no more reason to hold that the duty of doing so is meant to be imperative than to hold that other companies incorporated to carry on manufactories, or to do any other business, are bound to serve the public any further than they find it to be their interest to do so. It was earnestly insisted on the argument that the community has a great interest in the use of gas, and that companies set up to furnish it ought to be treated like innkeepers and common carriers, and that if no precedent can be found for such a decision, this court ought to make one. But that there is no authority for so holding in England or America, where companies have been so long incorporated for supplying water and gas to the inhabitants of numerous towns and cities, affords a strong presumption that there is no principle of law upon which it can be supported."

But this case and its reasoning was directly disapproved and overruled in the subsequent case of Olmstead v. Proprietors of Morris Aqueduct, 47 N. J. L. 333, in which the court says: "In that case, Paterson Gas Light Co. v. Brady,— Mr. Justice ELMER declared that the company was under no legal obligation to supply gas to all persons having buildings on the line of their pipes, upon tender of reasonable compensation. He rested this view on the absence of any express provision in the charter imposing such duty upon the company. This decision fails, however, to give due effect to the purpose of the legislature, in creating the company and to the implied obligation assumed by the company in accepting the grant. If it were a grant for mere private uses empowering the corporate body to withhold service at pleasure from all persons, the company would be without the right to occupy the public streets for the laying of its pipes, and of course the grant of eminent domain for such private purposes would be void. In this respect, in my judgment, the conclusion in the Paterson case was erroneous, and in conflict with the views expressed in Tide Water Co. v. Coster, 3 C. E. Green, 518; 90 Am. Dec. 634, and in Nat. Docks Ry. Co. v. Cent. R. Co. 5 Stew. Eq. 755."

This view is certainly more in accord with recent decisions establishing the doctrine that it is mandatory upon corporations of this sort to supply one and all without distinction. The defendant by incorporating, under the statute for the purpose of supplying water to the city and its inhabitants, undertook a business which it could not have carried on without the grant of eminent domain over the streets in which to lay its pipes. It was by incorporating for this purpose, and in accepting the grant, it became invested with a franchise, belonging to the public and not enjoyed of common right, for the accomplishment of public objects and the promotion of the public convenience and comfort. Its business was not of a private,

but of a public nature, and designed under the conditions of the grant as well for the benefit of the public as the company.

"Such a business," says Mr. Justice HARLAN, "is not like that of an ordinary corporation engaged in the manufacture of articles that may be quite as indispensable to some persons as are gas lights. The former articles may be supplied by individual effort, and with their supply the government has no such concern that it can grant an exclusive right to engage in their manufacture and sale, but as the distribution of gas in thickly populated districts is, for the reason stated in other cases, a matter of which the public may assume control, services rendered in supplying it for public and private use, constitute, in our opinion, such public services as, under the constitution of Kentucky, authorized the legislature to grant to the defendant the exclusive privileges in question." (Louisville Gas Co. v. Citizens Gas Co. 115 U. S. 683.) And, in another case, the same eminent judge said: "The manufacture of gas and its distribution for public and private use, by means of pipes laid down, under legislative authority, in the streets and ways of a city, is not an ordinary business in which every one may engage, but is a franchise belonging to the government to be granted for the accomplishment of public objects, to whomsoever, and upon what terms, it pleases. It is a business of a public nature, and meets a public necessity, for which the state may make provision." (New Orleans Gas Co. v. Louisiana Light Co. 115 U. S. 650.)

