State ex rel. Lemke v. Union Light Heat & Power Co.

• Decision Date: 21 March 1921
• Citation: 47 N.D. 402,182 N.W. 539
• Court: North Dakota Supreme Court
• Parties: STATE ex rel. LEMKE v. UNION LIGHT, HEAT & POWER CO. CITY OF GRAND FORKS et al. v. RED RIVER POWER CO.

47 N.D. 402

182 N.W. 539

STATE ex rel.

LEMKE

v.UNION LIGHT, HEAT & POWER CO.

CITY OF GRAND FORKS et al.

v.RED RIVER POWER CO.

Supreme Court of North Dakota.

March 21, 1921.

Syllabus by the Court.

In two actions brought to enjoin defendant utility companies from putting into effect certain surcharges upon their rates for electricity, gas, and heat, which surcharges purport to be authorized by orders of the Board of Railroad Commissioners, the complaints attack the validity of the orders of the Commissioners on the ground that the purported orders reflect the individual action of two members of the Board rather than the action of the Commission as a body. The pleadings frame issues of fact concerning the manner in which the action resulting in the purported orders was taken. Upon orders to show cause the trial court granted injunctions against the surcharges, but subsequently superseded the injunctions and allowed defendants to collect the surcharges, requiring them to give bonds conditioned for repayment in case the injunctional orders be held on appeal to have been wrongfully issued. It is held:

The action of the trial court, both in granting the injunctions pendente lite and in subsequently permitting the surcharges to be collected, involved the exercise of discretion and created a status for the parties to the litigation which will not be disturbed on appeal unless the discretion was abused.

The Board of Railroad Commissioners is a public body and can only act as a board. While the questions before it may be decided by a majority vote (section 601, Comp. Laws 1913), it is a prerequisite to valid board action that each member shall have reasonable opportunity to offer his counsel and judgment to the other members, and to this end it is required either that action be taken at regular meetings or at a meeting of which each member is advised and given reasonable opportunity to attend.

Since the action of the district judges in superseding the injunctions pendente lite has created a status which, in view of the uncertainty of the outcome of the trials on the merits, should not be disturbed, the defendants are given an opportunity to continue the status so created by giving security for the repayment of surcharges pending the determination of the litigation, in default of which the orders appealed from are affirmed.

Appeals from District Courts of Cass and Grand Forks County; Cooley, Cole, and Englert, Judges.

Actions by the State, on the relation of William Lemke, against the Union Light, Heat & Power Company, and by the City of Grand Forks and others against the Red River Power Company. Injunctions pendente lite were granted in each case, and defendants appeal. Defendants required to give security; otherwise order affirmed.

Denegre, McDermott, Stearns & Weeks, of St. Paul, Minn., and A. W. Fowler, of Fargo (Andrew Miller, of Bismarck, and Cummins, Roemer & Flynn, of Chicago, Ill., of counsel), for appellant Union Light, Heat & Power Co.

William Lemke, Atty. Gen., in pro. per.

Bangs, Hamilton & Bangs, of Grand Forks, and Denegre, McDermott, Stearns & Weeks, of St. Paul, Minn. (Cummins, Roemer & Flynn, of Chicago, Ill., and Andrew Miller, of Bismarck, of counsel), for appellant Red River Power Company.

W. J. Mayer, of Grand Forks, for respondents city of Grand Forks, and others.

G. S. Wooledge, City Atty., of Minot, for city of Minot.

BIRDZELL, J.

The above cases come to this court on appeals from orders entered in each of them granting an injunction pendente lite. The injunction prevents each of the defendants from putting into effect and collecting certain surcharges upon its rates for electricity, gas, and heat, which surcharges purport to be authorized by an order of the Board of Railroad Commissioners. Pending this appeal, however, the injunctional order is stayed. The trial judges have required the defendants to execute bonds conditioned, among other things, for the refunding of the surcharges, and have permitted the surcharges to be collected by the defendants pending the appeal. The facts upon which the orders appealed from are based are substantially identical for both cases and the two appeals may thus be disposed of under one opinion.

Upon the argument the city of Minot was represented by its city attorney, who stated that that city was likewise interested in the questions presented here, as a stipulation had been entered into with a view to avoiding the necessity of litigating the same questions as they affect that city in its relations with the utility company supplying similar services to its inhabitants.

