erection of the necessary plant; and to lay or construct any pipes, conduits, reservoirs, or other works or machinery necessary or proper and authorized for such purposes upon any lands or property entered upon, purchased, taken, or held. They may also enter on any lands, streets, highways, lanes, alleys, and public squares through which they may deem it proper to carry their utility, and there lay pipes, etc., leaving the premises as nearly as may be in the same condition as before.10

SUBJECT TO MUNICIPAL POLICE REGULATIONS. 209. The municipality generally grants its license to build and operate by contract with the company; but this right is exercised subject to the police power of the municipality to regulate and control operations.

The details of construction and operation of gas and water plants are commonly fixed by contract between the municipality and the company, wherein is conceded to the company the right to lay its pipes and mains along the streets of the city, and supply gas or water for public or private uses within its boundaries. Sometimes this contract assumes to give to the company this right exclusive of all other companies. In some cases such a contract has been held void as constituting an unlawful monopoly; 11 but the Supreme Court of the United States in leading cases 12 has held such a contract between the municipality and the company to be valid, and within the protection of the contract clause of the federal Constitution. In such cases, of course, a subsequent concession to another company of a like right to build and operate within the mu

10 See, for example, How. Ann. St. Mich. § 3115.

11 CITY OF BRENHAM v. WATER CO., 67 Tex. 542, 4 S. W. 143; Norwich Gaslight Co. v. Gas Co., 25 Conn. 19. Cf. Citizens' Water Co. v. Hydraulic Co., 55 Conn. 1, 10 Atl. 170. Contra, Hurley Water Co. v. Vaughn, 115 Wis. 470, 91 N. W. 971.

12 NEW ORLEANS GASLIGHT CO. v. MANUFACTURING CO., 115 U. S. 650, 6 Sup. Ct. 252, 29 L. Ed. 516; New Orleans Water Works Co. v. Rivers, 115 U. S. 674, 6 Sup. Ct. 273, 29 L. Ed. 525

1

nicipal limits would be void; 13 but, since the municipality cannot barter away the sovereign duty and police power conferred upon it, the operations of the company under such contract are always subject to reasonable regulation by subsequent as well as antecedent municipal ordinances.11

Monopolistic Intent and Authority Must Appear.

No presumption will be indulged by courts in favor of a claim for a monopoly.15 Both the intention and the authority of the municipality to make a contract conceding the exclusive right to furnish gas to the citizens must plainly appear, or the claim will be denied.18 A contract giving a company the right to lay its mains in the streets and supply the citizens with gas or water for twenty years will not prevent the municipality from making a like concession to another water, gas, or electric light company, or constructing its own plant." It has

13 So held in gas case in last note, and in water case concession of right by city to private person to supply himself was declared void.

14 Boise City Artesian Hot & Cold Water Co. v. Boise City, 123 Fed. 232, 59 C. C. A. 236; NEW ORLEANS GASLIGHT CO. v. MANUFACTURING CO., supra; National Water Works Co. v. Kansas City, 28 Fed. 921; Stein v. Water Supply Co., 34 Fed. 145.

An act providing that a consumer shall be supplied with a gas meter supplied by the gas company without charge, to be inspected by officials designated for that purpose, is a valid police regulation. Buffalo v. Buffalo Gas Co., 81 App. Div. 505, 80 N. Y. Supp. 1093.

15 Parkersburg Gas Co. v. Parkersburg, 30 W. Va. 435, 4 S. E. 650; State v. Coke Co., 18 Ohio St. 262; City of Indianapolis v. Coke Co., 66 Ind. 396.

16 Cedar Rapids Water Co. v. Cedar Rapids, 117 Iowa, 250, 90 N. W. 746; People v. Bowen, 30 Barb. (N. Y.) 24; Saginaw Gaslight Co. v. Saginaw, 28 Fed. 529; City of Chicago v. Rumpff, 45 Ill. 90, 92 Am. Dec. 196; Tuckahoe Canal Co. v. Railroad Co., 11 Leigh (Va.) 42, 36 Am. Dec. 374; Davenport v. Kleinschmidt, 6 Mont. 502, 13 Pac. 249; Lehigh Valley R. Co. v. Newark, 44 N. J. Law, 323.

