Freeport Water Co. v. Freeport City

It is not clear from, the opinion of the court whether it intended to decide that municipal corporations could' not be invested with the powér to bind themselves by an irrevocable contract not to regulate water rates. If so, we cannot concur in that view. We have decided to the contrary many times,, and very lately in Los Angeles v. Los Angeles City Water Co., 1900, 177 U. S. 558 . See also Walla Walla v. Walla Walla Water Co., 172 U. S. 1 , 7, where the subject is more extensively discussed and the cases reviewed. See also New Orleans Water Works Co. v. Rivers, 115 U. S. 674 .

We do not mean-to sáy that if it was the declared policy óf the State that the power of alienation of a governmental function did not exist, a subsequently asserted contract would not be controlled by such policy. In Stevenson v. School Directors, 87 Illinois, 225, 255, and in Davis v. School Directors, 92 Illinois, 298, it was held that a school boat'd could not make a contract for the employment of teachers to extend beyond the current year and this was put upon the ground of the inability of one board to control the exercise of the functions of its successor. In East St. Louis v. East St. Louis Cas Light & Coke Co., 98 Illinois, 415, decided in May, 1881, the doctrine of those

The Supreme Court did decide in the Danville case (l).that the water company having been incorporated under the genefal incorporation act of the State, approved April 18, 1872, the provisions of the act entered into and formed a part of its charter, and that by section 9 of the act (inserted in the margin,1) the right of the legislature to regulate and provide for the rates, at which the company should supply water to the city, was reserved; and (2) that the language of the act of April 9, 1872, and in force July 1, 1872, (inserted in the margin,1) did “ not necessarily imply the power to make and fix rates.” The court further said in 178 Illinois at page 309: “ The authority ‘ to contract for a supply of water for public use for a period not exceeding thirty years’ does not necéssarily imply that the price of the supply should be fixed for the entire period. The supply could be made for the entire term, but the price is to be determined from time to time, and the rates to be settled by the rules of the common law. Carlyle v. Carlyle Water, Light & Power Co., 52 Illinois App. 577.”

“ Since the ordinary administration of the law is carried on by the state courts, it necessarily happens that by the course of their decisions certain rules are established which become rules of property and action in.the State, and have all the effect of law, and which it would be wrong to disturb. ■ This is especially true with regard to the law of real estate and the construction of state constitutions and statutes. Such established rules are always regarded by the Federal courts, no less, than by the state courts themselves, as authoritative declarations of what the law is. But where the law has not been thus settled,

Applying these principles to the case at bar, we solve its questions. The Supreme Court of the State in passing .on the case not only considered the acts of the 9th and 10th of April, 1872, regarding municipalities, but also, as we have said, the general incorporation act of April 18,1872. Under the latter the plaintiff was incorporated, and it was held that the act “ must be regarded as entering into and forming part of the charter ” of the plaintiff: The statute reserves to the general assembly the power to prescribe in the government of corporations “ such regulations and provisions as it may deem advisable.” The language is very comprehensive. Regarding it alone, it is difficult to conceive what objects of legislation are not covered by it. The Supreme Court of the State has construed it to be of greater import than the usual reservation of the power to alter and amend the charters of corporations.

The plaintiff, however, contends that it was not intended by the terms, “ regulations and provisions,” “ to interfere with the internal business management' of the corporation itself,” but regulate “ those classes of acts which control the relation existing between stockholders as individuals and the corporation as

In Beer Co. v. Massachusetts, 97 U. S. 25 , a provision wa£ passed on of an act defining the .general powers and duties of manufacturing corporations as affecting the beer company. The general statute was enacted in 1809, and the provision construed was as follows: “ Provided always, that the legislature may from time to time, upon' due notice to any corporation, make further provisions and regulations for the management of the corporation and for the government thereof, or wholly to repeal any act or part thereof, establishing any corporation, as shall be deemed expedient.” The beer company was incorporated in 1828 “ for the purpose of manufacturing malt liquors in all their varieties.” It was held that the provisions of 1809 were adopted in' the charter of the beer .company* and were a part of the contract between the State and the company, rendering the latter subject to the exercise of that power; and the seizure and forfeiture of certain malt liquors, which were intended to be sold in violation of the prohibitory liquor law-passed in 1869, were sustained.

