*1 596
Power Co. v. owner, the defendant to show that he entered under a license from the right. question or under And on the of bona a bona claim of fide claim, only he be- such the defendant must show that fides right lieved he had enter, grounds but that he had reasonable v. Glenn, N.C., Durham, N.C., belief. S. 121 S. 546. But where tending there evidence to show believed and ground enter, had reasonable to believe in his then in addition to right, question his of his bona claim of fide proper way must be in some passed upon considered and before he can be nothing convicted.” complain Defendants have of in charge, to the evidently and their counsel thought by so mentioning charge joint brief filed with us.
Defendants’ motions in arrest of judgment, which the court over- ruled, and which assign defendants error, not mentioned in defendants’ brief, and are taken as abandoned defendants.
All assignments of the of error have been defendants con- sidered, and all are overruled. Defendants have not shown the viola- tion of of their rights, rights or of the them, one of guaranteed by the 14th Amendment to the Constitution, Federal I, Article of the North Carolina § Constitution. No error.
DUKE POWER COMPANY THE TOWN OF HUDSON v. BLUE RIDGE ELECTRIC MEMBERSHIP CORPORATION
(Filed January, 1961.) 12— 1. Contracts § parties A will be contract construed effect the intent of the un- contrary less such intent is to law. 2; Same placed upon interpretation contract themselves ordinarily be followed the courts.
will preclude membership corpo- Electricity held not 2— Contract § municipality. customers ration power company and an A between legislation implementing regard corporation, and Federal electrification, requires corporation pur- which contract rural electricity solely company from the for the chase “primarily” homes and to rural farm who resale consumers are mem- any incorporated and who are not located bers N.C.J Membership Ooep.
Power ». Oo. *2 selling .town, preclude corporation city from to or is held not to the merely purchased power company its members current from the because corporate village, being such of this members reside within the limits gathered the intent of from of con- the a construction the being interpretation as a and of tract whole consonant with the the parties themselves, having residing company with- the served customers corporate municipality inception limits of from of the the the years prior action, contract until two to of and the institution some years municipality territory several after the had annexed additional and by statute, ceased to be a rural area as defined the Federal USOA Title VII, 913. § 4. Same: Utilities Commission 3—§ approval by public the Utilities Commission a contract between gives utilities the contract the force and effect of an order of the Commission. Municipal Corporations 2—§ Municipal corporations power enlarge corporate to have the their
limits, subject territory and when do so the annexed and its citizens regulations municipality. to in in all ordinances and force the (f). G.S. 160-453.5 Municipal Corporations 18—§ power grant public municipal corporation to A to franchises utili- ties, 160-2(6). right implies to to franchise the control xiower public benefit, including among things, right fix other the reason- specify rates and to franchise be exercised to able where the adequate public. afford the service to 7. Same: 2— Utilities § municipalities grant delegating power By franchises to the power utilities, Assembly deprive did not itself of the the General right delegate part, specific in in or or the control utilities whole authority agency. regulate power com- another electric panies except municipally delegated those owned has been to 'the Utili- ties Commission. G.S. 62-30. Municipal Corporations mem- in electric 8. Same: 18—§ bership corporation by by municipality. is not terminated annexation membership corporation an and a contract between Where corporation only company provides power its mem- that the should serve company corporation nor should neither the the bers and that preclude acquire other, from and customers the the contract does corporation merely from its members because of their resi- the incorporated village, corporation within an the dence incorporated to its members who' vil sell current are inhabitants of the lage, annexation, pro- or who come within is not law, corporation being hibited by terminated change urban, community character from rural to and power company having the contract between given approved having been been the Utilities Commisison thus the eSeet of an order the Commission. J., concurring. Parker, concurring opinion. J., joins
Moore, Appeal Term, of Farthing, J. June 1960 Cald- by defendant from well. issuance Company begun by Duke Power This action was Mecklenburg Superior from the Court County of summons On to Caldwell was, defendant, motion of removed August 1959. on sought injunctive relief to defendant prohibit County. Plaintiff Town selling electric current or inhabitant franchise it had a sought, alleged Hudson. As a basis for the relief it,had inhabitants; municipality to serve that and its from Hudson twenty years, approximately selling current to been to- defendant action, selling was, at institution of the current ¡’cur- to written for resale to members of defendant pursuant contract any incorpo- contract, not, rent could terms of the be resold continuing to violatedi and was vio- city town; rated defendant had interfering performance with it in late *3 only plaintiff’s imposed franchise; by injunction could duties rights protected. be alleged only denied sales
Defendant violation of It contract. members, been re- to its some of whom resided had Hudson; many from ceiving years; current the sales so made defendant permissive alleged under with were its contract Duke. It violation by plaintiff and, breach, of the contract because of the asserted injunctive sought relief. January permitted
In was become Hudson to intervene -and party legisla- It plaintiff. alleged municipality was a it created it had act; granted Company tive franchise to Duke Power sixty years supply the town and its inhabitants with electricity; granted defendant; no franchise to defendant was furnishing residing electric current to inhabitants the town within corporate limits fixed when it was created in in. ad- dition providing to such service was electric service to citizens of the town who became citizens extension of corporate boundaries. prayed compel It court property to remove its corporate limits; which within its that defendant be permanently enjoined constructing maintaining from electric lines within the serving from town or residents town. iRJni¿mmxu tiijLiwL
oaoj-lLüuuj xiJL N.C.]
