Southern California Gas Co. v. City of Los Angeles

Decision Date29 August 1958
Citation50 Cal.2d 713,329 P.2d 289
CourtCalifornia Supreme Court
PartiesSOUTHERN CALIFORNIA GAS COMPANY, a corporation, Plaintiff and Respondent, v. CITY OF LOS ANGELES, a municipal corporation, Defendant and Appellant. L. A. 24909.

Roger Arnebergh, City Atty., Bourke Jones, Asst. City Atty., and Claude E. Hilker, Deputy City Atty., Los Angeles, for appellant.

Harold W. Kennedy, County Counsel, and Edward H. Gaylord, Deputy County Counsel, Los Angeles, amici curiae on behalf of appellant.

T. J. Reynolds, L. T. Rice, Allen L. Cleveland, Los Angeles, C. R. Salter, Whittier, Bates Booth, Orville A. Armstrong, Jr., and Gertrude Greengard, Los Angeles, for respondent.

Gibson, Dunn & Crutcher, Norman S. Sterry, Ira C. Powers, Martin E. Whelan, Jr., Los Angeles, F. T. Searls, P. E. Sloane, W. E. Johns and R. A. Clarke, San Francisco, amici curiae on behalf of respondent.

TRAYNOR, Justice.

The City of Los Angeles constructed the La Cienaga and San Fernando Relief Sewer as part of a sewer construction program. A short section of this sewer line passes under a narrow strip of land known as the County Strip located outside the city limits in an unincorporated area of the county of Los Angeles. To construct the sewer it was necessary to relocate gas lines of the Southern California Gas Company. The company agreed to relocate its gas lines in the County Strip subject to a later determination of its obligation to do so at its own expense. In conceded its obligation to relocate its lines at its own expense within the city limits but denied that it had the same obligation with respect to its lines located in the County Strip. After the work was completed it brought this action against the city to recover the costs incurred in relocating its County Strip lines and recovered judgment for $12,003.92 plus interest. The City appeals.

The company located its lines in the county pursuant to a county franchise. It is not disputed that this franchise constitutes a contract secured by the United States Constitution against impairment by subsequent state legislation (see County of Los Angeles v. Southern Cal. Tel. Co., 32 Cal.2d 378, 382, 196 P.2d 773) and that the company's rights thereunder can not be taken or damaged for public use without making just compensation. Cal.Const. art. I, § 14; U.S.Const. Amend. 14, § 1; Russell v. Sebastian, 233 U.S. 195, 34 S.Ct. 517, 58 L.Ed. 912; United States v. Brooklyn Union Gas Co., 2 Cir., 168 F.2d 391, 394; City of Petaluma v. Pac. Tel. & Tel. Co., 44 Cal.2d 284, 288, 282 P.2d 43. Accordingly it is necessary to determine what those rights are.

In the absence of a provision to the contrary it has generally been held that a public utility accepts franchise rights in public streets subject to an implied obligation to relocate its facilities therein at its own expense when necessary to make way for a proper governmental use of the streets. New Orleans Gas Light Co. v. Drainage Commission of New Orleans, 197 U.S. 453, 461-462, 25 S.Ct. 471, 49 L.Ed. 831; Chicago, B. & Q. Railway Co. v. State of Illinois ex rel. Drainage Com'rs, 200 U.S. 561, 586, 26 S.Ct. 341, 50 L.Ed. 596; Transit Commission v. Long Island R. Co., 253 N.Y. 345, 171 N.E. 565, 566; Southern Bell Tel. & Tel. Co. v. Commonwealth, Ky., 266 S.W.2d 308, 310; Southern Bell Telephone & Telegraph Co. v. State ex rel. Ervin, Fla., 75 So.2d 796, 800; Western Gas Co. of Washington v. City of Bremerton, 21 Wash.2d 907, 153 P.2d 846, 847; In re Delaware River Joint Commission, 342 Pa. 119, 19 A.2d 278, 280; Natick Gas Light Co. v. Inhabitants of Natick, 175 Mass. 246, 56 N.E. 292, 293; Opinion of the Justices, 152 Me. 449, 132 A.2d 440, 443; Opinion of the Justices, N.H., 132 A.2d 613, 614. The laying of sewers is a governmental as distinct from a proprietary function under the foregoing rule. Detroit Edison Co. v. City of Detroit, 332 Mich. 348, 51 N.W.2d 245, 247-248; Louisville Gas & Electric Co. v. Commissioners of Sewerage of Louisville, 236 Ky. 376, 33 S.W.2d 344, 344-345; Nicholas Di Menna & Sons v. City of New York, Sup., 114 N.Y.S.2d 347, 350; Portland Gas & Coke Co. v. Giebisch, 84 Or. 632, 165 P. 1004, L.R.A. 1917E, 1092; City of San Antonio v. San Antonio St. R. Co., 15 Tex.Civ.App. 1, 39 S.W. 136, 138; Anderson v. Fuller, 51 Fla. 380, 41 So. 684, 688, 6 L.R.A.,N.S., 1026; National Water Works Co. v. City of Kansas, C.C. 28 F. 921, 922-923; cf., City of Los Angeles v Los Angeles Gas & Electric Corp., 251 U.S. 32, 39-40, 40 S.Ct. 76, 64 L.Ed. 121; State ex rel. Speeth v. Carney, 163 Ohio St. 159, 126 N.E.2d 449, 460; Postal-Telegraph-Cable Co. v. City and County of San Francisco, 53 Cal.App. 188, 192-193, 199 P. 1108. Panhandle Eastern Pipe Line Co. v. State Highway Commission, 294 U.S. 613, 55 S.Ct. 563, 79 L.Ed. 1090, is not to the contrary, for in that case the utility's private right of way was involved, not its right to use the public streets.

