such competition, a right to do so should not have been left to argument or implication, but made certain by the terms of the contract." The weight of authority and the better considered cases, however, hold that the construction and operation of a competing plant even for the sole purpose of supplying the public corporation itself or rendering a certain service free to the public, is regarded an impairment of the contract obligation.1238 A leading 1238 City of Walla Walla v. Walla Walla Water Co., 172 U. S. 1; Southwest Missouri Light Co. v. City of Joplin, 101 Fed. 23. Where a city granted the right to a prirate corporation to supply light for public purposes and to private consumers for a period of twenty years, held there was an implied contract made by it through the acceptance of the ordinance granting the right that the city would not itself enter into competition with the grantee in supplying light to private consumers during the term of the grant and the private corporation is entitled to an injunction against such competition as the only adequate remedy. The court said in part: "The city of Joplin, in consideration of the benefits to be derived,' from the construction and erection of the plant by its grantees, gave them the right and privilege to its streets, etc. It compelled them to go to work within a given number of days. and to complete its works within a given time; to SO erect its poles and string its wires as to furnish the streets of the city with electric lights if the city should demand a contract therefor; it required of the company to keep and maintain a light at a given place for lighting a railroad crossing; it invited the company to put its money into this plant, and to become the owner of property in the city. Will the law permit that, as soon as it becomes strong enough to stand alone, because, perhaps, the very presence of electric lights on the streets and in its houses, furnished by this complainant, has invited population and growth and increase of its wealth, the city itself should embark in the electric light business, lay its pipes alongside of those of the complainant, and enter the field of competition in the mercantile business of selling lights, and to tax the property of the complainant to help to support this competition, and ultimately drive it from the field and destroy its investment? When it exercised its option, under the statute of 1891, to enter into a contract with some other person or corporation for a period of 20 years, it thereby as effectually declared to its grantee that it did not propose to exercise contemporaneously the power given in the first part of the statute to erect its own works, and enter upon competition with its grantees, as if it had written it in italics in the ordinance itself. What is necessarily implied need not be expressed. My conclusion in this case is based largely upon the peculiar provisions of this statute, the object of the legislature in its grant to cities of the third class, as well as the obvious equities and justice of the case. As the complainant does not ask that the defendant shall not supply for its public use electric lights, it certainly ought not to complain that it shall be restrained from entering the field of speculation in a business venture to compete for private patronage." Aubert-Gallion Corp. v. Roy, 21 Can. Sup. Ct. 456. The construction of a free bridge by a city held to impair respondent's exclusive franchise for the construction of a toll bridge. Townsend v. Blewett, 6 Miss. (5 How.) 503; Atlantic City Water-works Co. v. Atlantic City, 39 N. J. Eq. (12 Stew.) 367; Bennett Water Co. v. Borough of Millvale, 202 Pa. 616, 51 Atl. 1098, affirming on rehearing, 200 Pa. 613, 50 Atl. 155. White v. City of Meadville, 177 Pa. 643, 35 Atl. 694, 34 L. R. A. 567. "A municipality, in its beginnings, is perhaps not financially strong, or its debt may approach the constitutional limit so closely that it cannot borrow; nevertheless, the low state of its financial condition does not render less urgent the necessity of a water supply; it can obtain it in but one way, by contract with those who have the money and are willing to invest their private capital in the construction of waterworks; the legislature knew capital would not be invested in such an enterprise if in the future it were liable to confiscation by competition with a public enterprise operated from a municipal treasury, capable of replenishment from the pocket of the taxpayer. That fact suggested clause 7 of the corporation act (which conferred the power to buy); the municipality will not be forever poor; the time will come when it will be of