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(Additional Syllabus by Editorial Staff.) 4. Appeal and error 3-100s (1), 1002—Where evidence reasonably tends to support verdict, or where conflicting, it will not be disturbed. Where there is any evidence reasonably tending to support the verdict or where the evidence is conflicting, it will not be disturbed on appeal. - 5. Principal and agent 3-124(1)—Authority of agent gathered from all facts and circumstances, and is for jury. The authority of an agent is to be gathered from all the facts and circumstances in evidence, and is for the jury.

Commissioners' Opinion, Division No. 5. Appeal from County Court, Pontotoc County; Orel Busby, Judge.

Action by R. S. Moore against the BakerRiedt Motor Company and another. From a judgment for plaintiff, defendants appeal. Reversed and remanded.

King & Crawford and H. West, all of Ada, for plaintiffs in error.

C. F. Green and L. H. Green, both of Ada, for defendant in error.

FOSTER, C. This action was commenced in the county court of Pontotoc county on the 29th day of August, 1919, by R. S. Moore, defendant in error, plaintiff below, against Baker-Riedt Motor Company, a copartnership, and the International Harvester Company of America, plaintiffs in error, defendants below, to recover the sum of $775 alleged to be due him as commission on the sale of four motor trucks. For convenience the parties will be hereinafter referred to as they appeared in the court below.

The petition alleged that the defendants, on or about April 1, 1918, employed plaintiff as their agent to sell motor trucks and motor truck equipment in Pontotoc county, Okl., and agreed to pay him a commission of 10 per cent. of the gross sales, and that in compliance with said agreement he did sell four (4) trucks and equipment for the grand total of $8,750, and that said defendants were due him the sum of $875, of which amount $100 had been paid, leaving a balance due of $775, and praying judgment therefor.

Separate answers were filed by the defendants. The Baker-Riedt Motor Company in their answer admitted the employment of R. S. Moore to sell trucks in Pontotoc county, Okl., denied that he had sold for them the trucks alleged to have been sold, and averred payment of the sum of $185, in full settlement of commissions earned, and, further answering, by way of counterclaim alleged that plaintiff was indebted to them in the sum of $50.75 on account of storage charges paid for the plaintiff, and demanded judg

ment accordingly.

The International Harvester Company of America answered, denying that plaintiff had ever been in its employment or ever its agent for the purpose of selling trucks, alleged that it had only two agencies in the state of Oklahoma, the Baker-Riedt Motor Company of McAlester, Okl., sole agents for the eastern part of Oklahoma, and G. M. Head Motor Company, Oklahoma City, Okl., its exclusive agent for Western Oklahoma, and that it only sold trucks and equipment through these agencies. Replies in the nature of general denials were filed by the plaintiff, and thereafter, on the 9th day of January, 1920, the cause was tried before a jury, which returned two verdicts, one for $110 and cost against Baker-Riedt Motor Company, and one for $535 against the International Harvester Company. Motion for a new trial was filed and overruled, and the defendants prosecute this appeal to review the judgment of the trial court, and assign error as follows:

“First. Said court erred in overruling the motion of plaintiffs in error for a new trial. “Second. Said court erred in not rendering judgment for defendant in error on the pleadIngs. “Third. Said court erred in giving the following instructions to the jury, to wit, Nos. 2, 3, 4, and 5. “Fourth. Said court erred in admitting evidence on the part of the defendant in error. “Fifth. Said court erred in refusing and ruling out competent and legal evidence on the part of plaintiffs in error.”

The second, fourth, and fifth assignments of error are nowhere discussed by the defendants in their brief or relied upon in the argument as grounds for a reversal of the case, and under the rules this court is not called upon to review these assignments. This leaves for consideration only the first and third assignments of error.

The first assignment of error presents for consideration the sufficiency of the evidence to sustain the judgment of the court. We are called upon to say whether or not under the facts as disclosed by the record there was any legal evidence to sustain the two separate verdicts rendered by the jury. To determine this question it is necessary to review the evidence.

The undisputed evidence is that the International Harvester Company maintained two distributing agencies in the state of Oklahoma for the sale of motor trucks manufactured by it; that the G. M. Head Motor Com

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<>For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(220 P.)

of all sales made therein; that the BakerRiedt Motor Company received credit for all sales made in their territory, whether such sales were negotiated by their agents alone, or whether they were negotiated by their agents aided and assisted by the representatives of the International Harvester Company. The International Harvester Company maintained a general manager by the name of Prewitt in the territory controlled by the Baker-Riedt Motor Company to supervise its business and to aid and assist the Baker-Riedt Motor Company and their agents in disposing of as many motor trucks as possible, but without authority to appoint agents to sell trucks in competition with the Baker-Riedt Motor Company. The evidence shows that Prewitt on one or two occasions did assist the plaintiff in finding purchasers for motor trucks sold by the International Harvester Company to Baker-Riedt Motor Company and paid for by them. While there is evidence that the International Harvester Company knew that the Baker-Riedt Motor Company, its general distributing agent, did appoint the plaintiff as agent to represent Baker-Riedt Motor Company in the sale of trucks in Pontotoc county, there is no evidence that it ever authorized or empowered them to employ the plaintiff on its account, or that the Baker-Riedt Motor Company ever attempted to employ the plaintiff for the International Harvester Company, except the statement of the plaintiff, as a conclusion, that he was employed both by the Baker-Riedt Motor Company and the International Harvester Company at one and the same time. Whether, in view of the great weight of the uncontroverted evidence to the effect that Baker-Riedt Motor Company were the exclusive agents of the International Harvester Company in the sale of motor trucks in Pontotoc county, it can be said upon the unsupported statement of the plaintiff alone that he was employed by the International Harvester Company as its agent to sell motor trucks in competition with Baker-Riedt Motor Company at the same time he admits that he was employed by Baker-Riedt Motor Company, there is any legal evidence whatever reasonably tending to sustain the verdict of the jury, is a matter upon which this court entertains grave doubts. [4, 5] We are not unmindful of the wellestablished rule of this court that, where there is any evidence reasonably tending to support the verdict, or where the evidence is conflicting, it will not be disturbed, and that the authority of an agent is to be gathered from all of the facts and circumstances in evidence, and is a question of fact for the jury. Minneapolis Threshing Machine Co. v. Humphrey, 27 Okl. 694, 117 Pac. 203. Upon a survey of the whole evidence there was probably sufficient evidence to go to the jury

upon this issue under proper instructions of

the Court. [1] The defendants next complain of the

giving of instruction No. 4, as follows:

“You are instructed that as a general rule an agent has no implied authority to delegate his powers to a subagent, and that persons employed by him as subagents do not become the agents of the principal, without the principal's consent; and in this connection you are instructed that the lack of authority in an agent, in appointing a subagent and to bind his principal, is immaterial, where the principal with full knowledge has subsequently ratified the agent's acts in making said appointment.”

There is no evidence in the record that Baker-Riedt Motor Company ever employed plaintiff as agent for anybody except themselves. That the appointment was made for and on account of the International Harvester Company is to assume a state of facts not in evidence. We think this instruction clearly erroneous and misleading because it assumes that Baker-Riedt Motor Company had employed plaintiff for and on account of the International Harvester Company, and amounted to telling the jury that the employment had been so made.

[2] The court should have told the jury that, where an agent employs another to act, not on behalf of the principal, but on behalf of the agent, he makes such person his agent, and he alone is responsible for his compensation, even though the principal may know of the employment. The correct rule is laid down in Mechem on Agency, par. 197, at page 126, as follows:

“If an agent employs a subagent for his principal, and by his authority, expressed or implied, then the subagent is the agent of the principal and is directly responsible to the principal for his conduct, and, if damage results from the conduct of such subagent, the agent is only responsible in case he has not exercised due care in the selection of the subagent. But if the agent, having undertaken to transact the business of his principal, employs a subagent on his own account to assist him in what he has undertaken to do, he does so at his own risk, and there is no privity between such subagent and the principal. The subagent is therefore the agent of the agent only, and is responsible to him for his conduct, while the agent is responsible to the principal for the manner in which the business has been done, whether by himself, or his servant or his agent.”

In Hanback v. Corrigan, 7 Kan. App. 479, 54 Pac. 129, the Supreme Court of Kansas says in the syllabus:

“A subagent can look for his compensation only to his [immediate] employer."

