Barnes Laundry Company v City of Pittsburgh et al.

the city shall supply water to the public; (c) that the Act of 1913, supra, in so far as it exempts "municipalities," is unconstitutional in that it violates Article III, Section 7; and (d) that if the Act of 1915 (P. L. 976) was intended to operate as a repeal of the Public Service Company Law, insofar as it might be construed to apply to cities of the second class, it comes under constitutional condemnation in that it is "special" and "local." To the propositions c. and d. counsel for the City reply that the Public Service Company Act and the Acts relating to cities of the second class relate to different subjects, and insofar as any question of the constitutionality of the Act of 1913 or the exemption mentioned is involved, they say they are not concerned, as the Act does not purport to apply to municipal corporations owning water works and supplying water to their citizens. To the propositions a. and b. they reply that the City is governed by laws enacted prior to and since the enactment of the Public Service Company law. This is, of course, a denial that the Act in anywise affects the legislation under which the Council is, and has been, acting.

The power of the legislature to classify political divisions of the Commonwealth and legislate for each class has been discussed so fully and so frequently by our Supreme Court that it would be mere affectation of laborious research to collate the opinions. To hold unconstitutional the statutes enacted for the government of municipalities according to classification would not only result in chaos but would conflict with a long line of decisions beginning very soon after the adoption of our Constitution and continuing to this day. Classification is founded in and justified by necessity, "necessity springing from manifest peculiarities clearly distinguishing those of one class from each of the other classes and imperatively demanding legislation for each class separately that would be useless and detrimental to others." Ayars App. 266 (281).

That a manifest distinction exists between municipalities authorized to construct and maintain water works and municipalities obtaining their water supply from private corporations, will not be disputed. Water companies are chartered for private gain and quite naturally, and of right, legislative control is retained.

Controversies over rates, and between private water companies and boroughs respecting exclusive franchises were not infrequent, and to prohibit bargaining between consumers and companies chartered for public service, but for private profit; to prevent inequalities in rates and consequent injustice, and to protect these companies in the exercise of their rights, the "Commission" was created and given supervisory power and the authority to regulate rates.

That our large cities require legislation different than that applicable to smaller municipalities, is so self evident that discussion of the proposition is unnecessary.

The Act of May 31, 1913, P. L. 390, from which we have quoted Section 3 as amended, refers to water rents and taxes in cities of the second class; the Act approved July 26th of the same year relates to public service companies. The latter Act makes no reference to the former. Our Supreme Court in White v City of Meadville, 177 Pa., 643 (651) quotes, with approval, from Smith v People, 47 N. Y., 330, as follows:

"Statutes enacted at the same session of the legislature should receive a construction, if possible, which will give effect to each. They are within the reason of the rule governing the construction of statutes in pari materia. Each is supposed to speak the mind of the same legislature and the words used in each should be qualified and restricted, if necessary, in their construction and effect so as to give validity and effect to every other act passed at the same session."

Barnes Laundry Company v City of Pittsburgh et al.

It is therefore pertinent to inquire why the legislature would pass an Act in May and, by implication, repeal it before adjournment; and still more important to ascertain, if we can, the failure to cite it for repeal if the latter was in fact intended as a substitute for the earlier. That the legislature of 1915 regarded the Act of May 31, 1913, as still in force is evidenced by its amendment of five sections of the Act approved March 7, 1911, as amended in 1913.

If, therefore, the Act of 1915 cannot be successfully assailed upon constitutional grounds, it is the law by which, in respect of the matters therein mentioned, the City of Pittsburgh is governed. For even if the provision in the Public Service Company Act, exempting municipal corporations be declared unconstitutional it will not in the least degree strengthen the argument in support of the claim that the "Commission" has jurisdiction. In order to give the exemption such effect it would be necessary to add the word "municipal" or substitute it for the word "water." For in defining the scope of the term Public Service Company it is declared that it includes "water corporations." Expressio unius est exclusio alterius. When the legislature said "water" and omitted "municipal" we cannot say it did not mean what it said or meant what it did not say. If this were merely a mooted proposition, or a friendly debate, involving no rights, we might borrow the thought, though not the exact words, of Dean Swift and say, it is not permissible to resort to "Scholastic Midwifery" in an effort to deliver a statute of a purpose of which it is not pregnant. But the question is one of first importance to a number of our municipalities. The final decision may be far reaching in its consequences. In our opinion the Act relating to public service companies, insofar as the question under consideration is involved, in no way affects the Acts pertaining to the government of cities of the second class. That a municipal corporation has a dual existence; that in one it exercises rights of sovereignty, in the other the functions of a private corporation, is not and cannot be disputed. Admitting for the purpose of discussion that the exemption of municipal corporations renders the exempting clause of the Act of 1913 unconstitutional, does not bring cities of the second class, or municipalities in general, within its purview; does not read into it omitted provisions. The statutes for the government of cties of the second class require that reports of the receipts and expenditure of the various departments, also estimates of the probable revenues to be collected by, and of the probable amounts required by, the respective departments for the ensuing year, be made to the Council. This information with the report of the controller of the total amounts received by the City from taxes and other revenues in prior years, and also an estimate by him of the probable revenues of the ensuing fiscal year must be submitted for the purpose of enabling the Council to determine the amount of taxes and other revenues reasonably to be anticipated, and to determine the rate or millage to be fixed to meet the current expenses of the city for the ensuing fiscal year. 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. We do not think it will be contended seriously, and are of opinion it cannot be successfully. that when enacting the public service company law, the legislature intended to amend the charter of the City of Pittsburgh. Yet despite the fact that the Act provides that "no property owned by the Commonwealth of Pennsyl

