State ex rel. Johnson v. Consumers Public Power Dist.
| Decision Date | 06 August 1943 |
| Docket Number | 31433. |
| Citation | 10 N.W.2d 784,143 Neb. 753 |
| Parties | STATE ex rel. JOHNSON v. CONSUMERS PUBLIC POWER DIST. |
| Court | Nebraska Supreme Court |
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Syllabus by the Court.
1. Demurrer admits only facts that are well pleaded, and not conclusions of either law or fact.
2. The general principles as to waiver and estoppel in their application to cases involving constitutional law are subject to the important limitation that an estoppel does not necessarily extend to all the details of the statute.
3. The mere fact that a corporation is organized under a statute does not estop it to deny the constitutionality of a provision of the statute which constitutes a distinct, separable legislative enactment, the elimination of which would leave in full force and effect the provisions under which the corporation was organized.
4. The last sentence of section 70-713, Comp.St.Supp.1939, being a separable part thereof, is local, special, and class legislation, which freezes the class both in its terms and in its effect, and is unconstitutional.
5. In the absence of estoppel only the provisions of the franchise or charter which are legally enforceable will control the parties.
6. Section 1, Article XI of our Constitution must be construed with reference to the evils it was intended to correct or prevent. It was intended to prohibit any subdivision of the state from entering into private business by being associated as a stockholder, or by being a partner, or a part owner, in a private business venture or enterprise.
7. If a public corporation usurps or exercises powers not conferred upon it by law, quo warranto is the appropriate remedy to oust it from the exercise thereof without affecting in any other manner the corporate franchise, but it is only authorized and available as a remedy where the franchise is exercised in the absence of the vital element of power.
8. When a corporation lawfully possesses a certain power, the irregular or improper exercise thereof is not ground for proceedings in the nature of quo warranto.
9. Quo warranto will not lie to prevent a public corporation from exercising a power conferred upon it by law even though the power is exercised in an irregular or improper manner, nor to test the validity of a contract which is a mere incident to the execution of a power conferred.
10. The violation of a contract must be redressed, as all ordinary wrongs are redressed, by the usual remedies. The remedy by quo warranto cannot be used for the enforcement or forfeiture of a municipal contract.
11. Quo warranto is employed only to test the actual right to an office or franchise, and it can afford no relief for official misconduct or be used to test the legality of the official action of public or corporate officers.
Walter R. Johnson, Atty. Gen., and Edwin Vail, Asst. Atty. Gen., for relator.
George A. Lee, of Lincoln, for respondent.
P. J. Heaton, of Sidney, L. J. TePoel, of Omaha, Bern R. Coulter and Robert J. Bulger, both of Bridgeport, Edwin D. Crites, of Chadron, and Morrow & Miller, of Scottsbluff, for interveners.
Flansburg & Flansburg, of Lincoln, amicus curiae.
Heard before SIMMONS, C. J., and PAINE, CARTER, MESSMORE, YEAGER, CHAPPELL, and WENKE, JJ.
This is an original proceeding in the nature of quo warranto instituted by the attorney general by direction of the governor. The action is to determine by what warrant of law respondent, a public corporation, organized August 5, 1939 under the provisions of art. 7, ch. 70, Comp.St.Supp. 1939, exercises possession, ownership and control of the interconnected, integrated electric system known as Western Division of the Western Public Service Company, including certain ice and steam heating plants, and to require respondent to cease and desist therefrom and be ousted and excluded from the exercise of any relative pretended rights, franchises or privileges. Petitions in intervention adopting substantially the same formulae of allegations and prayers for relief as those set forth in the amended information were filed by the cities of Bridgeport, Chadron, Sidney, and Scottsbluff by permission of this court.
Respondent filed demurrers to relator's amended information and to the petitions in intervention. We held in a former opinion in this case, 142 Neb. 114, 5 N.W.2d 202, that quo warranto is a civil action both in substance and in form, as defined by our civil code, and that demurrer is a proper pleading. We have long recognized an applicable rule that demurrer admits only facts that are well pleaded and not conclusions of either law or fact. See American Water-Works Co. v. State, 46 Neb. 194, 64 N.W. 711, 30 L.R.A. 447, 50 Am.St.Rep. 610; Griffin v. Gass, 133 Neb. 56, 274 N.W. 193.
