A of the Circuit Court for Jefferson it the breach of a special contract beplant

Ball, 65 Iowa, 543, 22 N. W. 666; Lienkauf | this suit. Brown v. Birmingham Watery. Morris, 66 Ala. 416; Wilkinson V. works Co. 169 Ala. 230, 52 So. 915. Searcy, 76 Ala. 176; Birmingham Waterworks Co. v. Wilson, 2 Ala. App. 581, 56 So. 760; Remington v. Kirby, 120 N. C. 320, 26 S. E. 917; Walker v. Fuller, 29 Ark. 448; Gwynn v. Citizens' Teleph. Co. 69 S. C. 434, 67 L.R.A. 111, 104 Am. St. Rep. 819, 48 S. E. 460; Gerkins v. Kentucky Salt Co. 23 Ky. L. Rep. 2415, 67 S. W. 821, 22 Mor. Min. Rep. 189; Pratt v. Pond, 42 Conn. 318; Beveridge v. Rawson, 51 Ill. 504; Garrett v. Sewell, 108 Ala. 521, 18 So. 737; Snedecor v. Pope, (1) In the case of Smith v. Birmingham 143 Ala. 275, 39 So. 318. Waterworks Co. 104 Ala. 315, 16 So. 123, Messrs. A. G. Smith and E. D. Smith this court said: "The only cases in which for appellee. water furnished to the inhabitants' is not to be charged for by measurement are speci

One of the principal questions presented on this appeal is whether this court, on the first appeal, was correct in upholding the contract as valid. For this reason, as well as on account of the importance of this case, the record has been carefully examined in consultation by the full bench, and this opinion is written for the purpose of expressing the views of those members of the court who appear as concurring in the opinion.

De Graffenried, J., delivered the opin- fied in the first part of § 12, supra, and ion of the court:

This is the second appeal in this case. On the first appeal this court upheld, as valid, the contract which is the basis of to fix by agreement a less charge for an individual consumer, said: "The untenableness of this position, however, must become apparent when a moment's consideration is given to the fact that one of the primary and most important objects to be attained by rate regulation is the prevention of discrimination. It must be quite clear that to hold that the rate-fixing power goes no farther than to name an amount beyond | which a charge may not be made, leaves the utmost room for abuse by way of favoritism and discrimination within that limit. It is, in practical effect, a denial of the exist ence of the rate-fixing power itself."

In Economic Gas Co. v. Los Angeles, 168 Cal. 448, 143 Pac. 717, it is held that an ordinance which provides that it shall be unlawful to charge any person any rate greater or less than that demanded of another for the same service, and which prohibits the collection by rebate, drawback, or other device of compensation for gas greater or less than or different from the rate fixed by the ordinance, prohibited a gas company from granting a discount to consumers who paid their bills before a certain date. (As to right of public service corporation to exact a penalty or added amount for delay in payment, see notes to State ex rel. MacMahon v. Independent Teleph. Co. 31 L.R.A. (N.S.) 329, and Ford v. Vicksburg Waterworks Co. 43 L.R.A. (N.S.) 63.)

An ordinance of a city engaged in the business of providing electric light to its citizens, which provides for the payment of a penalty of 50 cents in addition to any bills which may be in arrear as a condition of having electric service reinstated when it has been discontinued because of failure to pay the charges, where no charge is made for turning on and off the current to customers who are not in arrears, is discriminative and unlawful. State ex rel. She

include only 'dwellings,' and then for 'water-closets' and 'bath tubs' for private families. For these the contract fixes a definite amount for water furnished withwalter v. Jones, 141 Mo. App. 299, 125 S. W. 1169.

A contract between a municipality and an electric company by which the electric company agreed to furnish electricity for lighting purposes to all of the public buildings of the municipality in exchange for the privilege of maintaining its lines on the city streets, although lawful when made, became unlawful upon the passage of a statute which prohibited the making or giving, directly or indirectly, any undue or unreasonable preference or advantage to any corporation or to any locality. Public Service Electric Co. v. Public Utility Comrs. N. J. L., P. U. R. 1915C, 229, 93 Atl.

707.

Legislative authority given to a municipality engaged in furnishing water to its inhabitants "to assess and collect from time to time a water rent of sufficient amount, in such manner as they may deem most equitable, upon all tenements and premises supplied with water," must be taken as meaning the power to fix general rates which shall be assessed equally upon all water takers of a given kind, and does not give the board having control of such matter power to tie the hands of a city for a period of years by special contracts entered into with individual customers. Lake Shore & M. S. R. Co. v. Elyria, 22 Ohio C. C. 449.

