1. A state has power, and it is its duty, to control and
conserve its water resources for the benefit of all its
inhabitants. P. 262 U. S.
2. Diversion of waters from the sources of supply for this use
is a legitimate function of the state, which may be left to private
enterprise subject to state regulation, or be performed directly,
or be delegated either to bodies politic created for the purpose or
to the state's municipalities. P. 262 U. S.
3. In the absence of state constitutional provisions
safeguarding it to them, municipalities have no inherent right of
self-government which is beyond the legislative control of the
state, but are merely departments of the state, with powers and
privileges such as the state has seen fit to grant, held and
exercised subject to its sovereign will. P. 262 U. S.
4. The power of a state over the rights and properties of cities
held and used for "governmental purposes" is unrestrained by the
Contract Clause, or the Fourteenth Amendment, of the federal
Constitution. P. 262 U. S.
5. The distinction between a municipality as an agent of the
state for governmental purposes, and as an organization to care for
local needs in a private or proprietary capacity, affords no ground
for the application of those constitutional restraints against a
state in favor of its own municipality. P. 262 U. S.
6. The City of Trenton, as successor to a grant made by New
Jersey to a private corporation, claimed a perpetual right,
unburdened by license fee or other charge, to divert all the water
that might be required for the use of the city or its inhabitants
from the Delaware River, and resisted a charge, imposed under c.
252, Laws N.J. 1907, for water diverted beyond the amount being
legally diverted when the act was passed and in excess of a per
capita maximum prescribed by the act. Held
that the city
could not invoke the Contract Clause or the Fourteenth Amendment,
even assuming that the private corporation might have done so if
its rights had not passed to the city, and that, in view of
previous decisions, the city's contention to the contrary did not
present a substantial federal question. Pp. 262 U. S. 185
262 U. S. 192
Writ of error to review 117 A. 158 dismissed.
Page 262 U. S. 183
Error to a judgment of the Supreme Court of New Jersey, affirmed
by the Court of Errors and Appeal, in favor of the state in its
action to recover license fees from the City of Trenton for water
diverted from the Delaware River.
MR. JUSTICE BUTLER delivered the opinion of the Court.
The State of New Jersey recovered judgment against the City of
Trenton for $14,310 in an action brought in the state supreme
court. The judgment was affirmed by the Court of Errors and
Appeals, and is here on writ of error.
The state's right to recover depends upon the validity of an act
of the legislature (c. 252, Laws of 1907). The city asserts that
this act offends against the contract clause of the Constitution of
the United States, and that it takes property owned by the city in
its private or proprietary capacity for public use without just
compensation and without due process of law, in violation of the
Fourteenth Amendment. The act provides that:
"Every municipality, corporation, or private person now
diverting the waters of streams or lakes with outlets for the
purpose of a public water supply shall make annual payments on the
first day of May to the State Treasurer for all such water
hereafter diverted in excess of the amount now being legally
diverted: provided, however,
no payment shall be required
until such legal diversion shall exceed a total amount equal to one
Page 262 U. S. 184
(100) gallons daily per capita for each inhabitant of the
municipality or municipalities supplied, as shown by the census of
one thousand nine hundred and five."
The city claims the right to take from the Delaware River all
the water that it requires, without limitation as to quantity and
without license fee for any part thereof, and that such right was
acquired by the president and directors of the Trenton Waterworks
(hereinafter called the water company) by grant direct from the
state March 24, 1852, and that the city acquired this right by
purchase from the water company. Briefly, the basis of the city's
claim is as follows: by an act of February 29, 1804, the president
and directors of the Trenton Waterworks were created a body politic
and corporate. They and their successors and assigns were made
capable of disposing of water to such as might apply for the same
for such annual rent and under such restrictions as they might
think proper, and they were authorized to lay and extend their
water mains through the streets of the city. Certain springs
constituted the company's source of supply, and, by reason of
increase of population, ceased to be adequate. March 24, 1852, a
supplement to the above-mentioned act was passed by which the
company was authorized to take the water required either in whole
or in part from the Delaware River. Later, March 2, 1855, an act
was passed, authorizing the city to purchase the whole or a
majority of the shares of the capital stock of the water company,
and the city purchased all of the stock. Thereafter, an act of
March 1, 1859, required the company to convey unto "the inhabitants
of the city of Trenton" all the real estate, works, and property
and all the corporate powers, franchises, and privileges of the
company, and this conveyance was duly made.
If the provision of the Act of 1907 imposing the license fee is
valid as against the city, the judgment is right.
