City of Durham v. Public Service Co. of North Carolina, Inc.

126 S.E.2d 315 (1962) 257 N.C. 546

CITY OF DURHAM, a Municipal Corporation,
v.
PUBLIC SERVICE COMPANY OF NORTH CAROLINA, Inc.

No. 674.

Supreme Court of North Carolina.

July 10, 1962.

Bryant, Lipton, Bryant & Battle, Durham, and Lake, Boyce & Lake, by I. Beverly Lake, Raleigh, for defendant appellant.

Claude V. Jones, Durham, for plaintiff appellee.

PARKER, Justice.

Defendant has not, so far as this record discloses, filed an answer, and yet two-thirds of its brief is taken up with a discussion of what would seem from the briefs to be the ultimate issues when it files its answer, and the answers to which issues will dispose of the case. Defendant in its brief discusses these questions under two headings, which it entitles as follows: One. "The provision in section 10 of the franchise limiting the defendant's right to apply to the Utilities Commission for authority to increase its rates is beyond the authority of the city and is not an enforceable provision." Two. "Section 19 of the franchise ordinance is unreasonable and unenforceable." A large part of plaintiff's brief discusses the same questions.

Plaintiff states in its brief: "The attention of the Court is called to the fact that no Answer has yet been filed, and, therefore, the pleadings do not set up any contention that sections 10 and 19 are unreasonable or for other reasons unenforceable. In the event the defendant ever files an Answer and makes this contention, it is the purpose of the City to reply and plead Waiver and Estoppel."

The above questions do not properly arise on this appeal. All the pleadings have not been filed and the aforesaid questions discussed in the briefs, if they arise on the pleadings when finally filed, must await a final hearing on the merits. "While equity does not permit the judge who hears the application (for an interlocutory injunction) to decide the cause on the merits, it does require him to exercise a sound discretion in determining whether an interlocutory injunction should be granted or refused." Huskins v. Yancey Hospital, Inc., 238 N.C. 357, 78 S.E.2d 116. Judge Mintz apparently recognized this for the last part of his "order and judgment" is "this cause is retained for trial after the filing of the defendant's answer to the complaint." The sole question before us on this appeal is whether or not Judge Mintz erred in granting the temporary injunction enjoining defendant "from the collection of any increased rates and charges as shown on schedule filed in Docket No. G-5, Sub 38, for natural gas furnished and to be furnished to consumers in the City of Durham during the period between August 1, 1961, and October 1, 1961," because defendant is not enjoined from doing anything else. Public Service Co. v. City of Shelby, 252 N.C. 816, 115 S.E.2d 12; Western Conference of Original Free Will Baptists v. Creech (Teasley v. Creech and Western Conference of Original Free Will Baptists Miles), 256 N.C. 128, 123 S.E.2d 619.

Acting pursuant to the authority vested in us to find the facts in respect to an interlocutory injunction, Huskins v. Yancey Hospital, Inc., supra, we find the following facts, which amplify and clarify Judge Mintz's findings of fact:

On 31 May 1961 defendant acting under the provisions of G.S. § 62-71, and without giving any notice to plaintiff, or its city manager, filed with the Utilities Commission a schedule of increased rates applicable to the entire territory served by it to become effective on all bills rendered by it on and after 1 July 1961, thus giving to the Commission the thirty days' notice required by the statute. This proceeding is designated Docket No. G-5, Sub 38, in the records of the Commission. On 5 June 1961 the Commission, acting under the provisions of G.S. § 62-71, issued an order suspending the putting into effect of increased rates by defendant on 1 July 1961 until 28 September 1961, unless authorized by the Commission, and ordering a hearing of defendant's schedule of increased rates on 24 October 1961.

A few days after the rendition of the Commission's suspension order, defendant, pursuant to Rule 15(3) of the Rules of Practice and Procedure before the Commission, filed a reply to the suspension order stating that it has, pursuant to the provisions of G.S. § 62-71, this day filed with the clerk of the Commission an undertaking under its corporate seal, and praying that the Commission modify its order of 5 June 1961, so as to eliminate therefrom the provision suspending the putting into effect of its increased rates on 1 July 1961. The material part of the undertaking is:

"(1) If, as a result of the above mentioned hearing, the Commission enters its order lawfully finding any rate for any class of service described in any of the said proposed schedules of rates to be excessive, and lawfully fixing a lower rate to be charged for such service and directing Public Service to refund to its customers the excess of payments made by them pursuant to such schedule over the amounts which would have been paid by such customers had the rate so fixed by the Commission been applied, Public Service will make such refund to each such customer within such time and in such manner as the Commission shall prescribe by its order, together with interest thereon at six per cent per annum from the dates of the collections by Public Service of such excess amounts."

The Commission on 23 June 1961 entered an order as follows:

"Public Service Company of North Carolina, Inc. has filed with the North Carolina Utilities Commission its undertaking and assurances in compliance with G.S. 62-71 in order to put into effect the increased rates which it filed on May 31, 1961, to be effective on all bills rendered on and after July 1, 1961, which were suspended by the Commission on June 5, 1961.

"It is the opinion of the Commission that said undertaking to refund the excess, if any, of the increased rates over the rates finally approved to be put into effect by Public Service Company of North Carolina, Inc. to the persons who may become entitled there-to is a satisfactory arrangement for the protection of the parties involved and complies with the requirements of G.S. 62-71.

"IT IS THEREFORE ORDERED That said undertaking of Public Service Company of North Carolina, Inc. constitutes satisfactory arrangements for the protection of the parties' interest, and complies with G.S. 62-71 and said undertaking is hereby approved for the purpose of and in order that Public Service Company of North Carolina, Inc. may properly put into effect the aforesaid rates, pursuant to G.S. 62-71 to be effective as of the date specified in said undertaking of Public Service Company of North Carolina, Inc."

Pursuant to the provisions of G.S. § 62-71, and the order of the Commission, defendant on 1 July 1961 put into effect its proposed increased rates throughout the entire area served by it.

G.S. § 62-71 provides this remedy in respect to the undertaking under seal of defendant:

"* * * Provided, and notwithstanding any such order of suspension, the public utility may put such suspended rate or rates into effect on the date when it or they would have become effective, if not so suspended, by filing with the Commission a bond in a reasonable amount approved by the Commission, with sureties approved by the Commission, conditioned upon the refund, in a manner to be prescribed by order of the Commission to the persons entitled thereto of the amount of the excess and interest at the rate of six per cent (6%) per annum from the date that such rates were put into effect, if the rate or rates so put into effect are finally determined to be excessive; or there may be substituted for such bond, other arrangements satisfactory to the Commission for the protection of the parties interested. If the public utility fails to make refund within thirty (30) days after such final determination any person entitled to such refund may sue therefor, in any court of this State of competent jurisdiction and be entitled to recover, in addition to the amount of the refund due, all court costs, but no suit may be maintained for that purpose unless instituted within two years after such final determination. Any number of persons entitled to such refund may join as plaintiffs and recover their several claims in a single action; in which action the court shall render a judgment severally for each plaintiff as his interest may appear."

It would seem unquestionable that Judge Mintz in enjoining defendant from collecting from its customers in the city of Durham any increased rates between 1 August 1961 and 1 October 1961 acted under the provisions of section ten of the franchise to the effect that defendant shall not apply to the Commission for increased rates unless and until the defendant, at least 30 days prior to the filing of such application, shall have filed with the city manager of plaintiff a written notice setting forth the matters and things required by the provisions of that section, and that defendant did not furnish plaintiff that information until 31 August 1961.

In Branch v. Board of Education, 230 N.C. 505, 53 S.E.2d 455, the Court said: "However, it must be borne in mind that the proceedings on the show cause order, including the findings of fact, are significant only with respect to the immediate issue—whether the order should be continued to the hearing or dissolved; and the findings of fact are not binding on the court upon the final hearing."

Ordinarily, an injunction will not be granted where there is a full, adequate and complete remedy at law, which is as practical and efficient as is the equitable remedy. In re Davis' Custody, 248 N.C. 423, 103 S.E.2d 503; Amazon Cotton Mills Co. v. Duplan Corp., 245 N.C. 496, 96 S.E. 2d 267; Armstrong v. Armstrong, 230 N.C. 201, 52 S.E.2d 362; Town of Clinton v. Ross, 226 N.C. 682, 40 S.E.2d 593; Whitford v. North Carolina Joint-Stock Land Bank, 207 N.C. 229, 176 S.E. 740; 43 C.J.S. Injunctions § 25, pp. 450-453.

