Heartland Consumers Power Dist., In re

• Citation: 180 N.W.2d 398,85 S.D. 205
• Decision Date: 07 October 1970
• Docket Number: No. 10718,10718
• Parties: In the Matter of the Creation of HEARTLAND CONSUMERS POWER DISTRICT. Jerome B. LAMMERS and Dennis Sunderman, Appellants, v. HEARTLAND CONSUMERS POWER DISTRICT, Respondent.
• Court: Supreme Court of South Dakota

Page 398

180 N.W.2d 398

85 S.D. 205

In the Matter of the Creation of HEARTLAND CONSUMERS POWER

DISTRICT.

Jerome B. LAMMERS and Dennis Sunderman, Appellants, v. HEARTLAND CONSUMERS POWER DISTRICT, Respondent.

No. 10718.

Supreme Court of South Dakota.

Oct. 7, 1970.

John H. Zimmer of Zimmer & Richter, Parker, Lammers & Lammers, Madison, for appellants.

Vincent J. Protsch and Thomas R. Pardy, of Munford, Protsch, Sage & Pardy, Howard, Leo P. Flynn, Milbank, for respondent.

BIEGELMEIER, Judge (on reassignment).

This is an appeal from an order of the circuit court approving the formation of Heartland Consumers Power District and presents some questions with reference to the statutes ¹ under which the court held the hearing and entered its order. The Consumer Power District Act, now Consumer Power Districts Law, will be referred to herein as the Act. It provides in general that nonprofit, public service, utility districts may be organized for the purpose of providing electric energy throughout the State of South Dakota; that when created it would be a political subdivision of the state and created only by election and the procedure provided therein. It required the filing of an original petition signed by 5% Of the qualified electors of the proposed district in rural areas in the office of the clerk of courts in the county in which the principal place of business of the district was to be located and certified copies in similar offices in other counties where the proposed district could extend.

Upon request a judge of the circuit court was authorized to hear the petition and set a time for hearing thereon with notice to be published in all counties involved. As no question has been raised with reference to the contents, execution and filing of the petition or notice of hearing thereon, reference to sections, relative thereto are unnecessary to be stated in this opinion. At this hearing the court heard the evidence, considered the record and entered findings of fact, conclusions of law and an order approving the formation of the district. The basis for considering constitutional law questions will first be stated.

I.

The Constitution of South Dakota is not a grant but a limitation upon the lawmaking power of the state legislature and it may enact any law not expressly or inferentially prohibited by the state or federal constitutions. In State ex rel. Wagner v. Summers, 33 S.D. 40, 144 N.W. 730, 50 L.R.A., N.S., 206, Ann.Cas.1916B, 860, the court wrote:

'no legislative act should be declared unconstitutional unless the conflict between its provisions and some principle of constitutional law is so plain and palpable as to leave no reasonable doubt of its validity.'

See also Kramer v. Bon Homme County, 83 S.D. 112, 155 N.W.2d 777; Clem v. City of Yankton, 83 S.D. 386, 160 N.W.2d 125. As stated in Clem, in order to determine that an act is unconstitutional we must find some provision that prohibits the enactment of a statute rather than for grants of such power. This is not to say this power is unlimited. See Nelson v. City of Miller, 83 S.D. 611, 163 N.W.2d 533, and discussion in White Eagle Oil & Refining Co. v. Gunderson, 48 S.D. 608, 205 N.W. 614, where the court left undecided the constitutional question of the state engaging in the sale of gasoline.

II.

By thorough briefs the parties have first discussed the authority of the state legislature to create this public corporation and political subdivision of the state with reference to the police power. In State v. Central Lumber Co., 24 S.D. 136, 123 N.W. 504, this court, quoting Justice Shaw, wrote that the police power is

'The power vested in the Legislature by the Constitution to make * * * all manner of wholesome and reasonable laws * * * either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the (state)'.

It is in accord with the generally accepted definition. 16 Am.Jur.2d, Constitutional Law, §§ 250, 262, 306.

A district organized under the Act of May 23, 1921, Cal.Stats.1921, p. 245, as amended was described as an agency of and a validly constituted political subdivision of the State of California duly empowered to finance the public function of supplying its inhabitants with light, heat and power. Pacific Gas & Electric Co. v. Sacramento Municipal Utility Dist., 9 Cir., 1937, 92 F.2d 365. The court there further held the district had power to levy general taxes against the property of the district, including that of a private competitor, an issue not here present.