Page 262 U. S. 185
The Court of Errors and Appeals held that it was valid, that the
state, under its police power, might impose a license fee as
specified in the act, and that this does not deprive the city of
any contractual or property right.
The state undoubtedly has power, and it is its duty, to control
and conserve the use of its water resources for the benefit of all
its inhabitants, and the Act of 1907 was passed pursuant to the
policy of the state to prevent waste and to economize its water
resources. Decision of the Court of Errors and Appeals in this
case, 117 A. 158; McCarter v. Hudson Water Co.,
695, 701, 702, affirmed by this Court in 209 U. S. 209
U.S. 349, 209 U. S. 355
Collingswood v. Water-Supply Commission,
84 N.J.Law 104,
110; Cobb v. Davenport,
32 N.J.Law 369, 378. The only way
the city could acquire the right to take the water of the Delaware
River was by grant from the state or by authorized purchase or
condemnation from one to whom the right had been granted by the
state. State v. Jersey City,
94 N.J.Law 431, 433. The
power to determine the conditions upon which waters may be so
diverted is a legislative function. The state may grant or withhold
the privilege as it sees fit. Assuming, in favor of the city, that
its grantor received a perpetual right, unburdened by license fee
or other charge, to divert all the water required for the use of
the city and its inhabitants, does it follow that the state, as
against the city, is bound by contract, and is without power to
impose a license fee as provided in the act?
The relations existing between the state and the water company
were not the same as those between the state and the city. The
company was organized and carried on its business for pecuniary
profit. Its rights and property were privately owned, and therefore
safeguarded by the constitutional provisions here sought to be
invoked by the city against the legislation of the state. The city
is a political subdivision of the state, created as a
Page 262 U. S. 186
agency for the exercise of such of the governmental powers of
the state as may be intrusted to it. The diversion of waters from
the sources of supply for the use of the inhabitants of the state
is a proper and legitimate function of the state. This function may
be left to private enterprise, subject to regulation by the state;
it may be performed directly; or it may be delegated to bodies
politic created for that purpose, or to the municipalities of the
state. Power to own, maintain, and operate public utilities, such
as waterworks, gas and electric plants, street railway systems,
public markets, and the like is frequently conferred by the states
upon their cities and other political subdivisions. For the purpose
of carrying on such activities, they are given power to hold and
manage personal and real property.
As said by this Court, speaking through Mr. Justice Moody, in
Hunter v. Pittsburgh, 207 U. S. 161
207 U. S.
"The number, nature, and duration of the powers conferred upon
these corporations and the territory over which they shall be
exercised rests in the absolute discretion of the state. Neither
their charters nor any law conferring governmental powers or
vesting in them property to be used for governmental purposes, or
authorizing them to hold or manage such property, or exempting them
from taxation upon it constitutes a contract with the state within
the meaning of the federal Constitution. The state therefore, at
its pleasure, may modify or withdraw all such powers, may take
without compensation such property, hold it itself, or vest it in
other agencies, expand or contract the territorial area, unite the
whole or a part of it with another municipality, repeal the
charter, and destroy the corporation. All this may be done,
conditionally or unconditionally, with or without the consent of
the citizens, or even against their protest. In all these respects,
the state is supreme, and its legislative body, conforming its
action to the state constitution,
Page 262 U. S. 187
may do as it will, unrestrained by any provision of the
Constitution of the United States. . . . The power is in the state,
and those who legislate for the state are alone responsible for any
unjust or oppressive exercise of it."
In New Jersey, it has been held that, within the limits
prescribed by the state constitution, the legislature may delegate
to municipalities such portion of political power as they may deem
expedient, withholding other powers, and may withdraw any part of
that which has been delegated. Van Cleve v. Passaic Valley
71 N.J.Law 183, 198.
In the absence of state constitutional provisions safeguarding
it to them, municipalities have no inherent right of
self-government which is beyond the legislative control of the
state. [Footnote 1
municipality is merely a department of the state, and the state may
withhold, grant, or withdraw powers and privileges as it sees fit.
However great or small its sphere of action, it remains the
creature of the stat,e exercising and holding powers and privileges
subject to the sovereign will. See Barnes v. District of
Columbia, 91 U. S. 540
91 U. S.
In Mt. Pleasant v. Beckwith, 100 U.
, 100 U. S.
-525, it was held that, where a municipal corporation
is legislated out of existence and its territory annexed to other
corporations, the latter, unless the legislature otherwise
provides, becomes entitled to all its property and immunities. In
the opinion, it is said (pp. 100 U. S.
