Gunnar v. Town of Montezuma

• Decision Date: 18 June 1940
• Docket Number: 45240.
• Parties: GUNNAR et al. v. TOWN OF MONTEZUMA et al.
• Court: Iowa Supreme Court

293 N.W. 1

228 Iowa 581

GUNNAR et al. v. TOWN OF MONTEZUMA et al.

No. 45240.

Supreme Court of Iowa.

June 18, 1940

Appeal from District Court, Poweshiek County; P. J. Siegers, Judge.

Action in equity to enjoin a town and its council from entering into a contract for the construction of a proposed municipal electric light plant and power system, from constructing the improvement and from issuing, pledging or delivering revenue bonds for the payment of the same. The trial resulted in a decree for the defendants. Plaintiffs appeal.

Reversed and remanded with instructions.

RICHARDS, J., dissenting.

Bradshaw, Fowler, Proctor & Fairgrave and H. A. Steele, all of Des Moines, and Clyde McFarlin, of Montezuma, for appellants.

W. L Hassett, of Des Moines, and C. F. Dickson, E. W. McNeil, and R. W. Boyd, all of Montezuma, for appellees.

J. E. Scovel, of Montezuma, for intervenor-appellee.

MILLER Justice.

This is an action in equity seeking to enjoin the town of Montezuma and its council from entering into a proposed contract for the construction of a municipal electric light plant and power system pursuant to the Simmer Law, Code 1939, § 6134.01 et seq., from constructing the proposed improvement and from issuing, pledging, selling or delivering revenue bonds in payment of the same. Numerous grounds were asserted by the plaintiffs as the basis for their claim that the proposed contract is invalid. Trial was had, resulting in a decree for the defendants, from which the plaintiffs appeal.

The principal ground for reversal asserted by the appellants here is directly analogous to the assertion which we sustained in the case of Weiss v. Town of Woodbine, Iowa, 289 N.W. 469.If we are to adhere to the decision there made, the decree herein appealed from is erroneous. The appellees recognize the controlling effect of that decision and earnestly endeavor to persuade us to refuse to adhere to it. A majority of the court, however, is disposed to follow the Woodbine case. Accordingly, it is necessary to and we do hold that the decree herein appealed from is erroneous.

Appellees contend, however, that the procedure followed by the appellants herein differs from that pursued in the Woodbine case and urge that the failure to follow such procedure is fatal to the right to have the appeal determined by this court. Accordingly, appellees have moved to dismiss this appeal.

In the Woodbine case, the successful bidder, Fairbanks-Morse & Company, was made a party to the proceedings in addition to the town and its officials. When a decree was entered dismissing the petition, the plaintiffs promptly applied to this court and secured a stay of proceedings pending the appeal, filing a stay bond in the sum of $25,000. By virtue of such stay, the contract was not performed and the improvement could not be constructed. When the matter was finally presented to us for decision, we could and did decide the case on its merits.

In this case, the successful bidder was also Fairbanks-Morse & Company. However, it was not made a party to the proceedings. When a decree was entered dismissing the petition, the appellants did not apply for a stay order. The decree was entered August 18, 1939. Simultaneously with the entry of the decree, the contract for the construction of the improvement was executed by the town and Fairbanks-Morse & Company. The construction work was promptly commenced. During the course thereof, on November 10, 1939, notice of appeal was served and filed. By January 13, 1940, the construction work was substantially completed, but no bonds had been issued in payment of the work. At that time, appellants made application for a stay order, and, on January 15, 1940, an order was entered restraining the appellees from accepting the work done on the contract, doing any act of use or occupancy which might be construed as an acceptance of the same and issuing or delivering any revenue bond to Fairbanks-Morse & Company in payment of the contract price. As a condition to such stay order, appellants filed a bond in the sum of $15,000. The completion of the project was not prevented by the stay order. The construction work was completed about February 1, 1940. Thereafter proceedings were had in this court to secure a clarification of the stay order, as a result of which completion of the project was recognized, but the appellees were specifically restrained from entering into any arrangement for the operation of the plant, pending a decision by this court.

One of the grounds of the motion to dismiss is the assertion that the questions presented by the appeal are now moot. This court has repeatedly recognized that injunctive relief cannot be had where the threatened action has become an accomplished fact. Wilbois v. Town of Runnells, 193 Iowa 789, 187 N.W. 855; Munn v. Independent School District, 188 Iowa 757, 769, 176 N.W. 811; Horrabin v. City of Iowa City, 160 Iowa 650, 654, 130 N.W. 150, 142 N.W. 212.Pursuant to the rule announced in such cases, insofar as appellants seek to enjoin the execution of the contract and the construction of the improvement, appellees' position is well grounded. The threatened action, which appellants seek to enjoin, has become an accomplished fact. Any claim for injunctive relief in regard thereto is now moot.

However, appellants also seek to enjoin the issuance of revenue bonds in payment of the contract price. In the proceedings had to secure a stay order herein, it was stipulated that no revenue bonds have as yet been issued and the issuance of such bonds has been stayed by order of this court, entered as aforesaid. In the case of Miller v. Town of Milford, 224 Iowa 753, 772, 276 N.W. 826, 835, 114 A.L.R. 1423, we state:

" Plaintiffs sought not only to restrain the building of the plant, but also prayed that the defendants be restrained from

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