Rutland Railway, Light & Power Company v. Clarendon Power Co.
| Decision Date | 20 May 1912 |
| Parties | RUTLAND RAILWAY, LIGHT & POWER COMPANY v. CLARENDON POWER COMPANY |
| Court | Vermont Supreme Court |
October Term, 1911.
APPEAL IN CHANCERY. Heard on demurrer to the bill, at the September Term, 1911, Rutland County, Taylor, Chancellor. Demurrer overruled, pro forma, and bill adjudged sufficient. The defendant appealed. The opinion states the case.
The pro forma decree overruling the demurrer and adjudging the bill sufficient is affirmed, and the cause is remanded.
T W. Moloney, F. S. Platt and Clarke C. Fitts for the orator.
Present ROWELL, C. J., MUNSON, WATSON, HASELTON, and POWERS, JJ.
The orator is a corporation owning and operating an electric railway in the streets of the city of Rutland, and between that city and the village of Fairhaven. When this bill was brought, it was completing an extension of this railway from Fairhaven to Poultney. It also supplies electricity for lighting the streets of Rutland City, and the villages of Castleton, Fairhaven, Poultney and Hydeville, and has entered into a contract to light the streets of Wallingford. It sells electricity to individuals in various towns in Rutland County for light and power. It owns maintains and operates dams, storage reservoirs and power plants for the generation of the electric current required in its business. On account of the extension of its line to Poultney and its Wallingford contract, it requires additional power, and on September 2, 1910, it purchased a tract of land of about forty-six acres, situated on Mill River, on which was an undeveloped, but valuable, water power. This power the orator proposes to develop and utilize in its said business. No claim is made that in any of the matters specified, the orator is outside its chartered authority. It is this water power, together with a right of way across this land for a penstock, that the defendant, which is also a corporation authorized by its charter to manufacture and sell electric current, seeks to condemn under the proceedings herein enjoined.
The bill is demurred to; and in support of the demurrer it is insisted that the court of chancery has no jurisdiction, since the orator may avail itself of the matters set forth in the bill as a defense to the condemnation proceedings, and so has an adequate remedy at law. This objection the orator does not meet when it points to the authorities holding that an entry under color of the right of eminent domain will, in certain circumstances, be enjoined. For, as shown in 5 Pom. Eq., § 466, restraining the condemnation proceedings is quite a different thing from restraining an actual entry thereunder. The rule is there stated to be that no injunction lies against the prosecution of such proceedings, when the matter relied upon as a ground for the injunction may be urged as a defense in the proceedings themselves. And it is generally so stated. 2 Lewis Em. Dom., § 296; Birmingham etc. R. R. Co. v. Louisville etc. R. R. Co., 152 Ala. 422, 44 So. 679; 15 Cyc. 987. But if the matter so relied upon cannot be urged as a defense to the proceedings to condemn, equity has jurisdiction to enjoin the proceedings--and that upon the broad ground of the inadequacy of the legal remedy.
Our attention is called to various cases of our own, wherein this jurisdiction has been exercised by the court of chancery. The question here made, however, does not appear to have been raised in those cases, and consequently they cannot be accepted as conclusive of the right so to proceed--though they might influence our decision if we regarded it as a doubtful question.
Accepting, then, the Pomeroy Rule as a correct statement of the law of the subject, we turn to a consideration of its application to the case in hand.
That property already devoted to a public use cannot be taken for another public use, without legislative authority, expressly given or necessarily implied, is the unquestioned law of this State. Barre R. R. Co. v. M. & W. R. R. Co., 61 Vt. 1, 17 A. 923, 4 L. R. A. 785, 15 Am. St. Rep. 877; Rut.-Can. R. R. Co. v. C. V. Ry. Co., 72 Vt. 128, 47 A. 399. And it makes no difference whether the property was acquired by condemnation or purchase. Evergreen Cemetery Asso. v. New Haven, 43 Conn. 234, 21 Am. Rep. 643; 15 Cyc. 614; Randolph, Em. Dom., § 97.
