Incorporated Town of Emerson v. Arkansas Public Service Commission, 5-1098

• Decision Date: 03 December 1956
• Docket Number: No. 5-1098,5-1098
• Citation: 227 Ark. 20,295 S.W.2d 778
• Parties: , 17 P.U.R.3d 99 INCORPORATED TOWN OF EMERSON et al., Appellants, v. ARKANSAS PUBLIC SERVICE COMMISSION et al., Appellees.
• Court: Arkansas Supreme Court

Page 778

295 S.W.2d 778

227 Ark. 20, 17 P.U.R.3d 99

INCORPORATED TOWN OF EMERSON et al., Appellants, v. ARKANSAS PUBLIC SERVICE COMMISSION et al., Appellees.

No. 5-1098.

Supreme Court of Arkansas.

Dec. 3, 1956.

McKay, McKay & Anderson, Magnolia, Lasley & Lovett, Little Rock, for appellants.

John R. Thompson, Little Rock, H. W. McMillan, Arkadelphia, and Chas. C. Wine, Texarkana, for appellees.

MILLWEE, Justice.

This is an appeal from a judgment of the Pulaski Circuit Court dismissing a petition to review an order of the Arkansas Public Service Commission, hereinafter called 'Commission.' Appellants, who were the petitioners and intervenors below, are Union Telephone Company and the town of Emerson, Arkansas, and will be respectively referred to as 'Union' and 'Emerson'.

Ray Bradley owned and operated the Emerson Telephone Exchange under a franchise from Emerson and an indeterminate permit from the Commission on June 11, 1951, when he applied to the Commission for a certificate of convenience and necessity to furnish telephone service to a 'rural area' ¹ in Columbia County which embraced Emerson and adjacent rural territory including the smaller rural communities of Atlanta, Mt. Pisgah and Walkerville.

Southwest Arkansas Telephone Cooperative, Inc., hereinafter called 'Cooperative' is a non-profit telephone corporation organized under Act 51 of 1951, Ark.Stats. §§ 77-1601 to 77-1639, for the purpose of engaging in and furnishing telephone service to rural areas. On July 22, 1953, Cooperative secured an option from Mrs. Ray Bradley and T. H. Bradley, owners of the Emerson Telephone Exchange, to purchase said exchange and telephone properties for $7,000.

On February 18, 1954 the Commission approved Bradley's application and entered an order issuing a certificate of convenience and necessity to service the rural area in question. On June 7, 1954, the town council of Emerson, which had a population of 523, passed an ordinance granting a franchise to Cooperative to construct and maintain a telephone exchange in the town. On July 20, 1954, Cooperative exercised its option to purchase from the Bradleys subject to approval of the Commission. On November 11, 1954 the Emerson council repealed the ordinance passed June 7, 1954, because Cooperative had not filed written acceptance of the franchise within 90 days.

On December 6, 1954, the Bradleys and Cooperative filed their joint application with the Commission requesting approval of the sale of the Emerson Telephone Company to Cooperative together with all rights granted the Bradleys under their certificate of convenience and necessity. This was done after a detailed engineering study and economic feasibility survey of the area in question had been made. On March 2, 1955, Union filed with the Commission its petition to reopen and set aside the order for allotment of the area to Bradley issued on February 18, 1954, and for the reallocation of said area to Union instead. On March 2, 1955, Union also filed its petition to intervene in the joint application of Cooperative and the Bradleys and requested its dismissal on the ground that it was contrary to the public interest. On April 12, 1955, Emerson filed an intervention joining in the request of Union. The various applications, petitions and interventions were consolidated for a hearing before the Commission which began May 10, 1955, and lasted for several days.

On June 16, 1955, the Commission entered an order approving the joint application of Cooperative and the Bradleys and denying the petition and application of Union. In approving allocation of the area in question to Cooperative as being in the public interest and granting it a certificate of convenience and necessity to construct and maintain telephone facilities in the area, the Commission made extensive findings. It found that Union did not propose to render telephone service to the entire area in question as proposed by Cooperative; that the agreed sale price of $7000 was considerably more than the actual value of the properties involved; that the total price should not be reflected in the rate base of Cooperative which would be required to enter $3,500 thereof in a surplus account, and that the balance over and above the value of the properties remaining in service after reconstruction should be amortized over a period of 10 years by charges to operations; that the fee of $50 which Cooperative proposed to charge new members is unreasonably high and a uniform fee of $10 is reasonable and adequate for all members; and that it is in the public interest to allow Cooperative to issue membership certificates, capitol stock and evidences of indebtedness necessary to secure a loan of $294,000 by the United States through the Rural Electrification Administration for construction of the facilities.

The evidence also discloses that for the past several years the properties of the Emerson Telephone Company have deteriorated and that the service is poor. Service to some former patrons in the area adjacent to Emerson had been discontinued and many...