Magill v. The Township of Moore and The Moore Municipal Telephone Association

That such abdication by a municipal corporation of its powers over and to its streets and highways would be contrary to law and against public policy does seem to me open to doubt.

Dubuc v. La Ville de Chicoutimi

If the consent contained in the first clause of the respondent's contract with the appellant be severable from the exclusive right conferred on the respondent by the seventh clause, so that it would continue after the expiration of the exclusive period, I would think that it would amount to a mere licence or permission which would be revocable at any time after the five years.

I would, therefore, allow the appeal with costs here and in the Appellate Division, and restore the judgment of the learned trial judge.

J. (ad hoc).-This is an appeal from the judgment of the Appellate Division of the Province of Ontario, declaring that the respondent has the right in perpetuity to maintain and operate on the streets of Cobalt its telephone system, and enjoining the appellant corporation from interfering with such rights. Concurring as I do in the result at which other members of the court have arrived, I think the appeal should be allowed and the judgment of the trial judge restored.

I base my conclusions on the view that the rights of the respondent company were acquired by-agreement with the municipality of Cobalt and that such rights terminated either on the expiry of the five year term mentioned in clause seven of the agreement of June, 1912, or by an effective revocation by the appellant corporation of any licence granted under clause 1 of rne that agreement-if such licence continued in force after the expiry of the five year term.

I think that what is termed in popular language "the franchise" granted by the agreement is to be --- ~defined in legal phraseology as a licence coupled with an interest and the duration of such licence, that is to say whether it was terminable or existed in perpetuity, is to be ascertained by an investigation of the intention of the parties and of their powers.

No express stipulation is made in the written agreement with regard to the continuance of the licence after the expiry of five years of exclusive enjoyment and consequently the intention of the parties as to its duration falls to be ascertained by a general consideration of all the terms of the agreement, the surrounding circumstances, the capacity of the parties and by an application of the principle that a grant in derogation of a public right is in case of doubt to be construed in favour of the public and against the licencee.

I agree with the view expressed by Riddell J. in the court below, that clause of the agreement (see Note "A" below) indicates that the parties intended an agreement for a certain term, that is a terminable agreement, not an agreement in perpetuity.

Note A.-Clause 9 above referred to is as follows:- I also think that there is great force in the argument of the appellant corporation as stated in their factum in these words:consent whatever was given before the lines were constructed. The first action by the town that is claimed to amount to a consent occurred in 1912.

By the Letters Patent, the consent of the Municipal Council OF was a condition precedent and they also provide for "control" by the municipality after consent is given.

It could also impose and fix "terms," "times," "rates and charges," at any time after granting consent.

Assuming, therefore, that the town consented to the respondent using its streets and originally imposed no limitation as to time TCPHONE and fixed no terms and rates, it could at a subsequent date limit the time and impose and fix terms and rates. Until the company fixed a Masten J. time in a binding way its hands were free. The Letters Patent so provided.

For the terms of the charter see Note B.:- Note B.-To carry on within the District of Nipissing the general business of a telephone company and for that purpose to erect, construct, maintain and operate a line or lines of telephone along the sides of or across or under aiy public highways, roads, streets, bridges, waters, water courses or other places subject, however, to the consent to be first had and obtained, and to the control of the municipal councils having jurisdiction in the municipalities in which the company's lines may be constructed and operated and to such terms for such times and at such rates and charges as by such councils shall be granted, limited and fixed for such purposes respectively.

With respect to the surrounding circumstances, I note that in-June, 1912, the respondent company had for - some years been occupying the streets of the appellant corporation with their poles and wires. No consent had been given to such occupation and claim had been frequently put forward on behalf of the appellant corporation that the respondent company were trespassers.

I think that clause 1 of the agreement was intended to operate as a fulfilment of the requirement of the charter as to municipal consent and an elimination of the claim which had theretofore been put forward that the respondent company had been or were then trespassers.

