Mich. Pub. Serv. Co. v. City of Cheboygan

• Citation: 37 N.W.2d 116,324 Mich. 309
• Decision Date: 11 April 1949
• Docket Number: 12.,Nos. 11,s. 11
• Parties: MICHIGAN PUBLIC SERVICE CO. v. CITY OF CHEBOYGAN et al. BLANCHARD et al. v. CITY OF CHEBOYGAN.
• Court: Supreme Court of Michigan

324 Mich. 309

37 N.W.2d 116

MICHIGAN PUBLIC SERVICE CO.

v.CITY OF CHEBOYGAN et al.

BLANCHARD et al.

v.CITY OF CHEBOYGAN.

Nos. 11, 12.

Supreme Court of Michigan.

April 11, 1949.

Appeal from Circuit Court, Cheboygan County, in Chancery; Sherman D. Callender, Judge.

Suit by Michigan Public Service Company against City of Cheboygan, a municipal corporation, and others, to enjoin defendants from acquiring, operating and maintaining a municipal electric generating plant or distribution system, and from issuing mortgage bonds based upon an allegedly void election, consolidated with information in nature of quo warranto by John D. Blanchard and Benjamin E. Oxley against City of Cheboygan, a municipal corporation, attacking legality of election. From judgment dismissing information and decree dismissing bill of complaint, plaintiffs appeal.

Judgment dismissing information affirmed, and decree in chancery case entered in accordance with opinion.Before the Entire Bench.

K. B. Matthews, of Ludington (Fitch R. Williams, of Traverse City, of counsel), for appellants.

John A. Cain, of Cheboygan (Benjamin V. Halstead, of Petoskey, of counsel), for appellees.

BOYLES, Justice.

This appeal involves two cases which were consolidated for hearing in the circuit court, and have been submitted here on consolidated record and briefs. On November 15, 1946, appellant Michigan Public Service Company filed a bill of complaint in the circuit court for Cheboygan county in chancery against the city of Cheboygan, its mayor and aldermen, to enjoin the defendants from taking any steps toward acquiring, operating or maintaining a municipal electric generating plant or distribution system for supplying the city and its inhabitants with electricity, and from issuing any mortgage bonds for such purposes based upon a certain election, which appellants claim is void.

The principal question of law involved in said chancery case is whether the plaintiff Michigan Public Service Company itself has any right to use the streets and alleys of the city of Cheboygan for its poles and wires to transmit and distribute electrical energy. Inasmuch as said corporate plaintiff now has no franchise from the municipality (such franchise having expired in 1943), the right of said plaintiff to maintain this suit in chancery against the defendants might partly depend upon whether it has any right to occupy the streets and alleys of the city with its poles and wires. For that reason the chancery matter will be considered first in this opinion. No question has been raised here as to the joinder of the chancery case with a quo warranto case for purpose of appeal, and all parties to the appeal have joined in requesting this Court to consider and decide the issues presented here in the consolidated cases. The underlying facts and circumstances in the chancery case are interwoven with the problems presented in a quo warranto proceeding, likewise attacking the validity of said election.

At the time the chancery case was instituted by the corporate plaintiff, the two individual appellants on leave granted by the court filed a petition in the nature of quo warranto in said court directly attacking the legality of the election, the validity of which the plaintiff corporation challenges in the chancery case. The two plaintiff in the quo warranto proceeding are citizens, electors and taxpayers of the defendant city of Cheboygan. One of them, John D. Blanchard, is a stockholder of the corporate plaintiff, Michigan Public Service Company. Their petition in the nature of quo warranto asks that the defendants be required to answer by what right they claim any authority to acquire and maintain a municipal electric plant. The defendants in their answer claim that right by virtue of said election, and that the election is not invalid.

In the lower court separate answers were filed. The two cases were heard on one record which here consists of 1366 pages of pleadings, testimony, exhibits, findings, the opinion, the judgment and decree of the trial court. On October 27, 1947, the court entered an order upholding the election, the legality of which was challenged in both cases, and dismissed the information filed in the quo warranto case. On December 29, 1947, the court entered a decree in the chancery case reciting that, inasmuch as no compromise settlement had been reached subsequent to the entry of the order dismissing the quo warranto case, the bill of complaint in the chancery case was thereby also dismissed. From these two final orders the plaintiffs in both cases have appealed. Not to be considered as establishing a precedent, but to avoid a multiplicity of suits and appeals, we consider the issues involved in both matters.

