The fact that § 720 of the Supplement to the Code has specified but one condition of the grant, a limit of twenty-five years, negatives the idea that any other condition may be attached to the grant. People ex rel. New York & N. S. Traction Co. v. Public Service Commission, 175 App. Div. 869, P.U.R.1917B, 957, 162 N. Y. Supp. 405.

The long-settled construction of the Iowa statutes by its highest judicature is that they do not confer any power or authority upon municipalities to enter into lawful and binding contracts with public utility companies fixing gas, water, heating, or electric rates to be charged to private consumers, but, to the contrary, prohibit the making of such contracts by the municipalities.

Woodward v. Iowa R. & Light Co. Iowa, —, 178 N. W. 549; Ottumwa R. & Light Co. v. Ottumwa, Iowa, 178 N. W. 905; Selkirk v. Sioux City Gas & E. Co. Iowa, 176 N. W. 301; Iowa R. & Light Co. v. Jones, 182 Iowa, 982, 164 N. W. 780; Williams v. Iowa Falls Electric Co. 185 Iowa, 493, P.U.R. 1919C, 501, 170 N. W. 815.

The previous holdings of the Iowa supreme court, construing the Iowa statutes relating to the granting of franchises and the regulation of rates, are controlling upon the Federal courts in construing such statutes, the Federal courts not having construed such statutes.

Raymond v. Terrebonne, 28 Fed. 773; Richmond v. Smith, 15 Wall. 429, 21 L. ed. 200; Jones v. Richmond, 18 Gratt. 517, 98 Am. Dec. 695; Leffingwell v. Warren, 2 Black, 599, 17 L. ed. 261; Milwaukee Electric R. & Light Co. v. Railroad Commission, 238 U. S. 174, 59 L. ed. 1254, P.U.R.1915D, 591, 35 Sup. Ct. Rep. 820; Hall v. DeCuir, 95 U. S. 485, 24 L. ed. 547.

The settled construction of the Iowa statutes relating to gas, heating, electric, and water franchises and rates is sustained by the decisions of the Federal courts.

The powers conferred by § 725 of the Supplement of the Code upon municipalities in respect to rates is governmental in character, to be exercised by legislation, and is continuous, so that a city council may not bind itself or its successor councils to any definite rate for any definite length of time.

Illinois Trust & Sav. Bank v. Arkansas City, 34 L.R.A. 518, 22 C. C. A. 171, 40 U. S. App. 257, 76 Fed. 271; Tipton v. Tipton Light & Heating Co. 176 Iowa, 230, 157 N. W. 844; 5 Dill. Mun. Corp. 5th ed. § 325; Cedar Rapids Gaslight Co. v. Cedar Rapids, 144 Iowa, 426, 48 L.R.A. (N.S.) 1025, 138 Am. St. Rep. 299, 120 N. W. 966; Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. Rep. 490; Pioneer Teleph. & Teleg. Co. v. State, 33 Okla. 724, 127 Pac. 1073; Home Teleph. & Teleg. Co. v. Los Angeles, 211 U. S. 265, 53 L. ed. 176, 29 Sup. Ct. Rep. 50; Williams v. Iowa Falls Electric Co. 185 Iowa, 493, 170 N. W. 815, P.U.R.1919C, 501; Selkirk v. Sioux City Gas & Electric Co. Iowa, 176 N. W. 301; San Antonio Pub. Serv. Co. v. San Antonio, 257 Fed. 467; Iowa R. & Light Co. v. Jones, 182 Iowa, 982, 164 N. W. 780; Knoxville Gas Co. v. Knoxville, P.U.R.1920B, 501, C. C. A., 261 Fed. 283; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493.

The power to regulate rates, conferred on cities by § 725 of the Code, is a continuing one, and one city council may not tie up its successors by anything it may do, and the rates specified are subject to subsequent adjustment, as may be deemed expedient by the city council.

Iowa R. & Light Co. v. Jones, 182 Iowa, 982, 164 N. W. 780.

The approval by electors of rates in a franchise is merely an approval of rates temporarily settled, with the understanding that the same may be changed upwards or downwards.

Ottumwa R. & Light Co. v. Ottumwa,
Iowa,, 178 N. W. 905.

