Southern California Gas Co. v. City of Los Angeles

329 P.2d 289, 50 Cal. 2d 713, 1958 Cal. LEXIS 189

• Court: California Supreme Court
• Decided: August 29, 1958
• Docket: L.A. 24909
• Status: Published

Opinions

TRAYNOR, J.

The city of Los Angeles constructed the La Ciénega and San Fernando Relief Sewer as part of a sewer construction program. A short section of this sewer line passes under a narrow strip of land known as the County Strip located outside the city limits in an unincorporated area of the county of Los Angeles. To construct the sewer it was necessary to relocate gas lines of the Southern California Gas Company. The company agreed to relocate its gas lines in the County Strip subject to a later determination of its obligation to do so at its own expense. It conceded its obligation to relocate its lines at its own expense within the city limits but denied that it had the same obligation with respect to its lines located in the County Strip. After the work was completed it brought this action against the city to recover the costs incurred in relocating its County Strip lines and recovered judgment for $12,003.92 plus interest. The city appeals.

The company located its lines in the county pursuant to a county franchise. It is not disputed that this franchise constitutes a contract secured by the United States Constitution against impairment by subsequent state legislation (see County of Los Angeles v. Southern Cal. Tel. Co., 32 Cal.2d 378, 382 [196 P.2d 773]) and that the company’s rights thereunder can hot be taken or damaged for public use without making just compensation. (Cal. Const., art. I, § 14; U.S. Const., Amend. 14, § 1; Russell v. Sebastian, 233 U.S. 195 [34 S.Ct. 517, 58 L.Ed. 912, L.R.A. 1918E 882]; United States v. Brooklyn Union Gas Co., 168 F.2d 391, 394; City of Petaluma v. Pacific Tel. & Tel. Co., 44 Cal.2d 284, 288 [282 P.2d 43].) Accordingly it is necessary to determine what those rights are.

In the absence of a provision to the contrary it has generally been held that a public utility accepts franchise rights in public streets subject to an implied obligation to relocate its facilities therein at its own expense when necessary to make way for a proper governmental use of the streets. (New Orleans Gaslight Co. v. Drainage Com., 197 U.S. 453, 461-462 [25 S.Ct. 471, 49 L.Ed. 831]; Chicago B. & Q. Railway v. Illinois, 200 U.S. 561, 586 [26 S.Ct. 341, 50 L.Ed. 596] ; Transit Com. v. Long Island B. Co., 253 N.Y. 345 [171 N.E. 565, 566]; Southern Bell Tel. & Tel. Co. v. Commonwealth, (Ky.) 266 S.W.2d 308, 310; Southern Bell Tel. & Tel. Co. v. State, (Fla.) 75 So.2d 796, 800; Western Gas Co. of Washington v. City of Bremerton, 21 Wn.2d 907 [153 P.2d 846, 847]; In re Delaware River Joint Com., 342 Pa. 119 [19 A.2d 278, 280]; Natick Gaslight Co. v. Inhabitants of Natick, 175 Mass. 246 [56 N.E, 292, 293]; Opinion of the Justices, - Me. - [132 A.2d 440, 443]; Opinion of the Justices, -N.H.- [132 A.2d 613, 614].) The laying of sewers is a governmental as distinct from a proprietary function under the foregoing rule. (Detroit Edison Co. v. City of Detroit, 332 Mich. 348 [51 N.W.2d 245, 247-248] ; Louisville Gas & Electric Co. v. Commissioners of Sewerage of Louisville, 236 Ky. 376 [33 S.W.2d 344, 344-345] ; Nicholas Di Menna & Sons v. City of New York, 114 N.Y.S.2d 347, 350; Portland Gas & Coke Co. v. Giebisch, 84 Ore. 632 [165 P. 1004, L.R.A. 1917E 1092] ; City of San Antonio v. San Antonio St. Ry. Co., 15 Tex. Civ. App. 1 [39 S.W. 136, 138] ; Anderson v. Fuller, 51 Fla. 380 [41 So. 684, 688, 120 Am.St.Rep. 170, 6 L.R.A.N.S. 1026] ; National Water-Works Co. v. City of Kansas, 28 F. 921, 922-923; cf. City of Los Angeles v. Los Angeles Gas & Elec. Corp., 251 U.S. 32, 39-40 [40 S.Ct. 76, 64 L.Ed. 121]; State ex rel. Speeth v. Carney, 163 Ohio St. 159 [126 N.E.2d 449, 460]; Postal Tel. Cable Co. v. City & County of San Francisco, 53 Cal.App. 188, 192-193 [199 P. 1108].) Panhandle etc. Co. v. State Highway Com., 294 U.S. 613 [55 S.Ct. 563, 79 L.Ed. 1090], is not to the contrary, for in that case the utility’s private right of way was involved, not its right to use the public streets.

