State v. City of Hamilton
State v. City of Hamilton
Dissenting Opinion
(dissenting). The proposition is that the city of Hamilton may build and operate gas works in opposition to, and in competition with, the Hamilton Gas Company. Authority for this action is claimed to exist in sec. 2486, Revised Statutes, enacted May 7, 1869, which is quoted in the majority opinion. I respectfully submit that the section, properly construed, gives no authority for such action. In other words, that sec. 2486 does not apply to this case, but gives to municipalities power to erect gas works only where none exist.
I concede that the letter of the section appears to give councils power, whenever deemed expedient and for the public good, to erect gas works. But we should try to get at the meaning of the "whole statute upon the subject, and not be content to determine the rights of the parties by a strict construction of one clause only. The subject matter should be considered, and we should endeavor to reach the intent of the law-makers. Disregarding these considerations, and reading according to the mere letter, would lead to false and unjust results, while if we regard the subject matter, the purpose and object, and the way in which parties whose interests are to be controlled by the law will be affected by the several parts, we may hope to reach rational, just and satisfactory results.
The law as to municipal control of the subject of gas supply is.contained in Revised Statutes, secs. 2478 to 2491, inclusive, and to get at the meaning and purpose of the legislature it is necessary to consider the sections as a whole. The controlling provisions are sufficiently set out in what precedes and follows, and need not be quoted anew. A
This construction makes the whole statute consistent, gives effect to every word, clause and provision of the entire law, and negatives any idea that it was the legislative purpose to authorize a municipality to erect and operate works in competition with a company therein duly established; while to give to section 2486 the construction claimed for it by the
It is true that section 2486 is later in local position, and in a sense, later in date of enactment than 2480 and 2482, and much is claimed for this. To me these facts seem entirely without practical value. Section 2486 first appeared in the municipal code, numbered there section 423. The act was entitled “ an act to provide for the organization and government of municipal corporations.” It repealed, with many other acts, that part of the act relating to municipal control of gas supply which embodied sections 2480 and 2482, and, to all intents and purposes, took the place, as a symmetrical whole, of all previous legislation upon the subject. Now, as the statute so enacted purported to contain a full expression of the legislative will, and to be treated as though enacted simultaneously, how can there be any first, or middle, or last ? To the rule even as claimed by the city there are modifications and exceptions. “Nor, as a statute is to be construed with reference to other statutes, in pari materia as well as by a survey of the whole context, and as the various provisions are to be made to stand together, if possible, will such be the result, where, upon a comparison of the entire act with others upon the same subject, there appearing no intention to change the general scheme or system of legislation upon the same, the earlier provision harmonizes, and the latter conflicts with suoh statute. And it has been seen that a reading of the provisions of the whole statute together, may give to earlier sec
But the section will not bear the construction claimed for it by the city for other reasons. This company was organized in 1855, under the act of May 1,1852, “ to create and regulate gas-light and water companies.” Its purpose was to manufacture gas and furnish it for lighting the streets, and public and private buildings in the city of Hamilton. This was a public purpose. Its accomplishment would benefit the city by enabling it to more effectually protect persons and property therein. In accepting the provisions of the laws then in force, the company, in consideration of the privilege granted, undertook to supply a public want. This duty it cannot avoid or shirk. Neglect of it, as we will presently see, would subject it to severe loss and possible deprivation of corporate existence. To avail itself of the rights and privileges conferred, and to enable it to perform the duty imposed, the company, under the authority and direction of the city of Hamilton, expended large sums of money in the construction of works and the laying of mains in the streets of the city, and the furnishing of facilities for the supply of gas to the city and its people, taking upon itself whatever risk of return upon the capital thus invested there might be in the venture. It undertook this work and assumed this risk in view of the law regarding gas companies, and the power of municipal
It will be borne in mind that the city is but an agency
In effect the statute gave to this company the exclusive right, so long as it complied with every requirement of law, to supply gas to the city of Hamilton and its inhabitants. This right was upon condition of performance of the required service by the company, an object beneficial to the community, and was a grant of a franchise vested in the state. Based as it was upon abundant consideration, and there being competent parties and a lawful subject matter, the transaction was, in all essential particulars, a contract between the state and the company, and if, as I claim, and think can be maintained, there was granted an exclusive right, any taking back by the state in the manner proposed would be a violation of that contract, and would result in the taking of private property without compensation. The extent to which such contract may be changed under the constitutional power to alter or repeal will be considered further on.
By the act referred to, the general assembly did not part with the police power and duty of protecting the public health, the public morals, and the public safety, and hence such contract was not in excess of the power of that body. New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650; Louisville Gas Co. v. Citizens' Gas Co., ibid. 683.
