City of Wilmington v. Addicks
| Decision Date | 06 May 1899 |
| Citation | 43 A. 297,8 Del.Ch. 310 |
| Court | Court of Chancery of Delaware |
| Parties | THE MAYOR AND COUNCIL OF WILMINGTON, A MUNICIPAL CORPORATION OF THE STATE OF DELAWARE, AT THE INSTANCE OF JOSEPH L. CARPENTER, JR., J. NEWLIN GAWTHROP, AND SAMUEL CHAMBERS, THE BOARD OF DIRECTORS OF THE STREET AND SEWER DEPARTMENT FOR THE CITY OF WILMINGTON, v. JOHN EDWARD ADDICKS, JOHN G. BAKER, FREDERICK P. ADDICKS, SIMON B. CONDE AND SAMUEL AUSTIN |
BILL FOR AN INJUNCTION by the City of Wilmington to restrain the laying of gas pipes in its streets. The complainants were the Mayor and Council of Wilmington, who, at the instance of the Board of Directors of the Street and Sewer Department of that City, filed a bill in equity, April 2, 1891, against the defendants, to restrain them from laying gas pipes in the streets of the City. The defendants demurred for want of proper parties, and the demurrer was heard by Chancellor ad litem, Henry R. Johnson, who had been appointed to that office, upon the certificate of Chancellor Wolcott that he had been of counsel for one or more of the defendants. The demurrer having been overruled by the Chancellor ad litem [*] the defendants filed their plea, with an answer in support of the same, and replication and rejoinder were entered and proofs taken. The plea was in substance that the bill did not contain proper parties inasmuch as the defendants were officers, agents and employees of the Oxy-Hydrogen Company of the State of Delaware, incorporated and organized and authorized to build gas works and lay gas pipes, and that the defendants were engaged in laying such pipes solely and only as officers and agents of the said company, and claimed no right in the premises otherwise. The plea averred that the said company was not, but should have been a party defendant to the bill.
After the adoption of the new Constitution in 1897 an application was made to the Chancellor, after his appointment under the new Constitution, for reinstatement of the case upon the regular docket of the Court of Chancery, upon the ground that by force of the Schedule to the Constitution, the jurisdiction of the Chancellor ad litem was terminated. The application prevailed and such an order was made. The hearing on this motion is reported ante p. 147.
Prior to the hearing the complainants also presented a supplemental bill and asked leave to file the same. In support of this application they set forth that it was made necessary and desirable:
(1) Because the terms of office of some of the Directors of the Street and Sewer Department, at whose instance the suit was instituted, had expired and other persons had been appointed to fill their places.
(2) That what was previously an ordinance and regulation of the Street and Sewer Department of the City of Wilmington had since been passed and enacted by the General Assembly as a public Act, general in its requirements.
(3) That since the filing of the bill the alleged charter of the Oxy-Hydrogen Company had expired by limitation.
The cause came to a hearing in July, 1898, and further argument was had in February, 1899. The history of the case and of the successive pleadings and the material facts are stated in the opinion.
William S. Hilles and Arthur W. Spruance, for complainants.
It is elementary that a plea in equity should clearly and distinctly aver all facts necessary to constitute a complete equitable defense to the case made by the bill so far as the plea extends. Sto. Eq. Pl. secs. 652a, 665, 680.
It is therefore, necessary that two material averments of the plea should be proved:
(1) A duly incorporated corporation.
(2) That it was authorized to build gas works and lay gas pipes in the streets.
The plea was filed January 30, 1894, and the Act of Incorporation was passed April 3, 1873. Though it contained no limitation of the period of existence under the Constitution of 1831 art. II, Sec. 17, it could not continue in force for a period longer than twenty years without re-enactment. No action was taken under the charter for fourteen years after its passage and its existence must have expired April 2, 1893, before the filing of the plea, unless the corporate existence was continued by the attempt on January 28, 1892, to comply with the provision of 19 Del. Laws, ch. 15.
This action of the corporation could not have had that effect:
(1) Because the Act provides only for the renewal of corporations in whose charters there is a provision stating the period for a corporation to continue.
(2) This charter could not be re-enacted by a general act, but only by special enactment, without violating Sec. 17 of the Constitution.
The lack of power to incorporate by general act is a lack of power to amend or continue thereby. San Francisco vs Water Works, 48 Cal. 493; Ex parte Pritz, 9 Ia. 30, 33; 1 Thomp., Corp. secs. 573, 577, 578, 581, 583, 585.
