State Highway Commission v. Southern Union Gas Co.

• Decision Date: 14 November 1958
• Docket Number: No. 6425,6425
• Citation: 332 P.2d 1007,1958 NMSC 124,65 N.M. 84
• Parties: , 75 A.L.R.2d 408 STATE HIGHWAY COMMISSION of New Mexico, and L. D. Wilson, Chief Highway Engineer, Plaintiffs-Appellants, v. SOUTHERN UNION GAS COMPANY, a Delaware Corporation, Defendant-Appellee.
• Court: New Mexico Supreme Court

Page 1007

332 P.2d 1007

65 N.M. 84, 75 A.L.R.2d 408

STATE HIGHWAY COMMISSION of New Mexico, and L. D. Wilson Chief Highway Engineer, Plaintiffs-Appellants, v. SOUTHERN UNION GAS COMPANY, a Delaware Corporation Defendant-Appellee.

No. 6425.

Supreme Court of New Mexico.

Nov. 14, 1958.

Rehearing Denied Dec. 30, 1958.

Leave to File Second Motion for Rehearing Denied Feb. 3,

1959.

See 334 P.2d 1118.

Fred M. Standley, Atty. Gen., Robert F. Pyatt, Asst. Atty. Gen., John T. Watson, Charles C. Spann, Robert E. Fox, Sp. Asst. Attys. Gen., Moise, Sutin & Jones, Albuquerque, for appellants.

Willis L. Lea, Jr., James R. Wetherbee, Dallas, Tex., Manuel A. Sanchez, Santa Fe, Noble & Noble, Las Vegas, for appellee.

Nordhaus & Moses, Albuquerque, and Hartley, Buzzard & Patton, Clovis, Frank L. Horan, Malcolm W. deVesty, Paul F. Henderson, Jr., Thomas N. Keltner, Albuquerque, amici curiae.

SHILLINGLAW, Justice.

This is a declaratory judgment action brought by the State Highway Commission of New Mexico and its Chief Highway Engineer against the Southern Union Gas Company to determine the constitutionality of Chapter 237 of the Laws of 1957, Sec. 55-7-18, N.M.S.A.1953, and the obligation of the Highway Commission, if any, to reimburse the defendant for the cost of relocating its gas lines required because of the widening and improving of a state highway. As provided by the Federal-Aid Highway Act of 1956, 23 U.S.C.A. Sec. 151 et seq., 62.88% of the cost of the project is to be reimbursable from federal aid funds.

The plaintiffs have refused to reimburse the defendant, contending that such reimbursement would be repugnant to the Constitution of the State of New Mexico for the reasons that payments would be in violation of:

1) Article IX, Sec. 14 which prohibits a donation of state funds in aid of a private corporation;

2) Article IV, Sec. 32 which prohibits the release of an existing obligation;

3) Article IV, Secs. 16 and 30 since the Act does not specify the sum appropriated and leaves the extent of the appropriation and the payment thereof to be determined by the Bureau of Public Roads; and

4) Article IV, Sec. 18 because the Act extends the provisions of the Federal- Aid Highway Act of 1956 by reference to its title only.

This cause was heard below before the Hon. David W. Carmody of the First Judicial District who found that the Act did not violate any of the constitutional provisions hereinabove mentioned. From such adverse judgment the plaintiff Highway Commission has appealed to this court. This cause together with the cases of State Highway Commission v. Southern Union Gas Co., No. 6427; State Highway Commission v. Mountain States Telephone & Telegraph Co., No. 6424; and State Highway Commission v. Ruidoso Telephone Co., No. 6426, were consolidated for argument before us on July 28, 1958. 65 N.M. 98, 99, 101, 332 P.2d 1017, 1018, 1019.

Let us examine the first constitutional question raised by the appellants:

'Reimbursement by states to public utilities for relocation of facilities as provided by Chapter 237, Laws of 1957, is unconstitutional in that it makes a donation in aid of private corporations in violation of Article IX, Section 14 of the Constitution of New Mexico.'

Section 14 of Article IX of the New Mexico Constitution reads as follows:

'Neither the state, nor any county, school district, or municipality, except as otherwise provided in this Constitution, shall directly or indirectly lend or pledge its credit, or make any donation to or in aid of any person, association or public or private corporation, or in aid of any private enterprise for the construction of any railroad; provided, nothing herein shall be construed to prohibit the state or any county or municipality from making provision for the case and maintenance of sick and indigent persons.'

