Public Service Co. of Indiana v. City of Lebanon

• Decision Date: 19 May 1941
• Docket Number: 27484.
• Citation: 34 N.E.2d 20,219 Ind. 62
• Parties: PUBLIC SERVICE CO. OF INDIANA et al. v. CITY OF LEBANON.
• Court: Indiana Supreme Court

34 N.E.2d 20

219 Ind. 62

PUBLIC SERVICE CO. OF INDIANA et al. v. CITY OF LEBANON.

No. 27484.

Supreme Court of Indiana

May 19, 1941

Appeal from Circuit Court, Boone County; Edgar A Rice, Judge.

Evans & Hebel, of Indianapolis, Parr, Parr & Parr, and Rogers & Smith, all of Lebanon, and Owen S. Boling, of Indianapolis, for appellants.

Scifres & Hollingsworth, Thomas O. Beck, and Adney & Adney all of Lebanon, for appellee.

FANSLER Judge.

This is an appeal from a final judgment in the case involved in the appeals in City of Lebanon v. Public Service Company of Indiana et al., 1938, 214 Ind. 295, 14 N.E.2d 719, and Public Service Company of Indiana et al. v. City of Lebanon, 1939, 215 Ind. 400, 19 N.E.2d 944. The action by the city of Lebanon seeks to condemn the public utility property of the Public Service Company of Indiana and it will be called the appellant. Issues were formed upon the report of the appraisers. There was a trial by jury, and a verdict assessing appellant's damages at $210,000.

The only questions involved are: (1) Was it error to exclude tendered evidence of the value of the franchise under which appellant operated as a public utility disfinct from the value of the business and property from a physical standpoint and from its going concern value? (2) Was the appellant entitled to damages which it claimed resulted from the severance of the local utility unit from its other utility property?

The appellant has been operating its Lebanon property under an indeterminate permit issued by the Public Service Commission in 1917. Prior to that time it had operated under a franchise from the city of Lebanon. The franchise was surrendered and an indeterminate permit accepted in lieu thereof. Under the act of 1913 (Acts 1913, ch. 76, § 1, p. 167), the indeterminate permit continued 'until such time as the municipality shall exercise its option to purchase, as provided in this act, or until it shall be otherwise terminated according to law.' The act (§ 102) also provides that by accepting the permit the utility company shall be deemed to consent to the future purchase of its property by the municipality in which the major part of it is situate, at the value and under the terms and conditions determined by the Public Service Commission, and shall be deemed to have waived the right to require that the necessity of the taking shall be established by a jury, and to have waived all other remedies and rights relative to condemnation, except such rights as are provided for in the act.

In 1933 the Public Utilities Law (Acts 1933, ch. 190, p. 928) was amended to the extent that if the city desires to purchase, the value of the property is to be determined under the Eminent Domain Act of 1905 (Acts 1905, ch. 48, p. 59) instead of by the Public Service Commission, and the determination of public convenience and necessity for the taking is delegated to the municipal council.

It is urgently contended by appellant that these changes destroy a vested right under its indeterminate permit contract with the state. It is conceded that the city still has the right to take its property under the power of eminent domain, but that in taking it it must pay the value of the indeterminate permit contract itself. In other words, the contention is that the indeterminate permit continues in force until the city exercises its option to purchase and has the value of the property determined by the Public Service Commission, and that if the value is determined in any other manner the indeterminate permit is not terminated but must be purchased.

It is also contended that under section 104 of the act of 1913 (Acts 1913, supra) it is required that the necessity for taking the property shall be adjudicated by a court in an action in which the utility company is a party. This section, by its terms, affects only properties operating under a permit or franchise at the time the act takes effect, and not those operating under an indeterminate permit provided for in the act. It is also contended that because of the provision in section 102 of the act, that the holder of the permit, by accepting it, 'shall thereby be deemed to have waived the right of requiring the necessity of such taking to be established by the verdict of a jury,' an agreement that the question of necessity shall be determined by a court without the intervention of a jury is implied, and that this right is a substantial consideration for the contract.

The questions thus presented were decided contrary to appellant's contention in Southern Indiana Gas &amp Electric Co. v. City of Boonville, 1939, 215 Ind. 552, 20 N.E.2d 648. As supporting the views there expressed, see, also, Galveston Wharf Co. et al. v. City of Galveston et al., 1923, 260 U.S. 473, 43 S.Ct. 168, 67 L.Ed. 355, and Contributors to Pennsylvania Hospital v. City of Philadelphia, 1917, 245 U.S. 20, 38 S.Ct. 35, 62 L.Ed. 124. The indeterminate permit provides that it shall terminate when the city exercises its option to purchase the property. It is pointed out in the Boonville case that the words 'purchase' and 'condemn' have been...