Emerson & Penn Fuel Co. v. Commonwealth ex rel. Attorney General , 108 Pa. 111 ( 1885 )

Mr. Justice Green

delivered the opinion of the court, February 2d, 1885.

This proceeding originated in an information filed by the Attorney General, against the defendants, alleging that they claimed.to exercise the franchises, rights and privileges of a corporation called the Penn Fuel Company, formed for the purpose of supplying heat to the public within the city of Pittsburgh by means of natural gas conveyed from such adjoining counties as may be convenient. The information denies that the respondents were ever incorporated, and that the Penn Fuel Company exists in law, and alleges that any pretended franchise, rights or privileges claimed by. the respondents under the Act of 1874 are fraudulent and null and void, and have no existence under the laws of Pennsylvania. As a special cause of invalidity of the defendants’ charter, it is alleged further in the information that letters patent had been issued to another corporation called “ The Fuel Gas Company,” conferring the same franchises ■ as are claimed by the defendants, at a date anterior to the grant of letters to the. defendants. In consequence of this prior grant it is claimed that the Fuel Gas Company became on the 19th day of January, A. D. 1882, entitled to the exclusive privilege and franchise of supplying the public withiii the city of Pittsburgh with heat from gas, and that the charter of the defendants, which was not obtained until February 22d, 1882, was illegal and void. This claim is founded upon the provision contained in the third clause of the 34th.section of the general Corporation Act of April 29th, 1874, which declares that the right to enjoy the franchises and privileges conferred by that section shall be exclusive within the district covered by the charter, and that no other company shall be incorporated for the same purpose, until the company first incorporated shall have.from its earnings realized, and divided among its stockholders a dividend equal to eight per cent, per annum for five years upon its capital stock. The information alleges that the Fuel Gas Company had not been in existence for five years and had not.1.divided any earnings among its stockholders.

■ Testimony was taken showing the incorporation of the Fuel Gas Company,'and also that defendants had laid a large quantity of. pipe and were engaged in furnishing natural gas to consumers. Mr. .Pew, one of the defendants, being asked what the gas was that they were furnishing, replied, “ It is natural gas just as it comes from the earth.” To show that this .was in conflict with- the franchise of the Fuel Gas Company the, president of that company was examined on behalf of the relator. He said his company had laid some eight miles nf pipe in the'city, and was then.asked: “ State whether your company made provision for the procuration of the gas from the gas well in Westmorehind county? A. It did. Q. Is it, in connection with these other pipes,, now furnishing that natural gas ? A. It is.” It 'will thus be seen that the contest between these two companies is upon the corporate right to.furnish natural gas to the citizens of Pittsburgh. On the argument and in the paper books two points were made, by .counsel for.the respondents. One was that the Act of .1874 did not authorize charters for supplying natural gas, and •the. other, that the exclusive privilege granted by the^ third clause of .the 34th. section was illegal and’void.- Both* these propositions were resisted by the counsel for the relators, and both are therefore before us for our consideration and decision.

The letters patent issued to both of these corporations omit all description of the purpose for which either was incorporated, but the organization certificates do set forth the purpose of each. Thus, in the case of the Fuel Gas Company it is stated: “The purpose for which it is forme'd is the supply of heat to the public from gas within the city of Pittsburgh.” In the case of the Penn Fuel Company the language is as follows: “Said corporation is formed for the purpose of supplying heat to the public within the city of Pittsburgh by means of natural gas conveyed from such adjoining counties as may be convenient.” If the franchises thus described are identical, the grant of the second would be in hostility with the prohibition contained in the third clause of the 34th section, and.we would be remitted to the question whether the exclusive privilege given to the first grantee of the franchise is contrary to law and void. But are these franchises .identical? We think clearly not.

• The Fuel Gas Company is authorized “ to supply heat to the public from gas within the city of Pittsburgh.” The thing to be supplied is “ heat,” the means of supplying it are “from gas within’the city of Pittsburgh.” Read literally and, strictly these words import that the gas used must be produced within the city of Pittsburgh. No authority is given to obtain it from without the city limits and the direct and naL ural meaning’ of the words in the collocation in which they are placed is that the heat to be supplied must be from gas within the city. If this company should go into an adjoining county to obtain its gas it might well be asked as to the source of its authority to do so, and the best reply it could make would be the quite doubtful authority contained in the words above quoted.. But passing this question, it is very certain that this company may. furnish heat produced from any kind of gas, manufactured or natural. There is no limit or restraint put upon it as to the kind of gas it may use, and hence any kind of manufactured gar, and any species of natural, gas, may be used in producing the heat which it is authorized to furnish.

Turning now to the description of the franchise of the Penn Fuel Company, we find it to be of a radically different character. Thus, “ supplying heat to the public within the city of Pittsburgh by means of natural gas conveyed from such adjoining counties as may be convenient.” It is very clear that this company cannot use any kind of manufactured gas but is limited to natural gas alone, as the fuel which it may employ in providing heat. In addition to this it must be natural gas conveyed from convenient adjoining counties. In designating a particular source from which its gas must be derived ail other sources are excluded, and it follows that this company must go outside the limits of Pittsburgh to obtain its gas. So that it follows that the Fuel Gas Company has a franchise to furnish heat produced from any kind of gas within the city of Pittsburgh, and the Penn Fuel Company has a franchise to furnish heat produced from natural gas alone and obtained from adjoining counties. If the Fuel Gas Company chooses to manufacture its gas from coal or other substance, and is entitled to an exclusive franchise, neither the Penn Fuel Company nor any other company can furnish heat from natural gas to the citizens of Pittsburgh, and they must do without it for at least five years fi’om the date of the charter of the Fuel Gas Company, and most probably for a much longer time. Such a result would be intolerable and not to be judicially declared except in obedience to the plainest legal requirement. There is no such neeessitj^ in this case. These two franchises are not identical and therefore not necessarily hostile to each other. The prohibitive language of the third clause of the 34th section is, “ and no other company shall be incorporated for that purpose until,” &c; that is for the same purpose which is covered by the franchise first granted.

It is scarcely necessary to saty that exclusive privileges which affect great public interests must be most strictly construed, against the grantee and i'n the interest of the public. We do not decide that they are necessarily illegal. The case does not require it. But we are very clear that these two franchises are not identical, and therefore the one cannot operate to the exclusion of the other.

The remaining question raised by the evidence and the contentions of the parties, is of a larger and broader character. The proposition of the counsel for the respondents, which presents it, is that the Act of 1874 does not authorize the grant of a franchise to furnish natural gas. The whole of the legislation affecting the subject is contained in the Act in question. In the enumeration of the corporations of the second class described in the second section, the eleventh clause defines those for “ the manufacture and supply of gas, or the supply of light or heat to the public by any other means.” The 34th section provides as follows: “Companies incorporated under the provisions of this statute for the supply of water to the public,or for the manufacture and supply of gas,or the supply of light or heat to the public by any other means shall, unless otherwise provided by this Act, from the date of the letters patent creating the same, have the powers and be governed, managed and controlled as follows:

Clause 1. Where any such company shall be incorporated as a gas company, or company for the supply of heat or light to the public, it shall have authority to supply with gas light the borough, town, city or district where it may be located, and such persons, partnerships and corporations' residing therein or adjacent thereto as may desire the same at such price as may be agreed upon, and also to make, erect and maintain therein the necessary buildings, machinery and apparatus for manufacturing gas, heat or light from coal or other material, and distributing the same,” with the right to enter upon the streets to lay pipe, &c.

