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Walker v. De Concini

Supreme Court of Arizona

July 16, 1959

Albert A. WALKER and Adalia A. Walker, husband and wife, dba Sunnyside Water Company, and Sunnyside Water Company, Inc., an Arizona corporation, and Arizona Corporation Commission and William T. Brooks, Mit Simms and E. T. Williams, as elected members of and comprising the same, Appellants,
v.
Evo DE CONCINI and Ora DeConcini, husband and wife, Walter E. Murphey, Jr., and Helen Murphey, husband and wife, Appellees.

Page 934

Page 935

[86 Ariz. 145] Robert Morrison, Atty. Gen., and Jack G. Marks, Sp. Asst. Atty. Gen., Udall & Udall and Gaynor K. Stover, Tucson, for appellants.

Hall, Catlin & Jones, and J. Richard Hannah, Tucson, for appellees.

Snell & Wilmer, Perry M. Ling, Nicholas H. Powell, Jennings, Strouss, Salmon & Trask, and Clarence J. Duncan, Phoenix, and Lawrence V. Robertson, Tucson, amici curiae.

OGG, Superior Court Judge.

This case was commenced in the Superior Court of Pima County by the appellants, Albert A. Walker and Adalia A. Walker, husband and wife, dba Sunnyside Water Company, and the Sunnyside Water Company, Inc., an Arizona corporation, filing[86 Ariz. 146] a complaint for a declaratory judgment against appellees, Evo DeConcini and Ora DeConcini, husband and wife, and Walter E. Murphey, Jr., and Helen Murphey, husband and wife.

The original complaint asked the Court to clarify the rights of the parties and to adjudicate that the certificate of convenience and necessity issued by the commission to the appellants, Albert A. Walker and Adalia A. Walker in 1948, to operate a domestic water company in Pima County, Arizona, was lawfully issued, valid, and of full legal force.

The Commission, answering separately, prayed for the same relief as appellants, Walker. The appellees, DeConcini and Murphey, answering together, prayed for a judgment decreeing the certificate to be null, void, and of no force and effect in the premise and particularly as to their lands covered by the franchise.

The Court below, after trial of the cause, entered a formal and final declaratory judgment in favor of the contentions of appellees DeConcini and Murphey, that the certificate of convenience and necessity was void as to their lands. The judgment being adverse to the Commission's contentions, the Commission then joined with appellants, Walker and the Sunnyside Water Company, Inc., in this appeal.

The facts as appear from the record are that the appellants, Walker, were granted a certificate of convenience and necessity by the Arizona Corporation Commission in July, 1948, to operate a water utility in an area containing approximately one and one-quarter sections of land in an area south of Tucson, commonly known as Sunnyside or Emery Park. The Board of Supervisors of Pima County also granted a franchise to them convering the same area. The appellees, DeConcini and Murphey each owned approximately a one-quarter section of unimproved land within the area covered by the certificate and franchise. From 1948, the appellants, Walker, operated under this franchise and developed a water system that grew until it was serving over one hundred and fifty customers by 1956. Appellants, Walker, never served the lands of appellees, DeConcini and Murphey, for the reason their land holdings were not developed and no request for service was made.

In 1956 appellants, Walker, made application before the Commission to sell and transfer their water utility and the certificate of convenience and necessity to appellant, Sunnyside Water Company, Inc. At the hearing of the application, appellee, DeConcini, appeared and challenged the validity of the certificate as issued by the Commission; thereafter, the parties to the sale and purchase mutually desiring an adjudication of the legality of the certificate, filed their complaint for a declaratory judgment[86 Ariz. 147] against appellees, DeConcini and Murphey.

Although there are nine separate assignments of error in this appeal, they are all interrelated, and the crux of the material legal problems to be determined by this appeal are stated simply as follows:

1. Was legal or proper notice given at the original hearing by the Corporation Commission in July, 1948, when Walker's application for a certificate of convenience

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and necessity was heard by the Commission?

2. Was that hearing legally held and conducted?

3. Were certain omissions in the form of the Commission's final opinion and order such fatal defects as would invalidate the certificate?

Since the notice, the manner of conducting the hearing, and the sufficiency of the final order, are of prime importance in this case, a more detailed statement of these facts is required.

Appellants, Walker, in the latter part of July 1948, made formal application to the Arizona Corporation Commission for a certificate of convenience and necessity. This application became 'Docket No. U-1242; with the Arizona Corporation Commission, and the Commission set the matter for hearing at Tucson, Arizona, on August 10, 1948. A mimeographed form of Notice of Hearing was mailed to the following parties: the Board of Supervisors of Pima County, the Clerk of the City of Tucson, Arizona, and to the Arizona Daily Star on August 3, 1948. The Commission also advised the attorneys representing appellants, Walker, by mail of the hearing date. No publication was made by the Arizona Daily Star, and no other notice of the hearing, other than that set out above, was given.

On the day of the hearing one member of the Corporation Commission and his staff were present in Tucson to hear the various matters pending before the Commission. After calling the Walker application for hearing, and after determining that no one was present for the purpose of protesting the application, the commissioner assigned the taking of testimony to W. H. Linville, Director of Utilities for the Corporation Commission. Sworn testimony was taken before Mr. Linville, who made penciled notes of the same, and the hearing was concluded. No commissioner, no stenographer or court reporter was present at this hearing, and no testimony was transcribed and filed with the Commission with the exception of Mr. Linville's brief notes.

Thereafter, evidently based on the recommendation of Mr. Linville, the Commission granted the certificate of convenience and necessity to appellants, Walker, on October 15, 1948. It should be noted that Mr. Linville died prior to the trial in the lower [86 Ariz. 148] court, and the only evidence regarding his recommendations appears in his notes made at the hearing in which he says, 'Recommend issuance of Certificate as prayed for.'

The opinion and order entered by the Commission granting the certificate filed to describe the certificated area, but did refer specifically to the Commission Docket Number U-1242, wherein a ...


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