100 F.2d 770 (10th Cir. 1938), 1687, Oklahoma Packing Co. v. Oklahoma Gas & Elec. Co.

Docket Nº:1687.
Citation:100 F.2d 770
Party Name:OKLAHOMA PACKING CO. et al. v. OKLAHOMA GAS & ELECTRIC CO. et al.
Case Date:December 19, 1938
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 770

100 F.2d 770 (10th Cir. 1938)

OKLAHOMA PACKING CO. et al.

v.

OKLAHOMA GAS & ELECTRIC CO. et al.

No. 1687.

United States Court of Appeals, Tenth Circuit.

December 19, 1938

Page 771

W. R. Brown, of Chicago, Ill. (Paul Ware, of Chicago, Ill., and G. H. Holloway, of Oklahoma City, Okl., on the brief), for appellants.

Streeter B. Flynn, of Oklahoma City, Okl., and I. J. Underwood, of Tulsa, Okl. (Robert M. Rainey and Calvin Jones, both of Oklahoma City, Okl., R. M. Campbell, of Chicago, Ill., Rainey, Flynn, Green & Anderson, of Oklahoma City, Okl., and Allen, Underwood & Canterbury, of Tulsa, Okl., on the brief), for appellees.

Before PHILLIPS, BRATTON, and WILLIAMS, Circuit Judges.

PHILLIPS, Circuit Judge.

The Oklahoma Natural Gas Company, an Oklahoma corporation, hereinafter called the Gas Company, was engaged in the business of producing, transporting, and selling natural gas. It held local franchises for the sale and distribution of gas in certain cities and towns in Oklahoma, but had no local franchise in Oklahoma City.

In September, 1926, the Oklahoma Natural Gas Corporation, a Maryland corporation, hereinafter called the Gas Corporation, purchased the properties of the Gas Company and thereafter engaged in the transmission, sale, and distribution of gas in Oklahoma.

The Oklahoma Gas and Electric Company, an Oklahoma corporation, hereinafter called the Electric Company, was engaged in the sale and distribution of natural gas to domestic and industrial consumers in Oklahoma City and the immediate vicinity thereof, and in other cities and towns in Oklahoma operating under local franchises.

In June, 1921, the Corporation Commission of Oklahoma fixed a gate rate for gas sold to local distributing companies. Theretofore the Gas Company had supplied gas to the Electric Company on a percentage basis. Upon the promulgation of the gate rate order the Gas Company established gas measuring stations at points adjacent to but outside the city limits of Oklahoma City and continued to supply gas to the Electric Company at such measuring stations at the gate rate.

In September, 1924, the Gas Company, with the approval of the Corporation Commission, put into effect an industrial gas rate to consumers located outside the city limits of the cities where the Gas Company held local franchises. The rate was on a monthly basis and was conditioned on a minimum consumption of thirty million cubic feet per month. The rate was thirty-eight cents per thousand cubic feet for the first one hundred thousand cubic feet and fifteen cents per thousand cubic feet for gas in excess thereof. On January 1,

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1926, with the approval of the Corporation Commission, the rate was reduced to thirty-five cents per thousand cubic feet for the first one hundred thousand cubic feet and the minimum was reduced to fifteen million cubic feet. Under these rates the Gas Company furnished gas to industrial consumers outside the city limits of cities and towns where it sold and distributed gas under local franchises.

After the measuring stations at the city gates were established there were certain gas consumers living outside the points where such measuring stations were located that had theretofore been served by the Electric Company. It was agreed between the Electric Company and the Gas Company with the approval of the Corporation Commission that such consumers should be supplied by the Gas Company. In accordance with such agreement the Gas Company furnished gas to such consumers.

Wilson & Company, Inc., of Oklahoma, hereinafter called the Oklahoma Company, is a corporation organized under the laws of Oklahoma. Wilson & Company, Inc., of Oklahoma, hereinafter called the Delaware Company, is a corporation organized under the laws of Delaware. The Oklahoma Company was engaged in the meat packing business. Its plant was located outside the city limits of Oklahoma City but within the territory lying between the city limits and the measuring stations.

Prior to March 1, 1928, neither the Gas Company nor the Gas Corporation served or offered to serve consumers located in Oklahoma City or within the territory surrounding Oklahoma City lying between the city limits and the measuring stations. That territory was being served by the Electric Company. Prior to 1919 the Electric Company extended its distribution lines to the district where the plant of the Oklahoma Company was located and distributed gas to consumers in that district.

In 1924 the Electric Company built a service line from one of its distributing lines to the Oklahoma Company plant and began furnishing it gas for industrial purposes.

On April 13, 1926, the Corporation Commission, upon complaint of the Oklahoma Company, promulgated its order No. 3388 which required the Gas Company to furnish the Oklahoma Company with gas at the industrial rates. The Gas Company and the Electric Company petitioned the Supreme Court of Oklahoma to review order No. 3388, and the Supreme Court awarded supersedeas suspending the operation of such order. On April 29, 1930, the Supreme Court affirmed such order. Oklahoma Gas & Electric Co. v. Wilson & Co., 146 Okl. 272, 288 P. 316.

On December 3, 1931, the Oklahoma Company transferred its packing plant and other property, including any claim on the supersedeas bonds, to the Delaware Company. Thereafter, the name of the Oklahoma Company was changed to Oklahoma Packing Company.

On March 1, 1928, the Gas Corporation purchased the natural gas distributing systems of the Electric Company in the cities and towns in Oklahoma in which the latter company held franchises, and thereafter operated such systems. The Gas Corporation on the acquisition of such systems put in effect in such cities and towns its industrial gas rate. From and after March 1, 1928, the Gas Corporation furnished gas to the Oklahoma Company and its successor, the Delaware Company, at such industrial rate.

On December 3, 1931, the Delaware Company, as successor to the Oklahoma Company, brought an action against the Electric Company and the Fidelity & Casualty Company of New York upon the bonds given to supersede order No. 3388, in the district court of Oklahoma County, numbered 71,898 on the docket of that court. On April 6, 1933, a judgment was entered in such action in favor of the Delaware Company and against the Electric Company and the Fidelity & Casualty Company. In such action the state court held it had jurisdiction to determine the validity of order No. 3388. The Electric Company and the Fidelity & Casualty Company duly appealed from such judgment and the execution of the judgment was duly superseded pending appeal.

On July 24, 1930, the Gas Company, then a dissolved corporation, its directors, the Gas Corporation, and the Electric Company brought a suit against the Oklahoma Company in the District Court of the United States for the Western District of Oklahoma, numbered 1144 Equity on the docket of that court, wherein they challenged the validity of order No. 3388, and sought...

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