City of Rushville v. The Rushville Natural Gas Co.
| Decision Date | 31 October 1891 |
| Docket Number | 16,002 |
| Citation | 28 N.E. 853,132 Ind. 575 |
| Parties | The City of Rushville et al. v. The Rushville Natural Gas Company |
| Court | Indiana Supreme Court |
Petition for a Rehearing Overruled April 28, 1892.
From the Rush Circuit Court.
Judgment affirmed.
A. B Irwin, for appellants.
G. W Campbell, B. L. Smith and C. Cambern, for appellee.
McBride, J. Miller, J., took no part in the decision of this case. Coffey, C. J.
The appellant, the city of Rushville, by ordinance, granted to the appellee, the Rushville Natural Gas Company, the right to use the streets, alleys and other public grounds of the city for the purpose of laying pipe and doing other necessary work in putting in a natural gas plant to supply the inhabitants of the city with natural gas. The appellee accepted the franchise, entered upon the streets, alleys and public grounds of the city, sunk wells, dug trenches, purchased and laid pipes, and entered upon the business of supplying natural gas in accordance with the terms of the ordinance.
The appellee avers that it expended in this way the sum of $ 100,000; that it in all respects complied with the requirements of the ordinance in question, and had made contracts with citizens of the place to supply them with natural gas, for which they were to receive $ 18,000 per annum.
Afterward the city enacted another ordinance, fixing the conditions under which any corporation or person could use the streets, etc., for the introduction and supply of natural gas. The latter ordinance was much more specific in its terms than the other, and imposed additional conditions and restrictions upon those acting under it. It also prescribed penalties for its violation. The appellee insisted that the last ordinance could not be made to apply to it, and refused to accept it or to conform to its requirements, and especially to execute a bond required by its terms, and was, through its employees, proceeding under the old ordinance to lay pipes and furnish gas to its patrons. The employee in charge of its work was arrested, prosecuted and fined for so doing, and the appellee alleges that the officers of the city threatened to continue such prosecutions indefinitely unless they accepted the terms prescribed by the last ordinance.
This suit was brought to enjoin the city from the further enforcement of the new ordinance against the appellee, and the further maintenance of the system of prosecutions which had thus been commenced and were threatened.
The questions presented by the record, upon which the controversy mainly hinges, are these:
1st. Is the original ordinance valid?
2d. Is the new ordinance valid, or, if valid in part, is it void in any of its material provisions which the appellant seeks to compel the appellee to accept before allowing it to proceed with its business?
3d. Assuming both ordinances to be valid, did the appellee, by its acceptance of the old ordinance, and its subsequent action thereunder, acquire substantial rights which would be violated by the enforcement of the new ordinance against it?
Incidentally, several other questions arise, which will be noticed hereafter.
The appellant insists that the old ordinance is void, for the reason that it attempts to grant a special and exclusive franchise to the appellee to occupy and use the streets of the city for the purpose of supplying natural gas to the city and its inhabitants. If the fact is as claimed, the appellant is unquestionably right as to the law. It is not in the power of the city to grant an exclusive franchise of that character and give to any person or corporation a monopoly of its streets. Citizens' Gas, etc., Co. v. Town of Elwood, 114 Ind. 332, 16 N.E. 624; Crowder v. Town of Sullivan, 128 Ind. 486, 28 N.E. 94. The ordinance here in question, however, is not open to this objection. It does not give, or purport or attempt to give, any exclusive right to the appellee. The only basis for the contention of the appellant is that the ordinance specifically, and by name, grants to the appellee the right to use its streets, etc., for the purpose of laying its pipes, etc. This is a mere license, or permission to this particular company to use the streets for the given purpose. That such a license is not exclusive and does not grant a monopoly is well settled. This question was so fully considered in the recent case of Crowder v. Town of Sullivan, supra, that it is unnecessary to consider it further. No other objection has been urged to the validity of the ordinance and we know of none. We regard it as valid.
The only objection to the validity of the second, or as it is styled by counsel, the "new" ordinance, as an entirety is, that as to a part of its provisions it does not take effect until December 1st, 1892. The case of Hendrickson v. Hendrickson, 7 Ind. 13, is cited as sustaining this contention. In that case the question was not as to the validity of a statute but as to when it took effect. The Constitution of the State, section 28, article 4, provides that: "No act shall take effect until the same shall have been published and circulated in the several counties of this State by authority, except in case of emergency, which emergency shall be declared in the preamble or in the body of the law." The Legislature passed an act declaring in the body of the act that it should take effect and be in force from and after August 1st, 1852. There was no emergency declared, and the act was not published and circulated until May 6th, 1853. The court held that the act was not in force until May 6th, 1853. This case does not sustain the contention of the appellee. If the act in question had contained an emergency clause it would undoubtedly have taken effect at the time named in the act. As it was, it took effect and became a valid and effective law when published and circulated as required by the Constitution. The rule relative to municipal ordinances is thus stated by Judge Dillon: "Municipal ordinances, otherwise valid, may, like an act of the Legislature, be adopted to take effect in the future and upon the happening of a contingent event." Dillon Munic. Corp., section 309. See, also, Sutherland Stat. Con. 107, and authorities cited.
The fact that certain provisions of the ordinance are not to take effect until December 1st, 1892, does not affect either the validity of the entire ordinance nor of the particular provisions.
Objection is made to the validity of several specific provisions of the ordinance.
The second section provides that "Before any corporation, firm, individual or company desiring to pipe the city of Rushville for the supply of natural gas shall do any work toward laying any mains or pipes in any street," etc., of the city, they shall execute a bond with sureties in the penal sum of $ 5,000, conditioned for the performance of certain acts. Section 12 of the ordinance provides that the filing of such bond shall constitute a full and complete acceptance of the provisions and conditions of the ordinance as soon as such bond is approved by the mayor and filed by him in the office of the city clerk. It is insisted by the appellee that it was not in the power of the city to exact the filing of such bond in any case, and especially that as to it the bond could not be required. For reasons which will hereafter appear, we do not deem it necessary to consider the power of a municipal corporation to require, as a condition of granting a franchise of this character, the execution of a bond, with surety, to restore the streets, when pipes are laid, to their original condition, or to maintain them in that condition for any given time, which was the general character of the bond required in this case.
Section 10 prescribes certain maximum rates which may be charged to consumers after December 1st, 1892, and forbids the charging of any higher rates after said time. It is averred in the complaint that the appellee has a large number of contracts with consumers based upon schedules of prices higher than those fixed by the ordinance, the total amounts aggregating $ 18,000, said contracts being for the term of three years, and all to take effect in the month of November, 1889. As these contracts will all expire before the schedule of prices fixed by the ordinance will take effect, there is no question of interference with contracts already made between the appellee and consumers.
The appellee, however, denies the power of the city to fix rates at all, and further, that even if such power exists it can not be exercised as against the appellee.
The act of March 7th, 1887, Acts 1887, page 36, Elliott's Supplement, section 800, contains the following: "The boards of trustees of towns, and the common councils 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." * * *
The appellant insists that the statute furnishes ample authority to municipalities to regulate the supply, distribution and consumption of natural gas, including the fixing of maximum rates to be charged therefor, while the appellee contends that the only regulations authorized by it are such as conduce to safety; that the corporation can only make regulations providing for its safe supply, safe distribution and safe consumption.
If the appellee is right in its interpretation of this statute, the Legislature by its enactment conferred upon municipal corporations no power whatever except the power to exact a license fee from persons or companies to whom franchises are granted. Independently of any statutory authority, municipal corporations possess, among their implied and inherent police powers,...
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