Tennessee Eastern Elec. Co. v. Hannah

• Decision Date: 22 December 1928
• Citation: 12 S.W.2d 372,157 Tenn. 582
• Parties: TENNESSEE EASTERN ELECTRIC CO. v. HANNAH, Commissioner, et al.
• Court: Tennessee Supreme Court

12 S.W.2d 372

157 Tenn. 582

TENNESSEE EASTERN ELECTRIC CO. v. HANNAH, Commissioner, et al.

Supreme Court of Tennessee.

December 22, 1928

Appeal from Chancery Court, Davidson County; John R. Aust Chancellor.

Suit by the Tennessee Eastern Electric Company against Harvey H Hannah, Commissioner, and others. From the decree complainant appeals. Modified and affirmed.

Alfred A. Gillette, of Boston, Mass., Cox & Taylor, of Johnson City, and Cornelius & Wade, of Nashville, for appellant.

Roberts & Roberts and Roy H. Beeler, all of Nashville, for appellees.

CHAMBLISS J.

Complainant is a public service corporation, chartered in Massachusetts and domesticated in Tennessee, owning and operating hydroelectric plants in upper East Tennessee and supplying electricity in that section of the state. The defendant Railroad and Public Utilities Commission, having issued a citation to the complainant to appear and show cause why a certificate of necessity and convenience should be issued to it to make certain developments in the Holston river, this bill was filed, challenging the jurisdiction of the commission to require complainant to apply for a certificate of necessity and convenience, and challenging also the validity of provisions incorporated by the commission in the forms promulgated by it, and required by its order to be agreed to by the applicant as a condition precedent of the consideration by the commission of any application by complainant for said certificate. A declaratory judgment was sought, defining the rights of the parties, and as a basis of the asserted right to such a judgment it was alleged that application for a permit, or permits, by complainant was pending before the Federal Water Power Commission, essential to the proposed projects for development of water power; that valuable rights were involved; that favorable action by the Federal Water Power Commission was dependent upon the obtaining of certain preliminary evidences of approval from the proper state authorities; and that the initial conditions imposed by the form of application proposed and required by the defendant commission were arbitrary and unreasonable, and exacted the relinquishment in advance of constitutional rights.

The chancellor sustained a demurrer filed by the commission in so far as it went to the right of the commission to issue, and the obligation of the complainant to obtain, a certificate of necessity and convenience as a condition of proceeding with the power developments proposed; but he was of opinion that the making of the rules and regulations challenged was a legislative rather than judicial function, and therefore subject to review in his court, and, holding the case a proper one for a declaratory judgment, proceeded to pass upon and adjudge with respect to the various provisions of the form promulgated by the commission. He found certain of the rules properly subject to objection as unreasonable and beyond the power of the commission to promulgate.

The chancellor held that the commission was within its jurisdiction in exacting that the complainant must procure the issuance of a certificate of necessity and convenience before proceeding, and that holding was not appealed from and is now the law of the case. The appellants insist (1) that the chancery court was without jurisdiction, the remedy being exclusively by certiorari in a court of law; (2) that no case for a declaratory judgment is presented, both because there is no sufficiently matured controversy, in that complainant had not obtained essential preliminary grants from the federal government, and for lack of a contradictor; and (3) that the chancellor was in error in his holding as to three rules adjudged by him to be unreasonable and invalid. The substance of these will be hereinafter stated.

Without elaborate discussion, we are of opinion that the chancellor was correct in holding, both that the chancery court had jurisdiction, and that a case for a declaratory judgment was fairly made. In re Cumberland Power Co., 147 Tenn. 509, 511, 249 S.W. 818, is authority for the first proposition. That which is sought to be reviewed in this proceeding is the power exercised by the commission in making rules for the future, which is a legislative function, not a decision of any controversies arising under its rules, which is a judicial or semijudicial, function.

Nor can we say that the chancellor has gone beyond the limits of his discretionary power in holding the case presented to be the proper subject of a declaratory judgment. "This court is committed to a liberal interpretation of the Declaratory Judgments Act." Hodges v. Hamblen County, 152 Tenn. 395 277 S.W. 901. His holding that the commission had the power to require the complainant to obtain from it a certificate is unappealed from. We think the necessity for the obtaining of a certificate, in order that it might proceed with the proposed developments, was made sufficiently to appeal. It was fairly shown that the developments projected could not be proceeded with in compliance with federal requirements until...