Napa Valley Electric Co. v. Calistoga Electric Co.

STURTEVANT, J., pro tem. The plaintiff brought this action against the defendant to compel it to convey to plaintiff its properties on which it had given the defendant an option. [478]The lower court sustained a demurrer to the plaintiff’s amended complaint, the plaintiff elected not to amend, judgment was entered in favor of the defendant, and the plaintiff has appealed on the judgment-roll. The plaintiff is a public service corporation serving electric energy to the inhabitants of St. Helena, and the defendant is the same kind of a corporation serving the inhabitants of Calistoga. December 31, 1914, each corporation executed to the other an option to sell to the other. The plaintiff first sought to exercise its option, and, as the defendant failed to comply, this action in specific performance was commenced. In its amended complaint the plaintiff does not allege that either the plaintiff or the defendant has “secured from the Railroad Commission of the state of California an order authorizing the defendant to sell to the plaintiff. ’ ’ The defendant claims such an allegation is a prerequisite to a cause of action in such a case. The plaintiff urges (1) that if such is the law, then no contract to sell a public utility plant can be enforced; and (2) that the objection is premature. We shall consider these contentions together.' Subdivision “a” of section 51 of the Public Utilities Act (Stats. 1911 [Ex. Sess.], p. 44), provides:

“No . . . electrical corporation . . . shall henceforth sell, lease, assign, mortgage or otherwise dispose of or encumber the whole or any part of its . . . line, plant or system, necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor by any means whatsoever, direct or indirect, merge or consolidate its . . , line, plant or system, or franchises or permits or any part thereof with any other public utility, without having first received from the commission an order authorizing it so to do. Every ysuch sale . . . made other than in accordance with the order and approval of the commission authorizing the same shall be void. ...”

Section 76 of the same statute (page 61) provides:

“Any public utility which violates or fails to comply with any'provisions ... of this act ... is subject to a penalty of not less than $500 nor more than $2,000 for each and every offense.”