Salisbury & S. Ry. Co. v. Southern Power Co.

• Decision Date: 20 December 1919
• Docket Number: 385.
• Parties: SALISBURY & S. RY. CO. ET AL. v. SOUTHERN POWER CO.
• Court: North Carolina Supreme Court

101 S.E. 593

179 N.C. 18

SALISBURY & S. RY. CO. ET AL. v. SOUTHERN POWER CO.

No. 385.

Supreme Court of North Carolina

December 20, 1919

Appeal from Superior Court, Guilford County; Shaw, Judge.

Petition by the Salisbury & Spencer Railway Company and the North Carolina Public Service Company for a writ of mandamus against the Southern Power Company. A demurrer to the petition was overruled, and defendant appeals. Affirmed.

Allen and Walker, JJ., dissenting.

A demurrer ore tenus admits all of the allegations of the complaint.

This was a mandamus against the Southern Power Company, to compel it to continue to furnish electric current from its substation at Salisbury to the plaintiffs for the use and benefit of Salisbury, Spencer, and East Spencer and the inhabitants thereof, and for operation of the electric street car system, as theretofore furnished, and to compel said Southern Power Company to furnish such service power and current, and without discrimination in favor of others for like service, under the same or substantially similar conditions. The Southern Power Company answered, and in addition demurred ore tenus to the complaint, alleging: (1) That the court has no jurisdiction to compel it to furnish electric current and power from its substation at Salisbury to the plaintiff for the purpose set forth in the complaint and (2) that the court has no power or jurisdiction to require the defendant to furnish power at a uniform rate without discrimination against the plaintiffs. The court held that it had jurisdiction to pass upon and determine the matters set out in the complaint, and that the complaint states a good cause of action.

The complaint avers that the plaintiff Salisbury & Spencer Railroad Company is a public service corporation, under the laws of this state, which operates a street railway, electric light, and gas plant in Salisbury, Spencer, and East Spencer its franchise rights being granted by those cities to operate the street railway by electricity and to furnish electric current for the public lighting of said cities and to the inhabitants of the same for domestic and power purposes. On January 11, 1912, it leased all of its rights and property to its coplaintiff the North Carolina Public Service Company for a period of 50 years. The latter company is a public service corporation chartered under the laws of this state, with its principal offices in Greensboro, and it owns a large part of the capital stock of the Spencer & Salisbury Railroad Company and has for many years past and still does control and manage the same through the 50-year lease, including the purchase of electric power from the defendant and its distribution to said city for domestic and industrial use, as well as the public lighting for the streets of the three said cities, and it also owns and operates similar properties in Greensboro High Point, and Concord, N. C.

The defendant power company is a public service corporation chartered in New Jersey and doing business in this state, with its principal office in Charlotte. It is engaged directly and indirectly in the business of generating hydroelectric power by means of dams built across large streams of water, which by suitable machinery is converted into electric power and conveyed over large wires by heavy voltage in great quantities to "receiving substations." At these stations large transformers are installed by the defendant company, by which the current thus received is "stepped down," that is, reduced from 100,000 voltage to as low as 2,300 volts, and after being so reduced the power is sold and distributed to various and sundry consumers connected with these substations. At each of these substations the agent of the defendant company keeps a record, by means of separate meters, of the amount of electric power furnished each consumer. The defendant has built transmission lines to various points in Western and Piedmont, North Carolina, Gastonia, Concord, Salisbury, Spencer, Statesville, Winston-Salem, High Point, Greensboro, Burlington, Graham, Hillsboro, Durham, Spray, and Reidsville, and to many cotton mills and other industrial plants along or near its lines connecting these various cities and localities, and at each of the above places it maintains and operates various substations as above described.

The defendant power company is a public service corporation, and only by reason thereof enjoys the right of eminent domain under which it has been enabled to construct and operate these lines, and the said company is the only hydroelectric company whose transmission line extends to the points above named, including the towns of Salisbury, Spencer, and East Spencer. It enjoys, therefore, a monopoly of this business, and also by long service its business is "affected with a public use," and it is therefore subject to public control and regulation, not only in fixing and prescribing its rates, but more especially in the requirement that it shall furnish its facilities at the same rate to all receiving them under like conditions. The plaintiff the North Carolina Public Service Corporation, prior to the time the defendant's transmission line was completed at Salisbury, generated its own electric current and power by a local steam plant, but about ten years ago the defendant approached the plaintiffs, assuring them that it would furnish power at less cost than it could be produced by steam generated from coal, and on this assurance the plaintiff and a large number of mills, factories, and other industrial plants were induced to discontinue their steam plants and made contracts with the defendant for their necessary electric current and power. Thereby the defendant acquired a complete monopoly of the hydroelectric power market at Salisbury and Spencer. The contract between the plaintiffs and the defendant was for ten years, and expired August, 1918. Under that contract the defendant charged the plaintiffs a rate of 1.1 per Kw. H. Some months prior to the expiration of this contract the defendant proposed to the plaintiff Public Service Company to make a new contract for the same service for another ten years at a substantial increase in rates. The defendant refused to contract for a period of less than five years, and persisted in demanding an increase in rates, and sent its agent to the home office of the plaintiff North Carolina Public Service Company in Greensboro, and demanded that the contract which it then presented should be signed within 48 hours. The rate stipulated in said contract was greatly in excess of the former rate, being increased to 1.5 per Kw. H., and was based upon the then war price of coal according to the statement of defendant's agent.

The plaintiff especially objected to this increase of increased rate, on the ground that it was beyond the rate charged by the defendant to other companies for like service under the same or substantially similar conditions, and the plaintiff declined to sign said contract.

The defendant power company, after the expiration of the ten-year contract, rendered the Public Service Company bills for current and power at the rate of 1.8 mills per Kw. H., and notified the plaintiff that if this rate was not paid it would discontinue supplying current to the plaintiff at Salisbury. The president of the defendant power company is J. B. Duke, who is the principal owner thereof and controls its policy and management. He is also largely interested financially in various cotton mills in North and South Carolina, and in street power and street railway and electric lighting also, some of which mills and plants are located in Charlotte, Gastonia, Concord, and Durham, and all are furnished light and power through the current received from the defendant power company, which has been and is selling current to those mills at a maximum rate of 1.1 per Kw. H., and in some instances to be used for power and lighting the mills and villages and other plants in which the defendant's principal owner is interested, and in some instances at a lower rate, greatly less than is charged and proposed to be charged the plaintiffs under substantially similar conditions; the said J. B. Duke is also the principal owner, either directly or indirectly, through his immediate family, of a subsidiary corporation of the Southern Power Company known as the "Southern Public Utilities Company," which last-named company owns the public utility franchises in Charlotte, Winston-Salem, Reidsville, and other towns and cities, and is now engaged in furnishing hydroelectric power and lights to those municipalities.

The power is furnished by said defendant company to the Public Utilities Company, one of its subsidiary companies, at its substations in Charlotte, Winston-Salem and Reidsville, under a long-term contract extending to 1944 at a less rate than it now charges the plaintiffs for current furnished under substantially similar conditions at its substation near Salisbury. The defendant power company is now selling distributing power from its substation at Salisbury to the Vance Cotton Mill under a contract entered into in the past year, and since the war began, at a rate of 1.1 per Kw. H. for day service and at a still lower rate for night service, and for the same service through the same substation under substantially the same conditions it is charging these plaintiffs 1.8 mills per Kw. H. The defendant power company is also furnishing current and power to the municipality of Salisbury from the same substation for water pumping services at a rate of 1 cent per Kw. H., and for like service under similar conditions is charging these plaintiffs 1.8 cents per Kw. H., or nearly double.

The plaintiffs are among the largest single purchasers and consumers of power and...