Dale Ex Rel. Dale v. City of Morganton , 270 N.C. 567 ( 1967 )

155 S.E.2d 136 (1967) 270 N.C. 567

Adelia Willis DALE, by and through her Agent and Attorney in Fact, Wheeler Dale
v.
CITY OF MORGANTON, North Carolina.

No. 356.

Supreme Court of North Carolina.

June 20, 1967.

Simpson & Simpson, Morganton, and C. David Swift, Valdesa, for plaintiff appellant.

John H. McMurray, Morganton, for defendant appellee.

LAKE, Justice.

On appeal from an order granting or refusing an interlocutory injunction, this Court is not bound by the findings of fact of the trial judge, but may review such evidence submitted to him and find facts for itself. State ex rel. North Carolina Milk Commission v. National Food Stores, Inc., 270 N.C. 323, 154 S.E.2d 548; State ex rel. North Carolina Milk Commission v. Dagenhardt, 261 N.C. 281, 134 S.E.2d 361; Huskins v. Yancey Hospital, Inc., 238 N.C. 357, 78 S.E.2d 116. The evidence by the defendant is that two of its housing officials inspected this house and found the electrical wiring to be in a dangerous condition. This is not contradicted or disputed. We, therefore, find it to be a fact.

The plaintiff complains of two separate and distinct actions by the city. The first is the condemnation of the plaintiff's property for use as a dwelling. The second is the refusal to connect this property with the city's electrical distribution system for the furnishing to it of electric current. The first is an exercise by the city of a governmental function. The second is an exercise of a proprietary function. State ex rel. North Carolina Utilities Commission v. Municipal Corporations, of Scotland Neck, 243 N.C. 193, 90 S.E.2d 519; Town of Grimesland v. City of Washington, 234 N.C. 117, 66 S.E.2d 794; Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42.

Municipal corporations are specifically excluded from the definition of a "public utility" in G.S. § 62-3(23). Consequently, a municipal corporation distributing and selling electric energy to its inhabitants, and to other in its vicinity, is not subject to regulation by the North Carolina Utilities Commission, and the provisions of Chapter 62 of the General Statutes do not apply to it, except as otherwise expressly stated therein. However, the duty now imposed by G.S. § 62-140 upon privately owned distributors and sellers of electric power not to discriminate in service or rates is merely a development of "the commonlaw obligation of equal and undiscriminating service." See North Carolina Public Service Co. v. Southern Power Co., 179 N.C. 18, 30, 101 S.E. 593, 599, 12 A.L.R. 304, reh. dis., 179 N.C. 330, 102 S.E. 625, 12 A.L.R. 304. Upon the rehearing of that case, Brown, J., speaking for the Court, said:

"It [a privately owned power company] cannot sell to one and arbitrarily refuse to sell to another. * * * A public-service corporation cannot arbitrarily refuse to supply one of a class which it has undertaken to serve. It must justify its refusal by good reasons."

In Fulghum v. Town of Selma, 238 N.C. 100, 105, 76 S.E.2d 368, this Court recognized that, in the absence of a statute, there is a duty upon a municipal corporation engaged in the distribution and sale of water to its inhabitants to serve without discrimination. There is no difference in this respect between a municipal corporation engaged in the distribution and sale of water and one engaged in the distribution and sale of electricity. That a municipal corporation engaged in such a proprietary function may not discriminate unreasonably between its inhabitants desiring such service, see also: Home Owners' Loan Corp. v. Mayor and City Council of Baltimore, 175 Md. 676, 3 A.2d 747; Toan v. Village of Perry, 269 A.D. 894, 56 N.Y.S.2d 572; Hall v. Village of Swanton, 113 Vt. 424, 35 A.2d 381; City of Montgomery v. Greene, 180 Ala. 322, 60 So. 900. In McQuillin, Municipal Corporations, 3rd Ed., 35.35, it is said that a municipal corporation engaged in such a proprietary activity "is under a duty to supply the services which it offers to all persons who apply, without discrimination and at reasonable rates, insofar as it may reasonably do so," and that in the operation of such business, "the municipality possesses the same rights and powers with reference to its management and control that a private owner possesses." To the same effect, see Holmes v. City of Fayetteville, 197 N.C. 740, 747, 150 S.E. 624, app. dis., 281 U.S. 700, 50 S. Ct. 353, 74 L. Ed. 1126. Thus, the right of a municipal corporation operating a plant for the distribution and sale of electricity to its inhabitants to refuse to serve is neither greater nor less than that of a privately owned electric power company to do so.

It is well settled that a privately owned supplier of electric power, or other public service, may not lawfully refuse its service because of a controversy with the applicant concerning a matter which is not related to the service sought. Seaton Mountain Electric etc. Co. v. Idaho Springs Investment Co., 49 Colo. 122, 111 P. 834, 33 L.R.A.,N.S. 1078; Snell v. Clinton Electric etc. Co., 196 Ill. 626, 63 N.E. 1082, 58 L. R.A. 284; Hicks v. City of Monroe Utilities Comm., 237 La. 848, 112 So. 2d 635; Ten Broek v. Miller, 240 Mich. 667, 216 N.W. 385, 43 Am.Jur., Public Utilities and Services, § 23; Annot., 55 A.L.R. 771.