Defendant, as authorized by the provisions of G.S. § 62-71, and by order of the Commission, put into effect on 1 July 1961 increased rates for its customers in the city of Durham and throughout the entire area served by it. Judge Mintz, under such circumstances, should not have enjoined defendant from collecting such increased rates as shown on schedule filed with the Commission in Docket No. G-5, Sub 38, for natural gas furnished and to be furnished to consumers in the city of Durham during the period between 1 August 1961 and 1 October 1961, for the reason that if it should finally be determined by the Commission that such increased rates put into effect by defendant on 1 July 1961 were excessive, then the obligations of the undertaking or bond filed by defendant with the Commission, and the provisions of G.S. § 62-71, giving plaintiff and any customers of defendant in the city of Durham an adequate and complete remedy at law to recover from defendant such excess amount or amounts paid by it or them with interest at the rate of 6% per annum from the date that such excess rates were put into effect and paid by it or them, furnish it and them full, adequate and complete relief, which is as practical and efficient as is the equitable remedy of an injunction. Plaintiff could hardly regard such payments with an adequate and complete legal remedy to recover back any excess amount paid as an irreparable injury. Loose-Wiles Biscuit Co. v. Town of Sanford, 200 N.C. 467, 157 S.E. 432. Judge Mintz's order enjoining defendant "from the collection of any increased rates and charges as shown on schedule filed in Docket No. G-5, Sub 38, for natural gas furnished and to be furnished to consumers in the city of Durham during the period between August 1, 1961, and October 1, 1961," was improvidently entered, is error, and is reversed.

Further, Judge Mintz's "order and judgment" enjoining defendant from collecting the increased rates from its customers in the city of Durham between 1 August 1961 and 1 October 1961 was signed 29 September 1961. Though the record does not show whether defendant had collected any increased rates put into effect 1 July 1961 from its customers in the city of Durham during the period between 1 August 1961 and 1 October 1961, it would seem reasonable to assume that it had. If so, Judge Mintz enjoined a fait accompli, so far as any collections had been made. A preventive injunction cannot be used to undo what has been done. Jackson v. Jernigan, 216 N.C. 401, 5 S.E.2d 143.

For reasons stated above, Judge Mintz was in error in making the following conclusions of law: The breach by defendant of section ten of the franchise has caused plaintiff to suffer irreparable damage for which it has no adequate remedy at law. Plaintiff is entitled to have a suspension of the proposed rates on gas sold and delivered within the city of Durham for thirty days following a final and complete compliance by defendant with respect to the information required by section ten of the franchise.

As we have said above, defendant, as appears from its argument in over two-thirds of its brief, is seeking here to have the provisions of sections ten and nineteen of the franchise adjudged unreasonable and unenforceable, though, so far as this record shows it has filed no answer raising such issues or questions of law. It seems certain from its brief that it will raise such ultimate issues or questions of law, when and if it answers. Plaintiff's counsel in oral argument before us said he brought this action to see if the provisions of these sections were valid. "The granting or denying of a temporary injunction does not involve a determination of the merits, and the decision should not be made in reference to matters which will come up for consideration at such hearing." 28 Am. Jur., Injunctions, sec. 278, p. 790. To the same effect 43 C.J.S., Injunctions § 2.

Judge Mintz went too far in the hearing on a show cause order as to whether or not an interlocutory order should be granted in making conclusions of law to the effect that the provisions of sections ten and nineteen of the franchise are valid and binding obligations upon the parties, and that plaintiff has not by conduct or acquiescence waived their performance by defendant, thereby deciding what would certainly seem to be the ultimate issues or questions of law upon the merits. These conclusions of law will be vacated. Huskins v. Yancey Hospital, Inc., supra.

It is to be understood that nothing herein said shall be construed as the expression of an opinion as to whether or not the provisions of sections ten and nineteen of the franchise are valid and enforceable. These are matters for the Superior Court on the final hearing when all the pleadings have been filed, if such pleadings raise such issues or questions of law.

Our task in writing this opinion has been made laborious by the fact that the assignments of error do not comply with our rules of practice. This is typical of all the assignments of error, except the one to the judgment:

"DEFENDANT'S ASSIGNMENT OF ERROR #5:

"The defendant excepts to Conclusion of Law #2 contained in the judgment and to the Court's including the said conclusion of law in its judgment and basing its judgment thereon. This is Defendant's EXCEPTION #5 (R pp. 30 and 33)."

These assignments of error have compelled us to go beyond them on a voyage through the record to find out what they refer to. This we well might have refused to do. Nichols v. McFarland, 249 N.C. 125, 105 S.E.2d 294.

Judge Mintz's "order and judgment" enjoins defendant only in respect to what we have discussed above. With the exception of the errors above set forth, the "order and judgment" will not be disturbed.

Error in part. Affirmed in part.