As to corporations named in § 725, there can be no contracting that rates fixed for service shall not be changed. Ibid.

The fixing of maximum rates in a franchise ordinance is not a contract that such rates may not be changed before the time stated in such ordinance elapsed.

Ibid.

has

Iowa R. & Light Co. v. Jones, 182 Iowa, 982, 164 N. W. 780; Usher v. Livermore, 2 Iowa, 117; 13 C. J. 331, 332; Williams v. Iowa Falls Electric Co. 185 Iowa, 493, P.U.R.1919C, 501, 170 N. W. 815; Dorsey v. Packwood, 12 How. 126, 13 L. ed. 921; Rutland Marble Co. v. Ripley, 10 Wall. 339, 19 L. ed. 955, 3 Mor. Min. Rep. 291; Nicolls v. Wetmore, 174 Iowa, 132, 156 N. W. 319; Great Northern R. Co. v. Sheyenne Teleph. Co. 27 N. D. 256, 145 N. W. 1062; Velie Motor Car Co. v. Kopmeier Motor Car Co. 114 C. C. A. 284, 194 Fed. 324; Oakland Motor Car Co. v. Indiana Auto Co. 121 C. C. A. 319, 201 Fed. 499; Tweedie Trading Co. v. Parlin & O. Co. 122 C. C. A. 364, 204 Fed. 50; Ellis v. Dodge Bros. 237 Fed. 860.

The void rate clause in a franchise does not bind grantee on account of grantee's acceptance of the franchise as a whole.

State ex rel. Larimer v. Chariton Teleph. Co. 173 Iowa, 497, 155 N. W. 968; Chamberlain v. Iowa Teleph. Co. 119 Iowa, 619, 93 N. W. 596; Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 255, 91 N. W. 1081; W. W. Cargill Co. v. Minnesota, 180 U. S. 468, 45 L. ed. 626, 21 Sup. Ct. Rep. 423.

Mr. Ralph H. Munro argued the cause, and, with Mr. X. C. Nady, filed a brief for appellees:

The provision of Iowa Code, § 720, authorized the city to exact any conditions it saw fit, not unlawful in themselves or contrary to public policy.

Manitowoc v. Manitowoc & N. Traction Co. 145 Wis. 13, 140 Am. St. Rep. 1056, 129 N. W. 925; Shreveport Traction Co. v. Shreveport, 122 La. 1, 129 Am. St. Rep. 345, 47 So. 40; Muscatine Lighting Co. v. Muscatine, 256 Fed. 929; 19 R. C. L. p. 1153, ¶ 427; Southern P. Co. v. Portland, 227 U. S. 559, 57 L. ed. 642, 33 Sup. Ct. Rep. 308; Chicago General R. Co. v. Chicago, 176 Ill. 253, 66 L.R.A. 959, 68 Am. St. Rep. 188, 52 N. E. 880; Indianapolis v. Consumer's Gas Trust Co. 140 Ind. 107, 27 L.R.A. 514, 49 Am. St. Rep. 183, 39 N. E. 433; State ex rel. Kansas City v. Corrigan Consol.

361; Muncie Natural Gas Co. v. Muncie, 160 Ind. 97, 60 L.R.A. 822, 66 N. E. 436; Westfield Gas & Mill Co. v. Mendenhall, 142 Ind. 538, 41 N. E. 1033; Logansport & W. V. Gas Co. v. Peru, 89 Fed. 185; 2 Dill. Mun. Corp. 4th ed. ¶ 705; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493; Cedar Rapids Water Co. v. Cedar Rapids, 118 Iowa, 234, 91 N. W. 1081; Missouri P. R. Co. v. Kansas, 216 U. S. 262, 54 L. ed. 472, 30 Sup. Ct. Rep. 330.

The city, by means of such conditions, may impose obligations upon the utility company which it would have no power or authority to impose under its general charter powers.

