Court Opinion

ID: 9687470
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:29:06.979955+00
Date Added: 2024-06-11T12:07:29.297150
License: Public Domain

TEIGEN, Justice
(dissenting).
I dissent. I believe that the Articles of Incorporation and the Bylaws of the defendant co-operative are the entire contract between the parties, and that the statutes to which the majority allude are not a part of the contract between the cooperative and the patron. The rule stated by the majority *153that “The law of the land in existence at the time a contract is entered into forms a part of that contract the same as if it were expressly incorporated therein, and the obligations of the contract are determined by the law in force at the time it is made” is a sound rule of law in proper situations. We have so held many times. State ex rel. Cleveringa v. Klein, 63 N.D. 514, 249 N.W. 118, 86 A.L.R. 1523; Baird v. Gray, 63 N.D. 640, 249 N.W. 718; Werner v. Riebe, 70 N.D. 533, 296 N.W. 422, 156 A.L.R. 1254; Dunham Lumber Co. v. Gresz, 71 N.D. 491, 2 N.W.2d 175, 141 A.L.R. 60; Kaisershot v. Gamble-Skogmo, Inc., N.D., 96 N.W.2d 666; Shimek v. Vogel, N.D., 105 N.W.2d 677; Ireland’s Lumber Yard v. Progressive Contractors, N.D., 122 N.W.2d 554. However, the rule is limited to laws which in a direct or necessary legal operation control or affect the obligation of such contract, and care should be taken that application of the rule is not extended to lengths beyond its purpose. 17A C.J.S. Contracts § 330. The statutes of North Dakota authorizing the formation of co-operative corporations provide they shall be organized and operated within the bounds set by statutory limitations. These statutes limit the scope of their operation to the purposes stated therein, and limit the powers to those granted. An electric co-operative corporation is authorized by Section 10-13-03(8), N.D.C.C., to fix, regulate, and collect rates for electrical energy furnished, but the statute does not direct an electrical cooperative corporation to fix classifications of rates. Section 10-13-06, N.D.C.C., provides that the revenues of an electrical co-operative corporation not required for the cost of operation, maintenance, and for the creation of reserves, shall be returned from time to time to the members of the co-operative in cash, in abatement of current charges for electrical energy, or otherwise, as the board of directors may determine, on a pro rata basis, according to the amount of business done with each during the period. The plaintiff has not suggested that an electrical co-operative cannot establish classification of rates, or that this Court may review the classifications made. The plaintiff bases his case on the power of the court to enforce the contractual relation between these parties. It is my opinion that the contract is established by the Articles and Bylaws, and is clear, unambiguous, and within the bounds of the statutes. The question before us is not what the co-operative may have provided in its Bylaws, nor whether provisions must he integrated into the contract by force of the statute, but whether the co-operative has lived up to the provisions of the contract between it and this plaintiff as that contract is set forth in the co-operative’s Articles and Bylaws. The statutes which the majority cite are not regulatory statutes, but merely prescribe the power which an electrical co-operative has and may exercise if it so desires. The instant contract was made within the field of the permissive legislation and is not repugnant to nor in conflict with the statutes.
The salient parts of the contract state as follows:
Section 1.
The Cooperative shall at all times be operated on a cooperative non-profit basis for the mutual benefit of its patrons. No interest or dividends shall be paid or payable by the Cooperative on any capital furnished by its patrons.
Section 2.
In furnishing of electric energy the Cooperative’s operations shall be so conducted that all patrons will through their patronage furnish capital for the Cooperative. In order to induce patronage and to assure that the Cooperative will operate on a non-profit basis to all its patrons for all amounts received and receivable from the furnishing of electric energy in excess of operating costs and expenses properly chargeable against the furnishing of electric energy. All such amounts in excess of operating costs and expenses at the moment of receipt by the Cooperative are received with the understanding that they are furnished by *154the patrons as capital. The Cooperative is obligated to pay by credits to a capital account for each patron all such amounts in excess of operating costs and expenses. The books and records of the Cooperative shall be set up and kept in such a manner that at the end of each fiscal year the amount of capital, if any, so furnished by each patron is clearly reflected and credited in an appropriate record to the capital account of each person, and the Cooperative shall within a reasonable time after the close of the fiscal year notify each patron of the amount of capital so credited to his account. All such amounts credited to the capital account of any patron shall have the same status as though they had been paid to the patron in cash in pursuance of a legal obligation to do so and the patron had then furnished the Cooperative corresponding amounts for capital.
The patrons of the Cooperative, by dealing with the Cooperative, acknowledges that the terms and provisions of the Article of Incorporation and By-Laws shall constitute and be a contract between the Cooperative and each patron, and both the Cooperative and the patrons are bound by such contract, as fully as though each patron had individually signed a separate instrument containing such terms and provisions. The provisions of this Article of the By-laws shall be called to the attention of each patron of the Cooperative by posting in a conspicuous place in the Cooperative’s office.
Section 3.
Each member shall, as soon as electric energy shall be available, purchase from the Cooperative all electric energy used on the premises specified in his application for membership, and shall pay therefor monthly at rates which shall from time to time be fixed by the Board of Directors; provided, however that the Board of Directors may limit the amount of electric energy which the Cooperative shall be required to furnish to any one member. It is expressly understood that amounts paid for electric energy in excess of the cost of service are furnished by members as capital and each member shall be credited with the capital so furnished as provided in these By-laws.

The evidence establishes that the plaintiff, although he received single-phase 220 volt power, is charged a commercial rate which is a higher rate than that charged other members who receive the same power. It is established as the reason for this classification that the plaintiff is served from a three-phase line used to serve commercial patrons, which was built past the plaintiff’s premises to serve a commercial elevator. The record, however, also establishes that although the plaintiff is served from a three-phase line, the cost to the co-operative in furnishing to him single-phase 220 volt power from this line is no greater than the cost of power served to other users of single-phase 220 volt power from single-phase 220 volt lines and for which they are billed at the lower, regular, or combination rate, and that during the period in question in this action the plaintiff has paid $1,041.97 more than he would have paid had he been billed at the regular rate.
The record also establishes that the defendant co-operative has not credited to the plaintiff’s capital account all of the amounts received by it from this plaintiff in excess of operating costs and expenses properly chargeable against the furnishing of such electrical energy, and that the additional amount properly creditable to his capital account during the period in question is the sum of $1,041.97. It appears to me that the plaintiff is entitled to recover from the defendant co-operative as additional credit to his capital account the said amount, and that therefore the judgment of the trial court should be reversed and a judgment entered requiring the defendant to set up on its books a capital credit to the plaintiff in the amount of the excess which it has charged him for electrical energy over and above the regular rate.