City of St. Louis v. The Laclede Gas Light Company
| Decision Date | 05 March 1900 |
| Citation | 55 S.W. 1003,155 Mo. 1 |
| Parties | CITY OF ST. LOUIS v. THE LACLEDE GAS LIGHT COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. John M. Wood Judge.
Reversed.
I. H Lionberger for appellant.
(1) There is no covenant from which an obligation on defendant's part to pay into the city treasury five per cent of its gross receipts from private lighting, can be inferred. (a) The requirement that the "operations" of the contractor shall be in accordance with and subject to all existing and future ordinances of the city does not even suggest an obligation to pay five per cent of his gross receipts, much less does it necessarily imply such obligation. Indianapolis v. Gas Co., 27 L. R. 517. (b) The agreement of the city that the contractor shall have the right, when making the statements of gross receipts required by section 590 of the revised ordinances to deduct the amounts paid by the city, does not by implication impose upon him the obligation to pay five per cent of such receipts into the city treasury. Section 590 contains several distinct requirements. One only of these requirements is mentioned in the contract, to-wit: That statements of gross receipts shall be filed. The contract does not provide that "the contractor, when making payments of five per cent on his gross receipts as required by section 590," shall be entitled, etc. Where there is an express covenant, one will never be implied which is broader. Noke's Case, 4 Co. 80; Kent v. Walsh, 7 John. 258; Wallon v Kauffman, 19 John. 97; Canal Co. v. Coal Co., 75 U.S. 276. (c) But if it be assumed that the contract binds the contractor, not only to conduct his operations in accordance with the police regulations prescribed by the city, but to do all other things required by the general ordinance, and particularly by section 590; still it does not require the defendant to pay five per cent of its gross receipts, because there is no such requirement in section 590, or any other part of the general ordinance. Section 590 provides that no person shall avail himself of the "privilege hereby conferred," unless he shall pay five per cent of his gross receipts. The tax is, in terms, imposed upon such persons only as use the privilege conferred by the general ordinance. The record in the present case shows and the city admits that defendant has never used the privilege conferred by the general ordinance. His contract "carried" a special privilege as an "additional consideration" to the cash payments made for public lighting. Giving, therefore, the widest possible scope to the covenant, still it does no more than bind the contractor to pay five per cent of his gross receipts if he shall use the privilege conferred by the general ordinance. This he has never done. (d) Even if it be admitted that the contract should be so interpreted as to require the contractor to pay five per cent of all gross receipts derived from the exercise of the privilege conferred by the contract, still the plaintiff can not recover, because it has not been proved nor attempted to be proved that the defendant ever used or availed itself of such privilege. It has used its charter powers derived from the State, and neither the ordinance nor the contract can by any possible construction be held to impose a tax upon the exercise of such power. The ordinance and contract are permissive. A "privilege" is not a duty. The Laclede Gas Light Company was not bound to use a city franchise when it already had from the State power to do the same thing. Railroad v. St. Louis, 66 Mo. 258. (2) If the contract does not bind the defendant to pay the five per cent tax, it can not be held liable under the general ordinance, because, first, this is a suit on an express contract and not on the ordinance; second, if the ordinance alone were relied on, it would be void as impairing the obligation of the gas company's contract with the State. State ex rel. v. Gas Co., 102 Mo. 472; Balto. v. Railroad, 33 L. R. A. 503; Hodges v. W. U. Tel. Co., 29 L. R. A. 770; Railroad v. Hefley, 158 U.S. 104; N. O. Gas Co. v. Louisiana Light Co., 115 U.S. 650; N. O. Waterworks Co. v. Rivers, 115 U.S. 674; Louisville Gas Co. v. Citizens' Gas Co., 115 U.S. 683; Mugler v. Kansas, 123 U.S. 623; Brennan v. Titusville, 153 U.S. 300; Railroad v. Husen, 95 U.S. 472; State ex rel. v. St. R'y, 85 Mo. 263; City of Kansas v. Corrigan, 86 Mo. 67; Sloan v. Railroad, 61 Mo. 31; State ex rel. v. Greer, 78 Mo. 194; Railroad v. Jacksonville, 67 Ill. 37; People v. Jackson P. L. Co., 9 Mich. 307; Railroad v. Memphis, 53 F. 715; Cooley's Const. Lims. (5 Ed.), pp. 706, 712, 713; Tiedeman on Police Power, secs. 191, 194; 1 Hare's Amer. Const. Law, p. 618; 2 Beach on Pub. Corps., secs. 1229, 1249.
Edw. C. Kehr for respondent.
(1) The reference to the ordinance makes it a part of the contract. Sec. 590 is as much a part of the contract as if set out in it. Johnson Co. v. Wood, 84 Mo. 489; Union Depot Co. v. Railroad, 131 Mo. 291; Wiley v. Robert, 27 Mo. 388; s. c. 31 Mo. 212; Briggs v. Munchon, 56 Mo. 467; Hays v. Perkins, 109 Mo. 102; West v. Bretelle, 115 Mo. 653; Lewis v. Penn. M. Ins. Co., 3 Mo.App. 372; Boeckeler v. McGowan, 12 Mo.App. 507; Gallaher v. Smith, 55 Mo.App. 116. (2) Read in connection with the ordinance, there is no doubt or ambiguity about the contract, and hence there is nothing to construe. Lamar Co. v. City of Lamar, 128 Mo. 198; Lake Co. v. Rollins, 130 U.S. 662; Cooley's Const. Lim. (6 Ed.), p. 69; State ex rel. v. Gammon, 73 Mo. 421; Lawson on Contracts, secs. 386 to 389. (3) Where a contract is open to two constructions, one making it legal and the other illegal, the former must be adopted. Wiggins Ferry Co. v. Railroad, 128 Mo. 224; Lamar Co. v. City of Lamar, 128 Mo. 199; Hobs v. McLean, 117 U.S. 567. (4) The contractor agreed to make, and the appellant actually did make, the sworn returns required by section 590. The section shows that these returns are required for the purpose of basing on them the five per cent assessment and are to be accompanied by the payment of the amount. (5) The contractor, having stipulated that he should be entitled to deduct from his returns all sums paid or payable by the city, it necessarily follows that he must pay the percentage on all the balance of his gross receipts. Words of exception or reservation are regarded as the words of the party in whose favor the exception or reservation is made and must be construed most strongly against him. McManus v. Gregory, 16 Mo.App. 375. (6) The construction contended for by the appellant eliminates from the contract the provision above alluded to. In fact, the success of appellant's argument depends upon having the above provision discarded as meaningless. But a contract will never be so construed as to nullify any of its material provisions. Effect must be given to all its parts. Shickle v. Chouteau, etc., Co., 84 Mo. 161; Lamar Co. v. City of Lamar, 128 Mo. 217; Union Depot Co. v. Railroad, 131 Mo. 291; Cooley's Const. Lim. (6 Ed.), p. 72; Shickle v. Chouteau, etc., Co., 10 Mo.App. 241; Haarstick v. Shields, 11 Mo.App. 602.
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 five per cent of the gross receipts on $ 130,600.99, received by defendant under said contract between the first 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, chapter 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 first 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, two and one-half per cent on the amount of such gross receipts up to the year 1890, and five per cent on the amount of such gross receipts thereafter. That whilst 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 consideration 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...
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