Southern P. Co. v. Portland, 227 U. S. 559, 57 L. ed. 642, 33 Sup. Ct. Rep. 308; Chicago General R. Co. v. Chicago, 176 Ill. 253, 66 L.R.A. 959, 68 Am. St. Rep. 188, 52 N. E. 880; 19 R. C. L. 427; Kadish v. Garden City Equitable Loan & Bldg. Asso. 151 Ill. 531, 42 Am. St. Rep. 256, 38 N. E. 236; Cook County v. Chicago, 158 Ill. 524, 42 N. E. 67; Fulton v. Northern Illinois College, 158 Ill. 333, 42 N. E. 138; Charles Simons Sons Co. v. Maryland Teleph. & Teleg. Co. 99 Md. 141, 63 L.R.A. 727, 57 Atl. 193.

If the utility company accepts the grant, it is bound by the conditions, and is estopped to question their validity.

Smittle v. Haag, 140 Iowa, 492, 118 N. W. 869; Thompson v. Mitchell, 133 Iowa, 527, 110 N. W. 901; Daniels v. Tearney, 102 U. S. 421, 26 L. ed. 187; Ferguson v. Landram, 5 Bush, 230, 96 Am. Dec. 350; Van Hook v. Whitlock, 26 Minneapolis & St. L. R. Co. 114 Iowa, Wend. 43, 37 Am. Dec. 246; Gano v. 713, 55 L.R.A. 263, 89 Am. St. Rep. 393, 87 N. W. 714; Pitkin v. Springfield, 112 Mass. 509; Deverson v. Eastern R. Co.

58 N. H. 129; Dodge v. Stickney, 61 N. H. 607; People v. Murray, 5 Hill, 468; Electric Co. v. Dow, 166 U. S. 489, 41 L. ed. 1088, 17 Sup. Ct. Rep. 645, 68 N. H. 59, 31 Atl. 22; Grand Rapids & I. R. Co. v. Osborn, 193 U. S. 17, 48 L. ed. 598, 24 Sup. Ct. Rep. 310; 12 C. J. 769; Farnsworth v. Boro Oil & Gas Co. 216 N. Y. 60, 109 N. E. 860; Pond v. New Rochelle Water Co. 183 N. Y. 330, 1 L.R.A. (N.S.) 958, 76 N. E. 211, 5 Ann. Cas. 504.

The utility company cannot retain the benefits of the franchise and repudiate the burdens on plea of ultra vires, or want of authority on the part of the city to make the condition.

Chicago General R. Co. v. Chicago, 176

Ill. 253, 66 L.R.A. 959, 68 Am. St. Rep. 188, 52 N. E. 880; Kadish v. Garden City Equitable Loan & Bldg. Asso. 151 Ill. 531, 42 Am. St. Rep. 256, 38 N. E. 236; Cook County v. Chicago, 158 Ill. 526, 42 N. E. 67; Fulton v. Northern Illinois College, 158 Ill. 333, 42 N. E. 138; Belfast v. Belfast Water Co. 115 Me. 234, L.R.A.1917B, 908, P.U.R. 1917A, 313, 98 Atl. 738; Ft. Worth City Co. v. Smith Bridge Co. 151 U. S. 294, 38 L. ed. 167, 14 Sup. Ct. Rep. 339; Richardson v. Welch, 47 Mich. 309, 11 N. W. 172; Doane v. Lake Street Elevator R. Co. 165 Ill. 510, 36 L.R.A. 97, 56 Am. St. Rep. 265, 46 N. E. 520; Collins v. Cole, 202 Ill. 469, 66 N. E. 1079; State ex rel. Pope v. Germania Bank, 90 Minn. 150, 95 N. W. 1116; Gibbs v. Craig, 58 N. J. L. 661, 33 Atl. 1052; Flower v. Barnekoff, 20 Or. 132, 11 L.R.A. 149, 25 Pac. 370; Dyer v. Walker, 40 Pa. 157; 2 Parsons, Contr. 961; Joy v. St. Louis, 138 U. S. 1, 34 L. ed. 843, 11 Sup. Ct. Rep. 243; Fidelity Ins. Co. v. German Sav. Bank, 127 Iowa, 591, 103 N. W. 958.

The municipality only can complain of lack of authority to contract.

Williamson v. Carlton, 51 Me. 449; Re Wellington, 16 Pick. 87, 26 Am. Dec. 631; Hingham & Q. Bridge & Turnp. Corp. v. Norfolk County, 6 Allen, 353; Red River Valley Nat. Bank v. Craig, 181 U. S. 548, 45 L. ed. 994, 21 Sup. Ct. Rep. 703.

