Case Name: Commonwealth ex rel. Attorney General, Appellant, v. Consumers' Gas Company of Scranton
Court: Supreme Court of Pennsylvania
Jurisdiction: Pennsylvania
Decision Date: 1906-02-26
Citations: 214 Pa. 72
Docket Number: Appeal, No. 5
Parties: Commonwealth ex rel. Attorney General, Appellant, v. Consumers’ Gas Company of Scranton.
Judges: Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
Reporter: Pennsylvania State Reports
Volume: 214
Pages: 72–82

Head Matter:
Commonwealth ex rel. Attorney General, Appellant, v. Consumers’ Gas Company of Scranton.
Corporations — Gas companies — Exclusive privileges — Act of April 29, 1874, sec. 34, clause 3, P. L. 73.
A gas company incorporated under the Act of April 29, 1874, sec. 34, clause 3, P. L. 73, has against all subsequent incorporated gas companies, an exclusive privilege until it has earned and distributed for five years a dividend of eight per cent on the capital stock, and this is the case although there is in existence a previously incorporated company having the right to supply gas in the same territory.
Where the charter of a gas company specifies a county within which the company may exercise its franchises; the charter is not wholly void because of the existence of a city within the county, within whose limits the company cannot exercise its franchises by reason of the. existence of a previously incorporated company with exclusive rights, as against the later company, to supply gas within the city limits.
Brown, Mestrezat and Potter, JJ., dissent.
Argued March 20, 1905.
Reargued October 18, 1905.
Appeal, No. 5, May T., 1905, by plaintiff, from judgment of C. P. Dauphin Co., Commonwealth Docket, 1901, No. 55, for defendant on case tried by the court without a jury in suit of Commonwealth ex rel. Attorney General v. Consumers’ Gas Company of Scranton.
Before Mitchell, C. J., Fell, Brown, Mestrezat, Potter, Elkin and Stewart, JJ.
Reversed.
Quo warranto against a gas company. Before Jacobs, J.
The findings of fact by the court below are quoted in the dissenting opinion of Mr. Justice Potter, infra.
The court entered judgment for defendant.
Errors assigned were in overruling various exceptions to the adjudication.
M. E. Olmsted, with him A. O. Stamm, Fred. W. Fleitz, deputy attorney general, and Hampton L. Oarson, attorney general, for appellant,
cited: Com. v. Illuminating Co., 180 Pa. 578; Consolidated Gas Co. v. Mitchell, 1 Dauph. 71; Com. v. Gray’s Mineral Fountain Co., 46 Legal Int. 118; Bly v. White Deer Mountain Water Co., 197 Pa. 80.
M. J. Martin and H. B. Gill, with them M. E. McDonald, for appellee,
cited: Emerson v. Com., 108 Pa. 111; Scranton Electric Light & Heat Co’s. App., 122 Pa. 154; Consolidated Gas Co. v. Mitchell, 1 Dauph. 71.
February 26, 1906:

Opinion:
Opinion by
Mr. Justice Fell,
The primary question in the case is whether the Hyde Park Gas Company, incorporated in 1875 under the act of 1874, has an exclusive right to supply gas for illuminating purposes in the territory covered by its charter against the Consumers' Gas Company incorporated under the same act in 1900. The 84th section of the act of 1874 expressly gives an exclusive right to the company first incorporated and forbids the incorporation of another company for the same purpose until certain dividends have been paid. It provides that " companies incorporated under the provisions of this statute for . the manufacture and sale of gas . shall . have the powers . . . . as follows: Clause 3. The right to have and enjoy the franchises and privileges of such incorporation within the- district or locality covered by its charter shall be an exclusive one, and no other company shall be incorporated for that purpose until the said corporation shall from its earnings have realized and divided among its stockholders during five years a dividend equal to eight per centum per annum upon its capital stock."
The Hyde Park Gas Company has not realized and divided any dividends among its stockholders. It was decided, however, by the learned judge of the common pleas that this company, although first incorporated under the act of 1874, has no exclusive right against the Consumers' Gas Company, because its right is not exclusive against an earlier company, the Scranton Gas and Water Company, incorporated by a special act in 1854 to furnish gas in the same territory. The ground on which the decision is based is that it was not the intention of the legislature to grant a right exclusive against a later company when the right could not be wholly exclusive because of the existence of an earlier company, and that clause 3 applies only where the company incorporated under the act of 1874 is the first company on the ground.
The act does two things : first, it provides for a grant which is in express terms exclusive; second, it protects the grant by an express prohibition of any other charter. That the grant to the first company chartered under the act cannot be exclusive as to pre-existing rights which the legislature could not take away is not a reason for holding that it is not exclusive against future companies. The limitation of the right is only to the extent required for the protection of such pre-existing rights, and while a company may not have the full letter of the grant it is entitled to what the legislature could and undoubtedly does give it. The conclusion reached by the learned judge is based on the assumption of a legislative intent that is not indicated by anything in the act, and it is in direct conflict with its clearly expressed purpose to make an exclusive grant, emphasized by the prohibition that "no other company shall be incorporated for the same purpose." If this conclusion is correct, it follows for the same reason that the legislature did not intend -to give an exclusive right under any circumstances, and clause 3 is ineffectual for any purpose, because a municipality may supply itself with gas: Lehigh Water Co's. Appeal, 102 Pa. 515, or a natural person may furnish a supply: Freeport Water Works Co. v. Prager, 129 Pa. 605. The principle that grants of exclusive privileges should be construed against the grantee applies where there is doubt or ambiguity and where there is something to construe, but here there is no room for construction. Clause 3 is as plain as words can make it. It has been considered by this court in numerous cases in the past thirty years and it has not been suggested that it does not mean just what it says. It has twice been before the legislature for amendment for the purpose of limiting the exclusive privilege. The Act of June 2, 1887, P. L. 310, took away the exclusive right to furnish gas for fuel, and the Act of June 24, 1895, P. L. 266, revoked the right acquired by the acceptance of the provisions of the act of 1874. In each case there was an express re-enactment of the exclusive grant as to companies furnishing gas for light only in the very words of the act of 1874.
Two additional reasons are stated for entering judgment for the defendant: first, that if the Hyde Park Company has an exclusive right in the city of Scranton, that right can be asserted without wholly ousting the Consumers' Gas Company from its corporate franchises, because the charter of the latter company embraces the whole of Lackawanna county, of which the city of Scranton is only a part; second, that the defendant has not exercised its franchises in the city of Scranton but only claims the right to do so, and should not at this time be ousted from the disputed territory. The effect of holding that the defendant has no valid grant in the city of Scranton is to exclude that city from the territory covered by the terms of its charter, but its charter may be valid as to the rest of Lackawanna county. It does not follow that its charter is wholly bad because it includes territory within which it cannot exercise its franchises, and it should not for this reason be deprived of its corporate existence. We do not, however, concur in the view that as to the city of Scranton the defendant has done nothing that warrants a judgment against it. By the terms of its charter its business is to be transacted in the city of Scranton. It has organized under this charter and has applied to the councils for municipal consent to occupy the streets of the city. This was the first step necessary to the exercise of the franchises claimed and it was an attempted exercise of them.
The judgment is reversed and it is directed that judgment be entered for the commonwealth as to all the territory included within the city of Scranton.