State ex rel. Kansas City Public Service Co. v. Latshaw

• Decision Date: 08 July 1930
• Docket Number: 29896
• Citation: 30 S.W.2d 105,325 Mo. 909
• Parties: The State ex rel. Kansas City Public Service Company v. Ralph S. Latshaw, Judge of Circuit Court
• Court: Missouri Supreme Court

30 S.W.2d 105

325 Mo. 909

The State ex rel. Kansas City Public Service Company v. Ralph S. Latshaw, Judge of Circuit Court

No. 29896

Supreme Court of Missouri

July 8, 1930

Rehearing Overruled July 8, 1930.

Preliminary rule made absolute.

Robert W. Otto, Charles M. Howell, Richard J. Higgins, Henry N. Ess Charles L. Carr and Powell C. Groner for relator;

D D. McDonald and J. P. Painter of counsel.

(1) The action of respondent, in assuming jurisdiction of the city's petition for injunction and in issuing the temporary restraining order, constitutes a usurpation of judicial power requiring correction by this court through writ of prohibition, for the reason that by virtue of the Public Service Act the courts of this State are prohibited from enjoining the Commission in the performance of its official duties. (a) The city's petition for injunction prays (among other things) that relator and the Commission be restrained absolutely from taking any further action whatever in connection with the pending rate case (R. 22-3); and also prays that the Commission be restrained from proceeding with its valuation, appraisal and audit of relator's property until a court of competent jurisdiction has construed the franchise contract (R. 23). The temporary restraining order issued by respondent enjoins (among other things) any further proceedings whatever by relator and the Commission in the cause; and also restrains the Commission from proceeding with the valuation, appraisal and audit until a court of competent jurisdiction has construed the franchise contract. (b) In entertaining the city's petition and issuing the temporary restraining order, respondent acted in contravention of the Public Service Commission Act, which prohibits the courts from enjoining, restraining or interfering with the Commission "in the performance of its official duties" or from reviewing, reversing, correcting or annulling the orders or decisions of the Commission, or suspending or delaying the execution or operation thereof, except by the prescribed method of review. Public Service Commission Act, sec. 111 (R. S. 1919, sec. 10522); Secs. 10521-10526, R. S. 1919. (c) The Commission was engaged "in the performance of its official duties" in entertaining relator's rate increase applications and making an investigation, valuation, appraisal and audit to determine the reasonableness and lawfulness of the proposed rates therein set forth. Public Service Commission Act, secs. 27, 29, 31, 35, 47, 48, 60 (R. S. 1919, secs. 10436, 10438, 10440, 10444, 10456, 10457, 10469); State ex rel. Sedalia v. Public Service Commission, 275 Mo. 201; Sexton v. Ry. Co., 173 Cal. 760. (d) Therefore, respondent was without jurisdiction to entertain the city's petition or issue the temporary restraining order either against the Commission or against relator, a party before the Commission. Public Service Commission Act, secs. 110, 111 (R. S. 1919, secs. 10521-2); Sexton v. Ry. Co., 173 Cal. 760. Judicial interference in advance of the determinations of the Commission is contrary to the plan and intent of the Public Service Commission Act, and the intent of the framers of the act will be given effect. State ex inf. Barker v. Kansas City Gas Co., 254 Mo. 541. (e) Prohibition is the proper proceeding to prevent an inferior court from acting without, or in excess of its jurisdiction. Constitution of Missouri, art. 6, sec. 3; R. S. 1919, sec. 2057; State ex rel. Stroh v. Klene, 276 Mo. 206; State ex rel. Hyde v. Westhues, 316 Mo. 469. (2) The action of respondent, in assuming jurisdiction of the city's petition for injunction and in issuing the temporary restraining order, constitutes a usurpation of judicial power requiring correction by this court through writ of prohibition, for the reason that (a) under the Constitution and statutes of Missouri and the charter of Kansas City, said city is without power to fix inviolably, by franchise or contract, the rates to be charged by relator or the value of its property or its rate of return, (b) the regulation of public utility rates, return and valuation is a legislative function exercised under the police power, and (c) the Commission, an administrative arm of the Legislature, has been vested with sole and exclusive jurisdiction to hear and determine relator's applications and to prescribe and regulate relator's rates and to ascertain and determine the valuation of relator's property and its rate of return, subject to judicial review of its proceedings but not to interference or control in advance of its determinations. (a) The city's petition for injunction alleges that the franchise constitutes a contract between relator and the city, so that relator is without right to prosecute its rate increase proceedings pending before the Commission and the Commission is without jurisdiction to entertain same or act thereon. The city prays injunctive relief, in view of the alleged contractual nature of the franchise, restraining relator and the Commission from taking any further action in the cause, and restraining the Commission from valuing, appraising and auditing relator's property until the alleged franchise contract has been construed by a court of competent jurisdiction. The temporary restraining order grants the relief prayed. (b) The Commission is vested with sole and exclusive jurisdiction to regulate relator's rates and, in the exercise of the police power, may prescribe just and reasonable rates for relator, irrespective of any franchise of contract fixing relator's rates for street railway service, subject to judicial review of its proceedings. Constitution of Missouri, art. 12, sec. 5; Public Service Commission Act, sec. 47 (R. S. 1919, sec. 10456); City Charter, 1925, sec. 416; State ex rel. Sedalia v. Public Service Commission, 275 Mo. 201 (writ of error dismissed for want of jurisdiction, 251 U.S. 547); City of Fulton v. Public Service Commission, 275 Mo. 67 (writ of error dismissed for want of jurisdiction, 251 U.S. 546); Kansas City Nut & Bolt Co. v. Kansas City Power & Light Co., 275 Mo. 529; St. Louis v. Public Service Commission, 276 Mo. 509; Kansas City v. Public Service Commission, 276 Mo. 539 (writ of error dismissed for want of jurisdiction, 250 U.S. 652); State ex rel. Harrisonville v. Public Service Commission, 291 Mo. 432; State ex rel. Washington University v. Public Service Commission, 308 Mo. 328; State ex rel. St. Louis Water Co. v. Public Service Commission, 316 Mo. 842; Ex parte Packman, 317 Mo. 732; Baton Rouge v. Baton Rouge Waterworks Co., 30 F.2d 897. (c) The Commission is vested with sole and exclusive jurisdiction to regulate relator's return or income, and to determine the rate-base value of its property, irrespective of any franchise or contract fixing relator's return, income or the value of its property. The determination of a just and reasonable return or income, and the valuation of the property upon which it is based, are essential elements in determining just and reasonable rates and are integral parts of the police power. Public Service Commission Act, secs. 47, 60 (R. S. 1919, secs. 10456, 10469); State ex rel. Washington University v. Public Service Commission, 308 Mo. 328; State ex rel. Mo. So. Railroad Co. v. Public Service Commission, 259 Mo. 704; State ex rel. Columbia Tel. Co. v. Atkinson, 271 Mo. 28; Home Tel. Co. v. Carthage, 235 Mo. 644; Southwest Mo. Railroad Co. v. Public Service Commission, 281 Mo. 52; Bluefield Waterworks & Improvement Co. v. Public Service Commission of West Virginia, 262 U.S. 679; State ex rel. Telephone Co. v. Public Service Commission, 262 U.S. 276; McCardle v. Indianapolis Water Co., 272 U.S. 400. (d) A writ of prohibition is the proper remedy and will be issued by a Supreme Court to prohibit an inferior court from interfering by injunction with proceedings before a Public Service Commission in advance of its hearings and determinations. Crowell & Spencer Lumber Co. v. Public Service Commission of Louisiana, 157 La. 676.

