Clarksburg Electric Light Co. v. Clarksburg.
| Decision Date | 07 April 1900 |
| Parties | Clarksburg Electric Light Co. v. Cityof Clarksburg et al. |
| Court | West Virginia Supreme Court |
The council of the town of Clarksburg-in 1887 had no power, either under its charter or under the g-eneral statute law governing towns and cities, to grant an exclusive franchise for 20 years to a private corporation to use its streets for the conveyance of electricity for public use in the city. Such exclusive grant does not prevent the town from granting to another corporation, within said term, the privilege to occu- py its streets for the same purpose. Such exclusive grant, being void, is not a valid contract protected by the provisions in the federal or state constitutions forbidding the passage of any law impairing the obligation of contracts, (p. 735).
Under the general statute law of West Virginia governing cities and towns, a grant by a municipal corporation of the privilege, not exclusive, of occupying its streets for the conveyance of electricity for public use therein, confers a valid franchise, and is a contract protected by the provisions in state and federal constitutions prohibiting the passage of any law impairing the obligations of contracts. (The question of the reasonableness of the term of such grant not considered, (p. 736).
The decision of the highest court of a state in the construction of its statutes, and as to the validity or invalidity of contracts dependent only on such statutes, is the controlling rule of decision in federal courts, where there is no federal question, (p. 737).
The grant by a city or town to an intended corporation of a franchise to use its streets for the conveyance of electricity for public use in the town or city is valid, though at its date the corporation is not chartered, but is later chartered, and accepts the grant, (p. 742).
Appeal from Circuit Court, Harrison Countv.
Action by the Clarksburg-Electric Light Company against the city of Clarksburg and others. Decree for defendants and plaintiff appeals.
Affirmed..
John Bassell, Edwin Maxwell and C. W.Lynch, for appellant.
M. F. Snider and Davis & Davis, for appellees. Brann, Judge:
On the 16th of December, 1887, the council of the town of Clarksburg passed an ordinance granting to the Clarksburg Electric Light Company the exclusive privilege for the term of twenty years to erect and operate electric light works for generating and supplying electricity for lighting the town and for use as power. Under this grant the said corporation constructed a costly and valuable plant and has been long-operating-the same, supplying" the town and its people with electricity for purposes of illumination and power. On the 12th of March, 1894, the Trader's Company was chartered by the State as a corporation to erect a hotel building with opera house, banking-house and offices therein under which the said hotel building has been erected in Clarksburg. On the 1st day of November 1894, the State incorporated a company called the Traders Annex Company with power tc erect buildings, construct electric light plant to light its buildings and the town of Clarksburg with electricity. The two last-named companies together erected an electric light plant, and have used the same for lighting the hotel, opera house, bank, and other apartments in the bui dings erected by said companies. Said two companies, having a surplus of electricity, engaged to supply private individually in the town. These individuals erected poles in the streets to support wires for conveyance of electricity, by leave of the town council and the said two companies were about to obtain, or at least ask for, the authority from the council of Clarksburg to erect poles in the streets for the conveyance of electricity through the town for sale to its people, and thereupon the Clarksburg Electric Light Company sued out an injunction restraining the Traders Company and the Traders Annex Company and all other persons from applying to said council for the privileges aforesaid, and restraining' the city council of C arksburg from granting to the Traders Company and the Traders Annex Company, jointly or severally, the privilege of occupying the streets for the purpose of carrying on the business of furnishing electricity to the said city and its citizens. The circuit court of Harrison County dissolved the injunction, and the electric light company appeals to this Court.
