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(125 Kan. 346, 264 Pac. 68.)

having been increased, all customers may avail themselves of the service for the coming winter.

"The Hutchinson Gas Company."

Following this announcement, on July 14, 1927, the city of Hutchinson filed this action in the district court

of Reno county to enjoin the Hutchinson Gas Company from putting these self-prescribed rates into effect. The petition briefly narrated the antecedent litigation in the district court of Shawnee county, and alleged that the new rates were "illegal, unauthorized, and unlawful," that plaintiff was without an adequate remedy at law and that "plaintiff alleges that the Hutchinson Gas Company is a public utility operated wholly within the city of Hutchinson and it is operated principally for the benefit of said city and its people; and that by reason thereof, the city of Hutchinson has exclusive original jurisdiction in the matter of fixing rates to be charged and charges to be demanded, exacted or received by the Hutchinson Gas Company for natural gas furnished to the city of Hutchinson and its people."

Four days later a hearing was had on the city's application for a temporary injunction. The gas company moved to dismiss for want of jurisdiction, and because of the pendency in the Supreme Court of the appeal from the judgment of the district court of Shawnee county. The motion was overruled; evidence was briefly presented on plaintiff's behalf; the trial court found the facts as alleged in plaintiff's petition; and the defendant gas company was restrained from putting the new rates in effect. Hence this appeal.

Owing to the importance of the subject, it seems advisable, even at the risk of repeating what this court has already said, to consider at some length the matters presented in this appeal.

We have set out above a literal quotation from plaintiff's petition, in which it is alleged that the defendant gas company is a utility op

erated wholly within the city of Hutchinson and principally for the benefit of that city and its people, and that "the city of Hutchinson has exclusive original jurisdiction in the matter of fixing rates to be charged and charges to be demanded, exacted or received by the Hutchinson Gas Company for natural gas furnished to the city of Hutchinson and its people."

Now, it does not appear that this allegation received any consideration in the trial court; it is not discussed in the briefs of counsel, and it is very doubtful if it has any merit (Winfield v. Court of Industrial Relations, 111 Kan. 580, syl. ¶ 3, 207 Pac. 813), but it will serve as a starting point for a discussion of the pertinent law of this case.

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The Public Utilities Act provides: The power and authority to control and regulate all public utilities and common carriers situated and operated wholly or principally within any city or principally operated for the benefit of such city or its people, shall be vested exclusively in such city, subject only to the right to apply for relief to said Public Utilities Commission as hereinafter provided in § 33 of this act." Laws 1911, chap. 238, § 3, Rev. Stat. § 66-104.

Section 33 of the act, among other matters, provides for a review of public utility rates and service regulations prescribed by a city government. Rev. Stat. § 66-133.

In Welsbach Street Lighting Co. v. Public Utilities Commission, 101 Kan. 774, 778, L.R.A.1918D, 310, P.U.R.1918B 564, 169 Pac. 206, it was said: "The cities of this state have always had the power to regulate and control their local public service corporations-assuming that the furnishing of lamp-posts, etc., is a public service. Gen. Stat. 1868, chaps. 18, 19; Gen. Stat. 1915, chaps. 17-20. Cities still have that power except where they have been stripped of it by the Public Utilities Act. Laws 1911, chap. 238, § 40; Gen. Stat. 1915, § 8368; Humphrey v. Pratt, 93 Kan. 413, 418, 144 Pac.

197. And where the utility service is furnished wholly or principally within one city, the power of control is expressly reserved to the city. Sections 3 and 33, Public Utilities Act. If the local utility company and the city come to loggerheads, then the Public Utilities Commission may take jurisdiction by a proceeding somewhat in the nature of an appeal or right of review. Laws 1911, chap. 238, § 33; Gen. Stat. 1915, 8361."

