*1 estab- formula grave error to follow the I feel it would be a consistent majority. formula is not Such a lished general nor interests Dinuba case with the best with the public. rehearing denied for a was petition appellant’s
Plaintiff and opinion that J., February Carter, 1954. was 17, granted. petition should be 22, A. No. 22570. In Bank. Jan.
[L. 1954.] Appellant, ANGELES, COUNTY OF LOS v. SOUTHERN (a COUNTIES GAS COMPANY OF CALIFORNIA Respondent. Corporation), *3 County Counsel, A. Curtis Kennedy,
Harold W. and Smith Kelly, County Counsel, G. Assistant and John H. Gerald County Deputy Appellant. for Larson, Counsel, Sattinger and LeRoy Edwards, Oscar Frank P. M. C. Doherty Respondent. for Myers ’Melveny Myers, as
Louis W. and O & Amici Curiae Respondent. on behalf This appeal
TRAYNOR, prob J. involves the same basic Diego City in presented lems as those San v. Southern p. 14], Corp., ante, Tel. [266 Calif. public engaged purchasing in Defendant is a selling illuminating gas. produces It small amount integrated it sells. is an one Its and extends through counties, including County six Angeles. Los granted by many It holds franchises these counties cities By declaratory for therein. this action relief and an account plaintiff judgment ing, establishing seeks which basis on due for four compute
defendant must the amount franchises public granted by plaintiff lay pipes roads, in its county. highways in Bach franchise streets, and was granted by separate pursuant Broughton ordinance 6001-6071.) (Stats. 1905, p. 777, Code, now Util. Act. Pub. §§ paid Section 3 fixes the amount that must be for that act (2%) the franchises “two annual at person, partnership corporation" or whom arising operation or awarded, use, the franchise its possession.” substantially Bach ordinance the same contains provision.1 payments made Defendant filed statements and years 1936-1939, plaintiff for which claims were incorrect. Although figures for this case is statements and based on payments will 1939, it control all due the termi dispute nation of each franchise. There no as to the figures accounting processes they- represent in the what dispute years for no as to end result the other once accounting it is determined which methods is correct. findings court judgment The trial made and entered sustain ing computations return of defendant’s the amount due. appeals, contending judgment Plaintiff is not Broughton with section 3 accord Act as construed City County court of Tulare (1922), v. Dinuba Cal. 664 P. 983]. following computation Defendant made the of the amount year plaintiff 1939, parties due for selected presenting the issues: capital, $31,216,087.13,
Prom total defendant deducted intangibles, $152,351.98, leaving $31,063,735.15 as its total operative property, investment i. e., property used and purchasing, producing, distributing useful in gas. It segregated the in property then amount invested not on of way, private, $9,955,707.06, amount invested facilities on all of way, and private, $21,108,028.09. Defendant then divided its total re- $9,620,838.45, by its ceipts, total investment operative $31,063,735.15, property, gave of gross $0.309713 re- *4 per ceipts dollar invested. The amount operative invested in rights on of property way, public all private, $21,108,- Series) (New typical. provides: 1Ordinance 500 It . the said . “. grantee franchise, assigns shall, during Ms or or successors the life of said pay Angeles per (2%) of Los . . . two cent of receipts gross grantee, annual of such and his or its successors- or arising use, operation possession assigns, from the or of said franchise.” gave a total $0.309713, which by multiplied then 028.09, was use arising from the receipts as the $6,537,430.70 be- this amount prorated way. then rights of Defendant mileage basis. way on a rights of public and tween 2,969.673 rights way; miles of 3,249.225 uses Defendant way. rights of public per cent, are thereof, or 91.3963 miles way, rights of to all attributable The amount by per cent, 91.3963 multiplied $6,537,430.70, was then subject franchises, right way percentage miles $5,974,969.77 the amount gave which 2,969.673 miles rights way. to such Of per or cent are rights of 456.829 miles 15.3831 way, of such way Angeles County. Multiplying public rights of in Los gave $919,135.57 per cent $5,974,969.77 15.3831 granted gross receipts arising from use of the franchises by plaintiff. per $18,382.60, Two cent of that amount is charge for 1939 for the use such franchises. foregoing computations following on were based maintains, agree and which
principles, which defendant we Diego (see City Corp., p. v. ante, San Southern Cal. Tel. 14]), principles accord with the enunciated implicit opinion or in the of this court in the Tulare case: from
1. Defendant’s arise all of its operative property, property or whether not such is located on or way, private, on land owned or leased or on land others. it owned operative
2. property Defendant’s consists various personal including kinds of property, real land leased owned, compressor equipment, stations and meter stations equipment, regulator equipment, gas pro- stations and equipment, pipe lines, valves, general duction buildings, office warehouses, transportation equipment, laboratory equipment, Pipe appurtenances lines and etc. component part are but a of defendant’s over-all
system. charge applies only
3. Since arising from use of franchises, gross receipts operative property other arising than franchises must the base to charge be excluded applies. making, in rate is a relationship
4. As
there
and the amount
earns;
the value
the dollars
produce
invested
dollars that form the
every
gross receipts.
