Case ID: ohio-np_8/html/0319-02.html
Source: Caselaw Access Project
Author: {"author": "CLARK, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(Butler County, Common Pleas.)
    THE CITY OF HAMILTON, v. THE HAMILTON GAS LIGHT and COKE COMPANY.
    
      Right of Gas Company to lay pipes in street —Construction of ordinance—
    (1.) The general right of a gas company granted under a municipal ordinance au horizing the gas company to use the streets lanes, alleys and public grounds of such city for the purpose o laying down pipes for the conveyance of gas, are not terminated at the end of twenty years by a section of such ordinance providing that the gas company shall have the exclusive right of laying gas pipes for the period of twenty years from the passage of the ordinance.
    
      Right of city to enjoin a corporation—
    
    (2.) A municipal corporation cannot interfere with a corporation by quo warranto, on the ground that it is departing from the purpose of its incorporation and violating the articles of its incorporation, unless the city is especially injured by such unlawful conduct.
    
      Right of Gas Company to purchase gas—
    (3. ) Under a municipal ordinance authorizing a gas company to use the streets and public grounds of the city for the purpose of laying down pipes for the conveyance of gas in and through the city for the use of said oity and its inhabitants, the gas company has the right to purchase the gas supplied by it from another company, there being no prohibition therefrom contained in the ordinance.
    
      Right of city to enjoin Gas Company from laying pipes—
    (4.) A municipal corporation cannot restrain a gas company from laying pipes in its streets, for the conveyance of gas to the patrons of the company, on the ground that the oity owns a gas plant which will be injured by the competition of the gas company.
    
      Enjoining nuisance made so by police regulation—
    
    (5.) A court of equity will not enjoin a nuisance because it is made so by a municipal ordinance or police regulation, unless it be a nuisance or wrong in itself.
    
      Same — Will not enjoin because no permit is obtained—
    (6.) Where a gas company has a right to lay gas pipes in the streets of a city, a court of equity will not enjoin'it from doing so, because it has not obtained a permit from the proper city officials as required by an ordinance or police regulation of the city.
   CLARK, J.

A motion has been filed by defendant to dissolve the restraining order granted by this oourt upon the filing of the petition, and that motion is now before the court for decision. In view of the impor tance of the case, I regret that I was not able to prepare for counsel a written opinion of the questions involved, but I have arrived at a conclusion entirely satisfactory to my own mind as to the, merits of the matters,more satisfactory than I shall be able to make it appear to the minds of counsel by the imperfeot manner in which I shall be able to formulate a decision orally.

The original "petition in the case simply set out that the-defendant company was unlawfully digging trenches in the streets of the plaintiff corporation, without any authority whatever, causing, great and irreparable injury to plaiDtiffi This was substantially the original petition.

An answer was filed, which contained a general denial, and also, set forth the allowance of a restraining order against the city in a case begun by the defendant in this case against the city, to enjoin it from interfering with the prosecution of the same work, to-wit: these excavations.

After that answer had been filed plaintiff filed an amendment to its petition, in-which it alleged:

That the city of Hamilton had, at great, expense, installed a gas plant of its own, had laid pipes in the streets of the city,, and was-supplying its citizens with gas, and from that source the city derived a-large revenue, and was able by means thereof to reduce the taxes and in part pay the expenditures of the oity government;

That the defendant, under pretense of repairing its original gas pipes, and laying down new pipes to take the place of old ones, was in fact seeking to install a new system of pipes not necessary to prosecute its original business, of much larger size, and that its real purpose was to purchase gas from a corporation called the Hamilton Otto Coke Company, which was situated outside of said city, and through these new pipes carry its gas-through the city of Hamilton,and supply its customers and the people generally of the oity of Hamilton with gas; that this is unlawful.

That the said Otto Coke Company has no authority of law to supply gas to the city of Hamilton or to force its gas through pipes in the city of Hamilton; and that the defendant company has no right, by means of laying down its pipes, to assist the Otto Coke Company in carrying out its unlawful design.

