Appendix — City of Jackson v. Mississippi Power & Light Co.

Ch nica TING at Cy IE Mtge le Ba IS WOOT ALD Nein OED IO

30

APPENDIX.

Sees. 2393 and 2426, Mississippi Code of 1930, are as fol-

lows:

‘9393. Powers or Mayor anp Boarp or ALDERMEN.—The

mayor and board of aldermen of every city, town, and vil-

lage shall have the care, management, and control of the

city, town, or village and its property and finances, and

shall have the power to enact ordinances for the purposes

hereinafter named, and such as are not repugnant to the

laws of the state, and such ordinances to alter, modify, and

repeal; and they shall have power.”’

‘69496. Tuirry-THirp.—May Prescrine Maximum Rares

AND CHarces For Water, Power, Licuts or Gas.—To pre-

scribe by ordinance maximum rates and charges for the sup-

ply of water, gas and electric energy or current for lights

and power, or either, furnished by an individual, company

or corporation to the municipality and its inhabitants, or

either, such rates and charges to be just and reasonable. If

the rates and charges prescribed be unjust and unreason-

able, they may be reviewed and determined by the chancery

court of the county, but the authority hereby granted shall

not be construed so as to impair the effect or obligation of

any valid or binding contract with any waterworks company,

electric light company or gas company, now existing or

heretofore made.’’

(2805)

Office ~ Supreme Court, US.

FILAoT

: FEB 98 194

SUPREME COURT OF THE UNITED STATES | |

OCTOBER TERM, 1940 patemen ey

No. 779

CITY OF JACKSON, ET AL.,

vs.

MISSISSIPPI POWER & LIGHT COMPANY.

RESPONSE OF MISSISSIPPI POWER & LIGHT COM-

PANY TO PETITION FOR CERTIORARI, WITH

SUPPORTING BRIEF.

MagcetLus GREEN,

Jackson, Mississippi;

R. A. Henperson,

2 Rector St., New York City;

A. M. Nzgtson,

Jackson, Mississippi;

Forrest B. Backson,

Jackson, Mississippi;

Garner W. GREEN,

Jackson, Mississippi;

Attorneys for Respondent.

Rew & Prisst,

2 Rector St., New York City.

Green & Green,

Jackson, Mississippi.

Jackson, Youna & Farenp,

Jackson, Mississippi, Of Counsel.

_—

INDEX. Pa

Sussectr Inpex. E

Page a

Response of Mississippi Power & Light Company to ‘

petition for certiorari, with supporting brief. __ 1 £

I hog a Soa 1 :

Questions involved .. Ania Ae Sais? xs 2

Pee WEI. 2

i eee vee 3

Jurisdiction of District Court................. 3

Me I os ss ok oe vw Ley ea 4

City’s motion to dismiss................... 8

ee WI eat tr 8

Point 1—Reply to City’s petition ©... . 10 .

Point Il—Reply to City’s brief—Preliminary P

RE AEE a an SOP IDI a en acento are eats a 20 .

I cP 0 ns es ys ees ss. i. 31 :

RRS SSG gy SA ta NLR RE nae an ie 32 z

I eho Pees cis Co ee. , 33 i

ASSES AIS SS pee aa en Pr ay ae 38 e

TaBie or Cases Crrep. 4

Htna Life Ins. Co. v. Haworth, 300 U. S. 227, 239-

242, 81 L. Ed. 617, 620-622, 57 S. Ct. 461, 108 ‘A. L. e

R. 1000 eee Ria sears cil Spe wk ek co. 12

Aetna Casualty & Surety Co. v. Quarles, 4 Cir., 92 F. ;

RRR SS I ge AL TGCS Sr eS ee ear 26 j

Almaras v. Hattiesburg, 180 So. 394, 181 Miss. 752. 12 S

Automobile Ins. Co. v. Freundt, 7 Cir, 5 103 F. (24) i

. RPS Sr aA a 29 .

Bell v. Kaye, 127 Miss. 165, 89 Aa Pee 12 ;

Bethke v. Grayburg Oil Co., 5 Cir., 89 F. (2d) 536,

Certiorari denied, 302 U. S. “730, 82 L. Ed. 564. . 13 ;

Chase National Bank v. Citizens Gas Co., 7 Cir. 113 %

MNP erry) cp tet ete 29 3

Cincinnati etc. v. Interstate Commerce Commission,

162 U. S. 197, 40 L. Ed. 935, 939................. 12

City of Laurel v. Mississippi Gas Co., 49 F. (2d)

a ee ee ee ne ee 26

— of El Paso v. Texas City Gas Co., 5 Cir., 100

DI rer ny ee eo 14

—2893

il INDEX

Columbus R., Power & Light Co. v. Columbus, 249

U.S. 399, 63 L. Ed. 669, 6 A. L. R. 1684... .

