185 Iowa 493 | Iowa | 1919
I. The defendant Electric Company is operating under a franchise and ordinance granted and enacted by the plaintiff town. Said ordinance provides that rates therein stated shall be in force for 10 years ensuing, and shall continue in force “until a readjustment of rates is demanded by the town or the grantee.” The company has notified its patrons that service will be discontinued, unless rates 10 per cent higher than the maximum rates fixed in said ordinance be paid. By a petition to enjoin this proposed action on part of the company, the plaintiff town contends that no readjustment has been demanded; that the proposed increase “is contrary to the franchise and agreement made by the defendant with the plaintiff, and is ■ unauthorized and void,” and is without authority of law. The answer of the defendant asserts that a readjustment has been demanded and refused; that, by reason of changed economic conditions, beyond the control of either party, said maximum rates have become inadequate, and, in effect, confiscatory; and that, if the franchise rates be increased as is proposed by defendant, the new rate will still be less than adequate and compensatory. The trial court granted a temporary injunction, restraining defendant from exacting said increase in rates. A motion to dissolve this writ was denied, and defendant appeals from that ruling.
On this appeal, we can decide nothing save whether it may be said now that the claims of defendant have no “just foundation.” We gather that these claims are the following:
a. The power to fix rates is purely governmental and legislative. So hold Rogers Park Water Co. v. Fergus, 180 U. S. 624; Home Tel. & Tel. Co. v. City of Los Angeles, 211 U. S. 265; City of Tipton v. Tipton L. & H. Co. 176 Iowa 224 ; 3 Dillon on Municipal Corporations (5th Ed.), Section 1325; and 4 McQuillin on Municipal Corporations (1912), Section 1729, approved in the Tipton case. The fixing of rates by ordinance is, in a sense, an exercise of the police force. Wherefore, a fine is enforcible for violating the provisions of the ordinance.. Tipton’s case, 176 Iowa 224.
b. The legislature can give power to a town to contract that rates fixed shall not be changed for a stated period; but authority “to regulate and fix” rates does not authorize such a contract. Power to make such a one can be given by unmistakable grant alone; and without such
c. The next proposition urged is that something that one party may change without the consent of the other is not a contract. To this we have to say that, in rate cases, the proposition that nothing is, in the true sense, a contract, unless there be a reciprocal obligation, and unless the alleged contract is binding on both, has the approval of numerous decisions in the Supreme Court of the United States, those of other Federal courts, and of courts of last resort in many of our sister states.
d. Next, it is urged that this is not changed by any estoppel arising from the fact that the service company has proceeded under the franchise grant. This is held in State v. Chariton Tel. Co., 173 Iowa 497, and in many de
e. Finally, it is said that the sole limitation upon the governmental power to fix rates, and upon the right of the service company to demand a change to higher rates, is that all rates shall be just and reasonable. This is held in Iowa R. & L. Co. v. Jones Auto Co., supra, Tipton’s case 176 Iowa 224, and in Abbott on Municipal Corporations, Section 915, approved in the Tipton case. The schedule fixed is presumed to fix rates that, “taking into account the entire business, would yield adequate returns in the way of profits.” So holds City of Buffalo v. Buffalo Gas Co., 81 App. Div. 505 (80 N. Y. Supp. 1093), approved in Tip-ton’s case. It follows there is no occasion for unalterable rates, since all rates must, at all times, be reasonable, fair, adequate, and non-confiscatory, — since the municipality may not use its governmental powers to confiscate, nor the service company demand excessive rates. So holds Rogers Park Water Co. v. Fergus, 180 U. S. 624.
In the last analysis,, the contention of the appellant, up to this point, is that no contract, no estoppel, no ordinance, nor refusal to amend an ordinance, stands, or can stand, in the way of raising the rates fixed by the plaintiff to a just rate, provided defendant can establish that the rates fixed by the ordinance of plaintiff are not now just, reasonable, and fairly compensatory. As has been shown, this position is well sustained by authority. Hence we cannot say, at this time, that it is clear that such claim should not be sustained on final hearing. The ultimate claim made by the defendant is that, if rates fixed by ordinance are not just, reasonable, and compensatory, and the municipality refuses to change such rates so that they will be that, then the defendant may exact an increase from its patrons, and, if it be attempted to restrain collection, it may successfully defend, by showing that the increase .is
IV. The next question is: Which method proposed will, with the least possible inconvenience to either, assure each that such judgment as he might obtain shall be effective?
The appellee contends, first, that whether a temporary* injunction shall be dissolved leaves so much in the discretion of the court as that we may not interfere on appeal. If that be so, thus broadly stated, the undoubted right to appeal would be of little value. Keeping in mind that the legislature has granted the right to appeal from a refusal to dissolve a temporary injunction, we hold that refusal to dissolve is discretionary only where the propriety of the ruling involves a consideration of a fact question, and that, whenever the appeal from the denial of a motion to dissolve presents questions of law only, the appellate review is as broad as it is on the review of any law question. This distinction has been so often made that we deem citations superfluous. But see Burlington, C. R. & N. R. Co. v. Dey, 82 Iowa 812, at 343.
So we reach the question whether the method advocated by appellant is not, as matter of law, preferable to keeping the temporary injunction in force. It contends that the method it proposes best serves the “balance of convenience.” Its method is defined in both its answer and its motion to dissolve, and is an offer “to deposit with some
In view of the conclusions finally reached on this appeal, and of the manner in which the dispute on the appeal is narrowed by the presentation thereof, several practice points made by the parties respectively require no consideration.
The cause is remanded for action in harmony with this opinion. — Reversed and remanded.