This Court is not prepared on the facts in this case to overrule
the highest court of a state in construing the relative powers of
the legislature and municipalities in establishing rates for
water.
The Supreme Court of Idaho having held that, under the
constitution of the state, the legislature has a continuing and
irrevocable power to establish the manner of fixing water rates,
and that a municipality can only grant franchises subject to that
power, this Court follows that construction, and therefore
held that:
A statute of the State of Idaho establishing a method for fixing
water rates is not unconstitutional under the federal Constitution
as impairing the obligation of the contract with a water company
under an ordinance of a municipality previously enacted and which
established a different method of fixing such rates.
A court which is not empowered to grant relief whatever the
merits may be cannot decide what the merits are, and a judgment
sustaining a demurrer to and dismissing the bill on the ground of
such lack of power is not
res judicata on the merits.
Where the judgment cannot be
res judicata on the merits
because the court has no power to grant relief, it is not made
res judicata by reference to the opinion in which the
court expresses its views on the merits.
21 Idaho 180 affirmed.
The facts, which involve the constitutionality under the
contract clause of the federal Constitution of a statute of Idaho,
are stated in the opinion.
Page 226 U. S. 322
Memorandum opinion by direction of the court. By MR. JUSTICE
HOLMES:
This was an application by the defendant in error for a mandate
requiring the plaintiff in error, Murray, to appoint commissioners
to act with commissioners appointed by the city in determining
water rates to be charged by Murray. Murray relied upon an
ordinance of June 6, 1901, as establishing by contract the only
method of fixing rates. The city relied upon a subsequent statute,
§ 2839, Rev.Code. The supreme court of the state held that
the
Page 226 U. S. 323
constitution in force when the ordinance was passed made it
impossible for the city to make a contract on the matter beyond the
power of the legislature to change. The constitution declared the
use of waters distributed for a beneficial use to be a public use,
and subject to the regulation and control of the state, and also
declared the right to collect rates for water to be a franchise
that could not be exercised except by authority of and in the
manner prescribed by law. It then ordained that the legislature
should provide by law the manner in which reasonable maximum rates
might be established. Art. 15, §§ 1, 2, 6. The court
relied upon
Tampa Water Works Co. v. Tampa, 199 U.
S. 241;
Home Telephone & Telegraph Co. v. Los
Angeles, 211 U. S. 265, and
Louisville & Nashville Railroad Co. v. Mottley,
219 U. S. 467,
which so far sustain its conclusion that we think further
discussion unnecessary. We are not prepared to overrule the
construction of the legislative power as continuing and irrevocable
adopted by the supreme court of the state.
A defense more relied upon was
res judicata. In 1909,
the city brought a bill in equity in the circuit court, seeking to
have the court fix reasonable rates. The defendant demurred for
want of jurisdiction to give relief in equity and multifariousness.
The decree was that the demurrer be sustained and the bill
dismissed. The dismissal was in general terms, but with a reference
to the opinion, reported in 173 F. 382. In the opinion, it is true,
the court expressed the view that the ordinance relied upon by the
defendant was not affected by the subsequent statute, but the point
decided, and the only point that could be decided, was that the
demurrer should be upheld, and that the court was without
jurisdiction to
"take upon itself the exercise of the 'legislative or
administrative' power to determine in advance what will be a
reasonable schedule of water rates for the defendant to charge for
the next three years."
173 F. 385. The
Page 226 U. S. 324
demurrer excludes a decision upon the merits, and even if the
decree referring to it did not have the same effect by itself, the
opinion to which the decree also refers would show the same thing.
Of course, if the court was not empowered to grant the relief
whatever the merits might be, it could not decide what the merits
were. The two grounds are not on the same plane, as they were in
Ontario Land Co. v. Wilfong, 223 U.
S. 543,
223 U. S. 559,
and when jurisdiction to grant equitable relief was denied, the
ground of the merits could not be reached. In
Forsyth v.
Hammond, 166 U. S. 506,
jurisdiction had been taken in the earlier decision relied upon.
Here, it was refused.
Judgment affirmed.
