Town of Grimesland v. City of Washington

66 S.E.2d 794 (1951) 234 N.C. 117

TOWN OF GRIMESLAND
v.
CITY OF WASHINGTON et al.

No. 18.

Supreme Court of North Carolina.

September 19, 1951.

J. D. Grimes, Washington, S. O. Worthington, Albion Dunn, Greenville, for plaintiff, appellant.

L. E. Mercer, and Rodman & Rodman, all of Washington, Brooks, McLendon, Brim & Holderness, Greensboro, for defendant, appellee.

DEVIN, Chief Justice.

The right of the Town of Grimesland to construct and maintain an electric system for the distribution and sale of electric current to consumers beyond its corporate limits, and to own and operate transmission lines for that purpose along the highway or over and upon rights of way acquired, is not questioned in this action. G.S. § 160-255. But this legislative authority would not be regarded as conferring the right to exclude competition in the territory served. Having the right to engage in this business gives no exclusive franchise, and if from lawful competition its business be curtailed, it would seem that no actionable wrong would result, nor would it be entitled to injunctive relief therefrom. Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S. Ct. 300, 82 L. Ed. 374; Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U.S. 118, 59 S. Ct. 366, 83 L. Ed. 543. There are no allegations or facts shown which would justify the finding that the defendant City of Washington, in the construction and operation of its electric transmission lines, from Washington to Chocowinity and beyond has caused physical interference with plaintiff's lines, or created any hazard thereto or that its operations constitute a continuing trespass. Negligence in the construction of defendant's lines is not alleged. The gravamen of the complaint is unlawful competition, but competition alone would not justify the court in decreeing injunction.

But the plaintiff challenges the right of the defendant to maintain and operate an electric power system for the distribution and sale of electric current to consumers beyond its corporate limits without a certificate of public convenience and necessity from the Utilities Commission. The statute authorizes a municipal corporation engaged in the production and distribution of electric power to extend this service to consumers outside its corporate limits, Public Laws 1929, Ch. 285, now codified as part of G.S. § 160-255. This would confer authority on the defendant to construct and operate transmission lines for the distribution of electric current for the benefit of the public beyond its corporate boundaries within reasonable limitation. Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90. Also by a local statute, Public Local Laws 1931, Ch. 31, amendatory of the Charter of the City of Washington and creating Washington Electric Service District, power and authority was expressly conferred upon the defendant to build, maintain and operate lines for the transmission of electric current beyond its corporate limits and within Beaufort County for the public benefit.

Having then the power to extend its electric lines and to serve the public in the territory now complained of, was this power by general law limited and circumscribed by requirement that a certificate of convenience and necessity be obtained from the Utilities Commission?

Municipal corporations are instrumentalities of the state for the administration of local government. They are created by the General Assembly under the general authority conferred by Art. VIII, sec. 4, of the State Constitution. They have such powers as are expressly conferred by statute and those necessarily implied therefrom. Nash v. Town of Tarboro, 227 N.C. 283, 42 S.E.2d 209. A municipal corporation may be empowered not only to perform governmental functions but also authorized to undertake operations in its corporate capacity when for a public purpose and for the public benefit. Holmes v. City of Fayetteville, 197 N.C. 740, 150 S.E. 624; Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90. The powers conferred upon municipal corporations by statute may be enlarged, diminished, or altogether withdrawn at the will of the Legislature. Rhodes v. City of Asheville, 230 N.C. 134, 52 S.E.2d 371; Town of Murphy v. C. A. Webb & Co., 156 N.C. 402, 72 S.E. 460. But when a municipal corporation undertakes functions beyond its governmental and police powers and engages in business in order to render a public service for the benefit of the community for a profit, it becomes subject to liability for contract and in tort as in case of private corporations, Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42; Harrington v. Com'rs of Town of Wadesboro, 153 N.C. 437, 69 S.E. 399, and by legislative act may be made amenable to regulations and supervisions imposed upon other corporations so engaged. Unquestionably the General Assembly would have power to prescribe that municipal corporations exercising corporate functions for public service for profit should be amenable to the laws regulating private corporations similarly engaged. Harrington v. Com'rs of Town of Wadesboro, 153 N.C. 437, 69 S.E. 399. Whether it has done so in this case is the question which this appeal presents.

The plaintiff's position is that if it be conceded that the defendant City of Washington, in the operation of an electric power plant for the benefit of its citizens, was given authority to extend its lines and furnish electric service to consumers beyond its corporate limits, nevertheless when the defendant in doing so undertook to construct and operate a public service system in direct competition, by parallel lines, with the public service system of the plaintiff already established and serving the same territory, it became amenable to the regulatory requirement of the general statute, G.S. § 62-101, that it must first obtain a certificate of public convenience and necessity from the Utilities Commission. Plaintiff maintains that considering the purpose of the statutes requiring supervision by the Utilities Commission together with the evils which would result from competition in the same locality between two public service systems, it was in the legislative mind that the same rule should be applied to municipal corporations as that applied to private corporations rendering public service.

