sumers, at all times during the said period of twenty-five (25) years; and this contract shall be voidable by the city of Walla Walla so far as it requires the payment of money, upon the judgment of a court of competent jurisdiction, whenever there shall be a substantial failure of such supply, or a substantial failure on the part of said company to keep or perform any agreement or contract on its part, herein specified or in said contract contained. But accident or reasonable delay shall not be deemed such failure. And until such contract shall have been so avoided the city of Walla Walla shall not erect, maintain, or become interested in any waterworks except the ones herein referred to, save as hereinafter specified. be regarded as its principal; therefore the state cannot be charged as being the actor in the proceeding, whether it be the making of the contract or the impairing of the obligation of one. Western College of Homeopathic Medicine v. Cleveland, 12 Ohio St. 377; New Orleans v. Abbagnato, 23 U. S. App. 533, 62 Fed. Rep. 240, 10 C. C. A. 361, 26 L. R. A. 329; Maxmilian v. New York, 62 N. Y. 160, 20 Am. Rep. 468; Safety Insulated Wire & Cable Co. v. Baltimore, 25 U. S. App. 166, 66 Fed. Rep. 140, 13 C. C. A. 377; Îllinois Trust & Sav. Bank v. Arkansas City, 40 U. S. App. 257, 76 Fed. Rep. 271, 22 Č. C. A. 181, 34 L. R. A. 518. A municipal ordinance not passed under supposed legislative authority cannot be regarded as a law of the state within the meaning of the constitutional prohibition against state laws impairing the obligation of contracts. "Sec. 8. Neither the existence of said contract nor the passage of this ordinance shall be construed to be or be a waiver of or relinquishment of any right of the city to take, condemn, and pay for the water rights and works of said or any company at any time; Murray v. Charleston, 96 U. S. 432, 24 L. and in case of such condemnation the existed. 760; Lehigh Water Co. v. Easton, 121 U. ence of this contract shall not be taken into S. 388, 30 L. ed. 1059; New Orleans Waterconsideration in estimating or determining works Co. v. Louisiana Sugar Ref. Co. 125 the value of the said waterworks of the said U. S. 18, 31 L. ed. 607. Walla Walla Water Company." [6] *The water company accepted this ordinance, entered into a formal contract with the city, and substantially complied with the terms and conditions of such contract,which has never been avoided by the city or by the courts, and was still in force at the time the bill was filed. After this contract had been in force and the stipulated rentals paid for about six years, on June 20, 1893, an ordinance was passed "to provide for the construction of a system of waterworks" for the purpose of supplying the city and its inhabitants with water; to authorize the purchase and condemnation of land for that purpose, and the issue of bonds to the amount of $160,000 to provide the necessary funds. Pursuant to the provisions of such ordinance an election was held whereby the proposition submitted by the ordinance was carried by a sufficient majority of the legal voters. The answer of the defendants insisted that the contract of the city with the plaintiff was not a valid and binding contract, so far as concerned the stipulation binding the city not to erect or maintain or become interested in any system of waterworks other than that of the plaintiff. A demurrer to the bill having been overruled, and a preliminary injunction having been granted pursuant to the prayer of the bill, the case subsequently went to a hearing upon the pleadings and proofs, and resulted in a decree perpetuating the injuncFrom this decree defendants appealed directly to this court, pursuant to § 5 of the circuit court of appeals act allowing such appeal in any case that involves the construction or application of the Constitution of the United States. tion. Messrs. A. H. Garland, J. Hamilton Lewis, and R. Garland, for appellants: The city of Walla Walla cannot be regarded as an agent of the state; the state cannot The general reservation of the power to alter, revoke, or repeal a grant of special privileges necessarily implies that the power may be exercised at the pleasure of the leg. islature. Close v. Glenwood Cemetery, 107 U. S. 466, 27 L. ed. 408; Spring Valley Waterworks v. Schottler, 110 U. S. 347, 28 L. ed. 173; Pennsylvania College Cases, 13 Wall. 190, 20 L. ed. 550; Tomlinson v. Jessup, 15 Wall. 454, 21 L. ed. 204. The plaintiff had an apparent, full, and adequate remedy at law. Smyth v. New Orleans Canal & Bkg. Co. 141 U. S. 656, 35 L. ed. 891. The governmental power of self-protection cannot be contracted away. New York & N. E. R. Co. v. Bristol, 151 U. S. 556, 38 L. ed. 269; Boston Beer Co. v. Massachusetts, 97 U. S. 25, 24 L. ed. 989; Barbier v. Connolly, 113 U. S. 27, 28 L. ed. 923; New Orleans Gaslight Co. v. Louisiana Light & H. P. & Mfg. Co. 115 U. S. 650, 29 L. ed. 516; Budd v. New York, 143 U. S. 517, 36 L. ed. 247, 4 Inters. Com. Rep. 45. A municipal corporation may make or authorize