Spring Valley Water Works v. City & County of San Francisco

Works, J.

This action is brought to set aside and declare void an ordinance of the board of supervisors of the city and county of San Francisco, fixing water rates to be charged for water to be furnished to said city and its inhabitants for the year commencing July 1, 1889.

The complaint, after alleging the plaintiff’s corporate existence, and its object and purpose, viz., to furnish water to said city and county, and other preliminary and technical matters, avers that it has for the purpose mentioned “constructed aqueducts, and pumping and other works, and laid many miles of water-pipe for distributing water to its consumers; and that its aforesaid lands, water rights, works, buildings, and improvements necessary to enable it to fulfill the said purposes of its incorporation are of very great value, to wit, of a value exceeding twenty-five million dollars”; that it has projected and has now in course of construction large additions to its works, necessary to meet the demands of said city and its inhabitants, and in order to meet the wants of said city and its inhabitants,, and “ to. meet the ex *297 penses and pay the cost of the said additions to its works and improvements, it will be necessary for the plaintiff to lay out and expend, during the year ending June 30, 1890, very large sums of money, amounting in the aggregate to more than one million five hundred thousand dollars”; that for these purposes it has borrowed large sums of money, amounting in the aggregate to more than nine million six hundred thousand dollars, and has an aggregate interest-bearing indebtedness, secured by mortgage on its property, of nine million dollars; that the interest which will accrue and have to be paid during the year ending June 30, 1890, will amount in the aggregate to four hundred and ninety-eight thousand dollars; that the operating expenses of the plaintiff’s business for said year will amount to three hundred and ninety thousand dollars, and the taxes to be paid by it will amount to seventy thousand six hundred dollars; that its capital stock is ten million dollars, is divided into one hundred thousand shares, and held by more than eleven hundred share-holders, and that the holders of said stock are reasonably entitled to receive in dividends upon their said stock not less than seven per cent per annum upon the par value of said stock; that the plaintiff is entitled to receive a reasonable and just compensation for the services rendered, “and that if so fixed its aggregate annual income from such rates would be sufficient to pay the interest on its indebtedness, the taxes upon its property, and its operating and other fixed expenses, and to pay dividends to its stockholders, amounting to at least seven per cent upon the par value of their stock, and that to this end it was and is entitled to have its rates for the year commencing July 1, 1889, and ending June 30, 1890, so fixed and established that its gross income for said year will amount to at least one million six hundred and seventy thousand dollars”; that, as required by law, the plaintiff furnished said board of supervisors, and filed with the clerk thereof, “a *298 detailed statement, verified by the oath of the president and secretary of the plaintiff, showing the name of each water-rate payer, his or her place of residence, the amount paid by each such water-rate payer during the year preceding the date of such statement, and also showing all-revenue derived by said plaintiff from all sources during said year, and an itemized statement of expenditures made by plaintiff for supplying water during said time; that from said statement it appeared, and so the fact is, that the receipts and expenditures made by the plaintiff from furnishing and for supplying water during said time were as follows, viz.: Receipts—From water rates, $1,421,751.39; from other sources, $12,498.25. Total, $1,434,249.64. Disbursements — For operating expenses, $361,653.65; for interest, $443,257.85; for taxes, $70,624,40; for dividends, $600,000. Total, $1,475,535.90. Balance, expenditures over receipts, $41,286.26.”

The complaint further alleges “ that said board of supervisors did not during said month of February, 1889, so fix and prescribe said rates for said year, and have not at any time lawfully or duly fixed or prescribed any rates whatever for supplying fresh water to said city and «county and its inhabitants during said year; that on the twenty-eighth day of February, 1889, the said board of supervisors assumed and pretended to pass a certain pretended ordinance or order, purporting to fix the maximum rates to be charged for furnishing fresh water to said city and county and its inhabitants for the said year commencing July 1, 1889, and ending June 30, 1890, a true and full copy of which said ordinance or order is hereto annexed, marked Exhibit A, and made a part of its complaint.

