Court Opinion

ID: 9707971
Source: CourtListenerOpinion
Date Created: 2023-08-26 02:26:14.079596+00
Date Added: 2024-06-11T18:22:40.711180
License: Public Domain

PAULSON, Judge
(dissenting).
The majority grants an injunction to MDU against the REC prohibiting the REC from serving the new high school. The injunction, however, is stayed until MDU either purchases or condemns the REC’s line and equipment with which it is presently serving the high school. The injunction, therefore, is of minimal value to MDU for, in all probability, the REC will not voluntarily sell such property and I am unable to find any statute which gives MDU the right to condemn the REC’s property.
On this subject, it is stated in 173 A.L. R. 1362, at page 1367:
“The power of a municipality or other public body to take for public utility purposes property of a public service corporation in use for its peculiar purposes must rest upon legislative authority granted either expressly or by necessary implication.”
And, at page 1379, 173 A.L.R.:
“The property of one public service corporation can be taken by another under eminent domain when, but only when, the authority so to do is given by the legislature either expressly or by necessary implication.”
And, at page 1384, 173 A.L.R.:
“In case the taking would amount to no more than a change in ownership, without evident advantage to the public, the authority cannot be made out by ‘necessary implication’ (in fact it has been doubted that express authority for such a taking could be supported).”
To the same effect is 1 Nichols, Eminent Domain § 2.2 [9] (1964), which states:
“Ordinarily, property already devoted to a public use cannot be condemned for the purpose of subjecting it to the same use in the hands of another party. This, in effect, would merely be the taking of property from one party and transferring it to another without any new benefit inuring to the public.”
I can find no legislative enactment in North Dakota which would expressly grant to MDU the right to condemn the line and equipment of the REC. Neither can I find a statute which implies such right (according to 173 A.L.R. quoted above, an implied right would not suffice). Indeed, the majority even concedes that the State’s statutes do not provide for a contingency of *735this kind. Section 32-15-04 of the North Dakota Century Code provides that the equipment belonging to the REC would be property subject to a taking by eminent domain. However, § 32-15-05, N.D.C.C., requires that the use to which the property would be put by MDU must be more necessary than the use to which the REC is applying the property. Since both MDU and the REC would use the property for serving the high school, the use by either would not constitute a more necessary public use. Furthermore, the use of the property by the REC is benefiting the public to a greater degree since the REC under its contract with the school district has agreed to serve the school district with power at a lower rate than MDU’s.
Just as the statutes of this State are silent on the right of MDU to condemn the property of the REC, the Constitution of the State of North Dakota is also silent. The right of eminent domain as set forth in § 14 of the North Dakota Constitution provides for the taking of private property for public use subject to the restrictions that such property shall not be taken without just compensation or by a method which deprives a person of property without due process of law. However, a perusal of § 14 fails to reveal that the right of eminent domain is delegable to a public utility where such delegation has not been implemented by specific statutory authority. Section 139 of our Constitution prohibits the Legislature from passing laws which do not require the consent of the local authorities before the streets and highways of a city can be used for electric power purposes, but § 139 of the North Dakota Constitution is not applicable here, since the REC’s line does not parallel or cross any streets within the city of Crosby.
The irony o.f the majority opinion is that it apparently recognizes the authority of 173 A.L.R. quoted above, for it cites with approval the case of Missouri Public Service Co. v. Platte-Clay Elec. Coop., 407 S. W.2d 883 (Mo. 1966). The statute involved in the Missouri case provides in effect that when a cooperative is serving customers who are subsequently annexed into a city, the franchisee of the city may purchase the lines and equipment of the cooperative and if the parties cannot agree on a fair price, the public service commission has the authority to fix a fair price. Even with this statute the Supreme Court of Missouri held that if the cooperative refused to sell, the court could not force it to do so because the statute did not explicitly require the cooperative to sell — it was only permissive. In view of the favorable citing by the majority of the Missouri case, it is inconceivable that a North Dakota court would order the REC to transfer its property to MDU.
In view of the importance of the issue at bar and the widespread potential consequences of the opinion of the majority, I find it imperative to point out to the majority and to the Legislature the case of Morgan Co. R. E. Mem. Corp. v. Public Serv. Co. of Ind., 255 N.E.2d 822, 824 (Ind. 1970), and the Indiana statute quoted therein, which provides as follows:
“Burns’ Ind.Stat.Ann. § 55^1418a, I.C. 1971, 8-1-13-19. . . .
