Community Natural Gas Co. v. Northern Texas U. Co.

• Decision Date: 19 December 1928
• Docket Number: (No. 3140.)
• Citation: 13 S.W.2d 184
• Parties: COMMUNITY NATURAL GAS CO. v. NORTHERN TEXAS UTILITIES CO.
• Court: Texas Court of Appeals

13 S.W.2d 184

COMMUNITY NATURAL GAS CO. v. NORTHERN TEXAS UTILITIES CO.

(No. 3140.)

Court of Civil Appeals of Texas. Amarillo.

December 19, 1928.

Rehearing Denied January 16, 1929.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Wilbarger County; C. C. Small, Judge.

Suit for injunction by the Northern Texas Utilities Company against the Community Natural Gas Company. Judgment for plaintiff, and defendant appeals. Reformed and affirmed.

Storey, Leak & Storey, of Vernon, and Karl F. Griffith and Roy C. Coffee, both of Dallas, for appellant.

Penix & Penix, of Wichita Falls, and Berry, Stokes, Warlick & Gossett, of Vernon, for appellee.

HALL, C. J.

This is the second appeal of this case. It is a contest between two gas companies, involving the right to supply the inhabitants of the city of Vernon with natural gas. The suit was originally filed by the Northern Texas Utilities Company (hereinafter referred to as the Utilities Company) against the Community Natural Gas Company (hereinafter referred to as the Community Company), seeking to enjoin the latter from laying its gas pipes in the streets of the city of Vernon.

The first trial resulted in a judgment for the Community Company, denying the Utilities Company an injunction. Upon appeal to this court, the judgment was reversed. 297 S. W. 904. The last trial resulted in a judgment for the plaintiff, the Utilities Company, permanently enjoining the Community Company from laying its gas pipes in the city of Vernon and restraining it from in any manner interfering with the Utilities Company's franchise and the performance of its duties in furnishing the citizens of Vernon with natural gas.

Since the judgment was reversed, the pleadings of both parties have been amended, alleging some additional facts, which are set out so much more specifically than before as to require an extended statement of the respective pleadings.

Plaintiff alleges in its first amended original petition: That both parties are Delaware corporations, having permits to do business in the state of Texas. That they are organized for the purpose of storing, transporting, buying, and selling oil, gas, and other minerals, and to construct, maintain, and operate pipe lines and other necessary apparatus necessary to transport natural gas between different points in the state, and to acquire and occupy such lands, easements, franchises, etc., as may be necessary for the purposes of its incorporation. That Vernon is a city organized and operating under what is known as the Home Rule Amendment of the Constitution, and that, in pursuance to the provisions of the Constitution and the laws, the citizens of said city adopted a city charter and likewise adopted the provisions of the statutes relating to the city commission form of government, under which charter and form of government it has been operating for about 10 years and is still being operated.

The petition sets out in full article 2, § 17, of the city charter relating to the matter of granting franchises for the use and occupancy of the streets, alleys, etc., to gas companies, water companies, and other public utilities, and alleges:

That said section is the only one in the charter pertaining to the granting of a franchise for the use of said streets and alleys for such purposes. That, acting under said article and section, the authorities of the city of Vernon granted to the Upham Gas Company of Texas a franchise to occupy the streets, alleys, etc., of the city for the purpose of distributing natural gas to the inhabitants of the city. That said section states the rate to be charged for the services proposed to be rendered by any gas company. Said franchise was evidenced by an ordinance passed by the commissioners of said city on or about the 22d day of September, 1925. That said ordinance was duly published as required by the city charter, and became effective, vesting the said Upham Gas Company with the privilege and rights stated in the franchise. That thereafter the city, acting by and through its commission or city council, on the ____ day of June, 1926, passed an order approving the domestic sliding scale of rates proposed by the Upham Gas Company, and on or about the 15th day of June, 1926, entered into an agreement with the Upham Gas Company, by which said company put up $10,000 as liquidated damages to insure the city that it would deliver gas to the inhabitants thereof on or before the 22d day of December, 1926, which agreement was fully complied with within the time stated. That on or about June 30, 1926, the city ratified and confirmed said franchise, which was evidenced by an ordinance numbered 414, theretofore passed by the commission on the 22d day of September, 1925. That thereafter about July 1, 1926, the city, by another ordinance, approved, ratified, and confirmed Ordinance No. 414, which granted the original franchise. That thereafter, on July 13, 1926, said Ordinance No. 414, which granted the franchise to the Upham Gas Company, was ratified and confirmed by an act of the city commission on its third and final reading.

