Court Opinion

ID: 3300480
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:16:54.717064+00
Date Added: 2024-06-11T14:00:37.198290
License: Public Domain

I concur in the conclusion that the order of the railroad commission should be annulled. The railroad commission has no power to compel a corporation which owns property in private right, and has not dedicated it to any public use, to apply it to a public use of any kind. But the commission has found as a fact that the Del Mar Company is operating a water system for compensation, and in its opinion it states as a fact that the said company is "a public utility." In view of the provision of section 67 of the Public Utilities Act that the findings of the commission on questions of fact shall be final and not subject to review, it cannot be held that this fact so stated in the opinion is not true, unless it should appear that the evidence on the subject was without conflict, so that the question would be purely one of law. I do not think that the question is necessary to the decision of this case.
The theory on which the commission appears to have proceeded is, in my opinion, fundamentally wrong, taking the facts as found by the commission itself. It appears from the record, and it is not disputed, that the Del Mar Company has a supply of water from which it has been for several years delivering water for compensation to persons who have purchased lots from the South Coast Land Company. Mr. Glass, the applicant in the proceeding before the commission, claimed that he was entitled to water from said Del Mar *Page 678 
Company as one of the public, or class, to whose use the water supply in charge of the Del Mar Company was dedicated. The commission found in favor of Glass and directed that the service be extended to him. The findings show that his land does not lie within the territory to which the Del Mar Company has been supplying or offering to supply its water. Prima facie,
therefore, he has no right to share in the water. The conclusion of the commission that he is entitled to water from that company is based, so far as appears, on two facts. The first is that the articles of incorporation of the Del Mar Company confer upon it the power "to construct, buy, lease, and otherwise acquire and dispose of, hold, manage, control, and operate waterworks and distributing systems, ditches, canals pipe-lines and all other means or appliances for the acquisition, sale or distribution of water for domestic, irrigation and all other purposes; also to sell and distribute water for domestic, irrigation and all other purposes." The second is the following finding: "We find as a fact that the defendant Del Mar Water, Light  Power Company, is owning, controlling, operating and managing a water system for compensation within this state." The only other findings regarding the right of the applicant Glass state merely that the company has water in sufficient quantity to supply him in addition to the other persons already supplied, and that it is feasible to extend its plant by additional pipes to a point near enough to supply water to his land.
The fact that the articles of incorporation empower the company to engage in public service does not, of itself, constitute proof that it is engaged in such public service, or that it has dedicated such property as it may own to such public service. The powers given in the articles, as above quoted, do not necessarily imply an intention to engage in public service. One may acquire and hold a water supply and waterworks and thereby distribute and sell water for domestic use and irrigation or other purposes, without engaging in public service. It may make such sales to particular persons and in such a manner that the public would not be entitled to it. The mere fact, therefore, that a company having such powers has acquired a water supply and constructed waterworks constituting a system which it is operating for compensation does not necessarily justify the conclusion that it *Page 679 
is engaged in public service or that its water is dedicated to public use. The only effect of the adoption of such articles by a corporation is to give it the capacity to engage in such public service if it so desires. After having become incorporated in this manner, it has the power to engage in such service in the same sense that an individual has power to engage in such service. It may or may not do so, and until it does, it cannot be said to be subject to the jurisdiction of the railroad commission.
