Bly v. White Deer Mountain Water Co.

Opinion by

Mr. Justice Mestrezat,

David. Bly, the plaintiff, is the owner of a gristmill, dam and water power located on White Deer creek, in Union county, Pennsylvania. He filed a bill in this case in the court below for an injunction against the White Deer Mountain Water Company, the White Deer Creek Water Supply Company and James I. Higbee, trading as the Higbee Construction Company, to restrain them from interfering with his riparian and other rights in the manner hereinafter stated.

The bill was filed October 26, 1899, and avers that the White Deer Mountain Water Company was incorporated September 27, 1899, under the act of April 29, 1874, and its supplements for the purpose of (quoting from its charter) “ supplying water to the public in the township of White Deer, Union county, state of Pennsylvania, and to such persons, partnerships and associations residing in or adjacent thereto as may desire the same; ” that the White Deer Creek Water Supply Company was incorporated under the same statutory authority, “ for the purpose of the storage, transmission, transportation and supply of water for commercial, manufacturing and other purposes in Kelly township, Union county; ” that the said two first mentioned defendants, or one of them, are proceeding to build across the said White Deer creek a dam and a reservoir to hold the waters of said creek and therefrom to divert and take away the said water and to supply the same to the public in said townships of White Deer and Kelly, in said county, and in other municipalities, boroughs and townships in this commonwealth, and to that end are proceeding to dig ditches and trenches and therein to lay mains and pipes for the transmission of said water from the said dam and reservoir to the said municipalities, boroughs and townships ; in the construction of said reservoir and dam and in digging of said ditches and trenches and laying of said mains and pipes the said James I. Higbee, trading as the Higbee Construction Company, is the contractor for the other said defendants, or one of them; that the defendants, or some of them, have threatened to dig ditches across the plaintiff’s mill race and property, and have already entered thereon for that purpose, to his irreparable injury and damage; that neither the said White Deer Mountain Water Company, nor the White Deer Creek Water Supply Company has any power, authority or right to supply water to the public outside of the said townships of White Deer and Kelly, in said Union county; that neither of the defendants has tendered or secured compensation to the plaintiff for the injuries thus done and threatened to be done to his private property. The bill further avers that said dam and reservoir will take the waters of White Deer creek at a point above the plaintiff’s property and above his dam and mill race, whereby his water power will be destroyed and irreparable injury will be done to him and his property. The bill contains additional averments but those recited raise the questions for decision and they are substantially admitted as averred, except that the defendants deny that their action will cause the plaintiff irreparable injury and that defendants have no authority to supply water outside of the townships of White Deer and Kelly. The bill prays, inter alia, for an injunction to restrain the defendants from taking the waters of White Deer creek for the purpose of supplying the same to the public in any municipality, borough or township other than the townships of White Deer and Kelly in Union county; and also to restrain them from entering upon the plaintiff’s premises and digging ditches and laying pipes therein until compensation therefor has been secured him. A preliminary injunction was awarded against the defendants.

At the hearing it was developed that the White Deer Mountain Water Company intended to supply the water to be taken from White Deer creek to the inhabitants of Watsontown, Northumberland county, separated from White Deer township, Union county, by the Susquehanna river, and also to supply the same in the borough of Lewisburg, in Union county, adjacent to Kelly township, but not adjacent to White Deer township, the former township lying between the latter township and Lewisburg. The present supply of water is obtained by the defendant companies from White Deer creek below plaintiff’s premises. It further appears that the day after the writ in this case issued, tbe White Deer Mountain Water Company tendered a bond to the plaintiff which was refused, and that the day thereafter, the bond, with a petition for its approval, was filed in court. Tlie bond was not approved by the court until November 17, 1899, on which day an additional bond from the same company to the plaintiff was also approved. No bond to the plaintiff was tendered or filed for approval by the White Deer Creek Water Supply Company or by the Higbee Construction Company, the other two defendants.

