Creech v. South Carolina Public Service Authority

• Decision Date: 12 May 1942
• Docket Number: 2274.
• Citation: 20 S.E.2d 645,200 S.C. 127
• Parties: CREECH v. SOUTH CAROLINA PUBLIC SERVICE AUTHORITY et al.
• Court: South Carolina Supreme Court

20 S.E.2d 645

200 S.C. 127

CREECH v. SOUTH CAROLINA PUBLIC SERVICE AUTHORITY et al.

No. 2274.

Supreme Court of South Carolina

May 12, 1942

[Copyrighted Material Omitted]

Shepard K. Nash, of Sumter, for plaintiff.

Watkins & Prince, of Anderson, Robinson & Robinson, of Columbia, and Cordie Page, of Conway (R. Milo Smith, of Lexington, M. B. Holman, of Batesburg, W. D. Douglas of Winnsboro, J. F. McLure and P. D. Barron, both of Union David A. Gaston, of Chester, R. B. Hildebrand, of York, B. V Chapman and R. A. Harley, both of Newberry, J. R. Folk, of Edgefield, Gregory & Gregory, of Lancaster, and Jos. L. Nettles, Jr., of Columbia, of counsel), for plaintiff-intervenors.

Christie Benet, of Columbia, W. M. Wilson and W. Turner Logan, both of Charleston, Samuel Want, of Darlington, and P. H. McEachin, of Florence, for defendants.

Heyward Brockinton, of Columbia, for defendant-intervenor.

FISHBURNE Justice.

Authority was granted to institute this action in the original jurisdiction of the Supreme Court because of the public character and importance of the issues involved, and because of the apparent urgency that a definite and final ruling be made respecting the proposed undertakings and other threatened actions of the defendants.

The plaintiff, F. B. Creech, a citizen and resident of the State, owning real and personal property subject to taxation in the area embraced within the project popularly known as Santee-Cooper Project, brought this suit on behalf of himself and all others similarly situated, for an injunction restraining the South Carolina Public Service Authority and its Board of Directors from acquiring by purchase the property, plants, equipment, and facilities of the South Carolina Electric and Gas Company, largely located in Richland, Lexington, Fairfield, and Newberry Counties, and the property and facilities of the Lexington Water Power Company, generally located in the above named counties, as well as in the County of Saluda.

Under the order of this Court the right was accorded to all taxpayers and all other persons and corporations whose interests might be controlled or affected by the issues made in this cause, to intervene and plead in the action. Within the scope and under the sanction of this order, several school districts and counties in the State, geographically situated North of Richland County, and various persons and corporations have come into the cause as plaintiffs, and have allied themselves with Mr. Creech, the original plaintiff, and joined with him in the prayer for injunction. By a later order, Richland County Rural Electric Co-operative, Incorporated, was permitted to intervene as a party defendant and to adopt the return and answer filed by the South Carolina Public Service Authority, which will hereafter be referred to as the Authority.

The Authority through the action of its Board of Directors has entered into negotiations for the acquisition by purchase of all of the properties of the South Carolina Electric and Gas Company and Lexington Water Power Company, and has agreed to pay for the said properties approximately forty million dollars. The electric properties which the Authority seeks to purchase are three hydro generating plants and one steam generating plant. The first hydro generating plant, operated by the South Carolina Electric and Gas Company, is located at Parr Shoals on Broad River, in Fairfield County, some thirty miles above the confluence of Broad and Saluda Rivers, with the dam extending across the river into Newberry County. The second hydro-electric generating plant is that of the Lexington Water Power Company on the Saluda River, about twelve miles above its confluence with the Broad River, with the dam and generating plant in Lexington County, and the reservoir (known as Lake Murray) extending into Newberry and Saluda Counties. The third property is the Columbia Canal Hydro-electric generating plant, located on the Broad and Congaree Rivers at and just above the City of Columbia, with the diversion dam extending across Broad River to Lexington County just north of the junction of the two rivers.

As an integral and inseparable part of its negotiations for the purchase of the foregoing electric properties, the Authority also seeks to acquire from the Electric and Gas Company, located at Parr Shoals, a large steam generating plant, and its distribution system, which provides electric energy for the City of Columbia and Fort Jackson; also the gas manufacturing and distribution system of the Electric and Gas Company in Columbia, and its urban and suburban bus transportation system in Columbia, together with its gas manufacturing and distribution system in the Cities of Florence and Darlington.

