189 Ind. 210 | Ind. | 1920
This is an appeal from a decree entered by the circuit court of Marion county ordering the specific performance of a written contract for the sale by appellee to first-named appellant of all the real estate, buildings and other properties of appellee, including the local and long-distance telephone lines operated by appellee, and all property owned and used in connection therewith, as well as all stocks and bonds owned by said company, and all other property except cash and credits.
The court overruled separate demurrers- addressed to the complaint by each of the appellants to which exceptions were reserved; and, on appellants ’ declining to answer or plead further, the decree was entered on the pleadings. The only question presented for review arises on the exception to the ruling of the court on the demurrer.
By the memoranda filed with the demurrers only one objection is raised as to the sufficiency of the complaint. The complaint sets out in full the franchise granted by the city of Indianapolis to the Indianapolis Telephone Company, under which that company constructed and operated its telephone system. The seventeenth section of the instrument so set is in the words following:
“It is also agreed that the franchise and privileges herein granted by the said City of Indianapolis are so granted upon the distinct condition*215 that neither such franchise nor any rights granted by this contract shall be hereafter assigned nor in any manner transferred by said companies, party of the second part either directly or indirectly, without the consent of the Board of Public Works of said City and ratified by the Common Council of the City of Indianapolis expressed in a resolution regularly adopted by said Board.”
The objection made to the complaint is that it does not allege that the city of Indianapolis, by its board of public works, consented to said sale and transfer, and that such consent was ratified by the common council of said city, as required by §17 of the franchise, and that it is not alleged that the franchise in question was surrendered in the manner and within the time prescribed by §101 of the Public Utilities Act, §10052x3 Burns 1914, §10052x3 Burns’ Supp. 1918, Acts 1915 p. 458.
Section 95% of the Public Service Commission Act (§10052a et seg. Burns 1914, Acts 1913 p. 67) provides that, where two public utilities are engaged in furnishing a like service or product, and are doing business in the same municipality or locality within the state, one of such corporations may lease or sell its property or business or any- part thereof to the other, on complying with certain conditions prescribed in the section, at a price and on terms to be fixed by the Public Service Commission. The section expressly provides that such leases or sales may be made with the consent and approval of the Public Service Commission, but not otherwise.
The allegations of the complaint show that appellant Central Union Telephone Company and appellee
Appellee takes the position that the sole power-to give or to withhold consent to a sale of its property and business, under the state of facts disclosed by the complaint, was vested by the legislature in the Public Service Comimssion by the section of statute to which reference has been made, and that the power to give or to withhold such consent reserved by the city of Indianapolis in its contract with appellee has been withdrawn by the state and vested in another body of its own creation. If appellee’s position is sound, the city of Indianapolis has no power to prevent the sale by withholding its consent when the Public Service Commission has given its consent and approval to such sale.
Appellants take the position that the franchise granted by the city of Indianapolis to appellee and accepted by it constitutes a legal and binding contract between the city and appellee, and that the seventeenth section of that instrument imposes on appellee a contractual obligation within the meaning and within the protection guaranteed by Art. 1, §10, of the federal Constitution. Basing their conclusion on the position thus stated, appellants assert that the state
There can be little doubt that it was the purpose of the legislature to confer on the Public Service Commission the power to control all mergers, consolidations aiid sales of public service corporations in such a way as to do justice to the public, as well as to those engaged in furnishing service to the public. It is equally clear that it was not the purpose of the legislature to divide this power so as to leave any portion of it in the municipality in which the public service corporations were doing business.
The complaint does not allege that appellee surrendered its franchise and accepted an indeterminate permit under the provisions of §101 of the Public Utilities Act, supra; and it must therefore be assumed that the instrument in question has not been abrogated as a whole by a mutual relinquishment of rights and release of obligations thereunder by the state on the one hand and appellee on the other. For the reason stated, and for other reasons which need not be here set out, the case of Winfield v. Public Service Comm. (1918), 187 Ind. 53, 118 N. E. 531, cannot be regarded as a decisive authority on the questions here involved.
Under the facts before the court in the instant case the franchise under which appellee was operating, if it is contractual in its nature, as asserted by appellant, is still operative, and the provisions of §17 are
In deciding the question thus presented the court is first required to consider the franchise or grant o”f authority, as set out in the complaint, under which appellee constructed its telephone plant and under which it was operating when the contract of sale was executed, on which this suit is based.
The written instrument was made and executed by appellee, and by the board of public works of the city of Indianapolis, representing the city, and it was afterward confirmed by an ordinance of the common council of said city. The written instrument so executed was contractual in form containing mutual stipulations and agreements as to the manner in which the plant was to be -constructed and operated, the rates appellee was to charge for its service, the conditions under which it might lease or sell, and numerous other agreements and stipulations which are not ma
states and by the provisions of treaties concluded in accordance with the provisions of the federal Constitution. The state through its legislative department of government may pass all laws and regulations respecting the peace, the safety, the health, the happiness, and the general well-being of the people of the state; and, under this power, it may prescribe the conditions under which persons and corporations engaged in furnishing utility service to residents of the state may do business and may fix the rates to be charged for such service.
By such a contract the state abdicates and relinquishes its power to prescribe conditions, or to regulate practices, or to fix rates, as the case may be, so far as the other party to the contract is concerned, to the extent evidenced by the express terms of the contract and for the period specified therein. During that period of time the state cannot exercise its power to change conditions or to fix rates
To guard against any misunderstanding or misapplication of the proposition just stated and of the authorities cited in its support, it may be well to say that the power of the state to abdicate or to bargain away its right to prescribe conditions and to regulate practices is sustained when property rights only are affected; but the state cannot abdicate or contract away its power to protect the life, the safety, the health, or the morals of its citizens. Grand Trunk, etc., R. Co. v. City of Couth Bend, supra; City of Chicago v. Chicago Union Traction Co. (1902), 199 Ill. 259, 65 N. E. 243, 59 L. R. A. 666.
It has been deemed advisable to discuss at some length the powers of the state with relation to the matter under consideration before considering the powers which municipalities may exercise by virtue of the delegated authority of the state.
“Any city or town may enter into contract with any person, corporation or association to furnish such city or town and its inhabitants with water, motive power, heat or light, * * * or to build * * * telegraph or telephone lines * * * into or through such city or town; and may provide-in such contract the terms and conditions on which such * * * tel-graph or telephone services * * * may be furnished * * * to such city or town and to its inhabitants : * * * and, Provided further, That before any such contract shall be made by any city of the first, second, third or fourth class, such contract shall be first agreed to by the board of public works of such city, after which agreement such board shall cause a proper ordinance approving and confirming-such contract to be presented for adoption by the common council.” Acts 1905 p. 219, §254, as amended, Acts 1911 p. 181, §8939 Burns 1914.
“The board of public works shall have power: * >* * Eleventh: To authorize telegraph, telephone, * * * companies to use any street, alley or public place in such city, and erect necessary structures therein, to prescribe the terms and conditions of such use and to fix by contract the price to be charged to patrons. ” Acts 1905 p. 219, §93, as amended, Acts 1913 p. 253, §8696 Burns 1914.
The power of the city to .make the contract, and to enforce any right thereunder was a power derived from the people. Such power, however, does not come directly from the' people to the city; but it comes indirectly by delegation from the general assembly, to which body the people have, by their Constitution, entrusted their entire power in such matters. When the state withdraws any such delegated power, it acts in behalf of the people of the state. The people residing within the corporate limits of a municipality have no grounds to complain of the exercise of such a power by the legislature in behalf of the people of the entire state. They are not thereby deprived of any supposed constitutional right of local self-government.
The trial court correctly overruled each of the separate demurrers to the complaint.
Judgment affirmed.