City of Noblesville v. Noblesville Gas & Improvement Co.

• Decision Date: 21 June 1901
• Citation: 157 Ind. 162,60 N.E. 1032
• Parties: CITY OF NOBLESVILLE v. NOBLESVILLE GAS & IMPROVEMENT CO.
• Court: Indiana Supreme Court

157 Ind. 162

60 N.E. 1032

CITY OF NOBLESVILLE

v.NOBLESVILLE GAS & IMPROVEMENT CO.

Supreme Court of Indiana.

June 21, 1901.

Appeal from circuit court, Clinton county; James V. Kent, Judge.

Suit by Noblesville Gas & Improvement Company against the city of Noblesville. From a judgment in favor of plaintiff, defendant appeals. Affirmed.W. R. Fertig and R. K. Kane, for appellant. Gavin & Davis, for appellee.

HADLEY, J.

Suit by appellee for injunction against the enforcement by appellant of its ordinance purporting to regulate the price to be charged by appellee for natural gas in certain cases. The complaint is in two paragraphs, to which a general demurrer was overruled. The city elected to stand by its demurrer, and judgment was rendered against it as upon default, in accordance with the prayer of the complaint. Subsequently, but at the same term of court, the city filed its motion, supported by divers affidavits, to set aside the judgment, open the case, and allow it to file an answer, which motion was overruled. These two rulings present the only questions for decision. The complaint discloses that the town of Noblesville, in December, 1886, granted to appellee, a corporation, the right to lay and maintain its gas pipes and mains in the streets and alleys of the town for the purpose of supplying the town and its inhabitants with natural gas upon specified terms. There was no exclusive right, no time limit, fixed for the continuance of the license, no restrictions upon the prices that might be charged for gas, and no reservation by the town of any right to revoke or to interfere at a subsequent date with appellee's enjoyment of the franchise. Under this grant appellee dug gas wells and put in its plant at great expense. Subsequently the town was incorporated as a city, and on April 11, 1888, the common council passed an ordinance entitled “An ordinance authorizing corporations, firms and individuals, to lay and maintain pipes in the streets, alleys and public grounds of the city of Noblesville for the purpose of supplying said city and its inhabitants with natural gas for heating and illuminating purposes,” prescribing in said ordinance a schedule of maximum rates that might be charged for gas in the instances therein specified by any one accepting its provisions. In the schedule prescribed, among other omissions, no rate was fixed, or attempted to be fixed, for furnaces and bath and water heaters in residences. The board of directors of the gas company, by resolution duly passed and filed with the common council of the city, accepted the provisions of the ordinance of 1888, upon the express “condition that none of the vested rights of the Noblesville Gas & Improvement Company under former franchises shall be in any manner affected thereby.” The schedule of rates prescribed by the ordinance of 1888 was precisely the same rates fixed and charged by the gas company prior thereto, and the same rates are now being charged. For furnaces and bath and water heaters in residences the company has heretofore and is now charging, for furnaces from $28 to $38.50 per year, according to size of fire pot, running from 22 to 28 inches, and for bath and water heaters each $6 per annum. In January, 1900, the common council of the city pretended to pass another ordinance, termed by it as supplemental to, but not in repeal of, the ordinance of 1888, whereby it is attempted to prescribe another schedule of maximum rates chargeable by any corporation, firm, or person now or hereafter furnishing gas to the inhabitants of the city, among which rates are, for furnaces in residences, $2.10 per room per year, kitchen, pantry, halls (except reception halls), and unfinished attics not to be counted, and no charge allowed for grates and other heaters in rooms of houses where furnaces are used; for bath and water heaters, $3.50 per annum. The last ordinance appellee refused to accept, and insists upon its right, under its grant of 1886, to make its charges as it deems proper in all instances not provided for in the ordinance of 1888. Occupants of houses where furnaces and grates and other heaters are used refuse to pay, and give out in speeches that they will not pay, anything for grates and other heaters, and only pay $2.10 per room per year, without reference to the amount of gas consumed; and many persons using bath and water heaters give it out in speeches that they are not required to pay, and will not pay, to exceed $3.50 per year for such heaters; and many others are giving it out that they are not required to pay according to the ordinance of 1888, but according to the ordinance of 1900; and much contention and confusion has arisen between appellee and its customers as to the amount properly chargeable for gas, and by reason thereof many actions have been brought and are now pending in the Hamilton circuit court wherein the plaintiff alleges that the appellee is asserting the right to collect rates in excess of what it is entitled to, and injunctions are prayed against appellee from collecting its just demands, and many other similar suits are threatened and will be brought if not restrained. There was no consideration for the acceptance of the ordinance of 1888, and appellee is not bound thereby. The ordinance of 1900 constitutes a cloud on the franchises and rights of the appellee, and is made the basis by consumers for their contentions that they are not bound by the rates prescribed by the ordinance of 1888, nor by the rates fixed by appellee in cases where the ordinance of 1888 does not prescribe them. To avoid a multiplicity of suits, and to put to rest the many controversies that have arisen between appellee and the consumers of its gas, it is necessary that the court determine their respective rights under the ordinances of 1888 and 1900. Prayer that the ordinance of 1900 be adjudged null, and that appellant be perpetually enjoined from attempting to enforce its provisions against appellee, and that the rights of the parties concerned, under the ordinance of 1888, be determined.

The real question presented by the demurrer is the validity of the ordinance of 1900, and the power of the city council to pass it is the only ground upon which it is controverted. Appellant impliedly concedes that to sustain its contention we must overrule the case of Lewisville Natural Gas Co. v. State, 135 Ind. 49, 34 N. E. 702, 21 L. R. A. 734, and reassert the doctrine discarded in City of Rushville v. Rushville Natural Gas Co., 132 Ind. 575, 28 N. E. 853, 15 L. R. A. 321, and this we are earnestly urged to do. The city council attempted, by the ordinance of 1900, to accomplish but a single thing, namely, to arbitrarily regulate the prices chargeable by appellee to its consumers of gas. All are agreed that the power to pass such an ordinance must be drawn from legislative grant, and that the grant has not been made unless it be found within the provisions of the act of 1887 (Acts 1887, p. 36), which reads thus: “That the board of trustees of towns and the common council of cities, in this state, shall have power to provide by ordinance, reasonable regulations for the safe supply, distribution, and consumption, of natural gas within the respective limits of such towns and cities, and to require persons or companies to whom the privilege of using the streets and alleys of such towns and cities is granted for the supply and distribution of such gas, to pay a reasonable license for such franchise and privilege.” It is not doubted that the power contended for by the appellant resides in the lawmaking body of the state, and that it may be by such body conferred upon towns and cities. It is,...