Houston v. Southwestern Bell Tel. Co., 259 U.S. 318 (1922)

Houston v. Southwestern Bell Telephone Company

Nos. 219

, 220

Argued April 24, 25, 1922
Decided May 29, 1922
259 U.S. 318

APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES

FOR THE SOUTHERN DISTRICT OF TEXAS

Syllabus

1. The evidence establishes that the local telephone rate fixed by the appellant city was confiscatory. Pp. 321-322.

2. In a suit by a local telephone company to restrain enforcement of an ordinance rate as confiscatory, there was evidence that the instruments used by the plaintiff were leased by it from another corporation which owned substantially all of its stock and also owned a large majority of the stock of a third corporation from which the plaintiff obtained much of its equipment and supplies, and that the charges paid by the plaintiff in return were reasonable, and less than such services and supplies could be obtained for from other sources. Held that the plaintiff was not obliged to prove the profits made by the two other companies, generally or in the business thus done with the plaintiff. P. 323.

3. A telephone company, by acceptance of a city ordinance approving its purchase of and merger with another company and containing an agreement on its part to measure its rates by a fair return upon its capital actually invested in the plant purchased, is not estopped from insisting that they shall be based upon the fair value of the property useful and used at the time of inquiry when the ordinance is void as to the city, under the state constitution, and therefore lacks mutuality as between the parties. P. 324.

4. Whether going concern value should be considered in determining the base for fixing the rates of a public service corporation depends on the financial history of the corporation. P. 325. Galveston Electric Co. v. Galveston, 258 U.S. 388.

5. An assignment of error which involves careful study of a voluminous record will not be considered if the provisions of Equity Rule 75, that evidence be stated in simple, condensed form, and of Rule 21 of this Court, that briefs refer to the pages of the record relied on, have not been properly complied with. P. 325.

268 F. 878 affirmed.

Appeal and cross-appeal from a decree of the district court enjoining a city from enforcing a rate fixed by ordinance for a telephone company.