State ex rel. Gas Co. v. Pub. Serv. Comm.
| Decision Date | 04 September 1935 |
| Docket Number | No. 32768.,32768. |
| Parties | STATE OF MISSOURI at the Relation of CITIES SERVICE GAS COMPANY, Appellant, v. PUBLIC SERVICE COMMISSION and MILTON R. STAHL, ALMON ING, J.H. PORTER, J. FRED HULL and GEO. H. ENGLISH, as Members of the Public Service Commission. |
| Court | Missouri Supreme Court |
Appeal from Cole Circuit Court. — Hon. N.G. Sevier, Judge.
JUDGMENT REVERSED.
James W. Finley, R.E. Cullison and Charles H. Mayer for appellant; Mayer, Conkling & Sprague of counsel.
(1) There is no evidence of any relation of agency between the Pipe Line Company and the local distributing company; the evidence discloses that all of the gas carried by the Pipe Line Company is transported from other states than Missouri; therefore, the transportation and sale by the Pipe Line Company to the local distributing company in Missouri was purely interstate business to be regulated only by Congress. Clause 3, sec. 8 of Art. I, Const. U.S.; Public Util. Comm. v. Landon, 63 L. Ed. 577; State ex rel. Barrett v. Kansas Natural Gas Co., 68 L. Ed. 1027; East Ohio Gas Co. v. Tax Comm., 75 L. Ed. 1171; Peoples Natural Gas Co. v. Pub. Serv. Comm., 70 L. Ed. 726; Ozark Pipe Line Corp. v. Monier, 69 L. Ed. 439. (2) The evidence conclusively shows that there is an outright sale to the distributing companies at the time the gas is delivered to them of all gas delivered by the Pipe Line Company to the distributing companies; therefore the finding of the Commission, which was affirmed by the court, that in selling the gas to industries the distributing companies act as agents for the Pipe Line Company is based upon no fact and is erroneous. Waring v. Mayor of Mobile, 19 L. Ed. 342; McMillan v. Schweitzer, 87 Mo. 402; Odell v. Boston & Maine Railroad Co., 109 Mass. 50; Burrows v. Whitaker, 71 N.Y. 291. (3) Even if there be conflict between the testimony of Mr. Adams given upon the hearing of case 5771 and his testimony in the case at bar, which we deny, and even if his testimony given in that hearing, if given at the hearing in the case at bar, would have proved an agency on the part of the Kansas City Gas Company, which we deny, the testimony given in case No. 5771 had no place in the case at bar except by way of impeachment and, of course, cannot be used as proof of an affirmative fact in the case at bar. 2 Wigmore on Evidence, p. 459, sec. 1018; 28 R.C.L., p. 633, sec. 219; 40 Cyc. 2764; Fesler v. Hunter, 35 S.W. (2d) 641; State v. Hughes, 71 Mo. 635. (4) There is no evidence of dominion or obtrusiveness on the part of any holding company or company affiliated with any of the distributing companies, and no rule of public policy requiring the corporate entity of the companies to be disregarded. Smith v. Illinois Bell Tel. Co., 75 L.E. 255; Houston v. Southwestern Bell Tel. Co., 66 L. Ed. 961; Berkey v. Ry. Co., 155 N.E. 58. Moreover, the question of destroying corporate entity for violation of public policy, or for abuse of corporate relations, transcends fact finding and in the truest sense presents judicial questions, to be determined by a court having jurisdiction, where the corporation may be heard on the questions involved, and the Commission has no judicial power. Lusk v. Atkinson, 268 Mo. 116; State ex rel. Railroad v. Pub. Serv. Comm., 303 Mo. 218; State ex rel. Jenkins v. Pub. Serv. Comm., 323 Mo. 386. (5) As to the twelve sales made directly by the Pipe Line Company to twelve isolated industries situated along the Pipe Line Company's pipe line and outside of any city, the evidence is that the Pipe Line Company simply transports the gas from other states and, in fulfillment of written contracts for the gas, which contracts were previously made at Bartlesville, Oklahoma, delivers it in large quantities to the twelve industries, not in tiny streams with greatly reduced pressure, and therefore greatly enlarged volume, as is the case in distribution throughout a city, but in the original package, just as it flows through the Pipe Line Company's pipe line; therefore the sale is an incident to, and an essential ingredient of, interstate commerce. Brown v. Maryland, 6 L. Ed. 678; State Tax Comm. of Miss. v. Interstate Gas Co., 76 L. Ed. 156, 284 U.S. 41; Dahnke-Walker Milling Co. v. Bondurant, 66 L. Ed. 239. (6) The Commission had no jurisdiction of the subject matter or of the person of appellant Pipe Line Company. Being a creature of the State, the Commission has no powers except those expressly conferred, and the Pipe Line Company does not come within the jurisdiction of the Commission. Secs. 5122, 5190, R.S. 1929; Western Union Tel. Co. v. Kansas, 54 L. Ed. 355; West v. Kan. Natural Gas Co., 55 L. Ed. 716; Pullman Co. v. Kansas, 54 L. Ed. 378; Ozark Pipe Line Corp. v. Monier, 69 L. Ed. 439.
