#### Birmingham Water Works Company *v.*Keiley.

*Damages for Cutting of Water.*

(Decided Nov. 23, 1911.

Rebearing denied Dec. 14, 1911.

56 South. 838.)

1. *Waters and Water Courses; Public Supply; Contract; Rates.—*The contract in this case stated and examined and held not to authorize a charge of 30 cents per thousand gallons by meter rate at the residence such as the one considered, but that the proper charge was at a rate not exceeding the flat rate for residences of the size here denoted.

2. *Same; Shutting Off Supply; Damages; Breach; Evidence —*Where a defendant water company in order to coerce a consumer to pay an unauthorized demand for water service contrary to its contract to furnish water at a specific rate, shut off plaintiff’s water supply and put plaintiff and his family to inconvenience, hardship and expense, there was evidence justifying the imposition of punitive damages.

*6303. *Same; Breach of Duty; Action.-*— -Where the municipality made a contract with a water company to supply its inhabitants with water at a specified rate, such contract was for the benefit of all the inhabitants who were willing and able to pay the rate specified and to comply with reasonable regulations; hence,' one whose water was wrongfully turned off was entitled to sue to lecover damages for breach of the water company’s duty in his own name.

4. *Damages; Actual; Punitive.*— Actual damages are such as are recoverable at law from a wrong doer by the injured party as a matter of right as compensation for the actual loss sustained *hy*him by reason of the wrong; punitive damages are such damages over and above actual damages, as will compensate the person for his actual loss, the imposition of which the law permits in proper cases at the discretion of the jury, not because the party injured is entitled to them as a matter of right, but as a punishment to the wrong doer and to deter him and other engaged in the same business from such wrong doing in the future.

5. *Same; Exemplary Damages; Discretion of Jury.-*— Where exemplary damages are allowable, the amount is in the discretion of the jury subject to revision by the court for manifest injustice or error.

6. *Same.*— Exemplary damages are recoverable not only for acts maliciously perpetrated, but also in cases where the defendant knowingly, wantonly or recklessly does an act fraught with probable injury to person or property, and ultimately producing such injury or damage.

7. *Same; Jury Question.*— Where there is evidence to warrant the imposition of exemplary damages, it becomes the duty of the court to submit the question to the jury as the sufficiency of the evidence is for the jury alone.

Appeal from Birmingham City Court.

Heard, before Hon. C. W. Ferguson.

Action by W. R. Keiley against the Birmingham Water Works Company for damages for shutting oft water. Judgment for plaintiff and defendant appeals.

Affirmed.

Lond’on & Fitts, for appellant.

The contention of plaintiff as to the meaning of the contract cannot be sustained for the right of a water company to cut off water because of the consumer’s failure to pay is everywhere *recognized.*— B. *W. W. Go. v. Ferguson,*164 Ala. 494; *B. W. W. Go. v. Vinter,*164 Ala. 490; 45 Barb. 136; 48 Mo. App. 273; 24 Pac. *631439; 29 Pac. 320. Tlie plaintiff was not, under the evidence, entitled to recover punitive damages, and the court, therefore, erred in its oral charge, and in refusing written charges 12 to 14, inclusive. — W. *U. T. C.o. <o, Westmoreland,*151 Ala. 326; *Wilkinson v. Searcy,*76 Ala. 176; *Leinkcmf v. Morris,*66 Ala. 406; 21 How. 412; Sutherland on Damages, p. 1096. Counsel insist that under the contract made with the city, the defendant had no right to bring an action in his own name for a breach thereof.

Bondurant & Smith, for appellee.

The court properly construed the *contract.*— Brotan *v. B. W. W. Go.,*52 South. 915; *State ex rel v. B. W. W. Go.,*51 South. 354; *Birmingham v. B. W. W. Go.*42 South. 10. The evidence authorized the imposition of punitive damages, and the amount was within the discretion of the jury.— *A. G. S. v. Sullivan,*9 South. 376; *Wilkerson v. Searcy,*76 Ala. 176; *R. R. Go. v. Frazer,*9 South. 303; *Smith v. B. W. W. Go.*16 South. 126.

de GRAFFENRIED, J.

The appellant, a public service corporation with its principal office in the city of Birmingham, Ala., made with the municipality of Graymont, then a suburb of Birmingham, a contract to supply its residents with water, the parts of which relevant to this controversy were as follows:

Flat Rates.

Private dwellings of three (3) rooms or less----------------------------$6.00 per annum

For each additional room in private dwelling up to and including ten (10) rooms____________________1.00 “ “

For each additional room in private dwelling over ten (10) rooms_____ .50 “ “

*632Water closet for private family, for first closet__=________________________5.00 “ “

. For each additional closet for same family or servants_________________2.50 “ “

Bath tubs for private family, each_____4.00 “ “

A dwelling in the rear of a premises occupied by a person or persons not employed as servant or servants on the premises shall be charged for as separate dwelling, whether or not there are water fixtures for the sole and individual use of its occupants.

Boarding or lodging house in addito the above room rate, for each boarder or lodger______________$ 1.50 per annum

Store, according to size and occupation___________$12.00 to $100.00 “ “

Drinking saloon__________ 25.00 to 100.00 “ “

Restaurant ______________ 25.00 to 100.00 “ “

Printing office, not including use steam engine______ 20.00 to 60.00 “ *“*

Bank_____________________________12.00 “ “

Photograph Gallery______12.00 to 50.00 *“ “*

Bakery__________________ 20.00 to 50.00 “ “

Cows, each________________________ 1.50 *“ “*

Meter Rates.

(Subject to the minimum charges and meter rents hereinafter provided for.)

For a daily consumption of 1,000 gallons -------------------------$.30 per 1,000 gals.

For a daily consumption of 1,000 to 1,500 gallons_________________.27^ “ “■ “

For a daily consumption of 1,500 to 2.000 gallons_________________.25 “ “ “

For a daily consumption of 2,000 to 3.000 *gallons_________________.22}4 “ “*“

*633For a daily consumption of 3,000 to 4,000 gallons_________________.20 “ “ “

•X* -X* * *X- -X* -X- -X- * -X-

The rates provided for in this section are subject to the modifications and provisions of sections fourteen, fifteen, sixteen, and eighteen of this ordinance. Water rents shall be payable at grantee’s Birmingham office. Failure to pay water rent when due shall entitle grantee to the right to discontinue Avater service until the amount due has been paid, together Avith a fee of fifty (50) cents for turning off and turning on the water.

Section 14. That grantee shall have the right to set a meter on any service line, whether it be used for domestic or any other purpose and notwithstanding a specific or annual rate may be named therefor herein; and charge for use of water according to the meter schedule provided'in this ordinance, and any water consumer shall have the right to require grantee to set a meter on his service pipe and to pay for Avater service by meter measurement, provided that each and every Avater consumer supplied by meter measurement shall pay a minimum monthly charge for Avater privileges of at least one ($1.00) dollar, or a, minimum quarterly charge for Avater privileges of at least three ($3.00) dollars; in cases where a one-half inch or five-eighths inch meter is used, except that in no event shall the minimum monthly or minimum quartely charge for water privileges by meter exceed the flat rate charge for the same period.”

The above contract nowhere provides — certainly not in express terms — a meter rate for water consumed in quantities of less than 1,000 gallons daily, but a flat rate is expressly provided for residences of every kind.

