San Diego Water Co. v. City of San Diego

McKee, J.: In 1875 the San Diego Water Company made a proposal in writing to the Board of Trustees of the city of San Diego to erect hoisting works, lay down pipes, and do all other things necessary to bring water from the San Diego River for supplying the city of San Diego with pure, wholesome water, if the Board would agree, in behalf of the city, to purchase from the Company one hundred thousand gallons of water per month, for five years, at one dollar per thousand gallons. Responding to this proposal, the Board, at a regular meeting, passed a resolution whereby they agreed, in behalf of the city, to use and consume not exceeding two hundred thousand gallons of water per month for five years, and to pay the Company from the time they commenced to furnish the water to the city one hundred dollars per month, in warrants to be drawn on the General Fund of the City Treasury.

The Company accepted and agreed to these terms, and, in performance of its part of the contract, brought water into the city December 1,1875; and from that time onward has furnished the city with water according to its agreement; and the city has paid for the water thus furnished from December, 1875, until July 31,1878, since which time it has refused to pay; and the action in hand was brought to recover the amount due under the contract for the water furnished from July 31,1878, to November 30,1880.

As a corporation formed for the purpose of supplying the inhabitants of the city with pure, fresh water, the plaintiff is a creature of the laws under which it incorporated.; and derives its rights, duties, and obligations entirely from them. When it incorporated under those laws it assumed two obli[520]gations: 1. To furnish water to the extent of its means to the city of San Diego in case of fire, or other great necessity, free of charge; 2. To furnish water to the inhabitants of the city for family uses, upon proper demand, at reasonable rates, to be fixed by a Board of Commissioners. (Stats. 1858, § 4.) The first did not bind the Company to furnish water free for all municipal purposes. But it bound the Company to furnish it free to the city “ for the extinguishment of fires, the flushing of sewers, and the watering of parks, or such other necessities as are incidental to the direct employment by the municipality of its government or police powers.” The second bound the Company to furnish water to the city, standing in loco parentis for the occupants or inhabitants of its prisons, hospitals, poor-houses, schools, and other institutions to which water is supplied for family uses, at reasonable rates, to be fixed in the manner required by the law. (Spring Valley W. W. v. San Francisco, 52 Cal. 111.)