A finding that the Del Mar Company owns and is operating a water system for compensation and that it has a water supply sufficient in quantity to supply the applicant Glass, is not the equivalent of a finding either that it is engaged in operating its plant for public use, or, if it is, that Glass is one of the persons entitled as a beneficiary of such use. It is evident, however, from the opinion of the commission that it considered the finding that the company owns and operates "a water system for compensation," as the equivalent of a finding that it was engaged in applying its water to a public use. Treating this as its intended meaning, it is nevertheless clear that the commission is in error wth respect to the effect of such a situation. Its theory is, apparently, that if such company is engaged in public service at all and has applied any part of its water supply to public use, the whole of its property must be deemed to have been dedicated to the general public use and subject to the power of the commission; and further that if it has by its dedication, evidenced, either by direct declaration, or by contract, or by conduct, devoted its water supply to public use within a specified and limited territory, it has thereby put itself and all of its property within the jurisdiction and power of the commission, and that, on the complaint of one desiring water, who is not within the territory so specified and limited, the commission may compel the company to lay new pipes, enlarge its territory, and devote its entire supply to service for such additional territory as the commission may find in need of the water and for which the supply is adequate; in other words, that whenever the commission finds a corporation engaged in public service and applying a part of its property to such service, it may take the entire property of the corporation and compel the dedication thereof to public use and *Page 680 
direct its distribution to such portions of the public as the commission may deem best. There are parts of the Public Utilities Act which seem to be based on the same theory. We refer to section 5 and section 36. These sections, taken literally, seem to empower the commission to direct any public utility to extend its plant and enlarge the territory supplied by it in such manner as the commission shall judge advisable. But a proper interpretation of these provisions must be that they are limited in their application to such public service corporations as may have devoted their entire property to the use of the entire public, or to those which may have undertaken to supply a certain district, such as a city, and dedicated their property to that service and which afterward may have failed or refused to give to such district an adequate service, or failed or refused to extend the system and supply to parts of the district, when it was within its means to have done so and such extension would not be unreasonable. In such cases it would be entirely proper to give such a commission power to compel adequate service within the territory which the corporation has undertaken to serve and to compel any reasonable extension of the service to other parts of such territory. But even a constitutional declaration cannot transform a private enterprise, or a part thereof, into a public utility and thus take property for public use without condemnation and payment. The provisions of this act could not authorize the commission to compel such corporation to dedicate additional property to public use without additional compensation. When a corporation voluntarily devotes a part of its property to public use, it is to be presumed that it makes the dedication because it is satisfied with the return which it expects to receive, and in that way it is deemed to have been compensated for such dedication. But when it is forced to devote to public use additional property which it has not dedicated to public use, or is compelled to extend its service to supply uses or territory not embraced in the original dedication, it must, under our constitutional provisions, as a condition precedent, be compensated for the value of the new property taken or new use exacted. This may be done under the power of eminent domain.(Pacific T.  T. Co. v. Eshleman, 166 Cal. 640, [137 P. 1119].) The fact therefore that the company is the owner of and is *Page 681 
operating a water system for compensation, and the fact that it has the power by reason of its articles of incorporation to engage in public service, are by no means sufficient to authorize the conclusion that any particular person is a beneficiary of the use which such company is administering, or that any of the outlying territory is entitled to the service. It still remains necessary to ascertain the fact that such person is such beneficiary; that he is within the district and of the class, for which such dedication is made.
This fact the findings of the commission do not cover. It is not claimed that there is evidence that the water company has held out that its water was for sale to the outside public generally, or to any persons whatever, except those within the original Del Mar townsite and those within the subdivided lands of the land company. The commission does not so find. The selling of water to persons who come and take it away in barrels, is not evidence of a dedication of all the water owned by the seller to public use, nor of a dedication of any of it to the supply of any particular territory or area. In this state, where the territory needing water is vastly greater than the available water will supply, it is obvious that the district to be served from any source, or by any water service company must be limited in extent. Indeed, the same is substantially true of a water service anywhere. The supply is always limited and the territory to which it is to be served must likewise be limited, otherwise the amount served to each person might, by constantly increasing demands, be made so small that it would be of no use to any one. There can be no doubt, therefore, that the owner of a water supply may make a limited dedication of it to public use, confining the use to such territory as he sees fit. Nor can there be any doubt that one owning a water supply is not compelled to dedicate all of it to public use, or that he may dedicate a part of it, only, to such use, reserving the remainder for private purposes or for private sale or disposition as he sees fit. Accordingly, our decisions have recognized and have repeatedly declared the right of a water company to make such limited dedication and to decline to furnish its water to persons not within the area it has undertaken to serve. (Leavitt v. Lassen Irr. Co., 157 Cal. 92, [29 L.R.A. (N.S.) 213, 106 P. 404]; Thayer v. California Dev. Co., 164 Cal. *Page 682 
128, [128 P. 21]; Price v. Riverside Land etc. Co., 56 Cal. 433;  Hildreth v. Montecito Creek Water Co., 139 Cal. 29, [72 P. 395]; 2 Wiel on Water-rights, 3d ed., sec. 1281; Lewis on Eminent Domain, 3d ed., secs. 254, 313.) The facts stated in the commission's findings and opinion do not show that the Del Mar Company ever offered its water for use to the territory in which applicant Glass lived, or to any persons other than those buying lots from the land company or residing within the "old town" surrounded by the territory subdivided by the land company. Its dedication of its water, if it has made any, extended no further than that. There has been no dedication of the water to the use of any portion of the public outside of that area.
For these reasons I am of the opinion that even if it should be conceded that the company is administering a public use, it does not appear that it is administering a use to which Glass is a beneficiary or that Glass comes within the class of persons to which its water has been dedicated. This being so, the commission has no power to compel an additional dedication or to compel an extension of the service beyond that to which it is already dedicated, and its order directing the extension and additional service was in excess of its authority and void.
Henshaw, J., Sloss, J., and Angellotti, J., concurred.
Rehearing denied.
In denying a rehearing the court in Bank filed the following opinion on May 11, 1914: