East Ohio Gas Co. v. City of Akron

81 Ohio St. (N.S.) 33
CourtOhio Supreme Court
DecidedOctober 19, 1909
DocketNo. 11675
StatusPublished

This text of 81 Ohio St. (N.S.) 33 (East Ohio Gas Co. v. City of Akron) is published on Counsel Stack Legal Research, covering Ohio Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
East Ohio Gas Co. v. City of Akron, 81 Ohio St. (N.S.) 33 (Ohio 1909).

Opinion

Davis, J.

This case was orally argued and submitted six months ago; but, on account of its great importance to the public as well as to all public [50]*50service corporations, we have given it unusual consideration and we have reached our conclusions only after most careful deliberation.

The chief question for solution here is whether the plaintiff in error may, under the circumstances disclosed in the record, discontinue the furnishing of gas to the city of Akron and its inhabitants and take away from the streets its mains and pipes and, in short, its whole plant.

In seeking an answer to this question it will be necessary first to consider the nature of the franchise granted to the plaintiff in error by its charter and the extent of the obligation imposed upon it by its acceptance of the city ordinance under which it entered the city and served the public therein until September 26, 1908. The- distinction between franchises, privileges or powers of a corporation, on the one hand, and its duties, obligations or liabilities, on the other hand, is elementary. There are no obligations imposed upon the plaintiff in error by its charter, or by the statutes under which it was granted, except the requirement that it shall have a principal office to be located at Cleveland and that the company’s main line shall commence at points on the Ohio river and run thence through certain counties to Cleveland in Cuyahoga county. These with the further obligation imposed by statute (Section 6780, Revised Statutes) that the company shall allow no lapse in the exercise of its franchise of the extent of five years, constitute all of the positive conditions, so far as we are now concerned, which are imposed upon this company. It seems to us that when to this association of persons was granted the right to be a corporation [51]*51“for any purpose for which individuals may lawfully associate themselves, except for-carrying on professional business” (Section 3235, Revised Statutes) the purpose is a privilege which may or may not be exercised to the full extent, just as individuals may modify their original designs to conform to circumstances. Therefore the statement in the articles of incorporation that the company is formed for the purpose of producing and furnishing gas to certain named towns and cities “and to other cities, villages and places in the counties aforesaid,” does not appear to us to be so indivisible that the company must conform to this purpose in all of such cities, villages or places or in none of them. As we construe the charter along with the statutes, the privilege conferred is of producing and transporting gas to each or all of the places named or described, and if to any' then in the manner described. The remedy for non-user or mis-user of the franchise lies with the state; and the defendant in error, the city of Akron, cannot invoke that remedy. Whatever rights the city may have to maintain this action, they must arise out of its contract with The East Ohio Gas Company; for that the ordinance passed in September, 1898, and its acceptance by the company constituted a contract will scarcely be disputed.

Whether a contract for the privilege of entering the streets of the city was necessary to the plaintiff in error or whether the defendant in error was competent to make it, is immaterial in this case. The consent of the city for that purpose was granted by the ordinance and it was accepted by the gas company; but no stipulation was made and [52]*52accepted as to the time when the use of the streets for the purposes of the gas company should end. The language of the ordinance is, “That The East Ohio Gas Company, its successors and assigns, are hereby granted the right to enter upon the streets, alleys and public grounds of .the city of Akron, Ohio, * * * to maintain, operate, repair and remove mains and pipes * * * together with the right to construct and maintain, repair and remove all necessary regulators,” etc. Did the granting of this privilege or right and its acceptance constitute an agreement by the gas company that, having entered the city, it should remain there forever if the city should not permit it to withdraw? The logic of the defendant in error would seem to support an affirmative answer to this question. But if the company enters by virtue of the contract and can withdraw only by consent of the city, then the contract lacks mutuality; for we can discover no corresponding stipulation in favor of the company. It is true that the ordinance grants the right to enter and occupy the streets, but in respect to the time when it shall terminate its occupancy and withdraw, the ordinance is silent. May we infer from this silence that the gas company has a perpetual franchise in the streets? We are not now prepared to hold that the company has thus acquired such a perpetual franchise; and we feel quite sure that even the defendant in error, on more mature reflection, would not insist upon such a conclusion. This court laid it down as the law, in Railroad Company v. Defiance, 52 Ohio St., 262, 307, that: “Every grant in derogation of the right of the public in the free and unobstructed use cf [53]*53the streets, or restriction of the control of the proper agencies of the municipal body over them, or of the legitimate exercise of their powers in the public interest, will be construed strictly against the grantee, and liberally in favor of the public, and never extended beyond its express terms when not indispensable to give effect to the grant.” The doctrine, as well as the judgment, in this case was affirmed in Wabash R. R. Co. v. Defiance, 167 U. S., 88. The same rule of construction was approved and followed in Blair v. Chicago, 201 U. S., 400, and in Cleveland Electric Ry. Co. v. Cleveland, 204 U. S., 116.

It comes then to this, that in the absence of limitations as to time, the termination of the franchise is indefinite and, to preserve mutuality in the contract, the franchise can continue only so long as both parties are consenting thereto. Or, to state it concretely, the contract being silent as to the duration of the franchise and the ten year agreement as to the price of gas having expired, the city may, under its power of. regulation, impose new conditions as to price and the gas company may accept or reject these. If the refusal to comply is final, the company necessarily incurs the penalty of forfeiture of its franchise to serve the people of the -city; but on the other hand, there being no provision to that effect in the original contract, the city cannot directly or indirectly deprive the gas company of its property without due process of law, when the latter withdraws from the further exercise' of its franchise. Cleveland Electric Ry. Co. v. Cleveland, 204 U. S., 116.

[54]*54In accord with Sections 2478 and 2479, Revised Statutes, in Section 6 of the ordinance, the parties entered into an agreement regulating' the price of gas for ten years from and after the passage of the ordinance, and so far as it appears in this record, this agreement has been faithfully kept by both parties and it is not now a subject of controversy.

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

Related

Munn v. Illinois
94 U.S. 113 (Supreme Court, 1877)
Wabash Railroad v. Defiance
167 U.S. 88 (Supreme Court, 1897)
Blair v. City of Chicago
201 U.S. 400 (Supreme Court, 1906)

Cite This Page — Counsel Stack

Bluebook (online)
81 Ohio St. (N.S.) 33, Counsel Stack Legal Research, https://law.counselstack.com/opinion/east-ohio-gas-co-v-city-of-akron-ohio-1909.