And in the body of the opinion:

“Even admitting that Davis was duly authorized to sell the property, he was not thereby authorized to employ another to sell it. * * * “Where the subagent has been ap

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This doctrine is approved by our own Supreme Court in Gaar, Scott & Co. v. Rogers, 46 Okl. 67, 148 Pac. 161.

It is not claimed by counsel for plaintiff that Moore was appointed subagent of the International Harvester Company by any act of McDill and Prewitt, as agents of the International Harvester Company, and the instruction could therefore have no application to the conduct of McDill or Prewitt. He argues that these individuals, being general managers of the International Harvester Company, had power to employ agents to solicit business for it. The question, however, for determination is not their power to employ, but whether under the evidence the court properly instructed the jury.

If the case was tried upon the theory argued by counsel for plaintiff that the International Harvester Company appointed Moore its agent to sell trucks in competition with and independently of Baker-Riedt Motor Company, the court evidently overlooked it, and the theory was not justified under the issues raised by the pleadings in the Case.

We are therefore of the opinion that instruction No. 4 was error, and that the cause should be reversed and remanded for a new trial.

OKMULGEE GAS CO. v. CORPORATION COMMISSION. (No. 12873.)

(Supreme Court of Oklahoma. April 17, 1923.
Petition for Rehearing Denied
Oct. 9, 1923.)

(Syllabus by the Court.)

1. Gas & 14(1)—Duties of Corporation Commission in fixing gas rates enumerated.

(a) The ascertainment of the fair value for rate-making purpose of the property of the gas company used and useful in furnishing gas to its patrons; (b) the fixing of the rate or per cent. the gas company should receive on the present fair valuation of its property after deducting cost of operation and any other legitimate expenses; (c) the amount per thousand cubic feet to be paid by consumers in order to raise the necessary funds to pay all cost and expenses and the compensation to be received by the gas company.

2. Public service commissions &=32—Scope of
review of orders of Corporation Commission
Stated.
The fixing of rates is not a judicial func-
tion, and the right to review the conclusions of
a board with legislative power such as that
exercised by the Corporation. Commission is
limited in determining whether the board acted
within the scope of its authority, or the order
is without foundation in evidence, or a con-
stitutional right of the public utility has been
infringed upon by fixing rates which are confis-
catory or insufficient to pay the cost of the
service and return to the utility a reasonable
profit on the investment. Muskogee Gas &
Electric Co. v. State et al., 81 Okl. 176, 186
Pac. 780. -

3. Public service commissions 6-7–Rule for ascertainment of value of public utility stated. As a general rule, to determine the value of a small public utility property, what it would cost to reproduce the property less accrued depreciation is the safest and most certain method of obtaining present fair value upon which such utility is entitled to a return.

4. Public service commissions 3-7–Method to ascertain value of public utilities property by “cost of reproduction less accrued depreciation” stated; “reproduction cost.” The equitable rule to be followed in the ascertainment of the present fair value of public utility property by resorting to the method of “cost of reproduction less accrued depreciation” is to give due consideration to the history and circumstances under which the utility property was created, and the prevailing prices of material and labor at the time of the investigation, and determine the fair average price of materials and labor necessary for the reproduction of the property. Pursuant to this method and the application of sound judgment and common sense, impartial tribunals will discharge the duty in the ascertainment of such values, so as to insure the public utility a fair return upon the present value of its property and the patrons a reasonable rate for the services rendered.

5. Public service commissions & 7–Improvements valued at cost without deduction for probable future reduced prices. Necessary additions or improvements should be valued at the cost price without deductions for probable reduced future prices.

6. Public service commissions &7 – Twenty per cent. to cover items of going concern value, working capital, and contingencies held reasonable. The allowance by the commission of 20 per cent. to cover the items of going concern value, working capital, and contingencies held to be reasonable.

7. Public service commissions $37 – Public utility entitled to fair return on present value of property in determining adequacy of rate. In determining the adequacy of a rate the public utility will be held to be entitled to a |fair return on the present value of its proper| ty used and useful in serving the public, and it is immaterial that such property was in part acquired or paid for out of previous earnings of the business, or whether or not previous rates were reasonable or excessive.

<>For other cases see same topic and KEx-NUMBER in all Key-Numbered Digests and Indexes

(220 P.)

