Opinion
No. 32179
Decided February 7, 1951.
Municipal corporations — City electric plant furnishing current to city's inhabitants — Franchise ordinance grant to public service corporation — Permitting furnishing of electricity to two named industries — Power of council to enact — Merely a grant to service corporation — Not subject to referendum — Section 5, Article XVIII, Constitution.
1. Where a city owns and operates a municipal plant which produces electric current and undertakes to furnish the same to the inhabitants of such city, the city council has the power, by ordinance, to grant to a public service corporation a ten-year franchise to erect, maintain and use poles, wires, conduits and other structures through and along the streets, alleys, highways and public places of such city, which may be necessary to enable such public service corporation to furnish and supply electricity to two named industries located in said city.
2. Where such ordinance merely grants a franchise and does not obligate the public service corporation to serve or supply said industries but leaves the public service corporation and the industries free to contract as they may choose, and does not create any interest on the part of the city in any contract which may be executed between the public service corporation and those industries, such ordinance does not come within the scope and meaning of Section 5, Article XVIII of the Constitution of Ohio, with regard to referendum and is not subject to referendum under that provision.
APPEAL from the Court of Appeals for Crawford county.
The only issue to be considered herein is the right to a constitutional referendum with respect to ordinance No. 2796 passed by the council of the city of Galion, Ohio. The cause is in this court on appeal on questions of law from the Court of Appeals.
The ordinance was originally passed by the city council on October 5, 1948. It recites that the electric energy now being produced or that can in the immediate future be produced by the Galion municipal light plant is wholly inadequate and insufficient to meet the demands of its customers; that manufacturing concerns in Galion have been compelled repeatedly to shut down because of the inability of the municipal plant to furnish sufficient power; that private customers have suffered hardships and inconvenience in being deprived of the necessary amount of electric energy; that the municipal plant is in such state of disrepair that it will take years to rebuild and repair the same; that the Galion Iron Works Manufacturing Company and The Central Ohio Steel Products Company have requested the city of Galion to permit them to purchase outside power and for that purpose to permit The Ohio Public Service Company to install the necessary poles, transmission wires and other appliances and appurtenances necessary and requisite to deliver electric energy to their respective plants; and that such grant would be of great benefit and advantage to the city of Galion.
It was, therefore, ordained by the council that The Ohio Public Service Company, its successors and assigns, be granted "the right, privilege and franchise to erect, construct, maintain and use the necessary poles, wires, conduits, and such other structures, fixtures and appliances, overhead and underground, as may be deemed by it or them necessary or essential to enable it or them to transmit electricity through and along the streets, alleys, highways, and public places of the city of Galion, Ohio, for the purpose of furnishing and supplying electric service to the Galion Iron Works Manufacturing Company and to The Central Ohio Steel Products Company, or to the successors or assigns of either of them."
The right so granted was not subject to revocation by the grantor prior to ten years from the effective date of the ordinance. The Ohio Public Service Company was required to file its written acceptance of the ordinance within 60 days from passage.
The ordinance was filed with the mayor on October 8, 1948; was vetoed by him on October 13, 1948; and was repassed by the city council over the mayor's veto on November 4, 1948. Referendum petitions were filed with the mayor on December 3, 1948, but no further steps were taken and no referendum election was held. The acceptance of the ordinance by The Ohio Public Service Company was filed with the city clerk on November 24, 1948.
This action was instituted in the name of the City of Galion, Ohio, by George H. Davies, its solicitor, on November 13, 1948. The City of Galion and The Ohio Public Service Company were named as defendants. The plaintiff was granted an order on November 13, 1948, temporarily enjoining any activity on the part of defendants under the ordinance, pending the filing of referendum petitions and a referendum vote if such petitions were filed.
On June 14, 1949, after hearing upon the pleadings and the evidence, the trial court held for the plaintiff and continued the injunction. Appeal was taken to the Court of Appeals which held for the defendants, dissolved the injunction and dismissed the petition.
The necessary steps to procure a referendum vote under statutory provisions were not taken and no claim is made in this case that the plaintiff is entitled to referendum pursuant to the statutory provisions. The plaintiff claims the right of referendum under the provisions of Sections 4 and 5 of Article XVIII of the Constitution of Ohio.
Mr. George H. Davies and Messrs. Myers Spurlock, for appellant.
Messrs. Strelitz, Halberstein Mitchell and Mr. Carl J. Gugler, city attorney, for appellees.
