Chicago Municipal Gas Light & Fuel Co. v. Town of Lake

130 Ill. 42

• Court: Illinois Supreme Court
• Decided: October 31, 1889
• Status: Published

Opinion

Mr. Justice Baker

delivered the opinion of the Court:

A franchise is a particular privilege conferred by grant from a sovereign or a government, and vested in individuals or a corporation. The franchises which were conferred by the State upon the appellant corporation, when it was organized under the general Incorporation law, are to be ascertained from the objects of the incorporation, as stated in the articles of incorporation, and these were, to manufacture and sell gas for illuminating and heating purposes in the city of Chicago and county of Cook. The corporation was also, by section 5 of the act under which it was organized, vested with and authorized to exercise all the powers necessary and requisite to carry into effect the objects for which it was formed. But these general powers intended by this section 5 are such powers only as are necessarily incident and supplemental to the special powers granted. The State did not assume, by this section, to grant to appellant a special privilege or franchise to occupy and use the public streets of the cities and villages in Cook county for the purpose of laying therein its mains and gas pipes, any more than it assumed thereby to vest it with the privilege of taking the private property of an individual land owner for the purpose of building thereon its gas works. The power to control and regulate the streets, alleys and other public places within the limits of the town of Lake, and abate any obstructions, encroachments or nuisances thereon, was given, in its charter, to the corporate authorities of the town. Under this power the town could lawfully permit any use of such streets and alleys that is consistent with the public objects for which they are held, and could make a grant of a right of way for the purpose of laying gas pipes and mains under the surface. (City of Quincy v. Bull et al. 106 Ill. 337.) If appellant has the right to place its mains and pipes in the streets of the town, it is either under a license from or a contract with the town. The right claimed in this case is based upon the provisions of the ordinance of March 25,.1884. That ordinance granted permission and authority to lay gas mains, pipes, feeders and service pipes in any and all of the streets, alleys, avenues, highways, parks and public grounds throughout the town of Lake, and to maintain and repair the same. If this was a mere license, then it was revocable at any time before it was acted upon. (Metropolitan City Ry. Co. v. Chicago West Division By. Co. 87 Ill. 317.) The privilege of the use of the public streets of a city or town, when granted by ordinance, is not always a mere license, and revocable at the pleasure of the municipality granting it, for if the grant is for an adequate consideration, and is accepted by the grantee, then the ordinance ceases to be a mere license, and becomes a valid and binding contract; and the same result is reached where, in case of a mere license, it is, prior to its revocation, acted upon in some substantial manner, so that to revoke it would be inequitable and unjust.

In Chicago City Ry. Co. v. The People, 73 Ill. 541, the court had under consideration the distinction between a franchise granted by the sovereign power of the State, and an authority given by an ordinance of a city to construct a railway on a certain street, and it was said: “The grant in the ordinance is not a franchise, but a mere license,—a permission to construct a railway in a certain street, within a limited period.” But notwithstanding this language, it is evident, from the opinion, that the court regarded the ordinance as a contract, —something more than a mere license, revocable at will,— for it is there said: “The common council had authority to amend, modify or annul the contract created by the ordinance of August 22,1864, with the consent of the railway company.” And it is further said: “The city was the sole judge whether the public exigency required an extension of time, or any other modification of the contract.”

In City of Quincy v. Bull, 106 Ill. 337, it was said: “The ordinance of August 7, 1873, and the acceptance of it by Prince, constituted a contract between him and the city of Quincy, by which there was granted the right of way which is claimed.” And further said: “This privilege of the use of the streets by Prince is not a mere license, revocable at the pleasure of the city council, but it is a grant under an express contract, for an adequate consideration received, and binding as such.”

In the case at bar there were like privileges granted by ordinance, to those granted in the case last cited. Here, there was a formal written. acceptance of the terms of the ordinance, and it was signed by the president and secretary of appellant, and attested with its seal, and this acceptance was, by the board of trustees of the town, ordered to be received, placed on file, and spread of record. The company, by this acceptance of the ordinance, undertook to perform a service for the public benefit of the town and its inhabitants, in furnishing them with gas for illuminating and heating purposes; and it expressly contracted to commence furnishing gas to the town within one year from the date of the passage of the ordinance, and that it would furnish gas to consumers at a price not exceeding $2.50 per thousand cubic feet, with a rebate of fifty cents per thousand cubic feet, and impliedly contracted that it would, within the year, either build or otherwise procure gas works with which to supply the demand in the town for gas. We think these undertakings on the part of appellant were a sufficient consideration for the contract based on the ordinance. The contract between the town and appellant being a valid and binding contract, the repealing ordinance of April 23,1884, adopted by the town, was ineffectual to abrogate it, and said last mentioned ordinance was consequently null and void.

The ordinance of March 25, 1884, contains this condition: “Said company shall commence furnishing gas to the town of Lake within one year from the date of the passage of this ordinance.” The theory of the bill of complaint is, that there has been a performance of this condition. The bill contains these allegations: “Complainant began the work of putting in its contemplated gas plant and getting ready to commence furnishing gas to the people of said town of Lake, within the period of one year from the passage of said ordinance therein named as the time when complainant should so commence to furnish gas; and complainant says that it did, within said period of one year, have its contemplated gas plant so far completed as to commence the manufacture and supply of gas to many of the people of said town, and in so doing complainant has expended many thousand dollars; * * * and complainant further represents, that * * * it did, within the said twelve months, so far advance with its said plant as to be able to commence furnishing gas as contemplated by said ordinance of March 25,1884, and complainant was, within said year mentioned in said ordinance, and is still, furnishing gas as therein contemplated.”

It is to be noted, that waiving the question of the passage of the repealing ordinance, on two occasions, only, was appellant interfered with in attempts made by it to lay gas pipes and mains in the streets of the town. The first of these occasions was on the 29th of March, 1884, and before it had, notified the authorities of the town of its acceptance of the provisions of the ordinance of March 25, 1884, and the interference then was not by or at the instance of the town, but by the service of a writ of injunction issued upon a bill filed by a third party,—the Lake Gas Company,—and that injunction was dissolved by the dismissal of the bill of complaint within one month after its issuance. The other occasion was on the 9th of May, 1885, when it was forcibly prevented by the town from laying gas pipes in the streets; but this was about a month and a half after the expiration of the year limited by the contract, and an interference after the expiration of the year could not, in the nature of things, have prevented the company from the performance of the condition within the year.

It is urged, however, the repeal of the ordinance was intended to be, and was, a constant menace and threat to use force, if necessary, to prevent appellant from proceeding with the work of laying pipe. No act or expression of the town authorities, prior to the expiration of the year, which tends to show an intention to interfere with the laying of pipe, except the fact of the passage of the repealing ordinance of April 23, 1884, is in proof; and the assumption the town would have interfered to stop by force the laying of pipe, is, under the evidence, of doubtful propriety. It would seem that if appellant regarded the repealing ordinance as of no force, and understood its contract, based upon the ordinance of March 25, 1884, was a subsisting contract, and was, in good faith, intending to carry out such contract, and desirous of performing its conditions, it would, at the very least, either have proceeded with the duties that contract imposed upon it, until forcibly prevented from so doing, or else would have notified appellee of its claim the contract was still in force, and of its readiness to perform the conditions of the same.

But if we waive this matter, and take for granted that the passage of the repealing ordinance fully justified appellant from making any attempt to lay gas pipes in the streets within the year designated in the first ordinance, yet it is manifest the act of the town in assuming to repeal the ordinance of March 25, 1884, did not prevent the gas company from constructing or acquiring gas works, by means of which it could comply with its undertaking to supply the town with gas. In fact, the case of appellant, as made by its bill of complaint, is not, as we have seen, that it was prevented from putting up its gas works, but that it did, within the year, procure the contemplated gas plant. It is admitted by appellant, both in its bill and by its conduct, that the procurement of gas works by it within the year was contemplated by the ordinance, and we doubt not that the company had the legal right to acquire, by lease or purchase, a gas plant to subserve the purposes of its incorporation, and enable it to comply with the conditions of the grant of a right of way in the public streets. It is far from clear, however, that the assignment to appellant of the agreement and lease made between the Bock Island railway company and Springer, was a performance by appellant of its contract with appellee, and a substantial compliance with the requirement contemplated by the ordinance. It seems to us the terms of that agreement preclude the idea the assignment was such performance and compliance. By that agreement the railway company demised and leased the building and premises, known as its gas works, to Springer for the term of two years, and Springer, who was engaged in the business of constructing gas works, agreed to put into the premises the Springer process and apparatus for the manufacture of gas, and furnish the company, during the two years, all the gas required for use in its shops and houses at net cost, with certain stated guaranties as to the quality and cost of such gas, and at the end of the two years, if the quality and cost of the gas furnished complied with the requirements of the contract, the railway company agreed to pay the cost and expense of constructing the new gas works, and any additions thereto; and the agreement provided that the railway company “thereafter shall own and control the same.” There was also a provision in the agreement the gas works and apparatus already in use should remain intact, so that if Springer failed to comply with his agreement, and furnish gas of the quality, etc., required, then the old works could again be used. Manifestly, the furnishing of gas to the town of Lake and its inhabitants for public consumption was not within the purview of this agreement. The intention of the railway company evidently was to test the Springer process and apparatus for a term of two years, and at the end of that time, if the guaranties were made good, and the test proved satisfactory, to pay for and own the new works and process furnished by Springer. The new works were undoubtedly wanted by the railway company solely for the purpose of lighting its own shops and buildings situate on its own grounds. It is not to be presumed it had any intention of engaging, either directly or indirectly, in the business of manufacturing and selling gas for public consumption, as that business would be wholly foreign to the purposes of its organization, and ultra vires. The objects of Springer in making the agreement and taking the lease, at least so far as they appear in the instrument which was executed, were to introduce his new process and apparatus for the manufacture of gas, and at the end of two years "effect a sale of the same and of the new gas works. The lease and contract had reference only to the railroad buildings and ground, and the lease, upon its face, was of a temporary and provisional character, and plainly made merely for the purpose of affording opportunity to test the Springer process and works.

