City of Beaumont v. Gulf States Utilities Co.

• Decision Date: 03 June 1942
• Docket Number: No. 3996.,3996.
• Citation: 163 S.W.2d 426
• Parties: CITY OF BEAUMONT v. GULF STATES UTILITIES CO.
• Court: Texas Court of Appeals

163 S.W.2d 426

CITY OF BEAUMONT v. GULF STATES UTILITIES CO.

No. 3996.

Court of Civil Appeals of Texas. Beaumont.

June 3, 1942.

Rehearing Denied June 17, 1942.

Appeal from District Court, Jefferson County; W. S. Nichols, Judge.

Suit by the City of Beaumont against Gulf States Utilities Company to collect rentals provided for by city ordinance for the use by defendant of city's streets and penalties for non-payment thereof. From a judgment on the pleadings dismissing its cause of action, plaintiff appeals.

Judgment affirmed.

Geo. E. Murphy, City Atty., of Beaumont, Robert L. Sonfield, of Houston, and W. A. Tatum, Asst. City Atty., of Beaumont, for appellant.

Orgain, Carroll & Bell, of Beaumont, for appellee.

WALKER, Chief Justice.

Appellant, City of Beaumont, is a municipal corporation holding its charter under Sec. 5, Art. XI — the Home Rule Amendment — of our State Constitution, Vernon's Ann.St., which, in its pertinent provisions, reads: "Cities having more than five thousand (5000) inhabitants may, by a majority vote of the qualified voters of said city, at an election held for that purpose, adopt or amend their charters, subject to such limitations as may be prescribed by the Legislature, and providing that no charter or any ordinance passed under said charter shall contain any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State; * * *" (Adopted election November 5, 1912; proclamation December 30, 1912.)

On June 4, 1940, appellant adopted an ordinance entitled "An ordinance fixing rentals to be paid by telegraph, telephone, electric and gas companies for the privilege of using with their poles, wires, conduits, pipes, and fixtures, the streets, easements, and alleys and other public ways within the city of Beaumont, Texas, providing penalties for violations, and an emergency." By the provisions of this ordinance appellee, Gulf States Utilities Company, an electric company, for the use of appellant's streets, was charged an annual rental equal to four per cent of its gross receipts, received from its business conducted in appellant's corporate limits for the preceding year. The ordinance also provided a penalty against appellee of $100 per day for conducting its business without paying this rental. No point is before us against the validity of this ordinance, as and when adopted.

By the provisions of the third paragraph of Sec. I of Art. V of the Omnibus Tax Law passed by the 47th Legislature, General and Special Laws, Regular Session 47th Legislature, c. 184, page 269 at page 284, Vernon's Ann.Civ.St. art. 7060, the power of cities in Texas to levy and collect rental from public utilities of the class of appellee for the use of their streets was limited to two per cent of their gross receipts. We give the language of the Omnibus Tax Law on this point: "Nothing in this Article shall be construed as prohibiting an incorporated city or town from making a reasonable charge, otherwise lawful, for the use of its streets, alleys, and public ways by a public utility in the conduct of its business, and each such city shall have such right and power; but any such charges, whether designated as rentals or otherwise, and whether measured by gross receipts, units of installation, or in any manner, shall not in the aggregate exceed the equivalent of two (2) per cent of the gross receipts of such utility within such municipality derived from the sale of gas, electric energy, or water."

This suit was by appellant against appellee to collect an additional two per cent rental charged by its ordinance, with penalties, etc., in addition to the two per cent admittedly paid under the ordinance by the appellee. For cause of action appellant plead the pertinent provisions of its ordinance assessing the rental charges against appellee, and further that the pertinent provisions of the Omnibus Tax Law, quoted above, were in violation of the Federal and State Constitution. Appellee challenges the sufficiency of appellant's petition to state a cause of action by special exception and motion to strike. Judgment was entered in the lower court on the pleadings in favor of appellee against appellant, dismissing appellant's cause of action.

The only point presented by this appeal is the constitutionality of the pertinent provisions of the Omnibus Tax Law, quoted above.

Appellant bottoms its constitutional points on the assumption that it owns its streets and alleys in its proprietary capacity. Sec. 19 of appellant's charter provides: "(1) The ownership, right of control and use of the streets, highways, alleys, public places and all other real property of the City of Beaumont is hereby declared to be inalienable to said city, except by ordinance passed by vote of the majority of the City Commission as hereinafter provided."

