Case Name: TOLEDO (CITY) v. N. W. OHIO NATURAL GAS CO.
Court: Lucas Circuit Court
Jurisdiction: Ohio
Decision Date: 1890-12
Citations: 3 Ohio Cir. Dec. 273
Docket Number: 
Parties: TOLEDO (CITY) v. N. W. OHIO NATURAL GAS CO.
Judges: Scribner, Haynes and Bentley, JJ.
Reporter: Ohio Circuit Decisions
Volume: 3
Pages: 273–282

Head Matter:
NATURAL GAS FRANCHISE.
[Lucas Circuit Court,
December Term, 1890.]
Scribner, Haynes and Bentley, JJ.
TOLEDO (CITY) v. N. W. OHIO NATURAL GAS CO.
1. Plaintiff may Appeal from Decision against Him on His Motion for Judgment on the Pleadings.
When, in an action for an injunction, the answer controverts material allegations in the petition which are necessary to sustain the plaintiff’s case, and the answer also contains affirmative allegations constituting a defense which are denied in the reply, and the cause is submitted to the court, without evidence, upon the plaintiff’s motion for a judgment on the pleadings, the plaintiff may appeal from the judgment entered against him, although it be apparent that such submission of the case must result in a judgment against him, the said act of the plaintiff not being equivalent to a voluntary dismissal of his petition.
2. Power of City to Contract for Supplying Natural Gas.
The city of Toledo had the power, even before the amendment in 1887 (84 O. L. 39) of sec. 2479 Rev. Stat. to contract with a natural gas company for piping the streets and supplying natural gas, and the ordinance of the council, and its acceptance and undertaking on the part of the gas company constituted a valid contract .between it and the city.
8. Company may be Compelled to Observe Terms of its Contract.
Under sec. 1777 Rev. Stat. the city solicitor may maintain an action to compel the gas company to observe the terms of the contract.'
4. City had Power to fix the Rates for Gas for Ten Years.
At the time the ordinance was passed, the city council had power, under Rev. Stat. sec. 2479, with the assent of the gas company, to fix rates to be charged for natural gas for a period of ten years, and its said agreement with the gas company that' regulations as to rates and prices should be such as might be agreed upon by the city and gas company, though in terms unlimited as to time, is valid and binding for a period of ten years from the time it was made and for that period only, the right to regulate prices for gas, conferred on the city by the amendment of Rev. Stat. sec." 2478, adopted March 4, 1887, being subject to the limitations of said agreement for said period of ten years from September 5, 1886. , . ■
5. Ordinance has Continuing Force for Ten Years, and Ordinances Fixing Prices Eor Shorter Periods are Exceptions Pro Tanto.
Such agreement for the fixing of prices by consent has a continuing force for the said period of ten years, and ordinances of the city regulating said prices for shorter periods within said ten year term, accepted by the gas company, are to be regarded as executions, pro tanto, of that continuing obligation, and the power conferred on the city by the amendment of 1897 (34 O. L. 39) to fix the price is subject to the" contract making assent of the company necessary. The statute did not annul the contract.
6. When Presumption of Reasonableness of Ordinances as to Price, will not Apply.
The presumption of the reasonableness of prices to be charged by a gas company, as fixed by an ordinance of the city, adopted without the consent of the gas company, will not be so applied as to require a judgment on the pleadings for the plaifttiff in an .action by the city, wherein the petition alleges the passage of the ordinance, its term* and their reasonableness, and the answer contains an admission of the passage of the ordinance and a denial that the prices therein fixed are reasonable, and affirmative allegations of the inadequacy and unreasonableness of the prices so fixed, and in. which action the pleadings show the existence of a contract between the city and. the gas company requiring such prices to be reasonable and to be fixed by agreement between the city and the gas company. State ex rel. Attorney-General v. The Ironton Gas Co., 37 Ohio St. 45, distinguished.
