Opinion
February 21, 1939.
1. MUNICIPAL CORPORATIONS: Light Plant. Under Section 12a, Article X, Missouri Constitution, authorizing cities of not more than 30,000 to become indebted "for the purpose of purchasing or constructing" a light plant, a submission to the voters of a proposition to issue bonds for the purpose of constructing an electric plant which was carried, authorized the construction of a light plant though the proposition was not submitted to the voters in the alternative.
2. MUNICIPAL CORPORATIONS: Light Plant: Certificate of Convenience and Necessity. A city before the acquisition of a light plant for which bonds were voted was not required to obtain from the Public Service Commission a certificate of convenience and necessity.
3. MUNICIPAL CORPORATIONS: Federal Grant. Where a city made a plan for an electric light plant and sought aid from the Federal government for one-third of the cost and after the election to authorize bonds for the purpose the application of the Federal government was rejected and the city changed its plan, since no reference to the Federal government was in the proposition voted, the city had authority to acquire a smaller plant than first planned without submitting the matter to another vote, and to levy taxes to pay for it.
Appeal from Davies Circuit Court. — Hon. ____ ____, Judge.
AFFIRMED.
Dean H. Leopard and Anderson, Gilbert, Wolfort, Allen Bierman for appellant.
(1) After the ordinance authorizing the application for loan and grant from the United States Government, and the appointment of Archer Company as engineers and the acceptance and adoption of the plans submitted by Archer Company and then the vote on the bonds, the Board of Aldermen had no right to change the plans to a different system. Jones v. Paving Co., 174 Mo. App. 393; City v. Collier, 68 Mo. App. 483; City v. Bacon, 144 Mo. App. 476; Chicago Heights v. Angus, 267 Ill. 628; Beers v. City, 177 N.W. 502, 43 S.D. 14; Hayes v. City, 207 P. 607. (2) The ordinance submitting to the vote of the people confers no authority to issue bonds or construct a plant, because it did not follow Section 12a of Article X of the Constitution of Missouri in the submission. That section does not authorize the aldermen to decide in advance whether to purchase or construct, but after the vote the city officials decide on the method of acquisition. State ex rel. v. Allen, 183 Mo. 291. (3) The city officials were guilty of an abuse of discretion in proceeding to construct a plant, after the Public Works Administration had refused the loan and grant because the construction of a plant was not economically sound, without a resubmission to the people. At the time the vote was taken it was known, and contemplated, that the economic desirability must be passed upon by the PWA and that, if uneconomic, the plant would not be built. Abuse of discretion voids action by municipal authorities. Corrigan v. Gage, 68 Mo. 545; Prairie Pipe Line Co. v. Village, 300 S.W. 298; State ex rel. v. Burch, 186 Mo. 219. (4) In furnishing electric facilities a city acts in a proprietary, not a governmental, capacity. Riley v. City, 258 Mo. 671; Thompson v. City, 17 S.W.2d 960; Blair v. Byers, 35 F.2d 326. And a city is within the definition of an electrical corporation (above cases and Ohio v. Helvering, 78 L.Ed. 911) and therefore requires a certificate of convenience and necessity before it can construct and operate an electric system. Secs. 5122, 5193, R.S. 1929. And the holder of a certificate can enjoin one attempting to function without a certificate. Frost v. Oklahoma Corp. Comm., 278 U.S. 515, 73 L.Ed. 488. (5) Cities act as proprietors, not as governments, in furnishing electric facilities (see cases under Point 4) and the Public Service Commission Act was designed to prevent useless competition. State ex rel. City v. Pub. Serv. Comm., 82 S.W.2d 110. And the utility cannot discontinue service without authority from the commission. Parkville Oil Gas. Co., 6 Mo. P.S.C. 689.
Gillihan Gillihan, Charles D. Brandom and R.H. Musser for respondent.
(1) The board of aldermen submitted to the voters of Pattonsburg, only the proposition to vote $50,000 by Ordinance No. 126. Sec. 12a, Art. X, Mo. Const.; Art. VIII, Chap. 38, R.S. 1929; Secs. 7016, 7028, 7030, R.S. 1929. State ex rel. v. Johnson, 50 S.W.2d 121, 330 Mo. 452; State ex rel. Canton v. Allen, 178 Mo. 555; Bank v. Howe, 56 Mo. 59; Palmer v. Liberal, 64 S.W.2d 267; Detroit United Ry. v. Detroit, 41 S.C. 285, 255 U.S. 171; Denver v. Trust Co., 229 U.S. 123, 33 Sup. Ct. 657. (2) Under the admissions of appellant's second amended petition all acts complained of, had been fully accomplished prior to the filing of said petition and all proceedings therein, so that the issues presented, if any, only constitute a moot case, and the petition is insufficient for the court to grant it any relief thereon. Fugel v. Becker, 2 S.W.2d 743; Gibson v. Powell, 96 Mo. App. 685; Realty Co. v. St. Louis, 282 Mo. 197; Shurlay v. Black, 119 N.E. 618. (3) The city of Pattonsburg had constitutional and statutory authority to call an election and to vote the $50,000 of bonds for its exclusive ownership of an electric lighting plant and distributing system, and this authority existed by both constitutional and state grant of power, and it is not subject to the public service commission law as to a grant of a certificate of convenience and necessity, and the appellant is merely raising a collateral issue, immaterial in this case, as if the city of Pattonsburg transcends its authority, this can only be heard by quo warranto proceedings, at the instance of the State's legal officers. Art. XIII, Chap. 7, R.S. 1929; State ex inf. v. L. P. Co., 246 Mo. 665; High Extraordinary Rem., sec. 695; 51 C.J. 345; Ferris Ex. Leg. Rem., 165, sec. 144; 22 R.C.L., sec. 10, p. 670; State v. Birmingham Water Works, 185 Ala. 388, 64 So. 23; Williams v. Riley, 50 Sup. Ct. 63, 280 U.S. 78. (4) There is no authority for the assertion that the Public Service Commission Law supercedes or wipes out the constitutional authority, and the grant by the State to municipalities, to own, operate and control their own utilities. Frost v. Corporation Comm., 278 U.S. 515, 49 Sup. Ct. 235, 73 L.Ed. 488; Pudget Sound P. L. Co. v. Seattle, 291 U.S. 619, 78 L.Ed. 1025.
Appellant, Missouri Power Light Company, filed this suit in the Circuit Court of Davies County, seeking an injunction, against the city of Pattonsburg and its officials, to restrain the letting of contracts for the construction of an electric light system, the issuance of bonds, the levying of taxes for the payment of the bonds, the operation of the plant and for such other relief as the court may deem proper.
The defendants filed a demurrer to the petition alleging that the petition did not state facts sufficient for a court of equity to grant any of the relief prayed for. The trial court sustained the demurrer and appellant declined to plead further. Judgment was entered dismissing the petition, whereupon the plaintiff appealed.
Appellant did not offer to give a bond or seek a temporary injunction. Pending a hearing of the case the city proceeded to the construction of the plant. Appellant filed a second amended petition wherein it was stated that the bonds had been sold, the plant constructed and in operation. Appellant contends that the election at which the bonds were authorized was void. It is argued that Section 12a, Article X, of our Constitution, authorizes the city to submit to the voters the question of becoming indebted "for the purpose of purchasing or constructing . . . electric or other light plants;" that the question submitted to the voters in this case authorized the issuance of bonds in an amount of $50,000 for the purpose of constructing an electric plant, but did not include the alternative of purchasing a plant. It is argued that the constitutional provision "does not authorize the aldermen to decide in advance whether to purchase or construct, but after the vote the city officials decide on the method of acquisition." Our search has not revealed any case where such contention has been made. The case of State ex rel. City of Columbia v. Allen, 183 Mo. 283, 82 S.W. 103, is cited as authority. In that case the city of Columbia submitted to the voters the question of issuing bonds for the purpose of purchasing a light and water plant and for the construction of such plant. The contention was made that the question was submitted in the alternative and therefore the election was void. But this court held that the question submitted was, whether or not to purchase the plant and improve it. The court held that this could be done. In the course of the opinion the court referred to the case of State ex rel. Town of Canton v. Allen. 178 Mo. 555, 77 S.W. 868, where the question was submitted in the alternative, and held that so submitting the question did not vitiate the election. In State ex rel. Columbia v. Allen, supra, the court said:
"A kindred contention was made in the case of State ex rel. Town of Canton v. Allen, 77 S.W. 868, and it was held by this Court en Banc that it was competent to submit such a proposition in the alternative. We think that case disposes of this point. Here the proposition is one only; i.e., to buy the old waterworks and electric plant and improve them." (Italics ours.)