That if defendant company is permitted to lay down these pipes, and to pur: chase gas from the Otto Coke Company, it will c-ome in competition with the city in supplying its citizens with gas, and thus materially reduce the revenues of the city from that source.

The only other material allegation in said amendment is, that the defendant company at no time prior to the beginning of the excavations complained of, applied for or procured from the proper board of city officers, or from any source, a permit from the oity to excavate the streets, and that the city was thereby deprived of all opportunity to prescriba the rules and regulations under which, said excavations should be made.

The prayer of the petition is, that tha defendant be perpetually enjoined from making these excavations in the streets, and laying these new pipes.

As before indicated, the answer, which was addressed only to the original petition, is, first, a general denial, and then the pleading of the pendency of another suit in which this plaintiff was enjoined from interfering with the work which is complained of in this suit, and that an order of injunction is in force.

Defendant having filed a motion to dissolve the restraining order, the court heard such evidence in addition to the original petition, amendment, and answer filed thereto, as counsel saw fit to introduce.

I think I may say there is no substantial controversy as to the facts in the case.

It is conceded by defendant company, that its intention in laying the new pipes is substantially as alleged in the petition; that it proposes to connect its pipes with the pipe of the Otto Coke Company outside of the city of Hamilton, and to procure from tnat company gas in some form, and conduot the same from that plant to its own plant in the city of Hamilton, and there either distribute directly to the meters in the city,or, if the gas so supplied is not suitable for the purpose for which the citizens desire it, to enrich it, or so modify it as to make it suitable for that purpose, and then supply it throughout the city.

There is no controversy on that subject; the defendant company proposes to do wbat the plaintiff alleges it is about to do with respect to the supplying of gas, with the exception, that defendant company does not admit, and there is no evidence to show that defendant proposes to do so, to entirely abandon the manufacture of gas at its own plant in the city of Hamilton,but simply in addition thereto. it proposes to get gas from the Otto Coke Company.

I may groap the claim of the plaintiff in this case as to the unlawfulness of this action on the part of defendant, under four heads:

First. Plaintiff claims that the defendant company has no rights whatever under the ordinance of July 9, 1855, which is the ordinance granting to the defendant company the right to use the streets of Hamilton for the purpose of laying pipes and supplying gas to the citizens, for the reason as claimed by plaintiff that this franchise was limited to the period of twenty years, and that permit having expired, the franchise giving the right to lay new pipes and extend its works has expired, and that the defendant company is simply a trespasser in the streets whenever it seeks to open a new line or lay down a new pipe.

Second.- The olaim of the plaintiff is that the purpose for which the defendant company was organized was to manufacture artificial gas and supply the same to the citizens of Hamilton; that the contract embodied in the ordinance of July 9, 1855, contemplated only the manufacture and supply of gas so manufactured by the defendant company, and that there was no contemplation either in the articles of incorporation or in the contract with the city of Hamilton that the defendant should have the right to use the streets for supplying any gas not manufactured by it.

Third. The third ground on which plaintiff alleges the unlawfulness of defendants action is, or, possibly 1 ought to say this is one of the injuries which plaintiff claims will result from the alleged unlawful action of defendant, to-wit: that it will thus come into competition with the city of Hamilton, and materially decrease the revenues which the city derives from rents collected from the customers who use gas supplied by its own plant.

Fourth. The plaintiff claims that the action of defendant is unlawfulf for the reason that at no time did defendant ever procure form the city any permit to open streets for the purpose for which it is now seeking to do, and that the plaintiff never did give any right, and did not and could not ever convey by any ordin. anee, or contract, to the defendant company any right to open the streets or use the streets except subject to the reasonable regulations prescribed by council, and that no opportunity has been given to the municipal corporation to fix the regulations or rules that shall govern this particular excavation.

Now, of these in their order.

