Old Colony Trust Company v. City of Omaha 27 28, 1913, No. 754
| Court | United States Supreme Court |
| Writing for the Court | Van Devanter |
| Citation | 230 U.S. 100,57 L.Ed. 1410,33 S.Ct. 967 |
| Parties | OLD COLONY TRUST COMPANY, Appt., v. CITY OF OMAHA. Argued February 27 and 28, 1913. Ordered for reargument |
| Docket Number | No. 754 |
| Decision Date | 17 March 1913 |
v.
CITY OF OMAHA.
[Syllabus from pages 100-102 intentionally omitted]
Page 102
Mr. William D. McHugh for appellant.
[Argument of Counsel from pages 102-105 intentionally omitted]
Page 105
Messrs. Benjamin S. Baker, William C. Lambert, John A. Rine, and L. J. TePoel for appellee.
[Argument of Counsel from pages 105-108 intentionally omitted.]
Page 108
Mr. Justice Van Devanter delivered the opinion of the court:
The principal questions presented by this suit are, first whether the Omaha Electric Light & Power Company, which will be spoken of as the electric company, has a subsisting franchise to occupy and use the streets, alleys, and public grounds of the city of Omaha, Nebraska, in the distribution of electric current, and, second, whether, if so, the franchise is limited to the distribution of such current for lighting purposes, or includes its distribution for power and heating purposes. If there be a franchise, it rests
Page 109
primarily upon the following ordinance adopted by the council of the city in December, 1884:
'The New Omaha Thompson-Houston Electric Light Company, or assigns, is hereby granted the right of way for the erection and maintenance of poles and wires, with all the appurtenances thereto, for the purpose of transacting a general electric light business through, upon, and over the streets, alleys, and public grounds of the city of Omaha, Nebraska, under such reasonable regulations as may be provided by ordinance: Provided, That said company shall at all times, when so requested by the city authorities, permit their poles and fixtures to be used for the purpose of placing and maintaining thereon any wires that may be necessary for the use of the police or fire department of the city; and further provided, such poles and wires shall be erected so as not to interfere with ordinary travel through such streets and alleys; and provided, that whenever it shall be necessary for any person to move along or across any of said streets or alleys any vehicle or structure of such height or size as to interfere with any poles or wires so erected, the company using and operating such poles and wires shall, upon receiving twelve hours' notice thereof, temporarily remove such poles and wires from such place as must necessarily be crossed by such vehicle or structure; and provided further that whenever the city council shall by ordinance declare the necessity of removing from the public streets or alleys of the city of Omaha the telegraph, telephone, or electric poles or wires thereon constructed or existing, said company shall, within sixty days from the passage of such ordinance, remove all poles and wires from said streets and alleys by it constructed, used, or operated.'
The Thompson Company, to which the grant was made, was not then incorporated, but was subsequently incorporated under the laws of Nebraska for a term which was to expire September 26, 1905. It accepted the grant,
Page 110
constructed and put into operation a central generating station and an extensive distributing system, and thereby placed itself in a position to supply electric current to those desiring to use it. At first the current was used almost exclusively for lighting purposes, but it came gradually to be used for power and heat, and in a few years the Thompson Company held itself out as distributing current for all three purposes. The generating plant was enlarged and improved from time to time, and the distributing system extended and adjusted, to meet the increasing demand for current for power and heat as well as for light. In 1903 the entire plant and all rights under the ordinance were transferred by the Thompson Company to the electric company, and the business established by the former has since been conducted in increasing volume by the latter. In 1891 the gross earnings from current for lighting purposes was $104,646.63, and for power and heat, $4,237.67. In 1903 these figures had increased to $261,421.89 and $50,390.11, respectively, and in 1908 to $563,447.57 and $130,537.72. By a series of ordinances, beginning in 1892, the city regulated in material ways the business of the two companies, each in turn, in distributing current for the three purposes, and by ordinances adopted in 1902 and 1904 the city required all their wires within designated districts, whether the current was used for light or for power or heat, to be placed in underground conduits, the ordinances being duly obeyed at a cost of $479,215. After March 4, 1902, the two companies, each in turn, were required to pay, and did pay, to the city, 3 per cent of the gross earnings from their business, including the receipts from the use of current for power and heat. The city also became and remained a purchaser of current in substantial quantities, to be used for power purposes.
