Case ID: ohio-st_99/html/0421-01.html
Source: Caselaw Access Project
Author: {"author": "Donahue, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Ohio River Power Co. v. The City of Steubenville.
    
      Municipal corporations — Authority to fix electric light rates— Acceptance of ordinance by company constitutes contract, when — Public utilities commission has no jurisdiction thereof, when — Section 614-47, General Code — Constitutional power to contract— Section 4, Article XVIII, Constitution, 1912.
    
    1. The council of a municipality has authority to fix the price that an electric light company may charge the city or its inhabitants for electric current for light and power purposes. {City of Washington v. Public Utilities Commission, ante, 70, approved and followed.)
    2. Where the price of such electric current for light or other purposes is fixed by ordinance for a period not exceeding ten years, and the electric light company files in the office of the auditor or clerk of the corporation its written acceptance, such ordinance and acceptance in writing constitute a contract between the municipality and the electric light company binding on both parties thereto during the term named in the ordinance.
    3. By the provisions of Section 614-47, General Code, such contracts are specifically exempted from the operation of the statutes of this state defining the powers and duties of the public utilities commission of Ohio in relation to the rate, price, charge, toll or rental that such public utility may charge, demand, exact or collect for any service rendered, or to be rendered by it.
    
      4. A contract entered into between a public utility and a municipality of this state, whereby the public utility agrees to supply its product or service to the municipality or its inhabitants for a period of ten years, at a rate, price, charge, toll or rental specified in such contract, is expressly authorized by Section 4, Article XVIII of the Constitution of Ohio, and is valid and binding upon the parties thereto, unless disapproved by a majority of the electors voting thereon, at a referendum election held under the provisions of Section 5, Article XVIII of the Constitution of this state.
    (No. 16073
    Decided April 29, 1919.)
    
      Error to the Court of Appeals of Jefferson county.
    On the 19th day of January, 1917, The Steuben-ville & East Liverpool Railway & Light Company transferred its property, franchises, and contracts, in so far as the same applied to the lighting and power business formerly carried on by it, to The Ohio River Power Company. This transfer included contracts with the city of Steubenville, dated, respectively, the 13th and 15th of October, 1915, for furnishing light and power to the city, and to private consumers, for a period of ten years from the date thereof.
    In 1915, the former contract of The Steubenville & East Liverpool Railway & Light Company with the city of Steubenville, Ohio, for the furnishing of electric current for light and power, expired, and on the 25th day of May, 1915, the city council of the city of Steubenville passed an ordinance authorizing the director of public service to advertise for bids for city lighting and power, and for light and power to be furnished the inhabitants of the city.
    The Steubenville & East Liverpool Railway & Light Company submitted bids covering both of these propositions, and on the 12th day of October, 1915, the council of the city of Steubenville passed an ordinance accepting the bid for the furnishing of light and power to the city and authorizing the director of public service on behalf of the city of Steubenville to enter into a contract with The East Liverpool Railway & Light Company to furnish the city with light and power at the rate named in the bid, for a period of ten years; which contract was executed on the following day.
    On the same day, October 12, 1915, the city council passed an ordinance fixing the price of electric current for light and power to private consumers for the ensuing ten years in accordance with the bid of The Steubenville & East Liverpool Railway & Light Company, and on the 15th day of October, 1915, that company, by its board of directors, accepted the terms and conditions of this ordinance, and filed its notice of acceptance with the city auditor and cleric of council, and also with the public utilities commission.
    The Steubenville & East Liverpool Railway & Light Company entered upon the performance of these contracts, and continued to perform until the same were sold and transferred to The Ohio River Power Company in January of 1917. The Ohio River Power Company continued to furnish service to the city and to private consumers under.the terms and conditions of these contracts until November 22, 1917, at which time it filed new schedules, increasing the rates for electric current for power purposes.
    On the 30th day of January, 1918, the city of Steubenville commenced an action in the common pleas court of Jefferson county to enjoin The Ohio River Power Company from putting these increased rates into effect. A temporary injunction was allowed, which, upon final hearing, was made perpetual. An appeal was taken to the court of appeals of Jefferson county, which court entered a like order, enjoining the defendant from increasing the rates for electric current for power fixed by the contracts with the city of Steubenville for and during the term of ten years next after the date of these contracts.
    This proceeding in error is brought to reverse the judgment of the court of appeals.
    
      Mr. W. McD. Miller; Mr. M. F. Millikan and Mr. J. P. Van DeVoort, for plaintiff in error.
    
      Mr. C. L. Williams, for defendant in error.
   Donahue, J.

It is contended on behalf of the plaintiff in error that the council of a municipality has no authority to fix the price at which it shall require a company to furnish electric current for power purposes, or to,make of to enter into any contract that will prevent the state from exercising its rate-making power during the time such contract is in force.

This court recently held in the case of the City of Washington v. The Public Utilities Commission of Ohio, ante, 70, that the council of a municipality has authority to fix the price of electric current for power, and were it not for the fact that this question was not necessarily controlling in that case, and that the opinion is per curiam and without syllabus, it would be wholly unnecessary to write this opinion, for the judgment in that case is decisive on this question.

