Town of Grimesland v. City of Washington

• Decision Date: 19 September 1951
• Docket Number: No. 18,18
• Citation: 66 S.E.2d 794,234 N.C. 117
• Parties: TOWN OF GRIMESLAND, v. CITY OF WASHINGTON et al.
• Court: North Carolina Supreme Court

Page 794

66 S.E.2d 794

234 N.C. 117

TOWN OF GRIMESLAND, v. CITY OF WASHINGTON et al.

No. 18

Supreme Court of North Carolina.

Sept. 19, 1951

J. D. Grimes, Washington, S. O. Worthington, Albion Dunn, Greenville, for plaintiff, appellant.

L. E. Mercer, and Rodman & Rodman, all of Washington, Brooks, McLendon, Brim & Holderness, Greensboro, for defendant, appellee.

DEVIN, Chief Justice.

The right of the Town of Grimesland to construct and maintain an electric system for the distribution and sale of electric current to consumers beyond its corporate limits, and to own and operate transmission lines for that purpose along the highway or over and upon rights of way acquired, is not questioned in this action. G.S. § 160-255. But this legislative authority would not be regarded as conferring the right to exclude competition in the territory served. Having the right to engage in this business gives no exclusive franchise, and if from lawful competition its business be curtailed, it would seem that no actionable wrong would result, nor would it be entitled to injunctive relief therefrom. Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374; Tennessee Electric Power Co. v Tennessee Valley Authority, 306 U.S. 118, 59 S.Ct. 366, 83 L.Ed. 543. There are no allegations or facts shown which would justify the finding that the defendant City of Washington, in the construction and operation of its electric transmission lines, from Washington to Chocowinity and beyond has caused physical interference with plaintiff's lines, or created any hazard thereto or that its operations constitute a continuing trespass. Negligence in the construction of defendant's lines is not alleged. The gravamen of the complaint is unlawful competition, but competition alone would not justify the court in decreeing injunction.

But the plaintiff challenges the right of the defendant to maintain and operate an electric power system for the distribution and sale of electric current to consumers beyond its corporate limits without a certificate of public convenience and necessity from the Utilities Commission. The statute authorizes a municipal corporation engaged in the production and distribution of electric power to extend this service to consumers outside its corporate limits, Public Laws 1929, Ch. 285, now codified as part of G.S. § 160-255. This would confer authority on the defendant to construct and operate transmission lines for the distribution of electric current for the benefit of the public beyond its corporate boundaries within reasonable limitation. Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90. Also by a local statute, Public Local Laws 1931, Ch. 31, amendatory of the Charter of the City of Washington and creating Washington Electric Service District, power and authority was expressly conferred upon the defendant to build, maintain and operate lines for the transmission of electric current beyond its corporate limits and within Beaufort County for the public benefit.

Having then the power to extend its electric lines and to serve the public in the territory now complained of, was this power by general law limited and circumscribed by requirement that a certificate of convenience and necessity be obtained from the Utilities Commission?

Municipal corporations are instrumentalities of the state for the administration of local government. They are created by the General Assembly under the general authority conferred by Art. VIII, sec. 4, of the State Constitution. They have such powers as are expressly conferred by statute and those necessarily implied therefrom. Nash v. Town of Tarboro, 227 N.C. 283, 42 S.E.2d 209. A municipal corporation may be empowered not only to perform governmental functions but also authorized to undertake operations in its corporate capacity when for a public purpose and for the public benefit. Holmes v. City of Fayetteville, 197 N.C. 740, 150 S.E. 624; Williamson v. City of High Point, 213 N.C. 96, 195 S.E. 90. The powers conferred upon municipal corporations by statute may be enlarged, diminished, or altogether withdrawn at the will of the Legislature. Rhodes v. City of Asheville, 230 N.C. 134, 52 S.E.2d 371; Town of Murphy v. C. A. Webb & Co., 156 N.C. 402, 72 S.E. 460. But when a municipal corporation undertakes functions beyond its governmental and police powers and engages in business in order to render a public service for the benefit of the community for a profit, it becomes subject to liability for contract and in tort as in case of private corporations, Millar v. Town of Wilson, 222 N.C. 340, 23 S.E.2d 42; Harrington v. Com'rs of Town of Wadesboro, 153 N.C. 437, 69 S.E. 399, and by legislative act may be made amenable to regulations and supervisions imposed upon other corporations so engaged. Unquestionably the General Assembly would have power to prescribe that municipal corporations exercising corporate functions for public service for profit should be amenable to the laws regulating private corporations similarly engaged. Harrington v. Com'rs of Town of Wadesboro, 153 N.C. 437, 69 S.E. 399. Whether it has done so in this case is the question which this appeal presents.

The plaintiff's position is that if it be conceded that the defendant City of Washington, in the operation of an electric power plant for the benefit of its citizens, was given authority to extend its lines and furnish electric service to consumers beyond its corporate limits, nevertheless when the defendant in doing so undertook to construct and operate a public service system in direct competition, by parallel lines, with the public service system of the plaintiff already established and serving the same territory, it became amenable to the regulatory requirement of the general statute, G.S. § 62-101, that it must first obtain a certificate of public convenience and necessity from the Utilities Commission. Plaintiff maintains that considering the purpose of the statutes requiring supervision by the Utilities Commission together with the evils which would result from competition in the same locality between two public service systems, it was in the legislative mind that the same rule should be applied to municipal corporations as that applied to private corporations rendering public service.

The statute relied on by plaintiff as authority for the position that defendant before constructing its transmission lines outside its limits was required to obtain such a certificate reads as follows: 'No person, or corporation, their lessees, trustees, or receivers shall hereafter begin the construction or operation of any public utility plant or system or acquire ownership or control of, either directly or indirectly, without first obtaining from the Utilities Commission a certificate that public convenience and necessity requires, or will require,...