Terre Haute Gas Corp. v. Johnson
| Decision Date | 30 December 1942 |
| Docket Number | 27736. |
| Citation | 45 N.E.2d 484,221 Ind. 499 |
| Parties | TERRE HAUTE GAS CORPORATION et al. v. JOHNSON et al. |
| Court | Indiana Supreme Court |
Appeal from Clay Circuit Court; John W. Baumunk, Judge.
Baker, Daniels, Wallace & Seagle, of Indianapolis, Rawley & Stewart, of Brazil, Cooper, Royse Gambill & Crawford, of Terre Haute, and Davis, Baltzell & Sparks, of Indianapolis (Paul Y. Davis and William G Davis, both of Indianapolis, Gilbert Gambill and Samuel D Royse, both of Terre Haute, and Robert B. Stewart, of Brazil, of counsel), for appellants Terre Haute Gas Corporation and Indiana Gas Utilities Co.
George N. Beamer, Atty. Gen., and Urban C. Stover, Deputy Atty. Gen., for appellant Public Service Commission of Indiana.
Frank Hamilton and Beasley, O'Brien, Lewis & Beasley, all of Terre Haute, for appellees.
The appellant Terre Haute Gas Corporation is a manufacturer of artificial gas and the appellant Indiana Gas Utilities Company is a public utility engaged in selling and distributing gas in the city of Terre Haute and in surrounding communities. The Utilities Company gave the Gas Corporation an option to purchase its physical assets, franchises, and permits on or before December 31, 1940. On November 20, 1940, the corporations filed separate petitions with the Public Service Commission of Indiana for the approval of said proposed purchase and sale. The Commission held a hearing on said petitions and on December 31, 1940, two of its three members entered purported orders approving said transaction and establishing a schedule of rates to be applicable to said Gas Corporation upon the consummation of said sale. The appellee Lenore H. Johnson, thereupon, brought a suit in the Vigo Circuit Court to set aside the purported orders of the Public Service Commission and to enjoin the Utilities Company from selling and the Gas Corporation from purchasing said property. Subsequently, the trial court permitted the appellee Charles J. Kolsem to intervene as a party plaintiff. The action was venued to the Clay Circuit Court, where there was a trial and a finding to the effect that the orders of the Public Service Commission were void and that the Gas Corporation and the Utilities Company should be permanently enjoined from acting thereunder. Motions for a new trial were filed by the appellant corporations and by the Public Service Commission. Upon the denial of a new trial the appellants filed motions in arrest and to modify the judgment, which were likewise overruled. This appeal followed.
The propositions duly presented and relied upon by the appellants are: (1) that neither of the appellees had any such interest in the subject matter as entitled him to maintain the action; (2) that it was error to permit John H. Beasley to appear in the court below as counsel for the appellees; (3) that it was error to admit in evidence a transcript of the testimony given at the hearing before the Public Service Commission and to permit a member of the Commission to relate a conversation he had with the mayor of Terre Haute and to relate a telephone conversation which he overheard between another member and a New York attorney; (4) that there was no evidence that the orders of the Public Service Commission were unreasonable, unlawful, or the result of fraud; and (5) that it was error to refuse to modify the judgment so that it would merely set aside the orders of the Public Service Commission and remand the case to that body. The appellants' propositions will be considered in the order stated.