contracts, but it has no power to make contracts or pass by-laws which shall cede away, control, or embarrass its legislative or governmental powers, or which shall disable it from performing its public duties. Garrison v. Chicago, 7 Biss. 480; Logan v. Fyne, 43 Iowa, 524, 22 Am. Rep. 261; State, Atty. Gen., v. Cincinnati Gaslight & Coke Co. 18 Ohio St. 262; Minturn v. Larue, 23 How. 435, 16 L. ed. 574; Norwich Gaslight Co. v. Norwich City Gas Co. 25 Conn. 19; Richmond County Gaslight Co. v. Middletown, 59 N. Y. 231; New Orleans City R. Co. v. Crescent City R. Co. 12 Fed. Rep. 308. The contract is void as an attempt to barter away a part of the governmental power of the city council. Grant v. Davenport, 36 Iowa, 402; Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77; Law There was no reservation in the charter to alter, amend, or repeal; and none, except a qualified one, in the ordinance and agreement. New Jersey v. Wilson, 7 Cranch, 164, 3 L. ed. 303; Jefferson Branch Bank v. Skelly, 1 Black, 436, 17 L. ed. 173; Home of the Friendless v. Rouse, 8 Wall. 430, 19 L. ed. 495; Wilmington R. Co. v. Reid, 13 Wall. 264, 20 L. ed. 568. ton v. Steele, 152 U. S. 133, 38 L. ed. 385; | 23 Fed. Rep. 113; Barnes v. Kornegay, 62 Burlington Water Co. v. Woodward, 49 Iowa, 61; Salem Water Co. v. Salem, 5 Or. 29; Fuller v. Chicago, 89 III. 282; Murphy v. East Portland, 42 Fed. Rep. 309. Mr. John H. Mitchell, for appellee: New Orleans Gaslight Co. v. Louisiana A contract with a municipal corporation is New Jersey v. Wilson, 7 Cranch, 166, 3 L. ed. 303; Fletcher v. Peck, 6 Cranch, 87, 3 L. ed. 162. There was a good and sufficient consideration for the contract. Home of the Friendless v. Rouse, 8 Wall. 437, 19 L. ed. 498. The ordinance of the city of Walla Walla approved June 20, 1893, and proceedings thereunder, constitute a law within the meaning of section 10, article 1, of the Constitution. When a contract made by a municipal corporation pertains to its ordinary expenses, and is, together with other like expenses, within the limit of its current revenues, such contract does not constitute the incurring of indebtedness within the meaning of the constitutional provision limiting the power of municipal corporations to contract debts. East St. Louis v. East St. Louis Gaslight & Coke Co. 98 Ill. 415, 38 Am. Rep. 97; Crowder v. Sullivan, 128 Ind. 486, 13 L. R. A. 647; Valparaiso v. Gardner, 97 Ind. 1, 49 Am. Rep. 417; Smith v. Dedham, 144 Mass. 177; Grant v. Davenport, 36 Iowa, 396; East St. Louis Gaslight & Coke Co. v. East St. Louis, 45 Ill. App. 591; Lott v. Waycross, 84 Ga. 681; Merrill R. & Lighting Co. v. Merrill, 80 Wis. 358. No obligation imposed by a contract to pay money becomes à debt until the money is payable. Weston v. Syracuse, 17 N. Y. 110; Garrison v. Howe, 17 N. Y. 458; Willington v. West Boylston, 4 Pick. 101; Badger v. Titcomb, 15 Pick. 409, 26 Am. Dec. 611; Knight v. New England Worsted Co. 2 Cush. 271; Oviatt v. Hughes, 41 Barb. 541; People v. Arguello, 37 Cal. 524; Wood v. Partridge, 11 Mass. 488; Wentworth v. Whittemore, 1 Mass. 471; Thorndike v. De Wolf, 6 Pick. 120; Meacham v. McCorbitt, 2 Met. 352; Davis v. Ham, 3 Mass. 33; Child v. Boston & F. Iron Works, 137 Mass. 516; Bent v. Hubbardston, 138 Mass. 99; Deane v. Caldwell, 127 Mass. 242. Saginaw Gaslight Co. v. Saginaw, 28 Fed. Rep. 529; Citizens' Street R. Co. v. City R. Co. 56 Fed. Rep. 746; Citizens' Street R. Co. v. Memphis, 53 Fed. Rep. 715; Santa Ana Water Co. v. San Buenaventura, 56 Fed. The demurrer to the plaintiff's bill rested Rep. 339; Capital City Gas Co. v. Des principally upon a "want of jurisdiction of[7] Moines, 72 Fed. Rep. 818; Baltimore Trust the court in certain particulars hereinafter & Guarantee Co. v. Baltimore, 64 Fed. Rep. specified. There was confessedly no diver153; Wright v. Nagle, 101 U. S. 791, 25 L.sity of citizenship, and the case was treated ed. 921; Hamilton Gaslight Co. v. Hamilton, by the court below as one arising under the 146 U. S. 258, 25 L. ed. 921; Bacon v. Texas, Constitution and laws of the United States. 163 U. S. 207, 41 L. ed. 132; New Orleans 1. The jurisdiction depends specifically upWaterworks Co. v. New Orleans, 164 U. S. on the allegation in the bill that defendants 471, 41 L. ed. 518; Williams v. Bruffy, 96 insist that the contract of the city with the U. S. 176, 24 L. ed. 716; New Orleans Water-plaintiff was not a valid and binding conworks Co. v. Louisiana Sugar Ref. Co. 125 U. S. 18, 31 L. ed. 607. *Mr. Justice Brown delivered the opinion [6] of the court: The circuit court had jurisdiction, and an injunction was the proper and appropriate remedy. Osborn v. Bank of United States, 9 Wheat. 