But assuming that section 9 of the general incorporation act is correctly interpreted by plaintiff, we are brought to the question of the power of the city to make an irrevocable contract for thirty years, fixing water rates. The power is claimed under the statutes' of 1872, heretofore quoted. The Supreme Court of the State, as we have seen, decided against the claim, and 'the principle of Burgess v. Seligman applies if-the ruling of the court and the contention of the plaintiff is “ balanced with doubt.” There "were no previous interpretations of the statutes by the state courts upon which the plaintiff had a right to rely. It acted upon the faith of the statutes alone, and committed its rights to a judicial interpretation of the statutes.

In Smith v. McDowell, 148 Illinois, 51, 62, the Supreme Court of the State expressed the rule as follows: “ Their power [the power of municipal corporations] is measured by the legislative grant, and they can exercise such powers only as are expressly granted, or are necessarily implied from the powers expressly conferred.”

The Supreme Court of the State applied these principles. It held that an irrevocable contract for specific rates was not indispensable to the other powers with which the cities of the State were invested. And a distinction was made between a contract which related to a governmental function, which the regulation of rates was said to be, and a contract which related to franchises which, though public in their nature, yet were not governmental, which the supply of water was said to be. This distinction, it was held, the statutes of 1872 observed, and gave the power to make one kind of contract but not the other — the power to contract for a supply of water, but not the power to contract “ to pay a fixed and unalterable rate for thirty years.” This was deduced from the silence of the statute of the 9th of April and the necessity of resolving all ambiguities in favor of the public. But ambiguity disappears, it was said, when the statute of the 9th was considered with the statute of the 10th, as it necessarily had to be, as the statutes were “inpari materia, and should be construed together.” Section one of the act of the 10th of April “ authorizes,” the court said, “ the city council to empower a private corporation to construct and maintain waterworks at such rates as may be fixed by ordinance. The meaning of this language is mot that the waterworks are to be maintained at such established rate as may be fixed by one ordinance for a period not exceeding thirty years. The clause, ‘ for a period not exceeding thirty years,’ qualifies the words

The statutes are certainly ambiguous, and in resolving the ambiguity in favor of the public the court applied the rule declared in many cases. We said in the Railroad Commission Cases, 116 U. S. 307 , 325, by Chief Justice Waite, of the power of the regulation of rates :

“ This power of regulation is a power of government, continuing in its nature, and if it can be bargained away at all it can only be by words of positive grant, or something which is in law equivalent. If there is reasonable doubt, it must be resolved in favor of the existence of the power. In the words of Chief Justice Marshall in Providence Bank v. Billings, 4 Pet. 514 , 561, ‘ its abandonment ought not to be presumed in a case in which the deliberate purpose of the State to abandon it does not appear.’' This rule is elementary, and the cases in our reports where it has been considered and applied are numerous.”

These remarks are obviously applicable to the Illinois statutes. The question is whether the power given to the municipalities of the State was to be continuing or occasional, indeed only special in its purpose, intended to have but one exercise and then bound in''contract for thirty years. If the latter had been the intention it would have been natural to express it. The- fullness of sovereignty can be taken for granted, and naturally would be and should be taken for granted. An example is afforded by the act of June 6, 1891. By that act the corporate authorities of any city which have authorized or shall authorize any individual, company or corporation to supply water, “ be and are hereby empowered to prescribe by ordinance maximum rates and charges for the supply of water furnished by such individual, company or corporation. . . .” There is no explicit provision for repetitions of the power — none declaring the power conferred a continuing one. Who now doubts that it is ? If rights were claimed and were pleading for a different interpretation we might have to listen to them, but now undis-. turbed by them we yield without resistance to that meaning which the subject-matter demands in the absence of negativing words.

It is also urged by plaintiff that the ordinance of February 10, 1896, deprives the plaintiff of its property without due process of law. The grounds of this contention are that (1) by the statute of June 6, 1891, none of the circumstances which, it is claimed, constitute a rate just and reasonable, are required to be considered by the authorities of cities nor is previous notice required to be given to the parties furnishing water; (2) establishing rates is a legislative, not a judicial act, and that, therefore, the power to review and determine them given by the statute to the circuit court is void; (3) the cities, towns and villages of the State are made judges in their own cases.

The first ground is answered by San Diego Land & Town Co. v. National City, 174 U. S. 739 , 750, and we may say there is no question of the reasonableness of the rates. It was alleged in the pleas of the defendant that the rate's of the ordinance of June, 1882, were unreasonable when established. This was conceded by the demurrer. It was alleged in the pleas that they continued unreasonable. This was conceded by the demurrer. It was also alleged that the rates established by the ordinance of February 10,1896, were just and reasonable. This was also conceded. The allegations, therefore, must be accepted as true conclusions from investigation. And it was averred besides that “ the plaintiff refused to treat ” with a committee appointed by the city council, “ and neglected to reduce or fix such rental and water rates so as to make them just, reasonable and fair.”

The third ground urged why plaintiff is deprived of its property without due process of law is as abstract, as free from real grievance to plaintiff, as the other grounds. With what functions the circuit courts of the State' may be invested may not be of Federal concern. It is also a matter of construction, in which we might be obliged to follow the state courts. The ground we are now reviewing seems not to have been presented to the Supreme Court of the State either in the case at bar or the cases referred to by it and upon which it based its opinion.

In City of Danville v. Danville Water Co., supra, the provision of the statute was referred to, but not in such way that it can be confidently said that the power given to the circuit court was to only review the rates fixed by the city council and to determine them to be reasonable or unreasonable, or whether the court could go farther and fix rates. The former seems a natural construction. But whether it is or not, the plaintiff has yet no reviewable grievance. No power has been attempted to be exercised by the circuit court against the plaintiff and no judicial remedy has been denied it.

Judgment affirmed.

dissenting.

The far-reaching consequences which must result from the principles upon which this case is decided, and the conflict between those principles and what I conceive to be previous well-settled rules of law, impel me to state the reasons for my dissent.

The legislature of Illinois, in 1872, passed a law entitled “ An act to enable cities and villages to contract for a supply of water for public use, and to levy and collect a tax to pay for water supplied.” The act in full is as follows:

“ Sec. 1. Be it enacted by the People of the State of Illinois,

represented in the General Assembly, That in all cities and villages where waterworks may hereafter be constructed by an incorporated company, the city or village authorities in such cities and villages may contract with such incorporated company for a supply of water for public use, for a period not exceeding thirty years.

“ Sec. 2. Any such city or village, so contracting, may levy and collect a tax on all taxable property within such city or village, to pay for the water so supplied.”

This act was approved on April 9,1872. Public Laws of Illinois, 1871-1872, p. 271.

At the same session, an elaborate law was passed entitled “ An act to provide for the incorporation of cities and villages.” Article X, under the heading “ (Miscellaneous Provisions.)— Water,” in section 1, provided as follows:

“Sec. 1. The city council or board of trustees shall have power to provide for a supply of water by the boring or sinking of artesian wells, or by the construction and regulation of wells, pumps, cisterns, reservoirs or waterworks, and to borrow money therefor, and to authorize any p>erson or primate corporation to construct and maintain the same at such rates as may be fixed by ordinance, and for a period not exceeding thirty years; also to prevent the unnecessary waste of water.; to prevent the pollution of the water, and injuries to such wells, pumps, cisterns, reservoirs or waterworks.”

This was followed, in subsections 2 and 3, by the granting of full power to municipal corporations, in the event they determined to construct their own waterworks, to acquire land, etc., to levy taxes, and to providé for the collection of water rates or assessments for the use of the water to be supplied to the inhabitants from the Avorks to be constructed. This act was approved on April 10, 1872: Public Laws of Illinois, 1871-1872, p. 259.

At the same session an act Avas passed entitled “ An act concerning corporations.” It Avas in effect' a general law regulating the organization of private corporations in the State of Illinois. Section 9 thereof, in part, reads as folloAvs:

“ Sec. 9. The general assembly shall, at all times, have poAArer

to prescribe such regulations and provisions as it may deem advisable, which regulations and provisions shall be binding on any and all corporations formed under the provisions of this act. ...”

This act was approved April 18, 1872. Public Laws of Illinois, 1871-1872, p. 299.

None of the foregoing acts contained an emergency clause ; and, hence, although approved on different dates, each act went into force on the same day, viz., July 1, 1872. Constitution of 1870, Illinois, Art. IV, sec. 13; 1 Starr & C. Ann. Stat. (2d ed.) p. 125.

The defendant in error, the city of Freeport, a municipal corporation,on June 6,1882, enacted an ordinance giving Nathan Shelton or his assigns the right of constructing, maintaining and operating waterworks for the term of thirty years from the first day of July, 1882, for the purpose of furnishing fire protection to and for the supply of said city of Freeport and the inhabitants thereof with water suitable for domestic and manufacturing purposes. The ordinance consisted of fourteen sections. It provided for a stand pipe, that the pumping machinery should possess a capacity of at least three million gallons of water in twenty-four hours, to be increased as the growth of the city and its needs required, and that not less than eight miles of mains, of specified dimensions and quality, should be laid for the distribution of water. Ample provision was also made for the extension of these mains by the water company, at its cost, upon the direction of the city government. The obligation was further imposed upon Shelton or his assigns to erect double-nozzle fire hydrants at the rate of not less than ten to each mile of main pipe, whenever and wherever the city council should direct. Payment was to be made by the city for fire hydrants by an annual rental for the first one hundred of one hundred dollars each, for all said hydrants, over one hundred and up to one hundred and fifty, an annual rental of eighty dollars each, and for all said hydrants over one hundred and fifty, an annual rental of fifty dollars each. It was expressly provided, in section 8 of the ordinance that the hydrant rentals “ shall continue during the full term specified in this ordinance,

The ordinance contained provisions for the use of water “ free of charge from the hydrants.on streets curbed and guttered, for the purpose of washing and flushing the gutters, and froln any hydrant for the purpose of flushing any and all sewers in said city whenever the city council shall deem it necessary for sanitary purposes, upon giving notice to the person in charge of said waterworks.” . It was also provided that “ the city shall have water free of charge for the use of the lire department, and for furnishing the city hall and the oiflees occupied for city purposes, for all public schools of the city, for all churches, and for four public fountains for drinking only, and one fountain in the public square or park should the city erect the same.” Full specifications were contained in the ordinance as to the maximum charge to be made for water to be furnished individual consumers. In other words, the ordinance formulated a complete system, not only for the construction of the works, but for their operation during the time specified therein.

It was provided that the ordinance should become a binding contract upon its acceptance in writing by Shelton within a stated time, and when so accepted its provisions should not be changed, altered or amended in any way without the consent of both parties thereto or their successors or assigns.

On June 27, 1872, within the time limited, Shelton filed his written acceptance of the contract. In the following August' he assigned all his rights to the plaintiff in error, a corporation organized under the provisions of the general statute relating to private corporations, approved April 18,1872, above referred to. The assignment was recognized by the municipality, and it is unquestioned that the works were constructed in accordance with the contract, and that all obligations which it imposed were discharged by the company to the satisfaction of the municipality.

In 1891 an act was passed by the legislature of the State of Illinois entitled “An act to enable cities, towns and villages incorporated under any general or special law of this State to fix the rates and charges for the supply of water furnished by any individual, company or corporation to any such city, town or village and the inhabitants thereof.” Briefly stated, this act, as its title indicated, empowered municipal corporations to prescribe by ordinance “ maximum rates and charges for the supply of water furnished by such individual, company or corporation to such city, town orvillage and the inhabitants thereof, such rates and charges to be just and reasonable.” ' The act moreover provided that the reasonableness of the rates prescribed by the municipality might be tested by proceedings before a designated court.

