Court Opinion

ID: 8195455
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:18:43.816238+00
Date Added: 2024-06-11T16:40:45.359024
License: Public Domain

The following opinion was filed May 3, 1927:
Stevens, J.
(1) When this action was before the court upon demurrer to the answer, the question was presented whether the waterworks operated by the city of Milwaukee was subject to regulation by the state as a public utility. That was the question decided, and the decision of the court on that question is the law in this case. “The ‘law of the case’ consists, not in the reasoning of the court or the illustrations given, but in the propositions of law actually decided and applicable to the facts in judgment.” Heidt v. Minor, 113 Cal. 385, 390, 45 Pac. 700, 701. All other questions were left open for future consideration and the cause was remanded “for further proceedings.” There was no attempt to determine that the rates adopted by the city on January 1, 1921, would have been legal and effective if the ten-day notice 'required by sec. 196.20 of the Statutes had been given. The purpose was simply to call attention to the fact that the first step essential to put the rates in effect had not been taken.
(2) The increased water rates established by the city in 1921 were illegal and the city is liable under the provisions *525of sec. 196.64 “to the person, firm or corporation injured thereby in treble the amount of damages sustained in consequence” of the collection of such excessive water rates, unless the right to recover is barred by laches or lost through the fact that such water rates were voluntarily paid.
Each time that the payment of the increased rate was demanded by the city, such demand was accompanied by notice that if the amount of the bill rendered was not paid within thirty-one days the city would shut off the water supply of the consumer. Under such circumstances “the parties are not upon equal ground. The city, as a water company, cannot do as it will with its water. It owes a duty to each consumer. The consumer, once taken on to the system, becomes dependent on that system for a prime necessity of business, comfort, health, and even life. He must have the pure water daily and hourly. To suddenly deprive him of this water, in order to force him to pay an old bill claimed to be unjust, puts him at an enormous disadvantage. He cannot wait for the water. He must surrender, and swallow his choking sense of injustice. Such a power in a water company or municipality places the consumer at its mercy.” Wood v. Auburn, 87 Me. 287, 32 Atl. 906, 29 L. R. A. 376, 377.
The modern city dweller is absolutely dependent upon the system of public water supply for all domestic and sanitary needs. He can no longer resort to the town pump, and, if he could, he would hesitate to use the water from a well located in a congested urban area for domestic uses, and it would be difficult, if not impossible, to use it for sanitary purposes. A constant supply of pure water is almost as essential to modern city life as is the air we breathe. This is equally true in the case of a corporation like the plaintiff which must have a constant supply of water in order to prosecute its business. Such corporation has no choice. It must submit to the exaction of an illegal rate or suspend its business operations if its water supply is cut off. Payments *526made under such circumstances are compulsory, not voluntary. Boston v. Edison E. I. Co. 242 Mass. 305, 310, 136 N. E. 113; St. Louis B. Asso. v. St. Louis, 140 Mo. 419, 424, 37 S. W. 525, 526; American B. Co. v. St. Louis, 187 Mo. 367, 86 S. W. 129, 132, 133. See, also, Swift Co. v. U. S. 111 U. S. 22, 28, 29, 4 Sup. Ct. 244.
“It is the well settled rule of this state that, where one is compelled to make payment of money which the party demanding has no legal right to receive, in order to' prevent injury to his person, business, or property, such payment is, in law, madé under duress, and may be recovered from the party receiving it; and it makes no difference that the payment was made with full knowledge of all the facts, provided it was made under duress.” Chicago v. Northwestern Mut. L. Ins. Co. 218 Ill. 40, 75 N. E. 803, 1 L. R. A. n. s. 770, 772. When excessive water rates are paid because of a threat to'turn off the water if they are not paid, such payment is “as much under compulsion as if the city officials had been armed with a warrant for the arrest of the person or the seizure of goods, in which case but one opinion would be entertained as to the nature of the payment if inade.” Westlake & Button v. St. Louis, 77 Mo. 47, 50, 51.