It seems to us plain that the words of this section contemplate, and authorize, the creation of corporations for the manufacture and supply of gas, and the supply of light or heat by any other means. Of course the only kind of gas companies that are authorized are those which manufacture gas, and this necessarily excludes corporations for supplying natural gas, that being a product of nature, and not the result of any manufacturing process. The other companies authorized are those for supplying light or heat produced by any other means. If the respondents in this suit did actually furnish heat, they could contend with great force that the largeness-of expression, “ by any other means,” included natural gas as one of those means. It is not easy to see that such contention could be resisted, unless by considering the language of clause 1, immediately following. That language confers the -right to make, erect and maintain “ the necessarjr buildings, machinery and apparatus for manufacturing gas, heat or light from coal or other material and distributing the same.” These Avords import, literally, an intent that the light or heat which is supplied shall be manufactured from gas, coal or other material. As the body of the section and the added clause are joined together, and constitute the entire scheme for granting power to furnish gas and light and heat, they must be construed together. Regarded in this manner we feel obliged to hold that whether the article furnished be gas or light or heat, it must be the result of a manufacturing process. That is, if gas is furnished it must be manufactured, if light or heat is furnished it also must be manufactured. Nor is this inconsistent with the language of the section which speaks of the “ supply of light or heat by any other means.” For neither light nor heat can be produced by any human agency except by some species of manufacture. If either is the result of the mere combustion of natural substances, that very combustion is a method of manufacture. In the nature of the case the material for combustion, and the gases which support it, must be furnished in large quantities, their union effected, and an economical and safe means of transportation of the product provided. It is well known that heat is furnished bjr means of steam and hot water in pipes or by currents of heated air produced by direct radiation from heated metallic surfaces.

This brings us to the decision of the question whether the’ Act of 1874 authorizes the creation of corporations for the supply of natural gas. The furnishing of natural gas is not the furnishing of heat. Natural gas is not heat. It is a fuel, a substance which may be converted into heat by combustion with atmospheric air. When the gas is delivered to the consumer it is still gas only. It is not heat. If the consumer does not produce combustion, no heat is obtained, and if he does produce it, the act of doing so is his act and not that of the company which furnishes the gas. ' In any point of view, therefore, it must be said that a company which furnishes natural gas is not necessarily furnishing heat. It would scarcely be contended that companies could be chartered under this section of the Act of’ 1874, for supplying coal, wood, oil, peat or other substance whose combustion produces heat, yet they all belong alike in the category of fuels. The fuels must be destroyed in order that their calorific quality may be developed, but when they are furnished in their original, natural state it can not be .said that they have been delivered in their developed form. They are still subject to any use to which the consumer may choose to apply them. If he does not choose to convert them into heat, no heat is obtained, and it certainly can not be said that the company has furnished any heat to the consumer. But if he does so convert them it is equally true that the heat thus obtained is not received from the company. We hold, therefore, that the Act of 1874 does not directly provide for the creation of corporations with authority to furnish natural gas nor does it do so indirectly by the authorization of companies for supplying heat. In view of the immense stores of this valuable fuel which have so recently been discovered, and of the great public interests to be subserved by the legal authorization of corporations for supplying it, we think the subject should be brought to the attention of the legislature without delay so that appropriate legislation may be obtained. And we think it will be -well for the law-making power to consider with great care -the question whether it is expedient to confer upon any corporations it may authorize, the exclusive privilege contained in the Act of 1874.

This case comes before us in rather a peculiar manner. A jury trial was had in the court below and the record is brought bere by writ of error to the judgment entered on the verdict. We reverse the judgment on the ground that the court erred in holding that the franchise granted to the Fuel Gas Company was exclusive as against the Penn Fuel Company.

But we hold also that there is no legal authority to confer a franchise to supply natural gas to consumers, and it appears by the evidence that this is the only kind of franchise that either the relator or the respondent is exercising. If such should be the distinct finding of the jury on another trial, it will be the duty of the court to say that there is no authority for such a franchise in the present state of our legislation and that all acts done in its exercise are illegal and void. We can not, however, say that the respondent’s charter is absolutely void, because on its face it is a charter to furnish heat, and as such is nominally in conformity with the law.

As the charters of both these companies were granted four years ago, and the franchise to furnish heat has apparently never been exercised by either, a question may possibly arise whether, as between them, or as between them and others, there has not been an abandonment of that franchise, so as to disable either of them from claiming an exclusive privilege under the Act. We express no opinion on the subject, but it may well be questioned whether a charter can be obtained under the 34th section of the Act of 1874, and then, without being used, be held in terrorem over all other persons who may desire to obtain, and in good faith exercise, a similar franchise.

Judgment reversed and venire de novo awarded.

A motion for a re-argument was subsequently filed, which was dismissed in the following opinion, filed May 4, 1885.

