Chicago Gas-Light & Coke Co. v. People's Gas-Light & Coke Co.

• Citation: 13 N.E. 169,121 Ill. 530
• Court: Supreme Court of Illinois
• Decision Date: 26 September 1887
• Parties: CHICAGO GAS-LIGHT & COKE CO. v. PEOPLE'S GAS-LIGHT & COKE CO.

121 Ill. 530

13 N.E. 169

CHICAGO GAS-LIGHT & COKE CO.

v.PEOPLE'S GAS-LIGHT & COKE CO.

Supreme Court of Illinois.

September 26, 1887.

Appeal from appellate court, First district; H. M. SHEPARD, Judge.John N. Jewett

and Melville W. Fuller, for appellant.

Francis Adams and C. Beckwith, for appellee.

MAGRUDER, J.

This is a bill for the specific performance of a contract, the nature of which will be explained hereafter. Upon final hearing in the superior court of Cook county, the preliminary injunction which had been granted was dissolved, and the bill dismissed. The bill was filed in that court by appellee against appellant. The cause was heard upon the pleadings and exhibits thereto, and upon certain affidavits filed with the answer. The appellate court, to which an appeal was taken, reversed the decree of the superior court, and remanded the case, with directions to ‘enter a decree enjoining and restraining the said Chicago Gas-Light & Coke Company from laying gas mains or pipes in the said West division, or entering into contracts for supplying the city or the inhabitants in said West division with gas, and from in any manner violating said contract.’ The case is brought before us by appeal from the appellate court.

The Chicago Gas-Light & Coke Company was incorporated by an act of the legislature approved February 12, 1849; the second section of which is as follows: ‘The corporation hereby created shall have full power and authority to manufacture and sell gas to be made from any and all of the substances, or a combination thereof, from which inflammable gas is usually obtained, and to be used for lighting the city of Chicago, or the streets thereof, and any buildings, manufactories, public places, or houses therein contained, and erect all necessary works and apparatus, and to lay pipes for the conducting of the gas in any of the streets or avenues of said city: provided, that no permanent injury or damage shall be done to any street, lane, or highway in said city. The real estate which the corporation is entitled to hold shall not exceed in value fifty thousand dollars.’ Section 3 provides, among other things, that the capital stock of the corporation shall not exceed $300,000, and that ‘said company shall have the exclusive privilege of supplying the city of Chicago and its inhabitants with gas, for the purpose of affording light, for ten years.’ An amendment approved January 17, 1855, authorized an increase of $1,000,000 to the capital stock of the company, and also authorized the company to borrow money for constructing, carrying on, and completing its works under the direction of its board of directors, and to issue bonds and mortgage its property. The company was also authorized to acquire and hold real estate necessary for its business. The second, and only other, amendment to the original charter was approved March 12, 1869, and simply authorized an increase of the capital stock of the company ‘to an amount not to exceed five million dollars.’

The People's Gas-Light & Coke Company (the appellee) was organized under a special charter, approved February 12, 1855. The bill states the substance of the powers conferred, and rights granted, as follows: ‘With power and authority to erect the necessary works for the manufacture of gas and coke within the city of Chicago, and on and after the twelfth day of February, 1859, to manufacture and sell gas to be made from any and all substances, or a combination thereof, from which illuminating gas is usually obtained, and to be used for the purpose of lighting the city of Chicago, or the streets thereof, and any buildings, manufactories, public places, or houses therein contained, and to erect all necessary works and apparatus for that purpose. And on and after the twelfth day of February, 1859, or sooner, and by and with the consent of the Chicago Gas-Light & Coke Company, to lay pipes for the purpose of conducting the gas in any of the streets or avenues of said city, with the consent of the city council.’ The bill also states that by an amendment to the said act of February 12, 1855, approved February 7, 1865, the People's Company ‘was granted full power and authority forthwith to proceed to the erection and maintenance of the necessary works for the manufacture of gas and coke within the said city of Chicago, and to manufacture, supply, and sell gas to be made from any and all substances, or a combination thereof, from which illuminating gas is usually obtained, and to be used for the purpose of lighting the city of Chicago, any streets, buildings, manufactories, public places, or houses therein contained, and to erect and use all necessary works and apparatus for such purposes aforesaid, and, with the consent of the common council of said city, to lay down and use all necessary pipes for the conducting of gas in and along any of the streets, alleys, avenues, or public squares of said city.’ In 1858, on ordinance was passed by the common council of Chicago authorizing the People's Company ‘to lay its gas-mains, pipes, feeders, and service-pipes in any of the streets, alleys, avenues, highways, public parks, and squares through said city, subject to then existing rights, and at all times to the resolutions and ordinances of the common council of said city.’

