Rio Grande Valley Gas Co. v. Ford

Citation169 S.W.2d 263
Decision Date16 December 1942
Docket NumberNo. 11217.,11217.
PartiesRIO GRANDE VALLEY GAS CO. v. FORD.
CourtCourt of Appeals of Texas

Appeal from District Court, Hidalgo County, Ninety-third District; W.R. Blalock, Judge.

Action by P. S. Ford against the Rio Grande Valley Gas Company brought under statute making it unlawful for gas corporation to discriminate against any person in the charge for gas or in service rendered under similar circumstances. From an adverse judgment, the defendant appeals.

Reversed and rendered.

B. D. Kimbrough, of McAllen, and West & Hightower, of Brownsville, for appellant.

E. A. McDaniel, of McAllen, for appellee.

NORVELL, Justice.

Rio Grande Valley Gas Company has appealed from a money judgment rendered in favor of P. S. Ford, the plaintiff below. The action was based upon Article 1438, Vernon's Ann.Civ.Stats., which reads as follows: "It shall be unlawful for any such corporation [gas, electric current or power corporation] to discriminate against any person, corporation, firm, association or place, in the charge for such gas, electric current or power, or in the service rendered under similar and like circumstances." The Article is a part of Subdivision 4, Chapter 10, of Title 32, Vernon's Ann.Civ.Stats., wherein the powers of gas, electric current and power corporations are defined and the right to condemn and appropriate lands, rights of ways, easements and properties is conferred. Article 1436, Vernon's Ann.Civ.Stats.

Ford, as the owner of the Square Deal Laundry of McAllen, Texas, claimed that he was the victim of discrimination under the statute in that the appellant, a corporation engaged in the distribution of natural gas for use as fuel, exacted from him a higher rate or charge than that made to firms and corporations engaged in processing fruit and vegetables in the vicinity of McAllen, Texas.

The controlling question upon the issue of discrimination was submitted in the following form:

"Do you find from a preponderance of the evidence that the service rendered by defendant Gas Company to customers in McAllen at the rate of seventeen (17¢) cents per thousand cubic feet between the dates of April 1, 1938, and Dec. 1, 1940, was a service rendered under similar and like circumstances to the service rendered plaintiff's Laundry during said period of time? * * *"

The jury answered the above inquiry in the affirmative.

It appears that appellee's laundry was classified by the Gas Company as a "commercial" user, at a rate of from 20 to 30 cents per thousand cubic feet of gas consumed, while fruit and vegetable processors were classified as "industrial" users, at a rate of 17 cents per M. C. F.

There was no evidence in the record that any business competitor of appellee had been furnished gas at a lower rate than that charged appellee. In fact, there is no evidence that any one other than a fruit and vegetable processor received a rate of 17 cents per M. C. F.

The trial court submitted no issues to the jury concerning the amount of damages sustained by appellee, but entered judgment for the difference between the amount actually paid by appellee to appellant under the 20 to 30 cent rate and the amount he would have paid under the 17 cent rate.

The theory underlying this award of damages may be stated as a proposition as follows:

A plaintiff who shows that a public utilities company has sold gas to some person, not a competitor of the plaintiff, under similar and like circumstances to those under which gas was sold to the plaintiff, but at a lesser rate, is, upon such showing, and nothing more, entitled to recover from the utilities company a sum of money equal to the difference between the amount actually paid by the plaintiff and the amount he would have paid under the rate afforded the more favored customer.

Appellee contends that this proposition is supported by Texas Power & Light Co. v. Hilltop Baking Co., Tex.Civ.App., 78 S.W. 2d 718, and Texas Power & Light Co. v. Doering Hotel Co., Tex.Civ.App., 147 S.W. 2d 897, affirmed by the Supreme Court 162 S.W.2d 938.

Appellant presents numerous points in support of his contention that the judgment of the trial court should be reversed. We are, however, of the opinion that its attack upon the validity of the proposition above stated, as embracing the theory of the trial court in awarding damages, must be sustained. This necessitates a reversal and rendition of the judgment appealed from and makes unnecessary a discussion of additional reasons for reversal urged by appellant.

"Every overcharge, when exacted of one to the exclusion of others, is indeed, a discrimination. Not every discrimination is an overcharge." Postal Telegraph-Cable Co. v. Associated Press, 228 N.Y. 370, 127 N.E. 256, 259. The Hilltop Baking Co. case, as well as the Doering Hotel Co. case, must be regarded as a case of overcharge involving a discrimination, while this case is one of discrimination which does not involve an overcharge.

