Hicks v. City of Monroe Utilities Commission

• Decision Date: 01 June 1959
• Docket Number: No. 44444,44444
• Citation: Hicks v. City of Monroe Utilities Commission, 112 So.2d 635, 237 La. 848 (La. 1959)
• Parties: , 29 P.U.R.3d 275 Donald E. HICKS et al. v. CITY OF MONROE UTILITIES COMMISSION et al.
• Court: Louisiana Supreme Court

Page 635

112 So.2d 635

237 La. 848, 29 P.U.R.3d 275

Donald E. HICKS et al. v.CITY OF MONROE UTILITIES COMMISSION et al.

No. 44444.

Supreme Court of Louisiana.

June 1, 1959.

Rehearing Denied June 25, 1959.

George M. Snellings, Jr., Haynes L. Harkey, Jr., Monroe, for applicants.

Frank H. Peterman, Alexandria, Arthur C. Watson, Natchitoches, Frank Voelker, Jr., Lake Providence, Edward F. LeBlanc, Abbeville, Edward N. Engolio, Plaquemine, amici curiae.

Theus, Grisham, Davis & Leigh, Monroe, for plaintiffs-respondents.

PONDER, Justice.

We granted a review in this case because it presented important issues that had not heretofore been passed upon by this Court.

The relators are contending that the Court of Appeal erred in confusing the legality of rate classification with legality of rate; in holding that the rate classification was unlawful; and in substituting its judgment for the judgment of the administrative commission charged with that authority and responsibility.

The sole issue in this case is whether or not a minicipality which owns and operates its utilities, can charge a higher rate for water to customers outside the city limits who take water service only, than it charges for water to those customers outside the city who take the combined service of water and electric power.In other words is this rate classification justified where the customers are otherwise similarly situated.

We have carefully considered the arguments and briefs of opposing counsel, examined the record, and analyzed the opinion handed down by the Court of Appeal in disposing of this controversy and find that no new issue has been raised in this Court and that all of the issues presented were carefully, painstakingly, ably, and correctly disposed of by the Court of Appeal, 108 So.2d 127.Therefore no useful purpose could be gained in rehashing and reiterating the findings of the Court of Appeal consequently we adopt the opinion of the court of appeal as the opinion of this court, viz.:

'Involved in this appeal is a suit for an injunction directed against the City of Monroe, as the owner, and the City of Monroe Utilities Commission, as the operator (under the provisions of Act 256 of 1956), of a municipal water plant and water distribution system, brought by water customers of defendants who reside in an area outside of but adjacent to the city limits of Monroe.

'By their suit plaintiffs, 73 in number, challenged as discriminatory and confiscatory a water rate which had been fixed by defendantUtilities Commission.They seek a declaratory judgment decreeing the illegality of the questioned rate, a preliminary injunction to restrain the enforcement of the rate complained of while the litigation is in progress, and a final judgment making the injunction permanent.To this petition defendants tendered an exception of no cause of action and subject to that exception filed an answer in which they admitted most of the allegations of fact contained in plaintiffs' petition but denied their conclusions of law and asserted the reasonableness of the rate complained of and defendants' right to impose it.The propriety of a declaratory judgment to resolve the controversy was not questioned.

'When the rule for a preliminary injunction was called for trial, the exception of no cause of action was referred to the merits, and upon a joint stipulation of fact the case proceeded to trial on its merits and was, accordingly, tried and submitted to the court for decision, following which judgment was rendered and signed sustaining the exception of no cause of action and dismissing plaintiffs' suit.From this judgment plaintiffs appealed.

In the consideration of the exception of no cause of action every well-pleaded allegation of fact contained in plaintiffs' petition must be accepted as true.But, the court is not bound to accept the conclusions of the pleaders.However, plaintiffs are entitled to the benefit of such legal consequences as properly result from the well pleaded facts.

'The facts alleged in their petition and upon which plaintiffs base their right to the relief they seek may be summarized as follows:

'For many years the City of Monroe has owned and operated a municipal waterworks plant and distribution system by means of which water is supplied to residents of the City of Monroe and which has also been extended from time to time so as to serve areas outside of but adjacent to the city limits.The City has also for many years owned and operated an electric generating plant and distribution system which has also from time to time been extended beyond the city limits and by means of which electricity is supplied not only to the residents of the City but to the residents of various areas adjacent to but outside the city limits.By Act 256 of 1956the defendantUtilities Commission was created and vested with 'the entire management and operation of the Electric Light and Power Water Plant Systems owned by the City of Monroe', and since the effective date of that Act this Commission has managed and operated both of these municipal utilities.