Power Co. Hudson, Duke, For brevity the are hereafter referred and Blue Ridge. jury supplying was
A trial was court found Duke waived. Ridge selling Blue resale, Ridge with current for and Blue was cur- corporate to its residing rent members within the limits of Hudson. Ridge Some these citizens Hudson when Blue members were began first supply them. were made citizens annexation Some they'began had, Ridge after receive but Blue did current. not have a from on the found franchise Hudson. Based facts as here amplified enjoined summarized in the opinion, and as the court Blue providing person residing electric service to inside Hudson, including granted annexed areas. Ridge permission, approval Hudson, Blue sell all of properties required inside of Hudson. It remove, months, poles, appliances twelve its wires, all from the streets 'buildings any portion situate in of Hudson unless sold with enjoined assent Hudson. It also from *4 long present of the citizens of Hudson so as the contract between and Blue continued in effect. North Carolina Electric Membership Corporation, acting on be- membership corporations pursuant half- of created 117 of c. Statutes, was, upon petition, granted permission General appear amicus curiae. to the
Defendant, having excepted judgment, appealed. Hudson, plaintiff appellee. L. H. Wall Town for of Ward, Carl Horn, Jr., Jr., William and Townsend <feTodd I. for ' Company, plaintiff appellee. Duke Power appellant. Williams and Claude Whisnant and F. Seila for defendant Crisp curiae, William T. amicus North Carolina Electric Mem- for bership Corporation. J. The between Duke and at lies Rodman, controversy. contracts, (Actually the threshold of there two are place designating each where Duke will connect with they current, lines to furnish but are so as identical far material case. single decision Hence are treated as instru- ment.) Each of these interpreta- bases its relief on its ¿
^ X ^ J o-l T\-T t ACfT HTVL i. THE IN SUPREME COURT. Power v. Oo. party to days from one period by sixty end of an annual notice
the other. provisions pertinent to the of this case read: decision shall power
"FOURTH: The hereunder electric delivered is be delivered for the to rural homes and primarily of resale farm consumers in Caldwell who are members of the ‘Consumer’ County, any incorporated North Carolina and who are not located city or furnish electric party town. Neither shall furnish or offer to energy anyone service, is re- who, proposed at of the the time capable ceiving premises are other, electric service from the or whose of being by existing served without exten- facilities of the other sion system by of its distribution than the construction other secondary party exceeding length, lines not nor shall either feet authority, duplicate by properly unless ordered so to do constituted facilities, except duplication the other’s insofar shall be as necessary energy in order between unconnected to transmit electric points on hereunder shall be power its lines. The electric delivered solely users, distributed ultimate and shall not Consumer firm, person, be sold or offered for sale Consumer municipal resale, or sold or corporation or other or association receiving anyone for sale who electric offered Consumer to is existing premises capable being or are served service whose exceeding 300 (including secondary lines not facilities additional system to length) any municipal feet in or distribution which other Company power resale, except where such Power sells electric municipality or other refuses to furnish such distributor service. contract, cause not, during shall the continuance of this Consumer Power permit power, or electric source other than the Com- system supplied of its pany, portion to be distributed over that without the written consent of hereunder, delivered Company.” the Power shall be sold or other- All such electric which
“SEVENTH: any person, firm or disposed wise the Consumer subject disposed sold to this contract.” shall be subject rates, rules, This contract to the “TWENTY-THIRD: Company the same regulations and conditions of the Power now on file with the Utilities Commission North lawfully changed or modified from Carolina, and the same be time, rates, rules, regulations time to and such conditions are *5 part fully contract to the effect as if made a same set forth herein.” provided binding
The that it should not be approved contract until 1960. N.C.] Power Co. the Rural the Administrator Duke’s Board of Directors and States. Administration of the United
Electrification been conditions, has contract, including The its terms and all of formally approved by Commission. the North Carolina Utilities interpreting
This the con- background presented is the factual of c. 117 Ridge provisions tract: Blue came into existence virtue years it has been eighteen General Statutes. For more than County, purchasing Duke for resale in Caldwell of 476 including County the Hudson with an area area. Caldwell square had, census, only 7,888 miles urban according to the 1950 citizens, remaining in- all of whom lived in the town of Lenoir. Hudson, incorporated habitants are listed census as rural. by legislative The 1960 1905, had, 1950, population act 922. gives census population of 1536.
