Case Name: State ex Rel. v. City of Hamilton
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1890-01-21
Citations: 47 Ohio St. 52
Docket Number: 
Parties: State ex Rel. v. City of Hamilton.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 47
Pages: 52–90

Head Matter:
State ex Rel. v. City of Hamilton.
Municipal Corporations — Gas Companies — Exclusive Franchise.
A gas company incorporated under the act of May 1, 1852 (1 S. & C. 271), for the purpose of supplying gas for lighting the streets, and public and private buildings of a city, under authority from the city council erected gas works, and laid pipes for long distances, for conducting gas through the streets for public and private consumption. The council regulated, from time to time, the price which such company might charge for gas, and from time to time, made contracts with the company for lighting the streets. At the expiration of the last contract, no new agreement was entered into, and the city declined to take gas any longer from the company. The company complied with all the provisions of the law of the state relating to gas companies, and with all the requirements of the city council in that behalf. Held:
1. That although there was no refusal or neglect by the company, to comply with the requirement of section 2480 of the Revised Statutes, as to laying pipes and lighting streets, and no neglect by the company to furnish gas to citizens and other consumers, in accordance with the prices fixed by the council, as provided in section 2482 of the Revised Statutes, the city council, under section 2486 of the Revised Statutes, was empowered to erect its own gas works at the expense of the corporation, or to purchase gas works already erected therein, whenever it might be deemed expedient and for the public good.
2. That the company acquired no vested rights of which it would be deprived, without due process of law, by the city’s erecting its own gas works.
(Decided January 21, 1890.)
QUO WARRANTO.
The case is stated in the opinion.
David K. Watson, Att’y Gen’l. Follett Kelly, Ramsey, Maxwell $ Ramsey, Thomas Millikin and A. F. Hume, for the plaintiff.
The issues involved in this case, arise chiefly, if not exclusively, upon the construction of the statutes and the power conferred by the laws of this state upon municipal corporations in relation to gas companies. At the time the Hamilton Gas Co. was organized and went into operation, no power was vested, by the statutes of this state, in municipal corporations to erect gas works except for the purpose of occupying such portions of the streets of the municipality as the gas co. had neglected or refused upon proper notice to occupy, and such streets in addition thereto as the gas co. had not occupied, and also in cases where the gas co. had forfeited its rights under its charter; and in the construction of the statutes as they are now found, it is important and necessary to review the history of legislation on this subject for the purpose of understanding what was intended to be provided for in each of the sections of the statutes relating to gas cos. Endlich on Int. of Stats., secs. 29, 35, 40 and 51; Bishop’s Written Laws, sec. 86; Green v. Commonwealth, 12 Allen, 155, 156; Hirn v. The State, 1 O. St. 15; State ex. rel. v. Commissioners, 20 O. St. 421; Pancost v. Ruffin, 1 O. 381; Lessee of Allen v. Parish, 3 O. 187; State v. Blake, 2 O. St. 147; Dodge v. Gridley, 10 O. 173; Roberts v. Wheeler, Wright 697; State ex rel. v. Auditor, 43 O. St. 315; City of Warren v. Davis, 43 O. St. 447; Ash v. Ash, 9 O. St. 383; Vancamp v. Board of Education, 9 O. St. 407; Conger et al. v. Barkers, adm’r, 11 O. St. 1; Commissioners v. Board of Public Works, 39 O. St. 628; Schultz v. Cambridge, 38 O. St. 659; State ex rel. v. Ry. Co., 37 O. St. 157; State v. Jackson, 36 O. St. 281.
In the light of the well settled rules of construction laid down in the foregoing cases, we ask the court to examine the several sections of the statutes relating to the organization of gas companies and the powers conferred upon municipal corporations to regulate and control such companies. There is running throughout these sections of the statutes a clear negation of the idea that council should run and operate works in opposition to the gas company, or that the gas company should have its property rights destroyed, and its property practically confiscated by the municipality itself running works in opposition, at the expense of the public, the burden being borne by the public, and the expenses being provided for by the tax-duplicate.
It is claimed that the exercise of this power is discretionary with the city council and that the court will not attempt to control this power. The complete answer to this claim is found in the decision of this court in the case of the State ex rel. v. The Cincinnati G. L. & C. Co., 8 O. St. 301.
Municipal corporations have only such powers as are specifically conferred upon them by the statutes. Dillon on Mun. Corp., sec. 89, and case cited in note 1; Ravenna v. Penn. Co., 45 O. St. 118.
If the court should disagree with us as to the construction of the statutes we insist that the construction of sec. 2486, contended for by council for the city of Hamilton, would be, as to the Hamilton Gas Light & Coke Co., a law impairing the obligation of contracts, and unconstitutional. Constitution of United States, art. 1, sec. 10; Constitution of Ohio, art. 2, sec. 28;, Dartmouth College Case, 4 Wheaton, 518; New Orleans Gas Co. v. Louisiana Light Co., 115 U. S. 650; The Binghamton Bridge, 3 Wall. 51; Greenwood v. Freight Co., 105 U. S. 13; New Jersey v. Yard, 95 U. S. 104; Water Works Co. v. Rivers, 115 U. S. 674; Gas Co. v. Gas Co., Id. 683: Waterman on Corp., 503; Seibert v. Lewis, 122 U. S. 284; Water Works v. Atlantic City, 39 N. J. Eq. 367; 10 Am. & Eng. Corp, Cases, 59; Gas Light Co. v. Gas Light Co., 25 Conn. 19; State v. Gas Light Co., 2 La. 520; State ex rel. v. Commissioners, 5 O. St. 497: Ireland v. Turnpike Co., 19 O. St. 369; Goodale v. Fennell et al., 27 O. St. 426; G. L. & C. Co. v. G. L. & C. Co., 16 Am. & Eng. Corp. Cases 527; Williams v. Gas Co., 52 Mich. 499; Hesterville R. R. v. Philadelphia, 89 Pa. St. 210.
