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CITY OF MOULTRIE et al. v. COLQUITT COUNTY RURAL ELECTRIC COMPANY.
18976.
Injunction. Before Judge Lilly. Colquitt Superior Court.
HEAD, Justice.
1. The contracts relied upon by the petitioner were executed subsequently to the annexation of the territory by the city (the petitioner having had notice of the annexation). The contracts did not, therefore, create a property right in the petitioner, in opposition to the rights of the city, which should be protected by a court of equity.
2. The assertion that a law or ordinance violates a stated provision of the Constitution, as being discriminatory, arbitrary, and unreasonable, without setting out how or wherein such ordinance is discriminatory, arbitrary, and unreasonable, is too indefinite to invoke any ruling upon the constitutionality of the law or the ordinance.
3. Contentions made for the first time in the brief of counsel present nothing for review.
Colquitt County Rural Electric Company filed a petition for equitable relief against City of Moultrie, its chief of police, and city manager, and in substance alleged: (4) About 1947, a residential subdivision east of the City of Moultrie, known as East Moultrie Heights, was created and homes were constructed therein. Prior to the creation of the subdivision, and during its development, the petitioner has served the subdivision with electrical energy. (5) There are three blocks in section 2, known as 6, 7, and 8, through which the petitioner has had distribution lines for a number of years. (6) On or about October 23, 1954, the owner of East Moultrie Heights Subdivision made application to the petitioner for service to houses that were to be constructed in blocks 6, 7, and 8, and on or about October 26, 1954, the petitioner began running service lines for dwellings uncles construction, "petitioner now serving about 10 houses under construction." (7) On or about November 15, 1954, the city advised the petitioner that it was annexing blocks 6, 7, and 8, and requested the petitioner to remove its lines therefrom. (8) On February 14, 1955, while the petitioner's employees were installing service to houses therein, police officers of the city arrested the employees. (9) There is an ordinance appearing on the ordinance book of the city, which appears to have been read the first and second times on January 4, 1955, and the third time on January 18, 1955, a copy being attached and marked Exhibit "A." (10) Blocks 6, 7, and 8 in the subdivision are not within the corporate limits of the City of Moultrie, but if in such area, the petitioner would be entitled to continue furnishing electrical energy to its customers. (11) The ordinance referred to in paragraph 9 is unconstitutional and void as being discriminatory against the petitioner, and as having been passed for economic reasons in order to give a monopoly to the city in the distribution of electric energy, in violation of the Constitution of the State of Georgia, art. I, sec. I, pars. II and III, and the Fifth and Fourteenth Amendments to the Constitution of the United States. (12) The petitioner built its distribution lines under a grant of right by the owner of the property, and became vested with a license to maintain its lines, and the efforts of the defendants to interfere with its right are in violation of contractual rights, and the ordinance is in violation of contractual rights, and the ordinance is an attempt to impair the rights of contract in violation of the Federal Constitution. (14) Further action and threats by the defendants will destroy the petitioner's business in the three blocks. The city is running lines preparatory to servicing houses under construction, and at the same time prevent the petitioner from running its lines and installing its service therein. (15) The actions and threats of the city's agents, officers, and servants constitute a deliberate and arbitrary invasion of the territory served with electrical energy by the petitioner, which is destructive of the petitioner's business. (16) Unless the defendants are enjoined and restrained from interfering with the petitioner in the lawful conduct of its business, it will sustain irreparable injury. (17) The petitioner has no adequate remedy at law.
The prayers were for process; that the city's agents, servants, and employees be permanently enjoined and restrained from arresting, harassing, or interfering with the petitioner and its agents in the maintenance of service to customers in blocks 6, 7, and 8 of section 2, that the defendants be temporarily enjoined; that the ordinance be decreed null and void, in violation of the provisions of the Constitution of the State of Georgia and of the United States; and for other relief.
On February 18, 1955, the judge of the superior court passed an order for service of process, that the defendants show cause why they should not be enjoined as prayed; and until the further order of the court, the defendants were enjoined and restrained as prayed.