But it is insisted that the franchise of the company is a mere license; that the company took it subject to the power
Had the general law of the state in force when the gas company was organized been incorporated in a special charter, it could not have formed a more essential part of the contract, or clothed the company with greater powers. While the act of May 1, 1852, does not, in terms, give an exclusive right to the company, yet if such right is necessary in order to fully accomplish the object of the statute, the result is the same. The right to furnish gas thus vested in the company was an exclusive right because, so long as the company complied with the law in the full performance of its duty, it had the right to furnish all gas required. “ Full
As to the purpose of the city in the erection of the contemplated works, it may not be of the first importance to determine whether it is intended to furnish gas for private consumption or not. The company alleges that such is the purpose. The response is that no action has been taken towards furnishing gas for private consumption; but the defendant cannot say what action, if any, the city will in the future take. This falls short of a disclaimer of the intent charged, and when it is remembered that, by an almost unanimous vote of the electors, the scheme of building works was approved, it needs no prophetic vision to see that, if private consumers can exercise choice, so soon as the city, is disposed to furnish gas to them, the demand upon the company- for gas from all sources will practically cease. Sb .that the proposition that the contracting and operating qf gas works by the city, would work practical confiscation of the property of the gas company seems clear. With the power to fix the price at which the company must furnish gas, and the power to fix its own price for that manufactured by itself, whatever might be the wish of private consumers, self interest would determine their choice, and real competition would be impossible. Such competition would not only prevent the company from further receiving benefit under its franchise, but would practically destroy the value of its property. Though not an actual physical taking of the property, there would be such practical destruction of the common and necessary use, as would be equivalent to a taking, and this
The construction of the statute claimed by the city is not reasonable. It shocks the moral sense. To admit that the legislature, after having, by laws enacted prior to the organization of this company, held out to gas companies an inducement to invest large amounts of money in works and pipes for the purpose of establishing their business of furnishing “such quantities of gas as may be required,” would, when the expenditure had been made on the faith of the power granted, by an amendment, give to municipal corporations the power to embark in the same business, to supply the same want, and thus place the property of gas companies wholly within the control of municipalities, acting on the caprice of city councils, or the impulsive vote of the people, is to presume a lack of good faith in matters of state which would be dishonorable between individuals. A statute ought not to receive a construction warranting such a conclusion, unless its terms are so direct and unambiguous as to admit of no other construction; and if, to give the construction contended for, would result in an interference with vested private rights, and cause the state to legislate back to-itself, the franchises, rights and privileges, which it had created, and thus destroy the corporeal property of the corporation without compensation, then such construction is not permissible, because it drives us to the conclusion that the statute is unconstitutional. Sinking Fund Cases, 99 U. S. 718. “A statute should ’ not receive a construction which makes it conflict with the constitution, if a different interpretation is practicable.” Burt v. Rattle, 31 Ohio St. 116.
It seems to be feared that this gas company cannot be accorded the right given it by the statute under which it was organized to furnish the gas that may be required in the city of Hamilton, because to do so would be a violation of the clause of the constitution (sec. 2, Art. I.), which forbids the legislature to grant special privileges that may not be altered, revoked, or repealed, and because there would thus be created
Attention is called to the statute, sec. 2485, which forbids councils to agree with any person or company to give or continue the exclusive privilege of using the streets, etc., for the purpose of conveying gas. The bearing of the section upon the question is not perceived, but if it has application, in principle, it is enough to say that no such provision existed at the time of the organization of the Hamilton Gas Company.
The decision in State v. Cincinnati Gas Co., cited in the majority opinion, would seem not to have close application to the case at bar. That was upon a question of tire power of a municipal corporation to grant an exclusive right to a gas company; this case raises the question whether the state can grant such right, and if so, whether after the right has been granted, it can be taken away to the destruction of the company’s plant? Turnpike Co. v. The State, 3 Wall. 210, is also cited. The cases are hardly parallel. Had the Maryland legislature undertaken to-authorize another turnpike company to build and operate a turnpike over the same road, with authority to fix the tolls to be charged by the rival company, there would have been a question similar to the one here being considered. The other cases cited in the majority opinion, as to the question of vested rights, will be
Nor would a judgment of ouster work injustice to the city, for before the expenditure of any money or the incurring of any obligation on the part of the city, it was duly notified of the claims of the company, and that legal action would be taken to enforce them.
