Arizona Corporation Commission v. Tucson Gas, Electric Light & Power Co

• Decision Date: 20 February 1948
• Docket Number: 5042
• Citation: 189 P.2d 907,67 Ariz. 12
• Parties: ARIZONA CORPORATION COMMISSION et al. v. TUCSON GAS, ELECTRIC LIGHT & POWER CO
• Court: Arizona Supreme Court

189 P.2d 907

67 Ariz. 12

ARIZONA CORPORATION COMMISSION et al. v. TUCSON GAS, ELECTRIC LIGHT & POWER CO

No. 5042

Supreme Court of Arizona

February 20, 1948

Appeal from Superior Court, Maricopa County; M. T. Phelps, Judge.

Suit by the Tucson Gas, Electric Light & Power Company, a corporation, against the Arizona Corporation Commission, and Wilson T. Wright and others, as members of and constituting the Arizona Corporation Commission, to set aside and annul certain orders of the commission. From a judgment vacating the commission's orders, the commission and its members appeal.

Judgment reversed with instructions to sustain motion to dismiss complaint.

Evo De Concini, Atty. Gen., and Chas. D. McCarty, Asst. Atty. Gen for appellants.

Jennings Strouss, Salmon & Trask, J. A. Riggins, Jr., Henry S. Stevens and Burr Sutter, all of Phoenix and Darnell, Robertson &amp Holesapple, of Tucson, for appellee.

Conner & Jones, of Tucson, amicus curiae.

Stanford Chief Justice. LaPrade and Udall, JJ., concurring.

OPINION

Stanford, Chief Justice.

This case comes here on appeal from the Superior Court of Maricopa County from a judgment of that court vacating, setting aside and annulling certain orders of the Corporation Commission of the State of Arizona made on the complaint of Albert S. Oshrin, Carl Racklyeft, the 11th Naval District of the U.S. Navy Department, and others, asking that they be served with gas and electricity from The Tucson Gas, Electric Light and Power Company, a corporation (appellee herein) which is a public utility serving the City of Tucson and vicinity.

The order of the Corporation Commission, which was vacated by the Superior Court, required that the appellee herein make such capital additions, improvements and extensions necessary to serve the parties applying for such service.

The Corporation Commission apparently knew it had no right to construe the constitutionality of Section 27-916, A.C.A. 1939, it being its duty to assume that the law was constitutional. Therefore, when it was appealed to by Albert S. Oshrin and others, asking that they be served with gas and electricity the Commission ordered The Tucson Gas, Electric Light and Power Company to render such service upon the premise that the courts would do justice to the utility by not taking its property without just compensation.

The order and judgment of the Superior Court was based on the grounds that the order of the Arizona Corporation Commission in granting the request of the applicants for service, as above stated, resulted in taking property without just compensation and without due process of law and was unconstitutional.

In other words, the court in construing the ruling of the Corporation Commission considered that it was bound by the United States Circuit Court's construction of the Arizona law, to the effect that Section 27-916, supra, was constitutional, but the Superior Court nevertheless held that the city could not take the utility's property without just compensation, and, therefore, that court voided the order of the Corporation Commission. In effect, the Superior Court, instead of declaring the statute (Section 27-916) invalid and unconstitutional in spite of the ruling of the Federal Court held the order of the Corporation Commission unconstitutional, i.e. the constitutional objection was successfully invoked against the public itself, and all progress stopped while the condemnation suit is pending.

In the complaint filed by the appellee in the Superior Court the following was set forth: "That there is now and has been since the 12th day of January, 1944, pending in the United States District Court, District of Arizona at Tucson, Arizona, an action brought by the City of Tucson, Arizona, under Articles 6 and 26 of Chapter 16, Arizona Code Annotated 1939, and Article 9, of Chapter 27, Arizona Code Annotated 1939, to condemn and take [ILLEGIBLE WORD] of plaintiff's property used and useful in its business as a public service corporation; that the summons and a copy of the complaint in said action were served on the plaintiff on the 17th day of January, 1944. That the United States Circuit Court of Appeals for the Ninth Circuit, on appeal by said City of Tucson from an order dismissing said condemnation action brought by said City, reversed said order and held that Section 27-916, Arizona Code Annotated 1939, fixing the time of determination of damages and compensation in condemnation by a municipality of the property of a public utility as of the date of service of summons and allowing no compensation for additions, betterments or improvements made between the date of service of summons and the final order of condemnation, is not unconstitutional as failing to provide for just compensation, and said decision is now the law of such case, and further that said United States District Court for the District of Arizona at Tucson, has refused and still refuses to permit plaintiff to put in issue or seek the recovery of compensation for additions, extensions, betterments or improvements made to its property after the service of summons in said action. * * *"

Section 27-916, A.C.A. 1939, which the United States Circuit Court of Appeals for the 9th Circuit declared, as shown by the case of City of Tucson v. Tucson Gas, Electric Light & Power Co., 152 F.2d 552, was not unconstitutional, is as follows: "Damages and value fixed from date of summons -- For the purpose of assessing compensation and damages, the right thereto shall be deemed to have accrued at the date of the summons, and its actual value at that date shall be the measure of compensation and damages. If an order be made letting the plaintiff into possession prior to final judgment, the compensation and damages awarded shall draw legal interest from the date of such order. No improvements placed upon the property subsequent to the date of service of summons shall be included in the assessment of compensation or damages."

By observing the last sentence of Section 27-916, supra, we can observe the dilemma of the appellee, but the judgment of the Superior Court, from which this appeal is taken, states that the decisions and orders of the Corporation Commission "are hereby vacated, set aside and annulled upon the grounds that the orders result in taking property without just compensation and without due process of law and are therefore unconstitutional."

Appellant presents two assignments of error which are as follows:

"I. The Court erred in denying appellants' Motion to Dismiss and in entering judgment for appellee for the reason that it appears on the face of the complaint that appellee's entire case rests upon a presumption that the United States District Court for the District of Arizona will at some future date take certain of appellee's properties without providing just compensation to appellee, and therefore said complaint wholly fails to state a claim upon which relief may be granted.

"II. The Court erred in denying Appellants' Motion to Dismiss and in entering judgment for appellee for the reason that it appears on the face of the complaint that the orders complained of were made by the Arizona Corporation Commission in the exercise of specific powers conferred upon it by the Constitution of Arizona and were in all respects legal and valid orders, and therefore said complaint wholly fails to state a claim upon which relief may be granted."

One of the principal contentions of the appellant is that: "* * * If this court now upholds the power of the Corporation Commission to make the orders, there will be presented to the Federal Court the conflict above referred to, and the opinion of this court will serve as a guide to the Federal Courts so that the conflict will be resolved in a manner most consonant with the public policy of this state. Furthermore, if the court remains unimpressed by the argument on appellants' First Assignment of Error and assumes, as did the lower court, that the condemnation action will proceed to judgment, then the real issue of the case is whether Section 27-916 is a limitation on the power of the Corporation Commission, the question expressly left undecided by the Circuit Court of Appeals. * * *"

Among cases cited by appellants are the cases of City of Los Angeles v. Blondeau, 127 Cal.App. 139, 15 P.2d 554 and the Washington case of Public Utility Dist. No. 1 v. Washington Water Power Co., 1944, 20 Wash.2d 384, 147 P.2d 923, 927. From the latter case we quote:

"* * * The general rule is that improvements and betterments placed upon property condemned for public use are subject to the judgment of award. 2 Lewis, Eminent Domain, 3rd Ed., p 1319, § 742, and p. 1704, § 962. In § 962, it is said:

"'The right of the owner...