The drainage of a city in the interest in the public health and
welfare is one of the most important purposes for which the police
power can be exercised.
Every reason of public policy requires that grants in the
subsurface of streets shall be held subject to such reasonable
regulation as the public health and safety may require.
Uncompensated obedience to a regulation enacted for the public
safety under the police power of the state is not a taking of
property without due compensation.
Under the facts of this case, the changing of the location of
gas pipes at the expense of the gas company to accommodate a system
of drainage which has been upheld by the state court as an
execution of the police power of the state does not amount to a
deprivation of property without due process of law.
The New Orleans Gas Light & Banking Company was incorporated
in 1835, and was given the exclusive privilege of vending gas in
the City of New Orleans and its faubourgs and the City of La
Fayette to such persons or bodies corporate as might voluntarily
choose to contract for the same, and it
Page 197 U. S. 454
was permitted to lay pipes and conduits at its own expense in
the public ways and streets of New Orleans, having due regard for
the public convenience. In 1845 and 1854, the charter of the
company as to its right to engage in banking was withdrawn, and the
right to vend gas and use the streets was continued to the
corporation under the name of the New Orleans Gas Light company
until April 1, 1875, when its corporate privileges should end, the
company during the continuance of its charter to furnish the
Charity Hospital with necessary gas and fixtures free of charge. By
amendments, the contract privilege of the company was extended
until April 1, 1895, the exclusive privileges granted by the
original charter not to extend beyond the time fixed in the act of
incorporation. In 1870, another company, under the name of the
Crescent City Gas Light Company, was incorporated, its charter
providing that the company, its successors, and assigns, should,
for fifty years from the expiration of the charter of the New
Orleans Gas Light Company, have the sole and exclusive privilege of
making and supplying gaslight in the City of New Orleans, and for
that purpose be allowed to lay pipes and conduits in the streets
and alleys of the city where the same may be required at its own
expense, in such manner as to least inconvenience the city and its
inhabitants, and the company was also required to afterwards
repair, with the least possible delay, the streets it had broken.
In 1873, an act of the legislature fixed the date of the expiration
of the exclusive franchise of the New Orleans Gas Light Company at
April, 1875, and the franchise of the Crescent City Gas Light
Company was confirmed from that date for the period of fifty years.
On March 29, 1875, the New Orleans Gas Light Company and the
Crescent City Gas Light Company were consolidated under the name of
the former corporation. This company is the plaintiff in the action
in the state court. By an act of the legislature approved July 9,
1896, the state created a board known as the Drainage Commission of
New Orleans, which board was given the power to control and execute
a plan for the drainage of the
Page 197 U. S. 455
City of New Orleans, and also the power to appropriate property
according to the laws of the state, by legal proceedings, for the
purpose of constructing a drainage system. After adopting a system
of drainage and proceeding with the construction thereof according
to the plans, it was found necessary to change the location in some
places in the streets of the city of the mains and pipes
theretofore laid by the New Orleans Gas Light Company. The
testimony shows that there was nothing to indicate that these
changes were made in other than cases of necessity and with as
little interference as possible with the property of the gas
company. By stipulation between the parties, it was agreed that the
charges should be paid by the gas company when it became necessary
to accede to the demands of the drainage commission, the gas
company should keep an account thereof, and that its right to
recover for the amount expended by it should not be prejudiced by
the arrangement made, but should be submitted to the courts for
final adjudication. This action was brought to recover the cost of
the changes so made. In the court of original jurisdiction, there
was a judgment in favor of the drainage commission. Upon appeal,
the Supreme Court of Louisiana reversed this judgment. Upon
rehearing, the latter judgment was reversed, and a final decree
rendered affirming the judgment of the lower court rejecting the
claim of the gas company. 111 La. 838. A writ of error to this
Court brings into review that judgment, the contention being that
the judgment of the state court has impaired the contract rights of
the gas company, and has the effect to take its property without
compensation in derogation of rights secured by the Constitution
and the Fourteenth Amendment.
Page 197 U. S. 458
MR. JUSTICE DAY delivered the opinion of the Court.
In the case of the
New Orleans Gas Light Co. v. Louisiana
Light Company, 115 U. S. 650, it
was held that the complainant, by reason of the franchises granted
and agreements made, as fully set forth in that case, had acquired
the exclusive right to supply gas to the City of New Orleans and
its inhabitants through pipes and mains laid in the streets.
It is the contention of the plaintiff in error that, having
acquired the franchise and availed itself of the right to locate
its pipes under the streets of the city, it has thereby acquired a
property right which cannot be taken from it by a shifting of some
of its mains and pipes from their location to accommodate the
drainage system, without compensation for the cost of such changes.
It is not contended that the gas company has acquired such a
property right as will prevent the drainage commission, in the
exercise of the police power granted to it by the state, from
removing the pipes so as to make room for its work, but it is
insisted that this can only be done upon terms of compensation for
the cost of removal. This contention requires an examination of the
extent and nature of the rights conferred in the grant to the gas
company. The exclusive privilege which was sustained by this Court
in the case
Page 197 U. S. 459
of
New Orleans Gas Co. v. Louisiana Light Co., supra,
was the right to supply the city and its inhabitants with gas for
the term granted. There was nothing in the grant of the privilege
which gave the company the right to any particular location in the
streets; it had the right to use the streets, or such of them as it
might require in the prosecution of its business, but, in the
original grant to the New Orleans Gas Light & Banking Company,
the pipes were to be laid in the public ways and streets "having
due regard to the public convenience." And in the grant to the
Crescent City Gas Light Company, the pipes were to be "laid in such
manner as to produce the least inconvenience to the city or its
inhabitants." In the very terms of the grant, there is a
recognition that the use of the streets by the gas company was to
be in such manner as to least inconvenience the city in such use
thereof. Except that the privilege was conferred to use the streets
in laying the pipes in some places thereunder, there was nothing in
the terms of the grant to indicate the intention of the state to
give up its control of the public streets -- certainly not so far
as such power might be required by proper regulations to control
their use for legitimate purposes connected with the public health
and safety. In the case above cited, in which the exclusive right
to supply gas was sustained, there was a distinct recognition that
the privilege granted was subject to proper regulations in the
interest of the public health, morals, and safety. Upon this
subject MR. JUSTICE HARLAN, speaking for the Court, said (115 U.S.