“Municipality annexing territory served by electric utility — Purchase of property —Condemnation.—Whenever a municipality in which a public utility (including a corporation organized, or admitted to do business, under this act [§§ 55-4401— 55-4426]) is rendering electric utility service under a franchise, license or indeterminate permit or in which a municipally owned utility is rendering electric utility service, as the case may be (such public or municipal utility being hereinafter called the ‘franchised utility’), annexes additional territory and such annexed territory includes any territory in which the franchised utility was not authorized to render electric utility service immediately prior to such annexation but in which some other public utility (including a corporation organized, or admitted to do business, under this act) or municipally owned utility (such public *736or municipally owned utility being hereinafter called the ‘other utility’) was lawfully rendering electric utility service at such time, then the franchised utility and the other utility shall promptly negotiate for the purchase by the franchised utility of the property owned by the other utility within the annexed territory and used and useful by the other utility in or in connection with the rendering of electric utility service therein. In the event that such property has not been purchased by the franchised utility within 90 days after such annexation takes place, then the franchised utility may bring an action in the circuit or superior court of the county where such municipality (or the major part thereof in area) is located against the other utility, as defendant, for the condemnation of such property of the other utility. Until and unless such purchase or condemnation is effected, the other utility shall have authority to operate within the portion of the .annexed territory in which it zuas lawfully rendering electric utility service immediately prior to such annexation. [Acts 1935, ch. 175, § 18A, as added by Acts 1953, ch. 48, § 2, p. 153.]” [Emphasis added by Indiana Supreme Court.]
In my opinion this Indiana statute represents the type of specific statutory authorization which 173 A.L.R. and the Supreme Court of Missouri would require before MDU could force the REC to sell its property.
The author of the majority opinion states that the problem of MDU’s condemning or purchasing the REC’s property within the city of Crosby does not arise in this case because the REC owns no property within the city of Crosby. The logic supporting this argument is that — by the contract entered into between the school board and the REC- — -the underground line, the pad, and the transformer became the property of the school district. The majority does not reconcile this logic with the fact that it declares the contract between the school board and the REC “unlawful”. If a contract is “unlawful”, I believe that it is therefore void and cannot transfer property. It is my opinion that the contract is not “unlawful” since it was entered into pursuant to authorization from the Legislature in Chapter 10-13 of the North Dakota Century Code. The matter of compensation for the property must still be decided, however, for the transfer of the property to the school district was a part of the consideration for the contract.
The remedy granted to MDU is not the only ground on which I disagree with the majority. I disagree with the holding of the majority that the power of a cooperative to serve its customers ceases when the customers are annexed into a city which has not granted a franchise to the cooperative. In my disagreement with this holding of the majority I am supported by nearly every jurisdiction in which I have found a case on the subject. Sec Mississippi Power & L. Co. v. Capital Elec. Power Ass’n, 222 So.2d 399 (Miss. 1969), appeal dismissed 396 U.S. 113, 90 S.Ct. 398, 24 L.Ed.2d 308; Clarke-Washington Elec. M. Corp. v. Alabama Pow. Co., 272 Ala. 598, 133 So.2d 488 (1961); Unity Light & Power Co. v. City of Burley, 92 Idaho 499, 445 P.2d 720 (1968); Caddo Electric Cooperative v. State ex rel. Whelan, 391 P.2d 234 (Okl. 1964); Montana Power Co. v. Vigilante Electric Coop., Inc., 143 Mont. 119, 387 P. 2d 718 (1963); Missouri Public Service Co. v. Platte-Clay Elec. Coop., 407 S.W.2d 883 (Mo.1966); Pee Dee Electric Member Corp. v. Carolina P. & L. Co., 253 N.C. 610, 117 S.E.2d 764 (1961); Georgia Power Co. v. Altamaha Rural Elec. Mem. Corp., 217 Ga. 376, 122 S.E.2d 250 (1961); Woodruff Elec. Coop. Corp. v. Arkansas Pub. Serv. Com’n, 234 Ark. 118, 351 S.W.2d 136 (1961); and Town of Coushatta v. Valley Electric Member. Corp., 139 So.2d 822 (La. App.1962, on rehearing).
