Salt Lake City v. Utah Light & Railway Co.

• Decision Date: 10 August 1914
• Docket Number: 2591
• Citation: 45 Utah 50,142 P. 1067
• Parties: SALT LAKE CITY v. UTAH LIGHT & RAILWAY CO
• Court: Utah Supreme Court

142 P. 1067

45 Utah 50

SALT LAKE CITY v. UTAH LIGHT & RAILWAY CO

No. 2591

Supreme Court of Utah

August 10, 1914

Appeal from District Court, Third District; Hon. F. C. Loofbourow Judge.

Action by Salt Lake City against the Utah Light & Railway Company, a corporation.

Judgment for plaintiff. Defendant appeals.

REVERSED AND REMANDED WITH DIRECTIONS TO DISMISS.

P. L Williams, G. H. Smith and H. B. Thompson for appellant.

H. J Dininny, Aaron Meyers and W. H. Folland for respondent.

FRICK, J. McCARTY, C. J., and STRAUP, J., concur.

OPINION

FRICK, J.

This proceeding was initiated in the City Court of Salt Lake City. The city there filed a complaint in which it charged the appellant with having violated the provisions of a certain ordinance. Appellant was found guilty in that court, and appealed the case to the District Court of Salt Lake County, where it was again found guilty, and from the latter conviction it now appeals to this court upon the ground that the ordinance in question, for the reasons hereinafter stated, is invalid. The ordinance reads as follows:

"Section 1. It shall be unlawful for any person, firm, association or corporation to engage in, conduct, operate, carry on, or manage the business of generating, furnishing, distributing or selling electricity for light, heat, fuel or power purposes, and using meters to gauge or measure the same, without first procuring a license so to do.

"Sec. 2. Persons required to pay license under the provisions of section 1 of this ordinance, shall, on or before the first day of January of each year, furnish the license assessor of Salt Lake City, a statement under oath of the number of meters used by said person for the gauging or measurement of electricity as generated, furnished, distributed or sold within Salt Lake City during the preceding year, and shall pay to Salt Lake City annually, in advance, the sum of one ($ 1.00) dollar for each and every meter so used as aforesaid.

"Sec. 3. Any person, firm, association or corporation violating any provision of this ordinance shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than $ 25.00, nor more than $ 299.00."

The cause was submitted to the district court upon an agreed statement of facts, which in substance are as follows:

That on the 20th day of May, 1893, Salt Lake City granted to the Salt Lake & Ogden Gas & Electric Light Company a franchise or permission "to use and occupy the streets, lanes and alleys and public places of Salt Lake City for the purpose of conveying * * * electrical current * * * by means of wires or conductors placed above said streets, to be used for electric lighting and * * * furnishing power and other purposes to the inhabitants and property owners and users in said city." In said franchise the city also granted said company "the privilege of erecting and maintaining in the streets, lanes and alleys of said city, poles and attaching thereto and extending and maintaining thereon wires or conductors for the purpose of transmitting electrical current within the limits of said city to the inhabitants thereof."

In December, 1893, Salt Lake City granted to one S. F. Walker a franchise in which said Walker was given "the privilege of erecting and maintaining in the streets, lanes, alleys and public places of said city, poles and attaching thereto and maintaining thereon wires and conductors for the purpose of transmitting electrical current within the limits of said city to the inhabitants thereof."

In May, 1897, Salt Lake City also granted a franchise to the Pioneer Electric Power Company, the privilege "to construct, erect and maintain a single line of poles in the streets, lanes, and alleys of Salt Lake City, with the necessary wires and other proper appliances thereto attached for the distribution and conveyance of electricity and gas throughout said city to be used by the inhabitants thereof for light, heat, power and other industrial and commercial purposes."

