Tampa Waterworks Company v. Tampa/Opinion of the Court

by Oliver Wendell Holmes, Jr.

United States Supreme Court

199 U.S. 241

Tampa Waterworks Company  v.  Tampa

 Argued: and submitted October 27, 1905. --- Decided: November 13, 1905

This case comes here by writ of error to a decree dismissing the bill of the plaintiff in error upon demurrer. 45 Fla. 600, 34 So. 631, 36 So. 174. The bill alleges a contract between the plaintiff water company and the city of Tampa, by which the former was to erect waterworks and to have the right to charge certain rates for the use of its water for thirty years, with various other terms, not necessary to mention. By a subsequent ordinance the city fixed lower rates as the highest to be charged by any person or corporation furnishing water to the city or its inhabitants, and imposed a penalty on violation of this ordinance or refusal to furnish water in compliance with its terms. The bill sets up that this ordinance impairs the obligation of the plaintiff's contract, and takes its property without due process of law, contrary to the Constitution of the United States. The city justified under § 30, article 16, of the state Constitution in force when the contract was made, and under an act approved May 31, 1901, chap. 5070, after the date of the contract. The supreme court of the state held the justification sufficient, and dismissed the bill.

We assume for the purpose of decision that the contract made was within the powers of the city, subject to whatever qualification of inherent weakness the Constitution created or imposed. We assume also that the case shows more than a mere breach of contract by the city if its justification fails, and pass at once to the merits of the justification.

The clause of the state Constitution is as follows: 'The legislature is invested with full power to pass laws for the correction of abuses and to prevent unjust discrimination and excessive charges by persons and corporations engaged as common carriers in transporting persons and property, or performing other services of a public nature, and shall provide for enforcing such laws by adequate penalties or forfeitures.'

In pursuance of this clause in the Constitution the legislature passed the act referred to above. By this act the corporate authorities of cities, towns, and villages were empowered to prescribe by ordinance maximum charges for water. 'Such charges to be just and reasonable: Provided, that this act shall not be so construed as to impair the validity of any valid contract heretofore entered into between any city, town, or village and any person, firm, or corporation for the supply of water to-such city, town, or village or its inhabitants. But this act shall not be held to validate any contract heretofore made.' This act was construed by the supreme court of Florida, as we understand it, to mean that cities might establish reasonable maxima in any case where they could do so without impairing the obligation of contracts. Therefore the act was held to authorize the ordinance complained of unless the ordinance was open to constitutional objection. This construction of the statute is a very slight extension of the direct meaning of the words used, and seems to us reasonable even if a somewhat different one could be conceived. Of course it removes any question of constitutionality from the statute, and therefore there seems to be no ground for reviewing the decision upon that point. Central Land Co. v. Laidley, 159 U.S. 103, 40 L. ed. 91, 16 Sup. Ct. Rep. 80; Weber v. Rogan, 188 U.S. 10, 47 L. ed. 363, 23 Sup. Ct. Rep. 263.

We turn to the construction of the Constitution of the state. There was some argument that the clause was not self-executing. But so far as it expressed a power of the legislature, of course, as soon as the Constitution went into effect, that power existed at once, and contracts afterwards were made subject to the possibility of its exercise, as it was exercised by the subsequent statute. Spring Valley Waterworks v. Schottler, 110 U.S. 347, 355, 28 L. ed. 173, 176, 4 Sup. Ct. Rep. 48; Bienville Water Supply Co. v. Mobile, 186 U.S. 212, 46 L. ed. 1132, 22 Sup. Ct. Rep. 820. The only question then is, how far the clause of the Constitution goes. When the contract was made there had been no judicial construction of the clause which withdrew the contract from its operation, nor has there been since, so far as we are aware. There is no ground for the application of the doctrine of Muhlker v. New York & H. R. Co. 197 U.S. 544, 49 L. ed. 872, 25 Sup. Ct. Rep. 522, or Gelpcke v. Dubuque, 1 Wall. 175, 17 L. ed. 520. In such circumstances, although we construe the Constitution for ourselves, and determine the existence or nonexistence of the contract set up, and whether its obligation has been impaired by the state enactment (Douglas v. Kentucky, 168 U.S. 488, 502, 42 L. ed. 553, 557, 18 Sup. Ct. Rep. 199), 'the Federal courts will lean towards an agreement of views with the state courts if the question seems to them balanced with doubt,'-a principle reinforced by the later cases. Burgess v. Seligman, 107 U.S. 20, 34, 27 L. ed. 359, 365, 2 Sup. Ct. Rep. 10; Wilson v. Standefer, 184 U.S. 399, 412, 46 L. ed. 612, 618, 22 Sup. Ct. Rep. 384; Bienville Water Supply Co. v. Mobile, 186 U.S. 212, 220, 46 L. ed. 1132, 1135, 22 Sup. Ct. Rep. 820; Chicago Theological Seminary v. Illinois, 188 U.S. 662, 674, 675, 677, 47 L. ed. 641, 649, 650, 23 Sup. Ct. Rep. 386.

It cannot be said that the interpretation adopted is not a possible one. Water companies are corporations performing services of a public nature quite as much as common carriers, and, therefore, are within the words of the clause which is not confined to common carriers. A natural method of preventing excessive charges is the passage by the cities or towns within which the services are performed, of ordinances establishing reasonable rates and punishing noncompliance. Therefore the power to prevent excessive charges, given to the legislature, properly was exercised by a law granting cities authority to pass ordinances of the kind supposed.

So much probably would be admitted; but it is said that the clause is merely declaratory of powers which the legislature would have had without it, and which, with or without it, the legislature could cut down by contract. The argument is not without force, but it did not prevail in this case, and we are not prepared to overrule the Florida courts in their interpretation of their own laws. It is entirely possible to read the words as conferring a power which, by their very form, they were meant to make inalienable. No doubt some sort of a legislature would exist, Constitution or no Constitution; and presumably would have power to regulate rates charged by companies performing public services, or to restrict that power by a constitutionally binding contract. But the actual legislature derives its being, its form as a senate and house of representatives, and its powers, from the instrument in force. When the Constitution says that the legislature 'is invested' with a certain power, it invests it with that power; and does so none the less that, in the absence of those words, a more or less similar power would be implied by more general expressions in the same instrument. It says that the power shall be 'full power;' and the adjective may be read as meaning a power which cannot be cut down. When it goes on to require that the legislature 'shall' provide for enforcing the laws which it is expected to pass for the correction of abuses and the prevention of excessive charges, the argument is strengthened that it means to impose a duty which the legislature is not at liberty to give up. Such was the opinion of the supreme court of Florida, and we have yielded to the judgment of the state court upon more doubtful questions than this.

The case stands on the single ground of contract. There is no allegation that the rates fixed by the new ordinances are unreasonable, or that their effect will be to destroy or considerably impair the value of the plaintiff's property. Although the 14th Amendment is invoked, no case is made out under it on any other ground than that the obligation of a binding contract is impaired. The single question is whether the city of Tampa is bound for thirty years from the date of its agreement to permit certain specified rates to be charged, even if they have ceased to be reasonable. We are not prepared to say that the supreme court of Florida was wrong in deciding that it is not bound, under the Florida Constitution and laws. The effect of a former decree dismissing a bill brought by the city, which is set up in this bill, cannot be reargued here.

Decree affirmed.

Mr. Justice Brown, with whom was Mr. Justice Peckham, dissenting:

Notes