The appellee was a resident of Graymont, and occupied a five-room residence without bathtub or sanitary *634connections, and he kept a cow. He became a customer of appellant, and under the above flat rate was chargeable with $8 per annum for his residence and $1.50 for his cow, making $9.50 per annum, or $2.37% per quarter. In February, 1909, the appellant, without the request of appellee, placed a five-eighths inch meter at his house. There seems to have been no trouble between the appellant and appellee until October 1, 1909, and the record fails to inform us whether, after February and before October, appellant’s quarterly charge was $2.37% or $3. We conclude that it could not have been greater than $3 per quarter, because the efforts of appellant to collect more than that amount in October brought on this litigation. The appellant made, not monthly, but quarterly collections, and on October 1, 1909, for the previous months of July, August, and September presented appellee with a bill for $8.75, an excess of $5.75 over the amount which appellee conceded he should be required to pay. Appellee had made no agreement to pay $8.75 for the water supplied to him during the previous July, August, and September, and appellant claimed that sum of appellee because during said period he had used at his residence 29,250 gallons of water, which at 30 cents per 1,000 gallons amounts to $8.75. During the period covered by the controversy, appellee’s family consisted of his wife and three children. They kept no servants, and appear to have done their own cooking and housework. The water -was used for washing, cooking, and other household purposes. On the back porch was a small churn, and this churn was run eight or ten minutes each day, six days during the week, with water supplied through a one-sixteenth inch pipe and conveyed from the churn into the trough, where the cow drank, and from there into an alley. When the bill *635for $8.75 was presented to appellee, according to his testimony, he saw the clerk of appellant, to whom he had previously been accustomed to make bis payments, and offered to pay bim $8 for tbe previous quarter, stating that be did not owe the other $5.75, but tbe clerk declined to receive it. He then saw, according to bis testimony, tbe agents of appellant in its Birmingham office, and, to use bis language, “insisted that there was a contract in effect, and that it was being violated, and insisted upon their getting tbe contract, and entering into a discussion with me for tlxe purpose of seeing if we could not come to some kind of understanding,” but without avail. He saw tbe general manager of appellant; and, to again use bis language: “I went into bis private office and told him that there was a little difference existing between the Birmingham Water Works Coixxpanv and myself, and that I supposed none of tbe bookkeepers or clerks would be authorized to regulate or handle it. In that conversation I tendered Mr. O’Connell the $3. He said that if the bookkeeper *had rendered a hill for*$8.75 *that would he the amount I would have to pay or the water would he turned off.”*He further testified that in two hours after that tbe water was turned off; that for about three weeks he and bis family suffered tbe expense and inconvenience necessarily resulting from tbe loss of tbe right to use appellant’s water; and that be finally paid under protest, tbe $•8.75, and tbe water was again supplied to bim.

1. It is manifest that appellant bad no right to collect of appellee more than $3 for tbe quarter ending October 1, 1909, and that tbe extra charge of $5.75 was unauthorized and illegal. It is not'necessary for us to determine whether tbe clause in tbe contract which provides “that each and every water consumer supplied by *636meter measurement shall • pay a minimum monthly charge for water privileges of at least one dollar or a minimum quarterly charge for water privileges of at least three dollars in cases where a five-eighths inch meter is used, except that in no event shall the minimum monthly or minimum quarterly charge for 'water privileges by meter exceed the flat rate charge for the same period,” authorized appellant to charge appellee $3 per quarter, instead of the flat rate of $2.37%. Appellee conceded the justice of the charge of $3, and tendered that amount to appellant before the water was cut from his premises, and that question is not before us. Neither are we called upon to determine whether a private dwelling which consumes more than 1,000 gallons of Avater daily can be by the installation at such residence of a meter by appellant required to pay more for the Avater it uses than is fixed under said contract by the *flat*rate, for ihat question is also not before us. What we *do determine*is that the meter rate of *30 cents per 1,000 gallons does not apply,*under the contract, to a residence Avhose occupants keep a cow and avIio do not consume as much as *1,000 gallons of water daily*by meter, measurement. To hold otherwise Avould be to place words .in the contract which the makers did not place in it. The contract was carefully drawn, and was evidently Avritten after the Supreme Court had rendered the opinion in the case of *Smith v. Birmingham Waterworks Company,*104 Ala. 315, 16 South. 123, in which appellant’s contract with the city of Birmingham Avas construed, and in which, it Avas determined that *flat,*and not *meter,*rates, apply to *all*the residences of Birmingham. In vieAV of the language and. reasoning of the Supreme Court in that case and in the subsequent case of *Birmingham Waterworks Co. v. Truss,*135 Ala. 530, *63733 South. 657, we would do violence to the contract made by the municipality of Graymont with appellant if we undertook to read into it a provision authorizing appellant to collect *any meter rate*from the occupants of a private residence, using less than 1,000 gallons of water daily. Certainly, as to such residences, it was contemplated by the makers of the contract that the *flat*rates would furnish sufficient compensation to appellant for the service rendered, and appellant is *not without remedy*in case any of its customers abuse the privileges to which they are entitled under the contract.*—Smith v. Birmingham Waterworks Co., supra; State ex rel. v. Birmingham Waterworks Co.,*164 Ala. 586, 51 South. 354, 27 L. R. A. (N. S.) 674137 Am. St. Rep. 69; *Brown v. Birmingham Waterworks Co.,*169 Ala. 230, 52 South. 915.