Barnes Laundry Company v City of Pittsburgh et al.

vania or municipality thereof at the date of when this becomes effective, shall be subject to the Commission or any of the terms of this Act except as elsewhere provided herein," this must be the result if it be held that the Act vests in the Commission power to control, or the right to participate in, legislation to provide revenues necessary for efficient administration of city government.

The City of Pittsburgh has expended millions in acquiring land and constructing water works, including a filtration plant, and to say that, by implication, its right to control its own property has been taken away is to strain the doctrine of "implied repeal" as it never, in this State, has been.

The City was incorporated in 1816. Subsequent Acts enlarging or limiting the powers originally conferred are but amendments to its charter. To say that a municipal charter may be altered or amended without notice of the intention so to do, clearly expressed in the title to the amending Act, is to set a dangerous precedent, and to hold that it may be amended or repeal by implication, is to enunciate a doctrine which we are not ready to accept.

"To repeal a statute by implication there must be such a positive repugnancy between the provisions of the new Act and the old that they cannot stand together or be consistently reconciled." Wright v Vickers, 81 Pa., 122, quoted in City of Harrisburg v Scheck, 104 Pa., 53.

If this be true of general statutes, how much stronger the reasons for applying the rule where "implied repeal" is contended for in the case of a statutory, charter.

We are not unaware that the consequences of legislation do not affect its validity; are never, alone, a test of its constitutionality. On the other hand, the Court will not be astute to discover defects in legislation that is in line with prior legislation on the same subject, accepted and acted upon as valid, and the annulment of which will introduce a third and allpowerful party into city government, whose right to participate, if exercised, spells inextricable confusion in the administration of municipal affairs. We are not persuaded that it was the purpose of the legislature of 1913 to add a new department to our city government or substitute the judgment of a Commission for that of the Council.

In their discussion of the alleged unconstitutionality of the Acts directly involved and of the dual character in which municipalities may and do act, counsel for plaintiff quote at length from Com. v Casey, 231 Pa., 170. and Taylor v Philadelphia, 261 Pa., 458. An examination discloses facts calling for emphatic condemnation of the statutes which made those cases possible. There can be no dispute respecting what the Court said in reference to duality or constitutionality; but neither of the cases presented the question now under consideration, to wit: the right, and the duty, of a municipal government to exercise the powers conferred upon it by legislative grant for the benefit of its citizens.

In Wheeler v Philadelphia, 77 Pa., 338, the Court recognizes the twofold capacity in which a municipal corporation may act and quotes from the "Savings Fund Cases," 31 Pa., 185, wherein it was held that as a local Sovereign the city had no authority to enter into the business of manufacturing and selling gas, but adds, "This was of course predicated of what was then before the Court: viz, whether the City in violation of its contract with the bondholders could take the management of the works out of the hands of the trustees," and then says:

"While it is no part of the ordinary and necessary duties of a municipal corporation to supply its citizens with gas and water, it is nevertheless true that it may lawfully do so."

Barnes Laundry Company v City of Pittsburgh et al.

Attention is then called to the fact that this power has long been exercised; that rights have grown up under it, costly improvements made and the health and comfort of large communities promoted; and adds, the Gas Works resemble the Water Department and Fairmount Park and may be considered as belonging to the City, and operated, not for the purpose of speculation but to promote the comfort of the whole body of the people. In Lehigh Water Co.'s App., 102 Pa., 528, the Court says: "The gas cases established the principal that a municipal corporation may perform the functions of a private corporation in supplying its citizens with gas and water. But that by so doing it loses its distinct municipal character is a proposition that does not require discussion."

