Case Name: CITY OF TEXARKANA, ARK., et al. v. SOUTHERN CITIES DISTRIBUTING CO.
Court: United States Court of Appeals for the Eighth Circuit
Jurisdiction: United States
Decision Date: 1933-03-24
Citations: 64 F.2d 944
Docket Number: No. 9589
Parties: CITY OF TEXARKANA, ARK., et al. v. SOUTHERN CITIES DISTRIBUTING CO.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 64
Pages: 944–946

Head Matter:
CITY OF TEXARKANA, ARK., et al. v. SOUTHERN CITIES DISTRIBUTING CO.
No. 9589.
Circuit Court of Appeals, Eighth Circuit.
March 24, 1933.
Rehearing Denied May 15, 1933.
Benjamin E. Carter, of Texarkana, Ark. (Willis B. Smith, of Texarkana, Ark., on the brief), for appellants.
William H. Arnold and William H. Arnold, Jr., both of Texaykana, Ark. (F. H. Bacon, of Shreveport, La., and David C. Arnold and Richard L. Arnold, both of Tex-arkana, Ark., on the brief), for appellee.
Before STONE, VAN VALKEN-BURGH, and BOOTH, Circuit Judges.

Opinion:
STONE, Circuit Judge.
Tbe Southern Cities Distributing Company furnishes gas. to the City of Texarkana, Ark. Under the statutes of that state (see Acts 1921, p. 177; Acts 1929, p. 1207) the city council has the power to regulate rates for gas. The company applied to the city council of Texarkana, for a raise in rates. Before determination of this application, the council and the company made an agreement upon rates higher than those then in force but lower than sought in the application. Thereafter, petitions were circulated, in accordance with the law of Arkansas for a public referendum upon this contract. After the referendum petitions were filed with the city council, certain signers thereof sought to withdraw their names therefrom and the council, according that privilege and finding that such withdrawals left an insufficient number of signers to authorize submission to tbe referendum, declined to orddr such submission. A mandamus proceeding in the state court against the council resulted in a decision by tbe Supreme- Court of the state (Southern Cities Distributing Co. v. Carter, 184 Ark. 4, 41 S.W.(2d) 1085) to the effect that the names could not be withdrawn and the submission should bo made. The result of the referendum was to overthrow the above contract for a change in rates. Thereafter, the company brought an injunction suit in the United States court for the Western District of Arkansas to protect the contract rates. A temporary injunction was issued. Thereafter, appellants filed a motion to dissolve the temporary injunction. From an order overruling that motion and continuing the injunction, this appeal is brought.
Various matters are urged upon us here, but the caso must bo reversed on one clear ground. The first is by the city council, upon an application and after hearing. The other is by a contract between the company and the city acting through its council. Also, it is established, by the Supreme Court in the mandamus action in connection with these rates, that such a contract is subject to the state statutes of referendum and, under those statutes, an adverse referendum renders that contract of no effect.
Hero the company initiated its movement for a raise in rates by an application to the city council. This proceeding readied no definite result as the matter was taken care of by the contract between the company and the city council. That contract would have been sufficient to establish the rates designated therein. However, a referendum was had upon this contract, with an unfavorable result, and the contract ceased to have any operativo force. It was as though the contract had never been made. The old rates automatically continued and they constituted the only lawful rates. The action of the trial court in protecting, through its injunctive process, the charging of the contract rates was a protection of the company in charging' rates which, under the undisputed and admitted situation, were not.lawful. Obviously, this was error. Ho circumstances of "convenience," such as sometimes will support a temporary injunction even though they will not a permanent order, are present here. Unless there are reasons (which have not been brought to our attention) why the application of the company to the city council is not still effective, the matter now stands as upon an application for increased rates. If the application is no longer vital for some reason, then the situation is that no application for higher rates exists. I11 either case, the legislative remedy of action by the city council has not been followed to its final result. In this situation the injunction proceeding is premature.
The case must be reversed with instructions to vacate the injunction and to dismiss the bill, without prejudice to appellants to pursue any proper remedy, in this action or otherwise, in connection with the matter of refunds raised in the answer.