Southern Bell Tel. & Tel. Co. v. Georgia Public Service Commission

• Decision Date: 15 July 1948
• Docket Number: 16241,16248 and 16249.
• Citation: 49 S.E.2d 38,203 Ga. 832
• Court: Georgia Supreme Court
• Parties: SOUTHERN BELL TELEPHONE & TELEGRAPH CO. v. GEORGIA PUBLIC SERVICE COMMISSION et al. GEORGIA HOTEL ASS'N v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO. GEORGIA PUBLIC SERVICE COMMISSION v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO.

49 S.E.2d 38

203 Ga. 832

SOUTHERN BELL TELEPHONE & TELEGRAPH CO. v. GEORGIA PUBLIC SERVICE COMMISSION et al.

GEORGIA HOTEL ASS'N v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO.

GEORGIA PUBLIC SERVICE COMMISSION v. SOUTHERN BELL TELEPHONE & TELEGRAPH CO.

Nos. 16241, 16248 and 16249.

Supreme Court of Georgia

July 15, 1948

Rehearing Dismissed July 28, 1948. [Copyrighted Material Omitted]

Syllabus by the Court.

1. 'Bills of exception shall be tendered to the judge who presided in the cause within 20 days from the date of the decision complained of.' Ga.L.1946, pp. 726, 734, Code Ann.Supp. § 6-902. This 20 days limitation of time within which to tender is applicable to exceptions pendente lite. Ga.L.1946, pp 726, 738, Code Ann.Supp. § 6-905. The ruling here complained of is a judgment overruling a motion to dismiss the petition, which was rendered February 23, 1948. The exceptions pendente lite were tendered March 26, 1948, and the main bill of exceptions was tendered April 8, 1948. It follows that neither exception was tendered in time to require a ruling on the exceptions pendente lite and, therefore, can not be considered by this court.

2. The exceptions to the rulings on the special demurrers are not argued and, hence, are abandoned and will not be here ruled upon.

3. The exceptions to the rulings on objections to the admissibility of evidence are too incomplete to present any question for decision by the Supreme Court, in that the evidence objected to is not specified, nor are the grounds of the objections made at the time the evidence was offered set forth.

4. The petition of the Georgia Hotel Association to intervene, in so far as it purports to allege any interest of the intervenor in the litigation, merely alleges, 'Now comes Georgia Hotel Association on behalf of its member hotels,' and was properly disallowed because no interest of the intervenor is shown.

5. Utility rate making is legislative in nature, and the power to make such rates in this State is by the constitution and laws vested exclusively in the Georgia Public Service Commission.

6. While courts of equity have and can exercise no jurisdiction to make public utility rates, yet they do have jurisdiction in all cases properly brought before them to render judgments enjoining confiscatory rates, thus preventing impingement of the constitutional rights of public utility companies. And where it is shown that utility rates fixed by the Public Service Commission are confiscatory and, therefore, result in taking the private property of a public utility company for public use without due process, a court of equity will not hesitate to take judicial action and enjoin the enforcement of such confiscatory rates.

7. While the order of the Public Service Commission fixing rates is presumed to be valid, and the burden rests upon the telephone company, in attacking that order, to carry the burden of rebutting this presumption with evidence which clearly shows the order to be invalid, yet where as here the uncontradicted evidence shows confiscation, the court did not err in granting an interlocutory injunction prohibiting the commission from putting that confiscatory order into operation and from interfering with the action of the utility company in collecting rates sufficient to avoid confiscation.

8. Although a court of equity can not make utility rates, such a court can, in the exercise of its jurisdiction, attach to the judgment enjoining the confiscatory rates a condition that the public utility company may not collect rates that will produce revenue in excess of a stated amount which in the judgment of the court is the amount necessary to avoid confiscation. Where the rate order is enjoined, the utility company could fix its rates until reasonable rates are fixed by the Public Service Commission.

9. But where as here it is conceded by all parties to the suit that the telephone company must have additional revenue in the amount of $3,715,000 per year to avoid confiscation, it was error for the trial court to attach as a condition to its injunction against confiscatory rates that the utility company not collect rates that will produce additional revenue in excess of $360,765. The least maximum of additional revenue that such condition can allow is the full amount shown to be necessary to avoid confiscation.

