Court Opinion

ID: 7070451
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:37:18.092218+00
Date Added: 2024-06-11T16:12:34.553134
License: Public Domain

Dissenting Opinion
“TREANOR, J.
DISSENTING. — Under the law of In-
diana the municipality of Huntington in 1914 acquired full power to own and operate a public utility. The fact that 'the operation of a utility is treated by the law of this state as a non-governmental function does not change the fact that the municipality of Huntington acquired the legal power to engage in the business of operating the utility. I do not believe .that this power can be lost by non-users. The fact that public officials of Huntington did not immediately proceed in the business of furnishing electric power to pri*41vate individuals cannot be utilized by the appellee as a legal ground for forfeiture of such power by the municipality of Huntington. To allow the contention of appellee in this case runs counter to the general rule that prescriptive rights cannot be acquired against the State or its political subdivisions, and the corollary that the failure of officials-to take action to assert rights or powers of the State or its subdivisions cannot be taken advantage of to acquire prescriptive rights by private individuals.
“The power of a municipal corporation to own and operate a public utility belongs to it as a political subdivision of the state; and the quality of the pov/er is not different from the power to carry on strictly governmental activities. The classification of municipal functions into governmental and non-governmental has been used chiefly as a basis for relieving municipalities from liability for negligence of agents; but the considerations therein involved afford no logical basis for the conclusion that a municipal corporation can lose rights or powers by non-user even though these relate to non-governmental functions.
“Furthermore, courts have no power to grant indeterminate permits to persons or corporations, private or municipal, to engage in the business of a public utility. Nor do they have power to revoke such permits either directly by adjudicating a cause for revocation or indirectly by adjudicating a forfeiture. If cause for forfeiture exists the only tribunal which has jurisdiction legally to determine the existence of that cause is the Public Service Commission of Indiana, subject only to the limited judicial review allowed by law. The Public Service Commission has not entered any order of revocation of the indeterminate permit which the Commission granted to the city of Huntington; and in the absence of such revocation the Huntington Circuit Court had no power to enjoin the city of Huntington from acting as a public utility.”
We quote the dissent above to show the lack of unanimity of the members of the Supreme Court on the question of the issue of a non-user.
In the case of Public Service Co. of Ind. v. City of Newcastle, supra, the appellant brought an action seeking an injunction against the city when the latter threatened to encroach upon appellant’s utility business in the city.
*42Evidence in said cause showed no ordinance had been adopted relative to .construction of electric power plant; that no resolution or ordinance of the city council had declared an intention to authorize or permit the city officials, or its employees, to engage in business as a public utility, and that no election had been held on the question as to whether the city should engage in the business as a public utility; that no application was ever made to the Public Service Commission of Indiana or a certificate of convenience and necessity authorized the city to engage in business, as a public utility.
The Supreme Court in its lengthy opinion narrated a history of the attempt by the city of Newcastle to construct and operate a public utilities. While the Henry Circuit Court found for the appellee on suit for injunctive relief filed by the appellant, the Supreme Court, in reversing the trial court, said that the city’s action:
“. . . indicated a desire to maintain a technical status— to preserve whatever legal rights the city might have had rather than a present intention to dedicate its plant, if it then had a plant adapted to serve the public, to a public use. A franchise or right to serve the public as a public utility is contingent upon use, and may lapse or be forfeited by non-user.”
The two cases cited above do not appear to be analogous to the case at bar.
It is the .contention of the appellee in the case at bar that a corporate power granted by statute is not lost in the same manner as corporate power conferred by a governmental regulatory agency or body. The appellee further points out, and we are in agreement, that both the Huntington case, supra, and the Newcastle case, supra, did not involve a grant of legislative statutory power but involved a franchise authorizing a grant by the Public Service Commission.
In the Huntington case, supra, the Supreme Court, at page 517, said:
*43“If the City of Huntington was or is engaged in rendering service for domestic and commercial purposes, as it .contends, it is in no better or different position from an independent corporation holding a permit from the Public Service Commission which it has not exercised by serving the public. The City of Huntington waited for more than twenty years after it was granted a permit by the Public Service Commission before it made an effort to serve the public, and when it did make an effort it did not do it in the manner prescribed by statute.”
