The Birmingham age-herald., 1912-02-14

Romaine Boyd, city attorney, yesterday rendered his opinion on the commissions authority to regulate the domestic water i rates in Birmingham. Captain Boyd holds l that the commissioners have authority to regulate such rates, except perhaps in some of the suburbs, whose contracts with the Birmingham Waterworks com pany differ somewhat from the original l franchise granted by the old city of Bir- mingham. His opinion reads as follows;
 Text of BOyd's Opinion "The Board of Commissioners, City:
 "Gentlemen-In the matter of the power of the city to regulate the rates charged l by the Birmingham Waterworks com l pany to private consumers. l would re- port as follows:
 l Quoting Dion's Municipal Corpora 1 tions, fifth edition, section 1924: " No excess constitutional reservation l is necessary to create or preserve the leg
 slative power to regulate public service corporations, and prescribe the reason able rates or maximum rates, which they may charge for services. These prn- ciples apply with full force to public ser l vice corporations organized to furnish l light and water for the use of a municipal ! ity and it's inhabitants. It is too well settled to be disputed, that the busi- | ness of such corporations, without regard to any express constitutional reservation, 1 is so affected by a public use that the lcorporation is subject within constitutional l limits to legislative control, and that such l legislative control includes the power to 1 prescribe reasonable rates or reasonable maximum rates which may be charged for public services
 l And Id. Section 1895 Delegation to municipalities of power to regulate rates: l 4 Ind lt of rprltt tn regulate and control the rates to be charged for public service reserved in a 1 grant of a franchise or right to use the l city streets, a city or other municipality ] has no power to regulate the rates to be charged hy water lighting or other public service corporations, in the absence of ex- press or plain legislative authority to do l so
 Also Wyman on public service corpora tions, section 14l0:
 ;" "'Action by municipal or other local l government. The legislature may by stat ute confer the power of fixing rates upon counties, cities or villages, or any such | bodies as constitute local governments; | and the power so conferred may be ex- 1 ercised by the body named in accordance | with the terms of the statute. The power | is derived solely from the statute, and | in the absence of such authority there Is | no power inherent in municipal corpora | ton to regulate the rates of public ser l vice companies
 1 And in Dillon. section 1925, it is fur ther stated:
 l Power delegated to a municipality to | prescribe the reasonable maximum rates | of public service corporation, must | be exercised in good faith, and carries with it the duty of ascertaining that the rates so prescribed are just and reason able with due regard to the property rights of the corporation. Irresponsive of any law prescribing a rate, it is the duty of a public service corporation to serve the public at reasonable rates
 "The code of Alabama, section 12e0. reads as folows:
 'Waterworls, gas and electric plants, power to establish, operate and maintain. Cities and towns shall have the right to establish, purchase maintain and operate | waterworks or contract for a supply of | wholesome water for it's inhabitants to establish, purchase, maintain and operate a gas or electric light works. and to con
 tract for the furnishing of gas or electric fty to the city or town and surrounding territory; to regulate the manner and rates for furnishing gas, electricity and 1 water after expiration of contract, and to prescribe the quality of gas and electricity furnished to the inhabitants.'
 Except As Restrained
 Prom the foregoing authorities it clear ly appears that the city has the right to regulate water rates, except as restrained or limited by existing contracts
 'The Birmingham Waterworks company claims that it's franchise contract with the city fixed the term of the erftire contract for a period of 90 years from the completion of the improvements and extensions provided for in the contract but careful reading of the contract fails to disclose any mention of such a term as 30 years except in section IA | thereof. where it is stipulated tpat the fire hydrants contracted for are to be used and paid for at certain rates for a period of 30 years from the completion of certain improvements and extensions Tt Is claimed by the waterworks com pany that this solitary provision also es- tablished the franchise period for service to private consumers. as to which impor- tant matter the contract Is otherwise ab- solutely, and, it seems, significantly, si- lent.
 From the waterworks company S standpoint it is inconceivabe that any sane man would have entered into a contract involving an investment up in the millions on a 30 year franchise con- tract as to fire hydrants only.
 But to this it can be replied the oues-
 ton is not, what contract the parties
 would have been willing to make, but sim
 ply, what terms were actually and mutually agreed on. as evidenced by the
 contract itself, which. above stated
 is silent as to the franchise period for | domestic service.
 If the parties were mutually agreed on 30 year contract it would have been ; proper and very easy to have expressly , so stipulated and it is natural to suppose
 that such an omission indicates either that there was no express agreement on this point or that the parties were un- able to agree. Therefore, as to whether
 the parties did would have agreed on So years. or 20 years. or 10 years, as to 7 private consumers, seems to be a mat ter resting largely in conjecture. Contract With Highlands
 This construction of view of the con-
 tract is further strengthened by the water I contract made three years later with the
 town of Highlands which contract was patterned after the Birmingham contract
 and is also suggestive of purposely omit ting any fixed term of service to private
 consumers. However, in any event. the
 water company's construction of this mart of the contract would seem, at least. to
 be subject to a reasonable doubt and { Judge Dillons leading work on municipal