Wyatt v. Town of Manning

• Decision Date: 26 September 1933
• Docket Number: No. 42135.,42135.
• Parties: WYATT v. TOWN OF MANNING et al. (IOWA PUBLIC SERVICE CO., Intervener).
• Court: Iowa Supreme Court

217 Iowa 929

250 N.W. 141

WYATT

v.TOWN OF MANNING et al. (IOWA PUBLIC SERVICE CO., Intervener).

No. 42135.

Supreme Court of Iowa.

Sept. 26, 1933.

Appeal from District Court, Carroll County; M. E. Hutchison, Judge.

The plaintiff, Wyatt, commenced a suit in equity against the town of Manning and its officers, to restrain them from proceeding with the establishment of a municipal electric plant pursuant to an election previously held. After the commencement of the action, the Iowa Public Service Company intervened and asked for similar relief against the town and its officers. A trial was had to the district court, which resulted in the issuance of the injunction.

Reversed.

Stipp, Perry, Bannister & Starzinger, of Des Moines, for appellants.

F. H. Cooney, of Carroll, for appellee.

B. J. Price, of Fort Dodge, for intervener.

KINDIG, Justice.

Manning, Iowa, is a municipal corporation, duly organized and existing under and by virtue of the laws of Iowa. During the times hereinafter material, A. D. Wiese was the mayor of Manning, and L. E. Schelldorf, C. T. Dietz, J. A. Bruck, John A. Barten, and Harry Hoffman were members of the town council thereof. O. V. Shelldorf, during that period, was the town clerk.

On November 3, 1932, the town of Manning, through its council, authorized a special election for the submission of the following public questions: “Shall the Town of Manning, Iowa, be empowered and authorized to establish, erect, maintain and operate a municipal electric light and power plant with all the necessary poles, wires, machinery, apparatus, buildings, site, and other requisites for such plant, at a maximum expenditure for the establishment thereof not exceeding the sum of $135,000.00; said plant to be paid for solely and only out of the earnings of said plant, without the incurring of any indebtedness therefor by the said Town of Manning, Iowa?” “Shall the Town of Manning, Iowa, place the management and control of its municipal electric light and power plant in the hands of a board of trustees?”

In accordance with the aforesaid authorization, those public questions, after the publication of due notice, were submitted to the qualified electors of Manning on December 9, 1932. At the election there were cast 640 votes for, and 248 votes against, the proposition to establish the electric plant. There were also cast at the election 597 votes for, and 184 votes against, the proposition of placing the management of the plant in the hands of a board of trustees. Accordingly, the vote was canvassed, and both propositions were declared carried.

Thereafter, on March 14, 1933, the plaintiff-appellee, O. W. Wyatt, a resident taxpayer and elector in the town of Manning and a user of electric energy therein, commenced the present suit in equity to enjoin the town and its officials from establishing said electric plant under the authority of the aforesaid election, on the theory that the election did not validly authorize the establishment of the plant, warrant the execution of contracts therefor, permit the financing thereof from the earnings of the plant, or justify the securing of the contracts by pledging the net earnings of the plant or the property purchased.

Then on March 27, 1933, thereafter, the Iowa Public Service Company, the intervener-appellee, intervened in said cause and asked relief which, for all material purposes, was the same as that prayed for by the plaintiff-appellee. This intervener company is a Delaware corporation, holding an electric franchise in the town of Manning. It is a taxpayer in said town.

Generally speaking, the plaintiff and the intervener, appellees, sought to restrain the city of Manning from establishing its electric plant because: First, the public measure which should have been submitted to the electors at such election was not printed in full upon the ballot; second, the proposition submitted to the electors was bad for duality, in that the maximum sum of $135,000 specified covered not only the cost of the establishment and erection, but also the cost of maintenance and operation; third, the proceedings were instituted by the council and not by the electors; and, fourth, the indebtedness contemplated is in violation of section 3, article 11, of the Constitution of Iowa.

The town of Manning and its officers answered to the petition, and likewise to the petition of intervention. So on March 16, 1933, the cause came on for trial before the district court. At that trial, part of the evidence was stipulated, and the remaining portion of it admitted in the regular way. After the submission, the district court overruled many of the contentions made by the plaintiff and the intervener, but nevertheless granted the injunction on the ground that the ballot did not contain the full public measure, because it lacked: First, the proposition to pledge the plant as security for the purchase price; second, the statement of the maximum rates to be charged consumers for electricity; and, third, the statement of the rate of interest to be paid by the municipality on the unpaid purchase price.

