Sandy Lake Borough v. Sandy Lake & Stoneboro Gas Co., 16 Pa. Super. 234

16 Pa. Super. 234 | Pa. Super. Ct. | 1901

Lead Opinion

Opinion by

W. D. Porter, J.,

The defendant did not, by the pleadings, raise the question of the regularity of the incorporation of the plaintiff borough, and it was proper for the learned court below to take judicial notice of the existence of the municipal and quasi-municipal corporations into which the county within its jurisdiction was, for purposes of local government, subdivided: Pearce v. Lang-fit, 101 Pa. 507. The borough had power to lay gas pipes under its streets for the purpose of supplying gas for lighting the streets, and for the use of citizens, and it was competent for it to exercise that power in favor of private citizens, by granting a license to do the same thing: Wood v. McGrath, 150 Pa. 451. In case the borough granted such a license and imposed conditions and duties upon the right to exercise the same, an acceptance of the grant by the licensees constitutes a contract that, while they operated under the license, the conditions would be observed and the duties performed: Allegheny v. People’s Natural Gas and Pipeage Company, 172 Pa. 632. Where such licensees enter under the grant and continue to enjoy the fruits thereof, they cannot set up as a defense to the performance of the conditions, that the contract was ultra vires. The law never sustains the defense of ultra vires out of regard for the defendant, but only when an imperative rule of public policy requires it: Wright v. The Antwerp Pipe Line Company, 101 Pa. 204. “ A man who has enjoyed a privilege has no right to say that, because he ought not to have enjoyed it, he will not pay for it:” Northampton County’s Appeal, 30 Pa. 305. Those who succeed to the rights of the original grantees of the license and continue to exercise such rights are equally bound to perform the conditions: Northampton County’s Appeal, supra.

It may be conceded that the resolution of the borough council granting to the original licensees the right to lay gas pipes in the streets, was defective and not binding upon the borough, for the reason that it was not approved by the burgess. The borough authorities, or any owner of property abutting upon the street, might have caused the licensees to be restrained from exercising the rights supposed to have been conferred by the defective resolution. The licensees were at liberty to decline to proceed to the performance of any act, or the expenditure of any money, upon the faith of the invalid resolution, but they could not proceed to exercise all the rights which would have been theirs had the resolution been valid, and, under a pretended acceptance of the grant, subject to the conditions, take possession of the borough streets, and, having complied with all the conditions during the time they were piping the streets and for a considerable period thereafter, decline to perform the conditions, while still insisting upon enjoying the fruits of the defective grant: Northampton County’s Appeal, supra. The learned judge of the court below, upon sufficient evidence, found the following facts : “That after the said resolution was adopted, as aforesaid, the said Hoovler, Bailey and Egbert accepted the terms of the same, and at their request, the time to begin laying pipes in accordance with the terms of said resolution was extended, from time to time, and they did begin, within the time limited by the last extension, to lay their gas pipes and mains in the streets and. alleys of said borough, under the terms and authority of said resolution. That prior to February 28, 1896, they liad laid their gas mains along the principal street of said borough, and had connected at least six street lamps with their said gas mains and were furnishing gas for said street lamps of said borough free of charge, under the terms of said resolution. That in February, 1896, the said Iioovler, Bailey and Egbert, having associated with them M. L. Kerr and I.’ M. Patterson, entered into articles of association to obtain a charter for their company, under the name and style of the Sandy Lake & Stoneboro Gas Company, under and in pursuance of the act of assembly of May 29, 1885, providing for the incorporation of natural gas companies, and on February 28,1896, applied to the governor of the commonwealth of Pennsylvania to grant them letters patent and incorporate them and their successors under the name and style aforesaid,' which letters patent were granted March 4, 1896. That after letters patent had been granted incorporating the said parties and their successors, as aforesaid, the corporation connected thirteen more street lamps in the said borough with its street mains, and began to furnish gas to said borough for said street lamps free of charge, and continued to furnish gas to the street lamps that had been connected up prior to the date of said incorporation, and those connected with it after their incorporation, in all nineteen street lamps, down to August 5, 1898, in accordance with the terms and conditions of said resolution of the town council of November 3, 1894, free of charge, excepting a specific bill of $10.00 presented by said corporation to the town council during the year 1897, for gas burned in the street lamps in daytime, which bill the town council paid.” When the private citizens who had been the original licensees thus formed a corporation, that corporation merely succeeded to the rights and property of the licensees, and took the same burdened with all the conditions and duties to which they were subject. The defendant corporation recognized this fact and connected its gas lines with the street lamps, and for a considerable period furnished gas to the street lamps, in accordance with the terms of the defective resolution, under a pretended acceptance of which their predecessors under the license had obtained possession of the streets. Having thus obtained possession of the streets of the borough under circumstances which plainly indicated to the parties and all the citizens of the borough that they recognized their obligation to maintain the street lamps, they now propose to retain possession of said streets without discharging the duties which they pretended to assume. They are at liberty to abandon the streets at any time, but while they insist upon enjoying the fruits of the defective ordinance, they cannot he permitted to set up their own wrong in order to retain the privilege, while refusing to perform the accompanying duty: Wright v. Pipe Line Company, supra.

Apart from these considerations, however, we must hold the defendant hound to perform the acts commanded by the decree of the learned court below, upon another ground: The borough clearly had authority to enter into the contract which is here sought to be enforced, and, having that authority, it had power by a subsequent ratification to make valid the contract based upon the defective resolution by which the license was originally granted: City of Phila. v. Hays, 93 Pa. 72; Silsby Mfg. Co. v. Allentown, 153 Pa. 319. It is not necessary that such ratification should be by a formal ordinance; the acceptance of the fruits of the contract, and the formal assertion in a judicial proceeding of a claim founded upon it are sufficient: Amberson Avenue, 179 Pa. 634; Shiloh Street, 165 Pa. 386. That the borough has ratified the contract is evident from the fact that it is now here endeavoring to enforce this claim: Harrisburg v. Shepler, 7 Pa. Superior Ct. 491.

The decree is affirmed, and the appeal dismissed at costs of the appellant, without prejudice to the right of the defendant to withdraw its pipe lines from the streets of the borough at any time.

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Dissenting Opinion

William W. Porter,

dissenting:

The plaintiff’s bill is founded upon a piece of borough legislation, in form a resolution. The resolution grants to certain private persons the .right to lay pipes upon the public streets to supply patrons with natural gas. The consideration for the right attempted to be conferred is the requirement that gas for twenty street lights, for public lighting, shall be furnished free, at designated points within the borough. Such legislation, if validly enacted and accepted, would create a contract between the parties. But nothing short of legislation enacted in compliance with the requirements of the law would suffice, since the act attempted is legislative, not ministerial. While legislation by borough councils may be by ordinance or resolution, yet the requirements which are essential to the validity of an ordinance must be observed in the passage, approval, recording and publication of resolutions where the action of councils is legislative: Howard v. Borough of Olyphant, 181 Pa. 198. Herein the resolution before us fails, in that it was not advertised, nor was it signed by the burgess, as required by the act of 1851. See Commonwealth v. Diamond National Bank, 9 Pa. Superior Ct. 118. The borough now files a bill praying for a decree of specific performance. It asks that the defendants be compelled to furnish the free lights stipulated for in the resolution. If the resolution be regarded as covering only ministerial action by the borough, then no foundation can be found in it to sustain the bill, for no contract was thereby created. If it be held to be the basis of a contractual relation, whereby both the borough and the grantees of the right are bound to the performance of obligation, then was th.e action legislative and void, because not fulfilling the requirements of law in its enactment.

The record shows the passage -of no legislation by the borough subsequent to the original resolution, ratifying the latter or accepting the benefits or assuming the obligations covered by it. The filing of the bill by the law officer of the municipality does not appear to have been directed by borough ordinance. Without the aid of such a direction, his act could not remedy the defects in the passage of the original resolution or give it the effect of a legally enacted ordinance. The acts of the parties do not help out the transaction by ratification. True, there was ah entry upon the streets and the free lighting was for some time furnished and accepted. This was not such an adoption by the borough of the provisions of the resolution as converted the privilege in the hands of the original parties (and the defendant company, their successors) into a right to continue the exercise of the privilege.

There is nothing in the course taken to prevent the borough from requiring the defendants to vacate the streets at any time. To invoke the provisions of the resolution as an estoppel would be useless. It would be answered that municipalities can incur liability only by proceeding in accordance with law; that those dealing with them are charged with the duty of seeing that the law is observed; and that the resolution was void. Here, if the borough is entitled to the relief prayed for, a contract must be shown. A contract involves reciprocal obligation. As the resolution fails to confer upon the defendants a right to use the streets, it also fails to confer upon the borough the right to insist upon the furnishing of free lights.

It is to be observed that the original resolution attempted to give to certain individuals the right to lay pipes upon the borough streets, and that the defendant company was, a considerable time thereafter, erected by the individuals named and certain other persons. The evidence is that the formation of the corporation was not in contemplation when the resolution was passed. The company, however, did succeed to the property, privileges and burdens of the original holders, whatever they were. The only authority of the company to be upon the streets is to be found in the defective resolution of November 3, 1894. This, therefore, is not the case of a corporation organized under the act of May 29, 1885, with right of eminent domain, procuring in first instance, the “ assent” of the borough to the laying of pipes. It is not determined by cases decided under that act. The company is here only as successors to such right as the resolution of November 3, 1894, conferred.

My opinion is that no contractual relation is exhibited by the bill and proofs, upon which a decree for specific performance can be rested. Doubtless the borough has the right to protection against the use of her streets by the defendant company. A forum in which such protection may be had is not wanting. It is not, however, a court of chancery. I would reverse the decree and dismiss the bill.