It can not reasonably be claimed that a lease upon gas works for the short term and of the provisional character of that here in question, is such a procurement of gas works as was contemplated hy the ordinance of March 25, 1884. At the time fixed by the ordinance for appellant to commence furnishing gas to the town, the lease had only about a year and a half to run, with the right vested in the-railway company to pay for and own the works at the end of that time, or else, in the event they did not prove satisfactory, to compel their removal from its grounds. At the time the cause was heard and determined in the circuit court, the term demised by the lease had long since expired, and the extension of the lease, which had been given during the pendency of the suit, had much less than a month to run.

The bill of complaint in this case, though not strictly a bill for the specific performance of a contract, is, in substance,- a bill of that kind. In Pomeroy’s Equity Jurisprudence, (sec. 1341,) it is said: “An injunction restraining the breach of a contract is a negative specific enforcement of that contract. The jurisdiction of equity to grant such injunction is substantially coincident with its jurisdiction to compel a specific performance. Both are governed by the same doctrine and rules. It may be stated as a general proposition, that whenever the contract is one of a class which will be affirmatively specifically enforced, a court of equity will restrain its breach by injunction, if this is the only practical mode of enforcement which its terms permit.” The exercise of the jurisdiction to enforce the specific performance of a contract rests in the sound legal discretion of the chancery court, in view of the terms of the contract and all the surrounding circumstances. McCabe v. Crosier, 69 Ill. 501; Bowman v. Cunningham, 78 id. 48; Chicago, Burlington and Quincy Railroad Co. v. Reno, 113 id. 39.

One of the principles which govern, where a bill for specific performance is brought, is, that the complainant must show that the contract has been fully and fairly, and in good faith, performed. In Story’s Equity Jurisprudence, (sec. 736,) it is said, that “in cases of covenants and other contracts, where a specific performance is sought, it is often material to consider how far the reciprocal obligations of the party, seeking the relief, have been fairly and fully performed. For if the latter have been disregarded', or they are incapable of being substantially performed on the part of the party so seeking relief, * * * courts of equity will not interfere.” In Pomeroy on Specific Performance, (sec. 330,) it is said: “The party seeking aid in the court as actor,—generally the plaintiff,—must not only show that he has complied with the terms, so far as they can and ought to be complied with, at'the commencement of the suit; he must also show that he is able, ready and willing to do those other future acts which the contract stipulates for as a part of its specific performance.”

It was not the spirit and true intent of the ordinance of March 25,1884, that the gas company should get the assignment of a short and merely provisional lease of gas works, and thereby fulfill the bare letter of its contract, by commencing, within the year, to deliver gas tó the town of Lake, without making any provision for the continuance of such service. It would be inequitable and unjust, upon so uncertain a tenure of its future gas service, to compel the town, against its will, to permit appellant to dig up and obstruct its public streets and highways, and occupy and use them for the purpose of laying and maintaining therein its gas mains and gas pipes. It is settled doctrine that the courts will interfere, by injunction, with the acts of a municipal corporation, in respect to matters which are, by the law, placed within the power and left to the discretion of the corporation, only in a case of clear and undoubted right, and such a case, in our opinion, is not shown in the record now before us.

We are unable to say that the decree of the circuit court refusing the injunction and dismissing the bill was erroneous. The judgment of the Appellate Court is affirmed.

Judgment affirmed.