Carlisle Gas & Water Co. v. Carlisle Water Co.

Citations

• 182 Pa. 17
• 37 A. 821
• 1897 Pa. LEXIS 764

Syllabus

<p>Corporations — Municipal corporations — Water companies —Acts of April 19, 1853 and April 29, 1874 — Boroughs.</p> <p>Where a borough is specially authorized by the legislature to subscribe to the stock of a corporation organized to supply the borough with water, with a right to appoint a certain number of the managers, but without the right to participate in the election of the other managers, the works of such company are constructed by the municipality within the meaning of the general corporation Act of April 29, 1874, P. L. 73, which forbids companies organized under that act to construct waterworks where such works have been already constructed by the municipality itself.</p> <p>Section 12 of the Act of April 19,1853, P. L. 578, incorporating the Car-lisle Gas and Water Company, provided that if the borough of Carlisle should subscribe and take one third or more of the capital stock of .the company, the borough should have the right annually to “ appoint three managers of the said company, and in that event the election of all other stockholders shall be confined to the president and five managers, and other stockholders shall alone have power to vote at elections and meetings.”</p> <p>The borough subscribed to one third of the stock, and continued to appoint three managers for more than forty years, without participating in the election of the other managers. For eighteen years the company was compelled to expend all of its net earnings in improving and extending its works, so that no dividends could be paid. The borough’s representatives always took an active part in the management and the extension of the plant. A corporation organized under the act of April 29, 1874, claimed the right to supply the borough of Carlisle with water. Held, that the works constructed by the Carlisle Gas and Water Company were municipal waterworks within the meaning of section 34 of the act of 1874 which forbids a company organized under that act “ to construct gas or water w