Source: https://supreme.justia.com/cases/federal/us/186/401/
Timestamp: 2019-04-22 08:23:46+00:00

Document:
The City of Tallahassee has never been under obligation to take electric lighting from the Capital City Light and Fuel Company.
There has been no impairment of any contract between the city and the plaintiff in error or its predecessor, and the city has the right to avail itself of the privileges granted by the acts of 1897 and 1899, so far as regards the electric lighting of the city.
The plaintiff in error, being the plaintiff below, brings this case here by writ of error to the Supreme Court of the State of Florida for the purpose of reviewing a judgment of that court affirming the judgment of the Circuit Court of the Second Judicial District of that state dismissing plaintiff's bill of complaint against the defendant with costs.
"to construct gas and electric light works in the City of Tallahassee, and for that purpose that the said company shall have the right to lay their pipes in any and all streets in said city and in the alleys and lots of the same, and to erect such lamp posts or poles or towers as may be necessary or essential for furnishing gas or electric lights in said City of Tallahassee, and to this end the Tallahassee Gas & Electric Light Company are authorized to make such excavations or erect such structures, poles, or towers, and run wires thereto along the streets of said city, as may be necessary or essential. . . ."
Provision was also made in the ordinance as to the manner of excavating the streets, constructing the works, and as to the quality and price of the gas to be furnished and the time within which the gas works should be completed and the plant put in operation. It was also provided that the company should file a written acceptance of the ordinance, whereupon the same should become binding upon both parties.
"And the said Tallahassee Gas & Electric Light Company shall put in and operate electric lights as soon as sufficient consumers can be secured to pay eight percent interest per annum on the additional capital required to purchase the machinery for and put in practical operation the said electric lights."
of the said Tallahassee Gas & Electric light Company, their associates, successors, and assigns, shall and hereby obligates itself to take all gas which it may wish to use in lighting its streets or buildings from said company at a price of not more than one and one-half dollars ($1.50) per one thousand feet for such as may be used in public buildings used exclusively by said city, and at a price of not more than ($30) thirty dollars per annum for each street lamp as hereinbefore provided for in section six of this ordinance for the period of twenty-five consecutive years from the completion of said gas works: Provided, That nothing herein shall be construed as an obligation on the part of the said City of Tallahassee to take any gas from said company."
"SEC. 11. That the privileges and licenses herein and hereby granted shall be exclusive in and to said Tallahassee Gas & Electric Light Company, their associates, successors, and assigns, for and during the term of twenty-five years."
"to acquire, construct, improve, maintain, and operate gas works and electric light works in and adjacent to the City of Tallahassee, in Leon County, State of Florida, and to manufacture gas for light and fuel; to dispose of and deal in coal or wood for fuel; to construct, maintain, and operate electric light machinery for supplying lights in and about the said city, or for manufacturing and dealing in any and all manner of artificial light or heat within or adjacent to said city."
had purchased for the purpose of transferring to the company, and in pursuance of such purpose, the property was made over to the company, which entered into the possession and assumed the management and control thereof, and continued the manufacture of gas for the purpose of supplying the city and its inhabitants with light and heat, and it has since coming into the possession of the property enlarged and extended its plant, and met the increased demands of the city and its inhabitants, the city having ever since recognized, treated, and dealt with the company as the lawful successor of the Tallahassee Gas & Electric Light Company and the legal assignee of all the rights, franchises, privileges, and contracts created and conferred on that company by the ordinance of the City of Tallahassee.
"An Act to Enable Cities and Towns to Manufacture and Distribute Gas and Electricity, and to Construct, Purchase, Lease, and Establish and Maintain within Its Limits One or More Plants for the Manufacture and Distribution of Gas and Electricity for Furnishing Light for Municipal Use, and for the Use of Such of Its Inhabitants as May Require and Pay for the Same as Herein Provided."
Thereafter, and on May 27, 1899, the legislature of the state passed another act, to enable the City of Tallahassee to exercise the powers provided by the act of 1897, above mentioned. This act of 1899 granted to the city the right to construct and maintain its own electric light plant upon complying with certain conditions specified in the act. These conditions the city proceeded to comply with, and passed a resolution to build and operate an electric light plant of its own, which was ratified at an election by the people of the city, and the city council was about to proceed to carry out the plan for the erection and operation of such electric lighting plant to light the city under the provisions of the act of 1899, when this suit was commenced.
that there has never been a time since the establishment of the gas works in that city that the plaintiff in error, or its predecessor, could have procured sufficient consumers to pay eight percent per annum on the additional capital required to purchase the machinery for and put into practical operation an electric lighting system therein. The bill prayed that the city and its officers might be enjoined from establishing and maintaining an electric plant, and from furnishing electric light to the inhabitants of the city during the balance of the period of twenty-five years for which the exclusive franchise of constructing gas and electric works in that city, and for using the streets thereof for that purpose, and for furnishing gas and electric light to the inhabitants of the city was granted, to-wit, until the year 1913. The bill also prayed that the city should be enjoined from making or entering into any contract or from performing any contract with any corporation or firm for furnishing electric lighting and other machinery, and that the city should be enjoined from issuing its bonds for the payment of any such plant.
This bill was demurred to for want of equity in that it showed no facts entitling complainant to relief against the defendant as to the matters contained in it. The demurrer was sustained and the complainant's bill dismissed, and the judgment entered thereon was affirmed by the Supreme Court of Florida. 28 So. 810.
electric light plant impair the obligation of its contract, and are therefore void.
As the case involves the provision of the federal Constitution which prohibits the states from passing any law impairing the obligation of a contract, and as the state court has given effect to subsequent legislation which, it is claimed, results in the impairment of the obligation of plaintiff's contract with the city, we are bound to determine for ourselves as to the existence and meaning of the alleged contract in order to determine the question whether subsequent legislation has impaired the obligation thereof.
the streets, alleys, and lots of the city for the purpose of constructing and operating a plant and its instrumentalities for furnishing electric lights in the city."
"Any corporation organized and put into successful operation under this chapter shall have exclusive privileges for the purposes of its creation for the term of twenty years from the date the corporation commenced to carry out in good faith the terms of its articles of incorporation: Provided, however, That this investment shall not so operate as to divest any future legislature of those powers of government which are inherent and essential attributes of sovereignty, to-wit, the power to create revenue for public purposes, to provide for the common defense, to provide safe and convenient ways for the public necessity and convenience, and to take private property for the public use, and the like."
business for which it was incorporated; that, if it were intended that the city should have power to grant such exclusive use it would have been stated in the act providing for the incorporation of cities, and, if it were not so intended, it cannot be implied from the language of the section above quoted, found in an act referring to corporations other than municipal. The two acts, it is said must be reconciled, and it can be done by excepting from the application of the 38th section the right to an exclusive use of the public streets of a city for any purpose. The plaintiff in error concedes that the city has full control and management of its streets, and that the plaintiff could not use the streets for the purpose of laying its pipes, etc., therein without the consent of the city. But it urges that, having secured such consent, it is authorized to maintain the exclusive use by reason of the 38th section above quoted, even if the city had no right to grant it under the act providing for the incorporation of cities. This question, while stated, was not decided by the court below, and we do not find it necessary to decide it ourselves.
lighting by electricity. The two grants might therefore have been in two separate ordinances and given to separate persons, firms, or corporations. The operation of one would not interfere with that of the other, except, perhaps, on a question of financial success, but so far as the character of the two grants is concerned, each one is wholly separate and distinct from the other.
this nature, tending to establish a monopoly, was granted without such express condition precedent as we find in our statute, such grant does not become a contract or a vested right so as to be protected by the Constitution of the state or the United States, until the company has, to say the least, begun to do the thing required by the charter as the consideration for the grant of such privilege. Pearsall v. Great Northern Railway Company, 161 U. S. 646; Louisville & Nashville Railroad Company v. Kentucky, 161 U. S. 677. See also Chincleclamouche Lumber & Boom Co. v. Commonwealth, 100 Pa. 438."
for twenty-five years, but at the same time will not require the person or corporation to whom the exclusive privilege is granted to furnish such lights until such time as it can make an annual profit of eight percent on its investment. The city has no such power over its streets, which are held by it in trust for the public benefit, Florida Central & Peninsular Railroad Company v. Ocala Street & Suburban Railroad Company, 39 Fla. 306; Gonzalez v. Sullivan, 16 Fla. 791, 820, and even if it did, so long as the grantee failed to invest money in a plant, the ordinance could be repealed or modified, being without consideration."
"We have not overlooked the fact that the first company performed its charter powers in part by erecting and operating a gas plant, and as to that plant, and the business connected therewith, it may have possessed exclusive privileges under statute which could not be impaired by subsequent legislation, and it may be that such privileges passed to appellant through the judicial sale. As to that we express no opinion. But while the purpose of erecting both plants would be the same, in that they would both furnish light to the city and its people, yet they furnish a different light and require separate and different plants and instrumentalities for their operation. We think they are so distinct in character as to amount to separate undertakings, and they are so treated in the articles of association of both companies, and in the ordinance. Power to operate the one would not include power to operate the other, and permission to use the streets for one would not include permission to use them for the other. Newport v. Newport Light Company, 89 Ky. 454. The exclusive privileges as to the electric light plant could not have operated as a consideration for erecting the gas plant, for such privileges under the statute were to attach to the electric light business only when that plant was put in."
granted by the acts of 1897 and 1899 of the legislature already mentioned, so far as regards the electric lighting of the city.

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