Court Opinion

ID: 6690727
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:37:31.0098+00
Date Added: 2024-06-11T16:01:06.151090
License: Public Domain

DILLO'N, J.
(dissenting). I cannot agree with the conclusion reached in this cause. In my judgment the order vacating the injunction and sustaining the demurrer should be reversed.
It is said: “The city and the defendant’s predecessor were powerless to make an irrevocable contract as to rates.” This statement is somewhat misleading. It must be admitted that the city and the company could agree upon reasonable rates, and when they did so the contract would be binding, and it would remain binding until it was changed by the Legislature, the city, or consent of the parties. All rates must be reasonable. When the defendant accepted and agreed to the ordinance, the agreement was subject to the exercise of the police power of the state, and the rate subject-matter was embodied into the contract, The burden was then upon the defendant to show that these rates were unreasonable.
Insolvency necessitating the going out of business may make it impossible to enforce the contract; yet the legal interpretation of the contract remains the same whether the company is solvent or insolvent. The solvency question affects only the remedy. “The presumption, is that the rates fixed by ordinance and agreement are fair and reasonable. Town of Woodward v. Iowa Ry. & Light Co., 189 Iowa 518, 178 N. W. 549.”
*393It is no defense to say that the contract cannot be enforced because of insolvency; neither can it be said that there is no contract when there is one, and thus confuse a legal interpretation of the contract with the remedy for its enforcement. Defendant may defeat the obligation by its inability to fulfill that obligation, but it is Obligated just the same as a matter of law.
Defendant ought not to be permitted to fix its own rates. Its grievances on the rates so agreed to can be remedied by applying to the city authorities to compel the fixing of just and reasonable rates.
Note — Reported in 193 N. W. 129. 'See American Key-Numbered Digest, (1) Electricity, KeylNo. 11, 20 C. J. Sec. 33; (2) Electricity, Key-No. 11, 20 C. J. Sec. 33; (3) Electricity, Key-No. 11, 20 C. J. Sec. 29, 9 R. C. L. 1191.
On power of municipality apart from contract 'to regulate rates to be charged by lighting company, see notes in 33 L. R. A. (N. S.) 759 and 43 L. R. A. (N. S.) 924.