Ultra vires transactions are utterly void when made the basis of suit to charge a bank with liability, but when the bank seeks to enforce advantages obtained through such transactions, even though they are impliedly forbidden, they are valid unless questioned by the govern

ment,

California Bank v. Kennedy, 167 U. S. 362, 42 L. ed. 198, 17 Sup. Ct. Rep. 831; Union Gold Min. Co. v. Rocky Mountain Nat. Bank, 96 U. S. 640, 24 L. ed. 648, 1 Mor. Min. Rep. 432; Union Nat. Bank v. Matthews, 98 U. S. 621, 25 L. ed. 188; Reynolds v. First Nat. Bank, 112 U. S. 405, 28 L. ed. 733, 5 Sup. Ct. Rep. 213; Schuyler Nat. Bank v. Gadsden, 191 U. S. 451, 48 L. ed. 258, 24 Sup. Ct. Rep.

129.

Ordinance 192 was in the nature of a contract, and the rates therein specified constituted one of the conditions upon which the franchise was granted.

Des Moines v. Des Moines Waterworks Co. 95 Iowa, 348, 64 N. W. 269; Creston Waterworks Co. v. Creston, 101 Iowa, 687, 70 N. W. 739; Independent School Dist. v. LeMars City Water & Light Co. 131 Iowa, 14, 10 L.R.A. (N.S.) 859,

107 N. W. 944; Iowa R. & Light Co. v. Jones Auto Co. 182 Iowa, 982, 164 N. W. 780; Cedar Rapids Gaslight Co. v. Cedar Rapids, 223 U. S. 655, 56 L. ed. 594, 32 Sup. Ct. Rep. 387; Knoxville Water Co. v. Knoxville, 189 U. S. 434, 47 L. ed. 887, 23 Sup. Ct. Rep. 531; Moorhead v. Union Light, Heat & P. Co. 255 Fed. 920; Muscatine Lighting Co. v. Muscatine, 256 Fed. 929; Chicago General R. Co. v. Chicago, 176 Ill. 253, 66 L.R.A. 959, 68 Am. St. Rep. 188, 52 N. E. 880; Cook County v. Chicago, 158 Ill. 526, 42 N. E. 67; Fulton v. Northern Illinois College, 158 Ill. 333, 42 N. E. 138; Columbus R. Power & Light Co. v. Columbus, 249 U. S. 399, 63 L. ed. 669, 6 A.L.R. 1648, P.U.R.1919D, 239, 39 Sup. Ct. Rep. 349; Belfast v. Belfast Water Co. 115 Me. 234, L.R.A.1917B, 908, P.U.R.1917A, 313, 98 Atl. 738; Tipton v. Tipton Light & Heating Co. 176 Iowa, 224, 157 N. W. 844; 3 Abbott, Mun. Corp. § 915; Noblesville v. Noblesville Gas & Improv. Co. 157 Ind. 162, 60 N. E. 1032; Indianapolis v. Consumers Gas Trust Co. 140 Ind. 107, 27 L.R.A. 514, 49 Am. St. Rep. 183, 39 N. E. 433; Western Paving & Supply Co. v. Citizens' Street R. Co. 128 Ind. 531, 10 L.R.A. 770, 25 Am. St. Rep. 462, 26 N. E. 188, 28 N. E. 88; Manitowoc v. Manitowoc & N. Traction Co. 145 Wis. 13, 140 Am. St. Rep. 1056, 129 N. W. 925; Woodburn v. Public Service Commission, 82 Or. 114, L.R.A.1917C, 98, P.U.R.1917B, 967, 161 Pac. 391; Trenton & M. County Traction Corp. v. Trenton, 90 N. J. L. 378, P.U.R.1918A, 10, 101 Atl. 562; State ex rel. Tacoma R. & Power Co. v. Public Service Commission, 101 Wash. 601, P.U.R.1918E, 277, 172 Pac. 890; Sausalito v. Marin Water & P. Co. (Cal.) P.U.R.1916A, 244; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493: Columbus R. Power & Light Co. v. Columbus, 253 Fed. 499.

