Riverside, Inc. v. Gulf States Utilities Company

289 S.W.2d 945, 1956 Tex. App. LEXIS 2217, 1956 WL 92551
CourtCourt of Appeals of Texas
DecidedApril 19, 1956
Docket6008
StatusPublished
Cited by3 cases

This text of 289 S.W.2d 945 (Riverside, Inc. v. Gulf States Utilities Company) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Riverside, Inc. v. Gulf States Utilities Company, 289 S.W.2d 945, 1956 Tex. App. LEXIS 2217, 1956 WL 92551 (Tex. Ct. App. 1956).

Opinion

ANDERSON, Justice.

Gulf States Utilities Company, as plain-, tiff, sued Riverside, Inc., and A,- P. Simons, and William H. Francis, Jr.,, to, recover a,, *946 balance claimed to be due it by defendants for water service. Trial to the court without a jury resulted in a judgment for the plaintiff, and the defendants have appealed.

At all pertinent times, plaintiff jvas supplying water to the City of Orange and its inhabitants. It was doing so on a commercial basis and under a franchise that had been granted it by the city. In addition to supplying water for domestic and private purposes, it also supplied water for fire protection purposes. The latter service required extra and larger facilities and vastly larger reserves of water than would have been essential without it, and, of course, a much greater capital investment than would otherwise have been necessary. As a consequence, plaintiff charged extra for it.

It charged at the rate of $50 per year for each fire hydrant extant, where the city was paying for the service, and at the rate of $40 per year for each fire hydrant extant, where an individual or private concern was paying for it. And such charges were not dependent upon the quantity of water used or upon whether any was used.

In the main and as regards residential sections other than the one presently to- be mentioned, the city appears to have paid for the fire protection service. Whether or not it was under any special duty to do so, we are unable to say; it was and is a home-rule city, and its charter is not before us. Furthermore, neither the franchise that was granted the plaintiff nor any other contract that may have been entered into by plaintiff and the city is before us.

In July of 1948, Riverside, Inc., purchased from the Federal Government a large tract of land that was within the city limits of Orange. Some 1,582 housing units were situated on the land, and a system of water mains, pipes and fire hydrants had been installed by the government so that water could be supplied to the houses and the area. Title to all of these passed to Riverside, Inc., with the land; and the houses were thereafter rented, as individual units, to members of the general public.

Plaintiff had been supplying the government with water for the houses and area. However, it had done no more in this respect than deliver the water into the government’s mains, at the government’s property line. The water appears to have been supplied under an express contract but it was charged for at the regular rates in effect for the City of Orange generally. Charges for fire-protection service had been regularly made at the rate of $40 per year for each of 45 fire hydrants that were on the government’s mains and had been regularly paid by the government.

Upon becoming the owner of the property, Riverside, Inc., requested a continuation of the same service plaintiff had been supplying the government. Plaintiff accordingly continued to deliver water into the same mains, at the same points, just as it had done while the government owned the property, and it was still doing so when this case was tried.

Plaintiff offered in the beginning to purchase the water mains and fire hydrants from Riverside, Inc., and to supply water to the houses and area on the same basis it was supplying water to other residential sections of the city, but the offer was declined. Rent schedules which had received Federal approval had been set up for the houses on the basis that water was to be supplied without extra charge, and Riverside, Inc., concluded that it was to its advantage to leave them that way.

No express contract with reference to the service to be supplied by plaintiff and the rates to be charged was shown to have been entered into between the parties. A proposed contract was reduced to writing and was submitted by plaintiff to Riverside, Inc., but the instrument was never executed by the latter. As a consequence, plaintiff continued to make the same charges after the change in ownership that it had made while the government owned the property. All water that was delivered was charged for at the regular rates in effect for the rest of the city, and fire protection was charged for at the regular rate in effect for individuals *947 or private concerns — i. e., at the rate of $40 per year for each fire hydrant on defendants’ mains.

Statements showing the amounts claimed to be due it were mailed by plaintiff to Riverside, Inc., or to the latter’s successors, Simons and Francis, each month. The defendants regularly paid for all water shown to have been used but refused from the beginning to pay the standby-fire-protection charges. This suit was brought to- recover the aggregate of such charges, together with interest from the respective dates when they are claimed to have been payable.

By their first point of error appellants advance the proposition that “a public utility has no right, in the absence of express contract, to charge private persons or concerns for standby fire protection enjoyed by the community in general.” In other words, as we understand them, they would have us hold that, irrespective of the attendant circumstances, the mere fact that a public service corporation supplies fire protection to most areas of a municipality without direct cost to those who live or own property in such areas precludes the corporation from charging those who live or own property in other areas of the municipality for similar service, unless such charges are authorized by an express contract.-

Appellants cite no authority which they claim supports their proposition directly, but take the position that the following cases from other jurisdictions support it by implication : Gordon & Ferguson v. Doran, 100 Minn. 343, 111 N.W. 272, 8 L.R.A.,N.S., 1049; J. W. Edgerly & Co. v. City of Ottumwa, 174 Iowa 205, 156 N.W. 388; Shaw Stocking Co. v. Lowell, 199 Mass. 118, 85 N.E. 90, 18 L.R.S..N.S., 746; Cox v. Abbeville Furniture Factory, 75 S.C. 48; 54 S.E. 830; North Coast Power Co. v. Pittock & Leadbetter Lumber Co., 118 Wash. 542, 204 P. 180. To our minds, however, the cited cases go no further by implication than to hold that it is unlawful for a municipality •that is operating its own water system or for a public service corporation such as appellee to discriminate arbitrarily, or unjustly between its customers or between -those who are entitled to be served by it, either as regards supplying service or as regards the rates at which charges are made for comparable services rendered under substantially the same conditions and circumstances ; and this principle of law is already well established in this state. City of Galveston v. Kenner, 111 Tex. 484, 240 S.W. 894; Allen v. Park Place Water, Light & Power Co., Tex.Civ.App., 266 S.W. 219, writ refused; Town of Highland Park v. Guthrie, Tex.Civ.App., 269 S.W. 193, writ refused; City of Houston v. Lockwood Inv. Co., Tex.Civ.App., 144 S.W. 685. Each of them — i.

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289 S.W.2d 945, 1956 Tex. App. LEXIS 2217, 1956 WL 92551, Counsel Stack Legal Research, https://law.counselstack.com/opinion/riverside-inc-v-gulf-states-utilities-company-texapp-1956.