17 City of Helena v. Waterworks Co., 122 Fed. 1, 58 C. C. A. 381: Parkersburg Gas Co. v. Parkersburg, 30 W. Va. 435, 4 S. E. 650;

been held that water and gas companies may be compelled by the municipality to lower their pipes so as to adapt them to a change of street grade; 18 and to make such other changes in location as public convenience or safety require.10 Such corporations, being chartered to supply public utilities, and possessing public powers, may be required by municipal ordinance to supply every building on the streets on which their mains are laid, upon compliance by the applicant with the reasonable regulations of the company.20 And since every quasi public corporation must serve the public without discrimination, any private citizen would probably have this right, in the absence of any statute or ordinance requiring the services, though the right was denied in New Jersey in an old case.21

Skaneateles Water Works Co. v. Skaneateles, 184 U. S. 354, 22 Sup. Ct. 400, 46 L. Ed. 585; Joplin v. Light Co., 191 U. S. 150, 24 Sup. Ct. 43, 48 L. Ed. 127.

18 Ante, § 111; also City of Quincy v. Bull, 106 Ill. 337.

19 In re Deering, 93 N. Y. 361; National Water Works Co. v. Kansas City, 28 Fed. 921; Kiskiminetas Tp. v. Gas Co., 14 Pa. Super. Ct. 67.

20 Charleston Natural Gas Co. v. Lowe, 52 W. Va. 662, 44 S. E. 410; City of Mobile v. Supply Co., 130 Ala. 379, 30 South. 445; People v. Gaslight Co., 45 Barb. (N. Y.) 136; New Orleans Gaslight & Banking Co. v. Paulding, 12 Rob. (La.) 378; Lloyd v. Gas Light Co., 1 Mackey (D. C.) 331; Shepard v. Gas Light Co., 15 Wis. 318, 82 Am. Dec. 679; McCrary v. Beaudry, 67 Cal. 120, 7 Pac. 264; Williams v. Gas Co., 52 Mich. 499, 18 N. W. 236, 50 Am. Rep. 266.

But where a city determined that public welfare was subserved by removing water mains and fire hydrants from a place where there was no demand for fire protection, and but one consumer, he was held not entitled to an injunction to restrain the removal, even though his property was thereby rendered valueless. Asher v. Power Co., 66 Kan. 496, 71 Pac. 813, 61 L. R. A. 52.

21 Paterson Gaslight Co. v. Brady, 27 N. J. Law, 245, 72 Am. Dec. 360. See, also, cases in note 20.

REGULATION OF PRICES BY MUNICIPALITY-LIMITA

TIONS.

210. Unless estopped by valid contract or prevented by statute, a municipality may, in the appropriate exercise

of its powers, regulate rates and prices to consumers of gas and water by reasonable ordinances.

The municipality is always the largest customer of the company for light and water, and by contract may make promises to pay prices, to which it will be bound as would any contracting party for any other article of commerce; 22 and prices for private consumers may be thus fixed by municipal contract, so that they cannot be changed by ordinance; 23 but authority for the municipality to make such contracts must plainly appear. A maximum rate may be fixed by company charter or by statute.25 In the absence of such restriction, however, it is competent for the municipality to fix prices to be charged by the company supplying light or water,20 such regulation

22 Seibrecht v. New Orleans, 12 La. Ann. 496; CITY OF INDIANAPOLIS v. COKE CO., 66 Ind. 396; CITY OF VALPARAISO v. GARDNER, 97 Ind. 1, 49 Am. Rep. 416; Douglass v. Virginia City, 5 Nev. 147.

