Court Opinion

ID: 3975253
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:33:12.710788+00
Date Added: 2024-06-11T07:44:05.635238
License: Public Domain

I am unable to agree with my Associates in the conclusion that the judgment of the trial judge, refusing appellant's application for a temporary injunction, should be affirmed.
I concur in the opinion of the majority that the ordinance passed by the city council of the city of Houston repealing the ordinance of September 19, 1918, authorizing the appellant to collect a fare of six cents, cannot be questioned on the ground that in passing said repealing ordinance the council did not exercise its discretion, but surrendered its judgment and discretion in the matter to the dictation of a majority of the voters who voted in the referendum election upon the question of whether the six-cent ordinance should become effective. The fact that the six-cent ordinance was repealed in obedience to the expressed will of the majority of the voters at the referendum election is shown by the undisputed evidence, but in enacting the repealing ordinance the council exercised a power vested in it by the law, and this exercise of its legislative function cannot be interfered with by the courts on the ground that in passing the ordinance it acted from improper motives. The motives or influences inducing legislative action cannot be inquired into by the courts, except for the purpose of construing a legislative act. See authorities cited in majority opinion.
I also agree with counsel for appellant that the question of what is a just and reasonable fare to be charged for transportation of its passengers by the appellant is not one that can be properly determined by a popular vote. The nature of the question is such that its proper determination requires an investigation of facts, a consideration and weighing of evidence, and the exercise of an impartial, unbiased judgment, which could rarely, if ever, be obtained by submitting the question to a popular vote. As said by our Supreme Court in the case of Telephone Co. v. City of Dallas, 104 Tex. 121, 134 S.W. 323:
"In the exercise of the power to regulate and fix rates, etc., there must be a body who can hear evidence and decide upon the reasonableness and unreasonableness of the rate or regulation, and if that cannot be done by the initiative — the popular vote — then the authority cannot be exercised in that manner. Can it be necessary to offer argument to show to any man that such hearing as the law provides could not be had in a campaign before the electorate of the city? It is too manifest for controversy."
There is much force in appellant's contention that, the govermental function of fixing rates for public utilities having been delegated by the Legislature to the city council, it *Page 204 
cannot be redelegated by the council, and can only be exercised by the council. City of Corpus Christi v. Wharf Co., 8 Tex. Civ. App. 97,27 S.W. 803.
While I am strongly inclined to the opinion that the referendum provisions of the charter of the city of Houston were not intended to apply and should not be invoked upon the rate-making power of the council, it is unnecessary to decide the question, because, as before stated, the city council, in the exercise of a power which cannot be questioned, has repealed the ordinance. It follows from this conclusion that I agree with the majority in the holding that the trial court correctly refused the mandamus prayed for by appellant. But the question of whether the six-cent ordinance is still in force or should be ordered reinstated is entirely different from the question of whether the appellant has shown itself entitled to relief against the enforcement by the city of the ordinance requiring it to charge only a fare of five cents.
There is no disagreement between the majority and myself as to the general principles which should control in the determination of this question.
If the operation of the ordinance will require appellant under the severe penalties therein provided, to furnish the means of transportation for the people of the city of Houston for a fare or rate of compensation insufficient to enable it to provide such means of transportation, and to earn a reasonable return upon the money reasonably invested by it in such undertaking, the ordinance should not be enforced. This proposition, which is only a specific application of the general principle that, except as a punishment for crime, no individual's property or labor should be taken or used for public benefit without fair compensation, is so just, so uniformly recognized in the laws of free peoples, and so embedded in our Constitution and laws, that citation of authorities in its support is unnecessary.
It seems to me that the majority opinion fails to give to the allegations of plaintiff's petition the effect and meaning which fair and reasonable interpretation of the language of the pleader requires.
The rule that the allegations of a bill for injunction, in order to entitle the applicant to the injunction, must be clear and plain, does not authorize a court, in order to justify a refusal of the injunction, to place a strained and unreasonable construction upon the allegations of the bill; but the commonsense rule that the allegations of the petition must be given the meaning which is reasonably and naturally conveyed by the language used applies with the same force to bills for injunction as to any other kind of pleading.
The petition, after reciting the various grants of franchise under which appellant is and has been for a number of years operating its street cars in the city of Houston, alleges that up to December 31, 1917, it had invested in establishing and improving its transportation system in said city the sum of $5,655,605, and that its properties on said date were reasonably worth said sum, and that until said date it had, under the fare it was permitted to charge, earned some annual return on its investments. It then alleges that in 1914 its gross earnings began to be reduced by competition from persons and companies operating jitneys over the streets of said city. These yearly reductions in gross earnings are stated to be: 1914, $28,000; 1915, $400,000; 1916, $300,000; 1917, $250; 1918, $175. It further alleges that since the beginning of the World War in 1914 there has been a continuous advance in the price of all the material required and purchased by it for the maintenance and operation of its business, and a much more rapid increase in the cost of such material, and in the wages paid its employés, has occurred since the entry of this country into the war in 1917, and that the increase in such wages alone since January, 1915, amounted to $363,876 per annum.
