Public Service Co. of Indiana v. City of Lebanon
| Decision Date | 09 February 1943 |
| Docket Number | 27793,27837. |
| Citation | 46 N.E.2d 480,221 Ind. 78 |
| Parties | PUBLIC SERVICE CO. OF INDIANA, Inc., et al. v. CITY OF LEBANON. PUBLIC SERVICE CO. OF INDIANA, Inc., v. CITY OF LEBANON et al. |
| Court | Indiana Supreme Court |
[Copyrighted Material Omitted]
Rogers & Smith and Parr, Parr & Parr, all of Lebanon, and Evans & Hebel, of Indianapolis, for appellant.
Scifres & Hollingsworth, Roy W. Adney, and Thomas O. Beck, all of Lebanon, for appellees.
In 1937 the City of Lebanon commenced an action against the Public Service Company of Indiana for the purchase of its electric utility system located in said city and in adjacent territory. This was cause No. 13623 in the Boone Circuit Court. Objections to the complaint in the nature of a demurrer were sustained and the city refused to plead over. There was judgment for the company and the city appealed to this court which reversed the judgment with directions for further proceedings. City of Lebanon v. Public Service Company of Indiana, 1938, 214 Ind. 295, 14 N.E.2d 719.
Subsequently the court below entered an order appointing appraisers to determine the value of the property sought to be acquired and the company appealed; that judgment was affirmed. Public Service Company of Indiana v. City of Lebanon, 1939, 215 Ind. 400, 19 N.E.2d 944. The appraisers fixed the value of the property at $172,636.90, to which both parties excepted. There was a jury trial resulting in a verdict for $210,000 on June 29, 1940. Judgment was entered on the verdict on September 10, 1940, and the company again appealed. This court affirmed the judgment and denied a rehearing on October 16, 1941. Public Service Company of Indiana v. City of Lebanon, 1941, 219 Ind. 62, 34 N.E.2d 20, 36 N.E.2d 852. An appeal to the Supreme Court of the United States was dismissed for want of a substantial federal question on March 16, 1942. Public Service Company of Indiana v. City of Lebanon, 1942, 315 U.S. 786, 62 S.Ct 908, 86 L.Ed. 1191. On April 20, 1942, the mandate of the Supreme Court of the United States was issued to the clerk of this court.
On May 9, 1942, the City of Lebanon paid to the clerk of the Boone Circuit Court $210,000 for the use and benefit of the company as the purchase price for said utilities property, and made a demand on the company for the property. On the same day the company filed a suit to enjoin the city from taking possession. A restraining order, without notice, was issued which was afterwards continued as a temporary injunction, but upon final hearing the temporary injunction was dissolved and it was adjudicated on July 9, 1942, that the company take nothing by its complaint. A motion for a new trial was overruled, and the company appealed to the Appellate Court of Indiana which affirmed the judgment. Public Service Company of Indiana v. City of Lebanon, 1942, ind.App., 44 N.E.2d 526. This case is before us on a petition to transfer under § 4-215, Burns' 1933. A transfer is now granted and the cause has been docketed as No. 27837 in this court.
Thereafter, on August 21, 1942, the City of Lebanon filed an action in the Boone Circuit Court naming said company and its district manager as defendants. It was charged in the complaint that the city had paid to the clerk of the court, for the use of the company, the sum adjudged to be the value of the electric system and that it had taken possession thereof, but that the company was interfering with said possession and threatening to continue so to do. A restraining order without notice was granted as prayed for. An issue was thereafter formed by the filing of a special answer in the nature of a general denial and, upon hearing, a temporary injunction similar to the restraining order was issued. From the granting of that order the company took an interlocutory appeal to this court, which is designated in the caption as cause No. 27793.
The questions sought to be presented by both appeals are substantially the same. The city claims that having paid the full purchase price for which it was authorized to acquire said electric system it is entitled to the unqualified possession thereof, and that if the appellant has any claim for additions or betterments it may prosecute an action for damages therefor. The company asserts that between the time when the jury returned the verdict upon which the purchase price was fixed and the payment thereof, the appellant, in discharge of the obligation resting upon it as an operating public utility, had been required to and had made necessary changes, additions, extensions and improvements to its electric system; that these additions and improvements had become an integral and inseparable part of such system; that the aggregate cost thereof to the appellant was in excess of $50,000; and that the city was threatening to take this property without condemnation and without paying or tendering compensation therefor. The appellant also says that it cannot deliver possession of the property which the city purchased, without surrendering the additions which it has made thereto, and that to force it to sue for damages for the taking of the latter would deprive it of property without process of law.
It seems clear that both parties have lost sight of the nature of the proceeding under which the city undertook to acquire the property, and that each of them has misconceived its remedy. Both apparently concluded that the action under which the city proceeded in the first instance was primarily one for the exercise of the power of eminent domain, and that the action was ended when the value of the property sought to be taken was finally adjudicated. They have apparently overlooked the fact that the Shively-Spencer Act of 1913 authorized holders of municipal franchises to voluntarily surrender the same, and to accept indeterminate permits in lieu thereof upon the express condition that public utilities operated thereunder might be purchased by municipalities. The appellant surrendered its municipal franchise and accepted such an indeterminate permit. Public Service Company of Indiana v. City of Lebanon, 1941, 219 Ind. 62, 34 N.E.2d 20, 36 N.E.2d 852.
The original Shively-Spencer Act provided that the necessity for the purchase of a utility property by a municipality should be determined by the circuit or superior court of the county, and that the compensation to be paid should be fixed by the Public Service Commission, subject to judicial review. Acts 1913, Ch. 76, §§ 100 to 109. The acceptance of the provisions of this act by the holder of an indeterminate permit created a binding contract between it and the state which was in no wise dependent upon the power of eminent domain.
In 1933 the Shively-Spencer Act was amended to provide that the determination of the necessity of purchase should be made by the municipal council, instead of a court, and so that the consideration to be paid should be fixed by the circuit or superior court in accordance with the procedure prescribed for condemnation, rather than by the Public Service Commission. Acts 1933, Ch. 190, §§ 10, 14 and 18(b). It has been held that these amendments do not impair the obligations of contracts that arose from the acceptance of the provisions of the act of 1913. City of Lebanon v. Public Service Company of Indiana, 1938, 214 Ind. 295, 14 N.E.2d 719; Southern Ind. Gas & Electric Co. v. City of Boonville, 1939, 215 Ind. 552, 20 N.E.2d 648; Public Service Company of Indiana v. City of Lebanon, 1941, 219 Ind. 62, 34 N.E.2d 20, 36 N.E.2d 852. We look to the eminent domain statute, Burns' Ann.St. § 3-1701 et seq., then as merely prescribing the procedure under which the compensation to be paid shall be determined, rather than as creating an independent right in the city to acquire property or as recognizing in the utility company a property right superior to that which has already been contracted away.
After providing for the forming of issues, trial and judgment on exceptions to the report of appraisers fixing damages in a condemnation proceeding, the Eminent Domain Act directs that 'the court may make such further orders, and render such findings and judgment as may seem just.' Burns' Ann.St. § 3-1707. In construing this provision this court said in City of Lebanon v. Public Service Company of Indiana, 1938, 214 Ind. 295, 14 N.E.2d 719, 724: 'The evident purpose of this provision is to enable the court to meet any contingency or situation that might arise, and to provide for full and just compensation to the owner of all the property, including extensions, additions, capital expenditures, etc., made after the proceedings are commenced. It is the evident purpose of the statute, by the provisions cited, to vest the trial court, on appeal [from the assessment of damages by the appraisers], with full power and authority to adjust the compensation to be paid to the owner in a manner to satisfy conditions arising subsequent to the appraisement, otherwise there would be no occasion for any 'further orders' by the court.'
The statute therefore vested the trial court with specific authority to entertain further proceedings in the original condemnation action to determine whether the appellant was entitled to compensation by reasons of additions and improvements...
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