Department of Highways v. Southwestern Elec. Power Co., 45599

• Decision Date: 15 January 1962
• Docket Number: No. 45599,45599
• Citation: 243 La. 564,145 So.2d 312
• Parties: DEPARTMENT OF HIGHWAYS of the State of Louisiana v. SOUTHWESTERN ELECTRIC POWER COMPANY.
• Court: Louisiana Supreme Court

Page 312

145 So.2d 312

243 La. 564

DEPARTMENT OF HIGHWAYS of the State of Louisiana v. SOUTHWESTERN ELECTRIC POWER COMPANY.

No. 45599.

Supreme Court of Louisiana.

Jan. 15, 1962.

On Rehearing June 29, 1962.

Second Rehearing Denied Oct. 3, 1962.

Dissenting Opinion Oct. 16, 1962.

D. Ross Banister, Philip K. Jones, George W. Lester, Thomas A. Warner, Jr., William J. Doran, Jr., Baton Rouge, for relator.

Provosty, McSween, Sadler & Scott, Alexandria, Taylor, Porter, Brooks, Fuller & Phillips, Baton Rouge, Monroe & Lemann, Chaffe, McCall, Phillips, Burke, Toler & Hopkins, Jones, Walker, Waechter, Poitevent, Carrere & Denegre, New Orleans, Tucker, Bronson & Martin, Shreveport, Plauche & Stockwell, Lake Charles, for amici curiae.

C. Huffman Lewis, Arthur R. Carmody, Jr., Wilkinson, Lewis, Madison & Woods, Shreveport, for defendant-respondent.

John R. Pleasant, Harry V. Booth, Booth, Lockard, Jack, Pleasant & LeSage, Shreveport, for intervenor-respondent.

SUMMERS, Justice.

The Trial Court and Court of Appeal rendered judgment adverse to the claims of the Department of Highways in this suit for a declaration of rights relating to its exercise of the police power. The matter is before this Court on writs granted to review the judgment of the Court of Appeal, Second Circuit.

The Department of Highways is constructing a limited access Federal-aid highway under the authority of LSA-R.S. 48:301--306 in cooperation with the United States Government. The highway in question, a new road, will traverse the northern part of Louisiana, through the City of Shreveport, and has been designated as Interstate 20. In crossing the City of Shreveport the new highway will occupy the space formerly occupied by a number of city streets and alleys.

The defendant, Southwestern Electric Power Company, has a franchise granted to it by the City for the erection of poles and lines and other equipment in the public streets, alleys and parks for transmission, and delivery of its electrical power to its customers.

The Department of Highways, purporting to exercise the police power of the State, has called upon Southwestern to remove and/or relocate at its own expense its poles, lines and other equipment where the highway will cross and replace existing streets and alleys. Upon its refusal the Department sought an injunction to prevent interference with its project and an order to compel removal of Southwestern's facilities from the right-of-way of the highway. The defendant, Shreveport Transit Company, Inc., intervened in that proceeding. The transit company is a public utility corporation engaged in the operation of a system of trolley and gasoline busses for the transportation of passengers over regularly scheduled routes in the City, pursuant to a franchise from the City. The highway project will require the relocation and adjustment of a large number of overhead trolley lines, feeder lines and other facilities used in the operation of its franchise.

The City of Shreveport has refused to require the utility companies to accommodate the highway construction taking the position that the matter is one to be resolved between the Department and the utilities, feeling, too, it is inferred, that it cannot impair the obligations created in the utility franchises. The utility companies have established that the removal required by the Department's project will involve substantial costs. They contend that the action of the Department constitutes expropriation--a taking of their property without their consent for which compensation is due.

By agreement between the Department and the utilities the work is progressing and the issue is simply whether the privately owned utility companies can be compelled to remove their facilities without being compensated for the substantial costs involved.