On April 21, 1862, a contract was made between appellant, of the first part, appellee, of the second part, and Cornelius K. Garrison, of the third part, the material portions of which are as follows:

‘ Third. For and in consideration of the sale and conveyance of the said improvements by the said party of the first part to the said party of the third part, as aforesaid, and of the covenants and agreements herein contained to be kept and performed by the said parties of the first part, the said parties of the second part and third part, separately, each for themselves, hereby covenant and agree, to and with the said party of the first part, that they, the said parties of the second and third parts, or either of them, will not, during the period of one hundred years from this date, either jointly or separately, in their own names, or in the names of any other party or parties, lay, or cause to be laid, any gas-mains or gas-pipes of any kind in the North and South divisions of the said city of Chicago, or in such partes of said city as now lie, or may hereafter lie, east of the North and South branches of the Chicago river, nor furnish nor sell illuminating gas to any person or persons for consumption or use within the said last-mentioned portions of the said city of Chicago; nor, during the period aforesaid, interfere with or molest, in any way whatever, the business of the party of the first part of manufacturing and selling illuminating gas and its incidents in the said last-mentioned parts of said city of Chicago.

‘ Fourth. For and in consideration of the purchase and payment so made, as aforesaid, by the said party of the third part, and of the covenants and agreements of the said parties of the second and third parts herein contained, the said party of the first part hereby covenants and agrees to and with the said parties of the second and third parts, severally, that the said party of the first part will not, during a like period of one hundred years from the date hereof, either directly or indirectly, in its own name, or in the name of any other party or parties, lay, or cause to be laid, any gas-mains or gas-pipes of any kind, in the said West division of the city of Chicago, or in such part or parts of said city as now lie, or may hereafter lie, west of the North and South branches of the Chicago river, nor furnish nor sell illuminating gas to any persons for consumption or use within the said last-mentioned portions of said city of Chicago, nor, during the period aforesaid, interfere with nor molest, in any way whatever, the business of the said parties of the second and third parts, or either of them, in manufacturing and selling illuminating gas and its incidents in the said last-mentioned part or division of said city.’

This contract appears to have been observed by both parties until May or June, 1886, when appellant obtained permission from the city council to construct a tunnel under the South branch of the Chicago river, in which to lay gas-mains to be connected with mains and service-pipes in the streets of the West division. The bill charges that appellant threatens to lay its mains and service-pipes in the West division for the purpose of supplying gas there in violation of its contract. The object of the bill is to enforce the fourth clause of the contract, as above quoted, and prevent its violation.

Under its charter, appellant had the right to make and sell gas to be used for lighting all the divisions of the city of Chicago, and all of the streets and buildings therein. It had as much power and authority to lay pipes in the streets of the West division as in those of the North and South divisions. By the contract, it agreed to lay no mains or pipes in the West division, nor to furnish or sell any gas to persons living there, for a period of 100 years. It thereby bound itself to avoid the performance of a duty which it owed to the public. The manufacture and distribution of illuminating gas by means of pipes or conduits placed, under legislative authority, in the streets of a town or city, is a business of a public character; it is the exercise of a franchise belonging to the state. The services rendered, and to be rendered, for such grant are of a public nature. Where the right to make and sell gas to the city and its inhabitants, under the conditions here named, is conferred upon a company, it is so conferred as well for the benefit of the public as of the company.

In Gas Co. v. Light Co., 115 U. S. 650, 6 Sup. Ct. Rep. 252, the supreme court of the United States say: ‘The manufacture of gas, and its distribution for public and private use by means of pipe...