An attempt to give a sufficiently accurate and comprehensive definition of the term "public use" would be a perilous undertaking. The difficulty, if not impossibility of formulating such a definition is everywhere recognized. See In re Barre Water Co., 62 Vt. 27, 20 A. 109, 9 L. R. A. 195; note to Grafter v. St. Paul etc. Ry. Co., 22 L.R.A. 1. The cases wherein the meaning of the term is judicially considered are of three classes: Those dealing with the right of eminent domain; those concerning the law of taxation; and those involving the power of legislative regulation. Each of these attributes of sovereignty, though differing from the others in essential particulars, implies a public use as a necessary condition, and one without which, it cannot be called into activity.
In seeking out the principle on which this right of legislative regulation is predicated, Prof. Wyman, in his recent work on Public Service Corporations, gives an interesting historical study of the subject and a careful analysis of the decided cases. As a result, he makes the whole question of public use, or what is the same thing, public calling, depend upon whether the calling involves a matter of public necessity and is monopolistic in character, in view of the economic, industrial and commercial conditions of the times. Taking monopoly as the criterion by which a given calling is to be tested, he determines its character as public or private, and classifies it accordingly. He divides monopolies into three classes: Natural; state granted, and virtual; and his conclusion is that when one engages in a business which is fairly assignable to either of these classes, his business becomes affected with a public interest, and the rights of the public therein may be protected by legislative action, and the conduct of the business regulated accordingly. That a business purely private is not subject to such regulation is plain enough. It is only when the public has an interest in it that it has any rights to be so protected. Nor is the situation changed (according to Prof. Wyman's theory) if that business, for one reason or another, becomes locally or temporarily monopolistic, as where a local merchant for the time being controls the whole available supply of a given commodity; it is still a private enterprise, and (in the respect now under consideration) free from legislative regulation or control. On the other hand, a public calling may become locally or temporarily competitive, as where two railroads come to serve the same territory; but such do not thereby lose their character as public service corporations, and they remain subject to regulation and control.
The distinction, then, between a public and a private calling inheres in the nature of the undertaking. A railroad company is engaged in a business affected with a public interest, not because it is subject to regulation; but it is subject to regulation because it is affected with a public interest. On the other hand, selling merchandise in a country store is a private enterprise not because it is free from legislative regulation, but it is free from such regulation because it is a private business.
It is upon this theory that the court based its decision in the much discussed and oft cited case of Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77, the doctrine of which in this respect has been repeatedly adhered to and affirmed.
So far as the matter of regulation of public services is concerned, this theory affords a test of public use at the same time logical, workable and satisfactory. It must be remembered, however, that the case in hand does not involve the power of regulation; we are here concerned only with the rule governing the right to condemn property already devoted to a public use. In this rule, the term "public use" is employed in the sense in which it is used in the law of eminent domain, and it may be that the meaning of the term varies according to its application. We have spoken at some length upon the subject of regulation with a two-fold purpose: To meet the argument of those who say that the question of public use in condemnation proceedings depends upon whether or not the business for the benefit of which condemnation is sought is subject to legislative regulation and control; and to afford the basis of an argument by analogy. In People v. Salem, 20 Mich. 452, 4 Am. Rep. 400, Judge Cooley utters a caution against arguing from one governmental power to another, and asserts that property may be devoted to a public use with reference to one power of government, and be devoted to a private use with reference to another power of government. It was said in Stiles v. Newport, 76 Vt. 154, 56 A. 662, and again in Frazier v. Slack, 85 Vt. 160, 81 A. 161, that the "public use" involved in the law of eminent domain is not the "public use" involved in the law of taxation; and the idea that the power to regulate is not determinative of the validity of a grant of the power of eminent domain lies at the very foundation of the decision in Tyler v. Beacher, 44 Vt. 648, 8 Am. Rep. 398.
It is not necessary, however, to determine how far the analogy between the powers of regulation and eminent domain can be carried without breaking down. To this extent the analogy can be safely relied upon: In both these powers, the distinction between public and private uses lies in the character of the use. In the law of eminent domain, no less than in the law...
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