The defendants filed an answer, in which they admitted the allegations of paragraphs 1, 2, 8, and 9, and denied the allegations of paragraphs 5, 10, 11, 12, 16, and 17. In answer to paragraph 3, the defendants alleged that the petitioner is a corporation organized under the Electric Membership Corporation Act, approved March 30, 1937, and that it has been engaged in business since about the year 1937. In answer to paragraph 4, the defendants admitted that about 1947 a residential subdivision known as East Moultrie Heights was created, and that during the development of the subdivision the petitioner served, not the entire area, but a portion thereof, with electrical energy and continues to serve this area. In answer to paragraph 6, the defendants alleged: On August 17, 1954, the owner of blocks 6, 7, and 8 made application to the city for the annexation of the territory. The defendants do not know when the petitioner began to run service lines, but deny that the petitioner is serving, or has served, any houses in either of the blocks by permanent lines connected to and running into the houses. In answer to paragraph 7, the defendants alleged: On November 3, 1954, H. S. Glenn, manager of the petitioner's business, was advised that the city had annexed the territory, that it expected to serve electric current to the residents of the area, and that the city would purchase the petitioner's lines so that it would stand no loss on account of such service. The petitioner declined to sell its lines at any price, and advised the defendants that it was going to try to serve the territory in all events. In further answer to paragraph 8, it was alleged that the employees of the petitioner were violating the ordinance of the city, and that the city manager was performing his duties in ordering their arrest. In answer to paragraph 13, the defendants denied that the city manager and police officers of the city in the enforcement of the ordinance were arbitrary, unreasonable, or discriminatory. The only arrests made were on February 14, 1955, but it was the purpose of the defendants to arrest agents, employees, or representatives of the petitioner, or anyone else, violating the ordinance. The defendants admitted the allegations of paragraph 14, except that the petitioner is serving any of the houses in either of the three blocks. They alleged that, at the time of the filing of the petition, the city had permanent service lines in all of the completed houses in these blocks. The defendants denied the allegations of paragraph 15, except that the defendants contend that the petitioner has no right to sell electrical current in the city without a franchise, which it does not have. Further answering the petition, the defendants alleged: On August 17, 1954, the owner of a part of East Moultrie Heights appeared before the mayor and council of the city and requested orally and in writing that portions of the subdivision be annexed to the city, representing that the development of the area depended on the owner's ability to get city services. On the same date the mayor and council put an ordinance upon its first and second reading for the purpose of annexing the territory, and at that time the petitioner was serving no customers in the area sought to be annexed. After due consideration, the mayor and council passed the ordinance annexing the territory to the city on November 2, 1954, and began the installation of its water, sewer, and electric services. The petitioner had run a distribution line into the area for the purpose of serving the contractor in the construction of the houses, and the city offered to buy the line from the petitioner. The city owns its electrical and water distribution system, and desires to furnish these services to its inhabitants. It is entitled to furnish electricity to its inhabitants without interference from the petitioner, which has no franchise to do business in the city, and is limited by its charter to service to members in rural areas.
On the hearing for interlocutory injunction, the sole testimony introduced was that of H. S. Glenn, manager of the petitioner, who testified: that the corporation was organized under the Rural Electric Membership Act, and the first lines were run in 1937 in Colquitt County; since 1947 the petitioner has been serving rural areas east of the City of Moultrie and east of Pilco Creek, in a section known as East Moultrie Heights Subdivision; the petitioner had been serving customers with both construction and permanent service; the original lines were built in 1951; and the lines built in 1951 were extended on October 26 and 27, 1954. With reference to the lines in blocks 6, 7, and 8, the witness testified on direct examination in part as follows: "On October 26 and 27 we built a line into this territory, blocks 6, 7 and 8,--I believe 7 and 8 already had the line,--only the 6th,--and after we had built the line into this territory ready to seize the contractor for temporary service to build the houses at the request of the property owner, we received a telephone call from the city manager about November 1--I don't know the exact date,--and he stated that the territory was being annexed by the city and they planned to build lines in there and would like for us to remove our lines . . . Later we were requested again to move the lines and the city would pay us for the lines, that is putting the lines up and taking them down, and as our transformers are different volts from the city they wouldn't have any use for the transformers, so they agreed to pay for the lines, putting them up and taking them down. This conversation, I believe, happened on November 15."
