
    Newton E. Farnsworth, Plaintiff, v. Boro Oil and Gas Co., Defendant.
    (Supreme Court, Erie Equity Term,
    March, 1912.)
    Estoppel — equitable estoppel and estoppel in pais — Stipulations and consents.
    Where a natural gas company, in 1901, applied to a town board, . instead of the commissioner of highways as provided by Laws of 1889, chapter 422, section 2, for authority to construct its pipe line in certain public highways, and said town board gave its consent on condition that the company should not charge more than twenty-five cents per thousand cubic feet, and an application, similarly made in 1909, for an extension of the consent to other highways was granted on the same terms and conditions, and said town board having subsequently refused -to permit the company to increase its rate, the company, having acted under the consent, is estopped, in an action to restrain it from charging an increased rate, from claiming that said town board was without power to give such consent and, therefore, without power to regulate the rate.
    Action to restrain defendant from charging thirty cents per thousand cubic feet for natural gas.
    Fred J. Blackmon, for plaintiff.
    Ward J. Wilber, for defendant.
   Pound, J.

The rights of the defendant in the highways

of the town of Collins were conferred by the provisions of chapter 422 of the Laws of 1889, which reads as follows:

“ Section 1. It shall be lawful for any corporation organized under chapter 611 of the Laws of 1875 (Business Corporations Law) and acts amendatory thereto, for the purpose of boring, drilling, digging or mining for natural gas, and conveying and distributing the same in pipes, and vending said gas to the consumers thereof; to purchase, lease, secure and convey such real estate, and such only, as may be necessary for the convenient transaction of.their business; and to effectually carry on the operations of such corporation.
§ 2. Such corporation is authorized to dig and trench for, and lay their pipes along or under any of the public roads or highways, or through or under any of the waters within the limits of this state; provided the same shall not be so done as to incommode the public use of said highways, or interrupt the navigation of said waters. Provided, however, that no pipe-line for the purpose aforesaid shall be constructed across, along, or upon any public highway, without the consent of the commissioners of highways of the town in which such highway is located, upon such terms as may be agreed upon with such commissioners.”

The defendant, mistakenly assuming that the town board rather than the commissioner of highways was the proper authority to which to apply for consent to construct its pipeline in certain of the public highways of the town, applied to it for such consent in the year 1901, whereupon the town board granted such consent on condition that “ said company or its assigns shall not charge the inhabitants of the said town using gas for fuel or .lights or both a sum exceeding twenty-five cents per thousand cubic feet.”

In 1909 defendant applied to the town board for an extension of the consent to other highways, and said consent was granted on the same terms and conditions. The defendant accepted and has acted upon such consents.

In 1911 defendant applied to the town board for leave to raise its rate to thirty cents per thousand cubic feet. This application was denied. It does not appear that the defendant has any express consent from the highway commissioner to place its pipe-line in the highway.

The town hoard consists of the supervisor, town clerk and justices of the peace.

Defendant now repudiates the terms imposed by the town board as a condition of granting its consent so far - as they fix rates for gas and raises its rate to thirty cents per thousand cubic feet, claiming that the town board was without authority to grant such consent and, therefore, without power to regulate rates’.

Plaintiff is an inhabitant of said town taking gas from defendant and he brings this action to restrain the defendant from charging the increased rate. He is a proper party to maintain the same.

It is true that the only limitation placed by law upon the right of the defendant to lay its pipe-lines in the public highway is that contained in the act of 1889, viz.: that the consent of the commissioners of highways be obtained on such terms as the commissioners may see fit to impose.

It is also true that defendant obtained no additional rights and privileges from the town board.

I think, however, that the law of the case is established by the authority of the Rochester Telephone Co. v. Ross, 125 App. Div. 76.

Justice Kruse, writing the opinion, says: The telephone company voluntarily entered into a contract with the city;. it recognized the right of the city to make the same and grant to it certain rights and privileges which it now uses and enjoys; and I think that it is now estopped from questioning the right of the city to grant the same and repudiating that part of its agreement limiting the telephone rates as provided in the contract. * * * under the principles of estoppel, it should not now be heard to question the authority of the city to make the agreement and grant the rights, as the city has assumed to do, taken advantage of by the telephone company.”

When this case was affirmed by the Court of Appeals (195 N. Y. 429) the affirmance was based solely on the ground that the city’s grant gave the company greater rights than it had from the general law of the state and that, therefore, there was a sufficient consideration to uphold the covenant of the company not to charge the subscribers in excess of the contract rate.

The opinion contains no suggestion of approval or disapproval of the theory of estoppel as enunciated by the Appellate Division,.but I cannot find that the views of Justice Kruse have been disapproved.

Furthermore, the lapse of time since the consent of the-town board was given to and accepted by the defendant- in 1901 permits. che inference that the commissioner of highways has acquiesced in and adopted the unauthorized act of the town hoard. I doubt exceedingly if the commissioner of highways could now exclude the company from the highways of the town and, if the consent of the town board is enough to give the. comp any its rights in the highways, it is enough to limit those rights.

Decision accordingly.  