Court Opinion

ID: 7815540
Source: CourtListenerOpinion
Date Created: 2022-09-07 17:34:50.523207+00
Date Added: 2024-06-11T16:30:35.339645
License: Public Domain

Carleton Harris, Chief Justice, dissenting. I am of the opinion that the temporary injunction should not have been issued because all of the proper parties were not before the court. Though the utility is operated by the Board, such operation is actually under the supervision of the City Council. The statute requires that the Board shall report to the Council “with reference to the conditions and affairs of the municipal plants under its control at such time and in such manner as the City Council may designate ’ and the Council has full authority to repeal or amend any ordinance which it has passed pursuant to Act 562 of 1953. This is not a taxpayer’s suit because no tax monies are involved. Edmonds is simply a customer of the utility. I am strongly of the view that the city of West Memphis and the City Council are necessary parties in the case, and since they were not before the court, there was a defect of parties, and the prayer for injunction should not have been granted. Ed. F. McFaddin, Associate Justice, dissenting. I recognize the rule to be, as stated in Riggs v. Hill, 201 Ark. 206, 144 S. W. 2d 26, and reaffirmed in Scrivner v. Portis Mercantile Co., 220 Ark. 814, 250 S. W. 2d 119: that in an appeal from an order granting or refusing a temporary injunction, the Chancellor’s exercise of discretion is usually sustained. In other words, on appeal from an order granting a temporary injunction, we are usually inclined to leave undisturbed the Chancellor’s discretion because the merits of the case have not been fully decided. But, in the case at bar, I cannot agree that the temporary injunction should have been issued, because I am of the opinion that the Court did not have before it all proper parties; and this question had been raised by a demurrer1 which the Court had overruled before granting the temporary injunction. This is the first time that Act No. 562 of 1953 (as now found in § 19-4051 Ark. Stats.) has been before this Court; and I think the Act deserves serious study. The Act allows a City of the first class, which owns a municipal utility, to enact an ordinance appointing a commission of five • citizens to operate the public utility. I will refer to these five as the ‘ ‘ Commissioners ’ ’. The title to the public utility does not pass from the City to the Commissioners; and there is nothing in the Act that says that the Commissioners have the power to bring or defend lawsuits. The title to the property still remains in the municipality,2 and the Commissioners are merely trustees of the municipality in the operation of the utility and at all times subject to the action of the City Council. I am thoroughly of the opinion that the trustees of a trust have no power to deal with themselves in handling the trust funds. But I think the beneficiary of the trust (that is, the City Council) should first he called on to stop such dealings, rather than for a mere utility user (as was the appellee Edmonds in this case) to maintain a plenary suit. Edmonds does not occupy the position of a taxpayer in this case because there are no tax moneys involved: he is a mere utility user. He could no more sue the Commissioners, as he is here trying, than any utility user could sue the Board of Directors of the corporation owning and operating a utility system. Edmonds should have gone to the City Council of West Memphis and asked the Council to investigate this matter of the Commissioners dealing with themselves. If the Council had not acted, then Edmonds could have made proper allegations to that effect and joined the City of West Memphis and the Council members in the litigation. I think that such demand on the Council was essential. The situation of Edmonds in the case at bar is very similar to that of a minority stockholder in a corporation, who may think the Board of Directors to be doing something wrongful : such minority stockholder must first go to the Board of Directors (that is, the City Council in the case at bar) and ask the Board of Directors to act. Then if the Board of Directors fails to act, the corporation and the directors must be joined in the litigation brought by such minority stockholder. See Red Bud Realty Co. v. South, 153 Ark. 380, 241 S. W. 21. If one utility user in West Memphis can bring a suit against the Commissioners whenever he pleases, then every other utility user can at any time bring such a suit against the Commissioners of the utility; and the result will be that the Commissioners will be busy defending lawsuits rather than operating the utility and reporting to the City Council. Section 9 of the Act No. 562 of 1953 says that the Commissioners will report to the Council; and that is where Edmonds should have first gone to ask for redress. There is no allegation in the complaint in this case that Edmonds ever took the matter up with the City Council of West Memphis. In the evidence it is said that the Mayor agreed to something when Edmonds talked to him; but the Mayor is not the City Council. I think the City of West Memphis and the City Council are necessary parties in this case. This is not a taxpayer’s suit and cannot be brought under Article 16, Section 13 of the Constitution. Neither is this a suit within the purview of § 20-113 Ark. Stats., because I consider Section 8 of the Act 562 to be impotent: it violates Art. Y § 23 of the Constitution. In the final analysis, this is a suit brought by a utility user against the Commissioners who are trustees for the City; and the City and its Board of Aldermen are essential parties to this litigation. Until those parties were before the Trial Court there was a defect of parties and the temporary injunction should not have been issued. For these reasons I respectfully dissent.   The demurrer read: “That the petitioner has not the legal capacity to maintain this cause of action in that there _ are no tax moneys involved in the operation of the utility commission of West Memphis, Arkansas paid either hy the petitioner or others that he may represent.”    Section 6 of the Act says: “Said board created pursuant to the provisions of this act shall have full power to operate and control the plant or plants entrusted to its direction by the city ordinance creating said board .... and subject to such restrictions as may be prescribed by the ordinance creating said board”. Section 9 of the Act says: “Said Board shall make due report to the City Council with reference to the conditions and affairs of the municipal plants under its control at such time and in such manner as the City Council may designate”; and Section 12 of the Act says: “Nothing contained in this act shall be construed to prohibit the city council of any city subject to the terms of this act from repealing or amending any act which it may have passed pursuant to the authority herein conferred”.