It should therefore be perfectly clear that if defendant was a onecity utility, whose gas rates and charges were within the primary jurisdiction of the governing body of the city of Hutchinson, the proper course for the city was to have had a proceeding instituted before itself in its governmental capacity and to have given a hearing to all concerned, including the gas company, and then promulgate a schedule of rates to be observed by the gas company. If the gas company felt aggrieved it could invoke its statutory right under §§ 3 and 33 of the Utilities Act (Rev. Stat. §§ 66-104, 66133), and apply to the Public Service Commission for relief; and, failing there, it could, of course, invoke whatever judicial redress might be available to it under the guaranty of state and Federal Constitutions. If the gas company had not invoked a review by the Public Service Commission or had failed before that tribunal, its compliance with the rates imposed by the city could have been enforced by mandamus. State ex rel. Dawson v. Parsons Street R. & E. Co. 81 Kan. 430, 28 L.R.A. (N.S.) 1082, 105 Pac. 704; State ex rel. Dawson v. Chicago, B. & Q. R. Co. 85 Kan. 649, 118 Pac. 872.

But we can hardly fail to note that in the collateral litigation, No. 27,945, Hutchinson Gas Company v. Public Service Commission, now pending before this court, the city of Hutchinson did not attempt to, invoke its alleged "exclusive original jurisdiction in the matter of rates to be charged" by the defendant gas company. It began by filing with

the Public Service Commission a complaint against the gas company charging that the gas rates were excessive, etc., and praying that the service charge of 75 cents per month be abolished or reduced to 25 cents, and for an order "reducing the gas charge and rates to be exacted from domestic consumers in a sum not exceeding 35 cents per thousand cubic feet for gas metered and sold to such domestic consumers and to this complainant."

It will thus be seen that if the city of Hutchinson had the original jurisdiction over gas rates in that city, it has not exercised that jurisdiction. In this case it merely brushed aside the whole Public Utilities Act and all that had already been undertaken by the Public Service Commission pursuant to a complaint lodged with that tribunal by this plaintiff, as well as all that had been considered and judicially determined by the district court of Shawnee county concerning valuations, income, expense, and the many pertinent and incidental matters which enter into a just and compensatory schedule of gas rates, sought by ill-advised injunctive interference to prevent this defendant from exercising its constitutional right to name rates of its own making until they are annulled and superseded by other lawful rates prescribed by proper authority. To give judicial sanction to such a maneuver would be a denial of due process of law in its most vexatious form, since the right of a utility company to prescribe and collect proper rates of its own making under such circumstances is thoroughly established.

In Emporia Teleph. Co. v. Public Utilities Commission, 97 Kan. 136, P.U.R.1916B, 987, 154 Pac. 262, it was held: "Where a court having jurisdiction determines that a rate fixed by the statute and approved by the Utilities Commission is confiscatory, the utility is left free to operate under such rate as it may establish until a new one has been fixed by the commission." Syl. ¶ 5.

(125 Kan. 346, 264 Pac. 68.)

In Hutchinson v. Southwestern Bell Teleph. Co. 109 Kan. 545, 200 Pac. 301, it was held: "Where rates fixed by the Utilities Commission for the services of a telephone company are adjudged to be confiscatory and are set aside by a court of competent jurisdiction, the telephone company may then promulgate rates of its own which will be deemed to be legal rates under which it may operate until such rates are found to be unreasonable and excessive, or until other rates are fixed by the Utilities Commission as the statute prescribes, and the rates so promulgated by the telephone company may not be enjoined by the courts until action thereon has been taken by the Utilities Commission." Syl. ¶ 1.

In the case just cited, this same plaintiff sought by injunctive proceedings to prevent a public utility from exercising its corporate right to prescribe rates for its services when for the time being all the rates prescribed by proper authority had been judicially determined to be noncompensatory. This court said: "The telephone company was required to carry on and give service to its subscribers. It was not required to serve the public at rates that were noncompensatory. When the rates fixed by authority of law were set aside it had the right, and indeed it may be said it was its duty, to put in reasonable, compensatory rates and continue the service to the public. Having a legal right to put in a rate, those promulgated must be deemed to be authoritative until they are set aside by proper authority. For the time being these rates are as binding on its subscribers as if they had been allowed by the commission. If parties interested deem them to be unreasonable and excessive, the law affords them a remedy and has provided a tribunal before which questions of that kind are investigated and determined. Upon promulgation of the increased rates any complaining subscriber could have applied to the Public Utilities Commission, the only tribunal which

