Manhattan Trust Co. v. City of Dayton

LURTOX, Circuit Judge, after stating the facts, delivered the opinion of the court. The controversy involved on this appeal is as to the price to be charged the citizens of Dayton, Ohio, by the receiver of the natural, gas company, and arises upon the intervening petition of the city of Dayton, the answers of the Manhattan Trust Company, and of the receiver. The contention of the receiver is that there is no agreement between the gas company and the city as. to the price, and no ordinance in force regulating the price; that the price of 10 cents per 1.000 cubic feet is an absolutely inadequate price, and ruinous to the interests of the property committed to his management as receiver; and that the charge of 20 cents per 1,000 cubic feet, demanded by him, is reasonable and just. The city, on the other hand, insists that section 10 of the ordinance of March 28, 1889, is in force, and operates as a maximum upon the price of gas furnished consumers by meter measurement. The question turns upon the construction of the ordinances of the city of Dayton passed December 23, 1887, and March 28, 1889, viewed in the light of sections 2478 and 2479 of the Revised Statutes of Ohio. These sections read as follows: “Sec. 2178. The council of any city or village in which electric lighting companies, natural or artificial gas companies, or gas light or coke companies may ho established, or into which their wires, mains or pipes may be conducted, are hereby empowered to regulate, from time to time, the prices which said electric lighting, natural or artificial gas, or gas and coke companies, may. charge for electric light, or for gas for lighting or fuel purposes, furnished by such companies to the citizens, public grounds and buildings, streets, lanes, alleys, avenues, wharves and landing places; and such electric lighting, natural or artificial gas, or gas light and coke companies, shall in no event charge more for any electric light, or natural or artificial gas, furnished to such corporation or individuals than the price specified by [332] ordinance of such council; and such council shall also have power to regulate and fix the price which such companies shall charge for rent of their meters. “Sec. 2479. In case the council fixes the minimum price at which it requires any company to furnish gas to the citizens, or public buildings, or for the purpose of lighting the streets, alloys, avenues, wharves, landing places and public grounds! for a period not exceeding ten years, and the company assents thereto by written acceptance, filed in the office of the cleric of the corporation, it shall not be lawful for the council to require such company to furnish gas at a less price .during the period of time agreed on, not exceeding ten years, as aforesaid.” Under the latter section it was clearly within the power of the council to fix a minimum price at which it would require gas to be furnished for a period “not exceeding ten years.” Upon the assent of the company, “by written acceptance filed in the office of the clerk of the corporation,” the act makes it unlawful for the council to require gas to be furnished at a less price during the period of time agreed on, not exceeding 10 years. The price ordinance of December 23, 1887, was a clear exercise of this limited power of contract. The ordinance was, in terms, limited to a period of 5 years from and after 10 days after the date of its first publication, and therefore expired by its own limitation on the 10th of January, 1893. It follows, therefore, that if that is the only price ordinance bearing upon this gas company, it has expired by its own terms, and there is now no agreement or ordinance regulating the charge to consumers. But the petitioner insists that by section 10 of the ordinance of March 28, 1889, a maximum rate is fixed for gas furnished by meter measurement, and an option given consumers to require meter measurement.- That section reads as follows: “Any consumer within said city shall have the right to require gas to be furnished by meter measurement, and not by the schedule rates; in cases where a meter is used, said company shall have the right to charge and receive any sum not exceeding ten cents per thousand cubic feet, if paid within ten days, or twelve and one-half cents per thousand cubic feet, if not so paid, for the gas used. Such meter shall be furnished and set in place upon the application of any consumer, without cost to such consumer, by said company; but said company shall be entitled to charge a rent of three dollars per year in advance therefor.” If tbis section is to be construed as a regulation of the price for gas furnished consumers under and by virtue of the power conferred by section 2478, above cited, and is still in force as general legislation, then the controversy is closed, and the receiver must comply with an ordinance clearly within the power of the council to enact. So, if it is to be regarded as a limitation imposed upon the license authorizing the gas company to enter upon the public streets of Dayton, and establish itself there as a gas company, it would be a valid legislative limitation upon the gas company so long as it remained unaltered or unrepealed. With regard to this section, the insistence of the learned counsel for appellants is, as set down in the brief: “First. It is not a limitation upon the power of the company for the period of twenty years. [333] “Second. It is not a contract for that period, it being manifestly beyond the power of council to enter into .such contract; nor is it a contract by construction for ten years, a period within its power. "Third. But it was a contract for the imexpired term of five years from January 10, 4888, (when the price, ordinance' of December 23, 1887, took effect), being, in effect, an amendment of that ordinance.” We quite agree with counsel as to the second of these propositions. The ordinance of which section 10 is a part dot's not by tiny fair and reasonable construction purport to be an agreement under section 2179, Rev. St. Ohio, for a period of 20 years. An agreement for such a term would be. ultra vires, and it is not to be lightly assumed that the legislative body of the city deliberately undertook to do a vain filing, expressly prohibited by the plain terms of the act giving it the right to make an agreement for a term not exceeding 10 years. Neither can it, hv construction, he regarded as an agreement for the term of 10 years. Such a construction could only be reached by the Insertion of a term of limitation where none* was inserted, or by substituting one term for another. That would be to make a contract for the parties. The section is not so worded as to enable the court to separate the lawful from the unlawful. The contract must stand or fall dependent upon the validity or invalidity of the ordinance as it was enacted. Trist v. Child, 21 Wall. 441. In U. S. v. Reese, 92 U. S. 214, a like question arose. Congress had passed a statute punishing election officers who should refuse to allow any person lawfully entitled to do so the right to cast his vote in an election. The supreme court held (.hat congress could only punish such denial when it was on account of ra.ee, color, or previous condition of servitude. "It was agreed,” says Air. Justice Miller, in the Trade-Mark Case, 100 U. S. 98. “that the general description of the offense included the more limited on<'. and that the section was valid where such was in fact the cause of denial. But the court said, through the chief justice: ‘We are not able to reject a part which is unconstitutional, and retain the remainder, because it is not possible to separate that which is constitutional, if there be any such, from that which is not. The proposed effect is not to be attained by striking out or disregarding words that are in the section, hut by inserting those that are not there now. Each of the sections must stand as a, whole, or fall altogether. The language' is plain. There is no room for construction, unless it be as to the effect of the constitution. The question, then, to be determined, is whether we can introduce words of limitation into a penal statute so as to make it specific, when, as expressed, it is general only. * * * To limit this statute in the manner now asked for would be to make a new law, not to enforce ail old one. This is no part of our duty.’ If we should, in the case before us, undertake to make, by judicial construction, a law which congress did not make, it is quite probable we should do what, if the matter wore now before that body, it would be unwilling to do. namely, make a trade-mark law which is only partial in its operation, and which would complicate! the rights which parties would hold, in some instances under the act of congress, and in others under state law.” Cooley, Const. Lim. 178, 179; Com. v. Hatchings, 5 Gray, 482. We cannot venture to say that an agreement for an indefinite time, or for 20 years, — a time beyond the power of the council,' — is to be construed in either case as by construction an agreement for 10 [334] years, because it was within the power of the council to have made an agreement for that time, or for any time short of that time. .This brings us to the question of real difficulty, — that covered'by the third contention of appellants, viz. that section 10 is to be construed as an agreement for the unexpired term of the contract as to price contained in the ordinance of December, 1887. This contention is entirely based upon the meaning and legal effect of the provision of section 15 of the ordinance of March 28, 1889, in these words: “Mixers numbered as follows shall have openings of the following diameter through them: No. 3, 3-32 of an inch. No. 5, 4r-32 of an inch. No. 7, 5-32 of an inch. No. 9,' 6-32 of an inch. “Mixers designated by letters shall have openings of the following diameter through them: Mixer A, 6-32 of an inch. Mixer B, 7-32 of an inch. Mixer O, 8-32 of an inch. Mixer D, 9-32 of an inch. Mixer E, 10-32 of an inoh. Mixer E, 11-32 of an inch. “The thickness of metal through which the outlet for gas is made in the mixer, should not exceed three-sixteenths- of an inch. Any of the above mixers shall be used when required by persons wishing quantity of gas they will supply. Inch measurements above refer to regulation sizes. The contract heretofore made between the city and this company, as to schedule of prices, shall be in full force except as herein altered, and for the unexpired time of said original contract, and all property rights heretofore acquired by this company shall be preserved to it, except as modified herein." This clearly has reference to the schedule of prices for gas supplied through mixers found in the ordinance of December, 1887. The contractual character of that ordinance, it having been accepted by the gas company, is recognized, and that agreement is proposed to be revised, “except as herein altered, and for the unexpired term of said ordinance.” The words, “as herein altered,” refer, as we think, to the alteration contained in this section. The old agreement contained no regulation as to the size of the openings in the mixers. This is remedied in this section by a definite provision as to the size of the openings in each mixer referred to by number or letter in the old ordinance. This section 15 contains the only definite indication that anything in this ordinance was intended as a contractual proposition. This proposition for an agreement is limited to the matter covered by the old agreement. . This leaves section 10 to stand as a regulating provision of legislative character, and not intended as a proposition under section 2479. The expression of a purpose to make an agreement, so far as there had been an agreement, and for the unexpired term of that agreement, is an indication of the limits of the agreement intended by the new ordinance. It is as much as to say that, “so far as there was an agreement, it shall be revived, subject to the provision herein as "to the size of the openings in the mixers; but as¡ to matters not within the old agreement there shall be no agree-1 [335] ment which is to stay our free hand as a legislative body.” This is borne out by the fact tha t there is no limitation as to time contained in section 10, which provided a price when delivered through meters, or section 11, which refers to the use of gas by manufacturers. Why such, particularity in limiting the agreement as to the delivery through mixers to the unexpired time of the old agreement, while ueiiher of these sections contain any reference as to time? The only answer would he that the council intended to give to the new company all the privileges of the old, whose rights had been forfeited, and to make it an agreement just as broad as that it had had with the old company, but no broader. To constitute a valid proposition for an agreement, the council should have made a schedule for a distinct period of time, not exceeding 10 years. Such a proposition, when accepted, would constitute an agreement. But if it he for an indefinite time, or for a period beyond the time allowed by section 2479, it will he void as an agreement. Coke Co. v. Avondale, 43 Ohio St. 257, 1 N. E. 527; State v. Gas Co., 37 Ohio St. 45. The conclusion we reach is this: That section 10 is a legislative regulation of the price of gas delivered by meters, and a limitation upon the license granted this company, which must stand as a lawful regulation of price, under section 2478, Rev. St. Ohio, until altered, amended, or repealed by subsequent legislation. The receiver is-as much bound by this public law as the company would he. The decree is therefore affirmed.