380 IRRIGATION INVESTIGATIONS IN CALIFORNIA. 



within the city limits^, is one of the print-ipal causes of the present suit. It does not change the 

 essence of the thing for which the complainant demands a sum of money to call it a water right, or to 

 say, as it does, that the charge is imposed for the purpose of reimbursing complainant in part for tlie 

 outlay to which it has been subjected. It is demanding a sum of money for doing what the constitu- 

 tion and laws of California authorized it to do, to appropriate water within its limits, conferring upon 

 it the great power of eminent domain and the franchise to distribute and sell the water so appropriated, 

 not only to those needing it for purposes of irrigation, but also to the cities and towns and their 

 inhabitants within its flow, for which it was given the right to charge rates to be established by law, 

 and nothing else. No authority can anywhere be found for any charge for the so-called water rights. 

 The State permitted the water in question to be appropriated for distribution and sale for the purposes 

 of irrigation, and for domestic and other beneficial uses; conferring upon the appropriator the great 

 powers mentioned and compensating it for its outlay by the fixed annual rates. 



This case was appealed to the United States Supreme Court, to whom it was 

 submitted October 11, 1898, and by whom it was decided May 22, 1899. From the 

 following syllabus the points of the decision can be obtained: 



(1) Formal notice as to the precise day upon which water rates will be fixed by ordinance need 

 not be given to a company whose rates are thus fixed under the California constitution, which gives 

 notice of the fact that ordinances will be passed annually in February, to take effect on the Ist of July 

 then next. 



(2) An opportunity to be heard upon the question of water rates fixed by ordinance is not denied 

 where such rates are fully considered in conference between the officers of the corporation whose rates 

 are fixed and the nmnicipal authorities, and such officers are heard, although they are not allowed to 

 be present at the final meeting when the ordinance is passed. 



(3) Judicial interference should never occur with the collection of rates established under legis- 

 lative sanction unless the case presents clearly and beyond all doubt such a flagrant attack upon the 

 rights of property, under the guise of regulations, as to compel the court to say that the rates prescribed 

 will necessarily have the effect to deny just compensation for private property taken for public use. 



(4) The reasonable value of property, rather than its original cost, is to be taken as the basis of 

 calculation in determining whether rates fixed under legislative authority constitute a fair comjjensa- 

 tion for the use of the property, so that the owners are not dejirived of their property without due 

 process of law. 



(5) The losses from distribution of water to consumers outside of the city are not to be considered 

 in fixing by ordinance the rates for consumers within the city. 



The United States Supreme Court makes no decision of the question as to 

 whether or not, in fixing the annual rates to be charged, the body authorized to fix 

 them can talie into account the amount that has been received bj- the company for 

 water rights, or as to whether the' company could demand a sum of mone,v for such 

 water rights, or " so-called water rights," as Judge Ross designated them. Referring 

 to this, the United States Supreme Court sa^'s (174 U. S., 739): 



* * * The present case does not require or admit of a decree declaring that the appellant may, 

 in addition to the rates established by the ordinance, charge for what is called a "water right" as 

 defined by it. It will be time enough to decide such a point when a case actually arises between the 

 appellant and some person or corporation involving the question whether the former may require, as 

 a condition of its furnishing water within the limits of the city on the terms prescribed by the defend- 

 ant's orc'inance, that it be also paid for what is called a water right. 



WATEB-BATE CASE OF LANNING v. OSBORNE ET AI,. 



The next cause to be brought before the courts on the subject of water rights 

 and water rates was the result of the attempt of the San Diego Land and Town Com- 

 pany to collect, from and after January 1, 1896, the sum of $7 per acre per annum 

 for water rental, instead of $3.50, the rate previously prevailing. The case was 