8. Public service commissions & 7–Rule for fixing rate of depreciation or for amortization of a public. utility stated. In fixing the rate of, depreciation or for amortization, the Commission should take into consideration the present life of the plant, if it be a small natural gas plant, and such depreciation allowed as would return to the investors their money over the probable period of the life of the plant, considering the average number of years the plant had been in service and the probable life of the same.

9. Public service commissions 3-7—Five per cent. for amortization and 8 per cent. on investment in fixing public utility rate held reasonable. The allowance of 5 per cent. for amortization and 8 per cent. for return on investment held to be reasonable.

10. Gas & 14(1)–Private property devoted to public use subject to public regulation. Section 1, c. 93, Session Laws 1913, vests the Corporation Commission with jurisdiction to regulate the price at which every corporation, association, company, individual, etc., may furnish the public with heat or light with gas. Held, that private property devoted to public use is subject to public regulation.

| 1. Gas 6-14(1)–Denying application for increase in gas rate held erroneous. Record examined, and held, that the Corporation Commission erred in denying the application of appellant for an increase in gas rates.

(Additional Syllabus by Editorial Staff.)

|2. Public service commissions 3-7—“Working capital” defined. The term “working capital” as used in making allowance therefor in appraising the physical property of a public utility for ratemaking purposes means a sufficient amount of money to pay employees and for the necessary equipment for repairs, and is based upon from four to six weeks' actual operating expenses, as this amount of time would usually expire before collections could be made from consumers. [Ed. Note.—For other definitions, see Words and Phrases, First and Second Series, Working Capital.]

Appeal from Corporation Commission.

Application of the Okmulgee Gas Company to the Corporation Commission of Oklahoma. From an order denying its application for an increase in gas rates, petitioner appeals. Order remanded, with directions.

Ames, Chambers, Lowe & Richardson, of Oklahoma City, for plaintiff in error.

E. S. Ratliff, of Oklahoma City, for defendant in error.

KENNAMER, J. This is an appeal from an order of the Corporation Commission en

tered February 5, 1922, upon an application of the Okmulgee Gas Company to increase its gas rates in the cities of Okmulgee and Morris. The appellant's assignments in error, in substance, are as follows: (1) The Commission erred in its findings in the value of appellant's property used and useful in rendering the public service. (2) The Commission erred in its findings of the operating expenses of the appellant, including its estimate of the loss of gas which it charged to operating expenses. (3) The Commission erred in making a rate inadequate to produce a sufficient return to pay interest upon a proper valuation of the property, depreciation, and operating expenSes. [1] In our view of this case, the duties of the Corporation Commission in passing upon the application of the appellant for an inCrease in rates are: (1) The ascertainment of the fair value for rate-making purpose of the property of the gas company used and useful in furnishing gas to its patrons; (2) the fixing ps the rate or per cent. the gas Company should receive on the present fair valuation of its property after deducting cost of Operation and any other legitimate expenses; and (3) the amount per thousand cubic feet to be paid by consumers in order to raise the necessary funds to pay all cost and expenses and the compensation to be received by the gas company. Petersburg Gas Co. v. City of Petersburg et al., 132 Va. 82, 110 S. E. 533, 20 A. L. R. 542. [2] In Muskogee Gas & Electric Co. v. State et al., 81 Okl. 176, 186 Pac. 730, it was held:

“The fixing of rates is not a judicial function, and the right to review the conclusions of a board with legislative power such as that exercised by the Corporation Commission, is limited in determining whether the board acted within the scope of its authority, or the order is without foundation in evidence, or a constitutional right of the public utility has been infringed upon by fixing rates which are confiscatory or insufficient to pay the cost of the service and return to the utility a reasonable profit on the investment.”

The Corporation Commission in fixing a rate for a public utility should always, as near as possible, ascertain the facts from the evidence introduced, and the findings and order of the Commission should be supported by the evidence. The rate necessary to be fixed by the Commission to produce a sufficient amount of revenue to pay operating expenses, interest upon the investment, and a reasonable depreciation for amortization must be determined upon the proof of the facts that may be introduced under the above designated captions.

