64 S.E. 189 | N.C. | 1909
The pleadings upon which judgment was rendered disclose this case: On the application of defendant D. B. Banks, the plaintiff, a municipal corporation, duly chartered by the General Assembly of North (409) Carolina, through its mayor and aldermen, on 19 June, 1905, undertook to grant to said Banks, by an ordinance duly passed, on 3 July, 1905, a franchise, extending thirty years, to construct in said town a gas plant for the purpose of furnishing gas, for light, fuel and power to the citizens of Elizabeth City. Said franchise carried the right to use the streets of said city as the said Banks deems necessary and requisite for the purpose of laying pipes and other devices incidental and necessary to the establishment, location and operation of said plant. Permission is given said Banks to use alleys, lanes, highways, streets, bridges and streams within the limits of said city; also to place poles and string wires along the streets, etc. Permission is given said Banks to contract with the citizens of said town for furnishing gas for light, fuel and power, and to contract with the town of Elizabeth City for said purpose. Maximum rates which said Banks was to charge the citizens for gas were fixed in said ordinance. The city reserved the right to buy the plant at the end of ten years, at a price to be fixed by arbitration. In consideration of the grant of the franchise, Banks contracted with the city that he would begin the erection of said gas plant within nine months from the passage of the ordinance, and complete the same within twenty-one months from said date, subject to certain contingencies named. For the purpose of securing the performance of the covenants entered into by him, and in consideration of the grant of said franchise, the defendant Banks, as principal, and the defendant Fidelity Deposit and Trust Company executed to plaintiff a bond in the sum of $5,000, conditioned that if the said Banks should fail to comply with *337 the stipulations in said contract they would pay to said city $5,000 as liquidated damages, it being recited therein that, "in the opinion of the undersigned, the said amount of $5,000 is not an unjust, absurd or oppressive amount, but a fair and just compensation to be paid upon the failure," etc. Plaintiff alleges that defendant Banks began the construction of the plant within nine months, but failed to complete the same within twenty-one months. Defendant admitted the execution of the bond, but denied that the plaintiff had any corporate power to grant the franchise, and that its attempt to do so was utterly void; that by reason thereof there was no consideration to support the covenants (410) made by Banks, the performance of which was secured by the bond, and that same were void; that by reason of the absence of power to grant the franchise the ordinance passed by the board of aldermen was ultra vires and void. Defendants also aver that defendant Banks began to construct said plant within nine months, but was prevented from completing it by the financial panic which overtook the country, rendering it impossible for him to procure the materials necessary for completing the work; that he asked for an extension of time, which was refused, etc.
His Honor, being of the opinion that the condition of the bond had been forfeited, and that the matter set up in the answer did not constitute a defense thereto, rendered judgment upon the pleadings for $5,000 and costs. Defendants excepted and appealed.
The question which lies at the threshold of this case is whether, in the absence of any legislative authority, express or implied, the plaintiff, through its governing body, had any power to grant to the defendant Banks the franchise to use its streets in the manner set forth in the ordinance. It is conceded that, prior to the enactment of section 2916, subsection 6, of the Revisal, which became effective 1 August, 1905, no such power was conferred upon municipal corporations by the general statutes prescribing the powers of cities and towns. By that statute they are authorized "to grant, upon reasonable terms, franchises to public utilities." Looking, therefore, to the charter of the plaintiff (Private Laws 1905, ch. 15), we find no express power conferred upon the board of aldermen to grant franchises in or over the streets of the city. Section 19 confers the power to make such ordinances as they may deem necessary for the government of the city, not inconsistent with the laws of the land, and by all needful *338
ordinances to secure order, health, quiet and safety within the city (411) limits and for one mile beyond. Such special powers as are conferred are confined to passing ordinances relating to markets, fires, observance of the Sabbath, nuisances, powder, speed of riding and driving vehicles, keeping the sidewalks clear of obstructions, etc., regulating building material, regulating charges for hacks and omnibuses, and appointing inspectors of fish and meats. Provision is made for electing a street commissioner, with power to keep in repair the streets, bridges, etc. The board of aldermen are given power to lay out and open streets, to extend or discontinue them, and to condemn land for these purposes. We find no grant of power to make provision for furnishing lights, power or fuel, or for establishing plants for that purpose. No question is presented upon this record in regard to the power, by implication, for providing for lighting the streets. This would doubtless be found, by necessary implication, in the power to regulate the streets, provide for the safety of the people, etc. This, under the more recent decisions of this Court, would be not only an implied power, but a duty, the discharge of which would involve a necessary expense.Faucett v. Mt. Airy,
Without discussing the question whether a contract void, becauseultra vires, can be ratified, we find in the pleadings nothing to indicate a purpose to ratify, or any act which is capable of being construed into a ratification. It is alleged in the complaint that defendant Banks failed to commence the erection of the plant within nine months and to complete it within twenty-one months. The defendant Banks alleges that he laid a part of the pipes within nine months from the date of the ordinance. It does not appear that he laid any pipe after 1 August, 1905, or that any other act was done by him in connection with the work. He has never used the franchise. The plaintiff does not allege any ratification or any act which could be so construed. If, as we have seen, the ordinance was void because the plaintiff was without authority to grant the franchise, it is evident that the defendant Banks acquired nothing of any value by reason of its passage. If he had, in the performance of his covenant, begun the work within the prescribed period, he would have been liable to be enjoined or prosecuted for obstructing the streets. It is manifest that as he acquired nothing his covenants are without any consideration to support them. There is a total failure of consideration, and no action can be maintained for damages by either party. It is manifest that plaintiff can not maintain an action for damages because of the failure of defendant to do an unlawful act — that is, obstruct the streets, which is indictable at common law. The plaintiff conferred no right upon the defendant Banks, and therefore can claim nothing from him on account of its unauthorized attempt to do (417) so. We forbear discussing the other questions raised by defendants in their brief. The judgment must be reversed, with direction to the Superior Court to set it aside and take such further action as is in accordance with law.
Reversed.
Cited: Water Co. v. Trustees,