These proceedings originated by complaints praying that the defendants be enjoined and restrained from charging increased rates for electricity, gas, and heat. In the complaint in the Fargo case it is alleged that the defendant Union Light, Heat & Power Company has unlawfully and without authority increased its rates on electricity and gas 25 per cent. and on heat 35 per cent.; that it bases the increases complained of upon a purported order of the Board of Railroad Commissioners dated September 2, 1920; that the purported order is illegal for the reason that it was never adopted by a majority of the Board at any special or regular session of the Board; that it was signed by two of the Commissioners, Sam Aandahl and C. F. Dupuis, in their private and individual capacity, and not as members of the Board of Railroad Commissioners; that the minutes of the Board show that the case involving the increase was never considered by the Board, nor the increased rates adopted or passed in any regular or special meeting; that the fact was there had never been a hearing in regard to the proposed increases in rates in which the city of Fargo and the inhabitants were given a fair opportunity to be heard and protect their interests as provided by law. In the Grand Forks case the surcharge on electricity which the board purported to authorize is 12 1/2 per cent., for gas 25 per cent., and for heat 35 per cent. It is not alleged in this case that there was not ample notice and opportunity for a hearing.

The answers set up the legal conclusion of regularity and validity and deny the allegations of fact in the complaint with reference to the manner in which the order was promulgated.

In the Grand Forks case there was a temporary restraining order, dated November 9th, preventing the collecting of the surcharge until the further order of the court. This was later vacated. In each case there was an order to show cause why a temporary restraining order should not be issued. Both cases came on for hearing upon the orders to show cause in the city of Grand Forks on November 26, 1920, and were heard before the district judges of the First district sitting together. Under the opinion and order of the lower court the defendants are restrained from collecting any sums in excess of the rates in force prior to September 2, 1920, the opinion being based upon the proposition that the members of the Board, in purporting to authorize the surcharges, acted individually, and not as the Board of Railroad Commissioners. But this court order is not in effect pending this appeal, and the surcharges complained of are apparently being collected. The facts concerning the manner in which the hearing was held in the Board of Railroad Commissioners and the purported order issued, as shown by affidavits accompanying the complaints, are as follows:

In the affidavit of Frank Milhollan, one of the members of the Board of Railroad Commissioners, it is stated that after the hearing the deponent requested the Director of Utilities of the Railroad Commission not to prepare a tentative opinion in the case until investigation could be made as to why the city of Fargo was not represented at the hearing; that shortly thereafter a tentative report, opinion, and order were shown him by Commissioner Dupuis, which had been signed by Commissioners Aandahl and Dupuis; that deponent protested against the releasing of any order because of a letter received by the Commission from a large consumer at Fargo and a resolution passed by the City Commission of Fargo, protesting against the increased rates until further hearing; and that affiant informed Commissioner Dupuis that, if such an order were released, he would submit a dissenting opinion. The most important part of the affidavit reads:

“That prior or subsequent to September 2, 1920, nor at any other time has the matter of disposition of the case been formally brought before the Commission for a decision.

That at no time has deponent had an opportunity to express at a regular or special meeting of the Board of Railroad Commissioners his views in connection with this matter, nor has he at any such meeting been given an opportunity to enter into a discussion of, or vote upon, this matter.”

Following this the deponent states that he has been present at all meetings of the Board held since August 16, 1920, and that of his own knowledge no formal action has been taken by the Commission in disposition of this matter.

The affidavit of J. H. Calderhead, Secretary of the Board of Railroad Commissioners, states that on September 2, 1920, the purported order was placed before him for signature and for affixing the seal of the Commission; that the purported report and order had been signed by Commissioners Aandahl and Dupuis and annexed thereto was a dissenting opinion signed by Commissioner Milhollan; that the purported report and order were duly signed and sealed by deponent with full knowledge that no formal action had been taken at any regular or special meeting of the Board of Railroad Commissioners; that deponent had been present and kept the minutes of all meetings of the Board of Railroad Commissioners; and that the matter had never been discussed or acted upon at any meeting of the Board.

The order, to which was attached the signature of the Board of Railroad Commissioners by Commissioners Aandahl and...