Corporation Commission v. Carey, 296 U. 8. 452, 80

Ric Se ES Oe igs Ce era a EE EKS

Currin v. Wallace, 306 U.S. 1-5, 88 L. Ed. 441.......

Driscoll v. Edison Light & Power Co., 307 U. 8. 108,

Ge Re ee es eee Ns ee een

Ex parte Bransford, 310 U.S. 354, 84 L. Ed. 1249...

Griffith v. Vicksburg Waterworks Co., 88 Miss. 371,

Ms a ee oe Pa ahs eae Ws ee ashes

Gulf & Ship Island R. Co. v. Laurel Oil & Fertilizer

Cu, Tae hy ey are Bete, GO ore ka i ce es

Gunter v. Atlantic Coast Line R. Co., 200 U. 8. 273,

ee a i Ss hk ack vc os el Re

Interstate Commerce Commission v. Alabama, ete.

Co., 168 U. S. 168, 42 L. Ed. 414, 423.............

Interstate Natural Gas Co. v. Louisiana Public Serv-

ice Commission (D. C. La.), 33 Fed. Supp. 50, 59;

ee PS I ee rae Ue ee es en

Julian v. Central Trust Co., 193 U. S. 93, 112, 48

ey A cere ear pena Pemerka ema

Kelleam v. Maryland Casualty Co., U. S. Law Week,

I Bile BOR es a ok 5s he wa Cee Renee

Kline v. Burke Construction Co., 260 U.S. 226, 67 L.

OE Re SS a aaa aie Beare OSA oT Ope vernal nA

Lake Erie Provision Co. v. Moore, 11 Fed. Supp.

a Sr eae ie re hes ek RL eT

Maryland Casualty Co. v. Pacific Oil & Coal Co., 85

Rie ae Rs SIND NS 2 osc en Loew es

McClellan v. Carland, 217 U. S. 281, 54 L. Ed. 762,

SO oe ee ee BS Palak RES He CR

Milk Wagon Drivers Union v. Meadowmoor Dairies,

Inc., U. S. Law Week, February 10, 1941, 4187....

Mississippi Power Co. vy. Aberdeen, 11 Fed. Supp.

OME a Poorer. ils Bete een enous eS

Mississippi Power & Light Co. v. Jackson, 9 Fed.

DREN or Sh ee eter ee

Munroe v. Raphael, 288 U.S. 485, 489, 77 L. Ed. 910,

el a i 3 er ee ha ee

Page

17

_—

INDEX ili

Page

Mountain States Power Co. v. Public Service Com-

mission, 299 U. S. 170, 81 L. Ed. 101........... 14

Nashville, etc. R. Co. v. Wallace, 288 U. 8S. 249, 77

Sc Bee Fs OF OAs Bh Re BA oe ie ca ee ea 13

New York Life Ins. Co. v. Roe, 8 Cir., 102 Fed. (2d)

Ry eee ays aon ae ee ee 26

Oklahoma Natural Gas Co. v. Corporation Commis-

sion, 88 Okla. 51, 211 Pac. 401, 31 A. L. R. 330... . 24

Pennsylvania v. Williams, 294 U. 8. 176, 188, 79 L.

DR SRC i eae a ie ye te eR Dei CES 27

Petroleum Exploration v. Public Service Commis-

sion, 304 U.S. 209, 214, 82 L. Ed. 1294, 1299... ... 14

Phillips v. United States, 85 L. Ed. 460............ 15

Powell v. United States, 300 U. S. 276, 286, 81 L. Ed.

Bidar hire ear a anmipe op ee OME 8 eee oop, I 15

Procter € Gamble Co. v. United States, 225 U.S. 281,

Be ee ys actos EN ee ener eee hla 15

Public Sevice Commission v. Brashear Freight Lines,

Inc., 306 U. 8S. 207, 83 L. Ed. 608, 610............. 14

Railroad Co. v. Blum Co., 88 Miss. 188, 42 So. 282. . 24

Sears, Roebuck & Co. v. Roddewig, 24 Fed. Supp.

WUE as ie ae a Gis oe ee Oe es OE 28

Shannahan v. United States, 303 U. S. 596, 599, 82

Sic mk I ks cl a a be 15

Skinner & Eddy Corporation v. United States, 249

11, Ge a Oe A I, A lg Fs eee aes 12

Southern Bell Tel., etc., Co. v. Railroad Commission,

AM re 6 ota yh BS Seka Re Tce Me Den ee 18

Southern Pacific Co. v. McAdoo, 9 Cir., 82 F. (2d) 121 29

State ex Rel. v. Benson, 108 Miss. 779, 67 So. 214... . 24

Stephenson v. