#### The People of the State of New York, Plaintiff, *v.*The Albion Water Works Company, Defendant.

(Supreme Court, Erie Special Term,

March, 1910.)

Franchises — Duties of grantee.

Waters and water courses — Supply to the public — Water companies— Duty to furnish water — Rates.

It is the duty of a water supply company, organized under chapter 737 of the Laws of 1873, to supply water to its customers at reasonable rates without discrimination.

*652A rate of twenty cents per thousand gallons to a State institution outside village limits, where the company furnishes water to the residents of the village at twelve cents per thousand .gallons, is illegal; and, in an action to restrain the company from cutting off the supply of the State for failure to pay such rate, an answer setting up that the twelve-cent rate to the residents of the village was in consequence of a contract by the village to pay the company $3,900 annually for fire protection is insufficient, where it does not appear that, taking into consideration such payment, the charges for water within the village are approximately equal to the rate charged the State.

Tbial of demurrer by plaintiff to defendant’s answer as being insufficient in law.

Edward H. Letchworth, for plaintiff.

Ramsdale & Church, for defendant.

Bbown, J.

Plaintiff alleges that the, defendant is a domestic corporation, carrying on the business of supplying water to the inhabitants of the village of Albion and vicinity, for public, domestic and fire purposes; that it has established a rate of twelve cents per 1,000 gallons for water consumed when the consumption is over 10,000 gallons per day; that the defendant insists upon the payment to it, for water consumed at the Western House of Refuge for Women, a State institution situated at Albion, and a customer of defendant, of a rate of twenty cents per 1,000 gallons for water consumed when the consumption is over 10,000 gallons per day; that the rate for such water service should be twelve cents instead of twenty cents; that defendant threatens to cut off the water supply of said House of Refuge, and prays an injunction restraining such act.

The defendant answers admitting all of such allegations in the complaint, except that the rate should be twelve cents instead of twenty cents, and denies that such House of Refuge is situated in the corporate limits of the village of Albion, and alleges that such institution is situated in the town of Albion; that defendant’s supply pipes from its source of supply are laid in the highways of said town, passing within about 400 *653feet from such House of Refuge; that defendant has laid a service pipe from such main to said institution and for many years has supplied the same with water for which it has been paid the twenty-cent rate. For further answer, the defendant alleges that the twenty-ccnt rate is a reasonable and fair rate for water consumed at said House of Refuge, and that said water cannot be so- furnished by defendant to said House of Refuge at twelve cents per 1,000 gallons without loss to defendant. For further answer, defendant alleges that it has a contract with the village of Albion for the purpose of supplying said village and its inhabitants with water for domestic use and fire protection, whereby the said village agrees to and does now pay to the defendant for fire protection a sum of upward of $3,900 per year, and whereby the defendant agrees to furnish water to private consumers in the villáge of Albion only, at the twelve-cent rate, and that such twelve-cent rate is made to the inhabitants of the village of Albion under and in pursuance of said contract.

To this answer plaintiff demurs, alleging that it is insufficient in law to constitute an answer.

The defendant being organized under chapter 737, Laws of 1873, and the laws amendatory thereof and supplementary thereto, it is the duty of the defendant, under section 81 of the Transportation Corporation Law, to supply to the authorities or any inhabitant of any town through which its mains or conduits pass, pure and wholesome water at reasonable rates. It is the duty of the defendant to supply water to the State institution as well as to inhabitants within the corporate limits of the village of Albion; and, the defendant being a *quasi*public corporation, it is prohibited by law from making a discriminatory rate for such water for or against its customers.

It is the contention of the plaintiff that the twenty-cent rate for the State institution is a discrimination against the State, when the defendant only requires the twelve-cent rate for like service to inhabitants within the village. The defendant attempts to justify its twelve-cent rate by alleging a contract whereby the village pays defendant $3,900 per year for fire protection, and argues that the $3,900 added to de*654fendant’s receipts for water furnished at the twelve-cent rate produces a revenue from all sources in the village which is equivalent to the twenty-cent rate exacted from the State institution.

This result may he mathematically correct and constitute a defense, hut such fact cannot be established from the allegations of the answer. The allegation in the answer is that the twelve-cent rate is made for inhabitants of the village for the reason that defendant’s contract securing to it the annual payment of $3,900 for fire protection requires that water be furnished to the inhabitants of the village at the twelve-cent rate. The mere fact that defendant has contracted to furnish water to the inhabitants of the village at the twelve-cent rate in consideration, of the payment to it by the municipality of $3,900 for fire protection is not an answer to the charge that the twelve-cent rate is a discrimination against the" twenty-cent rate imposed on the State. The defendant cannot escape the charge of making discriminatory rates simply by alleging that it has contracted with some of its customers to make such rates; it might be a complete answer to prove facts 'showing that the $3,900, plus the twelve-cent rate, approximately equals the twenty-cent rate imposed on the State institution, but there is no allegation in the answer affording a basis for such proof. The facts that are claimed to exist to constitute a justification for the twelve-cent rate to inhabitants within the village are not pleaded. Unless it appears that the charges for water within the limits of the village are approximately equal to the proportionate or pro rata charge made the State, there is a discrimination; the facts alleged in the answer do not constitute a defense.

The demurrer must be sustained, with leave to defendant to plead over on payment of costs.

Demurrer sustained, with leave to defendant to plead over on payment of costs.