In this action the plaintiff seeks a permanent injunction against the defendant and is consequently bound to show an entry into court with clean hands and a clear right to the relief demanded. The validity of plaintiff's contracts with other corporations is involved, but only for the purposes of this action, and the judgment which may be entered will necessarily be limited in its operation to the rights of parties before the court.
The plaintiff having set the court in motion cannot be heard to complain if the issues involve a wider range than it originally contemplated.
The plaintiff is a water works corporation, organized under the Transportation Corporations Law in December, 1902, naming in its certificate two villages and three towns in the county of Monroe which it proposed to supply with water. A portion of the territory named adjoins the defendant, the city of Rochester, on the east and a portion adjoins it on the *Page 53 west. The plaintiff intends, according to its certificate, to obtain its supply of water from Lake Ontario, some distance west of the Genesee river, and to lay its mains southerly parallel to the river to the west line of the city of Rochester, thence through the city to the territory on the east.
The trial court found that the plaintiff, before the commencement of this action, obtained from the state of New York a franchise giving to it the right to lay and maintain its water mains through the city of Rochester, upon the route adopted by it, to the exercise and enjoyment of which the consent of the city of Rochester is not required; that thereafter the plaintiff undertook to lay its mains on the line of its proposed route at two certain streets, but was prevented by defendant exercising force to that end.
The court further finds that the New York Central Hudson River railroad passes through the city of Rochester, and that the company owns and occupies a continuous strip of land through the city in an easterly and westerly direction, upon which its tracks are laid; that this strip of land is intersected by several streets, some of which cross at grade and some above or below grade; that the land at all of the street crossings is owned by the railroad company, subject to the public user for street purposes.
It is further found that plaintiff acquired an easement in the north six feet of said continuous strip of land, for the purpose of laying and maintaining thereon its water mains, by virtue of two written contracts with the New York Central Hudson River Railroad Company, by which it agreed to furnish water to the railroad company in large quantities in the city of Rochester and elsewhere, on its right of way, for a term of years; that a like contract to furnish water was made by plaintiff with the Buffalo, Rochester Pittsburg Railway Company.
It is found that the city of Rochester owns and operates a municipal water plant which supplies water to its inhabitants for domestic and municipal purposes in large quantities; that the cost of this plant was about $11,000,000, of which *Page 54 $3,000,000 are represented by outstanding bonds. The New York Central Hudson River Railroad Company has been supplied with water by the city of Rochester, paying therefor from $18,000 to $20,000 per annum. The Buffalo, Rochester Pittsburg Railway Company has also paid the city of Rochester a very considerable sum per annum for water.
The plaintiff contends that on the facts found it is, by virtue of the statute and under its contracts with the Central Hudson, possessed of a legal franchise and route through the city of Rochester on which to lay and maintain its mains. The plaintiff admits that whenever the question is presented it will insist that it can legally furnish water, in the city of Rochester, to the railroad companies with which it has contracted and to such adjoining owners as can be reached without laying its pipes along the streets.
The plaintiff and the courts below have sought to confine the case to the one question of the legality of the route claimed by plaintiff.
It will presently appear that other questions are necessarily involved in passing upon the alleged legality of the route.
1. The first point arises under the provisions of plaintiff's charter; it is authorized to furnish water to two villages and three towns. Its charter does not extend to the city of Rochester, and it has no more right to sell, or furnish, water within the corporate limits of that city than it has in the city of New York.
This point goes to the foundation of the action, for the plaintiff cannot sell or furnish water even to the New York Central Hudson River Railroad Company within the boundaries of the city of Rochester, and hence its contracts with the said company are ultra vires and give it no franchise or vested rights. The plaintiff's right to lay and maintain its mains on the strip of land in question, as between it and the Central Hudson, rests on its covenant to supply the railroad company with water.
2. While the Central Hudson could lay water pipes on its right of way to supply itself with water, for that would be a purpose incidental to its charter, it could not sell water *Page 55 to others, for that would be foreign to its charter. Not having that right itself, it could not confer it upon the plaintiff. It could not by contract enable the plaintiff to do something which the railroad company had no right to do itself.
