State ex rel. Hamilton Gas & Coke Co. v. City of Hamilton

• Decision Date: 21 January 1890
• Citation: 23 N.E. 935,47 Ohio St. 52
• Parties: STATE ex rel. HAMILTON GAS & COKE CO. v. CITY OF HAMILTON.
• Court: Ohio Supreme Court

23 N.E. 935

47 Ohio St. 52

STATE ex rel. HAMILTON GAS & COKE CO. v. CITY OF HAMILTON.

Supreme Court of Ohio.

January 21, 1890

Quo warranto .

SPEAR J., dissenting.

Syllabus by the Court

A gas company incorporated under the act of May 1, 1852, (1 Swan & C. St. 271,) for the purpose of supplying gas for lighting the streets and public and private buildings of a city, under authority from the city council erected gas-works, and laid pipes for long distances, for conducting gas through the streets for public and private consumption. The council regulated, from time to time, the price which such company might charge for gas, and from time to time made contracts with the company for lighting the streets. At the expiration of the last contract no new agreement was entered into, and the city declined to take gas any longer from the company. The company complied with all the provisions of the law of the state relating to gas companies, and with all the requirements of the city council in that behalf. Held: (1) That, although there was no refusal or neglect by the company to comply with the requirement of section 2480 of the Revised Statutes, as to laying pipes and lighting streets, and no neglect by the company to furnish gas to citizens and other consumers, in accordance with the prices fixed by the council, as provided in section 2482 of the Revised Statutes, the city council, under section 2486 of the Revised Statutes, was empowered to erect its own gas-works at the expense of the corporation, or to purchase gas-works already erected therein, whenever it might be deemed expedient and for the public good. (2) That the company acquired no vested rights of which it would be deprived, without due process of law, by the city's erecting its own gas-works.

David K. Watson , Atty. Gen., Follett & Kelley, Ramsey, Maxwell & Ramsey, Thomas Millikin, A. F. Hume , and John F. Neilan , for relator.

E. E. Hull , City Sol., James E. Neal , and Israel Williams , for defendant.

DICKMAN, J.

The facts necessary and sufficient for the determination of the material issue in this action are disclosed by the petition answer, and demurrer to the answer, and are as follows: The Hamilton Gas-Light & Coke Company was organized and duly incorporated in the year 1855, under the general incorporation act of May 1, 1852, for the purpose of supplying gas for the lighting of the streets and public and private buildings in the city of Hamilton, Ohio. At the time of its organization, by virtue of the provisions of an ordinance of the city of Hamilton passed in the year 1855, there was granted to the company, and it thereafter had, the use of the streets of the city, for the purpose of laying gas-pipes and mains, and supplying gas to the city and its inhabitants, for the period of 20 years, to-wit, until the year 1875. Since the year 1875 the city has used the gas of the company only in accordance with the terms of various contracts entered into between the city and the company, from time to time, the last of which contracts expired January 1, 1889; and since the last-named date there has been no contract existing between the parties, the city has declined to use the company's gas, and has provided other means for lighting its streets. For the purpose of manufacturing gas, the company erected gas-works, and laid gas-pipes and mains, to the probable extent of 30 miles, throughout the city, for the furnishing of gas for public and private consumption. It is conceded by the defendant that the company has complied with all the provisions of the law of Ohio relating to gas companies, and with all the ordinances in that behalf of the city of Hamilton, and is entitled to all the rights, privileges, and immunities secured to such companies by the laws of the state. The city of Hamilton is a municipal corporation organized under the laws of the state of Ohio, and had, at the last federal census, a population of 12,122, and a corporate area of about three square miles. On the 4th day of September, 1888, the city, by its council, on the petition of a large number of its inhabitants, duly passed an ordinance providing for the submission to the qualified voters of the question of issuing the city's bonds to the amount of $150,000, for the purpose of gas-works to be erected by the city. Legal notice having been given, the question was voted upon by the electors at the general election held on the 6th day of November, 1888, and resulted in 2,412 votes being cast for the issue of bonds, and 59 votes against such issue. Upon that decision of the electors the city council, on the 20th day of November, 1888, adopted a resolution that it was deemed expedient, and for the public good, to erect gas-works at the expense of the corporation. On the 18th day of December, 1888, an ordinance was passed by the council, providing for the issue of bonds, for the purpose of erecting such works by the city, to the extent of $150,000. The entire issue was sold for more than the par value thereof, and the proceeds of the sale were turned over to the city treasurer for the erection and completion of the proposed works. On the 7th day of May, 1889, trustees of the gas-works were appointed by the city council, who duly qualified, organized their board, and proceeded to the erecting of the works, in accordance with the decision of the citizens and tax-payers of the city of Hamilton. The board of trustees so appointed purchased land for the erection thereon of the proposed gas-works, agreed upon plans and details for the construction of such works, entered into contracts for the furnishing of material and the performance of labor, paid large sums of money upon contracts for material furnished and labor performed, and, in the execution of contracts, gas-pipes were extensively laid in the streets of the city. The defendant alleges that the gas-works are being built by the city for the purpose of furnishing the public lighting to the city, and that no action has been taken towards furnishing gas for private consumption; but the defendant cannot say what action, if any, the city will in the future take to wards furnishing gas for private consumption.

