Case ID: ohio-st_93/html/0236-01.html
Source: Caselaw Access Project
Author: {"author": "Johnson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Dravo-Doyle Co. v. Village of Orrville.
    
      Municipal corporations — Ownership of public utilities — Section 4, Article XVIII, Constitution, 1912 — Purchase of existing plant — Section 3990, General Code, unconstitutional ■ — Franchise or contract rights unaffected, — By constitutional or statutory amendment, when.
    
    1. Section 4, Article XVIII of the Constitution, confers plenary power on “any municipality” to acquire, construct, own, lease and operate any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and to contract with others for any such product or service.
    2. Section 3990,-General Code, which authorizes the council-of a municipality, when it is deemed expedient and for the public good, to erect gas works or electric works at the expense of the corporation, or to purchase any gas or electric works already erected therein, with the proviso that in villages where gas works or electrical works have already been erected by any person, company of persons, or corporation, to whom a franchise to erect and operate gas works or electric works has been granted, and such franchise has not yet expired, the council shall, with the consent of the owner or owners, purchase such gas works or electric works already erected therein, is unconstitutional and void so far as the proviso is concerned, because it is an unauthorized limitation of the powers granted in Section 4, Article XVIII of the Constitution, and inconsistent therewith.
    3. Such franchise or contract rights acquired prior to the adoption of Section 4, Article XVIII of the Constitution, and while the proviso in Section 3990, General Code, was in force, were not abrogated or affected by the subsequent adoption of the constitutional provision referred to, and contracts made subsequent to the adoption of the constitutional provision are controlled thereby and are enforceable.
    (No. 14917
    Decided December 11, 1915.)
    Error to the Court of- Appeals of Wayne county.
    The Dravo-Doyle Company brought suit in the common pleas of Wayne against the village of Orrville to recover the balance due on a contract between the parties for furnishing to the village an engine and certain appliances and erecting them in connection with an electric lighting plant erected by the village. The petition sets forth in detail the taking of all the necessary steps by the board of trustees of public affairs previous to the making of the contract, and the full performance by the plaintiff of all the terms and conditions of the contract on its part.
    The plaintiff admits the payment of a portion of the contract price and prays judgment for the balance.
    The answer of the defendant sets out the steps taken by the council of the village, beginning in July, 1913, for the issuing and sale of bonds, advertising for bids for the building referred to and the making of the contract set out in the petition.
    It further averred that in March, 1914, The Massillon Electric & Gas Company brought suit in the common pleas of Wayne against the village and others to enjoin the erection of the lighting plant on the ground that it owned and operated such a plant under an existing franchise granted before any of the steps above referred to; that the village had not offered to buy it as required by Section 3990, General Code; that a temporary restraining order was granted in said case, which, on final hearing, was dissolved and the petition dismissed; that on appeal the court of appeals enjoined the village from all of the things as prayed for by the Electric & Gas Company.
    