738, 6 L. ed. 204; Crescent City L. S. L. & S. H. Co. v. Butchers' Union L. S. L. & S. H. Co. 9 Fed. Rep. 743; New Orleans Waterworks Co. v. St. Tammany Waterworks Co. 14 Fed. Rep. 194; Baltimore & O. R. Co. v. Allen, 17 Fed. Rep. 171; Parsons v. Marye, tract, either in respect to the stipulation binding the city not to erect, maintain, or become interested in any system of waterworks other than those of the plaintiff, or in respect to the stipulation for furnishing water to the city by the plaintiff; and that, regardless of plaintiff's rights, the city refuses to be bound by the contract, and is proposing to borrow money to erect and maintain waterworks of its own, and become a competitor with the plaintiff for the trade and custom of the consumers of water: that ANN the plaintiff is the owner of property in the [ity, the question whether such contract has city of the value of $125,000, and pays taxes been substantially affected by the subsequent to the city on the same; that if the city is action of the city does not present one of permitted to borrow money and apply the impairment by act of the state or its ausame to the erection of waterworks the in-thorized agent, but one of an ordinary breach debtedness will become a cloud and burden of contract by a private party, and hence the upon all taxable property in the city, and case does not arise under the Constitution that such loan is inequitable and imposes and laws of the United States, and the court upon the taxpayers a large and unnecessary has no jurisdiction, unless there be the reburden; that the value of plaintiff's prop-quisite diversity of citizenship. How far erty is largely dependent upon the fact of this distinction can be carried to defeat the its having no competition, and that the jurisdiction of the court or the application [9] threatened action of the city has greatly di- of the contract clause may admit of considminished the value of such property and the erable doubt, if the contract be authorized credit of the company, and that it finds it- by the charter; but it is sufficient for the self without the ability to borrow money to purposes of this case to say that this court make the necessary additions and repairs to has too often decided for the rule to be now its property; and, in short, that the pro-questioned that the grant of a right to supposed action of the city is in fraud of plain-ply gas or water to a municipality and its tiff's rights under its contract with the city, inhabitants through pipes and mains laid in and the protection guaranteed to it under the streets, upon condition of the performthe Constitution of the United States. ance of its service by the grantee, is the These allegations, upon their face, raise a grant of a franchise vested in the state, in question of the power of the city to impair consideration of the performance of a public the obligation of its contract with the plain-service, and, after performance by the grantiff by the adoption of the ordinance of June tee, is a contract protected by the Constitu20, 1893. The argument of the defendant tion of the United States against state legin this connection is that the action of the islation to impair it. New Orleans Gas city in contracting with the water company, Co. v. Louisiana Light Co. 115 U. S. 650, and in passing the ordinance of 1893 provid-660 [29: 516,520]; New Orleans Waterworks [8] ing for the erection of waterworks, was not Co. v. Rivers, 115 U. S. 674 [29: 525]; St. in the exercise of its sovereignty; that in Tammany Waterworks V. New Orleans these particulars the city was not acting as Waterworks, 120 U. S. 64 [30: 563]; Cresthe agent of the state, but was merely exer- cent City Gaslight Co. v. New Orleans Gascising a power as agent of its citizens, and light Co. 27 La. Ann. 138, 147. representing solely their proprietary interests; that the council in such cases, as trustee for the citizens, stands in the relation to them as directors to stockholders in a private corporation, acting solely as the agent of the citizens, and nowise as the agent of the state; and therefore that neith-latures may not only exercise their soverer the state nor the city as its agent can be charged either with the making or the impairing of the original contract; that for these reasons the Constitution of the United States has no application to the case, the Federal court has no jurisdiction, and the bill, upon its admitted facts, presents only a violation by a citizen of the state of its contract with another citizen, and the plaintiff is bound to resort to the state courts for its remedy. It is true that in these cases the franchise was granted directly by the state legislature, but it is equally clear that such franchises may be bestowed upon corporations by the municipal authorities, provided the right to do so is given by their charters. State legis eignty directly, but may delegate such por tions of it to inferior legislative bodies as, in their judgment, is desirable for local purposes. As was said by the supreme court of Ohio in State [Atty. Gen.] v. Cincinnati Gaslight and Coke Co. 18 Ohio St. 262, 293: "And, assuming that such a power" (granting franchises to establish gas works) "may be exercised directly, we are not disposed to doubt that it may also be exercised indirectly, through the agency of a municipal corIt may be conceded as a general proposi-poration clearly