Court Opinion

ID: 5440588
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:02:25.902249+00
Date Added: 2024-06-11T08:31:59.283287
License: Public Domain

McKee, J.:
In 1875 the San Diego Water Company made a proposal in writing to the Board of Trustees of the city of San Diego to erect hoisting works, lay down pipes, and do all other things necessary to bring water from the San Diego River for supplying the city of San Diego with pure, wholesome water, if the Board would agree, in behalf of the city, to purchase from the Company one hundred thousand gallons of water per month, for five years, at one dollar per thousand gallons. Responding to this proposal, the Board, at a regular meeting, passed a resolution whereby they agreed, in behalf of the city, to use and consume not exceeding two hundred thousand gallons of water per month for five years, and to pay the Company from the time they commenced to furnish the water to the city one hundred dollars per month, in warrants to be drawn on the General Fund of the City Treasury.
The Company accepted and agreed to these terms, and, in performance of its part of the contract, brought water into the city December 1,1875; and from that time onward has furnished the city with water according to its agreement; and the city has paid for the water thus furnished from December, 1875, until July 31,1878, since which time it has refused to pay; and the action in hand was brought to recover the amount due under the contract for the water furnished from July 31,1878, to November 30,1880.
As a corporation formed for the purpose of supplying the inhabitants of the city with pure, fresh water, the plaintiff is a creature of the laws under which it incorporated.; and derives its rights, duties, and obligations entirely from them. When it incorporated under those laws it assumed two obli*520gations: 1. To furnish water to the extent of its means to the city of San Diego in case of fire, or other great necessity, free of charge; 2. To furnish water to the inhabitants of the city for family uses, upon proper demand, at reasonable rates, to be fixed by a Board of Commissioners. (Stats. 1858, § 4.) The first did not bind the Company to furnish water free for all municipal purposes. But it bound the Company to furnish it free to the city “ for the extinguishment of fires, the flushing of sewers, and the watering of parks, or such other necessities as are incidental to the direct employment by the municipality of its government or police powers.” The second bound the Company to furnish water to the city, standing in loco parentis for the occupants or inhabitants of its prisons, hospitals, poor-houses, schools, and other institutions to which water is supplied for family uses, at reasonable rates, to be fixed in the manner required by the law. (Spring Valley W. W. v. San Francisco, 52 Cal. 111.)
Whence it would seem to follow, that in performance of the obligations imposed upon the company by its charter, the company had no right to charge or contract for water furnished to the city, for the use of the inhabitants under its charge in its several public institutions, in any other mode than that prescribed by the charter. The charter having prescribed the mode of contracting, the mode is the measure of the power and must be observed, or the instrument by which the corporation undertakes to contract is of no binding force or validity.
Whether, therefore, the company furnished the water which is the subject-matter in controversy in this case, to the city of San Diego for “ municipal necessities,” or “ for family uses,” the contract was one which it had no power to make. If furnished for municipal necessities the contract is void, because the company could not, under its charter, charge for that which it was under obligation to furnish to the city “ free of charge.” If for “ family uses,” the contract was equally void, because the rates which the company were authorized to charge had not been fixed according to law.
Besides, the city itself had no power under its charter to make an engagement with the company to pay for water *521which the latter was bound by the law of its incorporation to furnish free for “ municipal necessities,” and at reasonable rates to be fixed as required by the law, “ for family uses.”
It is true, that by the fifth paragraph of Section 10 of the charter of the city, power was given to the Board of Trustees to provide for the cleaning of drains and sewers; and, by the sixth paragraph of the same section, to provide for the extinguishment of fires. For those purposes the Board, in the exercise of the powers expressly • conferred upon it, might, as a means necessary to an end, enter into a contract for obtaining a supply of water, if none had been provided. But the provisions of the charter of the city must be construed in subordination to the laws of the State under which the plaintiff incorporated; and as those laws had provided, through the plaintiff, for a supply of water for. extinguishing fires and flushing the. sewers of the city, free of charge, the Board, in the exercise of its incidental powers, could not contract to pay the plaintiff for water for which the latter could not charge. Such a contract would be in violation of the policy of the law in granting privileges to water corporations, and a contract made in violation of law by the officers of a municipal corporation is not binding upon the city.
But it is urged that the meritorious consideration for the contract between the plaintiff and the city, as stated in the first and third counts of the complaint, is not the water furnished to the city, but the erection of works and machinery, and conducting the water to the place where the city required it.
If that were the consideration and nature of the resolution adopted by the Board of Trustees, there is nothing in the charter of the city to sustain it. For the charter contains no express grant of power to the Board to aid in the construction of improvements partaking of a public character, and in the absence of such authority the action of the Board would be unauthorized. But even if there were in the city charter a grant of such power, the Board could not, in the exercise of the power, contract to pay money, or to appropriate the revenues of the city to aid in constructing the works of a private corporation. Such a contract would be in violation of the Constitution and laws of the State, be*522yond the scope of the corporate powers of the city, and any instrument in writing made, or any resolution adopted, for that purpose would be void.
Moreover, if the contract sought to be enforced is one to aid in the erection of the works of the plaintiff, it was not made according to the provisions of Section 14 of the city charter, which requires that “ all contracts for building and repairing or other works, which the Trustees are authorized to make for said city, must be let to the lowest bidder, after advertising for bids.” No publication was made, by order of the Board or otherwise, for sealed proposals; no bids were made, and no contract- was let to the lowest bidder, and as the contract between the plaintiff and the city was made without complying with the requirements of the charter, it is a nullity. And the contract being void, for want of power in the plaintiff, for want of power in the Board of Trustees of the city, and for non-conformity with the requirements of the charter of the city, no subsequent acts of the officers of the city in ratification of it would be binding upon the city. (Smith v. The City of Newburgh, 77 N. Y. 130, 136.)
Judgment affirmed.
McKinstry, J.; Morrison, O. J., and Boss, J., concurred.