New Orleans Gaslight Company v. Drainage Commission of New Orleans

The New Orleans Gaslight & Banking Company was incorporated in 1835, and was given the exclusive privilege of vending gas in the city of New Orleans and its faubourgs and the city of La Fayette, to such persons or bodies corporate as might voluntarily choose to contract for the same; and it was permitted to lay pipes and conduits at its own expense in the public ways and streets of New Orleans, having due regard for the public convenience. In 1845 and 1854 the charter of the company as to its right to engage in banking was withdrawn, and the right to vend gas and use the streets was continued to the corporation under the name of the New Orleans Gaslight company until April 1, 1875, when its corporate privileges should end, the company during the continuance of its charter to furnish the Charity Hospital with necessary gas and fixtures free of charge. By amendments the contract privilege of the company was extended until April 1, 1895, the exclusive privileges granted by the original charter not to extend beyond the time fixed in the act of incorporation. In 1870 another company, under the name of the Crescent City Gaslight Company, was incorporated, its charter providing that the company, its successors, and assigns, should for fifty years from the expiration of the charter of the New Orleans Gaslight Company have the sole and exclusive privilege of making and supplying gaslight in the city of New Orleans, and for that purpose be allowed to lay pipes and conduits in the streets and alleys of the city where the same may be required, at its own expense, in such manner as to least inconvenience the city and its inhabitants; and the company was also required to afterwards repair, with the least possible delay, the streets it had broken. In 1873 an act of the legislature fixed the date of the expiration of the exclusive franchise of the New Orleans Gaslight Company at April, 1875, and the franchise of the Crescent City Gaslight Company was confirmed from that date for the period of fifty years. On March 29, 1875, the New Orleans Gaslight Company and the Crescent City Gaslight Company were consolidated under the name of the former corporation. This company is the plaintiff in the action in the state court. By an act of the legislature, approved July 9, 1896, the state created a board known as the Drainage Commission of New Orleans, which board was given the power to control and execute a plan for the drainage of the city of New Orleans, and also the power to appropriate property according to the laws of the state, by legal proceedings, for the purpose of constructing a drainage system. After adopting a system of drainage, and proceeding with the construction thereof, according to the plans, it was found necessary to change the location in some places in the streets of the city, of the mains and pipes theretofore laid by the New Orleans Gaslight Company. The testimony shows that there was nothing to indicate that these changes were made in other than cases of necessity and with as little interference as possible with the property of the gas company. By stipulation between the parties it was agreed that the charges should be paid by the gas company when it became necessary to accede to the demands of the drainage commission; the gas company should keep an account thereof; and that its right to recover for the amount expended by it should not be prejudiced by the arrangement made, but should be submitted to the courts for final adjudication. This action was brought to recover the cost of the changes so made. In the court of original jurisdiction there was a judgment in favor of the drainage commission. Upon appeal the supreme court of Louisiana reversed this judgment. Upon rehearing, the latter judgment was reversed and a final decree rendered, affirming the judgment of the lower court, rejecting the claim of the gas company. 111 La. 838, 35 So. 929. A writ of error to this court brings into review that judgment, the contention being that the judgment of the state court has impaired the contract rights of the gas company, and has the effect to take its property without compensation, in derogation of rights secured by the Constitution and the 14th Amendment.

Mr. Charles F. Buck for plaintiff in error.

[Argument of Counsel from pages 455-457 intentionally omitted]

Mr. Omer Villere for defendant in error.

Mr. Justice Day delivered the opinion of the court: