Title: State Road Com'n of Utah v. Utah Power & Light Co.

State: utah

Issuer: Utah Supreme Court

Document:

10 Utah 2d 333 (1960) 353 P.2d 171 STATE ROAD COMMISSION OF UTAH, PLAINTIFF AND APPELLANT, v. UTAH POWER & LIGHT COMPANY, A CORPORATION, MOUNTAIN FUEL SUPPLY COMPANY, A CORPORATION, AND THE MOUNTAIN STATES TELEPHONE AND TELEGRAPH COMPANY, A CORPORATION, DEFENDANTS AND RESPONDENTS. No. 9136. Supreme Court of Utah. May 26, 1960. Walter L. Budge, Atty. Gen., of Utah, Franklyn B. Matheson, Robert S. Campbell, Jr., Assts. Atty. Gen., Merlin R. Lybbert, Robert Porter, Jr., Salt Lake City, for appellant. Gerald Irvine, S.G. Baucom, B.Z. Kastler, Jr., Calvin L. Rampton, Salt Lake City, Sam Cline, Milford, S.N. Cornwall, Salt Lake City, Luis R. Rovira, Denver, Colo., for respondent. HARDING, District Judge. State Road Commission of Utah filed an action under the declaratory judgment act to determine the validity of Chapter 53 of the 1957 Session Laws of Utah, now Section 27-2-7, Subsection (22), Utah Code Annotated, 1953, commonly known as the Utility Relocation Act. Summary judgment was rendered in favor of the defendants, holding the Utility Relocation Act to be valid, and ordered the State Road Commission to reimburse the defendant utility companies for the non-betterment costs of the relocation of their facilities. This appeal is taken from the judgment. The complaint alleged in substance that franchises which are still in full force and effect had been granted by the proper governmental authorities to the defendant utility companies to locate their utility facilities on public roads and streets (the franchises are silent as to any removal or relocation of the facilities); that the facilities had been placed in pursuance of the franchises; that thereafter portions of such roads and streets had been designated as federal aid highways which required the removal and relocation of the facilities; that the defendants had demanded that the plaintiff State Road Commission pay the relocation costs as provided by the aforementioned Utility Relocation Act, which had become effective prior to the time demand for removal and relocation had been made, and the plaintiff contends it cannot legally pay such costs, asserting the unconstitutionality of the Act. The pertinent part of Section 27-2-7, U.C.A. 1953, as amended by Chapter 53, Laws of Utah, 1957, involved in this controversy is as follows: The provisions of the Utah Constitution with which the above act are claimed to be in conflict are: It is to be conceded that the common law required utilities to pay the entire cost of removing and relocating any facilities located within the right-of-way of a public highway whenever the necessities of highway improvement so demanded. New Orleans Gaslight Co. v. Drainage Comm. of New Orleans, 197 U.S. 453, 25 S. Ct. 471, 49 L. Ed. 831. In view of the foregoing constitutional provisions and the rule of the common law, the question to be answered is whether or not the legislature has the power to modify the common law, prospectively, lifting a burden from the utilities and imposing it on the State. This question in whole or in part has been before the highest courts of twelve states in the following cases: State ex rel. Rich v. Idaho Power Co., 81 Idaho 487, 346 P.2d 596; Opinion of the Justices, 152 Me. 449, 132 A.2d 440; Baltimore Gas & Electric Co. v. State Roads Comm., 214 Md. 266, 134 A.2d 312; Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642; Opinion of the Justices, 101 N.H. 527, 132 A.2d 613; Wilson v. City of Long Branch, 27 N.J. 360, 142 A.2d 837; State Highway Commission v. Southern Union Gas Co., 65 N.M. 84, 332 P.2d 1007; Lehigh Valley R. Co. v. Canal Board, 204 N.Y. 471, 97 N.E. 964; New York City Tunnel Authority v. Consolidated Edison Co., 295 N.Y. 467, 68 N.E.2d 445; Oswego & Syracuse R. Co. v. State, 226 N.Y. 351, 124 N.E. 8; Transit Commission v. Long Island R. Co., 253 N.Y. 345, 171 N.E. 565; Westchester Electric R. Co. v. Westchester County Park Comm., 255 N.Y. 297, 174 N.E. 660; Northwestern Bell Telephone Co. v. Wentz, N.D., 103 N.W.2d 245; Delaware River Port Authority v. Pennsylvania Public Utility Comm., 393 Pa. 639, 145 A.2d 172; State v. Southern Bell Tel. & Tel. Co., Tenn., 319 S.W.2d 90; State v. City of Austin (State v. City of Dallas et al.), Tex., 331 S.W.2d 737. As so often happens, there is respectable authority on both sides of the question. The numerical weight of authority holds that under constitutional limitations similar to those in Utah the Legislature has the