As we see it, the theory of recovery supporting the award of damages in the Hilltop and Doering cases (stated as a proposition) is that when a plaintiff shows that he was charged for gas or electricity at a rate higher than the rate he was entitled to receive, he may recover from the public utility the amount of excess paid.

There can be little doubt but what the holdings of the Hilltop and Doering cases as to the award of damages are based upon a finding that the plaintiff was entitled to a lesser rate than the one charged.

In the Hilltop case it is said : "Here appellee is content if it be allowed to recover the difference between what it has been required to pay and what it should have been required to pay. This measure of damages seems to be the logical one to be applied in a case like the one here under consideration." The amount which plaintiff "should have been required to pay" must necessarily refer to the amount which would have been due under the M. R. Schedule mentioned in the opinion, and the holding of the court is clear that the plaintiff was entitled to the rates set forth in said schedule.

The opinion of the Court of Civil Appeals in the Doering case deals primarily with the sufficiency of the evidence to support the jury's findings that a discrimination had taken place. As to the "transformer losses" discussed in the opinion, the Court cites and follows the Hilltop case holding that the proper measure of damages is the difference between the rate charged and the one which should have been charged. The Court further says:

"Appellant next contends that the judgment in allowing appellee recovery for transformer losses, and in addition the difference between what he paid on the L P rate and what he would have paid on the flat 2-cent rate for his current, allowed him to make a profit, at appellant's expense, of $2,909.30. We fail to see how this could be. Recovery for the transformer loss was but for the moneys paid for current metered to appellee which it did not receive; and recovery of the difference, the actual amount of current billed to appellee not being disputed, between what Doering paid for the current he actually received and used, and what he should have paid under a flat 2-cent rate, was merely a matter of calculation. And as we understand the record, this is what the court awarded in its judgment." 147 S.W.2d 906.

From the above quotation we take it that the Court regarded the transformer loss claim as one for money had and received — an overcharge, and further found that Doering was entitled to receive electricity under the flat 2-cent rate established by the utility.

There are many features which distinguish the Doering Hotel case from the one now before us, which we need not here notice, as it seems safe to say that the recovery allowed in that case is squarely bottomed upon findings that Doering was entitled to have his electricity metering secondarily, and was further entitled to receive electricity at the flat 2-cent per K. W. H. rate.

This brings us to a consideration of the applicable rules and principles whereby it is legally determined that a user of the facilities and services of a public utility is entitled to a particular rate. Or the matter may be stated specifically, as applicable to this case, in the form of the following question: Has appellee shown himself entitled to receive a rate of 17 cents per M. C. F.?

Rate making is primarily a legislative and not a judicial function. Texarkana & Ft. S. R. Co. v. Houston Gas & Fuel Co., 121 Tex. 594, 51 S.W.2d 284. This is not a proceeding in accordance with the provisions of Articles 1125-1132, inclusive, of Vernon's Ann.Civ.Stats. It follows therefore that in this action we are restricted to a consideration of classifications which have been in fact established by the utility itself or a proper legal authority, as we are not at liberty to either make new classifications, correct erroneous ones, or regard classifications as established, which we might believe in all fairness should be established.

Rate making authority for plants and industries within the corporate limits of the City of McAllen is vested in the governing body of said City, Art. 1119, Vernon's Ann.Civ.Stats., with right of appeal to and trial de novo by the Railroad Commission, and a further limited right of review by the district courts of Travis County. Community Natural Gas Co. v. Natural Gas & Fuel Co., Tex.Civ.App., 34 S.W.2d 900.

It therefore seems that for appellee to show that he is entitled to a particular rate, he must show that he belongs to or comes under some classification for which a rate has been set, either by the utility or some agency vested by law with rate-making authority.

The existence of a classification may be evidenced by a municipal ordinance, the ruling of a proper rate-making authority, by a published schedule of rates by the...

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2 cases
  • Ford v. Rio Grande Valley Gas Co.
    • United States
    • Supreme Court of Texas
    • October 6, 1943
  • Quality Laundry, Inc. v. Southern Union Gas Co., 11892
    • United States
    • Court of Appeals of Texas. Court of Civil Appeals of Texas
    • March 1, 1972
    ...take nothing. We affirm that portion of the judgment disallowing Appellant penalties and attorney's fees. 1 Rio Grande Valley Gas Co. v. Ford, Tex.Civ.App., 169 S.W.2d 263 (affirmed 141 Tex. 525, 174 S.W.2d 479); Leslie v. Houston Natural Gas Corporation, 280 S.W.2d 353 (Tex.Civ.App.1955, w......

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