The witness further testified on direct examination: "Q. About the time this suit was filed, what service were you running to customers in blocks 7 and 8, Mr. Glenn? A. We were running permanent service, what we call the service from the pole to the house, service line, extending them from the temporary pole to the house, where we had been serving temporary service while building the house, and from around November 10, some of them, we were extending these services to the house . . . Q. I hand you five sheets of paper which I will ask you to identify . . . A. It's our regular form of application . . . Q. By whom were they made? A. They were made by Mr. Nijem on November 10. Q. Are you familiar with dates on which made? A. Made two on November 10, one on 12th, one the 16th, one on November 22 . . . Q. Do you have applications from others for permanent service on any of these lots? A. We have four applications from people that are planning on buying the houses, have contracted for the houses, to extend permanent service to them . . . Q. What are the dates on those applications? A. These were made on the 17th of February, 1955. Q. Are these on the same lots that Mr. Nijem made application? A. That's right, four of the original houses. Q. . . Do you know whether or not the city has run any distribution lines and service to any houses in this area in blocks 6, 7, and 8? A. Yes, it has, they have run after they stopped us a couple of weeks ago. Q. Do you know whether or not they have installed any service to dwellings there? A. Yes, sir, they have. Q. Are those the same dwellings on which you had applications for service for construction? A. Yes, sir, the same houses . . . Q. In order to clarify the identify [identity?] of blocks, 6, 7, and 8, will you state whether or not those particular blocks are in East Moultrie Heights subdivision? A. They are. Q. And they are in the general area in which you have been serving for several years? A. Yes, sir, they are. Q. What is the reason that your 600 yards of distribution line in blocks 7 and 8 was only run very recently? A. Application was made by the property owner, I said October 23, but it was Saturday I believe, and we were told the contractor was starting Monday morning building so many houses in 7 and 8. Q. Were there any houses in the area prior to that time? A. There wasn't any houses in any of those blocks and we went down on his request, which was the 26th and 27th, . . . and run our line and prepared him to take off temporary service on any block that he wanted to."
There is attached to the brief of evidence a plat of section 2 of East Moultrie Heights Subdivision, and two copies of applications for service to the petitioner, signed by Fred Nijem, dated November 10, 1954, one signed on November 12, one on November 16, and one on November 22; there were four signed on February 17, 1955, by D. B. Freeman, John A. Freeman, Vera Taylor, and C. E. Marshall.
On cross-examination, the witness Glenn testified in part as follows: "Q. I believe these last four applications which were for permanent service were gotten since this litigation arose? A. Yes, sir. Q. . . At the time this litigation arose you were not furnishing anybody with permanent service in these blocks 6, 7 and 8? A. That's right. We here furnishing the contractor service to build the houses with which I call temporary service . . . Q. You knew at the time you ran any service for consumption in blocks 6, 7 and 8 that that property had already been taken into the city, annexed to the city? A. I was told by the city manager. I didn't know. Q. You had that information? A. Well the city manager told me . . . Q. Back in October then you first ran your line there in blocks 6, 7 and 8, did you know at that time that the city had begun proceedings to annex this territory? A. We did not, we built the lines, the lines were installed and the men were gone when I heard from the city manager that the territory was going to be taken into the city then. The first call I had from the city manager was that the property would be taken in tomorrow night, that was on Monday, and the lines were installed at that time. Q. What Monday? A. It must have been the second--I mean the 1st of November. Q. You hadn't seen any news item in the paper prior to that time? A. Yes, I saw the intentions of the city of taking it into the city limits. Q. You had seen that back in August? A. I don't know about August, but I remember reading it. Q. Some time prior to the time Dr. Bean spoke to you about any service in this area? A. Yes sir. Q. And I believe you say that these applications signed by Mr. Nijem were taken by you and were acted on by you after your conversation with the city manager in which he told you that they were going to annex it into the city, is that correct? A. That's right. I believe the nearest one of those is November 10th, the earliest. Q. And these applications were purely for temporary service? A. Construction purposes, yes sir."
