Monett Electric Light, Power & Ice Co. v. Incorporated City of Monett, Mo.

• Decision Date: 09 January 1911
• Docket Number: 134.
• Citation: 186 F. 360
• Court: U.S. District Court — Western District of Missouri
• Parties: MONETT ELECTRIC LIGHT, POWER & ICE CO. v. INCORPORATED CITY OF MONETT, MO., et al.

186 F. 360

MONETT ELECTRIC LIGHT, POWER & ICE CO. v. INCORPORATED CITY OF MONETT, MO., et al.

No. 134.

United States Circuit Court, W.D. Missouri, Western Division.

January 9, 1911

Joseph M. Hill, James Brizzolara, and H. L. Fitzhugh, for complainant.

Thomas D. Steele and Fielding P. Sizer, for defendants.

VAN VALKENBURGH, District Judge.

This is a suit in equity to restrain the city of Monett, Mo., and its officers from building and operating a municipal light plant in said city. The facts as disclosed by the proofs are as follows:

On the 4th day of February, 1893, the city of Monett, being then a city of the fourth class, acting under authority of the statutes of the state of Missouri pertaining to cities of that class, undertook to grant to one H. Ward Hicks, his successors or assigns, the exclusive right and privilege to erect, construct, operate, furnish, and maintain electric light works and an electric power plant to furnish electric lights and electric power for the use of said city and its inhabitants for a period of 20 years. This was by ordinance numbered 107. Pursuant to law, this action of the city council was made subject to ratification by the qualified voters of the city voting at a special election to be called for the purpose and to be held February 16, 1893. On the same day the council essayed to pass an ordinance calling a special election to submit this proposition to the voters which ordinance was numbered 108, and thereunder the notice provided was duly given, and the special election held. February 18th the the common council undertook to pass an ordinance numbered 110, declaring the result of the special election held on the 16th day of February, 1893, as aforesaid, in which it was recited that 326 votes were there cast; 267 being in favor of the franchise and 59 against it. By Ordinance No. 110 it was further declared that H. Ward Hicks, his successors or assigns, had received the grant of said franchise under Ordinance No. 108, and was empowered authorized, and entitled to the exercise of all the rights and privileges subject to the limitations and duties set forth and embodied in said grant or franchise. Thereupon, to wit on the 28th day of February following, said Hicks filed with the city his formal acceptance of the franchise thus granted and subsequently assigned it to the complainant herein.

A lighting and power plant was constructed, and service to the city and its inhabitants began in due course. As heretofore stated, the ordinance sought to vest in the grantee the exclusive right to furnish electric light for the use of the city and its inhabitants for a period of 20 years in accordance with the power conferred upon cities of the fourth class by section 1589 of the Revised Statutes of Missouri of 1889. The complainant continued to enjoy its exclusive franchise for some years thereafter, but lately disagreements arose between it and the city. Complaints were made of the character and sufficiency of the service, with the result that numbers of the citizens withdrew their patronage, and provided themselves with lights from other sources, not however, in conflict with the franchise here in controversy. In February, 1909, the company desired to repair its plant and extend its service lines, and for that purpose contemplated a new location for many of the poles carrying its wires, and in this connection a conflict arose between the company and the city over the points at which the company would be permitted to locate its poles, the company desiring to transfer portions of its system from streets then occupied to certain alleys and the city seeking to restrict the locations to the points formerly occupied; it being apparent from the testimony that the city contemplated the use of these alleys and perhaps other points sought to be appropriated by the company for its proposed improvements and extension for use in the erection of a municipal lighting plant. The outcome of this controversy was that the company attempted to make locations of its poles without authority as contended by the city, and the city stopped such work on the part of the company and caused the poles to be removed; the city resorting to arrests of the officers and employes of the light company in the enforcement of its claims, and the company appealing to the courts to enjoin the city and its officers from such alleged unlawful interference. It clearly appears from the testimony that the plant at that time had been in operation for about its natural life, and it had become necessary, in the opinion of the company, to rebuild the entire system. Naturally the conflict between the company and the city respecting the extension and location of the light mains resulted in the abandonment of any attempt at improvement of the plant, so that in the spring of 1909 we find a greatly impaired and worn out lighting system, inadequate to meet the demands of the city under normal conditions, the city and its people dissatisfied and unwilling to grant further extension and changes of locations which might tend to embarrass the city in the establishment of its own plant either presently or at the end of the twenty-year franchise, and both parties in such an attitude of antagonism and hostility as to preclude any probable adjustment of the difficulties or the furnishing of satisfactory lighting service. At that time the franchise had less than four years to run. The physical property of the company was badly out of repair, and the entire plant could be rehabilitated only by the expenditure of large su In no event could the existing franchise endure longer thanms of money apparently essential to its practical rebuilding. 1913. No renewal was provided by its terms, nor would such a provision have been binding if made; and exclusive franchises for cities of the fourth class are now no longer authorized by the law of this state.

