Alabama Power Co.v.Patterson

Supreme Court of AlabamaOct 22, 1931
224 Ala. 3 (Ala. 1931)
224 Ala. 3138 So. 421

1 Div. 682.

October 22, 1931.

Inge, Stallworth Inge, of Mobile, and Martin, Thompson McWhorter, of Birmingham, for petitioner.

The Alabama public service commission has the exclusive jurisdiction and is under the duty to prescribe and enforce the rates to be charged by electric companies, and the rates so prescribed cannot be changed except by the same authority. Code 1923, §§ 9631, 9632, 9633, 9741, 5392, 9771; Ala. Water Co. v. Attalla, 211 Ala. 301, 100 So. 490; Ala. Pub. Serv. Commission v. Ala. Power Co., 213 Ala. 374, 104 So. 814. In fixing the rates to be charged by public utilities, the commission is charged with the duty of considering all the circumstances surrounding the system of the utility for which the rates are fixed. Code 1923, § 9779; Texas P. R. Co. v. Interstate Commerce Commission, 162 U.S. 197, 16 S.Ct. 666, 40 L.Ed. 940. An administrative and contemporaneous construction of rate schedules is entitled to consideration and weight in a judicial determination of the applicable rate. T. R. Miller Mill Co. v. L. N. R. Co., 207 Ala. 253, 92 So. 797; Davis v. Prarie Pipe Line Co. (C.C.A.) 298 F. 393. Upon consolidation of public utility corporations forming a new corporation, the rates prescribed by the public service commission for the respective systems of the constituent corporations become the rates of the new consolidated corporation; but such rates are applicable only to the respective systems of the respective constituent corporations for which they have been approved. Code 1923, § 7040; Jackson v. Ariton Banking Co., 214 Ala. 483, 108 So. 359, 45 A.L.R. 1026; Pullman Palace-Car Co. v. Mo. Pac. R. Co., 115 U.S. 587, 6 S.Ct. 194, 29 L.Ed. 499; Duke Power Co. v. Bell, 156 S.C. 299, 152 S.E. 865; Guaranty Trust Co. v. Minn. St. L. R. Co. (D.C.) 33 F.(2d) 512; City of New York v. Brooklyn Edison Co. (Sup.) 189 N.Y. S. 312. Where two rate schedules are by their terms applicable to the same situation and one of such schedules is general and the other specific, that which is more specific applies, even though the general rate is lower. U.S. v. Gulf Ref. Co., 268 U.S. 542, 45 S.Ct. 597, 69 L.Ed. 1082; Pillsbury F. M. Co. v. Gt. Nor. R. Co. (C. C. A.) 25 F.(2d) 66; T. R. Miller Mill Co. v. L. N. R. Co., supra; Auto Vehicle Co. v. Chicago, M. St. P. R. Co., 21 I.C.C. 286; Western Classification Cases, 25 I.C.C. 442; Cornell Wood Prod. Co. v. Atchison, T. S. F. R. Co., 49 I.C.C. 91; Armour Co. v. Director Gen., 88 I.C.C. 569.

Harry Seale, of Mobile, for respondent.

It is the province of the courts to determine which rate is applicable. Armstrong Bros. Co. v. Rowland, 22 Ala. App. 613, 118 So. 502; Republic I. S. Co. v. Davis, 210 Ala. 361, 98 So. 197; Davis v. Prarie Pipe Line Co. (C.C.A.) 298 F. 393; City of New York v. Brooklyn Edison Co. (Sup.) 189 N.Y. S. 312. There can be but one lawful rate in force at a given time. T. R. Miller Mill Co. v. L. N. R. Co., 207 Ala. 253, 92 So. 797. Where it is optional with the public service company to apply either of two rates applicable to customers, the utility is under obligation to apply the lowest applicable rate for the benefit of such customers. W. L. Shepherd Lbr. Co. v. A. C. L. R. Co., 216 Ala. 89, 112 So. 323; U.S. v. Gulf Ref. Co., 268 U.S. 542, 45 S.Ct. 597, 69 L.Ed. 1082. The statutes contemplate the making of rates on the basis of classification, and require that the utility conform its schedule of rates to such classification. When classification A-3 was approved, Mobile was an urban center having 7,000 or more lighting customers served by the hydro system over the retail distribution lines of the company. Classification A-3 was meant to apply to Mobile. Code 1923, § 9791.