"That the said ordinance or order purports to fix the rates to be charged for supplying fresh water to said city and county and its inhabitants for said year; but that the same is, in fact, null and void, and of no effect, and *299 that the rates pretended thereby to be fixed are wholly illegal and unauthorized; that the said ordinance or order was passed, or pretended to be passed, without any notice or opportunity to be heard against it on the part of the plaintiff or other person interested; that said order was first introduced in said board of supervisors, without any previous notice to plaintiff, or hearing accorded to plaintiff, with reference to the subject-matter thereof, at a meeting of said board of supervisors - held on the twenty-first day of February, A. D. 1889, and was thereafter called up for final passage at a meeting of said board of supervisors held on the twenty-eighth day of February, A. D. 1889; that the first information which the plaintiff received thereof was through the public newspapers, and on said twenty-first day of February, and that the first opportunity which the plaintiff had to object to said order, or to offer to introduce evidence before said board of supervisors, showing that said order was unreasonable and unjust, was at said meeting of February 28, A. D. 1889; that at said meeting, and at the first opportunity, and before the passage of said order, the plaintiff offered to produce and introduce evidence and testimony before said board, showing that said order was unreasonable and uniust, in that it would not allow the plaintiff to collect sufficient revenue to pay its necessary operating expenses, interest on its indebtedness, and taxes, but that the said board of supervisors would not, and did not, allow the plaintiff to introduce, and refused to hear, evidence offered by the said plaintiff to show that the said ordinance or order was, and that the rates pretended to be fixed thereby were, unreasonable, unjust, and oppressive, and refused to allow, and did not allow, any evidence whatever to be introduced respecting the reasonableness and justice of the said ordinance or order, and of the rates purported to be fixed thereby, but immediately passed and adopted said order, without giving the plaintiff any opportunity to be heard *300 whatever; that the rates purporting to be fixed by said ordinance or order were fixed arbitrarily, at random, and by mere guess-work, without any consideration of or regard to the right of plaintiff to a reasonable compensation for supplying water to the said city and county and its inhabitants, or to a reasonable income, or any income, upon its investment, and without any consideration of or regard to the value of the plaintiff’s works and property, or the amount of its interest-bearing indebtedness, and the annual interest charge thereon, or its operating expenses, or the amount of taxes which it would be required to pay, or the right of the plaintiff’s stockholders to reasonable, or any, dividends upon their stock, and without any reference to or consideration of the actual cost of supplying said water, but in total disregard of all such matters; and that in the passage, or pretended passage, of said ordinance or order, the said board of supervisors acted wholly without jurisdiction, power, or authority, and in excess of their lawful jurisdiction, power, or authority.

“ That the said ordinance or order is, and the rates purporting to be prescribed and fixed thereby are, grossly unjust, unreasonable, and oppressive; that said rates do not permit of nor provide for a just or fair or reasonable compensation for the water to be supplied during said year by this plaintiff to said city and county and the inhabitants thereof; and that if said ordinance or order is enforced, and if the plaintiff is prevented from charging and collecting any other or greater rates than those prescribed, its gross income from the said rates for the year commencing July 1, 1889, and ending June 30, 1890, will not, and cannot possibly, exceed the sum of seven hundred and fifty thousand dollars; and it will be wholly insufficient to pay the interest on the plaintiff’s indebtedness, its operating expenses, and taxes; and not only will not and cannot yield any dividend to its stockholders, but will render it necessary to levy heavy assess *301 ments upon said stockholders to pay said interest, expenses, and taxes.”

