New Orleans Gas Co. v. Drainage Comm’n, 197 U.S. 453 (1905)

Please note: this case begins in mid-page. It therefore shares a citation with the last page of the previous case. If you are attempting to follow a link to the last page of 197 U.S. 442, click here.

New Orleans Gas Light Company v.

Drainage Commission of New Orleans
No. 17

Argued March 8-9, 1905
Decided April 3, 1905
197 U.S. 453

ERROR TO THE SUPREME COURT

OF THE STATE OF LOUISIANA

Syllabus

The drainage of a city in the interest in the public health and welfare is one of the most important purposes for which the police power can be exercised.

Every reason of public policy requires that grants in the subsurface of streets shall be held subject to such reasonable regulation as the public health and safety may require.

Uncompensated obedience to a regulation enacted for the public safety under the police power of the state is not a taking of property without due compensation.

Under the facts of this case, the changing of the location of gas pipes at the expense of the gas company to accommodate a system of drainage which has been upheld by the state court as an execution of the police power of the state does not amount to a deprivation of property without due process of law.

The New Orleans Gas Light & Banking Company was incorporated in 1835, and was given the exclusive privilege of vending gas in the City of New Orleans and its faubourgs and the City of La Fayette to such persons or bodies corporate as might voluntarily choose to contract for the same, and it was permitted to lay pipes and conduits at its own expense in the public ways and streets of New Orleans, having due regard for the public convenience. In 1845 and 1854, the charter of the company as to its right to engage in banking was withdrawn, and the right to vend gas and use the streets was continued to the corporation under the name of the New Orleans Gas Light company until April 1, 1875, when its corporate privileges should end, the company during the continuance of its charter to furnish the Charity Hospital with necessary gas and fixtures free of charge. By amendments, the contract privilege of the company was extended until April 1, 1895, the exclusive privileges granted by the original charter not to extend beyond the time fixed in the act of incorporation. In 1870, another company, under the name of the Crescent City Gas Light Company, was incorporated, its charter providing that the company, its successors, and assigns, should, for fifty years from the expiration of the charter of the New Orleans Gas Light Company, have the sole and exclusive privilege of making and supplying gaslight in the City of New Orleans, and for that purpose be allowed to lay pipes and conduits in the streets and alleys of the city where the same may be required at its own expense, in such manner as to least inconvenience the city and its inhabitants, and the company was also required to afterwards repair, with the least possible delay, the streets it had broken. In 1873, an act of the legislature fixed the date of the expiration of the exclusive franchise of the New Orleans Gas Light Company at April, 1875, and the franchise of the Crescent City Gas Light Company was confirmed from that date for the period of fifty years. On March 29, 1875, the New Orleans Gas Light Company and the Crescent City Gas Light Company were consolidated under the name of the former corporation. This company is the plaintiff in the action in the state court. By an act of the legislature approved July 9, 1896, the state created a board known as the Drainage Commission of New Orleans, which board was given the power to control and execute a plan for the drainage of the City of New Orleans, and also the power to appropriate property according to the laws of the state, by legal proceedings, for the purpose of constructing a drainage system. After adopting a system of drainage and proceeding with the construction thereof according to the plans, it was found necessary to change the location in some places in the streets of the city of the mains and pipes theretofore laid by the New Orleans Gas Light Company. The testimony shows that there was nothing to indicate that these changes were made in other than cases of necessity and with as little interference as possible with the property of the gas company. By stipulation between the parties, it was agreed that the charges should be paid by the gas company when it became necessary to accede to the demands of the drainage commission, the gas company should keep an account thereof, and that its right to recover for the amount expended by it should not be prejudiced by the arrangement made, but should be submitted to the courts for final adjudication. This action was brought to recover the cost of the changes so made. In the court of original jurisdiction, there was a judgment in favor of the drainage commission. Upon appeal, the Supreme Court of Louisiana reversed this judgment. Upon rehearing, the latter judgment was reversed, and a final decree rendered affirming the judgment of the lower court rejecting the claim of the gas company. 111 La. 838. A writ of error to this Court brings into review that judgment, the contention being that the judgment of the state court has impaired the contract rights of the gas company, and has the effect to take its property without compensation in derogation of rights secured by the Constitution and the Fourteenth Amendment.