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U.S. Supreme Court

Joplin v. Southwest Missouri Light Co., 191 U.S. 150 (1903)

Joplin v. Southwest Missouri Light Company

No. 32

Argued October 20, 1903

Decided November 16, 1903

191 U.S. 150


Restraints upon governmental agencies will not be readily implied. There are presumptions against the granting of exclusive rights and against limitations upon the powers of government.

By the statute of 1891, cities in Missouri may erect and operate their own electric light plants, or they may grant the right to persons or corporations to erect and operate such plants for not exceeding a period of twenty years. The City of Joplin, by ordinance adopted subsequent to the statute, granted such right for twenty years to a corporation which erected and has ever since operated the plant. The ordinance conferred rights, exacted obligations, fixed rates and provided for its written acceptance, and the corporation so accepted it. By a later ordinance, the city provided for the issue of bonds to build its own plant.

In an action brought by the Light Company to restrain the erection of the plant during the continuance of the twenty-year term on the ground that the ordinance violated the federal constitution in that it impaired the obligation of the contract existing under the ordinance granting the franchise,

Page 191 U. S. 151

held that, as such ordinance did not provide that the city would not erect its own plant, no such provision could be implied.

Held that the fact that cities could elect under the statute of 1891 either to erect their own plants or grant franchises could not, in case of their election to grant the franchise, be construed as an implied contract not to erect their own plants during the period for which the franchise was granted.

Bill in equity to restrain the appellant from supplying its inhabitants with incandescent lights or other electric lighting in competition with the appellee.

The City of Joplin is a municipality of the State of Missouri; the appellee is a corporation of said state, and the jurisdiction of the circuit court was invoked on the ground that the action of the city impaired the obligation of the contract existing between it and the appellee in violation of the Constitution of the United States, and hence the appeal directly to this Court.

A preliminary injunction was granted. 101 F. 23. It was made perpetual upon final hearing, and a decree was entered enjoining the city

"from supplying or furnishing to the inhabitants, residents, or any other person, firm, or corporation within said city, or any addition thereto or extension thereof, electric lights, either incandescent or arc, or in any other form or manner, for commercial or private lighting, for and during the full term"

of the grant to the predecessors and assignors of appellee, to-wit, the term of twenty years from and after October 7, 1891. 113 F.8d 7.

A statute of Missouri, Laws 1891, April 2, p. 60, authorizes cities to erect, maintain, and operate electric light works, to light the streets and supply the inhabitants with light for their own use, and to establish rates therefor. Or they may, the statute provides,

"grant the right to any person or persons or corporation to erect such works . . . upon such terms as may be prescribed by ordinance, provided further that such right . . . shall not extend for a longer period than twenty years."

Subsequently to, and in pursuance of, this statute, the city, by ordinance, October 7, 1891, granted the right to

Page 191 U. S. 152

erect and maintain an electric light plant to certain persons, naming them, their successors and assigns, for a period of twenty years. The plant was erected at considerable expense, and has ever since been maintained and operated. The appellee is the successor of the original grantees.

The ordinance conferred rights and exacted obligations, and fixed besides the rates to be charged. It also provided for its written acceptance within ten days after its passage, and the commencement of the work within sixty days. It was accepted.

Subsequently, and on March, 1899, the city, acting in pursuance of, and in the manner provided in, certain ordinances, issued bonds to the amount of $30,000, "for the purpose of erecting an electric light plant, to be owned, controlled, and operated by the city," and by the means obtained thereby constructed electrical works, erected poles and wires, established a schedule of rates, and entered into the business of commercial electrical lighting in competition with appellee. The bill alleged that the appellee was the owner of real and personal property within the city, which is assessed by the city for municipal taxation, and that appellee is compelled, by reason of such taxation,

"to aid and assist in operating and maintaining defendant's [the city's] electric plant and business as a rival and competing one with appellee's electrical plant and business. "

Page 191 U. S. 155

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