Chancery Case.

The appellant Michigan Public Service Company is a Michigan corporation engaged in the production, distribution and sale of electrical energy in various counties, including Cheboygan. The corporate predecessor of appellant Michigan Public Service Company was incorporated in 1896 under the name Cheboygan Electric Light & Power Company. By amendment to its articles the corporate name was changed to Michigan Public Service Company in 1923. In 1926 articles were filed extending its corporate existence for 30 years. In 1927, by a merger agreement and articles filed, the company became possessed of all of the rights and powers of seven constituent corporations, one of which was Michigan Public Service Company, formerly the Cheboygan Electric Light & Power Company. By the articles then filed, the corporate life of the appellant company was extended to 1957.

The Cheboygan Electric Light & Power Company began supplying electrical energy to the city of Cheboygan and its inhabitants (apparently without a franchise) shortly after 1900. Said corporation under its own name and later its successor, the Michigan Public Service Company, have continuously served the city of Cheboygan and its inhabitants with electrical energy. Hereinafter in this opinion, wherever reference is made to the ‘corporate plaitniff,’ it is intended to include its corporate predecessor, the Cheboygan Electric Light & Power Company.

On March 7, 1904, the city of Cheboygan granted to Cheboygan Electric Light & Power Company a franchise. On January 9, 1913, another franchise was granted to said company. This franchise, as well as the former one, has now expired. However, the present corporate plaintiff claims a perpetual right to use the streets and alleys of said city for its poles and wires by virtue of its having occupied the city streets and having been engaged in the business of supplying electricity in the city prior to the adoption of the 1908 Constitution, and under and by virtue of Act No. 264, Pub.Acts 1905, and Act No. 510, Local Acts 1905.

In 1905, and at the time when the Cheboygan Electric Light & Power Company was occupying the city streets and alleys with its poles and wires, the legislature passed two pertinent acts. Act No. 264, Pub.Acts 1905, 1 Comp.Laws 1915, § 4841,¹ was as follows:

‘An Act to authorize under certain conditions and restrictions the use of public streets, alleys and highways by persons, firms or corporations engaged in the manufacture, transmission and distribution of electricity for lighting, heating and power purposes.

‘The People of the State of Michigan enact:

‘Section 1. Any person, firm or corporation authorized by the laws of this state to conduct the business of producing and supplying electicity for purposes of lighting, heating and power, and which shall be engaged or which shall hereafter desire to engage in the business of the transmission of such electricity, shall have the right to construct and maintain lines of poles and wires for use in the transmission and distribution of electricity on, along or across any public streets, alleys and highways and over, under or across any of the waters of this state, and to construct and maintain in any such public streets, alleys or highways all such erections and appliances as shall be electricity for lighting, heating and power such electricity to the purposes of lighting, heating and power, and to distribute and deliver the same to the persons, firms and public or private corporations using the same: Provided, That the same shall not injuriously interfere with other public uses of such streets, alleys or highways, or with the navigation of said waters, and that the designation and location of all lines of poles and wires shall be subject to the regulation, direction and approval of the common council of cities, the village council of villages, and the township board of townships, as the case may be: Provided, That this act shall not apply to the county of Wayne: Provided further, That nothing herein shall deprive cities, villages or townships of the power and control over their streets and highways, which they have by the general laws of this state.’

Act No. 510, Local Acts 1905, was for the purposes of this case, similar to said Act No. 264, Pub. Acts 1905, except that it applied only in the counties of Emmet and Cheboygan. It apparently matters not on which of these two acts the corporate plaintiff relies, inasmuch as its claimed right to construct and maintain poles and wires for transmission of electricity on or across the public streets and alleys of the defendant city might be considered to be based upon either one of the two acts. Both of these acts were abrogated by the Michigan Constitution (1908) when it went into effect January 1, 1909. However, if the right of the corporate plaintiff to use the streets and alleys of the city to construct and maintain poles and wires for use in the transmission of electricity became a vested right before January 1, 1909, such rights were not then terminated.

‘The Legislature has not repealed the act of 1905 (Act No. 264). It is claimed that the act of 1905 has been abrogated or repealed by section 28, art. 8, of the Constitution of [sic] ...