City of Houston v. Southwestern Bell Tel. Co.

• Decision Date: 09 December 1953
• Docket Number: No. 12685,12685
• Citation: 263 S.W.2d 169
• Parties: CITY OF HOUSTON et al. v. SOUTHWESTERN BELL TEL. CO.
• Court: Texas Court of Appeals

Page 169

263 S.W.2d 169

CITY OF HOUSTON et al. v. SOUTHWESTERN BELL TEL. CO.

No. 12685.

Court of Civil Appeals of Texas, Galveston.

Dec. 9, 1953.

Rehearing Denied Dec. 17, 1953.

Will Sears, City Atty., Houston, Jack W. Mills, Asst. City Atty., Oscar J. Cadwallader, Jr., and John R. Bennett, Asst. City Atty., Houston, for appellants.

Vinson, Elkins, Weems & Searls, David T. Searls, Tarlton Morrow, M. C. Chiles, and C. E. Coolidge, Houston, Ed Gossett and William A. Gray, Dallas, for appellee.

HAMBLEN, Chief Justice.

This is an appeal by the City of Houston and the Mayor and members of the City Council of the City of Houston from an order of the District Court of Harris County granting appellee Southwestern Bell Telephone Company a temporary injunction enjoining the appellants, pending final hearing for permanent injunction, from enforcing a schedule of local exchange telephone rates fixed by the City Council of Houston by ordinance dated December 1, 1949. The appellee as applicant before the trial court for the injunctive relief, based its right thereto upon the proposition that the rates fixed by the December 1, 1949 ordinance had become unjust and unreasonable to such an extent that the enforcement thereof resulted in confiscation of appellee's property. Each contention made by such appellee was denied by appellants and upon the issues thus joined the hearing proceeded before the trial court, resulting in the appealed-from order.

Despite the voluminous character of the record presented and the extensive arguments made by the litigants, this Court is of the opinion that this case insofar as the reaches of this appeal are concerned, is controlled by well-recognized principles of law, which, when applied to the present controversy, can result only in an affirmance of the judgment of the trial court, and while the decisions applying these rules are numerous, it appears upon examination that their combined effect has been declared in the opinion of this Court in the case of City of Baytown v. General Telephone Company of the Southwest, Tex.Civ.App., 256 S.W.2d 187, 194 (writ refused, n. r. e.). In that case the late Chief Justice Monteith, after a lengthy review of the authorities in this and other jurisdictions, summarized the law which he found to be controlling in that case and which by analogy is applicable to this in the following language taken from his opinion: 'A review of the decisions involving rates of public utilities shows that a temporary injunction will issue when three things are made to appear: (1) that there is a reasonable probability that the utility will succeed on final hearing, (2) that the loss to the utility resulting from a refusal to grant the temporary injunction will be irreparable, and (3) that the customers can be adequately protected by bond.'

And further said the Court in that case: '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.'

Courts have uniformly held that abuse of discretion may be found only when the record reflects that the findings of the trial court necessary to sustain its order are not supported by some evidence of a substantial and probative character. Frank v. Weiner, Tex.Civ.App., Galveston, 1950, 229 S.W.2d 186.

Our review of this case on this appeal from the temporary injunction granted by the trial court does not extend to or include in its purpose the making of independent findings by this Court upon the three elements necessary to the issuance of such injunction as set forth in City of Baytown v. General Telephone Company of the Southwest, supra. That is exclusively the function of the trial court. Our review is limited to the determination of whether there is some evidence of a substantial and probative character to support the findings of the trial court. If such evidence is in the record, the findings of the trial court control. Only where no such evidence exists can this or any other appellate court hold that the trial court abused its discretion.

With the inquiry thus limited, it is thought that some discussion of the nature of the litigation resulting in this appeal will assist in applying the law to the evidence in the record here presented.

Courts do not and cannot regulate rates of public utilities. That is exclusively and inherently a legislative prerogative. Munn v. Illinois, 94 U.S. 113, 24 L.Ed. 77; Missouri-Kansas & T. Ry. Co. v. Empire Express Company, Tex.Com.App., 221 S.W. 590. Except as limited by fundamental law this power of the legislature is absolute and free of any interference from other branches of our government. The fundamental law which limits the legislative power to regulate utility rates is that portion of the Fifth Amendment of the Constitution of the United States, which provides that no person shall be deprived of life, liberty or property without due process of law. Insofar as utility rates are concerned, the Supreme Court of the United States has held that the due process clause of the Constitution prohibits rate legislation which deprives the utility of a fair or reasonable return on the fair value of the property being used to render public service. Southwestern Bell Telephone Co. v. Public Service Commission of Missouri, 262 U.S. 276, 43 S.Ct. 544, 67 L.Ed. 981; United Gas Public Service Company v. Texas, 303 U.S. 123, 625, 58 S.Ct. 483, 82 L.Ed. 702; Lone Star Gas Co. v. Texas, 304 U.S. 224, 58 S.Ct. 883, 82 L.Ed. 1304. It is only where the contention is made that rate legislation is violative of this constitutional prohibition that injunctive relief can be sought in our courts. In Texas the power to regulate rates of public utilities has been expressly delegated by the Legislature to city commissions and councils subject to conditions prescribed by state statutes, principally Arts. 1175 and 1124, Revised Civil Statutes of Texas.

In the present case there is not involved the question of what rate the appellee should charge. That issue is not raised by the pleadings nor comprehended in the judgment of the court. Solely involved is the question of whether the ordinance of the City of Houston, dated December 1, 1949, provides a schedule of rates which deprives appellee of a fair or reasonable...