President of Colby University v. Village of Canandaigua

96 F. 449, 1899 U.S. App. LEXIS 3258

Opinion

COXE, District Judge

(after stating the facts). It is thought that the decision must turn upon the answer to a single question, namely, has a village corporation, after having granted a franchise to a water company, the right, pursuant to the law of 1875, to construct a water system of its own without taking, by purchase or condemnation, the property of the existing company? Chapter 181 of the Laws of 1875 is a comprehensive enactment to enable "the villages of the state to furnish pure and wholesome water to the inhabitants thereof.” It is not confined to those villages where there is no general water supply. It contemplates and expressly provides for the precise situation existing at Canandaigua in 1894. The proper construction of section 22 of the act is no longer in doubt. It is permissive and not mandatory. This is established by uncontradicted authority and was conceded at the argument and in the complainants’ brief. In case of an existing water company, therefore, the village authorities caxr take it or let it alone as they like. Their right to construct their own works does not depend in the slightest degree upon their acquiring the works of the company. If, in their judgment, it is not wise or necessary to take the company’s property they may proceed and erect their own plant precisely as if the company had never been organized. This proposition seems too plain for debate. But, say the counsel for the complainants:

“We do not contend that the language of section 22 is mandatory in compelling- a condemnation of the property, but what we contend is that the- village could not act witli regard to acquiring waterworks under the Laws of 1ST."), where there was an existing company with a franchise under the Law's of 1873, unless it did purchase or condemn the works.”

Tke distinction here drawn seems too metaphysical and refined for practical application. Having conceded that, the section is permissive merely, a construction is placed thereon which, in effect, makes it mandatory. To the mind of the court it appears inconsistent to contend that the acquisition of existing works is an absolute condition precedent to village ownership after having admitted tha t, by (lie terms of the sia tute, it is entirely optional with the village whether it takes the existing works or not.

It is argued that the act of 1875 must be treated in pari materia with the act of 1878, and that the two should be construed to mean that a village may provide for a water supply either by means of a private corporation or public ownership. That it may adopt either of these courses but not both, and, having chosen to obtain a supply of water through a private corporation, its power is exhausted in that regard. This position would be plausible were there any room for construction, but there is not. The act of 1875 recognizes the existence of corporations organized under the prior act and expressly provides, as before stated, that the village may take the property of such corporation if it deems such action advisable; if not, it may proceed and build entirely new works of its own. The complainants interpret sec lion 22 as if it read as follows:

“Whenever uny corporation shall have, been organized under the laws of this state for the purpose of supplying the inhabitants of any village with waier, ihe rights, privileges, grants and properties of such corporation must be reclaimed l>y purchase or condemnation before said board of water commissioners shall proceed to construct the waterworks as hereinbefore provided.”

No canon of construction is familiar to the court, which transforms plain and unambiguous language permitting an act to be done into a positive command to do the act. Bo far as the written law is concerned there can be little doubt that villages in this state may build and own their own water supply notwithstanding the fact that private corporal ions are in the field, provided the village authorities have done no tiling more than permit the corporation to lay its pipes in the village streets. In the present instance the village simply granted a naked permission to do this to the water company. It was a license and nothing more. Indeed, under the provisions of section 4 of the act of 1878 it is doubtful if any additional rights could have been granted. But it is enough that none were granted. The village is not hampered by any covenant on its part not to grant additional franchises to others. There is no agreement that it will not build its own works and no stipulation that it will for an indefinite period purchase water of the company. The controversy is, therefore, free from the complications which existed in several reported cases.

All of the salient propositions here involved were determined adversely to the complainants’ contention in the case of Syracuse Water Co. v. City of Syracuse, 116 N. Y. 167, 22 N. E. 381. ” It was there asserted by the plaintiff, upon facts closely analogous to those in the case at bar, that the water company possessed an exclusive right to furnish water to the city and its inhabitants and, consequently, that the city was powerless to obtain a supply from other sources. The decision establishes the following propositions: First. For the purpose of ascertaining the powers and privileges possessed by the water company recourse can only be had to the terms of the grant' which must be strictly construed against the grantee who takes nothing by inference. Second. Powers and privileges not expressly and exclusively granted are reserved and may subsequently be conveyed to a competitor of the grantee though the result may be injurious and practically destructive of the value of the prior franchise. Third. A charter which does not expressly declare that the right to supply water to the city is exclusive cannot be construed as an exclusive grant because of a provision requiring the company, on request, to furnish water to the municipality. Fourth. A municipal corporation can bind itself by contract only so far as authorized by statute. It cannot grant exclusive privileges to lay pipes in its streets or curtail by contract the right to exercise the powers vested in its legislative board. Fifth. By the grant to it the water company was given the privilege of supplying all the water the city or its inhabitants may wish to take, “but not the right to supply them with all the water they may be permitted to use.” Sixth. The right reserved to the city to take the property of the water company was a privilege merely which it might or might not exercise at its pleasure, it was not a legal duty upon the performance of which depended the right of the city to procure water from sources other than the water company. These propositions are fortified by a wealth of authority which it is not necessary to reproduce. The only distinction pointed out by counsel is that in the Syracuse Case the injury was not inflicted directly by the municipality, as in the case in hand, but through the medium of a rival corporation to which a franchise was given by the city. The difference does not seem to the court material. If the village of Canandaigua be not precluded by reason of its franchise to the water company,, if it still retains the right to obtain water from other sources it can make no difference, from a legal point of view, whether it delegates that right to others or exercises the right itself. The complainants contend that the village has granted an exclusive and inviolable franchise to the water company and has thus exhausted its powers. If this contention be well founded the complainants are entitled to a decree, but if, on the other hand, the doctrine of the Syracuse Case be correct, there is no estoppel, and the village, being free to act, may either grant a new franchise or exercise the unquestioned right to construct, its own works, vested in it by the statute. In other words, it is free to act and may adopt either course as its interests dictate. Doctrine similar to that enunciated in the Syracuse Case will be found in the following authorities: In re City of Brooklyn, 143 N. Y. 596, 38 N. E. 983; Warsaw Waterworks Co. v. Village of Warsaw, 16 App. Div. 502, 44 N. Y. Supp. 876.