7. Ordinance Fixing Price of Gas without Reference to Meter Measurement is-Void, if without Company’s Consent.
An ordinance of the city of Toledo, adopted without the consent of the gas company, contained provisions that said gas company should charge for gas,. according to the use to which the heat to be produced by the gas should be applied, and also that no consumer now receiving natural gas through a mixer shall be compelled against his: desire, to receive and use natural gas by meter measurement, or to receive and use natural gas in any other manner than he or it is now receiving and using the same. Held, that the said provisions of the ordinance are unreasonable, and render the ordinance void.
Appeal from the Court of Common Pleas of Lucas county.

Opinion:
BENTLEY, J.
The city solicitor of the city of Toledo, claiming to act under the authority of sec. 1777, Rev. Stat. of Ohio, brought an action m behalf of and in the name-of the city against the Northwestern Ohio Natural Gas Co. in the court of common pleas of this county, for a mandatory injunction restraining the gas company from refusing to furnish gas to any person, company or corporation applying for the same at the rate fixed therefor by an ordinance of said city, passed: August 4, 1890.
A preliminary injunction restraining the defendant from making contracts at. rates in excess of those fixed by said ordinance was granted by a judge of said, court of common pleas, and afterward, on final hearing in that court, that injunction was dissolved, and said petition was dismissed, and the city thereupon, appealed the case to the circuit court, where it is now pending, and where it will stand for hearing by the court in term, whatever be the disposition of this motion. The city solicitor applied to the judges of the circuit court for a temporary mandatory injunction, and said application was heard by the judges at chambers on last Monday. The arguments on each side and the briefs submitted evinced such thorough preparation, extensive research into the authorities, and able handling of the principles involved, as was and is highly creditable to counsel and gratifying' to us.
We have been holding court in another county since the day after election,, and-were urged to dispose of the motion to-day. While the pressure of other' duties has not been allowed to prevent our consideration of this matter so as to-become satisfied with the justice of our conclusions, it has not allowed us to> formulate such orderly statement of our views as we could wish.
The-application was submitted without other evidence than that afforded by the petition, which is sworn to positively, the answer, also, of course, under oath, and the reply.
Objection is made by the defendant that there was no authority to appeal' the case on account of the peculiar nature of its submission to the court below. I have, not before me the journal entry, but as I remember it, it was substantially that the plaintiff moved for judgment upon the pleadings in this case, and it was-argued in behalf of the defendant that, as the pleadings then stood, it was perfectly apparent that the case would have to be dismissed if submitted simply upon the pleadings, and that, when the plaintiff made such a motion as that it was equivalent, virtually, to dismissing its petition, and therefore no appeal could lie.
While the statement of the journal entry is perhaps a little out of the usual' form, yet we think substantially the same result obtained as if the journal entry' had simply shown that the plaintiff submitted the case upon the pleadings — we think that that was the scope of his application and motion, and that therefore- the plaintiff might rightfully appeal from the decision of the court finally made in that action.
It is also claimed by defendant's counsel that a mandatory injunction affecting the delivery of property, cannot be granted at an interlocutory hearing, but only as a part of a final decree of the court on the merits of the case in term. We think, however, that should we find that the plaintiff is entitled to relief, an order could be-framed to accomplish the purpose without violating the rules of law in that respect.
Some question is made as to- the fundamental basis of the action which can be brought by a city solicitor under said sec. 1777- — whether he can bring such action to enforce a public duty owing by a private corporation to a municipality and its citizens though not sounding in contract. Some suggestions on behalf of the city that this might be done and that this action is not necessarily based upon any contractual obligations, were made in reply to strong urging of the inviolability of contracts made by the defendant's counsel, but we conclude that the petition better sets forth the plaintiff's true position, since it asserts a contract resulted from the acts of the plaintiff and defendant, and that founded on that and the alleged lawful steps thereafter taken, the defendant owed duties to the plaintiff which could be enforced. These views, we think, are supported by Gaslight Co. v. Zanesville, 47 O. S. 35.
