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Barnes Laundry Company v City of Pittsburgh et al.

the property itself, and of the equal protection of the laws, contrary to the express provisions of the XIVth Amendment (to the Federal Constitution) and the fundamental principles of American liberty:" see 3 Dillon on Municipal Corporations (5th ed.), Sec. 1324, p. 2228, and authorities there cited from the United States Supreme Court.

The Act of 1915 deals witth both taxes and water rates, as sources of revenue, but the two are therein kept separate and distinct; as, indeed, so far as the right of the courts to review their assessment is concerned, they must be; for, technically, a water rent is not a tax, it is a charge for industrial service. (Jolly v Monaca Boro., 216 Pa., 345, 348-9, 350; Rieker v Lancaster, supra, 156; Wagner v Rock Island City, supra; Preston v Water Com’rs, supra, 598; Silkman v Water Com'rs, 152 N. Y. 327), and, therefore, may be judicially inquired into: see cases here cited; also 40 Cyc., 801.

The question as to just what elements the courts will or must consider, in deciding as to the reasonableness of municipal water assessments, is not here for decision at the present time; that can be determined when it properly arises. · All we now decide is equity has jurisdiction to entertain plaintiff's complaint that, threatening to shut off its supply unless it pay alleged "excessive, unreasonable and discriminatory” charges for the years in question, the defendant municipality arbitrarily and unreasonably selected the Barnes Laundry Company, compelling it to use meters at an unreasonable and discriminatory rate, or charge, while many others in the same industrial situation, using water under substantially similar circumstances and conditions, were for the same periods of time, supplied on a fat rate basis, which was much less than the rate here sought to be attacked.

The suggestion that plaintiff has a remedy at law, by waiting until the city files a lien for its water rents and then defending upon sci. fa. does not appeal to us; such a course would be inadequate for many reasons. In the first place, meter rates being billed every three months and the Act providing they shall become delinquent if not paid at the end of each quarter, plaintiff might be obliged to defend different suits in any one year; next, if it did not pay the bill at the end of the initial period, the water could be shut off. Although equity ordinarily will not entertain a suit where redress may be had at law, yet equitable jurisdiction does not depend entirely upon the want of a common law remedy, but may be sustained on the ground that, under given circumstances, it is the most convenient and efficient road to adequate relief; which principle applies to the present case.

Before concluding this branch of our consideration, we may say that neither by ordering nor using a necessity like water, from a plant which enjoys a monopoly of supply, can one be held estopped-on the theory of implied contract or otherwise (4 McQuillan on Municipal Corporations, Sec. 1725, p. 3690; id. p. 3729, n. 8)—from the right, in a due and proper proceeding, to question either the reasonableness of the ordained rate or the justness of its application, for rates unlawfully exacted are treated in law as though assented to under duress: Chicago v N. W. M. L. Ins. Co., 218 Ill., 40, 44. The city's contention to the contrary cannot be sustained: see Turtle Creek Boro. v Pa. Water Co., 243 Pa., 401; Mechanicsburg Boro. v Water Co., 246 Pa., 232; Leechburg Boro. v Water Works Co., 219 Pa., 263, 267, and other cases cited in this opinion, where users of water were permitted to question rates charged therefor. Here, so far as plaintiff is entitled to be heard, it properly asked relief in equity; but, among other grounds for denying a hearing, the chancellor held the complainant guilty of laches; we shall now consider that reason for dismissing the bill.

Barnes Laundry Company v City of Pittsburgh et al.


The opinion of the court below states: "In view of plaintiff's knowledge of the facts and its failure to institute proceedings for relief until the city for three successive years had assessed and in part collected the water rents on the basis fixed by the ordinance, we think complainant guilty of such laches as defeats this action, even if the bill were otherwise sustainable."

Owing to the manner in which, under the law (Act of 1915, supra), defendant municipality must be financed and its taxes and water rates arrived at, it is highly important that its officials should know, each year, the probable revenues they can depend upon; and this is largelv figured on the basis of the prior twelve months. Hence, water users who, like the present plaintiff, desire to attack the reasopableness of rates charged in any particular year, must proceed without undue delay; otherwise it is plain the city will be seriously inconvenienced. Plaintiff is chargeable with knowledge that the fixing of the water rates of which it complains necessarily affected thousands of others in addition to itself; therefore, if it considered such rates unreasonable and desired to question them in equity, it was its duty, in each instance, to proceed within the current year. We find nothing in plaintiff's averments sufficient to relieve it from the charge of laches so far as the time prior to 1918 is concerned, and, as to those years, the court below did not err in dismissing the bill, but plaintiff was entitled to, and should have been granted, a hearing on its complaints relating to 1918; the denial of this was error.


The authorities cited in this opinion are relied upon, in each instance, only for the particular point mentioned, and we are not to be considered as further adopting the views expressed therein; particularly is this so in regard to the cases from foreign jurisdictions.