Public power districts have been authorized by legislation in several states ² and no decision has been brought to our attention which, in the absence of constitutional prohibition, holds the state may not either engage in the business of manufacture and sale of electric power or create agencies for the purpose. See 29 C.J.S. Electricity § 6. The generation and distribution of electric power has long been recognized as a public use and purpose. Carstens v. Public Utility Dist. No. 1, 8 Wash.2d 136, 111 P.2d 583, 586; State v Lincoln County Power Dist. No. 1, 60 Nev. 401, 111 P.2d 528.

The Nevada court had before it the constitutionality of 'The Power District Law', Ch. 72, Laws of Nevada, 1935. Section 4 provided for the creation of such districts either by the governing body of a municipality proposed to be included in a district, by a petition of 10% Of the electors thereof or by the public service commission of Nevada of its own action. Other sections gave the commission authority to consolidate or dissolve such districts. The district was empowered to acquire, construct and operate a utility to furnish and sell heat, light and power service to the public, the state or any municipality or public institution. It provided for its officers, authority to issue revenue bonds and otherwise operate such business. The validity and constitutionality of this law being in issue, the court's opinion followed much the reasoning of this court in the Kramer and Clem opinions, supra. After writing the familiar guides that every presumption favors validity of a statute, that the legislature possessed the whole legislative powers of the people except so far as limited by the constitution and its plenary right to legislate upon every subject unless there is a denial of that right by the constitution, the court wrote:

'There is no constitutional limitation on the power of the Legislature of Nevada to create municipal corporations and confer on them such functions it considers necessary or expedient. * * *

'Therefore, power districts created pursuant to the provisions of Chapter 72, Laws of 1935, are municipal corporations. * * *

'Power districts, as provided for in Chapter 72, Laws of 1935, are also political subdivisions of the state, created to make available to the public, to any municipality, the state, any any public institution, an abundant supply of electricity at the lowest cost consistent with sound economy and prudent management for use for the purpose of raising the standard of living * * *

'The supplying of electric energy to the inhabitants of a state, county, or municipal corporation is a legitimate municipal or public purpose.

'* * * Power districts, authorized by Chapter 72, Laws of 1935, are created for the sole purpose of assisting the state in the performance of its governmental function of distributing hear, light and power among its people without profit.' State v. Lincoln County Power Dist. No. 1, 60 Nev. 401, 111 P.2d 528.

The many cases cited by the court throughout the opinion are omitted.

Approving the authority of Public Utility District No. 2 to institute eminent domain proceedings for the purpose of condemning the plants, lines and facilities for the distribution of electric current of a private utility as a public use and the important part it serves in our lives, the court in State ex rel. Washington Water Power Co. v. Superior Court for Grant County, 8 Wash.2d 122, 111 P.2d 577, said:

'The very nature of the business of furnishing electric energy determines that the use to which the condemned property is to be put is a public one. Under our present way of living, electricity is essentially necessary in order to enable our citizens to carry on their every day activities and pursue their accustomed manner of living.'

The corporations authorized or created by the legislature are not private corporations but are public corporations, Platte Valley Pub. Pow. and Irr. Dist. v. Lincoln County, 144 Neb. 584, 14 N.W.2d 202, subject to the plenary control of the legislature. Rural public power districts in Nebraska are designated as both public corporations and political subdivisions of that state. York County Rural Public Power District v. O'Connor, 172 Neb. 602, 111 N.W.2d 376. It has been stated that in the exercise of such power the legislature may authorize, limit, control or even destroy such corporations. Wittler v. Baumgartner, 180 Neb. 446, 144 N.W.2d 62, 67.

Determination whether a statutory purpose is public or private is much a matter of policy and wisdom of the legislature and in making such a decision it is vested with a large discretion with which the court should not interfere unless its action is clearly evasive. Clem v. City of Yankton, 83 S.D. 386, 160 N.W.2d 125.

The manufacture and sale of electric power is a governmental function, and, in the absence of a constitutional prohibition, the state may, through its agencies, engage in that business for the benefit of its people, and the legislature may create agencies or districts for that purpose. Clarke v. South Carolina Public Service Authority, 177 S.C. 427, 181 S.E. 481; Creech v. South Carolina Public Service Authority, 200 S.C. 127, 20 S.E.2d 645; State v. Lincoln County Power Dist. No. 1, 60 Nev. 401, 111 P.2d 528; Inhabitants of Boothbay v. Inhabitants of Boothbay Harbor, 148 Me. 31, 88 A.2d 820. See also Pacific Gas &...