Peoples Gas System, Inc. v. City Gas Co., 63-568

• Decision Date: 02 September 1964
• Docket Number: No. 63-568,63-568
• Citation: 167 So.2d 577
• Parties: PEOPLES GAS SYSTEM, INC., a Florida corporation, Appellant, v. CITY GAS COMPANY, a Florida Corporation, Appellee.
• Court: Florida District Court of Appeals

Page 577

167 So.2d 577

PEOPLES GAS SYSTEM, INC., a Florida corporation, Appellant, v. CITY GAS COMPANY, a Florida Corporation, Appellee.

No. 63-568.

District Court of Appeal of Florida, Third District.

Sept. 2, 1964.

Rehearing Denied Oct. 14, 1964.

Scott, McCarthy, Preston & Steel and George W. Wright, Jr., Miami, McClain, Cason & Turbiville, Tampa, for appellant.

Dubbin, Schiff, Berkman & Dubbin, Ward & Ward, Miami, for appellee.

Edgar H. Dunn, Jr., St. Petersburg, Erskine W. Landis, DeLand, amici curiae.

Before HORTON, TILLMAN PEARSON and HENDRY, JJ.

TILLMAN PEARSON, Judge.

The final decree which is appealed held a territorial service area agreement, defining the areas in which two gas utility companies should sell natural gas in Dade and Broward Counties, to be unenforceable. The basis for the decree was a e holding that the agreement was a violation of Chapter 542, Fla.Stat., F.S.A. ¹ This chapter is entitled: 'Combinations Restricting Trade or Commerce' and prohibits, subject to named exceptions, any combination, 'to prevent competition in manufacture, making transportation, sale or purchase of merchandise, produce or commodities, or to prevent competition in aids to commerce.'

The basic question is whether the chapter prohibits contracts made under the circumstances out of which this one grew. The appellant was plaintiff in the trial court and suffered an adverse decree dismissing its complaint. The decree was entered after trial. The chancellor has set down the factual background as follows:

'1. The litigants in the case at bar are two Florida regulated public utilities which voluntarily entered into a territorial service area agreement dividing the territory between them. It appears that upon application of the parties, the (Florida) Railroad and Public Utilities Commission gave its formal approval of the said agreement.

'A dispute later arose between the parties. Plaintiff claims the contract is valid and enforceable. Defendant claims the contract is void and unenforceable as contrary to the anti-trust laws of the state of Florida and the United States.

'Plaintiff admits that a territorial agreement as the one in question, without more, is indeed void. Plaintiff contends that the approval given by the utilities commission is the central fact that takes the agreement outside of the anti-trust laws and renders it valid and enforceable. Plaintiff also ascribes legal significance on the fact that these are 'regulated' public utilities, and further that they are allegedly engaged in interstate commerce.

'Defendant contends that the Commission had no authority to approve such a contract, had no authority to supersede the courts and nullify the anti-trust laws, and that the said utilities are engaged in interstate commerce.'

The suit was a complaint in equity brought by the appellant, Peoples Gas Company, seeking specific performance of the territorial service area agreement and an injunction against further violation of the agreement by construction undertaken by appellee. A pendente lite injunction was entered. At the conclusion of the plaintiff's evidence, the chancellor dismissed the complaint and dissolved the temporary injunction. Upon the first appeal this court reversed and remanded the cause for trial. See Peoples Gas System, Inc. v. City Gas Company, Fla.App.1962, 147 So.2d 334. The question that we found to be presented and our holding were as follows:

'* * * These findings were based on the chancellor's conclusion that the map attached to the agreement controlled over the detailed descrition contained on its reverse side and that the only service areas intended to be covered by the agreement were those shown on the map.'

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* * *

'Applying these principles to the case at bar we conclude that the chancellor erred in placing a construction upon the agreement which treated as surplusage one of its substantial, integral parts which could have been given a reasonable meaning consistent with the other parts of the agreement.'

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* * *

'Having considered the agreement, the map, and the description contained on the reverse side thereof, it is our conclusion that the parties intended the map to be demonstrative of the boundary line between their respective service areas, the areas themselves being delineated by the description contained on the reverse side of the map.

'Other contentions have been advanced by the appellant as further basis for the reversal of the decree appealed which we deem it unnecessary to discuss in view of the result reached herein.'

