Pennington v. Fairbanks, Morse & Co.

• Decision Date: 06 March 1934
• Docket Number: No. 42166.,42166.
• Citation: 253 N.W. 60,217 Iowa 1117
• Court: Iowa Supreme Court
• Parties: PENNINGTON et al. v. FAIRBANKS, MORSE & CO. et al.

217 Iowa 1117

253 N.W. 60

PENNINGTON et al.

v.FAIRBANKS, MORSE & CO. et al.

No. 42166.

Supreme Court of Iowa.

March 6, 1934.

Appeal from District Court, Bremer County; T. A. Beardmore, Judge.

This is an action in equity by the plaintiffs, C. W. Pennington, H. H. Neimann, F. C. Oltrogge, F. J. Bartels, E. F. Peohler, as citizens, taxpayers, and users of electric current in the town of Sumner, and the Central States Power & Light Corporation, a corporation, as a taxpayer, to enjoin the defendants, Fairbanks, Morse & Co., a corporation, town of Sumner, Iowa, a municipal corporation, Henry C. Frank, mayor, E. A. Wismer, clerk, and William Weiskirch, Harley Wescott, W. J. Hughes, John D. Hochberger, and George Reif, members of the town council of Sumner, Iowa, from carrying out a contract to erect a municipal electric plant in the town of Sumner. The district court granted the injunction, and from the judgment thus entered the defendants appeal.

Affirmed.

W. R. McClure, of Sumner, and Clark, Byers, Hutchinson & Garber, of Des Moines, for appellants.

Sager & Sweet, of Waverly, and Hurd, Lenehan, Smith & O'Connor, of Dubuque, for appellees.

KINDIG, Justice.

On February 23, 1932, the town council of Sumner, Iowa, by resolution, authorized a special election to be held March 24, 1932, for the purpose of determining whether or not the town should “purchase and operate” its own electric light and power plant. In that resolution, and as a part thereof, the town council authorized the submission, to the electors of the town at said special election, the following public question: “Shall the Town of Sumner, Iowa, establish, erect, extend, purchase, maintain and operate, within or without its corporate limits, an electric light and power plant with all the necessary poles, wires, burners, machinery, apparatus, and other requisites of said plant, with the right to sell or lease the current generated by said light and power plant and to construct and maintain the necessary transmission lines therefor, either within or without the corporate limits of the Town of Sumner, Iowa, at a maximum expenditure of $95,000.00.”

A notice of the special election was given to the electors of the town. This notice, when setting forth the nature of the public question to be determined, described such question in the exact language of the resolution, as above quoted. Accordingly, the public question to be voted upon at such special election was printed upon the ballots for that election in the exact language as that contained in the resolution previously set forth. At the special election, a large majority of the electors voted in favor of the proposition, and therefore the council, when canvassing the votes, declared that the proposition was duly carried.

So, on July 19, 1932, thereafter, the town council at a special meeting resolved “to (receive bids and) adopt proposed plans and specifications and proposed form of contract.” To carry out that purpose, the council fixed August 25, 1932, as the date on which such bids and form of contract would be considered. Due notice of the council's plan and purpose was given by the clerk. When the council met upon the occasion contemplated, it received bids from various contractors. It appears that the bids submitted to the town council ranged from a minimum of $82,968 to a maximum of $94,910. The bid of the defendant-appellant Fairbanks, Morse & Co., a corporation, was $94,567. This bid was accepted by the town council. Whereupon a contract was entered into between the defendant-appellant town of Sumner, and the appellant Fairbanks, Morse & Co., a corporation, under which it was agreed that Fairbanks, Morse & Co. was to establish and erect a municipal light and power plant, which would be paid for “solely out of the net earnings of the electric light and power plant.”

[1][2] Therefore, on September 26, 1932, C. W. Pennington, H. H. Neimann, F. C. Oltrogge, F. J. Bartels, and E. F. Peohler, citizens, property owners, and taxpayers in the town of Sumner, and the Central States Power & Light Corporation, a corporation, a taxpayer and user of electricity in said town, the plaintiffs-appellees, commenced an action to enjoin Fairbanks, Morse & Co., a corporation, town of Sumner, Iowa, a municipal corporation, Henry C. Frank, mayor thereof, E. A. Wismer, clerk thereof, and William Weiskirch, Harley Wescott, W. J. Hughes, John D. Hochberger, and George Reif, members of the town council of said town, from carrying out the terms of said contract and establishing the aforesaid electric light and power plant. An injunction is asked by the appellees on many grounds. We find it, however, unnecessary to discuss but one of those grounds. It is that the public question to be voted upon at the special election, and which is the foundation for the establishment of the municipal light and power plant in the town, was not sufficiently set out in the ballot submitted to the electors of the town at the special election. When referring to an analogous question, we said in Wyatt v. Town of Manning et al., 250 N. W. 141, reading on page 142: “While the public question need not be set forth on the ballot ‘in hæc verba’ (O'Keefe v. Hopp, 210 Iowa, 398, local citation, 405, 228 N. W. 625, 628), yet enough shall appear at least to clearly indicate the proposition which is being submitted to the electors. Lee Electric Co. v. City of Corning, 199 Iowa, 680, 202 N. W. 585;McLaughlin v. City of Newton, 189 Iowa, 556, 178 N. W. 540;O'Keefe v. Hopp (210 Iowa, 398, 228 N. W. 625), supra. See sections 761, 762, and 763 of the 1931 Code.” To the same effect, see Greaves v. City of Villisca, Iowa (Iowa) 251 N. W. 766.

As an indication of the strictness of the law in requiring that the voters be fully informed of the method to be pursued in financing a municipal plant so that it may be determined whether there is to be taxation or the appropriation of the town's property, we quote the following excerpt from the Greaves Case, reading on page 768 of the Northwestern Reporter: “Of course, if the proposition were to pay for the new plant out of past earnings of an old plant, the situation would be different from the one presented in the case at bar. A taxpayer would be interested in knowing whether moneys already in the city treasury were to be taken therefrom and used to improve or purchase a new plant. Indirectly, at least, the taxpayer would be affected in such event. Therefore, if the proposition is to take such money out of the city treasury and use it to pay for the new plant, such proposal should be set...