First. Have the rights which defendant company aoquired under the ordinance of July 9, 1855, terminated so far as extending its lines is concerned?

That ordinance provides:

Section 1. Be it ordained by the city council of the city of Hamilton, Ohio, that the Hamilton Gas Light and Coke Company be,and they are hereby authorized to use the stre its, lanes, alleys and public grounds of said city for the purpose of laying down pipes for the conveyance of gas in and through the city for the use of said city and its inhabitants.

Section 2. Be it further ordained, that all injuries done to said streets, alleys, sidewalks, public grounds, and other property of said city bj said company by excavation or otherwise shall be repaired by said company with due diligence and the same be left and kept in as good condition as before said injury was done.

Section 3. Be it further ordained, that skid company shall, have the exclusive privilege of laying pipes for conveying gas in said city and of the putting of pipes in dwellings in connection with the street pipe for. the period of twenty years, from the passage of this ordinance.

Section 4. Said company shall not charge for the use of gas that it may furnish to said city or any of the inhabitants at a price greater than is from time to time during said twenty years usually oharged for the same in cities of a similar size with like facilities for the making and furnishing of gas.

That is all of the ordinance that has any reference to limitation as to time.

It is claimed by plaintiff that the limi tation of twenty years applies to the franchise granted to lay down pipes.

A fair construction of section three seems to me to be, that the exclusive' privilege which is hereby attempted to be granted by the city to the defendant company is limited to twenty years. I find nothing in section three, nor in section four, which to my mind conveys the idea that the franchise or right to use the streets or right to extend the pipes is limited to twenty years. To my mind the plain interpretation of it is, that the exclusiveness of it should last twenty years, and at the end of that time the company should no longer be protected by the city from competition by other companies, or by the city itself.

It is true, I think, that section three is absolutely void, and was at the time it was passed.

By express terms of the statute a municipal corporation may not grant an exclusive franchise of this kind. Without legislative enactment, I think, it is clearly void. Therefore section three might be dropped out altogether without regard to its* meaning, and we would then have no limitation upon the gas company as to time.

Whether it remains in, or is dropped out, if seems to me clear that a fair interpretation of the contract embodied in this ordinance is, that the company shall have the right, without limit as to time, to use the streets for the purpose of laying pipes and conveying gas, and that the only limit placed upon it is that it shall have the exclusive right for only twenty years, and after that be subject to such competition as the city might permit from other companies,or from the city.

Therefore, I think that the gas company, so far as time is concerned, still has all the rights that it had upon the passage of this ordinance of July 9, 1855.

But it is urged, in ohe second place, that the defendant company is about to depart from ihe purpose of its organization, to-wi.t: the manufacture and supply of gas, and to buy and supply gas.

Unless such a departure as this would be injurious to the city of “Hamilton, it certainly cannot complain of it.

The state of Ohio might interfere, by quo warranto, where a corporation is departing from the purpose of its incorporation and violating the articles of its incorporation, but I do not understand that a private individual, or a municipal corporation, may interfere in that respect unless it is especially injured by the unlawful conduct.

In this case it is fair to say upon this branch of it, that there is nothing in the evidence to show that the city of Hamilton would be in any manner injured by Use defendant company purchasing its gas instead of manufacturing it itself. It does not appear that it will get a poorer quality of gas. nor that it would supply it to the citizens at a higher price, nor that the city would be in any manner in jured,

It has occurred to me, aside from this, that the question of whether or not the defendant company should manufacture the gas supplied, or should buy it wholly or partially manufactured, is not one of materiality. It is concerning the conduct of its own business.

The purpose of defendant’s incorporation was to permit the company to supply the municipality with lighting and heating gas; and the word “manufaoturs” was thought necessary to be inserted so as to convey to them the power to establish a plant and manufacture the gas which they would supply. -

I would not think that a corporation empowered to manufacture and supply gas would be stepping far from its purpose if it, instead of manufacturing from the beginning,bought a crude article and refinen it and then sold it; nor indeed do I think it would be stepping far beyond the limits of its power to purchase gas manufactured entirely, ready for consumption, and supply it to the citizens of the municipality with which it had contracted.

