Pack v. Southern Bell Tel. & Tel. Co.

• Decision Date: 04 March 1965
• Citation: 387 S.W.2d 789,19 McCanless 503,215 Tenn. 503
• Parties: , 215 Tenn. 503, 59 P.U.R.3d 276 David M. PACK, Commissioner of Highways and Public Works of the State of Tennessee, for and on behalf of said Department, Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Inc., Appellee, David M. PACK, Commissioner of Highways and Public Works of the State of Tennessee, for and on behalf of said Department, Appellant, v. CITY OF MEMPHIS, by an through its Mayor and Commissioners, William B. Ingram, Claude Armour, James Moore, Hunter Lane, Jr. and Pete Sisson, Appellee, David M. PACK, Commissioner of Highways and Public Works of the State of Tennessee, for and on behalf of the said Department, Appellant, v. MEMPHIS LIGHT, GAS AND WATER DIVISION OF the CITY OF MEMPHIS, by and through its Commissioners, Ray Morton, Edmund Orgill, Martin J. Lichterman, Appellee.
• Court: Tennessee Supreme Court

Page 789

387 S.W.2d 789

19 McCanless 503, 215 Tenn. 503, 59

P.U.R.3d 276

David M. PACK, Commissioner of Highways and Public Works of

the State of Tennessee, for and on behalf of said

Department, Appellant, v. SOUTHERN BELL TELEPHONE AND TELEGRAPH COMPANY, Inc., Appellee, David M. PACK, Commissioner of Highways and Public Works of

the State of Tennessee, for and on behalf of said

Department, Appellant, v. CITY OF MEMPHIS, by an through its Mayor and Commissioners, William B. Ingram, Claude Armour, James Moore, Hunter Lane, Jr. and Pete Sisson, Appellee, David M. PACK, Commissioner of Highways and Public Works of

the State of Tennessee, for and on behalf of the

said Department, Appellant, v. MEMPHIS LIGHT, GAS AND WATER DIVISION OF the CITY OF

MEMPHIS, by and through its Commissioners, Ray

Morton, Edmund Orgill, Martin J.

Lichterman, Appellee.

Supreme Court of Tennessee.

March 4, 1965.

Hanover, Hanover, Hanover & Walsh, Memphis, George F. McCanless, Atty. Gen., J. Malcolm Shull, Asst. Atty. Gen., Nashville, for appellant.

James L. Bomar, Jr., Shelbyville, Roane Waring, Jr., Waring, Walker, Cox & Lewis, Memphis, T. G. Pappas, J. O. Bass, Bass, Berry & Sims, Nashville, for Southern Bell Tel. & Tel. Co., Inc.

Patrick Johnson, Sr., City Atty., Clifford D. Pierce, Jr., Asst. City Atty., Memphis, for City of Memphis, etc.

Charles C. Crabtree, William A. Sands, Frank B. Gianotti, Jr., E. Brady Bartusch, Memphis, for Memphis Light, Gas and Water Division, etc.

DYER, Justice.

These three suits place in issue the constitutionality of Chapter 368, Public Acts of Tennessee for 1963. Although there are three separate utilities involved in this litigation (ranging from privately to publicly owned bodies), they all stand on the same footing for at least two reasons.

First, the activities engaged in by the City of Memphis, a municipal corporation, are of a proprietary character. Nashville Electric Service v. Luna, 185 Tenn. 175, 204 S.W.2d 529 (1947); and Prosser, Torts, Section 109 (2d ed. 1955). Those engaged in by the Memphis Light, Gas & Water Division are to provide those services to their customers within Shelby County, and are also obviously of a proprietary nature. Southern Bell is a private utility publicly regulated. Hence, for our purposes, the three will be treated equally.

Second, regardless of whether the utility facility is present by virtue of statutory permission (as is apparently the case of Southern Bell, see T.C.A. § 65-2105), or present pursuant to ownership of the land upon which the facility is located (as contended by the City), or is present pursuant to a franchise (the Division's contention), since the State's police power is inalienable, it a fortiori follows that property rights are not the determinative factor, since such rights are necessarily subject to the police power. See Atlantic Coast Line R. Co. v. City of Goldsboro, 232 U.S. 548, 34 S.Ct. 364, 58 L.Ed. 721 (1913).

This statute provides that the relocation of utility facilities such as water pipes and mains, sewer lines and other utility facilities located both above and below ground, now on the public rights-of-way, necessitated by the improvement of highways established as a part of the National System of Interstate and Defense Highways shall be made at the cost and expense of the State of Tennessee; provided the cost and expense of such relocation is eligible for Federal participation under the 1956 Federal Aid Highway Act, as amended (23 U.S.C.A. § 123).

This legislation has been enacted for the purpose of securing the benefits of the Federal Aid Highway Act of 1956, which authorizes the use of Federal funds to reimburse the state for the cost of relocating utility facilities in the same proportion as such funds are expended on a given project, with the proviso that Federal money shall not be used for that purpose when payment to the utility violates either State law or a legal contract between the utility and the State.

This Federal legislation offering to pay ninety per cent of the cost of relocating utilities has caused a number of our sister states to likewise enact legislation to take advantage of these funds. Most of these states have held such legislation valid, among them are: Opinion of Justices (1957), 152 Me. 449, 132 A.2d 440; Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642 (1958); Opinion of Justices (1957), 101 N.H. 527, 132 A.2d 613; Northwestern Bell Tel. Co. v. Wentz, 103 N.W.2d 245 (N.D.1960); Department of Highways v. Pennsylvania Pub. Util. Comm., 185 Pa. Super. 1, 136 A.2d 473 (1957); State v. City of Dallas, 319 S.W.2d 767, aff'd. (Tex.Civ.App.1958), State v. City of Austin, 160 Tex. 348, 331 S.W.2d 737 (1960); State Road Comm. v. Utah Power & Light Co., 10 Utah 2d 333, 353 P.2d 171 (1960); State Highway Dept. v. Delaware Power & Light Co., 39 Del.Ch. 467, 167 A.2d 27 (1961); Edge v. Brice, 253 Iowa 710, 113 N.W.2d 755 (1962); Jones v. Burns, 138 Mont. 268, 357 P.2d 22 (1960); State ex rel. City of Albuquerque v. Lavender, 69 N.M. 220, 365 P.2d 652 (1961).

The New Mexico (Lavender) case overruled its prior decision in State Highway Comm. v. Southern Union Gas Co., 65 N.M. 84, 332 P.2d 1007, 75 A.L.R.2d 408 (1958) which opinion held unconstitutional a statute similar to the one before this Court in State ex rel. (Leech, Commissioner of Highways) v. Southern Bell Tel. & Tel. Co., 204 Tenn. 207, 319 S.W.2d 90 (1958) infra. The earlier New Mexico decision had relied on the Tennessee Leech decision.

Two of our sister states have held such legislation invalid. State ex rel. Rich v. Idaho Power Co., 81 Idaho 487, 346 P.2d 596 (1959); Washington State Highway Comm. v. Pacific Northwest Bell Tel. Co., 59 Wash.2d 216, 367 P.2d 605 (1961). These two states, Idaho and Washington, have antidiversion clauses in their constitutions and the decision reached in each is based, in part, on these clauses. Since Tennessee does not have an antidiversion clause in her constitution, these cases would be of no great weight in the issue raised on the constitutionality of Chapter 368 aforesaid.

These antidiversion clauses prohibit the expenditure of highway funds for other than a highway purpose. Implicit in such decisions is the holding that the relocation of utility facilities is not an integral part of highway construction; hence, any reimbursement from the highway fund would violate such a clause. As will be discussed infra, this Court is of the opinion that since utilities are an integral part of the full use of the public rights-of-way, then necessary relocation costs resulting from a project such as that herein involved constitute an integral part of the highway construction cost. Thus, the Idaho and Washington decisions are not as persuasive as might first appear. Nor is there any merit in the argument that a different result should be reached when the obstacles impeding highway construction are unnatural (as here) or natural (as in the case where highway construction entails removal of trees, hills, etc.). If the obstacle stands in the way of the highway construction project, it must be removed (and perhaps relocated as in this case), be it natural or not.

By Chapter 170, Public Acts of 1957, Tennessee enacted legislation similar to Chapter 368 in that it dealt with the same general subject. In that case, State ex rel. (Leech) v. Southern Bell Tel. and Tel. Co., supra, this Court found Chapter 170 to be invalid under Article II, Section 31 of the Tennessee Constitution, in that such required the expenditure of state funds for other than a public purpose. In his dissent in Leech, Justice Tomlinson stated inter alia that:

'To assert, therefore, that the removal of these facilities of the utilities from the right-of-way for such a reason is not for a state purpose is, in my opinion, to assert that which does not square with every day logic.' 204 Tenn. at 229, 319 S.W.2d at 100.

Chapter 368 requires the use of State funds in the relocation of these utilities. The question then is whether such funds will be expended for a public purpose.

In arriving at the decision on this question that has troubled this, and many other courts, we need to kep in mind two things. First, that the construction and maintenance of a public highway is for a public purpose and State funds may be expended thereon for that purpose. Baker v. Hickman County, 164 Tenn. 294, 47 S.W.2d 1090 (1932).

Second, the relocation of the utilities involved herein concerns facilities now on or in public rights-of-way, either owned by a municipality in its proprietary capacity or by a private utility company, and that their relocation has been made necessary in order that the public might have and enjoy a better highway system which modern day travel demands. The Congress of the United States recognized the necessity therefor when it passed the 1956 Federal Aid Highway Act, as amended.

Since 1905 under the holding in Frazier v. East Tennessee Tel. Co., 115 Tenn. 416, 90 S.W. 620, 3 L.R.A.,N.S., 323, Tennessee has been committed to the view that the use of public rights-of-way by utilities for locating their facilities is a proper highway use subject to their principal purpose as travel and transportation of persons and property. This principal was recognized in the case of Johnson v. City of Chattanooga, 183 Tenn. 123, 191 S.W.2d 175 (1945).

In support of the decision in Frazier, supra, this Court cited the Minnesota case of Cater v. Northwestern Tel. Exch. Co., 60 Minn. 539, 63 N.W. 111, 28 L.R.A. 310 (1895). In the case of Minneapolis Gas Co. v. Zimmerman, 253 Minn. 164, 91 N.W.2d 642 (1958), holding a statute similar to Chapter 368 valid, the Minnesota court cited their Cater case and said:

'Clearly since the Cater decision in 1895, Minnesota has been definitely committed to the view that the use of rights-of-way by utilities for locating their facilities is one of the proper and primary purposes for which highways are designed...