It then alleges that on June 1, 1918, it applied to the city council of the city of Houston for permission to raise the fares charged by it from five cents for adults and two and onehalf cents for children to six and three cents, respectively, and in its said application, which is set out in full, it made a full itemized statement of its earnings and expenses of operation for the year 1918. The application containing this itemized statement is set out in full in the petition, and shows that that by the operation of the cars for the year named it cost the company $131,763 more than it earned. This application not having been acted upon by the city council, on September 4, 1918, appellant filed an additional application asking for a further increase in fares on the ground that since the filing of the first application the price of material had steadily increased, and that the company had been constrained, in order to satisfy its employés and give them a living wage under existing conditions, to increase said wages $54,000 per annum, and that the National War Labor Board had recommended a still further increase, which would cost the company approximately an additional $110,000, and that the company had stated to its employés that it desired to grant this increase, but was unable to do so unless its fares should be increased. In view of these additional demands upon the earnings of the company the council was asked to authorize a fare of seven cents for adults and three and one-half cents for children. It is also alleged that the "mayor and city commissioners caused a full, complete, and diligent inquiry *Page 205 
to be made into the affairs of the company, and in the facts recited in its petition of June 1, 1918," and thereafter, on September 19, 1918, the city council passed an ordinance amending the existing ordinance regulating street cars so as to authorize appellant to charge a fare of six cents for adults and three cents for children. This ordinance contains the following recitals:
"Whereas, the Houston Electric Company now owns and operates all the lines of street railway operated in the city of Houston and which will be affected by the following ordinance; and,
"Whereas, said company has applied to the city council of the city of Houston for an increase of fares to seven cents in order to meet financial conditions brought about by the war; and,
"Whereas, the city council, after full, careful, and complete investigation of the facts and conditions upon which said application is based, has found that, on account of the war, materials which the said company is required to purchase in order to operate said line of street railway have advanced in price from twenty-five per cent. to three hundred per cent. above normal and prewar prices, together with the fact that said company has granted to its employés several raises of wages during the present year on account of war conditions, and, further, in order to meet the scale of wages fixed for street railway employés by the War Labor Board it will be necessary to make a still further advance in said wages, whereby operating expenses of the said company will be very greatly increased, and the prewar scale of wages will be practically doubled, and that in view of these conditions the said company is not receiving from the present rate of fares sufficient return to pay its operating expenses and maintain its property in an efficient condition, and an emergency has arisen necessitating the granting in part of said petition of the company, and affording it temporary relief from the conditions set out in the following ordinance, in order to permit said company to meet said extraordinary and abnormal conditions.
"Now, therefore, be it ordained by the city council of the city of Houston," etc. This ordinance, in addition to fixing the street car fares at six and three cents from and after September 30, 1918, until January 1, 1919, and thereafter until changed by the city council, contained provisions requiring the appellant to permit a representative of the city, to be selected by the city council, to have access at all times to the books and records of the company and be present at all meetings of the board of directors. It also prohibited any capital expenditures by the company without first consulting with the city council or its representatives, limited the dividends that might be paid to the stockholders, and provided that the city could at any time cause an appraisement and valuation of the properties of the company to be mode at the expense of the company for the purpose of ascertaining and fixing such fares as would be reasonable, The two last sections of the ordinance are as follows:
"Sec. 8. This ordinance shall not become effective until the said Houston Electric Company has filed with the city secretary an acceptance stating that it will pay the financial obligations imposed upon it by this ordinance.
"Sec. 9. There being a public emergency requiring that this ordinance be passed finally on the date of its introduction, and the mayor having in writing declared the existence of such emergency and requested such passage, this ordinance shall be passed finally on the date of its introduction, this the 19th day of September, 1918, and shall take effect immediately upon its passage and approval by the mayor."
This ordinance was approved by the mayor on the date of its passage, and thereafter, on September 21, 1918, appellant filed its acceptance in writing in compliance with section 8 of the ordinance before set out, and, believing that it would get the increase in fares provided in the ordinance, granted the request of its employés for the increase mentioned in its application.