By way of separate demurrers to the amended complaint of the appellee Johnson and to the intervening complaint of the appellee Kolsem the appellants challenged the sufficiency of these pleadings to show that said appellees had any such interest in the subject of the litigation as authorized them to maintain their actions. A motion for a judgment on the pleadings raised the same issue, and the sufficiency of the evidence to establish the fact of a proper interest in the appellees was presented by motions for a new trial. The appellees rely on Acts 1929, Ch. 169, §§ 1 and 2, § 54-429, Burns' 1933, § 13982, Baldwin's 1934, and § 54-430, Burns' 1933, § 13983, Baldwin's 1934. These provisions authorize actions to vacate, set aside, or enjoin orders of the Public Service Commission on the ground that they are unreasonable or unlawful or were procured by fraud. Such an action must be commenced within 60 days after entry of the order complained of and must be prosecuted by a person adversely affected thereby. Without undertaking an academic definition, it seems sufficient to say that the phrase 'adversely affected' conveys the same meaning as the common-law rule which would be applicable in the absence of the statute. Generally, to enable a private individual to invoke the judicial power to determine the validity of an administrative order, he must show that he has sustained or is in immediate danger of sustaining a direct injury as a result of the order, and it is not sufficient that he has merely a general interest common to all members of the public. Ex parte Levitt, 1937, 302 U.S. 633, 58 S.Ct. 1, 82 L.Ed. 493. People's Gas Company et al. v. Tyner, 1892, 131 Ind. 277, 31 N.E. 59, 16 L.R.A. 443, 31 Am.St.Rep. 433. 39 Am.Jur., Parties, § 11. This rule supplies the standard by which the sufficiency of the complaints and of the evidence to disclose a right to maintain the action must be determined.
The amended complaint of the appellee Johnson alleged that she was the owner of an undivided interest in certain real estate on which was situated a dwelling house which was supplied with gas for cooking and heating by the appellant Utilities Company; that she resided with her husband in another dwelling house which was likewise served by said appellant; and that she was a user and consumer of gas furnished and distributed by said Utilities Company, by reason of which she was adversely affected by the purported orders of the Public Service Commission. The evidence relating to this issue disclosed that the real estate first referred to was occupied by a tenant who used gas for cooking and that the gas supplied to the house where the said appellee lived was paid for by her with money furnished by her husband. It was alleged in the intervening complaint of the appellee Kolsem that he occupied and maintained a residence in Terre Haute which was heated with gas supplied by the Utilities Company. His testimony supported the allegation.
Public utilities enjoy monopolies and they are privileged to exact rates established by agencies set up by law. Consumers of the products of such utilities have the undoubted right to assert that they are adversely affected by rates so promulgated. The fact that the orders of the Public Service Commission embraced service rates was a sufficient basis for the appellees' right to a judicial review. It is no answer to say that the order relating to rates may not be reviewed because it required a reduction. The appellees may have believed that the reduced rates were exhorbitant. As a matter of pleading and of proof the appellees showed such an interest in the subject matter as authorized them to institute their actions.
The appellant Utilities Company filed an unverified motion to prohibit John H. Beasley from appearing as an attorney for the appellees in the court below. The motion charged that Mr. Beasley had represented said appellant generally, both prior and subsequent to the hearing before the Public Service Commission on the application for authority to sell the utility's property, and that said attorney had obtained copies of certain franchises and permits for the use of said appellant at said hearing. To this charge Mr. Beasley filed a long answer under oath in which he detailed his prior associations and connections with said appellant and he asserted that his relationship as attorney for the Utilities Company had completely terminated long before the present controversy had its inception. He specifically denied that he had ever been employed by either of the appellants in connection with the subject matter of this litigation. The proper standard of conduct under the circumstances is well stated in the Sixth Canon of Professional Ethics of the American Bar Association as follows: 'The obligation to represent the client with undivided fidelity and not to divulge his secrets or confidences forbids also the subsequent acceptance of retainers or employment from others in matters adversely affecting any interest of the client with respect to which confidence has been reposed.' We must assume, however, that the ruling of the trial court was correct on the issue formed on the unverified charge against the attorney and his sworn answer denying the same.
'Good practice in all cases requires that where a motion is founded upon matters not within the judicial knowledge of the court, there should be an affidavit as to the existence of the facts upon which it is based, showing their materiality and the necessity for invoking the aid of the court with reference thereto.' McDonel v. State, 1883, 90 Ind. 320, 322.
Relying solely upon Levi v. State, 1914, 182 Ind. 188, 104 N.E. 765, 105 N.E. 898, Ann.Cas.1917A, 654, the appellants say that it was error to admit in evidence a transcript of the testimony received by the Public Service Commission at a hearing on applications for a reduction of the rates charged by the Utilities Company. The Levi case was a criminal prosecution in which the State offered the testimony of an absent witness given at a former trial of the cause. The evidence was admitted without a showing that the witness was unavailable and this was held to be error. We find nothing helpful in that case so far as...
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