Case Name: THE SPRING VALLEY WATER WORKS v. THE BOARD OF SUPERVISORS, OF THE CITY AND COUNTY OF SAN FRANCISCO
Court: Supreme Court of California
Jurisdiction: California
Decision Date: 1882-06-30
Citations: 61 Cal. 18
Docket Number: No. 8,340
Parties: THE SPRING VALLEY WATER WORKS v. THE BOARD OF SUPERVISORS, OF THE CITY AND COUNTY OF SAN FRANCISCO.
Judges: 
Reporter: California Reports
Volume: 61
Pages: 18–53

Head Matter:
[No. 8,340.
In Bank.]
June 30, 1882.
THE SPRING VALLEY WATER WORKS v. THE BOARD OF SUPERVISORS, OF THE CITY AND COUNTY OF SAN FRANCISCO.
Water Companies—:Free Water—Constitütio sal Law.—The provision of the Act of April 22,1858 “ for the incorporation of Water Companies,” requiring them to furnish water free of charge to cities and counties, cities or towns, for certain purposes, was abrogated by the new Constitution (Art. xi., § 19 and Art, xiv., § 1); and such companies are now relieved from any such obligation.
Id.—Id.—Id.—Duty of Board of Supervisors to Establish Water Bates—Mandamus.—By § 1, Art. xiv. of the Constitution, the duty of fixing the rates for the use of water supplied to any city and county, or city or town or the inhabitants thereof is imposed upon the Board of Supervisors or other governing body of such city and county, city or town, and the provision is both mandatory and self-executing ; but, if legislation upon the subject were necessary, it is found in the Act of March 7, 1881. Accordingly, writ of mandamus granted commanding the defendant to proceed to fix the rates, or compensation to be collected for the use of all water supplied by the plaintiff to the City and County of San Francisco as well as the inhabitants thereof. (McKinstry, Thornton, and McKee, JJ., dissenting.)
Application for writ of mandamus.
Fox & Kellogg, and F. G. Newlands, for Plaintiff.
Whatever may have been the rights of the city, or the obligations of the Spring Valley Water Works, prior to the adoption of the present Constitution, neither the said last named corporation, nor any other person, is now under obligation to furnish water free of charge for any purpose whatever. (Const. Art. xi. § 19, Art. xiv. § 1.)
It will be observed that the new Constitution establishes a comprehensive system for the introduction of water into cities and towns, and the regulation of the rates or compensation for which it shall be sold. On the one hand the privilege is given to any person, natural or artificial, to lay down pipes in the streets of any city in the State, and supply such city and its inhabitants with water, and on the other hand the right is given to the governing body of the municipality to determine the rates or compensation for the water so supplied.
The Constitution certainly contains no provision requiring that water should he furnished free. On the contrary, it compels the Board to fix rates or compensation for water supplied to the city and county, as well as to the inhabitants.
It lays down a broad and uniform rule of action which applies to all persons, both individuals and corporations, giving them equal rights, subjecting them to equal conditions and burdens and to the same mode of regulation. The rights and obligations prescribed by the Act of 1858 (Stat. 1858, p. 218) were reciprocal. Under it provision was made to the effect that companies organized under the Act should furnish water to the municipality “in case of fire or other great necessity” free of charge; and on the other hand, and, as we claim, in consideration of that obligation, it was provided that the company should have the right to have a voice in fixing the rates to be charged for family uses, the price to be charged for water supplied for other uses to private consumers being left entirely with the company, or to be the subject of mutual agreement as in case of sales of other commodities.
Under the Constitution as it stood at the time of the passage of the Act of 1858, the private property of this company could not be taken for public use without just compensation, so that the only theory upon which the provision for free water for any purpose could be maintained would and must be that of contract and of consideration, or of compensation provided for in the Act and accepted by the company. Upon that theory it has always been held that this obligation to the city was compensated by the privileges conferred by the Act upon the company, the chief of which, and the only one of value, was that of having a voice in fixing the rates.
This Court has recently held, in the case of S. V. W. W. v. Schottler, 9 P. C. L. J. 630, that under the present Constitution this right has been taken from the Company, and it no longer has any right to a voice in the fixing of rates. If the Constitution has taken from us the consideration for free water it must ex necessitate have relieved us of the obligation to furnish water free.
