City of St. Louis v. Laclede Gaslight Co.

• Decision Date: 05 March 1900
• Parties: CITY OF ST. LOUIS v. LACLEDE GASLIGHT CO.
• Court: Missouri Supreme Court

55 S.W. 1003

155 Mo. 1

CITY OF ST. LOUIS v. LACLEDE GASLIGHT CO.

Supreme Court of Missouri, Division No. 2.

March 5, 1900.

MUNICIPAL CORPORATIONS — STREET LIGHTING —CONTRACTS—WAIVER—CONSTRUCTION OF CONTRACTS.

1. Where defendant's assignor entered into a street-lighting contract with plaintiff city, which referred to a certain city ordinance, making same a part thereof, which ordinance imposed no contractual liability not created by the contract itself, and its privileges, which were conditions precedent to defendant's liability thereunder, were not accepted or availed of by defendant or its assignor, a judgment against defendant, based on its failure to comply with one of such conditions precedent, was erroneous.

2. Defendant contracted to do certain street lighting for plaintiff city. The contract contained provisions, which the city claimed required defendant to pay to it semiannually 5 per cent. of its gross receipts, which defendant contended was not true. For five years the parties failed to comply with, or to take steps to enforce, such provisions. Held, that such failure must be regarded as an interpretation by them that defendant was not required to make such payment; hence, the city is estopped to maintain an action for its collection.

Appeal from St. Louis circuit court; John M. Wood, Judge.

Action by the city of St. Louis against the Laclede Gaslight Company. Judgment for plaintiff, and defendant appeals. Reversed.

This is an action by plaintiff against the defendant, as assignee of a contract entered into by plaintiff and one Charles A. Brown on the 13th day of March, 1889, in regard to electric lighting certain parts of said city, to recover the sum of $6,530.04, being 5 per cent. of the gross receipts on $130,600.99, received by defendant under said contract between the 1st day of January, 1890, and the 30th day of December, 1894, for electric light and power sold by it to private parties and corporations, and which plaintiff claims is due to it by defendant under the terms of said contract, and which it refuses to pay. The petition alleges: That plaintiff and defendant are both corporations, plaintiff being a municipal corporation. That on and prior to the several dates mentioned in the petition, article 11, c. 15, of the Revised Ordinances of said city of 1887, and section 590 of said article and chapter, were in full force, and that by the provisions of said section it is provided and ordained that any person or persons, corporation or association, placing along or across any of the streets, alleys, or public places of the city of St. Louis wires, tubes, or cables conveying electricity for the production of light or power shall agree to file with the comptroller of said city on the 1st days of January and July of each year a sworn statement of his or its gross receipts from his or its business arising from supplying electricity for light or power for the six months next preceding such statement, and shall agree to pay into the city treasury, at the time when filing said statement, 2½ per cent. on the amount of such gross receipts up to the year 1890, and 5 per cent. on the amount of such gross receipts thereafter. That while the aforesaid revised ordinance and the above-quoted section thereof were in full force, to wit, on the 13th day of March, 1889, one Charles A. Brown, as party of the first part, entered into an agreement in writing with the plaintiff as party of the second part, bearing said date, in and by which agreement the said Charles A. Brown, for the considerations therein named, covenanted and agreed to and with the plaintiff, at his own proper cost and expense, for the term of ten years from and after January 1, 1890, to do all the electric lighting of the Northern district of the city of St. Louis, so far as said district is to be lighted by incandescent lights; said district comprising all the territory in the city of St. Louis north of a line coincident with the southern line of Washington avenue extending from the eastern to the western boundaries of the city. That in and by said contract the plaintiff granted to said Charles A. Brown the privilege of furnishing electricity for light and power to consumers other than the plaintiff—that is to say, to private parties and corporations —for the term of 10 years from and after January 1, 1890, and said Charles A. Brown agreed that all operations under said privilege should be in accordance with and subject to all then existing ordinances, rules, and regulations of the city of St. Louis appertaining to the furnishing of electricity for light and power, or to any such that might thereafter be established; and plaintiff agreed that the said Charles A. Brown, when making the statement of gross receipts required by the aforesaid section 590, art. 11, c. 15, of said Revised Ordinances, should be entitled to deduct therefrom all sums paid or payable by the plaintiff. That said contract was approved by the municipal assembly of the city of St. Louis by Ordinance No. 14,917, entitled "An ordinance to approve the contract for lighting with electricity the city of St. Louis," approved March 29, 1889. That by said agreement the said Charles A. Brown did agree to file with the comptroller of the city of St. Louis, on the 1st days of January and July of each year, beginning with the year 1889, a statement of his gross receipts arising from supplying electricity for light or power to consumers other than plaintiff for the six months next preceding such statement, and to verify such statement by his oath. And plaintiff furthermore states that by said agreement said Charles A. Brown did agree to pay into the city treasury, at the time of filing such statement, 2½ per cent. on the amount of such gross receipts during the year 1889, and 5 per cent. on the amount of all such receipts after the 1st day of January, 1890.

