City of Greenfield v. Hancock County Rural Elec. Membership Corp., 670S130

• Decision Date: 17 February 1971
• Docket Number: No. 670S130,670S130
• Citation: 266 N.E.2d 799,256 Ind. 15
• Parties: CITY OF GREENFIELD, Indiana, et al., Appellants, v. HANCOCK COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Appellee, Indiana Association of Cities and Towns, Amicus Curiae.
• Court: Indiana Supreme Court

Page 799

266 N.E.2d 799

256 Ind. 15

CITY OF GREENFIELD, Indiana, et al., Appellants, v. HANCOCK COUNTY RURAL ELECTRIC MEMBERSHIP CORPORATION, Appellee Indiana Association of Cities and Towns, Amicus Curiae.

No. 670S130.

Supreme Court of Indiana.

Feb. 17, 1971.

Rehearing Denied April 8, 1971.

Peter D. Shumacker, Greenfield, G. R. Redding, Virgil L. Beeler, Indianapolis, for appellants; Baker & Daniels, Indianapolis, of counsel.

William H. Wolf, Wolf & Robak, Greenfield, W. H. Parr, Parr, Richey, Obremskey, Pedersen & Morton, Lebanon, for appellee.

Gerald Seifert, Indianapolis, amicus curiae, Indiana Ass'n of Cities and Towns.

GIVAN, Judge.

The plaintiff (appellee) is a local district electric membership corporation organized under the Indiana REMC Act, the same being the Acts of 1935, Ch. 175 as amended and found in Burns' Ind.Stat., 1951 Repl., 1970 Supp., §§ 55--4401 et seq.

The defendants (appellants) are the city which owns and operates an electric utility and certain of its public officials.

Appellee filed its complaint for injunction in which it alleged that the city had annexed certain territory which appellee was entitled to service and that the city was proposing to furnish service to customers in the annexed territory without having first purchased or condemned the rights of appellee in said territory. It was appellee's contention that the actions of the appellants were unlawful and should be enjoined. The appellant city denies that its service in the annexed area is unlawful and alleges that appellee had never rendered service or owned property in the annexed area. The action was venued from Hancock County to Hamilton County where the Circuit Court after first conducting a hearing granted a preliminary injunction on May 21, 1970. In granting the preliminary injunction the court made findings of fact and conclusions of law which, in substance, are as follows:

He first found the parties to exist as above set out. The court then set out the legal description of the area under discussion. He then found that on May 15, 1936, the appellee had been granted a Certificate of Public Convenience and Necessity by the Public Service Commission of Indiana granting it authority to serve certain area in Hancock County, Indiana, excepting any territory served with electric energy by any public or municipally owned utility. On November 15, 1945, appellee received from the Mayor of the City of Greenfield a letter stating that the City of Greenfield was experiencing difficulty in furnishing power to customers outside the City limits of Greenfield and offering to sell the facilities owned by the city outside the City of Greenfield to appellee. Pursuant to receipt of this letter appellee purchased all of the physical facilities in an area which included the area in question in this case. The purchase, however, excepted service which was then being furnished to the home of one John B. Hinchman, which home was located in approximately the center of a 96.83 acre tract, which at that time was being operated as a farm. The line running along the east side of the annexed area and the line connecting to the Hinchman property were not sold to the appellee in this transaction. The Public Service Commission approved this transaction. With the exception of the service to the Hinchman property the appellee had serviced and is now ready, willing and able to service those areas described in the order of the Public Service Commission and the Warranty Deed and Bill of Sale, which included the annexed area which is the subject of this action. The appellee, however, had never served any customers nor did it have any physical assets located within the boundaries of the annexed area.

On April 16, 1969, the City of Greenfield passed a valid ordinance annexing the described area, at which time the city was furnishing the electricity to the only customer in the annexed territory.

The appellee filed its complaint for injunction on the 15th day of May, 1969. Thereafter the appellants authorized the erection of poles and the stringing and energizing of electric wires and continued to furnish electric energy to the consumers in the annexed area and proposed to continue to do so unless enjoined. That since the sale of the facilities by the appellant city to the appellee and until 1952 appellee had expended $66,000 on the entire area acquired...