The petition shows that the city itself is a consumer of gas under the arrangements made with the defendant, and whatever may be its rights as to enforcing contracts for the benefit of others- — its citizens — it may have a standing in court for the enforcement of whatever rights it has as a customer of the gas company, as was held in the Zanesville case. We recognize some difference between the objects and situation of the defendant corporation and corporations organized especially to furnish light to a single city, but we think that the defendant has devoted its property to a public use to stich a degree as to warrant the legislature providing for the reasonable regulation of its charges, if it can be done without the impairing of the obligation of contracts prohibited by the constitution.
The petition alleges and the answer admits, that the defendant is a corporation for profit, organized and existing under the laws of the state, but the terms of its certificate of incorporation are not definitely set forth.
The pleadings also show that on September 5, 1886, the city council of this city passed two ordinances granting to the defendant and another corporation, respectively, the right, on certain conditions, to lay, maintain and operate gas pipes in the city for heating and power purposes, and that said corporations duly accepted the terms and conditions of the ordinances. The ordinances are set out in full, and it is shown that the two- corporations afterwards became consolidated, and the defendant succeeded to the rights and liabilities of both. The ordinance as to the defendant, after providing in several sections as to the manner of laying pipes, making connections, and operating in the streets, has these provisions in sec. 8:
"Should said The Northwestern Ohio Natural Gas Co., its successors or assigns, neglect or fail to prosecute with all reasonable diligence, the work of bringing natural gas to Toledo, for the foregoing purposes, and fail to furnish a reasonable supply of the same by October 1, 1887, the franchise and privileges herein granted may be, by resolution duly passed by said common council, declared forfeited, and all rights hereby acquired shall then determine and cease. The right to further regulate the furnishing of said natural gas to consumers shall be subject to such terms' and conditions as said common council and said company or corporation may hereafter determine upon.
"This ordinance and all rights herein granted shall be subject to any general ordinance or ordinances which may hereafter be adopted by the common council, regulating the mode and manner of laying, relaying and repairing the mains or pipes, conductors, connections and drips, and the conducting of gas through the streets, lanes, alleys, squares, docks and lands of said city, not inconsistent with the provisions of this ordinance."
The ordinance as to the other corporation (Toledo Natural Gas Co.) contains the following provisions, after providing for the laying and maintaining of pipes, etc., as in the other case.
"Section 8. Should said The Toledo Natural Gas Co., its successors or assigns, neglect or fail to prosecute with all reasonable diligence, the work of bringing natural gas to Toledo for the foregoing purposes, and fail to furnish a supply of the same by October l, 1887, the franchises and privileges herein granted may be, by a resolution duly passed by said common council, declared duly forfeited, and all rights hereby acquired, shall then determine and cease.
"The right to further regulate the furnishing of said natural gas to consumers shall be subject to such terms and conditions as said common council and said company or corporation may hereafter determine upon. This ordinance and all rights herein granted shall be subject" to any general ordinance or ordinances which may hereafter be adopted by the common council regulating the mode and manner of laying, relaying and repairing the mains or pipes, conductors, connections and drips, and the conducting of gas through the streets, lanes, alleys, squares, docks and lands of said city, not inconsistent with the provisions of this ordinance.
"Section 9. Within thirty days after the passage of this ordinance the said company shall execute and deliver to the city of Toledo, an agreement in such form as shall be approved by the city solicitor, expressing the assent of said company to and undertaking to perform the terms and requirements of this ordinance on its part, and to furnish gas to all persons requiring it in the city of Toledo (so far as said company may be able), without preference or favoritism, on equal terms and at reasonable prices, reference 'being had to the cost of producing and delivering the same and the prices of like supplies in other cities."
On July s, 1887, the city council passed an ordinance regulating the price of gas to be charged by said companies for three years, and the companies, in writing filed with the city clerk, accepted the terms of said ordinance, and have furnished gas in accordance therewith.
On August 4, 1890, alter the expiration of said three years, the city council, claiming that under the authority of sec. 2478 Rev. Stat., as amended March 4, 1887, 84 O. L. 39, it had the absolute right to fix the price to be charged by the defendant for gas, without reference to the will of the. defendant, passed another ordinance 'fixing the price to be charged for fuel gas. And the defendant, insisting that said ordinance is invalid, both because it had not agreed to its terms and because it provided for unjust discriminations and favoritism, and certain other unreasonable provisions, and fixed inadequate prices, and was passed under the influence of improper conditions and motives, refuses to recognize or comply with it.
