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thereafter. Any board or body failing to pass the necessary ordinances or resolutions fixing water rates, where necessary, within such time, shall be subject to peremptory process to compel action at the suit of any party interested, and shall be liable to such further processes and penalties as the legislature may prescribe. Any person, company, or corporation collecting water rates in any city and county, or city or town in this state, otherwise than as so established, shall forfeit the franchises and waterworks of such person, company, or corporation to the city and county, or city or town where the same are collected, for the public use.
For use of streets by water companies, see section 19, article XI, ante.
There is no parallel provision in the Constitution of 1849. To enforce the provisions of this section the legislature has passed the act of March 26, 1880 (Stats. 1880, p. 16), for the fixing of rates for water sold for irrigating purposes; the act of March 7, 1881 (Stats. 1881, p. 54), for the fixing of rates for water supplied to municipalities, and the act of March 12, 1885 (Stats. 1885, p. 95), to regulate and control the sale, rental and distribution of appropriated water in this state other than in any city, city and county, or town therein, and to secure the rights of way for the conveyance of such water to the places of use.
San Francisco etc. Factory v. Brickwedel, 60 Cal. 169; S. V. W. W. v. S. F., 61 Cal. 4; S. V. W. W. v. S. F., 61 Cal. 25; People v. Stephens, 62 Cal. 232; McFadden v. Los Angeles, 74 Cal. 571, 16 Pac. 397; S. V. W. W. v. S. F., 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910, 1046; Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pac. 439; Jacobs v. Supervisors, 100 Cal. 125, 34 Pac. 630; People v. Elk etc. Co., 107 Cal. 221, 48 Am. St. Rep. 125, 40 Pac. 531; Merril v. Southside Irr. Co., 112 Cal. 426, 44 Pac. 720; San Diego Water Co. v. San Diego, 118 Cal. 556, 22 Am. St. Rep. 261, 50 Pac. 633; Fitch v. Su. pervisors, 122 Cal. 286, 54 Pac. 901; Fresno Canal etc. Co. v. Park, 129 Cal. 441, 62 Pac. 87; Crow v. San Joaquin etc. Irr. Co., 130 Cal. 309, 62 Pac. 562, 1058.
Construction of Section. The provisions of this section are both self-executing and mandatory. (Spring Valley W. W. v. San Francisco, 61 Cal. 18.)
The meaning of this section, which declares that “the use of all water appropriated for sale, rental, or distribution," is a public vee, cannot be so broadened as to cover the proposition that all water which is distributed among a number of persons is from that fact alone to be considered as devoted to a public use. (Hildreth v. Montecito Water Co., 139 Cal. 22.)
A public use must be for the general public, or some portion of it, in common, and not a use by or for particular individuals, or for the benefit of certain estates. The right of an individual to a public use of water is in the nature of a public right, possessed by reason of his status as a person of the class for whose benefit the water is appropriated or dedicated. (Hildreth v. Montecito Water Co., 139 Cal. 22.)
Where a number of persons owning land are each entitled to take water from a common source, for use upon their respective tracts, the water right of each is individual and several, and must be considered as private property, and not the subject of public use, and if such persons form a corporation for the diversion and distribution of the water, reserving their several rights in the water, they do not dedicate the water to public use; but the corporation becomes merely their agent, and the water remains in individual ownership and private use as before. (Hildreth v. Montecito Water Co., 139 Cal. 22.)
The provision of this section that a person or company collecting water rates “otherwise than so established,” shall forfeit its franchises and property, is to be construed as meaning contrary to, or in violation of, established rates. The law abhors a forfeiture, and it will not be declared, if the language admits of a fair and reasonable construction to the contrary. (Contra Costa Water Co. v. Breed, 139 Cal. 432.)
The section applies to a foreign corporation coming into California and acquiring water rights. (San Diego etc. Co. v. National City, 74 Fed. 79.)
All the provisions of the Constitution in regard to water in municipalities must be taken and read together, and effect given to each of them. They must receive a practical common-sense construction, and be considered with reference to the prior state of the law, and the mischief intended to be remedied. (People v. Stephens, 62 Cal. 209.)
Prior to the adoption of the Constitution of 1879, the right of lay. ing pipes in the streets of any incorporated city or town for the purpose of supplying the inhabitants thereof with water lay only in grant from the legislature. (People v. Stephens, 62 Cal. 209.)
This section does not apply to a case of a corporation which acquires and holds water solely for the use of its stockholders. (McFadden v. Los Angeles, 74 Cal. 571, 16 Pac. 397.)
This section has no reference to water furnished by a municipality itself, but refers to the rates to be collected for water authorized br section 19, article XI, of the Constitution, to be introduced into cities by individuals or companies incorporated for that purpose. (People v. Stephens, 62 Cal. 209.)
By this section water is declared to be a public use, subject to the control and regulation of the legislature in the manner prescribed by statute, such regulation, however, being subject to certain constitutional provisions, and among them the provision in respect to rates. (People v. Stephens, 62 Cal. 209.)
Under this section the use of water for sale is a public use, and the price at which it shall be sold is a matter within the power of the board of supervisors to determine. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910, 1046.)
This section was not intended to appropriate water for the use of the public without compensation. (People v. Elk etc. Co., 107 Cal. 221, 48 Am. St. Rep. 125, 40 Pac. 531.)
When water is designated, set apart, and devoted to purposes of sale, rental, or distribution, it is appropriated” within the meaning of this section, without reference to the mode of its acquisition. (Merrill v. Southside Irr. Co., 112 Cal. 426, 44 Pac. 720.)
