Washington Water Power Co. v. Rooney

• Decision Date: 26 April 1940
• Docket Number: 27876.
• Parties: WASHINGTON WATER POWER CO. et al. v. ROONEY et al. (BONNER et al., Interveners).
• Court: Washington Supreme Court

101 P.2d 580

3 Wn.2d 642

WASHINGTON WATER POWER CO. et al. v. ROONEY et al. (BONNER et al., Interveners).

No. 27876.

Supreme Court of Washington, En Banc.

April 26, 1940

Action by the Washington Water Power Company, a corporation, against W. Pat Rooney, Ralph E. Foley, and Joseph A. Stewart, as members of the Election Board of Spokane County, Washington and others, to enjoin the holding of an election, wherein Patrick J. Bonner and others intervened, seeking relief against parties plaintiff and defendant. From judgments dismissing interveners' complaint and enjoining defendants from expending money to hold an election defendants and interveners appeal.

Judgment reversed and cause remanded with directions.

Appeal from Superior Court, Spokane County; John A. Frater, judge.

G. M Ferris, B. A. Farley, and Paul F. Schiffner, all of Spokane for appellants.

John E. Blair, C. C. Dill, and E. Ben Johnson, all of Spokane, for interveners-appellants.

Post, Russell, Davis & Paine, Hamblen, Gilbert & Brooke, and Randall & Danskin, all of Spokane, for respondents.

GERAGHTY Justice.

This action was brought by the plaintiffs, as taxpayers, against the city of Spokane, its city commissioners, and the election board of Spokane county, to enjoin the holding of an election for submission to the voters of the city of Spokane of franchise ordinance No. C6625, on the ground that the ordinance was not subject to referendum. The members of the county election board were subsequently dismissed from the action, because the date fixed by the city council for holding the election had passed while the cause was pending below.

By leave of court, certain taxpayers intervened in the cause and filed a complaint in intervention seeking relief against the parties plaintiff and defendant and praying for judgment, that ordinance No. C6625 be declared null and void; that the Washington Water Power Company, one of the plaintiffs, as well as the defendant city and its officials, be enjoined from taking any further proceedings under the ordinance, including its submission to a vote of the electors of the city and from asserting any claim of right under it; and that the plaintiffs' action be dismissed.

A judgment dismissing the interveners' complaint was entered after a demurrer to it, interposed by the plaintiffs, had been sustained, and the interveners had declined to plead further.

A demurrer interposed by the defendants to the plaintiffs' complaint was overruled, and, as the defendants declined to plead further, judgment was entered enjoining them from expending any money to hold an election for the purpose of submitting ordinance C6625 to the voters for their approval or rejection. The defendants and interveners gave separate notices of appeal and filed separate

A demurrer interposed by the defendants the Washington Water Power Company will hereafter be referred to by that name, or as, the 'power company,' as if sole respondent; the defendant city and its officials will be referred to as 'the city,' and the appellant interveners as 'interveners' simply.

The facts, as they are alleged in the pleadings and exhibits, necessary to a determination of the issues, may be summarized as follows:

The Washington Water Power Company is engaged in the generation and distribution of electricity, and has, for many years, been supplying electricity for light and power in the city of Spokane under a franchise granted by ordinance No. A482 to its predecessor in interest, the Edison Electric Illuminating Company, July 31, 1894, and expiring July 31, 1944.

The power company owned all of the stock in a subsidiary, Spokane Central Heating Company, and both companies had the same officers. The heating company operated a steam-heating plant and distributed steam and hot water to parts of the business section of the city. It held a franchise which authorized it to maintain distribution lines and conduits in the streets of the city for distributing steam and hot water. The franchise also authorized the grantee to engage in the sale and distribution of electricity, and, to that end, to erect wires, underground conduits, and other appliances in the city's streets. This franchise was granted to the heating company's predecessor in interest, The Trustee Company, April 6, 1914, for the period of twenty-five years, expiring April 6, 1939.

While its franchise authorized it to do so, the heating company did not engage in the distribution and sale of electricity, but confined its business to the distribution of steam and hot water. Each of the companies paid an annual fee of twenty-five hundred dollars to the city for the privileges granted under its franchise.

April 27, 1939, the Spokane city council passed ordinance C6625. The ordinance granted to the heating company, for the term of twenty-five years, the right to maintain its pipes and conduits for the conveyance of steam and hot water for sale to the inhabitants of the city, for heating and other purposes, and, also, the right to construct and maintain poles, wires, conduits, and other instrumentalities necessary and required for the distribution and sale of electricity.

Prior to the passage of the ordinance, negotiations were had between the city council and the officials of the power company, in relation to the consideration to be paid by the grantee for the franchise, and four contracts were entered into. Three of these had reference to the rate to be charged for intersection traffic signals and lights, curb lights, and power furnished to the city's pumping plant.

Section 2 of the ordinance provided that the grantee named therein, the Central Heating Company, its successors or assigns, should pay to the city annually, as compensation, a sum equal to one per cent of the gross earnings of the grantee, its successors or assigns, for the sale of steam, hot water, and electricity used within the limits of the city. As the nominal grantee was not distributing electricity, and as its gross revenue from the sale of steam and hot water amounted to approximately two hundred thousand dollars a year, one per cent of its gross earnings would amount to less than the flat fee of twenty-five hundred dollars paid under its old franchise. Accordingly, the fourth agreement between the power company and the city recited that it was the intention of the company to consolidate the heating and power companies on or Before July 1, 1939, and that the property of the heating company, on and after that date, would become the property of the power company.

It was agreed that, if such consolidation should not take place until after July 1, 1939, the payment of the one per cent tax on the gross income from the sale of electric light and power mentioned in § 2 of ordinance C6625 should not thereby be postponed, but the power company would pay the agreed tax upon the gross annual income of its business from the sale of steam, hot water, and electric light and power after that date, regardless of whether such business should be carried on by the power company or a part of it carried on by the heating company, and regardless of whether or not the consolidation should or should not be completed. The current gross income from the power company's...