operative
dollar invested in
Since
prop-
*5
erty
equal
receipts, gross receipts
an
part
earns
of operative
are
particular
attributed to' a
item
class
property according
Moreover,
to the dollars invested in it.
in
in
proration
factors
be
the same
must
measured
terms, in
gross receipts
dollars,
since the
are measured
giving
the property
to them
rise
must be measured
dollars.
Diego
(City
p. 110
Corp., ante,
San
v. Southern
Tel.
Cal.
Although
opinion
P.2d
court’s
14].)
this
[266
gross receipts
Tulare case did
specify
not
how
were to
apportioned
rights
be
property
between the
on various
way
other property,
the method here described is the
only
making
apportionment
feasible
that
and was
method
on the
(
5. receipts Gross that arise the use the fran- gross receipts chises part are attributable to that using public rights way pursuant franchises. receipts
6. Gross attributable to the various way apportioned private rights between way according mileage, necessarily “not an as exclusive ’’ method, practicable one, suggested but as a as Tulare (188 664, 681.) ease. Cal. Defendant could have made this apportionment according to the amounts invested in (4) (City Diego above San v. Southern Cal. Corp., ante, pp. 110, 122, 125-126 14]), Tel. question plaintiff appor- raises no method rights way tioning gross and, fact, adopts it computations. in its own
Plaintiff arriving contends that in at the base to which 2 per charge applies, cent defendant and the trial court deducting erred in (1) all general other facilities; (2) part officeand of its distribu- private property tion on owned consumers and by defendant; (3) part not under lease its distribution private property owned leased defendant. contention would permit Since this allocation of gross receipts foregoing defendant’s to the- classes property, necessarily repudiation involves a of principle that defendant’s arise from all of its operative arising from all operative property other than franchises be must excluded 2 charge on which the from the base computed. grounds that on the repudiation justify this would Plaintiff gross receipts of a the total Tulare case decided that (1) that which categories: only into two utility can be divided (2) that which distribution is credited production system; credited to its fund constitutes the attributable to its ascertained; charge shall which the operative prop- from its receipts of defendant *6 there- erty that can be attributed to its charge 2 from fore from the fund which excluded for in facilities $134,111.96 is ascertained is investment produces of and does manufacturing the small amount only gross receipts of buy others; from not and that system that are not defendant attributable to gross receipts subject charge 2 are the attrib- rights way. support of In of private utable to the use following language from contention, plaintiff this cites the the Tulare case: gross receipts of accrue from
“The this defendant two agencies. generating plants or power- distinct One is the company, separate counties; houses of the located three system. other distributing step is the . . . The first accounting question this should be to determine as a of fact proportion what of the total annual public utility justly should be credited to its distribution rights distinguished over of way, various from power plants or producing agencies.” (188 other Cal. 673, 681.) light must be read language, however, in the of the
This court had reached as a basis for steps conclusions this accounting. Among these conclusions were: “The gross receipts, refer to the corporation’s language to of the operation possession’ from or ‘use, not Act arise alone highways, over the streets and franchises but these like- use, operation, possession from or power- wise way. private The two houses and last named are any charges to franchise subject county not and the municipality any is not under the law to part entitled privately attributable to these parts owned 673-674.) (188 system.” Cal. It should be noted that county that the reason the conclusion municipality any part to of the was not entitled rights private powerhouses way, to was that the com- gross receipts arise, not alone from pany’s the “use . . .” 136 powerhouses from franchise,
of the the use rights way, subject charges. to any not franchise case opinion
It is clear from the in the Tulare that the principle that this there enunciated was that the court any part gross receipts not was entitled to of the charges. subject not franchise generating plants, powerhouses, attributable to regarded of way excluded, were the court not because only them as the source of other than the use they privately of franchises, parts but because were owned subject charges. any (See, not franchise City also, Diego Corp., ante; City v. Tel. San Southern Cal. Co., Cal.App. Monrovia v. Southern Counties Gas Corp. ; Park Pier Amusement P. Ocean v. Santa [296 117] Monica, 879].) Cal.App.2d 668, ‘Since applies equal operative property that reason with force to all subject company charges, any franchise it cannot reasonably implied' court meant oper kind ative mentioned contributes to receipts. implication That an apparent such absurd absurdity statement, position “The part of integral distributing system electric an like this is earnings entitled credit for whole of the from deliveries *7 given county municipality and sales or large when a part such parts system service is over subject not may to permit such franchise be shown various illustra (188 674.) Operative Cal. property tions.” other than generating plants, powerhouses, distributing system and the consisting poles just wires, and integral are as much an part gas system of an electric or generating plants, as power private rights way. and buildings houses Office to house engineers and executive and staff, administrative warehouses, transportation equipment, equipment, communication meter equipment devices, laboratory and other facilities are all gas company’s to an operations essential electric and all gross receipts. contribute to its If say it is absurd to that integral any part system of such a is entitled to credit for receipts, the whole its is equally it absurd to say any that number less than the whole is so entitled. Plaintiff’s contention based the erroneous conclu- in the Tulare case regarded sion that this court all prop- erty of a other than generating plants and part powerhouses distributing system. as This court with concerned, was there not labels a division of distributing property producing system, into but subject not property property was and that was with arbitrary land, any charge. franchise classification warehouses, equipment, buildings, garages, office construction equipment, laboratory equipment as automotive and other entirely part part than of the distribution rather part production production or as of both systems producing agen distribution or as “other [revenue] (188 664, 681), cies” Cal. would not be unreasonable pointless. property Even if all of the other than generating reasonably re plants powerhouses could be garded entirely part utility’s system, it distribution gross receipts thereto should would not follow that charge applies. fund to which the 2 cent included admittedly Thus, property part system. Tulare case Yet this court abundantly made it clear that attributable to property subject were 2 per charge, such not to the property subject any since such was “not franchise charges.” For the same reason parts
other subject the distribution are not charges subject franchise charge. not Plaintiff quarrel capital does not with the investment method allocating gross receipts particular as such for to a operative item or fact, class In it. it uses apportionment that method itself in produc- between own tion although and distribution. Plaintiff contends that “plausible” “entirely correct,” method is there no occasion to use it as defendant uses and that unless it is plaintiff apportion gross limited to the use of it makes production between distribution, defendant will get a double deduction for purpose: the same (1) the deduc- proration tion taken mileage on a basis for re- ceipts private rights way attributable to (2) the deduc- taken, tion proration before the on a basis, oper- ative way. located on This contention validity assumes the of the distinction, length discussed at above, plaintiff would make and dis- *8 tribution and the conclusions it would draw therefrom, and simply way is another asserting of only gross receipts generating plants attributable to private rights way of can be excluded from the to per base which the 2 charge cent applies. There is no double deduction for purpose. same way receipts private rights of
Gross attributable to gross receipts private property not located rights way separately from the base to which excluded 2 per charge applies, duplication, cent or over- without for lapping, reason—they property the same arise subject any charges. not franchise justify repudiation of the
Plaintiff would also its principle gross receipts that defendant’s arise from all operative arising from gross receipts its and that operative property all other than franchises must be excluded 2 per charge computed, the base on which the cent following theory: Broughton on the The Act allows the utility per gross receipts to retain 98 as cent its total percentage applicable requires to its pay receipts it to 2 per to cities and counties cent of its (less way) those attributable to for the use property; if were more of it allowed to take gross receipts applicable its private property, to its get (1) would a double deduction: the amount so taken and (2) per theory the 98 cent it is allowed retain. This ignores Broughton limitation in 2 per Act that charge cent applies, gross receipts, not defendant’s total only “arising but to its receipts from the use” Thus, by express Broughton franchise. terms the Act only allows per per to retain not cent but gross receipts private property subject cent of its from its charges, per gross receipts to franchise as well as 98 cent of its arising from the use the franchises. It is not 2 gross receipts only of its total receipts “arising from use” of the franchises that payment for the exacted a use such franchises. foregoing theory plaintiff’s simply slight modification, purportedly made in obedience to case, the Tulare another suggested by contention. it that the Tulare ease should be disregarded proration should be there the entire on mileage pointed length basis.2 As we have out some above, at advancing plaintiff specious argument 2In this contention makes the all means without deduction and that there justification deducting is no more a cent from than manufacturing price there would be to deduct costs from the retail gas appliances computing gross receipts. a sales tax based on There manufacturing costs, gas, opera is tion or other costs. Gross franchises no deduction here cost of costs of that are attributed to the use of operative property gross receipts. and to other are still There
139 Diego Corp., ante, City Cal. Tel. v. Southern San of pro not what the statute pp. 14], 124 that is 110, [266 justification prorating for no more total vides. is There rights of than there would be receipts between gross receipts franchise attributing total to each used 2 of requiring utility pay to its total and granting of numerous cities and counties to each the franchises. judgment
The is affirmed. J., Gibson, Edmonds, Sehauer, J., C. J., Shenk, J., J., Spence, concurred. J. I dissent.