Between western March 1942 and June 1954 six homes near the boundary of to Blue corporate Hudson within its limits connected Ridge Ridge. lines and have been from Blue Duke receiving current did not at that time these homes. have a line within 300 feet of Ridge Blue did have such a line. July boundary
In changed portion 1956 Hudson of its western so as to Ridge include a home with Blue lines in connected October September
In changed 1957 Hudson its boundaries include an tp area at its brought corporate southeast corner. This action within-'its limits two homes receiving which were and had been current from Ridge Blue brought corporate since 1941: It also within High receiving Hudson School which had been current from Blue does appears, since October 1955. So far as not have transmission line this area. boundary April changed bring In 1959 Hudson its western so as to its homes, receiving limits eleven members of and Ridge. current from Blue between contract Duke and headed “RURAL early Duke had
RESALE.” a franchise from Hudson as 1927. /as This franchise was in 1950. renewed Notwithstanding rights, its franchise Duke furnished current Ridge, which resold to members, Hudson, inhabitants of early as 1941. contract between the made in June 1952 provision contained a identical with present section FOURTH of Notwithstanding provision, contract. this Duke continued to sell to Blue members, resale to its inhabitants Hudson, from June until the institution of in August this action *6 TTTjx
UtfUL ilVib. Power Co. v. seek to ascertain contract, courts upon interpret
When a called does not if that intent give parties the intent of the effect to interpret, To require prohibited act law. performance of an parties intended to accom- we must the result which the ascertain corporation, plish. Manifestly, Duke, private a was purpose purpose Ridge, of Blue profit. -to sell at The its wares a (electricity) fullest nonprofit promote encourage “the' cooperative, was to possibly energy use in the rural section the State of electric of the at making energy to inhabitants available economy prudent manage- lowest cost with sound consistent (cid:127) ment 117-10. . . G.S. is sold “for the of resale contract declares the current members, who are primarily to rural homes and farm consumers and who are County, in North Carolina ‘Consumer’ Caldwell city or town.” any incorporated not located in : for Manifestly rephrasing statutory purpose this is a mere does not cooperative which the created. The contract was define (c. our statute 117'of the consumer, rural home or a nor does farm Statutes) of electric authorizing the creation General of a rural home or rural area. contain a definition electrification, VH,’USCA, providing rural Federal statute Title 913, “any area of the sec. defines a rural area as United States any city, village, borough having included the boundaries hundred inhabitants.” Hudson and population excess of fifteen were, when this County except the town of Lenoir Caldwell n within the Federal made, rural areas contract was definition. . contracting parties is, think, intended to manifest legislation relating., Federal elec- implement both State and rural Denny, prior contract, to the execution of /., had, trification. this legislation North Mem- said: “The Carolina Electric implement Congress (cid:127)bership Corporations was enacted to Act . . creating Rural Administration .” Utilities Com- Electrification Municipal Corporations, 193, 248 N.C. 90 S.E. 2d mission v. .519. parties pointedly called attention to the Federal themselves by requiring approval by the Federal Administrator to make Act phrase “who binding. To hold that are not located the contract intended any incorporated city prohibit or town” was it from village residing of Hudson who had been members years many would, opinion, in our receiving do violence current cooperative. think cer- of the We between members crimination given approval would have his Federal Administrator tain the meaning to the words give the same It would to such a discrimination. is manifest were used as hav- “solely,” when it “primarily” and meanings. ing .different in contracts between the
Although phrase had been present years prior five execution con for more than interpretation put language had been on the at the no such tract, interpretation placed executed, time this contract was nor was such . As nearly years elapsed thereon until two after its execution J., Co., Fibre 200 N.C. 157 S.E. Stacy, said C. Cole v. general language employed from the is, where, rule
