Gulf States Util. Co. v. Incorporated Town of Hempstead, 11814.

• Decision Date: 05 December 1946
• Docket Number: No. 11814.,11814.
• Citation: 198 S.W.2d 620
• Parties: GULF STATES UTILITIES CO. v. INCORPORATED TOWN OF HEMPSTEAD et al.
• Court: Texas Court of Appeals

198 S.W.2d 620

GULF STATES UTILITIES CO. v. INCORPORATED TOWN OF HEMPSTEAD et al.

No. 11814.

Court of Civil Appeals of Texas. Galveston.

December 5, 1946.

Rehearing Denied January 9, 1947.

Appeal from District Court, Waller County; W. B. Browder, Judge.

Suit by Gulf States Utilities Company against Incorporated Town of Hempstead and others to enjoin defendants from enforcing an ordinance requiring plaintiff to remove its electric power lines from the streets, wherein named defendant filed a cross-action. From an adverse judgment, plaintiff appeals.

Reversed, and judgment rendered for plaintiff.

Baker, Botts, Andrews & Walne, of Houston, Pitts & Liles, of Conroe, and Orgain, Bell & Tucker, of Beaumont (B. D. Orgain, of Beaumont, of counsel), for appellant company.

W. H. Betts, of Hempstead, Vinson, Elkins, Weems & Francis and Victor W. Bouldin, all of Houston, for appellee town.

GRAVES, Justice.

This admittedly correct statement is taken from appellant's brief:

"This suit was instituted by the Gulf States Utilities Company to enjoin the Incorporated Town of Hempstead, its mayor, and the members of its Board of Commissioners, from enforcing an ordinance of the town requiring the plaintiff company to remove its electric power lines from the streets and alleys of the town. The town, by a cross-action, sought a mandatory injunction ordering the company to remove its lines. In a trial on the merits, before the court without a jury, judgment was rendered denying the injunction sought by the company, and granting the mandatory injunction sought by the town. However, the judgment provided that no writ of injunction should issue on the mandatory injunction against the company until 90 days after judgment should become final, and further ordered that upon filing of bond by the company (which was done), writ of injunction should issue restraining the town and its officers from enforcement of the penal provisions of the town ordinance, pending final determination of the cause. There was no motion for new trial. The Town appealed from that portion of the Judgment restraining the enforcement of the ordinance pending finality of judgment, and the company perfected appeal from the balance of the judgment."

At the hands of this court, appellant-Company prays for a complete reversal of the trial court's judgment, and that the appellee-Town be permanently enjoined from enforcement of its described ordinance, dated January 28, 1946; while, in turn, appellee-Town seeks an affirmance of that judgment in all respects, except in so far as it enjoins the appellee from enforcing such penal provisions of that ordinance.

The appeals together, thus involving the validity and the enforceability of the Town's ordinance so terminating the operations of the Company therein, at once bring under review these two comparatively recent decisions of our Supreme Court: Fleming v. Houston Lighting & Power Co., 135 Tex. 463, 138 S.W.2d 520, 143 S.W.2d 923; Id., Tex.Civ.App., 128 S.W.2d 487, and State ex rel. City of Jasper v. Gulf States Utilities Co., Tex.Civ.App., 189 S.W. 2d 693.

Appellant, grounding its position, in the main, upon Revised Civil Statutes of Texas, Articles 1435 and 1436, contends it had acquired and perfected—by grant direct from the State—a vested right and franchise in, over, and along the appellee's streets for the maintenance of its electric light and power service therein, prior to the incorporation of the Town, which, as a matter of both fact and law, before as well as after its incorporation, was shown to have consented to such use thereof by it; it relies primarily upon this court's construction of that statute in the Fleming case supra, as reported in 128 S.W.2d 487.

Whereas, the appellee plants its opposing position squarely upon the Supreme Court's disposition of the City of Jasper case, as so reported in 189 S.W.2d at page 693 et seq. Indeed, the Town urges that this cause is but a resurgence of, or at least a counterpart to, the Jasper case—indistinguishable from it upon either the facts or the law.

