Kansas City Power & Light Co. v. Town of Carrollton

• Decision Date: 16 September 1940
• Docket Number: 37025,37026
• Parties: Kansas City Power & Light Company, a Corporation, Appellant, v. Town of Carrollton, Harold M. Austin, Mayor, Mat Drake, Elmer Daniels, Frank Marshall, William L. Beams and Otto Steele, Councilmen
• Court: Missouri Supreme Court

142 S.W.2d 849

346 Mo. 802

Kansas City Power & Light Company, a Corporation, Appellant, v. Town of Carrollton, Harold M. Austin, Mayor, Mat Drake, Elmer Daniels, Frank Marshall, William L. Beams and Otto Steele, Councilmen

Nos. 37025, 37026

Supreme Court of Missouri

September 16, 1940

Rehearing Granted, Reported at 346 Mo. 802 at 814.

Appeal from Carroll Circuit Court; Hon. James S. Rooney Judge. Opinion filed at May Term, 1940, July 29, 1940; motion for rehearing filed; motion overruled at September Term 1940, September 3, 1940; second motion for rehearing filed motion overruled September 16, 1940.

Remanded (with directions).

Johnson, Lucas, Graves & Fane, S. J. Jones and John D. Taylor for appellant.

(1) Courts of equity have jurisdiction to enjoin the erection by a town of an electric generating and distribution system and a waterworks system if the town, by so doing, is violating a valid franchise granted by the town to a public service company. City of Walla Walla v. Walla Walla Water Co., 172 U.S. 1, 19 S.Ct. 77, 43 L.Ed. 341; New Orleans Waterworks Co. v. Rivers, 115 U.S. 674, 6 S.Ct. 273, 29 L.Ed. 525; New Orleans Gas Light Co. v. Louisiana L. & H. Producing & Mfg. Co., 115 U.S. 650, 6 S.Ct. 252, 29 L.Ed. 516; Port of Mobile v. L. & N. Ry. Co., 84 Ala. 115, 5 Am. St. Rep. 342; 26 C. J. 1047. (2) Provisions in a town franchise giving a public service company a right for twenty years to erect and maintain water and light plants and distribution systems, with a reservation in the town to purchase such plants and systems any time within the original twenty-year period, agreeing to purchase electricity for street lighting from the grantee, agreeing that it would not erect or maintain a water or light plant except it became the owner of the water and light plant of the grantee, and agreeing that if, at the expiration of the twenty-year period, the town has not purchased the property of the grantee, "this franchise shall be renewed and the Town will continue to . . . purchase from said company electricity for street lighting," are valid and enforceable franchise provisions, and the failure of the town to purchase said plants and systems during said initial period automatically renews said franchise for an additional period of twenty years. (a) On January 24, 1919, the date of the franchise contract, there were no legal or statutory time limitations upon the Town of Carrollton in its right to make franchise contracts with public service companies for the erection and maintenance of electric and water plants and distribution systems, and no legal or statutory time limitation upon its right to make such contracts for the purchase of electric energy for street lighting. (b) On January 24, 1919, the date of the franchise contract, there were no legal or statutory limitations upon the Town of Carrollton in its right to agree that it would not erect or maintain a water or light plant except it become the owner of the water and light plant of grantee. (c) The agreement by Carrollton that it would not erect or maintain a water or light plant except it become the owner of the water and light plant of the grantee did not constitute the grant of an "exclusive" franchise. Secs. 9089, 9122, 10172, 10173, R. S. 1919; State ex inf. McKittrick, Atty. Gen., ex rel. City of Springfield v. Springfield Water Co., 131 S.W.2d 525; Natl. Waterworks Co. v. Kansas City, 62 F. 853; Whitfield v. Carrollton, 50 Mo.App. 98; Lexington v. Lafayette County Bank, 105 Mo. 671, 65 S.W. 948; State ex rel. Agents Assn. v. Kansas City, 319 Mo. 386, 4 S.W.2d 427; Walla Walla v. Walla Walla Water Co., 172 U.S. 1, 19 S.Ct. 77, 43 L.Ed. 341; State ex inf. Chaney v. West Mo. Power Co., 313 Mo. 283, 281 S.W. 709; Saleno v. Neosho, 127 Mo. 627, 30 S.W. 190; Water Co. v. Lamar, 128 Mo. 188, 26 S.W. 1025; Water Co. v. Neosho, 136 Mo. 498, 38 S.W. 89; Water Co. v. Lamar, 140 Mo. 145, 39 S.W. 768. (3) A town franchise contract, by the terms of which the town agreed, for a period of twenty years, and, under certain circumstances, for an additional period of twenty years, (a) to permit the grantee to erect and maintain an electric light plant and distribution system, (b) to permit the grantee to erect and maintain a waterworks and distribution system, (c) to purchase electric energy for street lighting from the grantee, and (d) to purchase water for its fire hydrants from the grantee, was and is a separable contract, and the invalidity of contract (d), being in excess of the town's authority, does not and cannot vitiate contracts (a), (b), and (c). State ex inf. Chaney v. West Mo. Power Co., 313 Mo. 283, 281 S.W. 709; Water Co. v. Neosho, 136 Mo. 498, 38 S.W. 89; State ex inf. McKittrick, Atty. Gen., ex rel. City of Springfield v. Springfield Water Co., 131 S.W.2d 525; Carroll v. Campbell, 108 Mo. 550, 17 S.W. 884; Koontz v. Hannibal Savs. & Ins. Co., 42 Mo. 126; Schibi v. Miller, 268 S.W. 434; Sexton v. North Mo. Cent. Ry. Co., 194 S.W. 1082; 13 C. J. 512; 12 Amer. Juris. 737. (4) A town franchise contract for twenty years, with option for additional period, authorizing public service company to erect, construct, maintain, and operate electric light plant and waterworks and distribution systems for both, and by which the town agreed not to erect and maintain its own plants and systems for water and electricity except that it become the owner of the grantee's plants and systems, is a valid, enforceable contract, against the impairment of which by the town the grantee's assignee is protected by both the State and Federal Constitutions. Art. II, Sec. 15, Mo. Const.; Art. I, Sec. 10, U.S. Const.; Walla Walla v. Walla Walla Water Co., 172 U.S. 1, 19 S.Ct. 77, 43 L.Ed. 341; New Orleans Waterworks Co. v. Rivers, 115 U.S. 674, 6 S.Ct. 273, 29 L.Ed. 525; Superior Water, L. & P. Co. v. Superior, 263 U.S. 125, 68 L.Ed. 204; Hovelman v. K. C. Horse Railroad Co., 79 Mo. 632; State ex rel. Atty. Gen. v. Miller, 66 Mo. 328; 26 C. J. 1022; 12 R. C. L. 207; Vicksburg v. Vicksburg Waterworks Co., 202 U.S. 453, 50 L.Ed. 1102.

