Williamson v. City of High Point
| Decision Date | 02 February 1938 |
| Docket Number | 685. |
| Citation | 195 S.E. 90,213 N.C. 96 |
| Parties | WILLIAMSON (DUKE POWER CO., Intervener) v. CITY OF HIGH POINT et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Guilford County; H. Hoyle Sink, Judge.
Action by J. P. Williamson, in which the Duke Power Company intervened as plaintiff, against the City of High Point and the mayor and members of the council thereof, to enjoin the issuance of revenue bonds for construction of an electric light, heat, and power plant for such city, without approval of a majority of the qualified voters thereof, and construction of such plant. From a judgment denying injunctive relief, plaintiffs appeal.
Reversed.
Ordinarily Legislature's distinct statement of its design in act declaring state's policy with reference thereto leaves no place for construction.
Action originally submitted as controversy without action, in which Duke Power Company intervened and filed complaint, for injunction against the issuance of revenue bonds for construction of electric light, heat, and power plant for the City of High Point, without the approval of a majority of the qualified voters of the city, and against the construction of such plant.
The parties waived jury trial and agreed that the court should hear the case upon agreed statement of facts and upon evidence offered by either party, and find the facts. The court finds facts substantially as follows: The plaintiffs are property owners and tax payers in defendant City of High Point, a municipal corporation, of which the codefendants are and constitute the governing body.
The governing body of the City of High Point, acting under the authority of the Revenue Bond Act of 1935, chapter 473 P.L.1935, and the Charter of the City of High Point as amended, chapters 107 and 171 Private Laws 1931; chapter 149 Private Laws 1935, and chapters 65 and 561 Private Laws 1937 by resolution of November 30, 1936, as amended June 30 and August 4, 1937, authorized the acquisition, construction, and operation of an electric system "primarily for the use and benefit of the City of High Point and the consumers therein," but with the further provision that "any services, facilities or commodities furnished by the electric system which shall not, in the judgment of the Council, be immediately required for the use and benefit of the city and consumers therein may be sold to consumers outside of the city." Cotemporaneously, and for the purpose of financing same, the said governing body authorized the issuance of $3,171,500 of bonds "payable solely from the revenue of said electric system" to the payment of both principal and interest of which as same mature, and to create and maintain reserves therefrom as therein provided a sufficient amount of said revenues are pledged.
The governing body in said resolution prescribed at length regulations for the fixing and maintaining of rates, fees, and charges for the facilities and services afforded by said system; the collecting, handling, and distributing of revenues to cover expenses of operation and to create a bond fund and a reserve for and the payment of said bonds and of other obligations, not incurred under the Revenue Bond Act of 1935, to the payment of which the revenue shall have been pledged also; against free service by said electric system; and as to numerous other phases in connection therewith to the faithful and punctual performance of which the city, by the issuance of the bonds, is obligated and all of which shall constitute covenants between the city and the holders of the bonds. (The full context of the regulations is not necessary to consideration of this appeal.)
On December 2, 1936, the said governing body accepted an offer of the United States of America to make a grant to the City of High Point in the amount of 45 per cent. of the cost of said electric system upon completion as determined by the Federal Emergency Administrator of Public Works, but not to exceed in any event the sum of $2,595,000. This grant is subject to terms and conditions of PWA Form 210, July, 1936.
The court further finds as fact that: Duke Power Company now holds and owns a municipal franchise originally granted by the City of High Point on February 8, 1909, to John Leddy and his assigns for the term of sixty years from and after said date.
"5. Duke Power Company is now supplying, and for a number of years has supplied, the entire power requirements of the City of High Point and of the citizens, residents and industrial enterprises within said city and in its vicinity, including the sale of electric power and current to the City of High Point for street lighting, city pumping and for re-sale by said city to the citizens and residents within said city. During the calendar year 1935 the total power requirements of the City of High Point amounted to 11,083,000 kilowatt hours. During said year the total power requirements of all consumers of power within said city, including the city itself, amounted to 30,233,000 kilowatt hours, all of which was supplied by Duke Power Company. During said year the total power requirements within said city and in the vicinity thereof and adjacent thereto, also including the requirements of the city itself, were 32,249,000 kilowatt hours, all of which was supplied by Duke Power Company, and since said date it is agreed that there has been no substantial change up to the date of the hearing.
6. The City of High Point now owns and operates, and for a number of years has owned and operated, within said city an electrical distribution system for the sale and distribution of electric current to the citizens and residents of said city, which system is adequate and sufficient for said purpose. The City of High Point purchases, and for a number of years has purchased, from Duke Power Company at wholesale the electric current which the city resells within said city.
6 1/2. The City of High Point is preparing and proposes to construct on the Yadkin River at a point known as 'Styers' dam site' in Forsyth and Davie County hydroelectric plant, with transmission and distributions lines extending from said plant into and through the counties of Guilford, Forsyth and Davidson, together with substations, switching stations and other electric appliances and equipment for use in connection with the operation of said plant, for the purpose of engaging in the power business generally and of furnishing electric power and current to cities and towns, to industrial and commercial enterprises, to private individuals and to the public generally for domestic, commercial and industrial use. The annual output of said system will be 104,000,000 kilowatt hours of electric power consisting of approximately 60,000,000 kilowatt hours of primary power and approximately 44,000,000 kilowatt hours of secondary power. The details of the construction of said system will be as set out in the application of the City of High Point to the PWA. That the dam site is something more than twenty five miles from the city of High Point and the reservoir created by said dam will cover something like 15,000 acres of land located in the counties of Forsyth, Davie and Yadkin. That the entire plant and system will require several additional thousands of acres of land, all of which will be located outside of the corporate limits of the city of High Point. * *
7. The question of issuing said bonds has not been submitted to the voters of the city of High Point at an election.
8. The amount of said bonds is far in excess of the amount by which the indebtedness of the city of High Point was reduced during the last fiscal year of said city, namely, the fiscal year which ended June 30, 1937, and this same condition is true of the fiscal year ending June 30, 1936.
9. The city of High Point owns and operates and for more than forty years has owned and operated a system for the distribution of electricity for light, heat and power purposes; that said distribution system is owned and operated by the City of High Point in its proprietary or private capacity for public purposes and that the proposed electric generating system would be owned and operated by the city of High Point in its proprietary or private capacity for public purposes; that the said system for the distribution of electricity for light, heat and power purposes is one of the most fruitful sources of revenue of the city; said city has for a number of years derived a net profit after paying all expenses of operation, maintenance, administration, interest and principal on the debt of said electric distribution system; and that for the fiscal year 1936-1937 the net profit derived from said system was approximately $200,000.00, that at the present time such electricity is purchased by said city from a private corporation and is not generated by said city. The city of High Point has outstanding bonds issued partly for the purpose of constructing said distribution system and partly for the purpose of funding a debt incurred for the purchase of electricity. The net revenues of said distribution system are pledged for the payment of all or some of said bonds, but the said net profit, after annual interest and principal payment, inures to the benefit of all the citizens and tax payers of the city of High Point.
10. That the resolutions of the city of High Point and the commitment from the Federal Emergency Administration of Public Works, all referred to herein above, do not commit the said City of High Point to the 'Styers' dam site' project nor to any other specific project. That, however, the city of High Point and the Federal Emergency Administration of Public Works have each made considerable investigation in regard to the possibilities of such a plant and the cost thereof. That it is...
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