Appeal of Scranton Electric Light & Heat Co.

• Decision Date: 01 October 1888
• Docket Number: 310
• Citation: 122 Pa. 154,15 A. 446
• Parties: APPEAL OF SCRANTON ELEC. L. & H. CO. SCRANTON ELEC. L. & H. Co. v. SCRANTON ILL. H. & P. Co.
• Court: Pennsylvania Supreme Court

15 A. 446

122 Pa. 154

APPEAL OF SCRANTON ELEC. L. & H. CO.

SCRANTON ELEC. L. & H. Co. v. SCRANTON ILL. H. & P. Co.

No. 310

Supreme Court of Pennsylvania

October 1, 1888

Argued June 1, 1888

FROM THE COURT OF COMMON PLEAS OF LACKAWANNA COUNTY, IN EQUITY.

No 310 January Term 1888, Sup. Ct.; court below, No. 4 October Term 1886, C.P. in equity.

On September 30, 1886, The Scranton Electric Light & Heat Company filed a bill in equity against The Scranton Illuminating, Heat & Power Company, praying for a special injunction, to be made permanent on final hearing restraining the defendant company from furnishing electric light to the city of Scranton and from interfering with the rights of the plaintiff company; for further and other relief.

On October 18, 1886, a special injunction, issued on the filing of the bill, was dissolved, opinion by HAND, P.J. The defendant company filed its answer on March 5, 1887, and the cause being put at issue was subsequently referred to Mr James H. Torrey, as examiner and master, who on January 25 1888, reported as follows:

The complainant's bill filed September 30, 1886, sets forth that it is a corporation duly organized and chartered on May 12, 1883, under the act of April 29, 1874, for the purpose of furnishing light to the city of Scranton and suburbs and to the inhabitants thereof, with a capital of fifty thousand dollars; that in pursuance of said charter, the complainant had purchased land and constructed a plant for the manufacture and furnishing of light by electricity to all the citizens of the city of Scranton and suburbs, who desired to use such light, and had erected poles and placed wires upon the same, and procured costly machinery, and were and had been since June, 1884, engaged in furnishing electric light to all the inhabitants of the city of Scranton and suburbs who desired to purchase and use the same, and were ready and prepared to furnish the different kinds of electric light as the demand for the same might require; that complainant had obtained permission from the municipal authorities of the city of Scranton to occupy the streets and carry on their business within the corporate limits as required by law; that the defendant company had procured a charter for the purpose of furnishing light in the said city of Scranton, were engaged in planting poles and making other preparations for furnishing electric lights to the inhabitants of said city for a consideration in money, and claimed the right under their charter to do so; that under the act of assembly the complainant had by virtue of their charter the exclusive right to occupy the territory comprising the city of Scranton, and furnish the inhabitants thereof with electric light for and until the said company should have earned and divided dividends of eight per cent on the capital stock for a period of five years, and that they had neither earned nor divided any dividends upon this capital stock; that the defendant, without the right to do so, was interfering with the rights and franchises of the complainant company inflicting upon it serious harm and damage, and if allowed to proceed would reduce the value of complainant's property and capital, and do them other irreparable damage. The prayers were for a special injunction, to be made permanent on final hearing, restraining the defendant, its servants and agents, from furnishing electric light to the city of Scranton or any of the inhabitants thereof, and from interfering with the vested and exclusive rights of complainant in any manner; and for general relief.

