City of Cleveland v. East Ohio Gas Co.

15 Ohio App. 117, 1921 Ohio App. LEXIS 186
CourtOhio Court of Appeals
DecidedOctober 5, 1921
StatusPublished
Cited by3 cases

This text of 15 Ohio App. 117 (City of Cleveland v. East Ohio Gas Co.) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
City of Cleveland v. East Ohio Gas Co., 15 Ohio App. 117, 1921 Ohio App. LEXIS 186 (Ohio Ct. App. 1921).

Opinion

Vickery, P. J.

This cause came into this court on appeal from a decision of the common pleas court. It was first heard a few weeks ago in this court on 'an application or motion to fix a temporary rate, pending further and final litigation of the cause, which motion was disposed of soon after hearing. At that time there was another motion pending, a motion for judgment upon the pleadings. After the first motion was disposed of and a temporary rate [118]*118fixed, a time was assigned for the hearing of the second motion, that is, the motion for judgment on the pleadings, and the case, so far as it has now been heard, is upon that second motion.

The history of the litigation is so familiar that it is hardly necessary to repeat much of what is already known. Suffice it to. say that The East Ohio Gas Company had had the natural gas franchises for about twenty years, and that it became assignee of the franchises that had been granted to The Cleveland Gas, Light & Coke Co. and The Peoples Gas, Light & Coke Co., and I believe there was a consolidation of these companies. The East Ohio Gas Company succeeded to all the rights held by the other companies.

The franchise under which The East Ohio Gas Company occupies the streets was passed in 1901 or •1902, and was accepted by the company. In that franchise the law requires a rate fixing period, which shall not exceed a period of ten years. In 1911 a rate-fixing ordinance was passed, which provided for 30-ct. gas for the first eight years, and 35-ct. gas for the two remaining years. This rate-fixing period expired on the 8th day of February, 1921. Prior to that time the city council passed a new rate-fixing ordinance, in which they fixed the price of natural gas to be furnished for the period of ten years next ensuing at 35 cents, the same as it had been the last two years of the former rate-fixing ordinance. The Gas Company notified the city of Cleveland that it would not accept the terms of this last rate-fixing ordinance, and notified the city that it elected to terminate its franchise with the city of Cleveland and desired to withdraw from this field in serving the public with natural gas; and that it proposed [119]*119to do so at the expiration of its franchise, on the 6th day of February, last. Whereupon the city brought an injunction, and set up the various claims of the city in the petition, and a temporary restraining order was granted, from which time, up until the 1st day of October, this year, The East Ohio Gas Company has been furnishing gas at the rate of 35 cents per thousand cubic feet. There were various motions and demurrers filed to the petition to simplify the issue, and finally the Gas Company filed an answer. Motions were directed to this answer in various forms, and finally the city filed a reply; and the petition, answer and reply constitute the pleadings that ultimately raised the issue that is on trial before this court.

The case was heard in the court below before Judge Duncan, of the common pleas bench of Hancock county, -sitting by designation in this county. After a hearing he granted the prayer of the defendant company, overruled the contention of the city, and authorized the Gas Company to discontinue service, and set a time, to-wit, November 1st, when that should be done, and ordered the Gas Company to have its pipes and paraphernalia pulled out of the ground by the 1st day of April, 1922, and fixed a temporary rate pending the destruction of the Gas Company’s property. That decision was appealed from and carried into this court, and, as I have already said, the case was heard here upon the motion to fix a temporary rate, which motion has already been disposed of, and is now heard upon the motion before the court.

It is claimed that the motion raises issues which would show whether the city had or had not a right to maintain this suit; that the motion brings two [120]*120questions before the court for review and that if the court decides either one in favor of the city the motion must be denied, but, in the event that the court should decide against the city on both propositions, then it would be the end of the litigation so far as this court is concerned.

The two questions involved are:

First, was the franchise that was granted to The East Ohio Gas Company in 1901 a continuous franchise, or was it a franchise, terminable at will, at the expiration of any of .the rate-fixing periods? A reading of the franchise will show that there is no time fixed when it shall expire, and it is therefore claimed, on the part of the city, that this franchise was a perpetual franchise, and gave-1 the city and the gas company the right to enter into an agreement to fix the rate at various intervals,- and that when that rate was fixed, and the Gas Company accepted the same, it was a contract at that rate during the period for which the rate was fixed. On the other hand, the Gas Company claims that it was a franchise terminable at the will of either party, at the expiration -of any of these periods, where the rate bad been fixed by agreement between the city and the Gas Company. This is the first question to which our attention has been directed.

It must be conceded that in view of the decisions of our courts in Ohio there is a grave question involved as to whether this franchise is a perpetual franchise, or not. The court below held, and it is argued here with much Torce, that the case of East Ohio Gas Co. v. City of Akron, 81 Ohio St., 33, is conclusive of the proposition that this franchise is not a perpetual franchise, but is simply indeterminate, existing only so long as the parties mutually [121]*121agree thereto. That the supreme court did hold this, in a case similar to the one at bar, the Akron case referred to, is undoubtedly true, and if that case stood alone there would not be much question before the court as to what the nature of this franchise in the instant case is. It is claimed by the city that the decision of the supreme court, in Gas Co. v. City of Akron, supra, has been overruled by a later decision of the United States supreme court; that is that the legal effect of it has been destroyed by the decision of the United States supreme court in the case of Northern Ohio Traction & Light Co. v. State of Ohio, ex rel. Pontius, Pros. Atty., 245 U. S., 574, which expressly overruled State, ex rel. Pontius, Pros. Atty., v. Northern Ohio Traction & Light Co., 93 Ohio St., 466. By a recurrence to the 93d Ohio State, at page 467, we find this entry:

“Judgment for relator on authority of The East Ohio Gas Co. v. The City of Akron, 81 Ohio St., 33. Judgment for relator.”

Now it will be noticed that the supreme court of Ohio in the Northern Ohio Traction & Light Co. case based its ruling upon the decision in the City of Akron case, and held the same way, namely that the franchise granted by the county commissioners to The Northern Ohio Traction & Light Company was not a perpetual franchise, but one terminable at will; for that was the principle involved in the Akron case.

Our attention has been called to the dissenting opinion of Judge Jones in this case, because it has been argued that the statutes giving authority to county commissioners to grant railroad franchises are somewhat different from those in which municipalities are given authority to grant franchises to gas companies. It is true the dissenting opinion of [122]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State ex rel. Toledo Edison Co. v. Clyde
1996 Ohio 376 (Ohio Supreme Court, 1996)
State ex rel. Toledo Edison Co. v. City of Clyde
668 N.E.2d 498 (Ohio Supreme Court, 1996)

Cite This Page — Counsel Stack

Bluebook (online)
15 Ohio App. 117, 1921 Ohio App. LEXIS 186, Counsel Stack Legal Research, https://law.counselstack.com/opinion/city-of-cleveland-v-east-ohio-gas-co-ohioctapp-1921.