Danville Water Co. v. Danville City

Background

A private water company contracted with the city of Danville, Illinois, under an 1882 ordinance to build and operate waterworks and to provide one hundred fire hydrants for thirty years at set yearly rental rates. The company accepted the ordinance and later accepted amendments and additional ordinances that added more hydrants at varied rental rates. The company sued to recover about $5,000 in unpaid hydrant rentals after the city passed an 1895 ordinance, invoking a 1891 state law, that set maximum water rates and reduced hydrant rents.

Reasoning

The main question was whether the city could lawfully reduce the agreed hydrant rental rates under the authority of the 1891 state statute and the city’s 1895 ordinance. The Supreme Court treated this case as presenting the same statutory question decided in an immediately prior opinion (Freeport Water Co. v. Freeport City) and, relying on that authority, affirmed the Illinois Supreme Court’s judgment limiting the company’s recovery to the lower amount the state court approved.

Real world impact

The ruling limited the company’s recoverable rent to $1,930 as determined by the courts and allowed the city to enforce its 1895 rate schedule under the state law. The decision therefore confirms that, in cases governed by the same Illinois statutes, municipal rate-setting ordinances can prevail over earlier contract rates when the courts so hold.

Dissents or concurrances

Four Justices dissented, saying the case was materially like the Freeport case and arguing the city lacked power to reduce the contract rates; their views track the reasons stated in the Freeport dissent.