It is further averred that the defendants are about to enforce said ordinance; that its passage has already impaired the plaintiff's credit and depreciated the value of its property; and if enforced, it will greatly impair, if not entirely destroy, the plaintiff's credit as well as the value of its property and capital stock, and prevent it from constructing and completing the work necessary to supply water to the city and its inhabitants; and that the ordinance operates, and -will operate, to take away the plaintiff’s property without due process of law, and deprive the plaintiff of the equal protection of the laws, and that the plaintiff has no adequate remedy at law. There are other allegations in the complaint, but they need not be particularly noticed.

The prayer of the complaint is as follows:—

“Wherefore the plaintiff prays the judgment and decree of this court,—■

“1. That the said pretended ordinance or order of the board of supervisors of said city and county is utterly null and void, and of no effect in law.

“ 2. That the plaintiff is entitled to have the rates for supplying fresh water to said city and county and its inhabitants for the year commencing July 1,1889, and ending June 30, 1890, and for other years, so fixed that they will, in the aggregate, afford a reasonable and just compensation for the service rendered, and will yield a sufficient annual income to pay the interest on its indebtedness, its running expenses and taxes, and to the plaintiff’s stockholders a dividend of not less^than seven per cent per annum upon the face value of their stock.

“ 3. That the court issue its mandatory injunction or other peremptory process requiring the said board of supervisors forthwith to fix the rates for supplying water to said city and county and its inhabitants for the year commencing July 1, 1889, and ending June 30, 1890, in *302 accordance with the foregoing principles; to give plaintiff and all other persons interested due notice and an opportunity to be heard before the said board prior to the final adoption of any order fixing such rates, and to allow the plaintiff and others interested to introduce evidence respecting the reasonableness and justice of such proposed order, and to make, by their counsel, such argument upon the subject as they may see fit.

“ 4. That each and all of said defendants be personally enjoined from any attempt to enforce, or to cause to be enforced, the said pretended ordinance or order, or from bringing, or causing to b.e brought, any action or suit against the plaintiff in law or in equity, to enforce any forfeiture of the plaintiff’s franchise or works, or for any other purpose, for any refusal or failure of the plaintiff to obey the said pretended ordinance or order, or to conform to the rates thereby prescribed, and from any attempt, directly or indirectly, to compel the plaintiff to furnish water at any other rates than those fixed by the board of supervisors in obedience to the decree and mandate of this court.

“5. That the plaintiff’s rights in the premises be forever quieted against each and all of the defendants.

“6. That the plaintiff have such other and further relief as to the court may seem meet and conformable to equity and good conscience, together with the costs of this suit.”

There was a demurrer to the complaint, which was overruled, and the defendants declining to answer, judgment was rendered in favor of the plaintiff that the rates and compensation “ are grossly unreasonable, unjust, and oppressive, and amount to the taking of the property of the plaintiff for public use without just compensation and without due process of law ” ; that said ordinance “ is outside and in excess of the jurisdiction of the board of supervisors as conferred by article 14, section 1, of the constitution of the state of Cali *303 fornia, and not a compliance with the provisions of said article and section, and is, and ever has been,illegal, unauthorized and void.” It was further decreed that the ordinance be set aside and vacated, that the defendants be enjoined from enforcing the same, and that they be enjoined from bringing any action against the plaintiff to enforce any forfeiture of its franchise and works on account of any past or future refusal to obey said pretended ordinance, or to conform to said rates, or any of them, quieting plaintiff’s rights in the premises, and directing that the board of supervisors proceed forthwith to fix said rates and compensation as provided by the constitution.

The appellants, having seen fit to rest their case upon the facts as stated in the complaint, instead of answering and attempting, to show that the board of supervisors had endeavored to comply with the provisions of the constitution by an honest and fair effort to ascertain and fix a fair and reasonable rate for water to be furnished, the only question for us to determine is, whether, under the allegations of the complaint, which are by the demurrer admitted to be true, the plaintiff is entitled to any relief. If so, the judgment must be affirmed.

