Sandy Lake Borough v. Sandy Lake & Stoneboro Gas Co. , 16 Pa. Super. 234 ( 1901 )

Opinion by

W. D. Porter, J.,

The defendant did not, by the pleadings, raise the question of the regularity of the incorporation of the plaintiff borough, and it was proper for the learned court below to take judicial notice of the existence of the municipal and quasi-municipal corporations into which the county within its jurisdiction was, for purposes of local government, subdivided: Pearce v. Lang-fit, 101 Pa. 507. The borough had power to lay gas pipes under its streets for the purpose of supplying gas for lighting the streets, and for the use of citizens, and it was competent for it to exercise that power in favor of private citizens, by granting a license to do the same thing: Wood v. McGrath, 150 Pa. 451. In case the borough granted such a license and imposed conditions and duties upon the right to exercise the same, an acceptance of the grant by the licensees constitutes a contract that, while they operated under the license, the conditions would be observed and the duties performed: Allegheny v. People’s Natural Gas and Pipeage Company, 172 Pa. 632. Where such licensees enter under the grant and continue to enjoy the fruits thereof, they cannot set up as a defense to the performance of the conditions, that the contract was ultra vires. The law never sustains the defense of ultra vires out of regard for the defendant, but only when an imperative rule of public policy requires it: Wright v. The Antwerp Pipe Line Company, 101 Pa. 204. “ A man who has enjoyed a privilege has no right to say that, because he ought not to have enjoyed it, he will not pay for it:” Northampton County’s Appeal, 30 Pa. 305. Those who succeed to the rights of the original grantees of the license and continue to exercise such rights are equally bound to perform the conditions: Northampton County’s Appeal, supra.

It may be conceded that the resolution of the borough council granting to the original licensees the right to lay gas pipes in the streets, was defective and not binding upon the borough, for the reason that it was not approved by the burgess. The borough authorities, or any owner of property abutting upon the street, might have caused the licensees to be restrained from exercising the rights supposed to have been conferred by the defective resolution. The licensees were at liberty to decline to proceed to the performance of any act, or the expenditure of any money, upon the faith of the invalid resolution, but they could not proceed to exercise all the rights which would have been theirs had the resolution been valid, and, under a pretended acceptance of the grant, subject to the conditions, take possession of the borough streets, and, having complied with all the conditions during the time they were piping the streets and for a considerable period thereafter, decline to perform the conditions, while still insisting upon enjoying the fruits of the defective grant: Northampton County’s Appeal, supra. The learned judge of the court below, upon sufficient evidence, found the following facts : “That after the said resolution was adopted, as aforesaid, the said Hoovler, Bailey and Egbert accepted the terms of the same, and at their request, the time to begin laying pipes in accordance with the terms of said resolution was extended, from time to time, and they did begin, within the time limited by the last extension, to lay their gas pipes and mains in the streets and. alleys of said borough, under the terms and authority of said resolution. That prior to February 28, 1896, they liad laid their gas mains along the principal street of said borough, and had connected at least six street lamps with their said gas mains and were furnishing gas for said street lamps of said borough free of charge, under the terms of said resolution. That in February, 1896, the said Iioovler, Bailey and Egbert, having associated with them M. L. Kerr and I.’ M. Patterson, entered into articles of association to obtain a charter for their company, under the name and style of the Sandy Lake & Stoneboro Gas Company, under and in pursuance of the act of assembly of May 29, 1885, providing for the incorporation of natural gas companies, and on February 28,1896, applied to the governor of the commonwealth of Pennsylvania to grant them letters patent and incorporate them and their successors under the name and style aforesaid,' which letters patent were granted March 4, 1896. That after letters patent had been granted incorporating the said parties and their successors, as aforesaid, the corporation connected thirteen more street lamps in the said borough with its street mains, and began to furnish gas to said borough for said street lamps free of charge, and continued to furnish gas to the street lamps that had been connected up prior to the date of said incorporation, and those connected with it after their incorporation, in all nineteen street lamps, down to August 5, 1898, in accordance with the terms and conditions of said resolution of the town council of November 3, 1894, free of charge, excepting a specific bill of $10.00 presented by said corporation to the town council during the year 1897, for gas burned in the street lamps in daytime, which bill the town council paid.” When the private citizens who had been the original licensees thus formed a corporation, that corporation merely succeeded to the rights and property of the licensees, and took the same burdened with all the conditions and duties to which they were subject. The defendant corporation recognized this fact and connected its gas lines with the street lamps, and for a considerable period furnished gas to the street lamps, in accordance with the terms of the defective resolution, under a pretended acceptance of which their predecessors under the license had obtained possession of the streets. Having thus obtained possession of the streets of the borough under circumstances which plainly indicated to the parties and all the citizens of the borough that they recognized their obligation to maintain the street lamps, they now propose to retain possession of said streets without discharging the duties which they pretended to assume. They are at liberty to abandon the streets at any time, but while they insist upon enjoying the fruits of the defective ordinance, they cannot he permitted to set up their own wrong in order to retain the privilege, while refusing to perform the accompanying duty: Wright v. Pipe Line Company, supra.

Apart from these considerations, however, we must hold the defendant hound to perform the acts commanded by the decree of the learned court below, upon another ground: The borough clearly had authority to enter into the contract which is here sought to be enforced, and, having that authority, it had power by a subsequent ratification to make valid the contract based upon the defective resolution by which the license was originally granted: City of Phila. v. Hays, 93 Pa. 72; Silsby Mfg. Co. v. Allentown, 153 Pa. 319. It is not necessary that such ratification should be by a formal ordinance; the acceptance of the fruits of the contract, and the formal assertion in a judicial proceeding of a claim founded upon it are sufficient: Amberson Avenue, 179 Pa. 634; Shiloh Street, 165 Pa. 386. That the borough has ratified the contract is evident from the fact that it is now here endeavoring to enforce this claim: Harrisburg v. Shepler, 7 Pa. Superior Ct. 491.

The decree is affirmed, and the appeal dismissed at costs of the appellant, without prejudice to the right of the defendant to withdraw its pipe lines from the streets of the borough at any time.