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The act of 1858, providing for the fixing of water rates by a commission was superseded by this section of the Constitution. (Spring Valley W. W. v. San Francisco, 61 Cal. 3; S. V. W. W. v. Schottler, 110 U. S. 347, 4 Sup. Ct. Rep. 48.)
A water company has the right to shut off the water from a consumer who refuses to pay for the water supplied. (Sheward v. Citi. zens' Water Co., 90 Cal. 635, 27 Pac. 439.)
Water Rates.-By this section the power to fix water rates in San Francisco is granted solely to the board of supervisors, and the mayor has no power to veto an ordinance fixing such rates. (Jacobs v. Supervisors, 100 Cal. 121, 34 Pac. 630.)
Water rates under the Constitution are required to be fixed by ordinance; and water used by the city of Oakland does not fall within the provision of its charter concerning the letting of contracts for supplies to the lowest bidder. (Contra Costa Water Co. v. Breed, 139 Cal. 432.)
The supervisors are not bound to give notice to a water company of its intention to fix water rates; but they must make a proper effort to procure all necessary information, to enable them to act intelligently and fairly in fixing the rates. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac, 910.)
The proceeding to fix water rates is not adversary, but is conducted without notice to the rate payer or water company. (San Diego Water Co. v. San Diego, 118 Cal. 556, 62 Am. St. Rep. 261, note, 50 Pac. 663.)
This section is not opposed to the United States Constitution in rot giving the water company notice. (San Diego Water Co. v. San Diego, 118 Cal. 556, 62 Am. St. Rep. 261, note, 50 Pac. 633; San Diego Land Co. v. National City, 174 U. S. 739, 19 Sup. Ct. Rep. 804.)
If the board acts arbitrarily, without investigation, or without the exercise of judgment and discretion, or fixes rates so palpably unreasonable and unjust as to amount to arbitrary action, it violates its duty and goes beyond the powers conferred upon it. (San Diego Water Co. v. San Diego, 118 Cal. 556, 50 Pac. 633.)
The question of what is a reasonable rate is a question of fact. (Redlands etc. Co. v. Redlands, 121 Cal. 312, 53 Pac. 791.)
The water company is not entitled to be reimbursed from the income derived from the rates for interest upon its indebtedness, nor for depreciation of its plant, aside from the amount requisite for its maintenance and repairs during the year. (Redlands etc. Co. v. Redlands, 121 Cal. 312, 53 Pac. 791.)
The bonded or other indebtedness of the company is not to be considered; but the fair value of the property which is necessarily used 10 furnishing the water is the basis upon which to determine the amount of revenue, which should be the same whether the works are acquired or constructed by the company with its own resources, or with money borrowed from others. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The company has no absolute right to receive a given per cent on its capital stock. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The rights of the public, as well as those of the stockholders, are to be considered; and the public cannot be subjected to unreasonable rates in order simply that stockholders may have dividends. The company has the right to receive only what, under all the circumstances, is such compensation as will be just to it and to the public. (Redlands etc. Co. v. Redlands, 121 Cal. 365, 53 Pac. 843.)
The questions of reasonableness of rates and the basis for fixing rates are discussed in San Diego etc. Co. v. Jasper, 110 Fed. 702, affirmed in 23 Sup. Ct. Rep., p. 571; San Diego etc. Co. v. National City, 174 U. S. 739, 19 Sup. Ct. Rep. 804, and in S. V. W. W. v. S. F., decided June, 1903, not yet reported.
Where an ordinance fixing rates does not show upon its face that the rates to be collected, where the amount of consumption is ascertained by a meter, are different from those collected from persons who are rated by the use to which they apply the water, it will not be held invalid because that may be the result. (Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pac. 439.)
The action of the city council in fixing rates is legislative, and it is to receive all the presumptions and sanctions which belong to acts of legislative bodies generally; and the rates must be assumed to have been so fixed as to be just both toward the rate payer and the company. (Sheward v. Citizens' Water Co., 90 Cal. 635, 27 Pac. 439.)
An ordinance fixing water rates, and providing for meter and house rates at the option of the consumer, and providing that the meter shall be supplied at the expense of the water company, is valid. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
When the constitution provides for the fixing of rates, or compensation for the use of water, it means reasonable rates and just compensation. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
The power of regulating rates is not a power of confiscation, or to take the property of the water company without just compensation; and, if the power is arbitrarily exercised, without a fair investigation, and the rates are so fixed as to render it impossible to furnish the water without loss, it is not above the control of the courts. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
If the board have fairly investigated and exercised their discretion in fixing the rates, the courts have no right to interfere on the
sole ground that, in the judgment of the court, the rates fixed are not reasonable. (Spring Valley W. W. v. San Francisco, 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910.)
The fixing of water rates is not judicial. (Spring Valley W. W. v. Bartlett, 63 Cal. 245.)
An ordinance establishing water rates, and fixing certain rates to be paid by individuals and certain rates to be paid by the city, and providing that, if the city pays its rates, the rates of the individual consumers shall be diminished twenty-five per cent is void, as the city has no power to make such condition. (San Francisco etc. Factory v. Brickwedel, 60 Cal. 166.)