"Institutions of the kind, whether called cities, towns, or
counties, are the auxiliaries of the state in the important
business of municipal rule, but they cannot have the least
pretension to sustain their privileges or their existence upon
anything like a contract between themselves and the legislature of
the state, because there is
Page 262 U. S. 188
not and cannot be any reciprocity of stipulation between the
parties, and for the further reason that their objects and duties
are utterly incompatible with everything partaking of the nature of
The power of the state, unrestrained by the contract clause or
the Fourteenth Amendment, over the rights and property of cities
held and used for "governmental purposes" cannot be questioned. In
Hunter v. Pittsburgh, 207 U. S. 179
reference is made to the distinction between property owned by
municipal corporations in their public and governmental capacity
and that owned by them in their private or proprietary capacity,
and decisions of this Court which mention that distinction are
referred to. [Footnote 2
none of these cases was any power, right, or property of a city or
other political subdivision held to be protected by the Contract
Clause or the Fourteenth Amendment. This Court has never held that
these subdivisions may invoke such restraints upon the power of the
state. [Footnote 3
In East Hartford v. Hartford
10 How. 511, 51 U. S.
-536, it appeared that, for many years, a franchise
to operate a ferry over the Connecticut River belonged to the Town
of Hartford, that, upon the incorporation of
Page 262 U. S. 189
East Hartford, the legislature granted to it one-half of the
ferry during the pleasure of the General Assembly, and that,
subsequently, after the building of a bridge across the river, the
legislature discontinued the ferry. It was held that this was not
inconsistent with the contract clause of the federal Constitution.
The reasons given in the opinion (pp. 51 U. S.
-534) support the contention of the state here made
that the city cannot possess a contract with the state which may
not be changed or regulated by state legislation.
In Worcester v. Street Railway Co., 196 U.
, 196 U. S. 548
it was held that the obligation of the street railway company to
the city to pave and repair streets occupied by it, based on
accepted conditions of a municipal ordinance granting right of
location, is not private property beyond the legislative control of
the state, and that state legislation taxing the company, and
thereby relieving it from its obligation to the city to pave and
repair such streets, was not void as violating the contract clause
of the federal Constitution. In the opinion, it is said (pp.
196 U. S.
"The question then arising is whether the legislature, in the
exercise of its general legislative power, could abrogate the
provisions of the contract between the city and the railroad
company with the assent of the latter, and provide another and a
different method for the paving and repairing of the streets
through which the tracks of the railroad company were laid under
the permit of their extended location. We have no doubt that the
legislature of the commonwealth had that power. A municipal
corporation is simply a political subdivision of the state, and
exists by virtue of the exercise of the power of the state through
its legislative department. The legislature could at any time
terminate the existence of the corporation itself, and provide
other and different means for the government of the district
comprised within the limits of
Page 262 U. S. 190
the former city. The city is the creature of the state,"
citing East Hartford v. Hartford
10 How. 511, 51 U. S.
-534; United States v. Railroad
17 Wall. 322, 84 U. S. 329
New Orleans v. Clark, 95 U. S. 644
95 U. S. 654
Commissioners of Laramie County v. Commissioners of Albany
County, 92 U. S. 307
Commissioners v. Lucas, 93 U. S. 108
93 U. S.
In Pawhuska v. Pawhuska Oil Co., 250 U.
, 250 U. S. 399
it was held that a legislative grant to a city of the power to
regulate rates to be charged to the city and its inhabitants by a
gas company might be withdrawn by the state from the city and
conferred upon a commission, and that thereby no question was
presented under the contract clause of the federal Constitution. In
the opinion, after a statement of the issue, it is said (pp.
250 U. S.
"Thus, the whole controversy is as to which of two existing
agencies or arms of the state government is authorized for the time
being to exercise in the public interest a particular power,
obviously governmental, subject to which the franchise confessedly
was granted. In this no question under the contract clause of the
Constitution of the United States is involved, but only a question
of local law, the decision of which by the supreme court of the
state is final. . . . In New Orleans v. New Orleans Waterworks
Co., 142 U. S. 79
, where a city,
relying on the contract clause, sought a review by this Court of a
judgment of a state court sustaining a statute so modifying the
franchise of a waterworks company as to require the city to pay for
water used for municipal purposes, to which it theretofore was
entitled without charge, the writ of error was dismissed on the
ground that no question of impairment within the meaning of the
contract clause was involved. [Footnote 4
Page 262 U. S. 191
The distinction between the municipality as an agent of the
state for governmental purposes and as an organization to care for
local needs in a private or proprietary capacity has been applied
in various branches of the law of municipal corporations. The most
numerous illustrations are found in cases involving the question of
liability for negligent acts or omissions of its officers and
agents. See Harris v. District of Columbia, 256 U.