In Kilbourn City v. Southern Wisconsin Power Co. 149 Wis. 168, 135 N. W. 499, an arrangement between the city and a power company by which, ostensibly, the power company paid for certain privileges in the city and the city paid for electrical current furnished to it by the power company, but in reality the arrangement was a subterfuge to enable the city to receive its electrical current free of charge, in evasion of the public utility law which made it unlawful for a public utility to de

out regard to measurement. We would company for water furnished to residences, not be understood as holding that the desig- and while undoubtedly that rate may be nated classes could abuse the privileges by lawfully reduced, no reduction can be upunnecessary extravagence or waste of held which is not operative alike upon all water; but for the use of water in reason- who occupy the same class, and which is able quantities, sufficient without incon- discriminatory in its character. Birmingvenient economy for the purposes men-ham Waterworks Co. v. Birmingham, tioned, the rates are fixed."

The above opinion was rendered by a court which is regarded by the profession as one of exceptional ability, and since the rendition of that opinion this court has not -except in the opinion rendered on the first appeal in this case-upheld as legal any contract covering rates for water furnished by the water company to residences in the city of Birmingham which did not conform to the ordinance contract made by the water company with the city of Birmingham as construed in the above case. The flat rate provided in said ordinance contract for residences is the maximum rate which can be charged by the water mand, collect, or receive any rate, toll, or charge not specified in the schedule of rates required to be filed, was held to be invalid, the court saying that the village was one of the patrons of the defendant, and that it was entitled to receive the same consideration in the matter of rates and charges that any other person was entitled to receive; no less, no more.

A customer of a water company which supplies water to the public is entitled to enjoin it from cutting off his supply because of his refusal to pay water rates which were unreasonable, because discriminatory as compared with rates charged to others similarly situated. Ball v. Texarkana Water Corp. Tex. Civ. App. 127 S. W. 1068.

Ala.

42 So. 10; Birmingham Waterworks Co. v. Truss, 135 Ala. 530, 33 So. 657; Mobile v. Bienville Water Supply Co. 130 Ala. 384, 30 So. 445.

In the above case of Birmingham Waterworks Co. v. Birmingham, supra, this court, in holding that the city court of Birmingham, sitting in equity, erred in sustaining the demurrer to paragraph J of the bill of complaint in that case, in reality declared that contracts containing stipulations similar to those contained in the contract now under consideration were illegal. On the former appeal in this case this court, in the effort to sustain the contract now under consideration, said: "The second propcrimination. People v. Albion Waterworks Co. 140 App. Div. 646, 125 N. Y. Supp. 589.

Likewise in Steinman v. Edison Electric Illuminating Co. 43 Pa. Super. Ct. 77, a division of the customers of an electric company into two classes, consisting, first, of those whose business required the consumption of not less than a fixed amount of electric current annually, and who would agree to bind themselves by a contract extending over a period of years to purchase their entire supply of current from the company, and the second to embrace all those whose consumption of electric current was smaller than the amount so fixed, and who remained at liberty to buy or not buy from the defendant, as inclination or business advantage might direct, giving to the former But a public service corporation may law-class a lower rate per unit, was held not to fully classify its patrons and charge dif- be an unlawful discrimination. ferent rates for each character of service, provided the classification is not unjust and the rate does not given an undue or unreasonable preference or advantage to or make an unfair discrimination among its patrons and consumers, under the same or substantially similar circumstances and conditions. Elk Hotel Co. v. United Fuel Gas Co.

-

The fact that a water company has granted a lower rate than that which it was legally entitled to charge by its charter to a certain customer is not a defense to a suit for water furnished to another company. Paris Mountain Water Co. v. Camperdown Mills, 98 S. C. 304, 82 S. E. 417. In State ex rel. Raymond Light & Water Co. v. Public Service Commission, W. Va., L.R.A.-, 83 S. E. 922. Wash. So a lower rate for natural gas, given to hotels which installed boilers, than that given to other hotels where boilers were not installed, but open grates and stoves used, the agreement with the former class of hotels being that the special service for boilers might be cut off at any time that the gas was needed to supply the demand for domestic use and use in hotels having only the stove and grate service, was not unlawfully discriminatory. Ibid.

145 Pac. 215, a contract between certain mills which had conveyed a water plant to a water company, part of the consideration being that the water company agreed to furnish water to the mills free of charge for forty-nine years, was held not to be void, but one which the public service commission could order terminated by the water company in case such contract interfered with the proper service of the company to the public generally, such contract to be terminated by an agreement between the parties or by proper proceedings in which damages would be awarded to the R. L. S.