But to render the matter still more certain, it is provided in the Act of 1858 as follows:
“ Section 3. All privileges, immunities and franchises that may hereafter be granted, to any individual or individuals, or to any corporation or corporations relating to the introduction of fresh water into the City and County of San Francisco, or into any city or town in this State, for the use of the inhabitants thereof, are hereby granted to all companies incorporated, or that may hereafter become incorporated for the purpose aforesaid.”
Here, then, we have a direct grant made by the Constitution itself, to any individual or company, of all the privileges that are conferred upon this petitioner, freed from the obligation to furnish water free for any purposes, and subject only to the condition that the municipal government shall fix the rates; and by the express provision of the Act under which this company is incorporated, and above quoted, the privileges thus conferred enure to the benefit of petitioner.
And it is apparent that the framers of the Constitution so understood it, and deliberately intended by that instrument to do away with free water, and to relieve the private consumers from the burden of maintaining water works, for public use and public protection; for by Section 1, Article xiv., it is further expressly provided that the Board of Supervisors shall fix the rates or compensation to be charged, etc., for “the use of water supplied to any city and county, city or town, or the inhabitants thereof;” etc. This point the Supreme Court has already passed upon, in considering the effect of provisions of law similar to Section 3 of the Act of 1858. (San Francisco v. The Spring Valley Water Works, 48 Cal. 526; 38 id. 478.)
J. F. Gowdery (City and County Attorney), for Defendants.
As a question of fact, no other company has been formed or exists, pretending to supply San Francisco with water except Spring Valley Water Works above. The provisions of Section 3 of the Act of April 22, 1858, are nugatory, having nothing to act upon. The right of the City of San Francisco to have free water from the Spring Valley Water Works was obtained originally as the consideration of a valuable grant of land and water made to the San Francisco City Works. The right has been confirmed by this Court after years of' closely contested litigation, and is and always has been prized as of great value by the public. Had the makers of the Constitution intended to dispense with free water, and to giveaway such a property, they would not have left it to a sophistical construction of a doubtful clause, half concealed in an article upon some other subject, but would have put it in plain language, free from doubt, saying in terms, just what was meant. If the Convention intended to abolish free water, it certainly failed to express its purpose in specific and unmistakable language.
Unless the Constitution of 1879 changes the law, the Spring Valley Water Works is bound to furnish water to the City and County of San Francisco, to the extent of its means in case of fire or other great necessity, free of charge. Petitioner claims that Article xiv. of the Constitution, read in connection with Section 19, of Article xi., has abolished free water. That clause which provides that the Board of Supervisors, or city or town Council, or other governing body of such city and county, or city and town, shall fix annually the rates or compensation to be collected for water supplied to any city and county, or city or town, or the inhabitants thereof, does not make it obligatory upon a city or town to pay for all water consumed; but it does render it obligatory upon such boards or councils to fix the rates which a city or town shall pay for water which she is not entitled to use free of charge.
Petitioner places its main reliance upon the last clause of Sec, 19 of Art. xi. It asserts that the last clause commencing with the words “ upon the condition that the municipal government shall have the right to regulate the charges thereof,” has abrogated all other statutes in so far as they conflict with this clause. It claims that the sole condition upon which its right to use the streets depends is the condition that the city shall have’the right to regulate its charges for water. It also claims that under the provisions of Sec. 19, aforesaid, that other corporations, associations and individuals may use the streets of a city to introduce water subject to the conditions provided for in Section 19; that petitioner has the same rights under and by virtue of the third section of the Act of April 22,1858. The right to lay down pipes in the streets of a city, to supply the inhabitants with water may exist without the right to collect tolls or compensation for its use. The Constitution gave the right to lay down pipes, but the right to charge rates for the use of water being a franchise, was reserved to the legislature under Article xiv.