The authorities relied upon by the defendants are clearly distinguishable upon the facts. In the Walla Walla Case, 172 U. S. 1, 19 Sup. Ct. 77, there' was an express agreement on the part of the city not to build waterworks of its own during a period of 25 years, — tbe term of ° the contract. Tbe provision being that, while the contract was in force, “the city of Walla Walla shall not erect, maintain or become interested in any waterworks except the ones herein referred to.” The court decided that this stipulation was not ultra vires and. ihat it was a palpable violation of its provisions for the city to construct a system of waterworks of its own while its contract with the company had 19 years to run. If the village of Canandaigua had covenanted with the waterworks company that in no event would it erect waterworks of its own until after the year 1909 the two cases would be analogous. The case of White v. City of Meadville, 177 Pa. St. 643, 35 Atl. 695, arose under the laws of Pennsylvania, which differ in several important particulars from the laws of New York here in controversy. The court does not, however, seek to disguise the fact that the reasoning of that decision is in conformity with the complainants’ contention. Indeed, it may as well be conceded that were this controversy before the Pennsylvania court consistency would require a decree for the relief demanded in the bill. The Ifeadville decision states the argument for the water company as succinctly as possible and points out the injustice of permitting the sovereign authority, which gives life to the corporation, to destroy its property by indirection. Were the question an open one, this view would have great weight though modified somewhat by a contemplation of the inequitable results which might ensue were the Pennsylvania doctrine pushed to its logical conclusion. Might it not follow that instances will be more numerous than at present where a community is held in the grasp of a selfish and unyielding monopoly which condescends, for an exorbitant reward, to deal out liquid lili.it in parsimonious doses to the parched but helpless inhabitants? Admitting that the Meadville decision cannot be reconciled with the decisions of the courts of New York, it is clearly the duty of this court to follow the latter.

The latest exposition of the law upon this subject will be found in Bienville Water-Supply Co. v. City of Mobile, 95 Fed. 539. The cases cited by the complainants’ counsel, and several otheis of similar import. are there commented upon and their inapplicability to a case like the one at bar is clearly pointed out. The court states its conclusion in language, equally applicable here, as follows:

“Tims we have seen that Hie contract, in every case to which our attention has been called, either provided for an exclusive right in the water company 1o supply water to the city and its inhabitants, granted or contracted for by the city, or contained a covenant by the city (hat it would not erect waterworks of its own, and would abstain from granting the right to do so to a competing company, during the life of the contract. We have seen that the contract under consideration in this ease contains no such stipulation or agreement. We have seen that it does not attempt to grant any exclusive right to the complainant, and that it contains no provision that the complainant shall furnish water to the inhabitants of the city of Mobile, and no covenant by the city that it will not build or acquire waterworks of its own, or abstain from supplying water to its inhabitants, during the continuance of the contract. * s ⅝ My conclusion, then, is that the complainant has shown no valid or legal grounds on which to grant it the injunction prayed for in the bill.”

■ Several of the complainants’ arguments are addressed to the ethical rather than the legal aspects of the controversy. It may be/in view of existing relations, that the defendants’ conduct was not actuated by the purest morality or the most .exalted altruism. It may be •that, having granted a franchise to the water company, good faith required that they should not construct a system of their own, at least until they had condemned and paid for the property of the company. But these are considerations which the court is not called upon to determine. The golden rule is not a rule in equity and until the courts are given jurisdiction to enforce the principles of the dialogue their duty will be accomplished when they have ascertained and enforced the legal rights of the parties. The court has no doubt as to what those rights are under the statutes of this state as interpreted by tribunals whose judgments this court is bound to respect, but it may not be amiss to suggest that a provision of law safeguarding the rights of existing corporations would be in accordance with natural justice and would prevent the destruction of property in the hands of innocent parties who are powerless to protect themselves. The bill must be dismissed.