Capital City Light & Fuel Co. v. City of Tallahassee

Per Curiam : (After stating the facts.) As will be observed from the statement of the pleadings, the city of Tallahassee is asserting no right to put in and operate a plant for manfaucturing gas to supply light and heat for the use of the city or its inhabitants. It proposes to erect a plant to furnish lights, for municipal use, and for the use of its inhabitants, by means of electricty only. A careful reading of the ordinance passed in 1888 will show that the city is under no obligation whatever to the appellant or its predecessor company to light the streets and public building's of the city with either gas or electricity manufactured by said companies. Nothing is said in the ordinance about lighting tile streets or public buildings with electricity manufactured by the, company. In respect to gas, the city was not required to use any at all, but it obligated itself to take all gas that it might wish to use in lighting its streets and building's from the company at prices not to exceed the amounts named for a certain term of years. — 493 — There is no contract, therefore, between the city and the company that the latter shall have the righc to-furnish the .city for lighting its streets and public buildings all or any electricity used for that purpose, nor is there any stipulation in the ordinance that the city will use nothing but gas, nor that the city will not own or operate an electric light plant for supplying the city and its inhabitants with light. If the city is debarred from erecting an electric light plant by the ordinance passed by it, it is because that ordinance legally grants the company the exclusive privilege and license to use the streets, alleys and lots of the city for the purpose of constructing and operating a plant and its instrumentalities for furnishing electric lights in the city. Our first duty is, therefore, to determine whether the ordinance legally grants this exclusive privilege and license. At the time of the passage of the ordinance all the powers possessed by the city of Tallahassee in reference to lighting the city and authorizing the erection of structures in and over the streets were contained in the general incorporation law for cities and towns. A general power was given “to provide for the lighting of the streets of the city or town” (section 21, p. 249 McClellan’s Dig.), and also “to regulate, improve, alter, extend and open streets, lanes and avenues, and to cause encroachments and obstructions, decayed buildings and ruins to be removed.” Section 17, p. 248 ibid. These powers gave the city no authority to grant any exclusive privilege to use the streets of the city for the purpose of laying pipes or erecting poles and towers for furnishing gas or electric lights. Florida Central and Peninsular R. R. Co. v. Ocala Street and Suburban R. R. Co., 39 Fla. 306, 22 South. Rep. 692; Grand Rapids E. L. & P. — 494 — Co. v. Grand Rapids E. E. L. & F. G. Co., 33 Fed. Rep. 659, and authorities there cited. So far as any exclusive privilege for the use of the streets claimed under the ordinance by the appellant or its alleged predecessor is concerned, it is sufficient to say that no- such exclusive right could be granted by the city because of the want of power to grant it. That por «ion-of the ordinance attempting to grant such exclusive use, either as to gas or electricity, is, therefore, void. The appellant does not, however, rely exclusively upon the provisions of the statutes quoted for authority in the city to grant the exclusive feature of the ordinance in question. It contends that the ordinance may be sustained under a power conferred by the general incorporating act under which its alleged predecessor company was chartered, to the effect that “any corporation organized and put into successful operation under this chapter shall have exclusive privileges for the purposes of its creation for the term of twenty years from the date the corporation commenced to carry out in good faith the terms of its articles of incorporation; provided, however, that this investment shall not so operate as to divest any future legislature of those powers of government which are inherent and essential attributes of sovereignty, to-wit: the power to create revenue for public purposes, to provide for the common defence, to provide safe and convenient ways for the public necessity and convenience and to take private property for the public use, and the like.” Section 30 McClellan’s Dig. p. 234. We do not think this section adds any thing to the powers of the city. It has no reference whatever to municipal bodies. It does not purport to confer any power on them, or to aid or supplement the powers conferred by the general law apper — 495 — taming to the creation of municipal bodies.' It purports to grant certain privileges directly by the legislature, but it does not pretend to authorize municipal bodies to grant any, and it is clear' from its language that there was no design in enacting' it to confer power on municipalities to grant exclusive privileges. Whatever rights and privileges of an exclusive nature the Tallahassee Gas and Electric Light Company possessed must, therefore, be derived from the general incorporation act under which it was