Tyrone Gas & Water Co. v. Tyrone Borough
| Decision Date | 17 March 1930 |
| Docket Number | 166 |
| Citation | 299 Pa. 533,149 A. 713 |
| Parties | Tyrone Gas & Water Co., Appellant, v. Tyrone Borough et al |
| Court | Pennsylvania Supreme Court |
Argued February 4, 1930
Appeal, No. 166, Jan. T., 1930, by plaintiff, from decree of C.P. Blair Co., No. 1095, Equity Docket "H," dismissing bill in equity, in case of Tyrone Gas & Water Co. v. Tyrone Borough and the Burgess and Council of Tyrone Borough. Reversed.
Bill for injunction. Before PATTERSON, P.J.
The opinion of the Supreme Court states the facts.
Bill dismissed. Plaintiff appealed.
Error assigned, inter alia, was decree, quoting it.
The decree of the court below is reversed, and it is ordered that the record be remitted with directions that the injunction prayed for shall issue; defendant borough to pay the costs.
William Watson Smith, of Smith, Buchanan, Scott & Gordon, with him Oliver H. Hewitt and Leon E. Hickman, for appellant. -- Clause 7 of section 34 of the Corporation Act of 1874 does not authorize a partial taking of appellant's property Com. v. Mann, 168 Pa. 290; Bly v. Water Co., 197 Pa. 80; Croyle v. Water Co., 259 Pa 484; Meadville Theological School v. Hempstead, 290 Pa. 222; Com. v. Gas Co., 11 Pa. Dist. R. 546; Hey v. Water Co., 207 Pa. 38; Motter v. Electric Co., 212 Pa. 613; York Haven W. & P. Co. v. Pub. Ser. Com., 287 Pa. 241; Tyrone G. & W. Co. v. Tyrone Boro., 195 Pa. 566; Pardee's App., 100 Pa. 408; White's App., 15 W.N.C. 313; Reynoldsville Boro. v. Water Co., 247 Pa. 26; Com. v. Coal Co., 296 Pa. 359; Carlisle Boro. v. Pub. Ser. Com., 81 Pa.Super. 475; New York & Queens Gas Co. v. McCall, 245 U.S. 345.
There are numerous rules of construction against a statutory interpretation which permits appellees to dismember appellant's works: Reynoldsville Boro. v. Water Co., 247 Pa. 26; Solar Electric Co.'s App., 290 Pa. 156; Madeira's Land Condemnation, 296 Pa. 65; Valmont Developing Co. v. Rosser, 297 Pa. 140; Phila.'s Petition, 60 Pa.Super. 594, 596; Solar Electric Co.'s App. (No. 1), 290 Pa. 156; Phila.'s Petition, 253 Pa. 434.
A rule of strict construction should be applied to clause 7 of section 34 because the right of a municipality to operate a gas and water works is not a governmental function: Central I. & S. Co. v. Harrisburg, 271 Pa. 340; Reigle v. Smith, 287 Pa. 30.
A statute should not be construed in such a way as to raise constitutional difficulties if another construction may rationally be supported: Com. v. Benn, 284 Pa. 421; Omaha v. Water Co., 218 U.S. 180.
As a matter of judicial decision, it has been ruled in a closely analogous case that there is no statutory right to dismember appellant's plant: Greensburg Boro. v. Water Co., 240 Pa. 481; United Lighting Co. v. Pub. Ser. Com., 84 Pa.Super. 24.
If appellee's interpretation of clause 7 of section 34 is correct, it cannot be applied constitutionally to appellant: Dartmouth College v. Woodward, 4 Wheat. 518; P.R.R. v. Duncan, 111 Pa. 353; Com. v. Water Co., 94 Pa. 516; Manheim Boro. v. Water Co., 229 Pa. 177; P. & R. Ry. v. Phila. Co., 228 Pa. 505; P.R.R. v. Phila. Co., 220 Pa. 100; Vicksburg v. Waterworks Co., 202 U.S. 453.
Clause 7 of section 34, as construed by appellees, is a violation of article XVI, section 8 of the Constitution of Pennsylvania: Perry v. Ry., 64 Pa.Super. 583; Strain v. Kern, 277 Pa. 209; Phillips's Est., 295 Pa. 349.
Charles K. Robinson, with him Richard H. Gilbert and Charles A. Woods, Jr., for appellee. -- The Tyrone Gas & Water Co. has subjected itself to the provisions of clause 7 of section 34 of the Act of 1874: Tyrone Gas & Water Co. v. Tyrone Boro., 195 Pa. 566.
This therefore raises the controlling and the only important question in this case, namely, whether the Borough of Tyrone can acquire the water plant without taking the gas plant and whether the Tyrone Gas & Water Co. having accepted the General Incorporation Act of 1874 can now compel the borough to take both the gas and water plants. The question therefore becomes one of interpretation and of construction of clause 7 of section 34 of the General Incorporation Act of 1874.