This compare has a vested right in its charter and in its property of which it cannot be deprived without due process of law. 14 Amendment Constitution U. S. sec. 1; Con. O., Art. 1, sec. 19; Pumpelly v. Green Bay Co., 13 Wall. 166; N. H. & D. Ry. Co. v. Chapman, 38 Conn. 56; Cooley on Con. Lim. 721; Shields v. Ohio, 95 U. S. 324; Commonwealth v. Essex Co., 13 Gray 253; Waterman on Corp. 70; Louisville v. University, 15 B. Mon. 642; Allen v. McKean, 1 Sumner 276; Mor. on Corp. sec. 1087-1044.
A tax levied by the council of Hamilton for the purpose of the erection of gas works in said city, is not a tax levied for the public purpose, and is, therefore, illegal and unauthorized. Loan Asso’n v. Topeka, 20 Wall. 655; Mor. on Corp. sec. 1085; Parkersburg v. Brown, 106 U. S. 487; Allen v. Inhabitants, of J., 60 Me. 124; Lowell v. Boston, 111 Mass. 454; Jenkins v. Andover, 103 Mass. 94.
J. F. Keilan, also for plaintiff.
The question for investigation and decision is: What is the true legal relation of the state and company toward each other, resulting from the incorporation by the state of this company, and its acceptance and faithful performance of all the duties imposed by the laws of its creation and all other laws passed for its regulation and control ?
In deciding this question the city cuts no figure whatever. It is a mere cipher. It possesses no power or authority except such as is clearly conferred by the state. It is but the agent of the state by whose authority it lives, acts and has its being; and the only discretion with which it is vested in this gas business was the right to grant or withhold its consent to the use of the streets, alleys and public grounds. Having once exercised this discretion by permitting the company to use its streets for the laying therein of pipes to convey gas, its power is at an end;, and it cannot, after the grant is accepted and acted upon, withdraw this consent or in any manner impair its value. The city consented to the use of its streets, lanes, alleys and public grounds in which the company could lay its gas-pipes; the state vested the company with certain powers and imposed upon it certain duties. All powers to be exercised by the city afterwards are clearly duties from which the city cannot free itself and which it cannot surrender nor barg'ain away. State v. Gas Co., 18 O. St. 262; State v. Gas Co., 37 O. St. 47; Gas Co. v. Avondale, 48 O. St. 257.
Both the city and the company are agencies created by the state for certain specific public purposes. Neither can abandon or change the duties imposed without incurring certain penalties. The penalties imposed upon the company are set out in sections 2480 and 2482 Revised Statutes, which in this case have never been incurred.
The controversy then is between the company and the state; for the act of the city is the act of the state. If the city is authorized to build and operate gas works, issue bonds and levy taxes therefor, it got this authority from.the state. If the state could not constitutionally confer this power upon this city; or, if the state has in fact never conferred nor intended to confer, this power, all the acts of the city in furtherance of such object are absolutely void.
In 1852 the building and operation of gas works and'all business connected therewith were but little understood. There was great risk and uncertainty connected with the business. Add to this that the municipal corporations in Ohio were poor; had no credit; could not pay their ordinary running expenses, and jmar after year kept increasing their debts. The lighting of cities is, and was then, a great public necessity. The state was unable or unwilling to undertake to supply this public want. It therefore appealed to its private citizens to aid by investing their money to supply this public want; making certain propositions to them and conferring upon them certain powers which they were to exercise. When the private citizens accepted the state’s proposition, became incorporated and organized as the law provided, invested their money, entered upon the discharge of their duties, and always faithfully performed those duties, they are entitled to all the rights, franchises and privileges conferred by the act of incorporation, and the state cannot impair, much less destroy, those rights, franchises and privileges, no more than it can legally take any other private property for a public purpose, without due process of law and without making fall compensation therefor. In other words the proposition by the state and acceptance thereof and performance by the private parties according to the terms of the law, which is the proposition of the state, the law being the only way in which it could make a proposition, constitute a contract between the state and the corporations which the state cannot impair, much less abandon and destroy, without violating the Constitution of the United States and of the State of Ohio.
If any other person but the state made such a proposition and it was accepted and its terms performed, no one would for a moment doubt that such proposition and acceptance constitute a contract.
The state is but an aggregation of individuals, and any contract they enter into in their united capacity as a state, is binding upon them. All the elements of a valid contract are present here; parties having the legal capacity, a subject matter and consideration.
If there were no constitutional protection; if there were no decisions of courts affirming this view; if it were a case of first impressions and without precedent, this court would have no hesitation, on equitable grounds, in restraining the state, which, by its agent the city, is violating the compact between itself and this company, and would prevent the destruction of the company’s property resulting from the city’s acts. For, that the property of the company will be ultimately destroyed, if the city construct and operate gas works, is too plain to need proof.
The company cannot possibly compete with the tax duplicate of the city, "all of which is subject to taxation, including the company’s property, to pay the expenses of operating the city works, no matter whether this operation results in loss or profit. To talk of competition between the city and the company, under the circumstances, is nonsense.
