Muncy Electric Light, Heat & Power Co. v. Peoples' Electric Light, Heat & Power Co. , 218 Pa. 636 ( 1907 )

Opinion by

Mr. Chief Justice Mitchell,

By the general borough Act of April 3, 1851, sec. 2, P. L. 320, boroughs are empowered “ to light the streets,” and this has been expressly held to include the power to contract for lighting with electricity: Wade v. Oakmont Borough, 165 Pa. 479; Seitzinger v. Electric Illuminating Co., 187 Pa. 539. In the former case the contract which was for seven years was sustained, though the stress of the attack on it was not made on the length of the time but on the increase of the borough debt. In the Seitzinger case it was expressly decided that the contract need not be limited to a single year.

By the Act of May 20, 1891, P. L. 90, boroughs have the further “ right to manufacture electricity for commercial purposes for the supply and use of the inhabitants of said boroughs, and may introduce the arc or incandescent electric light or any other form or style of electricity that may be deemed most expedient and desirable, and said boroughs may enact such ordinances as may be proper and necessary to introduce and supply the inhabitants of said boroughs who may desire to use said electricity,” etc.

Under these two statutes there can be no question of the validity of the. grant to the Muncy company of the franchise to erect poles and wires in the streets of the borough. Indeed, that is not questioned. But the proposition made to the borough council in behalf of the company was that the council should grant a franchise for ten years, with the right of the borough to purchase the plant at the end of the term, or failing that to renew the ter in for another ten years. The proposal further stated that “ the franchise will consist of an ordinance granting the exclusive right of placing poles and wires upon all streets and alleys,” etc. The council passed the desired ordinance and incorporated the exclusive feature in it by expressly enacting that “ the proposal of the said Muncy Electric Light Heat and Power Company (a copy of which is hereto appended) is hereby declared to constitute a contract.” There can be no doubt that this was a contract between the Muncy company and the borough, and that it must be treated on the same footing as a contract between individuals: Jolly v. Monaca Borough, 216 Pa. 345. But it is objected that the borough had no authority to make the franchise exclusive, and it is said that there is no decision in Pennsylvania sustaining such a grant without express legislative sanction. This, however, does not present any serious difficulty.

Both companies, parties to this litigation, were incorporated under the Act of May 8, 1889, P. L. 136, which provides that “ No company which may be incorporated under the provisions of this act shall enter upon any street in any city or borough of this commonwealth until after the consent to such entry of the councils of the city or borough in which such street be located shall have been obtained.” Neither company, therefore, had any rights in the streets except by the borough’s consent. The borough was under no obligation to consent at all. It might have built its own light plant and refused all franchises to others. Or it might have granted a franchise on its own terms and conditions: Allegheny City v. Millville, etc., St. Ry. Co., 159 Pa. 411. And what the borough might do by itself it might do by contract with others. That is what it did here. Instead of expending the public money in building a plant it accepted the offer of the appellee to build the plant in consideration of a franchise which was to be exclusive for ten jmars. It was a valid exercise of the borough’s contractual power, on a valid consideration, and cannot now be rescinded directly or indirectly at the will of one party.

This is a clear case for equity jurisdiction. The breach of contract is undeniable and a suit at law would be an inadequate remedy for there could be no certain or satisfactory standard for the measure of .damages.

Decree affirmed.