It is not assumed that there is any vested right in the gas company to light the city of Hamilton. It was to furnish what gas might he required. So that, when gas is not longer required the right ceases. The city may return to oil or gasoline, or adopt some newer agency, as electricity, and the people may refuse to burn gas; and of this the gas company cannot complain, because its rights are not invaded. That a time might come when gas would not be required, was one of the risks the company assumed. But so long as the streets, public grounds and buildings of the city are to be lighted with gas, the l ight of this gas company to do that lighting, it seems to me, cannot be lawfully denied. Of course it is subject to the control of the city in all the particulars specified in the statute under which it was organized, and in later statutes relating to regulation. Under such authority the power of the city to regulate is ample. This regulation, however, is confined to the carrying out of the purpose for which the company was organized. While it may regulate, it may not destroy.
The contention of the city shocks the sentiment of common justice. It is opposed to the general policy of the national government, as shown by the decisions of its highest court, and the action of its executive officers, and to that
Opinion of the Court
The facts necessary and sufficient for the determination of the material issue in this action, are disclosed by the petition, answer, and demurrer to the answer, and are as follows : The Hamilton Gas-light and Coke Company was organized and duly incorporated in the year 1855, under the general incorporation act of May 1, 1852, for the purpose of supplying gas for the lighting of the streets, and public and private buildings in the city of Hamilton, Ohio. At the time of its organization, by virtue of the provisions of an ordinance of the city of Hamilton passed in the year 1855, there was granted to the company, and it thereafter had, the use of the streets of the city for the purpose of laying gas-pipes and mains, and supplying gas to the city and its inhabitants, for the period of twenty years, to wit, until the year 1875. Since the year 1875, the city has used the gas of the company only in accordance with the terms of various contracts entered into between the city and the company, from time to time, the last of which contracts expired January 1, 1889. And, since the last named date, there has been no contract existing between the parties; the city has declined to use the company’s gas, and has provided other means for lighting its streets. For the purpose of manufacturing gas, the company erected gas works, and laid gas-pipes and mains, to the probable extent of thirty miles, throughout the city, for the furnishing of gas for public and private consumption. It is conceded by the defendant that the company has complied with all the provisions of the law of Ohio relating to gas companies, and with all the ordinances in that behalf of the city of Hamilton, and is entitled to all the rights, privi
The city of Hamilton is a municipal corporation organized under the laws of the state of Ohio, and had, at the last federal census, a population of 12,122, and a corporate area of about three square miles. On the 4th day of September, 1888, the city, by its council, on the petition of a large number of its inhabitants, duly passed an ordinance providing for the submission to the qualified voters the question of issuing the city’s bonds to the amount of $150,000, for the purpose of gas works to be erected by the city. Legal notice having been given, the question was voted upon by the electors at the general election held on the 6th dajr of November, 1888, and resulted in 2,412 votes being cast for the issue of bonds, and fifty-nine votes against such issue. Upon that decision of the electors, the city council, on the 20th day of November, 1888, adopted a resolution that, it was deemed expedient and for the public good, to erect gas works at the expense of the corporation. .On the 18th day of December, 1888, an ordinance was passed by the council, providing for the issue of bonds, for the purpose of erecting such works by the city, to the extent of $150,000. The entire issue was sold for more than the par value thereof, and the proceeds of the sale were turned over to the city treasurer, for the erection and completion of the proposed works. On the 7th day of May, 1889, trustees of the gas works were appointed by the city council, who duly qualified, organized their board, and proceeded to the erecting of the works in accordance with the decision of the citizens and tax-payers of the city of Hamilton. The board of trustees so appointed purchased land for the erection thereon of the proposed gas works, agreed upon plans and details for the construction of such works, entered into contracts for the furnishing of material and the performance of labor, paid large sums of money upon contracts for material furnished and labor performed, and in the execution of contracts, gas-pipes were extensively laid in the streets of the city. The defendant alleges, that the gas works are being built by the city for the
The laws relating to gas companies when organized, and in force at the time the Hamilton Gas-light Company was incorporated, are substantially embraced in the Revised Statutes, between sections 2478 and 2491 inclusive. The material questions to be determined in this case arise under sections 2480, 2482, 2485, and 2486, the last two sections having been passed since the incorporation of the company.
Section 2480 provides that, if gas companies when required by the council to lay pipes and light streets, alleys, public grounds or buildings, refuse or neglect for six months after being notified by the authority of the council, to comply with such requirement, the council may laj' pipes and erect gas works, for lighting such streets, alleys, or public grounds, and all other streets, alleys, and public grounds not already lighted; and such companies shall thereafter be precluded from using or occupying any of the streets, alleys, public grounds or buildings, not already furnished with gas-pipes of such companies.
