Court Opinion

ID: 5006127
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:06:17.029281+00
Date Added: 2024-06-11T08:17:16.473183
License: Public Domain

On Motion for Rehearing.
Appellant, H. L. Mann, receiver of Texas Gas Utilities Company, has filed a motion for a rehearing in which he contends that we were in error in holding that the district court of Val Verde county did not have power to authorize appellant to raise the gas'rates in the city of Uvalde.
The basis of the contention is that the court who appoints a receiver of a gas company has jurisdiction to fix rates to be charged consumers, during the pendency of the l’eceivership, which will produce sufficient revenues to enable such receiver to operate the company and properly preserve the property of the company.
We agree with appellant that it is entirely proper for a receiver to apply to the court that appointed him for instructions and advice. And in this case appellant, as receiver, properly applied to the district court of Val Verde county for instructions leading to the ¡production of more revenue for the utilities company.
The court first took the proper action, when it authorized Mann to apply to the city *753council of the city of Uvalde for authority to raise rates. However, when the city council refused to raise the rates, the receiver, if not satisfied, could only appeal to the State Railroad Commission, 'as provided for in article 6058, R. S. 1925. Until this legislative remedy provided for by law had been exhausted, no court of this state has any jurisdiction of the matter, and, after the legislative remedy is exhausted, article 6059 gives only the courts of Travis county jurisdiction of the matter.
In support of his contention that a court appointing a receiver has jurisdiction to fix rates to be charged by the receiver of the utility company during the pendency of the receivership, appellant cites the following cases: (1) City of Minneapolis v. Rand (C. C. A.) 285 F. 818, 821; (2) City and County of Denver v. Denver Tramway Corporation (C. C. A.) 23 F.(2d) 287; (3) Landon v. Kansas City Gas Co. (C. C. A.) 10 F.(2d) 263; (4) Scott v. Western Pacific Railway Co. (C. C. A.) 246 F. 545.
In the Minneapolis-Rand Case, the legislative remedy had been exhausted, and a resort was had to a court of competent jurisdiction to test the reasonableness of the rate so fixed by the legislative act of the city. The court said: “The making of rates to be charged consumers by public- utility companies is a legislative and not a judicial function, and therefore the court had no jurisdiction to grant that relief in an independent or a dependent suit. St. L. & San Francisco Ry. Co. v. Gill, 156 U. S. 649, 663, 15 S. Ct. 484, 39 L. Ed. 567; Interstate Com. Commission v. Ry. Co., 167 U. S. 479, 499, 17 S. Ct. 896, 42 L. Ed. 243 ; Int. Com. Com. v. Alabama Midland Ry., 168 U. S. 144, 162, 18 S. Ct. 45, 42 L. Ed. 414; Minnesota Rate Cases, 230 U. S. 352, 433, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18; Newton v. Consolidated Gas Co., 258 U. S. 165, 42 S. Ct. 264, 66 L. Ed. 538.”
The court said in the Newton Case: “Rate making is no function of the courts and should not be attempted either directly or indirectly.”
What happened in the Minneapolis-Rand Case was, the court found the legislative act fixing rates to he invalid, and therefore not binding upon the receiver, and the court advised the receiver that he should charge a certain rate until the legislative body again fixed a rate.
The Rand Case differs from the case at bar in at least three respects: (1) In that case the legislative remedy had been exhausted, here it had not. (2) There the city ordinance had been declared confiscatory and invalid ; here it had not. (3) There the court did not attempt to fix rates in the true sense; here it did.
In the Denver Tramway and Landon Cases the same distinguishing features appear. The Scott Case is a tax suit, and fixing of rates is not involved in any way. It could have but little bearing on the question here presented. We believe the true rule is stated in the ease of Westinghouse Electric & Mfg. Co. v. Binghamton Ry. Co. (D. C.) 255 F. 378, 382. The court said: “This court is without power in any case or under any circumstances to increase rates of fare, or direct its receiver so to do, even while in possession of and operating the road for the benefit of the public who use it. The court cannot do this, even when to run at the present established rates entails large losses to creditors and stockholders.”
In this same case it is held that a court of equity has thé requisite power and should authorize the receiver of a public utility company to apply to a public service commission in a proper case for an increase in rates, in order to secure the revenue essential to conserve and preserve the corporation and its property for the benefit of creditors, secured and unsecured, the general public, and the stockholders. •
The rule is properly stated in Whitten-Wil-cox’s Valuation of Public Service Corporations, p. 30, § 24, as follows: “It has been decided repeatedly that rate making is a legislative, not a judicial function, and hence the courts will not fix rates, but merely enjoin them if they are found to be confiscatory, except that in certain- cases, a court having declared a commission rate confiscatory, will fix the maximum rate that the utility may charge pending further action by the commission.”
In this state all that need be done is to follow the statutes. Article 1119 gives to cities of more than 2,000 inhabitants the legislative power of fixing gas rates to be paid by consumers. Article 6058 provides for an appeal to the Railroad Commission for a tidal de no-vo, and this is made expressly to apply to receivers of gas companies by article 6050.
When this has been done, the legislative remedy will have been exhausted and the judicial stage reached. Article 6059 limits the judicial remedy to the courts of Travis county. We consider the'se statutes valid, and see no reason why they should not be followed.
The district court of Val Verde county did not have jurisdiction to fix gas rates, even *754though they were to govern a receiver appointed hy it and only to be valid during the pendency of the receivership.
Appellant’s motion for a rehearing will be in all things overruled.