The charter of incorporation of the Hamilton Gas Light and Coke Company, granted by the state in 1855, is a contract between the state and the corporation; and any impairment by the state of that charter, or the contract resulting therefrom is unconstitutional and void. Fletcher v. Peck, 6 Cranch, 133; Dartmouth College v. Woodward, 4 Wheaton, 518; Green v. Biddle, 8 Wheat. 1; Providence Bank v. Billings, 4 Pet. 514; Planters Bank v. Sharp, 6 How. 301; Trustees v. Indiana, 14 How. 268; Piqua Bank v. Knoop, 16 How. 369; Bridge Proprietors v. Hoboken, 1 Wall. 116; Hawthorn v. Calef, 2 Wall. 10; The Binghamton Bridge, 3 Wall. 51; Miller v. State, 15 Wall. 478; Delaware Railroad Tax Case, 18 Wall. 206; Greenwood v. Freight Co., 105 U. S. 13; New Orleans Gas Co. v. Louisiana Light & Heat Co., 115 U. S. 650; New Orleans Water Works v. Rivers, 115 U. S. 674; Lincoln Bank v. Richardson, 1 Me. 79; Yarmouth v. North Yarmouth, 34 Me. 411; Coffin v. Rich, 45 Me. 507; State v. Noyes, 47 Me. 189, 205; Backus v. Lebanon, 11 N. H. 19; Grammar School v. Burt, 11 Vt. 632; Welsh v. Stetson, 2 Mass. 146; King v. Bank, 15 Mass. 447; Nicholas v. Bertram, 3 Pick. 342; Central Bridge v. Lowell, 15 Gray, 106; Brighton v. Wilkinson, 2 Allen, 27; Washington Bridge Co. v. State, 18 Conn. 53; Lothrop v. Steadman, 42 Conn. 583; People v. Manhattan Co., 9 Wend. 351; Brown v. Hummel, 6 Pa. St. 86; Commonwealth v. Cullen, 13 Pa. St. 133; Iron City Bank v. Pittsburgh, 37 Pa. St. 340: Zabriskie v. Railroad, 18 N. J. Eq. 178; Lehigh Valley R. R. v. McFarlan, 31 N. J. Eq. 706; Bailey v. Railroad Co., 4 Gill & J. 1; Norris v. Trustee, 7 Gill & J. 7; Regents v. Williams, 9 Gill & J. 365; Bank of Dominion v. McVeigh, 20 Gratt. 457; Mills v. Williams, 11 Ired. 558; Bank of State v. Bank of Cape Fear, 13 Ired. 75; Attorney General v. Bank of Charlotte, 4 Jones Eq. 287; State v. Hayward, 3 Rich. 380; Young v. Harrison, 6 Ga. 130; State v. Tombigbee Bank, 2 Stew. (Ala.) 30; New Orleans, etc., R. R. v. Harris, 27 Miss. 517; Marysville Turnpike Co. v. Howard, 14 B. Mon. 426; Louisville v. University, 15 B. Mon. 642; Edwards v. Jagars, 19 Ind. 407; Bruce v. Schuyler, 4 Gilm. 221; Bruffett v. Railroad, 25 Ill. 353; Miners Bank v. U. S., 1 Greene, (Iowa,) 553; Gorman v. Railroad, 26 Mo. 441; Michigan State Bank v. Hastings, 1 Dougl. 225; People v. Jackson Plank Road, 9 Mich. 285; Flint Plank Road Co. v. Woodhull, 25 Mich. 99; McRoberts v. Washburn, 10 Min. 23; Stone v. Mississippi, 101 U. S. 814; Sinking Fund Case, 9 Otto (U. S.), 700; Shields v. Ohio, 5 Otto, 325; Jefferson Branch Bank v. Shelley, 1 Black, 346; Mechanics and Traders Bank v. Debolt, 16 How. 369; Neil v. Ohio, 3 How. 720.
The city now possesses the power of fixing the price for the gas furnished, and it is the duty of the company to furnish its gas at that price, under forfeiture of its charter. It possesses the power of compelling the company to extend its mains and furnish gas to light any street or streets within the city limits under certain penalties. It can fix the standard quality of the gas. It can appoint a gas inspector to inspect the gas, certify to bills of private consumers, make tests of the gas and perform such other duties as may be prescribed by ordinance. No matter how cheap the city could furnish gas, if it were operating works, it can compel the company to furnish it just as cheap or else the company forfeits its charter. The right is reserved to council to enforce an exact compliance with such specifications and under such rules as it may prescribe. And finally it is prohibited from making any agreement that would deprive it of the right to purchase the works and all appurtenances belonging thereto at any time. It follows, therefore, from the foregoing enumeration of the powers vested in council and the duties imposed upon the city, that when it passed an ordinance declaring it necessary for the public good to erect gas works, issue bonds and levy taxes to pay the same, its declaration in that regard was a fraud, not only upon the company which had always supplied the public and private want and was fully competent and willing to do so in the future; but it was also a fraud upon the citizens and tax payers of said city. There being no public want to supply, and taxation being authorized' only for public purposes, the discretion vested in council by section 2486 was abused by it, and its mere declaration that the public good would be subserved, is not sustained by the facts and the law of the case. Discretion to be legally and validly exercised must be honestly and fairly exercised. State v. Gas Co., 18 O. St. 262.
