Commonwealth Ex Rel. City Of Portsmouth v. Portsmouth Gas Co

• Decision Date: 15 June 1922
• Citation: 112 S.E. 792
• Parties: COMMONWEALTH ex rel. CITY OF PORTSMOUTH. v. PORTSMOUTH GAS CO.
• Court: Virginia Supreme Court

112 S.E. 792

COMMONWEALTH ex rel. CITY OF PORTSMOUTH.

v.PORTSMOUTH GAS CO.

Supreme Court of Appeals of Virginia.

June 15, 1922.

Error to Hustings Court of Portsmouth.

Information in the matter of quo warranto by the Commonwealth, on relation of the City of Portsmouth, against the Portsmouth Gas Company. Judgment for defendant on demurrer, and the relator brings error. Affirmed.

Mann & Tyler, of Norfolk, for plaintiff in error.

Goodrich Hatton, of Portsmouth, for defendant in error.

KELLY, P. The commonwealth of Virginia, at the relation of the city of Portsmouth, in April, 1918, filed in the hustings court of that city an information in the nature of a writ of quo warranto against the Portsmouth Gas Company, alleging that the company "from the 18th day of February, 1914, and ever since, has exercised the privilege or franchise not conferred upon it by law to use the streets, lanes and alleys ofthe city of Portsmouth, for the purpose of laying gas mains and pipes to distribute gas for public and private lighting and heating, and for power."

The respondent interposed a demurrer to the information, which was sustained, and thereupon, the plaintiff not desiring to amend, the court entered the order now under review, adjudging:

"That the Portsmouth Gas Company from the eighteenth day of February, nineteen hundred and fourteen, and ever since that time, was not in the exercise of a privilege or franchise not conferred upon it by law to use the streets and alleys of the city of Portsmouth for the purpose of laying and maintaining its gas mains and service pipes to distribute gas for public and private use. And that the charter of the Portsmouth Gas Company, by successive amendments having been extended to a period without limit, the said Portsmouth Gas Company is legally in the exercise of a franchise to use the streets and alleys of said city for said purposes so long as said the Portsmouth Gas Company may continue in existence, the court doth order that the demurrer to said information be and is hereby sustained. * * * And * * * that said information * * * is dismissed."

The material allegations of the information, other than as above set out, are as follows:

That Portsmouth was incorporated as a town by the Colonial Assembly in 1752, and as a city by the General Assembly in 1858.

That on September 6, 1853, the council of the town of Portsmouth passed the following resolution:

"Whereas, Messrs. Perdicaris and Hoy of Trenton, N. J., have expressed to the council their desire to erect for the use of the citizens of the town a suitable set of gas works provided the authorities of the town and its citizens will give them protection and encouragement; and whereas the council of Portsmouth desires to give Messrs. Perdicaris and Hoy a proof of the favor with which they will regard the erection of gas works to supply the citizens with a cheap, beautiful and much needed light, therefore be it resolved:

"(1) That the town of Portsmouth do grant unto Messrs. Perdicaris and Hoy and through them to the 'Portsmouth Gas Company' the exclusive privilege for the space of fifteen years from the completion of the gas works in the said town, of opening the streets and alleys of the town for the purpose of laying street mains and service pipes through them; the opening and closing of said streets and alleys to be done with all reasonable dispatch, and the said streets and alleys to be forthwith repaired and left by the parties opening them in the same good order and condition as before, at their own expense.

"(2) That the town of Portsmouth will exempt from town taxes the property of said contemplated gas works for the space of ten years from the going into operation of the same.

"(3) That the town of Portsmouth will pass all legal and proper ordinances to protect the said gas works and property from injury.

"(4) That on the completion of said gas works, the town of Portsmouth will contract for the lighting of such number of public lamps as the council may deem proper and the interest of the town may require.

"(5) That should the said Perdicaris and Hoy fail for six months to proceed to erect their gas works, and complete them with all practical dispatch, or should the gas furnished by said works when in operation be inferior in quality to, or furnished at a higher charge to the consumers per thousand feet, than that furnished by the gas works in the cities of Norfolk or Richmond, then the town of Portsmouth at any and all times reserves the right to annul the whole or any portion of the foregoing resolutions, and revoke the privilege hereby granted."