In these and various other ways disclosed by the record the city acquiesced in, encouraged, and directly sanctioned
Page 111
the action of the two companies in successively equipping and adjusting the electric plant, at great expense, for the distribution of current for power and heat, knowing that they were engaging therein under a claim of right under the ordinance of 1884. Fifteen circuits were established to supply the current for those purposes exclusively. Prior to May 26, 1908, no objection whatever was made by the city to the use of the streets, alleys, and public grounds for those purposes, but, on the contrary, it was satisfied and content therewith. On that day the city council, to use the words of the city's answer, 'elected to terminate' that use, and passed the following resolution, which was approved by the mayor:
'Resolved, by the city council of the city of Omaha, the mayor concurring, that the city electrician be and he is hereby ordered and directed to disconnect, or cause to be disconnected, on or before July 1st, 1908, all wires leading from the conduits or poles of the Omaha Electric Light & Power Company, transmitting electricity to private persons or premises, to be used for heat or power; and to take such steps as may be necessary to prevent the said Omaha Electric Light & Power Company from furnishing or transmitting from the conduits or wires electricity to private houses or premises for heat or power purposes.'
This suit is prosecuted by the Old Colony Trust Company, a Massachusetts corporation, against the city of Omaha, to enjoin the enforcement of that resolution. The trust company is the trustee in a mortgage executed in 1903 by the electric company upon all of its property, including its rights under the ordinance of 1884, to secure the payment of upwards of $2,000,000 of bonds issued by it in 1903 and 1904. The claim of the trust company, as set forth in the bill, is that the resolution of 1908 is a law of the state impairing the obligation of the contract resulting from the ordinance of 1884 and the action of the
Page 112
parties in interest thereunder, on the faith of which contract the bonds were purchased by their several holders, and that the resolution is therefore void, because repugnant to § 10 of article 1 of the Constitution of the United States.
The first question to be considered is whether the privilege or franchise granted by the ordinance of 1884 is still subsisting; because if it has expired, it will not be necessary to inquire whether it and the action of the parties thereunder resulted in any contractual rights respecting the use of the streets of the city in the distribution of current for power and heating purposes.
What was the life or duration of the privilege granted by the ordinance? Was it in perpetuity or for the corporate existence of the grantee? There is no claim, nor could there reasonably be, that it was during the pleasure of the city, or revocable at will. The trust company contends that it was a grant in perpetuity, and the city that it was for the corporate existence of the grantee. While the arguments have taken a wide range, it is of first importance to give attention to the statutes and decisions of Nebraska, because the city, being a creature of that state, derives its powers from the laws thereof and is necessarily within the influence of the decisions of the state's court of last resort.
By the charter of the city in force at the time, the city council was charged with 'the care, management, and control of the city,' and was given power 'to provide for the lighting of streets,' and 'to care for and control . . . streets, avenues, parks, and squares within the city.' Laws 1883, p. 89, chap. 10, § 15, subdivs. 8, 24.
In Sharp v. South Omaha, 53 Neb. 700, 705, 74 N. W. 76, the supreme court of the state had occasion to consider similar charter provisions and to determine whether and for what time they authorized the city council to grant
Page 113
a franchise to use the streets for supplying gas to the people of the city. It was held that there was 'an ample grant of power, unqualified as to persons, method, or time, to regulate the laying down of mains, the sale and use of gas, and the rate to be charged therefor.'
In Nebraska Teleph. Co. v. Fremont, 72 Neb. 25, 29, 99 N. W. 811, there was involved a grant by the city council, under like charter provisions, to the Fremont Telephone Company, an unincorporated association, of the right to erect and maintain telephone poles and wires in the streets of the city, the ordinance being silent as to the life of the grant. The court said: 'By the terms of the ordinance, there was a grant to the association, in perpetuity, of a right of way or easement over all its public ways, without restriction or limitation.'