The reservation of power by the state to alter or repeal the laws creating corporations, does not affect the contractual relations between the parties; and no alteration or repeal which takes away any of the franchises granted, or property actually acquired by operation of the grant, is legal. State ex rel. Gas Co., 34 O. St. 572; Hyatt v. McMahon, 25 Bar. 457; Mor. on Corp., sec. 1095; Shields v. Ohio, 5 Otto (U. S.), 325.
So long as the city uses gas, and the company complies with all requirements of law, it possesses the right to furnish the gas required; and any attempt to take away this right, or impair it, violates the constitutional protection thrown around it. If the state wants the property of the corporation, if the state’s ownership (by its agent, the city, or otherwise) is necessary for the public good, it must pay for it. If it cannot agree with the corporation on the price, it can exercise the power of eminent domain. A franchise is property; and the franchise may be taken under the power of eminent domain when adequate compensation is provided and the obligation of the contract is not impaired but recognized. West River Bridge v. Dix, 6 How. 507; Richmond etc. R. R. v. Louisa R. R., 13 How. 71; New Orleans Gas Light Co. v. Louisiana Light and Heat Co., 115 U. S. 650; Enfield Toll Bridge Co. v. Railroad, 17 Conn. 40; Backus v. Lebanon, 11 N. H. 19; Piscataqua Bridge v. N. H., 7 N. H. 35; Central Bridge Co. v. Lowell, 4 Gray 474; Boston Water Power Co. v. Railroad, 23 Pick. 360; In re Citizens Pass. R. R., 2 Pittsburgh, 10; In re Towanda Bridge, 91 Pa. St. 216; In re Twenty-Second Street, 102 Pa. St. 108; Benson v. New York, 10 Bar. 223; Shorter v. Smith, 9 Ga. 517; Cooley Constitutional Limitations, 281; 3 Parsons on Contracts, 537; Mor. on Corp., sec. 1086 ; 2 Washburn Real Property (4th ed.), 295.
E. E. Hull, City Solicitor, James B. Neal and Israel Williams, for the defendant.
It will be observed that the gas company was organized under the general incorporation laws of Ohio, and no special grant of power was there given, only “ for the purpose of supplying gas for lighting the streets and public and private buildings.” The act also provides, that said company “ shall be subject to all the restrictions hereafter provided; ” the court will notice the phraseology. It is not “ hereinafter ” but “ hereafter; ” the reference being to time, not to the statutes.
In 1855, as now, the legislature had no authority to grant “ any special privileges or immunities that might not be altered, revoked or repealed.” Constitution Ohio, Art. 1, sec. 2 ; Id. Art. 13, secs. 1 and 2.
It must be borne in mind in examining the statutes, that charters of incorporation are to be construed strictly against the corporators. Cooley Con. Lim., 488, and notes; Id., 251; G. L. & C. Co. v. Middletown, 59 N. Y. 228; Dillon Mun. Corp., sec. 97; Greene’s. Brice’s Ultra Vires, 285, 63 note.
Corporations are not relieved from the operation of general laws nor are they exempt from future legislation. Mor. on Corp., secs. 1061-62. Nor can a contract on the part of the state not to exercise its power of legislation ever be implied. Mor. on Corp., 1075 a; Stone v. Farmers Loan & Trust Co., 106 U. S. 307.
The revised law relating to municipal corporations, shows a manifest legislative intent that plainly requires a change of intended meaning, application and construction. Where the language is plain and explicit, it cannot be controlled by the rule in pari materia. Endlich, sec. 53; State ex rel. v. Auditor, 48 O. St. 315; City of Warren v. Davis, 43 O. St. 447; Ash v. Ash, 9 O. St. 387; G. L. & C. Co. v. Avondale, 43 O. St. 267.
If any ambiguity exists in the revision, the court will not refer to, or consider the language of the original statutes in determining the meaning of the revised statutes. 138 Mass. 99; 11 Western Rep. 259; Endlich, sec. 368.
In considering section 2486, the court will observe that the alternative is given, either to erect gas-works or purchase any already erected. If this section controls, then it conclusively settles the proposition that the city may own gas works; that it may obtain them either by construction or by purchase — by construction pr purchase whenever it is deemed best for the public good; this the city has declared by ordinance. The construction contended for by the defendant gives effect to every word, clause and provision of the enactment, while the construction contended for by the relator, renders meaningless the plain language of section 2486. It means what it says. The city may build or buy. G. L. & C. Co. v. City of Hamilton, 37. Fed. Rep. 832. As showing the intent and purpose of the legislature we call the attention of the court to the amendments passed last winter, making perfect and complete the authority for the building of gas works by the municipality. 86 O. L. 108.
The power to levy a tax for the purpose of erecting, enlarging, or improving gas works and for lighting the corporation is expressly conferred by section 2683, paragraph 18, Revised Statutes. Gas Co. v. Findlay, 2 C. C. Rep. 245. A general power to provide for lighting the streets etc. is granted by section 2492 Revised Statutes.
Section 3551 Revised Statutes provides, that where a company already exists in a city, another such company shall not go into operation unless authorized by a vote of the citizens and by ordinance. If the second company goes into operation, the cpuncil has full power to contract with it. The city, if it desired to purchase gas works, would certainly not be compelled to purchase both; in fact, we think, would be limited to tbe purchase of one. The operation of the second company, as against the first, would be clearly competition and not confiscation. Now if the city sees fit to purchase one, then it becomes the owner of its own gas works irrespective of any questions arising in regard to the other. If it has the power to authorize a second company, and then to purchase the works of that company, it clearly has the authority to build works of its own.
