Keith v. Johnson

• Decision Date: 28 November 1900
• Citation: 59 S.W. 487,109 Ky. 421
• Parties: KEITH v. JOHNSON et al. [1]
• Court: Kentucky Court of Appeals

59 S.W. 487

109 Ky. 421

KEITH v. JOHNSON et al. ^[1]

Court of Appeals of Kentucky.

November 28, 1900

Appeal from circuit court, Kenton county.

"To be officially reported."

Action by Charles W. Keith against J. L. Johnson and others composing the board of aldermen of the city of Covington, to enjoin defendants from awarding a franchise to a certain bidder. Judgment for defendants, and plaintiff appeals. Affirmed.

C. J. &amp W. W. Helm, W. S. Pryor, and W. McD. Shaw, for appellant.

J. W Bryan, for appellee Johnson. F. J. Hanlon, for appellee city of Covington.

HAZELRIGG C.J.

Section 164 of the constitution provides, among other things, that before granting a franchise for a term of years a county city, town, taxing district, or other municipality "shall first, after one advertisement, receive bids therefor publicly, and award the same to the highest and best bidder; but it shall have the right to reject any or all bids." In obedience to this provision, the city of Covington advertised for bids for the franchise of supplying the city and its inhabitants with fuel and illuminating gas for the term of 20 years. The board of aldermen, composed of the appellee Johnson and others, being about to award the franchise to the Covington Gas Company, one of the bidders therefor, the appellant, a citizen and taxpayer of the city sought to enjoin the appellees from so doing in substance, first, because that company had no authority to bid, and a contract with it would be void; and, second, because another bid--that of one Ditwiler--was the highest and best bid, as the bidder offered gas at the lowest rate.

Touching the first ground, it is urged that the gas company was incorporated in 1854 for the sole purpose of carrying out a prior grant of the city of Covington to James Southgate and his associates to supply the city with gas for the term of 50 years from October, 1852; and therefore the company could not acquire a new or different franchise, because it could only transact the business it was expressly incorporated to transact. Const. § 192. We think this contention was based on a too narrow construction of the purposes for which the company was incorporated. It is true it is stated in the act of incorporation that the business and operations of the company shall consist in furnishing the city of Covington, etc., with gaslight, in pursuance of and according to the terms of an ordinance passed by the city of Covington October 28, 1852, entitled "An ordinance to provide for lighting with gas the city of Covington, Ky."; and it is true that such ordinance was the one under which Southgate and associates were authorized to furnish gas for the term of 50 years. But we regard the reference to the Southgate ordinance as intending merely to fix the terms of the contract upon which the gas was to be furnished by the corporation, rather than as intending to designate the carrying out of that contract as the sole business for which the corporation was organized. Indeed, the very terms of the charter show this; for, confessedly, the Southgate contract terminated in 50 years from October 28, 1852, and yet the company was given the exclusive right to supply gas to the city and its inhabitants (under the terms and conditions provided in the Southgate ordinance) for the term of 50 years from the 1st day of January, 1854. It may be noticed that it is not contended that, because the life of the company is only some four or five years, it could not receive a grant to it of a franchise to last 20 years. It seems to be conceded on the authority of Detroit Citizens' St. Ry. Co. v....