Wilson & Co. v. Okla. Gas & Elec. Co.

• Decision Date: 14 April 1942
• Docket Number: Case Number: 29950
• Citation: 1942 OK 152,126 P.2d 1009,190 Okla. 528
• Parties: WILSON & CO., Inc., v. OKLAHOMA GAS & ELEC. CO. et al.
• Court: Oklahoma Supreme Court

1942 OK 152

126 P.2d 1009

190 Okla. 528

WILSON & CO., Inc., v. OKLAHOMA GAS & ELEC. CO. et al.

Case Number: 29950

Supreme Court of Oklahoma

Decided: April 14, 1942

Syllabus

¶0 1. CORPORATION COMMISSION--Action to recover on bonds given to supersede order of commission stayed pending determination of action in district court to enjoin enforcement of such order.

Under the particular facts and circumstances involved in this case, when suit is commenced in district court to enjoin the enforcement of an order of the Corporation Commission, an independent action to recover on the bonds given to supersede such order may be stayed pending determination of the suit in equity.

2. MANDAMUS--PROHIBITION--Writs not available to obtain judicial review of rate order of Corporation Commission.

Neither mandamus nor prohibition is available to obtain a judicial review of a rate order issued by the Corporation Commission.

Appeal from District Court, Oklahoma County; Clarence Mills, Judge.

Action by Oklahoma Gas & Electric Company and others against Wilson & Company, Inc. Judgment for plaintiffs, and defendant appeals. Affirmed.

Hayes, Richardson & Shartel, of Oklahoma City, and Paul Ware, of Chicago, Ill., for plaintiff in error.

Rainey, Flynn, Green & Anderson, of Oklahoma City, and Underwood, Canterbury, Pinson & Lupardus, of Tulsa, for defendants in error.

GIBSON, J.

¶1 This action was instituted in the district court of Oklahoma county by Oklahoma Gas & Electric Company and the trustees of Oklahoma Natural Gas Corporation, dissolved, against Wilson & Company and the Corporation Commission of the State of Oklahoma, to enjoin the enforcement of an alleged illegal order issued by said commission. From a judgment granting interlocutory injunction, Wilson & Company appeals.

¶2 The judgment appealed from restrains Wilson & Company, until further order, from further prosecution of an action pending in said court, entitled Wilson & Company, Plaintiff, v. Oklahoma Gas & Electric Company and Fidelity & Casualty Company of New York, Defendants, No. 71898, in which action plaintiff is seeking to recover judgment on certain supersedeas bonds executed by said defendants to supersede the order of the commission aforesaid on appeal therefrom to the Supreme Court.

¶3 For a number of years the controversy over said order and bonds has been in the state and federal courts. The order was issued on April 13, 1926, under No. 3388, and purported to reduce the rate of charges on natural gas then being supplied to Wilson & Company by Oklahoma Gas & Electric Company. Appeal was taken to the Supreme Court by the latter company and Oklahoma Natural Gas Corporation, and the bonds in question were given to supersede the order. The Supreme Court affirmed the commission (Oklahoma Gas & Electric Co. v. Wilson & Co., 146 Okla. 272, 288 P. 316).

¶4 Immediately thereafter the plaintiffs in the instant case, proceeding on the assumption that the order in question and its affirmance as aforesaid were merely the result of an administrative proceeding, filed an action in the District Court of the United States for the Western District of Oklahoma seeking, as they assert, to test the validity of the order by judicial review and to enjoin the enforcement thereof. After the questions involved had been before the Circuit Court of Appeals and the Supreme Court of the United States on a number of occasions, the latter court finally disposed of the case on jurisdictional grounds, holding that by reason of the provisions of 28 U.S.C.A. 379 the federal courts were prohibited from issuing injunctions in such cases to stay proceedings in state courts (Oklahoma Packing Co. et al. v. Oklahoma Gas & Electric Co. et al., 309 U. S. 4, 60 S. Ct. 215, 84 L. Ed. 537). In that case the court was apparently of the opinion that the plea interposed in the action on the bonds, No. 71898, attacking the validity of order No. 3388 was a proper method of obtaining a judicial determination of that question, and in this connection the court said:

"The present suit, therefore, is one -for an injunction 'to stay proceedings' previously begun in a state court. The decree below is thus within the plain interdiction of an Act of Congress, and not taken out of it by any of the exceptions which this court has heretofore engrafted upon a limitation of the power of the federal courts dating almost from the beginning of our history and expressing an important congressional policy-to prevent needless friction between state and federal courts ..."