Opinion:
Morrison, C. J.:
This is an application for a peremptory writ of mandamus to compel the defendants, as the Board of Supervisors of the City and County of San Francisco, to proceed forthwith to fix the rates or compensation to be collected for the use of all water supplied by the petitioner to the City and County of San Francisco, as well as to the inhabitants thereof, and also praying that it may be adjudged that the petitioner is not under obligation to furnish water to said city and county, for any municipal purpose whatever, free of charge. The petition contains the proper, general and introductory allegations showing that the plaintiff was,- on the nineteenth day of June, 1858, duly incorporated under the laws of this State, for the purpose of introducing pure and fresh water into the City of San Francisco; that it has erected the necessary works, and expended a large'sum of money to that end; and that it has already introduced water into the city, and has commenced to supply it, and the inhabitants thereof, with pure, fresh water; that the petitioner alone supplies all the water taken for the extinguishment of fires, irrigation of public squares and parks, sprinkling of streets, flushing of sewers, and for all other municipal purposes; that there are no public works owned or controlled by said city and county for supplying the same with water. It further states that no rates have been fixed by the Board of Supervisors of said city and county, although application has been made, to the Board of Supervisors to fix such rates or compensation, and that the said Board has refused and still refuses to fix any rates or compensation to be charged, collected or paid, for water supplied to said city and county, for any municipal purpose whatever, except for the single purpose denominated "family uses."
The answer of the defendants admits that the petitioner, the Spring Valley Water Works, was, on the nineteenth day of June, 1858, and now is, a corporation organized and existing under the laws of the State of California, and avers that when the company became incorporated, it assumed an obli gation to furnish water, to the extent of its means, to the City and County of San Francisco, for the extinguishment of fires, the flushing of sewers, and the watering of parks, free of charge, which is still in full force, and therefore defendants allege that it is not their duty to fix rates or compensation to he charged, collected or paid for water supplied to said city and county, for any municipal purpose, except for the single purpose denominated, family uses; and they pray to be hence dismissed.
The issues made in the case, and the questions upon which the Court is called upon to pass, clearly appear from the pleadings, and I will proceed to examine them with that care and deliberation which their great importance demands.
The petitioner was incorporated under "An Act for the Incorporation of Water Companies," approved April 22, 1858, the fourth section of which provides that "all corporations formed under the provisions of this Act, or claiming any of the privileges of the same, shall furnish pure, fresh water to the inhabitants of such city and county, or city, or town, for family uses, so long as the supply permits, at reasonable rates, and without distinction of persons upon proper demand therefor, and shall furnish water to the extent of their means to such city and covmty, or city, or town, in case of fire, or other great necessity, free of charge." Under that portion of the section which I have italicized, it has been held by this Court that "it is the duty of the Spring Valley WaterWorks to furnish water free to the city and county in case of fire, and also in case it is demanded for irrigating the parks and squares, watering the streets and flushing the sewers." (S. V. W. W. v. San Francisco, 52 Cal. 111; San Diego Water Co. v. San Diego, 59 id. 517.) It therefore follows, as a consequence, that if Section 4 of the Act of 1858 is still in existence, this Court has no right, by mandamus, to compel the Board of Supervisors to fix the rates or compensation for water to be furnished the city, which the company is obliged to furnish without charge, and therefore that portion of petitioner's prayer should be denied.
But it is claimed, on behalf of the petitioner, that the Act of 1858, so far as the same relates to free water, so called, has been abrogated and annulled by the provisions of the Con stiiution that went into effect on the first day of January, 1880. One of the provisions of the Constitution, which, it is claimed, abrogate the Act of 1858, is Section 19 of Article xi., which reads as follows:
" In any city where there are no public works owned and controlled by the municipality, for supplying the same with water or artificial light, any individual or any company duly incorporated for such purpose, under and by authority of the laws of this State, shall, under the direction of the Superintendent of Streets, or other officer in control thereof, and under such regulations as the municipality may prescribe for damages, have the privilege of using the public streets and the thoroughfares thereof, and of laying down pipes and conduits therein, and connections therewith, so far as may be necessary for introducing into and supplying such, city and its inhabitants either with gaslight or other illuminating light, or with fresh water for domestic and all other purposes, upon the condition that the municipal government shall have the right to regulate the charges thereof."
It will be observed that Section 19 of Article xi., declares that any individual or company, duly incorporated under the laws of this State, shall, under certain conditions prescribed, have the privilege of using the public streets and thoroughfares for laying down pipes and conduits therein for introducing and supplying such city and its inhabitants with fresh water for domestic and all other purposes, "upon the condition that the municipal government shall have the right to regulate the charges thereof."
By the third section of the Act of 1858 it is provided that " all privileges, immunities and franchises that may hereafter be granted to any individual or individuals, or to any corporation or corporations, relating to the introduction of fresh water into the City and County of San Francisco, or into any city or town in this State, for the use of the inhabitants thereof, are hereby granted to all companies incorporated-, or that may hereafter become incorporated, for the purposes aforesaid."