That on November 1, 1853, the town council by another resolution extended the time within which the gas works were to be commenced and completed, and also made certain alterations as to charges for and quality of gas to be furnished.

That the foregoing resolutions constitute all the formal corporate action by the municipality, except as hereinafter set out, giving consent of the corporate authorities for use by the gas company of the streets and alleys of the town.

"That within the time limit specified in said resolutions the said Perdicaris and Hoy and the Portsmouth Gas Company proceeded to erect gas works and to lay mains in the streets and alleys of the town of Portsmouth and ever since the fall of 1854 has been, and now is, using the streets, alleys and lanes of said town or city to furnish gas to the inhabitants of the town and of the city of Portsmouth, and has continuously during said period pursuant to contracts made between the Portsmouth Gas Company and said town and city in accordance with resolutions passed by the councils of said town and city, furnished gas for the streets and public buildings of the municipalities of the town and city of Portsmouth;

"That in the year 1854, the General Assembly of Virginia passed an act to incorporate the Portsmouth Gas Company, by act approved on the 11th day of February, 1854, authorizing the Portsmouth Gas Company to use the streets, alleys and lanes of the town of Portsmouth without regard to the consent or dissent of the council of said town or city, except as to the repair of the streets, lanes and alleys which may have been opened for the purpose of laying the said pipe, as will be seen by Acts of the General Assembly of Virginia, 1853-54, page 86;

"That this charter, with all the rights therein granted to the streets, alleys and lanes of the city of Portsmouth expired by its terms on the 11th day of February, 1884.

"That on the 19th day of February, 1884, the Portsmouth Gas Company applied to the General Assembly of Virginia for an amendment, re-enactment, extension and renewal of its charter, and the same was granted for a further period of thirty years from that date, as will be seen by the Acts of the General Assembly of Virginia, 1883-84, page 169.

"That the corporate existence, together with the rights granted to said company in and tothe streets, alleys and lanes of the city of Portsmouth by this latter act of the General Assembly of Virginia, expired on February 19, 1914."

That on the 17th day of May, 1911, "the Portsmouth Gas Company, recognizing that their corporate life and the rights therein granted would expire by limitation on the 19th day of February, 1914, applied to the State Corporation Commission of Virginia for the purpose of extending the charter of said corporation for a period without limit; and that in pursuance to said application the Corporation Commission of Virginia issued and certified to the Secretary of the Commonwealth an amendment to the charter of the said the Portsmouth Gas Company, extending its corporate life to a period without limit."

That the above-recited extension of the charter was procured by the company without compliance on its part with sections 124 and 125 of the Virginia Constitution of 1902.

That all the rights of the gas company in and to the use of the streets and alleys of the city not permitted to the general public ceased and determined on the 19th day of February, 1914, and that the action of the State Corporation Commission in granting an extension of the charter did not confer upon the company any rights in the streets and alleys not permitted to the public generally.

And, finally, that the gas company, by applying for and accepting the amendment to its charter on May 17, 1911, "thereby surrendered every exclusive and nonrepealable right which it enjoyed, and agreed thereafter to hold its charter, rights, privileges and franchises subject to the provisions of the Constitution of Virginia, especially sections 124 and 125. See section 158 of the Constitution of Virginia and Acts of the General Assembly of Virginia, 1902-1904, p. 437, § 1105a, cl. 8, Pollard's Code 1904."

The legal effect of the demurrer was to admit the facts but not the conclusions of law stated in the information, and upon the facts as alleged we are of opinion that the demurrer was properly sustained.

There has been no lapse or break in the corporate existence of the gas company since the date of its original incorporation, and the fact that the charter has twice been amended to avoid a forfeiture to which it otherwise would have been exposed is material here only in so far as the necessity for such amendments may bear upon a proper construction of the franchise granted to it by the municipality. And the same may be said as to the fact, stressed by counsel for the city, that the original franchise was granted to the company, and not in terms to its successors and assigns.

We do not understand that any serious question is raised before us as to the legislative authority of the town or city to grant a franchise for the use of its streets. There are some contrary expressions in the brief for the city, but the case has in the main been presented to us upon the apparent assumption that the authority existed. Such authority, of course, was necessary (Lile's Notes on Municipal Corporations [1922] § 58, and ...