Opinion
Rehearing Denied April 30, 1973.
Opinion Superseded 300 N.E.2d 653.
Richard D. Bray, Martinsville, Parr, Richey, Obremskey, Pedersens&s Morton, Lebanon, for appellants.
Ralph M. Foley, John E. Hurt, Martinsville, Frank T. Lewis, Plainfield, for appellees.
LOWDERMILK, Judge.
This is an action by Marvin Baker, Danny Payton, and Charles Cooley, newly elected members to the Board of the Town of Paragon, and intervening plaintiff, Morgan County, Rural Electric Membership Corporation (R.E.M.C.) against Carl W. Hawkins, J. B. Whitaker and Howard F. Baldwin, as members of the Old Board, and Public Service Company of Indiana (Public Service), intervening defendant herein.
The plaintiffs-appellants filed a complaint for restraining order without notice and temporary injunction and request for permanent injunction to restrain the defendants, Old Board, from perfecting the sale of the electrical distribution facilities of the Town of Paragon to Public Service. The appellants also prayed that the appellee, defendant Old Board, be enjoined from entering into a franchise contract with Public Service to sell said electric distribution system to it. The trial court granted appellants' petition for temporary restraining order without notice and set the matter for hearing.
The court, after hearing evidence and argument of counsel entered its ruling, finding for the defendants-appellees and against the plaintiffs-appellants, and ordered that the restraining order be dissolved.
The Town of Paragon, Indiana, (Town) operated its own electrical distribution system, which system was wholly owned by said Town. The Town, through the Old Board herein, passed, on the 6th day of July, 1970, Ordinance 1970-1, which was the first step in the sale of said Town electric utility system to Public Service.
Pursuant to the terms of that ordinance, the Old Board appointed three qualified appraisers to appraise the electrical distribution facilities of the Town.
On July 28, 1970, the appraisers returned their appraisal in the amount of $264,000. On January 4, 1971, by Ordinance No. 1970-2, defendants-appellees passed an ordinance, publishing the appraisal of the property, which was published in the Martinsville Daily Reporter, Martinsville, Indiana, on January 14, 1971.
After the publication of the ordinance more than five per cent of the registered voters of the Town presented a petition to the Old Board, requesting that the Old Board submit the question as to whether or not the electrical distribution facilities of the Town should be sold to Public Service, pursuant to the terms of Ordinance 1970-1, to the qualified voters of the Town. As the result of the petition, the Old Board caused the following notice to be placed in the newspapers of general circulation in Morgan County:
'REFERENDUM
All citizens and qualified voters shall be entitled to vote on the following question:
Shall the Town Board of Paragon sell the electric utility to the highest lawful bidder?
Yes.
No.'
The ballot that was voted upon at the November 2nd, 1971, general election read as follows:
'REFERENDUM
Shall the Town of Paragon sell the electric utility to the highest lawful bidder?
Yes
No'
Subsequent to the election, on November 9th, 1971, a special meeting of the Old Board was held, approving the sale of the town utility to Public Service. On November 15th, 1971, the Old Board entered into a bill of sale and assignment with Public Service, selling and assigning to Public Service all of the assets of the town electric utility. At the time the Old Board and Public Service entered into the aforesaid bill of sale, Public Service paid to the Town the sum of $354,531.00 for the Paragon electric utility. Simultaneously therewith, the Old Board caused to be published in the Martinsville Daily Reporter notice that the would finalize the transaction on November 29, 1971, by transferring the franchise grant and contract for the town utility.
The case at bar was filed on the date the Old Board entered into the above stated bill of sale and assignment with Public Service.
Mr. Danny Payton, one of the plaintiff-appellants, was, at the time of filing the suit for injunction, a member of the newly elected Town Board and also an employee of the appellant, R.E.M.C.
Plaintiffs-appellants first contend that the sale of the municipal utility to any prospective purchaser is strictly controlled by statute. The statutes which refer to the manner and procedure for sale of municipal electricity are Burns Ind.Stat. §§ 48-7210 through 48-7216, IC 1971, 18-5-14-1 to 18-5-14-7. Plaintiffs-appellants cited the case of Campbell v. Brackett (1910), 45 Ind.App. 293, 90 N.E. 777, where this court stated as follows:
'The board of trustees of an incorporated town has only statutory power, and can perform its functions only in the statutory way. * * *
Where the statute prescribes specifically how an act shall be performed by a statutory board, or prohibits its performance under certain conditions by such board, an act in direct violation thereof is absolutely void. . . .'