power to change the common law to relieve the utilities of the obligation to pay the cost of relocating facilities and to impose that cost on the state. Justice Cardozo's opinion in Oswego & Syracuse R. Co. v. State, supra, at page 356 of 226 N.Y., at page 10 of 124 N.E., is expressive of the holding of the majority: In Minneapolis Gas Co. v. Zimmerman, supra [253 Minn. 164, 91 N.W.2d 652] the Minnesota court resolved the constitutional questions raised (which are similar to those raised in the instant case) in favor of constitutionality. It also discussed the "realities of the situation" which would impose unfair burdens on utility customers in those states where the utility relocation costs were not paid in part from federal funds. Financial distress could be the lot of some of our municipalities and smaller utilities should they suddenly and on a large scale be required to relocate at their own expense non-salvageable sewer systems and other utility facilities which may parallel a highway designated for improvement under the Federal-Aid Highway Act of 1956. That inequities are bound to occur in such a tremendous program was recognized in statements made by some of our U.S. Senators and published in the U.S. Code Congressional and Administrative News, Vol. 2, 85th Congress, 2nd Session, page 2398 (1958): Of the states which have considered this matter, a minority, Idaho, New Mexico and Tennessee, have held that utility relocation acts like ours are invalid under similar constitutional provisions; whereas, the preponderant majority have held in accordance with the conclusion we reach, based upon considerations discussed below with respect to our concept of highway uses and legislative prerogatives. We subscribe to the philosophy that the policy of the greatest good for the greatest number in the long run as applied to the forest reserves also applies to the multiple uses available on public streets. Public welfare demands that the people be served with water, sewer systems, electricity, gas, telephone and telegraph, as well as transportation and means of travel. These services are vital to the well-being of our various communities. It would be almost impossible to meet these urgent requirements without making use of the public property. The presence of the utility facilities on the streets constitutes a use in the public interest subject to public regulation, and an object within the purview of a public policy to be established by the legislature. Also, we are committed to the proposition that the moral obligations of the state are within the realm of legislative policy and prerogatives. We said that Article 6, Section 31, of our Constitution is not violated even when direct gifts and loans of state funds are made to people in need under our Public Welfare Program, because of a public purpose served in discharging, not the legal, but the moral obligation of the state to care for its poor. Wallberg v. Utah Public Welfare Comm., 115 Utah 242, 203 P.2d 935. Utility relocations are ordered by virtue of the police power of the state. This power must be exercised fairly. The relocations will result in destruction and loss of some of the facilities. Expenditures for engineering, labor, and materials will be incurred. The cost is occasioned at the instance of the state and federal governments for the benefit of all the people. The utilities are in no way to blame that their facilities happen to be in the way of this improvement. We do not deem it to be unfair for the legislature to provide that they be reimbursed for the actual expense of their removal. This presents a question of morality and justice, closely coupled with the interest of the public as beneficiaries, taxpayers, and utility customers. The question is manifestly one for the legislature. It is a case where the state should set the example * * * and should be bound by the same concepts of justice and morality as its individual members * * * Driggs v. Utah State Teachers Retirement Board, 105 Utah 417, 425, 426, 142 P.2d 657, 660, 661. The legislature has determined the policy to be pursued in the relocation of utility facilities; and, mindful of the magnitude of the newly inaugurated federal program and the equities to be adjusted, has fixed in advance the terms upon which relocations shall be required. There is no gain to the utilities. They are simply protected from suffering a net loss in the relocation of their facilities, all resulting from this vast and farflung highway building program. We hold that in enacting the Utility Relocation Act, our legislature remained well within the boundaries of constitutionality as marked by Article 6, Section 31 of our Constitution. Article 6, Section 27, prohibits the legislature from releasing or extinguishing, in whole or in part, the indebtedness, liability or obligation of any corporation or person to the state, or to any municipal corporation. The claim that the Utility Relocation Act of 1957 offends this provision by changing the common law rule and requiring the state to pay the non-betterment costs of the relocation of the utility facilities is to argue that all laws which will cause obligations to arise in favor of the state upon the happening of future events are forever frozen as far as the legislature is concerned. This notion would mean that the legislature could enact a law imposing liability in favor of the state for prospective conduct and retain no power of repeal. We are persuaded that this section carries no such implications and does not invalidate legislation concerning transactions or acts yet future. In the cases of the State v. City of Austin (State v. City of Dallas, et al.), Tex., 331 S.W.2d 737, 742, the court, in construing a constitutional provision similar to our Article 6, Section 27, stated: As suggested by the Texas court, once the event occurs which causes the indebtedness to accrue, the liability to attach, or the obligation to subsist, the legislature may be powerless to act in releasing the indebtedness, cancelling the liability, or discharging the obligation. While the event is yet future that may create indebtedness or liability, or invoke obligations, the legislature is unfettered by this section. We are aware of no legal principle which requires that the rule here in question must remain unchanged. The law provides stability without paralysis, flexibility without anarchy. In this case it is admitted that the franchises were granted and accepted with knowledge that they were subject to the exercise of the police power of the state. Among the unwritten provisions, then as now, was that overarching one to comply with the law at all times. What that law would be from time to time, no one knew. What specific acts or other considerations would be required of the utilities was just as unpredictable. "We know in part, and we prophesy in part." When a change in use of the street necessitated adjustment with respect to use by the utilities and a demand for action on the part of the utilities was made, then and only then would an obligation arise and the requirements imposed by the obligation become known. If the law had changed or street uses now unknown were contemplated, the requirements would be affected accordingly. The utilities assumed that risk to their advantage or disadvantage. The theory that the common law rule as it existed when the franchises were granted became an integral part of the franchises as if expressly written therein, and could not be modified by subsequent legislation, is not supported by the authorities. All contract and property rights are held subject to the fair exercise of the police power of the state. Chicago & A.R. Co. v. Tranbarger, 238 U.S. 67, 35 S. Ct. 678, 59 L. Ed. 1204. Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642. The Utility Relocation Act does not impair or nullify any obligation, nor does it extinguish or release any indebtedness or liability. Construing Article 6, Sections 27 and 31 as we do, it is the holding of this court that Section 27-2-7, U.C.A. 1953, as amended by Chapter 53, Laws of Utah, 1957, does not violate the Constitution of this State, and is valid. The judgment of the district court is affirmed. No costs awarded. CROCKETT, C.J., and WADE and McDONOUGH, JJ., concur. HENRIOD, Justice (concurring in result). I concur in the result with the following observation: A strong, forceful argument was made by respondents to the effect that relocation costs are an expense of operation. They urged that: Taking this language at face value, it is assumed by this writer that the saving effected by elimination of such costs should be cut back to the utilities' consumers, not to the stockholders or anyone else, and that a corollary of such contention on the part of respondents would be a reduction in the rate base resulting in lower costs to the consumer, and that in fixing the rate, the Public Service Commission should take into consideration such relocation cost savings in revising the rate downward for the benefit of such consumer. CALLISTER. J., being disqualified did not participate herein.