or persons supplying water to such county, compelled to make in and about its water city, or town, or to the inhabitants thereof, system, had established a rate of one hunto furnish to such board or other governing dred dollars per acre for a perpetual water body in the month of January of each year, right for the purposes of irrigation, and rea detailed statement, verified by the oath of quired the purchase and payment for such the president and secretary of such corpora- water right before extending its distributing tion or company or of such person, as the system to lands not yet supplied with water case may be, showing the name of each or furnishing such lands with water, which water-rate payer, his or her place of resi- rate was made uniform and applicable alike dence, and the amount paid for water by to all lands to be furnished with water witheach of such water payers during the year in and outside of the city, and such payment preceding the date of such statement, and for a water right had ever since been charged also showing all revenue derived from all as a condition upon which alone water would sources, and an itemized statement of ex- be supplied to consumers for the purposes of penditures made for supplying water during | irrigation, and many consumers prior to the said time." Stats. of Cal. 1881, p. 54. *adoption of the ordinance had purchased[744] such water right and paid therefor; By an ordinance of the board of trustees of the defendant city approved February 21st, 1895, certain rates of compensation to be collected by persons, companies, or corporations for the use of water supplied to that city or its inhabitants, or to corporations, companies, or persons doing business or using water therein, were fixed for the year beginning July 1st, 1895. That the rate charged for such water right was reasonable and just and was necessary to enable the plaintiff to keep up and extend its water system so as to supply water to consumers requiring and needing the same, and without which it could not operate and extend its plant so as to render it available and beneficial to all water consumers that could with the necessary expenditure be supplied from the system; That the lands covered by plaintiff's system were arid and of but little value without water, and a water right such as it granted to consumers increased the land in value more than three times the amount charged for such right and was of great value to the landowner; For the purposes of that ordinance the uses of water were divided into four classes, namely, domestic purposes, public purposes, mechanical and manufacturing purposes, and purposes of irrigation; the rates for each class were prescribed; and it was provided that no person, company, or corporation should charge, collect, or receive water rates in the city except as thus established. [743] *The bill in this case questioned the validThat the above ordinance fixed the total ity of the above ordinance upon the follow-charge that might be made by the plaintiff ing grounds: for water furnished for purposes of irrigation at four dollars per acre per annum, and as construed by the city and consumers deprived the plaintiff of all right to make any charge for water rights, and the rate was fixed without taking into account or allowing in any way for such water right; That the amount of four dollars per acre per annum was unreasonably low and required the plaintiff to furnish water to consumers within the limits of the city for purposes of irrigation for less than it furnished the same to consumers outside of the city for the same purpose, and so low that it could not furnish the same without positive loss That no notice of the fixing of the water rates was given, nor opportunity presented hor a hearing upon the matter of rates; that no provision in the Constitution or laws of California, under and by virtue of which the board of trustees assumed to act, required or authorized such notice; that water rates were fixed by the board arbitrarily, without notice or evidence, and were unreasonable and unjust, in that under them the plaintiff could not realize therefrom, and from all other sources within and outside of the limits of the defendant city, a sufficient sum to pay its ordinary and necessary operating expenses, or any dividends whatever to stockholders, or any interest or profit on its That large numbers of persons residing investment; that so long as the ordinance within the city owning land therein and deremained in force the plaintiff would be re-siring to irrigate the same were demanding quired by the laws of California to supply water to all consumers within the city at the rates so fixed, which could only be done at a loss to the plaintiff, and that to compel the plaintiff to furnish water at those rates would be a practical confiscation and a taking of its property without due process of law. The bill also alleged that the defendant city was composed in large part of a territory of farming lands devoted to the raising of fruits and other products, only a small part thereof being occupied by residences or business houses; That prior to the adoption of the ordinance above set forth, the plaintiff, in order to meet in part the large outlay it had been to itself; without tiff's system and supplied with water at the that their lands be connected with the plainrate of four dollars per acre per annum and any payment for a water right, and under the laws of the state of California if water was once furnished to such parties the use of water on their lands without paythey thereby obtained a perpetual right to ment for such water rights; and, That until the questions as to the validity of the ordinance and of the right of the plaintiff to charge for a water right as a condi-[745] tion upon which it would furnish water for purposes of irrigation were determined, the plaintiff could not safely charge for such water rights or collect fair and reasonable rates for water furnished by reason of which it would be damaged in the sum of twenty The relief asked was a decree adjudging that the rates fixed by the defendant city were void; that the Constitution and laws of California and the proceedings of the defendant's board of trustees under them were in violation of the Constitution of the United