Case Title: State Highway Com'n v. Southern Union Gas Co.

Citation: 332 P.2d 1007, 65 N.M. 84

Docket Number: 

State: new-mexico

Court: New Mexico Supreme Court

Date: 1958-11-14T00:00:00Z

Document:
332 P.2d 1007 (1958) 65 N.M. 84 STATE HIGHWAY COMMISSION of New Mexico, and L.D. Wilson, Chief Highway Engineer, Plaintiffs-Appellants, v. SOUTHERN UNION GAS COMPANY, a Delaware Corporation, Defendant-Appellee. No. 6425. Supreme Court of New Mexico. November 14, 1958. Rehearing Denied December 30, 1958. Leave to File Second Motion for Rehearing Denied February 3, 1959. *1008 Fred M. Standley, Atty. Gen., Robert F. Pyatt, Asst. Atty. Gen., John T. Watson, Charles C. Spann, Robert E. Fox, Sp. Asst. Attys. Gen., Moise, Sutin & Jones, Albuquerque, for appellants. Willis L. Lea, Jr., James R. Wetherbee, Dallas, Tex., Manuel A. Sanchez, Santa Fe, Noble & Noble, Las Vegas, for appellee. Nordhaus & Moses, Albuquerque, and Hartley, Buzzard & Patton, Clovis, Frank L. Horan, Malcolm W. deVesty, Paul F. Henderson, Jr., Thomas N. Keltner, Albuquerque, amici curiae. SHILLINGLAW, Justice. This is a declaratory judgment action brought by the State Highway Commission of New Mexico and its Chief Highway Engineer against the Southern Union Gas Company to determine the constitutionality of Chapter 237 of the Laws of 1957, § 55-7-18, N.M.S.A. 1953, and the obligation of the Highway Commission, if any, to reimburse the defendant for the cost of relocating its gas lines required because of the widening and improving of a state highway. As provided by the Federal-Aid Highway Act of 1956, 23 U.S.C.A. § 151 et seq., 62.88% of the cost of the project is to be reimbursable from federal aid funds. The plaintiffs have refused to reimburse the defendant, contending that such reimbursement would be repugnant to the Constitution of the State of New Mexico for the reasons that payments would be in violation of: This cause was heard below before the Hon. David W. Carmody of the First Judicial District who found that the Act did not violate any of the constitutional provisions hereinabove mentioned. From such adverse judgment the plaintiff Highway Commission has appealed to this court. This cause together with the cases of State Highway Commission v. Southern Union Gas Co., No. 6427; State Highway Commission v. Mountain States Telephone & Telegraph Co., No. 6424; and State Highway Commission v. Ruidoso Telephone Co., No. 6426, were consolidated for argument before us on July 28, 1958. 65 N.M. 98, 99, 101, 332 P.2d 1017, 1018, 1019. Let us examine the first constitutional question raised by the appellants: Section 14 of Article IX of the New Mexico Constitution reads as follows: The question before us is whether or not Chapter 237, Laws of 1957, § 55-7-18, N.M.S.A. 1953, is repugnant to the above section of our constitution. Chapter 237 reads in part as follows: Chapter 237 was passed following the enactment by the Congress of the United States of the Federal-Aid Highway Act of 1956, section 111(a) through (c) of which reads as follows [23 U.S.C.A. § 162]: New Mexico and several of the states, following this action of the Congress, through their legislatures sought to reimburse the utilities for the cost of relocating their facilities. A summary of the states' actions is set out at U.S.Code, Cong. & Adm. News, 85th Cong., 2d Session 1958, No. 6, at pages 745 and 746. In our consideration of the problem we are favored with the opinions of the appellate courts of four of our sister states construing their statutes which, for all practical purposes, are identical with ours. The mandate of our constitution makers is as direct as any, and more so than some. In an Opinion of the Justices, 152 Me. 449, 132 A.2d 440, 443, the Supreme Judicial Court of Maine said: After repeating the above quotation from the Maine court, the justices of the Supreme Court of New Hampshire in an Opinion of the Justices, reported N.H., 132 A.2d 613, 615, added: The Minnesota Supreme Court said in the case of Minneapolis Gas Co. v. Zimmerman, Minn., 91 N.W.2d 642, 644: And the Minnesota court added, at page 651 of 91 N.W.2d: It might be explained that Minnesota is committed to the view, as stated at page 649 of 91 N.W.2d: Needless to say, such has never been the policy in New Mexico. The Supreme Court of Tennessee is the last to speak on the question and it takes an entirely opposite view in the very recent decision of State of Tennessee ex rel. v. Southern Bell Tel. & Tel. Co., 319 S.W.2d 90. There, as in the case before us, the legislation was attacked on several constitutional grounds, but the court held the statute violated Art. II, § 31 of their constitution. Although the case has been scheduled for reargument, we quote at length from the original opinion filed by the Supreme Court of Tennessee: *1012 We now turn to the opinions of this court for guidance. Admittedly the precise question has never previously been before us. However this court has spoken in a manner that points the way for our disposition of this