The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1928-12-17

an opinion from their counsel with
respects to the powers and duties
of such trustees in connection with
the administration Of the affairs of
said company and an interpreta-
ton and construction of the fran
chise, articles of incorporation, vot-
ing trust agreement and the stat
uteS applicably thereto, which opin-
ion is substantially as follows:
1. That by the franchise grant
ed in 1905 and its acceptance,
public charitable trust was Gre
ated in favor of the patrons of the
Citizens Gas Company and the res
idents of the city of Indianapolis to
provide for a supply of gas in IN
dianapolis at cost, whenever the
amounts invested by the certificate
holders of the company were repaid
with interest not exceeding 10 per
cent per annum; that this trust is
enforceable even though the right
of the city to purchase the property
and plant of the company should
Lot be exercised within the period
fixed by the franchise, so long as
the company continues to operate
as a public utility.
2. The right given to the vot-
ing trustees to vote the shares OF
stock of the Citizens Gas Company
is valid and not open to legal OBJ
lection. Under this voting trust
agreement, it is the duty of the
voting trustees annually to select
qualified board of directors to
manage the affairs of the Citizens
Gas Company and this right con-
tinues during the existence of the
company and until and unless its
prosperity is taken over by the city
of Indianapolis.
3. The voting trustees are trus-
tees for the certificate holders
until such time as they shall have
been paid in full with interest and
as such trustees, exercise the voting
powers above referred to.
Their trusteeship has public as
pect also, in that it is their duty to
see that the public charitable trust
created at the organization of the
company is enforced and carried
out for the public. In view of the
important questions involved and
the claims likely to be asserted by
those in interest, the trustees have
been advised that 1t would be I'M
wise for them to consent to any
disposition of the property of the
Citizens Gas Company without final
adjudication of important legal
questions, and that to do so might
involve them in personal liability.
4. At the time the Citizens Gas
Company was organized, there was
in force Section 249 of the act
of March 6, 1905. This section was
amended in 1915, (Section 11129
Burns 1920. but as originally
drawn and as now amended, it re-
quireS submission to the voters of
the city of Indianapolis of any con-
tract for purchase of a gas works.
The Citizens Gas Company is en-
gagged in business as a public utility
and operates a by-product coke
plant. More than half of it's bust
ness consists in the sale of its coke.
If any moneys of the city are re-
quired to be used in purchasing this
property, or its credit is to be
pledged directly or indirectly for
such purpose, an election would be
required before the city could en-
gage in this enterprise, unless Sec
ton 249 is. for some reason, not
presently operative.
1t was evidently the theory of the
legislature that the city should not
enter into municipal ownership of
property of this character without
assent of a majority of its qualified
voters, voting at the particular cleo
lion.
In the opinion Of our counsel, the
effect of this statute is suspended by
certain other legislation hereafter
referred to, but if that legislation
should be repealed or modified, an
election would be required before
the city could expend money or
pledge its credit for the purpose of
acquiring the property of the Gas
Company unless, in the meantime,
the certificate holders have been
paid in full, when an entirely diff
ferent situation would be presented.
5. The Citizens Gas Company,
on Aug. q, 1921, surrendered it's
franchise and accepted an indeter-
inmate permit from the public SER
vice commission of Indiana. BY Sec
tons 100, 102 and 103 of the
Shively- Spencer utility commission
act, every public utility so Surren-
der its franchise and taking an in
determinate permit consents that
it's property may be purchased by
the city upon terms and conditions
to be determined by the commits
sion.
We are advised by our counsel
that the state had the right to SUBJ
stitute the Judgment of the public
service commission of Indiana for
that of the voters of the city of
Indianapolis, at an election, as to
whether the city of Indianapolis
should acquire the property of the
company, but that in any proceed
ing before the commission, if it
shall be determined that the city
should acquire this property, the
commission will be bound to take
into consideration and to give eff
feet to the public charitable trust
created in connection with the Citi-
zens Gas Company and above re-
ferred to-
The franchise of this company
was surrendered and an indeter-
inmate permit taken from the pub
lie service commission, as above in
dicated, because at the time the
company faced bankruptcy under its
then existing rates.
The company could not have con-
tinued to function and obtain the
necessary financing without sur
render of it's franchise and the &C