Tampa Waterworks Company v. Tampa/Dissent Brown

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

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

In September, 1887, the waterworks company made a contract with the city for the establishment of waterworks, in which it was agreed that the contract should continue in force for thirty years from the time the works were completed and ready for duty, and that the owners might charge and collect quarterly, in advance, for water furnished to private consumers, prices not to exceed certain maximum rates fixed by the contract.

At this time there was in force the following constitutional provision in Florida:

'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.'

By an act of the legislature passed May 31, 1901 (chap. 5070), the corporate authorities of any city were empowered to prescribe by ordinance maximum rates and charges for the supply of 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 . . . for the supply of water to such city,' 'but this act shall not be held to validate any contract heretofore made.'

On December 20, 1901, the city council of Tampa passed the ordinance complained of (No. 274), which provided that 'it shall be unlawful for any individual, company, or corporation furnishing water to the city of Tampa or its inhabitants, to charge any higher rates for water than those hereinafter specified.' The ordinance made a large deduction in the rates fixed by the original ordinance or contract, and thereby, as it is alleged, impaired its obligation.

The constitutional provision was evidently not self-executing, though it vested full power in the legislature to prevent excessive charges for the performance of public services. The legislature did not see fit to exercise this power to its full extent. But in authorizing corporate authorities in any city, etc., to fix rates, provided that the act should not be so construed as to impair the validity of any valid contract. This it had the right to do. It was not bound to exercise the whole power vested in it by the Constitution, but might grant so much of such power to the corporate authorities as it deemed best for the public interests. This we have repeatedly held with respect to parceling out the power vested in Congress by the Constitution. M'Intire v. Wood, 7 Cranch, 504, 3 L. ed. 420; Kendall v. United States, 12 Pet. 524-616, 9 L. ed. 1181-1217; Cary v. Curtis, 3 How. 236-245, 11 L. ed. 576-581.

It follows that if the ordinance of 1901 impaired the original contract between the waterworks and the city, it exceeded its powers under the act of the legislature.

In its opinion the supreme court of Florida assumed, without deciding, that 'the powers granted to the city were sufficient to authorize it to contract with the water company for a public and private supply of water,' and were also sufficient to enable the city to insert clauses fixing the rates and obligating the city to pay these rates for water used by it during the entire contract period, and that the same powers existed of fixing the rates for water supply to individuals.

Now, as the Constitution only delegated to the legislature the power to authorize the corporate authorities to reduce rates, and the legislature delegated that power only in cases where it did not impair the validity of any contract, it seems to me clear that the city council of Tampa exceeded its authority in reducing rates protected by a contract, and must be held to have impaired its obligation.

Notes