From this statement of the facts, it is apparent that when this bill was filed, on October 26, 1899, neither of the defendant companies had the right to appropriate the waters of White Deer creek at the point they were constructing their dam, and they were not justified in entering upon plaintiff’s premises to dig their ditches and to lay their water mains. Upon the filing of his bill, therefore, the plaintiff was entitled to an injunction, to he continued until the defendants satisfied the court that they legally had the right to appropriate the waters of White Deer creek and to enter upon his premises to lay their pipes. From the record it appears that on November 15,1899, the court below entered a decree that, upon the filing of an additional bond and the approval thereof by tbe court, the preliminary injunction should be dissolved as to all the defendants and that the plaintiff’s bill should be dismissed. This action of the court was clearly erroneous, at least as to the White Deer Creek Water Supply Company and its employees. It had not tendered or secured compensation to the plaintiff for its intended appropriation of his property and, therefore, should have been restrained by a permanent injunction. So far as tbe White Deer Creek Water Supply Company is concerned tbe bill must be reinstated and tbe injunction made permanent. The only questions, therefore, for consideration here are (1) the right of the White Deer Mountain Water Company to appropriate the waters of White Deer creek for the purpose of supplying the same to the public in any municipality, borough or township other than White Deer township, in Union county, and (2) the right of the plaintiff to have that question determined by a court of equity in a proceeding under the provisions of the act of June 19, 1871.

The first question is an important one, and requires the consideration of the general corporation act of April 29,1874, and its supplements, under -which the defendant corporation holds its corporate rights. The charter must be supported by this legislation or it falls. The certificate of incorporation as well as the letters patent issued to a corporation by the governor must conform to, and comply with the statutory requisites. There can be no authority or power conferred upon a corporation by the certificate or letters patent, except such as are clearly given by, or necessarily implied, from the language of the statute under which they are granted. Equally true is it that the rights and privileges of a corporation must be written in the charter or they do not exist. When a corporate body asserts its right to do a thing or to deprive an individual of his property, even for an adequate compensation, it must be able to show that the right is conferred by the plain and unequivocal language of its charter. The language of Chief Justice Black in Commonwealth v. Erie, etc., Railroad Company, 27 Pa. 351, may be appropriately quoted in this connection: “ That which a company is authorized to do by its act of incorporation,” says the chief justice, “ it may do; beyond that all its acts are illegal. And the power must be given in plain words or by necessary implication. All powers not given in this direct and unmistakable manner are withheld. ... If you assert that a corporation has certain privileges, show us the words of the legislature conferring them. Failing in this, you must give up your claim, for nothing else can possibly avail you. A doubtful charter does not exist; because whatever is doubtful, is decisively certain against the corporation.”

Under the act of 1874, corporations are divided into two classes: the first class, or those not for profit, the second class, or those for profit. The defendant is a corporation of the second class. The ninth paragraph of the 2d section of the act authorized the incorporation of companies for “ the supply of water to the public.” The eighteenth paragraph of the same section provides for the formation of companies for, inter alia, “the storage and transportation of water, with the right to take rivulets and land, and erect reservoirs for holding water.” The second clause of tire 34th section of the act provides that “ where such company shall be incorporated for the supply of water, they shall have power to provide, erect and maintain all works and machinery necessary or proper lor raising and introducing into the town, borough, city or district where they may be located, a sufficient supply of pure water,” and for that purpose they were authorized, inter alia, to occupy, ditch and lay pipes through streets, etc., “ subject to such regulations in regard to streets, roads, lanes and other highways as is provided in the foregoing section for gas companies.” The 41st section of the act provides the manner in which damages for property taken by the water company shall be determined when the parties cannot agree upon the compensation for the damage done. The 3d section of the act provides the mode of incorporation and requires the charter to set forth, inter alia, “ the purposes for which it is formed,” and “ the place or places where its business is to be transacted.” A supplement to the act of 1874 was approved May 16, 1889, and it amended the ninth paragraph of the 2d section of the act so as to authorize the incorporation of companies for “ the supply of water to the public,” or “ the supply, storage or transportation of water and water power for commercial and manufacturing purposes.” Clause two of the 34th section of the act of 1874 was also amended by the act of 1889, so as to provide, inter alia, that such companies “shall have power to provide, erect and maintain all works and machinery or power for raising and introducing into the town, borough, city or district where they may be located, a sufficient supply of pure water, with water and water power as aforesaid.” The act of 1889 did not extend or change the territorial limits in which water companies were authorized to supply water under the act of 1874.