States, and particularly of the first section of the Fourteenth Amendment; and that the taking of the plaintiff's water, without payment for the water right or the right to the use thereof, was in violation of the Bill of Rights of the Constitution of California. The plaintiff also prayed that if the court determined that the state Constitution and laws relating to compensation for the use of water for public purposes were valid, then that it be declared by decree that the rates fixed in the ordinance were arbitrary, unreasonable, unjust, and void; that the board of trustees be ordered and required to adopt a new and reasonable rate of charges; and that the enforcement of the present ordinance be enjoined. der irrigation in the city at the time when It was further stated that since the plaintiff established the rate of $100 per acre for such "perpetual right for the purpose of irrigation" it had in no instance supplied wa ter to any land not already under irrigation except on purchase of said "water right" and payment therefor; and that the rate charged for said "water right" was not reasonable or just nor necessary to enable plaintiff to keep up and extend its water system, so as to supply water to consumers who required and needed the same. The defendants insisted that the laws of California did not confer upon the city or its board of trustees the power to prescribe by ordinance or otherwise that the purchase and payment of such "water rights" should be a condition to the exercise of the right of consumers to use any water appropriated for irrigation as already stated or any water supply affected with the public use; that $4 per acre was not unreasonably low; and that such rate did not require the plaintiff to furThe plaintiff asked that it be further de nish water to consumers within the city for creed that it was entitled to charge and col- purposes of irrigation for less than it fur-[747] lect for water rights at reasonable rates as nished the same to consumers outside of the a condition upon which it would furnish wa-city for the same purposes, or that it could ter for the purposes of irrigation, notwith- not furnish the same without positive loss to standing the rates fixed by the trustees for itself. water sold and furnished. It was denied that the rates fixed by the ordinance in question were unreasonable or unjust, or that the plaintiff could not realize within the city sufficient to pay the just proportion that the city and its inhabitants ought to contribute to the expenses of the plaintiff's system. and as much more as the city and its inhabitants should justly and reasonably pay toward interest and profit on plaintiff's investment as the same existed when the ordinance was enacted. It was alleged that under the annual rates fixed by the ordinance the income of the plaintiff in the city would be about the same as that derived and being derived by it under the or[746]dinance previously in force; *that it was not true that plaintiff could only supply consumers within the city at the rates so fixed at a loss; and that to compel the plaintiff to furnish water at said rates was not a practical confiscation of its property or a taking of it without due process of law. The defendants admitted that the city was composed in considerable part of a territory of farming lands devoted to the raising of fruits and other products, and that a part thereof was occupied by residences and business houses. But it was averred that the population of the city when the ordinance was adopted was about 1.300 persons; that the area within its boundaries laid out in town lots was about 800 acres, divided into 6,644 lots, of which the plaintiff in January, 1887, owned 4,200; that the land within the boundaries of the city not laid off into town lots comprised about 3,500 acres of which the plaintiff in January, 1888, owned 1,289 acres; that when the ordinance was passed plaintiff continued to own about 3,688 of said lots and about 1,184 acres of land; and that the number of acres of farming land not un It was further averred that up to December, 1892, plaintiff by its public representations and continuous practice voluntarily conferred and annexed such perpetual rights to the use of the water on the lands of all persons who requested the same without the payment of any consideration therefor except the annual rate of $3.50 per acre adopted by it under its entire system within and without the city, in addition to charges made for tap connections with its pipe, ranging from $12 to $50 for each such connection; that in December, 1892, it changed its rule and prac tice, and from that time on until February, 1895, charged and exacted the payment as and for a so-called water right of $50 per acre, and from the latter date $100 per acre, for the privilege of connecting with its system any lands not then already under irrigation from it; and that since December, 1892, it had at all times declined and refused to connect and had not in fact connected any lands with its irrigating system except upon payment made to it of such rates of $50 and $100 per acre respectively for the "water right;" and that whether plaintiff could or could not safely charge for such water rights had been in no way by law committed to said board of trustees to determine. The cause having been heard upon the pleadings and proofs, the bill was dismissed. 