115 U. S.
671):
"With reference to the contract in this case, it may be said
that it is not in any legal sense to the prejudice of the public
health or the public safety. It is nonetheless a contract because
the manufacture and distribution of gas, when not subjected to
proper supervision, may possibly work injury to the public, for the
grant of exclusive privileges to the plaintiff does not restrict
the power of the state, or of the municipal government of New
Orleans acting under authority for that purpose, to establish and
enforce regulations which are not
Page 197 U. S. 460
inconsistent with the essential rights granted by plaintiff's
charter, which may be necessary for the protection of the public
against injury, whether arising from the want of due care in the
conduct of its business or from an improper use of the streets in
laying gas pipes, or from the failure of the grantee to furnish gas
of the required quality and amount. The constitutional prohibition
upon state laws impairing the obligation of contracts does not
restrict the power of the state to protect the public health, the
public morals, or the public safety as the one or the other may be
involved in the execution of such contracts. Rights and privileges
arising from contracts with a state are subject to regulations for
the protection of the public health, the public morals, and the
public safety in the same sense and to the same extent as are all
contracts and all property, whether owned by natural persons or
corporations."
The drainage of a city in the interest of the public health and
welfare is one of the most important purposes for which the police
power can be exercised. The drainage commission, in carrying out
this important work, it has been held by the supreme court of the
state, is engaged in the execution of the police power of the
state.
State v. Flower, 49 La.Ann. 1199, 1203.
It is admitted that, in the exercise of this power, there has
been no more interference with the property of the gas company than
has been necessary to the carrying out of the drainage plan. There
is no showing that the value of the property of the gas company has
been depreciated, nor that it has suffered any deprivation further
than the expense which was rendered necessary by the changing of
the location of the pipes to accommodate the work of the drainage
commission. The police power, insofar as its exercise is essential
to the health of the community, it has been held, cannot be
contracted away.
N.Y. & N.E. R. Co. v. Bristol,
151 U. S. 556,
151 U. S. 567;
Butchers' Union Co. v. Crescent City Co., 111 U.
S. 746,
111 U. S. 751;
Stone v. Mississippi, 101 U. S. 814,
101 U. S. 816.
In a large city
Page 197 U. S. 461
like New Orleans, situated as it is, and the
entrepot
of an extensive commerce coming from many foreign countries, it is
of the highest importance that the public health shall be
safeguarded by all proper means. It would be unreasonable to
suppose that, in the grant to the gas company of the right to use
the streets in the laying of its pipes, it was ever intended to
surrender or impair the public right to discharge the duty of
conserving the public health. The gas company did not acquire any
specific location in the streets; it was content with the general
right to use them, and when it located its pipes, it was at the
risk that they might be at some future time disturbed when the
state might require for a necessary public use that changes in
location be made.
This right of control seems to be conceded by the learned
counsel for the plaintiff in error insofar as it relates to the
right to regulate the use of the surface of the streets, and it is
recognized that the users of such surface may be required to adapt
themselves to regulations made in the exercise of the police power.
We see no reason why the same principle should not apply to the
subsurface of the streets, which, no less than the surface, is
primarily under public control. The need of occupation of the soil
beneath the streets in cities is constantly increasing for the
supply of water and light and the construction of systems of
sewerage and drainage, and every reason of public policy requires
that grants of rights in such subsurface shall be held subject to
such reasonable regulation as the public health and safety may
require. There is nothing in the grant to the gas company, even if
it could legally be done, undertaking to limit the right of the
state to establish a system of drainage in the streets. We think
whatever right the gas company acquired was subject, insofar as the
location of its pipes was concerned, to such future regulations as
might be required in the interest of the public health and welfare.
These views are amply sustained by the authorities.
National
Water Works Co. v. Kansas, 28 F. 921, in which the opinion was
delivered by MR. JUSTICE BREWER,
Page 197 U. S. 462
then circuit judge;
Columbus Gas Light & Coke Co. v.
Columbus, 50 Ohio St. 65;
Jamaica Pond Aqueduct Corp. v.
Brookline, 121 Mass. 5;
In re Deering, 93 N.Y. 361;
Chicago, Burlington &c. R. Co. v. Chicago,
166 U. S. 226,
166 U. S. 254.
In the latter case, it was held that uncompensated obedience to a
regulation enacted for the public safety under the police power of
the state was not taking property without due compensation. In our
view, that is all there is to this case. The gas company, by its
grant from the city, acquired no exclusive right to the location of
its pipes in the streets, as chosen by it, under a general grant of
authority to use the streets. The city made no contract that the
gas company should not be disturbed in the location chosen. In the
exercise of the police power of the state for a purpose highly
necessary in the promotion of the public health, it has become
necessary to change the location of the pipes of the gas company so
as to accommodate them to the new public work. In complying with
this requirement at its own expense, none of the property of the
gas company has been taken, and the injury sustained is
damnum
absque injuria.
We find no error in the judgment of the Supreme Court of
Louisiana, and the same is
Affirmed.
