When, prior to the granting of a charter to a public service
corporation, it has been clearly settled both by statute law and
decisions that such a corporation must perform certain duties, the
compelling of such performance does not amount to an impairment of
the charter contract, nor does it deprive the corporation of its
property without due process of law.
Although a public service corporation may not under its charter
be required to extend its facilities in certain quarters, if it
does so voluntarily, it must render the service for which it
obtained its charter to those within reach of its facilities
without distinction of persons.
A judgment of the state court of Idaho compelling a water
company to furnish connection at its own expense to one residing on
an ungraded street in which it had voluntarily laid its mains,
although not required so to do by its charter,
held not to
have impaired the charter contract of the water company or to have
deprived it of its property without due process of law, it
appearing that, under decisions of the highest court of the state
made prior to the charter, the cost of connection was to be borne
by the water company.
17 Idaho 204 affirmed.
The facts, which involve the construction of the charter of a
public service corporation in Idaho and its rights and obligations
thereunder, are stated in the opinion.
Page 224 U. S. 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. 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
Page 224 U. S. 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 Fourteenth 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.
Page 224 U. S. 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 Fourteenth 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
Page 224 U. S. 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."
Affirmed.
* In
Pocatello Water Co. v. Standley (1900), 7 Idaho
155, considering obligations of a water supply company and
construing § 2712 of 1887 Revised Statutes of Idaho substantially
reenacted 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."