incorporated, and this brings us to the further contention that that company by the provisions of the statute last quoted had an exclusive right to use the streets of the city so far as the business of manufacturing and distributing gas and electricity for the use of the city and its inhabitants is concerned, and that the appellant company has succeeded to- all of its rights and privileges. And here it may be well to remark that the statute referred to was repealed before the appellant corporation was chartered under the general law, so that if it possesses any exclusive privileges of the nature claimed, they are not-derived from its own charter or any ordinance of the city enacted after its incorporation, but are derived solely from its alleged purchase of its predecessor’s property, corporate franchises and privileges. The, appellee contends that exclusive privileges of the character claimed in this case are not embraced within the class of exclusive privileges which the statute quoted properly interpreted meant to grant, and further, that if they are, such privileges are personal to the original corporation to whom granted, and can not be transferred to another by mortgage, or by judicial sale,. It claims also that the public nature of the business in — 496 — which the company was authorizéd to engage brings the charter within the proviso of the section which reserves power in the legislature to take away the exclusive feature of the privileges granted under circumstances therein mentioned, and that, therefore, the legislature had power to repeal the statute, as it did by the adoption of the Revised Statutes of 1892, or at least to- modify the exclusive character of the privilege granted so as to authorize-the city, for the public interest and convenience, to establish and operate an electric light plant within the city, as it did by the acts of 1897 and 1899. These are questions which we do not find it necessary to decide in the present case, being- content to- rest our decision upon other grounds which we deem conclusive. It appears from the pleadings that neither the Tallahassee Gas and Electric Light Company, nor the appellant company, ever established an electric light plant in the city of Tallahassee in pursuance of the authority conferred upon.either of them. From the organization of the first company up- to the time the gas plant was sold at judicial sale, about six years had elapsed, and from the time of the judicial sale to the time the city began proceedings to enable it to establish an electric light plant, about six years more elapsed. During all this period of time neither company attempted to- construct an electric light plant as authorized by its charter. In the meantime that provision in the general incorporation law relating to exclusive privileges had been repealed by the legislature of 1891, and an act passed in 1897 specially authorizing cities and towns to establish gas and electric light plants to supply themselves and their citizens with light, and still later, in 1899, special legislative authority was given the city of Tallahassee to — 497 — establish an electric light plant. Neither the Tallahassee Gas and Electric Light Company, nor appellant company, has acquired any vested right to erect' an electric light plant, by the investment of any money in any such plant, and the question arises as to whether or not any constitutional right has been impaired by the repeal of the statute granting the alleged exclusive privilege and by the legislation .authorizing the city to do. that which is a public benefit, and that which for some twelve years the companies have neglected to do as authorized by their charters and the city ordinance. We are unable, to see that any vested right of either company so far as the establishment of an electric light plant is concerned, is impaired by the legislation which authorizes the city to do that which it now proposes to do. In the first place, the statute properly construed does not grant the. exclusive privilege in respect to the electric light plant as claimed. A grant of exclusive privileges to. appellant's predecessor would be the grant of a franchise from the State, the possession of which would enable it to obtain a practical monopoly of the gas and electric light business in Tallahassee for the term specified. All such grants are strictly construed against the grantee, and nothing passes thereby but such as is clearly intended. Saginaw Gas Light Co. v. City of Saginaw, 28 Fed. Rep. 529; Florida, Atlantic & Gulf Central R. R. Co. v. Pensacola & Georgia R. R. Co., 10 Fla. 145. Under the express language of this statute the exclusive privilege did not attach until the corporation was not only organized, but put into successful operation, and the privileges were to attach for twenty years from the time the corporation commenced to carry out in good faith the terms, of its articles of incorporation. The condition upon which the — 498 — exclusive privilege, so far as the electric light plant was concerned, has never been perfomed, for the company has never been put into successful operation so far as that branch of its business is concerned, nor has it ever commenced to carry out in good faith the terms of its articles of incorporation in regard to erecting an electric light plant. The first company never acquired the right to the exclusive privilege mentioned in the statute, be cause it failed to perform the condition precedent, and therefore it had no exclusive privilege to transfer to appellant company, so far as the electric light plant is concerned. In the next place, even if an exclusive privilege of this nature, tending to establish a monopoly, was granted without such express condition precedent as we find in our statute, such grant does not become a contract or a vested right so as to be protected by the constitution of the State or the United States, until the company has, to say the least, begun to do the thing required by the charter as the consideration fot the grant of such privilege. Pearsall v. Great Northern Railway Co., 161 U. S. 646, 16 Sup. Ct. Rep. 705; Louisville & Nashville Railroad Company v. Kentucky, 161 U. S. 677, 16 Sup. Ct. Rep. 714. See, also, Chincleamouche Lumber and Boom Co. v. Commonwealth, 100 Pa. St. 438. It would be going too far to hold that the clauses of those constitutions protecting the obligations of contracts from impairment would enable one legislature to tie the hands of another in matters of public convenience and interest, such as lighting cities, by granting charters containing exclusive privileges to perform these public benefits which are held for speculative or other purposes, without attempt to execute the powers granted. Gonzalez v. — 499 — Sullivan, 16 Fla. 791, text 820; Elliott on Roads and Streets, p. 569 et seq. Our attention is called to that clause in the seventh section of the city ordinance which required the company to put in electric lights only when sufficient consumers could be secured to pay eight per cent, interest per annum on the additional capital required to purchase the machinery and put in'successful operation electric lights. It would appear from this clause that from the beginning the company only intended to avail itself immediately of that provision of its charter authorizing it to erect a gas plant, and to use the other power granted by its charter, together with the city ordinance, to shut out competition in its business from eletric light companies, intending only to put in an electric light plant whenever that plant could be made to secure it an 'annual profit on its investmenent in that plant of eight per cent. It is quite apparent that the legislature never intended to secure to it any such right; but, on the contrary, intended the privilege to extend only so far as to secure the company from competition in matters wherein it had complied with its charter by being put into successful operation. We have seen that the city had no authority to grant exclusive privileges to use, its streets for the purpose of furnishing light from gas and electricity, but even if it did have such power, it could not confer such exclusive right and at the same time defer construction of the plant until such time as it could be made to pay eight per cent, upon the investment. The effect of such a provision in an ordinance like the. one we are considering is, that the city will not permit any other person or corporation to use its streets for the public purpose of furnishing electric lights for twenty500 five years, but at the same, time will not require the person or corporation to whom the exclusive privilege is granted to furnish such lights until such time as it can make an annual profit of eight-per cent, on “its investment. The city has no such power over its streets, which are held by it in trust for the public benefit (Florida Central and Peninsular R. R. Co. v. Ocala Street and Suburban R. R. Co., 39 Fla. 306, 22 South. Rep. 692; Gonzalez v. Sullivan, 16 Fla. 791, text 820), and even it it did, so long as the grantee failed to invest money in a plant the ordinance could be repealed or modified— being without consideration. We have not overlooked the fact that the first company perfomed its charter powers in part by erecting and operating a g-as plant, and as to that plant, and the business connected therewith, it may have possessed exclusive privileges under the statute which could not be impaired by subsequent legislation, and it may be that such privileges passed to appellant throug'h the judicial sale. As to that we express no opinion. But while the purpose of erecting both plants would be the same, in that they would both furnish light to the city and its people, yet they furnish a different light and require separate and different plants and instrumentalities for their operation. We think they are so distinct in character as to amount to separate undertakings, and they are so treated in the articles of association of both companies and in the ordinance.. Power to operate the one would not include power to operate the other, and nermission to use the streets for one would not include permission to use them for the other. City of Newport v. Newport Light Co., 89 Ky. 454, 12 S. W. Rep. 1040. The exclusive privileges as to the electric light plant — 501 — could not have operated as a consideration.for erecting the gas plant, for such privileges under the statute were to attach to the electric light business only when that plant was put in. The decree of the court below is affirmed.