The facts in Ten Broek v. Miller, supra, were very similar to those in the case now before us. There, the proprietor of a summer resort which had been furnishing water and light to the plaintiff's cottage refused to continue to do so unless he built a septic tank approved by the Board of Health. The occupant of the cottage refused to so do on the ground that he had just constructed a cesspool which was satisfactory to him. In holding that the company must supply light and water, the Supreme Court of Michigan said:

"The installing of a septic tank was purely a collateral matter, and had no relation to the duty of defendant company to furnish the light and water and receive its pay therefor. [Citation omitted.] If plaintiff were violating a rule of the state health department, he could be proceeded against for its infraction in the proper forum. This would be a more orderly way of disposing of the dispute than for defendant to substitute itself for a court and punish plaintiff by shutting off his water and light."

Whatever may be the right of the city of Morganton, in the exercise of its governmental power, to forbid the occupancy of the plaintiff's house as a human habitation, that is a matter collateral to the duty of the city to supply electric power for use in this structure. A city may not deprive an inhabitant, otherwise entitled thereto, of light, water or other utility service as a means of compelling obedience to its police regulations, however valid and otherwise enforceable those regulations may be. The right of a city to cut off or refuse a service rendered by it in its proprietary capacity must be determined as if the city, in its capacity of supplier of such service, were a person separate and apart from the city as a unit of government. In the present case, it becomes apparent that for the city to deny electric service to this building, in order to compel obedience to its decree forbidding use of the building for human habitation, is arbitrary when it is remembered that electric service and water service may lawfully be demanded for purposes other than domestic consumption.

It is equally well settled, however, that a privately owned power company, and therefore a city, may lawfully refuse to supply electric energy to a building which is not properly wired. A city engaged in such proprietary activity is liable for injury due to its negligence upon the same principles applicable to a privately owned power company. Bowling v. City of Oxford, 267 N.C. 552, 148 S.E.2d 624, and cases there cited. A privately owned power company, and so a city, which introduces into a structure electric power, knowing that the wiring of such structure is in a dangerous condition, is liable in damages for injury to persons or property proximately caused thereby. See Keith v. United Cities Gas Co., 266 N.C. 119, 146 S.E.2d 7. Such company or city may, therefore, refuse to serve a customer when its inspection of his building reveals that the wiring therein is in a dangerous condition. Alabama Power Co. v. Sides, 229 Ala. 84, 155 So. 686; State ex rel. Thalheim v. Louisiana Gas Service Company (La.App.), 117 So. 2d 617; Tismer v. New York Edison Co., 170 A.D. 647, 156 N.Y.S. 28; Carroway v. Carolina Power & Light Company, 226 S.C. 237, 84 S.E.2d 728; Hawkins v. Vermont Hydro-electric Corporation, 98 Vt. 176, 126 A. 517, 37 A.L.R. 1359.

It having been established that the wiring in the plaintiff's house was in a dangerous condition, there was no error in the conclusion of the court below that the city had a right to refuse to allow this dwelling house to be connected to its electrical distribution system.

The plaintiff contends that the annexation by the city of the area which includes her property was void and, therefore, her property not being within the city limits, the city had no authority to forbid its use for residential purposes. In support of her position, she asserts that the annexation ordinance adopted by the city 7 October 1963 did not refer to Chapter 1009 of the Session Laws of 1959 and the city did not record the map showing the annexation, as required by G.S. § 160-453.19, until 14 May 1966.

If a city is authorized by the Legislature to adopt an ordinance, no reference in the ordinance, or in the minutes of the governing body of the city, to the statute conferring such authority upon the city is necessary in order to make the ordinance valid. Chapter 1009 of the Session Laws of 1959 is now codified as Part 3 of Article 36, Chapter 160 of the General Statutes. It provided that the laws theretofore governing the annexation of territory by municipalities should remain in force to 1 July 1962, but the authorities granted to municipalities by the 1959 Act were and have been in full force on and after 1 July 1959. G.S. § 160-453.23.

The annexation ordinance adopted by the city of Morganton, by which the plaintiff's properties were brought into the city, was introduced in evidence in the court below. It recites compliance by the city with all of the procedures made prerequisite to annexation by the 1959 Act. This Court held that where an appeal is taken from the adoption of an annexation ordinance, as provided in that statute, and the proceedings show prima facie that there has been a substantial compliance with the requirements and provisions of the statute, the burden is upon the party attacking the annexation to show, by competent evidence, failure on the part of the municipality to comply with the statutory requirements. In Re Annexation Ordinance, 255 N.S. 633, 122 S.E.2d 690. If it be assumed that the validity of an annexation may be attacked collaterally, as here, the rule as to the burden of proof would not be more favorable to the attacking party. There is in this record no evidence of such failure by the city in the annexation procedures in question.