That on the ____ day of July, 1926, said franchise was duly assigned to, and became the property of, and is now owned by, the Utilities Company, the plaintiff in this cause. That, by virtue of said franchise, the city vested rights in plaintiff to use the streets, alleys, etc., of said city, and that plaintiff has the right to dig trenches, excavate along and across the streets, and to lay its gas pipes and mains in the streets and alleys for the purpose of supplying gas to the inhabitants of said city. That the plaintiff is a taxpayer in the city by virtue of owning said franchise and because it has laid its pipes and mains in the city, and, because of the rights and privileges granted it and acting under its franchise, has laid approximately 30 miles of gas pipes and lines in order to enable it to serve the city and its inhabitants in an efficient manner. That it will require the laying of approximately 4 additional miles of pipes and mains at the reasonable total value and cost of $187,500. That the streets and alleys of said city are narrow and will not permit, without great damage and inconvenience, two different crews to work therein at the same time, or permit the laying of two gas pipe lines at the same time or anywhere near the same time.

That about the 19th day of July, 1926, the Community Company applied to the city for a franchise for the purpose of supplying natural gas to the city and its inhabitants, and was granted a franchise by a resolution passed that day, and known as ordinance No. 425. That thereafter, on July 26, 1926, the Community Company again applied to the city for a change in the rates, and filed a schedule of rates differing from those stated in its application made to the city on July 19th. That said rates so proposed by said company were adopted by the city commission on the 27th day of July, 1926, as a part of the proposed franchise of the defendant. That on the same date the city commission, without authority, and acting contrary to its charter, granted the defendant permission to at once and immediately use its streets for the purposes of laying its gas pipes, lines, etc. That thereafter, on the 29th day of July, 1926, the city commission repealed and rescinded the resolution last mentioned by a second resolution passed for that purpose.

The plaintiff further alleges, upon information and belief:

That the last purported publication of the original franchise granted on the 19th day of July, 1926, was made on the 3d day of August, 1926, and that the purported change therein proposed by the defendant on the 27th day of July, 1926, has never been published, and that under said franchise defendant has no right of any kind or character to occupy or use the streets, alleys, and highways of the city of Vernon for the purpose of laying its gas pipes and mains, and that it could have no right to do so under the terms of the franchise, until the expiration of 30 days from and after the day of the last publication of said original franchise, which was on the 3d day of August, 1926, and that said franchise could not, under the charter provisions, become effective, nor could the defendant have any rights thereunder, until the 3d day of September, 1926. That before said franchise granted to defendant by Ordinance No. 425 became effective, and on the 21st day of August, 1926, the city commission, by Ordinance No. 428, which was duly passed by said commission, repealed, canceled, and annulled said franchise granted by said Ordinance No. 425 to the defendant, thereby depriving the defendant of any right to lay its mains in the streets and alleys of said city. That before the purported ordinance granting a franchise to defendant could, under the charter, become effective, it must have been published in a newspaper in the city of Vernon once a week for three consecutive weeks, and that the franchise would not then become effective, according to the provisions of the charter, until the expiration of 30 days from the last publication thereof.

That the charter further provides that, if at any time prior to the expiration of said 30 days, 10 per cent. of the legally qualified voters, determined by the number of votes cast at the last regular municipal election, shall demand, by petition, that the city commission submit said franchise to a vote of the people, which submission shall not be less than 30 days nor more than 90 days from and after the filing of the petition, and that, if a majority of the votes cast at such election shall be against the granting of such franchise, the ordinance shall be ineffective, null, and void, and that, in case said franchise is submitted to a vote, it shall be ineffective during the interim.

That, notwithstanding the provisions of said city charter and the action of the commission and the repealing of said ordinance, and in spite of the fact...