*454Modified on rehearing November 27, 1917.
.On Petition for Rehearing.
(168 Pac. 939.)
From Polk: Percy R. Kelly, Judge.
On petition for rehearing. Former opinion modified.
Mr. George M. Brown, Attorney General, and Mr. John 0. Bailey, Assistant Attorney General, for the petition on behalf of the Public Service Commission of Oregon.
Mr. Ed F. Goad, for the petition on behalf of the City of Dallas.
Messrs. Huston & Huston ánd Mr. Oscar Hayter, opposing the rehearing- in the interest of plaintiff-appellant.
In Banc.
Opinion by
Mr. Chief Justice McBride.The brief of the learned Attorney General seems to us to be merely a repetition of his arguments urged upon the hearing. The question in a nutshell is this: Who owns the Dallas water plant? If Gates owns it, the commission has a right to regulate the rate charged for water. If the city of Dallas owns it, the commission has no such right. The situation may be briefly stated thus:
In 1902 the City of Dallas, by virtue of a provision of its charter, was authorized to expend the sum of $25,000 for the construction of a water system. The amount being, in the judgment of the inhabitants, in*455sufficient to construct a plant capable of furnishing an adequate supply of water, the City of Dallas by its proper officials, entered into a contract with plaintiff to build for the city a water plant sufficient for the purposes contemplated. The title of the ordinance which constituted the contract, specified that the contractor was to “construct a water plant for the City of Dallas” and that he should be paid therefor the sum of “$12,000.00, and a lease of said plant for a period of twenty (20) years, or until termination by agreement of the contracting parties.” The city was to secure rights of way for the conduits, reservoir site, and the right to use the waters of Canyon Creek, and the right of way therefrom to the reservoir. It was then provided when and under what conditions the $12,000 mentioned in the title to the act was to be paid. And further provided that after all of such payments are made, “the material and plant shall be and remain the property of the city and shall jiot be removed therefrom.”
It was further provided that after the plant had passed certain tests and the payments had been made and dating therefrom, “the contractor (plaintiff) shall retain as lessee the use of said plant for a period of twenty years.” It was also provided that at the expiration of twenty years, or at the end of each succeeding period of five years thereafter, the city at its option might cause a valuation to be placed upon the property, if the contracting parties should fail to agree, and the amount of such valuation should be paid to the contractor less the sum of $12,000 already paid by the city, but until such determination and payment the use and lease of the plant was to continue in the contractor upon the same terms as originally *456agreed upon. The ordinance fixed in detail the rates which should be charged for water.
2. Plaintiff constructed the plant and there is no charge that he in any way failed to live up to the terms of his contract. The rules governing the construction of contracts, where a municipality is a party, do not differ in any way from those applying to contracts made between natural persons, and the same rules of morality that require a natural person to keep his contract, are applicable to a city. The contract provided that the plant should be built for the city; that the city should provide the right of way and reservoir site, and that plaintiff as contractor — not owner — should receive as compensation therefor the sum of $12,000 and a lease of the property and water plant, with the right to charge certain prescribed rates for a period of twenty years.
Under this contract plaintiff did not and does not now own a single rodo of pipe or a single cubic foot of reservoir. By the words of the contract, the plant remains the property of the city and plaintiff’s interest is that of a mere lessee. In condemning the right of way, the city appeared as a plaintiff claiming-under pleadings sworn to by its officers — that it required the property for its use, not plaintiff’s use.
In the case of Dallas v. Hallock, 44 Or. 246, 256 (75 Pac. 204), cited in the original opinion, the very question at issue here was discussed. Justice Wolverton said :
“The contract contemplates that the city shall own the system when completed, and the fact that the builder as part consideration for its construction, is to take as lessee the tolls for a term of years, cannot affect the right to construct, and for that purpose to acquire the easement thereto.”
*457Had the City of Dallas made the claim that is now made, that plaintiff was the owner, it would have gone out of court and its right to condemn would have been denied. We are not prepared to say in the face of the fact that the contract in substance declares the City of Dallas to be the owner and plaintiff a lessee — that Dallas is not the owner. Neither are we prepared to say that it can blow hot and cold in the same breath, by condemning Mrs. Hallock’s and Judge Boise’s property under a pretext of ownership, and in this action denying such ownership in order to lay a foundation for action by the Public Service Commission.
