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CONSUMERS' CO v. HATCH , 224 U.S. 148 (1912)

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United States Supreme Court


No. 184

Argued: Decided: April 01, 1912

Messrs. Myron A. Folsom, Edward S. Elder, and Robert H. Elder for plaintiff in error.

Messrs. Eugene V. Boughton and Frank W. Reed for defendant in error. [224 U.S. 148, 149]  

Mr. Chief Justice White delivered the opinion of the court:

Omitting reference to matters not pertinent to the alleged Federal questions relied upon, the facts are these: Although it was optional with it to do so, the plaintiff in error, a water supply corporation, operating under a franchise granted in 1903, laid a water main in Third street, an ungraded street within the corporate limits of the then village-now city- of Coeur d'Alene, Idaho. While the company was supplying residents on the street with water for domestic use, upon payment of the regular monthly rates established by the water commission provided for by the statutes of Idaho, Albert L. Hatch, defendant in error, erected a dwelling upon a lot situated on the street, and laid a water pipe to the curb in front of his property. He them applied to the water company to connect the pipe at the curb line with its service main, so that a regular supply of water might be obtained. The water company, however, declined to make the desired connection because of the refusal to Hatch to pay, as required by the regulations of the company, $8.50, the cost of making the connection, or to comply with alternative regulations adopted for the purpose of enabling the water company to recover such cost. This action in mandamus was then commenced in the supreme court of Idaho, and culminated in a judgment in substance finding the regulations requiring a consumer to pay for service connections unreasonable, and ordering the water company to make the connection at its own cost, and to supply water to the premises of Hatch upon payment of the established monthly rate. 17 Idaho, 204, -- L.R.A.(N.S .) --, 104 Pac. 670. This writ of error was then prosecuted upon the assumption that rights of the water company, protected by the Constitution of the United States, had been wrongfully invaded.

The grounds for the claim in question are in substance [224 U.S. 148, 150]   that, as the water company was not required by its charter in express terms to make a service connection, and the benefits of such connection would inure solely to the house owner, to compel the water company to bear the cost of the connection would amount to a confiscation of its property, in violation of the due-process clause of the 14th Amendment, and also would be to impair the obligation of its contract. A further claim of impairment of contract is based upon the contention that, as it was optional with the water company, under its franchise, to lay mains in ungraded streets, there was no duty to supply water from a main voluntarily placed in an ungraded street.

The contentions are devoid of merit. The charter of the company was construed by the court below in connection with the statutes in force at the time of the grant of the franchise, in the light of the construction given to those statutes in decisions made prior to such grant. We excerpt in the margin a passage from the opinion in one of those cases.

In Pocatello Water Co. v. Standley (1900) 7 Idaho, 155, 61 PAc. 518, considering obligations of a water supply company, and construing 2712 of 1887 Revised Statutes of Idaho, substantially re-enacted in Revised Code of Idaho 1910, as 2840, the supreme court of Idaho said:

    'Under the said franchise the respondent has been granted the right to lay its mains and pipes 'over, along, and under' the streets, alleys, and highways of said city, for the purpose of supplying said city and its inhabitants with a sufficiency of pure water. It had the authority to lay all of the mains and pipes in said streets and alleys necessary to accomplish the purposes for which said franchise was granted. It is obliged to lay its mains and pipes in said streets and alleys, and deliver water to the consumers at its franchise limits, and to the line of the premises of the consumer, if such premises border on said franchise limits. The respondent has been granted a valuable right,-that of laying its mains and laterals in the streets and alleys of the city,-in consideration that it will furnish water to said city and its inhabitants. The company is under obligation to lay its pipes in the streets and alleys so as to make the water accessible to the citizen for his private use. It is given the right, within its franchise limits, to lay all pipes and make all connections with its mains and laterals. . . . Neither has the citizen any right to enter within the franchise limits of the company and in any manner interfere with its mains and pipes.' [224 U.S. 148, 151]   By thus interpreting the charter by applying the settled meaning of the statutes which had been announced at the time the charter was granted to the water company, the court held that it was the duty of the company, under its charter, to make the service connections for Hatch at its own cost. This was based upon the view that, as it was clearly settled by both the statute law and decisions at the time the charter was granted that it was the duty of the water company to make service connections, and its further duty being to supply water to consumers, by necessary implication the charter imposed the obligation to pay the cost of the service connection which it was incumbent upon the company to make.

That the construction thus placed upon the charter by the court below, in the light of the state of the law at the time of its adoption, did not amount to an impairment of the obligations of the charter by subsequent legislation, is, we think, too clear for anything but statement. That the mere fact of holding that an obligation would be implied to pay for the doing of work to enable the corporation to perform a duty, when the duty to do such work was clearly the result of the state law and decisions thereon at the time the charter was granted, did not amount to confiscation, and the consequent taking of the property of the corporation without due process of law, in violation of the 14th Amendment, is also, we think, so obvious as not to necessitate further consideration of the proposition.

As respects the claim based upon the clause of the charter which provided that the water company should not be 'required' to extend its distributing system in any ungraded street or alley within the then village (now city) of Coeur d'Alene, even if it were possible to indulge in [224 U.S. 148, 152]   the hypothesis that there was subsequent legislation, we think there is nothing supporting the claim of impairment of contract, because the supreme court of Idaho was clearly right in deciding that no contract provision was impaired, since the water company had voluntarily laid its main in the ungraded street in question, and was supplying water from such main to residents on the street, and its duty was to supply water 'without distinction of persons.'


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