State ex rel. City of St. Louis v. Laclede Gaslight Co.

• Decision Date: 15 December 1890
• Citation: 14 S.W. 974,102 Mo. 472
• Parties: The State ex rel. the City of St. Louis v. The Laclede Gaslight Company
• Court: Missouri Supreme Court

14 S.W. 974

102 Mo. 472

The State ex rel. the City of St. Louis v. The Laclede Gaslight Company

Supreme Court of Missouri

December 15, 1890

[Copyrighted Material Omitted] [Copyrighted Material Omitted]

Peremptory writ denied.

L. Bell for relator.

(1) The city of St. Louis is and has been since the year 1870 authorized to regulate the price and quality of gas. St. Louis Charter of 1870, art. 3, par. 12, sec. 1; Laws, 1869-70, p. 463; Present charter, R. S. 1889, p. 2098; St. Louis v. Tel. Co., 96 Mo. 623. (2) The Laclede Gaslight Company is not, under the terms of its charter, exempted from regulation by the city as to the price of gas. The charter of 1837 (Laws, p. 598) and subsequent enactments are silent as to the price of gas. (3) The Laclede Company is not, by virtue of any rights acquired, under ordinance 13494, exempted from regulation by the city of St. Louis as to price and quality of gas. (4) Ordinance 15482 is a constitutional and valid enactment, and is susceptible of enforcement by mandamus.

Boyle, Adams & McKeighan, and G. A. Madill for respondent.

(1) Charters of private corporations are contracts, protected from invasion by the constitution of the state of Missouri and the United States. Const. of Mo., art. 2, sec. 15; Const. of United States, art. 1, sec. 10; Chenango v. Bridge Co., 3 Wall. 51; College Case, 4 Wheat. 518. (2) Ordinance number 15482 of the city of St. Louis, within the meaning of the constitution, impairs the obligation of respondent's contract with the state of Missouri, evidenced by its charter. Edwards v. Kearzey, 96 U.S. 595; Bank v. Sharp, 6 How. 327; College Case, 4 Wheat. 712; Bank v. Knopp, 16 How. 380; Green v. Biddle, 8 Wheat. 84; Sloan v. Railroad, 61 Mo. 32; Railroad v. Minnesota, 134 U.S. 455. (3) Ordinance number 15482 cannot be upheld, as against this respondent, as an exercise of the police power of sovereignty. Cooley's Const. Lim., star p. 577, and cases cited; St. Louis v. Gaslight Co., 70 Mo. 69; Sloan v. Railroad, 61 Mo. 24; St. Louis v. Fitz, 53 Mo. 582; State ex rel. v. Greer, 78 Mo. 188; Scotland County v. Railroad, 65 Mo. 135; State v. Noyes, 47 Me. 212-213; People v. Railroad, 9 Mich. 285; Dillon's Mun. Corp., sec. 303, et seq.; Gas Co. v. Mfg. Co., 115 U.S. 650; Gas Co. v. Gaslight Co., 115 U.S. 683; Rowse v. Home of the Friendless, 8 Wall. 430; Rowse v. Washington University, 8 Wall. 439. (4) The contract between the city of St. Louis and the St. Louis Gaslight Company of date January 30, 1886 (ordinance number 13494), having been, with the consent of the relator, duly assigned to respondent, protects respondent from the operation of ordinance 15482. First. The city of St. Louis and the St. Louis Gaslight Company, each and both, had power to make the contract represented by ordinance number 13494. Laws of Missouri, 1838-9, sec. 13, p. 244; St. Louis v. Gaslight Co., 70 Mo. 97-98; Charter of St. Louis, art. 3, sec. 26, sub. 2 (R. S. 1889, p. 2096); Ferrenbach v. Turner, 86 Mo. 419-420; Building Co. v. Tel. Co., 88 Mo. 272. Second. The Laclede Gaslight Company (the respondent) and the city of St. Louis had power to make and become parties to the contract, represented by ordinance number 13494. Charter of Laclede Gaslight Company, sec. 5; St. Louis v. Gaslight Co., 86 Mo. 499, 500. Third. The St. Louis Gaslight Company was not disabled from accepting a grant extending beyond its corporate life. 1 Morawetz, Private Corp., sec. 330, p. 314, and 2 Morawetz Private Corp., sec. 1031, p. 989; Angell & Ames on Corporations [11 Ed. 1882] sec. 195, pp. 177, 178; Nicholl v. Railroad, 12 N.Y. 121; Bank v. Caldwell, 16 Ind. 469. Fourth. Ordinance number 13494, by its terms, confers full power upon the respondent to sell gas at $ 1.18 3/4 per thousand cubic feet. Such is the obvious meaning of the language employed in regard thereto, especially so when read in the light of other similar expressions contained in the ordinance; and such is necessarily the meaning when sections 2 and 3 are considered in their true light, as conditions attached to a grant. City Charter, art. 3, sec. 13 (R. S. 1889, p. 2094); State ex rel. v. Railroad, 85 Mo. 263; 2 Story's Eq. Jur., sec. 1319; Livingston v. Stickles, 7 Hill, 255; Towne v. Bowers, 81 Mo. 497; Catlin v. Ins. Co., 1 Sumner, 134; Martindale on Cont., secs. 526, 339-99; Hoyt v. Kimball, 49 N.H. 322; 1 Platt on Leases, p. 116. Fifth. The contract (ordinance number 13494) is not an unlawful interference with the exercise of the power, conferred by charter upon the city of St. Louis, to regulate the price of gas. Charter of the City of St. Louis, art. 3, sec. 26, sub. 7 (R. S. 1889, p. 2098); Charter City of St. Louis, art. 3, sec. 26 (R. S. 1889, p. 2096); Laws of Missouri, 1838-9, p. 244; St. Louis v. Gaslight Co., 70 Mo. 97-98; Hovelman v. Railroad, 79 Mo. 632; Railroad v. Springfield, 85 Mo. 674; State ex rel. v. Railroad, 85 Mo. 263; Indianapolis v. Gaslight Co., 66 Ind. 397; St. Louis v. Gaslight Co., 70 Mo. 69; Newport v. Light Co., 84 Ky. 168. Sixth. The contract expressed in ordinance number 13494 is not invalid, as an interference with the exercise of lawful police regulations on the part of the city. St. Louis v. Gaslight Co., supra; Butcher Union Co. v. Crescent City, 111 U.S. 706. See cases cited under head 3. (5) The city of St. Louis having received the benefits accruing to it by the performance, on the part of the St. Louis Gaslight Company, of its obligations, under ordinance 13494, is now estopped from denying the validity of that ordinance. St. Louis v. Gaslight Co., supra; 2 Parsons on Cont., star p. 790; Hathaway v. Payne, 34 N.Y. 92; Bigelow on Estoppel [2 Ed.] p. 514; Tureman v. Stephens, 83 Mo. 223-224; Hitchcock v. Galveston, 96 U.S. 341; Cook's Stock, Stockholders and Corporations, sec. 744; Buford v. Keokuk, 69 Mo. 611. (6) The city of St. Louis ratified and confirmed the contract (ordinance 13494) by receiving and filing the written acceptance of the terms thereof by respondent and by accepting the bond of the respondent, executed and filed pursuant to the provisions of section 12, and thereby brought itself into direct contract relations with respondent. (7) Ordinance number 15482 is void because it provides no scheme for a hearing by the municipal assembly of the city of St. Louis on the subject of what is a reasonable price for gas within the city of St. Louis. (8) The ordinance number 15482 is void because it imposes an excessive fine within the meaning of the constitutions of the United States and of this state. (9) If the state cannot pass a law impairing the obligation of pre-existing contracts a fortiori, the municipal assembly of St. Louis cannot do it. Cooley's Constitutional Limitations, p. 241.

