City of Baytown v. General Tel. Co. of the Southwest

• Decision Date: 19 February 1953
• Docket Number: No. 12526,12526
• Citation: 256 S.W.2d 187
• Parties: CITY OF BAYTOWN et al. v. GENERAL TEL. CO. OF THE SOUTHWEST.
• Court: Texas Court of Appeals

Page 187

256 S.W.2d 187

CITY OF BAYTOWN et al. v. GENERAL TEL. CO. OF THE SOUTHWEST.

No. 12526.

Court of Civil Appeals of Texas, Galveston.

Feb. 19, 1953.

Rehearing Denied March 12, 1953.

George Chandler, City Attorney and Shannon L. Morris, both of Baytown, for appellant.

Will Sears, City Atty. and Jack W. Mills, Asst. City Atty. of Houston, for amici curiae, League of Texas Municipalities and Texas City Attys. Ass'n.

Locke, Locke & Purnell and Wayne O. Woodruff, both of Dallas, Reid, Strickland & Gillette and Robert Strickland, both of Baytown, for appellee.

MONTEITH, Chief Justice.

This is an appeal by appellants, City of Baytown, its mayor and city council, from an order rendered by the District Court of Harris County granting appellee, General Telephone Company of the Southwest, a temporary injunction restraining appellants from enforcing an ordinance passed by the city council of Baytown prescribing rates to be charged by appellee for telephone services furnished by appellee within the territorial limits of the City of Baytown, and from interfering with appellee in promulgating, charging and collecting fair and reasonable rates and charges for telephone service in Baytown, Texas, until such time as the city council shall prescribe fair and reasonable rates and charges.

On February 14, 1952, appellee had requested of appellants an increase in rates to be charged by it. Appellants, as the city council of the City of Baytown, and acting as a rate-making body therefor, held hearings on appellee's request, and on August 14, 1952, adopted an ordinance granting appellee an increase in rates but not to the extent requested by appellee. This ordinance became effective immediately.

Appellee thereupon brought this action, in the nature of an application for injunctive relief, as an appeal from the failure of the city council of Baytown to grant the increase in rates requested of them by appellee. Upon a hearing of appellee's application before the 133rd District Court of Harris County, the trial court, without a jury, found, in the order entered, that appellee was being forced to operate its telephone exchange by virtue of an order dated August 14, 1952, at an unjust and unreasonable rate upon the fair value of appellee's property used and useful in furnishing telephone service in the City of Baytown and that such forced operation at an unjust and unreasonable rate or return amounted to a confiscation of appellee's property by appellants and that appellee for these reasons was entitled to a temporary injunction against appellants as prayed for. At this hearing the temporary injunction was granted upon appellee's sworn petition and affidavits. Appellants did not present any evidence or offer any testimony, nor did appellants cross-examine appellee's witnesses who had sworn to the facts contained in appellee's affidavits, although the witnesses were present in court and were tendered for cross-examination.

Appellee, in its petition for temporary injunction, admitted that by virtue of the provisions of the city charter of the City of Baytown, the city council was given and has the power and duty to determine and fix telephone rates.

The League of Texas Municipalities, a voluntary association of Texas cities, the City Attorney's Association of Texas, and the City of Houston, presented an amici curiae brief in support of the appeal and in opposition to the judgment rendered by the trial court.

The controlling question presented in the appeal is whether the trial court was justified in granting a temporary injunction and whether he had jurisdiction to do so under the pleadings and proof offered by appellee showing that the rates which appellee is compelled to charge for telephone service were unjust and unreasonable and amounted to a confiscation of appellee's property.

Pending an appeal from the order complained of, the trial court required appellee to post a bond in the amount of $300,000 payable to the City of Baytown to indemnify appellee's telephone subscribers in the event such temporary injunction was dissolved on appeal and the old and lower rates set by the ordinance of August 14, 1952 should be found to be in all things lawful.

Appellants rely in the appeal on four points of assigned error. They contend that the trial court erred in overruling their motion to dismiss appellee's suit and in holding that the trial court had general appellate jurisdiction to entertain appellee's application for injunctive relief, and in holding that the trial court had jurisdiction to make a judicial ascertainment of the telephone rates to be charged by appellee within the territorial limits of the City of Baytown before such fact issue had been presented to appellants for its determination, and in holding that the affirmative relief sought by appellees for ligher telephone rates could be granted by the remedy of temporary injunction.

It is undisputed that the City of Baytown is a home rule charter city, operating under a duly and legally adopted charter. The charter provides that 'The city council shall have full power, after due notice and hearing, to regulate by ordinance the rates and service of every public utility operating in the City of Baytown.' Since a telephone company is a public utility, the question presented is whether or not the trial court had jurisdiction to render the judgment entered.

Appellants contend that since there is no dispute about the facts but only a dispute as to how these facts ought to be interpreted, that this issue is a question of law. They contend that in the absence of a statute, an appeal does not lie from the findings of the duly constituted rate-making body to the courts, citing McQuillin, Muni. Corps., Vol. 12, § 34.160, holding that 'An appeal will lie from the fixing of a rate only if provided for by statute', and citing R. R. Comm. of Texas v. Houston & T. C. R. Co., 90 Tex. 340, 38 S.W. 750, 755, which holds, 'It is true that the courts have established a rule that the reasonableness and justice of rates fixed by the legislature, or by a commission empowered by it so to do, are ordinarly questions committed to the discretion of those bodies, and not subject to revision by the court; * * *'; and citing Gulf, C. & S. F. R. Co. v. Railroad Comm. of Texas, 102 Tex. 338, 116 S.W. 795.

Appellee, under its counter-points, contends that the question before this Court is whether the trial court abused its discretion in granting appellee a temporary injunction under the uncontroverted facts in this case as proven by appellee and in conditioning the issuance of said injunction upon the posting of adequate indemnification bond by appellee pending the determination of the case on final hearing, and that the facts establishing appellee's right to an injunction are uncontroverted, and that the only question is whether the trial court abused its discretion in its application of the law to these uncontroverted facts.

Appellee urges that the case of Horwitz v. Finkelstein, Tex.Civ.App., 189 S.W.2d 895, error refused, and the cases therein cited, dispose of appellants' appeal in the instant case.

In the Horwitz case, the court held, 'We have before us the verified pleadings of both parties joining issues on the material allegations and the judgment of the trial court dissolving the temporary restraining order and refusing the temporary injunction. The record does not contain a statement of facts in any form. The trial court did not file any findings and none was requested so far as the record shows but the judgment of the trial court recites that it heard and considered evidence and this court must, therefore, indulge all reasonable presumptions that there was sufficient evidence to sustain the trial court's judgment.'

It is well settled in this State that the sole question to be determined on appeal in the granting or refusing of a temporary injunction, is whether or not the trial court abused its discretion in entering the order appealed from.

In the case of Bates v. Texas Electric Railway Co., Tex.Civ.App., 220 S.W.2d 707, 710, it is said, 'We are not presently concerned with the merits of plaintiff's appeal, our duty extending no further than whether an abuse of the court's discretion is involved in his denial of injunction; or, otherwise stated, whether there is shown in the record reasonable grounds for its refusal.' The following authorities sustain the holding in the case of Bates v. Texas Electric Railway Co., supra; Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73; Construction & General Labor Union, Local No. 688 v. Stephenson, 148 Tex. 434, 225 S.W.2d 958; 3 Tex.Jur. 1008, § 719.

In the case of Hotel & Restaurant Employees', etc. v. Longley, Tex.Civ.App., 160 S.W.2d 124, 126, it is said, 'Regarding the evidence we are required, of course, to give effect to such as was undisputed and not subject to any qualification or variance as the possible result of the judge's exercise of his power to determine its weight or to determine the credibility of the witnesses. Of all disputed evidence we are required to consider only that most favorable to the plaintiffs. Further, of all reasonable inferences which may be drawn from such evidence, we are required to adopt only those, if any, favorable to plaintiffs.'

Appellants' position seems to be based on the assumption that the trial court did not and could not have jurisdiction to grant injunctive relief to appellee. It necessarily follows that if the court of equity could not issue a temporary injunction to appellee under the facts of this case, then appellee had no remedy at all. Out courts follow the equitable maxim that equity will not suffer right to be without remedy. The courts of this State have often stated that all that is required to warrant granting of a temporary injunction is a case of probable right and danger to that right unless the injunction is granted. Rosenfield v. Seifert, Tex.Civ.App.,...