It is, therefore, deemed expedient that the issues thus joined here be first considered in so far as they are deemed referable to or controlled by the holdings of the Supreme Court in the two causes thus brought under consideration by the parties.

After careful comparison of the Supreme Court's opinions in those two cases, it is this court's conclusion that neither of them was decided upon the legal equivalent of the facts here obtaining—indeed, that this cause in its ultimate reaches is distinguishable from them both, in that it is sui generis and in a class by itself, upon the controlling facts that do not bring it within the rules of law applied by the Supreme Court in either one of those somewhat similar situations.

As concern the Fleming case, there was but a single issue of law involved, and that upon undisputed facts, which simply was whether or not the ordinance of the City of West University Place, levying a 4% street-rental charge out of its gross receipts from sales made in the town against the Lighting & Power Company for its use of the city's streets, was valid, in the circumstances under which it was imposed; this court had held the ordinance invalid, upon the ground that the levy so exacting street-rental impaired the pre-existing franchise and contract rights that had inured to the Utilities Company under R.S. Articles 1435 and 1436, and the City's acceptance and consent thereto by the latter's officially granted contracts, and many other acts.

The Supreme Court, however, reversed that judgment, holding, in plain effect, that the consent-franchise, under which the Utilities Company was operating with the City, could coexist along with the new ordinance validly levying the rental charge; and it decided nothing else. The court was careful to restrict its holding to that one, which is made plain both in its original opinion, as reported in 138 S.W.2d 520, and in its subsequent overruling of the motion for rehearing, reported in 143 S.W.2d 923, 924.

Wherefore, since the validity of the street-rental ordinance was thus all that was involved in either court, the reversal of this court's judgment perforce took from it all authority of law as affected such street-rental ordinance; but the Supreme Court did not—either expressly or by necessary implication—overrule this court's construction of R.S. Articles 1435 and 1436, upon which, in part, it had arrived at its own determination in that cause.

In other words, this court had construed these articles, and particularly 1436, in this declaration:

"The appellant's right to the use and occupancy of these streets for that purpose was predicated upon a general statute of the State applying uniformly to all corporations rendering gas or electric service, which declared its general and state-wide policy with reference to such use and occupancy of streets in such cities and towns so created, to-wit: R. S. Article 1436; the right given thereby is plainly and directly granted by the State, and became complete on the giving of the City's consent thereto, which, as indicated supra, occurred in this instance, that being the sole statutory condition-precedent to the investment of the utility with the granted right; Galveston & W. Ry. Co. v. City of Galveston, 90 Tex. 398, 39 S.W. 96, 36 L.R.A. 33; Denison & S. R. Co. v. St. Louis S. W. Ry. Co., 96 Tex. 233, 72 S.W. 161, 201; Russell v. Sebastian, 233 U.S. 195, 34 S.Ct. 517, 58 L.Ed. 912, Ann.Cas. 1914C, 1282; Fort Worth Gas Co. v. Latex Oil & Gas Co., Tex.Civ.App., 299 S.W. 705, writ refused 118 Tex. 674."

The Supreme Court, however, in neither of its opinions in the same case held differently in that respect, but it proceeded, in careful discrimination, to point out that still our courts quite generally, including many of those cited in support of its own opinion by this court, had in effect held that such a street-rental was not inhibited by those statutory provisions; it went so far in its original opinion as to modify the authority of one of the cases this court had so cited, that is, Fort Worth Gas Co. v. Latex Oil & Gas Co., Tex.Civ.App., 299 S.W. 705, holding that its former order in that case of "writ refused" should have been "writ dismissed"; in its opinion on rehearing, 143 S.W.2d at page 924, it again made clear that it had sustained the City's ordinance because it had imposed only a street "rental charge", and not a "Tax or charge for the privilege of doing business"; still further, in Payne v. Massey, Tex.Sup., 196 S.W.2d 493, at page 495, top column 1, it also noted the fact that it had, in the Fleming case, "Held that a municipality might lawfully impose a gross receipts tax against a public utility company as a charge for the use of the streets. In that case there was a permanent occupation and appropriation of certain portions of the streets to the...