The South Carolina Electric and Gas Company and the Lexington Water Power Company are subsidiaries of General Gas and Electric Corporation, which in turn is a subsidiary of the Associated Gas and Electric Corporation, a foreign corporation which is now being administered in bankruptcy under the laws of the United States.

At the present time the Authority is constructing a hydro-electric plant in the Santee Basin, at Pinopolis, consisting of four large and one small generating units. It is alleged that three of the large units have already been completed and are in operation. The Authority owns no steam plant or other reserve or stand-by production facilities.

The plaintiffs attack the legality of the proposed acquisition of the plants and facilities of the corporations referred to as ultra vires and in violation of the enabling Act which specially chartered and created the South Carolina Public Service Authority as a body corporate and politic (Acts 1934, No. 887, 38 Stat. at Large, 1507), and in violation of stated constitutional provisions.

Under the pleadings filed on behalf of the parties, the complaint, intervening petitions, answer, return and demurrer, various issues are presented for our determination, but we think the whole matter may be disposed of by answering the question, whether the Authority under the terms of the statute chartering it, construed and interpreted in the light of the whole Act, and considering the history of the legislation, has power to purchase completed and operating electric utility systems situated at and north of Columbia, and the gas and transportation business connected therewith.

We have held that the manufacture and sale of electric power is a governmental function, and, in the absence of a constitutional prohibition, the State may, through its agencies, engage in that business for the benefit of its people, and the Legislature may create agencies for that purpose. Clarke v. South Carolina Public Service Authority, 177 S.C. 427, 181 S.E. 481; 29 C.J.S., Electricity, § 6, page 493. In the foregoing case we dealt with several constitutional questions touching the validity of the enabling act, and certain other issues then presented. The power of the Authority to undertake the purchase of completed and operating public utilities which is now claimed under the enabling act was not then before us.

It will promote the solution of the problem now before us to first determine the corporate character of the Authority.

In our opinion, the South Carolina Public Service Authority is a public corporation in the nature of a quasi municipal corporation, exercising certain governmental functions as an agency of the State. Floyd v. Parker Water & Sewer Sub-District, S.C., 17 S.E.2d 223. As such, the powers conferred are to be strictly construed, and any fair, substantial and reasonable doubt concerning the existence of any power or any ambiguity under the statute upon which the assertion of such power rests, is to be resolved against the corporation, and the power denied. Luther v. Wheeler, 73 S.C. 83, 52 S.E. 874, 4 L.R.A., N.S., 746, 6 Ann.Cas. 754.

Generally, a municipal corporation can exercise only those powers granted in express words or those necessarily or fairly implied in or incident to the powers expressly granted, or those essential to the declared objects and purposes of the corporation, which powers are not simply convenient, but indispensable. Southern Fruit Co. v. Porter, 188 S.C. 422, 199 S.E. 537.

In accordance with recognized rules of construction, the various provisions of an act should be read so that all may, if possible, have their due and conjoint effect without repugnancy or inconsistency. The Court may not, in order to give effect to particular words, virtually destroy the meaning of the entire context; that is, give the particular words a significance which would be clearly repugnant to the statute, looked at as a whole, and destructive of its obvious intent. 25 R.C.L. 1008, § 247; Crescent Mfg. Co. v. South Carolina Tax Commission, 129 S.C. 480, 124 S.E. 761.

The legislative intention must be gathered from the language of the statute, not that found in any particular section or proviso, but from the statute as a whole, and it must be read in the light of all the circumstances, the situation and relation of the parties, the subject of the grant, and the purpose to be attained. State v. Columbia Ry., Gas & Electric Co., 112 S.C. 528, 100 S.E. 355.

In construing charters to determine the powers of corporations, it is well settled, as in other cases of legislative grants, that they are to be construed strictly; any ambiguity in the terms of a corporate charter must operate against the corporation and in favor of the public. The specification of certain powers operates as a limitation on such objects only as are embodied therein and is an implied prohibition of the exercise of other and distinct powers. 13 Am.Jur., § 741, Page 774.

Having in mind the purposes and subject-matter of the...