Welsh v. Borough of Beaver Falls

Opinion by Mr. Justice Dean, ’In Metzger v. Borough of Beaver Falls, 178 Pa. 1, for the reasons there at length given, the defendant was enjoined from constructing municipal waterworks, principally, however, because it had already exhausted its municipal power to introduce [581] water, by its contract theretofore made with the Union Water Company, a private corporation. Immediately following the decision in that case, a number of the taxpayers of the borough made application and obtained a charter for the People’s Water Company, to supply water to the same borough; then, an ordinance was presented in borough councils, which passed first reading, enacting that the borough should execute a contract with the new company to supply it with water for fire and other purposes, for the period of ten years from January 1, 1898, at an annual compensation of 64,000; further, that the company should furnish to all citizens, by the latest improved methods, water at certain rates; an elaborate table of which rates was to be embodied in the contract; further, that the borough should have the right to purchase at any time after the completion of the plant the fire hydrants put in by the company, at the price of $6,000; further, that after the completion of the plant, the borough should have the right to purchase the plant of the company at a price not exceeding the cost of same. The court below, after hearing, enjoined councils from adopting that part of the contract providing for the purchase of the plant after completion, but declined to otherwise interfere. The proposed contract is palpably an attempt to evade the decree of this Court in Metzger v. Borough of Beaver Falls, supra. We held in that case that, under the act of 1851, the borough might adopt either of two methods for the supply of water. It might build its own works, as many boroughs have done, or it might contract with a private corporation for the same purpose; but it could not have both methods in operation at the same time; the adoption of either was the exhaustion of municipal power on that subject. When a contract is made with a private water company, authorized usually, only to build its works and'maintain its plant at one place, it would be grossly inequitable to hold that the municipality, after inviting the construction of such works, and contracting with the company for the water supply, could at any time thereafter destroy them by constructing its own works. To authorize such municipal action the statutory right must be explicit; it will not be implied from doubtful language. What is this contract, in substance? Clearly, nothing but a contract by an owner with a builder, if the owner so chooses to [582] regard it; the' borough has the right to purchase at cost the plant, as soon as completed, and for $6,000 the hydrants; then it becomes the owner of a municipal water plant which it must operate as such; the very action that was enjoined in the case cited. But it goes further and, by enumerating no less than twenty-two special uses in a long table, prescribes what shall be the water rates, from a drug store to a water-closet, and from a dwelling to a urinal; treating the new company as a municipal institution, and as if already under municipal control. > Merely enjoining embodying in the contract the right to immediately purchase the plant does not reach the illegal act. It is true, that provision unmistakably discloses the purpose to evade our former decree; but this purpose is still to a large extent carried out by the provisions for introduction of the water, and the absolute payment of the sum of $4,000 annually, and the right to purchase the hydrants for $6,000. We express no opinion as to the right of the borough, by proper assent, to permit a second company to lay pipes on the streets and alleys within its limits. That question is not before us. We do hold however, that the borough cannot indirectly and evasively do that which by our former decree it was prohibited from doing directly; it exhausted its power to contract with water companies for municipal purposes when it made its contract with the Union Company. The decree of the court below is reversed, and it is now ordered and decreed that an injunction issue, directed to defendants enjoining them from passing the ordinance set out and complained of in plaintiff’s bill, and from entering into any contract with “ The People’s Company ” for a supply of water for municipal or fire purposes, or other purposes.