In addition to the statutes hereinbefore set out, we call the attention of the court to sections 8835, 3836, 3837 of the Revised Statutes; and we claim that the city is authorized to construct and operate gas works under the provisions of said sections. Hensley v. City, 3 C. C. Rep. 201.
Corporations are subject to the law-making power of the statq the same as individuals. The contract on the part of the state not to exercise, its power of legislation can never be implied, and the reservation of the right to repeal, alter or amend, negatives any intention to confer irrevocable rights. The franchise is to be regarded as some legal power, not as a right secured by contract with the state. Cooley, Con. Lim., 251; G. L. & C. Co. v. Middletown, 59 N. Y. 58; Dillon’s Mun. Corp., sec. 97; 2 Mor., secs. 1061, 1062, 1063, 1064, 1069, 1072, 1075, 1093, and 1097; Stone v. Loan Co., 116 U. S. 307; Shields v. State, 26 O. St. 86; Shields v. Ohio, 95 U. S. 319; Saginaw Bank v. Saginaw, 28 Fed. Rep. 529; 39 Fed. Rep. 651; Gas Co. v. Avondale, 43 O. St. 257; State v. Gas Co., 37 O. St. 45; Norwich Co. v. Norwich City, 25 Conn. 19; State v. Gas Co., 3 C. C. Rep. 251; R. R. Co. v. Gas Co., 63 N. Y. 326.
The intent of the state to make a permanent grant must be clearly expressed. There must be a sufficient consideration. The right granted must be clearly granted. Every reasonable doubt as to the meaning of the language must be resolved in favor of the state. Mutual assent is the essence. 11 Pet. 420; 22 Wall. 527; 4 Pet. 514; 2 Black. 510; 24 How. 300; 100 U. S. 548; 97 U. S. 659; 4 Pet. 152-168; 109 U. S. 285.
The state law may be retrospective and impair vested rights, yet, if it do not impair the obligation of a contract, it is valid and constitutional. It is a general rule that no one has a vested right to be protected against consequential injuries arising from the proper exercise of rights by others. Satterlee v. Matthewson, 2 Pet. 378; Bridge v. Bridge, 11 Pet. 420-529; Baltimore R. R. v. Nesbit, 10 O. 395; Cooley Con. Lim. 475; 11 Pet. 420; 3 Wall. 210; 2 Mor. 1103; 14 Otto (U. S.) 788.

Opinion:
Dickman, J.
The facts necessary and sufficient for the determination of the material issue in this action, are disclosed by the petition, answer, and demurrer to the answer, and are as follows : The Hamilton Gas-light and Coke Company was organized and duly incorporated in the year 1855, under the general incorporation act of May 1, 1852, for the purpose of supplying gas for the lighting of the streets, and public and private buildings in the city of Hamilton, Ohio. At the time of its organization, by virtue of the provisions of an ordinance of the city of Hamilton passed in the year 1855, there was granted to the company, and it thereafter had, the use of the streets of the city for the purpose of laying gas-pipes and mains, and supplying gas to the city and its inhabitants, for the period of twenty years, to wit, until the year 1875. Since the year 1875, the city has used the gas of the company only in accordance with the terms of various contracts entered into between the city and the company, from time to time, the last of which contracts expired January 1, 1889. And, since the last named date, there has been no contract existing between the parties; the city has declined to use the company's gas, and has provided other means for lighting its streets. For the purpose of manufacturing gas, the company erected gas works, and laid gas-pipes and mains, to the probable extent of thirty miles, throughout the city, for the furnishing of gas for public and private consumption. It is conceded by the defendant that the company has complied with all the provisions of the law of Ohio relating to gas companies, and with all the ordinances in that behalf of the city of Hamilton, and is entitled to all the rights, privi leges and immunities secured to such companies by the laws of the state.
The city of Hamilton is a municipal corporation organized under the laws of the state of Ohio, and had, at the last federal census, a population of 12,122, and a corporate area of about three square miles. On the 4th day of September, 1888, the city, by its council, on the petition of a large number of its inhabitants, duly passed an ordinance providing for the submission to the qualified voters the question of issuing the city's bonds to the amount of $150,000, for the purpose of gas works to be erected by the city. Legal notice having been given, the question was voted upon by the electors at the general election held on the 6th dajr of November, 1888, and resulted in 2,412 votes being cast for the issue of bonds, and fifty-nine votes against such issue. Upon that decision of the electors, the city council, on the 20th day of November, 1888, adopted a resolution that, it was deemed expedient and for the public good, to erect gas works at the expense of the corporation. .On the 18th day of December, 1888, an ordinance was passed by the council, providing for the issue of bonds, for the purpose of erecting such works by the city, to the extent of $150,000. The entire issue was sold for more than the par value thereof, and the proceeds of the sale were turned over to the city treasurer, for the erection and completion of the proposed works. On the 7th day of May, 1889, trustees of the gas works were appointed by the city council, who duly qualified, organized their board, and proceeded to the erecting of the works in accordance with the decision of the citizens and tax-payers of the city of Hamilton. The board of trustees so appointed purchased land for the erection thereon of the proposed gas works, agreed upon plans and details for the construction of such works, entered into contracts for the furnishing of material and the performance of labor, paid large sums of money upon contracts for material furnished and labor performed, and in the execution of contracts, gas-pipes were extensively laid in the streets of the city. The defendant alleges, that the gas works are being built by the city for the purpose of furnishing the public lighting to the city, and that no action has been taken toward furnishing gas for private consumption; but, the defendant cannot say, what action, if any, the city will in the future take toward furnishing gas for private consumption.