1. The only material question in this case is whether, upon the facts as above stated, the city of Hamilton has corporate power to erect its own gas-works for the purpose of furnishing the public lighting to the city. The laws relating to gas companies when organized, and in force at the time the Hamilton Gas-Light Company was incorporated, are substantially embraced in the Revised Statutes, between sections 2478 and 2491, inclusive. The material questions to be determined in this case arise under sections 2480, 2482, 2485, and 2486, the last two sections having been passed since the incorporation of the company. Section 2480 provides that if gas companies, when required by the council to lay pipes and light streets, alleys, public grounds, or buildings, refuse or neglect, for six months after being notified by the authority of the council, to comply with such requirement, the council may lay pipes and erect gas-works for lighting such streets, alleys, or public grounds, and all other streets, alleys, and public grounds not already lighted; and such companies shall thereafter be precluded from using or occupying any of the streets, alleys, public grounds, or buildings not already furnished with gas-pipes of such companies. Section 2482 provides that a neglect to furnish gas to the citizens, and other consumers of gas, or to the corporation, by any company, in accordance with the prices fixed and established by the council, from time to time, shall forfeit all rights of such company under the charter by which it was established; and the council may proceed to erect, or by ordinance empower any person to erect, gas-works for the supply of gas to such corporation and its citizens. Section 2485 makes it unlawful for any council to agree by ordinance, contract, or otherwise, with any person or persons, for the construction or extension of gas-works for manufacturing or supplying the corporation or its inhabitants with gas, which shall give or continue to any person or persons making such agreements with the council the exclusive privilege of using the streets, lanes, commons, or alleys, for the purpose of conveying gas to the corporation, or the citizens thereof; nor is the council permitted to make any such agreement which shall not secure to the council the right to purchase such works, and all the appurtenances belonging thereto, at any time within the existence of such contract or agreement. Section 2486 enacts that ‘ the council of any city or village shall have power, whenever it may be deemed expedient and for the public good, to erect gas-works at the expense of the corporation, or to purchase any gas-works already erected therein.’ This provision for the erection of gas-works by the city was first embodied in section 423 of the Municipal Code, passed May 6, 1869, which, while a codification, enlarged the powers of municipalities as to gas-works and lighting corporations, and the same enlarged powers are continued under the Revised Statutes without material change. Among the general powers granted to cities, they may light streets, alleys, public grounds, and buildings within the corporation, and provide for laying down gas-pipes, they may appropriate, enter upon, and hold real estate within the corporate limits, for gas-works, and lighting and any public use; and may levy taxes for the special purpose of erecting, enlarging, and improving gas-works, and for lighting the corporation.

It is urged in behalf of the Hamilton Gas-Light Company that the legislature has declared, in sections 2480 and 2482, certain conditions under which the council may...