Case ID: nys_134/html/0348-01.html
Source: Caselaw Access Project
Author: {"author": "POUND, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(76 Misc. Rep. 37.)
    FARNSWORTH v. BORO OIL & GAS CO.
    (Supreme Court, Equity Term, Erie County.
    March, 1912.)
    1. Gas (§ 14)—Injunction—Excessive Rates.
    An inhabitant of a town, who purchases gas from defendant gas company, is entitled to maintain an action to restrain said company from charging a higher rate than that fixed by an agreement with the town authorities.
    [Ed. Note.—For other cases, see Gas, Cent. Dig. §§ 10-11; Dec. Dig. § 14.*1
    2. Gas (§ 7*)—Gas Companies—Feanchise—Estoppel.
    Laws 1889, c. 422, § 2, provides that natural gas companies are authorized to lay their pipes under highways, but that no pipe line for transmitting gas shall be so constructed without the consent of the commissioners of highways of the town in which it is located. A natural gas company, wishing to- use the streets of a town, mistakenly applied to the town board, which body granted its consent in the year 1901, on condition that it should not charge more than 25 cents per 1,000 feet of gas, and in 1909 the gas company applied for an extension of consent to other highways, which was given under the same conditions. Held that, the town board having refused the gas company permission to charge a higher rate, the gas company could not claim that it was not the body authorized by statute to give consent to the laying of pipes in the highway, for, having acted under the contract made with it, it was estopped from denying the board’s authority; it also being doubtful whether the commissioner of highways, having acquiesced in the action of the town board, could invalidate its action..
    [Ed. Note.—For other cases, see Gas, Cent. Dig. § 2; Dec. Dig. § 7.]
    Action by Newton E. Farnsworth against the Boro Oil & Gas Company. Judgment for plaintiff.
    Fred J. Blackmon, for plaintiff.
    Ward J. Wilber, for defendant.
    
      
      For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes
    
    
      
      For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
    
   POUND, J.

The rights of the defendant in the highways of the town of Collins were conferred by the provisions of chapter 422 of the Laws of 1889, which reads as follows:

“Section 1. It shall be lawful for any corporation organized under chapter Gil of the Laws of 1875 (Business Corporation Law) and acts amendatory thereof, for the purpose of boring, drilling, digging or mining for natural gas, ,and conveying and distributing the same in pipes, and vending said gas to the consumers thereof; to purchase, lease, secure and convey such real estate, and such only as may be necessary for the convenient transaction of their business; and to effectually carry on the operations of such corporation.
“Sec. 2. Such corporation is authorized to dig and trench for, and lay their pipes along or under any of the public roads or highways, or through /or under any of the waters within the limits of this state: Provided the same shall not be so done as to incommode the public use of said highways, or interrupt the navigation of said waters: Provided, however, that no pipe line for the purpose aforesaid shall be constructed across, along, or upon any public highway, without the consent of the commissioners of highways of the town in which súch highway is located, upon such terms as may be agreed upon with such commissioners. * * * ”

The defendant, mistakenly assuming that the town board, rather than the commissioner of highways, was the proper authority to which to apply for consent to construct its pipe line in certain of the public highways of the town, applied to it for such consent in the year 1901, whereupon the town board granted such consent on condition that “said company or its assigns shall not charge the inhabitants of the said town using gas for fuel,or lights or both a sum exceeding twenty-five cents per thousand cubic feet.” In 1909 defendant applied to the town board! for an extension of the consent to other highways, and said consent was granted in the same terms and conditions. The defendant accepted and has acted upon such consents. In 1911 defendant applied to the town board for leave to raise its rate to 30 cents per 1,000 cubic feet. This application was denied. It does not appear that the defendant has any express consent from the highway commissioner to place its pipe line in the highway. The town board consists of the supervisor, town clerk, and justices of the peace.

Defendant now repudiates the terms imposed by the town board as a condition of granting its consent, so far as they fix rates for gas, and raises its rate to 30 cents per 1,000 cubic feet, claiming that the town board was without authority to grant such consent, and therefore without power to regulate rates. Plaintiff is an inhabitant of said town taking gas from defendant, and he brings this action to restrain the defendant from charging the increased rate. He is a proper party to maintain the same.

It is true that the only limitation placed by law upon the right of the defendant to lay its pipe lines in the public highway is that contained in the act of 1889, viz., that the consent of the commissioners of highways be obtained on such terms as the commissioners may see fit to impose. It is also true that defendant obtained no additional ■ rights andl privileges from the town board. I think, however, that the law of the case is established by the authority of Rochester Telephone Co. v. Ross, 125 App. Div. 76, 109 N. Y. Supp. 381. Justice ICruse, writing the opinion, says:

“The telephone company voluntarily entered into a contract with the city; it recognized the right of the city to make the same, and grant it certain rights and privileges, which it now uses and enjoys; and I think that it is now estopped from questioning the right of the city to grant the same, and repudiating that part of its agreement limiting the telephone rates as provided in the contract. * * * Under the principles of estdppel, it should not now be heard to question the authority of the city to make the agreement and grant the rights, as the city has assumed to do, taken advantage of by the telephone company.”

When this case was affirmed by the Court of Appeals (195 N. Y. 429, 88 N. E. 793), the affirmance was based solely on the ground that the city’s grant gave the company greater rights than it had from the general law of-the state, and that therefore there was a sufficient consideration to uphold the covenant of the company not to charge the subscribers in excess of the contract rate. The opinion contains no suggestion of approval or disapproval of the theory of estoppel as'enunciated by the Appellate Division; but I cannot find that the views of Justice Kruse have been disapproved.

Furthermore, the lapse of time'since the consent of the town board was given to and accepted by the defendant in 1901 permits the inference that the commissioner of highways has acquiesced in and adopted the unauthorized act of the town board. I doubt exceedingly if the commissioner of highways could now exclude the company from the highways of the town; and if the consent of the town board is enough to give the company its rights in the high ways,, it is enough to limit those rights.

Decision accordingly.