Under authority of Acts of Congress, ninety per cent of the cost of relocating these facilities would be borne by the Federal Government unless this payment violates state law or a contract between the parties. ¹ There is no claim of any legal contract between the utilities and the State which would be violated by such reimbursement; nor has reference been made to any law of Louisiana which would be violated by the State reimbursing these utilities, unless we infer from the position taken by the Department of Highways that, inasmuch as that agency is empowered to compel compliance with its demands without reimbursing the utilities for the expense involved in the relocation and removal of its facilities, to nevertheless reimburse them would violate the law of the State. If the position of the Department is untenable, that agency can nevertheless proceed by way of expropriation under laws of this State granting that authority, and under which authority compensation by the Department to the utilities is expressly required. ² Reimbursement to the State would then be clearly authorized by the congressional authority embodied in Section 123, supra. (Footnote 1)

The determination of the questions at issue is not dependent upon those aspects of this case which have to do with reimbursement between the State and Federal Government, nor is that factor an influence upon the judgment in this cause for these questions must be resolved under applicable state law. It is mentioned, however, because the decision here will necessarily bear upon reimbursement once the legal questions presented by this litigation are settled with finality by this Court. Likewise, it is not determinative of the issues here that the Department has voluntarily agreed to reimburse the City for the costs involved in the removal of city facilities similarly situated, however difficult it may be to find a valid reason for the difference in attitude of the Department toward utilities operated by a city for profit and those operated by private utility companies.

Whether the utility companies are entitled to compensation from the Department requires the determination of these questions under laws of our State: (1) Do the franchises granted the utilities by the City of Shreveport constitute 'property'? (2) If so, can the Highway Department take this property from the utilities by administrative order, without paying compensation therefor, by exercising the inherent police power of the State?

The ordinance authorizing the franchise which Southwestern now holds constituted a grant of 'the right to lay pipes and erect poles through any of the streets, alleys, avenues, and sidewalks of the City of Shreveport, for the purpose of distributing * * * electricity of said company and for said purpose to maintain posts, conductors, lamps and burners'. The ordinance creating the franchise of Shreveport Transit Company, Inc. Likewise was a grant 'for the purpose, of maintaining and operating trackless trolley coaches and motor busses, with all necessary and incidental appurtenances, on certain streets and public places' within the City.

These franchises are privileges bestowed by the City on the respective utilities for a consideration and the exercise of these privileges necessarily involved the use of the property of the City in the manner designated by the authority creating those privileges. The privileges, uncommon rights thus bestowed, together with the right to the use of city property which is indispensable to those privileges, constitute a valuable property right of the utilities ³ which under fundamental guarantees cannot be taken or damaged except for public purposes and after just and adequate compensation is paid. This right once created and accepted cannot be altered, hindered or otherwise impaired without the consent of the utilities. ⁴

The Department's right to take the property of the utilities by way of expropriation being unquestioned, their right to resort to the police power and thereby avoid the consequences of proceeding by way of expropriation, which involves the payment of compensation, is the only remaining issue.

Police power, like the power of eminent domain, is an element of sovereignty. Though lacking a precise definition, it has been referred to in this State as follows:

'* * * (it) may be said to be the right of a State, or of State functionary, to prescribe regulations for the good order, peace, protection, comfort and convenience of the community, which do not encroach on the like power vested in Congress by the Federal Constitution. Of that power, it may well be said, that it is known when and where it begins; but not when and where it terminates. It is a power, in the exercise of which a man's property may be taken from him, where his liberty may be shackled, and his person exposed to destruction, in cases of great public emergencies.' New Orleans Gas-Light Co. v. Hart, 40 La.Ann. 474, 4 So. 215. See also Fernandez v. Alford, 203 La. 111, 13 So.2d 483.

The police power, unlike the power of eminent domain, is used to regulate; the power of eminent domain being used to acquire property from private ownership. ⁵

The rule concerning the taking of private property for public use has been stated thus:

'* * * it is universally conceded that when land Or other property is actually taken from the owner and put to use by the public authorities, the constitutional obligation to make just compensation arises, however much the use to which the property is put may enhance the public health, morals or safety. No one would seriously contend that private land or buildings or other property might be taken for a hospital, or for a prison, or for the abolition of a dangerous grade crossing without as complete a liability for compensation arising as if the land were to be used for a street or for a city hall.

'Not only is an actual physical appropriation, under an attempted exercise of the police power, in practical effect an exercise of the power of eminent domain, but if regulative legislation is so unreasonable or arbitrary as virtually to deprive a person of the complete use and...