It is true that a railroad company, needing water for its uses and purposes, may resort to condemnation proceedings to obtain it (Railroad Law, § 7, subd. 4), but this power does not affect the present situation.
In so far as plaintiff rests its claim for equitable relief on its contracts, it asks the protection of a right by injunction that does not exist in law. The contracts relied upon are two in number. One Mingle entered into a contract with the Central Hudson to furnish it for a term of years with water, which was assigned to plaintiff by Mingle, with the consent of the Central Hudson, the plaintiff assuming performance. Later, the plaintiff entered into a contract with the Central Hudson for its right of way, which was granted, subject to the express condition that plaintiff should fully perform the contract to furnish water, so assigned to it by Mingle.
3. The plaintiff further insists that its selected route through the city of Rochester rests not only on its contracts with the Central Hudson, but on the provisions of the Transportation Corporations Law.
It, therefore, becomes necessary to consider this contention in view of the provisions of various statutes, viz.: The Transportation Corporations Law, as amended; the charter of the city of Rochester and its amendments; the act for the government of cities of the second class, sometimes called the White charter. (Laws 1898, chap. 182.)
The plaintiff contends that, notwithstanding its route is six miles long and crosses twenty-nine streets in the city of Rochester, it can lay its mains thereon and cross said streets without interference from the local authorities. This contention is based on section 82, subd. 2 of the Transportation Corporations Law (Birdseye's R.S. [3d ed.] vol. 3, p. 3764), which authorizes water works corporations "To lay their water pipes in any streets or avenues or public places of an *Page 56 adjoining city, town or village where such permit has been obtained."
That is to say, where a corporation has received a permit from a municipality to furnish it with water, it may, in order to reach such municipality, lay its pipes in the streets of an adjoining city, town or village which lies between the water supply and the place to be furnished with water.
As the city of Rochester occupies this position as to certain of the municipalities to be supplied with water by the plaintiff, it is argued that the latter can proceed to locate its route and lay its mains without the permission or interference of the local authorities of the city of Rochester.
While the statute does not declare, in terms, that the local authorities are powerless to regulate or control the route selected in such intervening municipality, the respondent, in support of such a construction, places great reliance on the case of Village of Pelham Manor v. New Rochelle Water Company (143 N.Y. 532), decided in November, 1894.
Pelham and New Rochelle are adjoining villages. The claim of the plaintiff was that the defendant had no power to lay pipes in one of its highways without permission of the municipal authorities. Judge O'BRIEN, writing for the court, said: "What the defendant did was to use the road for about five hundred feet in order to connect two of its mains, which terminated in `dead ends,' near the boundary lines of the two towns. * * * So long as the defendant was without power to add to its revenues by furnishing water to the plaintiff, or any of its inhabitants, no great mischief is to be apprehended from any extensive use of the streets by the defendant. But the legislature evidently anticipated that a water company in performance of its functions of supplying the town and every part of it, which granted the permit, with water, might, for some reason, find it necessary to cross the boundary line of an adjoining town and use its highways, not for the purpose of supplying that town, but for the purpose of properly and effectively executing the purpose of its creation. Such necessity has been found in this case as matter *Page 57 of fact by the trial court, and hence the permission of the municipal authorities who had charge and control of the highways was not necessary."
This case was properly decided on its peculiar facts, as the law stood in 1894, but since then section 81 has been amended, and we have existing, by virtue of this amendment, the very situation, the absence of which controlled the foregoing decision, to wit, where the company claiming the right to lay its pipes in the streets of an intervening town has the power to add to its revenues by supplying it with water.
In 1896 (Laws of 1896, chap. 678) section 81 of the Transportation Corporations Law was amended so as to read:
"§ 81. Every such corporation shall supply the authorities or any of the inhabitants of any city, town or village throughwhich the conduits or mains of such corporation may pass * * * with pure and wholesome water at reasonable rates and cost," etc.
It would be an unreasonable construction of this statute, so amended as to compel the corporation passing through an intervening municipality with its pipes to furnish pure water to its authorities and inhabitants, to hold that it could select its route through such municipality without consulting the officers having charge of the streets.
While the right to pass through the streets of the intervening municipality is conferred by this statute, a fair construction leads to the conclusion that the legislature intended that its exercise is subject to the reasonable regulations and control of the local authorities, both as to route and manner of conducting the work.