financial ability to own and operate its own works; the very fact of having a supply of water on an investment of private capital, has tended to stimulate its growth, and to largely appreciate the value of taxable property. * Both the contracting parties must be conclusively presumed to have had in view the law which empowered them to contract, and which be came part of the contract. At the end of 20 years the defendants have a right to take the works at a price fixed by the law, and that is one of computation. True, as to the city, the taking of the works is only permissive." Metzger v. Borough of Beaver Falls, 178 Pa. 1, 35 Atl. 1134. "The legislature never did intend to commit the duty of supplying water to a municipality to two different agencies, both in operation at the same time. The borough had authority to provide a supply of water for the use of the inhabitants.' This supply was provided by the Union Water Company, subject to such regulations in regard to streets, roads and grades as the borough imposed. The borough did not attempt to construct works until years after the water company had laid its mains, and the public had been served. The rights of the water company vested by consent of the municipality and its contract to supply water for public purposes. After twenty years the borough has power to purchase the works at a price not exhorbitant." ** * Welsh v. Beaver Falls Borough, 186 Pa. 578, 40 Atl. 784. "When a contract is made with a private water company, authorized usually, case 19 decided by the Supreme Court of the United States said in maintaining the principle just stated: "There was no attempt made to create a monopoly by granting an exclusive right to this company, and the agreement that the city would not erect waterworks of its own was accompanied, in section 8 of the contract, with a reservation of a right to take, condemn and pay for the waterworks of the company at any time during the existence of the contract. Taking sections 7 and 8 together, they amount simply to this: That if the city should desire to establish waterworks of its own it would do so by condemning the property of the company and making such changes in its plant or such additions thereto as it might deem desirable for the better supply of its inhabitants; but that it would not enter into a direct competition with the company during the life of the contract. As such competition would be almost necessarily ruinous to the company, it was little more than an agreement that the city would carry out the contract in good faith. An agreement of this kind was a natural incident to the main purpose of the contract, to the power given to the city by its charter to provide a sufficient supply of water, and to grant the right to use the streets of the city for the purpose of laying water pipes to any person or association of persons for a term not exceeding twenty-five years. In only to build its works and maintain its plant at one place, it would be grossly inequitable to hold that the municipality, after inviting the construction of such works, and contracting with the company for the water supply, could at any time thereafter destroy them by constructing its own works. To authorize such municipal action the statutory right must be explicit. It will not be implied from doubtful language." Wilson v. Rochester Borough, 180 Pa. 509, 38 Atl. 136; Tyrone Gas & Water Co. v. Tyrone Borough, 195 Pa. 566, 46 Atl. 134; Troy Water Co. v. Borough of Troy, 200 Pa. 453 50 Atl. 259. A borough under Borough Act of April 3rd, 1851, having elected to contract with a company for a water supply has exhausted its power and cannot in a failure to furnish an adequate supply, erect a plant of its own. Victoria County V. Victoria Bridge Co., 68 Tex. 62, 4 S. W. 140. A license to construct a toll bridge under Tex. Act of April 23, 1874, (p. 139, § 79) which forbids the establishment of another toll bridge or toll ferry on the same stream within six miles is not a contract that can be impaired by the construction of a free bridge by the county within the prohibited distance. 