Patterson Orchard Co. v. Southwest Arkansas Utilities Corporation

• Decision Date: 08 July 1929
• Docket Number: 88
• Citation: Patterson Orchard Co. v. Southwest Arkansas Utilities Corporation, 179 Ark. 1029, 18 S.W.2d 1028 (Ark. 1929)
• Parties: PATTERSON ORCHARD COMPANY v. SOUTHWEST ARKANSAS UTILITIES CORPORATION
• Court: Arkansas Supreme Court

18 S.W.2d 1028

179 Ark. 1029

PATTERSON ORCHARD COMPANY v. SOUTHWEST ARKANSAS UTILITIES CORPORATION

No. 88

Supreme Court of Arkansas

July 8, 1929

Appeal from Sevier Chancery Court; C. E. Johnson, Chancellor affirmed.

Decree affirmed.

Lake Lake & Carlton, for appellant.

Abe Collins and Arnold & Arnold, for appellee.

OPINION

BUTLER, J.

The chancery court of Sevier County, on the petition of the Southwest Arkansas Utilities Corporation, rendered its decree in favor of the petitioner condemning a right-of-way across the orchard lands of the Patterson Orchard Company thirty feet in width, for use as a right-of-way for its lines used in the transmission and supply of electricity for public use and adjudging to the Patterson Orchard Company for its damage the sum of $ 1,000. From this decree the Patterson Orchard Company appeals to this court, and to that part of the decree adjudging damages the Southwest Arkansas Utilities Corporation has filed its cross-appeal, and has also asked this court to determine on its cross-appeal the question as to whether a foreign corporation engaged in the business of generating and transmitting electricity for public use, and which has complied with the laws of this State with reference to foreign corporations doing business herein, is authorized to exercise the right of eminent domain.

There are five questions presented to this court for its determination by the appellant, Patterson Orchard Company, which are as follows: (1) Could the appellee, a domestic public utilities corporation, clothed with the power of eminent domain, exercise that power for the benefit of a like foreign corporation which had complied with the general laws of the State prescribing upon what terms a foreign corporation might do business therein? (2) Was the purpose for which a right-of-way was sought to be condemned across the appellant's orchard one to serve a private use and not a public use, and, if the former, was the decree of the chancery court justified by law? (3) Was the right-of-way sought to be condemned necessary in order to enable the appellant or its lessee to perform their functions and duties to the public? (4) Was the chancery court correct in decreeing to appellee a fee simple title in and to the strip of land across the orchard of appellant? (5) Was the damage awarded to appellant adequate?

On its cross-appeal the appellee contends that the damages awarded were not only adequate, but excessive, and against the preponderance of the testimony. Appellee also has asked this court to pass upon the question as to whether or not a foreign corporation, having complied with the general laws of the State with reference to a foreign corporation doing business therein and engaged in the business of generating and transmitting electricity for public use, has the right to exercise the power of eminent domain and condemn a right-of-way for the purpose of its business.

The appellant, in addition to the questions presented and hereinbefore stated, challenges that part of the decree of the court adjudging the costs against it.

