Mountain States Telephone & Telegraph Co. v. Ogden City
487 P.2d 849
Utah
1971
Check Treatment

*1 computed together in- balance provided

terest as and at- contract

torney’s stipulated by parties. fees supports findings evidence .

judgment is, of the court the same

therefore, affirmed respond- with costs to

ent.

CALLISTER, J., ELLETT, C.

TUCKETT CROCKETT, JJ., concur.

HENRIOD, J., does not participate here-

in.

The MOUNTAIN STATES TELEPHONE AND COMPANY, corpo TELEGRAPH al., ration et Appellants, Plaintiffs and CITY, corporate body politic

OGDEN under Utah, the laws of the State of Respondent. Defendant and

No. 12310.

Supreme Court of Utah.

Aug. 3, 1971.

granting the provided franchises pay were two per utility gross cent derived from sales Each within the limits. or- *2 setting provision dinance forth contained Mecham, Salisbury, Alan and F. David E. payments that such of were “in lieu” all Cott, Mc- Bagley, & Cornwall other-taxes, Van impositions upon charges and of. appellants. City, Carthy, for Salt Lake utility company. the revenue of the The plaintiffs accepted the terms the fran- of Smith, Richards, T. A. and Carl Jack specified chise ordinances within the time- Ogden, respondent. for in each. Cutler, Crellin, Roger F. and Jack August city adopted On the an City Corp., Lake City, Lake for Salt Salt imposed ordinance which an additional tax amicus curiae. against plaintiffs pro- each of the which per vided for an additional two of cent the TUCKETT, Justice. gross plaintiff. A revenue of each subse- complaint in the plaintiffs The filed quent extended the additional ordinance declaring that seeking a decree court below tax. adopted by the taxing certain ordinances imposed upon plain- The new tax was the city invalid. defendant taxpayers. tiffs but upon not the other to the district The submitted matter was facts, and of agreed plaintiffs court on an statement validity The the of attack the necessary pertinent to an under- upon grounds: (1) ordinance two the fran- follows: The- standing granted plaintiffs are as by of the case chises to the the Telegraph Telephone acceptance Mountain and the the conditions there- States system telephone contracts, in Company operates by plaintiffs formed levy Mountain Fuel in Ogden City and elsewhere. that the additional taxes viola- sys- gas supply Supply Company operates provisions of the “in con- tion Utah; Ogden City impaired obligation of each con- in and elsewhere. tracts tem. Company operates provisions an in of' the Light Power & elec- of the violation City and the power system Ogden trical and else- Constitution of the United States Utah; Og- or- (2) the defendant Constitution prior where. At times only applies grant- dinance is in that by separate den had invalid ordinances plaintiffs plaintiffs therefore discrimi- ed and is franchises to each natory. periods years. of 25 to Each ordinance dealing plaintiffs’

-In light works, with the first telephone lines or street rail- subsequent ways, contention revenue or or construction, authorize the Ogden impaired obliga dinance operation maintenance and of the same * * prior by others, tions contracts we are first *. determining problem faced with the language The of the statute contains no whether was authorized to grant authority to the enter into into enter contracts which would limit the any dealing contract taxation. city’s power to assess and collect taxes. At only other statute with the must outset we make determination levy of cities to 10-8-80, taxes is Section of whether the Constitution and statutes of U.C.A.1953, provides: give municipality power to bar away

ter its to raise revenue tax They may raise revenue levying legisla ation. Cities are creatures of the collecting a license fee tax on power except ture and can exercise no business within city, the limits of the granted. must first * * We determine whether regulate ordinance; the same *. Ogden City expressly granted right was All such license fees and taxes shall be provisions enter into the “in lieu” upon uniform in class granting the ordinances imposed. *3 carry separate on

