Village of Oak Harbor v. Public Utilities Commission

99 Ohio St. (N.S.) 275
CourtOhio Supreme Court
DecidedMarch 11, 1919
DocketNo. 16078
StatusPublished

This text of 99 Ohio St. (N.S.) 275 (Village of Oak Harbor v. Public Utilities Commission) 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
Village of Oak Harbor v. Public Utilities Commission, 99 Ohio St. (N.S.) 275 (Ohio 1919).

Opinion

Johnson, J.

The contention of the village is that the public utilities commission was without jurisdiction to entertain the complaint and make the order, the reversal of which is sought.

A statement of the steps taken, in their chronological order, will assist in the consideration of the question.

The period fixed for the franchise granted the company, under which the company had laid its pipes and furnished gas, having expired, the village on the 28th of December, 1915, passed an ordinance which granted the company the right to maintain and lay in the streets its pipes and conduct natural and artificial gas for the period of five years, and fixed the rate which consumers should be required to pay at 50 cents per thousand cubic feet.

Among other conditions in the ordinance it was provided that before it should take effect a true plat showing the location of all the pipe lines and pipes of the company in the village should be filed with the clerk of the village, and that on the company failing to comply with any of the conditions the ordinance should terminate and end as though it had not been passed. It was also a condition precedent to the taking effect of the ordinance that the company should pay the cost of its publication.

[279]*279It is admitted that the company never paid the cost of publication of the ordinance, that the ordinance was never published, and that the company never filed the plat referred to.

On the 25th day of February, 1916, the company notified its consumers in the village that it would thereafter charge 75 cents per thousand, and thereupon, after the notice was received, the village, on the same day, ordered the company to remove its pipes from the streets.

On March 7th, the company appeared before the council and refused to accept the franchise ordinance, and on the following day the village repealed the ordinance.

The appeal to the public utilities commission was filed by the company on the day following the date on which it increased the charge to 75 cents and on which it had been ordered to remove its pipes by the village.

So the situation was that the franchise granting the privilege to lay the pipes and conduct its business in the village had expired and no new franchise or contract had been made and agreed upon by the parties.

Thus the status of the parties under the circumstances was as stated in The City of Columbus v. The Columbus Gas Co., 76 Ohio St., 309, 331: “Former ordinances referred to in the answer had run their course and had expired, and the gas company wanted and needed the ordinance of 1892, and without it the company had no right as against the will of the council to longer continue its business in the streets and other public grounds.”

[280]*280In The East Ohio Gas Co. v. The City of Akron, 81 Ohio St., 33, 53, it is said: “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.”

In Detroit United Railway v. City of Detroit, 229 U. S., 39, it was held:

“Where a street railroad company is operating in the streets of a city for a definite period and has enjoyed the full term granted, the municipality may, upon failure of renewal of the grant, require the company within a reasonable time to remove its tracks and other property from the streets, without impairing any contractual obligation protected by the Federal Constitution or depriving the company of its property without due process of law.”

In the opinion, at page 45, it is said: “The Railway took the several grants with knowledge of their duration and has accepted and acted upon them with that fact clearly and distinctly evidenced by written contract. The rights of the parties were thus fixed and cannot be enlarged by implication.” (Citing cases.)

In order that there should have been a valid contract between the parties, which renewed the franchise, it was necessary not only that there should be an ordinance duly passed and published in accordance with law, but that the company should accept its terms. (East Ohio Gas Co. v. City of Akron, 81 Ohio St., 33.) Until such acceptance, it lacked the essentials of a contract. It was a mere proposition.

[281]*281We have no doubt that if the period fixed for the duration of an existing franchise has expired, and the municipality thereafter duly and legally passes a new rate ordinance, which goes into legal effect with reference to the product or service contemplated in the franchise, such action would amount to an implied extension of the old franchise, for the term fixed in the ordinance, for the rate. But in this case at the time the company filed its appeal with the public utilities commission its franchise had expired and no new franchise had been granted and accepted; no new rate ordinance had been passed. The company had not only not accepted the new franchise ordinance, but it had in contravention of the terms of the ordinance notified its customers that the price of gas would be 75 cents instead of the 50 cents fixed by the ordinance. And thereafter it appeared before the council and specifically refused to accept the ordinance.

By the provisions of Section 614-44, General Code, any municipal corporation in which any public utility is established, may, by ordinance, at any time within one year before the expiration of any contract entered into under the provisions of Sections 3644, 3982 and 3983, General Code, between the municipality and the public utility with respect to the rate to be charged by such utility, proceed to fix the rate that such utility may charge for an ensuing period, as provided in those sections.

It is provided in the same section that the utility may file its complaint in writing with the public utilities commission within sixty days after the [282]*282passage of the ordinance, and that the commission shall thereupon proceed with the matter as provided in that and the succeeding sections, and shall, if it is of the opinion that the “rate so fixed by ordinance” Is unjust or unreasonable, or insufficient to yield reasonable compensation for the service, fix and determine the just and reasonable rate. All of which is to be done in the manner prescribed by those sections.

It will be observed that there is no right of appeal or complaint, at all, until an ordinance is duly and legally passed and in effect, fixing the rate. When such an ordinance is in effect, an appeal may be had. It must also be noted that Section 614-46 provides that if the commission is of opinion that the rate “so fixed by ordinance is or will be unjust * * * the commission shall * * * fix and determine the just and reasonable rate,” etc. Of course this could only be done in case of an ordinance in due and legal effect.

The public utilities commission is an administrative board and only has such authority as the statute creating it has given it. It has no power to confer franchises or make contracts which shall be effective between a municipality and a public utility, or between other parties.

We have repeatedly declared this view of its status and powers. The City of Cincinnati v. The Public Utilities Commission, 91 Ohio St., 331; The City of Cincinnati v. The Public Utilities Commission of Ohio, 96 Ohio St., 270; The Interurban Ry. & Term. Co.

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Related

Detroit United Railway v. City of Detroit
229 U.S. 39 (Supreme Court, 1913)

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Bluebook (online)
99 Ohio St. (N.S.) 275, Counsel Stack Legal Research, https://law.counselstack.com/opinion/village-of-oak-harbor-v-public-utilities-commission-ohio-1919.