Availing itself of the power conferred by this statute, the city of Freeport on February 11, 1896, passed an ordinance reducing the rates stipulated to be paid under the contract of 1882. It is necessary, however, only to consider, for the purposes of this case, the reduction- made on the contract price for the public hydrants. At the reduction they were to be paid for annually at the uniform rate of fifty dollars each. Whilst thus seeking to reduce the sum which the city was to pay for the hydrants, the ordinance in effect retained all the contract obligations for the benefit of the city resting upon the water company, among them being the duty to lay additional mains as directed and to furnish free water for schools, churches and other purposes. The city refusing to pay any longer for the hydrants at the original contract price, an action was instituted to recover an amount asserted to be then due under the contract. Without stating the form of pleadings, it suffices to say that on the one hand the right of the water company to recover according to the rates fixed by the original contract was asserted and on the other the obligation of the city to pay only at the reduced rates was' alleged. It was expressly charged in the pleadings on be

The case was ultimately taken to the Supreme Court of Illinois, and, upon the authority of the analogous case of City of Danville v. Danville Water Company, 178 Ill. 299 , judgment went in favor of the city and against the water company. 186 Ill. 179 . The opinion of the court in the Danville case was not unanimous, three of the seven judges dissenting. Without attempting to reproduce in its details the reasoning by which the court reached its conclusion, it seems to me that all the views expressed are embodied in the following propositions :

That the fixing of water rates was a public attribute, which from its natui’e was incapable of being alienated or restrained by the obligations of á contract, even although express authority to do so was conferred by the legislature on the municipality. That even if this was not the case, to contract for rates to be paid for a definite term required authority of the legislature, and that no such grant to the municipality had been conferred in this case, because, albeit, the legislative acts gave power to contract for a definite time for a supply of water, this did not give the right to fix the rates to be paid for the water during the time for which the municipality was authorized to contract; the argument being that the power to contract for a definite time is one thing and the fixing of the rates for the same time for the water contracted for is another and different thing. That even under the hypothesis that the power to contract for a definite time included the authority to fix the rates for such time, the reservation found in the general private incorporation law operated to confer upon the legislature the right to change the rates, because the contract, although originally made by the city with an individual, had been assigned to the defendant, a private corporation organized under the general private incorporation law.

These propositions practically embrace all but one of the contentions urged in the argument at bar, and their consideration will therefore substantially dispose of the controversy, except ih.

It is not even intimated in the opinion below that there was any express limitation in the constitution of the State of Illinois restricting the power of the legislature to authorize a municipality to contract for water for public use for a fixed period and to agree upon the rates to be paid therefor for such time. That in the absence of such restriction the legislature of a State may contract, by statute, or may empower a municipality to contract for water for public use for a stated period and fix the rates to be paid during such term for the same, and that such contract if made is protected from impairment by the Constitution of the United States, is ño longer an open question. New Orleans Water Works Company v. Rivers, 1885, 115 U. S. 674 .

In that case the exclusive right granted ivas to continue for fifty years, and the act Avhich it was held constituted a contract stipulated for the furnishing of a supply of water for public use during the continuance of the contract, “ in consideration Avhereof the franchises and property of the company, used in accordance with its charter, were exempted from taxation, state, municipal and parochial.” p.677. After observing that the case before the court Avas controlled by the decision in New Orleans Gas Company v. Louisiana Gas Company, 115 U. S. 650 , the court, speaking,through Mr. Justice Harlan, said (p. 680):

“ The tivo are not to be distinguished upon principle; for, if it was competent for the State, before the adoption of her present constitution, as we have held it was, to provide for supply

ing the city of New Orleans and its people with illuminating gas by means of pipes, mains and conduits placed at the cost of a private corporation, in its public ways, it was equally competent for her to make a valid contract with a private corporation for supplying, by the same means, pure and wholesome water for like use in the same city.”