Conditions in franchise ordinances fix

ing rates are not unlawful or against public policy.

Farmsworth v. Boro Oil & Gas Co. 216

N. Y. 40, 109 N. E. 860; Dusenberry v. New York, W. & C. Traction Co. 46 App. Div. 267, 61 N. Y. Supp. 420; Charles Simons Sons Co. v. Maryland Teleph. & Teleg. Co. 99 Md. 141, 63 L.R.A. 727, 57 Atl. 193; Mercantile Trust & D. Co. v. Collins Park & Belt R. Co. 101 Fed. 347; Bismarck Gas Co. v. District Ct. 41 N. D. 387, P.U.R.1919C, 394, 170 N. W. 878.

The gas company had no power to fix the rate, and the court had no power to

Pocatello v. Murray, 21 Idaho, 180, 120 Pac. 812; Emporia Teleph. Co. v. Public Utilities Commission, 97 Kan. 136, P.U.R.1916B, 987, 154 Pac. 262; Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co. 167 U. S. 479, 42 L. ed. 243, 17 Sup. Ct. Rep. 896. The Iowa statute, § 725, Code Supp. 1913, authorizes the city council to fix the rate; but, in the absence of its exercise or of any contract, the company furnishing the service may fix and demand reasonable compensation for such service. Here the rate is defined by the terms of the franchise granted, which is in the nature of a contract between the company and the municipality.

Iowa R. & Light Co. v. Jones Auto Co. 182 Iowa, 982, 164 N. W. 780.

The authority granted to a municipal corporation to contract for a water or gas supply includes the power to agree upon the rates to be charged for a definite period, notwithstanding the power to regulate rates is recognized as legislative or governmental.

Benwood v. Public Service Commission, 75 W. Va. 127, 83 S. E. 295, L.R.A. 1915C, 261, note, 267; Bessemer v. Bessemer City Waterworks, 152 Ala. 391, 44 So. 663; Birmingham Waterworks Co. v. Birmingham, 211. Fed. 497, affirmed in 130 C. C. A. 96, 213 Fed. 450; Vicksburg v. Vicksburg Waterworks Co. 206 U. S. 496, 51 L. ed. 1155, 27 Sup Ct. Rep. 762; Ashland v. Wheeler, 88 Wis. 607, 60 N. W. 818; Omaha Water Co. v. Omaha, 12 L.R.A.(N.S.) 736, 77 C. C. A. 267, 147 Fed. 1, 8 Ann. Cas. 614, 207 U. S. 584, 52 L. ed. 351, 28 Sup. Ct. Rep. 262; State ex rel. Fullerton v. Des Moines City R. Co. 159 Iowa, 281, 140 N. W. 437; State ex rel. Webster v. Superior Ct. 67 Wash. 37, L.R.A.1915C, 287, 120 Pac. 861, Ann. Cas. 1913D, 78; Turtle Creek v. Pennsylvania Water Co. 243 Pa. 415, 90 Atl. 199.

The law giving municipalities the power to regulate and fix rates was in force at the time of the passage of the ordinance and its acceptance, and hence became a part of the contract between the city and the plaintiff, as the successor of the original grantee of the franchise.

Ft. Smith Light & Traction Co. v. Ft. Smith, 202 Fed. 581; Arkadelphia Electric Light Co. v. Arkadelphia, 99 Ark. 178, 137 S. W. 1093; Cedar Rapids Gaslight Co. v. Cedar Rapids, 223 U. S. 655,

pa Waterworks Co. v. Tampa, 199 U. S. 241, 50 L. ed. 170, 26 Sup. Ct. Rep. 23, 45 Fla. 600, 34 So. 631; Lackey v. Fayetteville Water Co. 80 Ark. 108, 96 S. W. 622; State ex rel. Ellis v. Tampa Waterworks Co. 56 Fla. 858, 19 L.R.A. (N.S.) 183, 47 So. 358; Pocatello v. Murray, 21 Idaho, 180, 120 Pac. 812; Iowa R. & Light Co. v. Jones Auto Co. 182 Iowa, 982, 164 N. W. 780.

The power of the city and the voters thereof to fix a maximum rate, or a rate stated for a reasonable period of time, subject to the power of the city council to regulate and fix other rates, has long been recognized by the Iowa supreme court, the Supreme Court of the United States, and other courts generally, regardless of the number of inhabitants of the city.

Creston Waterworks Co. v. Creston, 101 Iowa, 687, 70 N. W. 739; Des Moines v. Des Moines Waterworks Co. 95 Iowa, 348, 64 N. W. 269; Independent School Dist. v. Le Mars City Water & Light Co. 131 Iowa, 14, 10 L.R.A. (N.S.) 859, 107 N. W. 944; State ex rel. Fullerton v. Des Moines City R. Co. 159 Iowa, 259, 140 N. W. 437; Cedar Rapids Gaslight Co. v. Cedar Rapids, 223 U. S. 655, 56 L. ed. 594, 32 Sup. Ct. Rep. 389; Benwood v. Public Service Commission, 75 W. Va. 127, L.R.A.1915C, 261, 83 S. E. 295; Pinney & B. Co. v. Los Angeles Gas & E. Corp. 168 Cal. 121, L.R.A.1915C, 282, 141 Pac. 620, Ann. Cas. 1915D, 471; State ex rel. Webster v. Superior Ct. 67 Wash. 37, L.R.A.1915C, 287, 120 Pac. 861, Ann. Cas. 1913D, 78.

The city, by the ordinance, did not undertake to surrender any right or power it had.

Ft. Smith Light & Traction Co. v. Ft. Smith, 202 Fed. 581; Knoxville Water Co. v. Knoxville, 189 U. S. 434, 47 L. ed. 887, 23 Sup. Ct. Rep. 531; Portland R. Light & P. Co. v. Portland, 201 Fed. 119, followed in Portland, R. Light & P. Co. v. Portland, 210 Fed. 667; Creston Waterworks Co. v. Creston, 101 Iowa, 687, 70 N. W. 739; Indianapolis v. Indianapolis Gaslight & Coke Co. 66 Ind. 396; Indianapolis v. Consumers Gas Trust Co. 140 Ind. 107, 27 L.R.A. 514, 49 Am. St. Rep. 183, 39 N. E. 433; New Orleans Gaslight Co. v. Louisiana Light & H. P. & Mfg. Co. 115 U. S. 650, 29 L. ed. 516, 6 Sup. Ct. Rep. 252; Beach, Pub. Corp. §§ 713, 990, 1229, 1230; Des Moines v. Des Moines Waterworks Co. 95 Iowa, 357, 64 N. W. 269; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493;

tract.

If the contract be doubtful, such doubt should be resolved in favor of the city and against the utility company.

Peterson v. Tacoma R. & Power Co. 60 Wash. 406, 140 Am. St. Rep. 936, 111 Pac. 338; Des Moines Waterworks Co. v. Des Moines, 95 Iowa, 348, 64 N. W. 269; Illinois C. R. Co. v. Chicago, 176 U. S. 616, 44 L. ed. 622, 20 Sup. Ct. Rep. 509; People v. Detroit United R. Co. 162 Mich. 460, 139 Am. St. Rep. 582, 125 N. W. 700, 127 N. W. 748; West Bloomfield Twp. v. Detroit United R. Co. 146 Mich. 198, 117 Am. St. Rep. 628, 109 N. W. 258; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493; Long Island Water Supply Co. v. Brooklyn, 166 U. S. 685, 41 L. ed. 1165, 17 Sup. Ct. Rep. 718. The power to contract and the power to regulate as to rates are not inconsistent, and both may exist at the same time in the same city council, or other legislative body.

Shreveport Traction Co. v. Shreveport, 122 La. 1, 129 Am. St. Rep. 345, 47 So. 40.

City councilmen are not disqualified because of their interest.

Home Teleph. & Teleg. Co. v. Los Angeles, 211 U. S. 265, 53 L. ed. 176, 29 Sup. Ct. Rep. 50.

There is a marked distinction between the power to regulate and the power to contract.

