Town of St. Francisville v. Cobb

188 So. 2d 146, 65 P.U.R.3d 218, 1966 La. App. LEXIS 4866
CourtLouisiana Court of Appeal
DecidedJune 6, 1966
DocketNo. 2225
StatusPublished

This text of 188 So. 2d 146 (Town of St. Francisville v. Cobb) is published on Counsel Stack Legal Research, covering Louisiana Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Town of St. Francisville v. Cobb, 188 So. 2d 146, 65 P.U.R.3d 218, 1966 La. App. LEXIS 4866 (La. Ct. App. 1966).

Opinion

BARNETTE, Judge.

Plaintiff, a municipal corporation, brought suit to recover $1,735.91, the amount required to reach the $3,000 minimum annual charge for natural gas supplied from July 7, 1963, to July 6, 1964, by plaintiff’s municipally owned utility to Marydale Farm, owned by defendant. Defendant answered, denying that he owed the deficiency amount, and reconvened for judgment for the deficiency amount paid by him in a previous year; for an injunction ordering plaintiff not to cut off service; and for other equitable relief.

The petition for the injunction was tried separately, and a preliminary injunction was issued on April 5, 1965, restraining the plaintiff from refusing to supply gas to defendant pending a final decision on the merits. Judgment on the merits was rendered in favor of plaintiff for the full amount as prayed, and dismissing defendant’s reconventional demands. By the terms of the order by which it was granted, the injunction was dissolved when the judgment on the merits was rendered. Defendant has appealed suspensively.

Defendant is the owner of Marydale Farm situated in West Feliciana Parish some five or six miles from the plaintiff town. He operates the farm as an agricultural-industrial enterprise, part of which operation consists of artificially drying grass and forming it into feed pellets for livestock. Defendant wanted to secure natural gas to use in his grass dehydrator and approached the plaintiff town in November, 1960, to see if it would supply the gas he needed from its main which passed near the farm.

The town readily agreed to furnish the gas service. In a letter from Mr. Leon A. Picou, attorney for the town, dated November 25, 1960, defendant was offered an industrial rate (the lowest available) for his farm provided that no residences be connected to the industrial use meter and that [148]*148defendant guarantee a minimum use of $3,000 worth of gas annually. Defendant attempted to negotiate with plaintiff to get it to include several residential buildings on the farm on the industrial rate meter and to reduce or remove the minimum guarantee. When plaintiff would not yield on its conditions, defendant sought relief from the Louisiana Public Service Commission, charging that proposed rates and charges were arbitrary and excessive. The Commission declined to take any action on the ground that LSA-R.S. 45:1164 excludes municipally owned utilities from its jurisdiction.

Defendant then signed, on March 19, 1962, a gas service application included in which was the provision against attaching additional service on the consumer’s side of the industrial rate meter. A service contract between the parties was completed on May 15, 1962, providing for industrial use rates and for a minimum annual billing of $3,000. Later, additional meters were installed to service the residential buildings on the farm at domestic rates.

The first year of service under the contract was completed on July 6, 1963. At that time the town billed defendant $1,379.-43, the amount necessary to make up the $3,000 minimum. Defendant paid this amount on September 30, 1962, while protesting again the imposition of the minimum fee.

At the end of the second year the deficiency amounted to $1,735.91 for which defendant was billed in August, 1964. When defendant refused to pay, this suit was filed by the town at defendant’s domicile in Jefferson Parish.

The judgment of the district court in favor of plaintiff was based on the rationale that, since the town was under no obligation to furnish defendant with gas service, the contract between the parties, which covered all of the points in dispute, was the law between them and was not subject to judicial review in the absence of allegations of error, fraud, or duress. While we agree with the result reached by the court below, we cannot agree with its reasoning.

Clearly a municipally ownbd public utility is subject to the same standards of public service and to the same measure of judicial review as a privately owned utility. Hicks v. City of Monroe Util. Comm’n, 237 La. 848, 112 So.2d 635 (1959); Vicksburg, S. & P. Ry. Co. v. City of Monroe, 164 La. 1033, 115 So. 136 (1927); Johnson v. Mayor & City Comm’n of City of Natchitoches, 14 La.App. 40, 129 So. 433 (2d Cir.1930).

There is a real issue here as to whether or not the town had an obligation to provide service for defendant. The town did serve other consumers outside its corporate limits, and its main passed along the right-of-way of a state road which cut through defendant’s farm. See State ex rel. Thalheim v. Louisiana Gas Serv. Co., 107 So.2d 817 (La.App.Orleans 1959). But, even if it be conceded that the town did not have to serve defendant, once it assumed the responsibility of doing so, it was charged with the duty of dealing with him in a fair and reasonable manner. Hicks v. City of Monroe Util. Comm’n, supra. The contract between these parties is charged with the same public interest as any other public utility contract and is subject to judicial review to protect that public interest.

In reviewing this contract we have first had to determine precisely what portions of it are objected to by defendant. Throughout the five years of contention between these parties, defendant has made many complaints, raised many issues, and charged plaintiff with various arbitrary and capricious acts. Some of his contentions are irrelevant, and some are inconsistent. A careful examination of the record reveals that he has two basic objections: first, that he should not be required to guarantee a minimum annual use of the service; and second, that it is unreasonable and unfair [149]*149to exclude his residential buildings from the industrial rate meter.

In the bond indenture pursuant to which the gas utility service was installed a rate schedule is included which is subject to revision under certain conditions by the town. There has been no revision, and the initial rate schedule is still in effect. It is as follows:

“A. DOMESTIC RATE
First 500 C.F. or less oi o
Next 2500 C.F. O >T| I — 1 o o
Excess O w O b\ cr
Minimum Bill ® H-* ui o
“B. COMMERCIAL RATE
First 50,000 C.F. @ $0.56 per MCF
Next 250,000 C.F. @ 0.46 per MCF
Excess @ 0.36 per MCF
Minimum Bill @ 5.00
“C. INDUSTRIAL RATE
All Deliveries @ $0.32 per MCF
Minimum Annual Bill @ 3,000”

Defendant has argued strenuously that -no definitions of the terms “domestic”, “commercial”, and “industrial” have been set out in the indenture or in any ordinance by the town council. He has established that many obviously “commercial” establishments under any ordinary definition of that term are served at “domestic” rates. He argues that this lack of definition and the obvious failure of the town to apply “commercial” rates to commercial enter•prises makes it impossible to determine who is entitled to what rate. As convincing .as his argument is, it gives him no help for he has not been prejudiced by this practice.

The practice on the part of the town has been to ignore the nature of the consumer installation and to permit the consumer to select the rate most economically beneficial to himself.

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Related

Hicks v. City of Monroe Utilities Commission
112 So. 2d 635 (Supreme Court of Louisiana, 1959)
Vicksburg, S. &. P. Ry. Co. v. City of Monroe
115 So. 136 (Supreme Court of Louisiana, 1927)
State ex rel. Thalheim v. Louisiana Gas Service Co.
107 So. 2d 817 (Louisiana Court of Appeal, 1959)
Johnson v. Mayor of Natchitoches
129 So. 433 (Louisiana Court of Appeal, 1930)

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Bluebook (online)
188 So. 2d 146, 65 P.U.R.3d 218, 1966 La. App. LEXIS 4866, Counsel Stack Legal Research, https://law.counselstack.com/opinion/town-of-st-francisville-v-cobb-lactapp-1966.