als are of just as much use and as valuable to the company as its mains in proportion to the amount of water to be delivered through such laterals as compared with that delivered through the main. The only difference whatever is in the extent of the service. The capacity of a main is ordinarily such that it will supply a large number of consumers along the street from the one main. The capacity of a lateral is ordinarily such that it will only supply one or two consumers. The relative value to the company of the main and laterals is measured by the extent of the service from the two. The necessity, however, for one is just as great as for the other. Without a main none of the residents along a street can be supplied. Without a lateral the individual consumer cannot be supplied. The law of ownership is the same in the one case as the other, and the right of property and control is the same in each instance. Water companies maintain waterworks for the purpose of collecting rates and tolls. They operate them for gain. In order to collect tolls, they must deliver water. The consumer, on the other hand, pays his money for service. Unless he is served, there is nothing for which he may be called upon to pay.

We are aware that some courts have held that the consumer may be required to pay the expenses of "service connections," as it is sometimes called, or, rather, for laterals extending from the curb line to the main. So far as we have been able to examine, however, these decisions are based upon express statutes. There is a line of decisions to that effect in Wisconsin. The case of Gleason v. Waukesha County, 103 Wis. 225, 79 N. W. 249, is a leading authority on this point, and holds that the expense of laying water pipes from the curb line to connect with the main may be properly assessed against the property of the abutting owner, but this is based upon the express provision of the Wisconsin statute authorizing the levying of assessments against abutting property owners for such purposes "whenever the council shall order the paving or re-paving of any street in which water, gas mains and sewer or either of them shall have been previously laid or constructed." In that case it was claimed that the statute was unconstitutional, in that it authorized a taking of property without due process of law. The court upheld the statute on the ground that the laying of the gas and water pipes was an improvement to the property of the abutting owners, and that it conferred a benefit. We know of no case, however, that has held to such a rule in the absence of a statute or ordinance authorizing and providing for levying an assessment for such purposes.

2 Compare State v. Hillyard Water Co. (1908), 49 Wash. 232. See State v. Seattle Lighting Co. (1910), 60 Wash. 81; Note, 16 Columbia L. Rev. 613.

CHAPTER IV.

RATES.

Section 1.

RATES FIXED BY THE ONE ENGAGED IN PUBLIC SERVICE.

INTERNATIONAL BRIDGE CO. v. CANADA SOUTHERN RAILWAY CO.

7 Ontario App. 226. 1882.1

SPRAGGE, C. J. The suit of the bridge company is for the recovery of tolls between the 31st of October, 1877, and the 31st of December, 1878; and the decree declares that the railway company is liable to pay to the bridge company tolls for the use of the bridge at the rate settled by the directors of the bridge company, namely: And the decree then sets out the rates, which it declares the railway company liable to pay; and refers it to the Master to take an account of the amount due in respect of such user of the bridge from the earlier to the later of the above dates, having regard to the declaration contained in the decree, with interest; and orders payment of the amount to be found due by the Master. The decree contains no declaration or order in respect of tolls accruing due after the later of the above dates. It is no res judicata as to anything subsequent to 31st December, 1878; and is not in any shape binding upon the railway company as to anything subsequent to that date.

In the suit in which the railway company are plaintiffs and the bridge company defendants, the same points are raised as in this suit, and the two were argued together.

Mr. Crooks conceded that it was incident to the corporate powers of the bridge company to require payment of tolls from railway companies for the user of the bridge, and to fix the amount of tolls to be paid for such user. . .

But Mr. Crooks, while conceding to the bridge company the possession of power to fix tolls, contends that this power is quali1 Part of the opinion is omitted.- ED.

fied by the implied condition, that the tolls fixed must be reasonable; and the ground upon which he bases this contention, is that the franchise of the company, and the structure built and used under and in pursuance of their franchise, are publici juris; and Mr. Crooks cites high authority for his position. He refers among other authorities to Lord Hale's treatise De Jure Maris; and the treatise of the same learned writer De Portibus Maris, to Mr. Justice Strong's observations upon the nature of a franchise and structure of a similar character in The Attorney-General v. The Niagara Falls Suspension Bridge Company, 20 Gr. 34, 490; to Allnut v. Inglis, 12 East 527, the London Docks wine case, and which is referred to in the learned and elaborate judgment of C. J. Waite in the case of Munn v. Illinois, 4 Otto 113. We are also referred to the language of Mr. Justice Blackburn in the case in the Lords of the Great Western Railway Co. v. Sutton, L. R. 4 H. L. 236. The earlier portion of the learned Judge's answer to the question propounded by the House is apposite to this point.2

The question is a very interesting one; but our decision in his favour would not help Mr. Crooks in this case, unless he is able to show not only that the tolls fixed by the company must be reasonable, but that they are in fact otherwise than reasonable. . . .

The parties differ widely as to the dividend yielded by the tariff of charges. Mr. Crooks makes it (reducing the capital by the items he objects to) about 17 per cent. Mr. Cassels, on the other hand, taking the capital at two millions, makes the dividend not to exceed 8 per cent. if spread over the whole period since the completion of the bridge, or, taking the year 1878 by itself, not to exceed 10 per cent.

Reading the evidence of Mr. Gzowski, and the very interesting narrative that it contains of the obstacles and difficulties encountered in the construction of the bridge, and the skill and perseverance with which he met and surmounted them, the evidence of Mr. Brydges, who was president of the company during its construction, and until the summer of 1874, and the evidence of Mr. Hannaford, the company's engineer then and ever since, one cannot fail to see that it is impossible to predicate of this bridge an immunity from disaster. So far as skilful and conscientious work

2 In this case MR. JUSTICE BLACKBURN says in part: "The obligation which the common law imposed upon him [a common carrier] was to accept and carry all goods delivered to him for carriage according to his profession (unless he has some reasonable excuse for not doing so) on being paid a reasonable compensation for so doing; and if the carrier refused to accept such goods, an action lay against him for so refusing; and if the customer in order to induce the carrier to perform his duty, paid, under protest, a larger sum than was reasonable, he might recover back the surplus beyond what the carrier was entitled to receive, in an action for money had and received as being money extorted from him."

2

could give it pcrmanence, no one can doubt that it has it; but Mr. Brydges says that no other bridge that he had seen, compared with this one in point of danger and risk. One of my learned brothers referred to the Tay bridge, which, since Mr. Brydges gave his evidence, has been swept away. It was regarded as a monument of engineering skill, but its destruction has shewn that the elements are more powerful than any work of man, and the International bridge is certainly exposed to not less danger than was the bridge across the Tay.

To speak of six per cent. upon capital laid out in such an enterprise, is most unreasonable. It is not necessary to say what we should think reasonable. But assuming it to be competent to the Courts to say when the point of unreasonableness has been reached, and to relieve against overcharge; we are unable to say that in this case that point was reached during the period with which we have to deal in this case.

In my opinion, the decree is right. It may be that the railway company failing in the principal object of their bill, may not care to take the reference which the decree gives them.3

3 When the case was affirmed in the House of Lords, sub nom. Canada Southern Railway Co. v. International Bridge Co. (1883), 8 App. Cas. 723, THE LORD CHANCELLOR (EARL OF SELBORNE) said with regard to the rates: "It certainly appears to their Lordships that the principle must be, when reasonableness comes in question, not what profit it may be reasonable for a company to make but what it is reasonable to charge to the person who is charged. That is the only thing he is concerned with. They do not say that the case may not be imagined of the results to a company being so enormously disproportionate to the money laid out upon the undertaking as to make that of itself possibly some evidence that the charge is unreasonable, with reference to the person against whom it is charged. But that is merely imaginary. Here we have got a perfectly reasonable scale of charges in everything which is to be regarded as material to the person against whom the charge is made. One of their Lordships asked Counsel at the bar to point out which of these charges were unreasonable. It was not found possible to do so. In point of fact, every one of them seems to be, when examined with reference to the service rendered and the benefit to the person receiving that service, perfectly unexceptionable, according to any standard of reasonableness which can be suggested. That being so, it seems to their Lordships that it would be a very extraordinary thing indeed, unless the Legislature had expressly said so, to hold that the persons using the bridge could claim a right to take the whole accounts of the company, to dissect their capital account, and to dissect their income account, to allow this item and disallow that, and, after manipulating the accounts in their own way, to ask a Court to say that the persons who have projected such an undertaking as this, who have encountered all the original risks of executing it, who are still subject to the risks which from natural and other causes every such undertaking is subject to, and who may possibly, as in the case alluded to by the learned Judge in the Court below, the case of the Tay Bridge. have the whole thing swept away in a moment, are to be regarded as making unreasonable charges, not because it is otherwise than fair for the railway company using the bridge to pay those charges, but because the bridge company gets a dividend which is alleged to amount, at the utmost, to 15 per cent. Their Lordships can hardly characterise that argument as anything less than preposterous."

TIFT et al. v. SOUTHERN RAILWAY CO. et al.

10 I. C. C. R. 548. 1905.1

ON June 22, 1903, the defendant railroads put into effect an advance of 2 cents per 100 pounds on lumber. The plaintiffs prayed that the defendants be ordered to cease from enforcing the advance in rates, and for other relief.

CLEMENTS, Commissioner. . . . The defendants do not attempt to justify the advance on the ground that the previous rate was unremunerative. The justifications set up are consistent with remunerativeness of that rate. In their answer they allege, among other things, that, if the advance is not allowed, "the result will be to prevent the respondents and other railroads in the South from sharing to any extent whatever in the phenomenal prosperity of the business in the regular grades of lumber.”

The lumber business, it is true, has grown from its inception, but the proof does not show that for the two or three years preceding the advance the prices of the mill products had materially increased or that the profits realized on the business were phenomenally large. (Finding 8.) However that may be, it is clear that, if a rate on an article of traffic is already remunerative, the increased prosperity of the business of manufacturing that article is no ground for an advance of the rate. The claim to the contrary on the part of the carriers is based upon the erroneous assumption, so prevalent among traffic managers that a rate may be made high as "the traffic will bear." On this point we quote what was said by us in the case of The Central Yellow Pine Association v. Illinois Central Railroad Company, et al. (ante, 561).

"The test of the reasonableness of a rate is not the amount of the profit in the business of a shipper or manufacturer, but whether the rate yields a reasonable compensation for the services rendered. If the prosperity of the manufacturer is to have a controlling influence, this would justify a higher rate on the traffic of the prosperous manufacturer than on that of one less prosperous. The right to participate in the prosperity of a shipper by raising rates is simply a license to the carrier to appropriate that prosperity, or in other words, to transfer the shipper's legitimate profit in his business from the shipper to the carrier."

The carriers necessarily and justly participate in the increased prosperity of their patrons in the resultant enlargement of their own business. This appears to be the case with these defendants

1 The statement of facts is omitted, and a short statement of the point in controversy is substituted. Part of the opinion is also omitted.- ED.