CARTER, accepted appears company formula, It to me that the majority, attempts every possible dollar of to deduct capital they invested from the distribution before compute the value attributable private ways. they to or In either this manner seek county’s pipe to base the share on more than little ground. complete misconception Broughton This is a of the interpretation court in Act this the Dinuba case. (County City Tulare v. 664 P. Dinuba, Cal. 983].) during that the “shall Broughton provides Act county municipality or pay franchise life of the grantee gross annual (2%) of the percent two possession of the fran- operation, or arising use, from the meaning of these interpretation to giving In an chise.” (p. 673) case, supra, the Dinuba stated court, words this gross receipts ‘use, “arise from the corporation’s ’ alone of these franchises over possession, or operation use, opera- from the highways, but likewise streets and private rights power-houses possession or tion, subject named are not to franchise way. The two last county municipality is not entitled under ch'arges and the any part gross receipts these the law gross receipts proration but a from is no deduction between subject charges property that to franchise just gross receipts plaintiff’s not, from as there no deduction way. rights argument proration of between Plaintiff’s necessarily proration lead to the conclusion that there can be no would receipts, way, every even that for fran- of chise granted city, pay each must defendant gross receipts. of its total privately parts system.” owned court then This went say (p. 681) step accounting that “The first question proportion should be determine as a of fact what total, public utility amount justly distributing system should be accredited to its over distinguished way, power plants various producing agencies. or other “This will establish the percentage from which the fund earnings arising operation the use, possession’ *10 of the various franchise easements shall ascertained. percentage
“The of apportioned this fund to be to the respective public franchises proportion will not include the of such of system the distributing as are at- private rights tributable to the use of way of occupied by utility, part the as such of subject the is not to charge.” (Emphasis added.) franchise import language of clear this is that we The are to first gross revenue that from amount attributable deduct to the system. This leaves us with the gross amount of system. to entire attributable the distribution revenue We proportion determine what of these earnings then must of system to the entire distribution attribute to the distribution ways system public on to contrasted the distribution private ways. was clearly located on Such this court’s view 676) (p. in the Dinuba case when it said : “The reasonable language construction of the used is county that each municipality percentage is entitled to its of the earn- ings arising highway, use of its proportion arising from highways the use of such that the bears way attributable to all the of to system.” determining In of entire what share the distribu- public ways to earnings tion to attribute and what share ways to this court felt mileage relative appropriate of most each was the basis. This was illustrated following page statement 681: “We have adopted appropriation, to the various of this way, according mileage, necessarily to not as an exclusive method of distri- gross receipts, practicable bution of the as a where one the various contribution easements to the franchise of gross earnings cannot be otherwise . determined. . . There may extent or be instances where the of value the distributing given right of may over a indicate its earning capacity; or where the service lateral may lines be differ- conduits entiated from main in the value of that of their use easements. In such cases these conditions should be account. where, happen, taken into But as will often con- earnings rights way gen- tribution to the the various is why eral and no indistinguishable, we can see reason proportionate mileage apportioning basis should not be used statutory percentage receipts.” (Emphasis added.) proportion
Thus we determined what see that once we have to the entire is attributable system, determining we must method of what find some proportion ways portion what public ways. practical attributable to The most method doing mileage so An example use the relative basis. application given by was this court in the Dinub a case (p. 676) where may it said: “It be assumed dis- tributing covers six hundred miles of easements. The proportion chargeable derived distributing system to the use should be credited mileage. this entire mileage may One-third extend private rights over of way which subject liability. remaining franchise two-thirds by county covered franchises is entitled two-thirds two amount, and each is entitled percentage of this two-thirds in proportion *11 mileage of its franchises bears to the the total mileage covered by all the franchises.” (Emphasis added.)