, and cases cited. It has been held that
municipalities are not liable for such acts and omissions in the
exercise of the police power, or in the performance of such
municipal faculties as the erection and maintenance of a city hall
and courthouse, the protection of the city's inhabitants against
disease and unsanitary conditions, the care of the sick, the
operation of fire departments, the inspection of steam boilers, the
promotion of education, and the administration of public charities.
On the other and, they have been held liable when such acts or
omissions occur in the exercise of the power to build and maintain
bridges, streets and highways, and waterworks, construct sewers,
collect refuse and care for the dump where it is deposited.
] Recovery is denied
where the act or omission occurs in the exercise of what are deemed
to be governmental powers, and is permitted if it occurs in a
proprietary capacity. The basis of the distinction is difficult to
state, and there
Page 262 U. S. 192
is no established rule for the determination of what belongs to
the one or the other class. It originated with the courts.
Generally it is applied to escape difficulties, in order that
injustice may not result from the recognition of technical defenses
based upon the governmental character of such corporations.
] But such
distinction furnishes no ground for the application of
constitutional restraints here sought to be invoked by the City of
Trenton against the State of New Jersey. They do not apply as
against the state in favor of its own municipalities. We hold that
the city cannot invoke these provisions of the federal Constitution
against the imposition of the license fee or charge for diversion
of water specified in the state law here in question. In view of
former opinions of this Court, no substantial federal question is
presented. Pawhuska v. Pawhuska Oil Co., supra,
cited. [Footnote 7
The writ of error is dismissed.
1 Dillon, Municipal Corporations (5th ed.) § 98, p.
154, et seq.
Commissioners v. Lucas, 93 U. S.
, 93 U. S. 115
Meriwether v. Garrett, 102 U. S. 472
102 U. S. 518
102 U. S. 530
Essex Board v. Skinkle, 140 U. S. 334
140 U. S. 342
New Orleans v. Water Works Co., 142 U. S.
, 142 U. S. 91
Covington v. Kentucky, 173 U. S. 231
173 U. S. 240
Worcester v. Street Railway Co., 196 U.
, 196 U. S. 551
Monterey v. Jacks, 203 U. S. 360
Some state cases holding that the state legislature is not
restrained by federal constitutional provisions: City of St.
Louis v. Sheelds,
52 Mo. 351, 354; Police Jury of Bossier
v. Corporation of Shreveport,
5 La.Ann. 661, 665; Trustees
of Schools v. Tatman,
13 Ill. 27; Board of Education v.
56 Miss. 518; Darlington v. City. of New
31 N.Y. 164, 193. See contra: Town of Milwaukee v.
City of Milwaukee,
12 Wis. 93, 109; Grogan v. City of San
18 Cal. 590, 612-613; Mt. Hope Cemetery v.
158 Mass. 509, 519; Spaulding v. Andover,
N.H. 38, 56; Ellerman v. McMains,
Cf. Williams v. Eggleston, 170 U.
, 170 U. S. 310
Mason v. Missouri, 179 U. S. 328
179 U. S. 335
See City of Winona v. Botzet,
169 F. 321, 332 et
and cases cited. See also Brantman v. City of
119 Minn. 396 (recovery permitted for gas explosion
where city furnished gas to inhabitants); Pettengill v. City of
116 N.Y. 558, 565 (recovery permitted for injury
sustained by excavation in street to lay mains); Watson v.
161 Mass. 404, 411 (damages recovered for breach of
contract by water commissioners to furnish water for plaintiff's
boiler, resulting in injury to vegetables in greenhouse heated
thereby); Brown v. Salt Lake City,
33 Utah, 222, 234 (city
held liable for death by drowning in conduit forming a part of city
waterworks system). These cases and others that might be cited
serve in general to illustrate the course of decision.
1 Dillon, Municipal Corporations (5th ed.) § 110,
decisions per curiam: City of Chicago v.
250 U.S. 651; Michigan ex rel. Groesbeck v.
Detroit United Railway,
257 U.S. 610; City of Chicago v.
Chicago Railways Company,
257 U.S. 617; Township of Avon
v. Detroit United Railway,
257 U.S. 618; Borough of
Edgewood v. Wilkinsburg & East Pittsburgh Street Railway
258 U.S. 605; City of Sapulpa v. Oklahoma Natural Gas
258 U.S. 608.