230 U.S. DAY, MCKENNA, HUGHES and PITNEY, JJ., dissenting.

Kentucky legislature to reserve in the municipality the authority to repeal such grants as the one here involved is not clearly manifested, at least there is reasonable room for doubt, and such doubt must be resolved in favor of the public. If the doubt be determined in favor of the company and a grant which is not clearly in perpetuity is held to be such, the effect is to tie the hands of the municipality from obtaining revenue from the use of property held by it in trust for all its people.

It is also said that the exercise of the reserved right to repeal in cases like this will have the effect to destroy contract rights, upon the strength of which large investments may have been made. But this argument overlooks the proposition that, if the grant was made subject to the right to revoke by subsequent action of the authority which made the grant, then no contract was entered between the parties beyond the control of the reserved power of the municipality, for as Mr. Justice Miller said in the Greenwood v. Freight Co. Case, under such "a provision reserving to the legislature the right to amend or repeal it must be held to be a part of the contract itself, and the subsequent exercise of the right would be in accordance with the contract, and could not, therefore, impair its obligation." So, if this limitation in fact existed, the right to repeal was inherent in the authority which made the grant, and the grantee is conclusively presumed to be aware of this limitation, and to make his investments subject to the exercise of the reserved right. Calder v. Michigan, supra. Moreover, if limited grants are to be construed into perpetuities then the control over streets for railway, telephone and other kindred enterprises of enormous value are granted to private corporations without compensation for the use of such valuable rights which belong to the municipality. Recent cases in this court have shown the great value of such privileges, and that investors are found who are willing to pay for VOL. CCXXX-6

DAY, MCKENNA, HUGHES and PITNEY, JJ., dissenting. 230 U.S.

the privilege of using the public streets for these purposes.

A single case is cited in the opinion of the court to sustain the conclusion reached upon this branch of the case, and that is Hudson Telephone Company v. Jersey City, 49 N. J. L. 303. An examination of that case shows that it did not involve the question now under consideration. There the telephone company was organized as such under the prevailing statutes of the State and had obtained on certain conditions the permission of the municipality to use the streets in accordance with a provision in the statute that the designation of the streets to be used and manner of placing poles should first be secured. An ordinance was passed, revoking the permission, although the company had complied with the conditions, and the court held that the revoking ordinance was invalid. The court noticed the power reserved in the corporation act to repeal, suspend and alter charters, and the power of the city council to repeal ordinances. The former was held to run to the legislature solely, and it was said that there was no provision in the act authorizing the municipality to revoke its permission. Of the latter the court said that the power to repeal was a general power arising from the power to pass ordinances and existed without the express charter powers, and that such general power would not sustain the rescission of an act authorized by other legislation.

A somewhat diligent search has failed to discover cases exactly in point construing a reservation of the character herein involved. The case of Lake Roland Elevated Railway Co. v. Mayor &c. of Baltimore, 77 Maryland, 352, followed and approved in United Railways v. Hayes, 92 Maryland, 490, is, however, closely analogous. In that case the city granted a franchise to the railway company permitting it to lay tracks in the streets of the city and also to erect an elevated railway in a certain street. A statute passed to con

230 U. S. DAY, MCKENNA, HUGHES and PITNEY, JJ., dissenting.

firm the action of the city with respect to that part of the ordinance granting a franchise which related to the elevated railway contained a reservation to the city of "the same power and control hereafter in reference to the enforcement, amendment or repeal of said ordinance [granting the franchise] as it has or would have in respect to any ordinance passed under its general powers." This reservation was held to authorize the repeal of the grant in question. The case upon this point meets the argument made in the opinion in this case that the right to amend, alter or repeal would have existed without the statute and cannot be held to cover the grant of franchise privileges to use the streets. Undoubtedly this right of repeal would have existed, and hence its insertion was unnecessary unless it was to have some further purpose than that the law already gave, the general power of a municipality to repeal ordinances of a legislative character. We think the intention in this case was the same as in the Maryland case, to preserve in the municipality authority over the streets in the interests of the public.

