Dale v. City of Morganton, 356

• Decision Date: 20 June 1967
• Docket Number: No. 356,356
• Citation: 270 N.C. 567,155 S.E.2d 136
• Parties: Adelia Willis DALE, by and through her Agent and Attorney in Fact, Wheeler Dale v. CITY OF MORGANTON, North Carolina.
• Court: North Carolina Supreme Court

Page 136

155 S.E.2d 136

270 N.C. 567

Adelia Willis DALE, by and through her Agent and Attorney in

Fact, Wheeler Dale v. CITY OF MORGANTON, North Carolina.

No. 356.

Supreme Court of North Carolina.

June 20, 1967.

Simpson & Simpson, Morganton, and C. David Swift, Valdesa, for plaintiff appellant.

John H. McMurray, Morganton, for defendant appellee.

LAKE, Justice.

On appeal from an order granting or refusing an interlocutory injunction, this Court is not bound by the findings of fact of the trial judge, but may review such evidence submitted to him and find facts for itself. State ex rel. North Carolina Milk Commission v. National Food Stores, Inc., 270 N.C. 323, 154 S.E.2d 548; State ex rel. North Carolina Milk Commission v. Dagenhardt, 261 N.C. 281, 134 S.E.2d 361; Huskins v. Yancey Hospital, Inc., 238 N.C. 357, 78 S.E.2d 116. The evidence by the defendant is that two of its housing officials inspected this house and found the electrical wiring to be in a dangerous condition. This is not contradicted or disputed. We, therefore, find it to be a fact.

The plaintiff complains of two separate and distinct actions by the city. The first is the condemnation of the plaintiff's property for use as a dwelling. The second is the refusal to connect this property with the city's electrical distribution system for the furnishing to it of electric current. The first is an exercise by the city of a governmental function. The second is an exercise of a proprietary function. State ex rel. North Carolina Utilities Commission v. Municipal Corporations, of Scotland Neck, 243 N.C. 193, 90 S.E.2d 519; Town of Grimesland v. City of Washington, 234 N.C. 117, 66 S.E.2d 794; Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42.

Municipal corporations are specifically excluded from the definition of a 'public utility' in G.S. § 62--3(23). Consequently, a municipal corporation distributing and selling electric energy to its inhabitants, and to other in its vicinity, is not subject to regulation by the North Carolina Utilities Commission, and the provisions of Chapter 62 of the General Statutes do not apply to it, except as otherwise expressly stated therein. However, the duty now imposed by G.S. § 62--140 upon privately owned distributors and sellers of electric power not to discriminate in service or rates is merely a development of 'the common-law obligation of equal and undiscriminating service.' See North Carolina Public Service Co. v. Southern Power Co., 179 N.C. 18, 30, 101 S.E. 593, 599, 12 A.L.R. 304, reh. dis., 179 N.C. 330, 102 S.E. 625, 12 A.L.R. 304. Upon the rehearing of that case, Brown, J., speaking for the Court, said:

'It (a privately owned power company) cannot sell to one and arbitrarily refuse to sell to another. * * * A public-service corporation cannot arbitrarily refuse to supply one of a class which it has undertaken to serve. It must justify its refusal by good reasons.'

In Fulghum v. Town of Selma, 238 N.C. 100, 105, 76 S.E.2d 368, this Court recognized that, in the absence of a statute, there is a duty upon a municipal corporation engaged in the distribution and sale of water to its inhabitants to serve without discrimination. There is no difference in this respect between a municipal corporation engaged in the distribution and sale of water and one engaged in the distribution and sale of electricity. That a municipal corporation engaged in such a proprietary function may not discriminate unreasonably between its inhabitants desiring such service, see also: Home Owners' Loan Corp. v. Mayor and City Council of Baltimore, 175 Md. 676, 3 A.2d 747; Toan v. Village of Perry, 269 App.Div. 894, 56 N.Y.S.2d 572; Hall v. Village of Swanton, 113 Vt. 424, 35 A.2d 381; City of Montgomery v. Greene, 180 Ala. 322, 60 So. 900. In McQuillin, Municipal Corporations, 3rd Ed., 35.35, it is said that a municipal corporation engaged in such a proprietary activity 'is under a duty to supply the services which it offers to all persons who apply, without discrimination and at reasonable rates, insofar as it may reasonably do so,' and that in the operation of such business, 'the municipality possesses the same rights and powers with reference to its management and control that a private owner possesses.' To the same effect, see Holmes v. City of Fayetteville, 197 N.C. 740, 747, 150 S.E. 624, app. dis., 281 U.S. 700, 50 S.Ct. 353, 74 L.Ed. 1126. Thus, the right of a municipal corporation operating a plant for the distribution and sale of electricity to its inhabitants to refuse to serve is neither greater nor less than that of a privately owned electric power company to do so.