It is to compel compliance with this ordinance that this action is brought.
The city claims that no contract binding upon it arises out of the said original grápts and their acceptance, for that its acts in making said grants were ultra vires, no law then existing permitting it'to allow such use of its streets.
To hold this doctrine, would necessitate a refusal of the city's motion, since in such case there could be no contract to specifically enforce, and no public duty created by contract whose evasion or violation the city solicitor in such action as this is authorized to correct or punish. The rights of the public in such case must be vindicated in a different form of action.
But we think it is manifest that the city had the authority to allow the use of its streets for the purposes named; that it is a public use, is the ground on which the right to regulate-it is asserted and maintained. Whether the right to make such grant arises from the general grant of power to municipal corporations, as has been contended for, or under other and more definite statutory provisions, it is perhaps unnecessary now to determine in settling this general claim. Up to the time of the passage of the act amending sec. 2478 in March, 1887, there was not any general law specifically authorizing cities to grant rights in their streets to natural gas companies by name; that act assumes the prior power to make such grants, and recognizes the lawful establishment and existence of natural gas plants in the streets of municipal cities.
What is commonly called the "heat and power act" of 1880, is broad enough in its terms to cover the supplying of heat and power by means of natural gas, unless we conclude that its generic terms are to be limited so as to anntv to airenc.ies then crenerallv known and used. F.viden+lv that statute was in the mind of those concerned in the drafting of said original ordinances, as they grant the right to lay pipes for supplying heat and power; and in view of what we have said above, we are unwilling to say that that act would not authorize such grants, but we will recur to this further on.
It is contended by the city that, even granting the power to make the contract, the terms regarding further regulations do not allude to the fixing of prices. Without now going into an analysis of the language employed, we have no doubt that that was in the minds of both parties to the arrangement, and that so far as authority existed to enter into it, the parties made an agreement that the prices to be charged for gas should be fixed from time to time by mutual or concurrent action of the city, and gas companies.
These various questions already disposed of, while important, have been of comparatively easy solution, contrasted with those which, in our judgment, lie at the root of the controversy; that is:—
i.. To what extent, in the absence of express statutory authority or prohibition, might a municipality bind itself as to future action, or disqualify itself from receiving and exercising a power of regulation afterwards expressly conferred upon it by the legislature?
2. What is the just and necessary effect of the amendment of March 4, 1887, upon the relations of these parties?
We concluded, upon the first, that these parties had the right to make the agreement that the prices to be charged for gas should be'fixed by mutual consent, and that that agreement would be binding upon both until the legislature, by reason of its reserved power, under the constitution, might alter, amend or annul the defendant's charter, or might confer the sole power of the reasonable regulation of prices upon the city council or other agencies selected by the-legislature. We must presume that both parties contracted with reference to this superior power, and subject to the conditions and provisions "imported by law" into every such contract, so that it is as if a provision covering the necessary limitations and conditions were inserted by the parties themselves in the wording of their compact. But until the legislature should pass some act necessarily interfering with or abrogating the contract, its terms and conditions are to be regarded and enforced as other contracts.
Some light upon the city's relation to its streets is afforded by Cincinnati St. R. R. Co. v. Smith, 29 O. S., pages 304 to 306. This was an action regarding a street railroad company, as the name of the party would indicate, but in it arose a question as to whether the city solicitor had the right, under the section of the code, to bring such an action as was brought there,and in disposing of the case the court say, among other things:
"The action was brought to enjoin (1) an abuse of corporate powers by the city, and (2) the execution and performance of a contract about to be made in behalf of the corporation in contravention of the laws or ordinances governing the same, it not being claimed that the facts stated in the petition show that there is to be any misapplication of corporate funds
"Following the order in which objections are made in argument by counsel for plaintiff in error, the first stated in effect this: That sec. 159 does not refer to or include contracts in general, but is confined to contracts made in behalf of the city, in contra-, vention of the laws and ordinances governing the same, and that a contract formed by the acceptance of a grant made by the city of an easement in its public streets, is not a contract made in behalf of the city.