invested, for police purposes, tion that there is a substantial distinction between the acts of a municipality as the agent of the state for the preservation of peace and the protection of persons and property, and its acts as the agent of its citizens for the care and improvement of the public property and the adaptation of the city for the purposes of residence and business. Questions respecting this distinction have usually arisen in actions against the municipality for the negligence of its officers, in which its liability has been held to turn upon the question whether the duties of such officers were performed in the exercise of public functions or merely proprietary powers. It is now sought to carry this distinction a step farther, and to hold that, if a contract be made by a city in its proprietary capac with the necessary authority." This case is directly in line with those above cited. See also Wright v. Nagle, 101 U. S. 791 [25: 921]; Hamilton Gaslight & Coke Co. v. Hamilton City, 146 U. S. 258, 266 [36: 963, 967]; Bacon v. Texas, 163 U. S. 207, 216 [41: 132, 136]: New Orleans Waterworks Co. v. New Orleans, 164 U. S. 471 [41: 518]. The cases relied upon by the appellant are no authority for the position assumed, that the Federal court has no jurisdiction of a [10] case wherein the charter of a water company is alleged to have been impaired by subsequent legislation. In several of these cases the actions were for negligence in the performance of certain duties which the court held to be public or private, as the case might be. New Orleans v. Abbaganto. 23 U. S. App. 533, 545 [26 L. R. A. 329]; Maxmilian | whether the city should supply itself with We know of no case in which it has been 2. The argument which attacks the juris- 3. The objection that a court of equity has no jurisdiction because the plaintiff has a complete and adequate remedy at law is equally untenable. Obviously it has no present remedy at law, since the city has done nothing in violation of its covenant not to [12] erect competing waterworks, and the water company has as yet suffered no damage. It is true that after the city shall have gone to the great expense of erecting a plant of its own and of entering into competition with the plaintiff company, the latter would doubtless have a remedy at law for breach of the covenant. In the meantime great, perhaps irreparable, damage would have been done to the plaintiff. What the measure of such damage was would be exceedingly diffi cult of ascertainment, and would depend largely upon the question whether the value of the plaintiff's plant was destroyed or merely impaired. It would be impossible to say what would be the damage incurred at any particular moment, since such damage might be more or less dependent upon whether the competition of the city should ultimately destroy, or only interfere with, the business of the plaintiff. This court has repeatedly declared in affirmance of the generally accepted proposition that the remedy at law, in order to exclude a concurrent remedy at equity, must be as complete, as practical, and as efficient to the ends of justice and its prompt administration as the remedy in equity. Boyce's Executors v. Grundy, 3 Pet. 210, 215 [7: 655, 657]; Phoenix Mut. L. Ins. Co. v. Bailey, 13 Wall. 616, 621 [20: 501, 503]; Kilbourn v. Sunderland, 130 U. S. 505, 514 [32: 1005, 1009]; Tyler v. Savage, 143 U. S. 79, 95 [36: 82, 89]. Where irreparable injury is threatened, or the damage be of such a nature that it cannot be adequately compensated by an action at law, or is such as, from its continuance, to occasion a constantly recurring grievance, the party is not ousted of his remedy by injunction. In such a case as this, the remedy will save to one party or the other a large pecuniary loss,-to the city, if it be obliged to pay to the plaintiff damages occasioned by the establishment of its competing works; to the plaintiff, if it be adjudged that the city has a right to do so. ANN As the contract in question was expressly limited to twenty-five years, and as no attempt was made to grant an exclusive privilege to the water company, the city seems to have acted within the strictest limitation of the charter. Atlantic City Waterworks v. Atlantic City, 48 N. J. L. 378. But it is further insisted in this connection | a term not exceeding twenty-five years, that, under section 8 of the contract, the provided always, that none of the city had the right at any time to take and rights or privileges hereinafter granted shall condemn the waterworks of the company, and be exclusive or prevent the council from that, in case of such condemnation, the con- granting the said rights to others;" and by tract should not be taken into consideration section 11 "the city of Walla Walla shall in estimating the value of the waterworks; have power to erect and maintain water[13]*and hence, that if the city elected to estab- works within or without the city limits, or lish waterworks of its own, without con- to authorize the erection of the same for