'The area in which plaintiffs live is one of the areas outside the city limits in which electric current has been made available from the City of Monroe's electric distribution system; and this area is also served with electric current by Louisiana Power & Light Company, so that the residents of this area enjoy two sources of electric service and are privileged to choose between these two sources which they prefer to patronize.

'For some years prior to February 28, 1958, E. W. Cruse, doing business as Cruse Water System, had operated a water distribution system in the area in which plaintiffs reside, by means of which a supply of water was furnished to the residents of that particular area.The water customers of the Cruse Water System were about equally divided between the City of Monroe and Louisiana Power & Light Company in the purchase of their electric requirements, with plaintiffs being among those who procured their electric service from Louisiana Power & Light Company--at rates less than those charged by the City of Monroe for the same electric consumption.

'By written contract of sale and purchase entered into under date of February 28, 1958, the City of Monroe acquired from E. W. Cruse that portion of his water distribution system which was being used by him to supply water to the area in which plaintiffs reside.This transfer was authorized, insofar as the vendor was concerned, by Special OrderNo. 2--58 of the Louisiana Public Service Commission, and on the part of the City of Monroe by its OrdinanceNo. 3245 adopted January 28, 1958, but it was consummated without solicitation from or consultation with the plaintiffs or other water customers affected thereby.No other commercial source of water supply exists in the area in which plaintiffs reside, so as a result of this acquisition by the City of Monroethese plaintiffs, without any request on their part and without their consent, became customers of the waterworks system of the City of Monroe and wholly dependent upon defendants for an adequate supply of water.

'Following the City's acquisition of the Cruse Water System the defendantUtilities Commission took over the operation of this water distribution system and immediately put into effect in this area the same water rate schedule which was applicable to all other customers of the City's waterworks system and which was as follows:

""Rate Schedule "C"--

All Metered Water Service

                                               per meter
                Rates                  Quantity Rates          per month
                First            50,000 gals. per IM gals......... $0.35
                Next             75,000 gals. per IM gals........   0.30
                Next             75,000 gals. per IM gals........   0.25
                Next            300,000 gals. per.  IM gals.......   0.20
                All excess gals. per IM gals.....................   0.15
                Minimum Charge
                For 3/4" meter (or less) ........................   2.50
                For 1" meters ...................................   2.75
                For 1 1/2" meters ...............................   3.00
                For 2" meters ...................................   5.00
                For 3" meters ...................................   8.00
                For 4" meters ...................................  10.00
                For over 4" Diameter ............................ 100.00
                The minimum charge will entitle the
                consumer to the quantity of water which
                that monthly minimum charge will purchase
                at the quantity rates.'
                

'This rate was higher than the rate schedule at which water had been furnished to its customers by the Cruse Water System, but plaintiffs offered no protest to the institution of this rate schedule since the rates which they were thus asked to pay were uniform with those charged other customers of defendants who were similarly situated.

'However, on or about April 26, 1958 each plaintiff received either by hand delivery or through the mail an unsigned notice dated April 28, 1958 reading as follows:

"Notice to Water Customers Outside the City of Monroe, Louisiana

"This is to notify you that, effective with the next meter reading date which will be approximately May 7th, 1958, rates for water supplied by the City of Monroe, Louisiana through the City of Monroe Utilities Commission to non-electric power customers serviced through meters located outside the city limits of Monroe, Louisiana, will be as follows:

'Schedule C--1

'First 1,000 Gallons at $7.50 per 1,000 Gallons

'All excess over 1,000 Gallons at $.50 per 1,000 Gallons

'Minimum Bill--$7.50

"This rate classification and schedule is put into effect pursuant to unanimous action of the City of Monroe Utilities Commission for the reason that it is uneconomical to supply city water service beyond the geographical limits of the City of Monroe, Louisiana as an accommodation service only.

'Monroe, Louisiana, April 28, 1958.

'City of Monroe Utilities Commission

'By_ _

'F. L. Smith, Chairman'

'A...