Oklahoma Gas & Elec. Co. v. Oklahoma Natural Gas Co.
| Decision Date | 01 February 1921 |
| Docket Number | 11778. |
| Citation | 205 P. 768,85 Okla. 25,1921 OK 31 |
| Parties | OKLAHOMA GAS & ELECTRIC CO. ET AL. v. OKLAHOMA NATURAL GAS CO. ET AL. |
| Court | Oklahoma Supreme Court |
Syllabus by the Court.
Public service corporations have a right to enter into contracts between themselves, but such contracts are subject to the control and supervision of the Corporation Commission, if they are unconscionable, oppressive and impair the obligation of the public service corporations in the discharge of their public duty to the public.
The jurisdiction of the Corporation Commission does not depend upon the form or sufficiency of any pleading; the test being not the relief prayed for, but that granted. (a) It is not essential for petition to be filed with the Corporation Commission, but that notice shall be had on the company or corporations to be affected.
Writ of prohibition will not lie to enjoin the Corporation Commission from proceeding to inquire into contracts entered into between public service corporations, when said contracts may be unconscionable, oppressive, and impair the obligation of the public service corporations in the discharge of their duty to the public.
Agreed case. Application by the Oklahoma Gas & Electric Company, the Muskogee Gas & Electric Company, the El Reno Gas & Electric Company, and the Enid Electric & Gas Company, for writ of prohibition to Corporation Commission. Writ denied.
Paul Reiss and Owen & Flynn, all of Oklahoma City, for plaintiffs.
E. S Ratliff, of Oklahoma City, for Corporation Commission.
Ames Chambers, Lowe & Richardson, of Oklahoma City, as amici curiæ for Oklahoma Natural Gas Co.
This is an agreed case filed pursuant to section 5303, Revised Laws 1910, by the Oklahoma Gas & Electric Company, a corporation, and other corporations, as plaintiffs and the Oklahoma Natural Gas Company, a corporation, and the Corporation Commission of this state as defendants.
The plaintiffs are public service corporations owning franchises in Oklahoma City and other cities, and are engaged in distributing and selling gas to the citizens. The Oklahoma Natural Gas Company is a public service corporation engaged in producing, furnishing, and selling natural gas.
This controversy arises over a contract executed on the 22d day of May, 1907, between the Oklahoma Natural Gas Company and the Oklahoma Gas & Electric Company, wherein the Oklahoma Natural Gas Company was to sell gas and deliver it into the pipe lines of the Oklahoma Gas & Electric Company in this city, and was to receive therefor, generally two-thirds of the gross amount collected by the Oklahoma Gas & Electric Company from its consumers; said contract to be in force for a period of 20 years. The Oklahoma Natural Gas Company has furnished gas to the Oklahoma Gas & Electric Company under the terms of said written contract, and the Oklahoma Gas & Electric Company has sold the same to the citizens and collected therefor and settled with the Oklahoma Natural Gas Company according to the terms of said contract up to the present time. The status of the other plaintiffs is similar to that of the Oklahoma Gas & Electric Company, and we will not mention their contracts, as the determination of the one question determines the rights of all the parties.
On the 10th day of August, 1920, the Oklahoma Natural Gas Company filed a petition with the Corporation Commission asking the Corporation Commission to fix what is known as a city gate rate, and permit it to furnish the Oklahoma Gas & Electric Company gas under a city gate rate, instead of under its percentage contract, and for the commission to ascertain the value of the property of the Oklahoma Natural Gas Company and fix a reasonable city gate rate to be charged the Oklahoma Gas & Electric Company for the gas received by it from the Oklahoma Natural Gas Company.
It is the contention of the Oklahoma Natural Gas Company that the Corporation Commission has authority to fix said city gate rate in lieu of the percentage contract, which expires May 22, 1927, upon the theory that said contracts are subject to the superintending power and control of the state in that they affect the public's interest. It is contended by the plaintiff herein that the relation between the Oklahoma Natural Gas Company and the local company is contractional, that of principal and agent, seller and purchaser, and the state has no jurisdiction to alter or impair the terms of the contract between said parties; it being admitted that, prior to the execution of the contract, the parties sustained no relation toward each other and there was no duty for one to contract with the other. The plaintiff contends that the changing of the terms of the contract would be in violation of section 15, article 9 of the Constitution of this state, and section 10, article 1 of the Constitution of the United States, which forbids any state passing any law impairing the obligation of a contract, and in violation of the fourteenth amendment of the Constitution of the United States prohibiting the taking of property without due process of law.
The plaintiff filed a demurrer to the petition of the Oklahoma Natural Gas Company, which demurrer was overruled by the ...
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