The testimony in this case as to the amount of damages sustained by the appellant is conflicting, but there is no dispute as to the other facts in the case, which are substantially as follows: The Southwestern Gas & Electric Company, a Delaware corporation, after having complied with the statutes of this State, was engaged, among other things, in the transmission of electricity for public use, and prior to the 17th day of March, 1928, owned and operated a transmission line from DeQueen, by way of Horatio, to Foreman, in Sevier County, Arkansas, the right-of-way of which paralleled the public highway and was adjacent thereto. This transmission line was a 33,000-volt capacity. At and before the date mentioned above, the said company was engaged in rebuilding, relocating and increasing the capacity of its high power electric transmission line running from Shreveport, Louisiana, to DeQueen, Arkansas, and had proceeded with this work until it reached the orchard of the appellant, located about three miles south of DeQueen, and, having been unable to obtain the right-of-way further across said orchard, filed its suit in the Sevier Circuit Court by which it sought to condemn said right-of-way for its own use, and, having made the deposit in the sum named by the circuit judge, obtained on said day an order permitting it to enter upon the land of the appellant for the purpose of constructing its transmission line, and, on the same day that the order was obtained, put a large force of men on the work and proceeded with the construction of said line across the appellant's land. On the same day, and a short time after the order had been procured and the work begun, the appellant, learning of this, filed its petition for a revocation of the order, setting up as grounds therefor the fact that the Southwestern Gas & Electric Company was a foreign corporation, and alleging that it was without authority or right to exercise the right of eminent domain or condemn a right-of-way over the appellant's land. This petition was presented to the judge at about noon on the same day on which the order was made, namely, March 20, and thereupon the judge issued an order holding in abeyance his former order, and setting March 24 for the hearing of the original petition of the Southwestern Gas & Electric Company. A copy of this last order was duly certified by the clerk and served by the sheriff upon the superintendent of the electric company in charge of the work. At that time the electric light poles had been erected across the entire tract, a distance of three-quarters of a mile, and the wires had been unrolled and lay across the orchard and the branches of some of the peach trees, and, after the order revoking the former order was served, the workmen continued to work for about an hour or an hour and a half, attaching the wires to the poles, the reason given for this apparent disobeyance of the order being that the work done after the notice of the revocation of the former order was that the wires might become tangled or damage the trees, and that they might properly be preserved.

On the 21st of March the appellant, Southwest Arkansas Utilities Corporation, was organized with a capital stock of $ 25,000, divided into 250 shares of the par value of $ 100 each. The superintendent of the gas and electric company took 248 shares of this stock and two other employees of said electric company took one share each. The purpose for which this company was organized, as stated in its charter, was to generate and transmit electricity for public use. As soon as, or a short time after, its organization and the issuance of its charter, the 248 shares taken by the superintendent of said company were issued to the gas and electric company in exchange for the transmission line extending from the north bank of Little River over the orchard of appellant to the substation of the gas and electric company at DeQueen, and the said line was then leased by the appellee to the gas and electric company. On the 24th day of March, the date set for the hearing of the petition of the Southwestern Gas & Electric Company, the appellee filed its intervention, alleging the purchase from the gas and electric company of all its rights in and to the transmission line constructed by it across the orchard of appellant. On the day of the hearing, after a resolution of the stockholders of the new company had been passed, by which there was adopted for the appellee corporation the route across appellant's orchard which had previously been selected by the gas and electric company, it filed in the office of the circuit clerk of the county its complaint, which is the original complaint in the case at bar, and the original suit and intervention were abandoned. A date was set for the hearing of the complaint and petition filed by the appellee, the 11th day of April, and on that day an order was entered authorizing the appellee to go on the lands of the appellant for the purpose of constructing and maintaining a transmission line, and requiring the appellee to make a deposit of $ 750 to be used in payment of such damages as might be finally assessed against it, which deposit was accordingly made. The appellant filed its answer, and asked that the cause be transferred to equity, and that it have a permanent injunction against the appellee. Upon a hearing, the chancery court entered a decree, to which reference has been heretofore made.

1. It is urged by the appellant that, under the facts disclosed the creation of the Southwest Arkansas Utilities Corporation was but a subterfuge for acquiring a right-of-way indirectly for the Southwestern Gas & Electric Company, which could not be done directly because of a constitutional prohibition; that the sole purpose behind the organization of the appellee company was to acquire a right-of-way for the gas and electric company, and that therefore it had no right to exercise the power of eminent domain for such purpose. It cannot be questioned that one of the reasons, if indeed not the principal one, for the formation of the appellee company was the procurement of a right-of-way for the gas and electric company, but there was also testimony to the effect that said company was organized to serve, and has served, as a developing company for the Southwestern Gas & Electric Company, and that it will own the right-of-way over which the new transmission line shall run until such time as it shall see fit to dispose of this property, and that, while at that time it had no funds available to pay out for development purposes, it expected to get funds from the gas and electric company, or from banking firms, bond issues, or...