State v. San Antonio Public Service Co.

69 S.W.2d 38
CourtTexas Commission of Appeals
DecidedMarch 14, 1934
DocketNo. 1763—6619
StatusPublished
Cited by9 cases

This text of 69 S.W.2d 38 (State v. San Antonio Public Service Co.) is published on Counsel Stack Legal Research, covering Texas Commission of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State v. San Antonio Public Service Co., 69 S.W.2d 38 (Tex. Super. Ct. 1934).

Opinion

BLAIR, Justice.

The state of Texas, upon the relation of its Attorney General, instituted this proceeding seeking to perpetually enjoin appellant, San Antonio Public Service Company, a Texas corporation, from doing certain acts alleged to be in violation of law and ultra vires of its corporate powers. The state alleged that appellant was incorporated under subdivision 60 of article 1121, R. S. 1911, as amended by the 35th Legislature (1917), c. 178, “for the purpose of constructing, acquiring, maintaining and operating lines of electric motor railway,” and “for the manufacture, supplying and selling of electricity and gas (artificial, natural, or both), for light, heat and power to the public and to municipalities” ; and that in violation of article 1349, R. S. 1925, inhibiting a corporation from employing “its stock, means, assets or other property, directly or indirectly for any purpose whatever other than to accomplish the legitimate business of its creation, or those purposes otherwise permitted by law”; and as ultra vires of its corporate powers, appellant was employing its means and assets: (1) In the purchase for sale and the sale of all kinds and character of electric and gas appliances, maintaining a department, salesrooms, and salesmen therefor, and employing in excess of $150,000 of its means' and assets for such purposes; (2) in the purchase and operation of large gasoline-propelled motor vehicles for transporting sight-seeing parties to points of interest within and more than five miles beyond the city limits of San Antonio, which operations were not authorized by its charter, or in connection with its street railway system, or over routes fixed and approved by the city of San Antonio or the commissioners’ court of Bexar county; and (3) in making loans to various firms and corporations, varying in amounts from $500 to $106,000, and aggregating $209,000 during the past four-years.

Appellant answered, in substance: (1) That as a part of its business of manufacturing, supplying, and selling electricity and gas to the public and as incident .thereto, it sold electric and gas appliances to its customers for the purpose of increasing its business and to accomplish the legitimate business of its creation; and that the $150,000, or less, so used was reasonable, and was less than one-half of one per cent, of its capital investment; (2) that it was fully authorized to operate the sightseeing busses by virtue of article 6548; and (3) that as -to lending money to the various firms and corporations named, all of such loans had been paid; and there was no allegation that appellant was threatening or intending to make further loans; and that in any event the loans were lawful.

A trial to the court without a jury resulted in judgment perpetually enjoining appellant from purchasing and selling electric and gas appliances and from operating the sight-seeing motorbusses; but the injunctive relief as to the alleged loans was denied. Appellant has appealed from the injunction granted against it; and the state has cross-assigned error with respect to the action of the court in refusing to enjoin appellant from making loans. .

Appellant was incorporated in 1917, for the-purposes aforementioned. Immediately upon its incorporation it took over the properties of the San Antonio Gas & Electric Company, a gas and electricity generating and distribution system; and the San Antonio Traction Company, an electric motor street railway system, and has continued the operation of these properties in San Antonio. On January 1, 1928, appellant acquired what is known as its South Texas Department, which includes electric systems acquired from other corporations or owners in some 30 towns adjacent to San Antonio, and serving Floresville, Boerne, New Braunfels, Stockdale, Falls City, Hondo, and other towns and villages; and in the same year extended its power lines to the city of -Seguin, under a contract to sell power to said city at wholesale when needed.

Prior to 1927, appellant and its San Antonio predecessor sold some gas and electric appliances, and especially those not carried by local merchants, such as large hotel ranges and burners for industrial plants. Prior to the purchase of its South Texas Department properties, appellant’s predecessors sold all kinds and character of electric appliances to their customers. As to gas appliances in 1927, and as to electric appliances in 1929, appal-[40]*40lant entered into the purchase and sale of all kinds of such appliances in San Antonio ; and it has continued the policy of its predecessors of the South Texas Department properties of selling to its customers outside of San Antonio all kinds of electric appliances.

After this suit was filed appellant ceased selling gas and electric appliances in San Antonio proper, giving as its reason that the local merchants were rendering sufficient services to its gas and electricity customers with respect to appliances. However, appellant has continued to use space in its main office for demonstrating and displaying for various merchants of San Antonio, all kinds of gas and electric appliances, and to use its funds for paying salesmen to induce its customers to purchase such appliances from the merchants selling them.

In four of the towns of its South Texas Department, appellant maintains salesrooms and salesmen for its electric business; and also at Seguin, where it does not sell electricity to the public, but only sells power to the city when needed. In each of these four towns, local merchants also sell electric appliances to the customers of appellant; and both as to the San Antonio and the South Texas Department territory the trial court found that there is an adequate supply of electric appliances available from other merchants, at prices and on terms equal and similar to those offered by appellant:

The trial court also found that “it is not the universal custom in Texas” for utility companies to sell gas and electric appliances. This finding is not material. The material issue is whether the sale of such appliances is the usual method or means employed by utilities in the accomplishment of their main business of manufacturing and selling gas and electricity to the public. The evidence on' this issue shows that every privately owned electric company in Texas sells, and for many years has sold, electric appliances. That three of the ten municipally owned electric systems inquired about sell electric appliances or have sold them. That of the thirty-four gas companies operating in Texas, all except four sell gas appliances, and the four not selling appliances are related companies under one management, and one of tírese maintains a display of appliances in its main office.

The trial court further found as follows: “The sale of appliances is not the means usually and necessarily resorted to by utility corporations in order to supply gas and electricity for light, heat and power, and that the sale of such appliances by utilities is not a direct method of accomplishing the purpose of the incorporation; to the contrary, the sale of appliances by utilities tends only in an indirect manner to promote the interest of such corporation.”

This is a mixed finding of fact and of law. It is not sustained by ths evidence adduced. The evidence above detailed shows the sale of gas and electric appliances is the usual means or method employed by utilities in the extension of their service and in the accomplishing of their main business of manufacturing and selling gas and electricity to the public.

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Bluebook (online)
69 S.W.2d 38, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-v-san-antonio-public-service-co-texcommnapp-1934.