After testifying as to negotiations with the city in regard to selling the petitioner's lines in the disputed area, and that a line running into block 5 "was simply a high line getting into that area," the witness testified further: "Q. Before this litigation arose you had not put any permanent service in any residence in this area, had you? A. No sir, we hadn't. We were in process of doing it when we were stopped. Q. But you had actually not put any permanent service in any houses in blocks 6, 7 and 8? A. No sir. . . Q. The city did go in there and put permanent service to the houses which had been completed, did it not? A. After he arrested us, yes sir. Q. After he stopped you? A. Yes sir. Q. Then the city went in there and put permanent service to those houses? A. Yes sir. Q. And after you got an injunction against the city and before the order was changed maintaining the status quo, you went in and took the city's permanent installations off of some of these houses? A. No sir, that's not true. We run some lines, service lines from our poles to these houses. Q. How many? A. Four or five of them. Q. Did you disconnect the city? A. We disconnected their wires from the entrance cables which is one connector and connected ours on the applications we had for service. Q. Which you obtained after this litigation arose? A. That's right. Q. Now, wait a minute: what day did you do that connection? A. It was on Friday afternoon, on the 18th of February. Q. You filed this litigation on the morning of the 18th, didn't you? A. Yes sir. Q. And your board has never acted on these applications yet, has it? A. No, they haven't passed them in a board meeting, no sir. Q. Did you get these applications on the 17th? A. Yes sir. Q. After you had brought this suit? A. The judge signed it on the morning of the 18th. We can't wait until the board meets to run a service line, that is when a man asks for service, it might be 30 days you know."
The city excepted to the judgment granting an interlocutory injunction, and authorizing the petitioner to serve residents in blocks 6, 7, and 8 of section 2.
The parties will be referred to as they appeared in the trial court.
1. "The general rule is that courts exercising equitable jurisdiction will not enjoin criminal prosecutions; and this rule is ordinarily applicable to proceedings to punish for violations of municipal ordinances, which are quasi criminal in their character." Mayor &c. of Shellman v. Saxon, 134 Ga. 29 (1) (67 S. E. 438, 27 L. R. A. (NS) 452); Jones v. Carlton, 146 Ga. 1 (90 S. E. 278); Burton v. City of Toccoa, 158 Ga. 63 (122 S. E. 603); Corley v. City of Atlanta, 181 Ga. 381 (182 S. E. 177); Powell v. Hartsfield, 190 Ga. 839 (11 S. E. 2d 33); City of Abbeville v. Renfroe, 192 Ga. 467 (15 S. E. 2d 782); Stephens v. City Council of Augusta, 193 Ga. 815 (20 S. E. 2d 80); City of Atlanta v. Universal Film Exchanges, 201 Ga. 463 (39 S. E. 2d 882); Code 55-102.
Where repeated prosecutions are threatened under a void municipal ordinance and the effect of the prosecutions would tend to injure or destroy the property of the person so prosecuted, or deprive him of the legitimate enjoyment of his profits, equity may entertain a suit to inquire into the validity of the ordinance and to enjoin its enforcement. Carey v. City of Atlanta, 143 Ga. 192 (84 S. E. 456, L. P. A. 1915D 684, Ann. Cas. 1916E 1151); Upchurch v. City of LaGrange, 159 Ga. 113 (125 S. E. 47); Morrow v. City of Atlanta, 162 Ga. 228 (133 S. E. 345); Chaires v. City of Atlanta, 164 Ga. 755 (139 S. E. 559, 55 A. L. R. 230); City of Douglas v. South Ga. Grocery Co., 178 Ga. 657 (174 S. E. 127); Great Atlantic & Pacific Tea Co. v. City of Columbus, 189 Ga. 458 (6 S. E. 2d 320).