The appellants take the broad ground that the constitution has conferred upon the board of supervisors the absolute and exclusive right to fix water rates, and that, under no circumstances, have the courts any jurisdiction to interfere with or control such authority; while the respondent contends that there is a limitation on the power of the board which compels the board to fix reasonable rates or compensation, and that whether the rates or compensation fixed by such board are reasonable or not the courts have the power and jurisdiction to determine.

The constitution, article 14, provides,—

“ Sec. 1. The use of all water now appropriated, or that may hereafter be appropriated, for sale, rental, or *304 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 of 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 any 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 of the city and county, or city or town, where the same are collected, for the public use.”

“ Sec. 2. The right to collect rates or compensation for the use of water supplied to any county, city and county, or town, or the inhabitants thereof, is a franchise, and cannot be exercised except by authority of and in the manner prescribed by law.”

The first point made as to the jurisdiction of the court below is, that, conceding the complaint states a cause of action, no jurisdiction to hear and determine the question raised thereby is vested.in the superior courts by the constitution or laws of this state. There is no force in *305 this contention. If any cause of action is stated in the complaint, it is an equitable one,"and óf such cases superior courts are given jurisdiction in the broadest terms by the constitution of this state. (Const., art. 6, sec. 5.)

We pass therefore to the only real question in the case, viz., whether there is any power on the part of any court, no matter how broad and comprehensive its grant of jurisdiction may be, to review, interfere with, or set aside the action of the board of supervisors, or whether the power and authority of such board is exclusive and beyond the reach of the courts under any and all circumstances.

It must be conceded in the outset that the use of water for sale is a public use, and that the price at which it shall be sold is a matter within the power of the board of supervisors to determine. (Munn v. Illinois, 94 U. S. 113; Spring Valley Water Works v. Schottler, 110 U. S. 347.) Indeed this is not controverted by the respondent. The constitution does not, in terms, confer upon the courts of the state any power or jurisdiction to control, supervise, or set aside any action of the board in respect to such rates. It may also be conceded, for the purposes of this case, that when the board of supervisors have fairly investigated and exercised their discretion in fixing the rates, the courts -have no right to interfere, on the sole ground that in the judgment of the court the rates thus fixed and -determined are not reasonable. That such is the case is attested by numerous authorities. (Nisbitt v. Board of Works, L. R. 10 Q. B. 10; Davis v. Mayor of New York, 1 Duer, 451-497; Munn v. Illinois, 94 U. S. 113; Spring Valley Water Works v. Schottler, 110 U. S. 347; Chicago & N. W. R’y Co. v. Day, 35 Fed. Rep. 866.)

But it seems to us that this complaint presents an entirely different question from this. The whole gist of the complaint is, that the board of supervisors have not exercised their judgment or discretion in the matter; *306 that they have arbitrarily, without investigation, and without any exercise of judgment or discretion, fixed these rates without any reference to what they should be, without reference either to the expense to the plaintiff necessary to furnish the water, or to what is a fair and reasonable compensation therefor; that the rates are so fixed as to render it impossible to furnish the water without loss, and so low as to amount to a practical confiscation of the plaintiff’s property. If this be true, and the demurrer admits it, a party whose property is thus jeopardized should not be without a remedy. If the action of the board of supervisors was taken as the com-' plaint alleges, they have not in any sense complied with the requirements of the constitution, and their pretended action was a palpable fraud which might result injuriously either to the plaintiff or the city and its inhabitants, and would almost certainly work injustice to one or the other. The constitution does not contemplate any such mode of fixing rates. It is not a matter of guess-work or an arbitrary fixing of rates without reference to the rights of the water company or the public. When the constitution provides for the fixing of rates or compensation, it means reasonable rates and just compensation. To fix such rates and compensation is the duty and within the jurisdiction of the board. To fix rates not reasonable or compensation not just is a plain violation of its duty. But the courts cannot, after the board has fully and fairly investigated and acted, by fixing what it believes to be reasonable rates, step in and say its action shall be set aside and nullified because the courts, upon a similar investigation, have come to a different conclusion as to the reasonableness of the rates fixed. There must be actual fraud in fixing the rates, or they must be so palpably and grossly unreasonable and unjust as to amount to the same thing.

