People Gaslight Coke Company v. City of Chicago

• Decision Date: 04 April 1904
• Docket Number: No. 132,132
• Citation: 194 U.S. 1,24 S.Ct. 520,48 L.Ed. 851
• Parties: PEOPLE'S GASLIGHT & COKE COMPANY of Chicago, Appt. , v. CITY OF CHICAGO
• Court: U.S. Supreme Court

194 U.S. 1

24 S.Ct. 520

48 L.Ed. 851

PEOPLE'S GASLIGHT & COKE COMPANY of Chicago, Appt.,

v CITY OF CHICAGO.

No. 132.

Argued January 20, 1904.

Decided April 4, 1904.

Messrs. William D. Guthrie, James F. Meagher, and William F. Sheehan for appellants.

[Argument of Counsel from pages 1-6 intentionally omitted] Messrs.Granville W. Browning and Edgar Bronson Tolman for appellee.

Mr. Chief Justice Fuller delivered the opinion of the court:

This was a bill to restrain the city of Chicago from putting in force a general ordinance passed October 15, 1900, providing that corporations, companies, or persons manufacturing, selling, and distributing gas in the city of Chicago for illuminating or fuel purposes should not charge individual consumers more than 75 cents per thousand cubic feet, and providing penalties for violation of its provisions. The bill was demurred to, and an opinion delivered on hearing on demurrer. 114 Fed. 384.

The opinion took a wider range than the bill as framed called for, because of certain facts not therein set forth, but which were admitted on the argument, and accordingly it was suggested that the bill be amended to bring in these facts, and, this having been done, the demurrer was renewed to the amended bill, whereupon, after argument, the court gave an additional brief opinion (which appears in the record), sustained the demurrer, and dismissed the bill, as amended, for want of jurisdiction. Subsequently it was stipulated and agreed by and between the parties that the decree as entered did not correctly recite what was intended by the court, and that it should be amended by striking out the words 'for want of jurisdiction,' and inserting in lieu thereof the words 'upon the merits as to the alleged contract rights of the complainant, but without prejudice to any other suit in respect to the question of power of the city council under the laws of the state of Illinois.' An order was then entered by the court, amending its previous decree nunc pro tunc in the particulars named.

The facts presented by the amended bill were these: The People's Gaslight & Coke Company was incorporated by a special act of the general assembly of Illinois, approved February 12, 1855, creating it a corporation, with the usual powers and liabilities, with a capital stock not to exceed $500,000, and with power to manufacture and sell gas in the city of Chicago and 'to lay pipes for the purpose of conducting the gas in any of the streets or avenues of said city, with the consent of the city council,' and by the 4th section it was expressly provided that the company should furnish and supply to the city, for its public uses, at the election of the proper authorities of the city, 'a sufficient supply of gas, at a rate not exceeding $2 per thousand feet, and the inhabitants of said city at a rate not exceeding $2.50 per thousand feet.' The city council passed an ordinance, August 30, 1858 granting the company permission and authority 'to lay their gas mains, pipes, feeders, and service pipes in any of the streets, avenues, highways, public parks, or squares throughout said city, subject at all times, however, to the resolutions and ordinances of the common council of said city.' The act of 1855 was amended February 7, 1865, so as to allow an indefinite increase of the capital stock, and by § 3 of this act all the corporate powers of the corporation were vested in a board of directors and such officers and agents as the board should appoint, with power to the board to 'adopt such by-laws, rules, and regulations for the government of said corporation and the management of its affairs and business as they may think proper, not inconsistent with the laws of this state,' the section continuing and concluding, 'and the 4th section of said act is hereby repealed; but ten years after the passage of this act the common council of the city of Chicago may, by resolution or ordinance, regulate the prices charged by said company for gas; but said common council of the city of Chicago shall, in no case, be authorized to compel the said company to furnish gas at a less rate than $3 per thousand feet.'

In 1870 a new constitution of the state of Illinois was adopted, providing that no law 'making any irrevocable grant of special privileges or immunities shall be passed' (art. II., § 14); that the general assembly should not pass local or special laws 'granting to any corporation, association, or individual any special or exclusive privilege, immunity, or franchise whatever' (art. IV., § 22); and that no corporation should be 'created by special laws, or its charter extended, changed, or amended, except those for charitable, educational, penal, or reformatory purposes, which are to be and remain under the patronage and control of the state; but the general assembly shall provide, by general laws, for the organization of all corporations hereafter to be created' (art, XI., § 1).

June 5, 1897, an act was passed 'in relation to gas companies,' which authorized and empowered gas companies to sell, transfer, convey or lease their real and personal property, rights, franchises, and privileges, in whole or in part, to any other gas company doing business in the same city, town, or village, and provided that by complying with the provisions of the act, gas companies doing business in the same city, town, or village might consolidate and merge into a single corporation, which should be one of said merging and consolidating corporations. 'The companies, parties to the agreement or agreements which provide for consolidation and merger shall thereupon be and are hereby declared to be consolidated and merged into the one corporation specified in such agreement or agreements.' Laws Illinois 1897, p. 179, §§ 2, 8.

The 9th and 11th sections read as follows:

'§ 9 Any corporation purchasing or leasing the real and personal property of any other company or companies, as provided for in § 1, or any consolidated corporation, as authorized by § 2, shall be subject to and shall perform, for each of the companies so entering into said agreement or agreements, the legal obligations now resting upon each of them, respectively, under their respective charters and ordinances, except where the provisions thereof conflict with the exercise of the powers herein granted, in the same manner and to the same extent as if the companies had remained individual and distinct; and such performance by said corporation so purchasing or leasing, or by such conslidated corporation, shall be held and considered as the performance by each of the respective companies so selling, leasing, or consolidating, of the legal obligations theretofore resting upon each of them respectively: Provided, however, that nothing in this act shall be construed as extinguishing said companies entering into the agreement or agreements mentioned in this act, or annulling or impairing any of their respective franchises, licenses, or privileges, but they shall severally be regarded as still subsisting, so far as their continuance for the purpose of upholding any right, title, or interest, power, privilege, or immunity ever exercised or enjoyed by any of them, may be necessary for the protection of their respective creditors or mortgagees, or any of them; the separate exercise of their respective powers, and the separate enjoyment of their separate privileges and immunities, being suspended until the protection of such creditors or mortgagees shall require their resumption, when such suspension shall cease, so far as, and for such time as, the protection of such creditors or mortgagees may require.'

'§ 11. Any corporation purchasing or leasing the property of any company or companies, or into which any company or companies are consolidated and merged under this act, shall be, at the time of availing itself of or accepting the benefits of this act, in the actual business of furnishing gas to consumers; and shall be subject to the following provisions:

'Such corporation shall not increase the price charged by it for gas of the quality furnished to consumers during any part of the year immediately preceding such purchase or lease or such consolidation and merger.

'Such corporation shall furnish gas to consumers as good in quality as it furnished previous to such purchase or lease or such consolidation and merger.'

The People's Gaslight & Coke Company under this act became consolidated with some ten other gas companies, most of which were organized under general laws passed in pursuance of the Constitution of 1870. One of them, the Chicago Gaslight & Coke Company, was incorporated by special act of February 12, 1849, amended February 9, 1855, but this contained no restriction on the right of the general assembly...