The court would not be justified in assuming that the legislature intended to allow a water company, in passing through an intervening town where it is compelled to supply water, if required, to select its route as to streets in defiance of the duly constituted authorities, but in the adjoining town, where by permit it is to erect a water system, it is subject to such restrictions as to route and interference with the public streets as the local authorities may deem it proper to impose. *Page 58
It follows that the provisions of the Transportation Corporations Law, as amended in 1896, do not authorize the plaintiff, even if lawfully within the city limits to cross the twenty-nine streets in the city of Rochester without submitting to the reasonable supervision and control of the local authorities.
The finding of the trial court that the land at all of these street crossings is owned by the railroad company, subject only to the public use for the purposes of a street, does not help plaintiff, as the local authorities have the power to protect and regulate this public use.
Furthermore, it is a question whether the Central Hudson could grant an easement to the plaintiff to lay its pipes over the entire strip of six miles, including the land involved in street crossings.
In Albany Northern Railroad Co. v. Brownell (24 N.Y. 345,349) the court said: "Upon this my opinion is, that the railroad companies under the general act do not acquire the same unqualified title and right of disposition, to the real estate taken for the road and paid for according to the act, which individuals have in their lands. The statute declares the effect of the proceedings which it authorizes to be that the company shall be entitled to enter upon, take possession of, and use the said land for the purposes of its incorporation, during the continuance of its `corporate existence;' and it further declares that the land it thus appropriates shall be deemed to be acquired for public use."
It is not contended that the laying of plaintiff's mains over the entire strip was necessary to furnish the railroad company with water; it is admitted a further object was to reach municipalities on the east of defendant. A conveyance by the railroad company with the latter object in view is clearly ultravires.
I have deemed it proper to construe the Transportation Corporations Law as claimed to be applicable to this case, although of the opinion that the charter of the city of Rochester and its amendments, read in connection with the White *Page 59 charter, already cited, bar the entrance of plaintiff to the city of Rochester.
We have here one of the large cities of the second class, which has, at an expenditure of eleven millions of dollars, created a water system adequate to supplying the municipality and its inhabitants with pure and wholesome water for many years to come.
The question is whether the statutes, under which the city is exercising its governmental functions, permit it to found and maintain a municipal water system in the interests of the public safety and health free from outside competition or interference.
This court has decided that this system of water works was erected for the public benefit and is held for public purposes. (City of Rochester v. Town of Rush, 80 N.Y. 302.)
This system of water works was authorized by Laws of 1872, chapter 387, under which were created the original water commissioners of Rochester. The consolidated charter of Rochester, as amended, transferred the control of the water system to the executive board. The amendments of 1890 (Chap. 561, § 150) declare: "The executive board shall have control of the water works of said city, and of the construction of all extensions and additions, improvements and repairs of the same, and of furnishing the water to citizens, and the care and repair of said works, * * * and they may make such rules and regulations and establish such rates for the use of water as they may deem proper."
The act for the government of cities of the second class (White charter, Laws 1898, chap. 182) devolves the construction, maintenance, extension and repair of the city water works upon the commissioner of public works (section 109), and it is also made his duty (section 110), "when a vacancy shall occur, to appoint a superintendent of water works and to see that the city has an abundant supply of wholesome water for public and private use; to devise the plans and sources of water supply; to plan and supervise the distribution of water through the city; to protect it against *Page 60 contamination; to prescribe rules and regulations for its use, which, when ratified and approved by the common council, shall have the same force and effect as an ordinance by the common council enacted." The section goes on to give to the commissioner most ample powers in detail.
We have here the legislative intention, clearly expressed, that the city of Rochester is to have full and complete control of its system of water works even to devising the plans and sources of supply, which may be necessary in every city where the increase of population renders the existing supply insufficient.
There is but one fair and workable construction to be given these charters, and that is they make the municipal water system exclusive and free from all outside competition or interference.