¶5 Thereupon the plaintiffs commenced the present action.

¶6 In the meantime, prior to the decision of the Supreme Court of the United States, 309 U. S. 4, supra, the action commenced by Wilson & Company, No. 71898, to recover on the bonds as aforesaid, was prosecuted to final judgment in favor of the plaintiff therein in the face of a motion to stay proceedings pending final disposition of the federal court action brought to test the validity of said order No. 3388. On appeal from the judgment in cause No. 71898 we held that the trial court erred in denying the motion to stay the proceedings, and remanded the cause with directions to stay the action in accordance with defendants' motion (Oklahoma Gas & Electric Co. et al. v. Wilson & Co., Inc., 178 Okla. 604, 63 P.2d 703). Subsequent to the mandate in that case the Supreme Court of the United States handed down its decision, supra, denying jurisdiction. Then, as stated above, this action followed.

¶7 Wilson & Company has interposed the following defenses to the present action:

¶8 First. The judgment of this court affirming Order No. 3388 on review thereof (146 Okla. 272, 288 P. 316) was res judicata of the issues pertaining to the primary obligation of the Oklahoma Gas & Electric Company to refund the overcharge for natural gas; that the proceedings on appeal constituted a judicial review as distinguished from a legislative review, and was final.

¶9 Second. That although the action of this court on said appeal may have constituted no more than the final step in a legislative proceeding to establish rates, the district court was nevertheless without jurisdiction to review or annul or to enjoin the enforcement of said order by reason of the provisions of section 20, art. 9, of the Constitution.

¶10 Third. That the jurisdiction of the district court to review the order in an equitable action is not essential to the validity of the same, since both this court and the federal district court have such jurisdiction.

¶11 Fourth. That another action between the parties, No. 71898, above, involving the same cause was pending in the same court; that the validity of said order No. 3388 could be tested by way of defense in said action No. 71898.

¶12 There were other defenses urged which would go to the merits of the order in question and not to the jurisdiction of the district court in testing the validity of said order in an equitable action. They have no part in the proceedings to obtain the interlocutory injunction here on appeal.

¶13 The trial court in granting the injunction in this case held that the decision of this court on the former appeal (178 Okla. 604, 63 P.2d 703) was clearly to the effect that the plaintiffs were justified in considering our review of order No. 3388 as being legislative and not judicial, and that the plaintiffs under the circumstances were entitled to maintain an action in equity to test the validity of the order, and that our decision was now the law of the case.

¶14 And such was our holding in that case. But the decision had specific reference to the injunction suit then pending in the federal court. The question of the propriety of such a suit in a state court was not before us. We also held that by reason of the particular circumstances involved, the plea in No. 718918 attacking the validity of order No. 3388 was not an effective method of obtaining a judicial review thereof; that where direct attack in equity is made on such an order the liability thereon is not final so as to support such an action as No. 71898 until its validity is judicially determined by direct attack in equity. Our opinion was before the Supreme Court of the United States when the opinion reported in 309 U. S. 4, above, was promulgated. Why the above pronouncement of this court was not there recognized, we are unable to say. The minority opinion does recognize our holding, and considers the same as a purely state question (309 U. S. 11, 12), which it is.

¶15 In our former opinion (178 Okla. 604, 63 P.2d 703), we referred to Oklahoma Cotton Ginners' Ass'n v. State, 174 Okla. 243, 51 P.2d 327, wherein it was held that our reviews of rate orders such as order No. 338 were judicial, and said:

"At the time this cause was tried and determined in the lower court the Cotton Ginners Case had not been decided, and the right to judicial review of rate orders in state courts remained uncertain, as will clearly appear from our decisions at that time. See McAlester Gas & Coke Co. v. Corporation Commission, 101 Okla. 268, 224 P. 698; also Oklahoma Nat. Gas Co. v. Russell, 261 U. S. 290."

¶16 Then, following the decision in Corporation Commission v. Cary, 296 U. S. 452, 66 S. Ct. 300, 80 L. Ed. 324, we summed up our holding as follows:

"In the instant case, in view of the fact that defendants' right to a judicial remedy in the state courts was uncertain, the federal court acquired jurisdiction of the cause instituted therein by defendants. That remedy was available to them as the only certain method of obtaining a judicial determination of the validity of the commission's order. The suit was a direct attack upon such order. and until its validity was established in that suit, the state court was without jurisdiction to proceed with an action based upon such order. This for the reason that where direct attack in equity is made upon the order of the commission, the defendants' liability on such order is not finally determined judicially

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