It must then be conceded that the defendant is engaged in a business of a public and not of a private nature, like that of ordinary corporations engaged in the manufacture of articles for sale, and that the right to dig up the streets, and place therein pipes or mains for the purpose of conducting water for the supply of the city and its inhabitants, according to the express purpose of its incorporation, and the business in which it is engaged, is a franchise, the exercise of which could only be granted by the state, or the municipality acting under legislative authority. In such case, how can the defendant, upon the tender of the proper compensation, refuse to supply water without distinction to one and all whose property abuts upon the street in which its pipes are laid? The defendant company was organized to supply water to the city and its inhabitants, and the franchise granted by the city authorities was the means necessary to enable it to effect that purpose. Without the franchise, the object for which the company was incorporated would fail and come to naught. It could not carry on the business of supplying the city and its inhabitants with water without authority from the city to dig its streets and lay pipes therein for conducting or distributing water for public and private use. It

1

was not organized to lay pipes but to supply water, and the grant was to enable it to do so and thereby effect the public purpose contemplated.

When the defendant incorporated to carry on such a business, we may reasonably assume that it was with the expectation of receiving a franchise from the city, which, when conferred, it would undertake to carry on according to the purposes for which it was organized. By its acceptance of the grant, under the terms of its incorporation, it assumed the obligation of supplying the city and its inhabitants with water along the line of its mains. It could not dig up the streets and lay pipes therein for conducting water, except to furnish the city and its inhabitants with water. That was the purpose for which it became a corporation, and the grant of the city was to enable it to carry it into effect. And "if the supplying of a city or town with water," as VAN SYCKEL, J., said, "is not a public purpose, it is difficult to conceive of any enterprise entrusted to a private corporation that could be classed under that head." (Olmstead v. Morris Aqueduct, supra.)

As the defendant could not carry on the business of supplying water without the franchise, the city must have intended, in granting such franchise, to charge it with the performance of the duty it undertook for the public by the terms of its incorporation, and the defendant, in accepting the benefits of the grant, must have assumed the performance of such duty. In a word, the acceptance of a franchise, under such conditions, carries with it the corresponding duty of supplying the public without discrimination with the particular commodity which the corporation was organized to supply. "It may be laid down as a general rule," says Mr. Morawetz, "that whenever the aid of the government is granted to a private company, in the form of a monopoly, or a donation of public property or funds, or a delegation of the power of eminent domain, the grant is subject to an implied condition that the company shall assume an obligation to fulfill the public purpose on account of which the grant was made. . . . The same rule applies to companies invested with special privileges at the expense of the public for the purpose of supplying cities with water." (2 Morawetz on Corp. § 1129.)

The books are replete with illustrations of this principle as applied to water companies, gas companies, telephone companies, and others in the performance of public duties.2

2 See also Griffin v. Goldsboro Water Co. (1898), 122 N. C. 206; McCrary v. Beaudry (1885), 67 Cal. 120; Rockingham County L. & P. Co. v. Hobbs (1904), 72 N. H. 531; Crumley v. Watauga Water Co. (1897), 99 Tenn. 420; American Water Works Co. v. State (1895), 46 Neb. 194; State v. Butte Water Co. (1896), 18 Mont. 199.

Purposes

def carp,

PRICE v. RIVERSIDE LAND & IRRIGATION CO.

56 Cal. 431. 1880.1

MCKINSTRY, J. The purposes for which defendant was incorporated, as set forth in its articles, were: "To buy, own, occupy, improve, and sell or otherwise dispose of any lands and real estate in the State of California, and any personal property; to acquire and hold any water rights and privileges, and to use and dispose of the same; to conduct and maintain ditches and canals, and all easements and rights appertaining thereto, for the purpose of taking and conveying water for irrigation, milling, manufacturing, or other purposes; to make, purchase, maintain, hold, and use all dams, reservoirs, ditches, sluices, canals, aqueducts, and structures connected therewith; to furnish, sell, give, and supply water to any person or corporation, for irrigation, mechanical or other purposes; to make improvements, borrow money, and transact any and all business and things connected with the business of the corporation, or related thereto."

