The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1903-01-06
The CITY VS.. MATER CO.
CONTINUED from First Page.l


of its most important points follows:
THE present situation can b. fully
understood only after a review Of the
contracts and legislation in the past
He then gives a history of the forma-
ton of the Water company. its pur-
poses and powers. the legislative action
taken from that time to this. and also
the action Of the citizens. 1t then reads:
y am of the opinion that the former
contracts, including that of 1892. though
without express legislative authority or
confirmation. so far as the city's power
was concerned. were in all respects val
i'd and binding.
I'VE meet now the question whether
the continuing contract of 1902 is valid,
having been concluded without express
legislative authority. l have carefully
examined again this contract. and do
not find that it has imposed any Obliga-
ton upon the city as a municipal cor
pOratiOn, except to take and use the
water for public purposes and to either
reimburse the company for taxes of
kind not now eXacted, or. in the alter
native, pay for the water so used. AS
this is optional with the city it amounts
to no more than a promise to pay for
water taken and used. The substance
of the contract is this: The city relin-
quishes the present and continuing
right to purchase which it had by the
terms of the contract of 1892 in return
for free water for public use and
guarantee concerning consumers rates.
1t does not appear to me that the city
has exceeded its power in making
contract the terms of which is perpet-
ual or that the provisions for the OPP
tional reimbursement of certain taxes
or payment for water in the alterna-
tive, or the use of the city's name in re-
coveries for violations, necessarily
make the contract invalid without leg
islative authority or approval. The
charter of the company as amended IN
1860 provided in section that the COM
pany might make and establish public
hydrants in such places as may from
time to time be deemed proper, and
prescribe the purposes and manner OF
their use; might distribute the water
through the town and city of New Ha-
ven, and for that purpose lay down
pipes to any house or building, the
owners consenting, and might regulate
the use of the said water within and
without the said city, and establish the
prices or rents to be paid therefor
The company thus has by its charter
the right to regulate consumers rates
The company was, however, created
for a purpose in which the public had
an interest, and was, for the better ac-
complishment of that purpose empow-
cred with certain rights, although they
are not absolute.
at is my opinion that it is at all
times within the power of the legisla-
ture to regulate the water rates, either
directly or indirectly. The contract OF
1902 provides in the fifth section that
the rates to be charged to all consum-
ers shall at all times be fair and rea-
sonable, and if the city at any time
considers them unreasonable it has
right to arbitrate the matter. The
company may still be said to fix its
rates. though it fixes them by an agreed
method of arbitration. Neither does
such agreement preclude, or assume to
future legislative regulation.
. tt is not a contract between the COM
nanv and the consumers, because the
consumers are not parties to the con-
j. tract and the city is not authorized to
act for them.
SCI am of the opinion that the city
would not have exceeded it's power in
making the contract of 1902 assuming
that the contract had not by its terms
contemplated legislative confirmation.
It is highly desirable, whether techni-
cally or not, that a contract of this ma
ture should have legislative authority
or approval"
In closing he summarized in the fol-
lowing paragraphs:
The former contracts, including the
ten-year contract of 1892, were legally
made by the city and were binding up
on it, though there was no specific leg
islative authority for or confirmation of
the city's acts
The continuing contract imposed no
obligation upon the city, except to take
and in one contingency pay for water.
The provisions of the contract OF
1902 concerning consumers rates are a
guaranty by the company of protection
no the consumer, not guaranty to the
company against proper legislative
regulation. The acceptance of such
guaranty was not in excess of the
city's power, and the contract is there
fore valid and binding either with or
without legislative authority.
Though legislative approval may not be
necessary, II Is uluCll W NC NSN'iiON XII"
contemplated by the terms OF the con-
tract The fact that it was 50 contem-
Mated does not make the validity OF the
contract dependent on such approval.
The provision that the company and
the city will unite in obtaining legisla-
five approval can not in itself give val
iditv to an unauthorized contract, and
is in itself not enforceable. 1t does
however, indicate the good faith of the
parties and may equitably estop either
Of them from attempting to exercise
rights inconsistent with that contract
until the legislature shall have had OPP
nortunity to pass upon it,
The contract of 1902 assuming that II
requires legislative approval for its
- validity, is not entirely nullity. Flu
ture legislative approval may give i
full force and operation from the date
when it was signed.
The provisions of the contract OF lS9
concerning consumers rates and the
citv's right to purchase might, if no
sunerseded by the contract of 1902, b.
forcibly claimed to have survived thu
ten year period