Stein v. Mayor of Mobile

PETERS, O. J. — There is no controversy about the facts in this cause. They were fixed by agreement of the parties in the court below. From the statement of these facts, as shown by the record, it appears that the city of Mobile, in a proper manner, entered into a contract with the appellant, Albert [368] Stein, to furnish said city with water. Said contract was so entered into on the 26th day of December, 1840; and the rights arising under it were to continue for twenty years at least, and thereafter until said city redeemed certain waterworks conveyed to Stein, which had been formerly used or erected by said city, for the purpose of securing a supply of water for its inhabitants. By this contract, the city of Mobile agreed with Stein, upon his performance and compliance on b,is part with the stipulations and agreements in said contract, that he “ shall and may retain quiet possession of said waterworks for said term of twenty years, without let, molestation, or hindrance ” of said city ; “ and said Albert Stein, his executors, administrators, and assigns, shall, during the said term of twenty years, or any further time until said works are redeemed as above stipulated, have the exclusive privilege of supplying to the citizens and inhabitants of the city of Mobile, water from the waterworks aforesaid, at the sum or price, which shall at no time exceed the following rates.” Under this contract, which is but partly set out above, said Stein went into possession of said waterworks and supplied the inhabitants of said city of Mobile with water, as he was required to do by its stipulations, up to the date of the mayor’s license. There is no pretence that he has failed to perform and comply with said stipulations; or that said contract has yet expired; or that any of the duties under it have ceased to be required of him. In this contract, the city of Mobile, in its corporate and personal capacity, is the contracting party on one side, and Stein on the other. The business to be performed or carried on is within the limits of the city. The authority of the city does not extend beyond these limits. It is a grant to Stein, by the city, for this purpose ; that is, a grant to him to carry on the business of his waterworks in the city, under his contract. “ A contract executed, as well as one which is executory, contains obligations binding on the parties. A grant, in its own nature, amounts to an extinguishment of the right of the grantor-, and implies a contract not to reassert that right. A party is, therefore, always estopped by his own grant.” Marshall, C. J., in Fletcher v. Peck, 6 Cr. 87, 137. The city of Mobile, by its ordinance or by-law, proposes to restrict the privilege thus granted, to do business in its limits under the contract above referred to, unless Stein shall purchase a license, by a fine or tax, which is arbitrarily imposed by the city government. Can this be done ? This is the sole question in this case. Evidently, the power of the city as a corporation, over its contracts, is no more than that of the citizen in a like case. A corporation cannot revoke a grant once made, and it cannot ob [369] struct the full enjoyment of the privileges secured by it. The ' power to supply the inhabitants of the city with water necessarily implies the right to carry on this business in the city. If this right could be interfered with at all, as there is no limit to the interference, it may be defeated altogether. The contract shows that this was not the purpose of the parties. The city government is a creature of the state legislature. Its powers, then, are restrained by all the constitutional limits of the General Assembly of the State. It- cannot pass by-laws. or ordinances which impair the obligation of contracts. Ang. & Ames on Corp. §§ 18, 332, 333, 334, 835; Cooley’s Const. Lim. pp. 192, 193, 198. It cannot, then, revoke its grant. This would be to impair its contract. 6 Cranch, 137, supra. The ordinance which assails the privilege already granted impairs the contract on which it depends, and is void; and the tax levied under its authority, by way of license, cannot be supported. The ordinance complained of is not merely a police regulation. The police power of the city refers rather to the regulation of its morals than its property. Blackstone’s definition of this power is : “ The due regulation and domestic order of the kingdom, whereby the inhabitants of the state, like' members of a well-governed family, are bound to conform their general behavior to the rules of propriety, good neighborhood, and good manners, and to be decent, industrious, and inoffensive in their respective stations.” 4 Bla. Com. 162; also Cooley’s Const. Lim. pp. 572, et seq. and cases cited'in the notes. This is no regulation of this sort. It is simply a tax in restraint of a privilege already granted by the city to the grantee, Stein. The privilege or right to carry on the business of the Mobile Waterworks in the city, having been once granted, cannot be reasserted. The ordinance which attempts this impairs the grant, and is void. See Mayor, Aldermen, and Commonalty of the City of New York v. Second Avenue Railroad Co. 32 New York R. p. 261; also Cooley, p. 201, n 4. The judgment of the court below is reversed, and the cause is remanded at appellee’s costs.