In my view the case in its present attitude comes to this: The permission to place poles and string wires in the City of Owensboro was granted under a charter which expressly reserved the right to repeal by subsequent act of the municipal legislature. In the face of this authority and presumably with knowledge of it, the company has entered upon the streets and made use of them for the purposes intended. Holding its grant subject to this superior right in the city to end it, I think the subsequent repealing ordinance was within the power of the municipality.

MR. JUSTICE MCKENNA, MR. JUSTICE HUGHES, and MR. JUSTICE PITNEY concur in this dissent.

BOISE ARTESIAN HOT AND COLD WATER CO., LIMITED, v. BOISE CITY.

BOISE CITY v. BOISE ARTESIAN HOT AND COLD WATER CO., LIMITED.

ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF IDAHO.

Nos. 573, 639. Argued May 7, 8, 1913.-Decided June 16, 1913.

Where appellants' direct appeal to this court under § 5 of the Judiciary Act of 1891 is taken on the claim that the ordinance on which the Circuit Court based its decision is in contravention of the Constitution of the United States, this court has jurisdiction to review not only the constitutional question but every other question properly arising in the case including error assigned by the other party on its cross writ for failure to allow its counterclaim under the contract. Rights acquired under an ordinance granting the right to a water company to lay and maintain pipes in the streets is a substantial property right, with all the attributes of property; and the obligation of the contract in the ordinance on which it is based is protected against impairment by the contract clause of the Constitution of the United States.

There is a presumption that investments of large amounts of capital

in a public utility enterprise will not be made on a franchise for necessary use of the streets which is a mere license revocable at will. Where there is no limitation in the general law of the State, nor in the

charter of the city, as to duration of franchises for public utilities in the streets, the grant of an easement for that purpose, not specifying a period of duration, is in perpetuity. Quare whether the limitation of fifty years in § 2710, Rev. Stat., and $2838, Rev. Codes of Idaho, on grants to corporations applies to a grant made by a municipality to an individual and afterwards assigned to a corporation.

Where there is a limitation in the law of the State of duration for which easements in streets can be granted by municipalities, an easement granted for an indefinite period continues for the statutory period. There is a distinction between a definite grant for a period longer than

the law of the State permits and an indefinite grant; while the former may be altogether void as an effort to obtain that which is illegal, the latter is simply limited in duration to the period established by law, and during that time it is protected from impairment by the contract clause of the Constitution of the United States.

The municipal ordinance of a town in Idaho imposing additional obligations on a corporation holding by assignment an easement granted by a former municipal ordinance within fifty years for use of the streets for water mains held an unconstitutional impairment of the obligation of the contract of the former ordinance.

A municipality may not object to the State relieving a grantee of franchise rights from obligations formerly imposed by a general law of the State.

Municipal corporations are mere emanations from the State, exercising such public power as the State chooses to grant.

A statutory provision that all water companies must furnish free water to the municipalities in which they are situated does not constitute a contract to which the municipalities are parties; it is within the power of the State to relieve the water companies of the obligation and permit them to furnish water at reasonable cost.

A water company under the laws of the State of Idaho is entitled to compensation for water furnished and which it is ready to furnish to the municipality, even if the report of commissioners fixing reasonable rates in pursuance of the statute has not been adopted by municipal ordinance.

A municipality, which continues to use water furnished by a water company after giving notice that it will pay no further bills for such water, is not relieved by such notice from the obligation to pay therefor according to the reasonable rates which have been fixed pursuant to statute.

THE facts, which involve the constitutionality under the contract clause of the Federal Constitution of an ordinance of Boise City, Idaho, affecting a franchise for using the streets of the city for water supply purposes and the liability of the city for water supplied to it, are stated in the opinion.

Mr. Richard H. Johnson, with whom Mr. Richard Z. Johnson was on the brief, for plaintiff in error in No. 573, and defendant in error in No. 639.