Case Name: Philadelphia Electric Co. v. Philadelphia, Appellant
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1930-06-21
Citations: 301 Pa. 291
Docket Number: Appeal, No. 278
Parties: Philadelphia Electric Co. v. Philadelphia, Appellant.
Judges: Before Moschzisker, C. J., Frazer, Walling, Simpson, Kephart, Sadler and Schaffer, JJ.
Reporter: Pennsylvania State Reports
Volume: 301
Pages: 291–315

Head Matter:
Philadelphia Electric Co. v. Philadelphia, Appellant.
Argued April 21, 1930.
Before Moschzisker, C. J., Frazer, Walling, Simpson, Kephart, Sadler and Schaffer, JJ.
Augustus Trash Ashton, City Solicitor, and Ernest Lowengrund, Assistant City Solicitor, with them John B. Gest and G. Coe Farrier, Assistant City Solicitors, for appellant.
Appellee is bound by its agreement to abide by the regulations of the board of highway supervisors which require it to relocate its facilities at its own expense whenever such relocation is made necessary by the laying of water or gas pipes, sewers or any other municipal work.
The regulation here in question was not unreasonable, was a condition precedent, and was within the authority of the city to require: Phila. v. Ry., 143 Pa. 444; Keystone Tel. Co. v. Ry., 56 Pa. Superior Ct. 384.
The Philadelphia Electric Company had no right to lay conduits in the streets without the consent of the city: School Dist. of Freeport Boro. v. Gas Co., 18 Pa. Superior Ct. 73, 78; Phila. Co. v. Boro., 167 Pa. 279, 286; Mechanicsburg Boro. v. Gray, 61 Pa. Superior Ct. 95, 102.
As a logical result of this, the city could annex such conditions as it saw fit to the granting of its consent and otherwise the requirement of consent would be an unnecessary formality: United Lighting Co. v. Pub. Ser. Com., 84 Pa. Superior Ct. 24, 30; Allegheny City v. Gas & Pipeage Co., 172 Pa. 632, 635; Sandy Lake Boro, v. Gas Co., 16 Pa. Superior Ct. 234, 241; Cochranton Boro. v. Telephone Co., 41 Pa. Superior Ct. 146, 153; West Chester v. Cable Co., 227 Pa. 384; Valley Ry. v. Boro., 265 Pa. 222; Swarthmore v. Traction Co., 280 Pa. 79.
The Philadelphia Electric Company, appellee, is bound by its agreement irrespective of whether it is reasonable or not, and cannot raise this question at this late date.
The authority of the board of highway supervisors to require the condition agreed to by the Philadelphia Electric Company in the present case is sustained by the ordinances of 1884, 1886 and 1902.
Appellee is estopped from raising any question of ultra vires by acceptance of benefits and by its failure to raise question of authority in limine: Wrightsville Hardware Co. v. McElroy, 254 Pa. 422; Wright v. Pipe Line Co., 101 Pa. 204; Sandy Lake Boro. v. Gas Co., 16 Pa. Superior Ct. 234.
Francis B. Bracken, with him W. James MacIntosh, for appellee.
The city possessed no inherent right through any municipal control of the streets, to interfere with the maintenance and use of its wires and conduits by the electric, company, appellee, in connection with the building of a subway railway: Com. v. Transit Co., 287 Pa. 70; Electric Light Co. v. Light Co., 200 Pa. 209; Los Angeles v. Gas Co., 251 U. S. 32; Edison Electric Co. v. Electric Co., 235 Pa. 492.
June 21, 1930:
No ordinance or regulations of any municipal body made pursuant to ordinances falling within the scope of the consent ordinance of December 26, 1902, can be invoked as justifying the interference with appellee’s wires and conduits in connection with subway construction.
There might be some question if the regulation were an attempted exercise of the city’s police power; but Avhen it is conceded to be a regulation as construed by the city to accomplish a purely business object of the city, acting in its capacity as a private corporation, at the expense of another utility company having equal rights under the law, its unreasonableness becomes too apparent for discussion: Valley Rys. v. Harrisburg, 280 Pa. 385; Johnstown Tel. Co. v. Ferndale, 47 Pa. Superior Ct. 461; Minneapolis v. Ry., 215 U. S. 417; Detroit v. Ry., 184 U. S. 368.