The right of the plaintiff to dispose of the water collected in its reservoirs, at reasonable rates, is the only *307 value it has, and is the only thing that can bring the plaintiff any return for the money expended for reservoirs for its storage, and pipes for its distribution. Not only reservoirs, pipes, and other works and improvements necessary to carry out the objects of its incorporation, but the water itself, is property which cannot be taken without just compensation.

The fact that the right to store and dispose of the water is a public use, subject to the control of the state, and that its regulation is provided for by the constitution of this state, does not affect the question. Regulation, as provided for in the constitution, does not mean confiscation, or a taking without just compensation. If it does, then our constitution is clearly in violation of the constitution of the United States, which provides that this shall not be done.

The ground taken by the appellant is, that the fixing of rates is a legislative act; that by the terms of the constitution the hoard of supervisors are made a part of the legislative department of the state government, and exclusive power given to them which cannot be encroached upon by the courts. In other words, the board of supervisors, for the purpose of fixing these water rates, is a part of one of the co-ordinate and independent departments of the state government, and, as such, beyond and independent of any control by the judicial department.

This court has held that the fixing of water rates is a legislative act, at least to the extent that the action of the proper bodies clothed with such power cannot be controlled by writs which can issue only for the purpose of controlling judicial action. (Spring Valley Water Works v. Bryant, 52 Cal. 132; Spring Valley Water Works v. City and County of San Francisco, 52 Cal. 111; Spring Valley Water Works v. Bartlett, 63 Cal. 245.) There are other cases holding the act to be legislative, but whether it is judicial, legislative, or administrative, is immaterial. Let it be which it may, it is not above the control of the *308 courts in proper cases. It has also been held that where a power is vested in an officer of the state involving the exercise of discretion and judgment on his part, such discretion and judgment cannot be controlled by the courts by mandamus. (Berryman v. Perkins, 55 Cal. 483.)

The right and jurisdiction in this respect is fully and accurately stated in Davis v. Mayor etc. of New York, 4 Duer, 451-497, as follows: “Notwithstanding these observations, the question still remains, Has this court, or any court of equity, the power to interfere with the legislative discretion of the common council of this city, or of any other municipal corporation? And to this question I at once reply, certainly not, if the term (discretion' be properly limited and understood; and thus understood, I carry the proposition much further than the counsel who advanced it. This court has no rig-lit to interfere with and control the exercise, not merely of the legislative, but of any other discretionary, power, that the law has vested in the corporation of the city; and hence I deem it quite immaterial whether the resolution in favor of Jacob Sharp and his associates be termed a by-law, a grant, or contract, or whether the power exercised in passing it be legislative, judicial, or executive; for if the corporation had the power of granting at all the extraordinary privileges which the resolution confers, the propriety of exercising the power, and perhaps even the form of its exercise, rested entirely in its- discretion. Nor is this all. A court of equity has no right to interfere with and control, in any case, the exercise of a discretionary power, no matter in whom it may be vested, — a corporate body or individuals, the aldermen of a city, the directors of a- bank, a trustee, executor, or guardian; and I add that the meaning and principle of the rule, and the limitations to which it is subject, are, in all the cases to which it applies, exactly the same. The meaning and principle of the rule are, that the court will not substitute its own judgment for *309 that of the party in whom the discretion is vested, and thus assume to itself a power which the law had given to another; and the limitations to which it is subject are, that the discretion must be exercised, within its proper limits, for the purposes for which it was given, and from the motives by which alone those who gave the discretion intended that its exercise should be governed.”

We are not inclined to the doctrine asserted by the appellant in this case, that every subordinate body of officers to whom the legislature delegates what may be regarded as legislative power thereby becomes a part of the legislative branch of the state government, and beyond judicial control.