By Section 16 of an Act relating to the government of cities of the second class, approved June 14, 1887, P. L. 395, water and gas works, as well as the supply and distribution of water and gas, were placed under the department of public works, created by that Act. As heretofore noted, the Act of 1911 (P. L. 461), vests the legislative power of cities of the second class in one body and declares that every legislative act shall be by resolution or ordinance; and by Section 5 of an Act passed the same year (P. L. 295) the Council is required, not merely authorized, to annually fix and levy a schedule of water rents or rates. Then follows the Act of 1913, P. L. 390, which, with prior Acts, was amended in 1915, and as the law now stands it is the duty of the Council to levy and assess taxes and water rents or rates annually by "general ordinance."

We are not dealing with the question of general or implied powers incidental to the grant of municipal corporate existence, but with the question of a statutory municipal government. The power of the legislature to amend or annul a municipal charter granted by it, is not questioned, but it requires more than "implication" to give that effect to a statute defining and governing public service companies. It would be a strange doctrine that would purport to sustain the proposition that a power which the council is directed to exercise for the general welfare of the city may be taken away by implication, and especially so when a statute alleged to have that effect is passed and approved for a different and unrelated purpose unequivocally expressed. The charter as amended makes the assessment and collection of taxes and water rents or rates a municipal function. True, water rents or rates are not technically taxes, but in view of the legislation to which we have called attention their assessment is both a right conferred and a duty imposed. Departments are necessary, and though for certain purposes independent, are for governmental purposes, interdependent.

In Kirch v City of Louisville, 101 S. W., 373, the Court of Appeals of Kentucky say:

*

"One of the governmental functions of a municipality is the supplying of a sufficient amount of water for its public use, such as watering its streets and parks, the extinguishing of fires and providing its citizens with a sufficient supply of water. It is true that supplying water to the citizens for pay is, in a sense, a private business; nevertheless it is so connected with governmental functions of the city, that the legislature could, without violating Section 59 of the Constitution, place the water company in the hands of and under the control of a Board of Commissioners." The Act in question had reference to a city board of commissioners. Since reaching the conclusions stated, we have received from counsel for appellant a copy of the opinion of the Supreme Court of Illinois in The Springfield Gas and Electric Company v The City of Springfield, published in Rate Research, Vol. 15, No. 8, to which our attention was called shortly after the case was remitted. It is contended this case is on all

Barnes Laundry Company v City of Pittsburgh et al.

fours with the case at bar and should be followed. We cannot concur in this view, for reasons which we think are manifest.

As reported, the question in the Springfield case was whether or not a municipality of Illinois owning and operating an electric light plant for the production and sale of electricity to private consumers was subject to the supervision of the Public Service Commission. Mr. Justice Dunn says:

"The theory of the bill is that the appellant and the appellee are competitors in business, each operating a public utility and subject to the utilities act."

No such question is here presented. The recognized doctrine that a municipal corporation has a dual entity is set out at some length in the opinion. The Court say:

"A municipal corporation which supplies its inhabitants with gas and water does so in its capacity of a private corporation and not in the exercise of its powers of local sovereignty. So far as a municipality

is engaged in the commercial distribution of electricity its rights and liabilities, powers and duties, are measured by the same standard and governed by the same rules as apply to corporatons similarly engaged. *** A municipal corporation has no authority either to sell electricity to private consumers or to fix the rate at which it shall be sold within the municipality in the absence of a statute enabling it to do so."

The reasoning of Mr. Justice Dunn is, that the city and the private corporation being competitors in business, a law regulating the exercise of powers common to both, which did not apply to both, that is, exempted public utilities owned or operated by the municipality, was unconstitutional. The Illinois Act reads:

"The term 'Public Utility' when used in this Act means and includes every corporation, company, association, joint stock company or association, firm, partnership or individual; their lessees, trustees or receivers appointed by any Court whatsoever (except, however, such public utilities as are or may hereafter be owned or operated by any municipality) that now or hereafter: (a) may own, control, operate or manage * * for public * delivery or furnishing of heat, cold,

use

light

* any plant for

or water."

In view of the facts as reported in Rate Research, the provisions of the statute and of the Constitution, it would be difficult to point out error in the conclusion. But we are dealing with a question arising under our own Constitution and laws with special reference to a statutory charter, and the authorized practice in providing necessary revenue for municipal purposes.

If we give the "duality" doctrine its fullest effect it cannot apply where the legislature has declared what the municipal council must, not may, do; has imposed a legislative duty. The charter of the City of Pittsburgh preceded the Public Service Company law by almost a century, and so far as we know, the City's power to regulate and collect water rents or rates never has been questioned. Moreover the right to assess, file liens, and enforce payment of taxes and water rents (sometimes referred to as taxes) was expressly conferred long prior to the adoption of our present Constitution and has not been taken away. Even if it be conceded that in exercising the powers granted and performing the duties imposed by law, the City of Pittsburgh is not exercising a governmental function, we fail to see wherein it will strengthen plaintiff's contention. 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 dele