And the fact that a water company charges a state institution located outside of the municipality a higher rate than it charges to consumers in the municipality mill companies. does not necessarily show unlawful dis

Waterworks Company had a right to contract with an individual to furnish water at a less rate than the maximum rate fixed by said franchise contract, and less than that charged other individuals for similar service so long as the 'discrimination is enjoyed by those having the favored rate at the expense of the company, and does not impinge upon any rights of other consumers.'"

osition is that a condition could arise this court said that the "Birmingham under the provisions of said contract where a greater charge could be made by defendant than that provided by the maximum rate; that is, that the rate provided for in the contract for water in excess of 3,333 gallons per month is such that the excess could be large enough to make the rate greater than the maximum rate fixed by the franchise contract. We think it sufficient answer to this argument to say that the parties contracted with full knowledge of what the franchise contract provided, as well as the law, and what limitations the same imposed, and that a proper construction of the contract between appellant and appellee would be that there was implied the following: 'Provided, that the charge for water shall in no case be greater than the maximum provided by said franchise contract, and, provided further, that it shall not be greater than what is a reasonable charge.'

This statement was based upon some expressions which are to be found in State ex rel. Ferguson v. Birmingham Waterworks Co. 164 Ala. 586, 27 L.R.A. (N.S.) 674, 137 Am. St. Rep. 69, 51 So. 354, 20 Ann. Cas. 951. In that case there was a petition for a writ of mandamus, wherein it was claimed that the company had entered into contracts with some consumers similarly situated with the relator, by which it had undertaken to furnish to them water at a rate less than the maximum charges allowed by the ordinance contract. The relator did not claim that he was charged more than the maximum rate, nor that he was charged more than a reasonable price for the water furnished him, but he contended that he was entitled to receive water at the most favorable rate

Upon these allegations of the petition for the writ of mandamus this court held that the relator was not entitled to the writ.

In the opinion in that case this court, after declaring that "the business of a company furnishing water to the public is naturally monopolistic, and, being given the

The contract which is made the basis of this suit contains plain provisions to pay for all water in excess of 3,333 gallons per month "by the regular schedule of meter rates, which are made a part of this application and agreement." In other words, the contract now under consideration contains, as already stated, provisions sub-furnished to any others similarly situated. stantially identical with those which were described in paragraph J of the bill of complaint considered in Birmingham Waterworks Co. v. Birmingham, supra, and which were in that case, in effect, condemned as illegal. We find nothing in this record in dicating that since the rendition of the opinion in Smith v. Birmingham Water-power of eminent domain to serve the needs works Co. supra, the water company has of the public more effectually, must serve surrendered the right to exact the flat all consumers with equal facilities without rates which are provided in the ordinance discrimination," indicated that a contract contract for residences in the city of Bir- made by the Birmingham Waterworks Commingham, or that any other rate has been pany with a favored customer at a rate legally provided for such residences, and, less than the rate fixed for residences, etc., this being true, these rates are, in so far by the ordinance contract as construed in as the evidence in this record discloses, Smith v. Birmingham Waterworks Comthe only rates which the water company has pany, supra, and at rate less than that the right to offer to, or exact of, its custom-charged its other customers, might, under ers in the city of Birmingham. certain circumstances, be upheld. Birmingham Waterworks Co. v. Birmingham, supra; Birmingham Waterworks Co. v. Truss, 135 Ala. 530, 33 So. 657; Bessemer V. Bessemer City Waterworks, 152 Ala. 391, 44 So. 663; Crosby v. Montgomery, 108 Ala. 498, 18 So. 723: 3 Dill. Mun. Corp. 5th ed. p. 2236, § 1326. In fact, the contract now under consideration is a contract which this court in Smith v. Birmingham Waterworks Co. supra, expressly declared the waterworks company had no authority, under its ordinance contract, to make with its customers.

Ibid.;

This case of State ex rel. Ferguson v. Birmingham Waterworks Co. supra, is reported in 164 Ala. 586, 27 L.R.A. (N.S.) 674, 137 Am. St. Rep. 69, 51 So. 354, 20 Ann. Cas. 951, and in a note to that case (27 L.R.A. (N.S.) page 674) we find the following: "It may be stated as a general proposition that a corporation or municipality authorized to supply water or light to the inhabitants of a municipality may not discriminate as to the rates charged, at least among those of the same class."

