City of Joplin v. Southwest Missouri Light Company

• Decision Date: 16 November 1903
• Docket Number: No. 32,32
• Citation: 24 S.Ct. 43,191 U.S. 150,48 L.Ed. 127
• Parties: CITY OF JOPLIN, Appt. , v. SOUTHWEST MISSOURI LIGHT COMPANY
• Court: U.S. Supreme Court

191 U.S. 150

24 S.Ct. 43

48 L.Ed. 127

CITY OF JOPLIN, Appt.,

v SOUTHWEST MISSOURI LIGHT COMPANY.

No. 32.

Argued October 20, 1903.

Decided November 16, 1903.

Bill in equity to restrain the appellant from supplying its inhabitants with incandescent lights or other electric lighting in competition with the appellee.

The city of Joplin is a municipality of the state of Missouri; the appellee is a corporation of said state, and the jurisdiction of the circuit court was invoked on the ground that the action of the city impaired the obligation of the contract existing between it and the appellee, in violation of the Constitution of the United States, and hence the appeal directly to this court.

A preliminary injunction was granted. 101 Fed. 23. It was made perpetual upon final hearing, and a decree was entered enjoining the city 'from supplying or furnishing to the inhabitants, residents, or any other person, firm, or corporation within said city, or any addition thereto or extension thereof, electric lights, either incandescent or arc, or in any other form or manner, for commercial or private lighting, for and during the full term' of the grant to the predecessors and assignors of appellee, to wit, the term of twenty years from and after October 7, 1891. 113 Fed. 817.

A statute of Missouri (Laws 1891, p. 60) authorizes cities to erect, maintain, and operate electric light works, to light the streets, and supply the inhabitants with light for their own use, and to establish rates therefor. Or they may, the statute provides, 'grant the right to any person or persons or corporation to erect such works . . . upon such terms as may be prescribed by ordinance, provided further that such right . . . shall not extend for a longer period than twenty years.' Subsequently to, and in pursuance of, this statute, the city, by ordinance, October 7, 1891, granted the right to erect and maintain an electric light plant to certain persons, naming them, their successors and assigns, for a period of twenty years. The plant was erected at considerable expense, and has ever since been maintained and operated. The appellee is the successor of the original grantees.

The ordinance conferred rights and exacted obligations, and fixed, besides, the rates to be charged. It also provided for its written acceptance within ten days after its passage, and the commencement of the work within sixty days. It was accepted.

Subsequently (March, 1899), the city, acting in pursuance of, and in the manner provided in, certain ordinances, issued bonds to the amount of $30,000, 'for the purpose of erecting an electric light plant, to be owned, controlled, and operated by the city,' and by the means obtained thereby constructed electrical works, erected poles and wires, established a schedule of rates, and entered into the business of commercial electrical lighting in competition with appellee. The bill alleged that the appellee was the owner of real and personal property within the city, which is assessed by the city for municipal taxation, and that appellee is compelled, by reason of such taxation, 'to aid and assist in operating and maintaining defendant's (the city's) electric plant and business as a rival and competing one' with appellee's electrical plant and business.

Messrs.C. H. Montgomery and Samuel W. Moore for appellant.

Messrs. John A. Eaton and J. McD. Trimble for appellee.

Statement by Mr. Justice McKenna:

[Argument of Counsel from pages 153-155 intentionally omitted] Mr. Justice McKenna, after stating the case, delivered the opinion of the court:

The foundation of the suit is that the ordinances of March, 1899, and the acts and conduct of the city in entering into competition with the complainant (appellee) impair the obligation of the contract impliedly arising from the ordinance of October 7, 1891, and the acceptance thereof by appellee. In other words, it is contended that under the statute of the state, which we have quoted, the city was given the power to construct an electical plant and erect poles, etc., to 'supply private lights for the use of the inhabitants of the city,' or it could grant that right 'to any person or persons or corporation' upon such terms as might be prescribed by ordinance. It chose the latter, and granted to the assignors of appellee the right given by the statute, and expressed it to be 'in consideration of the benefits to be derived therefrom.' And it is hence contended that thereby the city contracted not to build works of its own, and that by doing so it violated § 10 of article 1 of the Constitution of the United States, which provides that no state shall pass any law impairing the obligation of a contract, and also violated that clause of the 14th Amendment of that instrument, which...