The City of Fairbanks brought this eminent domain action to condemn the complete electric distribution system located in that portion of the Island Homes Subdivision which had been annexed to the City of Fairbanks. The system was owned by the appellee, Golden Valley Electric Association, and had been mortgaged, along with all of the rest of Golden Valley's electrical distribution facilities, as security for a loan from the United States to Golden Valley, pursuant to the Rural Electrification Act of 1936.
The trial court held that the United States was an indispensable party to this action, and dismissed appellant's complaint. Whether or not the court was correct in that holding is the sole issue that appellant raises on this appeal.
Civil Rule 72 deals with the subject of eminent domain. Subdivision (a) of that rule provides:
Subdivision (c) (2) of Rule 72, which pertains to the complaint in a condemnation action, provides in part as follows:
Civil Rule 19 deals with the compulsory joinder of parties. It recognizes the classes of proper, necessary and indispensable parties that were first developed in the equity courts.
The trial court held that Civil Rule 72 (c) (2), rather than Civil Rule 19, was to be looked to in determining who is an indispensable party; that the requirement in Rule 72(c) (2) that "the plaintiff shall add as defendants all persons having or claiming an interest" in the property sought to be condemned makes such persons indispensable parties; and that since the United States, as mortgagee, had an interest in the property involved in this case, it was an indispensable party.
We agree with the trial court that the United States was an indispensable party. But we disagree with the court's reasoning in reaching that result.
Civil Rule 19, which deals with classes of proper, necessary and indispensable parties, is applicable in an eminent domain action, unless within the meaning of Rule 72(a) the subject of indispensable parties is "otherwise provided" for in Rule 72 (c) (2), so that it is apparent that Rule 19 has no application in a condemnation action. We find nothing in Rule 72(c) (2) which supersedes or conflicts with Rule 19 so far as it relates to indispensable parties. The requirement in Rule 72(c) (2) that "the plaintiff shall add as defendants all persons having or claiming an interest" in the property to be condemned does nothing more than make such persons necessary parties. At that point Rule 19(b) comes into play.
In our recent decision in State, Dept. of Highways, v. Crosby
Applying the test of indispensability as stated in the Crosby case, we believe that the United States is an indispensable party in this action. Golden Valley's electric distribution facilities were mortgaged as security for a loan from the United States pursuant to the Rural Electrification Act of 1936.
These provisions reflect the basic policy of the Rural Electrification Act, which was to provide electric energy to persons residing in rural areas who were not able to receive such services from utility companies serving cities and other populated communities. The service area of Golden Valley includes not only the densely populated area within a portion of and immediately adjacent to the City of Fairbanks, but also encompasses a vast but sparsely populated rural area away from the City of Fairbanks. Presumably the densely populated areas that Golden Valley serves are profitable, whereas the sparsely populated areas are not. The former would then serve to offset the latter. If Golden Valley is deprived of its facilities in the profitable areas, then the federal policy of
In these circumstances we believe that the United States has an interest in this litigation that would be adversely affected by a judgment condemning the electric distribution facilities in the Island Homes Subdivision. It is an interest that would not be satisfied merely by repayment from the condemnation proceeds of the pro tanto portion of the money the United States has loaned to Golden Valley. The interest of the United States is not merely that of a money lender who expects repayment of its loan with interest. The interest of the United States is in seeing to it that Golden Valley is able to continue to provide electrical services at reasonable rates to the rural areas it has undertaken to serve. This it may not be able to do if the cream of its consumers of electrical energy in the densely populated areas is skimmed off by another utility, such as the City of Fairbanks.
We hold that the United States has an interest in this controversy which will be adversely affected by a judgment of condemnation of Golden Valley's electrical facilities in the Island Homes Subdivision, and therefore is an indispensable party to this action. The United States may not be joned as a party because it may not be sued without its consent,
Before the briefs were filed in this case, we denied appellees' motion to dismiss the appeal without a statement of reasons for our action. Discussion of this question was reserved until the writing of this opinion.
In their motion to dismiss appellees contended that the order from which the appeal was taken was not a "final judgment", within the meaning of Supreme Court Rule 6,
The judgment is affirmed.
Effect of Failure to Join. When persons who are not indispensable, but who ought to be made parties if complete relief is to be accorded between those already parties, have not been made parties and are subject to the jurisdiction of the court, the court shall order them summoned to appear in the action. If jurisdiction over them cannot be acquired except by their consent or voluntary appearance, the court in its discretion may proceed in the action without making them parties, but the judgment rendered therein does not affect the rights or liabilities of absent persons.
An appeal may be taken to this court from a final judgment entered by the superior court or a judge thereof in any action or proceeding, civil or criminal, except that the state shall have a right to appeal in criminal cases only to test the sufficiency of the indictment or information.