Court Opinion

ID: 8826649
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:49:10.674818+00
Date Added: 2024-06-11T17:04:47.941599
License: Public Domain

WADDILD, Circuit Judge
(dissenting). On the 21st day of November, 1908, the Southern Power Company, appellee, entered into a contract with the High Point Electric Company to sell it electricity for redistribution in the city of High Point for the period of 10 years, and on the 23d day of December, 1908, likewise entered into a contract with the Greensboro Electric Company to sell it electricity for redistribution in the city of Greensboro for the period of 10 years. In 1909 the North Carolina Public Service Company, appellant, was chartered under the laws of North Carolina, and thereafter acquired the property and franchises of the High Point Electric Company and the Greensboro Electric Company, and had assigned to it the rights of those companies under their contracts aforesaid with the Southern Power Company. Under its charter the North Carolina Public Service Company was authorized to secure, develop, and operate hydroelectric companies, and to generate electricity, and sell and distribute it. Its powers in this respect were the same as those possessed by appellee, the Southern Power Company, and it was authorized to purchase the privileges and franchises of any other corporation doing an electric lighting, electric power, street car, or gas business, either for public or private use, or its own use for distribution and sale to others, and in the conduct of its business the said Public Service Company sold and distributed electricity that had been purchased from the appellee, in competition with the appellee.
Prior to the expiration of the 10-year periods named in said contracts, negotiations weré had looking to the renewal of the same, but nothing substantial was accomplished by those efforts. The appellee offered to renew the contracts at the then established rate, and at *848which it was then selling power to other customers, under substantially similar conditions, being an advance of one mill per kilowatt hour over the price it was furnishing power to the town of Charlotte through the Southern Utilities Company, under a contract made prior to the expiration of the 10-year period aforesaid, expiring in the year 1944. The advance in price was made necessary by reason of the very substantial increase in the cost and expense of generating and distributing electricity. This offer was declined, and pending the period during which appellee was temporarily furnishing power to avoid inconvenience to the public, after the expiration of the contracts aforesaid, the bill in this cause was filed to prevent the appellee from discontinuing the service, and to require it to continue- to furnish power to said two cities and their citizens through the North Carolina Public Service Company.
The case as thus presented is a simple one, viz. whether appellee can be required, in the absence of a contract, to furnish appellant, the North Carolina Public Service Company, a competitor, with power, to enable the latter company to sell the same to the cities of High Point and Greensboro and the citizens of said two cities in competition with appellee. Appellee insists that, having made the contracts in. question for a specified time, it did not thereby, or by any other act on its part, dedicate the use of its power to the public, or in any other manner. On the contrary, it indicated its intention not to do so, and entered into the contracts for the use of this power in the two cities, only for the limited periods covered by the contracts, and the contracts in terms specified that at the time of their termination the appellee should have the right to discontinue supplying the electricity therein contracted for.
Appellee Power Company does not deny that the cities in question, and their inhabitants, as consumers, have the right to call upon it to supply such power as may be within its ability to furnish; but it insists that it cannot be required to furnish power to the appellant Public Service Company for resale to the said two cities and their inhabitants, in competition with itself. It is this latter demand that is the vital issue in this case, and unless the contracts entered into by the two companies acquired by the appellant public service company, and both of which have long since expired, or some other act on its part constitutes a dedication of its right to sell electricity to the public, and thereby enabled the appellant public service company and other similar companies to call upon it to furnish power for resale and distribution, in competition with i.tself, confessedly no such right exists. In my opinion, it is entirely clear that no such dedication was made by the appellee power company, and at the expiration of the contracts with said two companies it had the undoubted right to decline to renew the same, although the obligation to furnish electricity to the two cities for their lawful corporate purposes, and to their inhabitants as consumers, to the extent of their ability, at reasonable and lawful rates, to be prescribed by the Corporation Commission of the State of North Carolina, necessarily followed.
The principles involved in this case are of far-reaching importance; *849indeed, could hardly be of more serious concern to one engaged in the maintenance and operation of a public service corporation, charged with the obligation and duty to render efficient service to the public at reasonable remuneration. Appellee’s business is sustained by its receipts from the sale of its power to its customer; and if the appellant, its direct competitor, engaged in the same business, can call upon appellee to furnish to it power to resell in competition with what it produces, how long could any business withstand such a strain? In the end the public would suffer, as no well-organized and strong business could long provide against the disastrous consequences that would necessarily flow from such unbusinesslike and chaotic conditions. To be wholly without means would place one in quite as good, if not a better, position than that of great strength, since it could secure without risk the benefits of the labor and capital of the strong until the latter was destroyed. A more dangerous blow could not well be struck at vested interests, and one that would eventually result in withholding capital necessary to start or maintain enterprises requiring large outlay. Authorities to support this position can be cited almost without number. Only a few need be given. Memphis & Little Rock R. Co. v. Southern Express Co., 117 U. S. 1, 6 Sup. Ct. 542, 628, 29 L.Ed. 791; Evansville & H. Traction Co. v. Henderson Bridge Co. (C. C.) 134 Fed. 973; Express Co. v. Railroad, 111 N. C. 463, 16 S. E. 393; Elliott on Railroads, §§ 922, 974, and 1084; People ex rel. Oneida Tel. Co. v. Central Tel. Co., 41 App. Div. 19, 58 N. Y. Supp. 221; Home Telephone Co. v. Sarcoxie Light & Tel. Co., 236 Mo. 114, 139 S. W. 108, 36 L. R. A. (N. S.) 124.