Section 4 of Article XVIII of the Constitution of Ohio provides:
"Any municipality may acquire, construct, own, lease and operate within or without its corporate limits, any public utility the product or service of which is or is to be supplied to the municipality or its inhabitants, and may contract with others for any such product or service. * * *"
Section 5 of Article XVIII reads:
"Any municipality proceeding to acquire, construct, own, lease or operate a public utility, or to contract with any person or company therefor, shall act by ordinance and no such ordinance shall take effect until after thirty days from its passage. If within said thirty days a petition signed by ten per centum of the electors of the municipality shall be filed with the executive authority thereof demanding a referendum on such ordinance it shall not take effect until submitted to the electors and approved by a majority of those voting thereon. * * *"
It is argued by the plaintiff that the ordinance in question provides for a contract to be entered into between a public utility and the municipality whereby the public utility agrees to supply its product or service to the municipality or its inhabitants and that consequently the action of council is governed by Section 5, Article XVIII of the Constitution of Ohio. Adopting the common expression, the plaintiff's claim is that the ordinance is subject to a constitutional referendum as distinguished from a referendum authorized by, and conducted pursuant to, the statutes of Ohio.
It is the opinion of this court that the ordinance in question does not constitute or authorize a contract to acquire, construct, own, lease or operate a public utility or a "contract with any person or company therefor." It does not require The Ohio Public Service Company to supply, furnish or sell electric current to anyone. It fixes no rates to be charged by that company in the event it should supply current to any inhabitant of Galion. It merely authorizes The Ohio Public Service Company to make certain use of the streets, alleys and public ways of Galion to enable that company to furnish and supply "electric service" to two industries if and when those industries contract with The Ohio Public Service Company for such service. The ordinance gives the city of Galion no power to require The Ohio Public Service Company to supply current to those two industries and the city would have no interest in any dispute which might arise between The Ohio Public Service Company and those industries with respect to the furnishing or supplying of such service.
If it could be claimed that the effect of this ordinance would be that the city of Galion would indirectly furnish electric service to its inhabitants through The Ohio Public Service Company, the ordinance would, in our judgment, only provide for extension of the present service furnished by the existing municipally owned plant. In such event, the law announced in State, ex rel. City of Fostoria, v. King, Aud., 154 Ohio St. 213, 94 N.E.2d 697, would be applicable.
This court approves the reasoning and decision of the Court of Appeals and finds that the ordinance in question is not subject to referendum pursuant to the provisions of Sections 4 and 5 of Article XVIII of the Constitution of Ohio. There is then no occasion to pass upon the question raised as to the date upon which it would have been necessary to file such referendum petitions.
The plaintiff claimed further that the city council was without power or authority to pass the ordinance and that consequently the ordinance is void. The legislative power of the state to control the use of streets and public grounds has long been established and was briefly stated by this court in Louisville Nashville Rd. Co: v. City of Cincinnati, 76 Ohio St. 481, 497, 81 N.E. 983, as follows:
"Public streets, squares, landings and grounds are held in trust for the public, and being so held they are, for the use for which they were dedicated or acquired and subject to the property rights of abutting owners, under the absolute control of the legislative power of the state."
The General Assembly exercised its control by enacting several provisions of the General Code. Section 3714, General Code, provides:
"Municipal corporations shall have special power to regulate the use of the streets, to be exercised in the manner provided by law. The council shall have the care, supervision and control of public highways, streets, avenues, alleys, sidewalks, public grounds, bridges, aqueducts, and viaducts, within the corporation, and shall cause them to be kept open, in repair, and free from nuisance."
By Section 9193, General Code, companies organized for the purpose of supplying electric light and power are forbidden to construct their lines through a street, alley, lane, square, etc., of a city or a village without the consent of the municipality.
Likewise, Section 9195, General Code, provides as follows:
"A company organized for the purpose of supplying electricity for power purposes, and for lighting the streets and public and private buildings of a city or village, may manufacture, sell and furnish the electric light and power required therein for such or other purposes and with the consent of the municipality, under such reasonable regulations as it prescribes, also construct lines for conducting electricity for power and light purposes through the streets, alleys, lanes, lands, squares and public places of such city or village, by the erection of the necessary fixtures, including posts, piers and abutments necessary for the wires."
We agree with the Court of Appeals in holding that the city council had the power and authority to pass the ordinance.
The judgment of the Court of Appeals is affirmed.
Judgment affirmed.
WEYGANDT, C.J., ZIMMERMAN, STEWART, TAFT, MATTHIAS and HART, JJ., concur.