"This objection is made upon the assumption that the city has no property right in the public streets. And it is contended, that such property being in the public, the grant is a contract made in behalf of the public, in the making of which the city does not act in its own behalf as a corporation, but as the agent of the public, in the exercise of a governing power of the state, delegated to it in the particular instance to be executed in the mode authorized.
"The correctness of this assumption may be determined by the provisions of the statute on the subject."
The court then recites sec. 6 of the act to provide for the recording of town plats, at hearino- «non the. fee which it vests in the streets, and follows the ciuotatinn with this: '
"This vests the fee of the streets in the corporation, subject to the right of the state to direct the mode of administering the trust. So far as the state has assumed to do this, it is binding on the corporation.
"The 439th sec. of the municipal code provides: 'The council shall have the care, supervision and control of all public highways, bridges, streets, avenues, alleys, sidewalks, and public grounds within the corporation, and shall cause the same to be kept open and in repair, and free from nuisance. This is substantially a re-enactment of the provisions of former laws.
"It seems to us that the provisions of these sections negative the claim that the proposed contract between the city and the defendant street railroad companies when the easement granted in the streets is accepted by them, will not constitute a contract made in behalf of the city. The city holds the fee of the streets in trust for the uses intended, and the care, supervision and control of them is expressly imposed upon the council."
Citing the provisions of the 411th section of the municipal code.
"These sections taken together show that the state, in its sovereign character, has reserved no property interest in the streets in question. The revenues, and profits that are to accrue from the use of the streets in the mode contemplated will be the private property of the city, in which the state has no interest whatever.
"Under the plain provisions of the sections quoted, authorities need not be quoted to .show that the proposed contract, if consummated, would be one made in behalf of the •corporation."
One of the Zanesville .cases cited holds that in granting the right to lay ;pipe in the streets, the city might properly provide the maximum rate to be •charged for gas.
The Ironton case recognizes that a contract for 20 years, made while the council was limited to ten years, might be valid, but at the expiration of the 10 years would become wholly inoperative; and all of the Ohio cases recognize this principle, that if a municipality, under a statutory authority, has made a contract fixing a price, subsequent legislation cannot interfere with it during the period covered by the authority.
Had the city statutory authority to make the contract; or, has it by legislation received such direction or power as to abrogate its provisions?
The act of 1880 provides: (In this book — Giauque's Statutes — it seems to be put down as sec. 92x9):
"Section i. That any municipal corporation may, by ordinance, use or grant the use of its streets, avenues, alleys, lanes and other public places, to lay pipes and drains under the surface thereof, to be used for the purpose of supplying its inhabitants with heat and power, upon such terms as such corporation may deem proper.
"Section 2. That in all municipal corporations which have heretofore, by ordinance, authorized the use, by any person or corporation, of the streets, avenues, alleys, lanes and other places of such municipal corporation, for the purpose of laying pipes and drains below the surface thereof, to convey and supply its inhabitants heat and power, such ordinance's shall be held as valid and binding as if the power in all such municipal corporations to so grant such use of its streets, avenues, alleys and public places had been expressly enumerated in the general municipal corporation act now in force; provided, that the councils-of such corporations are empowered to regulate, by ordinance, at intervals of five years, the price which such person or company may charge for such heat or power."
This divided the years into blocks of five, and gave the council full authority to legislate upon the subject so as to cover such periods of five years. Had the council contracted in advance with the defendant for five years as to the rates, we think few would doubt the validity of the contract.
We think this act broad enough to cover these grants, although the statutes regarding illuminating gas had many features and expressions applicable to fuel gas.