If it be admitted that the company was a valid and existing corporation, it did not possess, as alleged, authority "to build gas works and lay gas pipes in the streets of the City of Wilmington." When this charter was granted the complainant was a municipal corporation clothed with power inter alia "to enact ordinances to protect the health, to define and remove nuisances, to ascertain and fix boundaries of streets, to repair and amend the same and provide for the paving thereof, to regulate the ascent and descent of all streets, and in general to do all those things and matters for the well being of said city which shall not be in contravention with any of the laws of this State or the Constitution thereof."
It is to be presumed that the powers granted to the Oxy-Hydrogen Company were subject to the proper municipal control and not to be exercised without complying with the municipal requirements.
The control of the streets and the rights and powers over the same, and the right to make rules and regulations concerning them, which had theretofore existed in the Council, was by Act of April 20, 1887, conferred upon the Board of Directors of the Street and Sewer Department. 18 Del. Laws, Ch. 352.
Pursuant to that authority that Department, on April 9th, 1889, provided by general regulation when and how any person or corporation should be permitted to open the bed of a street.
By Act of May 14, 1891, passed before the attempted continuance of its corporate franchise by the Oxy-Hydrogen Company, the Legislature prohibited the opening or excavation of any highway in this State, in a city, town or village for the purpose of laying or placing wires or other conductors therein, without first obtaining the consent of the municipal authorities. 19 Del. Laws, ch. 224.
It nowhere appears in the proofs that the company has complied with the requirements of this regulation of the Street and Sewer Department, or of the Act of Assembly.
It cannot be questioned that corporations are subject to the restraints of the general laws and police regulations, which are to be read into their charters, and must obey them to the same extent as is required of individuals, unless they are expressly and constitutionally exempted from their operations. Relfe vs. Randle, 103 U.S. 222; Republican &c. Co. vs. Brown, 7 C. C. A., 412; Wiggans Ferry Co. vs. East St. Louis, 102 Ill. 560; Pratt vs. Railway, 42 Maine 579; French vs. Commonwealth &c. Co., 145 Mass. 261; Worcester &c. R. R. vs. Nashua, 63 N.H. 593, 596; Talmage vs. Pell, 7 N.Y. 328, 340; Tyng. vs. Commercial &c. Co., 58 N.Y. 313; Morawetz, Corp. 1061, 1091; 7 Am. Encyc. Law, 710; Sutherland, Stat. Constr. sec. 283.
There is no constitutional restraint upon the Legislative power, either in the Fourteenth Amendment to the Constitution of the United States, or elsewhere, to prevent the passage of such a law. Mugler vs. Kansas, 123 U.S. 623, 663; New Orleans &c. Co. vs. Louisiana Co., 115 U.S. 650, 671, 672; Munn vs. Illinois. 94 U.S. 113; this case has been followed consistently by others holding that the Legislature may fix the price of gas, water, elevator charges, railroad charges, &c., Spring Valley Water Works Co. vs. Schottler, 110 U.S. 347; R. R. Commission cases, 116 U.S. 307; Dow vs. Beidleman, 125 U.S. 680; Georgia &c. R. R. vs. Smith, 128 U.S. 174, 180; State vs. Gas. Co., 34 O. St. 572; Zanesville vs. Gas Light Co., 47 O. St. 1; State vs. Milwaukee &c. Co., 29 Wis. 454; State vs. Laclede Gas Co., 130 Mo. 572, 31 S.W. 594; Philadelphia Co. vs. Freeport, 157 Pa. St. 279; Philadelphia vs. Reading R. R., printed opinion; New York vs. Squire, 145 U.S. 175.
Gas companies have been expressly held to be subject to this doctrine. New Orleans &c. Gas Co. vs. Louisiana &c. Gas Co., 115 U.S. 650; Gibbs vs. Baltimore Gas Co., 130 U.S. 396, 408; Chicago &c. Gas Co. vs. Peoples &c. Gas Co., 121 Ill. 530.
We contend that the question of the corporate existence of the Oxy-Hydrogen Company is a matter necessary and proper to be determined in this Court:
(1) The question is res judicata in this case. The question of corporate existence was involved in the argument on demurrer, and the decision thereon necessarily assumed that the questions raised by the bill and the pleadings were proper for the decision of this Court.
(2) Upon the plea and answer now filed, the record raises the direct question of the existence and powers of this corporation, and it is submitted that as the defendants justified their action as having been under the authority of an act of incorporation, and the powers thereby granted, the question must be determined by the Court in this case. Owen vs. Sheppard, 8 C. C. A. 244; Montgomery vs. Forbes, 148 Mass. 249; Hill vs. Beach, 12 N.J.Eq. 31; Gas Co. vs. Dwight, 29 N.J.Eq. 242, 244; Booth vs. Wonderly, 36 N. J. L. 250.
(3) The reasons generally given for recognition of de facto...
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