Section 2482 provides that, a neglect to furnish gas to the citizens, and other consumers of gas, or to the corporation, by any company, in accordance with the prices fixed and established by the council, from time to time, shall forfeit all rights of such company under the charter of which it was established; and the council may proceed to erect, or, by ordinance, empower any person to erect gas works, for the supply of gas to such corporation and its citizens.
Section 2485 makes it unlawful for any council to agree by ordinance, contract, or otherwise, with any person or persons, for the construction or extension of gas works for man
Section 2486 enacts that, “.The council of any city or village shall have power, whenever it may be deemed expedient and for the public good, to erect gas works at the expense of the corporation, or to purchase any gas works already erected therein.”
This provision for the erection of gas works by the city, was first embodied in section 423 of the municipal code, passed May 6, 1869, which, while a codification, enlarged the powers of municipalities as to gas works and lighting corporations, and the same enlarged powers are continued under the revised statutes, without material change. Among the general powers granted to cities, they may light streets, allej's, public grounds and buildings, within the corporation, and provide for laying down gas-pipes; they may appropriate, enter upon, and hold real estate within the corporate limits, for gas works, and “ lighting any public uSe ; ” and may levy taxes for the special purpose of erecting, enlarging, and improving gas works, and for lighting the corporation.
It is urged in behalf of the Hamilton Gas-light Company, that the legislature has declared in sections 2480 and 2482, certain conditions under which the council may build gas works, and that in the absence of those conditions, the city has not such power while there are gas works,.in the municipality that have complied with all the provisions of the law, and met all the demands made upon them. Such an expression of the legislature will, it is said, exclude the right of a city to erect gas works under any other circumstances. Those two sections designate what refusal or neglect on the
Section 2486, in plain language, gives the power to the council, either to erect gas works, or to purchase such works already erected. The authority granted is not coupled with any condition or contingency, but is to be exercised when the council may deem it expedient and for the public good. The language is free from ambiguity. The discretionary power would hardly seem consistent with the limitation sought to be imposed, that the council can build gas works only where there are no gas works in the municipality; or where gas companies already organized, refuse or neglect to comply with the requirements of the law as to lighting or laying pipes, or neglect to furnish gas to citizens. The interest of the city may demand that a gas company established and doing business, although complying with all statutes and ordinances, should not continue to enjoy exclusive possession of the field of operation. And it may be deemed expedient, and for the public good, to discourage the growth of a monopoly, by the city’s erecting its own gas works, or encouraging the incorporation of a competing company. Certainly, it would not be a doubtful public policy, to place the city on an independent basis, by clothing it with the power of building its own gas works if an emergency should arise, although there might be a company within the municipality, which fully discharged all its corporate duties. Indeed, the provision in section 2485, rendering it unlawful to give or continue to any gas company the exclusive privilege of using the streets, would seem designed not merely to prevent the sole occupation of the streets by one .company as against another, but also to secure to the municipality the
It is conceded that a municipality within which a gas company has been already formed, may, by a vote of its citizens and by ordinance, authorize the operation of another gas company within its borders. Rev. Stats., section 3551. The municipality may also purchase the gas works of the newly organized company. But it is contended that if two such companies exist at the same time, in the same municipality, and occupying the same territory, the municipal authorities though purchasing could not operate the works of one in opposition to the other; that after such purchase, the law will not permit the city to use its own property for the purpose of lighting its streets for the public safety and convenience, unless it either buys out the other company, or the other company goes out of existence, or fails to discharge its statutory duty. The statdte, it is evident, is not susceptible of such an interpretation, nor has the legislature, in our judgment, hampered by such limitations and conditions, the right of a city to purchase and operate the works of one of two competing gas companies within its borders. And if it may own and use without restriction the plant of one such company, it may well be inquired, why may not the city, so far as the other company is concerned, be authorized to erect its own gas works, whenever it may be deemed expedient- and for the public good.
