Southern Oil Corp. v. Yale Natural Gas Co.

1923 OK 129, 214 P. 131, 89 Okla. 121, 1923 Okla. LEXIS 1012
CourtSupreme Court of Oklahoma
DecidedFebruary 27, 1923
Docket10766
StatusPublished
Cited by28 cases

This text of 1923 OK 129 (Southern Oil Corp. v. Yale Natural Gas Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Southern Oil Corp. v. Yale Natural Gas Co., 1923 OK 129, 214 P. 131, 89 Okla. 121, 1923 Okla. LEXIS 1012 (Okla. 1923).

Opinion

NICHOLSON, J.

This suit was instituted by the Southern Oil Corporation, as .plaintiff, against the Yale Natural Gas Company, as defendant, seeking to enjoin the defendant from shutting off or failing to deliver to the plaintiff natural gas for fuel purposes. The gist of plaintiff’s action, as set forth in its petition, is that on or about the 4th day of January, 1916, the parties hereto entered into a contract in writing, a copy of which was attached to the petition as an exhibit, by the terms of which the defendant agreed to sell and deliver to the plaintiff, at its refinery, natural gas for fuel purposes at the price of five cents per 1,000 cubic feet for one year, and six cents per 1,000 cubic feet for the next two years, said contract covering a total period of three years; that said contract was duly approved and the rate and term's thereof confirmed by tire Corporation Commission of the state of Oklahoma on January 26, 1916; that in November, 1918, said defendant, in violation of the terms of said contract, demanded of the plaintiff 15 cents per 1,009 cubic feet for gas furnished during the month of October, 1918, which it is alleged was an unreasonable and unlawful rate for said gas; that plaintiff tendered to defendant payment for ■ all gas used at .the contract rate of six cents per 1,000 cubic feet, but defendant refused to accept *122 tire same, and will, unless restrained by order of the court, shut off the supply of gas to plaintiff’s refinery on December 15, 1918, unless said gas is paid for at the rate of 15 cents per 1,000 cubic feet; that plaintiff has at all times complied with the terms of said contract upon its part.

The defendant filed answer in which it admitted the execution of said contract and that the plaintiff had complied with the terms thereof up to October 1, 1918; that for the month of November, 1918, the plaintiff tendered to it the amount which would have been due under the terms of said contract; and by way of affirmative defense it was averred, in substance, that on January 4, 1916, the defendant was a public service corporation, engaged in the business of producing and selling natural gas to a large number of consumers, including refineries and other industries in the town of Yale, and to the inhabitants of said town, and that the plaintiff at the time of the execution of said contract knew that the defendant was a public service corporation and that it 'was subject to all the laws and regulations of the state of Oklahoma then in force as well as all future rulings or regulations and control of the Corporation Commission of the state; that said commission promulgated a general order No. 755, effective November 15, 1913, by which it required any gas company operating as a public service corporation to secure the approval of the Corporation Commission before advancing rates.

It was further averred that on and prior to August 3, 1918, the supply of natural gas in the vicinity of Yale, from which defendant obtained its gas supply, became largely depleted and it became necessary for the defendant to drill new wells and lay new pipe lines in order that it might discharge its duties to the public and its consumers, and that it was necessary that tbe rates theretofore charged by it be increased; that in compliance with the above order of the Corporation Commission the defendant filed with the commission its application for an order permitting it to advance its rates; that said commission on October 1, 1918, made an order permitting the defendant to increase its rates from six cents to .15 cents per 1,000 cubic feet, and that it was by virtue of this order that the increase in rates was made.

To this answer the plaintiff filed a very lengthy reply, in which it admitted the order of the Corporation Commission as set out by the defendant, but alleged that such order was ineffective, invalid, and void in so far as it attempted to modify or cancel the rights of the plaintiff under the contract of January 4, 1916.

It was further alleged that the Corporation Commission was without jurisdiction to promulgate said order, for the reason that the same was not published for four consecutive weeks in a newspaper of general circulation at the state capital as provided by section 18, art. 9, of the Constitution, and that no notice of the application to increase rates was given as provided thereby, and for that reason the increased rate did not become effective; that said order was ineffectual to cancel or destroy the rights of the plaintiff under and by virtue of the contract of January 4, 1916, for the reason that the subsequent order of the commission increasing the rate would operate to deprive the plaintiff of its property without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States, and violates sections 6 and 7 of the Bill of Rights of the Constitution of the state of Oklahoma.