Opinion:
Opinion by
Mr. Justice Frazer,
In the course of extensive excavations, commenced in 1924, attendant upon the construction of a municipal subway under Broad Street in the City of Philadelphia, it became necessary to shift and relocate underground electrical conduits, placed in that street and owned by plaintiff company. Requests Avere made, in September, 1925, by the proper city authorities, to the company to make such necessary relocations, and in December the city served written notice on the company "to remove said conduits and appurtenant facilities, so as to permit the execution of the city's project." In reply, the company denied the right of the municipality to compel relocation of the conduits, "at the cost and expense of the company," and assumed "the position......that the encroachment upon its rights heretofore granted, to construct and maintain these conduits, for purposes of subway construction, without proceeding according to law, and providing compensation to this company for the loss and expense thereby occasioned, imposes a liability on the city for such loss and expense"; however to avoid interruption of its service to customers, "this company has performed the work under protest, and will hold the city responsible for the cost and expense to which it has thus been improperly and unlawfully subjected." The city having denied liability, the company sued in trespass, to determine the question whether or not plaintiff was obliged to remove and relay the conduits in question at its own expense. By agreement of the parties, the case was tried without a jury. The court filed findings of fact and conclusions of law, holding the municipality liable and entered judgment against it for the sum of $6,261.66. Exceptions to the findings were dismissed and final judgment entered for the amount of the claim, with interest. This appeal by the city is from the judgment so entered.
It is conceded that plaintiff company is a public service corporation, chartered under the laws of this Commonwealth, that it has for a number of years supplied the public in the City of Philadelphia with electric lighting, that for such purpose it has constructed and operated apparatus in and upon Broad Street, as well as other thoroughfares throughout the municipality, and through conduits and wires beneath the street's surface, and that it obtained its rights and privileges to enter upon and use the streets of the city, with its consent, as required by the Constitution of Pennsylvania and the provisions of the Act of May 8, 1889, P. L. 136, supplemental to the Act of April 29, 1874, P. L. 73. Nor is it disputed that the grant of the franchise and the conditions imposed by the municipality and its formal acceptance by the company constitute a contract.
Plaintiff company's contention, as set forth in its statement of claim, is that the municipality, "without warrant of law, arbitrarily appropriated said property of the plaintiff, and deprived plaintiff of its franchises and rights respecting the maintenance and use of said conduits and wires therein contained, in the location where they had been lawfully placed as aforesaid, and that said arbitrary appropriation was for the sole purpose of constructing transit facilities under said Broad Street."
A short presentation will be helpful here of the substance of the material ordinances, rules and regulations adopted by the city council and the departments, having supervision of the streets, granting and governing the entry upon and use of the highways by plaintiff for its designated purposes and the formal acceptance of these ordinances and rules and regulations by the company previous to such entry upon and use of the streets in the construction and operation of its electric lighting plant. At the time the charter of plaintiff company was granted in 1902, there was in existence and in full force and effect an ordinance adopted by council in 1886, providing, among other things, that "every company, corporation, etc., desiring to lay and construct a line or lines of telegraph,......electric light wires .conduits......under any of the streets of the city shall first file with the board of highway supervisors an application in writing, accompanied by a general plan and specification, showing the location of the proposed work"; and that the laying, construction and maintenance of all wires, conduits, etc., shall be under the rules and regulations of the board of highway supervisors. In 1906, four years before the company's entry and use of the streets and its first application for permission to do so, definite rules and regulations were adopted and continued in force by the board of highway supervisors, "governing applications for the laying of electrical conduits, tubes and manholes"; wherein, section 2 stipulated that, "Before any street surface shall be broken, or a permit be issued (except as hereinafter provided), the following rules and regulations, and such additional rules and regulations as the board of highway super visors may from time to time adopt, shall be binding on the applicant or applicants"; that "any modification of existing structures found to be necessary must be made by or under the direction of the bureau concerned and at the expense of the party having the permit"; and it was further provided in section 12, "If, in the laying of water or gas pipes, sewers, or any other municipal work, it shall become necessary to change the location of any of the conduits, manholes, or other structures, they shall be shifted or altered at the cost or expense of the owners, to such places as shall be directed by the board of highway supervisors."