This proposition is overruled.

If appellant did not own its streets and alleys prior to the adoption of its Home Rule Charter, it did not acquire title by the positive charter assumption of title. The law of this state on this point, prior to the adoption of the Home Rule Amendment, was stated as follows by our Supreme Court in Compton v. Waco Bridge Co., 62 Tex. 715: "As between the legislature and the municipal government, the former has the paramount and unrestricted authority over the streets and alleys of the city as public highways; and by virtue of this authority it may authorize the placing of obstructions in these streets or legalize existing obstructions which might otherwise be deemed nuisances. The legislature may also delegate this power to the municipal authorities, and vest in them such authority and control over the streets and alleys as might be thought best for the general good."

On this authority, it was clearly the law that Texas cities did not own their streets and alleys in their proprietary capacity prior to the adoption of the Home Rule Amendment. In West v. City of Waco, 115 Tex. 472, 294 S.W. 832, 833, speaking of the streets and alleys of home rule cities — the City of Waco was a home rule city — the court said: "The highways of the state, including streets of cities, belong to the state, and the state has full control and authority over them. They `are the property of and for the use of the state, which, through its Legislature, has absolute control over same, which control it may or may not, from time to time, delegate to the local authorities.'"

Since Texas cities did not own their streets and alleys in their proprietary capacity prior to the adoption of the Home Rule Amendment, and are not vested with title by the Home Rule Amendment, it necessarily follows that appellant was without power to preempt title by the simple declaration of its charter; so, the provisions of Sec. 19 of its charter, declaring its streets and alleys to be its property, is without force and effect in support of appellant's point, attacking the constitutionality of the pertinent provisions of the Omnibus Tax Law.

The next question: Under the law of Texas which government, the state or the municipality, has dominent control of the streets and alleys of home rule cities? This question was answered in favor of the State by Judge Alexander, now Chief Justice of our Supreme Court, speaking for the Waco Court of Civil Appeals, in City of Waco v. Thralls, 128 S.W.2d 462, 464: "Our State Constitution, art. 11, sec. 5, Vernon's Ann.St., authorizing cities to adopt Home Rule Charters provides that such cities may `adopt or amend their charters, subject to such limitations as may be prescribed by the Legislature, and providing that no charter or any ordinance passed under said charter shall contain any provision inconsistent with the Constitution of the State, or of the general laws enacted by the Legislature of this State * * *.' See also R.S. art. 1165. It has been held many times that any ordinance or charter provision of a Home Rule city that is contrary to or inconsistent with any general law enacted by the Legislature is void."

Our Supreme Court in McCutcheon v. Wozencraft, 116 Tex. 440, 294 S.W. 1105, quoting the Home Rule Amendment, said that charters and ordinances of home rule cities must conform to the Constitution and general laws of the state. The Supreme Court of the United States, in City of Worcester v. Worcester Street Ry. Co., 196 U.S. 539, 25 S.Ct. 327, 49 L.Ed. 591, ruled this point in favor of the State Legislature.

In 39 Texas Jurisprudence, para. 57, page 597, is this statement: "Control of streets is a legislative power which cannot be surrendered, impaired or abridged by the city, by contract or otherwise."

In McQuillam on Municipal Corporations, 2d Ed., par. 2902, page 12, the general rule is stated as follows: "Courts everywhere decline to recognize that the city possesses any property rights in the streets, although they may be a sourse of profit to the municipality. Their interest is exclusively public juris, and is in any respect wholly unlike property of the private corporation which is held for its own benefit and used for its private gain and advantage."

In 39 Texas Jurisprudence, page 613, par. 68, it is said: "* * * a regulation will be declared void if it conflicts with the Constitution or a law of the State."

In City of Springfield v. Springfield Street Ry. Co., 182 Mass. 41, 64 N.E. 577, 581, the court said: "So far as the city is concerned, it must be deemed to have acted in behalf of the public, and not in virtue of any private or proprietary rights; and the legislature has the same right to modify or abrogate the conditions on which location in the streets and public ways have been granted that it would have if such conditions had been originally imposed by it." See also City of Lubbock v. Magnolia Petroleum Co., Tex.Com.App., 6 S.W.2d 80.

On the authorities cited, it is clear that a home rule city can not enact a valid ordinance in conflict with the general law of the state. This is...