When the legislature came to legislate directly upon the subject, it seemed to assume the existence of natural gas plants in cities, as I have already said, and placed its provisions, not in an independent act, but as a mere amendment to secs. 2473 and 2491, thus incorporating them in a chapter of several sections, some of which clearly comprehend a reference to natural gas after the amendment is in; that is, 2478, after the amendment, (it has been amended since that time as to electric fights,) reads as follows;
"Section 2478. The council of any city or village in which electric lighting companies, natural or artificial gas companies, or gas light or coke companies may be established, or into which their wires, mains or pipes may be conducted, are hereby empowered to regulate, from time to time, the price which said electric lighting, natural or artificial gas and coke •companies, may charge for electric light or for gas for lighting or fuel purposes, furnished by such companies to the citizens, public grounds and buildings, streets, lanes, alleys, avenues, wharves and landing places; and such electric lighting, natural or artificial gas, or gas light and coke companies, shall in no event, charge more for any electric light, or natural •or artificial gas furnished to such corporation or individuals than the price specified by ordinance of such council; and such council shall also have the power to regulate and fix the price which such companies shall charge for rent of their meters
"Section 2479. In case the council fixes the minimum price at which it requires any company to furnish gas to the citizens, or public buildings, or for the purpose of lighting the streets, alleys, avenues, wharves, landing places and public grounds, for a period not exceeding ten years, and the company assents thereto by written acceptance, filed in the •office of the clerk of the'corporation, it shall not be lawful for the council to require such company to furnish gas at a less price during the period of time agreed on, not exceeding ten years, as aforesaid."
Section 2479 remains unamended, and reads now as it did prior to the act of March 24, 1887, and in the act was incorporated the provisions regarding the natural gas companies, by name.
"Section 2482. A neglect to furnish gas to the citizens and other consumers of gas, or ¿0 the corporation, by any company, in accordance with the prices fixed and established by the council, from time to time, shall forfeit all rights of such company under the charter by which it has been established; and the council may proceed to erect, or, by ordinance, empower any person to erect gas works, for the supply of gas to such corpora.1. i.s and its citizens; provided, that nothing in this section, or in sec. 2479 and 2480, shall t pc ate to impair or affect any contract heretofore made between any municipal corporation and any gas light and coke company."
Section 2491 by its amendment authorized the council to allow natural gas to be placed in the street.
We think that the legislature must be held to have intended that at least the provisions of sec. 2479 should apply to natural gas as well as to artificial gas, and clearly recognized the power of the council to enter into binding contracts regarding rates for a period of ten years, thus extending the period that might "have covered the subject under the heat and power act.
If the council had by ordinance and its acceptance made a contract for ten years under this' amendment, clearly it would be binding for the entire period. Instead of having done that, it had previously made a reasonable contract indefinite as to its time, but which, if now made, would by intendment of law, be limited to ten years. Can it be justly held that the legislature intended by the act of March 4, 1887, to annul such contract as had been made before, and which h.ut for the act would be good, not by taking away any power from the city, but by the very act of granting it power to make such contract good for ten years? We think that a condition working such results could not reasonably be imported by law as entering into and forming part of this contract from the start, and be liable, like a worm, at its maturity, to destroy it.
But it may be objected that this original ordinance did not fix rates, but only left the parties to agree upon them; and that they did agree for three years. We-hold that this original agreement requiring the rates to be fixed by agreement, has a continuing force for ten years from its adoption, and only for that period; :and- the ordinances made under it from time to time, when accepted, constitute the continuing carrying out of its terms for the periods limited in them, but do not effect its round and completed fulfilment until the ten years have expired, at which time the city will possess full power of fixing reasonable rates. It may be said that even under the provisions of this original ordinance the city should maintain this action. That the contract having provided that the rate should be established by agreement of the city and the gas company, and it being alleged' that the city has passed an ordinance which it says is perfectly reasonable, and that the gas company refuses to abide by it or recognize it, therefore a case might be made under the contract in the original ordinance itself, since an agreement with the municipality must be arrived at by the way of proposition on one side and acceptance or rejection on the other side. But the defendant denies.the reasonableness of the ordinance passed. And we think the whole petition in its scope and meaning is evidently intended to enforce the idea that the city council, having, without reference to any contract or agreement with the company, passed this ordinance, has the right to have it enforced. The petition, by its averments and prayer, is not aimed at this condition of affairs, above stated. It may be. said that'such a contract as the one that was made would leave the city at the mercy of the defendant company; that is, that it might say to any proposition or ordinance that it would not agree to it; and that therefore the consequence would be that it might itself fix the terms and rates by which it could charge for gas. But, under circumstances of that kind, the,remedy would be plain and clear; while the contract is that the rates shall be fixed by agreement of the parties, it would not be competent for one party unreasonably to refuse to enter into such an agreement, when a reasonable proposition to it, and such an one as it ought to have accepted, is made. When such a case as that is presented, undoubtedly a remedy for the city would be found in account of equity.