74 Fed. Rep. 79. Messrs. G. Wiley Wells, John D. Works, Bradner W. Lee, and Lewis R. Works for appellant. Messrs. Irvine Dungan and Daniel M. *Mr. Justice Harlan, after stating the case[747] as above, delivered the opinion of the court: While admitting that the power to limit of the property itself, without due process of law, and in violation of the Constitution of the United States; and in so far as it is thus deprived, while other persons are permitted to receive reasonable profits upon their invested capital, the company is deprived of the equal protection of the laws." Observe that this court based its interpretation of the statute of Minnesota upon the construction given to it by the supreme court of that state. charges for water sold by a corporation like | ery, it is deprived of the lawful use of its [748]itself has been too often upheld to be now property, and thus, in substance and effect, questioned, the appellant contends that the Constitution and statutes of California relating to rates or compensation to be collected for the use of water supplied to a municipality or its inhabitants are inconsistent with the Constitution of the United States. It is said that the state Constitution and laws authorized rates to be established without previous notice to the corporation or person immediately interested in the matter, and without hearing in any form, and therefore were repugnant to the clause of the Federal Constitution declaring that no state shall deprive any person of property without due process of law. We What this court said about the Minnesota statute can have no application to the present case unless it be made to appear that the Constitution and laws of California invest Upon the point just stated we are referred the municipal authorities of that state with to the decision of this court in Chicago, M. & power to fix water rates arbitrarily, without St. P. Railway Co. v. Minnesota, 134 U. S. investigation, and without permitting the 418, 452, 456, 457 [33: 970, 977, 980, 981, 3 corporations or persons affected thereby to Inters. Com. Rep. 209]. That case involved make any showing as to rates to be exacted the constitutionality of a statute of Minne- or to be heard at any time or in any way upsota empowering a commission to fix the rates on the subject. The contention of appellant of charges by railroad companies for the is that such is the purpose and necessary eftransportation of property. The supreme fect of the Constitution of the state. court of the state held that it was intended are not at liberty so to interpret that instruby the statute to make the action of the com- ment. What the supreme court of Califormission final and conclusive as to rates, and nia said in Spring Valley Water Works v. that the railroad companies were not at liber- San Francisco, 82 Cal. 286, 306, 307, 309, ty, in any form or at any time, to question 315 [6 L. R. A. 756], upon this subject them as being illegal or unreasonable. This would seem to be a sufficient answer to the court said: "This being the construction of views expressed by the appellant. In that the statute by which we are bound in con- case it was contended that a board of supersidering the present case, we are of opinion visors had fixed rates arbitrarily, without that, so construed, it conflicts with the Con- investigating, without any exercise of judg stitution of the United States in the particu- ment or discretion, without any reference to lars complained of by the railroad company. what they should be, and without reference 750] It deprives the company of its right to a ju- either to the expense incurred in furnishing dicial investigation, by due process of law, water or to what was fair compensation under the forms and with the machinery pro-. therefor. The court said: "The Constituvided by the wisdom of successive ages for tion does not contemplate any such mode of the investigation, judicially, of the truth of fixing rates. It is not a matter of guessa matter in controversy, and substitutes work or an arbitrary fixing of rates without therefor, as an absolute finality, the action of reference to the rights of the water company a railroad commission which, in view of the or the public. When the Constitution propowers conceded to it by the state court, can- vides for the fixing of rates or compensation, not be regarded as clothed with judicial func- it means reasonable rates and just compentions or possessing the machinery of a court sation. To fix such rates and compensation of justice." "By the second section of the it is the duty and within the jurisdiction of statute in question it is provided that all the board. To fix rates not reasonable or charges made by a common carrier for the compensation not just is a plain violation of transportation of passengers or property its duty. But the courts cannot, after the shall be equal and reasonable. Under this board has fully and fairly investigated and provision the carrier has a right to make acted, by fixing what it believes to be reasonequal and reasonable charges for such trans- able rates, step in and say its action shall be [749]portation. *In the present case, the return set aside and nullified because the courts, upalleged that the rate of charge fixed by the on a similar investigation, have come to a commission was not equal or reasonable, and different conclusion as to the reasonableness the supreme court held that the statute de- of the rates fixed. There must be actual prived the company of the right to show that fraud in fixing the rates, or they must be so judicially. The question of the reasonable palpably and grossly unreasonable and unness of a rate of charge for transportation just as to amount to the same thing." "The by a railroad company, involving, as it does, fact that the right to store and dispose of the element of reasonableness, both as re-water is a public use subject to the control of gards the company and as regards the public, is eminently a question for ju dicial investigation, requiring due process of law for its determination. If the company is deprived of the power of charging reasonable rates for the use of its property, and such deprivation takes place in the absence of an investigation by judicial machin the state, and that its regulation is provided for by the state Constitution, does not affect the question. Regulation as provided for in the Constitution does not mean confiscation or 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 | ity, upon a fair investigation, and with the that the fixing of rates is a legislative act; that by the terms of the Constitution the board of supervisors are made a part of the legislative department of the state govern ment and exclusive power given them which cannot be encroached upon by the courts. 