counsel to have been at that time the policy of the State to attach, as a condition of all banking charters, the construction of some work of public utility. At any rate, it appears that this bank was invested with authority to purchase and hold property necessary to carry into complete effect the object of its charter, which was declared to be "the furnishing of the city with good and wholesome water;" that it was given the exclusive privilege," from and after the date of its charter, of "supplying the city and inhabitants of New Orleans and its faubourgs with water from the Mississippi River, by means of pipes and conduits, and for erecting, constructing, or working of any necessary engine;" that, to that end, it could lay and place any number of conduits, pipes and aqueducts, on or over any of the lands or streets of New Orleans and its faubourgs; that the city might, within a prescribed time, subscribe for five thousand shares of the capital stock of the Company, not subject to deduction, to be [676) paid for by city bonds, redeemable in forty years, and bearing an annual interest not exceeding 5 per centum, payable half yearly; and might, at any time after the expiration of thirty-five years from the passage of the Act, purchase the water works constructed by the bank. ОСТ. TERM, works and all the property appurtenant thereto. The Company was required, immediately after its organization, to issue to the city stock to the amount of $606,600, as full paid and not subject to assessment, and one additional share for every one hundred dollars of water works bonds which the city had theretofore taken up and extinguished by payment, exchange or otherwise-the residue of the stock to be received and surrendered to the city for the benefit of the holders of water works bonds who might elect to exchange them for stock of the Company, and the bonds so exchanged to be canceled. the Water Works Company shall own and posThe Act provided, among other things, that sess the privileges acquired by the city from the bank; that it shall have, for fifty years from the passage of this Act, "the exclusive privilege of supplying the City of New Orleans and its inhabitants with water from the Mississippi, or any other stream or river, by mains or conduits, and for erecting and constructing any necessary works or engines or machines for that purpose;" may purchase or lease such lands or lots of ground, and construct such dykes, mounds or reservoirs as may be required for securing and carrying "a full supThe city made the subscription authorized ants;" for which purpose it could lay and ply of pure water to said city and its inhabitby the Act, issuing its bonds in payment there- place conduits, pipes or aqueducts in the for; and the bank constructed an extended sys- streets, public places and lands of the city, tem of water works, which it managed and taking care not to obstruct commerce or free operated for the full term of thirty-five years, circulation; that the city might use water from at the end of which period, in 1888, the city, the pipes and plugs of the Company then laid, exercising the privilege reserved by the State, or thereafter to be laid, free of any charge, took possession of and purchased the water for the extinguishment of fires, cleansing of works at the appraised value of $2,000,000, pay-the streets, and for the use of all public building, for the bank's interest, in city bonds, re- ings, public markets and charitable institudeemable in forty years, the sum of $1,393,400. tions; that the Company should place, free of The balance of the appraised value represent- any charge, for public purposes, two hydrants ed the city's interest by original subscription, of the most approved construction in front of and by purchase subsequently from stockhold- each square where a main pipe was laid; that ers. Upon such payment being made, the wherever main pipes are laid it shall be the bank, as it was bound to do, transferred to the duty of the Company to supply water, for all city an absolute, complete title to the water the purposes mentioned, at all times during works property, and to all the rights, privileges the continuance of its charter, in consideraand immunities which it possessed. The city managed and controlled the prop-in accordance with its charter, were exempted tion whereof its franchises and property, used erty for several years, during which period it from taxation, state, municipal and parochial; became seriously embarrassed in its finances. that immediately after its organization the That it might be relieved from such embarrass- Company shall proceed to the erection of new ment, the Legislature of Louisiana, in 1877, works and pipes, sufficient in capacity to furpassed an Act entitled "An Act to enable the nish a full and adequate supply of water, to be City of New Orleans to promote the public drawn from the Mississippi River or elsewhere, health, and to afford greater security against as might be judged most expedient, such new fire, by the establishment of a corporation to works and pipes to be commenced within be called the New Orleans Water Works Com- twelve months from the passage of the Act, pany, to authorize the said Company to issue and be completed within four years, so as to bonds for the purpose of extending and im- give an adequate supply of water to the peoproving the said works, and to furnish the in-ple of New Orleans, exclusive of the Fifth habitants of the City of New Orleans an adequate supply of pure and wholesome water, and to permit holders of the water works bonds to convert them into stock, and provide for the liquidation of the bonded and floating debt of the City of New Orleans." By that Act, the New Orleans Water Works Company was created a corporation, with a capital stock of $2,000,000, to which the mayor of New Orleans was directed, as soon after the election of directors as the city council should determine, to transfer the water 526 District; that, if the work was not done as prescribed, the Company should forfeit all exclusive privileges granted to it, and the city might contract with anyone else for a supply of water, and appropriate the property of the new works and pipes, the Company should, Company; that, after the completion of the from time to time, as the wants of the popu lation required, and when the estimated rev10 per centum, extend its works throughout enue on the cost of such extension should equal the entire limits of the city and suburbs, as ben or thereafter established; and that any are of the Company to comply with these rovisions should work a forfeiture of its charer. While the Act gave the Company the nght to fix the rate of charges for water, that nicht was subject to the condition that the net s should not exceed 10 per cent per um. At the expiration of fifty years from organization of the Company, the city was Even the privilege of buying the works, pipes, at a valuation to be fixed by experts; and, the city did not purchase, the Company's carter should be ipso facto extended for fifty years longer, but without any exclusive privree or right to supply water," according to the provisions of the charter. gations of the bill, was executing in good faith In addition to authority to increase is capi- The New Orleans Water Works Company was in existence before the adoption of the present Constitution of Louisiana, one of the articles of which, as we have seen, repeals the monopoly features in the charters of all then existing corporations other than railroad companies. This case is, therefore, controlled by the decision just rendered in New Orleans Gas Light Co. v. Louisiana Light and Heat Producing and Manufacturing Co. [ante,516]. The two are not to be distinguished upon principle; for if it was competent for the State, before the City of New Orleans accepted the pro- adoption of her present Constitution, as we and conditions of the Act of 1877, and have held it was, to provide for supplying the writed the full amount of stock authorized City of New Orleans and its people with ilTaw. Holders of bonds also subscribed luminating gas by means of pipes, mains, and es to the amount of $500,000, and, as re- conduits placed, at the cost of a private corpodrrendered their bonds to the city, ration, in its public ways, it was equally comwere canceled, leaving to the latter, in petent for her to make a valid contract with a we of their bonds, the stock so subscribed by private corporation for supplying, by the same Subsequently, April 9, 1878, the city means, pure and wholesome water for like use ferred to the Water Works Company, its in the same city. The right to dig up and use and assigns, all of the before men- the streets and alleys of New Orleans for the property, subject to its right to repur- purpose of placing pipes and mains to supply the same as provided in the foregoing the city and its inhabitants with water is a Thereafter, the property was controlled franchise belonging to the State, which she managed by the Company. In order to could g.ant to such persons or corporations, obligations imposed by its charter, it and upon such terms, as she deemed best for the large sums of money, raised by the public interest. And as the object to be atmortgage bonds, to the amount of tained was a public one, for which the State *****, of which $300,000 were sold, and could make provision by legislative enactment, Bocey, or a large portion thereof, was the grant of the franchise could be accompanied in enlarging and improving the with such exclusive privileges to the grantee, Works, so as to meet the demand for in respect of the subject of the grant, as in the for the use of the city and its inhabitants. judgment of the legislative department would the Company, according to the alle-best promote the public health and the public [680] [681] SUPREME COURT OF THE UNITED STATES. comfort, or the protection