157 Wis. 1 | Wis. | 1914
Lead Opinion
The following opinion was filed February 3, 1914:
For many years prior to 1907 the plaintiff was a public utility. It did not elect to surrender its franchises and to take in lieu thereof the indeterminate permit provided for by the Public Utilities Law of 1907 (ch. 499), sec. 1797m — 1, Stats., and succeeding sections.
Ch. 596, Laws of 1911, was published and became effective on July 8, 1911. This act in effect provided that any franchises theretofore granted to a public utility by the state or through any of its agencies wras so altered and amended as to
Sub. 3, sec. 1797m — 74, Stats., being part of the Public Utilities Act, provides:
“No municipality shall hereafter construct any such plant or equipment where there is in operation under an indeterminate permit as provided in this act, in such municipality a public utility engaged in similar service, without first securing from the commission a declaration, after a public hearing of all parties interested, that public convenience and necessity require such municipal public utility.”
The appellant contends that by force of said eh. 596, Laws of 1911, it received an indeterminate permit in lieu of the existing franchises under which it operated, and became subject to the Public Utilities Law to the same extent that it. would have become subject thereto had it surrendered its franchises under the 1907 law and elected to receive in lieu thereof an indeterminate permit as provided by ch. 499, Laws of 1907 (sec. 1797m — 77). The plaintiff being subject to the Public Utilities Act after July 8, 1911, it insists that it was unlawful for the defendant city to engage in the business of commercial lighting after that date without a certificate of convenience and necessity from the railroad commission, and it is conceded that no such certificate was procured and it appears by inference that none was asked for.
The defendant insists that it had the right to proceed without any certificate from the railroad commission, for the following reasons:
(1) The clause in the franchise granted the plaintiff in 1904 by which the defendant expressly reserved to itself the right to engage in the business of commercial lighting is still
(2) By a resolution passed February 21, 1911, the city, as it had the right to do at that time, evinced an intention to enlarge its plant so as to engage in the business of commercial lighting, and it should be held that thereafter the city became a public utility in the business of commercial lighting.
(3) The city was in fact a public utility engaged in the commercial lighting business since the summer of 1906, and therefore it was not affected by ch. 596, Laws of 1911.
The circuit judge held in substance that there was a contract between the parties by which it was agreed that the city might at any time engage in the commercial lighting business; that the obligation of this contract could not be impaired, although the legislature might prohibit the city from building a lighting plant; that the contract was not affected by ch. 596, Laws of 1911, and that under the provisions of the ordinance of 1904 referred to the plaintiff was estopped from claiming that the city did not have the right to engage in the commercial lighting business. The trial judge also said he was inclined to thint the position was well taken that the city was a public utility engaged in the business of commercial lighting long prior to the passage of the act of 1911.
The Public Utilities Law was undoubtedly framed on the theory that certain kinds of business were of such a character that the duplication of plants for the purpose of carrying them on was undesirable because it resulted in an economic waste, the loss from which in the end usually fell upon the consumer. As to some kinds of business, such as that of operating telephone lines, duplication is not only an added expense to the user, but is apt to be a positive nuisance. Competition in the public utility business in our cities in the end generally resulted in consolidation or an agreement between competing companies as to the rates to be charged. In either
When ch. 596, Laws of 1911, was passed, it took from the plaintiff some rights and privileges which it had and conferred some privileges on it which it did not have. It also conferred some rights on municipalities in regard to acquiring existing plants which they did not before have. After the passage of this act, sub. 3, sec. 1197m — 74, above quoted became part and parcel of the plaintiff’s franchise.