Plaintiffs-appellants urge that failure to comply with the strict terms of the statutes which govern the selling of an electric facility would make such sale a nullity.
Appellants admit that the three appraisers were appointed in compliance with Burns § 48-7211, IC 1971, 18-5-14-2, and returned their appraisal to the Old Board within the specified thirty days. Appellants contend that the Old Board did not comply with the dictates of § 48-7212, IC 1971, 18-5-14-3, which reads as follows, to-wit:
'Within fifteen (15) days after the return of such appraisement by the appraisers to the common council of the city or to the board of trustees of the town, the ordinance or resolution providing for sale or disposition of such property and the total valuation of the same as fixed by the appraisement shall be published in the same manner as is provided by section 2, 4 and 7 of chapter 96, Acts of 1927, as amended, and the sale shall not be closed or consummated for thirty (30) days after this notice is given. . . .'
R.E.M.C. asked the Old Board to hold up notice so they could prepare their appraisal of the electric system, in order that they might bid on the same.
Appellants point out that no publication was made of the appraisal until some five and a half months after the report of the appraisers was returned to the Town Board and that failure to comply with the provision of the statute was a fatal defect in the procedure of the sale.
Appellants further contend that the Town Board, when it published Ordinance 1970-2, on January 14, 1971, failed to comply with Burns § 48-7213, IC 1971, 18-5-14-4, which states as follows:
'. . . The common council of the city or the board of trustees of the town shall cause notice of election held under this act (ss 48-7210-48-7216) to be given by publication in the same manner as is provided by sections 2, 4 and 7 (ss 49-702, 49-704, 49-707) of chapter 96, Acts of 1927 as amended, at least fifteen (15) days before the election; Provided, however, That if the question of such sale is submitted to the voters at a general election, notice thereof shall be sufficient if made a part of the regular notice of general election and published at the time and in the manner provided by the general election laws of this state for such general election. The common council of the city or the board of trustees of the town shall cause copies of the ordinance or resolution to be printed in convenient form, and shall furnish the same to the voters of the city or town, upon their application or order, and the notice of election provided in this section, shall designate where the copies may be obtained.'
Appellants argue that there was no reference made in the published referendum as to where copies of the ordinance approving the sale could be obtained and in fact did not include any reference whatsoever to the ordinance. Appellants contend that this failure to comply with the statute misled the voters in that they were not advised as to where they might obtain information on the referendum.
Appellants contend that the ballot, hereinabove set out, was misleading to the voters and that it did not contain the question that the voters had requested in their petition to the Town Board, in that no reference is made specifically to the sale of the municipal electrical distribution plant to Public Service. Appellants further argue that the referendum failed to specifically refer to the ordinance authorizing the sale and such failure was grossly misleading to the citizens.
It is appellants' position that the referendum voted upon by the citizens of Paragon only gave the voters a choice of whether or not the utility should be sold and did not ratify the sale to Public Service.
Appellees, in their brief, have admitted that certain irregularities occurred during the process by which the sale of the public utility was made. However, it is appellees' position that any deviation from the statutory requirements set forth herein were not of such a substantial nature as to render the referendum and sale resulting refrom void. Appellees contend that Town Board of Trustees operated in good faith, above board, and substantially complied with all of statutory provisions.
Appellees point out in reference to the failure of the Board to publish the appraisal within fifteen days, that this was due partially, at least, to a request made by the intervening plaintiff herein, R.E.M.C., to have the Old Board extend time to R.E.M.C. so that it might submit a formal bid. Appellees state that the Old Board was simply acting in good faith in delaying its own actions so that R.E.M.C. might have an opportunity to bid if it found that it could lawfully and financially do so. From the record we can find no bid on the Paragon Electric Utility submitted by R.E.M.C. Appellees contend that although there was no formal publishing of the appraisal until January of 1971, there was substantial compliance with the statute and that this small irregularity should not void the entire sale.