The statute relied on by plaintiff as authority for the position that defendant before constructing its transmission lines outside its limits was required to obtain such a certificate reads as follows: "No person, or corporation, their lessees, trustees, or receivers shall hereafter begin the construction or operation of any public utility plant or system or acquire ownership or control of, either directly or indirectly, without first obtaining from the Utilities Commission a certificate that public convenience and necessity requires, or will require, such construction, acquisition, or operation: Provided, that this section shall not apply to new construction in progress on May 27, 1931, nor to construction into territory contiguous to that already occupied and not receiving similar service from another utility, nor to construction in the ordinary conduct of business." The statute designates those upon whom the requirement is imposed as "person, or corporation, their lessees, trustees or receivers". These descriptive words are not those ordinarily applicable to, or to be thought of as embracing cities and towns. And the business coming within the regulatory provisions of the statute is designated as "the construction or operation of any public utility plant or system". If the Legislature intended this statute to include municipal corporations, no distinction was made between operations within or without their corporate limits. It would not seem to be a reasonable construction of this statute to adopt the view that the Legislature intended to prescribe that no city or town could operate an electric light plant for the service of its citizens without obtaining this certificate from the Utilities Commission. Examining the language of the statute, the implication of a private corporation is unmistakable. Limitation upon the granted power of a municipal corporation to construct and operate for the public benefit and electric distribution system, by requiring such a certificate as a condition precedent, will not be inferred in the absence of definite expression of legislative will.

The effect of the local statute, Public Local Laws 1931, Ch. 31, which purported to empower the City of Washington to extend its electric service beyond its corporate limits "with all the privileges and immunities existing in favor of municipalities operating within the boundaries * * * mentioned", was debated in the argument, but from an examination of this statute, we observe that it makes no reference to supervision by the Utilities Commission, nor does it specifically exempt the City from the requirement of obtaining such a certificate. This statute was ratified February 12, 1931, and the general statute now codified as G.S. § 62-101, was ratified May 27, 1931. But the former being a local statute relating only to the City of Washington would not be repealed or affected by the subsequent enactment of the general statute which makes no reference to it. Rogers v. Davis, 212 N.C. 35, 192 S.E. 872; G.S. § 164-7. Plaintiff's objections to this statute on constitutional ground are met by the well considered opinion of Justice Adams, speaking for the court in Holmes v. City of Fayetteville, 197 N.C. 740, 150 S.E. 624. In any event the defendant was clothed with authority in the premises by the general statute without the aid of the local act of 1931. Kennerly v. Town of Dallas, 215 N.C. 532, 2 S.E.2d 538; Holmes v. City of Fayetteville, supra.

The question here presented whether a municipal corporation in the operation of a municipally owned electric power plant with transmission lines extended to supply consumers beyond its corporate limits is required under G.S. § 62-101 to obtain from the Utilities Commission a certificate of public convenience and necessity before it can lawfully operate, does not seem to have been heretofore directly decided by this court.

In Carolina Power & Light Co. v. Johnston County Electric Membership Corp., 211 N.C. 717, 192 S.E. 105, it was held that a county electric membership corporation, created under G.S. § 117-6 et seq., was not required to obtain a certificate of public convenience and necessity before beginning operations, for the reason that the statute authorizing the formation of such membership corporation provided that the provisions of other laws should not apply to a corporation formed under this act. G. S. § 117-27. Apparently it was thought the provisions of G.S. § 62-101 would not be extended by implication.

In McGuinn v. City of High Point, 217 N.C. 449, 8 S.E.2d 462, 128 A.L.R. 608, it was held that the City of High Point, in undertaking to construct a power plant and issue bonds therefor, had elected to proceed under the Revenue Bond Act of 1938 and was bound by the specific requirement imposed by that act upon those proceeding thereunder to obtain a certificate of convenience and necessity. It may be noted that this act excepted from the requirement an undertaking authorized by any local act heretofore enacted.

In Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90, it was the holding of this court that the City's undertaking to construct an electric power plant capable of generating 104 million kilowatt hours of electric power to cost $5,500,000, and to transmit current across three counties for the purpose of engaging in the power business generally was beyond the powers of the City conferred by the Revenue Bond Act of 1935.

It may be noted that the statute defining the powers and duties of the Utilities Commission gives the Commission general supervision over rates and service by electric light, power, water and gas companies, other than such as are municipally owned or conducted; thus expressing legislative purpose to leave municipal corporations free from the supervision of the Commission. G.S. § 62-30(3). And in G.S. § 62-65 codifying the Public Utilities Act of 1933 it is declared that "The term ``corporation,' when used in this article, includes a private corporation, an association, a joint stock association, or a business trust." Expressio unius est exclusio alterius.

Giving due consideration to all pertinent statutes as well as the decisions of this court, we reach the conclusion that the court below has ruled correctly, and that the defendant City of Washington was not required to obtain a certificate of public convenience and necessity from the Utilities Commission before engaging in the distribution of electric current to consumers outside its corporate limits within Beaufort County, and that the judgment dismissing plaintiff's action should be affirmed.

Plaintiff's motion to remand the question of continuing the restraining order to the judge before whom it had been pending was properly denied. The cause was regularly reached in the Superior Court of Beaufort County and the judge then presiding had full power and authority to determine the cause. In view of this disposition of the appeal, motion to make Virginia Electric and Power Company a party defendant has become academic.

Judgment affirmed.

VALENTINE, J., took no part in the consideration or decision of this case.