City of Houston v. Houston Light. & Power Co., 1331

• Decision Date: 05 November 1975
• Docket Number: No. 1331,1331
• Citation: 530 S.W.2d 866
• Court: Texas Court of Appeals
• Parties: CITY OF HOUSTON, Texas, Appellants, v. HOUSTON LIGHTING & POWER COMPANY, Appellee. (14th Dist.)

Page 866

530 S.W.2d 866

CITY OF HOUSTON, Texas, Appellants, v. HOUSTON LIGHTING & POWER COMPANY, Appellee.

No. 1331.

Court of Civil Appeals of Texas,

Houston (14th Dist.).

Nov. 5, 1975.

Rehearing Denied Dec. 10, 1975.

Jonathan Day, City Atty., Harriet E. Hubacker, John Meinrath, Asst. City Attys., Houston, for appellants.

William R. Brown, Baker & Botts, Houston, for appellee.

TUNKS, Chief Justice.

This is a temporary injunction case. The City of Houston (the City) appeals from an order of the trial court temporarily enjoining it from enforcing its ordinance fixing the maximum rates that the Houston Lighting and Power Company (H.L.&P.) can charge those of its customers who are located in the City of Houston.

In 1973 H.L.&P. petitioned the City for the passage of an ordinance increasing the rates which it could charge its customers. After a hearing the City passed such an ordinance on August 15th of that year. In February of 1975 H.L.&P. again petitioned for a rate increase. After an extended hearing the City declined to grant such a rate increase, but rather left the 1973 rate ordinance in effect. H.L.&P. filed suit against the City asking temporary and permanent injunctions against the further enforcement of the 1973 rate ordinance. The basis upon which H.L.&P. sought such relief is an allegation that the rates allowed by that ordinance are so low that its further enforcement amounts to a confiscation of its property in that it does not allow it to make a fair return on the fair value of its property. The trial court granted the temporary injunction sought by H.L.&P., and the City appealed.

At the outset we feel obliged to discuss a matter not formally raised by the parties' briefs. In the trial court H.L.&P. filed a motion asking an adjudication that the Harris County district judges, who were its customers, were financially interested in the subject matter of this suit so that they were disqualified to act on it. Such motion was granted and such declaration was made. Arrangements were made for the assignment of an out-of-county judge to try the case. The City then moved, under Tex.Rev.Civ.Stat.Ann. art. 1824, for leave to file an original proceeding in this court seeking to mandamus the trial court to proceed to trial and judgment, before a Harris County district judge. We denied leave to file such proceeding for the reason that the record showed that a timely trial of the case had been arranged, and we had no jurisdiction to determine by original proceeding which judge should try the case. All the judges of this court are customers of H.L.&P. If the Harris County district judges were disqualified because of being customers of H.L.&P., so are the judges of this court. While this question has not formally been raised to this court, it is a fundamental question and presents itself. We have, therefore, considered the questions of the disqualification of the members of this court and have concluded that we are not disqualified. See Hidalgo County Water Improvement Dist. No. 2 v. Blalock, 157 Tex. 206, 301 S.W.2d 593 (1957).

The primary points presented by this appeal grew out of the fact that the trial judge rendered his order granting the prayer of H.L.&P., for temporary injunction at the conclusion of the plaintiff's evidence and denied the defendant City the right to put on any evidence, to cross examine one of the plaintiff's witnesses and to make a formal bill of exceptions. The facts relevant to this part of the procedure are as follows.

H.L.&P. called as its first witness Eugene W. Meyer, an expert in the field of corporate finance. He testified on direct examination that H.L.&P., in order to be able to finance the construction of needed expansions by the sale of bonds or shares of stock, needed a rate schedule that would produce a return on its common equity (that portion of its capital derived from its common shares plus its earned surplus) of 15.6%. He also testified that the present rate schedule, fixed by the 1973 ordinance, produced a return on H.L.&P.'s common equity of 9.75%. His direct examination fills 86 pages of the statement of facts. The day ended before the City's attorney completed his cross examination. Mr. Meyer's schedule would not permit him to return to court the next day, so it was agreed that he should return the following Friday so that the City could complete its cross examination. On Thursday, before the witness had returned to court so that the City could complete cross examination, the court sustained the motion of H.L.&P. for judgment and granted its prayer for temporary injunction.

The last witness called by H.L.&P. was Mr. Jonathan Day, the City Attorney for the City of Houston. Mr. Day admitted that while participating in the rate hearing before the City Council, he had, on behalf of himself and the head of the City's Department of Public Service, recommended that the City enact a rate ordinance that would allow H.L.&.P. an increase of about 29 million dollars a year. Mr. Day had stated to the City Council:

It is clear...