In the case of Davis v. Mayor etc. of New York, supra, it is further said:—•

“It is this discretion, therefore, that I adopt, and for the purpose of this opinion I shall treat the resolution as an ordinance or by-law, and its reconsideration and adoption as properly acts of legislation, in the fullest sense in which the term ‘legislation’ can be justly applied to the acts of a corporate body.

“Making these concessions,' the denial of the jurisdiction of this court amounts to this: that a court of equity of general jurisdiction has no power, in any case or for any purpose, to restrain the legislative action of a municipal corporation, nor in any manner to interfere with or control its legislative discretion, no matter to what subject the action may be directed, nor how manifest and gross the violation of law, even of the provisions of its own charter, that it may involve, and no matter by what motives of fear, partiality, or corruption its discretion may be governed, nor how extensive and irreparable the mischief that, in the particular case, may be certain to result to individuals or the public from its threatened exercise.

“If this be true as a proposition of law, then the in *310 junction order of this court, from the want of jurisdiction manifest on its face, was wholly void. If the proposition be not true, the order was valid, and should have been obeyed.

“In reply to a question put by the court, it was expressly affirmed by one of the counsel that should the common council attempt, by an ordinance, and from motives manifestly corrupt, to convey, for a grossly inadequate or merely nominal consideration, all the corporate property of the city, neither this nor any other court would have power to suppress, by an injunction, the meditated fraud, or when consummated, to rescind the grant, or punish its authors, or divest them of its fruits. There could be no remedy, we were told, but from the force of public opinion, and the action of the people at an ensuing election, and all this upon the ground that neither the propriety nor the honesty of the proceedings of a legislative body, nor, while they are pending, even their legality, can ever be made the subject of judicial inquiry.

“ This, it must be confessed, is a startling doctrine. We all felt it to be so when announced, and I rejoice that we are now able to say, with an entire conviction, that, applied to a municipal corporation, it is just as groundless in law as it seems to us it is wrong in its principle, and certainly would be pernicious in its effects.

“ The doctrine, exactly as stated, may be true when applied to the legislature of the state, which, as a coordinate branch of the government representing and exercising in its sphere the sovereignty of the people, is, for political reasons of manifest force, wholly exempt in all its proceedings from any legal process or judicial control; but the doctrine is not, nor is any portion of it, true when applied to a subordinate municipal body, which, although clothed to some extent with legislative and even political powers, is yet, in the exercise of all its powers, just *311 as subject to the authority and control of courts of justice, to legal process, legal restraint, and legal correction as any other body or person, natural or artificial.

“ The supposition that there exists an important distinction, or any distinction whatever, between a municipal corporation and any other corporation aggregate, in respect to the powers of courts of justice over its proceedings, is entirely gratuitous, and as it seems to me is as destitute of reason as it certainly is of authority. The counsel could refer us to no case, nor have we found any, in which the judgment of the court has proceeded upon such a distinction; nor in our researches, which have not been limited, have we been able to discover that, by any judge or jurist, the existence of such a distinction has ever been asserted or intimated.” (Pages 494,495.)

This case was affirmed by the court of appeals of New York, in People v. Sturtevant, 9 N. Y. 263, 59 Am. Dec. 536, and the doctrine announced meets with our approval.

Counsel for appellants rely mainly in support of their position on the decisions of the supreme court of the United States in what are known as the Granger cases, the leading one of which is the case of Munn v. Illinois, 94 U. S. 113. But while there may be some language used in the opinion in that case tending to maintain their contention, there was no such question presented as we have here, and the point made in this case was not decided. The question there presented is clearly stated by the learned chief justice in his opinion: “ The question to be determined in this case is, whether the general assembly of Illinois can, under the limitations upon the legislative power of the states imposed by the constitution of the United States, fix by law the maximum of charges of the storage of grain in warehouses at Chicago and other places in the state having not less than one hundred thousand inhabitants, ‘ in which grain is stored in bulk, and in which the grain of different owners is mixed together, or in which grain is stored in such a *312 manner that the identity of different lots or parcels cannot be accurately preserved.’” (Page 123; see also, for a statement of the questions passed upon in this case, Wabash etc. R’y Co. v. Illinois, 118 U. S. 557-568.)

