Railroad Commission v. Houston Natural Gas Corp.

• Decision Date: 17 January 1945
• Docket Number: No. 9467.,9467.
• Citation: 186 S.W.2d 117
• Parties: RAILROAD COMMISSION et al. v. HOUSTON NATURAL GAS CORPORATION.
• Court: Texas Court of Appeals

186 S.W.2d 117

RAILROAD COMMISSION et al. v. HOUSTON NATURAL GAS CORPORATION.

No. 9467.

Court of Civil Appeals of Texas. Austin.

January 17, 1945.

Rehearing Denied March 7, 1945.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, 126th District, Travis County; Roy C. Archer, Judge.

Proceeding by the Houston Natural Gas Corporation against the Railroad Commission of Texas and others for a declaratory judgment, determining whether the commission was authorized by statutes to furnish and use its own employees and their evidence in preparation of and on a pending appeal to the commission for review of a city ordinance reducing petitioner's gas rates. From a judgment overruling the commission's pleas to the jurisdiction and in abatement and denying petitioner any relief on the merits, the commission and petitioner appeal.

Affirmed.

Grover Sellers, Atty. Gen., and Ed Roy Simmons and David W. Heath, Asst. Attys. Gen., for appellant Railroad Commission of Texas.

Geo. D. Neal, of Houston, and Kuykendall, Bauknight, Mann & Stevenson, of Austin, for appellant Houston Natural Gas Co.

W. C. Gray, City Atty., of Palacios, for appellee.

BLAIR, Justice.

This proceeding for a declaratory judgment under the Uniform Declaratory Judgments Act of this State (Arts. 2524—1, §§ 1, 2, Vernon's Ann.Civ.St.) arose as follows:

Under authority of Art. 1119, the City of Palacios passed an ordinance reducing the rates for gas sold to the public in said city by appellee, Houston Natural Gas Corporation, a gas utility. Appellee gas utility, herein called the Utility, appealed to the Railroad Commission under authority of Art. 6058, which provides that a gas utility may so appeal for a review of a city ordinance reducing its gas rates, and further provides that "the Commission shall hear such appeal de novo," and that it shall make such order therein "as it may deem just and reasonable." The Commission set the matter for hearing and in accordance with its usual practice in such matters instructed the accountants and engineers of its Gas Utility Division to inspect and audit the books and records of the Utility, and to inspect and appraise its property used in serving gas to the public in said city; all of which was done.

Under its usual practice the Commission intended to use its said employees as witnesses and their audits and appraisals so obtained as evidence, and to use the Chief Examiner of its Gas Utility Division, an attorney, to examine its own employee witnesses and to cross-examine witnesses offered by the Utility on its appeal to the Commission under Art. 6058, for a review of the ordinance reducing its gas rates, and to have the Commission determine and fix just and reasonable rates for gas sold by the Utility to the public in said City of Palacios.

A few days prior to the date set for the hearing the Utility filed this proceeding for the declaratory judgment against appellants, the City of Palacios, the Commission and its members, and the Attorney General, herein referred to as the Commission, seeking a construction of Arts. 6050 to 6066, both inclusive, and particularly of Art. 6058, to adjudicate or declare whether it or the applicable portions of the other statutes cited authorize the Commission to so furnish and use its own employees and their evidence in preparation of and on the pending appeal and de novo hearing under Art. 6058.

The Utility alleged that the construction so placed upon the statutes involved by the Commission affects its rights, status, or other legal relations with respect to the power or authority of the Commission to so furnish and use its employees and their evidence in preparation of and on its appeal under Art. 6058, to determine and fix just and reasonable gas rates, both presently and in the future. The Utility prayed for a declaratory judgment adjudicating and determining whether the statutes involved gave the Commission the power or authority to so use its employees and their evidence; and also prayed for a temporary restraining order pending the hearing of the suit for the declaratory judgment, which was granted; and for such other temporary and permanent injunctive relief as it might show itself entitled to receive.

The Commission filed pleas to the jurisdiction and in abatement to the suit of the Utility for the declaratory judgment, that for the several reasons stated such proceeding was not maintainable under the facts alleged therefor; and in answer to the merits alleged that the Commission has the authority to so furnish and use its employees and their evidence in preparation of and on the appeal and de novo hearing pending before it under Art. 6058, by virtue of the applicable provisions of Arts. 6050 to 6066, both inclusive.