The cases dealing with the effect of the acceptance of the Constitution of 1874 and the General Incorporation Act of 1874, and the position occupied by these companies after such acceptance, uniformly hold that they are subjected to the provisions of the General Incorporation Act of 1874 the same as if they had been originally created under that act and must accept the burdens as well as the benefits of the Incorporation Act of 1874: Tyrone Gas & Water Co. v. Tyrone Boro., 195 Pa. 566; Meadville Theological School v. Hempstead, 290 Pa. 222.
One of the major purposes of the Corporation Act of 1874 was to establish uniformity among corporations: Com. v. Trust Co., 287 Pa. 251; Citizens Elec. I. Co. v. Power Co., 255 Pa. 145.
Acceptance by a corporation, specially chartered before 1874, of the Constitution and Act of 1874, renders it subject to the provisions of the Act of 1874: Tyrone Gas & Water Co. v. Tyrone Boro., 195 Pa. 566; Williamsport v. Water & Gas Co., 232 Pa. 232; Com. v. Flannery, 203 Pa. 28.
We do not contend, nor is it a necessary consequence of our argument, that acceptance of the legislation of 1874 deprived appellant of one of its charter purposes.
The language of clause 7 of section 34 will be construed against the corporation and in favor of the public because it is in the nature of a contract right reserved to the public: Wagner Free Institute v. Phila., 132 Pa. 612; Reynoldsville Boro. v. Water Co., 247 Pa. 26, 28; White v. Meadville, 177 Pa. 643, 655; New Brighton Boro. v. Water Co., 247 Pa. 232, 240; Com. v. Erie & N.E.R.R., 27 Pa. 339, 351; Scranton Electric Light & Heating Co.'s App., 122 Pa. 154, 175; Bly v. Water Co., 197 Pa. 80; P.R.R. v. Comrs., 21 Pa. 9.
Before MOSCHZISKER, C.J., FRAZER, WALLING, SIMPSON, SADLER and SCHAFFER, JJ.
The Tyrone Gas & Water Company is a corporation organized under the special Act of March 10, 1865 (P.L. of 1866, Appendix, 1147), to supply gas and water to the Borough of Tyrone. In 1893, the company accepted the present Constitution and the General Incorporation Act of April 29, 1874, P.L. 73, received letters patent to that effect, and thus brought itself under section 34, clause 7 of that statute, (P.L. 95) which provides: "It shall be lawful at any time after twenty years from the introduction of water or gas, as the case may be, . . . for the . . . borough . . . into which the said company shall be located, to become the owners of said works, and the property of said company, by paying therefor the net cost of erecting and maintaining the same, with interest thereon, at the rate of ten per centum per annum, deducting from said interest all dividends theretofore declared."
In 1926, the council of defendant borough enacted an ordinance "to acquire all the properties of the Tyrone Gas & Water Works Company owned and used by the said company for water works purposes"; whereupon the company filed a bill in equity to restrain any attempt by the borough to take over its water plant without a like acquisition of its gas works. The court below held that the water plant alone might be taken, and dismissed the bill. This appeal followed.
The broad question for our determination is whether, under the above quoted statutory provision, a gas and water company, chartered prior to 1874, which has formally accepted the Constitution and the General Incorporation Act of that year, must be taken in toto, or whether one of its facilities may be separately acquired. It might suffice to point to Tyrone Gas & Water Co. v. Tyrone Boro., 195 Pa. 566, as determining that plaintiff corporation is subject to clause 7, section 34 of the Act of 1874, and then to enter on an interpretation of the phraseology of that part of the statute, but, in view of the decision of the court below in the case now on appeal, with which we disagree, it seems best before examining the particular words for construction, to consider some other matters which shed light on the special point at issue.
The Constitution of 1873, by section 2 of article XVI, provides that "The General Assembly shall not . . . alter or amend [the charter of] or pass any . . . general or special law for the benefit of [a corporation existing at the date of the Constitution], except upon the condition that such corporation shall thereafter hold its charter subject to the provisions of this Constitution." The Act of 1874 provides, by section 26, P.L. 84, that "Corporations for any of the purposes named, and covered by the provisions of this act, heretofore created, . . . upon accepting the provisions of the Constitution and of this act . . ., shall be entitled to all of the privileges, immunities, franchises and powers conferred by this act upon corporations to be created under the same." Plaintiff filed its acceptance under this provision.
The section just quoted, providing for acceptance of the Constitution, etc., by previously chartered corporations generally, differs from section 40, P.L. 103 (), covering acceptances only by corporations whose charters "are about to expire by lapse of time," in that the latter section particularly states that a corporation acting under it must "expressly surrender all privileges conferred . . . by its original charter that are not enjoyed by corporations of its class under this act or general laws of this Commonwealth." Notwithstanding the omission of any such provision from section 26 (above quoted), under which plaintiff acted, we have held that all corporations accepting the Constitution and the Act of 1874 become subject to their several relevant provisions, and to those of...
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