In December, 1903, the city council of Salt Lake City passed an ordinance in which all of the foregoing franchises are recited, and in which ordinance the franchises and privileges aforesaid are all vested in the Utah Light & Power Company. It was also declared in said ordinance that the life of each of said franchises shall be fifty years. Prior to August, 1905, all of the foregoing franchises and privileges had been assigned and transferred to the Utah Light & Railway Company, the appellant here, and said company succeeded to all of the rights and privileges in said franchises specified. On the 30th day of August, 1905, appellant being desirous of having extended the life of said franchises and of having the transfers thereof to it ratified and approved by said city, therefore, pursuant to such request, the city council of Salt Lake City by ordinance duly passed and approved, ratified and confirmed the transfers of said franchises and privileges in the Utah Light & Railway Company, the appellant, and it was provided in said ordinance that "the life, validity, and term of each and every one of said franchises is hereby extended and ordained to be fifty years from July 1, 1905." In consideration for the granting of the franchises and privileges aforesaid, each one of the grantees agreed to furnish to Salt Lake City certain lights and power free of charge. Appellant, among other things, also agreed to furnish to the city certain lights and power free of charge. The lights so furnished to the city at commercial rates for the year 1910 would have cost $ 21,993.90, for the year 1911, $ 23,277.82, and for the year 1912 (estimated) $ 21,744.25. Appellant also pays an ad valorem tax upon its property the same as other property owners. In 1910 it paid such taxes to the state amounting to $ 11,152.76, to the county, $ 9,756.20, and to the city, $ 8,786.65. It was also provided in said ordinance that appellant should not charge or exact pay for light and power furnished to its patrons an amount in excess of the prices fixed in said ordinance. As part consideration for said franchises and privileges appellant also conveyed by proper deed of conveyance to Salt Lake City certain real estate and water and power rights. The deed conveying said property and rights contained the following condition:

"This deed is given and made on the express condition that the privileges and rights, restrictions and limitations mentioned in said ordinances and each and every one of them shall be valid and binding upon said city, and shall not be impaired or in any way modified or changed."

It was further stipulated that the ordinance in which the franchise, privileges, and rights were granted and ratified contained the following provisions:

"In consideration of the premises, Salt Lake City agrees and ordains that it will not by ordinance or resolution make any rules or regulations in regard to the price of lighting different from the prices therefor herein named, nor shall the said Utah Light & Railway Company be obliged to furnish light for any one for less than herein named."

What the value of the franchises which were granted to appellant was does not appear. It was also stipulated that there are other persons who are "engaged in the business of generating and selling electricity for light and power purposes within the corporate limits of Salt Lake City, but that said persons were not required by law or ordinance to use meters to gauge or measure the same." Further that the electric meter is a practical and tested device used for the purpose of measuring or ascertaining the exact amount of current that is used by consumers. Appellant also has a franchise from Salt Lake City to operate a street car system, and as a consideration for said franchise it pays to said city annually the sum of twenty-five dollars for each car operated over its lines in addition to the ad valorem taxes paid as aforesaid. The cost of lights and power that appellant is required to furnish the city free of charge may still increase considerably during the life of the franchise.

While the foregoing is a very condensed statement of the facts stipulated, yet we think it is sufficient to enable the reader to understand the points hereinafter decided.

At the outset it should be noted that there is no express provision in any of the so-called franchises, or in the ordinances under which appellant claims the right herein referred to whereby Salt Lake City has either bartered granted, or surrendered its right to impose any license or occupation tax upon appellant which may be permitted under our Constitution or statutes. Upon the question of imposing taxes, both the franchises and the ordinances are silent. Appellant, however, in substance contends that the ordinance in question is invalid as against it for the reason that, in obtaining the franchise as aforesaid, it already has paid for the privilege of conducting or carrying on the business sought to be taxed in said ordinance; that the granting of said franchises constitutes a contract between it and Salt Lake City; and hence the imposition of said tax is in violation of the provisions of said contract and impairs the obligations thereof. A large number of cases are cited by appellant's counsel which they insist support the foregoing contentions. Among those cited are the following: Boise Water Co. v. Boise City, 230 U.S. 84; 33 S.Ct. 997; 57 L.Ed. 1400; Los Angeles v. Los Angeles City Water Co., 177 U.S. 558; 20 S.Ct. 736; 44 L.Ed. 886; City of St. Louis v. Western Union Tel. Co. (C. C.), 63 F. 68; New Orleans Gas Co. v. Louisiana Light Co., 115 U.S. 650; 6 S.Ct. 252; 29 L.Ed. 516; American Smelting Co. v. Colorado, 204 U.S. 103; 27 S.Ct. 198; 51 L.Ed. 393; 9 Ann....