The only material question in this case is, whether upon the facts as above stated, the city of Hamilton has corporate power to erect its own gas works, for the purpose of furnishing the public lighting to the city.
The laws relating to gas companies when organized, and in force at the time the Hamilton Gas-light Company was incorporated, are substantially embraced in the Revised Statutes, between sections 2478 and 2491 inclusive. The material questions to be determined in this case arise under sections 2480, 2482, 2485, and 2486, the last two sections having been passed since the incorporation of the company.
Section 2480 provides that, if gas companies when required by the council to lay pipes and light streets, alleys, public grounds or buildings, refuse or neglect for six months after being notified by the authority of the council, to comply with such requirement, the council may laj' pipes and erect gas works, for lighting such streets, alleys, or public grounds, and all other streets, alleys, and public grounds not already lighted; and such companies shall thereafter be precluded from using or occupying any of the streets, alleys, public grounds or buildings, not already furnished with gas-pipes of such companies.
Section 2482 provides that, a neglect to furnish gas to the citizens, and other consumers of gas, or to 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 of which it was 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 corporation and its citizens.
Section 2485 makes it unlawful for any council to agree by ordinance, contract, or otherwise, with any person or persons, for the construction or extension of gas works for man ufacturing or supplying the corporation or its inhabitants with gas, which shall give or continue to any person or per-: sons making such agreements with the council the exclusive privilege of using the streets, lanes, commons, or alleys, for the purpose of conveying gas to the -corporation, or the citizens thereof; . nor is the council permitted to make any such agreement which shall not secure to the council the right to purchase such works, and all the appurtenances belonging thereto, at any time within the existence of such contract or agreement.
Section 2486 enacts that, ".The council of any city or village shall 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."
This provision for the erection of gas works by the city, was first embodied in section 423 of the municipal code, passed May 6, 1869, which, while a codification, enlarged the powers of municipalities as to gas works and lighting corporations, and the same enlarged powers are continued under the revised statutes, without material change. Among the general powers granted to cities, they may light streets, allej's, public grounds and buildings, within the corporation, and provide for laying down gas-pipes; they may appropriate, enter upon, and hold real estate within the corporate limits, for gas works, and " lighting any public uSe ; " and may levy taxes for the special purpose of erecting, enlarging, and improving gas works, and for lighting the corporation.
It is urged in behalf of the Hamilton Gas-light Company, that the legislature has declared in sections 2480 and 2482, certain conditions under which the council may build gas works, and that in the absence of those conditions, the city has not such power while there are gas works,.in the municipality that have complied with all the provisions of the law, and met all the demands made upon them. Such an expression of the legislature will, it is said, exclude the right of a city to erect gas works under any other circumstances. Those two sections designate what refusal or neglect on the part of gas companies to meet the requirements of the law, would work a forfeiture of their rights under their charter, and authorize the council to lay pipes, and erect gas works, and exclude a gas company already in operation, from occupying any streets not already furnished with gas pipes of such companies; but such authority is very different from the general power conferred upon the council by section 2486, to construct gas works without reference to the manner in which an existing company may use its franchise.
Section 2486, in plain language, gives the power to the council, either to erect gas works, or to purchase such works already erected. The authority granted is not coupled with any condition or contingency, but is to be exercised when the council may deem it expedient and for the public good. The language is free from ambiguity. The discretionary power would hardly seem consistent with the limitation sought to be imposed, that the council can build gas works only where there are no gas works in the municipality; or where gas companies already organized, refuse or neglect to comply with the requirements of the law as to lighting or laying pipes, or neglect to furnish gas to citizens. The interest of the city may demand that a gas company established and doing business, although complying with all statutes and ordinances, should not continue to enjoy exclusive possession of the field of operation. And it may be deemed expedient, and for the public good, to discourage the growth of a monopoly, by the city's erecting its own gas works, or encouraging the incorporation of a competing company. Certainly, it would not be a doubtful public policy, to place the city on an independent basis, by clothing it with the power of building its own gas works if an emergency should arise, although there might be a company within the municipality, which fully discharged all its corporate duties. Indeed, the provision in section 2485, rendering it unlawful to give or continue to any gas company the exclusive privilege of using the streets, would seem designed not merely to prevent the sole occupation of the streets by one .company as against another, but also to secure to the municipality the use of the streets, should it conclude to avail itself of the right, granted by the following section, of erecting gasworks.
It is conceded that a municipality within which a gas company has been already formed, may, by a vote of its citizens and by ordinance, authorize the operation of another gas company within its borders. Rev. Stats., section 3551. The municipality may also purchase the gas works of the newly organized company. But it is contended that if two such companies exist at the same time, in the same municipality, and occupying the same territory, the municipal authorities though purchasing could not operate the works of one in opposition to the other; that after such purchase, the law will not permit the city to use its own property for the purpose of lighting its streets for the public safety and convenience, unless it either buys out the other company, or the other company goes out of existence, or fails to discharge its statutory duty. The statdte, it is evident, is not susceptible of such an interpretation, nor has the legislature, in our judgment, hampered by such limitations and conditions, the right of a city to purchase and operate the works of one of two competing gas companies within its borders. And if it may own and use without restriction the plant of one such company, it may well be inquired, why may not the city, so far as the other company is concerned, be authorized to erect its own gas works, whenever it may be deemed expedient- and for the public good.
In its present form, section 2486 was passed many years after the two sections which are reproduced in section 2480 and section 2482. Between the earlier and later statutory provisions we discover no repugnancy, and the canons of statutory construction do not require that either should prevail over the other. The authority given to municipalities by the later section, is distinct from and independent of the power granted by the two antecedent sections. But, if such repugnancy did exist in the pre'sent case, it is one of the settled rules of construction that when, in a statute, there are several clauses which present, as compared with each other, an irreconcilable conflict, the one last in order of date or local position must prevail, whether the conflicting clauses be sections of the same act, or merely portions of the same section. This rule, it has been said, is subject to the modification, that a later clause which is obscure and incoherent will not prevail over an earlier one which is clear and explicit. Eudlich on Interpretation of Statutes, sec. 183. But, the provisions of section 2486 are plain and unequivocal, and of definite import. Where the legislature has used words of plain and definite import, it would be very dangerous to put upon them a construction which would amount to holding that a legislature did not mean what it has expressed. " The fittest course in all cases where the intention of the legislature is brought into question, is to adhere to the words of the statute, construing them according to their natural import, in the order in which they stand in the act." Dwarris on Statutes, 583; Rex v. Ramsgate, 6 B. & C. 712.
II. It is urged in behalf of the plaintiff, that the Hamilton Gas-light Company acquired, by its charter, a vested right to supply the public, as well as private consumers with gas at such reasonable prices as the council should fix, and that to authorize the citjr to construct and operate its own gas works, would be to destroy that vested right without due process of law. It may be conceded, that the company acquired the right of laying its pipes and conveying gas to the city and its citizens,• but it never acquired the exclusive franchise of opening and using the streets of the city, for the introduction of pipes and other apparatus for the purpose of thus conveying gas. By sec. 53, of the act of May 1, 1852, under which the company was organized, it was provided as follows: " Any corporation formed under this act shall have full powers, if a gas company, to manufacture and sell, and to furnish such quantities of gas as may be required in the city, town or village where located, for public and private buildings, or for other purposes; and such corporation shall. have power to lay conductors, for conducting gas through the streets, lands, alleys and squares, in such city, town or village, with the consent of the municipal authorities of said city, town or village, and under such reasonable regulations as they may prescribe." But this section does not purport to grant, either directly or by the permission of the municipal authorities, an exclusive right to any one company, to lay its conductors for conducting gas through the streets of a city, town or village. A gas company may open the streets and lay down its pipes with the consent of the city, under such reasonable regulations as the city may make; but, the right to give such consent and prescribe such regulations, does not carry with it a power to exclude every other gas company, or to bar the municipality from ever using unoccupied portions of the streets for the same purposes. In State v. Cincinnati Gas Co., 18 Ohio St. 262, 289, the principle is stated, that to enable the city council to grant, by ordinance in the nature of a contract, an exclusive right to use the streets and alleys of the city for the purpose of laying downpipes for carrying gas to be used in lighting the city for a term of twenty-five years, the power must be shown to have been expressly granted, or to be so far necessary to the proper execution of the powers which are expressly granted, as to make its existence free from doubt. Grants by the public are to be strictly construed, and an intention to grant an exclusive privilege or monopoly is not to be implied. Where exclusive privileges are not expressly given by the charter, they should not be held to be conferred. Morawetz on Private Corporations, § 1057; Charles River Bridge v. Warren Bridge, 11 Pet. 536, 549; Tuckahoe Canal Co. v. Tuckahoe Railroad Co., 11 Leigh, 42; Shorter v. Smith, 9 Ga. 517; Parkersburg Gas Co. v. Parkersburg, 30 W. Va. 435, 4 S. E. Rep. 650.
Again, by sec. 54, of the act of 1852, it is enacted: " The municipal authorities of any city, town or village, in which any gas-light company shall be organized under this act, are hereby authorized to contract with any such corporation, for the lighting the streets, lands, lanes, squares and public places in any such city, town or village." While the language of this section, properly construed, authorized the municipal authorities to contract with a gas company for lighting the streets and other public places, it is not, in the absence of express authority, to be construed as investing them, by implication, with power to grant by contract, to such company, the exclusive privilege in perpetuity of supplying gas for the public lighting.
The city of Hamilton was not, either under the act of 1852, or under any l.aw subsequently passed, bound to enter into an agreement with the gas company, for supplying with gas the streets and other public places in the corporate limits. It did, however, make contracts with the company, from time to time, for that purpose — the last of which expired by its own limitation, on the first day of January, 1889. That the city performed all its contract obligations, is not denied. And if the city^ did not see fit to further contract, it was beyond the power of the company to compel it to do so. Pursuant to its agreement, the city purchased gas from the company for over thirty years, and then determined to erect its own gas works under the authority which had then been given by the statute. In this, there was no destruction of a corporate franchise or vested right of the company. The company still retains the right to contract with the city for the public lighting, and to furnish gas for private consumption. Its pipes and mains remain undisturbed in the streets, and through them gas may be conducted, as long as the company will manufacture it. Indeed, there has been no interference by the city, with any- of the real or personal property of the company. It is conceded in argument by the gas company, that if the city were to supply for the public lighting, some newly discovered or different agency than gas, such for instance as electricity, the company would have no reason to complain; and yet, the investment of the company would be subject to no greater detriment or loss, if any, by the city's manufacturing its own gas, than by adopting electricity as a mode of public lighting.
