Owensboro v. Owensboro Water Works Co. of Owensboro

Citations

• 243 U.S. 166
• 37 S. Ct. 322
• 61 L. Ed. 650
• 1917 U.S. LEXIS 2104

Syllabus

<p>A city granted to a water company a franchise to construct and operate water works, using the streets. The ordinance defined the grant as made “for the duration of the said Company” (the grantee), but elsewhere limited the term expressly to twenty-five years from the passage of the ordinance; which also contained a contract for the same period providing that, if, at the city’s request-, the company should extend its pipes “during the said.term of twenty-five years,” the city would rent hydrants thereon “for the uneXpired term of said franchise.” Some years later, the city granted a similar, substitute franchise to a second company, successor to the first with the city’s consent, by an ordinance defining the franchise term as “for and during the existence” of the second company, and recognizing the latter as the successor of the first company in respect of the contract for hydrant rental “as fully as if such existing contract had been originally made” with the second company “without .the inter-, vention” of the first. By the law of its creation, the life of the second company was twenty-five • years primarily, with the right (reserved in its articles) to prolong the term by twenty-five year extensions.</p> <p>Held: (1) That the life of the second franchise was not limited to twenty-five years, but was intended to endure while the corporate life of the grantee endured by extension beyond that period.</p> <p>(2) The fact that the first franchise was expressly limited to twenty-five years while the second was granted for' “the existence of the corporation” was evidence confirming this construction.</p> <p>(3) Respecting the contract concerning hydrants, the second company became successor of the first only for the unexpired, term of that contract.</p> <p>(4) That later ordinances of the city requesting pipe fine extensions and declaring that the city thereby rented the hydrants along such extensions “for the unexpired term of the franchises of the said Water Company