The company contends, however, that any implied obligations in its county franchise to relocate its pipes cannot be invoked for the benefit of the city operating outside its territorial limits. We cannot agree with this contention. Such obligations rest on the paramount right of the people as a whole to use the public streets wherever located, and the fact that a franchise is granted by one political subdivision as an agent of the state (see, San Francisco-Oakland Terminal Rys. v. County of Alameda, 66 Cal.App. 77, 83, 225 P. 304; Belfast Water Co. v. City of Belfast, 92 Me. 52, 42 A. 235, 237) does not defeat the right of another such agent acting in its governmental capacity to invoke the public right for the public benefit. First Nat. Bank of Boston v. Maine Turnpike Authority, 153 Me. 131, 136 A.2d 699, 711; City of San Antonio v. Bexar Metropolitan Water Dist., Tex.Civ.App., 309 S.W.2d 491, 493; Cummins v. City of Seymour, 79 Ind. 491, 41 Am.Rep. 618, 623-625; New Orleans Gaslight Co. v. Drainage Commission, 111 La. 838, 35 So. 929, 933; see, Gadd v. McGuire, 69 Cal.App. 347, 358-359, 231 P. 754. The fact that the city's use of county streets for its sewers is authorized by section 10101 of the Public Utilities Code has no bearing on the applicability of the foregoing rule. It is true that the rights granted to municipal corporations by that section have been held to constitute franchises subject to the paramount right of the state to make the streets safe for public travel (State v. Marin Municipal Water Dist., 17 Cal.2d 699, 703-704, 111 P.2d 651), but it does not follow that a franchise exercised by a city in its governmental capacity under that section is subordinate to a prior franchise granted to a public utility. The utility involved in the Marin case was a municipal water district operating in a proprietary capacity. See City of South Pasadena v. Pasadena Land & Water Co., 152 Cal. 579, 592-593, 93 P. 490. In the present case, on the other hand, the city is exercising one of its most important governmental powers, a power so important that it is one of the few powers it may exercise outside of its territorial limits without express authorization. Harden v. Superior Court, 44 Cal.2d 630, 638-639, 284 P.2d 9; Mulville v. City of San Diego, 183 Cal. 734, 737, 192 P. 702; McBean v. City of Fresno, 112 Cal. 159, 163, 44 P. 358, 31 L.R.A. 794; see also, National City v. Fritz, 33 Cal.2d 635, 637, 204 P.2d 7; City of Madera v. Black, 181 Cal. 306, 312-313, 184 P. 397. The Marin case itself recognized and applied the established rule that a utility's rights in the public streets are taken subject to the paramount right of public travel, and as stated above, the same rule applies between public utilities and municipal corporations using the streets for sewer purposes.

The company contends, however, that the express terms of its county franchise define its obligation to relocate its lines at its own expense and that by clear implication any other similar obligations are excluded. Section 8 of its franchise provides that 'the County of Los Angeles reserves the right to change the grade of any highway over which this franchise is granted, and the grantee of said franchise, its successors or assigns, shall at once change the location of all pipes and other appliances laid hereunder to conform to such change of grade.' The city contends that the recital of the obligation to relocate the gas lines for changes of grade does not exclude other implied obligations to relocate lines and that any attempt to relieve the company of such obligations would be invalid.

The right of municipal corporations to require utilities to relocate their lines to make way for governmental uses of the streets has usually been described as resting in the police power, and it has frequently been stated in this context that the police power cannot be bargained away. National Waterworks Co. v. City of Kansas, C.C., 28 F. 921, 922-923; City of Macon v. Southern Bell Tel. & Tel. Co., 89 Ga.App. 252, 79 S.E.2d 265, 275; Belfast Water Co. v. City of Belfast, 92 Me. 52, 42 A. 235, 237; Louisville City Railway Company v. City of Louisville, 71 Ky. 415, 422-423; Scranton Gas & Water Co. v. City of Scranton, 214 Pa. 586, 64 A. 84, 85, 6 %.l.r.a./,N.S., 1033; Louisville Gas & Electric Co. v. Commissioners of Sewerage of Louisville, 236 Ky. 376, 33 S.W.2d 344, 344-345; see, New Orleans Gas Light Co. v. Drainage Commission, 197 U.S. 453, 460, 25 S.Ct. 471, 49 L.Ed. 831. Given, however, the municipal power to vacate streets or acquire a lesser interest in them in the first instance than is usually obtained by the public (see Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416, 43 S.Ct. 158, 67 L.Ed. 322; Detroit Edison Co. v. City of Detroit, 332 Mich. 348, 51 N.W.2d 245, 247-248), there would appear to be no basic principle that would prohibit granting a utility a right to compensation for relocating its lines as part of its franchise although such right would...

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