The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921. Page: 415
xx, 1023 p. ; 23 cm.View a full description of this legislative document.
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CITY OF DALLAS V. DALLAS TELEPHONE CO. 415
(272 F )
The matter was heard upon an application for a preliminary injunc-
tion before the District Judge upon bill and answer and proofs sub-
mitted The court found on the facts that the rates named in said or-
dinance at the time when it took effect barely produced sufficient reve-
nue to meet the operating expenses of the telephone company, and the
revenue steadily fell short each succeeding month; that during the
two years from October 1, 1918, the company had received approxi-
mately $1,000,000 less than it cost to operate its system: that the mon-
ey loss from January to October, 1920, ranged from $60,000 to $80,000
less than it was costing the company to operate, leaving out every item
of expense questioned by the city, and, reducing the aggregate expenses
of operation by these amounts, the revenues received by the company
were not sufficient to pay even its actual operating expenses; that the
franchise ordinance provided that the company should receive after
October 1, 1920, such a rate as would produce a reasonable return
upon a fair valuation of its property, in addition to its operating ex-
penses, and that this is also provided by the Constitution of the Untied
States; and that complainant's property is being taken for public use
without due compensation, and without due process of the law, unless
it is allowed a reasonable and adequate compensation; that the city had
not been reasonably diligent in the matter of acting under the fran-
chise ordinance in forthwith determining the rates which grantees
might charge after October 1, 1920-and enjoined the city from inter-
fering with the schedule of rates proposed by plaintiff. The court ex-
pressly held that it was not deciding what was a fair or reasonable
rate, but only that the present monthly rates of $5 and $2 for business
and residence telephones, respectively, were confiscatory, and that ir-
reparable loss and injury were being suffered by the telephone compa-
ny, and the city of Dallas had refused or failed to comply with the ob-
ligations of the franchise ordinance to determine the rates which the
company should charge. The court required complainant to give a
bond in the sum of $400,000, with good security, conditioned to pay
back to the city and each one of its subscribers the pro rata share of
any difference in charge in the event that, as a result of this proceed-
ing, a lower rate than $10 and $4, respectively, was adjudged to be
reasonable.
After the opinion in said case was announced, and before the entry
of the decree, defendants moved to suspend the entry thereof upon
the ground that the cause is one in which an injunction is sought sus-
pending and restraining the enforcement, operation, or execution of a
statute of the state of Texas, by restraining the exercise of author-
ity by an administrative board, acting under and in pursuance of
the statutes of such state, upon the ground of the unconstitutionality
of such statute, and that such cause should be heard as provided by
Judicial Code of the United States, 266 (Comp. St 1243), by three
judges, of whom at least one should be a Justice of the Supreme Court
or a Circuit Judge, which motion was overruled. The overruling of
said motion and the granting of said temporary injunction are the
errors assigned here.
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The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921., legislative document, 1921; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38843/m1/437/: accessed May 4, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.