Sw. Bell Tel. Co. v. State, Case Number: 26340

Decision Date13 July 1937
Docket NumberCase Number: 26340
CourtOklahoma Supreme Court

¶0 1. CORPORATION COMMISSION - Public Utility Rates - Power to Grant Rehearings.

Where the Corporation Commission of Oklahoma has jurisdiction of a proceeding to inquire into the reasonableness of the rates charged by a public utility in Oklahoma, and after a full hearing thereon has made an order, the commission has implied power and authority to entertain an application for rehearing on the matter and the power to set aside its order and upon reconsideration of the matter to enter another order; provided such is done within a reasonable time and before an appeal from such order has been lodged in the Supreme Court and no prejudice thereby is shown.

2. SAME - APPEALS - Presumption of Reasonableness of Order.

Where an appeal has been taken from an order of the Corporation Commission, the action of the commission appealed from is regarded as prima facie just, reasonable and correct; and the burden of rebutting this presumption lies upon the complaining party.

3. SAME - Burden of Proof That Rate Order is Confiscatory.

Where a public utility company seeks to set aside a rate order upon the ground of confiscation, it has the burden of establishing the alleged confiscation with clarity and definiteness befitting the cause.

4. SAME - Method of Determining present Fair Value of Properties for Rate-Making Purposes.

In a hearing to establish the present fair value of the properties of a public utility for rate-making purposes, no precise formula is more acceptable than any other formula designed to ascertain the figure sought; and a present fair Value arrived at by taking into consideration the original east, less depreciation, plus an allowance, for working capital is acceptable, when the results obtained thereby are sustained by the evidence.

Appeal by the Southwestern Bell Telephone Company from order of the State Corporation Commission. Order affirmed.

J.R. Spielman, John H. Cantrell, and E.W. Clausen, for plaintiff in error.

Holmes Baldridge (J.B.A. Robertson and Arthur Holloway, of counsel), for defendants in error.


¶1 This is an appeal from an order of the State Corporation Commission and involves Southwestern Bell Telephone Company, a corporation. The commission began a general investigation of the rates, charges, and practices of all telephone companies within the state of Oklahoma, under one general cause. This cause was divided into divisions, and division III is involved herein and is concerned with the reasonableness of the rates charged for telephone service at Tulsa, Okla. The hearing resulted in an order for a reduction of 25 cents per month, or $3 per year, for one-party, two-party, and four-party residential telephones in Tulsa. The company appeals, asserting that the reduction results in confiscation of its property by virtue of establishing inadequate rates.

¶2 The company makes three assignments of error, two of which are argued under subheads. We are considering these assignments in a different order, and we will dispose of III first, II next, and I last.

¶3 Proposition III. "The commission exceeded its authority and jurisdiction in vacating its former order No. 8335, and granting a rehearing and substituting therefor order No. SCM, complained of in this cause."

¶4 This cause was heard at great length; only one of the members of the commission heard the evidence. After the parties had closed, the matter was taken under consideration, and on December 10, 1934, the commission filed and entered Order No. 8335, which denied any reduction in rates for the Tulsa exchange. This order was signed by two members of the commission only. December 26, 1934, A.F. Sweeney, a citizen of Tulsa, Okla., filed motion to set aside order and for rehearing or consolidation with Cause No. 11803, and on January 16, 1935, the city of Tulsa, Okla., a municipal corporation, filed a petition for rehearing and oral argument. Upon consideration of these pleadings the commission made an order on January 22, 1935, granting the relief sought in those pleadings and set the cause for further hearing. Between the date of the order in December and the order in January, Commissioner Hughes, who signed Order No. 8335, had gone Out of office and had been succeeded by Commissioner Shaw. Neither of these commissioners heard the evidence. Upon further consideration of the matter the commission made and entered Order No. 8666, from which this appeal arises.

¶5 The contention is made that the commission was without authority or jurisdiction to grant a rehearing and to substitute another order for the final order theretofore made. In other words, the company contends that when the commission has held a hearing, and has received evidence, and upon consideration thereof finds and orders certain matters, it thereupon has made a final order disposing of the cause, and the commission is without power to review what it has ordered. To follow this one step further, it means that an order once entered is conclusive, unless reversed on appeal, and a new proceeding is necessary to authorize a different order.