appeal. In Hutcheson v. Atherton, 44 N.M. 144, 99 P.2d 462, 470, Mr. Justice Sadler quoted from the opinion of Chief Justice Roberts in Harrington v. Atteberry, 21 N.M. 50, 153 P. 1041, as follows: And then Mr. Justice Sadler applied the above remarks to the case before him: May we paraphrase from portions of the foregoing quotations: We are not unmindful of the fact that in operating its gas distribution system the Southern Union Gas Company is engaged in serving a highly commendable public purpose. But that fact alone does not warrant the state in making a donation in aid of it. In the Hutcheson case, supra, this court assumed the corporation involved to be a nonprofit corporation without shareholders (while in the case before us the Southern Union Gas Company is unquestionably a private corporation) but in that case the court said: It has been suggested that the expenditure of public monies to reimburse the Southern Union Gas Company for the relocation of its facilities is an expenditure for a public governmental function. Assuming this to be true for the sake of argument, the foregoing quotation from the Hutcheson case suggests the answer to such contention. That the utility is not performing a public governmental function was unequivocally decided by the Supreme Court of Tennessee in State of Tennessee ex rel. Leech v. Southern Bell Tel. and Tel. Co., supra. Department of Highways v. Pennsylvania Public Utility Commission, 185 Pa. Super. 1, 136 A.2d 473, an opinion of the Superior Court of Pennsylvania, was a case upon which appellee relied most heavily in its brief. Since argument of the instant case before this court, the Supreme Court of Pennsylvania has reversed the Superior Court in an opinion filed September 29, 1958, 145 A.2d 538. The question in the Superior Court was primarily one of statutory construction but it also involved a constitutional question. The Supreme Court reversed the Superior Court [184 Pa. Super. 280, 133 A.2d 853] on the question of the statutory construction but it did say, in Delaware River Port Authority v. Pennsylvania Public Utility Commission, *1014 Pa., 145 A.2d 172, 175, the controlling case decided the same day: A review of the cited cases reveals that no reference is made therein to the constitutional question involved in the case before us. Likewise the facility being considered was a self-liquidating project as hereinafter further noted. We are also impressed with the fact that the Pennsylvania constitution is not nearly as comprehensive as ours: Article IX, Section 7 of the Pennsylvania constitution reads: This inhibition against appropriations by counties is very similar in wording to our constitutional provision inhibiting the legislature itself from making a donation. Section 7 of Article IX of the Pennsylvania constitution was before their Supreme Court in the case of Wilkesbarre City Hospital v. County of Luzerne, 84 Pa. 55, and that case was quoted with approval by Mr. Chief Justice Roberts in Harrington v. Atteberry, supra [21 N.M. 50, 153 P. 1043]: And Chief Justice Roberts added: Appellee contends that the legislature here has determined these relocation costs to be a part of highway construction and that we are precluded from determining the reasonableness of that conclusion. We think the question before us is, "Whose cost?" Minnesota and New Hampshire would agree with appellee. Maine and, of course, Tennessee hold otherwise. In determining whether or not the expenditure of highway funds would violate Art. IX, § 19 of their constitution, the Supreme Judicial Court of Maine said in the Opinion of the Justices, 152 Me. 449, 132 A.2d 440, 443: The Supreme Court of Georgia held likewise in Mulkey v. Quillian, 213 Ga. 507, 100 S.E.2d 268, 271, a taxpayer's suit alleging illegality of an act under which the highway department loaned money to a city for the purpose of removing and relocating utility facilities from rights of way of state aid roads. Granting an injunction, the court stated: The appellee has argued that if these relocation costs were made payable "at the gasoline pumps" the burden would be imposed on those for whose benefit the highway construction was undertaken. We hardly feel that this is a valid argument for the constitutionality of the act but, on the other hand, it does point out the distinction between the case at bar and the facts in Baltimore Gas & Electric Co. v. State Roads Comm., 214 Md. 266, 134 A.2d 312, and the facts in the two Walt Whitman Bridge cases, Delaware River Port Authority v. Pennsylvania Public Utility Commission, 180 Pa.Super. 315, 119 A.2d 855, and Delaware River Port Authority v. Pennsylvania Public Utility Commission, 184 Pa.Super. 