the demning those of the plaintiff company, the purpose of furnishing the city, or the inhabi value of such waterworks would furnish the tants thereof, with a sufficient supply of proper measure of damages in such action. water." This argument necessarily assumes, however, that the damages in such action would be the same as in a proceeding for condemnation. Perhaps if the plaintiff company were forced to abandon its works entirely by the competition of the city, the value of such works might furnish the measure of its compensation; but it could not be forced to do this, and if the company elected not to abandon, but to enter into competition with the city, the damages would have to be estimated by the probable injury done to the company by such competition. This, as above indicated, would furnish a most uncertain basis. 4. The case upon the merits depends largely upon the power of the city under its charter. The ordinance authorizing the contract, which purports to have been passed in pursuance of this charter, declared that until such contract should be avoided by a court of competent jurisdiction the city should not erect, maintain, or become interested in any waterworks except the ones established by the company, while the ordinance of June 20, 1893, provided for the immediate construction of a system of waterworks by the city for the purpose of supplying the city and its inhabitants with water. Upon the face of the two ordinances there was a plain conflict, the latter clearly impaired the obligation of the former. [14] the water sive one, the contract might be considered Had the privilege granted been an excluobjectionable upon the ground that it created the legislature to that effect. It is true a monopoly without an express sanction of that in City of Brenham v. Brenham Water Co. 67 Tex. 542, a city ordinance grantand privilege for the term of twentying to company the right five years of supplying the city with water, for which the city agreed to pay an annual rental for each hydrant, the supreme court of Texas held to be the grant of an exclusive privilege to the water company for the period named. The decision seems to have been rested largely upon the use of the words "privilege" and "supplying,”— words which are not found in the contract in this case. Without expressing an opinion upon the point involved in that case, we are content to say that an ordinance granting a [15] right to a water company, for twenty-five years, to lay and maintain water pipes for The argument of the city is that the coun- the purpose of furnishing the inhabitants of cil exceeded its powers in authorizing the a city with water, does not, in our opinion, contract with the water company for a con- create a monopoly or prevent the granting of tinuous supply of water and the payment of a similar franchise to another company. rentals for twenty-five years, and that such Particularly is this so when taken in conneccontract was specially obnoxious in its stip-tion with a further stipulation that the city ulation that the city should not construct shall not erect waterworks of its own. waterworks of its own during the life of the provision is not devoid of an implication contract. The several objections to the con- that it was intended to exclude only competract are specifically stated by counsel for tition from itself, and not from other parties the city in their brief as follows: whom it might choose to invest with a similar franchise. This a. The contract creates a monopoly which, in the absence of an express grant from the 5. The argument that the contract is void legislature of power so to do or such power as an attempt to barter away the legislative necessarily implied, is void as in contraven-power of the city council rests upon the astion of public policy; *b. The contract is void as an attempt to contract away a part of the governmental power of the city council; c. The contract is void as creating an indebtedness in excess of the charter limits; d. The contract is in violation of the express provision of a general statute of the territory of Washington. By section 10 of the city charter, the city is authorized "to grant the right to use the streets of said city for the purpose of laying gas and other pipes intended to furnish the inhabitants of said city with light or water, to any persons or association of persons, for sumption that contracts for supplying a city with water are within the police power of the city, and may be controlled, managed, or abrogated at the pleasure of the council. This court has doubtless held that the police power is one which remains constantly under the control of the legislative authority, and that a city council can neither bind itself nor its successors to contracts prejudicial to the peace, good order, health, or morals of its inhabitants; but it is to cases of this class that these rulings have been confined. If a contract be objectionable in itself upon these grounds, or if it become so in its execution, the municipality may, in the exer |