3. That the City of Dallas is the owner of the water system seems almost too plain to admit of argument, but on account of an alleged hardship entailed upon the city, if it shall he compelled to keep its contract, we are urged to construe the statute as meaning something different from what the terms used ordinarily imply. The contention of counsel for the city is this, quoting his own language:
“The provision relied on by appellant in exempting the city from the Act of 1911, is as follows: ‘No plant owned or operated by a municipality shall be deemed a public utility under this act! I feel confident that the character of ownership intended by the legislature in making this exception, was such ownership as carried with it the operation of the plant in distributing water to its inhabitants, as well as the ownership in fact.”
Such is not the natural import of the language used, which makes the exception depend upon one or the other of two contingencies. (1) Where the city owns a water system, and (2) where it operates a water system owned by someone else. Construction is as a usual thing, only resorted to where the statute is ambiguous, Here it is clea,r. If it had been the inten*458tion of the legislature to include within the operation of the Public Utilities Act all utilities owned by a city but operated by lessees, it could easily have said so at the expense of one line of print. It is quite probable the legislature had in mind the doctrine that cities which had already contracted by lease with private persons for the operation of their utilities, should not be allowed to ask the Public Utilities Commission to modify their contracts, and that in the future municipalities which might make like contracts, would be capable of protecting themselves by proper reservations in the contracts.
To say that a city which, under the ordinary rules of construction of contracts would be the owner, is, for the purposes of this act not the owner, and that the lessee who under the ordinary course of construction would be held not an owner is, for the purposes of this act an owner, would be to amend the statute by the baldest judicial legislation.
4. The Attorney General indulges in dire forebodings as to what might happen in case we should hold that the statute means literally what it says. His point is that the method adopted in the Dallas Case may be adopted for the purpose of giving bonuses, but how it would have this tendency does not appear. Another suggestion is that the Dallas method may be resorted to for the purpose of avoiding the operation of the Public Utility Act. This objection may be urged with equal force against any law permitting cities to be incorporated or allowing them to own public utilities. If a city owns or operates a public utility, such utility is automatically relieved from the operation of the act. Whether this is good or bad policy is not a matter for the courts but for the legislature which has in its wis*459dom, or unwisdom, abstained from appointing a guardian for cities owning or operating public utilities.
Tbe contract between the City of Dallas and plaintiff was not concocted by a set of grafting officials, conspiring in secret to give the plaintiff some advantage but the question of issuing bonds to carry out the contract was submitted to a vote of the people, who by withholding their approval could have defeated the whole project. That the contract has now become more or less profitable is no reason why the courts should go beyond the plain letter of the law to give the Public Utilities Commission jurisdiction to set it aside or modify it. We have been asked by counsel for the city to decide several other matters which are not involved in the question before us. Our decision upon such questions would have no legal validity and the contract seems too plain to require interpretation.
5, 6. One question, however, is raised upon the petition for rehearing which has been overlooked heretofore. It was stipulated that the City of Dallas should be at liberty at any time to raise the question that it was not a proper party defendant, and that question was raised in the lower court. This is a proceeding sui generis. Instead of providing for an appeal to the Circuit Court from the findings of the commission, Section 54 of Chapter 279, General Laws of 1911, provides that the party deeming himself aggrieved may commence a suit in the Circuit Court “against the commission as defendant” to set aside such findings. The proceedings are special and in many features differ from those of an ordinary suit in equity. We think the remedy prescribed by statute is exclusive and the City of Dallas was improperly joined. The suit will, therefore, be dismissed as to the City of Dallas and the city will recover of plaintiff its fees paid for filing *460answer and for appearance in the Circuit Court, and the expense of printing its brief in this court, these appearing to be the only costs which it incurred which do not apply as well to the other defendant as to it. As to the other defendant, we adhere to our original opinion.
Modified on Petition for Rehearing.