Subsequent to the incorporation of plaintiff company, the city council adopted a "consenting ordinance," granting permission to plaintiff to enter upon and use the streets of Philadelphia and the construction and operation, among other things, of underground conduits. The ordinance also provided that "the board of highway supervisors shall locate said conduits, wires .and all such work shall be done under the direction of the electrical bureau of the department of public safety"; and it further required from the company a bond in the sum of $50,000, "conditioned that the company shall faithfully comply with the provisions of this ordinance, as well as other ordinances, regulating the construction, maintenance and extension of electrical conduits, poles, wires, and lines and license charges thereon, in the City of Philadelphia." Following the enactment of the above mentioned ordinance, the company furnished the required bond, in which was recited all provisions of the consenting ordinance of 1902, and the further obligation that "the said company shall and will fully and faithfully comply with all the provisions" of the ordinance of 1902, "as well as all other ordinances of council of said city regulating the construction, maintenance and extension of electrical conduits,......in the City of Philadelphia."
Plaintiff filed its written acceptance, obligating it "to accept and agree to be governed by the ordinances of councils, and the rules and regulations of the board of highway supervisors and such additional rules and regulations as the board shall hereafter make." Plaintiff company made written applications in 1901, 1914 and 1916 for permission to open streets and lay conduits. To one of the applications, that of 1914, and presumably to all, were annexed plaintiff's formal acceptance of the ordinances and rules and regulations mentioned above.
The right of plaintiff to enter upon Broad Street and lay its conduits beneath the surface rests, accordingly, upon contract, subject however to the police power of the city and its rights under its charter which continued its full control and supervisions over all its thoroughfares. The chief sphere of the action of the police power, being a function of government, concerns immediately a restriction on the use of property or the conduct of persons that may be detrimental to public health, morals or safety: White's App., 287 Pa. 259, 263. We need not go further than to say, in relation to the nature of this contract, that it was a contract for service; and the contractual conditions imposed by the city, which plaintiff could either accept or reject, were impositions certainly within the scope of its municipal powers. The record of the case discloses that the company had every opportunity to know, in detail, before its formal acceptance, all requirements exacted by the city and the evidence indicates its familiarity with all prerequisites imposed by the city. Consequently, when plaintiff seeks to repudiate the contractual requirement that "if, in the laying of water or gas pipes, or sewers, or any other municipal work, it shall become necessary to change the location of any conduits, manholes, or other structures, they shall be shifted and altered at the cost or expenses of the owners, and relaid at such places as shall be directed by the board of highway supervisors," it unquestionably can therein find no just grounds for repudiation. When the occasion arose and necessity required the moving and replacing of the conduits, and plaintiff, in the face of its contract with the municipality, refused to comply with the city's request, a situation was created threatening the convenience and safety of the people and one which the city could meet only by exercising its rights in behalf of the public welfare in requiring the obstructing conduits to be shifted. The city, however, was mindful of the rights of the company when it set forth the stipulation as to shifting and replacing. No such work could be performed at the expense of plaintiff except when "it shall become necessary." The city had entered upon the construction, at great expense, of a most extensive subway improvement in one of its prominent thoroughfares. In the course of construction of this municipal enterprise it was found that conduits of plaintiff, as then located, hindered and prevented the proper completion of the project, intended for public use. The shifting and relaying of the structures was k matter of pressing and immediate public concern. Hindrance and delay in the construction by reason of the location of plaintiff's property meant not only increased cost to the city, but also a serious public inconvenience and that such continued incompletion, or an improper completion, would unquestionably amount to nothing less than jeopardy to public safety. Before these imposing public necessities, private rights may not stand as a barrier; and in the present instance the conduits were subject to the regulatory control of the municipality under its police power (Springfield Con. Water Co. v. Phila.,. 285 Pa. 172,175; Pittsburgh v. Gas Co., 34 Pa. Superior Ct. 374) and by its acceptance of the provisions of the ordinances and rules and regulations governing its right to enter upon and use the streets, plaintiff was obligated to defray the cost of moving and relaying its conduits and other property in accordance with the principle set forth in many declarations of this court: Allegheny v. Millville, Etna & Sharpsburg Street Railway Co., 159 Pa. 411; Davis v. Gray, 16 Wall. 231. This court has repeatedly held that if a public service corporation accepts imposed municipal conditions in consideration of the right given to construct its works, it must perform as stipulated or suffer the penalty arising from failure to do so. The kind and range of the conditions imposed by the municipality were within the discretion of its executive and administrative officers, and it has long been an established principle of law that the court, except in cases of manifest abuse of discretion, will not substitute its judgment for that of the body to whom the parties committed the right of imposing conditions (Carlisle v. M. St. Ry. Co.'s App., 245 Pa. 561; Cameron v. Carbondale, 227 Pa. 473) ; and the conditions exacted, and which plaintiff accepted, were such as the city deemed proper: Allegheny City v. Peoples' N. Gas & Pipeage Co., 172 Pa. 632; Allegheny v. Millville, etc., Ry., supra.