The company contends, however, that any implied obligations in its county franchise to relocate its pipes cannot be invoked for the benefit of the city operating outside its territorial limits. We cannot agree with this contention. Such obligations rest on the paramount right of the people as a whole to use the public streets wherever located, and the fact that a franchise is granted by one political subdivision as an agent of the state (see San Francisco-Oakland Terminal Rys. v. County of Alameda, 66 Cal.App. 77, 83 [225 P. 304] ; Belfast Water Co. v. City of Belfast, 92 Me. 52 [42 A. 235, 237]) does not defeat the right of another such agent acting in its governmental capacity to invoke the public right for the public benefit. (First Nat. Bank of Boston v. Main Turnpike Auth., 153 Me. 131 [136 A.2d 699, 711]; City of San Antonio v. Bexar Metropolitan W. Dist., (Tex. Civ. App.) 309 S.W.2d 491, 493; Cummins v. City of Seymour, 71 Ind. 491 [41 Am.Rep. 618, 623-625]; New Orleans Gaslight Co. v. Drainage Com., 111 La. 838 [35 So. 929, 933]; see Gadd v. McQuire, 69 Cal.App. 347, 358-359 [231 P.2d 754].) The fact that the city’s use of county streets for its sewers is authorized by section 10101 of the Public Utilities Code has no bearing on the applicability of the foregoing rule. It is true that the rights granted to municipal corporations by that section have been held to constitute franchises subject to the paramount right of the state to make the streets safe for public travel (State v. Marin Mun. W. Dist., 17 Cal.2d 699, 703-704 [111 P.2d 651]), but it -does not follow that a franchise exercised by a city in its governmental capacity under that section is subordinate to a prior franchise granted to a public utility. The utility involved in the Marin case was a municipal water district operating in a proprietary capacity. (See City of South Pasadena v. Pasadena Land etc. Co., 152 Cal. 579, 592-593 [93 P. 490].) In the present case, on the other hand, the city is exercising one of its most important governmental powers, a power so important that it is one of the few powers it may exercise outside of its territorial limits without express authorization. (Harden v. Superior Court, 44 Cal.2d 630, 638-639 [284 P.2d 9] : Mulville v. City of San Diego, 183 Cal. 734, 737 [192 P. 702] ; McBean v. City of Fresno, 112 Cal. 159, 163 [44 P. 358, 53 Am.St.Rep. 191, 31 L.R.A. 794]; see also City of National City v. Fritz, 33 Cal.2d 635, 637 [204 P.2d 7]; City of Madera v. Black, 181 Cal. 306, 312-313 [184 P. 397].) The Marin case itself recognized and applied the established rule that a utility’s rights in the public streets are taken subject to the paramount right of public travel, and as stated above, the same rule applies between public utilities and municipal corporations using the streets for sewer purposes.

The company contends, however, that the express terms of its county franchise define its obligation to relocate its lines at its own expense and that by clear implication any other similar obligations are excluded. Section 8 of its franchise provides that “the County of Los Angeles reserves the right to change the grade of any highway over which this franchise is granted, and the grantee of said franchise, its successors or assigns, shall at once change the location of all pipes and other appliances laid hereunder to conform to such change of grade. ’ ’ The city contends that the recital of the obligation to relocate the gas lines for changes of grade does not exclude other implied obligations to relocate lines and that any attempt to relieve the company of such obligations would be invalid.

The right of municipal corporations to require utilities to relocate their lines to make way for governmental uses of the streets has usually been described as resting in the police power, and it has frequently been stated in this context that the police power cannot be bargained away. (National WaterWorks Co. v. City of Kansas, 28 F. 921, 922-923; City of Macon v. Southern Bell Tel. & Tel. Co., 89 Ga. App. 252 [79 S.E.2d 265, 275]; Belfast Water Co. v. City of Belfast, 92 Me. 52 [42 A. 235, 237]; Louisville City Ry. Co. v. City of Louisville, 71 Ky. (8 Bush) 415, 422-423; Scranton Gas & Water Co. v. City of Scranton, 214 Pa. 586 [64 A. 84, 85, 6 L.R.A.N.S. 1033] ; Louisville Gas & Electric Co. v. Commissioners of Sewerage of Louisville, 236 Ky. 376 [33 S.W.2d 344, 344-345]; see New Orleans Gaslight Co. v. Drainage Com., 197 U.S. 453, 460 [25 S.Ct. 471, 49 L.Ed. 831].) Given, however, the municipal power to vacate streets or acquire a lesser interest in them in the first instance than is usually obtained by the public (see Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 416 [43 S.Ct. 158, 67 L.Ed. 322, 28 A.L.R. 1321] ; Detroit Edison Co. v. City of Detroit, 332 Mich. 348 [51 N.W. 2d 245, 247-248]), there would appear to be no basic principle that would prohibit granting a utility a right to compensation for relocating its lines as part of its franchise although such right would not otherwise pass. This view finds support in cases holding that the Legislature may provide for such compensation. (In re Gillen Place, Borough of Brooklyn, 304 N.Y. 215 [106 N.E.2d 897, 900] ; Baltimore Gas & Electric Co. v. State Roads Com., 214 Md. 266 [134 A.2d 312, 315] ; Philadelphia Sub. W. Co. v. Pennsylvania P. U. Com., 168 Pa. Super. 360 [78 A.2d 46, 51-52] ; Opinion of the Justices, - Me. - [132 A.2d 440, 443] ; Opinion of the Justices, -N.H.- [132 A.2d 613, 614-615]; see Columbus Gaslight & Coke Co. v. City of Columbus, 50 Ohio St. 65 [33 N.E. 292, 293, 40 Am.St.Rep. 648, 19 L.R.A. 510].)