Having thus cleared the ground, the next step taken by the parties was to provide by the combined operation of clauses 1 and 7 for an exclusive franchise definitely granted for a period of five years. It is possible that at the expiry of the five years of exclusive franchise the situation as contemplated by the parties was that the respondent company. should still be in occupation of the streets, not as trespassers, but as licencees under the provisions of clause 1. In other words, that clause 1 remained in effect notwithstanding the expiry of the exclusive J franchise granted for the first five years, but in that event I think that the right of the appellant corporation to fix the time of the duration of the licence came into operation and enabled it to effect a revocation, which it has done.

With respect to the capacity and power of the appellant corporation, I observe, without attempting to reach any positive conclusion, that it is manifest from the course of judicial decision in this case that grave doubts exist regarding the extent of the powers conferred on the municipality by the "Municipal Act." In ascertaining the intention of the parties respecting the duration of the franchise.the presumption is that the appellant corporation intended to act within the powers which it clearly possessed and not that it intended to assume powers the right to which was at least doubtful.

Lastly, if doubt remain notwithstanding the consideration to which I have adverted, such doubt is to be resolved in favour of the public right and against the respondent company.

I think that the principle of construction enunciated by Lord Stowell in The Rebeckah at page 230, applies to this case.

rogatives, rights and emoluments are diminished by any grant, beyond what such grant by necessary and unavoidable construction shall take THE I think that the principle so stated applies to a licence granted by a municipal corporation whereby the rights of the public in a highway are diminished. The principle was so applied by the Supreme Court of the United States in Knoxville Water Co. v. Knoxville (1), Masten J. where Mr. Justice Harlan, in delivering the judgment of the court, after referring to the various cases where the above principle had been applied, said:- It is true that the cases to which we have referred involved in the main the construction of legislative enactments.

But the principles they announce apply with full force to ordinances and contracts by municipal corporations in respect of matters that concern the public. The authorities are all agreed that a municipal corporation, when exerting its functions for the general good, is not to be shorn of its powers by mere implication.

If by contract or otherwise it may, in particular circumstances, restrict the exercise of its public powers, the intention to do so must be manifested by words so clear as not to admit of two different or inconsistent meanings.

The same view was maintained in Blair v. City of Chicago (2).

This conclusion renders it unnecessary for me to consider the capacity or powers of the appellant corporation or of the respondent company, but in view of the discussion that has taken place in the courts below respecting the effect of the "Companies Act" and the Letters Patent incorporating the respondent company, I ought perhaps to add one word.

It seems to me that when the agreement of June, 1912, was made the respondent company was governed by the "Companies Act" of 1907 as amended in 1908 and 1910. In support of that view I refer to sees. 210 (c) and 211 (1) of the "Companies Act" of 1907. I agree with the view that the ultimate source from which the powers of a company are derived is the (1) 200 U.S.R. 22.

legislature and in certain cases the Crown (Bonanza Creek Gold Mining Co. v. Rex

I also agree that the legislature can clothe the company with rights as well as with powers and that in so doing it can act either directly or by delegating to the Governor-in- Council the necessary authority. I fail, however, to --find in the provisions of the "Companies Act" of 1907, as amended in 1908 and 1910, any warrant for holding that there has been delegated by the legislature to the Lieutenant-Governor in Council power to confer on a company objective rights as distinguished from subjective powers, or that this company was invested with such rights in 1912.

I think that the "pith and marrow" of the "Companies Act" of 1907 is the incorporation of a company-the designation of its powers and the definition of the mutual rights of its shareholders inter se. In other words, the authority conferred upon the Governor-in-Council is, in my opinion, merely to bring into existence the entity known as the company and to endow it with certain powers, but I think the Act gives to the Governor-in- Council no authority as against other subjects of His Majesty to confer on the 'company so created objective rights of the kind here in question.

Dealing concretely with the facts of this case, I think that no actual immediate right to occupy the streets of Cobalt was, or could be, conferred on the respondent company through the provisions of the "Companies Acts" under which it was constituted, but that any such right must have been acquired from the appellant corporation.

I agree on this point with the views expressed by the trial judge and by Kelly J. in the courts below.

The appeal should be allowed and the judgment of the trial judge restored.

Appeal allowed with costs.

Masten