Under this section it is made the duty of a water company supply. ing water for distribution to furnish water upon tender of the established rates, and no other duty than such tender can be lawfully prescribed or imposed by such company as a condition for supplying water as required by law. (Crow v. San Joaquin etc. Irr. Co., 130 Cal. 309, 62 Pac. 562, 1058.).
An agreement by a consumer, upon being furnished water upon credit, that no water need be furnished him in succeeding years un. til such water is paid for, is without consideration, it being the duty of the company to furnish him the water, whether he made such agreement or not. (Crow v. San Joaquin etc. Irr. Co., 130 Cal. 309, 62 Pac. 562, Beatty, C. J., and McFarland, J., dissenting.)
A person engaged in furnishing water to the inhabitants of a city, under a franchise permitting him to lay pipes through the streets, cannot, without reasonable cause, shut off the water from one of such inhabitants, who is using the same at a fixed rate. (Mc. Crary v. Beaudry, 67 Cal. 120, 7 Pac. 264.)
It was the duty of the legislature to enact all needful laws to carry this section into effect; but the failure of the legislature to enact such laws could not prevent the establishment of the rates required to be established by the Constitution. (People v. Stephens, 62 Cal. 209.)
The provision of the act of 1858, requiring water companies to fur. nish water free of charge to cities and counties, was abrogated by this section. (Spring Valley W. W. v. San Francisco, 61 Cal. 18.)
The act of 1858, providing for the fixing of water rates by a commission was superseded by this section of the Constitution. (Spring Talley W. W. v. San Francisco, 61 Cal. 3; S. V. W. W. v. Schottler, 110 U. S. 347, 4 Sup. Ct. Rep. 48.)
A water company has the right to shut off the water from a consumer who refuses to pay for the water supplied. (Sheward v. Citi. zens' Water Co., 90 Cal. 635, 27 Pac. 439.)
Water Rates.-By this section the power to fix water rates in San Francisco is granted solely to the board of supervisors, and the mayor has no power to veto an ordinance fixing such rates. (Jacobs v. Supervisors, 100 Cal. 121, 34 Pac. 630.)
Water rates under the Constitution are required to be fixed by ordinance; and water used by the city of Oakland does not fall within the provision of its charter concerning the letting of contracts for supplies to the lowest bidder. (Contra Costa Water Co. v. Breed, 139 Cal. 432.)
The supervisors are not bound to give notice to a water company of its intention to fix water rates; but they must make a proper effort to procure all necessary information, to enable them to act intelligently and fairly in fixing the rates. (Spring Valley W. W. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
The proceeding to fix water rates is not adversary, but is conducted without notice to the rate payer or water company. (San Diego Water Co. v. San Diego, 118 Cal. 556, 62 Am. St. Rep. 261, note, 50 Pae. 663.)
This section is not opposed to the United States Constitution in rot giving the water company notice. (San Diego Water Co. v. San Diego, 118 Cal. 556, 62 Am. St. Rep. 261, note, 50 Pac. 633; San Diego Land Co. v. National City, 174 U. S. 739, 19 Sup. Ct. Rep. 804.)
If the board acts arbitrarily, without investigation, or without the exercise of judgment and discretion, or fixes rates so palpably unreasonable and unjust as to amount to arbitrary action, it violates its duty and goes beyond the powers conferred upon it. (San Diego Water Co. v. San Diego, 118 Cal. 556, 50 Pac. 633.)
The question of what is a reasonable rate is a question of fact. (Redlands etc. Co. v. Redlands, 121 Cal. 312, 53 Pac. 791.)
The water company is not entitled to be reimbursed from the income derived from the rates for interest upon its indebtedness, nor for depreciation of its plant, aside from the amount requisite for its maintenance and repairs during the year. (Redlands etc. Co. v. Redlands, 121 Cal. 312, 53 Pac. 791.)
The bonded or other indebtedness of the company is not to be considered; but the fair value of the property which is necessarily used in furnishing the water is the basis upon which to determine the amount of revenue, which should be the same whether the works are acquired or constructed by the company with its own resources,
or with money borrowed from others. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The company has no absolute right to receive a given per cent on its capital stock. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The rights of the public, as well as those of the stockholders, are to be considered; and the public cannot be subjected to unreasonable rates in order simply that stockholders may have dividends. The company has the right to receive only what, under all the circumstances, is such compensation as will be just to it and to the public. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The questions of reasonableness of rates and the basis for fixing rates are discussed in San Diego etc. Co. v. Jasper, 110 Fed. 702, affirmed in 23 Sup. Ct. Rep., p. 571; San Diego etc. Co. v. National City, 174 U. S. 739, 19 Sup. Ct. Rep. 804, and in S. V. W. W. v. S. F., decided June, 1903, not yet reported.
Where an ordinance fixing rates does not show upon its face that the rates to be collected, where the amount of consumption is ascertained by a meter, are different from those collected from persons who are rated by the use to which they apply the water, it will not be held invalid because that may be the result. (Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pac. 439.)
The action of the city council in fixing rates is legislative, and it is to receive all the presumptions and sanctions which belong to acts of legislative bodies generally; and the rates must be assumed to have been so fixed as to be just both toward the rate payer and the company. (Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pae, 439.)
An ordinance fixing water rates, and providing for meter and house rates at the option of the consumer, and providing that the meter shall be supplied at the expense of the water company, is valid. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
When the constitution provides for the fixing of rates, or compensation for the use of water, it means reasonable rates and just compensation. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
The power of regulating rates is not a power of confiscation, or to take the property of the water company without just compensation; and, if the power is arbitrarily exercised, without a fair investigation, and the rates are so fixed as to render it impossible to furnish the water without loss, it is not above the control of the courts. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
If the board have fairly investigated and exercised their discretion in fixing the rates, the courts have no right to interfere on the