An examination of the Act of July 2, 1895, P. L. 432, shows that the authority and powers granted by the act are confined to companies incorporated for “ the supply, storage or transportation of water and water power for commercial and manufacturing purposes,” and that it does not extend the territorial limits in which such companies may exercise their rights and privileges, and does not apply to, or confer any powers on, companies incorporated for “the supply of water to the public.” It, therefore, cannot affect the rights of either party to this controversy.

It is contended by the defendant that as to water companies organized under the act of April 29,1874 and its supplements, there is no territorial limitation or restriction on their right to supply water to the public, and that the defendant company has authority to supply water not only to the public in White Deer township, but also to “ such persons, partnerships and associations residing in and adjacent thereto as may desire the same.” In support of this contention and to show that such was the intention of the legislature in the enactments under consideration the defendant’s counsel cites the fact that water companies have the right of eminent domain; that an individual has the right to lay pipes through the streets of a borough and supply its inhabitants with water notwithstanding the incorporation of a company for this purpose with an exclusive franchise; and that the 2d section of the act of May 16, 1889 authorizes a water company to appropriate “ so much of the water from the rivers, creeks, canal water-rights and easements, within or without the limits of the city, borough or place in which said company may by its charter be located, as may be necessary for its purposes.” It is further maintained that the defendant’s contention is supported by the construction put upon the act of 1874 and its supplements by the state department which, it is claimed, does not impose any territorial restrictions in the charters issued by the department.

The learned court below, in its opinion, considered the case as against both of the defendant companies and held that “ if the charter rights of the companies are so clearly restricted as to prohibit their exercising the right of eminent domain conferred by the charter, then the plaintiff may perhaps have some right to contest the act of the defendants under the provisions of the Act of June 19, 1871, P. L. 1860. If not so limited by the charter, then the plaintiff has no standing in this proceeding to contest the charter rights of the defendants.” In his argument to sustain the position that the defendant has the right to supply water to the public outside of White Deer township, the learned judge quotes, as applicable to water companies, that part of section 34 of the act of April 29, 1874, by which a gas company is authorized to supply gas light to the district where it is located, “and such persons, partnerships and corporations residing therein, or adjacent thereto as may desire the same.” He also cites the Act of July 2, 1895, P. L. 432, in support of his position. He further holds that the plaintiff “ has no standing to raise the question in this case, and the provisions of the act of 1871 do not apply.”

As we have said, the contention here is between the plaintiff and the White Deer Mountain Water Company. The failure of the supply company to give the bond required by the. statute eliminated it from the case and prevents the water company from defending itself through any charter rights which the supply company may possess.

Section 84 of the act of 1874 defines and limits the powers to be granted to water and gas companies. But it is done in two separate clauses of the section, and the rights and privileges conferred upon each must be ascertained from the clause in which they are granted. The first clause is devoted to gas companies and companies organized to supply heat and light to the public, and therein is granted to such companies the authority to supply with gas light, the borough town, city or district where they may be located, “ and such persons, partnerships and corporations residing therein, or adjacent thereto, as may desire the same.” The powers of a water company are conferred by the second clause, but the phrase just quoted or no similar expression appears in the clause. The inclusion of the phrase in the case of gas companies justifies the inference that its omission in the case of water companies was intentional. Hence it must be presumed that the legislature did not intend to confer such authority on water companies.

The act of 1874 authorized the formation of water companies for the purpose of supplying water to the public. But this was not the extent of the legislative enactment. The act went further and defined the powers of such companies so explicitly that they need and should not be misapprehended. The act provides that water companies incorporated under its provisions shall have the power to supply water in “ the town, borough, city or district where they may be located.” This language clearly and expressly limits the authority of a water company to the municipal or quasi-municipal division in which it is located. It can exercise its corporate functions in only a single territorial division, and that division is where it “may be located.” Such is the plainly written command of the statute, and it will permit of no other reasonable construction. The word “ district,” used in the act, having no qualifying adjective to indicate its extent or meaning, is not to be construed as extending tbe territorial limits in which the corporation may supply water beyond those given it by the prior words used in that connection. It may embrace a township or a part of one of the political divisions mentioned immediately preceding it, but not two or more of them.