In the Gas Company case, beginning at page 660, the court considered and held untenable the contention “that, as the supplying of New Orleans and its inhabitants with gas has relation to the public comfort, and, in some sense, to the public health and the public safety, and, for that reason, is an object to which the police power extends, it was not competent for one legislature to limit or restrict the power of a subsequent legislature in respect to those subjects.” After reviewing various decisions bearing upon this feature of the case, the court said (p. 664):

“Numerous other cases could be cited as establishing the doctrine that the State may by contract restrict the exercise' of some of its most important powers. We particularly refer to those in which it is held that an exemption from taxation for a valuable consideration at the time advanced, or for services to be thereafter performed, constitutes a contract within the meaning of the Constitution. Asylum v. New Orleans, 105 U. S. 362 , 368; Home of the Friendless, 8 Wall. 430 ; New Jersey v. Wilson, 1 Cranch, 164 , 166; State Bank of Ohio v. Knoop, 16 How. 363 , 376; Gordon v. Appeal Tax Court, 3 How. 133 ; Wilmington Railroad v. Reid, 13 Wall. 264 , 266; Humphrey v. Pegues, 16 Wall. 244 , 248-9; Farrington v. Tennessee, 95 U. S. 679 , 689.”

The doctrine of the cases just cited was applied in St. Tammany Waterworks v. New Orleans Waterworks, 120 U. S. 64 . It was also recognized and applied in Walla Walla v. Walla Walla Water Co., 172 U. S. 1 , 9. In that case the court held valid a stipulation contained in a contract with the water company by which the city of Walla Walla bound itself not to erect waterworks during the stipulated life of a contract, viz., twenty-five years. Speaking of the earlier decisions to which we have above referred, the court, speaking through Mr. Justice Brown, said (p. 9):

“ It is true that in these cases the' franchise was granted, directly by. the state legislature, but it is equally clear that such franchises may be bestowed upon corporations by the municipal authorities, provided the right to do so is given by their charters. State legislatures may not only exercise their sovereignty directly,, but may delegate such portions of it to inferior legislative bodies as, in their judgment, is desirable for local purposes. As was said by the Supreme Court of Ohio in State v. Cincinnati Gaslight & Coke Co., 18 Ohio St. 262 , 293: £ And, assuming that such a power ’ (granting franchises to establish gas works) £ may be exercised directly, we are not disposed to doubt that it may also be exercised indirectly, through the agency of a municipal corporation clearly invested, for police purposes, with the necessary authority.’ This case is directly in line with those above cited. See also Wright v. Nagle, 101 U. S. 791 ; Hamilton Gaslight & Coke Co. v. Hamilton City, 146 U. S. 258 , 266; Bacon v. Texas, 163 U. S. 207 , 216; New Orleans Waterworks Co. v. New Orleans, 164 U. S. 471 . . :

“ Where a contract for a supply of water is innocuous in itself, and is carried out with due regard to the good order of the city and the health of its inhabitants, the aid of the police power cannot be invoked to abrogate or impair it.” ...

That a city if authorized by the legislature, in the absence of limitations in the state constitution on the legislative power, could validly stipulate in a contract for a supply of water that the existing rates should not be reduced by the municipality during the contract period, was expressly adjudged in the recent case of Los Angeles v. Los Angeles City Waterworks Co., (1900) 177 U. S. 558 . indeed, in that case, at the time the contract was made, the city was without authority to make it, but inasmuch as subsequently its action had been ratified by legislative enactment the' effect of such ratification was held to be equivalent to a prior original grant. But I need not further pursue this aspect of the case, since, as I understand the opinion of the court, it does not sanction the theory adopted by the Supreme Court of Illinois on this subject, and hence does not therefore in terms overrule the principle so firmly settled by the previous decisions of this court that the subject-matter of a water-supply

That in the present case some authority "was delegated by the legislature to the municipality to contract for water is unquestioned, and it is also undisputed that undér the right thus conferred the municipality acted in making the contract which is now in controversy. The issue which then arises is simply this, Did the authority conferred by the legislature upon the municipality authorize it to contract, and in doing so to fix the rates to be paid for such supply during the time stated ? Of course, an answer to this question involves an analysis of the statutes of Illinois under which the authority to make the asserted contract arises.

