City of Clay Center v. Clay Center Light & Power Co.

The opinion of- the court was delivered by Graves, J.: Many important and interesting questions have been ably and exhaustively discussed by counsel, both in the briefs and the oral argument, but we have concluded that the case can be disposed of by the decision of a single question, and will, therefore, consider nothing further. It will be seen that the statute which conferred the authority under which this franchise was .granted expressly limits the duration of such grant to twenty-one years. It is needless, therefore, to inquire what power the city might have had under the general-welfare clause of its charter with respect to providing electric light for its streets, lanes and alleys and for the use of its inhabitants in the absence of a statute upon that subject, nor what rights it might have had under the general-welfare clause and this statute taken together, if the restrictive clause had been omitted. The limitartion against granting such a franchise for a period exceeding twenty-one years amounts to an absolute prohibition, which is conclusive upon the city and all other persons. Both of the parties to this franchise were bound to take notice of the law under which they acted, and must be held to have contracted with reference thereto. The city council, being without authority to grant the franchise for a period exceeding twenty-one years when the ordinance in question was enacted, was likewise powerless to impose a valid burden upon the city [393] as a penalty for' refusing to do the act which the statute prohibited it from agreeing to do. That which the city was forbidden to do directly it could not accomplish by evasion and indirection. The evident purpose of the limitation placed upon the continuance of franchises of this kind was to give cities an opportunity at reasonable intervals to revise the provisions thereof, and thereby secure by the terms of a new contract such advantages as might result from the growth of the city and the consequent increased demand for light and power, or on account of improved appliances for lighting plants or otherwise. The language here used is: “If at the expiration of twenty-one years the city shall refuse to grant a further continuance of these privileges the said city shall purchase,” etc. This completely deprives the city of an opportunity to stipulate for any change in the terms or conditions of the contract, and enforces a perpetuation of the old franchise, however disadvantageous its provisions might be to the city. In this indirect manner the object of the statute is rendered nugatory. The provision of the statute limiting the life of the franchise presents a complete bar to the enforcement of this provision of the contract. These propositions are too familiar and elementary to justify the citation of authorities in their support. The judgment of the district court is reversed, with instructions to enter judgment for costs in favor of the city.