The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-10-04
LAKE right
TO ESTABLISH CITY
Light PLANT UPHELD
Supreme Court Rules r. r
Commission Without Pow.
Or to Regulate Rates

The right Of the city Of Devils
Lake to issue 100000 In special OBJ
legation bonds for construction or
acquisition Of . municipal electric
plant was upheld Thursday by the
state supreme court.
In an opinion written by Justice
George H. Moellring, the court held
that the board Of railroad commits
sioners has no authority to deter
mine, supervise or regulate rates OF
charges fixed by the city where elec-
tors have authorized purchase Of an
electric plant, with costs to be paid
from net earnings.
The decision was handed down in
the suit brought against Harry T.
McHugh and others as members ol
the board Of city commissioners OF
Devils Lake by Gus Thomas, . tax.
payer.
A demurrer by the city commission
ers to the original complaint filed by
Thomas was sustained by the dis
trict court Of Ramsey county, and the
ruling Of the lower court was af-
firmed in Judge Moellring,s decision.
In the decision, Judge Moellring
held, "a proposition submitted to the
electors Of q city, under section two.
chapter l72, laws Of 1929, as to wheth-
er q city should purchase, acquire,
build or establish an electric plant
and distributing system not to exceed
q stated maximum expenditure, and
issue special obligation bonds there
fore, payable from net earnings only,
Is not invalid for duality.
Where the governing board Of q
city is authorized by the electors
therefor to purchase or procure IN
electric plant the cost to be
paid from net earnings Of plant only,
1t = not necessary as q condition pre-
cedent, to secure q certificate Of con-
venience and necessity from the board
Of railroad commissioners.
City Authorizes Purchase
where city is authorized by the
electors to purchase or procure IN
electric plant and distributing system
for the use Of the city, It's inhabitants
and industries. the cost to be paid
from net earnings only, the board Of
railroad commissioners has no author
ity to determine, supervise or regu-
late the rates or charges fixed by the
city to the users Of electrical energy
Similarly. under like conditions.
Judge Moellring held, the consent or
approval Of the railroad commission
Is not necessary before the city can
obligate itself for the cost Of the pro-
ject.
The municipality has the power
under electors authorization, to enter
into q contract with reference there
to with deferred obligations" he held.
Under like authorization, the deci-
sion read, pledging Of earnings Of the
plant to pay cost Of construction ID
not IAN appropriation in violation Of
chapter l81, laws Of 1888, relating to
municipal utilities funds"
It Is not necessary to submit the
special obligation bonds, under these
conditions, to the board Of budget re-
view, he ruled, and the manner Of
sale Of such bonds Is In the discretion
Of the governing body, and Is not
within Contemplation" Of statutes
requiring advertising for bids.
He held further that the cost Of
such . plant under such circum-
stances, not q general obligation Of
the municipality, Is not m indebted
ness" within constitutional Or statu-
tory law limiting Indebtedness.
I. D. Cooler Of Devils Lake appear
ed on behalf Of Thomas. with r. +.
Cuthbert, ana the firm Of Lawrence,
Murphy, Fuller and Powers Of Fargo
appearing for the city.