[1] From the judgment then entered, the town and its officers appeal. Although the district court overruled part of the contentions made by the plaintiff and the intervener, and sustained others, these parties, although they have not appealed, now argue all the propositions which they submitted to the district court. This the plaintiff and the intervener may do in order to sustain the judgment of the district court, providing the matters now argued were mere findings of the court below, as distinguished from the judgment thereof. Concerning this, we said in Northwestern Mutual Life Insurance Co. v. Blohm, 212 Iowa, 89, reading on pages 96 and 97, 234 N. W. 268, 271: “All equity cases are triable de novo in this court. An appeal, therefore, brings up the entire record as duly contained in the abstract, or otherwise properly certified, and the case is here tried anew. If the judgment of the district court can be sustained upon any theory, the same may be done regardless of that court's findings. Clearly the party not appealing can obtain no advantage in this court which he failed to receive in the district court, yet this does not mean that we, upon appeal, must affirm the district court only on the theory adopted by it. This court may sustain the district court regardless of its findings and theories.” In other words, the appeal is from the judgment, and not from the findings of the district court.

Therefore, the propositions argued by the plaintiff and the intervener in the district court will now be considered, in addition to the points argued by the appellant in this court.

I. It is said by the plaintiff and the intervener that the ballot submitted to the electors of the town of Manning did not contain the entire public measure.

[2] While the public question need not be set forth on the ballot “in hæc verba” (O'Keefe v. Hopp, 210 Iowa, 398, local citation, 405, 228 N. W. 625, 628), yet enough shall appear at least to clearly indicate the proposition which is being submitted to the electors. Lee Electric Co. v. City of Corning, 199 Iowa, 680, 202 N. W. 585;McLaughlin v. City of Newton, 189 Iowa, 556, 178 N. W. 540;O'Keefe v. Hopp (210 Iowa, 398, 228 N. W. 625), supra. See sections 761, 762, and 763 of the 1931 Code.

[3] Consequently it is argued by the plaintiff and the intervener that the ballot in question should have contained, in addition to its subject-matter, the following: First, whether the plant is to be paid for out of past or future earnings; second, whether the municipality is to contract to pay all or part of the costs from future earnings; third, whether the municipality is to pledge the plant and its earnings; fourth, the maximum rate to be charged consumers, including the municipality; and, fifth, the rate of interest to be charged the municipality. According to the ballot under consideration, it is clear that the municipality was attemptingto establish its electric plant under sections 6134-d1, 6134-d2, and 6134-d3 of the 1931 Code. These sections read as follows:

“6134-d1. They [cities and towns] shall have power to pay for any such plant [electric], improvement or extension thereof out of the past earnings of the plant and/or out of the future earnings and/or may contract for the payment of all or part of the cost of such plant, improvement or extension out of the future earnings from such plant, and may secure such contract by the pledge of the property purchased and the net earnings of the plant.

6134-d2. Such contract shall not constitute a general obligation or be payable in any manner by taxation. Such contract shall specify the maximum rate that may be charged the consumers, including the municipality, and the city shall not increase or fix any rate beyond such maximum. Under no circumstances shall the city be in any manner liable by reason of the failure of the net earnings being sufficient for the payments provided in the contract. Such contract shall also specify the rate of interest to be charged.

6134-d3. Nothing contained in the last two preceding sections [6134-d1 and 6134-d2] shall be construed as authorizing an establishment of a plant without an election as required by section 6131. And such proposition when submitted to an election shall state the maximum amount which may be expended for the establishment, construction, or acquisition of such plant.”

The sections of the 1931 Code, just quoted, appear in chapter 312 thereof. Contained in that chapter are also sections 6127 and 6131. Section 6131 is referred to in section 6134-d3, above set forth. In sections 6127 and 6131 are the following provisions:

“6127. Cities and towns shall have the power to purchase, establish, erect, maintain, and operate within or without their corporate limits, heating plants, waterworks, gasworks, or electric light or power plants, with all the necessary reservoirs, mains,...