That the right of eminent domain is conferred on water companies does not, as argued, enlarge the territory in which they may supply water, or show a legislative intention to grant them additional territory in which to exercise their corporate rights. It, in no way, affects or determines the territorial limitations of such companies. That right must be exercised for the purpose of enabling the company to supply water to the public within its charter limits. For the purpose of supplying water beyond those limits, the authority thus granted cannot be invoked to assist water companies in the appropriation of water to the injury of riparian rights. Nor is the defendant’s position strengthened by the fact that under the 2d section of the act of 1889 a water company has the right to appropriate water for its use outside the limits of the place where it is located. On the contrary it is a significant fact that tends strongly to support the opposite theory. That the right thus acquired needed express legislation to grant it affords a strong and convincing reason for withhplding the authority to furnish water outside the limits of the place where the company is located when it is not conferred by direct and positive terms in the statute. The same may be said of the provision in the second clause of the 34th section of the act of 1874 making streets, etc., subject to the regulations provided in the first clause of the section for gas companies. It shows a legislative intention not to extend the rights and. powers of gas companies to water companies, except where it is expressly so stated.

It is asserted by both parties to this controversy and used as an argument by them to support their respective positions, that the uniform ruling of the state department in issuing charters supports their contention. The opinions of that department have been cited and they seem to sustain the contention of both litigants. There is one logical conclusion to be drawn from this conflict of opinion and that is that the language of the act under which the charters are granted does not plainly and unequivocally confer the right on such corporations to supply water outside the place where they are located. This doubt of the right of the corporation to exercise such authority is of itself sufficient to warrant the denial of the right. “ In the construction of a charter,” says Chief Justice Black in Pennsylvania Railroad Company v. Canal Commissioners, 21 Pa. 22, “ to be in doubt is to be resolved; and every resolution which springs from doubt is against the corporation. This is the rule sustained by all the courts in this country and in England. No other has ever received the sanction of any authority to which we owe much deference. This court has asserted it times without number. ... If the usefulness of the company would be increased by extending them, let the legislature see to it. But let it be remembered that nothing but plain English words will do it.”

As we have already said the supplemental act of July 2,1895, does not strengthen the defendant’s contention or affect the question now under consideration. It empowers corporations incorporated for “the supply, storage and transportation of water and water power for commercial and manufacturing purposes; ” to determine the character, design and construction of the works and the use to be made of the water and water power of such companies in order that the same may be supplied to the public to the best advantage; to locate, maintain and operate their works, machinery, dams, etc., under the act of 1874 and its supplements ; to contract for the construction and maintenance of their works, and to mortgage their property to secure the indebtedness incurred in the construction of their works, or as a guaranty for the performance of their contracts. It will be observed that this act does not define the territorial limits within which such companies may exercise their powers, nor in any way refer to the subject. Even, therefore, if it applied to water companies, instead of supply companies only, it would not affect the issue in this controversy.

So far, we have endeavored to ascertain and determine the powers and privileges conferred on water companies by the act of 1874, with special reference to their right to supply water to the inhabitants of the territory adjacent to the place where they are located. That right, as we have seen, was not given by the act. Has such authority been conferred by subsequent legislation ? Our attention has not been called to any supplemental legislation that enlarges or extends the limits within which a water company may supply water beyond those fixed by the act of 1874. We have already referred to the act of 1889, and it is seen that it does not confer authority on water companies to supply water in territory adjacent to the place where they are located. Neither does the act of 1895 authorize water companies to exercise such rights.

It will hardly be maintained that, without statutory authority, the defendant company has the right to supply water in Watsontown and Lewisburg by reason of the insertion in its certificate of incorporation of the words, “ and to such persons, partnerships and associations residing in and adjacent thereto as may desire the same.” It is the duty of the governor to examine the certificate of incorporation, “ and if he find it in proper form and within the purposes named in the second class, specified in the foregoing (2d) section, he shall approve thereof .... and direct letters patent to issue in the usual form,” and after the recording of the certificate, “ the subscribers thereto, and their associates and successors shall be a corporation for the purposes and upon the terms named in the said charter.” It is thus seen that the governor should not approve the certificate unless it is in proper form and within the purposes clearly named in the statutory authority, from which alone the corporation can acquire its powers and privileges. No other or greater powers can be conferred by the certificate than those authorized by the statute. It necessarily follows, therefore, that including in the defendant’s certificate of incorporation the language just quoted therefrom does not confer upon the corporation the power to supply water in adjacent territory.