23 City of Tampa v. Waterworks Co. (Fla.) 34 South. 631; Logan Nat. Gas & Fuel Co. v. Chillicothe, 65 Ohio St. 186, 62 N. E. 122; Western Sav. Fund Soc. v. Philadelphia, 31 Pa. 185. See, also, cases in preceding note.

241 Dill. Mun. Corp. § 447; People v. Barnard, 110 N. Y. 552, 18 N. E. 354; Allegheny City v. Railway Co., 159 Pa. 411, 28 Atl. 202; State v. Coke Co., 18 Ohio St. 262.

25 Muncie Nat. Gas Co. v. Muncie, 160 Ind. 97, 66 N. E. 436, 60 L. R. A. 822; CITY OF KNOXVILLE v. WATER CO., 107 Tenn. 647, 64 S. W. 1075, 61 L. R. A. 888; Knoxville Water Co. v. Knoxville, 189 U. S. 434, 23 Sup. Ct. 531, 47 L. Ed. 887; Los Angeles City Water Co. v. Los Angeles, 88 Fed. 720; City of Danville v. Water Co., 178 Ill. 299, 53 N. E. 118, 69 Am. St. Rep. 304; Creston Waterworks Co. v. Creston, 101 Iowa, 687, 70 N. W. 739; San Diego Land & Town Co. v. National City, 74 Fed. 79.

26 State v. Coke Co., 18 Ohio St. 262; State v. Gaslight Co., 29 Wis. 454, 9 Am. Rep. 598; State v. Gas Co., 37 Ohio St. 45.

being a proper exercise of the police power. But the rate so fixed must not be less than the necessary cost of producing and supplying the utility, and thereby amount to a confiscation of the company's franchise.27 Nor, indeed, must it be so low as to deprive the company of the just compensation which it is entitled to demand for its service.28 The settled rule upon this subject is that the regulation of rates must be reasonable,29 having in view both the rights of the company and those of its customers; for confiscation and extortion are equally odious to the law.30

REASONABLE REGULATION OF RATES-BASIS OF. 211. A reasonable regulation of rates is one based upon the reasonable value of the company's property at the time it is being used for the public and the regulation enforced.

The power of public regulation of public utilities has been. the subject of much contention during the last quarter of a century. The doctrine was first conspicuously asserted and applied in the celebrated Warehouse Case, in 1877, by the Supreme Court of the United States. This case and the Granger Cases 32 seemed to concede absolute power of regulation to the legislature. Later cases, however, by the same

31

27 State v. Coke Co., supra; Cotting v. Stock Yards Co., 183 U. S. 79, 91, 22 Sup. Ct. 30, 46 L. Ed. 92.

28 San Diego Land & Town Co. v. Jasper, 189 U. S. 442, 23 Sup. Ct. 571, 47 L. Ed. 892.

29 People v. Gaslight Co., 45 Barb. (N. Y.) 136; Tacoma Hotel Co. v. Water Co., 3 Wash. St. 316, 28 Pac. 516, 14 L. R. A. 669, 28 Am. St. Rep. 35; Stone v. Trust Co., 116 U. S. 307, 6 Sup. Ct. 334, 388, 29 L. Ed. 636; SMYTH v. AMES, 169 U. S. 466, 523, 18 Sup. Ct. 418, 42 L. Ed. 819; SAN DIEGO LAND & TOWN CO. v. NATIONAL CITY, 174 U. S. 739–757, 758, 19 Sup. Ct. 804, 43 L. Ed. 1154.

30 CHICAGO, M. & ST. P. R. CO. v. MINNESOTA, 134 U. S. 459, 10 Sup. Ct. 462, 33 L. Ed. 970.

31 MUNN v. ILLINOIS, 94 U. S. 113, 24 L. Ed. 77.

82 CHICAGO, B. & Q. R. Co. v. IOWA, 94 U. S. 155, 24 L. Ed. 94; Peik v. Railroad Co., 94 U. S. 164, 24 L. Ed. 97.