In the majority opinion, the transactions between the appellee and the Southern Public Utilities Company, in the matter of sales of power to the latter company, are largely made the basis for the conclusion reached, which, in effect, holds that appellee company has so dedicated its rights to sell electric power as to entitle complainant the North Carolina Public Service Company to the relief it seeks, and that it is estopped from interposing the defenses made here to the claim of the appellant the North Carolina Public Service Company. Of course the appellee could have so conducted its business as to have dedicated its rights and privileges under its charter to manufacture and furnish electricity to the public generally, in which event it would not be heard to decline to furnish the same to the appellant as one of the public, for resale to the two cities involved here. But, if anything is manifest in this case, as well from the pleadings and proofs as from the findings of the lower court, it is that no such dedication has ever been or'was intended to be made. On the contrary, appellee company has at all times carefully in terms so contracted as to be relieved from the implication of any such folly as it would have been guilty of, had it transferred its vast business interests from its own stockholders for the benefit of the public.
I find myself so far out of accord with the findings, reasonings, and conclusions arrived at by my brethren, as at all applicable to the facts of this case, that it is difficult for me, perhaps, to properly appreciate them. I might readily agree as to many of the positions taken, if I *850could bring myself to believe that the condition of affairs described by them in point of fact exists. But I cannot, and suffice it to say that in this, as in all other litigation, we have to look to the pleadings and proofs to finally and intelligently ascertain just what are the merits of the case. So far as the transactions with the Southern Public Utilities Corporation, so much relied on, are concerned, as well as in respect to several other minor transactions with the other companies, the complainant’s case is elaborately set up in its bill, and the appellee in its answer made full and detailed explanation and denials in respect thereto. Upon the issue thus joined the cause was heard, proofs taken orally under the new equity rules before the judge of the District Court, and upon full and elaborate hearing and arguments of counsel that court reached its conclusions and made its findings, fully sustaining the appellee’s contentions against those of the complainant, the appellant. Upon the case thus heard and disposed of, and the findings and conclusions reached, this dissent is based. The contract entered into between the appellee, Southern Power Company, and the Southern Public Utilities Company, would in no event operate to dedicate the appellee’s right to sell its power to the public as claimed, or prevent it from making lawful contracts with other persons or corporations in.respect thereto, or to refuse to make such contracts. Memphis & Little Rock R. R. Co. v. Southern Express Co., supra, 117 U. S. 1, 6 Sup. Ct. 542, 628, 29 L. Ed. 791; Donovan v. Pennsylvania Co., 199 U. S. 279, 26 Sup. Ct. 91, 50 L. Ed. 192; Oregon Short Line & U. N. Ry. Co. v. Northern Pac. R. Co. (C. C.) 51 Fed. 465; Little Rock & M. R. Co. v. St. Louis S. W. R. Co., 63 Fed. 775; 11 C. C. A. 417, 26 L. R. A. 192; Prescott & A. C. R. Co. v. Atchison, T. & S. F. Co. (C. C.) 73 Fed. 438; Gulf, C. & S. F. Ry. Co. v. Miami S. S. Co., 86 Fed. 407, 30 C. C. A. 142; State v. Cadwallader, 172 Ind. 619, 87 N. E. 644, 89 N. E. 319.
In considering the subject, sight should not be lost of the fact that the appellee is in no sense or manner to be relieved of its full obligation and duty to serve all the public alike, upon just remuneration being paid. But appellant, a public service corporation, is not one of the general public, in the sense of a consumer. On the contrary, it is a competitor in business as a public service corporation, without the ability to produce electricity for sale, trying to ingraft itself on the appellee, with a view of securing its power, in order that it may deal in and resell the same in competition with the producer. The equities of the case are clearly with the appellee. The appellant has all to make and nothing to lose by the success of the litigation, since it is seeking to avail itself of the right to use the appellee’s franchise in competition with it; whereas, in the case of the appellee, the situation is entirely different, in that it secured its charter to do business and is so engaged upon an extended scale, and at great expense, and is dependent upon having secured to it the rights given by its charter, to lawfully sell its output to its customers, without let or hindrance on the part of others, who have no interest therein except to avail themselves of its rights and privileges and franchises.
The decision of the majority will operate to deprive appellee of its *851property without just compensation made therefor, and without according to it due process of law under the Fourteenth Amendment to the Constitution of the United States, as it will also deny to it the equal protection of the laws as guaranteed therein. Atchison, T. & S. F. R. Co. v. Denver & New Orleans R. Co., 110 U. S. 667, 4 Sup. Ct. 185, 28 L. Ed. 291; Memphis & Little Rock R. Co. v. Southern Express Co., supra, 117 U. S. 1, 6 Sup. Ct. 542, 628, 29 L. Ed. 791; L. & N. R. Co. v. Central Stock Yards Co., 212 U. S. 132, 29 Sup. Ct. 246, 53 L. Ed. 441; Lewis on Eminent Domain (3d Ed.) § 440.
So far as appellants, the cities of Greensboro and High Point are concerned, they are in no better or worse positions than they would be in respect to any other corporate matter in which they insisted upon making contracts with persons who had no means of performing the particular undertakings, instead of with those who are able to comply with their contracts, and who by law are under obligation to do so.
The decision of the lower court, in my judgment, should be affirmed.