City of El Dorado v. Citizens' Light & Power Co.

• Decision Date: 07 May 1923
• Docket Number: (No. 353.)
• Citation: 250 S.W. 882
• Parties: CITY OF EL DORADO et al. v. CITIZENS' LIGHT & POWER CO.
• Court: Arkansas Supreme Court

250 S.W. 882

CITY OF EL DORADO et al. v. CITIZENS' LIGHT & POWER CO.

(No. 353.)

Supreme Court of Arkansas.

May 7, 1923.

Appeal from Union Chancery Court; J. Y. Stevens, Chancellor.

Action for injunction by the City of El Dorado and others against the Citizens' Light & Power Company. Judgment for defendant, and plaintiffs appeal. Affirmed.

U. L. Meade and Mahony, Yocum & Saye, all of El Dorado, for appellants.

Patterson & Rector, of El Dorado, for appellee.

McCULLOCH, C. J.

The council of the city of El Dorado passed an ordinance on August 17, 1922, granting a franchise to J. A. Rowland and eight other citizens of the municipality to construct and operate a system for furnishing light and water in the city, and the franchise was subsequently assigned by the original holders to the Citizens' Light & Power Company, a domestic corporation. Prior to that time a franchise, for similar purposes, not exclusive, had been granted to the Arkansas Light & Power Company, and that company is operating in the city.

On August 25, 1922, the city council passed another ordinance, revoking the ordinance of August 17, 1922, granting the franchise held by appellee, Citizens' Light & Power Company, and on December 2, 1922, the present action was instituted in the chancery court by the city against appellee to restrain appellee from asserting rights and proceeding to operate under the franchise which the council had undertaken to revoke. The court sustained a demurrer to the original complaint, and appellant filed an amended complaint, to which the court also sustained a demurrer. Appellant stood upon its amended complaint and declined to further amend, so the complaint was dismissed, and an appeal has been prosecuted to this court.

The validity of the franchise is attacked on three grounds: First, that the ordinance was not properly passed, in that it was read three times at the same meeting, and placed on its final passage without a suspension of the rules; second, that the passage of the ordinance was procured by false and fraudulent misrepresentations on the part of the promoters concerning its contents; and, third, that there was a material change in the phraseology of the ordinance after its enactment and before publication.

Answering the first ground of attack on the validity of the ordinance, it is sufficient to call attention to the fact that this question has already been expressly decided by this court against the contention of appellant. We held in Barnett v. Mays, 153 Ark 1, 239 S. W. 379, that the statute (Crawford & Moses' Digest, § 7502) requiring that "all by-laws and ordinances of a general or permanent nature shall be fully and distinctly read on three different days, unless two-thirds of the members composing the council shall dispense with the rule," does not "apply to an ordinance or resolution entering into a special contract." In that case we were dealing with an ordinance identical in character with the one now under consideration and which granted a franchise authorizing the operation of an electric light plant.

Counsel for appellant seek to make a distinction between the two cases because the court in the Barnett Case used the words "special contract," and that the contract under consideration in that case was more restricted than the one in the present case. The use of the word "special" may have been inapt, but the effect of the decision was that the statute quoted above has no application to an ordinance or resolution entering into a contract, and it is unimportant whether the contract is one more or less restricted in its character. The test as to the requirement of the statute is whether or not the ordinance is one of a "general or permanent nature," and unless it falls within that class the statute requiring a reading on different days or a suspension of the rule has no application. The fact that the franchise created by the ordinance runs for a long period of time does not make it general or permanent. Of course, all ordinances enacted by city councils are not permanent in the sense that they cannot be repealed; but those which endure until repealed are deemed to be permanent, and all others are not permanent. Ordinances of a general nature are those which are general and uniform in their application. It is clear, we think, that this point of attack on the validity of the ordinance is unfounded.

The other two grounds of attack on the validity of the ordinance may be discussed and disposed of together. Section 1 of the ordinance in controversy reads as follows:

"There is hereby granted to J. A. Rowland, T. H. Norris, E. L. Pye, J. H. Alphin, George S. Miles, Hopkins Wade, H. M. Johnson, Neill C. Marsh, and B. W. Griffin, their heirs and assigns the right and authority to build, equip, maintain, and operate a light and water plant in the city of El Dorado, Arkansas, and to furnish electric light power and current and water for domestic and other purposes to the inhabitants of all that part of the city of El Dorado, Arkansas, lying east of the Chicago, Rock Island & Pacific Railway Company's main line tracks, as now located with the right to erect poles, string electric lines and lay water mains in any of the streets, avenues, and alleys thereof and to furnish and supply the inhabitants of any other part of the city of El Dorado, Arkansas, with electric lights, power, or current and with water, who are not being supplied and furnished with such light and water by the Arkansas Light & Power Company; and the right to use the streets, avenues and alleys of said city for said purposes is hereby granted."

It is alleged in one of the paragraphs of the complaint that the passing of the ordinance was induced by false and fraudulent misrepresentations made by one of the promoters to the city council to the effect that the "franchise was being sought for the sole purpose of giving service to that part of the city of El Dorado east of the Chicago, Rock Island & Pacific Railway Company's main line tracks, and only such other portions of the city of El Dorado not then being served by the Arkansas Light & Power Company," and that the ordinance was read to the council by the attorney for the promoters as containing language which showed only that intention.

There is another allegation in the complaint that the ordinance as read and passed contained the word "now," so as to make that portion of it read that the franchise was to cover the right of operating in "any other portions of the city of El Dorado not now being served by the Arkansas Light & Power Company," whereas the word "now" was omitted from the publication of the ordinance.

The ordinance as published, as well as the minutes of the city council, are exhibited with the complaint, and we are permitted to look to them in testing the sufficiency of the allegations of the complaint. In other words, the exhibits control the allegations of the complaint. There are many decisions of this court bearing on this subject in regard to the effect of exhibits filed with pleadings, and the rule recognized by them all is that under the statute...