Van Der Zee v. Means

281 N.W. 460, 225 Iowa 871

• Court: Supreme Court of Iowa
• Decided: September 27, 1938
• Docket: No. 44216.
• Status: Published

Opinions

Miller, J.

— The contention of the contestants requires the recital of certain events preceding the election in question.

The Iowa City Light & Power Company for a number of years distributed electricity in Iowa City under a franchise which expired in January 1934. On October 11, 1932, a special election was held in said city at which was submitted to the voters the question of the renewal of said franchise for a period of 25 years, and at which election the renewal thereof was defeated by a vote of approximately 3 to 1. On April 17, 1934, a special election was held in said city for the purpose of voting on an issue of $917,000 of revenue bonds for the establishment of a municipally owned electric light plant and distribution system, which proposition carried by a majority of 155 votes. Following the special election in April 1934 an ordinance was introduced before the city council providing for the establishment of a municipally owned plant which was tabled, and in October 1934 the same council returned unexecuted to the Federal government a PWA contract for a loan and grant which had been requested by the city, and which had been allocated by the PWA.

At the regular city election in Iowa City in March 1935 the ballot contained a Municipal Ownership Non-Partisan ticket, as well as the Republican and Democratic tickets. At this election all candidates upon the Municipal Ownership Non-Partisan ticket were elected; following which the new council took office the fore part of April 1935; enacted the ordinance that had been tabled in 1934; and filed a new application with the PWA for a loan and grant in connection with the construction of said plant, which was later changed to an application for a grant only. In August 1935 a grant was made to the city of $413,000, of which amount nearly $30,000 was advanced. The council then engaged engineers to prepare plans and specifications and published notices in December 1935 calling for bids on the light plant and equipment. However, all further progress of the council relative to letting any construction contract, or proceeding with the construction of the plant and distribution system, was stayed by an injunction, which enjoined the council from using tax funds in connection with said project; and by a restraining order procured by the light, and power company which prohibited the advancement of any further PWA funds to the city, and likewise enjoined the city from doing any act or things in furtherance of the plan of erecting and acquiring a municipally owned plant.

At a meeting of the council on May 27, 1935, a resolution was adopted directing the Iowa City Light & Power Company to submit to the city a sale price for its electric distribution system in Iowa City and immediate vicinity. On June 20, 1935, the company replied thereto by a letter addressed to the mayor and city council, therein refusing to dispose of its distribution system only, but therein offering to sell its entire electric property, consisting of power house, dam, water rights, transmission lines and distribution system, for the sum of $1,125,000. In that letter the company also proposed that if purchase of its entire electric property was not consummated,, that it would reduce the rates upon electric current furnished by it, and therein submitted a schedule of rates under such proposed reduction; stating however in its offer to so reduce rates, as follows:

“Confronted, as the Company is, by ouster proceedings with the threatened destruction of its property and probable protracted litigation, it must seem reasonable that the Company would not unconditionally lower its schedule of rates now in effect unless the threat of municipal ownership is withdrawn, and we, therefore, propose that the foregoing rates shall be applicable only after the City has taken some action indicative of the abandonment of the municipal ownership plan. Therefore, effective on the date of the first meter readings in July, the Company proposes to keep the records of each customer so as to show the amount of the monthly charge for electricity on the basis of the present rates, upon which basis payment will be made. The Company will also keep the record of the customers’ accounts on the basis of the reduced rates herein proposed. The difference between the two accounts will be impounded and paid to each customer immediately upon the abandonment by the City of its present intention to establish a municipal electric light and power plant and distribution system, and the reduced rates will be effective thereafter.”

