Marchi v. Brackman
| Decision Date | 27 June 1956 |
| Docket Number | No. 9541,9541 |
| Citation | 130 Mont. 228,299 P.2d 761 |
| Parties | John R. MARCHI, Joan T. Marchi, Leif Erickson, Huberta Erickson, Plaintiffs and Appellants, v. O. L. BRACKMAN, as Mayor of the City of Helena, City Commissioners, and The Montana Power Company, Defendants and Respondents. |
| Court | Montana Supreme Court |
Leif Erickson and John R. Marchi, Helena, argued pro se.
Weir, Gough & Matson, Helena, for Montana Power Co.
David R. Smith, City Atty., Helena, for City of Helena.
W. T. Weir, Helena, argued orally for respondents.
Plaintiffs brought this action to enjoin the defendants from proceeding with the installation of lighting structures in a special improvement district described in the complaint. Upon the filing of the complaint a temporary restraining order and an order to show cause issued, restraining the installation until the further order of the court and requiring the defendants to appear before the court at a fixed time to show cause why they should not be permanently restrained from proceeding with the lighting project.
Defendants filed motions to strike most of the allegations from the complaint and the defendant Montana Power Company filed a motion to quash, vacate and set aside the restraining order. After hearing the court entered an order granting the motions to strike and the motion to quash.
Plaintiffs have appealed from that order.
The proceedings sought to be enjoined by the complaint were proceedings taken by the city council of the City of Helena to create a special improvement district for lighting streets under R.C.M.1947, § 11-2245 et seq. Most of the complaint is directed at an attack upon the contract made by the city council with the Montana Power Company under section 11[130 Mont. 231] -2252. After the appeal was perfected the Montana Power Company entered into an agreement with the city council whereby the contract was cancelled and rescinded. Because of that fact the defendants moved for a dismissal of the appeal upon the ground that the questions involved have become moot by reason of the cancellation of that contract. Thereafter defendants filed the following withdrawal of objection from the motion to dismiss the appeal:
In the state of the record there is some uncertainty as to what is before this court for consideration. The contract made between the city council and the Montana Power Company has been cancelled and we are not advised as to what contract, if any, took its place. The resolution creating the district is still in effect and under it and the statute the defendants are obliged to make another contract.
R.C.M.1947, § 11-2252, provides in part that: 'The lights in each district shall be maintained by contract for such period of time and in such way or manner as the city or town council shall elect; provided, however, that the city or town council shall not let a contract for a period to exceed three (3) years.' The resolution creating the district provides that, 'The mayor and the Clerk of the Commission of the City of Helena, Montana, are hereby authorized and directed to enter into a contract with the Montana Power Company for the installation of the herein described improvements and for the maintenance thereof.'
The contract attached as an exhibit to the complaint having been cancelled, we of course cannot be expected to determine its validity. But issues are still tendered by the allegations stricken from the complaint as to the validity of the resolution creating the district if the allegations of fact are material to the statement of a cause of action.
In response to the order to show cause why the temporary restraining order should not be made permanent, defendants filed the motion to strike and nothing more. Hence, the only cause for refusing the injunction on the record before us is the motion to strike. The order granting the motion to strike and dissolving the restraining order was, in effect, an order refusing to grant an injunction. From that order an appeal to this court lies. R.C.M.1947, § 93-8003, and State ex rel. Olsen v. 30 Club, 124 Mont. 91, 219 P.2d 307.
Hence we have before us the question whether the court erred in sustaining the motion to strike. The allegations stricken question the validity not only of the contract but of the resolution creating the special improvement district.
No useful purpose would be subserved in setting out the stricken allegations in full here. It is sufficient to say that the allegations are pertinent and material to the statement of a cause of action if plaintiffs' hypothesis is correct that section 11-2245 et seq. have to do only with a municipally owned lighting plant or if the proceedings taken by defendants contemplated such a project. Defendants contend however that the statutes are sufficiently broad to authorize the creation of an improvement district to provide for the maintenance of an electric lighting system and the furnishing of electrical current to the system, constructed and owned by a private corporation and that such is the character of the district attempted to be created here.
R.C.M.1947, § 70-301, expressly empowers an electric light or electric power line company to install appliances necessary for service along and upon public roads and streets, and section 11-909 gives the city council power to provide for the lighting of streets, alleys and avenues.
Reading sections 70-301 and 11-909 with the statutes relating to the creation of special improvement districts it seems to us that an improvement district may be created for the purpose of maintaining a system owned by a corporation or individual and the furnishing of electrical current therefor.
The stattues quite clearly authorize an improvement district for such purposes as well as for installing a system and it does not appear to have been the legislative intent that the purposes might not be separated and a district created merely for the purpose of maintaining the system and furnishing the electrical current therefor. It has been held that it is proper to assess the cost of furnishing electrical current to property in a special improvement district. Ankeny v. City of Spokane, 92 Wash. 549, 159 P. 806, L.R.A.1917A, 1093. If there be no cost to the property owners in erecting the posts, wires and other needed appliances, then there is no occasion to resort to section 11-2249 by the issuance of warrants or bonds.
It is a fact question as to what character of improvement district is here attempted which in turn depends upon the truth of the allegation in plaintiffs' complaint that 'the amount to be charged the city and the property owners includes an item to retire the construction costs of said structure over a fifteen year period.' For the purpose of the motion to strike, this allegation must be accepted as true. Paramount Publix Corp. v. Boucher, 93 Mont. 340, 19 P.2d 223. In legal effect this allegation is equivalent to a statement that the Montana Power Company advances the cost of installation initially rather than proceeding under section 11-2249 to issue bonds or warrants. The power company is then repaid the installation cost over a fifteen-year period.
Defendants' position is that the power company is entitled to depreciation in the fixing of its rates and that the plan here attempted accomplishes this result, and that if the rate be excessive relief must be sought before the board of railroad commissioners. This depends upon the question as to who actually bears the construction costs of the lighting system. If the system be owned by the municipality as contended by plaintiffs, then it is at least doubtful whether the public service commission would have anything to say regarding the rates in view of section 36 of Article V of our Constitution. Compare Town of Holyoke v. Smith, 75 Colo. 286, 226 P. 158, and People ex rel. Public Utilities Commission of State of Colorado v. City of Loveland, 76 Colo. 188, 230 P. 399.
We do not pass upon this point at this time since we have not yet learned what type of system is proposed to be constructed--whether municipally or privately owned. That is one of the issues between the parties. If the lighting system be constructed and owned by the Montana Power Company, then the rate should be fixed and determined after maintenance charges and depreciation are taken into account. It is not proper to fix the rate for supplying the electrical current which would and should be fixed after allowing for depreciation, and then at the same time have a separate maintenance charge which was not considered in establishing the rate. Such a plan would be allowing double charge for depreciation or perhaps more since the service life of most of the lighting facilities would probably greatly exceed 15 years.
The proper method of dealing with depreciation and maintenance charges is explained in the well considered opinion in Lindheimer v. Illinois Bell Tel. Co., 292 U.S. 151, 54 S.Ct. 658, 78 L.Ed. 1182, in which it is made plain that maintenance charges may be sufficiently high that it would result in very little depreciation. Here the resolution creating the district recites that there is proposed to be eighty-six 4000 lumen fixtures on steel poles and thirteen 2500 lumen fixtures on wood poles in the district. The monthly charge for supplying current and maintaining each of the 4000 lumen fixtures, according to the resolution, is $2.89, and for each of the 2500 lumen fixtures $1.26. But according to the rate schedules on file in the office of the public service commission, of...
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