Tipton v. Tipton Light & Heating Co. 176 Iowa, 224, 157 N. W. 844; Noblesville v. Noblesville Gas & Improv. Co. 157 Ind. 162, 60 N. E. 1032; Manitowoc v. Manitowoc & N. Traction Co. 145 Wis. 13, 140 Am. St. Rep. 1056, 129 N. W. 925; Omaha Water Co. v. Omaha, 12 L.R.A.(N.S.) 736, 77 C. C. A. 267, 147 Fed. 1, 8 Ann. Cas. 614; Woodburn v. Public Service Commission, 82 Or. 114, L.R.A.1917C, 98, P.U.R.1917B, 967, 161 Pac. 391, Ann. Cas. 1917E, 996; Salt Lake City v. Utah Light & Traction Co. 52 Utah, 210, 3 A.L.R. 715, P.U.R.1918F, 377, 173 Pac. 556; Trenton & M. County Traction Corp. v. Trenton, 90 N. J. L. 378, P.U.R.1918A, 10, 101 Atl. 562; State ex rel. Tacoma R. & P. Co. v. Washington Public Service Commission, 101 Wash. 601, P.U.R.1918E, 277, 172 Pac. 890; Sausalito v. Marin Water & P. Co. (Cal.) P.U.R.1916A, 244.

Prior to the passage of chapter 16 of the 22d Iowa General Assembly, all cities

This statute did not have the effect of taking away from cities of over 7,000 the right they had theretofore possessed of contracting for rates, but provided, in express terms, for further and additional powers.

Council Bluffs v. Waterman, 86 Iowa, 688, 53 N. W. 289; Phillips v. Council Bluffs, 63 Iowa, 576, 19 N. W. 672; Lambe v. McCormick, 116 Iowa, 169, 89 N. W. 241; United States v. Freeman, 3 How. 556, 11 L. ed. 724; State v. Gerhardt, 145 Ind. 439, 33 L.R.A. 313, 44 N. E. 469; Sherman v. Des Moines, 100 Iowa, 88, 69 N. W. 410; Dubuque v. Harrison, 34 Iowa, 163; Ament v. Humphrey, 3 G. Greene, 255; State ex rel. Shaver v. Iowa Teleph. Co. 175 Iowa, 607, 154 N. W. 678, Ann. Cas. 1917E, 539; Diver v. Keokuk Sav. Bank, 126 Iowa, 691, 102 N. W. 542, 3 Ann. Cas. 669.

The supreme court of Iowa has held that the language used in the Code of 1897 was, in effect, a substantial reenactment of the provisions of chap. 16, 22d General Assembly.

Ottumwa R. & Light Co. v. Ottumwa,
Iowa,, 173 N. W. 270.

Intention on the part of the municipality to abridge its power to regulate rates cannot be implied from the language used in the ordinance in question.

Knoxville Water Co. v. Knoxville, 189 U. S. 434, 47 L. ed. 887, 23 Sup. Ct. Rep. 531; Georgia R. & Bkg. Co. v. Smith, 128 U. S. 174, 32 L. ed. 377, 9 Sup. Ct. Rep. 47; Ragan v. Aiken, 9 Lea, 609, 42 Am. Rep. 684; Ft. Smith Light & Traction Co. v. Ft. Smith, 202 Fed. 581; Arkadelphia Electric Light Co. v. Arkadelphia, 99 Ark. 178, 137 S. W. 1093; Cedar Rapids Gaslight Co. v. Cedar Rapids, 233 U. S. 655, 56 L. ed. 594, 32 Sup. Ct. Rep. 389; Creston Waterworks Co. v. Creston, 101 Iowa, 687, 70 N. W. 739; Freeport Water Co. v. Freeport, 180 U. S. 587, 45 L. ed. 679, 21 Sup. Ct. Rep. 493; Rogers Park Water Co. v. Fergus, 180 U. S. 624, 45 L. ed. 702, 21 Sup. Ct. Rep. 490; State ex rel. Tacoma R. & Power Co. v. Public Service Commission, 101 Wash. 601, P.U.R.1918E, 277, 172 Pac. 890.

Where the state courts hold that a contract right exists, instead of denying it, there is reason for following the state courts' ruling.

Birmingham Waterworks Co. v. Birmingham, 211 Fed. 497.

This rule, however, is limited to such construction given to similar charters at the time the contract was made.