On June 27, 1935, the mayor and council wrote a letter to the light and power company, therein stating that the company’s offer to sell its entire electric property for the sum of $1,125,000 could not be accepted as the voters at the election in April 1934 had authorized an expenditure of only $917,000 for the establishment of a complete plant and distribution system. This letter also stated that the proposed rate contract of the company was of doubtful enforceability and that municipal ownership could not be abandoned in exchange for an unenforceable and temporary rate agreement. The light and power company on July 5, 1935, replied thereto, stating that for the sole purpose of removing any doubt as to the enforceability of its rate reduction proposal, it was willing to grant the city a five-year option to purchase for a consideration of $900,000, plus net additions after July 1, 1935, the entire .electric plant and electric distribution system of the company, including the dam in Coralville and transmission lines to Iowa City; such proposed. option to be exercisable only upon the company’s failure to abide by the terms of the reduced rate proposal; and that the consideration for said option would be the abandonment by the city council of its intention to establish a municipal light plant and distribution system. The record contains no mention of any further communication between the council and the light and power company.

Commencing with the month of August 1935, and every month thereafter, the Iowa City Light & Power Company sent to each of its electricity consumers, some 5,500 in number, a monthly notice therein referring to the contents of its two letters of June 20, 1935, and July 5, 1935, to the mayor and council; stating that, in conformity with its reduced rate proposal, it was keeping a record of each account on the basis of the proposed reduced rates in addition to the record of each account on the present rates; that the difference between the two accounts was being impounded and would be paid each consumer in cash whenever the council abandoned its plans for a municipal light plant; and each of said monthly notices also showed the exact amount impounded to the credit of the customer. Likewise, during the period from August 1935 to March 1937, the company openly advertised in the local newspapers of Iowa City that these impounded funds would be paid its customers whenever the city council abandoned its plans for a municipal light plant. This amount of impounded funds naturally increased every month, and in February, immediately preceding the city election held on March 29, 1937, this fund had reached a grand total of $72,294.42.

On March 5, 1937, at a convention held in Iowa City, a ticket known as the Citizens Non-Partisan ticket was selected for the city election to be held on March 29, 1937. At this convention the incumbents were selected as candidates for the city council ; and a platform was adopted in which was included the following plank:

“We pledge strict and fair regulation of our public utilities so that essential services may be supplied to the consumer at minimum cost now, and whatever future profits may accrue will be equitably shared among the rate payers, the taxpayers and the owners of these properties.

“We are opposed to the building of a municipal light plant or to any other project which involves the city in further obligation without bringing the citizens increased benefits. We believe THAT NO FRANCHISE SHOULD BE GRANTED TO ANY PRIVATELY OWNED LIGHT AND POWER COMPANY UNTIL THESE CONTINUED WILLINGNESS TO SERVE THEIR SUBSCRIBERS EFFICIENTLY AND AT RATES JUSTIFIED BY THEIR INCOME, HAS BEEN PROVEN TO THE VOTERS' SATISFACTION. ’ ’

On March 7, 1937, a convention was held by the Municipal Ownerhsip League, wherein the contestants were selected as candidates for the city council, which convention adopted a platform again favoring the building of a municipal light plant. Both platforms were widely and generally circulated in Iowa City prior to the election.'

In the notices of contest appellants claim that the incumbents are not eligible to hold, and were not legally elected to the offices of councilmen, for the reason that as candidates for such offices they concurred in, joined with, and were parties to an offer made by the Iowa City Light & Power Company, to bribe and illegally influence the voters in the aforesaid city election, in the election of incumbents to the offices of councilmen; it being the contention of appellants that the offer of the Iowa City Light & Power Company to reduce electric rates and to pay each electricity consumer a definite sum in cash, conditioned upon the city council abandoning plans for building a municipal plant, was an offer of a bribe made for the specific purpose of influencing all electric consumers, as electors, to elect to the city council candidates who publicly announced they were opposed to building a municipal plant, and that appellees acquiesced, joined in and ratified said offer of the light and power company, and thereby became parties to an offer of bribes to the electors.