In order to determine whether or not the petitioner had a property right pursuant to valid contracts for its electric service within the territory involved, consideration must be given to the charter powers of the parties and the record in the cause. The Electric Membership Corporation Act of 1937 (Ga. L. 1937, pp. 644, 645; Code, Ann. Supp., 34A-102, 34A-103), under which the petitioner was chartered and is operating, provides that such corporations may engage in the business of "the furnishing of electric energy to persons in rural areas who are not receiving electric service from any corporation subject to the jurisdiction of the Georgia Public Service Commission, or from any municipal corporation." "Rural area" is defined as "any area not included within the boundaries of any incorporated or unincorporated city, town or village, having a population in excess of 1,500 inhabitants, according to the last Federal census, and includes both the farm and non-farm population."
The charter powers of the City of Moultrie (Ga. L. 1937 p. 1990; Ga. L. 1943, pp. 1458-1499) authorize the city to engage in the business of furnishing electrical energy. It has been held, in the absence of specific legislative authority, that a municipal corporation may own and operate a water works or electric system under its general-welfare clause or under its contractual powers. Mayor &c. of Rome v. Cabot, 28 Ga. 50; Heilbron v. Mayor &c. of Cuthbert, 96 Ga. 312 (23 S. E. 206).
The right, power, and authority of each of the parties to engage in the business of furnishing electrical energy is not questioned in this case. The petitioner contends that its right to serve customers in the disputed area is based upon the prior construction of its lines to serve customers with whom it had contracts and at a time then the territory in dispute had not been included within the corporate limits of the city. The city contends that the petitioner extended its lines with notice of the city's intention to include the territory within its corporate limits, that the petitioner's only customers for permanent service were procured after the territory was annexed to the city, and that the petitioner can not operate within the territorial limits of the city.
The uncontroverted facts appearing from the record disclose that the petitioner had electric lines and distribution lines in a part of East Moultrie Heights Subdivision, adjoining the city, continuously from the year 1951. It had no distribution lines in blocks 6, 7, and 8 of section 2, the territory involved in the present dispute. This property was undeveloped prior to 1954. On August 17, 1954, the owner of the property appeared before the mayor and council of the city and requested in writing that this territory be taken into the city. At that time an ordinance was passed on first and second reading, to include the territory in the city. The ordinance was finally passed on November 2, 1954.
It appears from the testimony of H. S. Glenn, the manager of the petitioner: he had notice from a publication appearing in the paper in August, 1954, that the city proposed to annex blocks 6, 7, and 8 of section 2, and on or about November 3, 1954, he was advised by the city manager that the territory had been annexed. At the time the litigation was instituted by the petitioner, it was not furnishing permanent service to any customer in blocks 6, 7, and 8 of section 2 of the subdivision. The city offered to pay the petitioner in full for its lines in this area before the petitioner's suit was filed, and this offer was refused.
The petitioner introduced, and relies upon, some nine contracts or applications for its service. Five of these applications were signed by Fred Nijem, the first two being dated November 10, 1954. The applications signed by Nijem appear to have been subsequently approved by agents of the petitioner. The other four applications do not appear to have been approved by the petitioner's agents.
The first requisite of a valid contract is that there shall be parties able to contract. Code 20-107. The Electric Membership Corporation Act (Ga. L. 1937, pp. 644, 645; Code, Ann. Supp., 34A-102, 34A-103), provides that such corporations can not operate within the boundaries of an incorporated city having a population in excess of 1,500 inhabitants. Whether calculated by the census of 1930 or of 1950, the City of Moultrie had in excess of 1,500 inhabitants prior to and at the time written applications were made to the petitioner for electric service. The limitation imposed by the Electric Membership Corporation Act, that corporations created under that act may operate electric lines in rural areas not receiving service from a municipal corporation or a corporation regulated by the Public Service Commission, is a limitation to be determined at the time the application for service is made.
2. The petitioner attacks an ordinance of the City of Moultrie passed on January 18, 1955, making it unlawful for any person, firm, or corporation to maintain poles, wires, or electric apparatus within the city without the consent of the mayor and council. It is alleged that this ordinance "is unconstitutional and void as being discriminatory against petitioner," and is "arbitrary and unreasonable" in violation of art. I, sec. I, pars. II and III of the Constitution of the State of Georgia and the Fifth and Fourteenth Amendments to the Constitution of the United States.
