City of Wheeling v. Natural Gas Co. of W. Va.
| Decision Date | 12 May 1914 |
| Docket Number | 2240. |
| Citation | 82 S.E. 345,74 W.Va. 372 |
| Parties | CITY OF WHEELING v. NATURAL GAS CO. OF WEST VIRGINIA. |
| Court | West Virginia Supreme Court |
Rehearing Denied July 1, 1914.
Syllabus by the Court.
Consumers of natural gas are not necessary parties to a bill by a municipal corporation against the gas company to enjoin alleged violation of its franchise contract, and for an accounting of gas sold.
In such case of alleged violation of a franchise ordinance the remedies at law, by mandamus or by enforcement of criminal ordinances against consumers of gas for violations thereof are not as complete and adequate as the remedy by injunction and for specific execution, so as to justify denial of relief in equity.
Where a municipal charter gives power and authority to open and lay out, graduate, pave, and otherwise improve streets, and "generally to ordain and enforce such regulations respecting the same as shall be proper for the health interest or convenience of the inhabitants of said city," power is thereby also implied to grant the use thereof to gas companies and other public service corporations, but not the exclusive use, and also the discretionary power to refuse such privileges, and also to limit the same to a particular purpose not violative of some statute, rule of law, or rule of public policy.
Possessed of such discretionary charter powers a municipality in granting a franchise may limit the use of its streets, alleys and public grounds to a particular purpose, without violating any rule of law or rule of public policy.
A franchise ordinance given a natural gas company by a municipal corporation to use its streets, alleys and public grounds for supplying natural gas for heating purposes, and conditioning the same that gas shall not be sold through the pipes of such company for lighting purposes in competition with gas manufactured by it, does not operate to create a monopoly in favor of such municipality in the manufacture and sale of manufactured gas, inhibited by any rule of law or rule of public policy.
The rule appears to be different in those states where public service corporations derive power and right to serve the public in a particular way, not from the municipality, but from the constitutional or statutory law, and requiring only the consent of the municipality to occupy its streets, alleys and public grounds for such purposes.
While a rule of frequent application is that when a public service corporation accepts a franchise it accepts the same with the burdens imposed and is estopped to deny the validity of its conditions, yet where, as in this state, a limit to the power of a municipality to attach conditions is recognized, the attempt to impose unlawful or invalid conditions is regarded as a mere nullity, and if divisible, the rule is to disregard the unlawful or invalid part, leaving the remaining part unaffected thereby.
But if a public service corporation has accepted the provisions of such franchise ordinance and by doing so enjoyed benefits which would not otherwise have been granted, and has thereby assumed obligations of money or service, which it ought not to escape, such liability will be enforced, and it will be estopped to deny the validity thereof.
Though a municipal corporation at the time it grants a franchise to a natural gas company to serve the public with natural gas for heating purposes owns and operates a plant for manufacturing gas for lighting purposes, and thereby lawfully conditions its grant to the natural gas company that gas shall not be sold through the latter's pipes for lighting purposes so as to compete with gas manufactured by it nevertheless, if it afterwards grants to electric lighting companies franchises, and permits them to sell electricity for lighting purposes in competition with its gas, and knowingly and actually permits citizens not reached by its pipes to use natural gas for lighting purposes, and has suffered its gas plant to become dilapidated, and no longer manufactures gas reasonably fit for lighting purposes, and because of which others within reach of its pipes discard and refuse to use such gas, and without the consent and against the protest and notice of the natural gas company they make use of natural gas for lighting purposes, a court of equity will not, upon principles enunciated in the opinion, enjoin such natural gas company from permitting such use of its gas and require it to account in damages to said municipality as for a breach of its franchise and for the gas so used for lighting purposes.
Appeal from Circuit Court, Ohio County.
Suit by the City of Wheeling against the Natural Gas Company of West Virginia. From decree for plaintiff, defendant appeals. Reversed and rendered.
[Copyrighted Material Omitted]
Caldwell & Caldwell and J. B. Handlan, all of Wheeling, for appellant.
J Harold Brennan and T. S. Riley, both of Wheeling, for appellee.
MILLER, P.
The bill prays for an injunction restraining defendant from selling or permitting to be sold for lighting purposes natural gas conducted through its pipe lines, so as to compete with gas manufactured by plaintiff, in alleged violation of its ordinance franchise of April 17, 1885; also for an accounting for all illuminating gas sold in competition with plaintiff's manufactured gas, and for general relief.
Section 1 of said ordinance provides:
The condition of section 2 thereof, alleged to have been violated and on which the relief prayed for is predicated, is as follows:
The amending ordinances of March 24, 1896, and March 26, 1907, relate mainly to the rates per thousand cubic feet to be charged for gas, but limit the right of defendant to the sale of gas for heating purposes. All ordinances were duly accepted by defendant by resolutions of its board of directors.
Defendant both demurred to and answered the bill. The answer denies any violations of these ordinances, and puts in issue the material allegations of the bill. Many exceptions to the answer were sustained and the action of the court thereon is relied on as error. By its demurrer defendant challenges the sufficiency of the bill, because of the absence as parties of the consumers of gas, want of equity, and because of alleged invalidity of the conditions of the ordinance pleaded; and the same matters are pleaded and relied on in its answer.
We do not think the bill bad for want of parties. If the ordinances are valid exercises of legislative, administrative, or police powers conferred on plaintiff, and are valid and enforceable contracts between plaintiff and defendant, consumers of gas have no such interests, not represented by plaintiff, as entitle them to be heard in defense of the suit. While they might not be bound by the decree, so as to affect their right to demand gas from defendant for lighting purposes, if any, they have not such right to be heard on the issues involved here as to make them necessary parties to the suit. Nairin v. Kentucky Heating Co. (Ky.) 86 S.W. 676.
Nor on the principles of the bill do we think there would be adequate remedy at law. It is claimed that one remedy would be by enforcing criminal ordinances against the use of natural gas for lighting purposes, and the remedy by mandamus. If the ordinances are valid and enforceable, we do not think these remedies would be adequate. Besides equity is a more adequate and complete remedy and jurisdiction is well founded on right to specific execution of valid ordinance contracts. City of Moundsville v. Ohio River R. R. Co., 37 W.Va. 92, 16 S.E. 514, 20 L.R.A. 161. All other grounds of defense relied on in the demurrer are also covered in the answer, and need not be separately considered. Summarized by the learned judge below, they are as follows:
"1. The city of Wheeling was without power to pass such an ordinance as that under which it seeks to limit defendant's sale of gas.
2. The condition limiting the right of the defendant to sell gas creates a monopoly in the sale of gas for lighting purposes, and for that reason it is void.
3. Said condition is in restraint of trade and contrary to public policy.
4. Said condition gives rise to discrimination between classes of consumers, is therefore unreasonable and void."
And we will add another not fully comprehended perhaps by those stated, and founded on the broad principles of justice and equity:
5. That the enforcement of the conditions imposed by said ordinances in this case would be arbitrary and unreasonable, and would impose burdens upon and deprive the people of benefits to which they are justly entitled, resulting in partiality and prejudice unwarranted by law.
The allegations of the answer bearing on these propositions, and particularly the last one, briefly stated are:
That defendant has never sold gas for lighting purposes without consent of council, that all gas is served through meters upon applications in writing, limiting consumers to the use of gas for heating purposes only; that when gas passes the meter it becomes the property of the consumer, and defendant has no control of the use made of the gas, except by arbitrarily shutting it off at the street, in violation of its duty as a public service corporation to serve the consumer with gas for...
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