If it should be held that these charters, when inconsistent with, are subject to the provisions of the Transportation Corporations Law, and if the judgment appealed from is affirmed, the right and obligation of plaintiff to furnish water to the authorities and inhabitants of Rochester instantly spring into existence. It thus becomes evident that the real question is not solely whether, under section 82 of the Transportation Corporations Law, the plaintiff has the right to pass through the intervening municipality of Rochester, but is the much broader question whether, under the amendment of section 81 of the above law, as already pointed out, the plaintiff can gain a foothold in the city of Rochester which will enable it to become a competitor of the municipal water system, notwithstanding the charter provisions already quoted and other stringent enactments contained therein, and in the ordinances as to the control of the water system and the public streets, which cannot, for lack of space, be quoted here in full.
The question, briefly stated, that dominates this case is, can the plaintiff, under any circumstances, furnish water to the authorities or inhabitants of the city of Rochester? I answer no, unless the city of Rochester permits it.
The charter of the city of Rochester and its amendments *Page 61 constitute a special act, and are not repealed by the Transportation Corporations Law in the absence of an express or necessarily implied statement to that effect.
The White charter is special in nature as to the Transportation Corporations Law for it is confined to four cities. Independent of that, however, it is subsequent in date to the Transportation Corporations Law and, hence, is superior to the provisions of the latter when there is a necessary conflict.
4. There is a reason, independent of statutory enactments, why the city of Rochester should have exclusive and absolute control of its water system. It is necessarily vested with the police power as a part of its governmental functions.
The law of paramount necessity is involved and the maintenance of the municipal water system, untrammeled by competition or interference, is essential for sanitary purposes, the extinguishment of fires and the conservation of the public health by furnishing an abundant supply of pure and wholesome water for general consumption.
Chief Justice REDFIELD said: "The police power of the State extends to the protection of the lives, limbs, health, comfort and quiet of all persons and the protection of all property within the State." (Sharp v. Rutland B.R.R. Co., 27 Vt. 149. )
A city or other political division of the state acts in a dual capacity; in business matters it is treated as a private person in suing and being sued, but when exercising the delegated sovereign power of the state it is judged by the same legal standard as the state itself. (Maxmilian v. Mayor, etc., ofNew York, 62 N.Y. 160; Hughes v. County of Monroe, 147 N.Y. 49;Missano v. Mayor, etc., of New York, 160 N.Y. 123.)
In People ex rel. N.Y. Electric Lines Co. v. Squire (107 N.Y. 593, 606), RUGER, Ch. J., in discussing the police power, said: "The right to exercise this power cannot be alienated, surrendered or abridged by the legislature by any grant, contract or delegation whatsoever, because it constitutes the exercise *Page 62 of a governmental function, without which it would become powerless to protect the rights which it was specially designed to accomplish."
The police power is as broad and plenary as the taxing power. (Kidd v. Pearson, 128 U.S. 1.)
This court has held, as already pointed out, that the Rochester water works system is to be regarded as created for the public benefit, held for public purposes, and not subject to taxation. (City of Rochester v. Town of Rush, 80 N.Y. 302.) To subject this system to competition or interference would be to weaken and possibly destroy it.
5. In arriving at the conclusion that the plaintiff cannot lawfully extend its route through the city of Rochester, I have not adverted to the charter amendments of 1903, as I am of opinion they are not absolutely essential in reaching that result. The legislature of 1903 twice amended the charter of the city of Rochester, section 157 (Laws 1903, chap. 59; chap. 553). This section is headed: "Power over streets, et cetera, to extend water works." The first amendment added these words to the section: "No other person or corporation shall enter upon or excavate any road, street, highway or public place in the city of Rochester, for the purpose of laying down pipes for the conveyance of water, without the permission of the common council." This provision limited the exercise of power to the commissioner of public works. The amendment became operative March 19th, 1903.
The motion for a preliminary injunction herein was granted March 18th, 1903, but the order was not entered until two days later. The appellant claims the legislation precedes the injunction. The order entered related back to the day the motion was granted in writing, with a direction that the order be settled on two days' notice. (Robinson v. Govers, 138 N.Y. 425. ) We do not regard this point as material.
The trial of this action, which resulted in the judgment making the preliminary injunction permanent, did not take place until the following April. This judgment was entered notwithstanding the declaration of the legislature that no other *Page 63 person than the commissioner of public works could lay pipes in the streets for conveying water without the permission of the common council.
