Attorney General v. Haverhill Gaslight Co.

• Decision Date: 27 May 1913
• Citation: 215 Mass. 394,101 N.E. 1061
• Parties: ATTORNEY GENERAL ex rel. CORPORATION COM'r v. HAVERHILL GASLIGHT CO.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

215 Mass. 394

101 N.E. 1061

ATTORNEY GENERAL ex rel. CORPORATION COM'r v. HAVERHILL GASLIGHT CO.

Supreme Judicial Court of Massachusetts, Suffolk.

May 27, 1913

COUNSEL

James M. Swift, Atty. Gen., and Frederic B. Greenhalge, Asst. Atty Gen., for relator.

Tyler Corneau & Eames, of Boston, Winn & Mitchell, of Haverhill and W. C. Rice, of Boston, for defendant.

OPINION

RUGG C.J.

This is an information in equity brought under St. 1906, c. 372, which authorizes this court at the relation of the Attorney General to restrain any corporation 'from assuming or exercising any franchise or privilege or transacting any kind of business not authorized by the charter of such corporation and the laws of this commonwealth.' The bill alleges in substance, that the defendant, having for a long time been engaged in the business of manufacturing and selling gas for light and heat in the city of Haverhill, is about to sell 'all of its franchise and property in the said city, including all of its mains, pipes and other appurtenances necessary for or incidental to the manufacture and sale of gas for light and heat, without authority from the General Court and without authority of any law,' and that thereby it will become unable to continue its business of furnishing gas for light and heat. The answer and certain agreed facts admit the purpose of the defendant to dispose of all its physical property, including its mains and pipes in the public ways of Haverhill to the Haverhill Gas Company, a corporation recently organized under the laws of the commonwealth, for the purpose of taking over the physical properties of the defendant as a part of a general scheme for improving the facilities for providing gas in the city of Haverhill. The point at issue is, whether the defendant has a right under the general law without special authority from the Legislature to sell its physical properties, including its pipes and mains in streets necessary to the carrying on of its business, and thus deprive itself of its facilities for doing business. The defendant does not undertake directly to transfer its right to be a corporation (but proposes to surrender it), nor its licenses and permits granted by the municipal authorities to lay its pipes in public ways. It is contended that the new corporation has licenses and permits to act in its own right in maintaining such pipes to be sold to it. There are numerous statements in the answer respecting contracts and alleged grants from the city council of Haverhill to the Haverhill Gas Company. It is not necessary to describe these in detail, nor to inquire whether the alleged permits to lay pipes granted to the Haverhill Gas Company are valid. See Metropolitan Home Telephone Co. v. Emerson, 202 Mass. 402, 88 N.E. 670. Sufficient appears upon the record to warrant the assumption that the Haverhill Gas Company would be able to furnish gas in sufficient quantities and of required quality if given the opportunity.

In Weld v. Board of Gas & Electric Light Commissioners, 197 Mass. 556, 84 N.E. 101, it was said by the court speaking through Chief Justice Knowlton, referring to a gas and electric light company:

'The respondent is a corporation, organized to exercise a public franchise of importance to the community in which it conducts its business. It is its duty to exercise this franchise for the benefit of the public, with a reasonable regard for the rights of individuals who desire to be served, and without discrimination between them. It cannot relieve itself from this duty so long as it retains its charter. It enjoys public rights in the streets, which are derived from the commonwealth, through action of the board of aldermen under authority of the Legislature. It is a quasi public corporation, and as such it owes duties to the public. New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650 [6 S.Ct. 252, 29 L.Ed. 516]; Coy v. Indianapolis Gas Co., 146 Ind. 655-659 [46 N.E. 17, 36 L. R. A. 535]; Williams v. Mutual Gas Co., 52 Mich. 499-501 [18 N.W. 236, 50 Am. Rep. 266]; Shepard v. Milwaukee Gaslight Co., 6 Wis. 539 ; Gaslight Co. of Baltimore v. Colliday, 25 Md. 1. Without legislative authority it cannot sell its property and franchise to another party, in such a way as to take away its power to perform its public duties. Central Transportation Co. v. Pullman's Palace Car Co., 139 U.S. 24 [11 S.Ct. 478, 35 L.Ed. 55], and cases cited; Brunswick Gaslight Co. v. United Gas, Fuel & Light Co., 85 Me. 532 [27 A. 525, 35 Am. St. Rep. 385]; Gibbs v. Baltimore Gas Co., 130 U.S. 396 [9 S.Ct. 553, 32 L.Ed. 979]; Thomas v. Railroad Co., 101 U.S. 73, 83 ; Chicago Gaslight Co. v. People's Gaslight Co., 121 Ill. 530 [13 N.E. 169, 2 Am. St. Rep. 124]; South Chicago Ry. v. Calumet St. Ry., 171 Ill. 391 ; State v. Hartford & New Haven R. R., 29 Conn. 538.'