Appellees point out that Burns § 48-7213, supra, requires the Town Board to furnish copies of the ordinance to the voters 'upon their application or order.' The record discloses that no application for any printed copy of the ordinance was ever made. Appellees contend that the size of the Town of Paragon would necessarily preclude the argument that the voters of Paragon did not know of the nature of the referendum to be voted upon. Appellees further contend that even though there may have been a technical irregularity with respect to this notice of the election, it was so minimal and undamaging that it in no way thwarted the intent of the Legislature and the notice was in substantial compliance with the statute.
Appellees next contend that the ballot itself served the purpose of the statute by informing the voters in a clear and concise manner of what the Town Board wanted to do. Appellees further contend that the ballot used gave the voter a clear alternative to vote for or against the proposition. Appellees contend that the ballot asking the question whether the town utility should be sold to the 'highest lawful bidder' represented substantial compliance with the applicable statute, even if it was not in the strictest conformity. Appellees point out that only one bid had been received by the Town Board and such bid was submitted by Public Service and no other bid had been made by any utility company, including R.E.M.C., and the Indianapolis Power and Light Company, which had sent a representative to the Old Board and advised them they were not interested in the property. Thus, the ballot employed herein did give the voters a choice, since it asked whether the utility should be sold to the 'highest lawful bidder,' and since there was only one lawful bidder and only one bid was submitted, the voters necessarily were aware that they were actually voting on whether or not to sell the town utility to Public Service. We note that the voters did express by a large majority their approval of the sale of the public utility.
Appellees contend that R.E.M.C. could not be a lawful bidder for the Paragon electric utility and was improperly allowed to become an intervening plaintiff. This issue is immaterial to the basic issues of this case, i.e., statutory violations, and, further, R.E.M.C. did not bid on the property and we need not write on that issue.
Campbell, supra, stated that a board, such as the one in the case at bar, could not perform in direct violation of the statute. In the case at bar, the Old Board followed the statute substantially and any deviations from the statutory requirements were minimal in nature and no rights were impaired and no damages resulted therefrom.
In the case of Smith v. Calhoun Community Unit School District No. 40 (1959), 16 Ill.2d 328, 157 N.E.2d 59, the Supreme Court of Illinois stated as follows:
'We have frequently held that where a special statute prescribes the form of the ballot re must be a substantial compliance with special statutory mandate or election is void. . . . not every deviation from form of ballot prescribed by applicable statute will render an election void. . . .
The purpose of printing the substance of a public measure upon a ballot is not to furnish the electors with every detail regarding the public measure to be voted upon, but to enable them to readily identify the proposition, to know its fundamentals, its general effect, and to indicate their individual choice in the matter.
The substance of a public measure is adequately set forth if the ballot gives a fair portrayal of the chief features of the proposition in words of plain meaning, so that it can be understood by persons entitled to vote. . . .'
57 Am.Jur.2d, Municipal Corporations, § 576, states that where a statute gives a certain procedure to be followed substantial compliance with these procedures is sufficient.
In Smith, supra, the Supreme Court of Illinois held that there must be substantial compliance with the statute, which declares the form of a ballot and failure to observe the statute in a manner of substance would render the election void. It is our opinion that the Old Board did substantially follow all of the statutes governing the sale of the electric utility, including notice of the referendum and form of the ballot, and that such substantial compliance was sufficient and any deviations from the statutory requirements were of such minimal nature that the election and sale should not be voided.
Both parties discuss the issue of whether the Public Service Commission of Indiana was required to given approval as a prerequisite to the sale in question. We note that appellants admit in their brief that such approval was not required and we do not feel that it is necessary to write on this issue.
Finally, appellees point out that the remedy asked for by plaintiffs-appellants was equitable in nature. Appellees contend that regardless of the strictest interpretation of the applicable statutes, the town electorate did, in fact, have their opportunity to voice their vote as to whether or not the electric utility should be sold and that equity will not now frustrate this choice that was made by the voters, simply because of certain fine technicalities not being followed.
In our opinion, for the reasons set forth above, the statutes were substantially followed and we find that the trial court did have sufficient evidence to come to its decision when the court discontinued the restraining order and denied injunctive relief.
For the above stated reasons, the judgment is hereby affirmed.
ROBERTSON, P. J., and LYBROOK, J., concur.