“The *7 contract, meaning appears question arises, of doubtful and it that parties interpreted contract, practically themselves their have otherwise, ordinarily interpretation, the courts will follow presumed it that is to be a contract know best what terms, was meant its and are less liable to be mistaken as to its intent.” and prohibit Ridge selling We conclude the contract Blue does purchased merely members current from Duke its because corporate within the reside limits of Hudson. brings question:
This conclusion us to this Is the contract Ridge Blue sell to members who are inhabitants of Hudson legally prohibited? invalid because (cid:127) The on invalidity facts which is based asserted are summarized Findings and as follows: Blue Corporation “6. Electric op-- has been . erating adjacent in areas near or the corporate limits of the Town twenty years of Hudson for more than and has had several lines corporate within the limits of Hudson at the places, and constructed on on the dates, Map shown attached Number 1. Prior to the in- stitution of action Blue Ridige Electric Membership Corporation electricity supplied to six consumers within original corporate When Blue Hudson. was advised and notified Toym supplying electricity it was inside the of Hudson to withdraw from the refused town and still refuses withdraw. “7. Blue does not have and has never had a franchise from operate Town of Hudson to its boundaries, nor has it sought a franchise from Town of Hudson.” contract, having formally approved been by the Utilities Com- mission, effect an order of the Commission, binding on each of parties. Section FOURTH substance and effect P3
Power Co. Ridge, mak- and between Duke prevents competition unbridled respect to the authority the final ing the Utilities contracting lines extension transmission and each parties. electricity which village Hudson Ridge’s right in the to sell delegated control on the depends
Duke contracted to sell (b) the Utilities (a) municipal corporations, Legislature Authority (c) Commission, the North Carolina Rural Electrification approval. with its created enlarge Municipal corporations permitted expand corporate enlarged When so 160, limits. General Statutes. Art. c. subject territory the annexed its citizens are to all ordinances (f). regulations municipality. 160-453.5 G.S. force Every by statute, 160-2(6), grant town engage within the public utilities, is, franchises to boundaries in of a Businesses re- business nature. *8 quiring sovereign permission operate transpor- to are multitudinous: goods tation of persons by carrier, and railroad or motor trans- mission of telegrams, power, transmission and distribution of electric sewerage milling, water and systems, telephone systems, public bank- ing, transmission gas petroleum products pipeline, of and and railways street many are illustrative of the kinds of but businesses may require which sovereign approval. sovereign right
The implies to power to franchise control for public benefit, including among fix things, right other to reason- able rates and to specify may may where the or franchise nob be exercised so as to adequate afford service public. Hood, to Pue v. Comr. Banks, 222 N.C. S.E. 2d 896. Legislature, by granting municipalities right The to to franchise, deprive power delegate did not itself of the to control or to other public agencies specific the right to control in whole utilities or part. That it did give not intend to exclusive unlimited or control municipalities by grant is, think, ap- franchise we parent from other legislative acts. regulate many public power is, broadly utilities speaking,
delegated power companies to the Utilities Commission. Electric other municipally or express than those owned controlled are language the supervision under Utilities placed Commission. G.S. 62-30. expressly This section declares Commission is vested “with all necessary to require compel and power any public utility public or , corporation . provide service . furnish to the citizens of this reasonable State service of kind it to furnish undertakes . . .” N.C.] Corp. v. MEMBERSHIP
Power Co. is ex The Commission in G.S. 62-27. Similar directives found for rates services pressly prescribe empowered G.S. 62-36 by a mu those fixed supersede fixed municipality and the rates so nicipal Co., Water 190 N.C. Corp. franchise. v. Henderson Comm. 70, 128 Co., S.E. 122 N.C. Water Griffin im- gives require “to power G.S. 62-37 provements public and extensions to the service of necessary given mentioned in 62-36 deem . .” It . § power way “to utility, order lines railroad or membership by any electric crossed other to be ... utility given membership corporation G.S. 62-54. It is . . .” power speed through to fix the a rate passing of trains towns at prescribed by different from municipal 62-60. It ordinance. G.S. may compel telephone and telegraph companies to make connections continuous service, 62-73, and furnish service to served, G.S. 62-74.