It will be observed from this statement that the only question there was whether the power to regulate prices rested in the legislature of the state of Illinois at all, and not whether, if it did exist, it was exclusive, and beyond judicial inquiry and control.

That there was no intention to decide that the courts have no jurisdiction to interfere in this class of cases, upon a proper showing, is clearly indicated by what is said by the same court in later decisions, and by judges of other federal courts. In the case of Spring Valley Water Works v. Schottler, 110 U. S. 347, Chief Justice Waite, who delivered the opinion in Munn v. Illinois, said: “ That it is within the power of the government to regulate the prices at which water shall be sold by one who énjoys a virtual monopoly of the sale, we do not doubt. That question is settled by what was decided on full consideration in Munn v. Illinois, 94 U. S. 113. As was said in that case, such regulations do not deprive a person of his property without due process of law. What may be done if the municipal authorities do not exercise an honest judgment, or if they fix upon a price which is manifestly unreasonable, need not now be considered, for that proposition is not presented by this record. The objection here is not to any improper prices fixed by the officers, bu,t to their power to fix prices at all. By the constitution and the legislation under it, the municipal authorities have been created a special tribunal to determine what, as between the public and the company, shall be deemed a reasonable price during a certain limited period. Like every other tribunal established by the legislature for such a purpose, their duties are judicial in their nature, and they are bound in morals and in law to exercise an honest judgment as to all matters submitted for their *313 official determination.” (Page 354.) Again, in Stone v. Farmers’ Loan and Trust Co., 116 U. S. 307-331, Chief Justice Waite said: “ From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense of regulating fares and freights, the state cannot require a railroad corporation to carry persons or property without reward; neither can it do that which in law amounts to a taking of private property for public use without just compensation, or without due process of law. What would have this effect, we need not now say, because no tariff has yet been fixed by the commission, and the statute of Mississippi expressly provides ‘that in all trials of cases brought for a violation of any tariff of charges, as fixed by the commission, it may be shown in defense that such tariff so fixed is unjust.’ ” (Page 331; see also Dow v. Beidelman, 125 U. S. 680.)

In the case of Georgia Banking Co. v. Smith, 128 U. S. 174-179, Mr. Justice Field sums up the former decisions of that court as follows: “It has been adjudged by this court in numerous instances that the legislature of a state has the power to prescribe the charges of a railroad company for the carriage of persons and merchandise within its "limits, in the absence of any provision in the charter of the company constituting a contract vesting in it authority over these matters, subject to the limitation that the carriage is not required without reward, or upon conditions amounting to the taking of property for public use without just compensation; and that what is done does not amount to a regulation of foreign or interstate commerce.” (Page 179.)

• It will be observed that in all the decisions of the supreme court of the United States, while the power of the state to regulate these charges is recognized, the power is *314 so limited as to authorize just what it is contended should be done by the court in this case.