D.D. McDonald and Sam Hargus, General Counsel, and James P. Boyd, Assistant Counsel, for Public Service Commission.
(1) Cities Service Gas Company is a public utility. Sec. 20, Art. II, Const. of Mo.; Producers Transportation Co. v. Railroad Commission, 176 Cal. 499, affirmed 251 U.S. 228. (2) Cities Service Gas Company as to the sales made directly by it to industrial consumers is a public utility engaged in local business subject to the jurisdiction of the Public Service Commission. State ex rel. Barrett v. Kansas Natural Gas Co., 265 U.S. 298; Pennsylvania Gas Co. v. Pub. Serv. Comm., 252 U.S. 23; East Ohio Gas Co. v. Tax Comm., 283 U.S. 465; Salisbury & Spencer Ry. Co. v. So. Power Co., 179 N.C. 330; Town of Kearney v. N.J. Suburban Water Co., P.U.R. 1926C, 41; Clarksburg L. & H. Co. v. Pub. Serv. Comm., 84 W. Va. 638; Arkansas Natural Gas Co. v. Norton, 165 Ark. 172. (3) The affiliated distributing companies in the order of the Commission are acting as agents of Cities Service Gas Company in the sale and distribution of industrial gas and appellant is therefore engaged in the business of distributing such gas in this State. Cases under Point 2. (4) The Public Service Commission Act gives the Commission jurisdiction over appellant. Secs. 5122, 5136, R.S. 1929.
Jones, Hocker, Sullivan, Gladney & Reeder, amicus curiae.
This is an appeal by the Cities Service Gas Company, from a judgment of the Circuit Court of Cole County, where that court affirmed, on a writ of review, an order of the Missouri Public Service Commission. The relator, the Cities Service Gas Company, will be hereafter referred to as the Pipe Line and the Public Service Commission as the Commission.
This cause was instituted by the Commission on its own motion against the Pipe Line; Kansas City Gas Company; Carthage Gas Company; Jackson County Light, Heat & Power Company; Joplin Gas Company; St. Joseph Gas Company; City Light & Traction Company; Webb City & Carterville Gas Company; Ozark Distributing Company; Springfield Gas & Electric Company; and Carl Junction Gas Company, to determine if the Pipe Line was a public utility engaged in the sale and distribution of industrial gas in Missouri, and as such required to file schedules of rates. The investigation did not involve the rates charged or the valuation of property. The Commission dismissed as to Carl Junction Gas Company.
The Commission found that the Pipe Line was selling and distributing industrial gas to consumers located in the cities in this State through the Kansas City Gas Company; St. Joseph Gas Company; Joplin Gas Company; Carthage Gas Company; and Webb City & Carterville Gas Company, and that it was directly selling and distributing industrial gas from its pipe line in Missouri to consumers in this State outside the cities. The Commission further found that in so distributing industrial gas the Pipe Line was engaged in intrastate business as a public utility, and that it should file with the Commission its schedules of rates and its rules as to terms and conditions for the sale and distribution of industrial gas and thereby submit to the provisions of the Public Service Commission Act of Missouri. The Commission made an order in conformity with the above findings. The order did not include the Jackson County Light, Heat & Power Company, Springfield Gas & Electric Company, Ozark Distributing Company and City Light & Traction Company.
The Pipe Line Company contends (1) that the distributing companies are not its agent in the sale and distribution of industrial gas to consumers in cities of Missouri; (2) that it is not engaged in intrastate business by directly selling and distributing industrial gas to consumers in this State outside of these cities, and that the order of the Commission in so holding imposes a direct burden upon interstate commerce within the meaning of the Commerce Clause of the Federal Constitution.
In its brief the Commission concedes that there is no dispute as to what the Pipe Line is actually doing in Missouri; that "the controversy is over the legal conclusions to be drawn from its action."
The facts upon which the Commission found that the Pipe Line was distributing gas to industries in cities by the distributing companies as its agents are as follows:
The Pipe Line is a Delaware corporation engaged in producing, gathering and selling natural gas, produced and gathered in Texas, Oklahoma and Kansas, and transported by it through its pipe lines into Missouri. The common stock of the Pipe Line except qualifying shares held by the directors, is owned by the Empire Gas & Fuel Company, the common stock of which is owned by the Cities Service Company. The other companies mentioned in the report are distributors of gas in Missouri.
The Gas Service Company owns the common stock of the Kansas City Gas Company, Carthage Gas Company, Jackson County Light, Heat & Power Company, Joplin Gas Company, St. Joseph Gas Company, Ozark Distributing Company, and Webb City & Carterville Gas Company. The entire capital stock of the Gas Service Company is owned by the Cities Service Company. The common stock of the City Light & Traction Company is owned by the Cities...
To continue reading
Request your trial