Before approaching the text of the statutes it is well to state the scope of the duty which devolves upon this-court in determining whether there was a contract and the principles which must control in doing so. It is elementary that where a contract is asserted to have been impaired by subsequent state legislation, this court is constrained to form an independent judgment as to the existence of the contract and its terms. ■ It is equally true that where the contract originates' from a state statute, if, in the exercise of an independent judgment, the existence or nature of the contract becomes, balanced in doubt, such doubt will be resolved in favor of the construction given to the state statute by the court of last resort of the State. But this qualification is not a limitation upon the duty to form an independent judgment, and does not imply that because the statute has been construed against the contract by the state court, therefore the matter is “ balanced in doubt.” If the rule did so imply, it would follow that in every case where a right arose from a state statute, and the court below held there was no contract, the review of that question in this court would be wholly nugatory, since the decision below would engender the doubt, and where doubt arose the decision of the state court would have to be followed. The rule then to be applied when the ihatter is balanced in doubt is this and nothing more, that if in using its independent judgment, as it is its duty to do, a

It is unquestioned also that where a right asserted if enforced will put a contractual limitation upon the power of the lawmaking authority of a State, presumably to be exercised for the public benefit, doubt is to be resolved in favor of the continued existence of the lawmaking power. In other words, that no contract limitation on the powers of government can be upheld by mere implication or sustained if- there be doubt on the subject. The existence of such a contract limitation must arise clearly and by express intendment.

Bearing these principles in mind, I cometo consider the legislative acts by which it is asserted the contract in question arose. Whilst it is quite clear to my mind that the powers conferred by the respective statutes were to be exerted under different circumstances and that the contract which is here in question came more especially within the scope of the act approved April 10,1872¿ I shall not stop to discuss this view, since, whether the statutes be treated separately or together, they fully authorize the contract. Under this view I first approach the consideration of the act of April 9,1872. Its language is that in all cities and villages where waterworks may hereafter be constructed, the city or village authorities “ may contract '. . . for a supply of water for public use for a period not exceeding thirty years.”- And the second section conferred upon a municipality so contracting power to levy taxes “ to pay for the water so supplied.” Clearly, authority is expressly conferred to contract for a supply of water for the period stated. The argument is that this right to contract for the water for the period of thirty years did not include the power to agree upon the sum to be paid for it for that period. In other words, the contention is that the right to contract for the purchase existed for the stated period without the power to fix the price which was an inseparable and necessary concomitant of the right itself.

But.the construction adopted below and now maintained by

The contract as executed, beyond peradventure, expressly fixed the rates for the term for which it was agreed the supply should be furnished. It imposed, moreover, upon the water company duties to construct and extend the works, which could only arise from contract, and which cannot reasonably be assumed to have been entered into but upon the basis of an agreed compensation. The obligations on the water company were not

The contract in its entirety being then valid, the question which arises is, Did the power to destroy the contract arise from the reservation contained in the general private incorporation law ?

In considering this question it must be borne in mind that there was no reservation whatever of the power to repeal, alter or amend contained in the law regulating public corporations, nor was such a reservation found in the constitution of the State. The power conferred upon municipalities to contract for a supply of water or for the construction of waterworks

Indeed, the statute of lg91 which conferred the power to regulate water rates — under the authority of which the ordinance here complained of reducing the rates, was passed — shows

Although no reference was made to it in the opinion below, it is suggested in argument that as there-was a provision in the constitution of the State of Illinois forbidding a grant of exclusive privileges, therefore the contract here considered was void because, it is asserted, such contract expressly conferred an exclusive right and privilege. ' It is, however, settled that the mere making of a contract for a water supply for a definite time and the fixing of rates for such time, accompanied with an obligation that the municipality itself would not construct waterworks for such period, does not amount to a grant of an exclusive- privilege. Walla Walla v. Walla Walla Water Co., 172 U. S. 1 , 14, 17. This being beyond question, it clearly follows that even upon the hypothesis that the contract in this .case contained ah express or implied stipulation that the city would not.grant to any one else the right to use the streets of the city for the purposes of a waterwork system during the life of the contract, the stipulation for such exclusive right and not the contract would come within the inhibition of the provision of the constitution. We say this arguendo only, as the controversy here presented involves the validity of the contract in so far as it affected the supply for public use and fixed the rates of such supply during the period stated.

•In my opinion, the contract having been expressly authorized for a definite period, the. rates agreed. upon could not, during the term of the contract, be changed-,without violating the contract clause of the Constitution .of the United -States; and I therefore dissent from the judgment holding otherwise.