The sole exception to this rule is Tennessee [Franklin Pow. & L. Co. v. Middle Tenn. Elec. Mem. Corp., 222 Tenn. 182, 434 S.W.2d 829 (1968)], but it should be noted that Tennessee has a statute (T.C.A. § 6-*737318) which provides that an annexing municipality shall have the exclusive right to provide utility functions in any territory which it annexes notwithstanding any other statute. It is interesting to note that the Tennessee statute provides the municipality with two alternatives — either to buy the cooperative’s lines or else to grant the cooperative a franchise.
The Legislature of North Dakota, but not the majority of this court, recognizes that a public utility and a cooperative can both serve within the same municipality, for it provided in § 49-03-01.3, N.D.C. C, that a public utility in extending its service within a municipality “shall not interfere with existing services provided by a rural electric cooperative”. Since this section (§ 49-03-01.3, N.D.C.C.) makes no mention that the cooperative must be franchised by the municipality, it cannot be presumed that a municipality can exclude a cooperative by refusing a franchise when the Legislature provides in § 10-13-04, N. D.C.C., that a municipality with less than 2500 population is a “rural area” in which a cooperative is authorized to serve.
I find it indeed regrettable that the majority should base its decision on a holding which is contrary to the overwhelming weight of authority in other jurisdictions when the controversy in the case at bar could be decided on a much narrower issue. In my opinion this case should be decided on the issue of whether or not the REC was serving the school prior to annexation. If the majority is convinced that MDU has the lawful right to serve the new Divide County High School, I would suggest that they adopt the rule that an REC cannot serve an annexed customer unless it is serving the customer prior to annexation and then hold that the furnishing of power to the light pole prior to annexation did not constitute service to the high school. Such a holding would not be contrary tO’ the overwhelming weight of authority in other jurisdictions and would not subject the courts of this State to the avalanche of litigation which will surely result if the majority opinion, as now written, stands. If the majority opinion, as now written, prevails, I foresee litigation concerning every REC customer currently within the city limits of every city (above or below 2500 population) within the State. The result of such litigation would be an injunction prohibiting the cooperatives from serving such customers with the provision that the injunction be stayed until the appropriate franchisee buys or condemns the cooperative’s lines and equipment — an occurrence which, as discussed previously, can never occur.
While I would urge the majority to adopt the narrower issue which I propose, I still cannot agree that MDU has the lawful right to serve the Divide County High School. Section 10-13-04, N.D.C.C., provides that the city of Crosby is a “rural area” in which the REC is authorized to do business. Section 40-05-01, N.D.C.C., authorizes the city of Crosby to enact ordinances which are “not repugnant to the . laws of this state”. It is clear to me that Ordinance No. 220 of the city of Crosby is repugnant to § 10-13-04, N.D. C.C. The majority circumvents the clear intent of the Legislature by holding that customers who are annexed into a city are automatically “persons who are receiving central station service” from the franchisee even though they have never done business with the franchisee and could not have done so for the reason that the franchisee could not extend service beyond the city limits without a certificate of public convenience and necessity (§ 49-03-01, N. D.C.C.). The intent of the Legislature in using the language “persons . . . who are not receiving central station service” in § 10-13-01, N.D.C.C., was to prohibit a cooperative from serving customers who are already receiving power from another source.
In Williams Electric Coop. v. Montana-Dakota Util. Co., 79 N.W.2d 508 (N.D. 1956), at page 521, this court construed the phrase “not receiving similar service from *738another utility or electric cooperative corporation” by stating:
“[This phrase] . . . has reference to service in fact as distinguished from ability to give service. It denotes actual physical delivery of electrical energy.” [Emphasis added.]
The majority does not explain why the similar phrase “persons who are receiving central station service” does not have reference to service in fact as distinguished from ability or desire to provide service.
Another reason why I believe Ordinance No. 220 should not apply to the REC is that the REC had established the school district as a customer at the location of the new high school prior to the enactment of the ordinance and was serving the school district outside of the then-existing city limits. In 6 McQuillin, Municipal Corporations [3d Ed. (1969 Revised Volume )], § 20.69, at page 184, it is stated:
“Thus, it is said that an ordinance speaks only from the time that it goes into effect. An intention that they are to have a retrospective effect will not be presumed, but must be manifested by clear and unequivocal language.”
Since Ordinance No. 220 in no way purports to be retrospective, it cannot affect the business relationship between the REC and the school district which was entered into prior to the passage of this ordinance, as well as prior to the passage of the annexation ordinance.
For the reasons stated, I would affirm the judgment of the district court.