The court overruled the pleas of the Commission to the jurisdiction and in abatement; but on the merits held that the statutes authorize the Commission to so furnish and use its employees and their evidence in preparation of and on the appeal and de novo hearing under Art. 6058, and denied the Utility any relief sought; and from which judgments the Commission and the Utility have appealed.

On its appeal from the judgment overruling its pleas to the jurisdiction and in abatement, the Commission contends that under the facts alleged for the declaratory judgment the suit is merely one to enjoin the proceeding or hearing brought by the Utility under Art. 6058, at a time when such proceeding or hearing is still in progress and incomplete; and that the declaratory judgment proceeding is not maintainable to grant such injunctive relief.

We think that under the facts alleged the suit of the Utility is a proceeding under the Uniform Declaratory Judgments Act for the construction of the pertinent portions of Arts. 6050 to 6066, both inclusive, to adjudicate or declare whether the Commission has the power or authority thereunder to furnish and use its own employees to inspect the books and records of the Utility, and to inspect and appraise its property used to serve the public with gas, for the purpose of security such audits and appraisals as evidence to be used on the appeal brought by the Utility under authority of Art. 6058, to have the Commission on the de novo hearing provided for determine and fix just and reasonable rates for gas sold to the public in said city. Clearly the suit of the Utility is one for a declaratory judgment for the construction of the statutes, and the injunctive relief prayed for is merely ancillary thereto. Abilene & S. R. Co. v. Terrell, Tex. Civ.App., 131 S.W.2d 37, writ refused. The question of whether such ancillary injunctive relief may be granted in a declaratory judgment proceeding is not here involved, because the Utility has not appealed from any denial of any ancillary injunctive relief prayed for, and has therefore abandoned its prayer for such relief. But its suit for the declaratory judgment for the construction of the statutes involved remains to be disposed of as in declaratory judgments proceedings.

The Commission also contends that under the facts alleged the suit for the declaratory judgment is merely one raising questions as to the practice or procedural matters of how the Commission may obtain and what evidence it may take on the pending appeal and de novo hearing brought before it by the Utility under Art. 6058, to aid the Commission in determining and fixing just and reasonable rates to be charged the public for gas sold in said City of Palacios; and that the declaratory judgment proceeding is not maintainable to adjudicate or determine such alleged procedural errors of the Commission.

Under our foregoing conclusions the suit of the Utility does not raise mere questions of practice or procedural errors of the Commission occurring in the course of the proceeding or hearing of the Utility's appeal under Art. 6058. The pleadings of the Utility clearly raise questions as to the construction of the statutes cited to determine whether the Commission has the power or authority thereunder to so furnish and use its employees to secure evidence to be used on appeals to it under Art. 6058. The questions presented do not relate to mere matters of practice or procedure in taking evidence by the Commission, but relate to the authority of the Commission to invade the books and records, and to go upon and inspect and appraise the Utility's property to secure evidence to be used by the Commission on appeals and de novo hearings brought before it under Art. 6058, to aid it in determining and fixing just and reasonable gas rates for gas sold to the public within the city or town involved on such an appeal. The question to be determined is whether the statutes authorize the Commission to so secure the evidence used by it on appeals and hearings under Art. 6058, by using its own employees to obtain and secure audits and appraisals of the Utility's business in the manner stated. This is not a question of practice or procedure, but one of legal right to so secure and use evidence. It is manifest that if the statutes under which the Commission claims to act do not authorize it to so furnish and use its employees to secure the evidence shown by their audits and appraisals of the business and property of the Utility, then it is illegally obtained evidence and may not be used on appeals and de novo hearings under Art. 6058 to aid the Commission in determining and fixing just and reasonable gas rates on any such appeal and de novo hearing. The question so pleaded presents a justiciable issue or controversy as to the construction of the statutes; and Sec. 2 of the Uniform Declaratory Judgments Act expressly enumerates questions as to construction of statutes among others which may be determined thereunder, the material portions of which read as follows:

"Any person * * * whose rights, status, or other legal relations are affected by a Statute * * * may have determined any question of construction or validity arising under the...