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 [751]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 courts in proper We are not inclined to the cases. . exercise of judgment and discretion, shall fix Was the appellant entitled to formal nodoctrine asserted by the appellant in this tice as to the precise day upon which the case, that every subordinate body of officers water rates would be fixed by ordinance? to whom the legislature delegates what may We think not. The Constitution itself was be regarded as legislative power thereby be- notice of the fact that ordinances or resolu comes a part of the legislative branch of the tions fixing rates would be passed annually state government and beyond judicial con- in the month of February in each year and trol. In the case of Davis v. Mayor, etc. of would take effect on the first day of July New York, supra [1 Duer, 451-497], it is fur- thereafter. It was made by statute the duty ther said: The doctrine, exactly as of the appellee at least thirty days prior to stated, may be true when applied to the leg- the 15th day of January in each year to obislature of the state, which, as a co-ordin-tain from the appellant a detailed statement, ate 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 as subject to the authority and control of courts of justice, to legal process, legal restraint, and legal cor: rection, as any other body or person, natural or artificial."" Again: "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 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 necessary information from whatever source may defeat its action." all In the more recent case of San Diego Wa ter Co. v. San Diego, 118 Cal. 556, 566 [38 L. R. A. 4601], the state court, referring to [752]*section 1 of the Constitution of California, said that the meaning of that section was that "the governing body of the municipal. showing the names of water rate payers, the The time and place for holding them are fixed by law." There is no ground to say that the appellant did not in fact have or was denied an opportunity to be heard upon the question of rates. On the contrary, it appears in evidence that the subject of rates was considered in conferences between the local authorities and the officers of the appellant. Those officers may not have been present at the final meeting of the city board when the ordinance complained of was passed. They were not entitled, of right, to be present at that particular meeting. They were heard, and there is nothing to justify the conclusion that the case of the appellant was not fully considered before the ordinance was passed. public agency designated by it. But when it is alleged that a state enactment invades or destroys rights secured by the Constitution of the United States a judicial question arises, and the courts, Federal and state, must meet the issue, taking care always not to entrench upon the authority belonging to a different department, nor to disregard a statute unless it be unmistakably repugnant to the fundamental law. What elements are involved in the general inquiry as to the reasonableness of rates established by law for the use of property by the public? This question received much consideration in Smyth v. Ames, above cited. That case, it is true, related to rates estab-[755] lished by a statute of Nebraska for railroad companies doing business in that state. But the principles involved in such a case are applicable to the present case. It was there contended that a railroad company was entitled to exact such charges for transportation as would enable it at all times, not only to pay operating expenses, but to meet the interest regularly accruing upon all its outstanding obligations and justify a dividend upon all its stock; and that to prohibit it from maintaining rates or charges for trans That it was competent for the state of California to declare that the use of all water appropriated for sale, rental, or distribution should be a public use and subject to public regulation and control, and that it could confer upon the proper municipal corporation power to fix the rates of compensation to be collected for the use of water supplied to any city, county, or town or to the inhabitants thereof, is not disputed, and is not, as we think, to be doubted. It is equal-portation adequate to all those ends would ly clear that this power could not be exer- be a deprivation of property without due cised arbitrarily and without reference to process of law, and a denial of the equal prowhat was just and reasonable as between the tection of the laws. After observing that public and those who appropriated water and this broad proposition involved a misconcep[754]supplied it for general use; for the state tion of the relations between the public and cannot by any of its agencies, legislative, ex- a railroad corporation, that such a corporaecutive, or judicial, withhold from the own- tion was created for public purposes, and ers of private property just compensation for performed a function of the state, and that its use. That would be a deprivation of its right to exercise the power of eminent property without due process of law. Chi- domain and to charge tolls was given pricago, Burlington, & Q. Railroad Co. v. Chi-marily for the benefit of the public, this cago, 166 U. S. 226 [41: 979]; Smyth v. Ames, 169 U. S. 466, 524 [42: 819, 841]. But it should also be remembered that the judiciary ought not to interfere with the collection of rates established under legislative sanction unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of property for public use without such compensation as under all the circumstances is just both to the owner and to the public; that is, judicial interference should never occur unless the case presents, clearly and beyond all doubt, such a flagrant attack upon the rights of property under the guise of regulations as to compel the court to say that the rates prescribed will necessarily have the effect to deny just compensation for private property taken for the public use. Chicago & Grand Trunk Railway Co. v. Wellman, 143 U. S. 339, 344 [36: 176, 179]; Reagan v. Farmers' Loan & Trust Co. 154 U. S. 362, 399 [38: 1014, 1024, 4 Inters. Com. Rep. 560]; Smyth v. Ames, above cited. See also Henderson Bridge Co. v. Henderson City, 173 U. S. 592, 614, 615 [ante, 823, 831]. In view of these principles, can it be said that the rates in question are so unreasonable as to call for judicial interference in behalf of the appellant? Such a question is always an embarrassing one to a judicial tribunal, because it is primarily for the determination of the legislature or of some court said: "It cannot, therefore, be admit- |