282 F. 680 (D.Kan. 1922), 75, Central Trust Co. of New York v. Consumers' Light, Heat & Power Co.

Docket Nº:75-N.
Citation:282 F. 680
Party Name:CENTRAL TRUST CO. OF NEW YORK v. CONSUMERS' LIGHT, HEAT & POWER CO. (STATE OF KANSAS ex rel. HELM, Intervener).
Case Date:June 15, 1922
Court:United States District Courts, 10th Circuit, District of Kansas
 
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Page 680

282 F. 680 (D.Kan. 1922)

CENTRAL TRUST CO. OF NEW YORK

v.

CONSUMERS' LIGHT, HEAT & POWER CO. (STATE OF KANSAS ex rel. HELM, Intervener).

No. 75-N.

United States District Court, D. Kansas, First Division.

June 15, 1922

A. E. Helm, of Topeka, Kan., for Public Utilities Commission of kansas.

H. O. Caster, S. N. Hawkes, and Robert C. Garver, all of Bartlesville, Okl., for Kansas Natural Gas Co.

Thomas F. Doran, of Topeka, Kan., for defendant.

POLLOCK, District Judge.

The single question now presented to the court for decision in this suit is this, namely: Is the business done by the Kansas Natural Gas Company (hereinafter called the Natural Company) a Delaware corporation, engaged in the business of producing and buying natural gas, mostly in the state of Oklahoma, also in this state, and transporting the same through pipe lines in this state, and through this state into the state of Missouri, and delivering the same to distributing companies, to be delivered by said companies to their customers, in its nature such business as is under the control and subject to the regulation of the Public Utilities Commission of the state of Kansas in the matter of rates or price per 1,000 cubic feet which may be charged by the Natural Company for the gas so transported, sold, and furnished the distributing companies at the intake of said distributing companies' lines at the gates of the cities? This question arises and is now presented for determination in the following manner:

One G. J. Swan is the receiver, duly appointed, in the above entitled and numbered suit in this court, over the property and assets of defendant, the Consumers' Light, Heat & Power Company, a corporation created for the purpose of furnishing light, heat, and power to the city of Topeka and its inhabitants, in this state, and the adjoining town of Oakland. Said receiver was, through the gas system of defendant Light, Heat & Power Company engaged in the business of so furnishing

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gas at the time this litigation arose. The only source of supply of natural gas which said receiver has or can procure is from the Natural Company. The rate fixed and price charged by the Natural Company prior to the 1st day of April, this present year, for gas furnished and delivered to said receiver at the city gate, was the sum of 35 cents per 1,000 cubic feet. However, on April 1st, said receiver was by the Natural Company notified, as follows:

'Kansas Natural Gas Company.

'Bartlesville, Oklahoma, April 1, 1922.

'Consumers' Light, Heat & Power Co., Topeka, Kansas-- Gentlemen: You are hereby notified that on and after April, 1922, meter reading you will be charged at the rate of forty cents per thousand cubic feet for all gas delivered to you at the town border measuring station, gas to be computed on a temperature basis of 60 degrees Fahrenheit, and a pressure basis of eight ounces atmospheric pressure, atmospheric pressure being assumed to be 14.41 pounds per square inch.

'Very truly yours,

Kansas Natural Gas Co., by H. L. Montgomery.'

This same proposed increase in rates from 35 to 40 cents per 1,000 cubic feet was made as to all cities and towns of this state, without presentation of the right to so do to the Public Utilities Commission of this state, or receiving any authority from that source. Thereupon the receiver of defendant Consumers' Light, Heat & Power Company filed in this suit his complaint, praying an injunction against the Natural Company, restraining said company from charging the proposed rate of 40 cents per 1,000 cubic feet, on the ground said rate was confiscatory, in view of the only rate it is by the Public Utilities Commission allowed to charge its customers.

Thereupon a restraining order was granted the receiver, and the Public Utilities Commission, through its solicitor, in the name of the state, intervened herein, praying an injunction against the Natural Company, restraining it from charging or collecting from any distributing company located in this state said increase in price of gas from 35 to 40 cents per 1,000 cubic feet, on the ground such proposed increase or charge for gas is unlawful and void, because not authorized by the Public Utilities Commission of this state. Thus is raised the issue of the power, jurisdiction, and control of the Public Utilities Commission of this state over the business done by the Natural Company within this state.

Coming, now, to the consideration of this question, it may be said: The Natural Company owns and exercises no franchise rights in this state, acquired from the state or any of its municipal bodies. It is a foreign corporation, owning a pipe line system, and is producing or purchasing natural gas in Oklahoma, this state, and transporting it from Oklahoma, into and through this state, into the state of Missouri, and delivering the same to some 40-odd local gas companies holding franchises from the several cities in which they are located for the distribution and sale of natural gas therein. In the transaction of its...

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