      It was further alleged that the Electric & Gas Company brought suit as a taxpayer and that in that proceeding an injunction was also decreed.
    The village further alleged that the resolution of July 21, 1913, and the ordinance providing for the bonds were published in but one paper and that no further notice or publication of the passage' of said resolution or ordinance was given.
    In its reply the plaintiff alleged that it had not been made a party to any of the suits or proceedings by the Electric & Gas Coriipany and denied that it had knowledge or notice of the pendency of the suits.
    It further averred that Section 3990, General Code, is unconstitutional and void because in conflict with Article XVIII of the Constitution, and for the reason that the same was repealed and annulled by the general schedule attached to the amendments of the Constitution adopted in 1912.
    On the trial of the case a jury was waived and the cause submitted to the court on an agreed statement of facts. By this statement it is shown that the council of the village passed the resolution declaring it necessary to issue the bonds in the sum of $41,000 for the purpose of erecting the lighting plant and providing for the submission of the question to the voters; the publication of notice of the resolution and the notice of the election in The Orr-ville Courier-Crescent; that at the election the proposition carried by an affirmative vote of more than two-thirds of the votes cast at the election; that in November, 1913, the council passed an ordinance providing for the issue of the bonds; that the ordinance was published in the same paper for two consecutive weeks and that no other notice of the passage of the ordinance was given; that notice of the sale of the bonds was given by publication in the same paper and in The Wooster Daily Republican for four weeks, and that on December 24 bids were received and the bonds sold; that in January, 1914, the board of trustees of public affairs advertised for bids for furnishing material and machinery for the construction of the plant, in The Orrville Courier-Crescent, for two weeks, and that the plaintiff submitted the bid to furnish the materials referred to in its petition, which was accepted, and that on February 15, 1914, the contract referred to in the petition was entered into; that in accordance with the contract the plaintiff delivered to the defendant in July the machinery and material mentioned in the contract and performed all of the other obligations on its part to be performed by said contract; “that there is due the plaintiff from the defendant the sum of $1313.34 upon its said contract, which the defendant is ready and willing to pay but for the fact that it is restrained from so doing by reason of the restraining order and injunction mentioned in the answer and hereafter in these findings of fact;” that on July 21, 1913, and prior thereto The Massillon Electric & Gas Company, an Ohio corporation, owned an electric lighting plant in the village and was furnishing electricity to said village and the inhabitants thereof, for both public and private lighting, under a franchise granted by said village in 1892, and the said franchise has not yet expired; that the mayor of the village, in October, 1913, wrote to the Electric & Gas Company asking a plan or plans whereby the city might take over the property of the light company; that said letter was not authorized by the village council; that some subsequent correspondence was had, but no other effort made; that on March 12, 1914, the Electric & Gas Company brought suit to enjoin the erection of the plant or the making of a contract for the same; that a temporary restraining order was granted in April, 1914; that on May 21 it was dissolved and the petition dismissed by the common pleas court; that on May 26 the Electric & Gas Company perfected an appeal to the court of appeals of each of its cases; that on the 25th of September the court of appeals entered a final decree enjoining all of the acts complained of; that on May 26 there was paid by the defendant to the plaintiff the sum of $1,290 and that no other payments have been made; that on the......day of March, 1914, the clerk of the village board of public affairs notified plaintiff of the suits by the Electric & Gas Company and of the granting of the temporary restraining orders; that on February 10, 1914, the clerk of the village certified to the council and board of trustees that the money required for the contract was in the treasury to the credit of the electric light fund not appropriated for any other purpose; that the judgment, order and decree of the said court of .appeals are in full force and effect and no proceedings have been instituted to reverse the same; that there is but one newspaper published in the village of Orrville, The Orrville Courier-Crescent, which is independent in politics; that the bond issue was not offered to the state liability board of awards prior to being advertised for sale, but that after the sale of the bonds that board stated in writing that if the bonds had been offered to it they would have been refused; that the plaintiff was not a party in any manner to the suits brought in the court of common pleas by the Electric & Gas Company or in the court of appeals; that on May 21 the plaintiff was notified by the defendant that the temporary restraining order theretofore granted was dissolved and it was instructed to proceed with its contract.
    In the court of common pleas judgment was entered for the defendant. This judgment was affirmed by the court of appeals, and this proceeding is brought to reverse the judgments of the courts below.
    
      Messrs. Taggart, Weygandt & Ross and Mr. S. G. Rogers, for plaintiff in error.
    
      Mr. Alton H. Riling; Mr. Clyde Merchant and Mr. G. A. Siam, for defendant in error.
   Johnson, J.

The decisive question is whether Section 3990 of the General Code, in so far as the requirements therein, which defendant claims were not complied with, are concerned, is invalid because inconsistent with Sections 4 and 5 of Article XVIII of the Constitution as amended in 1912. The pertinent portion of Section 3990, General Code, is as follows:

“The council of a municipality may, when it is deemed expedient and for the public good, erect gas works or electric works at the expense of the corporation, or purchase any gas or electric works already erected therein, but in villages where gas works or electrical works have already been erected by any person, company of persons, or corporation, to whom a franchise to erect and operate gas works or electric works has been granted, and such franchise has not yet expired, the council shall, with the consent- of the owner or owners, purchase such gas works or electric works already erected therein. If the council and owner or owners of such gas or electric works are unable to agree upon the compensation to be paid therefor, the council may file in the probate court of the county where such gas works or electric works are located, a petition to appropriate such gas works or electric works, and thereupon the same proceedings of appropriation shall be had as is provided for the appropriation of private property by a municipal corporation.”

The constitutional convention was not content to leave the subject of the public utilities of the cities and villages of the state entirely to legislation. It wrote into Article XVIII — the home-rule amendment — specific provisions touching that subject, including authority to acquire and operate such utilities, and a specific and independent clause securing the referendum and defining the mode of its exercise.

Section 4 of that article reads:

“Any municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for. any such product or service. The acquisition of any such public utility may be by condemnation or otherwise, and a municipality may acquire thereby the use of, or full title to, the property and franchise of any company or person supplying to the municipality or its inhabitants the service or product of any such utility.”

The provisions of Section 5 of that article prescribe the manner in which the municipality may exercise the power conferred and contains a special provision for a referendum. These provisions are explicit and they confer plenary power upon the municipality to deal with the subject-matter involved in this controversy.

It is provided in the schedule to the constitution, as amended in 1912, that all laws then in force not inconsistent therewith shall continue in force until amended or repealed; and it is familiar doctrine, well settled, that all repugnant statutes are repealed by implication. All laws then in force which were inconsistent with the new constitution fell because they were inconsistent.

Section 3990, General Code, was passed by the legislature in May, 1902, and was in force when the above amendment to the constitution was adopted. The first clause of the section confers authority upon the council of a municipality to erect gas works or electric works at the expense of the corporation or to purchase any gas or electric works already erected therein. It applies to every municipality in the state, and the powers it confers are similar to those referred to in Section 4, Article XVIII. Then follows a limitation upon the authority of villages where gas works or electric works have already been erected by any person, company or persons to whom a franchise to operate 'gas works or electric works has been granted. This limitation is wholly inconsistent with the plenary grant of power contained in the article of the constitution referred to, and the statute, so far as this inconsistent provision is concerned, fell simply because it was inconsistent. Authority given by the constitution cannot, be lessened by statute. There is no equivalent for a constitutional provision.

The franchise was granted in 1892 and fixed the contractual rights and duties of the parties. The statute then in force provided that the council of any city or incorporated village should have power “whenever it may be deemed expedient and for the public good, to erect gas-works at the expense of the corporation, or to purchase any gas-works already erected therein.”

It will be observed, therefore, that the statute in force at the time the franchise was granted, and which the parties must be presumed to have had in contemplation when they made the franchise contract, did not contain the proviso afterwards included in the amendment adopted by the legislature. There is, therefore, no impairment of contract obligations by the action of the village under Section 4, Article XVIII of the Constitution. Rights acquired under a franchise or contract prior to the adoption of Section 4, Article XVIII, and while the proviso in Section 3990, General Code, was in force, would not be abrogated or affected by the subsequent adoption of the constitutional provision referred to.

The plaintiff in error was not a party to either of the injunction proceedings brought against the village in the common pleas of Wayne county by The' Massillon Electric & Gas Company and its rights were not in anywise adjudicated in those proceedings.

The contention with reference to the publication of the resolutions and ordinances in but one newspaper has been disposed of by the case of Village of Elmwood Place v. Schanzle, 91 Ohio St., 354.

We think the village was authorized to make the contract with the plaintiff which was set up in its petition, and it being conceded that the plaintiff has fully complied with its terms on its part, it is entitled to recover the balance due on its contract.

The judgments of the courts below will be reversed and the cause remanded for further proceedings according to law.

Judgments reversed.

Nichols, C. J., Newman, Jones and Matthias, JJ-, concur.

Donahue and Wanamaker, JJ., concur in the judgment and in the first and second propositions of the syllabus.