The question before us is whether or not Chapter 237, Laws of 1957, Sec. 55-7-18, N.M.S.A.1953, is repugnant to the above section of our constitution. Chapter 237 reads in part as follows:

'B. Whenever the state highway commission shall determine it is necessary that any facilities be relocated because of the construction of a project on the federal aid primary or secondary systems or on the interstate system, including extensions thereof within urban areas, the state highway commission shall reimburse the owner of such utility facilities for the cost of such relocations, when the proportionate part of such cost is reimbursable from federal funds as provided by the Federal Aid Highway Act of 1956, without discrimination or impairment for lack of easement or because of the provisions of any local franchise entered into with any department, commission or political subdivision of this state, not to exceed an amount approved by the bureau of public roads.

* * *

* * *

'D. For the purposes of this section, the term 'cost of relocation' shall include the entire amount paid by such utility properly attributable to such relocation after deducting therefrom any increase in the value of the new facility and any salvage value derived from the old facility.'

Chapter 237 was passed following the enactment by the Congress of the United States of the Federal-Aid Highway Act of 1956, section 111(a) through (c) of which reads as follows [23 U.S.C.A Sec. 162]:

'(a) Subject to the conditions contained in this section, whenever a State shall pay for the cost of relocation of utility facilities necessitated by the construction of a project on the Federalaid primary or secondary systems or on the Interstate System, including extensions thereof within urban areas, Federal funds may be used to reimburse the State for such cost in the same proportion as Federal funds are expended on the project: Provided, That Federal funds shall not be apportioned to the States under this section when the payment to the utility violates the law of the State or violates a legal contract between the utility and the State.

'(b) For the purposes of this section, the term 'utility' shall include publicly, privately, and cooperatively owned utilities.

'(c) For the purposes of this section, the term 'cost of relocation' shall include the entire amount paid by such utility properly attributable to such relocation after deducting therefrom any increase in the value of the new facility and any salvage value derived from the old facility.'

New Mexico and several of the states, following this action of the Congress, through their legislatures sought to reimburse the utilities for the cost of relocating their facilities. A summary of the states' actions is set out at U.S.Code, Cong. & Adm.News, 85th Cong., 2d Session 1958, No. 6, at pages 745 and 746.

In our consideration of the problem we are favored with the opinions of the appellate courts of four of our sister states constructing their statutes which, for all practical purposes, are identical with ours. The mandate of our constitution makers is as direct as any, and more so than some.

In an Opinion of the Justices, 152 Me. 449, 132 A.2d 440, 443, the Supreme Judicial Court of Maine said:

'The State, however, may, in our view, pay for the cost of relocating such facilities, if it chooses to do so. The purpose of such expenditures is public in nature, and the extent and conditions under which the State may meet such costs are for the Legislature to determine.'

After repeating the above quotation from the Maine court, the justices of the Supreme Court of New Hampshire in an Opinion of the Justices, reported N.H., 132 A.2d 613, 615, added:

'The common-law rule which places the costs of relocating utility facilities on the owner 'specifically admits to legislative change.' [Citations omitted.]'

The Minnesota Supreme Court said in the case of Minneapolis Gas Co. v. Zimmerman, Minn., 91 N.W.2d 642, 644:

'Although gratuities and benevolences of public monies in aid of private undertakings are prohibited, Minn. Const. art. 9, Secs. 1 and 10, does not prohibit the legislature from, by prospective action * * * fixing the conditions of performance and making provisions for the future recognition of claims for damages founded on equity and justice, although such claims would otherwise be damnum absque injuria and unenforceable against the state.'

And the Minnesota court added, at page 651 of 91 N.W.2d:

'* * * [W]here it becomes reasonably necessary to relocate such utility facilities in order to improve the highway for public travel (and especially so, as to a highway designed to facilitate interstate travel and commerce and to further the common defense) an expenditure of funds to effect such relocation is properly a governmental function exercised for a public purpose of primary benefit to the entire community.'

It might be explained that Minnesota is committed to the view, as stated at page 649 of 91 N.W.2d:

'* * * 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 * * *.' [Emphasis ours.]

Needless to say, such has never been the policy in New Mexico.

The Supreme Court of Tennessee is the last to speak on the question and it takes an entirely opposite view in the very recent decision of State of Tennessee ex rel. v. Southern Bell Tel. & Tel. Co., 319 S.W.2d 90. There, as in the case before us, the legislation was attacked on several constitutional grounds, but the court held the statute violated Art. II, Sec. 31 of their constitution. Although the case has been scheduled for reargument, we quote at length from the original opinion filed by the Supreme Court of Tennessee:

'It will be noted that in Article II, Section 31, the Constitution expressly prohibits the State's credit to, and in aid, not only of persons, corporations but municipalities as well.

'Now, with this situation in mind this statute directing the expenditures of State funds to reimburse utilities for adjusting or removing their facilities from publicly owned right of way so that a...