There is certainly nothing in the ordinance of July.9, 1855, to in any manner prevent the gas company from purchasing gas, if it choose to do so,

The purpose for which it is to use the streets and public grounds of the eity is for laying pipes for the convevance* of gas in and through said city for the use of said city and its inhabitants; the only place in the ordinance where there is any suggestion as to the manufacture of gas is in the fifth section, which provides:

“If tho gas works for manufacturing said gas shall be located within the corporate limits of said city' of Hamilton, Ohio, the council of said city,at the time said works are being erected, shall have the privilege of approving the location.”

Also, in section six, there is a provision that unless the gas works shall be erected and a certain amount of pipe laid within two years, the franchise shall be null and void.

But such reference to it as that can not be taken as limiting the right of the gas company, unde'' this ordinance, to use the streets for supplying only gas which is manufactured by it itself.

Therefore, if the gas company does what the'evidence shows it proposes to do, and what the city claims it is about to do, it does not seem to me it is violating any agreement that it has with the city.

And more forcible, I think, is the fact that the city itself has no ground to complain unless it is injured thereby.

Upon that ground,I do not see how the city is entitled to an injunction.

The third ground is, that the gas company will thus be brought into competition with the gas works owned by the city, and reduce the city’s revenues

It seems to me it is sufficient to say in answer to this, that the only purpose of municipal ownership of property is the accommodation of its inhabitants, and the supplying to them such commodities as gas, water and light at as little expense as possible T do not understand that a municipal corporation has any ■right to enter into business as a money ■making enterprise.

I have never understood that cities had the right to enter into any enterprise ■or arrangement for keeping up the prices of commodities furnished to their citizens. Municipal corporations are oreated for the benefit of the citizens, to protect ■them from the greed of private corporations, and with such purpose, with such ■object in view, the legislature has authorized them to do such things as establishing gas works of their own, electric light works of their own,and water works of their own; but Ido not understand that the legislature ever intended that such plants should be used as a means of obtaining revenue to pay other expenses than those incident to the furnishing ■of that particular commodity.

Therefore,the city of Hamilton can not be heard to say; “We have here a valuable gas plant, with which, if we can keep out private competition, we can make up a large revenue toward the payment of public expenses.” The law does not authorize the city of Hamilton to build gas works for that purpose.

The law Iooks to the benefit of all citizens, and not to anv particular enterprise which the city or village may enter into. Therefore, it would not be just to hear the city of Hamilton complain of tbis.for the reason that if defendant is permitted to do what it is about to do it would so reduce the price of gas to the citizens of Hamilton, its own citizens, that it, the ■city, would not be able to procure so large .a revenue from its gas.

The proper course for the city, it seems to me, under such circumstances, would be to abandon its gas plant, if it could not-manufacture gas as oheap as it could ■be made in some other way; it surely •cannot impose upon its citizens a restraint or burden for the sols purpose of •making its own plant pay expenses or pay profit.

That brings us to the consideration of the last ground upon whioh it is alleged that this excavation which the defendant is about to make, and is making, is unlawful, to-wit: that it never at any time procured any permit so to do.

The evidence in this case tends to show that the city council in 1875, placed upon its minutes, the following resolution:

“The following resolution by Mr. Pfau was also adopted: Resolved, that the oity commissioner be instructed not to allow the Hamilton Gas Light and Coke Company to tear up any streets or the laying of any gas pipe or the repairing of any more without permit of the city council.” (Minute Book 47, p. 591.)

This is the only thing that has been produced in evidence tending to show any action on the part of the city to regulate the laying down of gas pipes.

There were a numbar of extracts from the minutes tending to show that the defendant company applied for permission to open certain streets for laying gas pipes, and that the plaintiff did grant such permission in a number of cases.

