Town of Tryon v. Duke Power Co.

• Decision Date: 04 November 1942
• Docket Number: 168.
• Citation: 22 S.E.2d 450,222 N.C. 200
• Parties: TOWN OF TRYON v. DUKE POWER CO.
• Court: North Carolina Supreme Court

22 S.E.2d 450

222 N.C. 200

TOWN OF TRYON v. DUKE POWER CO.

No. 168.

Supreme Court of North Carolina

November 4, 1942

The Town of Tryon brought this proceeding under the Declaratory Judgment Act, Chapter 102, Public Laws of 1931, to have declared and determined certain rights which it claimed the right to exercise against the defendant under a contract alleged to have been made between the Town and defendant's predecessor in title to certain utilities.

It set up a franchise granted to Ralph C. Erskine and his associates operating the Tryon Electric Service Company and the ordinance granting the franchise, enacted by the governing body of the Town at a meeting of the board in 1913 and subsequently confirmed.

Under this franchise the Tryon Electric Service Company supplied electric current to the residents of the Town of Tryon, and maintained facilities, apparatus, and equipment in connection with the operation of the business. Later, the Duke Power Company, the defendant, succeeded to all the rights of Erskine and his associates under the ordinance and franchise and the complaint alleges that because thereof the contract continues and exists between plaintiff and defendant.

Section 6 of the franchise, to which particular attention is directed, reads as follows:

"Section 6. That if, at any time in the future, the Town of Tryon shall decide to own and operate its own electrical lighting plant, it may first acquire, either by purchase or condemnation the property of the persons or corporations who shall then be operating and serving the public by virtue of this franchise. If the said town cannot agree with the owners upon the terms of purchase, then it may have said property valued by three commissioners to be appointed by the Judge of the Superior Court, and condemn the same to the public use as provided by Chapter 86 of the public laws of 1911."

Plaintiff asks the Court to render a declaratory judgment construing the contract and franchise, and "determining whether or not in the event the Town of Tryon decides to own and operate its own electrical lighting plant, it may first acquire either by purchase or condemnation the property of the defendant corporation, which is now operating and serving the public in the Town of Tryon by virtue of the franchise above referred to, and determining the rights of the Town of Tryon with reference to the purchase of the property of the defendant referred to in paragraph 6 of said ordinance."

The defendant answered, admitting that it had succeeded to the rights and obligations of the Tryon Electric Service Company franchise, whatever the legal effect might be, and setting up a further defense not necessary to summarize here.

In this answer defendant denies the right of the plaintiff "to have said franchise, and particularly section 6 thereof, construed by the court in this proceeding as requested."

Upon notice, the matter came before His Honor, J. Will Pless, Jr., Resident Judge of the Eighteenth Judicial District, at Chambers in Marion, North Carolina, for judgment as a matter of law upon the pleadings. At that time it was the opinion of the court that as the complaint then stood, the plaintiff did not have the right to a declaratory judgment, since it had made no "declaration of a purpose to pursue any rights which it might have to acquire defendant's property pursuant to section 6 of the franchise." Thereupon, the court permitted the plaintiff to amend its complaint as follows:

"8. That the plaintiff requested the defendant to fix a price on its transmission lines and property mentioned and referred to in the aforesaid ordinance and franchise; that the defendant declined to do so; that in so declining the defendant contended that the plaintiff did not have the right to acquire said property in the manner set forth in said ordinance and franchise or in any manner; that there is an actual controversy existing between the plaintiff and the defendant respecting their rights under the said ordinance and franchise in that the plaintiff contends that under the same it has the right to purchase and acquire the transmission lines and property of the defendant mentioned and referred to therein, whereas the defendant contends to the contrary.

"9. That as long as the questions and differences exist between the plaintiff and the defendant regarding the rights of the plaintiff under the aforesaid contract and franchise, the plaintiff will be seriously handicapped in making financial arrangements to exercise the rights it claims under said contract and franchise, and the plaintiff, therefore, desires to have said questions adjudicated and determined, all to the end that the plaintiff may exercise its rights under said contract and franchise in accordance with the decision of this Court regarding said rights." The defendant answered the amendments to the complaint, admitting that the Town of Tryon had asked it to name a price on its properties, and it had declined to do so, and that it had denied the right of the Town to condemn its property because of the repeal of Chapter 86, Public Laws of 1911; defendant further admitted that there was a difference of opinion between plaintiff and defendant respecting plaintiff's right to condemn defendant's property, which right it denied; and averred that the effect of such difference of opinion upon plaintiff's financial arrangements "when and if undertaken" was conjectural and uncertain.

Defendant renewed the objection that upon the facts alleged, the plaintiff was not entitled to a declaratory judgment and moved to dismiss the action.

Judge Pless then entered a judgment finding certain facts and holding that the amendments above quoted "did not constitute a declaration of intent on the part of the plaintiff to exercise any rights which it might have under section 6 of the defendant's franchise (counsel for plaintiff having stated that the plaintiff had not authorized him to allege such intent), and dismissed the action.

Plaintiff appealed, assigning error.

McCown & Arledge, of Tryon, for appellant.

W. S. O'B. Robinson, Jr., of Charlotte, J. E. Shipman, of Hendersonville, and W. B. McGuire, Jr., of Charlotte, for appellee.

SEAWELL Justice.

Section 1 of the Declaratory Judgment Act, Chapter 102, Public Laws of 1931, empowers courts of record within their respective jurisdictions "to declare rights, status, and other legal relations," and section 2 has special relation to such "rights, status or other legal relations * * affected by a statute, municipal ordinance, contract or franchise," with special relation to the construction or validity thereof; but the apparent broad terms of the statute do not confer upon the court an unlimited jurisdiction of a merely advisory nature to construe and declare the law. Before a declaratory judgment may be obtained, the existence of those conditions upon which the jurisdiction of the court may be invoked must appear. Under the statute the court will not entertain an ex parte proceeding or a proceeding which, while adversary in form, yet lacks the essentials of genuine controversy.

The difference between the operation of the Declaratory Judgment Act and that of C.S. § 626 providing for the submission of controversies without action is pointed out in Wright v McGee, 206 N.C. 52, 173 S.E. 31, 33, by Justice Connor, writing the...