It follows from what we have above said that the appellee was entitled to the general charge which the court gave to the jury in his behalf at his written request.

2. The only other question, as we read the record, before the court, is whether there was evidence before, the jury which, if believed, authorized the jury in its discretion to impose exemplary damages. *Actual*damages are recoverable at law, out of a wrongdoer by the injured party *as a matter of right*as *compensation*for the actual loss sustained by him by reason of such, wrong. Punitive damages are damages *over and atom*such sum as will compensate a person for his actual loss, and the law permits their imposition, in proper cases, at the *discretion of the jury,*not because the party injured is entitled to them as *matter of right,*but as *punishment*to the wrongdoer, and to deter him and others in *similar*businesses from such wrongdoing in the *future.*— Oliver *638*v. Columbia, N. & L. R. R. Co,,*65 S. C. 1, 43 S. E. 307; 7 Words and Phrases, 5851.

The amount of such exemplary damages, when allowed by a jury, in a proper case, is also left to their discretion, subject to revision by the court for manifest injustice or *error.*—Western *Union Tel. Co. v. Seed,*115 Ala. 670, 22 South. 474; *Mobile Furniture Co. v. Little*108 Ala. 399, 19 South. 443.

3. In the case of *Lienkauf & Strauss v. Morris,*66 Ala. 406, the Supreme Court says on the question as to when, in the discretion of the jury, exemplary damages are properly allowable: “We deduce from the authorities the doctrine to be that exemplary damages are allowable, not only for acts *maliciously*perpetrated, but also in cases where one *knoivingly, wantonly,*and *redo Icssly*does an act fraught with probable injury to person or property, and ultimately producing such injury or damage. Such a spirit must be considered as at Avar with that *good faith*Avhich ever preserves a just regard for the rights of others.” “Where there is no malice connected with the wrong complained of, or such *gross .negligence*or *oppression .or fraud*as amounts to malice, the compensation or amount of damages should be confined to the actual injury and its immediate effects.”— *Wilkinson v. Searcy,*76 Ala. 176. “Malice in law is not necessarily personal hate or ill will, but it is that state of mind which is *reckless of lam*and of the *legal rights of the citizen.”*—Willis *v. Miller*(C. C.) 29 Fed. 238. The above-quoted language, in which the italics are ours, correctly and concisely states the conditions Avhich must exist when exemplary damages may or may not in the discretion of the jury be imposed.

4. Was there *evidence*in the case *tending*to warrant the imposition of exemplary damages by the jury? If *639so, it was the *duty*of the court to submit the question to the jury, as the *sufficiency*of the evidence on the subject was for the *jury alone.—13*Cyc. 118.