has authority to revise and establish rates, to have the reasonableness of the rates fixed by the company determined. That this was the only proper course was decided in Emporia Teleph. Co. v. Public Utilities Commission, 97 Kan. 136, P.U.R. 1918B, 987, 154 Pac. 262, and since the consideration and decision of the question in that case there is little. room or necessity for further discussion." 109 Kan. at page 549.

In State v. Independence Gas Co. 102 Kan. 712, 716, 172 Pac. 715, it was said: "When the federal court enjoined the rates that were in effect on January 1, 1911, and enjoined the rates that the Public Utilities Commission put into effect on December 10, 1915, there were no legal rates that could be collected by the receiver of the Kansas Natural Gas Company. In order to serve the public, the receiver was then compelled to put into effect rates of his own; that he did."

In the still later case of Coffeyville Gas & Fuel Co. v. Public Utilities Commission, 116 Kan. 165, 225 Pac. 1036, it was said: "Ordinarily when a rate is set aside by a competent court the utility is at liberty to promulgate a rate of its own, which should be deemed a legal rate until a different one is authorized and established by the commission. Hutchinson v. Southwestern Bell Teleph. Co. 109 Kan. 545, 200 Pac. 301. This case is in a somewhat different attitude. The application of the company was for a rate higher than 60 cents. Instead of allowing an increased rate the commission ordered a reduction to 50 cents. The order for a 50-cent rate has been found to be invalid, and the order being a nullity, it left in force the 60-cent rate under which the company was operating when the order was made. That was the view taken by this court when the company was restrained during the pendency of the appeal from charging more than the rate authorized by the commission, and which was in force when the invalid order of reduction was made. Whether that rate is too high or too

low at the present time is a question for the commission to determine upon application of either party." Page 174.

In view of these well-considered precedents, the defendant had a

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right to publish and promulgate reasonable gas rates and service charges in Hutchinson after

lishment of new the invalidity of the rates of 1920 and 1926 prescribed by the commission was adjudicated. Nor is this right necessarily affected by the fact that the Shawnee county judgment has been appealed to this court. No effort was made to secure from the Shawnee county district court, or from this court, an order impounding the margin of increase which the defendant proposed to exact during the pendency of the litigation on appeal, nor was a bond demanded of the defendant for the refunding of such margin of increased rates if in the pending appeal it should be determined that the rates prescribed by the Public Service Commission were just and compensatory and that the judgment of the district court to the contrary should be set aside. And yet such orders of impounding and such bonds for refunding challenged exactions by public service companies are not a novelty in this jurisdiction. In Hutchinson v. Southwestern Bell Teleph. Co. supra, a bond for $100,000 was exacted from the telephone company conditioned that it would refund the excess, if any, over the lawful rates which should finally be adjudicated.

In the recent case of Ætna Ins. Co. v. Travis, 124 Kan. 350, 259 Pac. 1068, where the validity of certain insurance rate reductions made by the superintendent of insurance. was the subject of litigation, the trial court ordered the difference between the old rates and the new to be impounded pending the determination of the action. On appeal this court continued in effect the impounding order until we disposed of

the case; and preliminary to a further appeal to the United States Supreme Court, a bond was exacted from the insurance companies to secure the return of the excess premiums collected in the event the litigation should be decided adversely to the insurance companies by the court of last resort.

In State ex rel. Dawson v. Atchison, T. & S. F. R. Co. 87 Kan. 348, 125 Pac. 98, an original action was brought in this court to compel railway companies and certain other corporations to perform certain more or less onerous duties concerning the inspection of grain and to serve as collectors of inspection fees exacted by the state. Pending a determination of the constitutionality of the statute, this court made an order that the fees be collected and the money impounded with the clerk of this court. Eventually defendants prevailed and the impounded funds were returned to the parties concerned. See Clerk's App. Docket M. M. 298 et seq.