The allegations attacking the ordinance are wholly insufficient to make any question as to its constitutionality. The assertion that a law or an ordinance violates a stated provision of the Constitution as being discriminatory, arbitrary, and unreasonable, without setting out how or wherein such ordinance is discriminatory, arbitrary, and unreasonable, is too indefinite to invoke any ruling upon the constitutionality of such law or ordinance. Hood v. Mayor &c. of Griffin, 113 Ga. 190, 191 (38 S. E. 409); Curtis v. Town of Helen, 171 Ga. 256, 257 (2c) (155 S. E. 202); Jordan v. State, 172 Ga. 857 (159 S. E. 235); Montgomery &c. Freight Lines v. Georgia Public Service Commission, 175 Ga. 826, 831 (166 S. E. 200); Herndon v. State, 179 Ga. 597, 602 (176 S. E. 620); Williams v. McIntosh County, 179 Ga. 735, 741 (177 S. E. 248); Gray v. City of Atlanta, 183 Ga. 730 (189 S. E. 591); Rose Theatre v. Lilly, 185 Ga. 53 (193 S. E. 866); Poole v. Arnold, 187 Ga. 734, 742 (2 S. E. 2d 83); Abel v. State, 190 Ga. 651 (10 S. E. 2d 198); Estes v. Jones, 202 Ga. 749 (44 S. E. 2d 550).
No attack is made by any allegation of the petition upon the act of the City of Moultrie in annexing blocks 6, 7, and 8 of section 2 of East Moultrie Heights Subdivision. Whether the ordinance may be valid or invalid, constitutional or unconstitutional, the petitioner would have no right to erect poles and lines and electrical apparatus in, on, over, and upon the streets of the city without specific authority to do so. The general law on municipal corporations provides: "Without express legislative authority, a municipality may not grant to any person the right to erect or maintain a structure or obstruction in a public street." Code 69-304. Whether or not the City of Moultrie has express legislative authority to grant to another the right to maintain obstructions in its public streets need not be determined. The petitioner has no grant of authority from the city to erect or maintain poles or lines within its corporate limits, and any attempt by the petitioner to erect distribution lines in, on, over, and upon the streets of the city would constitute a public nuisance. Any unauthorized and illegal obstruction of a public street is a nuisance. Mayor &c. of Columbus v. Jaques, 30 Ga. 506; Simon v. City of Atlanta, 67 Ga. 618 (44 Am. R. 739); Robins v. McGehee, 127 Ga. 431 (56 S. E. 461); Rider v. Porter, 147 Ga. 760 (95 S. E. 284); Williamson v. Souter, 172 Ga. 364 (157 S. E. 463); Harbuck v. Richland Box Co., 204 Ga. 352 (49 S. E. 2d 883); City of East Point v. Henry Chanin Corporation, 210 Ga. 628 (81 S. E. 2d 812).
Since neither the petition nor any evidence introduced by the petitioner makes any attack upon the validity of the action of the city in annexing the territory in question under the act of 1946 (Ga. L. 1946, pp. 130, 131), the petitioner could not legally extend its electric lines in the corporate limits of the city (under the Electric Membership Corporation Act of 1937, Ga. L. 1937, pp. 644-659; Code, Ann. Supp., Chapter 34A), and would not be entitled to injunctive relief. This would be true even should the ordinance prohibiting the use of the city's streets be declared void.
The petitioner was not entitled to the equitable relief of injunction, and the court erred in its order in allowing the petitioner to continue to operate in territory within the City of Moultrie.
WYATT, Presiding Justice, dissenting. 1. I can not agree with the opinion of the majority in this case. The trial court was authorized to find from the evidence that Colquitt County Rural Electric Company lead for a number of years been serving electricity to East Moultrie Heights subdivision, which was outside the city limits of Moultrie; that blocks 6, 7, and 8 in section 2 were a part of this subdivision; that recently the said electric company placed poles and lines in blocks 6, 7, and 8 and were serving contractors and owners of property wish electricity for the purpose of constructing homes; that contracts had been made with certain owners in said blocks for the purpose of furnishing electricity to the new homes being constructed; that, after all this had been done, the City of Moultrie had by ordinance, as provided by law, extended its city limits so as to take into the city limits of Moultrie said blocks 6, 7, and 8 of said subdivision. The City of Moultrie then arrested the employees of the electric company engaged in wiring the houses and stringing lines to the houses and advised them to the effect that they would be arrested and placed in jail every time they entered upon the property in question for the purpose of providing electricity.