Section 981 of the 1935 Code sets out the grounds upon which an election of a candidate for office may be contested by any person eligible to such office, and contains seven separate grounds of contest. The actions involved herein are all predicated upon the fourth ground thereof, which reads as follows, to wit:

“That the incumbent has given or offered to any elector, # * # any bribe or reward in money, property, or thing of value, for the purpose of procuring his election.”

Appellants contend that the action of the light and power company in mailing monthly notices to each of its 5,500 customers, of its offer to reduce rates and pay in cash the impounded funds when the city council abandoned its plans for the construction of a municipal plant, constituted bribery upon the part of said company to influence electors to vote for candidates opposed to building a municipal plant. However, we do not find it necessary to determine whether or not this conduct on the part of the light and power company did in fact constitute bribery. Without determining that question, but conceding for the purpose of analysis only, that this conduct constituted bribery, the same could not and would not invalidate the election of appellees, unless by some act or conduct upon their part they acquiesced in, and approved and ratified such offers on the part of the light and power company, and thereby in effect became parties to such offer. The very wording of the statute in question requires that the incumbent himself must have given or offered to an elector a bribe or reward in money, property, or thing of value, for the purpose of procuring his election.

Appellants recognize the necessity of establishing the acquiescence in and the approval and ratification of the claimed bribery by the incumbents themselves, and claim that the facts hereafter set out establish such acquiescence in, and approval and ratification of such claimed bribery. In January 1934 there appeared in Iowa City an organization known as the Iowa City Consumers Protective Association of which organization Herman Smith was president, Will J. Hayek was secretary-treasurer, and Dr. D. F. Fitzpatrick was a member of the board of directors. This organization, through advertisements in newspapers and through circulars distributed among the voters, conducted a very active and intensive campaign against the proposal to establish a municipally owned plant preceding the special election of April 1934, and likewise, preceding the city election of March 1935, actively campaigned against the candidates on the municipal ownership ticket. Following said election of March 1935 this association continued to carry on its very active and intensive campaign unfavorable to municipal ownership, and in favor of the abandonment of the plans for the construction of a municipal plant, and the acceptance of the reduced rate schedule and impounded funds as proposed by the light and power company. Said Herman Smith, Will J. Hayek and Dr. D. F. Fitzpatrick were active in the convention at which the Citizens Non-Partisan ticket was nominated, and also active in the campaign preceding the March 1937 election in behalf of the appellees. Appellants claim that there was a conspiracy between the light and power company, the Consumers Protective Association and the Citzens Non-Partisan organization to elect appellees to the city council for the purpose of abandoning the plans for the municipal plant then in the process of execution, and base this contention upon the association of Herman Smith, Will J. Hayek and Dr. Fitzpatrick with the Consumers Protective Association and the Citizens Non-Partisan organization. .The evidence establishes that Herman Smith is a member of the firm of Smith & Berger, general contractors in Iowa City, which firm has done work for the light and power company as independent contractors on a cost-plus basis; that Will J. Hayek, although not a regular counsel for the company, had been retained on two or three occasions as its attorney in particular matters; and that Dr. Fitzpatrick was the regular physician for the company. This evidence constitutes the basis of appellants’ contention of such conspiracy, but the record fails to reveal any showing whatever that the company had anything to do with the organizing, financing or determining policies of either of said organizations. Bach of the incumbents testified that he was opposed to municipal ownership in Iowa City; that he had been so opposed long before becoming a candidate, and had joined with other citizens similarly opposed in organizing the Citizens Non-Partisan party for the purpose of combatting municipal ownership. None of the appellees was approached or talked to by any representative of the light and power company relative to being a candidate on the Citizens Non-Partisan ticket, other than appellee John Ostdiek, who was first approached by Will J. Hayek, who, as we have heretofore shown, had had occasional employment as an attorney for the light and power company. With this record before us we are unable to agree with the contention of appellants that there existed a conspiracy between the light and power company and the appellees; or that the evidence establishes such acquiescence in, and approAml and ratification of the claimed bribery of the light and power company by appellees as to make them parties thereto.