By language court, this in the Dinuba case, made it extremely per2 clear that the cent was to be taken from that portion total system the the distribution public attributable to the distribution on ways; that earnings exact of each mile in the the always cannot accurately determined; that the value of portion each necessarily the distribution is not indicative of its capacity and earning therefore the best method of prorating earnings of the the entire distribution public between private ways and is to mileage use the basis. All of apparent makes it that this court established a rather simple whereby formula we portion first determine what of the total gross receipts to the distribution system, and practical then, as the best method of prorating these total private and ways, we use mileage the basis. From relative the receipts attrib- public ways governmental utable bodies granting the 142 proportionate
franchises are per entitled to their interest. What could be clearer ? by
As stated of Appeal opinion the District in its Court (see County in this Angeles case Los Counties v. Southern Gas Co., (Cal.App.), 665) Broughton : “The recognized Act justice a allowing credit for property by exempting charge. from the franchise The Dinuba step case went allowing apportionment further an cent toll any charge so as to for that eliminate proportion of private rights way. over gas company is accept granted not satisfied to the benefits by Broughton both the Act decision, the Dinuba and in addition thereto it takes the additional deduction facilities located on property by the utilization ‘capital the so-called accounting.” investment method’ of proposed by The formula county accepted Appeal District Court of pattern follows the as established gas in the Dinuba company, case. The hand, the other seeks to use a combination formula which includes some suggestions of the Dinuba case but which also includes other designed several calculations to reduce mini- bare county. mum the amount due the For a clearer understand- ing gas company’s departure from the formula in the case, may Dinuba be well compare at this time to county used gas methods company. begin To with it should be noted that both county gas company accord as to certain calculations even though they stages are made at different respective starting point formulae. As a both company agree in 1939 capital equalled total invested $31,216,081.13. From this both intangibles, capital deduct general capital facilities office invested in $28,548,380.17 facilities. This leaves a total of portion as that capital of the total which is invested in the distribution system. the extent of Once the distribution system, as con- producing system, trasted to the has ascertained, been step (under should case) next Dinuba be to determine proportion what can be attributed to system. required the total distribution This under the *12 county. formula county Dinuba and is done Thus the of capital calculates that the amount invested in distribution per per is 99.1306 contrasted to .8694 cent invested per facilities. Since 99.1306 pro- capital duction and distribution invested distribution facilities it follows that 99.1306 cent of the system. should be credited to the entire distribution This is logical approach, reasoning this is the the Dinuba case county, gas this is the formula used company another seeks still deduction. Rather than deter- capital mine the amount of invested the entire distribu- system they figure tion only seek a which includes the dis- capital way. tribution invested in they To do this $7,556,603.15, deduct which is the value all distribution capital property. consumer’s or on leased It is major respect gas company that the departs formula Dinuba case and differs formula.