When payment is made under threat to shut off the water supply of the consumer if the payment is not made, it would be superfluous to require payment under protest as a condition precedent to the recovery of the excess payment. To object or protest under such circumstances would be an idle waste of words. The law looks to the substance of things and does not require useless forms or ceremonies. “Ordinarily, protest is the best evidence of compulsion or unwillingness to pay, and it is usually expected where the payment is made to one who has a right to make terms with the payor; but where protest, would be useless it is superfluous. . . . Compulsion may appear from the circumstances and not' from any expression of unwillingness or protest *527against a payment.” Illinois G. Co. v. Chicago Tel. Co. 234 Ill. 535, 85 N. E. 200, 18 L. R. A. n. s. 124, 131.
“The old rule that there could be duress only where there was a threat of loss of life, limb, or liberty has been- so-changed that duress may sometimes be implied when a payment is made or an act performed to prevent great property loss or heavy penalties when there seems no adequate remedy except to submit to an unjust or illegal demand and then seek redress in the courts.” Minneapolis, St. P. & S. S. M. R. Co. v. Railroad Comm. 183 Wis. 47, 56, 197 N. W. 352.
The fact that a consumer may resort to equity to enjoin the collection of an illegal water rate does not make the payment of such illegal rate without resort to equity a voluntary one which will bar recovery of the excess paid. ■ For -the small consumer the cost of such, proceeding in equity would be so out of proportion to the amount involved as to be prohibitive. To hold that a public utility supplying an absolute necessity of modern urban life can compel a consumer to pay excessive and illegal rates under a threat of depriving the consumer of the service and then defeat recovery for the excess illegally collected because the consumer has not resorted to a suit in equity, “would be a violation of the fundamental juristic principle of procedure. That principle is that the claimant, not the defendant, shall resort to judicial process; that he who asserts something to be due him, not he who denies a debt, shall have the burden of judicial action and proof. It is only in the case of dues to the state that this principle is suspended.” Wood v. Auburn, 87 Me. 287, 293, 32 Atl. 906, 29 L. R. A. 376, 377, 378. When the city is collecting its water rates it is acting in its proprietary capacity and not as a governmental agency of the state.
(3) The case stands in a class by itself because the city and the patrons of its municipal water plant acted in good faith for some years under the mistaken belief that ch. 279, *528Laws of 1919, took the waterworks of the city of Milwaukee out of the control of the railroad commission and exempted the city from the provisions of the law regulating public utilities in Wisconsin. Apparently the railroad commission gave this act the same construction.
There is no proof that the rates collected by the city since 1921 are unreasonable or that they would have been held excessive if legally adopted. The fact that the railroad commission has entered an order permitting the establishment of the same rates that have been collected since 1921 tends to show that the rates actually collected by the city were in fact reasonable. But for the passage of the public utility act the rates collected would have been legal and their collection would have subjected the city to no penalty under the provisions of sec. 196.64 of the Statutes.
The plaintiff corporation made fifteen separate payments of the rates which the city put in force January 1, 1921, before it questioned the right of the city to establish and collect such rates. The plaintiff corporation, after having dealt with the city for so long a period as if it were a municipal proprietor with full power to establish its water rates, is now estopped to raise the question that it did not possess such power because it was in fact a public utility. The rule which controls is analogous to that which applies to one who had dealt with an association in such a way as to recognize and in legal effect to admit its legal existence as a corporate body and estop him from denying corporate existence in any action arising out of such dealings. Citizens Bank v. Jones, 117 Wis. 446, 453, 454, 94 N. W. 329; Gilman v. Druse, 111 Wis. 400, 408, 87 N. W. 557; Whitney v. Robinson, 53 Wis. 309, 316, 10 N. W. 512.
After having dealt with the city for so long a time as if it were a municipal proprietor, not subject to regulation by the state, the plaintiff corporation ought not in justice and equity to be permitted to assert that the city was not acting *529in such capacity for the purpose of subjecting the city to such a harsh penalty as the payment of treble damages.
(4) The judgment properly enjoined the collection of any rate in excess of that in force on April 1, 1907, until such time as such rates have been changed in the manner provided by the public utility law. When such change is made the injunctional order by its terms will cease to restrain the city from collecting the new rate.
By the Court. — Judgment affirmed.
The following opinion was filed October 12, 1927: