Capital City Light & Fuel Company v. City Of Tallahassee

The plaintiff in error, being the plaintiff below, brings this case here by writ of error to the supreme court of the state of Florida for the purpose of reviewing a judgment of that court, affirming the judgment of the circuit court of the second judicial district of that state, dismissing plaintiff's bill of complaint against the defendant with costs.

The bill shows that the Tallahassee Gas & Electric Light Company was incorporated pursuant to the laws of the state, December 20, 1887, for the purpose, as stated in its articles of association, of constructing, maintaining, and operating gas works and electric-light works in the city of Tallahassee, and for the manufacture of gas for light and fuel or for the purpose of disposing of or dealing in coal or wood for fuel, and in maintaining and operating electric-light machinery for supplying lights in the city, or for manufacturing or dealing in any and all manner of artificial light or heat within that city. After its incorporation the company applied to the city council for the franchise of constructing gas and electric-light works in the city for the purposes declared in its charter, and, pursuant to such application, an ordinance of the city council was duly passed on January 4, 1888, the 1st section of which authorized the company 'to construct gas and electric-light works in the city of Tallahassee, and for that purpose that the said company shall have the right to lay their pipes in any and all streets in said city and in the alleys and lots of the same, and to erect such lamp posts or poles or towers as may be necessary or essential for furnishing gas or electric lights in said city of Tallahassee, and to this end the Tallahassee Gas & Electric Light Company are authorized to make such excavations or erect such structures, poles, or towers, and run wires thereto along the streets of said city, as may be necessary or essential. . . .'

Provision was also made in the ordinance as to the manner of excavating the streets, constructing the works, and as to the quality and price of the gas to be furnished and the time within which the gas works should be completed and the plant put in operation. It was also provided that the company should file a written acceptance of the ordinance, whereupon the same should become binding upon both parties.

Section 7 of the ordinance provided for the completion of the gas works and for operating the same within a short time, stated therein, and ended with the following provision:

'And the said Tallahassee Gas & Electric Light Company shall put in and operate electric lights as soon as sufficient consumers can be secured to pay 8 per cent interest per annum on the additional capital required to purchase the machinery for and put in practical operation the said electric lights.'

Sections 10 and 11 of the ordinance read as follows:

'Sec. 10. That the said city of Tallahassee, in consideration of the foregoing requirements being complied with on the part of the said Tallahassee Gas & Electric light Company, their associates, successors, and assigns, shall and hereby obligates itself to take all gas which it may wish to use in lighting its streets or buildings from said company at a price of not more than one and one-half dollars ($1.50) per one thousand feet for such as may be used in public buildings used exclusively by said city, and at a price of not more than ($30) thirty dollars per annum for each street lamp as hereinbefore provided for in § 6 of this ordinance, for the period of twenty-five consecutive years from the completion of said gas works: Provided, That nothing herein shall be construed as an obligation on the part of the said city of Tallahassee to take any gas from said company.

'Sec. 11. That the privileges and licenses herein and hereby granted shall be exclusive in and to said Tallahassee Gas & Electric Light Company, their associates, successors, and assigns, for and during the term of twenty-five years.'

After the adoption of the ordinance the company filed its acceptance thereof, and proceeded to the construction of its gas works, which it completed, and thereafter furnished gas without any complaint until November 8, 1893, when a receiver was appointed, and subsequently its property sold under a foreclosure decree. It was bid in by William A. Rawls, and a deed made to him. Thereafter, and on March 19, 1894, the plaintiff in error was incorporated, and the property conveyed to it by Rawls. It was stated in the articles of incorporation that the general nature of the business of the company to be transacted by it was 'to acquire, construct, improve, maintain, and operate gas works and electric-light works in and adjacent to the city of Tallahassee, in Leon county, state of Florida, and to manufacture gas for light and fuel; to dispose of and deal in coal or wood for fuel; to construct, maintain, and operate electric-light machinery for supplying lights in and about the said city, or for manufacturing and dealing in any and all manner of artificial light or heat within or adjacent to said city.'

The company was incorporated for the purpose of operating under the terms and provisions of the ordinance of the city above mentioned, the property purchased by Rawls, which he had purchased for the purpose of transferring to the company, and in pursuance of such purpose the property was made over to the company, which entered into the possession and assumed the management and control thereof, and continued the manufacture of gas for the purpose of supplying the city and its inhabitants with light and heat, and it has since coming into the possession of the property enlarged and extended its plant, and met the increased demands of the city and its inhabitants, the city having ever since recognized, treated, and dealt with the company as the lawful successor of the Tallahassee Gas & Electric Light Company, and the legal assignee of all the rights, franchises, privileges, and contracts created and conferred on that company by the ordinance of the city of Tallahassee.

The legislature on June 5, 1897, passed an act, chapter 4600 of the Laws of Florida, entitled 'An Act to Enable Cities and Towns to Manufacture and Distribute Gas and Electricity, and to Construct, Purchase, Lease, and Establish and Maintain within Its Limits One or More Plants for the Manufacture and Distribution of Gas and Electricity for Furnishing Light for Municipal Use, and for the Use of Such of Its Inhabitants as May Require and Pay for the Same as Herein Provided.' Thereafter, and on May 27, 1899, the legislature of the state passed another act, to enable the city of Tallahassee to exercise the powers provided by the act of 1897, above mentioned. This act of 1899 granted to the city the right to construct and maintain its own electric-light plant upon complying with certain conditions specified in the act. These conditions the city proceeded to comply with, and passed a resolution to build and operate an electric-light plant of its own, which was ratified at an election by the people of the city, and the city council was about to proceed to carry out the plan for the erection and operation of such electric-lighting plant to light the city under the provisions of the act of 1899, when this suit was commenced.

The plaintiff duly protested at each step against the action of the city council for the erection and operation of such a plant, and claimed that it would be a violation and impairment of the contract which it held with the city, and would very greatly injure, if not ruin, the plaintiff in error. It was also stated that there has never been a time since the establishment of the gas works in that city that the plaintiff in error, or its predecessor, could have procured sufficient consumers to pay 8 per cent per annum on the additional capital required to purchase the machinery for and put into practical operation an electric-lighting system therein. The bill prayed that the city and its officers might be enjoined from establishing and maintaining an electric plant, and from furnishing electric light to the inhabitants of the city during the balance of the period of twenty-five years for which the exclusive franchise of constructing gas and electric works in that city, and for using the streets thereof for that purpose, and for furnishing gas and electric light to the inhabitants of the city was granted, to wit, until the year 1913. The bill also prayed that the city should be enjoined from making or entering into any contract or from performing any contract with any corporation or firm for furnishing electric lighting and other machinery, and that the city should be enjoined from issuing its bonds for the payment of any such plant.

This bill was demurred to for want of equity, in that it showed no facts entitling complainant to relief against the defendant as to the matters contained in it. The demurrer was sustained and the complainant's bill dismissed, and the judgment entered thereon was affirmed by the supreme court of Florida. 28 So. 810.

Mr. Frederick T. Myers for plaintiff in error.

Mr. George P. Raney for defendant in error.

Mr. Justice Peckham, after making the foregoing statement of facts, delivered the opinion of the court: