Public Service Co. of Colorado v. City of Loveland

• Decision Date: 08 March 1926
• Docket Number: 11363.
• Citation: 245 P. 493,79 Colo. 216
• Parties: PUBLIC SERVICE CO. OF COLORADO v. CITY OF LOVELAND.
• Court: Colorado Supreme Court

245 P. 493

79 Colo. 216

PUBLIC SERVICE CO. OF COLORADO v. CITY OF LOVELAND.

No. 11363.

Supreme Court of Colorado, En Banc.

March 8, 1926

Rehearing Denied April 12, 1926.

Error to District Court, Larimer County; Claude C. Coffin, Judge.

Condemnation proceeding by the City of Loveland against the Public Service Company of Colorado. Judgment for plaintiff, and defendant brings error.

Affirmed.

Paul W. Lee and George H. Shaw, both of Ft Collins, for plaintiff in error.

Reid Williams, of Loveland, Pershing, Nye, Tallmadge & Bosworth of Denver, Ab. H. Romans, of Loveland, and Robert H. Dunlap of Denver, for defendant in error.

ADAMS J.

The city of Loveland, in the exercise of the right of eminent domain, brought an action against the Public Service Company, a corporation, to condemn for public purposes an electric lighting plant belonging to the company. The city prevailed in the litigation. A jury assessed the price to be paid by the city to the company and the city paid the money into the registry of the court for the use of the company, pursuant to statute. The city was then permitted to take over the property and is now operating it. The company has brought the case here for review and alleges that many errors were committed by the district court.

Loveland is a city with a population exceeding 2,000 and less than 15,000. As such, for the purposes of organization and classification, it comes within the denomination of the statutes of cities of the second class. C. L. 1921, § 9005. It was an incorporated town when the ordinance hereafter mentioned was passed. Public Service Company of Colorado is a private corporation, engaged generally in the business of manufacturing and selling electricity for light, heat, and power purposes throughout different portions of the state.

In 1903, the town (now city) of Loveland passed an ordinance granting to the Loveland Light, Heat & Power Company, its successors and assigns, the right to construct, operate, and maintain an electric lighting plant for the generation and distribution of electric current for power, heating, and other purposes. The ordinance also gave rights of way through the streets and alleys of the town, and the franchise so granted was for a period of 25 years. It was not submitted to a vote of the taxpayers for their approval.

Under the authority of the ordinance, an electric lighting plant was constructed, generating electricity by steam, but afterwards the steam generating plant was dismantled and the Loveland distributing system was then connected with a large central plant of Public Service Company located near the town of LaFayette, which central plant supplies other cities and towns and other customers of the company in the state. Thereupon the Loveland distributing system became a part of the central plant of the company and was thereafter supplied with electricity through a substation connected therewith and located in Loveland. This continued until the company ceedings brought by the city. The city sought was dispossessed by the condemnation proto condemn only the Loveland distributing system and also means for supplying a few customers located adjacent to or in close proximity with the city. The city did not need all of the property of the company, particularly the substation, or the real estate upon which it stood, and certain transmission lines, and so excluded them from the condemnation. Public Service Company succeeded to the rights granted under the above ordinance, and the company or its predecessor in interest above named operated under the franchise for over 20 years before the condemnation proceedings were commenced.

After the above occurrences, the city decided to operate a municipally owned electric plant, and to that end acquired water and power rights, built a hydroelectric generating plant on the Big Thompson river, about 11 miles west of Loveland, and constructed therefrom, on rights of way, lines for the transmission of electrical current to the city. The Big Thompson plant and the transmission lines therefrom to the city, added to the distributing system of the company covered by the condemnation, furnished the city with its own complete hydroelectric system, which it is now operating. The city got part of its money for these purposes by means of authorized bond issues, and obligated itself for the payment of further sums out of the income to be derived from its municipally owned plant. It made efforts to agree with the company to obtain the property sought, and as to the compensation to be paid, but was unsuccessful. Then the city brought this action.

