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Cataract Power & Conduit Co. v. City of Buffalo

Supreme Court of New York, Appellate Division

March 3, 1909

CATARACT POWER & CONDUIT CO.
v.
CITY OF BUFFALO.

Submitted controversy on an agreed case by the Cataract Power & Conduit Company against the City of Buffalo. Judgment in part for each party, as stated.

[115 N.Y.S. 1046] Daniel J. Kenefeck, for plaintiff.

Louis E. Desbecker and Samuel F. Moran, for defendant.

Argued before McLENNAN, P. J., and SPRING, WILLIAMS, KRUSE, and ROBSON, JJ.

WILLIAMS, J.

Judgment should be ordered in favor of plaintiff on the fourth and sixth prayers, and for the defendant on the first, second, and third prayers (the fifth not passed upon, and no costs allowed).

The controversy arises over the construction of an ordinance passed by the common council of the city, granting the right to introduce electrical energy into the city for the purpose of light, heat, and power. The Niagara Falls Power Company and another corporation of similar powers each petitioned the city for such right, and December 2, 1895, the ordinance in question was adopted and approved, granting the right, subject to certain conditions and restrictions, among which were these:

First. When either company desired to construct its lines, it should file with the board of public works a plan and specifications, and should not have authority to proceed with the work, until such board and common council should have approved thereof, and said board and the common council should have approved thereof, and said board should issue its permit, and the board of park commissioners should consent as to any lands of which it had control.

Second. The structures should be sufficient to afford facilities for at least one other company, which additional space should not be used by the company receiving the grant for 10 years after the acceptance of the grant, and at any time during the 10 years the city might use such additional space for any public purpose from which it should not derive a revenue without compensation, and such use, if commenced, might be continued upon the same terms for the whole period of the grant. The city might also use such additional space during the 10 years for the purpose of furnishing light, heat, and power for other than public purposes, or authorize any other company to use it for similar purposes, upon such city or company making compensation; and if such city or company should commence such use of the additional space, during the 10 years, such use might be continued during the whole period of the grant, upon making compensation. If after the end of 10 years such additional space should remain unused, and neither the city nor the company should have become entitled to the use of the same, then the company receiving the grant might use it for its own purposes. The structure should also be sufficient to accommodate six Buffalo fire alarm telegraph wires and six wires of the Buffalo police signal system call, and the city should be permitted to use the same without compensation.

Eleventh. The grant should be for the period of 36 years from the date of acceptance.

[115 N.Y.S. 1047] Fifteenth. The grant should not become operative until accepted by any company.

On January 14, 1896, the Niagara Falls Power Company accepted the franchise. No other company accepted one. July 10, 1896, the franchise was with the assent of the city assigned to this plaintiff, and the consent went into effect October 5, 1896. Since that time the plaintiff has erected extensive structures in the city, and has and is engaged in selling and distributing electric energy. The city has never used any of the additional space provided for under the franchise for any purpose, nor has it authorized any other company to use it; but the 1O-year period has by agreement of the parties been extended until 60 days after the entry of the judgment herein.

The city owns and operates the only waterworks for the supply of the city and its inhabitants, pumping the water from Niagara river, and distributing it within the city and in the vicinity outside, for which service it charges water rates, regulated by ordinance. In the financial literature of the city these water rates are classified as " revenues," and the expense connected with the water supply as " expenditures." The city's use extends to the fire department's supply for extinguishing fires, sanitary purposes in schools and other city buildings and places, flushing sewers, and other usual public purposes. All this water is pumped at the same station, and served through the same pipes; there being no separation as to public and private consumption.

The plaintiff is selling electrical power to the city, to drive one of its pumps. The business of supplying water is under the control of the " bureau of water" of the department of public works. The expenses of this bureau are provided by certain estimates for the various public uses, and raised by tax; and it also receives the revenues for the sale to private persons and corporations. All money accruing each year from the sale and use of water is turned over to the city treasurer, to be used for the payment of the principal and interest of the water bonds, and the balance, if any, is applied as a resource in the appropriations to be raised by tax for the next fiscal year.

The questions for our determination are embodied in several prayers in behalf of the plaintiff contained in the submission, viz. (in brief): First, that by the ordinance the plaintiff is not required in its structures, erected after the expiration of the 10-year period, to provide the additional space (so called); second, that the city has no rights as to structures erected after the 10-year period, or to authorize any other company to use such additional space; third, that the city has no right to use, or authorize any other company to use, such additional space, unless said use shall have been commenced before the expiration of the 10-year period; fourth, that the water rates paid by persons and corporations for their private use is " revenue" under the ordinance, and the city has no right to use such additional space for the purpose of transmitting electricity to use in pumping water for such private use, without compensation; fifth, that the city has no right, and the Legislature cannot give it the right, to engage in or carry on the business of buying or generating electricity and selling [115 N.Y.S. 1048] the same to private parties, or to ...


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