This is a succinct, clear and comprehensive statement of the law. It rests upon fundamental conceptions of the character of service rendered by gas companies and of the nature of the instrumentalities utilized by them in performing their duties. The defendant is empowered by its charter (St. 1853, cc. 8, 163) among other matters to lay and repair pipes in the streets and highways of what is now the city of Haverhill, when granted a license by municipal officers. The authority to use the public ways is, according to common knowledge, one of the important and essential privileges conferred upon the defendant. Its ability to carry on business rests on the power to use exclusively a part of the public ways for the purpose of laying its pipes and distributing its product. The right acquired by the public in laying out a highway is an easement for public travel. It would be incompatible with the right obtained by the public through the laying out of a highway to devote it in whole or in part to strictly private uses. Com. v. Morrison, 197 Mass. 199, 83 N.E. 415, 14 L. R. A. (N. S.) 194, 125 Am. St. Rep. 338. It is only the element of service rendered to the public by a gas company which warrants the laying of its pipes in highways.

It has been said repeatedly in decisions of this court that the paramount right acquired by the public in land taken for highways includes the laying of gas pipes. The charter authority of the defendant to lay its pipes in public ways, although not in express terms made dependent upon such reasonable limitations and regulations as the Legislature might impose from time to time, was not absolute and unqualified in character, and was subject by implication to the general power of the Legislature over highways. It would be within the power of the Legislature to pass any reasonable restrictions at any time touching the use of the highway. Fairhaven & Westville R. R. v. New Haven, 203 U.S. 379, 390, 27 S.Ct. 74, 51 L.Ed. 237. This includes proper regulations of the conditions under which a gas company may use highways. The language in Com. v. Lowell Gaslight Co., 12 Allen, 75, which seems to look in a different direction, occurs in the decision of a tax case and was directed to the argument that a gaslight company was a corporation of such a character that it was exempt from local taxation. It was quoted at length in Milford Water Co. v. Hopkinton, 192 Mass. 491, 497, 78 N.E. 451, to the same point. It must be read in the light of the subject as to which it was used. So read there is nothing in it inconsistent with the proposition that the privilege of appropriating exclusively a portion of the highway involves and is predicated upon a kind of public service.

It is plain that it has been the declared law of the commonwealth since the Opinion of Justices in 150 Mass. 592, 24 N.E. 1084, 8 L. R. A. 487, that gas companies are quasi public corporations performing an important service of a kind so essentially for the general public that cities and towns may be authorized to undertake the service and appropriate money therefor. This opinion was founded upon the proposition that the manufacturing and distribution of gas for the use of the municipality and its citizens is a public service, and hence the business could be undertaken by municipalities as a part of their general governmental functions. It is familiar law that money raised by taxation can be appropriated only for public uses. This public nature of the function of furnishing of gas for public and private illumination is reaffirmed in many decisions, not only by way of illustration but by direct determination. The limitations upon the right of a gas company to maintain its pipes in public ways has been frequently adverted to. Natick Gaslight Co. v. Natick, 175 Mass. 246, 56 N.E. 292; Boston Electric Light Co. v. Boston Terminal Co., 182 Mass. 397, 65 N.E. 835; Boston Electric Light Co. v. Boston Terminal Co., 184 Mass. 566, 570, 69 N.E. 346; Cheney v. Barker, 198 Mass. 356, 84 N.E. 492, 16 L. R. A. (N. S.) 436. See Twin Village Water Co. v. Damariscotta Gaslight Co., 98 Me. 325, 56 A. 1112; State v. New Orleans Gaslight Co., 108 La. 67, 32 So. 179; Haugen v. Albina Light & Water Co., 21 Or. 411, 28 P. 244, 14 L. R. A. 424; Charleston Natural Gas Co. v. Lowe, 52 W.Va. 662, 44 S.E. 410; Miller v. Wilkes-Barre Gas Co., 206 Pa. 254, 55 A. 974; People v. Union Gas Co., 254 Ill. 395, 98 N.E. 768; McCarter v. Vineland Light & Power Co., 73 N. J. Eq. 703, 70 A. 177. As is pointed out in Weld v. Edison Elec. Ill. Co., 197 Mass. 556, 84 N.E. 101, the policy which has been developed in Massachusetts respecting the furnishing of artificial light is regulated monopoly. This is an advantage accruing to the defendant beyond and in addition to those enjoyed at the time its charter was granted.

A public service or quasi public corporation is one private in its ownership but having an appropriate franchise from the...