This same limitation, so necessary to the protection of the rights and property of corporations and individuals vested with a public use, is fully recognized by Brewer, J., now one of the justices of the supreme court of the United States, in Chicago & N. W. R’y Co. v. Dey, 35 Fed. Rep. 866, 877. After reviewing the Granger cases and other cases above cited, he says: “ It is obvious from these last quotations that the mere fact that the legislature has pursued the forms of law in prescribing a schedule of rates does not prevent inquiry by the courts; and the question is open, and must be decided in each case, whether the rates prescribed are within the limits of legislative power, or mere proceedings, which, in the end, if not restrained, will work a confiscation of the property of complainant. Of course, some rule must exist, fixed and definite, to control the action of the courts; for it cannot be that a chancellor is at liberty to substitute his discretion as to the reasonableness of rates for that of the legislature. The legislature has the discretion, and the general rule is, that, where any officer or board has discretion, its acts within the limits of that discretion are not subject to review by the courts. Counsel for complainant urged that the lowest rates the legislature may establish must be such as will secure to the owners of the railroad property a profit on their investment at least equal to the lowest current rate of interest, say three per cent. Decisions of the supreme court seem to forbid such a limit to the power of the legislature in respect to that which they apparently recognize as a right of the owners of the railroad property to some reward; and the right of judicial interference exists only when the schedule of rates established will fail to secure to the owners of the property some compensation or income from their investment. As-to the amount of such compensation, if some compensation or reward is in fact secured, the legislature is *315 the sole judge.” (Page 878; see further, as supporting this view, Pensacola & A. R. Co. v. State, 5 South. Rep. 833.)

Counsel on both sides have shown great industry and research in the presentation of this case, and many authorities are cited bearing more or less directly on this question, but we cannot extend this opinion by noticing or even citing them all. We have cited sufficient, we think, to sustain fully our view that the court below had jurisdiction, and that the complaint presented a case sufficient to call for the interposition of the court in the matter. The conclusion we have reached on this question is decisive of the case, but there are other points made and argued in the briefs which it is proper we should notice.

On the part of the appellant it is contended that a part of the allegations of the complaint necessary to make out a cause of action are of mere conclusions of law, and should not be considered. We think, however, that the allegations referred to, or enough of them to entitle the plaintiff to the relief demanded, are well pleaded. There are other objections to the form of the complaint and the manner of alleging the facts, which are equally groundless. It is further claimed that the mayor of the city should have been made a party, but we do not regard this as necessary.

On the part of the respondent it is contended, in support of the decision of the court below, that notice to the plaintiff of an intention to fix the rates was necessary, and that without such notice being given, the action of the board was a taking of its property without due process of law. But the constitution is self-executing, and as it does not require notice, we think no notice was necessary.

It does not follow, however, that because no notice is necessary the board are for that reason excused from applying to corporations or individuals interested to obtain *316 all information necessary to enable it to act intelligibly and fairly in fixing the rates. This is its plain duty, and a failure to make the proper effort to procure all necessary information from whatever source may defeat its action. Both the corporation a-nd the individuals furnishing the water, as well as the public, who must pay for its use, are entitled to a careful and honest effort on the part of the board to obtain such information and to have it act accordingly.

It is objected to the ordinance that it gives every householder an option to require a meter upon his premises, and to pay for the water furnished at meter rates, which are different from the house rate. It is contended that this does not fix the rate as the constitution requires, but leaves it indefinite and uncertain. We do not think the ordinance is defective in this respect. The rates are definitely fixed, and the fact that there may be one price for the consumer who has a meter, and a different price for one who has none, does not render the ordinance uncertain. It is also contended that the requirement that meters shall be furnished by the plaintiff is unreasonable and cannot be enforced, but we think otherwise. The requirement that the party furnishing water shall provide the means necessary for its measurement, so that the quantity furnished and to be paid for may be known, is not an unreasonable regulation. The expense of the meter could not be imposed on the consumer. (Red Star Steamship Co. v. Jersey City, 45 N. J. L. 246.) There are other objections to the ordinance which we need not notice specifically. It is enough to say that, in our opinion, none of them are well taken.

Finally, we are asked by the respondent to lay.down some basis upon which the board must proceed in fixing rates. But we do not feel that we should attempt to lay down such a rule in advance. This must be left for the board to determine.

Judgment affirmed.

*317 McFarland, J., Sharpstein, J., Paterson, J., and Beatty, C. J., concurred.

Mr. Justice Fox, being disqualified, did not participate in the decision of this case.