John T. Barker, Marcy K. Brown, Jr., and William H. Allen for respondent.

(1) By filing a motion for judgment on the pleadings relator admits that it has violated every term and condition of its contract with Kansas City. Under such circumstances relator is entitled to no relief in this court. "He who seeks equity must do equity." "He who comes into equity must come with clean hands." McFarland v Bishop, 282 Mo. 558; Keener v. Williams, 307 Mo. 707; Kline v. Vogel, 90 Mo. 245; Corby v. Bean, 44 Mo. 381; Crane v. Deacon, 253 S.W. 1072; Pan American Co. v. United States, 273 U.S. 505; Thomas v. Railroad Co., 109 U.S. 526; Neblett v. Macfarland, 92 U.S. 103; Talbott v. Hill, 261 F. 246; Fullman v. Steel City Electric Co., 2 F.2d 6; 10 R. C. L. 389; 22 R. C. L. 3, 8; 32 Cyc. 604. (2) In 1927 Kansas City entered into a franchise contract with relator. Such agreement is different from the ordinary franchise contract and has never been construed by any court. It is alleged that relator has violated practically every term and condition of such contract. Kansas City brought a suit in the Circuit Court to have this contract construed and enforced. This proceeding was proper as the Public Service Commission has no jurisdiction to either construe or enforce this contract. State ex rel. Comm. v. Ry. Co., 280 Mo. 466; State ex rel. Terminal Ry. Co. v. Comm., 308 Mo. 373; Louisiana v. La. Water Co., P. U. R. Ann. 1918B, 783; La. P. S. C. v. Company, 264 U.S. 399; M., K. & T. Ry. Co. v. Oklahoma, 271 U.S. 309; St. Cloud P. S. C. v. City, 265 U.S. 362; Company v. Los Angeles, 211 U.S. 273; Company v. City of Chariton, 255 U.S. 541; City v. Paducah Ry. Co., 261 U.S. 272; Company v. Town of Decatur, 262 U.S. 437; Company v. City, 249 U.S. 413. (3) The suit below was to...