It is not necessary to inquire whether a single corporation can be formed under more than one of the statutes, or can be clothed with the powers and franchises conferred upon two or more of the separate classes of corporations such as may be created under

"The appellee is a corporation authorized by the legislature to exercise the right of eminent domain (Acts 1889, p. 22) and licensed by the city of Indianapolis to lay pipes through its streets and alleys for the transportation and distribution of natural gas to its customers. These rights, which involve an element of sovereignty, and which can exist only by grant from the public, are rooted in the principle that their exercise will bestow a benefit upon that part of the public, in whose behalf the grant is made, and the benefit reserved by the citizens is the adequate consideration for the right and convenience surrendered by them. The grant thus resting upon a public and reciprocal relation, imposes upon the appellee the legal obligation to serve all members of the public contributing to its asserted right, impartially. State ex rel. Wood v. Consumers' Gas Co. (1901), 157 Ind. 345, 351.

Other instructive cases on this subject of the duty of gas companies arising out of their exercise of the power of eminent domain, or the power to use streets and highways, are the following: Williams v. Mutual Gas Co. (1884), 52 Mich. 499; Portland Nat. Gas & Oil Co. v. State (1893), 135 Ind. 54; Coy v. Indianapolis Gas Co. (1897), 146 Ind. 655; Public Service Corporation v. American Lighting Co. (1904), 67 N. J. Eq. 122: Owensboro Gaslight Co. v. Hildebrand (Ky., 1897), 42 S. W. 351; Nairin v. Kentucky Heating Co. (Ky., 1900), 86 S. W. 676; Charleston Natural Gas Co. v Lowe (1901), 52 W. Va. 662, 671.

Electric light cases: Jones v. North Georgia El. Co. (1906), 125 Ga. 618; Cincinnati H. & D. R. R. Co. v. Village of Bowling Green (1879), 57 Oh. St. 366.

Supply of heat: State v. Marion L. & H. Co. (Ind., 1910), 92 N. E. 731. 1 Arguments of counsel and part of the opinion are omitted.- ED.

different laws. It is quite certain that defendant cannot escape the performance of a public duty which it assumed on its attempted incorporation as a water company by the assertion of a right, as another sort of corporation, to apply all the water to its own uses, or to those of its grantees. So far as the appropriation, purchase, or condemnation as to a public use of waters for irrigation purposes, as also their distribution for rates or tolls, is concerned, defendant cannot deny that it is a "canal" company. Each person entitled to water, on the theory that such companies are charged with the duty of disposing of it for proper compensation, is entitled to treat with defendant as if it had been organized exclusively under the Act of May 14, 1862, "An act to authorize the incorporation of canal companies and the construction of canals." (Stats. 1862, p. 540.) The rights and privileges which may be claimed and exercised by defendant with respect to water are derived from that act. With reference to such rights and privileges, and their corresponding obligations, the defendant is at least a corporation de facto; it cannot successfully assert the one and disregard the other. Every corporation deriving its being from the act above cited has impressed upon it a public trust the duty of furnishing water, if water it has, to all those who come within the class or community for whose alleged benefit it has been created. Every such corporation may exercise, on behalf of the public, the power of eminent domain; and no man nor company of men, incorporated or otherwise, can take the property of a citizen for his or their own exclusive benefit. So plain a proposition cannot require elaboration. The power-in its nature a public power and the public duty are correlative. The duty exists without any express statutory words imposing it wherever the public use appears, nor is it necessary, as the case is presented, to deny that a corporation may be formed to furnish with water, for purposes of irrigation, a particular community, or even a particular territory, provided the territory is not in the exclusive occupation of the corporation itself. This defendant was organized "to furnish, sell, give, or supply water to any person or corporation, for irrigation, mechanical or other purposes." Even assuming that the duty imposed on defendant by its articles of incorporation, and the law under which it was created, could be limited by a transfer to it from the Southern California Colony Association of its "rights, franchises, and privileges," the last-named corporation was organized to furnish, &c., water to people of the town and colony mentioned in the complaint, " and others" in the townships specifically

2

3.

set forth, for irrigation and other purposes. The plaintiff's land 4

is a portion of one of the townships named in the complaint, and

J

Diety.