116 Ky. 76 | Ky. Ct. App. | 1903
Opinion of the cottet by
Affirming.
This equitable action was instituted by tbe appellant, People’s Electric Light & Power Company, to enjoin the appellee, Capital Gas & Electric Light Company, from interfering with its alleged exclusive right to supply the city of Frankfort, its inhabitants, and consumers, with electricity for lighting and other purposes, as provided by its articles of incorporation and authorized by an ordinance of the city. The answer and counterclaim filed by appellee contains six paragraphs, and denies that appellant has or owns the exclusive right, or any right, td supply the city of Frankfort, or its inhabitants, with electricity for lighting, or any other purpose, or that the city council bad tbe power, by ordinance or otherwise, to confer upon appellant any such right, and for further defense avers in substance that it and its assignor and predecessor, tbe Southern Gasworks Company, by purchase and deed from tbe city of Frankfort, acquired title to its gasworks, mains, and pipes, and to the exclusive use of its streets and alleys, for the purpose of furnishing gas and electricity for the lighting of its streets and the use of its inhabitants, which right has been confirmed by repeated' subsequent contracts made between it and the city, and that this right is about to be interfered with by appellant, for which reason the answer asks an injunction against it.
Appellant filed general demurrer to tbe answer and counterclaim, and each paragraph thereof, which was sustained to the first, second, fourth and fifth, and overruled as to the third and sixth paragraphs. Thereupon an amend
The facts presented by the pleadings 'and evidence are as follows: The city of Frankfort, by a written contract of May 30, 1882, made with the Southern Gasworks Company,, the assignor of appellee, sold to it its gasworks, which had theretofore been constructed and was then being operated under a charter from the Legislature granted the city. By the terms of this contract it granted, or attempted to grant,, to the Southern Gasworks Company, the exclusive right to the use of its streets “for the purpose of laying, repairing,, and properly operating all mains, pipes and other necessary machinery for the furnishing of all gas or other illuminating light in said city:” The consideration of this sale, as
Appellee’s claim of the exclusive right to the use of the streets of the city for furnishing electricity to the city and its inhabitants for lighting purposes is based upon its various contracts with the city. Upon the other hand, the appellant, People’s Electric Light & Power Company, contends that it has the exclusive right to the use of the streets for the furnishing of electric lights to the city and its inhabitants by virtue of the ordinances of the general council passed July 23 and August 13, 1901, and that the franchise granted it by these ordinances was duly advertised for sale, and bids therefor were received publicly, and that the franchise was thereby awarded to it as the highest bidder. It is averred by appellants that appellee is wrongfully asserting an exclusive right or franchise to supply electricity-to the city and its inhabitants for lighting purposes, and is thereby casting such a cloud upon its title that it is being prevented from selling, pledging, or mortgaging its stock, or selling its bonds, whereby to raise the money with which to erect its plant, and it therefore
We think the special judge properly sustained the -appellee’s general demurrer to the extent indicated in the judgment. The first paragraph of the answer interposes the defense that appellant can not maintain the actioh to quiet its title to a franchise to light the city of Frankfort with electricity, as it is not in possession of the streets and alleys of the city, the use of which is necessary to the enjoyment of its franchise. The contention of appellant is that the cloud cast upon its’title to the franchise is preventing it from selling, pledging or mortgaging its stock, or selling its bonds, in consequence of which it has been unable to erect its electric plant, or to enjoy the franchise granted it by the city of- Frankfort. In such a state of case, injunction is the only remedy, if, as a matter of fact, appellant owns the exclusive franchise to which it lays claim. This point seems to have been well settled in Citizens’ Gaslight Company v. Louisville Gas Company, 81 Ky., 263, 5 R., 72.
The second paragraph contains a plea of the statute of champerty, which has no place in a case like this.- Although it may have been.true that, at the time of the grant of the franchise from the city of Frankfort to appellant, appellee was exercising a like franchise under claim that it was exclusive, such a claim, unless true in fact, could not prevent the city from granting a similar franchise to appellant. Upon the other hand, if appellee’s franchise was exclusive, the grant of the franchise by the city to appellant was simply void.
The third paragraph of the answer, by denying that the-sale of the franchise to appellant was advertised, or that bids were publicly received therefor, or that the franchise-
We find in appellee’s charter the following provisions: “Said company shall furnish gas light or. electric light" to any person on such terms as the company and such person may agree upon, and any such contract shall be obligatory and enforceable in any proper court in this Commonwealth” —and, further, that the appellee company shall have authority “to put up lamp posts and electric lights, and that said gas and electric lights shall be furnished to the city at a reasonable price per light per annum, as may be agreed on.” It is contended for the appellee that these provisions of its charter, considered with those of the charter of the
The' Southern Gasworks Company, appellee’s assignor, made the original contract with the city, under which appellee claims title to the franchise asserted by it. It is clear that the charter of the Southern Gasworks Company provided only for the furnishing of gaslight. It conferred no authority to use :any light other than gaslight, and its contract with the city was to furnish only gaslight; indeed, it was unprepared to furnish any other. We therefore further agree with the special judge that the 'contract which granted, or attempted to grant, to that company the ex-elusive right to the use of the streets of the city for the purpose of supplying “gas or other illuminating light” was void as to “other illuminating light.”
An examination of the charter of appellee will show ■that it did oonfer power to make and supply electricity, and to accept from the city a grant of the use of its streets for that purpose; and the city having carried out its contract with the Southern Gasworks Company, by executing a deed to appellee, as its assignee, conveying to it the gasworks, and the exclusive use of the. streets of the city for supplying “gas or other illuminating light,” it becomes im
It is contended, however, by counsel for appellee, that the incorporation of such an obligation in the contract was unnecessary, as it was required by its charter to furnish electricity for lighting purposes. We-are of opinion that the provision of appellee’s charter that “said company shall furnish gas or electric light to any person on such terms a.s the company and .such person may agree upon” only ex-, pressed the duty which rests upon every corporation enjoying a public franchise to serve all alike, and does not compel the exercise of the franchise; We find that, for seven years after its right, to use the 'Streets, of the city for lighting purposes was -secured, appellee failed to use electricity for that purpose; -and this failure to exercise its electric light franchise demonstrates that it was under no obligation to do so. Furthermore, there was no- time during that seven years that it could have been compelled by the
We do not feel called upon to consider the contention of appellant that the grant from the city to appellee is in perpetuity, and therefore void. It wias the opinion of the special judge that the grant is limited to forty years, because the bonds issued by appellee to the city, which are secured by lien on its property and franchises, were made payable in forty years. We are not disposed to question the correctness of this' conclusion; but, as the pleadings make
For the reasons herein indicated,' the judgment of the lower court is .affirmed upon both the original and cross appeal.