¶6 The company insists there is no express grant of power to the commission to review Its orders, and the opponents admit this. However, opponents insist there is implied power to this in respect to the powers and duties devolving upon the commission. The company denies this.

¶7 It is needlessly repetitious to say that executive, legislative, and judicial powers and functions are given the commission. It is this co-existence of inconsistent functions which renders the question difficult.

¶8 A hearing to determine a rate for a public utility is a legislative proceeding. Prentice v. Atlantic Coast Line Co., 211 U.S. 210, 53 L.Ed. 150. But it is obvious that the organization of the commission for the hearing, the general course of the procedure, and the ultimate action of the commission more nearly approximates a judicial proceeding. An appeal follows, in which the reasonableness (correctness) of the finding and rate ordered is reviewed. A review of the action of a legislative body acting in a matter of legislation is unknown, except in special boards, whose duties and functions embody those pertaining to more than one of the governmental branches. However, it is not an answer to our question to say that a legislative body may repeal, amend or extend its legislation at its whim. There is implicit in a rate proceeding enough of the aspects of the orderly procedure inherent in due process of law to require that the matter of a review, by the body acting, approximate judicial procedure. Nevertheless, the rules applicable to courts in this aspect may not be susceptible of strict or technical application.

¶9 The earlier opinions of this court on appeals from the commission disclose that the issue of review or rehearing has been considered. In the cases of A., T. & S. F. Ry. Co. v. Love, 23 Okla. 192, 99 P. 1081, and K. C. So. Ry. Co. v. Love, 23 Okla. 224, 100 P. 22, it was held that the filing of a motion for new trial and refusal thereof were not necessary to an appeal. This conclusion was reached upon considering the method of appeal set out in the Constitution as contrasted with the statutory method of appeal from trial courts by case-made. It was pointed out, however, that such motions were not expressly provided for.

¶10 In the case of A., T. & S. F. Ry. Co. v. State, 82 Okla. 288, 200 P. 232, it appears that the commission actually made an order, entertained, and granted a new trial, and upon consideration of points of law entered a second order. This was not assigned as error, but the procedure was not criticized or condemned.

¶11 In the case of St. L. & S. F. Ry. Co. v. Williams, 25 Okla. 662, 107 P. 428, a motion for new trial was filed and denied. Among the errors assigned on appeal was the refusal of the commission to grant a continuance of the hearing set. We said in our opinion:

"In order to have a reversal of the action of the commission in this respect, as no proper showing was made for a continuance at the time of the hearing, there should have been an affirmative and further showing by motion for the reopening of this case in order that it might defend. Whilst a motion for a new trial is not required in order to have the action of the commission reviewed by this court, yet, if, within proper time after this, order has been made, a motion has been filed before the commission setting forth facts showing that this order was unreasonable and unjust, and that it did not have sufficient notice in which to meet the an which the order was entered, and that if it had been granted a continuance such defense would have been made, then the appellant would be in a position to complain here of the commission's action overruling the motion for a continuance of closing Vie case. The motion for new trial filed in this case does not set up any affirmative fact to show that it was prejudiced in not being granted a continuance."

¶12 In the case of Pioneer Tel. & Tel. Co. v. State, 40 Okla. 417, 129 P. 1033, in discussing the methods by which the orders of the commission could be attacked by an aggrieved party, it was said:

"Three remedies were available to the appellant by which the validity of said order might be challenged: (1) By appeal as provided in section 20 of art. 9 (sec. 238, Williams' Anno. Ed.) of the Constitution; (2d) by application made directly to the commission to set aside order (sec. 18 of art. 9 [see. 234, Williams' Anno. Ed.1 of the Constitution); and (3) by an action in equity to restrain its enforcement. As a matter of practice the first two remedies should be sought before the last remedy is resorted to. * * *"

¶13 In our opinion, "an application * * * to set aside order" means an application or motion for new trial, rehearing, review by the commission of its...

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