Paragraphs 19 and 20 of the petition are as follows:
"The plaintiff further alleges that the ordinance passed by the city council of the city of Houston on November 6, 1918, repealing the six-cent fare ordinance and copied in paragraph eleven hereof, and the ordinance passed by the city council on the same date and copied in paragraph twelve hereof, are part and parcel of the same transaction, and grow out of and are inseparably connected with the prior ordinance of September 19th, copied in paragraph eight hereof; that it conclusively appears from the face of these proceedings and from the recitations in these ordinances that both of the ordinances passed and enacted on November 6th are unreasonable and arbitrary and wrong, and that they deprive this plaintiff of a common right, to wit, the right to earn a sufficient sum of money to pay operating expenses and keep up its property and to have a fair return upon its investment; that, since these facts conclusively appear on the face of the ordinances aforesaid, they are invalid, and the city council should be restrained from enforcing the five-cent fare ordinance, copied in paragraph twelve hereof, or from further attempting to change, set aside, or modify the ordinance of the 19th of September, 1918, until it is made to appear that such modification or changes therein are fair and just, and until notice of said proposed change has been given to this plaintiff as required by said ordinance."
"The plaintiff avers that there was no change in the condition of affairs discussed in its application of September 4th, set out in the seventh paragraph hereof, between that date and the 6th of November, 1918; that all the unfavorable and adverse conditions surrounding the operation of its properties with reference to the price of labor and material obtained on the last date as they did on September 4th; that there has been no change of these conditions since that time; that the temporary cessation of *Page 206 
hostilities and the approach of peace has not bettered any of these conditions, or reduced any of these prices, or in any way reduced operating expenses for the plaintiff company; that the plaintiff's manager and other persons interested in its properties have made diligent inquiry for the purpose of determining whether it is reasonably probable that there will be any improvement in these conditions, and, with the very best information obtainable, the plaintiff is led to believe that there will be no decrease in the price of labor during the ensuing year or two years, nor will there be any appreciable decrease in the price of materials or operating expenses of any character during the ensuing year; that the vast amount of men and material needed for reconstruction work at home and abroad will overload the capacity of the country to such an extent that this company cannot expect any reduction in the price of either labor or material in the near future that, if any change whatever is brought about at the approach of peace, it will rather be a decrease in the earnings of this company because of the removal of the army camps from the vicinity of Houston, and the consequent loss of the patronage of the great number of soldiers who have been in these camps, and who have used the company's facilities of transportation during the last year; that the number of these soldiers has varied from 5,000 to 40,000, and their presence in the city of Houston and its suburbs has increased the fares which this company has received during this period of time; that their removal, which is now imminent, may materially decrease the company's income."
From the foregoing accurate statement of the allegations of the petition I think it clear that appellant does, in plain and explicit language, set out definite facts which show that under a five-cent fare it not only could not maintain and operate its transportation system in the city of Houston and earn any return upon the money invested therein, but that such maintenance and operation was costing the appellant, in money necessarily paid by it to fulfill its transportation obligations to the citizens of Houston, a sum largely in excess of its gross earnings. These allegations are not general, but specific. An itemized statement of the gross earnings, and the necessary expenditures of the company for the year 1918, is set out, and this statement shows that the deficit for that year was $131,763, without including an advance of wages to its employés made subsequent to June 1, 1918, of more than $100,000. This itemized statement showing the actual loss to appellant from the operation of its street car system was contained in the application made to the city council in June, 1918, for permission to charge a six-cent fare, and the council, which was then, as now, composed of the five citizens of Houston, who are the defendants in this suit, after, according to their own statement made under their official oath,
"full, careful, and complete investigation of the facts and conditions upon which said application is based, has found that, on account of the war, materials which the said company is required to purchase in order to operate said line of street railway have advanced in price from twenty-five per cent. to three hundred per cent. above normal and prewar prices, together with the fact that said company has granted to its employés several raises of wages during the present year on account of war conditions, and, further, in order to meet the scale of wages fixed for street railway employés by the War Labor Board, it will be necessary to make a still further advance in said wages, whereby operating expenses of the said company will be very greatly increased, and the prewar scale of wages will be practically doubled, and that in view of these conditions the said company is not receiving from the present rate of fares sufficient return to pay its operating expenses and maintain its property in an efficient condition."
It was further expressly alleged —
"that there was no change in the condition of affairs discussed in its application to the city council of date September 4, 1918, between said date and November 6, 1918 (when the ordinance repealing the six-cent fare ordinance was passed); that all the unfavorable and adverse conditions surrounding the operation of its properties with reference to the price of labor and material obtained on the last date as they did on September 4th; that there had been no change of these conditions since that time."
Facts are then stated upon which the conclusion is based that the cost of material and operation will not decrease in the near future, and the earnings of the company will probably decrease.