It is claimed on behalf of the petitioner that by virtue of the above section the Spring Valley Water Works was put upon an equality with any individual or corporation to whom tho right of introducing fresh water into the city should after-wards he granted, and that as such right has been granted by a provision of the Constitution to any individual or corporation to introduce water into the city for sale, without any limitation or condition except the sole condition of having the rates fixed by the Board of Supervisors, therefore the obligation imposed upon the Spring Valley Water Works to furnish free water has been removed.
I think the position is well taken, for if any other individual or corporation has the right to introduce water into the city for its use and to demand pay therefor, the Spring Valley Company stands on the same footing and is entitled to the "same " privileges, immunities and franchises." To impose upon the petitioner the obligation of furnishing water to the city for certain purposes free, would be withholding from it privileges and immunities, and would be imposing upon it burdens not cast upon any other individual or corporation provided for by Section 19 of Article xi. of the Constitution. It may be that no other individual or corporation has laid pipes or introduced water into the city for its use or for the use of the inhabitants thereof, but the right to do so is clearly granted by the Constitution, subject to certain conditions therein prescribed, none of which provide for or contemplate free water; and this is a privilege, and immunity, within the meaning of Section 3 of the Act of 1858, which ipsofacio relieves the petitioner from the obligation of furnishing water free, under Section 4 of the same Act.
2. But there is another ground relied upon by petitioner, which seems even stronger than the one above presented. By Section 1 of Article xiv., of the Constitution it is provided that "the use of all water now appropriated, or that may hereafter be appropriated, for sale, rental or distribution, is hereby declared to be a public use, and subject to the regulation and control of the State, in the manner to be prescribed by law; provided, that the rates or compensation to be collected by any person, company, or corporation in this State, for the use of water supplied to any city and county, or city or town, or the inhabitants thereof, shall be fixed annually, by the Board of Supervisors, or city and county, or city or town council, or other governing body of such city and county, or city or town, by ordinance or otherwise, in the manner that other ordinances or legislative acts or resolutions are passed by such body, and shall continue in force for one year and no longer. Such ordinances or resolutions shall be passed in the month of February of each year, and take effect on the first day of July thereafter. Any Board or body failing to pass the necessary ordinances or resolutions fixing water rates, where necessary, within such time, shall be subject to peremptory process to compel action at the suit of any party interested, and shall be liable to such further processes and penalties as the Legislature may prescribe. Any person, company or corporation collecting water rates in any city and county, or city.or town in this State, otherwise than as so established, shall forfeit the franchises and water works of such person, company or corporation to the city and county, or city or town where the same are collected, for the public use."
The provision contained in the above Article, to the effect that " the rates or compensation to be collected by any person, company, or corporation in this State,.for the use of water supplied to any city and county, or city or town, or the inhabitants thereof, shall be fixed," etc., is as broad and comprehensive as the English language could make it, and gives to the Board of Supervisors of the city plenary power over the subject-matter to which the Article relates. Water supplied to the city and county is as fully covered by the express language of the Article as is water supplied to the individual consumers, and the whole matter of rates or compensation is placed within the power and control of the Board of Supervisors.
Section 4 of the Act of 1858, which imposes upon water companies the duty of furnishing water to cities and towns in case of fire or other great necessity free of charge, also provides that the rates to be charged for water shall be determined by a Board of Commissioners, two of whom to be elected by the city and county, or city or town authorities, and two by the water company, and in case the four can not agree, the four Commissioners shall select a fifth.
The effect of the present Constitution upon the clause of Section 4 of the Act of 1858, last referred to, was under con sideration by this Court in the late case of the Spring Valley Water Works v. The Board of Supervisors of San Francisco, ante, 3, and it was there held that the portion of Section 4 which gave to the Company a voice in fixing the rates or compensation for water furnished the city of San Francisco or the inhabitants thereof, was taken away by Article xiv. of the Constitution. In that case Mr. Justice McKee, delivering the majority opinion of the Court, says: "A privilege of participating in the selection of agents for the performance of a public duty between it and the public has been taken away; but that privilege was in no sense a part of the contract between it and the State. The State was not under any obligation to continue it or to make it co-existent with the grant of the charter. As a mere privilege, the Company held it subject to the retained power of the State, in the exercise of which it was liable at any time to be modified or annulled. By the constitutional amendment the State has annulled it; but in doing so, it has not interfered with the charter of the Company or disturbed any right of property acquired under it, or obstructed the Company in the enjoyment of any of these rights."