As we understand, the main question in this case is whether or not the general rate fixed for the old Alabama Power Company by the public service commission, classified as A 3, was applicable to Mobile, which was, at the time, being served by another company and at a different rate; the old Alabama Power Company having no plant or connecting line with Mobile at the time. In other words, at the time of the consolidation of the old Alabama Power Company with the Gulf and Houston Companies, which one had the right and was obligated to the city of Mobile to supply lights, and at what rate was it to be done? There is no question but what this obligation was, at the time of the consolidation, upon the Gulf Company as the successor of the electric company, and it cannot be logically contended that the old Alabama Power Company was also obligated to do so at a different rate and before it had ever entered the Mobile territory to do business, simply because of the fixation of its general rate where it was then doing business. It may be conceded that, generally speaking, orders and rules of public bodies, like acts of the Legislature, are deemed prospective unless a contrary intent appears. It is manifest, however, that the public service commission did not intend the rate as fixed by A 3 to apply to the old Alabama Power Company and Mobile when it had no connection with Mobile and which was 280 miles from its transmission lines and was then being served by another company and at a different rate as fixed by the public service commission. In other words, did the public service commission intend for the Alabama Power Company to serve Mobile at one rate and the electric company, or its successor, the Gulf Company, at a different rate? Such a condition and intent is not only refuted by the physical facts and common sense, but by the conduct and action of the public service commission which has, ever since the fixation of the rate A 3, regarded it as not applicable to Mobile. Of course, it is for the court and not the public service commission to construe the orders of the latter, but "contemporary construction and official usage are among the legitimate aids in the interpretation of statutes." Wetmore v. State, 55 Ala. 198. This rule is particularly applicable when considering rules or orders by a department charged with the duty of making and enforcing same. Davis v. Prairie Pipe Line Co. (C.C.A.) 298 F. 393.

Section 7040 of the Code of 1923, in defining the powers, duties, and liabilities of consolidated or merger corporations, says: "Consolidated or merger corporations shall possess all the rights, powers, and privileges, and be subject to all the restrictions, disabilities, and duties of each of the consolidating corporations, unless additional powers not inconsistent with the provisions of this chapter, are expressed in the said agreement and acts of consolidation, and unless the powers possessed by the several merging corporations are limited or restricted in said agreement."

Therefore, the question is: What were the duties and obligations of the new consolidated corporation, which we might term the "new Alabama Power Company," with reference to supplying lights to the city of Mobile? It was to carry out the obligations existing between the city and the one of the old companies that was merged into the new corporation, that is, the Gulf Company, and, this being so, it was for the rate as then existing between the city and said Gulf Company until changed by the public service commission and which was the existing rate for the year 1928. The old Alabama Power Company was not, at the time, obligated to serve Mobile, but the Gulf Company was, so the liability or duty of the new company was to assume the obligations of the Gulf Company.

For instance, had the rate existing between the city of Mobile and the Gulf Company, at the time of the consolidation, been lower than the one fixed by A 3, as applicable to the Alabama Company, we would not hesitate to hold that the new consolidated company was obligated to serve the city at the rate fixed for the Gulf Company instead of the higher rate fixed by A 3. City of N.Y. v. Brooklyn Edison Co. (Sup.) 189 N.Y. S. 312.

This is not only the logical interpretation of section 7040, but we are supported by leading authorities in dealing with the liability and obligations of the new or consolidated corporations for those which are embraced in the merger or consolidation. City of N.Y. v. Brooklyn Edison Co. (Sup.) 189 N.Y. S. 312; Pullman's Palace Car Co. v. Missouri Pac. Ry. Co., 115 U.S. 587, 6 S.Ct. 194, 29 L.Ed. 499; Duke Power Co. v. Bell, 156 S.C. 299, 152 S.E. 865; Jackson v. Ariton Banking Co., 214 Ala. 483, 108 So. 359, 45 A.L.R. 1026.

As to whether or not the rate fixed for the city of Mobile between the electric company and its successor, the Gulf Company, is so much greater than the one applicable to the city of Montgomery as to operate as an unlawful discrimination, is a question not passed upon by the Court of Appeals. It is sufficient to suggest, however, that at the time the respective rates were fixed, the physical conditions existing between the Alabama Power Company and Montgomery and the electric or Gulf Company and Mobile were in no wise similar.

If, since the consolidation of the companies, the conditions have become so identical or similar that these places should enjoy the same rate, redress should be first sought through the public service commission.

The Court of Appeals erred in holding that rate A 3, instead of the rate that was charged, was the proper rate, and in affirming the judgment of the circuit court.

Writ awarded, and this cause is reversed and remanded to the Court of Appeals to be decided in conformity with this opinion.

Writ awarded, and reversed and remanded.

All Justices concur, except SAYRE and FOSTER, JJ., not sitting.