Á utility begin operation cannot until it has obtained unless certificate necessity convenience and from the Utilities Commission. G.S. 62-101. clearly think, cited sections of our statute law indicate, we legislative delegation say to the Utilities Commission
when companies under what conditions shall furnish serv- ice, authority and this relates to service inside as well outside of municipalities. legislative is, think, reason for such action readily apparent. Except by municipally areas those served owned plants or electric corporations, the citizens of the depend primarily on power companies, Duke, four Carolina Power & Light, Virginia Power, Light, Electric & and Nantahala Power & supply them with current. To invest each of the towns served *9 these companies power with the regulate prescribe to the man- ner in which service be rendered inhabitants of the might town well lead to seriously interfering a chaotic condition ability with the utility equal to render residing service to all in the served area by it. Casey, 297, Commission 245
In Utilities v. N.C. 96 8, S.E. 2d we upon power were called to decide whether the company could sell portion transmission line to Kinston, its owner operator thereby system, depriving own electric customers residing an power annexed Kinston of the company’s area power services. The company no power franchise from Kinston. The company ap- plied permission to the Utilities Commission for to sell, asserting public longer required no convenience it to furnish service. The Com-
606 Membership Cokp.
Power v. Co. protest of customers of over the this to be a fact mission found J., re- Denny, area. after power residing in the annexed company of c. 62 of to other sections General ferring 62-27 and G.S. give the Commission Statutes, opinion, “In our these statutes said: impose upon duty pass upon it the only authority but one consideration to determine wheth- such contracts as the under permit public interest er or not it consummation.” is language of this (Emphasis supplied.) pertinency the con- It would apparent. between Duke and Blue is be difficult tract more positive language authority to find selling companies electricity Commission over Utilities an area by municipality. annexed Wilson, held in Commission 252
We Utilities N.C. municipality not, by franchise, procure could the device of favored for itself to the of other treatment detriment customers of a tele- phone company. upheld order We an Utilities pro- hibiting such favored treatment. authority upon determine final called between munici
Courts over operation utilities commissions public palities interpreted the statutes in favor generally of utilities have utilities Pennsylvania reasons are Willits v. manifest. Utili commissions. Jennings 105; Light 2d v. Connecticut A Com’n., 128 & Power ties 535; Geneseo v. Ill. Northern City Co., A 2d Utilities Co., Annotation, “Generally, 39 A.L.R. however, 2d N.E. given by statute commissions super power supersedes public utilities regulate vise and munici utilities, except spe palities such where the regulate municipalities.” cifically reserved Am. Jur. power lines operating
Any person to con along any or other public lines railroad but such highway, struct so constructed and maintained as not to lines shall be obstruct such highway. trafile on railroad other the usual or hinder now “highway” determine whether word need 56-1. We *10 municipal includes streets within that statute boundaries. used question with any not raise to the right does This case to its to maintain lines so require to inter Hudson its rightful uses of streets. Blue with other fere concedes Hud son’s U-U-1 right under (cid:127) police power ' . to - prescribe -I .. governing standards power companies to extend require It could not 117-2. State. G.S. expressly reserved power was purpose. That their lines for that purpose, when accomplish its To Utilities Commission. 117-13. pro lines extend their and to persuade power companies to unable to Authority could authorize the crea service, vide the Electrification Every corporation so membership corporations. created tion of electric accomplish necessary requisite all or “vested with capable being delegated ment of its the legislature . .” 117-17. . G.S.
In general power delegated, corporations -addition to the so these 117-18(6) were given by specific power, upon approval by G.S. Authority, North. “to Carolina Rural Electrification construct or place-any parts system any or along high- its lines way any over may be, or lands which are or now, property of this State, political or These membership subdivision thereof.” corporations given express are also power “to make and all necessary contracts or convenient for the full powers exercise including, this article granted, but not limited to, contracts with any person purchase or federal for the or agency, energy.” sale of 117-18(8).