The electric light company claims that the grant to it by the council of Clarksburg of the privilege of furnishing electricity and occupying the streets of the city with its poles for the distribution of electricity to its consumers constitutes a contract giving that company the sole and exclusive right to furnish electricity within the city, and that the use of the streets by any other company, or even persons, for furnishing-electricity, is a violation of its rights, and that the grant by the said city to the Traders Company or the Traders Annex Company, as proposed, would be a violation and impairment of such contract, contrary to the Constitution of the United States. Upon this position that the proposed grant or franchise to the Traders Company and Traders Annex Company would be a violation ot the contract subsisting between the electric light company and the city, and a violation of the Constitution of the United States the said electric light company stakes its case in this Court. The Federal Constitution (article 1, § 10) provides that "no state shall * * * pass any law impairing the obligation of contracts." It is beyond question that a grant by a municipal corporation, under authority of the statute of a state, to a private corporation to supply a city or town with electricity for the public use, or any similar franchise, constitutes a contract, when accepted and carried out bv the corporation, which is under the protection of both the State and National constitutions. New Orleans Gaslight Co. v. Louisiana Light and Heat Producing and Manufacturing Co., 115 U. S..650, 6 Sup. Ct. 252, 29 L. Ed. 516; Louisville Gas Co. v. Citizens Gaslight Co., 115 U. S. 683, 6 Sup. Ct. 265, 29 L. Ed. 510. Therefore we do not question that the electric light company possesses a contract, and lawful vested rights under it; but to what extent? Has it the right to an exclusive franchise, effectually shutting out others from transacting a very important business, so needful to the public of the city of Clarksburg? Has that company the monopoly it claims? I shall not discuss the question whether an act of the legislature granting such an exclusive franchise would be valid, further than to say that under the great powers of a state legislature such an act would likely be valid under the cases just cited and others; but I can safely say that under multitudinous authorities the courts lean against construing statutes so as to grant, or to authorize municipal corporations to grant, such exclusive franchises. Such franchises constitute monopolies, which the law has through ages condemned, because thev tie down and restrain and cripple the public right and interest, and sacrifice great public interests to the benefit and aggrandize- merit of the few. Still, where such rights are valid and lawful, the courts must and do protect them. I state the proposition, as sustained by authorities in all quarters, that to authorize such exclusive franchise the statute must admit of no other reasonable construction. The ordinance of Clarksburg granting to the electric light company its franchise does, in terms, make it exclusive; but had the council power to insert in the franchise the clause or section granting such exclusive right? That is our question in this case; that is the pivot cf this case. Turn to the statute law on the subject. The town of Clarksburg was incorporated by an act of Virginia of March 15, 1849, which gave its trustees power io "improve streets, walks, and alleys."-An act of February 27, 1867, gave the town "control of all county roads, turn-pikes, and bridges within the limits thereof." The Virginia Code of 1860, applying to towns generally, gave the council "power to lay off streets, walks, or alleys, alter, improve, and light the same, and have them kept in good order." The Code of West Virginia of 1868, page 329 (Ed. 1891, page 426), the law in force when the franchise claim by the plaintiff was granted, and which applied to towns generally, provides that "the council of such city, town or village shall have power therein to lay off, vacate, close, open, alter, curb, pave and keep in good repair, roads, streets, alleys, * * * and to improve and light the same." No statute special to Clarksburg has beer cited giving it power to confer such exclusive privilege. If the power to improve and light its streets does not authorize such exclusive franchise, it does not possess the power. If the general law governing cities and towns above quoted does not give Clarksburg-'s council power to grant such exclusive franchise, it does not possess the power. That the council, under the charter provisions and general statutes above quoted, does not possess the power to gran: such exclusive franchise is settled, by Parkersburg Gas Co. v. Parkcrsburg, 30 W. Va. 435, (4 S. E. 650). That, case has been approved by the opinions since delivered in Richards v. Clarksburo, 30 W. Va. 496, (4 S. E. 774), and Arbenz v. Railroad Co., 33 W. Va. 6, (10 S. E. 14,) 5 L. R. A. 371, and is thus the settled law of this State. That case.holds that neither the char- ter of Parkersburg, which was general, like that of Clarksburg, in this respect, nor the general statutes in relation to municipal corporations in force in 1864, which were the same as those quoted above, "conferred upon said citv power to delegate to a...
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