by taking water from the Los Angeles River, and, therefore, is not entitled to specific performance.

In reply to this contention we may adopt the language of the Supreme Court of the State of California, used on behalf of the court by Mr. Justice McFarland, in Los Angeles v. Los Angeles City Water Company, 124 Cal. 377.

The contract of 1868 and the right of the water company to take water from the river was considered and decided. The learned justice said:

“Before considering the main questions in the case, it is proper here to notice a preliminary point made by the city, and somewhat insisted on, to vdt: That the only quantity of the water of the Los Angeles River to which the water company is entitled under the contract is ten inches under a four-inch pressure. This contention cannot be maintained. The words of the contract on this subject are simply that the company shall not take from the river 1 more than ten inches of water without the previous consent’ of the city ; there is nothing in the contract about ‘ four-inch pressure,’ nor is there any intimation as to what the parties meant by ‘ ten inches ’ of water. But, looking at the context and the subject matter of the contract, it is quite evident that the parties did not mean only ten inches under a four-inch pressure. If that had been the meaning, there would have been no sense in the other important covenants. At the time of the contract it would have taken many times ten inches under a four-inch pressure to furnish water for domestic purposes to even the few thousand people who were then inhabitants of the city; and much more than that amount was necessary to supply free water under the contract; and a solemn covenant to supply a growing city with sufficient water for domestic and municipal purposes for thirty years from a flow of ten inches under a four-inch pressure would have been absurd. The company, immediately after the date of the contract, commenced to use an amount of water greatly in excess of ten inches under a four-inch pressure; soon after the execu tion of the contract the company was using three hundred inches under a four-inch pressure, and from that to the present time they have been using, with the knowledge and consent of the city, from three hundred to seven hundred inches so measured. Therefore, whatever (if anything) was meant by the simple words ‘ ten inches,’ the contract was immediately, and has been continuously, construed by the action of the parties as niéaning more than ten inches measured under a four-inch pressure. There is no pretence that the city ever objected to the use of this water by the water company until 1896, when an ordinance was passed by the city government undertaking to withdraw the city’s consent to- the taking of more than ten inches from the river. It is difficult to imagine how this ordinance was passed seriously; for if the water company had been prevented from taking from the river at that time more than ten inches of water under a four-inch pressure, there certainly would have been a Water famine in the city, for the city had no works of its own and no means whatever for supplying water for either domestic or municipal purposes. But the city, having allowed the water company, for nearly thirty years, to divert the quantity of water above mentioned, and to expend vast sums of money upon the faith of a continuance of the; right to take said water, could not withdraw its consent within the period of the contract.”

The learned justice then quoted and approved the following remarks of the Circuit Court in the case at bar:

' “ ‘ If it be conceded, as claimed by defendants, (which, however, I do not decide,) that the provision of the contract,, limiting the quantity of the water to be taken from the river without previous consent of the city, is sufficiently certain for enforcement, or, more specially, that said quantity is ten inches measured under a four-inch pressure, still the consent of the city to the taking of a larger quantity, once given, cannot be withdrawn during the life of the contract, for the reason that large expenditures have been made by complainants in reliance upon such consent.’ The court cites as authorities to the point: Rhodes v. Otis, 33 Ala. 600; 73 Am. Dec. 439; Woodbury v. Parshley, 7 N. H. 237; 26 Am. Dec. 739; Lacy v. Arnett, 33 Pa. St. 169; Russell v. Hubbard, 59 Ill. 339; Beall v. Marietta &c. Mill Co., 45 Ga. 33; Veghte v. Raritan Water Power Co., 19 N. J. Eq. 153; Wilmington &c. R. R. Co. v. Battle, 66 N. C. 546; Flickinger v. Shaw, 87 Cal. 126; 22 Am. St. Rep. 2 4; Grimshaw v. Belcher, 88 Cal. 217; 22 Am. St. Rep. 298; Smith v. Green, 109 Cal. 228, all of which sustain the point.”

Decree affirmed.