Cited, as sustaining the above proposi(2) In the opinion on the first appeal tion, we find in this note the following

cases
s: Danville v.
180 Ill. 235, 54 N. E.
Latshaw v. Water &
Minn. 472, 127 Am. St. Rep. 581, 117
N. W. 827; Griffin v. Goldsboro Water Co.
122 N. C. 206, 41 L.R.A. 240, 30 S. E. 319;
Armour Packing Co. v. Edison Electric Il-
luminating Co. 115 App. Div. 51, 100 N.
Y. Supp. 605; Cincinnati, H. & D. R. Co.
v. Bowling Green, 57 Ohio St. 336, 41 L.R.A.
422, 49 N. E. 121; Mobile v. Bienville
Water Supply Co. 130 Ala. 379, 30 So. 445;
Snell v. Clinton Electric Light, Heat &
P. Co. 196 Ill. 626, 58 L.R.A. 284, 89 Am.
St. Rep. 341, 63 N. E. 1082.

Danville Water Co. | thorities which are pertinent to the sub224; State ex rel. ject now in hand. That the members of Light Comrs. 105 the public are entitled under the law to receive uniformity of treatment at the hands of public service corporations, and that contracts not partaking of a private nature, between public service corporations and some members of the public, whereby special privileges are obtained which are not commendable as matter of right by all other members of the public of the same class, will not be upheld, have become truisms of the law; and the trend of modern legislation, state and Federal, in so far as public service corporations are concerned, has been largely to that important end. That one member of the public of a particular class shall not be accorded the same identical treatment that is accorded to another member of the public of the same class, by a public service corporation, is not only not in harmony with an enlightened sense of right and fair play, but is opposed to the true reasons upon which such corporations are given their franchises and permitted to exist. Indeed, whenever inequality in such treatment is attempted by a public service corporation, dissatisfaction is the necessary result, and this dissatisfaction ultimately finds expression in unpleasant and expensive litigation.

When the city of Birmingham made its contract with the waterworks company it intended-and the contract so provides that there should not be any discrimination made by the waterworks company in the matter of supplying water to the inhabitants of the city of the same class. The maximum rates provided for residences are specific and certain. Stability and equality of rates on the part of a public service corporation are more important than reduced rates. It was the fact that with out a contract fixing the rates for water there would probably be instability and inequality of rates, and out of this instability and inequality, unjust discrimination, and other unlawful practices with reference to such rates, the city of Birmingham exacted the contract with appellant, and by that contract fixed a definite, uniform, maximum rate for residences in said city. The law must see that all citizens of the same class receive the same treatment at the hands of public service corporations, and the spirit which controlled the city of Birmingham in exacting this contract from the waterworks company was the same spirit which actuated the Congress of the United States in its legislation with reference to tariffs for freight transported by carriers engaged in interstate commerce. On that subject we quote the following from Poor v. Chicago, B. & Q. R. Co. 12 Inters. Com. Rep. 418: "Stability and equality of rates are more important to commercial interests than reduced rates. It was instability and inequality that were the special evils to be remedied; it was the possibility that one shipper, in one way or another, whether by mistake or otherwise, could, and actually did, get a lower rate than another shipper, that led to more stringent legislation."

The case of Louisville & N. R. Co. v. McMullen, 5 Ala. App. 662, 59 So. 683, in which the opinion of the court of appeals was prepared by the writer, deals with the many questions which are now under consideration, and cites some of the au

The city of Birmingham, when it made the contract with the waterworks company which was construed by this court in Smith v. Birmingham Waterworks Co. 104 Ala. 315, 16 So. 123, was acting for all of the inhabitants of the municipality. While in State ex rel. Ferguson v. Birmingham Waterworks Co. supra, this court stated that, under certain conditions, the Birmingham Waterworks Company might vary the terms of the contract which it made with the city for the benefit of some favored customer, the authorities cited in the note to that case, as it appears in 27 L.R.A. (N.S.) 674, will show with what sparingness the courts of last resort are willing to uphold contracts made with public service corporations which confer special favors upon individuals with whom they deal as servants of the public.

The pronouncement of the courts in the cases above cited, and the undisputed facts in the instant case, all show the wisdom of the courts in rigidly holding public service corporations, in their dealings with the public, to uniformity in rates. In the instant case, a contract by meter rates was entered into. The customer complied with the letter of her contract and tendered to the water company the amount due under the terms of her contract. This amount the company refused to accept, demanding the amount which, under the flat rate, was due