Arkansas State Highway Commission v. Arkansas Power & Light Co.

• Decision Date: 30 November 1959
• Docket Number: No. 5-1939,5-1939
• Citation: 330 S.W.2d 77,231 Ark. 307
• Parties: ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. ARKANSAS POWER AND LIGHT COMPANY, Appellee.
• Court: Arkansas Supreme Court

Page 77

330 S.W.2d 77

231 Ark. 307

ARKANSAS STATE HIGHWAY COMMISSION, Appellant, v. ARKANSAS POWER AND LIGHT COMPANY, Appellee.

No. 5-1939.

Supreme Court of Arkansas.

Nov. 30, 1959.

Rehearing Denied Jan. 11, 1960.

W. R. Thrasher, Dowell Anders, W. B. Brady, Little Rock, for appellant.

House, Holmes, Butler & Jewell, Little Rock, for appellee.

ROBINSON, Justice.

The appellant, Arkansas State Highway Commission, hereinafter called the Commission, ordered the Arkansas Power & Light Company, hereinafter called the Power Company, to remove its poles and wires from certain property which the Commission intends to use as the right of way for the new El Dorado by-pass, a controlled access highway. The Power Company questioned the authority of the Commission to summarily order such removal, and this suit for a declaratory judgment was filed by the Commission. From a judgment in favor of the Power Company the Commission has appealed. The sole issue here is whether the Commission has authority by virtue of the police power of the State to take from the Power Company, without compensation for damages sustained, its property rights, if any, in the use of the right of way of the streets and roads to maintain its poles and wires.

The Power Company concedes that the Commission has the right to cause the utility facilities to be removed, but contends that such action in the existing circumstances must be by eminent domain proceedings and that the Power Company is entitled to compensation for damages sustained. The facilities in question, consisting principally of poles and wires, are located on property that may be divided into three categories: (1) Facilities of the Power Company located on the public streets of El Dorado; (2) facilities located on property which has been dedicated as public streets in additions outside the city limits; and (3) facilities located on county roads.

Conceding, without deciding, that the Commission would have authority to exercise the police power in some circumstances, we do not believe that the situation in the case at bar calls for the exercise of such power. The issues were submitted on a stipulation of facts, wherein it is agreed that the Power Company had the lawful right to locate, operate and maintain its existing poles in the city of El Dorado and urban areas thereof on street rights of way, as authorized by the franchise from the city of El Dorado, and also that the Power Company had acquired an easement on the right of way of the county roads, either by purchase from the adjoining property owners or by precription insofar as such owners are concerned.

But even though the Power Company has the right to maintain its poles on the rights of way, it does not mean that the company could not be compelled to move its facilities so as not to unnecessarily interfere with use of the streets. The franchise specifically provides: That 'the grantee [Power Company] shall, in the construction and operation of said electric light and power plant or plants, locate all poles on the curb lines of streets, alleys, avenues, sidewalks and public grounds of said City, and furnish sufficient power to operate all street lights and all commercial electrical lights and power continually', and, further, that 'The grantee [Power Company] is hereby granted the right-of-way in, through, under and over all streets, avenues, alleys, side-walks, and public grounds of said City for the purpose of erecting, constructing, operating and maintaining its electric light and power plant or plants; the right to trim all trees in said streets, alleys, sidewalks and public places and grounds that may come in contact with its wires, and of erecting and maintaining poles, wires, fixtures and all other attachments and equipments necessary for the carrying of electricity in and through the city, provided the streets, alleys, avenues and sidewalks shall not be unnecessarily and unreasonably impaired or obstructed thereby.' Hence, if the city or county should change the right of way of a public street or road, or widen it, or relocate it, the Company could be required to change its poles and wires without compensation so as not to 'unnecessarily and unreasonably impair or obstruct' the street. But here it is not a question of requiring the Power Company to relocate its poles so as not to unnecessarily or unreasonably impair or obstruct the traffic. The Commission has demanded that the Company remove its facilities entirely from the right of way.

The franchise gave to the Power Company certain property rights. The ordinance granting the franchise provides that it constitutes a contract between the city and the Power Company, and the Power Company is obligated to furnish to certain public buildings in El Dorado electricity free of charge, and for 25 years after the granting of the franchise the Power Company must supply electricity to the citizens of the city at the price named in the contract.

It was further agreed 'between the city and the grantee that this franchise and contract is granted by the city upon the conditions that the grantee shall carry out the requirements herein imposed and shall complete the installation of all street lights within six (6) months from date of notice * * *'.

There is no question but that under the franchise the Company owns a property right. In 18 Am.Jur. 790, it is said: 'Contract rights and franchises--When contract rights are taken for the public use, there is a constitutional right to compensation in the same manner as when other property rights are taken. A franchise which constitutes a binding contract is property in the constitutional sense. The fact that the franchise relates to the public use does not entitle the state to abrogate it without compensation, for a franchise is the private property of even a public service corporation.'

'A right of way upon a public street, whether granted by act of the Legislature or ordinance of a city council, is an easement, and as such is a property right and entitled to all the constitutional protection afforded other property and contracts.' Southern Bell Telephone & Telegraph Co. v. City of Mobile, C.C., 162 F. 523, 528, 532; 5 Cir., 174 F. 1020.

The Court said in Natural Gas & Fuel Corp. v. Norphlet Gas & Water Co., 173 Ark. 174, 294 S.W. 52, 55: 'Again in City of Louisville v. Cumberland Telephone & Telegraph Co., 224 U.S. 649, 32 S.Ct. 572, 56 L.Ed. 934, it was held that the right to use the streets in a city for the purpose of a public utility 'has been called by various names--incorporeal hereditament, an interest in land, an easement, a right of way--but, howsoever designated, it is property.' This principle has been recognized and applied by this court in Clear Creek Oil & Gas Co. v. Ft. Smith Spelter Co., 148 Ark. 260, 230 S.W. 897.'

The police power should not be indiscriminately or unnecessarily used. In Beaty v. Humphrey, 195 Ark. 1008, 115 S.W.2d 559, 561, this Court said: 'The police power of the state is one founded in public necessity and this necessity must exist in order to justify its exercise.' To the same effect is City of Little Rock v. Smith, 204 Ark. 692, 163 S.W.2d 705.

Here it does not appear that it is necessary for the Commission to exercise the police power to take from the Power Company whatever rights it has in maintaining its poles and wires on property the Commission desires to use in constructing the by-pass. The controlled access road is being constructed on authority of Act 383 of 1953 (Ark.Stat. § 76-2202 to 76-2207, incl.). Appellant says in its brief that these sections of the statute 'specifically authorize the course of action taken by the Highway Commission in this instance.' We do not find that the statutes cited authorize the course of action employed by the Commission in attempting to take from the Power Company by the exercise of police power whatever rights it has in the use of the streets to maintain its facilities. In fact, just the contrary appears. Section 76-2205 provides that the highway authorities 'may acquire private or public property and property rights for controlled-access facilities and service roads, including rights of access, air, view, and light, by gift, devise, purchase, or condemnation. * * *' Thus it will be seen that the statute gives to the highway authorities the power to acquire private or public property and property rights by gift, devise, purchase or condemnation, but the statute does not authorize the taking of property rights by the exercise of...