The position and relative obligations of the parties to each, other at the time of the act complained of should be of sendee in determining this question. Water, one of the necessaries of life, is now almost universally supplied to the inhabitants of cities and towns through the medium of the public service corporation. Surface water in cities and towns is notoriously subject to contamination, and is, for that reason, often dangerous. The water sendee which was denied by appellant to appellee was of importance to him, and its denial, according to his testimony, put him and his family to inconvenience, hardship, and expense. Appellee tendered to appellant all that was due it, and, if his testimony is to be believed, he was not only legally entitled to the service which Avas denied to him, but he did more than the law required him to do to retain his water,connections. It is true that the appellee, by paying the entire amount'of the disputed bill, .under protest, before the Avater was cut off from his premises, could have forced the appellant to continue it.s service Avhile he litigated with it the correctness of the account, but this course was not required of him by the laAV. For the law to require such a course Avould be, as said in *Wood v. Auburn,*87 Me. 293, 32 Atl. 908, 29 L. R. A. 376, “to violate the fundamental juristic principle of procedure. That principle is that the claimant, not the defendant, shall resort to judicial process.”

The appellant certainly has the legal right, by ,the punitive power of discontinuing its sendee, to coerce out of unAvilling or laggard debtors the payment of its just demands. On account of the number of its cus*640tomers, the character and size of many of its accounts, and, in fact, the necessity of such, authority for the orderly conduct of its business, the law should and will be swift in upholding appellant in the legal and orderly exercise of that power. But the law has not conferred judicial authority upon appellant, or the right, by its punitive power of discontinuing its service, to coerce *payment*of a demand not just. We think that there-can be no dispute about the soundness of the proposition that when the correctness of a bill of a public service corporation is disputed by one of its customers and the company, by reason of the failure of such customer to pay such bill, discontinues its service, it does so at its peril, and, if in the wrong, is liable to compensatory damages in any event, and, when the circumstances justify it, to punitive damages. To use the language of Mays, J.: “It is a public service corporation, monopolistic in its nature, and the patrons have no choice but to accept its service, and they have not the privilege of selecting to do business with a competitor, because there is no competitor, and for this reason the rights of the public should be carefully guarded against oppressive nletliods used for the purpose of collecting unjust demands. The necessities of the law must meet modern *conditions.”—Telegraph*Co*. v. Hobart,*89 Miss. 252, 42 South. 349.

It is true that appellant insists that it acted in good faith in this matter, and under an "honest misconception of its,rights. The appellant *did not act*under a *mistake of fact.*If there was a *mistake or misconception,*it was not one of *fad hut one of law.*The courts were open to it for a judicial construction of any doubtful clause in its contract, and it could have invoked the aid of the courts for that purpose without severing its *641relations with the appellee. It therefore appears to us that the question, under all the evidence, as to whether the appellant, Avhen it severed its «relations with appellee, did so in good faith, or in that state of mind which is reckless of law and the legal rights of others, knowing, at the time, that its act was fraught Avith probable damage to appellee (which damage, by reason of such act, *dicl occur*to appellee), was one for the jury, and Ave are therefore of opinion that the court beloAV committed no error in submitting to the consideration, of the jury the subject of punitive damages.

5. The appellee, Avith leave of the court, withdrew the third count of his complaint, and there is nothing, therefore, in the assignments of error relating to that count, as it Avas not a part of the record Avhen the case Avas tried.

6. As the contract was made by the municipality of G-raymont for the benefit of its inhabitants, and as the contract made it the *duty*of appellant to supply all of the inhabitants of the municipality with water Avho Avere Avilling and able to pay its water charges and comply with its reasonable regulations, the appellee had a right to sue for a breach of such duty in his own name.*—Smith v. Birmingham Waterworks Co.,*104 Ala. 315, 16 South. 123; *Birmingham Waterworks Co. v. Truss,*135 Ala. 530, 33 South. 657; *State ex rel. v. Birmingham Waterworks Co.,*164 Ala. 586, 51 South. 354, 27 L. R. A. (N. S.) 674, 137 Am. St. Rep. 69.

There are many assignments of error on the record, but the above disposes óf all the assignments Avliich are insisted upon, and as Ave find no error in the record, the judgment of the court below is affirmed.

Affirmed.