But there is nothing except the minute I have read, of November 22. 1875, tending to show that the city ever made any regulation on the subject whatever.

I may say of the resolution that I have 'just read, that it does not appear it ever was passed as an ordinance, nor that the formality required by statute of reading it on three different days was complied with, nor that the ayes and nays were called upon its passage, nor that it ever was recorded in the book provided for the recording or ordinances. These things do not appear, but they may be said to be merely formal matters. It may also be said of this resolution, that it was rather of the nature of a direction to the city commissioner, as to his duties, than any regulation for the laying down of gas pipes. It would seem from the language of it to be directed to the conduct of the city commissioner, as if be had been derelict in his duties, and they were notifying him that he should not permit this oompany to further tear up the streets without procuring a permit.

It doe's appear, however, whatever the nature cf this resolution may be,that the defendant company was furnished with a copy of it at a subsequent date.

It appears to have been brought before council that defendant company was not regarding this resolution.and that it was excavating the streets without procuring a permit; a motion was made, and carried,to the effect that the defendant company should be furnished with a copy of this resolution.

Therefore, it may be fairly said that council by this resolution attempted, at least, to make that much of a regulation with reference to the laying down of gas pipes, to-wit: that they should not be laid down without proourmg a permit beforehand from, at that time, the oity commissioner. I know not whether the city of Hamilton has such an officer now.

C. R. Hartkopf, Alex S. Hume and-Warren Gard, for Plaintiff.

M. O Burns and Robert. Ramsey, for-Defendant.

Section 3550 of the statutes does provide, that gas companies may be organized for the purpose for which this company was organized, and that they shall have the right to use the streets of cities for the purpose of laying down gas pipes and conducting gas through them to supply the citizens, “with the consent of the municipal authorities, and under such reasonable regulations as the municipal corporation may prescribe.”

It is contended in this case that the municipal corporation must first be given the opportunity, in each particular instance, wheie the defendant company seeks to excavate the streets,to prescribe the regulations for that particular excavation.

There can be no doubt that the city-may prescribe by ordinance such a-regulation as the one indicated in the resolution which I have read.

Whether they can make such a regulation to apply to a particular corporation, and whether such regulation must be made by a general ordinance, regularly passed, may admit of doubt.

But this, I conceive, is not the question, presented in this case.

Let us assume that the city of Hamilton had a valid ordinance, prescribing just such a regulation as that indicated by the resolution referred to. Let us further suppose that the defendant company, without complying with its requirements, and without procuring any permit to open the streets, proceeded to do so.

Now, would the city of Hamilton under such circumstances have a standing in a court of equity to enjoin defendant from so proceeding? Assuming that defendant company has the right to do what it is doing by virtue of the ordinance of July 9, 1855, and that plaintiff shows no reason other than its failure to procure such permit, why it should not prosecute its work, will equity interfere to enjoin defendant on that account?

It has been repeatedly decided that courts of equity will not interfere by injunction to prevent the violation of a police regulation. Such regulations are to be enforced by the municipality by appropriate penalties prescribed. Where the sole standing of a complainant in equity is upon the ground that his adver sary is about to violate such a regulation, I think he can not be heard.

In this case, plaintiff clearly can not be heard to complain of defendant’s omission to procure such permit, unless plaintiff has been in some manner,or will be in some manner, injured thereby.

It does not appear in this case that any reason exists why plaintiff should refuse to grant such a permit if it were applied for. On the other hand,from all that appears on the hearing of;this motion, defendant,'upon application, w.ould be entitled to receive such a permit from the plaintiff.

The thing whioh a court of equity will enjoin must be a nuisance, or a wrong in itself, and not something merely made so-by ordinance or police regulation.

When a complainant seeks the extraordinary remedy of any injunction, the-court will look to the substantial rights-of the parties, and not to mere irregularities in the exercise of those rights.

It follows that the plaintiff has no-right to the restraining order heretofore granted, and the same is dissolved.