In view of the holdings which we have made in this case, we think that we need not necessarily determine whether the act granting municipal authorities the right to fix prices is in conflict with the constitution of the United States as interpreted by the supreme court of Ohio.
The pleadings in the' Ironton case differ materially from those in this case — - the answer being different. And while there is the general statement in that case that unless bad or improper motives are charged upon the council, and issuable facts are pleaded in that direction, the ordinance passed by the village would be conclusively deemed to be reasonable. While, I say, the Ironton case involves that proposition, we do not think that, necessarily, in the hearing of the case, we would be bound by the statement of the law in the Ironton case as to-hearing evidence. We apprehend that a distinction could well be made, and ought to be made, between this case and that.
Counsel for defendant have cited a late case from the supreme court of the United States, coming up from, and involving a case decided by the supreme court of Minnesota, which holds that the law of the state of Minnesota regarding the fixing of railroad rates by a commission is unconstitutional, as interpreted by its supreme court, and they claim that by analogy the same principles are involved in the attitude of our own supreme court as expressed in the Ironton case; and that it necessarily results from this opinion of the United States supreme court, that the statute of Ohio, thus interpreted, would be unconstitutional. I think, however, I will not take the time to go over the authorities regarding this matter or to analyze more fully the opinion of the supreme court of the United States as pronounced in that case and other cases ; but it'seems to-be recognized again and again in the courts generally, and in the supreme court, of the United States, that this power of regulation is not without limit. And the supreme court of the United States so say in so many words in the case of Shields v. Ohio, decided by the supreme court of the United States in the 95, U. S., in which it is said that where a legislature even, should attempt by any unreasonable legislation to fix prices so that they would be ruinous, a remedy could be sought in these courts, and would be obtained. The opinion in 34. U. S., cited by counsel, is in line with this, and we think, with the better reasoning of the case.
If, however, it may be considered in any way that this action ought to-proceed as one presenting a case where, in violation of this original contract, there has been a refusal and failure -on the part of the company to observe its. provisions, then the question is presented, whether or not, upon the statement of this case, upon the mere pleadings- — upon the petition, denied by answer as -it is. and the affirmative allegation of the answer, the presumptions arising as to the reasonableness of the ordinance, are of sufficient strength to warrant us in granting a preliminary injunction, mandatory in its effect. Cases are cited from the supreme court of Ohio and other cases, holding that an ordinance of a municipal corporation fixing the rates to be charged by a corporation will be presumed to be reasonable; and, as was said in the Ironton case, except under certain circumstances, charging bad faith or improper motives, or something of that kind, the adequacy of the p'rice fixed by the ordinance is not inquirable into by the court, but that the reasonableness and propriety of the rates will be conclusively presumed.
We think that whether the ordinance is thus unassailable, and whether the presumptions arising from it are not to be contradicted, depends upon how its consideration arises in the case.
If, now, as claimed by the city, the city had a right without the agreement of the defendant company, to pass this ordinance, fixing the rates, and the city had the right to enforce it simply because it did pass the ordinance, these presumptions, under the rule of the supreme court, must obtain, and we must say that the petition setting forth the ordinance, and the answer not denying it, it is shown sufficiently that there is an unreasonable rejection of a reasonable ordinance. But, holding as we do, that this ordinance must be judged with reference to the original contract made between the parties, we think a different case arises — that is, the city in such a case presents this ordinance and makes claim that it was unable to agree with the defendant company; that the company unreasonably refuses to agree to reasonable prices; and that therefore by very force of tbe situation it was driven to an action to compel an observance of that part of the defendant's contract.