The force of this legislation was sought to be limited by the trial court in its opinion, but the application of a familiar canon of construction disposes of the matter, to the effect that in construing a statute resort may be had to the circumstances under which and the purposes for which a statute is passed. (People ex rel. Onondaga County Savings Bank v. Butler,147 N.Y. 164; Smith v. People, 47 N.Y. 330.)
It was shown that the object of this legislation was to prevent the plaintiff extending its route through the city of Rochester, and the governor discloses the fact in his memorandum handed down when signing the bill.
The plaintiff was possessed of no franchise or vested rights authorizing it to extend its route through the city of Rochester, and the trial court should have heeded this latest expression of the legislative will.
The second amendment (Laws 1903, chap. 553) did not become operative until May 12th, 1903, and need not be considered at this time, although it is a more emphatic announcement of the legislative intention to make the water works system of the defendant exclusive.
6. Our attention is called to the fact that the trial court sought, in its judgment, to protect the defendant by stringent provisions as to the manner in which plaintiff should proceed with its work.
The plaintiff's contention was that it is authorized by law to lay out its route through the city of Rochester, and the local officials had no authority to interfere in any way. The defendant's position was that the plaintiff had acquired no franchise or vested rights in the premises and could not enter the city of Rochester without its permission. There is no middle ground lying between these two positions; the plaintiff could extend its route through the city of Rochester undisturbed, or it was powerless to do so unless the defendant gave its permission. The provisions in the judgment to which reference *Page 64 has been made were unauthorized, as the rights of the parties rest upon legislative enactment.
7. The trial court found (finding XII) that it was necessary for plaintiff to pass through the city of Rochester "in order to carry out the purposes of its incorporation and fulfill the contracts which it has made and assumed," etc. This finding must be read, however, with another (finding XX), to the effect that it is a physical possibility to reach the territory on the east of the city of Rochester without laying any pipes within its territory, but the cost of construction would be materially greater.
8. It would seem quite impossible to read this record without reaching the conclusion that the real object of this plaintiff is to accomplish by indirection that which it could not secure otherwise, to wit, an entrance into the city of Rochester, for the purpose of ultimately serving that city and its inhabitants with water as a competitor of the existing municipal water works system.
I have previously pointed out that the plaintiff admits that whenever the question is presented (and we hold that it is presented now) it will insist that it can legally furnish water in the city of Rochester to the railroad companies, with which it has contracted, and to such adjoining owners as can be reached, without laying its pipes along the streets.
I have also called attention to the fact that if this route can be extended through the city of Rochester, under the provisions of the Transportation Corporations Law, as contended, then the amendment of section 81 in 1896 would enable the plaintiff to furnish water to the defendant and its inhabitants, subject only to the reasonable regulations and control of the local authorities.
The learned Appellate Division in its opinion says: "It is obvious, however, that the incidental privileges of supplying water to the Central Railroad Company and contiguous property owners within the city of Rochester was one of the chief inducements to the organization of the plaintiff, although that intention was not embodied in its certificate of incorporation *Page 65 filed with the Secretary of State, and upon which its organization tax was accepted by the State."
The learned court, notwithstanding its expressed conviction that plaintiff was impelled by ulterior motives, failed to apprehend the full legal results of affirming the judgment of the Trial Term.
It may be further stated that a corporation having a capital stock of $2,500,000, and the power to issue bonds for a large sum, would not be justified in marketing such an amount of securities, if its real object was only to furnish water to the rural localities named in the certificate, with their small aggregate population.
The fact that the plaintiff has selected the corporate name of the Rochester Lake Ontario Water Company is not without significance as bearing upon plaintiff's ulterior designs.
9. I have to say, in conclusion, that while there are many objections to the judgment below, the primary and controlling one is that the plaintiff sought an injunction to promote an illegal purpose, and, hence, its prayer for relief should have been denied.
The judgment of the Appellate Division and the Special Term should be reversed, with costs.
PARKER, Ch. J., GRAY and O'BRIEN, JJ., concur with HAIGHT, J.; MARTIN and VANN, JJ., concur with BARTLETT, J.
Judgment affirmed.