Gibson, Bond & Gibson also for respondent.

(1) A contract between the state and a corporation created thereunder is formed in the grant and acceptance of a charter of corporate life and franchises; the acceptance of such charter completes its binding force and obligation upon the legislature according to the terms thereof. College v Woodward, 4 Wheat. 518; Von Hoffman v. Quincy, 4 Wall. 535; Rowse v. Home of Friendless, 8 Wall. 430; Humphrey v. Pegnus, 16 Wall. 244; Farrington v. Tennessee, 95 U.S. 679; Gas Co. v. Gas Co., 115 U.S. 683; Sloan v. Railroad, 61 Mo. 24. (2) A municipal assembly is a delegated agency of the state for purposes of local government. Within its lawful sphere its ordinances have the force of laws. It may also enter into contracts in pursuance of powers to that effect, and such contracts, when so made, are not subject to be impaired nor abrogated by subsequent ordinances, or by any municipal action against the will of the parties thereto. Springfield v. Railroad, 85 Mo. 674; State ex rel. v. Railroad, 85 Mo. 263; City of Kansas v. Corrigan, 86 Mo. 67; Holman v. Kansas City, 79 Mo. 633; State v. Miller, 66 Mo. 329; State v. Miller, 50 Mo. 129; State v. De Bar, 58 Mo. 395; St. Louis v. Foster, 52 Mo. 515. (3) The power to fix rates for the exercise of public franchises is a valid subject-matter of contract between the state and the person exercising such public function, and when it has once been regulated and fixed by contract, the state and its representatives are bound by the terms of the contract so made. Sloan v. Railroad, 61 Mo. 24; Stone v. Loan & Trust Co., 116 U.S. 307; Railroad v. Minnesota, 134 U.S. 418. (4) If the power to fix such rates and charges is a police power, it is also a branch of that power that is alienable; for the police power is divisible into two branches -- the alienable and the inalienable. This distribution of the police power into two classes is grounded upon an essential distinction. Such police powers as are necessary to the existence of government, or to the safety of public health and morals, belong to the inalienable class, and cannot be bargained away. Such police powers as do not fall within the above definition belong to the alienable class, and may become matter of contract between the state and its representatives on the one hand, and private persons or corporation on the other, and after having been regulated by contract can only be exercised in conformity with the conditions of such contract. Gas Co. v. Light & Heat Co., 115 U.S. 650; Waterworks Co. v. Rivers, 115 U.S. 674; Gas Co. v. Gas Co., 115 U.S. 683; Butchers' Union Co. v. Crescent City, 111 U.S. 746. (5) Where the state is not restrained by a lawful contract, it can only exercise its power to fix rates and charges for public service, by proceeding judicially, and establishing a rate according to "due course of law." Any act of a legislature of a state finally fixing a rate or schedule of charges without hearing and judicial consideration of the reasonableness of the amount so fixed is void. Railroad...