Our first consideration will be directed to the different contentions of the respective parties and the findings of the Commission in reference to valuation. [3,4] The plaintiff alleged that the value of its property, including the distribution system and its field lines, was $488,477.19. The evidence disclosed that the plaintiff ascertained its valuation by taking the valuation of $208,000, fixed by the Corporation Commission in 1914, of which $100,000 was for field lines, to which it added the actual cost of additions as shown by the books of the company, and from which amount it deducted depreciations, and to the depreciated amount it added 20 per cent. to cover overhead and other intangibles, working capital, interest during construction, and going concern value, by this method arriving at the net valuation of $488,477.19. The Commission's method of determining the valuation is found in its order in part as follows:

©->For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

“The application of the Okmulgee Gas Company filed in this cause sets forth a valuation at the time of the filing of same of $556,634.52. The Commission in making and entering the order of November 4, 1921, to wit, Order No. 1949, took as a tentative basis and for the purpose of that order a valuation of $389,113.10. The testimony adduced at the hearing before the Commission as to the value of the property used and useful by the applicant company is conflicting and very much confused, and, when taken as a basis for the arrival at a permament value for rate-making purposes, is very indefinite. In treating the subject in order No. 1949, the Commission adopted tentative values to meet the necessities of the occasion. It is believed, however, by the Commission, that the value of any property to its owners is not greater than that which they are satisfied to realize upon. It is shown in the evidence taken at the hearing that a meeting of the board of directors of the Okmulgee Gas Company on June 20, 1919, the following resolution was adopted: “‘Where it appears from the books of the company that the average capital investment in the company's plant and property for the year 1919 will exceed the sum of $350,000; and “‘Whereas, it further appears that the present franchise of the company in the city of Okmulgee will expire July 20, 1925, and the present contract for gas with the Kingwood Oil Company will expire in less than five years from this date; and “‘Whereas, the salvage value of the company's plant and equipment at the expiration of said contract and franchise will not exceed the sum of approximately $50,000, and it will therefore be necessary during a period of approximately five years for the stockholders of the company to receive a return on their capital investment: “‘Be it therefore resolved that the company set up on its books for each year, beginning with the year 1919, and continuing thereafter for five years, a reserve for depreciation and obsolescence equal to 20 per cent of the amount found by deducting from the average capital investment for each year, the sum of $50,000 salvage value aforesaid; and that liquidation dividends be declared and paid from

time to time equal to the amount of such reServe. , “‘And be it further resolved that whereas, it appears that such reserve for the year 1919 will exceed the sum of $55,000 and the receipts of the company will warrant the payment of a liquidation dividend to the amount of $52,000, that such dividend be and the same is hereby declared and ordered paid.’”

The Commission, in its opinion, in detail discusses the dividends paid out in pursuance of the resolution mentioned in its order, and shows that on June 20, 1919, there was a liquidating dividend of $52,000 paid to the stockholders, and that on December 31, 1920, there was an additional liquidating dividend of $75,988.64 paid out. The Commission makes the following statement in its opinion with reference to ascertaining the value of of the property of the plaintiff:

“For the purpose of this order it is not considered by the Commission absolutely necessary to determine any fixed value of the property of the gas company for the reason that in this case the evidence shows profits of the past to have been such that no change in the rate schedule is considered necessary; consequently there is no present necessity to fix a permanent value.”

The Commission then sets out the book value of the property for the period from 1914 to 1921, inclusive, increased by 20 per cent., which shows net earning over and above operating expenses for the eight years of $316,463.65, and, after deducting a reasonable rate of return, there is $84,941.83 left to apply upon depreciation; and the Commission in its findings states:

“That the fair present value of the property used and useful in the business of distribution and sale of natural gas by the Okmulgee Gas Company in the city of Okmulgee is not in excess of that found by this Commission in order No. 1949, to wit, $389,113.23.”

Order No. 1949 was the original order of the Commission entered November 4, 1921, denying the application of the appellant for an increase in rates, and which was subsequently set aside by the Commission on No

vember 30, 1921, on its own motion, after the

case had been appealed to the Supreme Court for the purpose of incorporating in the record additional testimony. On the 5th day of February, 1922, after having heard additional testimony, and after the case had been remanded by this court for further hearing, the Commission entered order No. 2004, which is involved in this appeal. This court has repeatedly announced the rule that the findings of the Commission are presumed to be prima facie just, reasonable, and correct, and must be so accepted by this court unless the court can determine from the evidence in the record that such findings are not supported by competent evidence. Muskogee Gas & Electric Co. v. State et al.,

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