It seems to me that the decision in the above case has a bearing upon the case now under consideration, for if the Constitution took from the Water Company the privilege of having a voice in fixing the rates it might charge for water supplied, it also relieved the company of the duty of supplying water to the city for any purpose free of charge. The consideration for the duty imposed upon the company to supply free water was the privilege conferred by the same section of the Act upon the company to participate in fixing the water rates. The duty and privilege were correlative, and when the privilege was taken away the corresponding duty ceased to exist.
But I am not obliged to rely upon this line of argument to support the conclusion arrived at in the case now before us. The plain language and obvious intention of the Constitution force me to the same conclusion. It was the manifest purpose of that instrument to frame a scheme covering the entire subject of water supply: "The use of water now appropriated or that may hereafter be appropriated for sale, rental, or dis tribution, is hereby declared to be a public use, and subject to the regulation and control of the State, in the manner to be prescribed by law; provided, that the rates of compensation for the use of water supplied to any city and county shall be fixed, annually, by the Board of Supervisors." The time for the performance of this duty is the month of February in each year. The duty imposed by the Constitution, as well as the time for its performance, are plainly marked out in the Constitution—its provisions being both mandatory and self-executing. But if legislation on the subject were necessary, I find it in the Act of March 7,1881, the first section of which provides as follows:
" The Board of Supervisors, Town Council, Board of Aider-men, or other legislative body 'of any city and county, city or town, are hereby authorized and empowered, and it is made their official duty, to annually fix the rates that shall be charged and collected by any person, company, association, or corporation, for water furnished to any such city and county, or-city or town, or the inhabitants thereof."
This Act follows the language of the Constitution. It contains numerous details, applicable to the subject, and the eighth section thereof imposes a penalty on the Board of Supervisors or other legislative body for a failure to perform any of the duties prescribed by it.
I have endeavored to show that Section á of the Act of 1858, which made it the duty of the petitioner to furnish water to the City of San Francisco for certain purposes, without any compensation therefor, has been abrogated by the Constitution/ It was a duty imposed upon the company by • the law, and it was within the power of the Legislature, and, a fortiori, of the framers of the Constitution, at any time, to relieve the Water Company from the obligation.
But if permitted to inquire into the motives of the Constitutional Convention in discharging the Water Company from an obligation imposed upon it by the law of its creation it will not be difficult to discover a sufficient motive. The company must be compensated for the water supplied by it. This compensation may be fair and just, or it may be unjust and exorbitant. Whether it is the one or the other, an unfair and disproportionate burden fell upon the individual con- Burners under the operation of the Act of 1858. The water furnished the city for the extinguishment of fires, and other great necessity, was not paid for by the city out of funds arising from taxes upon city property, but it was indirectly paid for by the individual consumers of the water. The owner of a large and very valuable building, used as a store or warehouse, in which but little if any water is used, enjoys benefits resulting from the use of the water in extinguishing-fires, and the protection of his property, as well as the reduction of the rate of insurance thereon, but he contributes little or nothing to the Water Company for the benefits thus conferred. The householder occupying a small residence of comparatively but little value, is required to pay for all the water used by him.
It is too plain to require argument, that if the Water Company is to receive compensation for all the water furnished by it (and that it is, will hardly be denied), the burden under the Act of 1858, fell almost exclusively upon the consumers, and the owners of valuable property, enjoying the protection and other benefits from the water, paid little or nothing. It was to distribute the burden more equally that the new Constitution abolished free water. And there is no hardship in the new rule of rates or compensation introduced by the Constitution. The matter has been placed in the hands and under the power and control of the Board of Supervisors of the city and county. This body represents the people of the city, one member being selected from each of twelve districts thereof. It is their duty to protect the rights of the city and the individual rights of the citizens. It also owes certain duties to the individual or corporation furnishing water for the use of the city and the inhabitants thereof. If, in fixing the rates or compensation it is governed by fair and disinterested motives, and does establish such rates as will be fair and just to the Water Company, as well as to the people, distributing the burden as equally and justly as possible among the consumers, as well as the property-owners, who enjoy the benefits and protection which the presence of the water in the city affords, no one will have any cause to complain of the scheme adopted by the new Constitution.
Writ granted as prayed for.