There having been no exclusive franchise granted to the Hamilton Gas-light Company, either to open and use the streets for the introduction of gas pipes and other apparatus, or to supply gas in perpetuum, under contract, to the city of Hamilton for public consumption, and the city having com plied with the terms of all written contracts entered into with the company from time to time, there was no interference with vested rights, nor does section 2486, when construed as authorizing the city to erect its own gas works, become, as to the company, a law impairing the obligation of a contract. In Turnpike Co. v. The State, 3 Wall. 210, the state of Maryland in 1812, incorporated a company to build a turnpike road between Baltimore and Washington. By its charter, the company had power to take tolls, but, iu regard to its privileges generally, there was nothing special about it. In 1831, the same state granted a charter to a railroad company to make a railroad between the same cities, the line of which ran near to and parallel with the track of the turnpike. The turnpike company set up in defense, that the railroad had been made not only under the authority of the state, but to a considerable extent with the state's money; the state, in addition, managing it largely, and getting from it one fifth of the whole amount received for the transportation of passengers; that by incorporating a company to make a railroad, with the grant of a charter to the turnpike company in force, the state had impaired the obligation of a contract. But, it was said by Justice Nelson, in delivering the opinion of the court: " The difficulty of the argument in behalf of the turnpike company, and which lies at the foundation of the defense is, that there is no contract in the charter of the turnpike company that prohibited the legislature from authorizing the construction of the rival railroad. ' No exclusive privileges had been conferred upon it, either in express terms, or by necessary implication ; and hence whatever may have been the general injurious effects and consequences to the company, from the construction and operation of the rival road, they are not the subject of legal redress."
It is argued and claimed, in substance, that, as long as the city of Hamilton continues to light its streets, public grounds and buildings with gas, the Hamilton Gas-light Company, a corporation organized under a general law passed since the adoption of the present state constitution, will have, while it exists and complies with all statutes of Ohio and ordinances of the city relating to gas companies, the exclusive franchise or privilege, as against the city, of manufacturing and furnishing the gas required by the city for such public lighting; and that if the city is allowed, by virtue of the provisions of section 2486 to erect its own gas works, such privilege will be destroyed. The privilege claimed involves the imposition of a burden upon all tax-paying citizens in the municipality, for the purpose of giving a monopoly to a private corporation for an indefinite period.
If, for the sake of the argument, the company ever acquired such a special privilege, it is evident, that the statute empowering any city to erect its own gas works, as effectually revoked and repealed the privilege, as if that had been the declared intent of the statute. By section 2, article 1, of the constitution of 1851, "No special privileges or immunities shall ever be granted, that may not be altered, revoked, or repealed by the general assembly; " and in connection with this section is to be construed section 2, article 13, which declares that, " Corporations may be formed under general laws ; but all such laws may, from time to time, be altered ox xepealed." The general law under which the Hamilton Gas-light Company was formed, was subject to the limitations and reservations contained in these provisions of the constitution. The constitutional provisions entered into the general law, and operated as to all corporations organized under it, in the same manner as a reservation to the legislature embodied in a special charter. Such reservation in a special charter or under a general law, negatives an intention on the part of the legislature to confer irrevocable rights upon the corporators.
In Shields v. The State, 26 Ohio St. 86, a consolidated company was formed by the union of several original and independent railroad companies, in pursuance of the act of April 10,1856 (4 Curwen, 2791). Among the companies forming the consolidation, were two companies chartered and organized before the adoption of the present constitution, and whose charters were, therefore, not subject to the constitu fcional provisions above quoted. It was held that, the consolidated company was a corporation' 'formed under a general law, within the meaning of section'2, article 13, of the constitution, and as such, was subject to the limitations and reservations contained in that section, and in section 2, article 1, of that instrument; and that the general assembly had power to pass the- act of April 25, 1873 (70 Ohio L. 161), altering and regulating rates of fare chargeable by such consolidated company. The case was taken on error to the Supreme Court of the United States (see 95 U. S. 319), and the judgment of the state court was there affirmed. It was there held that the general assembly did not impair the obligation of a contract by prescribing the rates for the transportation of passengers by the new company, although qne of the original companies was, prior to the adoption of the constitution of 1851, organized under a charter which imposed no limitation as to such rates. The constitutional'provision that, " no special privileges or immunities shall ever be granted that may not be altered, revoked, or repealed by the general assembly," entered, it was said by the court, into the act under which the consolidation was made, and rendered the corporation created and the franchises conferred subject to repeal and alteration, just as if they had been expressly declared to be so by the act; and the act of April 25, 1873, in the particular in question, was held to be a legitimate exercise of the reserved power of alteration, and was therefore valid.
The force of the doctrine1 announced in the ease of The Dartmouth College v. Woodward, 4 Wheat. 518, that the creation of a private corporation by charter is such a grant as includes an obligation of the nature of a contrac't which no state legislature can pass laws to impair, has been, in a large measure, obviated by the practice of reserving to the state the right to alter, revoke or repeal charters, general incorporation laws, and special privileges and immunities. Whether such special privileges and immunities be designated property or a capacity to acquire and hold property, a wise public policy suggests, that they should not be irrevocably placed beyond the sovereign control of the state. The corporeal property of the Hamilton Gas-light Company, real and personal, has remained unimpaired, "but the exclusive franchise claimed by the company, as against the city, would, if it had ever been acquired, be subject to the power vested by the constitution in the general assembly.
Demurrer to the answer overruled, and petition dismissed.