of public and private their places of business or residences with water OCT. TERM, property. Such was the nature of the plaint- therefrom, obtained otherwise than by pipes, iff's grant, which, not being at the time pro- mains, or conduits laid in the public ways of hibited by the Constitution of the State, was a the city. The restriction, imposed by the concontract, the obligation of which cannot be im- tract upon the use by others than plaintiff of paired by subsequent legislation, or by a change the public streets and ways, for such purposes, in her organic law within the meaning of the Constitution of the He was not thereby restrained of any freedom It is as much a contract, is not one of which the appellee can complain. United States, as a grant to a private corpora- or liberty he had before; for he had no right, tion for a valuable consideration, or in consid- without the consent of the government, to dig eration of public services to be rendered by it, up the streets and alleys of the city for the purof the exclusive right to construct and maintain pose of conveying water to his hotel. Nor can a railroad within certain lines and between he question the authority of the State to grant given points, or a bridge over a navigable to a private corporation the exclusive use of stream within a prescribed distance above and public streets and alleys for such purposes, as a below a designated point. It is idle to insist that this contract was pre- supplying one of her municipalities and its inmeans of accomplishing the public object of judicial either to the public health or to the habitants with pure and wholesome water. public safety, as might, perhaps, be said to be The permission given to the appellee by the the case if the State, after making it, was pre- city council to lay pipes in the streets, for the vented from exercising any control whatever purpose of conveying water to his hote., is over the matter of supplying the city and its plainly in derogation of the State's grant to the inhabitants with water. But, notwithstanding appellant; for if that rody can accord such a the exclusive privileges granted to the plaint- use of the public ways to him, it may grant a iff, the power remains with the State, or with like use to all other citizens and to corporations the municipal government of New Orleans, act- of every kind, thereby materially diminishing, iug under legislative authority, to make such if not destroying, the value of the plaintiff's regulations as will secure to the public the un- contract, upon the faith of which it has exinterrupted use of the streets, as well as pre-pended large sums of money, and rendered servvent the distribution of water anfit for use, and ices to the public which might otherwise have provide for such a continuous supply, in quan- been performed by the State or the city at the tity, as protection to property, public and pri- public expense. vate, may require. In the case just decided we said: "The constitutional prohibition upon state laws impairing the obligation of contracts does not restrict the power of the State to protect the public health, the public morals, or the public safety, as the one or the other may be involved in the execution of such contracts. [682] Rights and privileges arising from contracts with a State are subject to regulations for the protection of the public health, the public morals and the public safety, in the same sense as are all contracts and all property, whether owned by natural persons or corporations." The contract with the Water Works Company does not interfere with, but expressly reserves, the riparian rights of anyone "contiguous to the river." To that class the appellee does not belong; for his hotel is distant many blocks from the Mississippi River, and others own and occupy the intervening property. Nor does the contract assume to interfere with the right of any person or corporation, even when not contiguous to that stream, to supply i 528 to in the other case, or repeating the general for further proceedings in conformity with this James H. McKenney, Clerk, Sup. Court, U. & 115 U. S. END OF VOL. 115. CXV UNITED STATES. 115 U. S. 1-25, 29 L. 319, PACIFIC RAILWAY REMOVAL CASES. Removal of causes.