Washington Fruit & Produce Co. v. City of Yakima, 27583.
| Decision Date | 11 March 1940 |
| Docket Number | 27583. |
| Citation | 3 Wn.2d 152,100 P.2d 8 |
| Court | Washington Supreme Court |
| Parties | WASHINGTON FRUIT & PRODUCE CO. et al. v. CITY OF YAKIMA et al. |
Department 2.
Action by the Washington Fruit & Produce Company and others against the City of Yakima, a municipal corporation, and others, to have a street lighting contract between the City of Yakima and the Pacific Power & Light Company declared void and the performance thereof enjoined. From judgment dismissing the action, the plaintiffs appeal.
Judgment reversed, with direction.
A complaint, seeking to have contract between city of Yakima and power company for furnishing of overhead street lighting service to city for period of 10 years declared void on ground that contract was for an unreasonable length of time which alleged that city had theretofore obtained from company sufficient light without limitation upon period and without promise of contract, and that government projects for development and transmission of electrical energy were nearing completion, assuring means of obtaining for city lighting facilities at lower rates than offered by company was sufficient as against demurrer.
Appeal from Superior Court, Yakima County; Robert J. Willis, judge.
Cheney & Hutcheson, and Velikanje & Velikanje, all of Yakima, for appellants.
Rigg Brown & Halverson, of Yakima, and Laing & Gray, of Portland Or., for respondents.
Harry L. Olson, of Yakima, for City of Yakima and City Commissioners.
Plaintiffs instituted this action seeking to have a street lighting contract between the city of Yakima and Pacific Power & Light Company declared void and the performance thereof enjoined. Defendants' demurrers to the complaint were sustained and, upon plaintiffs' refusal to plead further, the court entered judgment dismissing the action. Plaintiffs have appealed.
The allegations of the complaint are, in substance, as follows: Appellants compose a group of taxpayers and residents of Yakima, and wage this action on behalf of themselves and all other taxpayers similarly situated. Respondent City of Yakima is a municipal corporation having a commission form of government, and operating under a charter adopted by its electorate. The individual respondents are the city's commissioners. Pacific Power & Light Company, hereinafter variously referred to as the Pacific Company or the power company, is a corporation engaged in the business of furnishing light in and to the city.
The Pacific Company formerly had a franchise from the city, but it had expired. A renewal thereof was presented to the voters of the municipality for their approval but was defeated. Since that time the power company has been operating in the city without a franchise.
On June 6, 1938, pursuant to a resolution adopted by the respondent commissioners, the Pacific Company and the city entered into the contract which is now under attack. By the terms of that agreement, the Pacific Company obligated itself to furnish, during a period of ten years, all electric overhead system street lighting service required by the city for lighting its streets, highways, and public places. The service was to include the continued operation and maintenance, and also the reconstruction, of the company's street are and incandescent lamps then being used, and the extension and installation of additional overhead street lighting service from time to time as the city should request. The power company was to be compensated upon a stipulated flat rate, subject to any lawful orders of the department of public service of the state, and also upon the condition that if the power company furnished any other city with overhead street lighting service at lower rates, the city of Yakima would be entitled to the benefit of the lower schedule during the remainder of the term.
As alleged in the complaint, Article XI of the city charter of Yakima provides that no franchise or right to occupy or use the streets shall be granted except by ordinance, and that such ordinance shall not become effective until it has been submitted to, and approved by, the majority of the voters at a general or special election (§2); that no franchise shall be granted unless it contains certain provisions relative to future acquisition of the utility by the city (§3); and that no franchise shall be granted without provision for proper compensation to the city (§6).
No ordinance approving the contract was ever submitted to the voters, as provided by section 2, nor did the contract contain the provisions set forth in sections 3 and 6 of Article XI of the charter.
As further alleged in the complaint, the city charter also provides, in Article VI, §6, that in all cases of work to be done by contract, or of the purchase of property or material, when the cost thereof exceeds five hundred dollars, unless the city commission, by resolution shall declare an emergency, the commission shall advertise for bids therefor in the official newspaper. In this instance, the city commission did not advertise for bids.
The complaint further contained allegations intimating fraud and conspiracy on the part of the respondents in entering into the contract. These, however, need not be detailed, since they do not appear to form the basis of any of the contentions made by appellants in their brief.
Finally, the complaint alleged that the United States Government had constructed, and was constructing, huge electrical development projects on the Columbia river, at Bonneville and Coulee, and was planning other projects within the vicinity, all to the end of furnishing cheap electrical power to the city of Yakima, adjacent territory, and other communities in Washington; that power plants 'will be available on or about January 1, 1939'; that a network of power transmission lines connecting the aforementioned electrical development projects in the state of Washington, and serving the county and city of Yakima directly, had been proposed and planned by the government, and that the construction thereof was already commenced and well under way; that the completion of such transmission lines was a matter of but a few months; that, as a result, a surplus of power at very low and economical rates would soon be fully available for the city and all taxpayers and inhabitants thereof, with a consequent tremendous saving of rates as compared to those provided in the contract; that the commissioners of Yakima county had made provision for submitting at the general election to be held on November 8, 1938, the question of the formation of a public utility district, and that the formation of such district would greatly reduce rates for electrical power in the city; that the city commissioners were well aware of these facts and conditions at the time they entered into the contract; and that theretofore the city had obtained from the Pacific Power & Light Company adequate and sufficient light without limitation upon the period, and without a promise of a contract or franchise.
Appellants assign three grounds upon which they seek to have the contract declared void and its performance enjoined: (1) That the contract actually grants a franchise to use the city's streets and therefore contravenes Article XI, §§ 2, 3, and 6, of the city charter, in that it was not submitted to the voters for approval, did not contain certain provisions relative to future acquisition of the utility by the city, and did not provide for 'proper compensation to the city'; (2) that the contract is violative of Article VI, § 6, of the charter because there was no advertisement for bids; and (3) that the contract was for an unreasonable length of time under the existing conditions. We shall consider these contentions in the order just stated.
The first question Before us is whether the contract in issue is actually a franchise. If it is not, then, of course, it is immaterial whether or not it was submitted to the voters for approval.
In support of their contention that the contract in question is a franchise, appellants cite numerous decisions which hold, in general, that a franchise is the right to use or occupy the streets for purposes other than those for which the streets are ordinarily used. That proposition, however, is not determinative of the problem with which we are here concerned. While it is unquestionably true that, by definition, a franchise is said to be the privilege of using the streets, it does not necessarily follow that the converse is true, and that any right or privilege to use public streets, regardless of the manner in which it arises or regardless of its purpose, is a franchise. The specific question Before us now is whether or not the right in a public utility to use the streets of a municipality only in so far as is necessary in order to enable the utility to perform a valid contractual obligation to supply street lighting to the city, constitutes a franchise.
A franchise, in the sense in which we are now considering that term, connotes the right of a public utility to make use of the city streets for the purpose of carrying on the business in which it is generally engaged, that is, of furnishing service to of the public generally. When, however, a city undertakes, as in this instance, to supply a public need, and to that end purchases the necessary service from the utility, the city is to be regarded as merely authorizing the use of the streets as an incident to the delivery of service to itself, and not as granting a franchise to use the streets for general business purposes.
There is a practical unanimity in the cases upon the subject, to the effect that a contract made with a municipality for the sale and delivery to it of light or power is not a franchise even though there is an...
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