The Public Service Commission issues a permit when it determines there is a present public need for the exercise of rights granted in the permit. Thereupon the Public Service Commission issues a “Certificate of Public Convenience and Necessity.” Should such a permittee fail to render service authorized by such certificate the public may be injured by such failure to comply with the said certificate, and such failure by non-user may result in the loss of power to the permittee. On the other hand, this situation and result would not occur when there is a specific legislative grant of power as is contained in the REMC Act.
Hence, it is our opinion that as long as the power exists in the statute creating the REMC, it cannot be lost through non-user. It appears to us that the only way this power can be destroyed is by repeal by legislation, or by direct attack on the statute as to its constitutionality. The REMC Act itself .contains no provision that the power is lost should it not be exercised for any period of time, and were we to hold that this statutory corporate power has been lost by non-user, it would in effect be an amendment of the statute.
As in the Huntington case, supra, as well as in the case at bar, the trial court held that the question as to whether the corporate power had been lost through non-user was a question of fact presented to the trial court. The trial court in the case at bar, in its general finding, held that such power had not been lost. Whether appellee has indicated an intent to *44abandon its power was also a fact question which the trial court decided in the negative.
• The contracts between the appellant and the Southern REMC, and also the Dubois REMC, contain an attached schedule of rates, and to meet statutory requirements, the contracts need be filed with the approval of the Public Service Commission. No indeterminate permits were issued to appellant in respect thereto.
We recognize that appellant possesses a property right in respect to his franchises, certificates and indeterminate permits, and thus are entitled to protection should unlawful interference with these rights arise. Kosciusko County, etc. v. Public Service Comm. (1948), 225 Ind. 666, 77 N. E. 2d 572.
In the case at bar, appellee, as authorized by statute, proposes to generate and sell electric energy to its members, to wit: local district corporations, and thence the local district corporations' will serve the patron consumers in such territory assigned to them by provision of their articles of incorporation which the Public Service Commission has approved.
Appellant’s rights to supply energy to the two (2) REMCs are based on contracts subjected to expire at a given time. The Public Service Commission gave its approval to these contracts. When the contracts ■ expire the contractual rights of appellant cease.
The claim of appellant reduced to its simplest terms seeks an injunction against the REMC, a corporate entity, which has statutory incorporate authority to generate and transmit electric energy, to enjoin such REMC from entering into competition with appellant in the sale of such energy at wholesale to appellee’s members.
We are of the opinion that appellant is not entitled to such an injunction, inasmuch as it is not entitled to go scot-free of lawful competition. The Federal Court, in the case of Alabama Power Co. v. Ickes (1938), 302 U.S. 464, 82 L. Ed. 374, and the Tennessee Electric Power Co. v. *45the T.V.A. (1939), 306 U. S. 118, 83 L. Ed. 543, set forth fundamental principles relative to their constitutionality and to the matter of lawful competition. The Supreme Court, in the T.V.A. case, supra, at page 139, said:
“The vice of the position is that neither their charters nor their local franchises involved the grant of a monopoly or render competition illegal. The franchise to exist as a corporation, and to function as a public utility, in the absence of a specific charter contract on the subject, creates no right to be free of competition, and affords the corporation no legal cause of complaint by reason of the state’s subsequently authorizing another to enter and operate in the same field.” (emphasis supplied).
We are of the opinion that the Federal Court cases listed above contain underlying principles closely analogous to the .case at bar.
Evidence of probative value shows that competition between appellant and appellee will not arise in reference to geographic boundaries of the áreas where each is given authority to act; that the issue resolves about the contention of appellant that it is entitled to be free from competition in the wholesale sale of electric energy to the two (2) REMCs. The appellant is not entitled to be free in this field, and deserves no injunction against the proposed plan of appellee.
Due to appellant’s failure to demonstrate reversible error in the case at bar, we shall not discuss more fully appellee’s contention that the issue of forfeiture may not be presented by appellant.
Having determined no reversible error we are of the opinion that the judgment of the trial court should be affirmed.
Judgment affirmed.
Carson, C. J., and Prime, J., .concur.
Cooper, J., dissents with opinion in which Cook and Pfaff, JJ., concur.
Faulconer and Smith, JJ., not participating.