The learned court below declares that the authority vested in the board of highway supervisors "does not extend to so great a matter as the shifting of a whole system of electrical apparatus." The board was a functioning part of the municipal government, invested with power and authority to perform and carry out its designated functions and duties as such. Plaintiff obligated itself to conform to the city's necessities and the board was precisely that part of the municipal government whose lawful duty it was to see that requirements were fulfilled by the electric company. It was never intended, as was said in Phila. v. Ry. Co., 143 Pa. 444, 471, to transfer the duty of determining these matters, or any of them, from municipal authorities to others.
The learned court below was in error in holding that the city ordered shifting "of a whole system of electrical apparatus." The conduits beneath Broad Street can be considered only as a part of the general system by which plaintiff supplies electrical light, heat and power, to the people of Philadelphia City and County. Plaintiff ac cordingly was not obliged to go, and did not go, to the trouble and expense of shifting its miles of conduits extending beneath many streets, other than Broad Street. The franchise, and not the particular location, is the essence of the contract, and the city under its power to regulate might compel, for instance, a railway company to remove its tracks from the center to the side, or from the side to the center of the street: Grand Trunk Western Ry. v. South Bend, 227 U. S. 544, 553. The business of the corporation must here be considered as a whole, and the cost of shifting its appliances laid in Broad Street is imposed upon only a part: Puget Sound Traction Co. v. Reynolds, 244 U. S. 574.
Plaintiff in its statement of claim avers that "the defendant, in manner aforesaid and without warrant of law, arbitrarily appropriated said property of plaintiff," and the court below, in its opinion holding the city liable, says that "since it is clear that the defendant has not compensated or expressed a willingness to make compensation to the plaintiff for the results of its interference with latter's property rights, its interference cannot be justified under the right of eminent domain, and consequently amounts to a trespass." The court below bases that conclusion upon its interpretation of the provisions of the Act of June 17, 1913, P. L. 520, by which authority was given the municipality of Philadelphia, as a city of the first class, to construct the subway in question here. An examination of that act reveals that it does not apply to and therefore does not control the present dispute. The act provides that a city of the first class may "purchase, lease, locate, construct and equip, or otherwise acquire, transit facilities, and to own......and operate the same." By the provisions of section 6 the municipality is empowered to resort to the exercise of the right of eminent domain to acquire such private property, "as shall be necessary," and the payment of compensatory damages. But the learned court below quite misconstrues the meaning and intent of the act, with reference to the present controversy, in saying: "The Act of 1913, under which the defendant is. constructing the underground railway, to make way for which its officers caused the shifting of the plaintiff's conduits, provides for the assessment of damages for property taken thereunder, and thus indicated that the taking of such property is not by virtue of the police power." In the case before us there was no taking or appropriating of property. The conduits were not removed from Broad Street by the city, nor destroyed or demolished. In their original position they rested upon property of the municipality, in which the company had no proprietary rights or interests whatever. They were merely shifted to another and near-by location in the same street and remained upon the city's property. It is true, the Act of 1913 makes specific provisions with reference to the removal and relocation of underground conduits, of the character here in question. The provisions apply to a situation entirely different from that which exists here. Section 6 of the act sets forth in terms the exact purposes for which the city shall exercise its right of eminent domain. It may take and appropriate, under that right, lands for the construction and operation of transit facilities, such as may be necessary for the relocation of existing railway tracks and for the removal and relocation of "any pipes, sewers, underground conduits, when such things interfere with the construction and operation of the facilities of transit"; and "including also, such lands