The Fargo forum and daily republican. [volume] (Fargo, N.D.) 1894-1957, 1918-10-28
JUDGE AhIDON
.DISNISSES HEAT
CASE FOR LACK
OF JURISDICTION
Holds Contesting Parties
Are North Dakota
Residents l-
CONTRACT BINDING
IN MOORHEAD CASE
Rules It Cannot Be :Abro-
" gated to Detri1nent of
-. the Public ii. ..-c/ . !

The suit OF the Guaranty Trust Co:
! New York, mortgage. of the Union
Light, Heat e. Power Co, against the
| city Of Fargo and certain heat con-
| sumers seeking to set aside an in
| junction granted in district court re-
straining the company from increas-
| ing it's rates for heat or discontinu-
ing the service, heard in federal court
| in Fargo a month ago, was dismissed
! for lack of jurisdiction by Federal
Judge G. F. Amidon in a decision rem
dered late Saturday afternoon.
Judge Amidon held that the plain
tiffs and defendants in the action
were in reality residents of the state,
and that Jurisdiction rested in the
| state courts. The trust company held
that it's security was jeopardized by
the fact that the light company was
forced to supply heat at loss due
! to war conditions. @
In q decision in the Moorhead gas
case, rendered at the same time,
Judge Amidon held that the contract
between the light company and the
city Of Moorhead, providing a maxi
mum rate for gas and heat, was bind
ing on the company and could not be
ahrogated by the company to the de-
triment OF the public.
A similar decision was rendered in
the Minot case, Judge Amidon con-
tinuing the injunction against the
light company, and denying the com
pany's motion for an injunction
against the city.
Decision In Fargo Case.
The Fargo case is brought by the
Guaranty Trust company Of New
York against the Union Light, Heat
& Power company, the city Of Fargo,
and certain individual users Of the
light company's heat service. The
court dismisses this case upon the
ground that 1t has no jurisdiction.
The jurisdiction is based upon the
claim that the suit is between citi-
zens of different states. The court
holds that in determining whether
there Is Jurisdiction, the e. Union
Light, Heat g. Power company, which
appears in the complaint as 6. defen-
dant, must be placed along with the
plaintiff, as it really stands on the
same side as the plaintiff in the con-
troversy. When the parties are re-
arranged in that way the case in
wolves a controversy between the
trust company and the light company
as plaintiffs, and the city Of Fargo,
and the individual defendants, as de-
PENDANTS The light company Is a
citizen of North Dakota. All the
defendants are citizens Of North Da-
kota. So the jurisdiction fails be,
cause the controversy is really not
between citizens of different states,
but between citizens Of the same
| state.
| -. The Moorhead Case.
In the Moorhead case the ordinance
authorizing the light company to use
the streets in distributing gas fixed
| the rates for lighting at $1.40, and
for heating at $3.50 per thousand
cubic feet. The rates were to remain
in force for ten years. The ordtn-
ance was accepted by the company
and thus became a contract between
the parties binding upon the com
pany and upon the plaintiff. The
court says that the meat OF the case
| is this: Does the fact that plaintlHs
contract with the city has, by reason
of the European war, become unpro-
| ftable, justify the court in releasing
defendant from the contract? Does
F.! a. public utility company which con
! tracts rto supply the public. with q
commodity like gas or electricity, oe-
cupy a different position from other
contractors who ahve agreed to sup
plv articles the cost of which have
been greatly enhanced by the war
| Is a public utility. company entitled
| to modify it's contract whenever a
change is necessary in order to make
! performance profitable? The court
also points out that utility COM
| panies when they, have valid con-
tract uniformly insist in the courts
that rates shall not be reduced dur
/ ing the period of the contract, and
when the contract was valid ana
| within the powers Of the city at the
| time it was made, the courts have
/ held that the city is bound by the
rates fixed in the contract, and can-
not reduce them, although the COM
pany may be earning excessive prof
| its. The court again ask sthat as the
CITY is to be bound by contracts oi
this character, when they are valid
for the whole term Of the contraci
although the utility company may
make excessive profits, why snouio
not the rule work both. ways, aI1C
the company be- bound, although tbs
contract turns out to. be a losing one
The court rules In the case that tins
company is bound by the contract
and that the courts have no power. e
modify the contract or excuse the
company from performance.
/ Franchise Is Mandatory
1 AS to the suggestion of the com
pany that the franchise is permits.
sive and not mandatory, and there.
fore the company has right y
withdraw from performing the ser
vice at any time that 1t becomes un'
profitable, the court points out tina
if any such rights exists 1t would neee
to be carefully safeguarded, ana ina
the company would be required :
L - Sy,Ja ~ "a
the service for q sufficient time U
enable the city either TO erect
plant itself, or to grant a gfranchis'
to another company for that purpose
1t rules that when the public has pc
come accustomed to the use OF q com
modify like gas or electricity 1t can
not be suddenly thrown back upoI
the use Of oil lamps and coal ranges.
The court also points out that
states where the utility commission
is given full power over the sup1ec
of rates, so that 1t can protect pott
the public and the company, tn'
i commission has frequently increased
rates by reason Of the Increased COS
caused by the war, but that there y
no commission having such power
4 in Minnesota or in North Dakota.
The decision OF the court is tina
the Injunction restraining the com
pany from disseminating its servlcs
be kept in force during the pendenes
| of the action, and that the motion @
the company for an injunction agalnsi
j the city to restrain the city from # Z
fusing TO pay a higher rate than tns'
/ fixad in the ordinance should ne qe'
/ MED and that the cross-pH MED DS
the company in the case, be dismiss 2.
ed for want Of equity.