Another instructive instance where this procedure was followed was in State ex rel. Brewster v. Cumiskey, 97 Kan. 343, 155 Pac. 47, where resistance was made to certain oil inspection fees on the ground that they were greatly in excess of the legitimate cost of inspection, thus constituting an unconstitutional tax burden on the oil industry. This court ordered the disputed fees impounded in the hands of the state treasurer as special custodian on condition that if defendants should prevail in the litigation the fees should be returned to them and otherwise the money should become treasury funds under the law. See Clerk's Journal U. U. 570, 571. The fees were held invalid and the money returned to the parties concerned. State ex rel. Brewster v. Cumiskey, supra, page 353.

We mention these precedents because of the discouraging note in appellee's brief in reference to what it conceives to be the impractical state of the law touching the rights.

(125 Kan. 346, 264 Pac. 68.)
wards. Courts do not hesitate at
the instance of a utility company to
inquire into the facts which under-
lie the whole fabric of rate-making
and decide on proper occasion that
an officially prescribed rate for gas,
water, light, etc., is too low, and en-
join its enforcement. Nothing more
common. But that is only one side
of the shield. Should not such exer-
cise of judicial power on proper oc-
casion be similarly invoked to en-
join utility rates which are unrea-
sonably high? It is the statutory
duty of a public utility company to
exact no other rates for its services
than those which are reasonable and
just. The statute reads:

of the public where officially prescribed utility rates are adjudged to be invalid. Appellee refers to the long interval before just and proper new rates can be lawfully put into effect, during which time any rates the utility sees fit to impose may be exacted. As to such situation, we can only remark that this court cannot function both as court and counsel. But why should it take "approximately a year" to secure a new hearing and order from the Public Service Commission after its prior order has been held confiscatory or noncompensatory? Why should it take more than half a day? All the facts will have already been ascertained. The data already gathered by the commission and the facts established in court proving the old rates too low will be at hand, and an approximately correct rate can be deduced therefrom by a simple mathematical computation. It is practically impossible to prove by figures that a utility rate is unprofitable without also having at hand the data on which a prima facie fair rate can likewise be ascertained as well as what would be an excessive rate. And it is because of this obvious fact that by constitutional provision in Virginia and Oklahoma it is provided that whenever a court of competent jurisdiction shall determine that an officially prescribed utility rate is too low, it is the same court's duty to prescribe a reasonable rate from the facts already ascertained in the litigation. See Virginia, Const. § 156 (g); Virginia Code of 1924; of Okla. Const. art. 9, § 23; Okla. Comp. Stat. Anno. 1921.

Without such constitutional sanction the tying of judicial and legislative power in one branch of government would of course be impossible; and the courts in general have scrupulously refrained from every appearance of exercising rate-making (legislative) power. And yet it is possible that in this commendable policy of keeping strictly within the proper limits of judicial power the courts have actually leaned back

"66-107. Every common carrier and public utility governed by the provisions of this act shall be required to furnish reasonably efficient and sufficient service, joint service and facilities for the use of any and all products or services rendered, furnished, supplied or produced by such public utility or common carrier and to establish just and reasonable rates, joint rates, fares, tolls, charges and exactions and to make just and reasonable rules, classifications and regulations; and every unjust or unreasonable discriminatory or unduly preferential rule or regulation, classification, rate, joint rate, fare. toll or charge demanded, exacted or received is prohibited and hereby declared to be unlawful and void."

"66-139. The commission may compel compliance with the provisions of this act . . . by proceeding in mandamus, injunction or other appropriate civil remedies.

"66-140. The rights and remedies given by this act shall be construed as cumulative of all other laws in force in this state relating to common carriers and public utilities, and shall not repeal any other remedies or rights now existing in this state for the enforcement of the duties and obligations of public utilities."

It is therefore apparent that while the courts of this state have no pow

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