PUBLIC SERVICE COMPANY OF NC, INC. v. City of Shelby

115 S.E.2d 12 (1960) 252 N.C. 816

PUBLIC SERVICE COMPANY OF NORTH CAROLINA, INC.
v.
CITY OF SHELBY.

No. 163.

Supreme Court of North Carolina.

June 30, 1960.

Fletcher & Lake, Raleigh, for plaintiff, appellant.

A. A. Powell, Shelby, and Robinson, Jones & Hewson, Charlotte, for defendant, appellee.

MOORE, Justice.

The parties in their briefs discuss the ultimate issues involved in the action. But these questions have not been adjudicated by the court below and do not properly arise on this appeal. From a careful consideration of the record and the order appealed from it is determined that the sole question now before us is whether or not the court erred in dismissing and vacating the temporary restraining order.

"* * * (i)n order to justify continuing the writ until the final hearing, ordinarily it must be made to appear (1) that there is probable cause the plaintiff will be able to establish the asserted right, and (2) that there is reasonable apprehension of irreparable loss unless the temporary order of injunction remains in force, or that in the opinion of the court such injunctive relief appears to be reasonably necessary to protect the plaintiff's rights until the controversy can be determined." Edmonds v. Hall, 236 N.C. 153, 156, 72 S.E.2d 221, 223.

When these rules are applied to the situation here presented, we find no error in the dismissal of the temporary order of injunction. We do not think that plaintiff has alleged facts that tend to show, or has otherwise shown, that there is reasonable apprehension of irreparable loss pending the determination of the action or that a temporary restraining order is reasonably necessary to protect plaintiff's rights during litigation. Besides, it ordinarily lies in the sound discretion of the court to determine whether or not a temporary injunction will be dissolved on hearing pleadings and affidavits only. It is the duty of the court to consider the inconvenience and damage to the defendant as well as the benefit that will accrue to the plaintiff in continuing the writ. Lance v. Cogdill, 238 N.C. 500, 78 S.E.2d 319. The rights asserted by the plaintiff are controverted by the defendant.

"Injunction is a proper remedy in cases in which a franchise of a corporation or rights thereunder are being invaded. * * * and, even though complainant's franchise is not exclusive, equity may, * * * enjoin the illegal acts of others * * *. As a general rule a preliminary injunction should not be granted unless a reasonably clear case of necessity and threatened irreparable damage is made out." 43 C.J.S. Injunctions § 97, pp. 601-603.

In the main the injury, damage and impairment of rights of which plaintiff complains are such as will be completely remedied and restored by a favorable final judgment. Such damage by an unfavorable final judgment will be rendered damnum absque injuria. We refer to such damages as are occasioned by invasion of territorial franchise, fixing of discriminatory rates, possible increase of rates for rural users of plaintiff's services, further invasions by defendant and other municipal corporations, duty to serve less desirable customers while the more profitable users are served by defendant and other municipal corporations, and possible loss of attractiveness for investors of capital. These are matters more naturally to be considered on the final hearing.

The only immediate damage that will result to plaintiff by dissolution of the temporary restraining order is possible loss of profits. If profits are lost pending final termination of the action, the amount thereof will be ascertainable and recoverable and therefore such damages are not irreparable. Furthermore, it appears from the record that Fiber has made no contract with plaintiff for service, and plaintiff does not allege otherwise. It does not affirmatively appear that Fiber would use plaintiff's services even if denied the right to purchase natural gas from defendant. It might decide to make use of artificial gas, electricity or other fuel or energy. So it does not clearly appear that there would be a loss of profits to plaintiff during litigation.

We cannot say that the court below abused its discretion in dissolving the temporary restraining order. The order appealed from should be affirmed.

Plaintiff bases its action for relief on two grounds: (1) that defendant entered into a contract (consent judgment) with plaintiff not to serve natural gas to users, save Pittsburgh Plate Glass Company, outside its corporate boundaries in competition with plaintiff, and defendant proposes to serve natural gas to Fiber in breach of this agreement; and (2) that the construction and use of the proposed pipe line by defendant to deliver and sell natural gas to Fiber are not authorized by law and are ultra vires of defendant.

The court below made no finding of fact or conclusion of law with respect to the alleged contract, did not rule upon its validity, did not undertake to construe it, and gave it no consideration. This Court will not ordinarily review matters not ruled on or adjudicated in Superior Court. Collier v. Mills, 245 N.C. 200, 204, 95 S.E.2d 529; Wilson Realty Co. v. City and County Planning Board, 243 N.C. 648, 655, 92 S.E.2d 82. The alleged contract and its effect will be for determination upon the final hearing of this cause in Superior Court.

As to the legality of defendant's proposed project, the court concluded as a matter of law that under G.S. § 160-255 defendant is authorized "to furnish gas services to any person, firm or corporation desiring same outside the corporate limits where the service can be made available by the municipality" and, since the project is not to be financed through a revenue bond issue, defendant is not required to obtain permission therefor from the North Carolina Utilities Commission. This is tantamount to a ruling that there is no probable cause shown that defendant's proposed undertaking is illegal. In as much as the order dismissing the temporary injunction must be affirmed on the ground already discussed, we refrain from expressing an opinion as to the correctness of the court's conclusion on the legality of the project. A final determination of this question of legality must await the final hearing in Superior Court when all facts and circumstances are presented.

We deem it expedient to point out that the authority granted by G.S. § 160-255 is not unlimited. It authorizes a municipality "to construct and operate (utilities) for the benefit of the public beyond its corporate boundaries within reasonable limitation." (Emphasis added). Town of Grimesland v. City of Washington, 234 N.C. 117, 122, 66 S.E.2d 794, 798. If the authority was not thus limited the Act would contravene fundamental law. Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90. The 1957 amendment did not affect these limitations. In considering the matter of public benefit, reference is not merely to the residents of the municipality. Consideration must be given to the users of gas from the City outside its boundaries, the possible effect on rural users of gas from plaintiff and like corporations, and the effect on the public generally. The term, "within reasonable limitation," does not refer solely to the territorial extent of the venture but embraces all facts and circumstances which affect the reasonness of the venture.

While the source of the necessary funds for construction of defendant's project is not disclosed, it does appear without contradiction that the funds are not to be derived from a bond issue. Therefore, assuming that the funds are such as may be lawfully used for the proposed purpose and the project is otherwise in compliance with legal authority, a certificate of convenience and necessity from the Utilities Commission is not required. Town of Grimesland v. City of Washington, supra, 234 N.C. at page 126, 66 S.E.2d at page 800. However, the court is not disqualified to inquire into the source of the funds allocated for the project in so far as such inquiry might bear upon the legality of the venture.

Nothing herein shall be construed as the expression of an opinion as to the validity or effect of the alleged contract or as to the legality of defendant's proposed pipe line. These are matters for the Superior Court on the final hearing.

The order appealed from is

Affirmed.