The requirement in G.S. § 160-453.19 that a map of the annexed territory, together with a certified copy of the ordinance, be recorded in the office of the register of deeds and in the office of the Secretary of State is, obviously, not a condition precedent to the effective annexation of the territory but the imposition of a duty to be performed after the annexation is complete. Similarly, the failure, if any, of the city to extend sewer lines and other services into the annexed area, pursuant to the plan of annexation, is not a condition precedent to annexation, the statutory remedy for such failure being an application, by a person owning property in the annexed territory, for a writ of mandamus to compel such performance of the plan. G.S. § 160-453.17(h).

Therefore, we hold that the annexation by the city of the area including the plaintiff's property was valid. It conferred upon the city such governmental powers within that area as it is authorized to exercise elsewhere within its territorial limits.

It is well settled that a municipal corporation has no inherent police power and statutes conferring such powers upon them are to be construed strictly. State v. Furio, 267 N.C. 353, 148 S.E.2d 275; Kass v. Hedgpeth, 226 N.C. 405, 38 S.E.2d 164.

The city relies upon an ordinance adopted by it 25 October 1965, referred to as "The Southern Standard Housing Code." Reference to the Code of the City of Morganton, § 8-84, discloses that the ordinance adopting this housing code provided:

"The Southern Standard Housing Code, 1965 edition, * * * is hereby adopted as the housing code of the city; provided that in the event of conflict with the provisions of said code with this Code or state law, the provisions of this Code or state law shall prevail."

The City Code, §§ 8-85 to 8-99, substantially incorporate the provisions of G.S. § 160-183 to G.S. § 160-189, the governing body of the city having found to exist therein the conditions specified in G.S. § 160-182 as prerequisites to the adoption of an ordinance for the closing of a dwelling house unfit for human habitation. Although G.S. § 160-191 provides that the powers conferred upon municipal corporations by the above cited statutes are in addition to and supplemental to powers conferred by any other law, it is plain that the City Council has acted pursuant to these statutory provisions and has made its ordinance called the "Southern Standard Housing Code," subject to powers conferred upon the city by G.S. § 160-183 et seq. It is, therefore, not necessary to inquire whether the city has any other authority to enact such police regulation.

G.S. § 160-184 provides that an ordinance enacted pursuant to the authority so conferred upon the city shall include certain provisions. The City Code of Morganton, §§ 8-86 to 8-92, does so. Among these is the provision that whenever it appears to the officer, charged with the duty of administering such regulation, that any dwelling is unfit for human habitation, such officer shall issue and cause to be served upon the owner a complaint stating the charges in that respect and containing a notice of a hearing to be held. Another provides that if such officer, "after such notice and hearing," determines that the dwelling is unfit for human habitation he shall state "in writing his findings of fact in support of such determination," and shall issue and cause to be served upon the owner an order requiring the repair of the house under certain circumstances and its removal under other circumstances. It is then provided that if the owner fails to comply with such order, the officer may cause the building to be "vacated and closed," and may cause to be posted upon the main entrance to the building a placard stating, "This building is unfit for human habitation; the use or occupation of this building for human habitation is prohibited and unlawful."

We do not deem the variation between the wording of the notice posted upon the plaintiff's property and that prescribed by the statute to be material. However, the record before us clearly indicates that the building inspector of the city did not comply with the procedural requirements of the statute and of the City Code. Substantial compliance with these procedures is a condition precedent to the authority of the city to forbid the use of a dwelling house for human habitation. If the "Southern Standard Housing Code" purports to confer a more extensive authority upon the city officer, which we do not determine, it is, by the very terms of the ordinance adopting it, subject to these procedural requirements in the City Code and in the statute. Thus, it cannot confer upon the officer authority to forbid the occupancy of this dwelling without compliance with these procedural requirements.

It is not contended that the city has ordered the destruction of the house in question. The authority of the city to do so is, therefore, not before us. We express no opinion with reference thereto.

The city not having afforded the plaintiff the opportunity to be heard upon the question of the fitness of her house for human habitation, and this being a prerequisite to such finding by the city official, the fitness or unfitness of the house for such use was not properly before the superior court and is not before us. The finding of fact by the superior court that "this house is unfit for human habitation" is, therefore, vacated and set aside without prejudice to the right of the city to make a determination of such matter pursuant to the procedures above mentioned. The conclusion of the superior court that notice of the condition of the house was given to the plaintiff "in substantial compliance with the code" is error and is vacated and set aside. The conclusion of the superior court that "the City of Morganton had the right to prevent the occupancy and use of this dwelling house by people" is erroneous and is vacated and set aside without prejudice to the right of the city to issue such order as may be justified by proper findings of fact, supported by evidence, made pursuant to the procedural requirements above mentioned.

There was no error in the denial of the plaintiff's motion for a temporary mandatory injunction requiring the city to supply electric service to her house. There was, however, error in the denial of her motion for a temporary injunction requiring the defendant to remove its notice of condemnation from her property and to cease its interference with the use of the premises by the plaintiff. This matter is remanded to the superior court for the issuance of such injunction without prejudice to the right of the city to enter such order as may be appropriate after compliance by the city with the above mentioned procedural provisions of its code and the statutes above cited.

Error and remanded.