State ex rel. Caldwell v. Lincoln Street R. Co., 80 Neb. 333, 343, 14...
To continue reading
Request your trial
-
Carter v. Certain-Teed Products Corp., Civ. No. 508.
...the practical construction placed upon them by the parties is of importance. See, e.g., Old Colony Trust Co. v. City of Omaha, 1913, 230 U.S. 100, 118; 33 S.Ct. 967, 57 L.Ed. 1410; Terry v. Muller, 8 Cir., 1951, 190 F.2d 170, 173; Thompson v. Thompson, 8 Cir., 1946, 156 F.2d 581, 586; Darna......
-
Green v. Obergfell, 7551.
...of their organizations." 37 Brooks, Unions of Their Own Choosing (1939) 140 et seq. 38 Art. VIII, § 1. 39 Old Colony Trust Co. v. Omaha, 230 U.S. 100, 118, 33 S.Ct. 967, 972, 57 L. Ed. 1410: "Generally speaking, the practical interpretation of a contract by the parties to it for any conside......
-
City of Jamestown v. Pennsylvania Gas Co., 106.
...Ohio Traction & Light Co. v. Ohio, 245 U. S. 574, 585, 38 S. Ct. 196, 62 L. Ed. 481, L. R. A. 1918E, 865; Old Colony Trust Co. v. Omaha, 230 U. S. 100, 117, 33 S. Ct. 967, 57 L. Ed. 1410; Owensboro v. Cumberland Telephone Co., 230 U. S. 58, 73, 33 S. Ct. 988, 57 L. Ed. 1389; Grand Trunk Wes......
-
Landon v. Public Utilities Commission of State of Kansas, 136-N.
...the mandamus proceeding. See Keokuk & Western R.R. v. Missouri, 152 U.S. 301, 14 Sup.Ct. 592, 38 L.Ed. 450; Old Colony Trust Co. v. Omaha, 230 U.S. 100, 33 Sup.Ct. [242 F. 681] 967, 57 L.Ed. 1410; Louisville Trust Co. v. Cincinnati, 76 F. 296, 22 C.C.A. 334; Williamson v. City of Clay Cente......
-
Carter v. Certain-Teed Products Corp., Civ. No. 508.
...the practical construction placed upon them by the parties is of importance. See, e.g., Old Colony Trust Co. v. City of Omaha, 1913, 230 U.S. 100, 118; 33 S.Ct. 967, 57 L.Ed. 1410; Terry v. Muller, 8 Cir., 1951, 190 F.2d 170, 173; Thompson v. Thompson, 8 Cir., 1946, 156 F.2d 581, 586; Darna......
-
Green v. Obergfell, 7551.
...of their organizations." 37 Brooks, Unions of Their Own Choosing (1939) 140 et seq. 38 Art. VIII, § 1. 39 Old Colony Trust Co. v. Omaha, 230 U.S. 100, 118, 33 S.Ct. 967, 972, 57 L. Ed. 1410: "Generally speaking, the practical interpretation of a contract by the parties to it for any conside......
-
City of Jamestown v. Pennsylvania Gas Co., 106.
...Ohio Traction & Light Co. v. Ohio, 245 U. S. 574, 585, 38 S. Ct. 196, 62 L. Ed. 481, L. R. A. 1918E, 865; Old Colony Trust Co. v. Omaha, 230 U. S. 100, 117, 33 S. Ct. 967, 57 L. Ed. 1410; Owensboro v. Cumberland Telephone Co., 230 U. S. 58, 73, 33 S. Ct. 988, 57 L. Ed. 1389; Grand Trunk Wes......
-
Landon v. Public Utilities Commission of State of Kansas, 136-N.
...the mandamus proceeding. See Keokuk & Western R.R. v. Missouri, 152 U.S. 301, 14 Sup.Ct. 592, 38 L.Ed. 450; Old Colony Trust Co. v. Omaha, 230 U.S. 100, 33 Sup.Ct. [242 F. 681] 967, 57 L.Ed. 1410; Louisville Trust Co. v. Cincinnati, 76 F. 296, 22 C.C.A. 334; Williamson v. City of Clay Cente......