The main propositions upon which this case was decided by the lower court would seem to be untenable under our decisions. In brief it was held in La Crosse v. La Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530, that when a public utility comes under the 1907 law it surrenders its existing franchise and that its rights and liabilities are then fixed and determined by the provisions of the Public Utilities Act. The writer of this opinion did not agree with the decision in the La Grosse Case, but has no doubt that where there is an express provision in the Public Utilities Law which is inconsistent with a provision .contained in the franchise surrendered, the latter is abrogated. The quoted section of the Public Utilities Act is inconsistent with the provision of the 1904 ordinance granted to the plaintiff upon which the defendant relies; so the case here made by the plaintiff is stronger than that made by the defendant in the La Grosse Gase. It is also decided in this latter case and in other cases that the provision of the 1904 ordinance relied on might be abrogated by the legislature. An agreement by which a city reserved the right to do a commercial lighting business has no
The argument is made that because the plaintiff accepted a franchise reserving to the city the right to engage in the commercial lighting business, it is now estopped from asserting that the city has no such right. The argument is not convincing. The plaintiff was apparently satisfied with its franchise. It might have voluntarily surrendered it and taken an indeterminate permit, but it did not see fit to do so. So long as it retained its original franchise the city had a perfect right to engage in the commercial lighting business. The legislature, however, intervened and took away the existing franchise of the.plaintiff and substituted another for it. Plaintiff could no longer claim the benefits of its former franchise, and it would hardly seem fair to impose on it the burdens imposed by the old franchise, which were expressly taken away by the new. The state substituted a franchise of its
The main contention of the respondent, as stated by its counsel, is that on July 8, 1911, and for a long time prior thereto the defendant was a public utility doing a commercial lighting business and therefore was not affected by ch. 596, Laws of 1911. The facts upon which this claim is based have been fully set out in the statement of facts.
A city in lighting its streets and public buildings is performing a governmental function. It is not liable for the negligence of its servants in .performing that duty. On the other hand, when a city engages in the business of supplying light to private consumers, it is performing a proprietary or private function, and it is liable for the negligence of its servants. Piper v. Madison, 140 Wis. 311, 122 N. W. 730; Evans v. Sheboygan, 153 Wis. 287, 141 N. W. 265, and cases cited. The two kinds of business are separate and distinct. 1 Dillon, Mun. Corp. (5th ed.) § 109; Ashland v. Wheeler, 88 Wis. 607, 60 N. W. 818; Kaulcauna E. L. Co. v. Kaukauna, 114 Wis. 327, 89 N. W. 542.
There can be no doubt that when the city built its original plant it was built for the purpose of lighting the streets, and possibly the public buildings owned by the city. It was built in the exercise of a governmental function. The resolution adopted was broad enough to cover both kinds of lighting, but the plant constructed was wholly inadequate for the dual purpose. It appears from the evidence of one witness that the building in which the equipment was placed was large enough to accommodate another light engine. Other evidence indicates that the equipment was placed in the waterworks building. After the plant had been running a few months it was thought that some private lighting could be done, so wires were run some six or seven hundred feet to
Under the facts stated we do not think the city was a public utility engaged in the business of commercial lighting at any time prior to July, 1911. According to the census of 1905 the city of Menasha had a population of 5,960. The furnishing of a few lights to one store and one residence for a short time, wTe do not think made the city a public utility under the doctrine of Cawker v. Meyer, 147 Wis. 320, 133 N. W. 157. However this might be, the city had ceased, to perform any function as a public utility for more than three years before the passage of the 1911 act.
It is true that the action of the city in 1911 contemplated the enlargement of the existing plant, but the purpose of making the enlargement was to enable the city to embark in a new and independent business, to wit, that of furnishing commercial light in its private or proprietary capacity. To
After July 8, 1911, the plaintiff was a public utility operating under an indeterminate permit and furnished light to the inhabitants of the city of Menasha. The city was not and had not been engaged in this business for at least three years, and we think never had been engaged in such business. Under the statute quoted the city was prohibited' from “constructing any plant or equipment” for the purpose of engaging in the field occupied by the plaintiff, without the consent of the railroad commission. When the original plant was constructed, it may have intended and probably did intend to embark in the commercial lighting business at some future time, but it did not do so or take any steps in that direction until after July 8, 1911.
Respondent’s counsel argue that under the decision in Neacy v. Milwaukee, 151 Wis. 504, 139 N. W. 409, the city became a public utility for the purpose of engaging in the lighting business prior to July 8, ÍL911. The cases are very dissimilar in their facts. Eive years before the Public Utilities Law was passed, the city of Milwaukee determined to erect a municipal lighting plant and voted bonds for that purpose in 1904. It was tied up by various proceedings in the courts, but in 1906 it issued bonds for this purpose to the amount of $150,000 and purchased a site for $60,000. Before the Public Utilities Law was passed the city expended other large sums of money for and in connection with the construction of an electric light plant. Under these circumstances it was perhaps inferentially held in the Neacy Case that a certificate from the railroad commission was not necessary, because the city had reached a definite conclusion to build, had provided the necessary funds therefor, had pro
State ex rel. Kenosha G. & E. Co. v. Kenosha E. R. Co. 145 Wis. 337, 129 N. W. 600, has some bearing on the question. There the city entered into a contract with the street railway company to do its lighting, and the latter expended a considerable sum of money to provide the necessary equipment to carry out its contract. Before the city succeeded in passing an ordinance granting the street railway company the right to place its poles and wires in the streets, the Kenosha Gas & Electric Company surrendered its franchise and took the indeterminate permit provided for by the Public Utilities Law, and it was held that the ordinance passed after such surrender was void and that the street railway company acquired no rights thereunder. The fact that a preliminary contract was entered into and considerable expenditures were made thereunder before the competing Titility took an indeterminate permit was not considered sufficient to deprive it of the benefits conferred by sub. 1, sec. 1797m — 74.
The respondent no doubt constructed its plant in the best of faith. We realize that this decision leaves it in an unfor-
By the Court. — Judgment reversed, with directions to enter judgment in accordance with this opinion.
Dissenting Opinion
(dissenting) It is uncontroverted that the defendant city took all the legal steps necessary to establish its right and power to build a lighting plant to supply the city and the inhabitants thereof with light under ch. 143, Laws of 1901. These steps were taken and the plant built and in operation long prior to July 8, 1911, when the plaintiff became the owner of an indeterminate permit.- The city had acquired and built the plant and the plant was in operation during 1906, to say the least. It is argued that the city did not at once or did not prior to July 8, 1911, efficiently equip this plant for both kinds of lighting, but confined its work to
We start out with the proposition that the city had a lawful charter for both kinds of lighting, had its site purchased and its plant in operation for municipal lighting, waiting, as it lawfully might, before making the additional outlay for further extension. That the city never abandoned its rights so acquired is uncontroverted, and is further shown by the express contract with plaintiff with reference to this condition, recognizing the right and power of the city to enlarge its plant for the purpose of commercial lighting. The real significance of this stipulation is to show that there was no abandonment by the city, but a mere ad interim authority given to the plaintiff, a passerby, an interurban railway with no plant in the city but carrying a current through the city, to do commercial lighting until such time as the city should further enlarge its plant acquired for that purpose. I think the city lost no rights which it had acquired under ch. 143, supra, by delaying to extend its activities to commercial lighting under such circumstances. It did not if a city has the same rights under ch. 143, supra, as corporations organized for private gain have. Such as street railways under sec. 1862, Stats. (Wright v. Milwaukee E. R. & L. Co. 95 Wis. 29, 69 N. W. 791), or such as an electric company has under sec. 1797m — 74 (Calumet 8. Co. v. Chilton, 148 Wis. 334, 135 N. W. 131). In the case last cited it is said at page 367:
“Excusable, temporary suspensions, involving no purpose to abandon, the owner being willing and seasonably, under the circumstances, able to resume and doing so, as in this case, satisfies the calls for a ‘public utility operating under,’ etc.”
Municipal corporations should not lightly be held to have abandoned their charter powers, nor should statutes conferring power upon such corporations to acquire and operate property in their proprietary capacity be considered repealed
A motion for a rehearing was denied, with $25 costs, on May 1, 1914.