The assignments of error raised by the company require the consideration of the following questions: (1) Right of city to condemn; (2) whether vote of taxpayers is necessary as condition precedent in condemnation by city; (3) whether the city is required to take the entire electrical plant, if it takes anything; (4) right of city to condemn property outside city limits for electric light works; (5) limitation of scope of inquiry in condemnation proceedings as to details of municipal finances; (6) damages and instructions to jury. We shall discuss the above matters in the order named.

1. As to the right of the city to condemn, Colo. Const. art. 2, § 15, makes provision for the taking of private property for public use and the manner of ascertaining the compensation to be paid. The section reads as follows:

'That private property shall not be taken or damaged, for public or private use, without just compensation. Such compensation shall be ascertained by a board of commissioners, of not less than three freeholders, or by a jury, when required by the owner of the property, in such manner as may be prescribed by law, and until the same shall be paid to the owner, or into court for the owner, the property shall not be needlessly disturbed, or the proprietary rights of the owner therein divested; and whenever an attempt is made to take private property for a use alleged to be public, the question whether the contemplated use be really public shall be a judicial question, and determined as such without regard to any legislative assertion that the use is public.'

It is further provided by Colo. Const. art. 15, § 8, that:

'The right of eminent domain shall never be abridged nor so construed as to prevent the General Assembly from taking the property and franchises of incorporated companies, and subjecting them to public use, the same as the property of individuals; and the police power of the state shall never be abridged or so construed as to permit corporations to conduct their business in such manner as to infringe the equal rights of individuals or the general well-being of the state.'

Article 2, § 11, of our Constitution, also has a bearing on the discussion which is to follow. It reads:

'That no ex post facto law, nor law impairing the obligation of contracts, or retrospective in its operation, or making any irrevocable grant of special privileges, franchises or immunities, shall be passed by the General Assembly.'

With particular reference to cities and towns, the General Assembly, in 1899, enacted chapter 153, L. 1899 (C. L. 1921, § 8987, subsecs. 67 and 70), in the following language:

'Sixty-Seventh--The city council of cities and board of trustees of towns shall have power to purchase or erect waterworks, gas works or electric light works; or to authorize the erection of the same by others; but no such works shall be erected or authorized until a majority of the voters of the city or town who are taxpayers under the law voting on the question at a general or special election, by vote approve the same. All such works hereafter so authorized by any city or town to be erected by others or the franchise of which shall be extended or renewed, shall be authorized, extended or renewed upon the express condition that such municipality shall at any time have the right and power to purchase or condemn any such works at its actual cash value, and at a price excluding all value of the franchise or right of way through the streets, and also excluding any value by virtue of any contract for hydrant or private rental or otherwise entered into with the municipality in excess of the actual value of the works: Provided, That nothing herein shall authorize the condemnation of any such works within twenty years after their original erection or construction, except at periods of ten and fifteen years after granting the franchise therefor. * * *

'Seventieth--Said cities or towns are hereby authorized to condemn and appropriate so much private property as shall be necessary for the construction and operation of said water, gas or electrical light works in such manner as may be prescribed by law. Said cities or towns shall also have the power to condemn and appropriate any water, gas or electric light works not owned by such city or town, in such manner as is or may be prescribed by law for the condemnation of real estate.'

Subdivision 69 of the above section (8987) is section 2 of L. 1893, p. 465. It reads in part:

'Sixty-Ninth--When the right to build and operate such water, gas or electric light works is granted to private individuals or incorporated companies by said cities and towns, they may make such grant to inure for a term of not more than twenty-five (25) years. * * *'

Subsection 67 of section 8987 expressly reserves the right of the city or town to condemn. Furthermore, the concluding words in subsection 70, giving cities and towns power to condemn 'in such manner as is or may be prescribed by law for the condemnation of real estate,' clearly indicate the legislative intent to make the law there expressly referred to available in condemnation ...