So the case cited by appellant seems to be an authority against its contention. Those interested in this question will find cases annotated in 5 American Law Reports, 538, where it is stated that the majority rule permits the proposition to be submitted in the alternative. The minority rule holds that to submit such a question in the alternative renders the election void. [See 5 A.L.R. 542.] The states so holding are, Kansas, New Jersey and Ohio. The case which precedes the annotations is Albuquerque v. Water Supply Co., 24 N.M. 368, 174 P. 217, 5 A.L.R. 519. The latter case reasoned that to submit the question in the alternative did not render the question a dual one but that the purpose was single, that is, the acquisition of a municipal plant. From a reading of those cases it seems clear that the submission of the question in the singular, as was done in this case, is fully authorized. We cannot conceive any logical argument to the contrary
It is next contended that the city of Pattonsburg did not obtain a certificate of convenience and necessity from the State Public Service Commission; that this was necessary before a plant could be legally constructed. The following cases definitely decide this contention against appellant: Missouri Public Utilities Co. v. City of Poplar Bluff, 2 P.S.C. 442; Public Service Commission v. Kirkwood 4 S.W.2d 773, 319 Mo. 562; City of Columbia v. State Public Service Commission, 329 Mo. 38, 43 S.W.2d 813; State ex rel. City of Sikeston v. Public Service Commission of Mo., 336 Mo. 985, 82 S.W.2d 105, l.c. 111 (9-11). In the latter case the court said:
"The policy of our Legislature concerning the light and power business, up to the present time, has been to leave the field open to both private and public ownership. In any case where the people are not satisfied with the results of regulation, the right of any city to build its own plant, without asking the permission of the commission and to furnish electricity to its people at such rates and under such conditions as it sees fit, without being subject to any regulation except the will of its own citizens, remains as a further safeguard in the public interest."
Appellant makes the point that the original plan of the city was to obtain from the Federal Government a grant of $17,420 and a loan of $50,000, for the purpose of constructing a light plant; that plans and specifications were prepared with that proposition in view that that plan was still pending at the time of the election. It was alleged that, after the election authorizing the issuing of bonds in the amount of $50,000, the Federal authorities rejected the city's application. It is contended that the city officials then changed the plans and constructed a light plant of a smaller capacity than originally intended. It is argued that the city officials were, under these circumstances, not authorized to proceed with the building of a plant without resubmitting the new plan to the voters of the city. The ordinance ordering the election provided specifically that it was for the purpose of determining whether the city should become indebted in the sum of $50,000 for the purpose of constructing an electric light and power plant. No reference was made to the proposals made to the Federal Government. Under the constitutional provision, Section 12a, Article X, above referred to, the people of Pattonsburg had the authority to vote an indebtedness upon the city for the purpose of building a light plant. This they did. Whether it was the expedient thing to do was for the people and the city officials to decide and not for the courts. Neither did the rejection of the plan by the Federal authorities, for whatever reason they deemed proper, diminish the power of the city to build its own plant. It is evident from plaintiff's petition that the city was determined to build a light plant. At the time of the election the request for Federal aid had not been granted. There is no allegation in the petition that any fraud was practiced on the voters, or that they were misinformed as to the true facts. We do not see any ground for a court of equity to enjoin the collection of the tax authorized by the voters, or to enjoin the authorities from operating the plant.
The judgment of the trial court is affirmed. Cooley and Bohling, CC., concur.
The foregoing opinion by WESTHUES, C., is adopted as the opinion of the court. All the judges concur.