It is well settled that a privately owned supplier of electric power, or other public service, may not lawfully refuse its service because of a controversy with the applicant concerning a matter which is not related to the service sought. Seaton Mountain Electric etc. Co. v. Idaho Springs Investment Co., 49 Colo. 122, 111 P. 834, 33 L.R.A.,N.S. 1078; Snell v. Clinton Electric etc. Co., 196 Ill. 626, 63 N.E. 1082, 58 L.R.A. 284; Hicks v. City of Monroe Utilities Comm., 237 La. 848, 112 So.2d 635; Ten Broek v. Miller, 240 Mich. 667, 216 N.W. 385, 43 Am.Jur., Public Utilities and Services, § 23; Annot., 55 A.L.R. 771.

The facts in Ten Broek v. Miller, supra, were very similar to those in the case now before us. There, the proprietor of a summer resort which had been furnishing water and light to the plaintiff's cottage refused to continue to do so unless he built a septic tank approved by the Board of Health. The occupant of the cottage refused to so do on the ground that he had just constructed a cesspool which was satisfactory to him. In holding that the company must supply light and water, the Supreme Court of Michigan said:

'The installing of a septic tank was purely a collateral matter, and had no relation to the duty of defendant company to furnish the light and water and receive its pay therefor. (Citation omitted.) If plaintiff were violating a rule of the state health department, he could be proceeded against for its infraction in the proper forum. This would be a more orderly way of disposing of the dispute than for defendant to substitute itself for a court and punish plaintiff by shutting off his water and light.'

Whatever may be the right of the city of Morganton, in the exercise of its governmental power, to forbid the occupancy of the plaintiff's house as a human habitation, that is a matter collateral to the duty of the city to supply electric power for use in this structure. A city may not deprive an inhabitant, otherwise entitled thereto, of light, water or other utility service as a means of compelling obedience to its police regulations, however valid and otherwise enforceable those regulations may be. The right of a city to cut off or refuse a service rendered by it in its proprietary capacity must be determined as if the city, in its capacity of supplier of such service, were a person separate and apart from the city as a unit of government. In the present case, it becomes apparent that for the city to deny electric service to this building, in order to compel obedience to its decree forbidding use of the building for human habitation, is arbitrary when it is remembered that electric service and water service may lawfully be demanded for purposes other than domestic consumption.

It is equally well settled, however, that a privately owned power company, and therefore a city, may lawfully refuse to supply electric energy to a building which is not properly wired. A city engaged in such proprietary activity is liable for injury due to its negligence upon the same principles applicable to a privately owned power company. Bowling v. City of Oxford, 267 N.C. 552, 148 S.E.2d 624, and cases there cited. A privately owned power company, and so a city, which introduces into a structure electric power, knowing that the wiring of such structure is in a dangerous condition, is liable in damages for injury to persons or property proximately caused thereby. See Keith v. United Cities Gas Co., 266 N.C. 119, 146 S.E.2d 7. Such company or city may, therefore, refuse to serve a customer when its inspection of his building reveals that the wiring therein is in a dangerous condition. Alabama Power Co. v. Sides, 229 Ala. 84, 155 So. 686; State ex rel. Thalheim v. Louisiana Gas Service Company (La.App.), 117 So.2d 617; Tismer v. New York Edison Co., 170 App.Div. 647, 156 N.Y.S. 28; Carroway v. Carolina Power & Light Company, 226 S.C. 237, 84 S.E.2d 728; Hawkins v. Vermont Hydro-electric Corporation, 98 Vt. 176, 126 A. 517, 37 A.L.R. 1359.

It having been established that the wiring in the plaintiff's house was in a dangerous condition, there was no error in the conclusion of the court below that the city had a right to refuse to allow this dwelling house to be connected to its electrical distribution system.

The plaintiff contends that the annexation by the city of the area which includes her property was void and, therefore, her property not being within the city limits, the city had no authority to forbid its use for residential purposes. In support of her position, she asserts that the annexation ordinance adopted by the city 7 October 1963 did not refer to Chapter 1009 of the Session Laws of 1959 and the city did not record the map showing the annexation, as required by G.S. § 160--453.19, until 14 May 1966.

If a city is authorized by the Legislature to adopt an ordinance, no reference in the ordinance, or in the minutes of the governing body of the city, to the statute conferring such...