In this extremely unsatisfactory situation, the mayor and common council of the defendant city in June, 1909, passed an ordinance by which it was provided that said city should erect an electric light system, and should itself furnish the city and its inhabitants with electric light and electric power, and should be given the use of all the streets, alleys, and public places in said city as required for the placing of poles and the hanging of wires for the aforesaid purposes; that to pay therefor the city should issue its interest-bearing bonds whereby all property in said city would be taxed for the purpose of rebuilding, equipping, and operating said electric light plant in practical competition with complainants. This ordinance was submitted to the voters of the city by special election held therefor on the 26th day of June, 1909, and on the 13th day of July, 1909, the council passed an ordinance declaring the result of the election, ratifying and approving the ordinance. This was followed by a contract between the city and the defendants Knapp and Martin for the erection and construction of the new municipal plant, and providing for the placing of poles and wires along, over, and through the streets and alleys of the defendant city. The complainant, contending that the granting and passage of the ordinance authorizing the defendant city to build and operate such electric light plant is in violation of the contract claimed to exist between the city and the complainant, under and by virtue of which the complainant constructed and is now operating its plant, filed this suit on the 20th of July, 1909, alleging the impairment of the obligation of its contract in violation of the rights guaranteed to it by the Constitution of the United States. Both parties appear to have been content to permit the matter to remain in statu quo until final determination. No restraining order was issued.

Defendants by their answer deny that the city at any time entered into a contract with H. Ward Hicks which subsequently inured to the complainant, claiming that such a contract to be binding must be in writing, dated when made, and subscribed by the parties thereto or their agents authorized by law and duly appointed and authorized in writing, and denying that the ordinances referred to constituted any such contract, or that such ordinances were passed in accordance with law. Defendants further contend that there is no proof before the court of the existence of such ordinances, nor that said ordinances were ever presented to the mayor for his approval, nor that he ever did approve the same; that the record does not show that said purported ordinances were passed by bill; that a bill of any character was ever introduced by any member of the board of aldermen; that the yeas and nays were entered on the journal, nor that the bill was read three times before its final passage, as required by statute. Defendants insist that Ordinance No. 107 granted no exclusive rights except to the furnishing of electricity for mechanical purposes; also, that complainant has abandoned its suit in this court by voluntarily thereafter bringing a suit in the state court involving the same issues.

Complainant urges that an ordinance when accepted by a public service corporation constitutes a contract; that the ordinances were passed by bill and duly approved by the mayor; that the statutory provision requiring the yeas and nays to be called and entered on the journal was substantially complied with and that, in any event, the municipality is now estopped from pleading the irregularity, if one exists; that the suit subsequently brought in the state court was merely to prevent criminal prosecution against the officers of the complainant company growing out of an ordinance alleged to conflict with the rights granted to complainant, and to prevent annoyance and a...