VII. The decree is affirmed, except so far as it relates to the year 1918, to that extent it is reversed and the bill reinstated with a procedendo; defendant municipality to pay the costs.

Frazer, J., dissents.

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Barnes Laundry Company v City of Pittsburgh et al.




Water Rates Public Service Commission
Second Class Cities.

The Public Service Commission, under the Act of July 26, 1913, P. L. 1374, has no jurisdiction over municipal corporations of the second class as to water rates, where, in all the legislation relating to the subject, authority is given to levy and assess taxes and water rents, and the Council must determine the rate or millage required to properly maintain the city government, when the revenues from all other sources have been ascertained, as nearly as can be in advance.

If the Act of 1913, P. L. 391, is a valid exercise of legislative authority it needs but to be read to disclose that it is in irreconcilable conflict with the "Public Service Company Law,” if the latter be construed as giving the “Commission” exclusive initial jurisdiction of water rents or rates. But the statutes do not conflict. They do not purport to refer to the same subject and on the contrary exhibit both in the titles and in the bodies of the Acts the purpose to legislate concerning different matters. One refers to city government, the other to public service companies.

To vest in the Public Service Commission authority to fix water rates for the city is to deprive the latter of one of its charter rights on the faith of which it has incurred debts and levied taxes-a right granted generally and specifically and never withdrawn, Whether the vesting of this right in the commission offends against Section 20, Article III of the Constitution which prohibits delegating to any special commission the power to perform any municipal function we deem it unnecessary that we express an opinion.

The legislature having omitted municipal corporations, when defining the term “Public Service Company" and declared that the term “corporation" did not include municipal corporations, except where otherwise specially provided, and that property owned by a municipality should not be subject to the Commission, except as provided; it would be a violation of the settled rules of construction to hold that the power to fix water rates or rents for the City of Pittsburgh can be read into the Act.

Statutes enacted at the same session of the legislature must, if possible, be construed so as to give effect to each.

To repeal a statute by implication there must be a positive repugnancy between the provisions of the new Act and the old that they can not stand together or be consistently reconciled.

W. W. Stoner, J. B Eichenauer; Gray, Thompson & Rose; H. Stewart Dunn, T. F. Ryan and S. J. Dille, for plaintiff.

C. A. O'Brien, City Solicitor; Harry Diamond and B. J. Jarrett, Assistant City Solicitors, for defendant.

In Equity. No. 1624 July Term, 1918. C. P. Allegheny County.

Before SHAFER, P. J., and CARPENTER, J. CARPENTER, J., September 22, 1919.—When this cause came before the Court on demurrer to the bill, the question of jurisdiction of the Public Service Commission was not raised but was mentioned incidentally by counsel for plaintiff who stated, in substance, that the Commission did not have jurisdiction. To this statement counsel for defendant assented and attention, thereafter, was centered upon the questions presented by the bill and demurrer. Whether the concurring opinions of counsel were or were not correct, it must be admitted they were not wholly without foundation in view of the legislation relating to the City of Pittsburgh, the uniform practice in the conduct of its affairs, the title to the Public Service Company Law, and the declaration in the body of the Act that the word “corporation" did not include municipal corporations, except as otherwise provided. Other legislation (Act of 1913, P. L. 249) declaring that the fiscal year in cities of the second class should begin January 1st and end December 31st, and that appropriations must be made and taxes and water rents levied prior to specified dates, doubtless was considered. The fact that at the same

Barnes Laundry Company v City of Pittsburgh et al.

session (P. L. 445) the legislature declared that boroughs owning and maintaining their own water works might establish a Commission of Water Works authorized to collect water rents and make and establish rates, etc., no doubt had its effect.

A third and significant fact was not overlooked, to wit: That the first section of the Act of July 26, 1913, P. L. 1374, declares that the term “Public Service Company” includes "water corporations." A fourth reason for assuming the Act was not intended to apply to cities is, that it is declared to be an Act defining public service companies.

Whether counsel misapprehended the purpose and effect of the Act, misinterpreted language apparently free from ambiguity, and erred in agreeing that as touching the pending dispute the Commission had no voice, the facts mentioned seem to furnish a basis for the assumption that the controversy was one which the courts and not the Commission must adjudicate. If the assumption was erroneous the error should be corrected promptly, for Pittsburgh is but one of our cities directly affected. When the case came on for argument on the question submitted, to wit: “The question of the matter complained of," the City of Philadelphia was permitted to intervene, not as a party to the suit but that counsel for that city might participate in the discussion of the concrete question. The siuation is somewhat anomalous, in that the plaintiffs counsel having elected to proceed in equity now say the Court does not have jurisdiction and strenuously contend for exclusive jurisdiction in the Commission. We have both parties denying the jurisdiction in equity; the plaintiff, because of the existence of another tribunal to which, it says, the controversy must first be submitted; the defendant because, it says, the controversy is exclusively cognizable in a court of law, where equitable relief can be given, if the plaintiff is thereto entitled.

