p. 152erect 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 rpaintained and operated. The ap-pellee 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 electrical 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 schedul 3 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.
Mr. C. H. Montgomery, with whom Mr. Samuel W. Moore was on the brief, for appellant:
The franchise granted in the ordinance was not exclusive nor does it contain any obligation on the part of the municipality not to compete with the owner of the franchise in commercial lighting or otherwise; nor is the use of the streets granted by the franchise an exclusive, one. The ordinance amounts to a license to use the streets and that is all. One claiming the grant of an exclusive franchise from a municipality must be able to point out the express terms by which the exclusive grant is created. The rights of the city and its citizens .
p. 153do not pass by uncertain or ambiguous language or by implication. Where a municipality is vested with certain powers, the law jealously guards their exercise and construes contracts of the nature now under consideration most favorably to the municipality.
Bienville Water Co: v.
City of Mobile, 95 Fed. Rep. -539;
175 U. S. 1 ;
186 U. S. 212 ;
Skaneatales Water Works Co. v.
Skaneatales, 184 U. S. 354 ; Pearsall v.
Railway Co., 161 U. S. 664 ;
Charles River Bridge v.
Warren Bridge, 11 Peters, 420 ;
St. Paul Gas Light Co. v.
St. Paul, 181 U. B. 142 ;
Stein v.
Water Co.,'141 XJ. S. 67;
New Orleans Water Works Co. v. Rivers, 115 U. S. 674 ';
-St. Tamany Water Works Co. v.
New Orleans Water Works, Í
20 U. S. 64 ;
Hamilton Gas Light Co. v.
Hamilton, 146 U. S. 258 ;
Thompson Electric Co. v.
City of Newton, 42 Fed. Rep. 723 ;
Lewis v.
City, 75 Fed. Rep. 884 ;
City of Brooklyn, .143-.N. Y. 596 ;
City of Austin v.
Bartholamew, 107 Fed. Rep. 349 ;
Newhuryport Water Co. v.
Newburyport, 103 Fed. Rep. 587 ,
The power of the city of Joplin to erect and operate its own electric light plant and the power to grant to some person or corporation a franchise therefor are concurrent powers. The lower court erred in holding that the city in granting a fran-clpse for the erection of an electric light plant thereby disabled itself from erecting and maintaining one of its own.
Skanea-tales W. W. Co. v.
Skaneatales, supra; The Walla Walla Case, 172 U. S. 1 ;Los Angeles v.
Water Co., 177 U. S. 588 , and other cases on brief of defendant in error, distinguished.
If the city of Joplin in granting complainant’s franchise thereby disabled itself from érecting an electric light plant of its own, then the lower court was without jurisdiction and should have dismissed the bill.
Hamilton Gas Light Co. v.
Hamilton, 146 U. S. 258 ;
State v.
Hamilton, 47 Ohio St. 52 .
Mr. J. McD. Trimble and Mr. John A. Eaton for defendant in error and appellee:
The statute must be read into the ordinance or contract.
Walker v.
Whitehead, 16 Wall. 314 .
p. 155Courts may acquaint themselves with the persons and circumstances that are the .subjects of the written agreement and place themselves in the situation of the parties who made the contract; view the circumstances as they viewed them, so as to judge of the meaning of the words, and of the correct application of the language to the thing déscribed. ■ Guar- . antee Co. v. Mechanics’ Sav. Bank & Tr. Co., 80 Fed, Rep. 766 ; Goddard v. Foster, 17 Wallace, 123, 143.
The following fully support the right to an injunction in this suit: Walla Walla-Water Co. v.' City of Walla Walla, 60 Fed. Rep. 957 ; 172 U. S; 1; Westerly Water Works v. Town of Westerly, 75 Fed. Rep. 181 ; White v. City of Meadville (Pa.),. 35 Atl. Rep. 695 .
A legislative act which impairs the obligation of an existing contract is void, as violative of the contract clause of the Constitution.
New Orleans v.
Rivers, 115 U. S. 674 ;
St. Tamany Water Works Co. y.
New Orleans, 120 U. S. 64 ;
City of Los Angeles v.
Los Angeles Water Co., 177 TJ, S. 558;
Detroit v.
Railway Co., 184 TJ. S. 368.
Cases on brief of plaintiff in error distinguished..
This" court has, and the Circuit Court had jurisdiction. Vicksburg Water Works v. Mayor of Vicksburg, 185 TJ. S. 65; Riverside Ry. Co. v. Riverside, 118 Fed. Rep. 736 ; St. Paul Gas L. Co. v. St. Paul, 181 TJ. S. 142; City R. R, Co. v. Citizens’ R. R. Co., 166 TJ. S. 557. -
after' stating the case, delivered the opinion of the court.
The foundation of the suit is that the ordinances of March, 1899, and the acts and conduct of the city in entering into competition with the complainant (appellee) impair the obligation of the contract impliedly arising from the ordinance of October 7,. 1891, and the acceptance thereof by appellee. In other words, it is contended that under the statute of the State, which we have quoted, the city was given the power to
p. 156construct an electrical plant and erect poles, etc., to “supply private lights for the use of the inhabitants of the city,” or it could grant that right “to any person or persons or corporation” upon such terms, as might'be prescribed by ordinance. It chose the latter, and granted to the assignors of appellee' the right given by the statute and expressed it to be “in consideration of the benefits to be derived therefrom.” And it is hence contended that thereby the city contracted not to build works of its own, and that by doing so it violated section 10 of the Constitution of the United States, which pro- . vides that no State shall “pass any law impairing the obligation of a contract,” and also violated that clause of
the Fourteenth Amendment of that instrument which provides that no State “shall deprive any person of property without due process of law.”
It is by implication from the statute and the ordinance passed under it, not from the explicit expression of either, that the conclusion is deduced that the city is precluded from erecting its own lighting plant, and yet it is conceded that the grant to the appellee is'not exclusive. That is, it is conceded the city has not exhausted its power under the statute by the grant held by appellee, but may make another to some other person than the appellee. In other words, that the city may make a competitor to appellee, but . cannot itself become such competitor. The strength of the argument urged to support the distinction is in the consideration that competition by the city would-be more effective than competition by private persons or corporations — indeed, might be destructive. The city, it is further urged, could be indifferent .to profits and could tax its competitor .to compensate losses. But this is speculation and it may be opposed by speculation, and there are besides countervailing considerations. The limitation contended for is upon a governmental agency, and restraints upon that must not be readily implied. The appellee concedes, as we have seen, that it has no exclusive right, and yet contends for a limitation upon the city which might give it (the appel-
p. 157lee) a practical monopoly. Others may not seek to compete with it, and if the city cannot, the city is left with a useless potentiality while the appellee exercises and enjoys a practically exclusive right. There are presumptions, we repeat, against the granting of exclusive rights and against limitations upon the powers of government. •
Many cases illustrate this principle, and some of them were decided in response to contentions similar to those made in the case at bar. In Skaneatales Water Works Co. v. Skanea-tales, 184 U. S. 354 , the village of Skaneatales, under statutes, of the State of New York, granted to the water .company the right to construct waterworks, and contracted with it to supply water to the village and its inhabitants for the period of five years. At the expiration of the term of the contract some difference arose about the terms of its continuance, and the village constructed an independent system of waterworks. A suit was brought by the water company to restrain the further construction of the works and their operation, and the company contended that under the statute of the State, by which the. village granted to the company its franchises, the village had the election to construct works, or confer such power upon a private company like the water company, and having elected the latter, it impliedly contracted not to construct works of its own. In reply to this contention this court said (p. 363), by Mr. Justice Peckham:
“There is no implied contract in an' ordinary grant of a franchise, such as this, that the grantor will never do any act by which the value of the franchise granted may in the future be reduced. Such a contract would be altogether too far-reaching and important in. its possible consequences in the way of limitation of the powers of a municipality, even in matters not immediately connected] with water, to be left to implication. We think none such arise from the facts detailed.”
It is. true there was an element in that case which is not in the case at bar. The village of Skaneatales had entered into a contract with the water company to take water from the
p. 158company. This contract had expired before the city constructed its works. It was not that contract, however, which was alleged to have been impaired, but that which the water company claimed to have been implied by reason of its organization and incorporation and in pursuance of the application made to and with the consent of the village authorities. The ultimate reliance, therefore, of the water company was that from the grant’ to it the village impliedly contracted not to construct works of its own. The similarity of the contention with that in the case at bar is apparent.
In Bienville Water Supply Company v. Mobile, 175 U. S. 109 ; 186 U. S. 212 , it was again decided that the granting of franchises to private persons to construct waterworks in a city does not preclude the city from afterwards erecting such works and supplying its inhabitants with water.
Walla Walla v. Walla Walla Water Co., 172 U. S. 1 , is not in' opposition to these views. The city of Walla Walla was, by the statute incorporating it, empowered to erect waterworks or to authorize the erection of the same. In pursuance of this power it granted a franchise to the Walla Walla Company and contracted to take water from the company, ■ reserving the right to avoid the contract under certain contingencies. But it was provided that: “Until such contract shall have been so avoided, the city of Walla Walla shall not erect, maintain or become interested in any waterworks except the ones herein referred to, save as hereinafter specified.” The contract was in force at the time the suit was brought and the water company had substantially complied with all of its terms and conditions. The contract passed upon, therefore, was expressed and explicit. The power to make it was sustained. In the case at bar restraint upon the .power of the appellant city is claimed to be implied 'by the grant to the appellee. We think, for the reasons stated and upon the authorities cited, such restraint cannot be.implied.
Decree reversed and case remanded with directions to dismiss the bill,