The controlling question here presented is, when a rural electric company enters a territory that is clearly rural at the time, and thereafter the territory is taken info the limits of a city, what are the rights of the city and the rural electric company as to providing electricity to customers in the territory involved? Neither Federal nor State law deals specifically with this question. It therefore becomes the duty of a court of equity to fill in the vacuum created by the law and do justice and equity to all parties concerned.
The Congress of the United States, by the Rural Electrification Act of 1936 (7 U. S. C. A. 547, 902) attempted to make electricity available to people in rural areas who could not otherwise be served. It was provided that co-operative, non-profit electric membership corporations organized under the laws of any State or territory of the United States could borrow money from the United States Government for the purpose of the construction and operation of self-liquidating electric systems furnishing current to persons in rural areas, and the defendant in error here was such a system. The administrator, however, was required to find and certify that in his judgment the security for the loan was reasonably adequate, and that such loans would be repaid within the time agreed. It must be noted here that, when these loans are fully repaid, these membership corporations become private corporations in every sense of the word.
The case of Cobb County Rural Electric Membership Corporation v. Board of Lights, 211 Ga. 535 (87 S. E. 2d 80), does not answer the question here presented. In that case the rural electric company sought to enjoin the City of Marietta from furnishing electric service to anyone in the territory in question, thereby giving the rural electric company a monopoly in so far as that particular territory was concerned. In the instant case, the rural electric company simply seeks to enjoin the City of Moultrie from preventing it from carrying out the contracts it may have with its customers. The trial judge in the instant case in his judgment expressly preserved the right of the City of Moultrie to seek customers in the territory involved, thus leaving the territory open as a territory in which the City of Moultrie and the rural electric company could compete for customers.
We look to see what would be the result of any other holding by this court. It would simply mean that, when the rural electric company has entered a territory not profitable enough to attract cities or private companies, and has developed the area with money furnished by the Federal Government to these non-profit companies to a point that has become profitable, their business could be gradually taken from them and all chance of ever repaying the Federal Government would be gone. This result does not sound like equity to the writer. It would also mean that the Congress of the United States in creating the Rural Electrification Authority planted the germ in the legislation that would mean its ultimate destruction. Even in these fast-moving, modern times I do not believe it was the intention of the Congress to pay with the taxpayers' money in this fast and loose manner.
The territory here involved was clearly rural when entered into by the rural electric company, and when taken into the city, the city did so with full knowledge that the rural electric company was operating in the territory. It seems to me that the judgment of the trial court, leaving both parties to operate in this territory on a free competitive basis, is the only judgment that could have provided equity for all parties concerned. It is my opinion that courts should encourage and not prevent competition.
2. In addition to what has been said above, it appears from a reading of the Electric Membership Act (Ga. L. 1937, p. 644) that the terms of the act settle the question here presented. Section 2 of the act defines various terms used in the act, and division 8 of this section reads as follows: " 'Rural Act' means any area not included within the boundaries of any incorporated or unincorporated city, town, or village, having a population in excess of 1,500 inhabitants, according to the last Federal census, and includes both the farm and the non-farm population." It will be noted that the General Assembly in defining "Rural area" tied it down to the population according to the census of 1930. This being true, under the very terms of the act itself, the territory here in question is now a "rural area" as that term is defined in the act, supra. This could have been done by the General Assembly for no other reason than to prevent co-operative, non-profit electric companies from being pushed out of territories they had developed, just as is sought to be done in this case.
I am authorized to say that Candler, Justice, concurs in this dissent.
Moore, Gibson, DeLoache & Gardner, contra.
Whelchel & Whelchel, Hoyt H. Whelchel, for plaintiffs in error.
ARGUED JUNE 13, 1955 -- DECIDED SEPTEMBER 16, 1955 -- REHEARING DENIED OCTOBER 13, 1955.
Saturday May 23 02:51 EDT


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