The result of this conclusion leaves remaining for our determination the question of whether or not appellees must be disqualified from holding the offices to which they were elected, for the reason that at the time they were candidates for election upon the Citizens Non-Partisan ticket, upon a platform opposed to municipal ownership, that they knew that the light and power company had for some eighteen months been informing their customers by monthly circulars, and by' adAi-ertisements, that such customers would be paid in cash the impounded fund amounting to over $72,000 upon the abandonment by the council of its plans for the construction of a municipal light plant. The evidence is undisputed that each of the appellees was opposed to municipal ownership, and Avithout any showing that they were parties to the offers made by the light and power company, Ave do not believe that they were disqualified under the quoted section of the Code of Iowa relevant thereto. If the contention of appellants is to be sustained and appellees are to be disqualified on account of being candidates upon a ticket opposed to the principle of municipal ownership, the result of necessity must be that the offer made by the light and power company to the city council and to their customers precluded all possibility that any group of candidates could have run in 1937 on a platform opposed to municipal ownership. The fact that some third person may have given or offered a bribe for the purpose of procuring the election of some candidate certainly should not be construed as disqualifying tbe particular candidate from bolding office, unless of course tbe candidate actually participated therein and approved thereof.

Appellants cite numerous cases to the effect that the giving or offering of a reward, money or thing of value ly a candidate to an elector for the purpose of influencing his vote, disqualifies the candidate from holding office, and include therein the Iowa case of Carrothers v. Russell, 53 Iowa 346, 5 N. W. 499, 36 Am. Rep. 222. We are heartily in accord with the principle of law pronounced in each of those cases, but are not here confronted with a state of facts wherein said principle is applicable, and being convinced that appellees herein were not parties to the claimed bribery, it follows under the provisions of the statutory law of this state that they were not disqualified from holding the offices to which they were elected.

The trial court rendered its decision on July 15, 1937, and on the same date appellants served and filed their notice of appeal. Thereafter, on the 31st day of August, 1937, appellants filed a motion for new-trial; therein alleging that during the month of August 1937, the city council of Iowa City enacted an ordinance repealing the ordinance passed by the previous council providing for the establishment of a municipal light plant and distribution system in Iowa City; and likewise passed a resolution surrendering the grant of $413,000 from the PWA; and that on the 25th of August, 1937, the light and power company paid to their consumers the impounded funds. Therein they claimed that said facts constituted competent newly discovered evidence sufficient to warrant a new trial. The trial court overruled this motion for new trial, and appellants now contend that the overruling of said motion for new trial was erroneous. We find it unnecessary to determine whether or not these alleged facts occurring subsequent to the trial come within the rule announced in Guth v. Bell, 153 Iowa 511, 133 N. W. 883, 42 L. R. A. (N. S.), 692, Ann. Cas. 1913E, 142, to the effect that acts and declarations, subsequentto the trial, made by the successful party and inconsistent with his right to recover, may be shown as a ground for a new trial. Such facts must be material and have definite probative value, and we fail to see where these claimed facts would prove of value to appellants. Such action upon the part of the city council was simply the fulfillment and carrying out of the platform plank of the Citizens Non-Partisan party rel- alive to municipal ownership. Finding as we do that the evidence fails to show that appellees were disqualified on, account of having participated in the offer of a bribe, this subsequent action could not be held to establish that thereby they did participate in the offer of a bribe. Having reached the conclusion herein set out, it follows that the action of the trial court must be and the same is hereby affirmed.

In view of the conclusions that we have reached upon the merits of the case, it is unnecessary to pass upon the motion of the appellee R. J. Phelps to dismiss the appeal of appellant George E. Johnston. — Affirmed.

Stiger, C. J., and Mitchell, Sager, and Donegan, JJ., concur. Kintzinger and Richards, JJ., dissent.