The Legislature, by this section, made certain that when neces-
sary to
create
provide
citizens of rural
areas with electricity, the corporation so created would not
hamp-
be
ered
having to
permission
obtain
to function from some other
agency. Light
Co.
Corp.,
N.C.
Power Oo. v. Sanitary operation unlawful. original entry or its continued make the 2d 96, 105 249 N.C. S.E. Lenoir, District v. provide membership corporations to continue right
The of electric of a become citizens those members who annexation service to Arkansas, Supreme of the Courts municipality has been considered The was in each made to right Texas. serve case Georgia, and of the States which depend proper construction statutes on question presented. was the Coop. Corp. Arkansas, in Farmers Electric Supreme of Court 837, 2d L. 249 S.W. concluded that Co., Arkansas Power &
v. serve its members terminated right membership corporation a of a nonrural area annexation. when became citizens Colquitt County Co., v. City In Moultrie Rural Elec. S.E. 657, held no Supreme Georgia 2d Court of defendant had ap were the time of applicants to serve who at municipality which did plication citizens annexation of a statutory meet definition of a rural area. As determinative of controversy, the Court said: requisite is there “The of valid contract that shall be first a Code, Membership Corpora- able to contract. 20-107. The Electric § Supp. 1937, pp. 644, 645, 34A-102, Ann. Act, tion L. Code Ga. §§ corporations operate 34A-103, provides that such can city having population in incorporated of an ex- the boundaries by the census of 1930 1,500 cess inhabitants. Whether calculated 1950, City 1,500 excess of inhabi- or of Moultrie prior applications the time written were made to and at to the tants imposed by The limitation petitioner for service. Elec- electric Membership Corporation Act, that tric created under may operate receiving lines in rural areas not that act serv- corporation regulated by or a municipal from a ice is a limitation determined Commission, Public to be at the Service is application time the service made.” Georgia interesting Legislature that the is note enacted question here dealing
a law with the under consideration. This statute substance, is, in the same as the fourth section of the contract be- 430, Georgia c. tween Blue and Duke. See Session Laws 1960. Cooperative Electric Upshur Corp., Rural v. S.W. In State having Gilmer, company franchise from munici 2d 1,500, challenged population excess pality municipality. to sell current With those annexation, Court said: made citizens experienced difficulty which we have most in de- question “The N.C.] Core.
Power Co. those ciding Cooperative is whether the continue who persons City of who now annexed to the Gilmer reside in areas were Cooperative were time such areas lawful members of the at the it has that city. right. annexed to the court held that trial cited, Supreme cases above from the Court particularly cases sus- Arkansas, deny right. recognize the Act While *12 court, ceptible upon by of the it placed construction Arkansas still agree court lawful are constrained to with the trial that by membership acquired once annexation is terminated city of the provides area which the member resides. Act that is the resignation, terminated expulsion, or death There provision is no it member. that is terminated annexa- tion. members Since retain that annexation, status after and since Cooperative expressly supply energy authorized to its members, is our view it it is authorized to continue service them after annexation.” agreed has to a limitation it area which
may serve. This been approved by contract has the Utilities Com- may mission. The contract ignored by not be Duke. It contains a provision by which Duke be permitted provide con- service trary to the cantractual restrictions. voluntarily agreed to a restriction might of the area lawfully which otherwise only provide serve. Blue can its members. G.S. 117-16. is not terminated change in the character community of the rural urban. Blue has the duty and the to serve its members. The court erred in requiring it to remove or otherwise dispose of its properties within the corporate limits of Hudson.
Error and remanded. concurring. trial PARKER,J., required court to re- move within twelve months of its wires, poles, and appliances buildings any portion from the streets and all situate in town Hudson, sold town unless assent of the Hudson. agree upon holds this to be I Court error. the facts in the be- record fore us.
However, question on this I hold the view expressed same my concurring opinion in Dee Pee Electric Membership Corporation Light Co., original defendant, v. Carolina Power & and Town of al., et Rockingham, defendants, additional N.C. 117 S.E. 2d 764. concurring opinion. J., joins in
MooRE,
20—253