City of Detroit v. Dean

• Decision Date: 22 January 1883
• Parties: CITY OF DETROIT v. DEAN and another
• Court: U.S. Supreme Court

106 U.S. 537

1 S.Ct. 560

27 L.Ed. 300

CITY OF DETROIT v. DEAN and another.

January 22, 1883.

Henry M. Duffield, for appellant.

E. W. Meddaugh, E. N. Dickerson, and Geo. T. Curtis, for appellees.

FIELD, J.

In December, 1871, the Mutual Gas-light Company, of Detroit, was created a corporation under a general law of Michigan, for the purpose of manufacturing, selling, and furnishing gas for consumption in Detroit. The proposed corporators had previously made application to the common council to authorize the corporation, when formed, to lay gas-pipes, mains, conductors, and service-pipes in the avenues, streets, lanes, highways, alleys, public parks, and squares throughout the city; and obtained the passage of an ordinance granting permission to the company to lay the pipes, subject, however, to certain conditions. Power was conferred by law upon the city authorities to grant the permission 'upon such reasonable regulations as they might prescribe;' and they provided that the permission should cease if the company should, at any time, combine with any other company concerning rates to be charged for gas either to the city or to private consumers; and that the company should not sell its property, franchised, or privileges to any other gas-light company, under the penalty of a forfeiture of its works to the city. The company accepted the terms of the ordinance; erected its manufacturing works in the township of Hamtramck, just beyond the boundary of the city; laid mains and service-pipes in the streets, and in November, 1872, commenced distributing and supplying gas to private consumers and to the city, and continued to do so up to the time this suit was commenced. During this period, and previously, another corporation, known as the Detroit Gas-light Company, was in existence and was also supplying gas to private consumers and the city. In June, 1877, the two companies entered into an agreement to divide the city between them, one to take the part lying easterly of the middle of Woodward avenue, and the other the part lying westerly of it; each to transfer to the other its property situated in the portion of the other, and each stipulating not to lay mains or to supply gas in the portion of the other reserving, however, the right to fulfill all obligations resting upon it with respect to any portion of the city. The difference in the value of the property exchanged was $140,000 in favor of the old company, and this sum the new company agreed to pay. The common council, deeming this division of the city, and other things done or omitted by the company, to constitute a breach of the conditions upon which permission to lay its pipes in the streets had been granted, passed on the fourteenth of December, 1877, an ordinance repealing the previous one, reciting as reasons for it that the company had not built its gas-works in the city of Detroit, but in the township of Hamtramck; that it had entered into an agreement with the Detroit Gas-light Company to divide the territory of Detroit between them for the supply of gas; and that it had refused to lay mains in streets on petition of owners or occupants of buildings for a supply of gas.

The repealing ordinance declared that the company had thus forfeited its gas-pipes, mains, conductors, and service-pipes lying within the avenues, streets, lanes, highways, alleys, public parks, and squares of the city, and all other property situated within its limits; and that the title to the whole had vested in the city of Detroit. It therefore directed the comptroller to assume possession and control of the same, and to serve a copy of the ordinance upon the company. To restrain the enforcement of this ordinance and protect the rights and property of the company, the present suit was commenced by the complainant, a citizen of New York. The company had expended large sums of money in the construction of its works, and created for that purpose a debt, represented by bonds secured by mortgage upon its property, which, with interest, amounted to...