In its present form, section 2486 was passed many years after the two sections which are reproduced in section 2480 and section 2482. Between the earlier and later statutory provisions we discover no repugnancy, and the canons of statutory construction do not require that either should prevail over the other. The authority given to municipalities by the later section, is distinct from and independent of the power granted by the two antecedent sections. But, if such repugnancy did exist in the pre'sent case, it is one of the settled rules of construction that when, in a statute, there are several clauses which present, as compared with each other, an irreconcilable conflict, the one last in order of date or
II. It is urged in behalf of the plaintiff, that the Hamilton Gas-light Company acquired, by its charter, a vested right to supply the public, as well as private consumers with gas at such reasonable prices as the council should fix, and that to authorize the citjr to construct and operate its own gas works, would be to destroy that vested right without due process of law. It may be conceded, that the company acquired the right of laying its pipes and conveying gas to the city and its citizens,• but it never acquired the exclusive franchise of opening and using the streets of the city, for the introduction of pipes and other apparatus for the purpose of thus conveying gas. By sec. 53, of the act of May 1, 1852, under which the company was organized, it was provided as follows: “ Any corporation formed under this act shall have full powers, if a gas company, to manufacture and sell, and to furnish such quantities of gas as may be required in the city, town or village where located, for public and private buildings, or for other purposes; and such corporation shall. have power to lay conductors, for conducting gas through the streets, lands, alleys and squares, in such city, town or village, with the consent of the municipal authorities of said city, town or village, and under such reasonable regulations
Again, by sec. 54, of the act of 1852, it is enacted: “ The municipal authorities of any city, town or village, in which any gas-light company shall be organized under this act, are hereby authorized to contract with any such corporation, for the lighting the streets, lands, lanes, squares and public places in any such city, town or village.” While the language of this section, properly construed, authorized the municipal authorities to contract with a gas company for lighting the streets and other public places, it is not, in the
The city of Hamilton was not, either under the act of 1852, or under any l.aw subsequently passed, bound to enter into an agreement with the gas company, for supplying with gas the streets and other public places in the corporate limits. It did, however, make contracts with the company, from time to time, for that purpose — the last of which expired by its own limitation, on the first day of January, 1889. That the city performed all its contract obligations, is not denied. And if the city^ did not see fit to further contract, it was beyond the power of the company to compel it to do so. Pursuant to its agreement, the city purchased gas from the company for over thirty years, and then determined to erect its own gas works under the authority which had then been given by the statute. In this, there was no destruction of a corporate franchise or vested right of the company. The company still retains the right to contract with the city for the public lighting, and to furnish gas for private consumption. Its pipes and mains remain undisturbed in the streets, and through them gas may be conducted, as long as the company will manufacture it. Indeed, there has been no interference by the city, with any- of the real or personal property of the company. It is conceded in argument by the gas company, that if the city were to supply for the public lighting, some newly discovered or different agency than gas, such for instance as electricity, the company would have no reason to complain; and yet, the investment of the company would be subject to no greater detriment or loss, if any, by the city’s manufacturing its own gas, than by adopting electricity as a mode of public lighting.
There having been no exclusive franchise granted to the Hamilton Gas-light Company, either to open and use the streets for the introduction of gas pipes and other apparatus, or to supply gas in perpetuum, under contract, to the city of Hamilton for public consumption, and the city having com
It is argued and claimed, in substance, that, as long as the city of Hamilton continues to light its streets, public grounds and buildings with gas, the Hamilton Gas-light Company, a corporation organized under a general law passed since the adoption of the present state constitution, will have, while
If, for the sake of the argument, the company ever acquired such a special privilege, it is evident, that the statute empowering any city to erect its own gas works, as effectually revoked and repealed the privilege, as if that had been the declared intent of the statute. By section 2, article 1, of the constitution of 1851, “No special privileges or immunities shall ever be granted, that may not be altered, revoked, or repealed by the general assembly; ” and in connection with this section is to be construed section 2, article 13, which declares that, “ Corporations may be formed under general laws ; but all such laws may, from time to time, be altered ox xepealed.” The general law under which the Hamilton Gas-light Company was formed, was subject to the limitations and reservations contained in these provisions of the constitution. The constitutional provisions entered into the general law, and operated as to all corporations organized under it, in the same manner as a reservation to the legislature embodied in a special charter. Such reservation in a special charter or under a general law, negatives an intention on the part of the legislature to confer irrevocable rights upon the corporators.
In Shields v. The State, 26 Ohio St. 86, a consolidated company was formed by the union of several original and independent railroad companies, in pursuance of the act of April 10,1856 (4 Curwen, 2791). Among the companies forming the consolidation, were two companies chartered and organized before the adoption of the present constitution, and whose charters were, therefore, not subject to the constitu
The force of the doctrine1 announced in the ease of The Dartmouth College v. Woodward, 4 Wheat. 518, that the creation of a private corporation by charter is such a grant as includes an obligation of the nature of a contrac’t which no state legislature can pass laws to impair, has been, in a large measure, obviated by the practice of reserving to the state the right to alter, revoke or repeal charters, general incorporation laws, and special privileges and immunities. Whether such special privileges and immunities be designated property or a capacity to acquire and hold property, a wise public policy suggests, that they should not be irrevocably
Demurrer to the answer overruled, and petition dismissed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.