- Corporations of the United States, created under acts of Congress, are entitled, as such, to remove to Circuit Courts suits brought against them in State courts, under removal act of March 3, 1875, pp. 11–17. Reaffirmed in Butler v. National Home, 144 U. S. 66, 36 L. 349, 12 S. Ct. 582, Texas, etc., Ry. v. Cox, 145 U. S. 601, 36 L. 832, 12 S. Ct. 907, Allen v. Texas, etc., Ry., 25 Fed. 513, People v. Colorado Cent. Ry., 42 Fed. 639, Supreme Lodge v. Hill, 76 Fed. 471, 42 U. 8. App. 200, United States, etc., Co. v. Gallegos, 89 Fed. 771, 61 U. S. App. 18, and Texas, etc., Ry. v. Bloom, 85 Tex. 285, 20 S. W. 135. Approved in Starin v. New York, 115 U. S. 257, 29 L. 390, 6 S. Ct. 31, defining term "suit arising under Constitution or laws of United States;" Metcalf v. Watertown, 128 U. S. 589, 32 L. 544, 9 S. Ct. 174, but holding Federal jurisdiction on ground of diverse citizenship must appear from record; McNulta v. Lochridge, 141 U. S. 331, 35 L. 799, 12 S. Ct. 13, holding adverse State court judgment upon claim of Federal receiver, reviewable by Supreme Court; Luxton v. North River Bridge Co., 153 U. S. 529, 38 L. 810, 14 S. Ct. 892, holding Congress may create corporation to build bridge over navigable waters between States; Texas, etc., Ry. v. Cody, 166 U. S. 608, 609, 41 L. 1133, 1134, 17 S. Ct. 704, 705, holding Federal corporation defendant entitled to removal, although described in complaint as State corporation; Sonnentheil v. Moerlein Brewing Co., 172 U. S. 405, 19 S. Ct. 234, holding suit against Federal marshal, one arising under United States laws; State v. Bradley, 26 Fed. 289, holding point once decided by Federal Supreme Court presents no Federal question; Hendee v. Connecticut, etc., Ry., 26 Fed. 678, holding suit in behalf of corporation created by Congress, arises under laws of United States; Briscoe v. Southern Kan. Ry., 40 Fed. 277, holding Federal court has jurisdiction over suits by or against railroad authorized by Congress to operate in Indian country; Graut ▼. Spokane Nat. Bank, 47 Fed. 673, holding suit to control official Conduct of national bank receiver, arises under Federal laws; Walker v. Windsor Nat. Bank, 56 Fed. 80, 5 U. S. App. 423, holding suit on bond of national bank cashier involves Federal question; Wood v. Drake, 70 Fed. 882, holding action for false imprisonment by Federal marshal removable: Lund v. Chicago, etc., Ry., 78 Fed. 288, holding suit against corporation of plaintiff's State, joined with 1111 U. S. Notes 115 U. S. 29 L. ed. 528-78 p. Federal corporation, removable; State of Arkansas 7. Kansas & T. Coal Co., 96 Fed. 355, 357, holding cause removable where records show that either party claims right under Federal Constitution or laws; Austin v. Northern Pac. Ry., 34 Minn. 474, 26 N. W. 608, allowing amendment of complaint in action involving Federal corporation by increasing demand to jurisdictional amount for removal; Texas, etc., Ry. v. Gay, 86 Tex. 582, 26 S. W. 601, 25 L. R. A. 54, holding jurisdiction of Federal court over case to which Federal corporation is party, will be presumed; Texas, etc., Ry. v. WatTex. Civ. App. -, 43 S. W. 1061, holding principles applicable to diverse citizenship may be applied to Federal corporations. Cited generally in Pacific Gas Imp. Co. v. Ellert, 64 Fed. 429, and Caples v. Texas, etc., Ry., 67 Fed. 10; arguendo, in California v. Pacific Ry. Co., 127 U. S. 40, 32 L. 157, 8 S. Ct. 1080, Northern Pac. Ry. v. Austin, 135 U. S. 317, 34 L. 219, 10 S. Ct. 759, and Roberts v. Northern Pac. Ry., 158 U. S. 22, 39 L. 881, 15 S. Ct. 763. son, Distinguished in Leather, etc., Bank v. Cooper, 120 U. S. 780, 30 L. 818, 7 S. Ct. 778, holding, since act of 1885, suits by or against national banks not necessarily removable; Petri v. Commercial Nat. Bank, 142 U. S. 648, 35 L. 1145, 12 S. Ct. 326, and Ex parte Jones, 164 U. S. 692, 41 L. 601, 17 S. Ct. 223, holding Federal Jurisdiction over action by and against national banks depends upon diverse citizenship; Colorado Cent. Min. Co. v. Turck, 150 U. S. 143, 37 L. 1032, 14 S. Ct. 37, and Tennessee v. Union, etc., Bank, 152 U. S. 460, 38 L. 514, 14 S. Ct. 656 (but see dissenting opinion in 152 U. S. 468, 38 L. 516, 14 S. Ct. 659), denying Federal jurisdiction of suit as arising under Federal Constitution, unless it appears from complaint; Oregon, etc., Ry. v. Skottowe, 162 U. S. 496, 40 L. 1050, 16 S. Ct. 870, holding, on application for removal, Federal character of defendant corporation must appear from complaint; Seattle, etc., Ry. v. State, 52 Fed. 596, holding Federal corporation joined as defendant cannot remove, where it does not appear concerned in the litigation; State of Kansas v. Atchison, etc., Ry., 77 Fed. 343, holding action not removable unless fact that it arises under Federal laws appears from plaintiff's statement of his own claim; Follett v. Tillinghast, 82 Fed. 241, denying right of removal on ground that case arises under Federal laws, where disputed amount did not exceed $2,000; Chicago, etc., Ry. v. Martin, 59 Kan. 447, 53 Pac. 464, holding Federal corporation not entitled to removal unless its co-defendant joins in petition; Conlon v. Oregon, etc., Ry., 21 Or. 464, 28 Pac. 501, holding rule inapplicable to corporations organized by territory and afterwards granted privileges by Congress; State v. Southern Pac. Ry., 23 Or. 431, 31 Pac. 962, holding defendant not a Federal corporation for purposes of removal. Corporations.- Railroad company formed under acts of Congress, by consolidation of various State and United States corporations, is at least a de facto corporation, and its existence will not be inquired into collaterally, p. 16. |