The petition further alleges: That Ordinance 15,285 of the city of St. Louis, entitled "An ordinance authorizing the assignment of the electric lighting contracts and the substitution of new sureties thereon," was duly passed by the municipal assembly of said city, and approved August 13, 1889, which said ordinance authorized the said Charles A. Brown, by an instrument in writing, to assign said contract to another; and that on the 24th day of August, 1889, by authority of said ordinance, he did, by an instrument in writing, assign and transfer the said contract to the defendant, the Laclede Gaslight Company, and the defendant joined in and accepted said assignment, and undertook and agreed to perform said contract, and all the conditions and stipulations therein contained, which were to be performed by said Charles A. Brown, for the consideration therein specified to be paid by plaintiff; which said assignment was duly approved by the council of said city October 29, 1889, and approved and accepted by plaintiff, and so acted upon by plaintiff and defendant. That shortly after said 29th day of October, 1889, the defendant entered upon the execution of said contract, and placed along and across the streets, alleys, and public places of the city of St. Louis its wires, tubes, and cables conveying electricity for the production of light and power, and availed itself of the privilege granted to said Charles A. Brown by plaintiff, and assigned to it as aforesaid, of furnishing electricity for light and power to consumers other than plaintiff; and plaintiff states that defendant did thereafter furnish and supply electricity for light and power to private parties and corporations, and derived therefrom the gross receipts hereinafter set forth. That pursuant and in obedience to said section 590, art. 2, c. 15, of said Revised Ordinances, defendant, on the 1st days of January and July of each year, filed with said comptroller its statement or return of its said gross receipts for the preceding six months, verified as said section requires; and that said gross receipts, as shown by said returns, and after deducting all the sums paid or payable by the city from January 1, 1890, to December 31, 1894, have been $130,600.99. That the sum above stated is defendant's gross receipts for electric light and power supplied or furnished by it under and by virtue of the terms of said contract with plaintiff to consumers other than plaintiff. That by the terms of said contract and the assignment thereof defendant is bound to pay 5 per cent. of said gross receipts or $130,600.99, being the sum of $6,530.04, for which, with interest and costs, plaintiff prays judgment.

The defendant answered, admitting its incorporation, and the execution and assignment of the contract, but denying its liability thereunder to pay 5 per cent. of its gross receipts. By way of special defense, the defendant alleged that it was authorized by its charter to sell electricity for private lighting by means of the streets of the city of St. Louis, and that, in so far as the general ordinance purported to impose a tax of 5 per cent. upon its gross receipts, it violated the obligation of said charter as a contract with the state, and was, therefore, in conflict with the constitution of the state of Missouri and of the United States. The defendant further urged, by way of special defense, that it had never used or exercised the privilege conferred by the general ordinance, and that nothing contained in the Brown contract sued on imposed any such obligation upon it.

There is no disagreement with respect to the facts, which are substantially these: In 1884 the city of St. Louis passed an ordinance —No. 12,723—authorizing "any person, corporation, or association" to use the streets and alleys of the city for the distribution of electricity upon certain conditions. Among these conditions it was provided that every person, corporation, or association availing itself of the "privilege conferred by the ordinance" should—First. Observe all regulations prescribed by the board of...