By doing gas so company deducts over 25 cent of the value of the entire distribution computing before attributable to system. the distribution This only capital leaves invested in of way and has the basing effect of attributable to the distribu- tion on little more than the value of the pipe ground. departure It is a from the strict formula established in the decision Dinuba case. gas The net result company formula is that it does compute for the entire distribution system required by ease, Dinuba but it tries to limit the fund to those only to rights way. attempts It to exclude some which is located on property in this preliminary calculation, when such exclusion properly should be made on the mileage basis when the ratio of system is determined. already pointed
As has been out in the Dinuba case the portion value of an isolated of the distributing system is not necessarily earning capacity. indicative por- Certain may tions are new have greater value but far less earning capacity than some of the older sections which have great little book value but a of earning deal power. The may terminus conduit one the most extensive parts of the line but that does not mean that the meters and terminal equipment account for most all the earnings and transporting that conduit earns little or nothing. Thus we can see that while amount capital invested in an system may entire be some indication of its earnings, we segregate portions cannot isolated and determine that its dollar value is a correct measurement of earning *13 pre- For Dinuba case
power. this reason this court in the compute gross all the ferred system prorate them between entire distribution and then private ways on a basis rather than the deducting part basis. This such on a dollar value necessary practical contributions of since as a matter the portions gross the the of the distribution various otherwise be determined. cannot recognize portions that some the fact majority fails to may in dollar are low value system which of the distribution great greater portions than other power as earning have an misconception Based on this high book value. have a making relationship there a in rate that “As it states earns; property and the amount it the value between the produce the dollars that property in the the dollars invested every opera- dollar invested receipts. Since form the equal part receipts, earns an tive particular opera- item class of a attributed to receipts are invested it.” according to the dollars Granted tive corpora- relationship between the value a is a that there earns, recognize it we must amount property and the tion’s generalization. might Thus of such a broad it the limitations relationship between the value of the there is a said that earning power; system and the extent entire relationship a might there is between the be said that or it amount entire distribution value relationship between value of general earns; but such a degree earning power cannot be property and the every example, building assume that For too far. carried connection with main “A” has direct conduit a on Block $100; book value of conduit has a that line; each that using gas ranges; restaurant buildings is a serviced one of the buildings bakery using gas ovens; is a that one of the buildings unoccupied; buildings that one two apd locker; that one by food of the occupied a frozen type market. From this occupied a meat buildings is clearly be seen that it can amount situation factual serviced vary various customers will gas consumed though the value of extent even conduit a considerable building the same book value. we $100 has Thus each into earning vary of the various power conduits will that the s-'e same number of fact that the dollars is invested of the spite, each; generalization that earnings have and therefore invested has its relationship to dollars limitations. dollars relationship Granting there is earnings, is not there system and its in an entire invested par- value of between the always relationship an accurate earnings. In view of portion of the ticular “every majority has) that (as say this it is not correct to equal part earns an operative property dollar invested “gross receipts are attributed receipts,” and that according operative property particular item or class of ato By this added.) (Emphasis in it.” to the dollars invested theory (following advanced reasoning majority earning power of gas company) contends *14 value of the invest- public must limited to the actual ways ways portions of various other the rights of after ments in they compute Thus system been deducted. distribution have portion of particular on a the distribution dollars earned the though such method basis even a system on a dollar investment system an as contrasted only applied to entire is feasible when part. to an isolated recognized by were limitations court the
These 682) may : "(p. when it stated “There be in- Dinuba case distributing system or value of the where the extent stances given right way may earning capacity; indicate a over where, happen, as will often contribution . . But . general earnings of the various is and indis- why we no reason tinguishable, proportionate can the see mileage apportioning statutory should not be basis used gross receipts.” compute Thus order to percentage arising use, operation possession public franchise we must first of the determine system entire receipts of the distribution on mileage and then a prorate public these private basis ways. $7,556,603.15 part of
By as seeking to the dis- deduct system or on leased tribution on consumers’ per mileage 8.603 cent of the seeking to and later deduct company private ways gas attempt- is being located on portion of ing a The form of double deduction. the'distribu- high at each line is system located the terminus tion mileage gas company ($7,556,603.15) but low so value portion on a dollar The to deduct this basis. other seeks ways system private on portions distribution do (approximately $2,400,000) for as much value so account willing gas compute portions on company these gas mileage attempts Thus company basis. to divide system ways parts. the distribution on into two part having high they one ($7,556,603.15) value seek to portions having deduct on a dollar The other basis. lower (approximately mileage $2,400,000) higher dollar value but a they mileage Actually value seek to deduct on a basis. gas company entitled from the re- to one deduction ceipts of the single distribution and that is a deduction proportion system private ways. on distribution portion This should running include that over private ways company, private ways owned leased private ways merely the company, company used private ways and all other forms of including the conduits equipment running Why to each consumer. should there private ways be a distinction between on prop- consumers’ erty ways part and other f It is all distribution company and the will be portion credited with that on private ways the distribution all mileage on a basis.