While it is undoubtedly true that grants of power must be strictly construed, that the enumeration of certain powers presupposes the exclusion of all others, and that an incident to a grant does not imply a grant of power, yet these rules of construction must not be carried beyond the reason for their existence.

Section 3983, General Code, is so closely related to Section 3982, General Code, that it must be read in connection with that section as an aid in determining the intent and purpose of the general assembly of Ohio in enacting Section 3982. Section 3983 clearly contemplates the power of the municipal council to fix the price of electric current, not only for lighting purposes, but for all other legitimate purposes, for a period not exceeding ten years, when assent in writing is filed by the company in the office of the auditor or clerk of the corporation. There is no better way to determine the intent and purpose of the legislature than by its own construction of the language used. In Section 3983 the general assembly of Ohio has by the words “for other purposes” given its interpretation of the extent of the rate-making power intended to be granted to municipalities. This intent further appears from the language used in Sections 9195 and 9321, General Code, which authorize electric light companies to manufacture and supply electricity for light, heat, and power purposes, and sell the same with the consent of the municipality.

That this is no strained construction of Section 3982, General Code, is evidenced by the provisions of Section 614-2, General Code, defining an electric light company as a company “engaged in the business of supplying electricity for light, heat or power purposes to consumers within this state.”

If we were to insist upon a narrow and technical definition of the word “light,” an electric light company must necessarily be defined as a company that furnishes electric current for lighting purposes only; but the general assembly by enacting Section 614-2, General Code, has expanded the ordinary meaning of the word “light,” as used in the designation “electric light company,” to include companies furnishing electricity for heat or for power, or for light, or for all or either of these.

If an electric light company means a company that furnishes current for light, or heat, or power, all of these things must have been within the contemplation of the general assembly when it enacted Sections 3982 and 3983, General Code. But, even if Section 3982 were not subject to this construction, Section 3983, independent of Section 3982 and independent of all other legislation upon this subject, authorizes a contract of this character, and provides in detail how such contracts shall be executed.

Section 3982 does not contemplate a contract. On the contrary, it grants arbitrary power to the council to fix rates from time to time, regardless of the consent of the utility; but Section 3983 provides, in terms, that when an ordinance has been passed fixing the rate for electric current for lighting the streets, or other purposes, for a definite term not exceeding ten years, and written acceptance has been filed by the company in the office of the auditor or clerk of the corporation, the power granted to council by Section 3982 shall be suspended during the term named in the ordinance.

The provisions of Section 3983 are not merely incident to the power granted in Section 3982, but confer specific authority upon the council of any municipality to fix rates for a period not exceeding ten years by contract with the utility furnishing electric current for light, or for other purposes.

This is a distinct and different method than the method of fixing rates from time to time by the exercise of the arbitrary power conferred by Section 3982, regardless of the assent of the utility.

Section 614-44, General Code, specifically authorizes municipal corporations to fix by ordinance the price, rate, charge, toll, or rental, that a public utility of this character may charge, demand, exact, or collect therefor, for an ensuing period, as provided in Sections 3644, 3982 and 3983, General Code, and also provides for the filing of acceptance of such rate by the company, as provided in Section 3983, General Code; and Section 614-47 expressly provides that the utilities act shall not apply to prices fixed under authority of these sections.

This court has repeatedly held that the filing of such acceptance constitutes a contract between the municipality and the company, for the period of ten years; so that here we are dealing with -two contracts between the parties to this litigation, one in relation to the electrical current furnished to the city for lighting and power purposes, and the other for current furnished the citizens of Steubenville for the same purposes.

Even if it were conceded that the statutes of this state do not confer power upon the council of a municipality to fix arbitrarily, or by contract, the rate an electric light company might charge for electric current for power purposes; nevertheless, Section 4, Article XVIII of the Constitution, as amended 1912, expressly authorizes a municipality to contract with any public utility, the product or service of which is to be supplied to the municipality or its inhabitants. While this section does not authorize the municipality to fix an arbitrary rate to be charged by a public utility for the commodity it furnishes to the municipality or its inhabitants, it does clearly authorize a contract between the municipality and the utility, and that contract would necessarily include the price to be paid for service or commodity to be furnished by the utility. Therefore, when the utility names the rate at which it is willing to furnish its product, and the city accepts that rate on its own behalf and on behalf of its inhabitants, and enters into a contract, the terms of which include the rate so agreed upon, such contract, including the agreement as to rate, clearly comes within the authority conferred upon municipalities by Section 4, Article XVIII of the Constitution of Ohio; and if there were any conflict between the provisions of the Constitution and the provisions of any statute of this state existing at the time or enacted since this constitutional amendment was adopted such statute must fall. It would therefore be idle to discuss whether there is or is not any statute in conflict with this constitutional provision, for it could avail nothing in determining the validity of these contracts.

This court having reached the conclusion that these contracts are valid and subsisting contracts between the city of Steubenville and The Ohio River Power Company, it follows that the courts have jurisdiction to enforce the contracts as written.

Judgment affirmed.

Nichols, C. J., Jones, Matthias, Johnson, Wanamaker and Robinson, JJ., concur.