City of Monrovia v. Southern Counties Gas Co.

[660]

NOURSE, P. J.

Plaintiff sued for an accounting of the amount due from the defendant under its franchise to use the public streets of the plaintiff city for the distribution of gas. Plaintiff had judgment for $894.44, and the defendant appeals on typewritten transcripts.

Defendant is the successor in interest of a franchise granted in September, 1905, under the terms of the Broughton Act (Stats. 1905, p. 777). The franchise stipulated that the grantee should pay to the city annually “two (2%) per cent of the gross annual receipts . . .

arising

from the use, operation or possession of such franchise”. For some years after the date of the franchise the grantee maintained and operated a gas manufacturing plant within the city limits of Monrovia where artificial gas was manufactured and distributed to consumers. In 1920, upon the discovery of natural gas fields in the southern part of the state, the defendant abandoned its manufacturing plant in the City of Monrovia and since has supplied its consumers with natural gas from a widely scattered general system which reaches fifty-seven municipalities and five counties. In the operation of this business the company’s transmission lines occupy public highways to and through the various counties and municipalities, but a considerable portion of its investment is located on private property and private rights of way. In order to determine the proper proportion of its gross proceeds which should be allocated to the various counties and municipalities served by it through this system the company followed the method laid, down for that purpose by the Supreme Court in

County of Tulare

v.

City of Dinuba,

188 Cal. 664 [206 Pac. 983, 984]. In accordance with this method the defendant paid to the various counties and municipalities within its system an amount estimated on the basis of the total mileage in each, eliminating that portion of its earnings attributable to the use of its properties located on private property. This allocation was accepted by all the counties and municipalities within the system except the City of Monrovia which asserted that it should be paid two per cent of the gross receipts from the sale of gas within its boundaries. The trial court adopted the city’s theory and the correctness of its judgment as matter of law is the only question on this appeal.