The Birmingham age-herald., 1923-06-09
Associates On Federal Bench OverruIe Opinion Of Judge Clayton And Reopen Books Of Mobile Gas Company
DECISION FAR REACHING IN REGULATORY POWERS
Fellows Application For h. junction Sought By Gas Company In Effort To Make Valuation Of $1,969,56
STATE CAPITAL BUREAU !
 THE AGE-HERALD Mont gnpnary Ala Jnna q

Judge Henry D. Clayton of the federal district court was overruled by his associates, Judges N. P. Bryan and Richard w Walker. in a decision sustaining the validity of the Brewer act. giving the public service commission the right to make another valuation of the property of the Mobile Gas company. Judge Clay ton held that the commission entered into contract with the gas com- pany when it made its original order for a valuation of s1.969,5 ,565, and that the contract would remain binding on the state and the company. A copy of the opinion of the majority which held that no such contract was made and that nothing in the act permitted the public service commission to enter into such a contract was de ,iyered to Harwell c. Davis, attorney general, by the district court here Friday.
 The decision was handed down several days ago, but the opinion did not reach state officials until Fri day. The three judges who heard the petition of the gas company for an injunction preventing the commis- sion from proceeding with it's revalua-
 
 hibiting the commission from enter ing into an examination of sucE 1 bonds and records of the company which may have Teen examined in re- cent msnths but their order made no gn9entson of the right af the commis- sion to resalue the property.
 Books Open To Inspection.
 The opinion said specifically that the commission had the power to make the revaluation and Attorney General Davis expressed the opinion informally that the commission had the right. under the courts decision to make an inspection of all books and records of the company which had not been purchased for inspection and which the company declined to produce.
 In referring to the inspection of the books of the company and the estab- lishment of rates for service which will produce a fair return on the in- vestment. the majority opinion said:
 Tn order to determine rate which will produce a fair return, it Is essential to know the value of the property used and useful in conduct Ing plaintiffs business. But an ex- animation of it's records has been so recently made that, as it appears to us, there is no necessity for re- examination at this time, with the accompanying inconvenience to the gas company. According to the aver ments of the bill, which are undis- puted, complete and exhaustive search has been made within the last few months, and the commission al ready has or can get the necessary information without another exami- nation of the records. An interlocu- tory injunction will therefore issue restraining the commission from compelling the gas company to pro- duce its records flor another exami- nation. We recognize the right of the commission to proceed to re- valuation and it may apply for any information necessary to that end" Majority Opinion.
 That portion of the opinion of tho majority holding that the original order of the commission. did not con Stitute contract said:
 An application was recently made. by the commission in the main suit for an order requiring the company to submit it's records for examina- ton by the commission, and in opn- ion upon that application it was stated incidentally that to permit a revaluation would be to authorize the commission to impair the obligation of contract in violation of the fed eial constitution. However, upon furtber consideration of the public utility act. We are of the opinion that a contract between the state and the gas company did not result from the valuation of the company's property at it's expense. The title
 (COntinued On PaCe TWO)