Bowersock, Fizzell & Rhodes, Chas. R. Timmons, Dudley D. Thomas, Jr., Wade W. Maupin and W. A. Franken for respondents.

(1) That part of Section 26 of Ordinance 347 which provides that "the Town agrees that it will not erect or maintain a water plant or an electric light plant except that it becomes the owner of the water and light plant of the Company" is null and void, because: (a) The town had no right to bargain away the powers conferred upon it by its charter. Secs. 2164, 9089, 9099, 10173, R. S. 1919; State ex rel. City of Sikeston v. Pub. Serv. Comm., 336 Mo. 985, 82 S.W.2d 105; Mo. P. & L. Co. v. Pattonsburg, 343 Mo. 1128, 125 S.W.2d 20; 19 R. C. L. 797, sec. 104; Eureka Fire Hose Mfg. Co. v. Portageville, 106 S.W.2d 513; Lively v. Webb City, 106 S.W.2d 517; Natl. Water Works Co. v. City of Kansas, 20 Mo.App. 237; State ex rel. v. Murphy, 134 Mo. 548; Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817; Long v. Duluth, 49 Minn. 280, 51 N.W. 913; Sec. 15, Art. II, Sec. 53, Subsec. 26, Art. IV, Mo. Const.; Carroll v. Campbell, 110 Mo. 557. (b) Even if the town had the implied power to enter into a contract of this character during the period for which it could contract for water and/or light, it would not have any power to enter into such a contract beyond such period. Secs. 9122, 10172, R. S. 1919. (2) The provision of Ordinance 347 that "if at the expiration of this franchise the Town has not purchased the said property of the company, as herein provided, then this franchise shall be renewed and the Town will continue to rent fire hydrants from said company and purchase from said company electricity for street illumination" is null and void beyond twenty years, because: (a) Section 12, Article X of the Constitution impliedly prohibits the making of contracts of this character beyond twenty years. Sec. 10173, R. S. 1919; Secs. 11, 12, Art. X, Mo. Const.; State ex rel. v. Gordon, 251 Mo. 303, 158 S.W. 683; Steinbrenner v. St. Joseph, 285 Mo. 318, 226 S.W. 890; State ex rel. City v. Hackmann, 287 Mo. 184, 229 S.W. 1079; State ex rel. v. Hackmann, 275 Mo. 534; Lamar Water & E. L. Co. v. City of Lamar, 128 Mo. 188. (b) A contract for light extending beyond the period of twenty years would be unreasonable. Secs. 8302, 8479, R. S. 1919; 44 C. J. 72; Flynn v. Little Falls Electric & W. Co., 74 Minn. 180, 77 N.W. 38; Horkan v. City of Moultrie, 136 Ga. 561, 71 S.E. 785; Hall v. City of Cedar Falls, 115 Iowa 199, 88 N.W. 448; Hoskins v. City of Orlando, 51 F.2d 901; City of Barre v. Perry & Scribner, 82 Vt. 301, 73 A. 574; State ex inf. McKittrick, Atty. Gen., ex rel. City of Springfield, v. Springfield Water Co., 131 S.W.2d 525; Clay Center v. Clay Center Light, etc., Co., 78 Kan. 390, 97 P. 377. (3) If Ordinance 347 is separable as contended by the appellant, then said ordinance was never legally ratified and is void. State ex rel. v. Gordon, 268 Mo. 321. (4) The provisions of Ordinance 347 are not separable and being void as to the provision for water contract and/or light contract beyond the period of twenty years and these provisions being essential parts of the ordinance, the whole ordinance is void beyond the period of twenty years. Hagler v. Salem, 333 Mo. 330, 62 S.W.2d 751.

OPINION

Clark, J.

Appeal from circuit court of Carroll county. Appellant is the successor to the rights and title of the Water, Light & Transit Company mentioned in Ordinance No. 347 of the Town of Carrollton. The respondents are the Town and its Mayor and Councilmen. The Town of Carrollton is governed by special charter and contains between 4000 and 5000 inhabitants. Appellant brought two suits which were consolidated and tried as one. The purpose of the suits was to enjoin the Town...