Pacific Paper Co. v. Portland

Mr. Justice Bean delivered the opinion of the court. The assignments of error relied upon by the defendant city present but one question, namely: Is the city liable for damages caused by the bursting of a water-main, which is maintained and used for fire protection, when it appears that the main is connected yith the general water system of the city used to supply water for domestic purposes and sale, and that water sufficient to fill a 6-inch pipe passed from this main into [123] other mains, and was there delivered to private consumers ? The city requested the court to instruct the jury upon this point, that the city would not be liable, although it appeared that some water might pass from this main into other mains and reach private consumers. The court did not instruct the jury as requested, but plainly submitted the following questions: Was the city maintaining the main as a part of the water system of the City of Portland for the purpose of receiving revenue from those who might need its water? Or was it engaged in using this water-main exclusively for fire purposes? The court instructed the jury that the burden was upon the plaintiff to show every element necessary to recovery; that it must show that the city was using this water-main for the purpose of profit, or, if it were not using it for profit, that it contemplated getting a profit out of it whenever it could; that the city was negligent; that such negligence was the proximate cause of the injury. Counsel for defendant contend that the city was deprived of its right of exemption as an agency of the state in the exercise of a governmental function. 1. The authorities agree that a municipal government has a double function, first, the private, proprietary function, and, second, the governmental function as the arm or agent of the state. The intermingling of these two functions has caused the courts some difficulty in determining the boundary line separating the two. There is no conflict upon the proposition that the city, when exercising a governmental function in good faith, is exempt from liability for damages, and, when exercising its private or corporate powers, it is liable to respond in damages for the negligence of its officers or employees. 2. Section 358, L. O. L., provides that an action may be maintained against a municipal corporation of this [124] state in its corporate character, and. within the scope of its authority, for an injury to the rights of the plaintiff arising from some act or omission of such corporation. The case of Esberg Cigar Co. v. City of Portland, 34 Or. 282 (55 Pac. 961, 75 Am. St. Rep. 651, 43 L. R. A. 435), establishes the rule in this state that a system of waterworks operated for profit by a city belongs to the municipality in its private rather than in its public or governmental character, and the city is liable as a private proprietor would be for the negligent construction or maintenance thereof. At page 290 of 34 Or., at page 963 of 55 Pac. of the opinion, Mr. Justice Bean uses this language: “It is quite universally held that, when a municipal corporation voluntarily undertakes to construct and maintain water or gas works in pursuance of statutory authority, for the purpose of supplying the inhabitants thereof with water or gas at rates established by the city, it is liable for an injury in consequence of its acts in constructing and maintaining such works the same as a private corporation or individual. ‘A municipal corporation, owning waterworks or gasworks which supply private consumers on the payment of tolls,’ says Mr. Dillon, ‘is liable for the negligence of its agents and servants the same as like private proprietors would be’: Dillon, Mun. Corp., § 954.” Further in the opinion he quotes with approval from the case of Western Saving Fund Soc. v. City of Philadelphia, 31 Pa. 183 (72 Am. Dec. 730), as follows: “Blending the two powers in one grant does not destroy the clear and well-settled distinction, and the process of separation is not rendered impossible by the confusion. In separating them, regard must be had to the object of the legislature in conferring them. If granted for public purposes exclusively, they belong to the corporate body in its public, political, or municipal character. But, if the grant was for purposes of private advantage and [125] emolument, though the public may derive a common benefit therefrom, the corporation quoad hoc is to be regarded as a private company”: See, also, Giaconi v. Astoria, 60 Or. 12 (113 Pac. 855, 118 Pac. 180); 3 Dillon, Municipal Corp. (5 ed.),- § 1303; 1 Shear. & Red., Neg., §§ 281, 282. 3, 4. We see nothing in the facts of this case to take it out of the general rule. It is alleged, and the testimony tends to show, and the jury by their verdict-found, that the water-main was negligently constructed, inspected and used. We think the instructions given by the court upon this question were as favorable to the city as could he reasonably expected. According to the verdict, this water-main was constructed and maintained as a part of the general water system of the City of Portland, receiving its supply from the same source, and connected with the other mains, and the care necessary in the construction and maintenance thereof was governed to a certain extent by the force which it received from the water system, and which the main was required to withstand. The jury found in effect that the water-main in question was as much a part of the system as any other main, and evidently believed that, inasmuch as water seeks its level, and the main was used in connection with the city water system, they were unable to detach it from such system. Finding no error in the record, the judgment of the lower court is affirmed. Affirmed: Rehearing Denied. Mr. Justice Moore dissents.