Charles Evans Hughes

“ The jury were instructed as to the right of appellant to receive a fair return on the fair value of its property that is used and useful in the public service and that the jury should take into consideration all elements of value that had been introduced in evidence, including the reproduction cost new of the property and the amount of going value, if any, that inhered in it. ”

“ The state is entitled to determine the procedure of its courts, so long as it provides the requisite due process. And on that question we have never held that it is beyond the power of the state to provide for the trial by a jury of questions of fact because they are complicated. Cases at law triable by a jury in the federal courts often involve most difficult and complex questions, as, for example, in patent cases at law presenting issues of validity and infringement. ”

“ The Court of Civil Appeals held not only that appellant had failed to make good its claim that it was entitled to judgment in its favor, but that, having regard to the presumption in favor of the commission's rate order and the clear and satisfactory proof required to overcome such presumption, appellant's evidence was insufficient as matter of law to show that the commission's rate was confiscatory. ”

“ A tribunal required to accept weighty presumptions against a defendant, resolve all doubts against it, pare down valuations to the utmost, and refuse a judgment in its favor when the evidence is conflicting as to valuations or other important elements, could not reach an independent judgment in respect of the law and facts could not arrive at a fair, judicial determination. To us the proceedings in the state courts seem an empty show. ”

“ When a public utility chooses to pay out a large part of its 'operating expenses' to corporate associates, affiliates, etc., these payments might conceivably be used to drain the operating company's income and to inflate the 'operating expenses.' Inflated operating expenses inevitably lead to inflated rates. Since affiliates, associates, etc., do not ordinarily deal at 'arm's length,' appellant had the burden of proving the fairness and reasonableness of all expenditures made or charged as inter-company transactions. ”

“ The special issues which appellant requested were for findings as to the value of component parts of appellant's property during the years 1932 and 1933 and as to the amounts necessary to cover material and supplies, working capital, going value, and certain other items. It will be observed that these special issues did not embrace all the questions which the jury should consider, as for example, the questions of operating revenues, operating expenses and return for the period to which the evidence before the court appropriately related and not simply for the years 1932 and 1933. ”

“ Appellant, United Gas Public Service Company, challenges the validity of a rate fixed by the Railroad Commission of Texas for natural gas supplied by appellant for domestic uses in the city of Laredo.
The city council of Laredo, on December 15, 1931, enacted an ordinance fixing gas rates, which included a rate of 40 cents per 1,000 cubic feet for domestic consumption, with a provision for a discount of 10 per cent. on payment of bills within ten days, the ordinance to become effective on January 1, 1932. The rate had previously been 75 cents per m.c.f. with a 10 per cent. ”

“ If trial by jury was permissible, as we hold it was, we cannot say-putting aside questions of correct practice under the state law not reviewable here-that appellant was entitled under the Federal Constitution to have special issues framed and submitted to the jury, much less that appellant could demand that the particular items it mentioned should be singled out and specially passed upon. ”

“ Appeal from city control.-When a city government has ordered any existing rate reduced, the gas utility affected by such order may appeal to the Commission by filing with it on such terms and conditions as the Commission may direct, a petition and bond to review the decision, regulation, ordinance, or order of the city, town or municipality. Upon such appeal being taken the Commission shall set a hearing and may make such order or decision in regard to the matter involved therein as it may deem just and reasonable. The Commission shall hear such appeal de novo. ”

“ As consumers in a number of other communities within the Laredo area were also served, it became necessary to allocate to Laredo its appropriate proportion. Methods of allocation were submitted by the respective parties and the commission adopted a weighted average per cent., which had been taken by the city's engineer as an approximate mean between two percentages used by the company's engineer, as coming the closest to a fair and correct allocation. Evidence of historical cost and of reproduction cost new less depreciation was submitted. ”

“ In addition appellant has not shown beyond a reasonable doubt that there is an actual investment of stockholders-over and above the amount of borrowed capital-which could be confiscated. [5] Appellant has obviously failed to establish all the elements necessary to prove beyond a reasonable doubt [6] that the rate fixed by the State will result in confiscation of its property.
Operating Expenses.-The record shows that appellant is one of many corporate associates and affiliates connected with the Electric Bond & Share Company and the United Gas System. ”

“ Whenever any local distributing company or concern, whose rates have been fixed by any municipal government, desires a change of any of its rates, rentals or charges, it shall make its application to the municipal government where such utility is located and such municipal government shall determine said application within sixty days after presentation unless the determination thereof may be longer deferred by agreement. ”

“ Public Utilities Commission, No. 1, supra. This Court will review the findings of fact by a state court (1) where a federal right has been denied as the result of a finding shown by the record to be without evidence to support it, and (2) where a conclusion of law as to a federal right and findings of fact are so intermingled as to make it necessary, in order to pass upon the federal question, to analyze the facts. ”

“ Prior to the hearing before the commission, the South Texas Gas Company, which owned and operated the transmission properties and transported the gas sold to the Texas Border Gas Company at the Laredo city gate, was made a party to the proceeding. ”

“ Surely, before the courts are called upon to adjudge an act of the legislature fixing * * * maximum * * * rates for railroad companies to be unconstitutional, * * * they should be fully advised as to what is done with the receipts and earnings of the company. ”

“ As to the requirement of due process under the Federal Constitution, appellant contends that it was denied the independent judicial judgment upon the facts and law to which it was entitled. See Ohio Valley Water Co. v. Ben Avon Borough, 253 U.S. 287, 40 S.Ct. 527, 64 L.Ed. 908; Bluefield Water Works Co. v. Public Service Commission, 262 U.S. 679, 43 S.Ct. 675, 67 L.Ed. 1176; State Corporation Commission v. Wichita Gas Co., 290 U.S. 561, 569, 54 S.Ct. 321, 324, 78 L.Ed. 500; St. Joseph Stock Yards Co. v. ”