Preliminary to the discussion of the questions involved we call attention to certain facts appearing in the amended information and petitions in intervention. In December, 1941, respondent contracted to purchase, and since a short time thereafter has owned and operated, all of the electric properties of the Western Public Service Company. These properties include electric facilities in the intervener cities and many other cities and towns, which comprise what was formerly known as the Western Division of the Western Public Service Company. There are other divisions of the Western Public Service Company comprising other such facilities, the lawful purchase, ownership, possession and control of which relator and interveners concede and do not contest or challenge in this action. It is sought only to oust and evict respondent from franchises asserted in that part or portion of the property known as the Western Division. The federal power plants at Guernsey and Lingle, Wyoming, are the only plant or plants owned by the United States of America referred to in the pleadings as being involved in section 70-713, Comp.St.Supp. 1939.
Since there are only questions of law presented, we will not recite at length the allegations of the amended information or petitions in intervention. Suffice it to say that discerning examination discloses three reasons or grounds for the prayers thereof, to wit: 1. That purchase by respondent of the Western Division including intervener cities and other towns therein was prohibited by the last sentence of section 70-713, Comp.St.Supp. 1939, and that purchase of all the common stock of Western Public Service Company by respondent was ultra vires, illegal, without statutory authority, and in violation of section 1, art. XI of our state Constitution. 2. That the purchase by respondent of certain ice manufacturing equipment and steam heating plants in Nebraska and a small portion of interconnected and integrated electrical transmission lines in South Dakota, as a part of the properties of the Western Public Service Company, were ultra vires, illegal, and without statutory authority. 3. That respondent violated certain agreements between Western Public Service Company and certain named cities, whereby the cities had an option, upon 90 days notice of a proposed sale, to purchase and take over from Western Public Service Company certain electric facilities within their own borders; and that section 70-713, Comp.St.Supp. 1939 required respondent to assume all municipal contractual obligations and pay certain municipal bonds of Sidney, Grant and Republican City, guaranteed contractually by Western Public Service Company, but that respondent in violation thereof terminated such guaranties without notice to or the consent of such cities, and in so far as is known, or it is able to be ascertained, has made no provision to fulfill such obligations.
Demurrers of respondent, in so far as they are important here, contend that the amended information and petitions in intervention do not plead facts sufficient to constitute a cause of action in quo warranto; that quo warranto will not lie because there are adequate remedies at law and in equity, and that so much of section 70-713, Comp.St.Supp.1939 as is referred to and relied upon by relator and interveners, to wit, the last sentence thereof, is unconstitutional for the reason that it is special, local, and class legislation, which freezes the class.
Original jurisdiction in quo warranto is vested in this court by section 2, art. V of our Constitution. Sections 20-21,112 to 20-21,139, inclusive, Comp.St.1929 constitute the only statutory provisions applicable to the subject. Section 20-21,112 reads in part: "An information may be filed against any person *** if, being incorporated, they *** exercise powers not conferred by law." (Italics supplied.) The purpose of the present action, therefore, is to test the existence of powers conferred upon a public corporation. The only question before the court in such a case is whether the corporation has in fact the power which it assumes.
"When a corporation is organized under a general enabling act, its charter consists of the provisions of the existing state constitution, the particular statute under which it is formed and all other general laws which are made applicable to corporations formed thereunder, and of the articles of association or incorporation filed thereunder, or the charter or certificate of incorporation granted by the court or officer in compliance with its terms; and its powers, rights duties, and liabilities are determined accordingly." 14 C.J. 117, § 108. See also 18 C.J.S., Corporations, § 43. If a public corporation usurps or exercises powers not conferred upon it by law, quo warranto is the appropriate remedy to oust it from the exercise thereof, without affecting in any other manner the corporate franchise, but it is only authorized and...
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