franchises to serv We find no language in the statutes city. ices of within the limits the We find might above referred quoted to and which specific provision no Constitution the nor grant be power construed as to franchises, statutes with nor city to enter a contract into which would parties have the herein our attention called exempt person corporation or from provisions. to power such The aof payment of taxes thereafter levied for grant emanate, the franchises must years. period being grant no There all, provisions if at from the of Section authority part on the the city to enter 10-8-14, U.C.A.19S3, provides which as fol provisions “in into the of the fran- lows: chises, compelled we are that conclude construct, They may op- maintain and beyond provisions were waterworks, gas works, erate electric and therefore invalid.1 Light Co. v. Railroad Comm., 1. ex State rel. of St. Paul & Wis. v. St. Paul 153 City Ry. Township Co., 331, 592, 491; Spoerl v. Minn. 142 78 81 N.W. N.W. 200; Pennsauken, 186, Walla Walla v. Walla Walla Water 14 N.J. 101 A.2d Co., 1, 77, 855, (Headnote 4), 172 19 L.Ed. U.S. 43 47 A.L.R.2d S.Ct. 1177 36 341; Bank, Am.Jur.2d, p. 730, Elizabeth 150 N.C. § 7. 407, 189; Milwaukee R. S.E. Elect. valid, perfectly have been except of error assignment As a second by city’s gratuity that could not the ordinance be for too plaintiffs that contend time,1 sup long period on businesses that is not its levying an additional tax —but point appeal. point appeal on Its on is that energy gas, electric plying telephone, or express statutory “in the absence of discriminatory classification service is a authority legislature, may from the not con- plain The applies only plaintiffs. away power its This of taxation.” only applies urge that the tax tiffs the view away concedes that it its could contract fall group businesses to a small power legislature gives taxation utilities. public if the classification of within power. that pretty Such a conclusion clear- common car public utilities such as Other ly 25, seq., reflected is in-173 A.L.R. et freight cargo are passengers, riers cited, the cases therein con- such —and questioned ordinance. not included I, 10, tracts are enforceable under Art. Sec. comprise a class of The distinct of the U. Constitution S. utility field public businesses within the against interdiction laws impairing the supplies public a service obligation of contracts. product or used which is consumed public. therefore conclude that We only point then, The Ogden is whether plain which classifies ordinance power had the to enter into the contract. utility for separate public tiffs as class opinion’s main is whole thrust that it purpose of taxation is reasonable had power, no such that is the law of —and discriminatory.2 this only case and the law of this case—- a conclusion disagree with which I The decision of the court is af- evi- below denced this I Ogden dissent. think had firmed. No costs awarded. such under the statute for the fol- lowing reasons: ELLETT, CROCKETT, JJ., concur. 10-8-14, U.C.A.1953, Title as amended in

HENRIOD, (dissenting). Justice 1969, Laws of provides Ch. Sec. respectfully I Ogden may dissent. concedes cities “authorize the construc- * * * tion, that if the given power, statute had it the operation maintenance and works, the contracts “gas with these utilities would others” of light electric *4 Ames, interesting 2. It Illinois Bell Tel. v. Ill. 1. is Co. 364 note to that this court 362, 494; Opinion 4 N.E.2d In Re held enforceable a contract executed in Justices, 559, 321; City agreed 84 N.H. A. 1888 wherein 149 Salt Lake to City Co., Capitol Building Salt Lake v. Christensen 34 furnish water to the and 38, grounds forever, City State, Utah 95 P. 523. in S. L. v. 37, (1968). 22 Utah 2d 448 P.2d 350 194

works, telephone Invariably lines” etc. and to those essential to the declared ob- necessarily jects such purposes a corporation, authorization involves is contract, City with terms conditions. As settled law in this state. Salt Lake above, pointed Sutter, 533, has been out one of those 61 v. Utah 216 P. 234. legally provision conditions could be for certainly The decision in instant case gross percentage sales “in certain industry any any will not attract new to substitute, taxes, or, lieu” as— extensively in Utah so used means reason, synonymous with is one could successfully South, that en- “taxes,” protected would be —all couraged enterprise extending a new tax I, against arbitrary increase under Art. exemption specified for a time. Utah’s 10, This Constitution. Sec. U. S. sorely economy needs an to at- incentive seem that to would be a condition would “percentage new business and than terms be or onerous not too different gross in at- lieu taxes” formula is an poles, placement of requiring height of might tractive one for those who risk have facilities, transformers, specifications for Besides, capital ap- for new it business. safety and the like. As measures pears indulged this writer that defendant grows, would “in lieu” amount. so in an procedure unconscionable becom- above, is only question, suggested as contract, only ing to a signatory sacred legislative and I think our own authority, convenient, renege say- it when deemed in such cases sanction the inclusion would ing money, that now that need we were we legal “in perfectly contract of illegal. unilateracy This sort of does necessarily provision, being as law, lend and breeds itself to city, fairly implied in the doctrine we —a suspicion in when the minds of the citizens many require as to have enunciated times so they pub- occasion business with have to do reported here. Per- but cases few to be This little else lic officials. case can do succinctly haps principle stated was as part utili- provoke but hesitation on any place in American Fork else capital, in having ties risk others Robinson,2 said: v. where we cities, must now the former when strictly powers That invest- expansion realize granted, expressly limited to those perhaps a los- may prove ment fruitless fairly implied in or know that ing proposition when necessarily or worth expressly granted, are not promises municipalities incident 254, (1930); Allred, 2d Stev 19 Utah 249 292 P. 2. 77 Utah City Corp., (1967). 2d S. enson v. (1957) ; Lake Salt P.2d 597 *5 10K paper upon which are written. largest in this has state subscribed departure by join- to such faith good from

ing Ogden brief so-called “amicus

curiae,” which is no “amicus curiae” brief all, simply

at but a brief “amicus itself.”

I require would reverse this case parties up to the contracts to live strictly good

their terms and in faith.

CALLISTER, J.,C. concurs the dis- HENRIOD,

senting opinion of J.

STATE FARM MUTUAL AUTO INSUR- COMPANY, ANCE Plaintiff Appellant, Myrtle Kay, KAY

Richard Respondents. Defendants and

No. 12300.

Supreme Court of Utah.

July 28, 1971.