280, 133 A.2d 853, reversed Pa., 145 A.2d 172. The Maryland case involved a tunnel and the Pennsylvania cases a toll-bridge; both facilities were self-liquidating and in neither instance was there a direct obligation on the state. Those projects were literally being paid "at the gasoline pumps" by the users of the facilities. It is interesting to note that the Supreme Court of Maine in the Opinion of the Justices, 152 Me. 449, 132 A.2d 440, specifically held that relocation costs could be paid but that they could not be paid "at the gasoline pumps." In the instant case, if the payment of the relocation costs is a valid legislative act under our constitution, then the legislature could provide for the payment of such costs at the gasoline pumps, or it could, in its legislative discretion, provide for payment of such costs from a sales tax on bread and milk. In conclusion, we would answer the main argument of the appellee that relocation of these utilities is a public governmental function by stating that the construction of highways is unquestionably a public governmental function but that we disagree as to relocation of utility facilities. Highways are constructed by the state on stateowned rights-of-way for the use of the public. The Southern Union Gas Company, in laying its gas lines, is acting solely for the benefit of the utility. The line is the property of the utility and to be used solely by it, neither the state nor the public having any right to use these lines. The Southern Union Gas Company is not a subordinate governmental agency nor is it fulfilling a governmental function although it is serving a highly useful purpose in the great American free enterprise tradition by furnishing for profit an essential commodity to the people of this state. *1016 In reply to the appellee's contention that the legislature can change the common law to provide for future payment of utility relocation costs, it is beyond question that the common law is subject to change by statute. That such change may not offend the constitution is equally true. Public policy of this state is determined by the legislature but such declarations of policy are restricted by the limitations of our constitution. Flaska v. State, 51 N.M. 13, 177 P.2d 174. An argument is advanced that it is "for the legislature to determine what are and what are not compensable damages." In the relocation of these facilities, we see no damage to or taking of the property of the utility as contemplated by Art. II, § 20 of the constitution. Relocation costs are an expense to the utility, but it would permit the circumvention of the constitution by a play on words to say that this expense could be classified as damages and that the state could then pay such "damages." And we see no benefit accruing to the state, no quid pro quo as was found to exist in White v. Board of Education of Silver City, 42 N.M. 94, 75 P.2d 712. Attention is directed to the excellent analysis of the prohibitions of Art. IX, § 14 contained in the opinion of Mr. Justice McGhee in State ex rel. Mechem v. Hannah, 63 N.M. 110, 314 P.2d 714. See also, State ex rel. Sena v. Trujillo, 46 N.M. 361, 129 P.2d 329, 142 A.L.R. 932. The case of Village of Deming v. Hosdreg Co., 62 N.M. 18, 303 P.2d 920, is readily distinguishable from the instant case. Much has been said concerning the power of the legislature to reimburse the utility on the basis of equity and justice. That the legislature has the power to be equitable and just we may admit, but that power is restricted by the constitution. Otherwise the prohibition against a donation would have no meaning or effect. As stated in State ex rel. Sena v. Trujillo, supra [46 N.M. 361, 129 P.2d 333], the "constitution makes no distinction as between `donations', whether they be for a good cause or a questionable one. It prohibits them all * * *." It is true that in Harrington v. Atteberry, supra, Chief Justice Roberts was striking down a $500 appropriation, but the legal principles then announced control us now in restraining our legislature in its attempt to expend a sum now approximating $10 million, and amounting to untold millions of dollars in the future. We hold that sections 1(B) and (D) of Chapter 237, Laws of 1957, § 55-7-18(B) and (D), N.M.S.A. 1953, are repugnant to section 14 of Article IX of the Constitution of New Mexico and are thus invalid insofar as they provide for payment of relocation costs to the appellee. Inasmuch as sections 1 (B) and (D) are severable from the remainder of Chapter 237, only these sections are unenforceable. Amicus curiae for the City of Albuquerque raises the question of repayment of relocation costs to a municipality which moves its municipally-owned utility facilities from a municipally-owned right-of-way. Since this question is not in issue under the fact situations presented, we deem it unnecessary to pass upon it. The judgment of the lower court is reversed and the cause is remanded with instructions to enter a judgment declaring that the appellant State Highway Commission is under no obligation to reimburse the Southern Union Gas Company for relocation of utility facilities as contemplated by Chapter 237 of the Laws of 1957. It is so ordered. McGHEE and COMPTON, JJ., and J.V. GALLEGOS, D.J., concur. LUJAN, C.J., not participating. SADLER, J., not participating because of illness.