By gas company these calculations the has reduced the' $6,537,430.70 total rather than the $9,537,137.16 total of reached under formula. 91.3963 Since the distribution ways ways, fund from which is to be taken, should total $8,716,590.49 instead of $5,974,969.77 computed by the *15 company. gas result of company’s The the net double deduc- county Angeles tion for 1939 the is that of Los having 15.3831 ways public the would be entitled to $18,382.60 $26,817.63. rather than no Broughton
There can be doubt that the Act as well 2 per as the Dinnba ease intended the cent to be taken from the to the distribution after proportion private ways the attributable to had been deducted. manner of or However, deducting excluding such items proper is not must be consistent. It to exclude part ' the distribution located on property on a dollar invested basis and the balance on a mileage basis. term adequately
The was by defined the Dis- Appeal (County Angeles trict Court of Los v. Southern Co., (Cal.App.) 259 665) Counties Gas P.2d when it said: authority has found to “No been define the term ‘gross re- anything ceipts’ other than the mean total without deduc- ‘ it ; beginning tion means all ending business
147 ’ 176 (Pacific Roberts, v.Co. Gas & Elec. within state. language ‘plain is 845].) phrase 183, P. Cal. 189 [167 un plain, “perfectly . . requires interpretation . no plain in its sense language” ... it must be taken equivocal expressly modi as deduction save without limitation ’ Johnson, (Bekins Lines, v. by Legislature. Van Inc. fied all receipts mean 421].) 135, 21 140 P.2d Gross Cal. 2d [130 employment growing out of the receipts arising from or (Robert capital designated business. in its corporation’s 388].) Is there Cal.App.2d 610 Johnson, son v. 55 [131 for the Legislature intended doubt then that the highways on which to public pay as a toll for use gross receipts ? per2 lay cables, its pipes, tracks doctrine strict fortified “These conclusions are New 1107, (No. ordinance basic franchise construction. The upon granted each Series, 1924) provides that ‘the franchise the ordinance every herein, and in condition contained against strictly construed granting the same shall ever be ’ protection grantee. provides for When a franchise the board interest, assumption fair public duty trustee perform its supervisors endeavored to for the were inserted provisions for advantages. securing all substantial purpose of 214.) principle construction (38 general It is Am.Jur. granted persons or cor- state to that franchises pub- most favor porations strongly must be construed by implication nothing is arises, to be taken lic. If a doubt against public rights. (Clark City Angeles, v. Los 722]; & Elec. 30, 38 P. v. Gas Cal. Sacramento [116 Pacific 978].) Co., 787, Cal. P. “From all that is said above it unavoidable that strictly franchise must construed in favor of the respondent pay construed and as so should full year cent of its each the life its franchise except with no deductions those attributable to proportion of capital the distribution belonging utility.” appear It the eases majority would also cited adequately company distinguished by were Appeal (County Angeles District Court Los v. Southern Co., supra, (Cal.App.) 665) Gas 259 P.2d Counties *16 following Corp. discussion: “Ocean Park Pier v. Amusement 879], City Cal.App.2d 40 Monica, 668, Santa 76 [104 cited company support readily position, distinguishable. city In that case the exacted the full statu- tory toll for the use its own and in addition sought charge corporation’s to exact a for prop- the use of the erty. It properly pay- was therefore held no franchise ment private property need be made for the use with re- spect to no public property was contributed or used. In bar, however, gas company consistently the ease at has operations utilized in its and of course could operate public franchises, for an instant without attempt record no by appellant discloses ‘to include ’ grant, no proprietary interest, land over which had was City true of authority, Santa Monica in the last cited page 86. “Respondent City cites also v. Monrovia Southern Co., Cal.App. authority
Counties Gas 117], P. page its contention. The court said at 660, ‘In accord ance with this method Dinuba de [from decision] . portion fendant . . its earnings attrib [eliminated] ’ properties utable to the use on located property. portion above of. sentence, context which re spondent quotes, makes it clear that allocation decision, dispute formula the Dinuba under no in the case, instant is referred to. But event, the issue involved in the Monrovia action was whether or city not the entitled was collected within ’’ city, point not at all involved controversy. in the instant If abide case, we are to decision the Dinuba if fair we are insist and consistent formula without deductions, and if we are to double construe the franchise (as strongly required favor of the by law), most judgment we must reverse the rendered then trial court. judgment. I
For these reasons would reverse the rehearing petition for a Appellant’s February was denied ‘ Carter, J., opinion 1954. 17, petition was granted. should be