It was further alleged that the Corporation Commission was authorized under the Constitution and laws of the state to make and authorize the contract of January 4, 1916, and by its order of January 26, 1916, did authorize and make binding upon the plaintiff and defendant the provisions of said contract, and that the subsequent order increasing the rate did not, by its terms, apply to the holders of contracts for natural gas for a fixed period of time, and the commission did not find that the defendant must raise its rates to holders of such contracts as distinguished from other individual consumers.

To this reply the defendant filed a general demuprer, which was by the court 'sustained. The plaintiff elected to stand on its petition and reply, whereupon judgment was rendered dismissing the action, and the plaintiff has appealed.

The plaintiff makes numerous assignments of error, which are argued from various angles, but all of these lead to the one pivotal question of the effect of the contract of January 4, 1916.

It is first urged that the order made by the Corporation Commission on January 26, 1916, gave express authority and its plain meaning was to authorize the parties to make and enter into the contract dated January 4, 1916, which established the rates for a term of three years under which plaintiff bases its claim.

*123 It appears from the order that the Southern Oil Corporation filed its complaint against the Yale Natural Gas Company alleging that the defendant refused to furnish the complainant gas except under a three-year contract whereby plaintiff was required to pay five cents per 1,000 cubic feet for gas for the first year, and six cents per 1,000 cubic feet for the two succeeding years. The defendant answered the complaint stating that it had not refused to furnish the plaintiff gas, hut that it had asked complainant to enter into a contract whereby it agreed to purchase of the defendant, at the rate of five cents per 1,000 cubic feet for one year and six cents per 1,000 cubic feet for the two succeeding years, all the natural gas used in plaintiff’s refinery for a period of three years, otherwise to pay eight cents per 1,000 cubic feet for all gas used.

The commission in a lengthy opinion held that the terms offered by the defendant were not unreasonable, and did not amount to a discrimination against the complainant, and that complainant might elect to pay for gas under either of the two plans and rates offered by the defendant, and dismissed the complaint without prejudice.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

CITY OF OKLAHOMA CITY v. OKLAHOMA CORPORATION COMMISSION
2024 OK 77 (Supreme Court of Oklahoma, 2024)
Southwestern Bell Telephone Co. v. Oklahoma Corporation Commission
1994 OK 38 (Supreme Court of Oklahoma, 1994)
Henry v. Corporation Commission
1990 OK 104 (Supreme Court of Oklahoma, 1990)
Opinion No. 79-129 (1979) Ag
Oklahoma Attorney General Reports, 1979
Opinion No. (1979)
Oklahoma Attorney General Reports, 1979
Chickasha Cotton Oil Co. v. Corporation Commission
1977 OK 40 (Supreme Court of Oklahoma, 1977)
Oklahoma Gas & Electric Co. v. Corporation Commission
1975 OK 15 (Supreme Court of Oklahoma, 1975)
Hixon v. SNUG HARBOR WATER AND GAS COMPANY
1963 OK 100 (Supreme Court of Oklahoma, 1963)
Chastain v. Oklahoma City
1953 OK 166 (Supreme Court of Oklahoma, 1953)
State Ex Rel. Oklahoma Natural Gas Co. v. Hughes
1950 OK 321 (Supreme Court of Oklahoma, 1950)
Wilson & Co. v. Oklahoma Gas & Elec. Co.
1942 OK 152 (Supreme Court of Oklahoma, 1942)
Missouri-Kansas-Texas R. Co. v. State
1938 OK 73 (Supreme Court of Oklahoma, 1938)
Oklahoma Cotton Ginners' Ass'n v. State
1935 OK 1004 (Supreme Court of Oklahoma, 1935)
Cary v. Corporation Commission of Oklahoma
9 F. Supp. 709 (W.D. Oklahoma, 1935)
H. F. Wilcox Oil & Gas Co. v. Walker
1934 OK 280 (Supreme Court of Oklahoma, 1934)
Russell Petroleum Co. v. Walker
1933 OK 75 (Supreme Court of Oklahoma, 1933)
American Indian Oil Gas Co. v. Geo. F. Collins
1932 OK 5 (Supreme Court of Oklahoma, 1932)
Shaffer Oil & Refining Co. v. Creek County Gas Co.
1926 OK 25 (Supreme Court of Oklahoma, 1926)
Oklahoma News Co. v. Ryan
1924 OK 270 (Supreme Court of Oklahoma, 1924)
United States v. Oklahoma Gas & Electric Co.
297 F. 575 (Eighth Circuit, 1924)

Cite This Page — Counsel Stack

Bluebook (online)
1923 OK 129, 214 P. 131, 89 Okla. 121, 1923 Okla. LEXIS 1012, Counsel Stack Legal Research, https://law.counselstack.com/opinion/southern-oil-corp-v-yale-natural-gas-co-okla-1923.