This court's mandate was issued on January 3, 1963. Plaintiff moved the trial court on February, 8, 1963, for an order citing defendant for contempt for having continued to construct gas facilities in plaintiff's service area, in violation of the circuit court's temporary injunction entered before the appeal. Plaintiff urged that the temporary injunction was re-instated as a result of this court's reversal of the final decree, wherein the temporary injunction had been dissolved. Plaintiff also moved for a new temporary injunction. Both aspects of plaintiff's motion were denied. The chancellor completed the trial of the cause and entered the final decree dismissing the complaint. This appeal followed.

Appellant's first point urges that it was error for the chancellor to dismiss the complaint after trial because this court's prior opinion established that the service area agreement was valid and enforceable. A reference to the portions of our judgment above quoted serves to show that this position is not correct. In the opinion we held that the factual matters found by the chancellor were not determinative and remanded the cause 'for further proceedings not inconsistent herewith.' The holding of this court left for determination by the trial court all issues not dealt with in the opinion. See Kelly v. Kaufman, Fla.App.1958, 101 So.2d 909, 911 and authorities cited therein.

The second and third points presented urge that the chancellor erred in his holding that the service area agreement is in violation of the laws of the State of Florida and therefore, unenforceable. Under these points it is urged that the contract is not in violation of the laws of the State because (a) it is in keeping with the public policy of the State, and (b) the contract was specifically approved by the Florida Public Utilities Commission which had implied authority to approve such agreement. The decree for the chancellor was as follows:

'26. IT IS THEREFORE CONSIDERED, ORDERED, ADJUDGED AND DECREED as follows:

'(1) That Chapter 542, including Section 542.10, is specifically applicable to the contract sought to be enforced herein.

(2) That the claim by the plaintiff that Chapter 542 of the Florida Statutes is or has been amended by implication by the provisions of any existing laws granting powers to the Florida Railroad & Public Utilities Commission, is hereby specifically denied.

(3) That the claim of the plaintiff that the effect of the Florida Statutes, Section 542, has been superseded by implication, or that its enforceability has been avoided or prevented by the acts of the Florida Railroad & Public Utilities Commission approving of the contract in question, is hereby denied.

(4) The counterclaim of the defendant or claims for affirmative relief and for damages, re hereby denied without prejudice to the defendant instituting such other suits at law or in equity in this or other forums or courts having proper jurisdiction, as it may be advised.

(5) The contract between Peoples Gas System, Inc., the plaintiff, and City Gas Company, dated the 9th day of September, 1960, being in violation of the laws of the State of Florida, as set forth above, is hereby declared to be void and unenforceable.

(6) Having adjudicated that the agreement of September 9, 1960, upon which the plaintiff predicated its claim for relief, is void and unenforceable, it is unnecessary for the Court to pass upon the other affirmative defenses, such as estoppel, urged by the defendant, and the Court does not pass upon these issues.

(7) The plaintiff's cause of action and all proceedings hereunder are hereby dismissed with prejudice.'

The factual background, out of which this question arises, is not in controversy. The service area agreement defined the respective service areas of the parties in Dade and Broward Counties, Florida, and prohibited certain activities in the territory of the other.

Pursuant to, and as required by the terms of the agreement, plaintiff and defendant jointly filed a copy thereof with the Florida Public Utilities Commission which approved same by its Order No. 3051 entered in Docket No. 6231-GU on November 9, 1960.

In its order approving the agreement the Florida Public Utilities Commission stated by way of preamble:

'Peoples Gas System, Inc. and City Gas Company of Florida are gas public utilities operating under the jurisdiction of the Florida Railroad and Public Utilities Commission pursuant to Chapter 366, Florida Statutes. Said utilities have filed with this Commission a copy of a Territorial Agreement entered into between them on September 9, 1960. The territorial Agreement is an agreement between said companies as to the territorial service area boundary between said two companies in Dade and Broward Counties, Florida. Its approval is requested by the Commission.

'Chapter 366, Florida Statutes, does not authorize the Commission to grant franchises or certificates of public convenience and necessity to electric and gas public utilities. The Commission's jurisdiction under said chapter extends to the rates, service, and the issuance and sale of certain securities of public utilities as defined therein. In the exercise of this jurisdiction the Commission is specifically authorized to require repairs, improvements, additions and extensions to the plant and equipment of any public utility reasonably necessary to promote the...