Green, J.

We have considered with care the reasons assigned for a re-argument in this case and are not satisfied of their sufficiency. Counsel are in error in supposing that, we decided that the Act of 1874 did not authorize the incorporation of companies for furnishing heat from natural gas. We carefully distinguished between charters for furnishing heat and those for furnishing natural gas itself; and we expressly declined to declare the respondents’ charter void because it was a charter to furnish heat.

As the forty companies referred to in the second reason are not asking for any re-argument and have in no manner expressed any dissatisfaction with the decision made, but on the contrary some, at least, of them, were heard by counsel representing their views in an elaborate argument submitted with the paper books in this case, and in favor of the ruling expressed in our decision, we cannot regard the matters set forth in the second reason as a correct expression of their sentiment or desires.

The third reason assigned is of much more practical moment, and if it raised even a doubt in our minds as to the correctness of our decision we would willingly order a re-argument. But a patient examination of the 18th clause of the second section of the Act of 1874, which is supposed to confer the necessary authority to grant charters to furnish natural gas, fails to convince us that it has the slightest application to that subject. The eleventh paragraph of this section is the one which purports to confer whatever power .was intended to be granted in relation to the supply of gas and heat. The 18th clause relates to corporations for “ the carrying on of any mechanical, mining, quarrying or manufacturing business,-” and the 39th section of- the Act provides for the-details of the organization of such companies as the 34th section does for those mentioned in the 11th clause of the second section. The 18th clause directs that the companies thereby designated shall include all of the purposes covered by the Act of April 7th, 1849, and the Act of July 18th, 1863, and the several supplements to each of said Acts. The Act of 1863 (Bright. Purd. 1407), authorizes the incorporation of companies “ for the purpose of carrying on mechanical; mining, quarrying or manufacturing business in this Commonwealth except that of distilling or manufacturing intoxicating liquors,” and is no more extensive in the corporations enumerated than the 18th clause of the Act of 1874 itself. The Act of 7th April, 1849 (Bright. Purd. 992), authorizes companies to be formed “ for the purpose of carrying on the manufacture of woolen, cotton, flax or silk goods, or of iron, paper, lumber or salt,” none of which could possibly include natural gas. A supplement to the Act of 1849, passed April 20th, 1853 (Bright. Purd. 1000, pi. 40), extends the provisions of the Act of 1849, “ so as to embrace companies formed for mining coal, and for mining, quarrying and preparing for market lime, marl, soda, hydraulic cement or other minerals, and smelting copper, lead, tin or zinc ores, and for quarrying marble, stone or slate, and for the manufacture of lumber, with the right of preparing for market the produce of their said mines and quarries, and vending the same.” The words, “ or other minerals,” in this Act are the only ones which could by any possibility-be claimed to include natural gas within their meaning. But it is quite impossible for us to regard a gas well as a mine or quarry, or natural gas as a mineral substance, to be mined or quarried and prepared for market, within any conceivable meaning to be imputed to the Legislature which passed this Act. At that time natural gas was unknown as a .fuel,'bút had it'been perfectly well known it would have required far more precise and specific words than these to authorize the formation of companies for supplying it.' The judicial power of the government' may sometimes impute a legislative intent not expressed with perfect clearness where the words used import such intent,,,either necessarily or by a plain and manifest implication. But it would be a dangerous excess of judicial authority, not to be justified by any considerations, for a court to declare a law by the imputation of intent, when the words used do not import it, either necessarily or by plain implication, and when all the surroundings of the enactment clearly evince that the construction claimed could not have been within the legislative thought. We would have to forget all our decisions that a doubtful charter ■cannot exist, and to disregard entirely the line which divides ■the judicial from the legislative department of the government, were we to attempt to bring this case within the Acts' of 1849 or 1863, or their supplements. It will be infinitely preferable that the law-making power should now be directly invoked to' confer the requisite authority for the full-development of this great and new industry in clear, plain terms, and enlightened by.the experience of the recent past. If this is done we see no reason to doubt that the application will meet •with ¡i ready and hearty response from the representatives of the people, who possess all the power -necessary to the occar sion. ■ .

Re-argument refusedi