147 P. 969 | Cal. | 1915
The city of Hanford, a city of the sixth class, sued defendant, the Hanford Gas Power Company, to recover judgment for a specific sum with interest, this sum being two per cent of the gross annual receipts of the defendant, earned by operating its plant in the city of Hanford, under the provisions of ordinance No. 115 of that city. Defendant demurred to the complaint. The demurrer was overruled. Defendant declining to answer, judgment was given against it and it appeals. It appears that the defendant, a public service corporation, was and had been for many years occupying the streets of the city of Hanford with mains and laterals for the supplying of gas to the inhabitants of the city. It was exercising this franchise under the constitutional grant and permission of section 19, of article XI of the constitution as it read prior to the amendment of October 10, 1911. The legislature in 1901 enumerated certain franchises which a municipality might dispose of by sale, and provided for the manner of disposition. (Stats. 1901, p. 265.) Amongst these franchises was the franchise "to lay gas pipes for the purpose of carrying gas for heat and power." In 1902 an application was filed with the board of trustees of the city of Hanford for a franchise for the privilege of using the public streets and thoroughfares of the city for the purposes of laying pipes and conduits therein to supply the city and its inhabitants with gas "for heat, light, and power." Pursuing the course prescribed by the act of 1901, above cited, the city of Hanford advertised for bids and sold this franchise to the applicant Young, who, in turn, conveyed and assigned all his franchise rights to defendant corporation. The act of 1901 required that the successful bidder and his assigns must, during the life of the franchise, pay to the municipality two per cent of the gross annual receipts arising from the use and operation or possession *751
of the franchise. Such provision was contained in the grant to Young. It is this two per cent which defendant has refused to pay, and for which judgment was sought and obtained. Upon appeal appellant places reliance upon such cases as In re Johnson,
Manifestly no one of these cases is in point upon the question here under consideration. The franchise granted by the city of Hanford did not attempt to touch upon nor deal with defendant's rights to supply gas for illuminating purposes. Unquestionably while the same gas may be used through the same mains and laterals, the use of gas for heat and power is a distinct and different use from its use for illumination, and it is only the right to the latter use which is protected and, so to speak, given free under the constitution. To say, as our decisions have said, that the franchise to supply illuminating gas will not be forfeited because the purveyor permits its gas to be used for purposes not covered by the franchise, is very different from saying that with the franchise to furnish gas for lighting purposes goes the franchise right to furnish it for the other purposes. The latter this court has never said, and from nothing that it has said can any such inference be derived. If the use is different, the right to the use is different. Conceivably a corporation might be formed for the purpose of supplying a gas unfit for illumination, but eminently well suited for purposes of heat and power. Could such a company without a franchise occupy the streets for this purpose under the constitutional grant of a right to occupy the streets for the supplying of illuminating gas? If it could not, then per contra a company supplying illuminating gas has acquired no right to supply a gas for the other separate enumerated uses. The vital question then is, Did the defendant in accepting this franchise from the city of Hanford acquire anything of value? If it did, then, no element of fraud entering into the case, it is bound by its contract. We think clearly that it did. Up to the time that it acquired the right to supply *754 gas for purposes of heat and power it had the franchise right to supply gas solely for purposes of illumination, with the added guaranty under the decisions of this court that its franchise to supply illuminating gas would not be forfeited merely because it permitted its gas to be used for these other purposes. It was not told that it had the right, and it did not have the legal right, to permit its gas so to be used. If effort had been directed to that end, this use could undoubtedly have been restrained. The city of Hanford admittedly, under its charter (Municipal Corporations Act, sec. 862, subd. 13), [Stats. 1883, p. 270], had the power to grant the franchise for the use of its streets for the purveying of gas for heat and power, if the constitutional grant before referred to did not stand in the way. Clearly it did not stand in the way, and, moreover, the legislature itself had recognized that the different uses were subject to different franchise rights, and had made provision for the award by municipalities of separate franchises permitting these new uses.
The judgment appealed from is therefore affirmed.
Lorigan, J., Melvin, J., Shaw, J., Sloss, J., and Angellotti, C.J., concurred.