181 N.W. 363 | N.D. | 1921
Lead Opinion
Statement.
This is an action to recover for electric current furnished the city. The action was tried to the court without a jury. The plaintiff has appealed from a judgment of dismissal in favor of the city. This same action, upon a demurrer to the complaint, was previously before this court. 43 N. D. 437, 175 N. W. 622. In its amended complaint the plaintiff seeks to recover for a first cause of action, the reasonable value of electric current furnished to the city for lighting its streets and public places between February 1, 1918 and July 31, 1918, amounting to $253; for a second cause of action the reasonable value of electric current furnished the city as power in the operation of city pumps, from August, 1918, to November, 1919, in amount $11,975.46; for a third cause of action the reasonable value of electric current furnished in lighting a public library and reading room in the city hall from December 28, 1908, to date, in amount $1,402.02.
The answer generally denies the complaint and alleges a written agreement for street lighting, and, pursuant thereto, the furnishing of electric current by the plaintiff; alleges a franchise granted to, and accepted by, the plaintiff by the terms of which plaintiff became bound to furnish to the city free electric current to its city hall and engine house without cost and also to pump water for the city at a certain specified rate, and, further, that pursuant to such ordinance the plaintiff has so furnished electric current in pumping water for the city and in furnishing electric light to a library room and reading room. It further alleges that no liability of the city was ever created by the city council as required by law, to pay the demand made for the electric current furnished.
The facts in the record necessary to be stated are substantially as follows:
In 1902 the city enacted an ordinance granting to the Jamestown Electric Light Company a franchise for a period of twenty-five, years,
In 1912 a white way was established upon the streets of the city. In March, 1912, the plaintiff submitted to the city council a proposition to furnish current for lighting this white way, for a term of one year, upon a flat rate, which, subject to a slight modification agreed upon, was accepted by the city council. ■ Thereafter current was furnished for this white way at the flat rate basis for which bills were rendered and paid by the city. In February, 1918, the plaintiff added a 10 per cent increase to be known as a surcharge to the street lighting rate. For six months, from February to July, 1918, this surcharge amounted to $253, the amount of plaintiff’s first cause of action. The city council refused payment of such surcharge, although it has otherwise paid the regular flat rate which umount has been monthly received by the plaintiff. In .January, 1914, it appears that the city council by an “aye” and “nay” vote upon a resolution, declared the contract made in March, 1912, to be canceled and annulled. Nevertheless thereafter the plaintiff continued to-furnish electric current under the same arrangement as theretofore existed until the month of February, 1918. From 1902 to 1910 the plaintiff furnished power through the steam of its boilers for pumping water from a well located adjacent to its plant and was paid at the rate provided in the franchise. Then in 1910 the city made changes in its public water system. New wells were provided at some distance from the plant of the plaintiff. The pumps installed were designed to be operated by electric current. The plaintiff thereupon furnished the: current, and for a period of over eight years furnished, such current at- the rate stipulated in the franchise, rendered bills there
In 1908 the city constructed and occupied a city hall, a large brick building, consisting of three floors. On the second floor, a large room, some 30 by 40 feet in dimension, was fitted up as a public library and reading room. There, from December, 1908, until about December, 1918, such library and reading room was maintained and electric current for lighting this room, as well as the building, was furnished by the plaintiff. In the year 1914 the plaintiff furnished the city a statement for the current furnished as shown by a separate meter. The city refused payment on the ground that it was the duty of the plaintiff to furnish this current in accordance with the provisions of the ordinance. Again a claim was presented and rejected before the commencement of this action. The amount thereof constitutes the third cause of action.
Decision.
1. Electricity furnished for street lights. The plaintiff contends that the contract made in March, 1912, became almost immediately operative by reason of the use of lamps installed on “street hoods.” That the resolution of the city council in June, 1914, canceling and annulling this contract, being unanimously adopted and entered upon the council proceedings was presumptively published in due course in the official newspaper and presumptively afforded formal notice thereof to the plaintiff; that the reasonable presumption is that the city assumed that the contract of March, 1912, had expired on March 1, 1913, and from that time had continued in force as a contract from month to
The city contends that the contract of March, 1912, became effective in October, 1912; that by the acts of the parties, the plaintiff furnishing current, the city receiving and paying for the same, at the contract rate, this agreement was renewed from year to year until and including the year of 1918; that the notice given by the plaintiff in February, 1918, of a surcharge increased rate did not operate to terminate the contract then existing, without the consent of the city; that the resolution of the city council in June, 1914, did not terminate the contract; that its abrogation was not accepted by the plaintiff; that the city did not consent to the surcharge; and that the plaintiff furnished current to the city so knowing.
The trial court found that the plaintiff commenced furnishing current under the March, 1912, contract on October 1, 1912; that the contract, by acts of the parties, was renewed from year to year and continued in force; that no notice of the cancelation of this contract was given by either of the parties until February, 1918, when the plaintiff notified the city of its surcharge rate; that thereafter the plaintiff rendered monthly bills for its services, based on the rate in the contract of 1912, with a 10 per cent surcharge added; that the city allowed such bills at the contract rate, rejected the surcharge, and the amounts thereof as allowed were paid to and accepted by the plaintiff. As a conclusion
Under this specific question we are of the opinion that the findings and conclusions above stated are proper. Although the contract of March, 1912, was for the term of one year, it could be renewed by implication of law, through the acts of the parties for another year. It was so renewed for the year 1913. Although the city council in June, 1914, did adopt a resolution terminating and canceling this contract, nevertheless it fully appears that the plaintiff neither consented to nor acted upon such resolution of termination and that the city itself did not thereafter treat such contract as if canceled. The acts of the parties from June 1, 1914, through and until February 1, 1918, recognized this contract of March, 1912, to be in force. Electricity was furnished by the plaintiff pursuant to its terms and the rates therein prescribed. Its service Avas accepted by the city and payment made therefor pursuant to the contract. The action of the city in adopting this resolution does not afford, in our opinion, any ground for a presumption that this contract was thereafter to be considered and determined to be merely a contract from month to month. No consent is shown in the record to such termination. The contract then to be terminated as it then existed ■required the consent of both parties. Comp. Laws 1913, § 5934. As it then existed it was a renewal contract for a year. The sole action of the city itself without the consent of the plaintiff did not serve to alter its character. See Taylor v. Lambertville, 43 N. J. Eq. 107, 10 Atl. 809. See Appleton Waterworks Co. v. Appleton, 132 Wis. 563, 113 N. W. 44. The parties continued to operate under this contract pursuant to its original terms in respect to the rates, the term, and the monthly period of payment. We are further of the opinion, in any event, that it is immaterial whether this contract became operative in March, 1912, or in October, 1912, or whether it be considered to have been renewed after its termination from year to year or from month to month.
On February 1, 1918, when the plaintiff gave notice of a surcharge rate, a contract then existed between the parties. Upon plaintiff’s contention and showing, the contract, then existing, either was terminated
2. Electricity furnished for pumping. The plaintiff contends that, under the ordinance granting to it a franchise in 1902, it was willing to furnish steam power for pumping water from wells immediately adjoining its power plant at the rate prescribed in the ordinance; that the city, by reason of its changing in 1910 the location of the steam pumps and dispensing with steam power for pumping, made it impossible for the plaintiff to render the services contemplated by the franchise; that the acts of the city renounced and abrogated the contract for pumping made in the franchise of 1902; that the city, through its request that the plaintiff extend its wires to the pumping station and furnish electric current to operate the city pumps by electricity, impliedly entered into a new contract to pay the reasonable value of the current so furnished; that the act of the city in rendering impossible performance by the plaintiff of the contract of 1912 for pumping water precludes it now from asserting that the plaintiff is bound to furnish power for pumping such city water pursuant to the terms of the franchise.
The plaintiff further contends, concerning the electric current furnished for pumping since March 5, 1919, that, by legislative act, effective March 5, 1919, known as the Public Utilities Act (Laws 1919, chap. 192), the state, through powers conferred upon the board of railroad commissioners, assumed full regulations and control concerning rates and charges of all public utilities; that accordingly the plaintiff since that time was required to furnish electric current at rates which were just and reasonable to all persons or corporations and was prohibited from making any discrimination in rate charges; that at such time when the act became effective the scheduled rates of the plaintiff wore then the legal rates in force; that therefore the charge of 6 cents per
On the other hand, the defendant contends that the franchise granted to the plaintiff in 1902 constituted a valid contract, except in so far as the same was invalidated for any purpose for the period subsequent to March 5, 1919, by the Public Utility Act; that, in making this franchise, the parties contemplated, and their acts subsequently demonstrated, that the franchise rate for pumping should apply to changed conditions that might occur, in the growth of the city, to the city water system, and to the location of the city’s pumps, means of pumping, and the plaintiff’s proximity thereto; that this is shown through the furnishing of electric current for power and receiving the franchise rate therefor, by the plaintiff, for a period of some eight years after the city changed the location of its wells in 1910, and, further, too, after the plaintiff had changed the location of its own electric light plant; that, by its acts, the plaintiff placed a practical construction upon this contract; that in August, 1918, for the first time, it made the demand that its arbitrary rate of 6 cents per K.W. be paid for the electric current furnished for pumping; that the city has tendered its warrants in full payment pursuant to the franchise rate.
Further, concerning the Public Utilities Act, the city contends that the act, even if applicable, does not apply to the period in controversy from August, 1918, to November, 1919, for the reason, that, until the state has taken action or directed to the contrary, in the exercise of its police power, the franchise provisions continue to exist valid between the parties; that, furthermore, in any event, the city had the authority and the right to receive this electric current at the rate prescribed in
In its findings the trial court found that for over eight years previous to August 1, 1918, the plaintiff furnished electric current for the city’s pumps, located some six city blocks from plaintiff’s plant, for which service it has rendered monthly bills at the franchise fate which were regularly allowed and paid by the city; that during such time it made no objection to pumping such water in such manner and at such price nor that it was not obligated so to do by the terms of the franchise; that, furthermore, until 1910, it had furnished power by means of a steam pump to pump water for the city from a well located very near plaintiff’s electric plant; that since August 1, 1918, plaintiff rendered bills monthly to the city council for the payment of rates charged by it to its private consumers for electric current; that such bills were allowed by the city at the franchise rate and rejected as to the excess; that the plaintiff had full notice of the claim of the city to such services by the plaintiff at the prescribed franchise rate. As a conclusion of law the trial court determined that the plaintiff was legally obligated by the franchise and the contract made thereby to furnish electric current to the city’s pumps at the franchise rate.
The contention of the parties in the findings of the trial court have been stated somewhat fully in order to present clearly a consideration of the issues. We are clearly of the opinion that the findings of the trial court are proper and sustained by the evidence; that its conclusions are correct. Upon the legal propositions presented, both counsel, with much ability, have discussed with numerous citations of authority the liability of the city for the current furnished under the altered conditions and in connection Avith the recently enacted Public Utilities Act. Strenuously has the plaintiff contended that the city, by changing the location of its pumps and the method of furnishing power thereto, had renounced the contract provisions of the franchise applicable thereto and had placed the plaintiff in a position where it could not perform in accordance with the provisions of the contract. We are clearly of the opinion that this contention upon this record cannot be sustained in
The franchise so granted constituted a contract between the state, through the municipality representing the state by its permission, and the company. Ghee v. Northern Union Gas Co. 158 N. Y. 510, 53 N. E. 693; New Orleans Gaslight Co. v. Louisiana Light & H. P. & Mfg. Co. 115 U. S. 650, 658, 29 L. ed. 516, 520, 6 Sup. Ct. Rep. 252; Russell v. Sebastian, 233 U. S. 204, 58 L. ed. 921, L.R.A.1918E, 882, 34
Tho consideration for the exercise of this right might have been evidenced by the payment of a stipulated sum of money annually, or otherwise by the payment of a percentage of the gross or net revenues of the company earned in the city, or by doing certain service in and upon the streets or highways of the city and by furnishing as an equivalent, in lieu of money, a certain service of a certain commodity for the city’s use. 5 McQuillin, Mun. Corp. § 1645; Mitchell v. Dakota Cent. Teleph. Co. 25 S. D. 409, 127 N. W. 582. This furnishing of a certain service or a certain commodity for the city’s public use may not be termed a bargaining of the municipal or state police power concerning rates, in the absence of a restrictive or prohibitive constitutional or legislative provisions, but rather the “quid pro quo” of, or the consideration for, the exercise of the franchise.
Readily, upon the law of this state, may such cases as Kenosha v. Kenosha Home Teleph. Co. 149 Wis. 338, 135 N. W. 848, be distinguished by reason of the fact that in this state, the right to permit the exercise of a franchise in a city is directly reserved and preserved to a city by a constitutional provision. In the case cited it was held that the franchise was created by statutory authority subject to reasonable regulations under the police power; that the city in enacting an Ordinance granting a franchise did not thereby create a contract because it had no consideration to give for such a contract; that therefore a provision thereunder for furnishing freo telephones to a city was rendered ineffectual by a subsequent enacted public utilities statute making illegal such furnishing of telephones.
Likewise, upon the law and facts of this case, may a distinction be drawn concerning such cases as V. & S. Bottle Co. v. Mountain Gas Co. 261 Pa. 523, 104 Atl. 667; State Public Utilities Commission ex rel. Quincy R. Co. v. Quincy, 290 Ill. 360, P.U.R.1920B, 313, 125 N. E. 374; Ottumwa R. & Light Co. v. Ottumwa, — Iowa, —, 173 N. W.
Presumably under the contract the service so rendered by the plaintiff is reasonably compensatory for the privilege so exercised by the plaintiff. And likewise the value of this franchise might reasonably and presumptively measure the difference between the amount of actual charge in fact made to and paid by the city and the amount of the reasonable charge for the service rendered. State v. Peninsular Teleph. Co. 73 Fla. 913, 10 A.L.R. 501, P.U.R.1917E, 453, 75 So. 201. The rate charged therefor under the contract cannot be termed in any event unreasonable or discriminatory.
It must appear, accordingly, that the right of the city in consenting to a franchise to contract for the consideration to be paid by a public utility for the exercise of the franchise is not to be confused with-either the state or municipal police power to regulate public service rates or such public utility. Pond, Public Utilities, §§ 434, 436; 4 McQuillin, Mun. Corp. §§ 1733, 1736. It therefore follows that the franchise of 1902 concerning the electric service rendered to the city is operative, and to it the Public Utilities Act cited has no application.
S. Electric current furnished library and reading room. The plaintiff contends that continuously from December 28, 1902, to the commencement of this action the plaintiff furnished electric current to the public library and reading room in a building erected by the city to be used as a city hall; that the plaintiff was requested by the city to extend its wires to this room; that the city appropriated money by ordinance for lighting the streets and public places and for maintenance of the city hall including fuel, janitorial service, and incidental expenses during the period of time covered; that during such period this room was'
The city contends that the electricity so furnished for this room was within the provisions of the contract between the parties; that the plaintiff should furnish electric current to light the city hall, and engine house of the city, and the offices therein without cost to the city. That the library hoard, a public hoard, was an agency or department of the city government. That, in any event, the furnishing of the electric current to this room by the plaintiff, without objection or demand for payment during the years operated as a practical construction of the contract between the parties; that no contract in fact was ever made between the parties other than the franchise contract to pay for such current and that no liability was ever incurred by the city upon an “aye” and “nay” vote of the city council as required hv law.
In its findings the trial court determined that this library and reading room was located in the city hall of the city, erected in 1902; that the city permitted the public library there to he maintained governed by tbe board of education of the independent school district of the city and that during the time involved the room was under the charge and control of such library board. That no specific request was made by the city to furnish electric current for such room and that no hill therefor was ever presented, except one presented in the year 1914 for the electricity furnished up to that time; that this bill was rejected by tbe city; that, without further negotiation, the plaintiff continued 1 o furnish electricity for tbis room up to tbe timo of tbo action with knowledge on the part of the plaintiff that the city claimed it to ho obligated under its contract to light such room freo of charge as part of the city hall and offices therein. In its conclusions the trial court found that there existed no contract, either express or implied, or either in law or in fact, to pay the plaintiff any sum whatever for electric current furnished for lighting such library and reading room.
We are again of the opinion that the findings of the trial court are
Concurrence Opinion
(concurring). I agree with my associates that the facts in this case do not entitle the plaintiff to recover upon any of his three causes of action. While the Public Utilities Act makes it “unlawful for any public utility corporation subject to the provisions of the act to make or give any undue or unreasonable preference or advantage to any particular person, firm, corporation, or locality, the same section (§ 16, of the Public Utilities Act) which contains this provision also provides: “Nothing in this act shall prohibit a public utility from entering into any reasonable agreement with its customers, consumers, or employees, or for [from] providing for a sliding scale of charges, unless the same is prohibited by the terms of the franchise or permit under which such utility is operated. No such agreement or sliding scale shall be lawful unless and until the same shall have been filed with and approved by the commissioners.” Section 4 of the Public Utilities Act provides: “The commissioners shall have the power, after .notice and hearing, to enforce, originate, establish, modify or adjust and promulgate tariffs, rates, joint rates, tolls and charges of all public utility corporations and whenever the commissioners shall, after hearing, find any existing rates, tolls, tariffs, joint, rates or schedules unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in viola
As found by tbe trial court, and by this court, the plaintiff and the defendant city had agreed upon certain rates; these rates were in existence when the Public Utilities Act became operative. There is no contention that the commissioners had adjudged the rates so agreed upon between the public utility and tbe city to be discriminatory; or that tbe commissioners liave taken any action whatsoever regarding such rates. Hence, it seems to me tliat so far as this litigation is concerned the rights of the parties depend upon and are measured hy their contracts. And I agree with my associates that the evidence justifies the conclusions drawn by the trial court as regards the contractual rights and obligations of the parties. I express no opinion as to whether the Public Utilities Act invests the commissioners with authority to change a rate which has been agreed upon between tbe public utility corporation and a city as regards compensation to be paid by the city itself (as contradistinguished from maximum rates fixed in the franchise to be charged customers generally) for service rendered to it; and which rate is stipulated in the franchises under which the public utility is operated. Nor do I express any opinion as to whether under § 139 of the state Constitution the legislature could confer upon a public utility commission the power to change or alter such rates.