The defendant, by its answer filed March 5, 1887, admits the incorporation of the plaintiff company, and does not deny that it has purchased ground, erected poles and constructed a plant for the purpose of furnishing electric light to the city of Scranton and the inhabitants thereof; it does specifically deny that complainant is provided with machinery and appliances necessary to enable it to furnish other than arc electric light, or that it is in good faith furnishing to the public any kind of electric light. Upon this point it specifically charges that in the summer of 1884, the control of the complainant company passed into the hands of the Scranton Gas & Water Company; that this control was secured for the express purpose of managing the plaintiff company in the interests of the said Gas & Water Company, and that by a system of over-charges and by other means the use of electric lights had been discouraged and the inhabitants of the city of Scranton practically deprived of their use. It is admitted that the defendant had secured a charter, and that it was proceeding thereunder to locate, erect and construct all the necessary machinery, poles, wires and other appliances for the manufacture and supply of electricity for lighting, heating and other purposes within the city of Scranton; it is averred that the defendant company had obtained permission from the municipal authorities of the said city to occupy and use the streets and carry on its business within the corporate limits thereof; it is specifically denied that the complainant has the exclusive right claimed in its bill, "to occupy the territory comprising the city of Scranton and to furnish the inhabitants thereof with electric light," during the period in said bill averred, (a) because the purposes of the corporations, plaintiff and defendant respectively, are not identical or in conflict with each other; (b) because neither the said act of April 29, 1874, nor any other act, has conferred any exclusive rights, privileges or franchises whatever upon the said corporation plaintiff; (c) because if any act of assembly purports to confer such exclusive privilege, such act is, in that regard, unconstitutional and void. It is further denied that the defendant corporation is in any manner interfering with the rights and privileges of the plaintiff, or inflicting upon them any harm or damage; whereupon the defendant prays to be dismissed with costs.

Upon the filing of the bill a special injunction was granted as prayed for, and at the same time a rule was taken on the defendant to show cause why the injunction should not be continued. By opinion of HAND, P.J., filed October 18, 1886, this rule was discharged and the special injunction dissolved.

The testimony offered by the parties was taken by the undersigned sitting as examiner, September 13, 1887, and on other succeeding days, which was reduced to writing and is filed with this report. The master finds from the testimony as facts pertinent to the issue in this case the following:

1. April 30, 1883, Randolph Crippen and eight others, citizens of the city of Scranton, executed a certificate of incorporation in accordance with the requirements of the act of April 29, 1874, for the formation of a corporation of the second class, to be called The Scranton Electric Light & Heat Company. These articles were duly acknowledged and recorded in the office of the secretary of the commonwealth in Charter Book No. 17, page 296. May 12, 1883, letters patent, under the great seal of the commonwealth, were duly issued incorporating the subscribers to the said certificate under the corporate name aforesaid. This corporation is the plaintiff in this suit.

2. By concurrent resolution of the councils of the city of Scranton, approved by the mayor June 23, 1883, the plaintiff was granted permisssion "to introduce, locate and erect the electric light plant in the city of Scranton, said lights to be attached to insulated wires; said wires to be erected on poles along streets, avenues and alleys."

3. Between the date of its incorporation and June 1, 1884, the plaintiff company purchased land in said city of Scranton, erected machinery, planted poles, and otherwise prepared themselves to furnish arc electric lights to such subscribers as they could secure in said city.

4. About July 1, 1884, the plaintiff company was in full operation, having obtained subscribers for about sixty-four lights. At this time the entire stock and property of the company had passed into the hands of Mr. W. H. Spang, of Reading. Through Mr. L. N. Kramer, of Scranton, Mr. Spang entered into negotiations for the sale of the plant to Mr. W. W. Scranton. These negotiations were consummated about July 1, 1884, by the purchase of the entire stock, plant and property of the plaintiff corporation (the stock being assigned in blank) for the sum of $20,000, part of which was paid by Mr. Scranton's assumption of certain debts owing by the company, part by the check of the Scranton Gas & Water Company, of which Mr. Scranton was then the president, payable to Mr. Scranton and indorsed by him, and the balance by a note of the Scranton Gas & Water Company, similarly indorsed. Thereafter, up to the present time, the officers and directors of the plaintiff company have been identical with the officers and directors of The Scranton Gas & Water Company, and all its business has been transacted in the office of that company.

5. At the time of this transfer, the plaintiff company were operating one circuit to supply lights until nine or ten o'clock at night, called the ten o'clock circuit, and another to supply lights until midnight, called the twelve o'clock circuit. The ten o'clock circuit was made to accommodate stores, which needed no light after that hour and the rates charged were proportionally lower. For instance, at the time of the transfer, the rate for two lights on the twelve o'clock circuit was ninety cents per night, on the ten o'clock circuit seventy cents; for three or more lights, on the twelve o'clock circuit forty cents per light per night, and on the ten o'clock circuit thirty-two and a half cents. In November, 1884, four months after the...