. Now, when the ordinance is used for that purpose, and presented to the court, we think that the presumption of the reasonableness of its provisions are not conclusive, as they would be in the other view of the case; but that, its reasonableness being denied, it stands like the allegations of any other act of the municipality, or the act of any other such contracting party. And when it stands contradicted — denied—and with affirmative allegations in the answer alleging its reasonableness and impropriety, it calls upon the city for some proof, in the first instance, to sustain the allegations of the petition over the denials and averments of the answer.
Now, the ordinance which was passed on the 4th of August, which was sought to be enforced in this action, has various provisions. This ordinance provides for fixing the rates to be charged for one year from July 25, 1890. It provides that it shall not exceed the following, to-wit: Then follow various rates; for cooking ranges, for laundry, for heating, for mixers, and providing for different rates to be charged by the company, according to the use to which it is applied; and among its provisions is sec. 5:
"No consumer now receiving and using natural gas through a mixer or mixers shall be compelled, against his desire, to receive and use natural gas by meter measuiement; and no consumer now receiving and using natural gas by meter measure shall be compelled, against his desire, to receive and use natural gas through a mixer or mixers; and no person, company or corporation, shall be compelled, against his or its desire, to receive and use natural gas in any other manner than he or it is now receiving and using the same."
It is claimed by the defendant company that to use the mixer is a wasteful way of using gas, and an improper way of providing for the charges regulating it; that by mixer it makes no difference in the price charged, how long the fire is kept burning — whether it burns one day, or- all days and all nights, or only a short time, and it would necessarily result that if this company was compelled to furnish gas by mixer to one party, and might exact that the next one, or another party, should use a meter for measurement, that a great difference in the price actually to be paid by the two parties would result; and that by using mixers there not onlv is in fact a srreat waste of material, but that bv usinp- them the supply of natural gas, which it claims must have a limit, would be sooner exhausted, and the consequence would be that by this wasteful way of measuring gas by the use of mixers, very soon, or sooner than otherwise would happen, the people generally would be deprived of having gas at all; and further than that that the prices thus to be paid would be unequal; that the company ought at least to be allowed to provide some manner in which the prices should have reference to the amount of gas consumed by each party, and not simply to the :size of the orifice through which gas is delivered to the party.
W. H. A. Reed, city solicitor, and Brown & Geddes, for plaintiff.
Doyle, Scott & Lewis and Scribner & Hurd, for defendant
Upon the reading of that section, either with or without these suggestions, it would be manifest to any thinking person that there is an injustice in compelling the company to observe at least that section of the ordinance. And if this ordinance is to be enforced as a whole, it has at least that unreasonable and improper condition in it.
It is claimed that that' might be left out, and that the ordinance might be .enforced by holding that section bad, and enforcing the rest of it, in as much as it is a separate section. But the action here is to enforce the provisions of this .ordinance as it stands. For myself, I cannot see the justice of arranging a .schedule of prices with reference to anything else than the quantity of gas .consumed by the different parties, no matter what the gas is used for; and with that difference of the cost of delivering gas to different parties, and the difference in the cost of providing for it, and seeing about it, and regulating it, and collecting the bills, etc.
It is said that the company is estopped because it has itself agreed to an ordinance fixing rates having these differences, not founded upon the actual amount of gas delivered; but it presents a different question, whether or not the .company and the municipality might agree to an ordinance which would make these discriminations, and the passing of an ordinance by the municipality which would compel the company against its will to accede to an ordinance necessarily resulting in these inequalities. We think that in a case of this kind there should •not be a narrow, captious inquiry into the provisions of the ordinance, and that it should not be subjected to a rigid criticism, so that it should be entirely perfect in every respect. But at least the provisions of it should not shock the natural sense of propriety and justice in any of these particulars.
It follows from the statement already made that this application must be denied. We think that the city, by the allegations of the petition, has not made out a case that would justify us, or warrant us in granting the extraordinary order that is sought. The plaintiff's petition is therefore dismissed at its costs.