Halifax Paper Co. v. Roanoke Rapids Sanitary Dist., 169

• Decision Date: 11 October 1950
• Docket Number: No. 169,169
• Citation: 232 N.C. 421,61 S.E.2d 378
• Court: North Carolina Supreme Court
• Parties: HALIFAX PAPER CO., Inc. v. ROANOKE RAPIDS SANITARY DIST. et al.

Page 378

61 S.E.2d 378

232 N.C. 421

HALIFAX PAPER CO., Inc. v. ROANOKE RAPIDS SANITARY DIST. et al.

No. 169

Supreme Court of North Carolina.

Oct. 11, 1950

George C. Green, Weldon, and Lucas & Rand, Wilson, for plaintiff.

Kelly Jenkins, Roanoke Rapids, and Lassiter, Leager & Walker, Raleigh, for the District.

Allsbrook & Benton, Roanoke Rapids, and Gay & Midyette, Jackson, for Rosemary and its Associates.

DENNY, Justice.

The only assignment of error is based on the exception to the signing of the judgment, dissolving the temporary restraining order, and denying the plaintiff's prayer that such order be made permanent. Therefore, the only question presented is whether error appears on the face of the record. Parker v. Duke University, 230 N.C. 656, 55 S.E.2d 189, and cited cases. Such error appears where the facts found are insufficient to support the judgment, or where the conclusions of law are not supported by the facts. Culbreth v. Britt Corp., 231 N.C. 76, 56 S.E.2d 15; State ex rel. Employment Security Comm. v. Jarrell, 231 N.C. 381, 57 S.E.2d 403; Roach v. Pritchett, 228 N.C. 747, 47 S.E.2d 20; Lea v. Bridgeman, 228 N.C. 565, 46 S.E.2d 555; Smith v. Davis, 228 N.C. 172, 45 S.E.2d 51, 174 A. L.R. 643; Redwine v. Clodfelter, 226 N.C. 366, 38 S.E.2d 203; Rader v. Queen City Coach Co., 225 N.C. 537, 35 S.E.2d 609.

The appellant contends the lease entered into between the District and Rosemary, 1 August, 1932, as amended in 1940, is void insofar as Rosemary and its associates are given priority over other customers of the District who purchase water for industrial purposes.

It is well to keep in mind that we are dealing with a contract between a private corporation and a quasi-municipal corporation, G.S. § 130-39, which is not under the control or supervision of the North Carolina Utilities Commission as to services or rates. G.S. § 62-30(3). Therefore, the contention of the appellant is without merit unless the provisions in the lease of which it complains, constitute such unwarranted discrimination between customers of the District as to be against public policy. G.S. § 130-39(7).

A public utility, whether publicly or privately owned, 'is under a legal obligation to serve the members of the public to whom its use extends, impartially and without unjust discrimination. * * * A public utility must serve alike all who are similarly circumstanced with reference to its system, and favor cannot be extended to one which is not offered to another, nor can a privilege given one be refused to another.' 43 Am.Jur. 599; 51 C.J. 7. This is in accord with our decisions. North Carolina Public Service Co. v. Southern Power Co., 179 N.C. 18, 101 S.E. 593, 12 A.L.R. 304; Solomon v. Wilmington Sewerage Co., 133 N.C. 144, 45 S.E. 536; Griffin v. Goldsboro Water Co., 122 N.C. 206, 30 S.E. 319, 41 L.R.A. 240.

It is settled law with us that utility corporations under the jurisdiction and control of the North ycarolina Public Utilities Commission must conform to the rates or charges established by the commission; and that a contract between such a utility corporation and a customer, fixing a lower rate for service than that established by the commission, is subject to the police power of the State, with respect to the rate to be charged under such contract. G.S. § 62-123. Corporation Commission v. Henderson Water Co., 190 N.C. 70, 128 S.E. 465; Corporation Commission v. Cannon Mfg. Co., 185 N.C. 17, 116 S.E. 178; North Carolina Public Service Co. v. Southern Power Co., supra.

According to numerous authorities, however, a distinction is made between contracts for public utility services generally and a private contract where a rate or service has been fixed as a part of the consideration for the conveyance of property to the utility. 43 Am.Jur. 641; Schiller Piano Co. v. Illinois Northern Utilities Co., 288 Ill. 580, 123 N.E. 631, 11 A.L.R. 454; Cudahy Packing Co. v. City of Omaha, 8 Cir., 277 F. 49; Sunset Shingle Co. v. Northwest Electric Water Works, 118 Wash. 416, 203 P. 978; Southern Pac. Co. v. Spring Valley Water Co., 173 Cal. 291, 159 P. 865, L.R.A. 1917E, 680; Bond Bros. v. Louisville & Jefferson County Metropolitan Sewer Dist., 307 Ky. 689, 211 S.W.2d 867; State ex rel. Raymond Light & Water Co. v. Public Service Commission, 83 Wash. 130, 145 P. 215; Village of Long Beach v. Long Beach Power Co., 104 Misc. 337, 171 N.Y.S. 824. See also Twin City Pipe Line Co. v. Harding Glass Co., 283 U.S. 353, 51 S.Ct. 476, 75 L.Ed. 1112, 83 A.L.R. 1168.

It is stated in 51 C.J., p. 8, Sec. (19) F., 'The fact that a business or enterprise is, generally speaking, a public utility, does not make every service performed or rendered by it a public service, but it may act in a private capacity as distinguished from its public capacity, and in so doing is subject to the same rules as a private person.' City of Phoenix v. Kasun, 54 Ariz. 470, 97 P.2d 210, 127 A.L.R. 84; Western Union Telegraph Co. v. Louisville & N. R. Co., 5 Cir., 250 F. 199. And in 51 C.J. p. 6, Sec. (13) B., it is also said: 'Public utilities have the right to enter into contracts between themselves or with others, free from the control or supervision of the State, so long as such contracts are not unconscionable or oppressive and do not impair the obligation of the utility to discharge its public duties.' Oklahoma Gas & Electric Co. v. Wilson & Co., 146 Okl. 272, 288 P. 316; Oklahoma Gas & Electric Co. v. Oklahoma Natural Gas Co., 85 Okl. 25, 205 P. 768.

In our opinion the agreement between the District and Rosemary is a private contract and does not fall within the purview of rate making power, even if the District were under the control and supervision of the State as to services or rates.

In the case of Sunset Shingle Co. v. Northwest Electric Water Works, supra, the Supreme Court of Washington held that where an electric light company before the construction of its plant contracted with a lumber mill whereby it received the site for its plant and the waste from the lumber mill as fuel in exchange for furnishing steam heat and electricity for power and lighting, the dedication of the electric plant to public service was subject to the contract obligations, even though some of the services to be rendered thereunder were public services.

In the Schiller case, supra, the plaintiff company conveyed an interest in a power dam in consideration of the agreement by the purchaser to furnish it, its successors and assigns, a continuous supply of '72.4 kilowatts of electrical power or energy free of charge, unless prevented by act of God or inevitable accident.' It was contended by the defendant, a successor to the original purchaser, that since it was subject to the provisions of the Public Utilities Act of the State of Illinois, the contract was void. However, the court held the contract was valid and enforceable against the purchaser, its successors and assigns; and, among other things, ...