* Perhaps this apparent conflict can be reconciled on the theory that a state Legislature may authorize franchises granting the utility the right to compensation for relocating its lines to make way for governmental uses, but that it will not be held to have delegated such power to a political subdivision in the absence of express language to that effect. It is unnecessary to determine, however, whether the county was empowered to grant a franchise including the right to the compensation here sought, for we have concluded that properly interpreted the company’s franchise included no such right.

As a public grant the franchise is to be construed in favor of the public interest. (Knoxville Water Co. v. Knoxville, 200 U.S. 22, 33-34 [26 S.Ct. 224, 50 L.Ed. 353] ; County of Los Angeles v. Southern Cal. Tel. Co., 32 Cal.2d 378, 384 [196 P.2d 773] ; City of Sacramento v. Pacific Gas & Electric Co., 173 Cal. 787, 791 [161 P. 978] ; Civ. Code § 1069.) Its own terms provide that it “is hereby granted upon each and every condition herein contained, and shall ever be strictly construed against the grantee and its successors and assigns. Nothing shall pass hereby unless it be granted in plain and unambiguous terms.” The maxim expressio unius ex-clusio alterius est cannot be invoked to make plain and unambiguous the right to compensation that the company seeks. Given the parties’ express recognition of the rule of strict construction against the grantee, paragraph 8 cannot reasonably be interpreted as being more than a partial expression of the parties’ common-law rights and obligations (City of Los Angeles v. City of Glendale, 23 Cal.2d 68, 77 [142 P.2d 289] ; Strand Improvement Co. v. City of Long Beach, 173 Cal. 765, 772-773 [161 P. 975]) inserted out of an abundance of caution or by way of example only. (City of Lexington v. Commercial Bank, 130 Mo. App. 687 [108 S.W. 1095, 1096] ; Georgia Power Co. v. Leonard, 187 Ga. 608 [1 S.E.2d 579, 581] ; see also Springer v. Philippine Islands, 277 U.S. 189, 206 [48 S.Ct. 480, 72 L.Ed. 845] ; Dickey v. Raisin Proration Zone No. 1, 24 Cal.2d 796, 811 [151 P.2d 505, 157 A.L.R. 324].) Thus, the New York Court of Appeals has pointed out that despite the existence of express provisions dealing with the utility’s obligations with respect to the streets “The reasonable construction ... is to assume that the people are not to be burdened with any heavier expense than necessity requires, and that to relieve the public service corporations having franchises in the streets of their common-law liabilities and to pass them over to the taxpayer can only be accomplished by the express direction of the Legislature.” (Transit Commission v. Long Island R. Co., 253 N.Y. 345 [171 N.E. 565, 568] ; see also New York Tunnel Authority v. Consolidated Edison Co., 295 N.Y. 467 [68 N.E.2d 445, 448-449].) Chicago v. Sheldon, 9 Wall. (U.S.) 50 [19 L.Ed. 594], State ex rel. City of Kansas v. Corrigan Consol. Street Ry. Co., 85 Mo. 263 [55 Am.Rep. 361], City of Kansas v. Corrigan, 86 Mo. 67, and Western Union Tel. Co. v. Police Jury, 225 La. 531 [73 So.2d 450], are not to the contrary. The first three of these cases involved, not competing uses of the streets, but the extent of the utility’s duty to repair and repave the streets, a matter covered by the express terms of the franchise, and in the Sheldon case the court’s interpretation was in accord with the practical construction placed on the franchise by the parties. In the fourth ease, the competing public use was so highly unusual that it could not have been contemplated at the time the franchise was accepted. In the present ease, on the contrary, the use of the streets for sewers was clearly to be anticipated, the utility’s common-law obligation to relocate its pipes to accommodate that use has at all times been clearly recognized by the law, and there is no provision in the company’s franchise abrogating that obligation by giving it the right to recover the costs of such relocation.

The judgment is reversed with directions to the trial court to enter judgment for the defendant city.

Gibson, C. J., Shenk, J., and Spence, J., concurred.

It should be noted that we are not here concerned with the question of the power of the Legislature to grant additional rights under a franchise after it has been accepted by the utility and the problem that would be raised thereby of a possible gift of public funds.