State v. Casey

Annotate this Case

96 S.E.2d 8 (1957)

245 N.C. 297

STATE of North Carolina ex rel. NORTH CAROLINA UTILITIES COMMISSION v. Floyd CASEY, Jr., Robert S. Sullivan and others, Protestants, as shown in the record.

No. 318.

Supreme Court of North Carolina.

January 11, 1957.

*11 Jones, Reed & Griffin, Kinston, for protestants-appellants.

Charles F. Rouse, Raleigh, for Carolina Power & Light Co., appellee.

George B. Greene, City Atty., Kinston, amicus curiae.

DENNY, Justice.

The City of Kinston is not a formal party to this proceeding. However, in addition to the facts found by the Commission, it appears from the evidence introduced in the hearing below that the City of Kinston serves through its electric distribution system approximately 8,700 customers within its corporate limits, and about 2,400 customers outside its corporate limits. It further appears, if the agreement entered into by and between the City of Kinston and the Power Company on 20 January 1955 is consummated, it will mean the transfer of 238 customers of the Power Company who reside in the Spence Drive and Lawrence Hill Sections to the City of Kinston.

It is conceded by the City of Kinston, appearing by counsel amicus curiae, and by the Power Company, that the City and the Power Company are equally equipped and qualified to furnish electric power and energy to the citizens living in the Spence Drive and Lawrence Hill areas.

In addition to the payment of the sum of $20,000 by the City of Kinston to the Power Company for the purchase and transfer of the facilities referred to herein, the City as a further consideration therefor, according to the contract, has agreed to give the Power Company an extension of its present franchise or permit for a period of thirty years for the continued maintenance and operation of certain of its power lines along and across certain designated streets and other public places within the corporate limits of the City of Kinston, which lines serve the Power Company's substations located in or near the City of Kinston.

It also appears from the record in this proceeding that since the Spence Drive and Lawrence Hill Sections were incorporated within the corporate limits of the City of Kinston in 1952, the City has expended approximately $100,000 for water, sewer, and *12 other municipal improvements within said areas.

The City of Kinston does not concede the right of the Power Company to serve customers within its corporate limits without a franchise from the City, and the Power Company does not concede that the action of the City by incorporating the areas involved within its corporate limits, canceled or abrogated its right to continue its service in said areas. Consequently, in order to avoid a legal controversy between the parties, the agreement involved in this proceeding was entered into.

In our opinion, this appeal turns upon the answer to this question: Does the Power Company, with the consent and approval of the Commission, have the right to sell the facilities involved herein for the consideration set forth in its agreement with the City of Kinston, and thereby permit the City of Kinston to assume the obligation for meeting the public convenience and necessity for the service heretofore rendered by the Power Company? This question, in our opinion, must be answered in the affirmative.

G.S. § 62-27 provides: "The Utilities Commission shall have general power and control over the public utilities and public service corporations of the State, and such supervision as may be necessary to carry into full force and effect the laws regulating the companies, corporations, partnerships, and individuals hereinafter referred to, and to fix and regulate the rates charged the public for service, and to require such efficient service to be given as may be reasonably necessary."

In addition to the powers given to the Commission in Chapter 62 of the General Statutes of North Carolina, the General Assembly has expressly given the Commission certain implied powers as follows: "The Utilities Commission shall also have, exercise, and perform all the functions, powers, and duties and have all the responsibilities conferred by this article, and all such other powers and duties as may be necessary or incident to the proper discharge of the duties of its office." G.S. § 62-29.

G.S. § 62-96 provides: "Upon finding that public convenience and necessity are no longer served, or that there is no reasonable probability of a utility realizing sufficient revenue from the service to meet its expenses, the Commission shall have power, after petition, notice and hearing, to authorize by order any utility to abandon or reduce its service or facilities."

In our opinion, these statutes give the Commission not only the authority but impose upon it the duty to pass upon such contracts as the one under consideration and to determine whether or not it is in the public interest to permit their consummation.