We are of opinion that a corporation created and existing under the provisions of the act of April 29, 1874 and the supplements thereto, for the purpose of supplying water to the public, is not authorized to supply the same beyond the single territorial division in which it is located. The White Deer Moun tain Water Company, the defendant, therefore, has no authority, under its charter, to supply water to the public in any municipality, borough or township other than White Deer township, in Union county, and, in carrying out the authorized purposes of its incorporation, the company is confined to the limits of that township.

As the defendant company has no right to supply water in territory adjacent to White Deer township, it has no authority under its right of eminent domain to condemn and appropriate waters for such purposes. The right to condemn water depends upon the purpose for which the company may lawfully use it. It cannot take, by its right of eminent domain, the plaintiff’s property for a purpose for which, under its charter, it has no right to use it. The act of 1889 confers power upon the company to appropriate so much of the water of a stream within or without the place it is located, “ as may be necessary for its purposes.” But it does not grant the company the power under its right of eminent domain to condemn water for the purpose of supplying it to the public beyond the territorial limits to which its charter confines it.

The other question which invites attention and requires consideration is the right of the plaintiff to invoke the assistance of a court of equity under the Act of June 19,1871, P. L. 1360, to restrain the defendant company from illegally taking the waters of White Deer creek to the detriment of his riparian rights. It is contended by the learned counsel of the appellee and held by the court below, that he cannot appeal to that act for protection against the infringement of his rights by the defendant company.

In the fifth paragraph of the bill it is averred that the defendant is proceeding to divert and take away the waters of White Deer creek to suppty the same to the public of White Deer township, “and in other municipalities, boroughs and townships in this commonwealth.” The defendant’s answer admits the averment, but alleges that the quantity to be taken will be limited to 2,000,000 gallons per day. It is not controverted, therefore, that the defendant intends to appropriate to its use the property of the plaintiff without legal authority to do so under the franchise granted it by the commonwealth.

The act of 1871 provides “that in all proceedings in courts of law or equity of this commonwealth, in which it is alleged that the private rights of individuals .... are injured or invaded by any corporation claiming to have a right or franchise to do the act from which such injury results, it shall be the duty of the court .... to examine, inquire and ascertain whether such corporation does in fact possess the right or franchise to do the act from which such alleged injury to private rights .... results; and if such rights or franchises have not been conferred upon such corporation, such courts, if exercising equitable power shall, by injunction, at suit of the private parties .... restrain such injurious acts.” The language of the act is clear and its application to the case in hand is without difficulty. The private rights of the plaintiff in the waters of White Deer creek have been threatened, and if the water is taken by the defendant company he will be injured. The only authority claimed by the defendant to sustain its action in appropriating the water of the stream to its use is the franchise granted in its charter. The plaintiff, therefore, seeks by this proceeding “ to have the right or franchise to do the act,” claimed to be authorized by the charter of the company, examined and ascertained, “and if such rights or franchises have not been conferred upon such corporation,” he asks the'court to restrain the defendant. We deem it unnecessary to cite authorities to show that the plaintiff is entitled to the remedy he invokes.

The plaintiff is not assailing the charter of the defendant company. It is conceded that the company has authority after securing compensation to the parties entitled thereto to take the water of White Deer creek for the purpose of supplying it to the inhabitants of White Deer Creek township. This right is not denied nor sought to be abridged. But it is denied that defendant has, under the franchise granted it by the commonwealth, the right to appropriate, to the plaintiff’s special damage, the water of that stream for the purpose of supplying adjacent territory. This proceeding, therefore, was instituted by the plaintiff, who, as said in Western Pennsylvania Railroad Company’s Appeal, 104 Pa. 399, “ under the provisions of the act of 1871, has the undoubted right to call upon the defendant, to show, by its charter, that it has the power to do what it proposes to do.” .

The decree of the court below is reversed, and it is ordered, adjudged and decreed that the plaintiff’s bill be reinstated and that the preliminary injunction granted by the court restraining the defendants from the commission of the acts complained of in the plaintiff’s bill be made permanent. Costs of this appeal and in the court below to be paid by the appellees.