City of Rushville v. Rushville Natural Gas Company
| Decision Date | 26 January 1905 |
| Docket Number | 20,386 |
| Citation | 73 N.E. 87,164 Ind. 162 |
| Parties | City of Rushville v. Rushville Natural Gas Company |
| Court | Indiana Supreme Court |
From Rush Circuit Court; John L. Rupe, Special Judge.
Action by the Rushville Natural Gas Company against the City of Rushville. From a decree for plaintiff, defendant appeals.
Affirmed.
Young & Young and Forkner & Forkner, for appellant.
Ben L Smith, Claude Cambern and D. L. Smith, for appellee.
The appellee is occupying the streets and public places of the city of Rushville, and supplying its inhabitants with natural gas, under a franchise granted for that purpose by said city by an ordinance duly passed on the 19th day of July, 1889. This ordinance, known as No. 26, imposes no restrictions or limitations upon appellee with respect to the rate to be charged consumers for such gas, or as to the method by which the price is to be ascertained and fixed. On August 13, 1890 appellant city duly passed another ordinance, known as No. 30, granting generally to any corporation, firm, company or individual a franchise to supply said city and its inhabitants with natural gas upon compliance with terms and conditions set forth at length in said ordinance. On May 16, 1899, said city duly passed another ordinance, known as No. 73, amending section ten of ordinance No. 30, providing for the use of meters for the measurement of gas consumed, and limiting the charge therefor to fifteen cents per thousand feet. This action was brought by appellant to enjoin appellee from increasing its rates and charging consumers of natural gas in excess of the maximum price fixed by the provisions of said ordinances No. 30 and No. 73. The cause was tried, a special finding of facts made, with a conclusion of law, a motion for a new trial overruled, and judgment rendered for appellee.
The questions presented to this court arise upon appellant's exception to the conclusion of law, and to the court's ruling upon the motion for a new trial.
The special finding of facts is, in substance, as follows: That appellee is a corporation organized April 22, 1889, under the laws of this State, for the purpose of supplying the citizens of the city of Rushville with natural gas, and that on the 19th day of July, 1889, said city duly passed an ordinance (set forth) granting to appellee the right to use the streets of said city for such purpose; that appellee accepted said ordinance, and pursuant thereto constructed its plant, and expended in that behalf $ 100,000, and since the original construction has expended an additional sum of $ 125,000; that on the 13th day of August, 1890, said city duly passed another ordinance (fully set out), known as No. 30, purporting to regulate and prescribe the terms on which any gas company might occupy the streets of the city. Section ten of this ordinance fixed maximum rates to be charged per month for natural gas for stoves and heaters for dwellings and for stores; that on the 16th day of May, 1899, said city duly passed another ordinance (fully set out), known as No. 73, amending section ten of said ordinance No. 30. This ordinance also fixed maximum rates to be charged, and also provided for the use of meters, and prohibited a charge in excess of fifteen cents per thousand feet for fuel gas; that at the commencement of this action appellee was furnishing some of its patrons fuel gas at the old "flat rate," but was intending to discontinue the same as fast as practicable, and furnish gas by meter measurement only, at a charge of twenty-five cents per thousand feet; that since the taking effect of ordinance No. 73, appellee has extended its mains an aggregate distance of 3,878 feet; that appellee began the use of meters in December, 1895, and charged its patrons for gas consumed at the rate of fifteen cents per thousand feet; that said ordinances No. 30 and No. 73 were passed without the knowledge or consent of appellee, and neither of them was ever accepted by it, but on the 18th day of September, 1899, appellee notified appellant, in writing, that it refused to accept said ordinance No. 73. Upon these facts, the court stated, as a conclusion of law, that appellee is not bound by either said ordinance No. 30 or said ordinance No. 73, and that appellee should recover costs. Judgment was rendered accordingly. Did the court err in this conclusion of law?
In the case of the City of Rushville v. Rushville Nat. Gas Co. (1892), 132 Ind. 575, 15 L.R.A. 321, 28 N.E. 853, the ordinance of July 19, 1889, granting the franchise under which appellee is operating, was under consideration, and its validity settled. The conclusion of the court in that case is in these words:
Appellee accepted the provisions of this ordinance, adjudged and conceded to be valid, and constructed its plant at a cost of $ 100,000, to fulfil the purpose of its creation. The acceptance by appellee of the privileges granted by appellant in this ordinance constituted a contract equally binding upon both parties, and when acted upon rights became vested, and its provisions became secure against impairment by any subsequent municipal action. City of Indianapolis v. Consumers Gas Trust Co. (1895), 140 Ind. 107, 27 L.R.A. 514, 49 Am. St. Rep. 183, 39 N.E. 433; Westfield Gas, etc., Co. v. Mendenhall (1895), 142 Ind. 538, 41 N.E. 1033; Michigan Telephone Co. v. City of St. Joseph (1899), 121 Mich. 502, 80 N.W. 383, 47 L.R.A. 87, 80 Am. St. Rep. 520; State, ex rel., v. Corrigan, etc., St. R. Co. (1884), 85 Mo. 263, 55 Am. Rep. 361; City of Burlington v. Burlington St. R. Co. (1878), 49 Iowa 144, 31 Am. Rep. 145; City of New Orleans v. Great Southern, etc., Co. (1888), 40 La. Ann. 41, 3 So. 533, 8 Am. St. Rep. 502; Baltimore Trust, etc., Co. v. Mayor, etc. (1894), 64 F. 153, 159; City R. Co. v. Citizens' St. R. Co. (1897), 166 U.S. 557, 17 S.Ct. 653, 41 L.Ed. 1114.
In the case of the City of Rushville v. Rushville Nat Gas Co., supra, it was held by this court that the act of March 7, 1887 (Acts 1887, p. 36), empowered cities to exercise a reasonable control over the price which may be charged consumers of natural gas; and that, inasmuch as ordinance No. 26 is silent as to rates, a...
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