and rights and interests therein, as shall be necessary for the purpose of disposing of earth, stone, or other material excavated in the construction of such transit facilities." That is to say, when private property for the designated various purposes is required it may be taken by right of eminent domain. But what land, other than already owned by the municipality, was needed here for the relocation of plaintiff's conduits? Upon what other property were they to be shifted and relaid? Certainly not upon any additional land purchased, or acquired in any manner, or to be so purchased or acquired, by the city. The appliances in their original position rested upon municipal property; when shifted and relaid they still remained on city property. Subject to the paramount authority of the Commonwealth, the regulation and control of the streets, which are the great highways of the city, belong to the city government (Southwark R. R. Co. v. City of Phila., 47 Pa. 314, 321; Springfield Con. Water Co. v. Phila., supra) ; and a regulation enacted for the public safety under the police power is not a taking without just compensation of private property or of private property affected with a public interest: Chicago, Burlington, etc., R. R. v. Chicago, 166 U. S. 226, 255. The precise question here involved was met in the case of New Orleans Gas Light Co. v. Drainage Commission of New Orleans, 197 U. S. 453. The gas company was given the exclusive privilege to supply gas to the city and laid underground pipes and conduits in the streets. Later the municipality adopted a general system of drainage, and in the construction of the scheme found it necessary to remove and change the location of the gas conduits and pipes. The company claimed an arbitrary taking by the city, without just compensation. The court in denying the claim of the corporation, so clearly sets forth the legal principles which governed there, and equally control here, that we may quote and adopt them as stated: "There is nothing in the grant of the privilege which gave the company the right to any particular location in the streets; it had the right to use the streets, or such of them as it might require, in the prosecution of its business...... Except that the privilege was conferred to use the streets in laying the pipes in some places thereunder, there was nothing in the terms of the grant to indicate the intention of the State to give up its control of the public streets, certainly not so far as such power might be required by proper regulations to con trol their use for legitimate purposes connected with the public health and safety...... The gas company by its grant from the city acquired no exclusive right to the location of its pipes in the streets as chosen by it, under a general grant of authority to use the streets. The city made no contract that the gas company should not be disturbed in the locations therein." In Keystone Telephone Co. v. P. & R. Ry. Co., 56 Pa. Superior Ct. 384, the stipulation involved in the present case whereby the plaintiff here was required, and agreed, to shift and relay its conduits under Broad Street at its own expense, was considered. In that case the City of Philadelphia changed the street grade to enable the tracks of a railroad company to be elevated, which necessitated a relocation of the telephone company's underground conduits. In affirming the judgment of the court below for the city, the appellate court said: "The shifting of the conduits was decided upon by the city authorities, and these were removed and replaced under the direction and supervision of the board of highway supervisors of the city...... The resultant changes were necessary to enable the telephone company to continue its business, and these were reasonably in contemplation, by the provisions that they shall be shifted and altered at the expense of the owners, to such places as shall be directed."
In the present case plaintiff's conduits were removed and relaid at its expense in accordance with its contract with the city, a contract concluded previous to the entry upon and use of the streets by the company. There was no appropriation or destruction of its property. The shifting and relaying were upon the land of the municipality and were plainly necessary for the public welfare. It has long been an established doctrine that a city cannot be required to compensate the plaintiff for obeying lawful regulations enacted for the safety of the lives and the property of the citizens: New Orleans Public Service, Inc., v. New Orleans, 281 U. S. 682.
October 7, 1930 :
For the reasons set forth in the foregoing opinion the judgment of the court below must be reversed and judgment entered for defendant.