On January 30, 1948, Southern Bell Telephone and Telegraph Company filed a petition in the Superior Court of Fulton County against the Georgia Public Service Commission and Walter R. McDonald, chairman, Matt L. McWhorter, Allen Chappell, Perry T. Knight, and James A. Perry, composing the membership of the same, seeking to enjoin the defendants from interfering with the petitioner, hereinafter called the company, or obstructing it from placing into effect a schedule of rates attached to the petition and marked Exhibit 'B,' which would meet the emergency needs of the company to avoid confiscation; that the rates fixed by the commission by its order of January 23, 1948, were wholly inadequate and confiscatory, and that if the company be required to operate under such rates its property would be daily confiscated and taken without due process of law in violation of article 1, section 1, paragraph 3, of the constitution of Georgia and of the 14th amendment to the constitution of the United States. The petition prayed that the court determine and decree that the company had the constitutional right to charge its customers at least an amount which would be produced by the schedule of rates shown by Exhibit 'B,' and that the commission be enjoined from obstructing the company in putting into force immediately the said rates and from imposing or seeking to impose any penalties, civil or criminal, upon the petitioner or any of the officers or representatives in virtue of the petitioner putting into effect the said schedule of rates and from seeking further to maintain in force or effect the rate schedule heretofore ordered by the commission on January 23, 1948, or any schedule of rates inconsistent with the schedule of rates as shown by Exhibit 'B'; and for such further relief as may to justice and equity appertain; and for process.

A rule nisi was issued returnable on February 23, 1948. At the hearing the defendants filed a written motion to dismiss the petition. The court, on February 23, 1948, overruled the motion and the defendants filed exceptions pendente lite on March 26, 1948.

The petitioner introduced in evidence the petition as amended, together with certain exhibits attached thereto. The petitioner also introduced evidence by affidavits, exhibits and documents. The defendant introduced evidence by affidavits and exhibits attached thereto.

After introducing such evidence the defendants, on February 26, 1948, filed an answer, together with an amendment.

The petitioner, on March 5, 1948, filed written objections to certain portions of an affidavit of the defendants entitled 'General,' and having to do with the commission's actions and reasons for promulgating its rate order of January 23, 1948. The court subsequently sustained certain portions of the objections.

The petitioner, on March 5, 1948, demurred specially to certain portions of the defendants' answer, and by amendment added additional grounds of special demurrer on March 8, 1948. On March 9, 1948, the court entered an order sustaining in part the demurrers and striking portions of the defendants' answer. The defendants excepted pendente lite.

The defendants introduced further evidence by affidavits: and then the petitioner introduced rebuttal evidence by affidavits.

On February 23, 1948, the Georgia Hotel Association, naming as defendant the Southern Bell Telephone & Telegraph Company, filed a petition seeking to intervene in the proceeding 'on behalf of its member hotels,' and praying that the order of the commission of January 23, 1948, be not enjoined. The company demurred generally on the ground that no right to any relief by the Georgia Hotel Association was shown by its petition and also specially demurred on several grounds. The court subsequently sustained the demurrers and disallowed the intervention.

In an affidavit of the defendants, entitled 'General,' as hereinbefore referred to, it was stated: 'As will appear from the order [order of January 23, 1948], it was determined on this basis of computation that petitioner would require total earnings before the payment of State and Federal income taxes in the amount of $3,715,000 [annually] which would leave after the payment of income taxes $2,866,672 available for the payment of interest and dividends.' The commission, however, as shown by the affidavit disallowed certain items which the company had listed in its prior undertaking to obtain increased rates and which resulted in the order of January 23, 1948, these items being as follows: Payments to American Company under license contract, $360,765. Rate case expense, $63,984. Losses sustained in operating lunch rooms for employees, $97,180. Interest arresting accruals on unfunded portion of pension reserve, $76,844. Operators' wages, $556,000. Operators' employment and training, $100,000. Local commercial expenses, $150,000. Advertising expenses, $50,000. Accounting expense, $160,942 (of $1,322,942). Rearrangements and changes expense, $607,172. Depreciation expense, $79,640. Total, $2,302,527. Deducting this total from the annual amount of $3,715,000, required total earnings of the company as determined by the defendants' calculations, an amount of $1,412,473 was left, and the commission allowed rates which would provide additional annual revenue of $1,415,000 for the company as contemplated by its order of January 23, 1948. Since it is apparent, therefore, that the...