But with the situation thus created we are not at present concerned and therefore confine our discussion to the question we have been directed to consider and pass upon.

Plaintiff's counsel contend that in supplying water to its citizens the City is exercising the functions of a private corporation and therefore comes within the purview of the Public Service Company Law. The foundation, of their argument is the repeated utterances of our own appellate courts and the appellate courts of other States. They quote from Girard Life Ins. Co. v Philadelphia, 88 Pa., 393; Commonwealth v Casey, 231 Pa., 170; and other cases. In the latter case Mr. Justice Stewart quotes as follows, from the former:

"The supplying of water and gas to a city is not a municipal duty. Hence when the city undertakes to do so it acts, not from any right of sovereignty but exercises merely the functions of a private corporation.”

This doctrine is not controverted but its application to the case at bar is denied by defendant's counsel.

The City of Pittsburgh was incorporated by Act of March 18, 1816 under the name and style, “The Mayor, Aldermen and Citizens of Pittsburgh," and the legislative power of the corporation was vested in select and common councils. In 1843 (P. L. 46) the legislature provided for the punishment of persons defiling the water “in the new reservoir on 'Stone Quarry Hill'” near the city, and also authorized the city to sue for damages for injury to the buildings, machinery, etc. By the same Act the city is authorized to make use of the streets, etc., for laying water pipes, and is authorized to collect water rents in the same way as city taxes are recoverable. By Act of 1851, P. L. 419, "relative to the collection of water 'tax' in the City of Pittsburgh,” it is provided that all water rents shall be "assessed” to the owner of the premises in the same manner as city taxes

Barnes Laundry Company v City of Pittsburgh et al.


and be collected and be a lien on the real estate on which they are "assessed" in the same manner as city taxes. By a supplement to the Act incorporating the City of Pittsburgh, enacted in 1857 (P. L. 541), the treasurer is to collect all taxes and public assessments, and all taxes, rates and levies which may be imposed or assessed are made a lien.

By Act of April 6, 1867, P. L. 850, Section 7, the corporate authority of the city was vested in the mayor and the select and common councils, and other officers. Section 10 of the Act authorized the corporation to provide for a supply of water by constructing

reservoirs or water works, By Act approved February 28, 1868, P. L. 237, the City was authorized to borrow $1,000,000 for the purpose of improving and extending the water works. By Act approved March 7, 1901, P. L. 20, the executive power in cities of the second class was vested in a City Recorder (the title of Mayor was restored by Act of 1903) and the legislative power in two bodies designated respectively, the Select and Common Council, and by Act approved May 31, 1911, P. L. 461, the legislative power was vested in one body. No change was made in the powers, rights and duties of the council. These Acts indicate clearly the legislative mind.

The Act of 1901, supra, was supplemented by an Act approved May 12, 1911, P. L. 295. The supplement relates to the levy, collection and disbursement of taxes and water rents, and repeals numerous Acts.

In all the legislation relating to the subject, authority is given to levy and assess taxes and water rents, and the Councils-now the Councilmust determine the rate or millage required to properly maintain the city government, when the revenues from all other sources have been ascertained, as nearly as can be in advance. All the statutes, for years past, which relate to the “lien" and "collection" of taxes in cities of the second class include water-rents.

The Public Service Company Law of 1913 was approved July 26th, and at the same session of the legislature Section 3 of the Act of May 12, 1911, supra, was amended to read as follows:

"All taxes and water-rents, or rates, levied for city and water purposes, shall be payable in advance, during the months of March, April and May of each year, except water rents for water supplied to consumers through a meter. Where water is supplied to consumers through a meter, the council of the city may, by ordinance, prescribe the time or times at which such meters shall be read, and the terms and conditions as to meter service, and the time or times at which payments for water supplied through a meter service shall be made; and they may also provide for a minimum rate or rates for meter service of both domestic and commercial users of water. In the absence of such provision by ordinance, the Board of Water Assessors shall read such meters not less than four times per year; and shall read all such meters during the months of December and January of each year, and ascertain the amount of water used in each year for the preceding twelve months, or as near thereto as may be convenient, and shall assess the water rents for the water consumed at the rates fixed by councils, and the same shall be payable annually during the months of March, April and May of each succeeding year."

The Act of 1915, P. L. 976, is the last legislative utterance, prior to filing this bill, relating to taxes and water rents in cities of the second class.

Four propositions are advanced by plaintiff's counsel in support of their contention that the Public Service Company Law applies to the City of Pittsburgh in the matter of water rents. They contend (a) that the City in supplying water exercises the functions of a private corporation; (b) that the Public Service Company Law vests in the “Commission" exclusive power, subject to the right of appeal, to declare the rates at which

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