Lakota Oil & Gas Co. v. City of Casper

116 P.2d 861, 57 Wyo. 329, 1941 Wyo. LEXIS 34
CourtWyoming Supreme Court
DecidedSeptember 19, 1941
Docket2184
StatusPublished
Cited by7 cases

This text of 116 P.2d 861 (Lakota Oil & Gas Co. v. City of Casper) is published on Counsel Stack Legal Research, covering Wyoming Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lakota Oil & Gas Co. v. City of Casper, 116 P.2d 861, 57 Wyo. 329, 1941 Wyo. LEXIS 34 (Wyo. 1941).

Opinion

*336 Blume, Justice.

: This is an action, brought by Lakota Oil & Gas Company, as plaintiff, against the City of Casper and New York Oil Company, fqr a declaratory judgment. A demurrer on the part of both defendants was filed to the amended petition. The demurrer was sustained by the court. Plaintiff refusing to plead further, judgment was entered dismissing the action.

• .For the purposes of .this case, a short statement of the facts will be sufficient. The following appears from *337 the allegations of the amended petition: On March 2, 1920, the City of Casper, ordinarily called the city, by Ordinance No. 135-A granted a franchise to Harry P. Hynds, his successors and assigns, to conduct, maintain and operate in the public streets, alleys and public ways in said City a plant for the conveyance, transmission, supply, and distribution of gas. The franchise was assigned by Hynds to defendant New York Oil Company and that defendant Company during the times herein material has been engaged in the operation of said plant in said City. Section 14 of the franchise ordinance provides as follows:

“The City reserves the right to purchase the gas plant including all its rights, equipment and fixtures, should it be decided at any time by the council so to do, and the purchase price to be paid shall be found and arrived at by a board of appraisers, the City of Casper selecting one appraiser, the said Harry P. Hynds, his successors and assigns, selecting one appraiser, these two selecting a third party to appraise the value of the plant, equipment and fixtures at the time of the purchase.”

On May 2,1932, the City passed Ordinance No. 622-A whereby the City determined, elected and decided to exercise its optional rights and to that end determined to obtain an appraisal of the property. The Ordinance also provided for the appointment of appraisers by the City and the New York Oil Company within thirty days from and after passage thereof. Immediately upon its passage, notice thereof was served upon the New York Oil Company by the City. Appraisers were thereafter duly appointed by the City and the New York Oil Company. On May 3, 1932, the City notified plaintiff in writing that it had determined, elected and decided to exercise its optional rights under Section 14 of the franchise ordinance and that it had taken action to secure an appraisal. The City in the written notice invited plaintiff to submit a written proposal covering *338 the furnishing of natural gas to the City and the inhabitants thereof, pursuant to a franchise to be granted by the City to plaintiff, covering the leasing by the City to plaintiff of the property to be acquired by the City from the New York Oil Company, and covering the furnishing of funds by plaintiff to the City for the purpose of acquiring the above mentioned property. Thereupon the plaintiff, in good faith, commenced negotiations with the City for a franchise to furnish natural gas to the city and its inhabitants, and leasing the property from the city. On May 25, 1932, plaintiff deposited $10,000 in a bank, making the money available for the use by the city. On July 16, 1932, plaintiff and the city entered into a contract (without setting out its terms), covering the leasing by the plaintiff from the city of the property to be acquired from the New York Oil Company, and covering the furnishing by plaintiff to the city and its inhabitants of natural gas, and covering the furnishing to the city of funds to acquire the property from the New York Oil Company. Other contracts looking to the same end were entered into subsequently, but which only modified, clarified and supplemented the contract of July 16, 1932. The negotiations culminated in the final contract dated August 29, 1933 (the only one set out in the pleading). This contract, briefly, provides that the city shall at once proceed to acquire the gas plant from the New York Oil Company; that in any litigation which may ensue, it shall not be obligated to pay expenses exceeding $5000; and that all expenses over that amount shall be paid by plaintiff; that plaintiff shall furnish not to exceed a million dollars in cash with which the city may purchase the plant (unless under certain contingencies a greater amount becomes necessary) ; that for this the city shall issue its Class A bonds, payable solely out of the revenue derived from the operation of the plant during the period of 40 *339 years; that during said period the plant shall be operated by plaintiff under a lease from the city, and a sufficient amount of rental shall be paid by the plaintiff each year to pay and retire all of the bonds issued as they may mature, so that at the end of the period the city would own the plant free of any burdens. Should the plaintiff default in its obligation, the lease may be forfeited. In that event the city agrees that the rates charged for gas thereafter will be sufficient to retire the revenue bonds still outstanding as they mature. The contract recites that the city has received from plaintiff sufficient assurances that it, the plaintiff, has sufficient supply of natural gas, and sufficient financial ability to perform its duties under the contract, but such duties are suspended until the city has acquired ownership of the plant.

On February 18, 1933, the legislature enacted chapter 78 of the Session Laws of that year. Section 6 thereof provides that no city shall start proceedings for the purpose of acquisition of a utility property unless the same shall be authorized at a special election called for that purpose. If the act were applicable herein, the contract between the plaintiff and the city would, of course, be wholly void, inasmuch, as is conceded, no such authorization as provided by that act has been given. Plaintiff, however, contends that the act is not applicable, for the reason, first, that proceedings for the acquisition of the gas plant in question had alréady been started when the act was passed, and secondly, that at the time of the enactment plaintiff had acquired vested rights of which it could not be deprived by the legislature. It is not necessary to decide these contentions.

The original petition filed in this action disclosed that the proceedings for the acquisition of the gas plant in question had not been started until the summer of 1933. It was, accordingly, fatally defective, in view of *340 the legislative act of 1933 above mentioned. The proceedings and negotiations between the plaintiff and the city prior to August 29, 1933, were, in the amended petition, set out in general terms. A motion to make these allegations more specific was denied. Notwithstanding that, a demurrer was filed, and it is argued herein at length that the contract of August 29, 1933, set out in full in connection with the amended petition, clearly shows that the city did not undertake to take over the gas plant until the summer of 1933, and that the specific allegations in the amended petition control the general allegations to the contrary. We do not, however, consider it necessary to decide the point. The trial court, it seems, decided the case on the contention, made herein, that the city had no power to purchase a gas plant except, of course, as provided in the legislative act of 1933 above mentioned.

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Cite This Page — Counsel Stack

Bluebook (online)
116 P.2d 861, 57 Wyo. 329, 1941 Wyo. LEXIS 34, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lakota-oil-gas-co-v-city-of-casper-wyo-1941.