1239 City of Walla Walla v. Walla Walla Water Co., 172 U. S. 1. establishing a system of waterworks the company would necessarily incur a large expense in the construction of the power house and the laying of its pipes through the streets, and, as the life of the contract was limited to twenty-five years, it would naturally desire to protect itself from competition as far as possible, and would have a right to expect that at least the city would not itself enter into such competition. It is not to be supposed that the company would have entered upon this large undertaking in view of the possibility that, in one of the sudden changes of public opinion to which all municipalities are more or less subject, the city might resolve to enter the field itselfa field in which it undoubtedly would have become the masterand practically extinguish the rights it had already granted to the company. We think a disclaimer of this kind was within the fair intendment of the contract, and that a stipulation to that effect was such a one as the city might lawfully make as an incident of the principal undertaking." The supplying of water, light or a similar service involves the construction, ordinarily, of an extensive plant and the investment of large sums of money. If the profit was dependent upon its sale to private consumers alone, in the great majority of cases, the business could not be carried on except at a loss and the right to sell to the corporation is regarded equally with the right to sell private consumers as an essential part of the contract. § 929. Forfeiture or revocation of grant or license. Where an exclusive privilege or license has been granted the duty of the public corporation and its obligation is to refrain from granting similar privileges. The licensee or grantee on the other hand is obligated to comply strictly with the terms of the grant not only in the construction and maintenance of its plant but also, and especially, this is true in the case of a supply of water and light, in furnishing a commodity at a designated pressure or that reaches a certain standard of purity or quality.1241 1240 1240 City of Greenville v. Greenville Water Co., 125 Ala. 625, 27 So. 764; Grand Junction Water Co. v. City of Grand Junction, 14 Colo. App. 424, 60 Pac. 196; Wilson v. City of Charlotte, 108 N. C. 121, 12 1241 City of Winfield v. Winfield Water Co., 51 Kan. 70, 32 Pac. 663; Bennett Water Co. v. Borough of If the licensee persistently fails to furnish an adequate supply of pure, wholesome water, for example, this may be the occasion for a refusal to pay charges,1242 forfeiture or revocation of the rights granted by the license or under the contract.1243 The existence of conditions or circumstances, however, which are sufficient to warrant this action, is a question for judicial determination unless by the terms of the grant or license the arbitrary right is given to the public authorities. Where the forfeiture of a license or privilege is claimed because of broken conditions, the rule almost universally obtains that a substantial compliance, especially in respect to minor details or trivial matters, is all that is necessary. 1244 Where the parties have in good faith given and accepted a license or privilege, exclusive or otherwise in its character, and Millvale, 202 Pa. 616, 51 Atl. 1098, affirming on rehearing 200 Pa. 613, 50 Atl. 155; Borough of Du Bois v. Du Bois City Water Co., 176 Pa. 430, 25 Atl. 248, 34 L. R. A. 92; Green v. Ashland Water Co., 101 Wis. 258, 77 N. W. 722, 43 L. R. A. 117. Passing upon the responsibility of a water company is no implied warrantor of the purity of the water distributed by it. See, as to the same, Britton v. Green Bay & Ft. H. Water-works Co., 81 Wis. 48, 51 N. W. 84; City of Wilkesbarre v. Spring Brook Water Supply Co., 4 Lack. Leg. N. (Pa.) 367. There is no obligation to furnish water that is chemically pure but only that which is reasonably pure and wholesome. See, also, §§ 469 and 470, ante. 1242 City of Kankakee v. Kankakee Water Co., 38 Ill. App. 620; Burlington Water-works Co. v. City of Burlington, 43 Kan. 725, 23 Pac. 1068. A city may be estopped from elaiming a broken condition in this respect by an acceptance and use of water. State Trust Co. of New York v. City of Duluth, 70 Minn. 257, 73 N. W. 249. The fact that a water company has failed to furnish private consumers according to the terms of its grant is no ground for a refusal on the part of the city to pay the rental of fire hydrants which have been amply supplied. Brymer v. Butler Water Co., 172 Pa. 489, 33 Atl. 707. But see Wilson v. City of Charlotte, 108 N. C. 121, 12 S. E. 846. 1243 State v. Capitol City Water Co., 102 Ala. 231, 14 So. 652; Capital City Water Co. v. State, 105 Ala. 406, 18 So. 62, 29 L. R. A. 743; State v. City of Philipsburg, 23 Mont. 16, 57 Pac. 405; Palestine Water & Power Co. v. City of Palestine, 91 Tex. 540, 44 S. W. 814; 40 L. R. A. 203, Id. (Tex. Civ. App.) 41 S. W. 659. But see Cherryvale, Water Co. v. City of Cherryvale, 65 Kan. 219, 69 Pac. 176. 1244 Cunningham v. City of Cleveland (C. C. A.) 98 Fed. 657; State v. City of Crete, 32 Neb. 568, 49 N. W. 272; City of Elmira v. Maple Ave. R. Co., 51 Hun, 638, 4 N. Y. Supp. 943. |