"The doctrine of convenience and necessity has been the subject of much judicial consideration. No set rule can be used as a yardstick and applied to all cases alike. This doctrine is a relative or elastic theory rather than an abstract or absolute rule. The facts in each case must be separately considered and from those facts it must be determined whether or not public convenience and necessity require a given service to be performed or dispensed with. * * * The convenience and necessity required are those of the public and not of an individual or individuals." Illinois Cent. R. Co. v. Illinois Commerce Commission, 397 Ill. 323, 74 N.E.2d 545, 547; State ex rel. Utilities Commission v. Atlantic Coast Line R. Co., 233 N.C. 365, 64 S.E.2d 272; State ex rel. Utilities Commission v. Atlantic Coast Line R. Co., 238 N.C. 701, 78 S.E.2d 780.

Public convenience and necessity as it relates to the situation involved in this proceeding, was a question to be determined by the Commission in light of existing circumstances, including the ability of the City of Kinston to meet the public need for the services involved. Utilities Commission of North Carolina v. Great Southern Trucking Co., 223 N.C. 687, 28 S.E.2d 201, and cited cases.

*13 In the hearing below, the protestants offered no evidence except certain exhibits for the purpose of showing that electric rates of the City of Kinston are higher than those of the Power Company. The ability of Kinston to serve the areas satisfactorily otherwise was not challenged.

Certainly the mere fact that the rates of the Power Company are lower than those established by the City of Kinston is not determinative of what is for the best interest of the public as a whole, including the protestants. Neither does it have any material bearing on the question of public convenience and necessity. Moreover, according to the record, the citizens and residents of the Spence Drive and Lawrence Hill Sections were not brought within the corporate limits of the City of Kinston against their will, but at their request. Even so, the procedure followed in this respect has no legal bearing on the question or questions posed on this appeal.

In the case of City of Indianapolis v. Consumers' Gas Trust Co., 7 Cir., 144 F. 640, 643, certiorari denied, 203 U.S. 592, 27 S. Ct. 779, 51 L. Ed. 331, the Court said: "In none of the citations, state or general, are there any reasons stated that seem inconsistent with the proposition that a corporation, engaged in a service of public utility, may contract for a sale to the municipality of all its property therein, either through a condition accepted in the franchise from the city, or through subsequent arrangement. The question whether municipal ownership is favorable to the public interest, is neither involved in, nor open to judicial inquiry."

In the 1935 Supplement to section 450, 2 Pond, Public Utilities, 4th Ed., it is said: "Where the consent of the public utility commission is necessary to the sale of the plant or its product which is necessary to render its service to the public, this consent is essential, and any attempt to make such a disposition independently of the commission exceeds the power of the public utility, and any agreement to that effect is of no force," citing Crum v. Mt. Shasta Power Corp., 220 Cal. 295, 30 P.2d 30.

In the case of Sweetheart Lake, Inc., v. Carolina Power & Light Co., 211 N.C. 269, 189 S.E. 785, 787, this Court, speaking through Connor, J., said: "When a public service corporation, engaged in business as a public utility, has furnished service to a customer through a period of years, the customer is entitled to a continuance of such service, or, in the event of a temporary suspension of such service, for good cause, to its restoration, without having first obtained an order to that effect from the State Utilities Commission. In such case, the public service corporation has no legal right to refuse to continue or to restore such service, without having first obtained an order to that effect from the State Utilities Commission". (Emphasis added.) 73 C.J.S., Public Utilities, § 8, page 1001, et seq.

We hold the convenience and necessity involved in determining whether one utility or another will provide a specific service relates to the public and not to an individual or individuals. Illinois Cent. R. Co. v. Illinois Commerce Commission, supra.

The Commission has found that public convenience and necessity are no longer served by the ownership and operation of the Power Company of its electrical distribution system within the corporate limits of the City of Kinston. And by statute, an order of the Commission is prima facie just and reasonable. G.S. § 62-26.10; State ex rel. Utilities Commission v. Ray, 236 N.C. 692, 73 S.E.2d 870.

Moreover, the essential and pertinent findings of fact by the Commission are supported by uncontradicted evidence which is competent, material and substantial. Therefore, the judgment of the court below will be upheld.


JOHNSON, J., not sitting.