I cannot see how there could well be more explicit and positive allegations of facts showing the unreasonableness and injustice of requiring the appellant to continue to operate its street cars under an ordinance prohibiting it, under severe penalties, from charging more than a five-cent fare. The fact that the proceedings of the city council, and the several ordinances set out in the petition, may not on their face show "that both of the ordinances passed and enacted on November 6th are unreasonable and arbitrary and wrong, and that they deprive this plaintiff of a common right, to wit, the right to earn a sufficient sum of money to pay operating expenses and keep up its property and to have a fair return upon its investment," does not destroy the effect of the other allegations of the petition before set out, nor is the effect of these allegations in any way lessened by the narrative form of the petition.
Before appellant was entitled to relief from the courts it was required to exhaust its remedy by appeal to the city council, and it was entirely proper to allege all of the proceedings had by it with the council. In order to do this, it properly set out in detail the facts presented by it to the council and the *Page 207 
action of the council on its application. After doing this, it alleged that the facts presented by it to the council still existed, and in addition thereto alleged other facts showing that it could not maintain and operate its cars for a fare of five cents without serious loss.
Unless the equities thus shown by the bill were sworn away by the answer of the defendant, appellant was entitled to relief, and I think appellees' answer was clearly insufficient to justify a refusal of appellant's application.
The only effect of a general denial in any case is to put plaintiff upon proof of the facts necessary to entitle him to relief, and, on application for temporary injunction, a sworn petition is sufficient proof. 22 Cyc. 942; Vernon's Sayles' Civil Statutes, art. 4649.
An answer sufficient to defeat the right to relief by temporary injunction must be positive in its averments of fact, and not consist of mere general allegations or conclusions based on information and belief, and must contain a full and unequivocal denial of the material allegations of the petition. Dawson v. Baldridge, 55 Tex. Civ. App. 124,118 S.W. 593; McAmis v. Railway, 184 S.W. 331.
The first allegation of the petition which the answer questions is the allegation that the appellant's street car system is reasonably worth the sum of $5,655,605. The denial of this allegation is as follows:
"Further answering these, defendants say that, according to their best information and belief, the properties of the said plaintiff company are not of the reasonable worth and value of $5,655,605, and such sum has not been invested in said property by the said company according to defendants' best information and belief, in such a manner as to entitle it to earn return thereon."
The allegation as to the value of the properties is not material in view of the other allegations which show that the earnings of the company are less than the cost of the service, but, if it were material, the denial is too equivocal and uncertain to be entitled to any consideration. The only other denial of any allegation of the petition is of the allegation that there has been no change in the unfavorable condition of the affairs of the company since the application for a higher rate was presented to the council. In denial of this application the answer avers that since the passage of the ordinance of September, 1918, authorizing appellant to charge a six-cent fare, an armistice has been signed, and hostilities in the World War have ceased, "and some, if not all, of the material necessary for the operation of said street railways have declined in price, and these defendants have reason to believe, and do believe, that conditions will be much more favorable in the near future." There is no averment as to the amount of decline in the price of material, and it is not alleged that the decline has been such that appellant can now maintain and operate its street cars without loss. The substance of this denial is that things are not quite as bad as they were, and defendants believe that conditions will improve in the near future. The answer further avers that the jitney competition has greatly decreased since 1915, and at the present it amounts to very little. The allegations of the petition show that such competition has greatly decreased since 1915, but that, notwithstanding this decrease, the appellant, by the operation of its railways in 1918, sustained a loss of more than $200,000. The further averment that this competition is now very little, and the earnings of appellant had reached practically its highest point, are too general and indefinite to be considered as an answer to the allegations of the bill showing the loss sustained by appellant in maintaining and operating its road under present conditions and being required to charge not more than a five-cent fare. The further consoling prophecy in the answer, that with the increased earnings brought about by the elimination of jitneys, and the probability of falling prices due to the termination of the war, appellant "should and could be able to earn sufficient to pay its fixed charges, set aside a reasonable replacement fund, and pay a reasonable net earning upon the amount invested," falls far short of being such a denial of the equities of the bill as to authorize the court to refuse relief. If is, I think, clear that the defendants, as stated in the ordinance passed by them on September 19, 1918, having after a full and complete investigation of the affairs of appellant, found that facts existed entitling it to temporary relief, could not and would not now deny the existence of such facts, but were only willing to swear that the conditions were not as bad as they were and they believed they would improve in the near future. Such an answer cannot justify a refusal to grant appellant relief by temporary injunction.
If the injunction is granted, and conditions should improve as appellees anticipate, the injunction could be dissolved at any time upon a showing that a five-cent fare was sufficient to enable appellant to maintain and operate its system and pay a reasonable dividend upon its investment.
I think the application for temporary inJunction should have been granted. *Page 208