Failure to Fix Rates. This provision does not authorize the court by mandamus to compel the board to fix the rates, where their action fixing them has been vetoed by the mayor. (Jacobs v. Superrisors, 100 Cal. 121, 34 Pac. 630.)
An ordinance fixing rates passed subsequently to the month of February, and prior to July 1st, when it is required to take effect, is equally valid, if passed voluntarily, as if passed under peremptory process. (Fitch v. Supervisors, 122 Cal. 285, 54 Pac. 901.)
The provision of this section authorizing the legislature to preseribe “further processes and penalties” only authorizes such processes and penalties as are within the power of the legislature, in view of other limitations of the constitution. (Fitch v. Superrisors, 122 Cal. 285, 54 Pac. 901.)
A taxpayer is not an “interested party” within the meaning of this section. (Fitch v. Supervisors, 122 Cal. 285, 54 Pac. 901.)
In view of section 20, article VI, the legislature cannot authorize the removal of a board of supervisors from office for delay in fixing water rates "at the suit of any interested party,” or in the name of any individual. (Fitch v. Supervisors, 122 Cal. 285, 54. Pac. 901.)
Where enforcement of rates is enjoined and appeal is taken, and the water company has continued to supply water pending the litigation, the city has the right to pay the water company therefor, at rates agreed upon, not exceeding those fixed by the ordinance. (Contra Costa Water Co. v. Breed, 139 Cal. 432.)
And where the city council, having general authority to provide for furnishing the city with water, received and retained the benefit of the water supply, although there was no express contract as to the price, the city is liable in assumpsit for its reasonable value, and is estopped to deny the validity of the claim, on the ground that it had not passed a lawful ordinance therefor. [Per McFarland, J., and Lorigan, J.; Beatty, C. J., dissenting; and Shaw, J., Angellotti, J., and Van Dyke, J., expressing no opinion.] (Contra Costa Water Co. v. Breed, 139 Cal. 432.)
This section does not take away the right to collect rates fixed by contract for irrigation in the absence of statute or provision regulating such rates. The act of March 5, 1885 (Stats. 1885, p. 95), does not destroy the right of contract between irrigation companies and the owners of land. It merely allows the supervisors upon proper petition to fix maximum rates, anl the power to contract within such maximum rates is still preserved, and, until the supervisors shall have acted, persons selling water are allowed to continue to collect their established and customary rates, without being re. quired to make a formal declaration, or to secure an ordinance to that effect. (Fresno Canal etc. Co. v. Park, 129 Cal. 437, 62 Pac. 87. To same effect: San Diego Flume Co. v. Souther, 90 Fed. 164; 104 Fed. 706; 112 Fed. 228; overruling San Diego etc. Co. v. Nat. City, 74 Fed. 79; Lanning v. Osbourne, 76 Fed. 319; Mandell v. San Diego etc. Co., 89 Fed. 295. And see Osborne v. San Diego etc. Co., 178 U. S. 22, 20 Sup. Ct. Rep. 860.)
RIGHT TO COLLECT RATES-HOW EXERCISED.
Sec. 2, Art. XIV. The right to collect rates or compensation for the use of water supplied to any county, city and county, or town, or the inhabitants thereof, is a franchise, and cannot be exercised except by authority of and in the manner prescribed by law.
There is no parallel provision in the Constitution of 1849. For legislation as to water rates, see section 1 of this article, ante.
S. V. W. W. v. S. F., 61 Cal. 38; S. V. W. W. v. Schottler, 62 Cal. 108; People v. Stephens, 62 Cal. 233; S. V. W. W. v. S. F., 82 Cal. 286, 16 Am. St. Rep. 116, 22 Pac. 910, 1046; San Diego Water Co. v. San Diego, 118 Cal. 579, 62 Am. St. Rep. 261, 50 Pac. 633; Fresna Canal etc. Co. v. Park, 129 Cal. 437, 62 Pac. 87.
Water Rates. The right to collect rates for water is a franchise. (Spring Valley W. W. v. Schottler, 62 Cal. 69; People v. Stephens, 62 Cal. 209.)
This section does not take away the right under the general law of the land to collect rates or compensation fixed by contract of the parties for the irrigation of lands, in the absence of a special stat. ute, or authorized provision, regulating such rates. (Fresno Canal etc. Co. v. Park, 129 Cal. 437, 62 Pac. 87.)
PROVISIONS OF THE CIVIL CODE OF CALIFORNIA RELAT.
ING TO CORPORATIONS.
Title I. General Provisions Applicable to all Corporations, $8283
V. Wagon Road Corporations, $8 512-523.
X. Savings and Loan Corporations, $8 571-583a.
XV. Gas Corporations, $$ 628-632. XVI. Land and Building Corporations, $8 639-64842. XVII. Colleges and Seminaries of Learning, 88 649-651. XVIII. Consolidation of Colleges and Institutions of Higher Educa
tion, $8 652-653.
GENERAL PROVISIONS APPLICABLE TO ALL COR
Chapter I. Formation of Corporations, $$_283-321a.
II. Corporate Stock, $$ 322-349.