Public Serv. Comm'n of Indiana v. State ex rel. Merchants' Heat & Light Co.

• Decision Date: 14 January 1916
• Docket Number: No. 22739.,22739.
• Court: Indiana Supreme Court
• Parties: PUBLIC SERVICE COMMISSION OF INDIANA v. STATE ex rel. MERCHANTS' HEAT & LIGHT CO.

184 Ind. 273

111 N.E. 10

PUBLIC SERVICE COMMISSION OF INDIANA

v.STATE ex rel. MERCHANTS' HEAT & LIGHT CO.

No. 22739.

Supreme Court of Indiana.

Jan. 14, 1916.

Appeal from Circuit Court, Marion County; Charles J. Remster, Judge.

Mandamus by the State, on the relation of the Merchants' Heat & Light Company against the Public Service Commission of Indiana. Demurrer to complaint was overruled, and defendant appeals. Affirmed.Burt New, of Indianapolis, for appellant. Charles McPherson, of Grand Rapids, Mich., and John B. Elam, J. W. Fesler, Harvey J. Elam, and Howard S. Young, all of Indianapolis, for appellee.

LAIRY, J.

The relator is a public service corporation engaged in manufacturing and selling electricity for light and power in the city of Indianapolis, and is operating under an indeterminate permit granted to it by the Public Service Commission upon the surrender of its franchise. Prior to the commencement of this suit, the relator applied to the Public Service Commission for authority to issue and sell bonds of the par value of $103,000 on account of additions and extensions made by it to enable it to perform a contract made with the city of Indianapolis for lighting streets and alleys. At the time relator entered into this contract with the city and made such extensions and improvements, and at the time the application for authority to issue and sell bonds was made, another public service corporation known as the Indianapolis Light & Heat Company was engaged in the business of manufacturing heat and light in the city of Indianapolis in competition with the relator and was furnishing light to the city for streets and alleys. In passing upon the application of relator, the Public Service Commission granted authority to issue and sell bonds to the amount of $75,000 and declined to authorize the issue of the remaining $28,000 necessary to cover the cost of such improvement, on the ground that the additions and improvements upon which the authority to issue $28,000 of bonds was asked constituted a duplication of the instrumentalities already in existence and in use by the Indianapolis Heat & Light Company, and for that reason they would be neither used nor useful for public convenience. This is a mandamus proceeding brought to compel the Public Service Commission to issue to relator a certificate of authority to issue and sell bonds of the par value of $28,000. The trial court overruled the demurrer of appellant to the complaint, and on its refusal to plead further entered judgment against it, and a peremptory writ was ordered directing it to issue the certificate as prayed. The overruling of the demurrer to the complaint is assigned as error, thus presenting for consideration on appeal the several objections to the complaint set out in the memorandum attached thereto.

[1][2] On behalf of appellant, it is first asserted that the power to authorize the issue and sale of bonds as conferred by sections 88, 89, 90, 91, and 92 of the Acts of 1913, p. 167, is discretionary and judicial in its nature, for which reason it is not subject to control by mandamus. The first section mentioned provides that no stocks, bonds, notes, or other evidences of indebtedness, payable at periods of more than 12 months in advance, shall be issued to an amount exceeding that which may be reasonably necessary for the purpose for which such issue is authorized, which amount is to be determined as provided in the act. The two succeeding sections provide the purposes for which stocks, bonds, notes, and other evidences of indebtedness may be issued. As to stocks, section 98 provides that no stock or certificate of stock shall be issued except in consideration of money or of labor or property at its true money value as determined by the commission, and that such stock shall not be sold by such utility corporation at a discount without the approval of the commission. As to bonds and other evidences of indebtedness, the same section provides that no public utility shall issue such bonds or notes except for money, or labor or property estimated at its true money value as determined by the commission, and that the actual value thus received as found by the commission shall be at least 75 per cent. of the face value of the bonds or other evidence of indebtedness authorized. Section 90 provides that stocks, bonds, notes, and other evidence of indebtedness may be issued when necessary for the acquisition of property, the construction, completion, extension, or improvement of its facilities, plant, or distributing system, or for the improvement of its service, or for the discharge of lawful refunding of its obligations, or for the reimbursement of moneys actually expended for such purposes from its income, or from other moneys in the treasury of the public utility not secured or obtained from the issue of stocks, bonds, notes, or other evidence of indebtedness within five years next prior to the filing of application. Section 91 provides that a public utility desiring to issue such evidence of indebtedness shall file an application with the Public Service Commission requesting authority to make such issue and sale. This section provides what facts shall be stated in the application and also provides for a hearing by the commission. The final provision of section 89 is as follows:

“The amount of bonds, notes and other evidences of indebtedness which any public utility may issue shall bear a reasonable proportion to the amount of stock and certificates of stock issued by such utility, due consideration being given to the nature of the business in which the corporation is engaged, its credit, future prospects and earnings, the effect which such issue will have upon the management and efficient operation of the public utility by reason of the relative amount of financial interest which the stockholders will have in the corporation and the circumstances surrounding the operation and business of the corporation.”

Section 92 provides that, if the commission shall determine that such proposed issue complies with the provisions of this act, such authority shall thereupon be granted,...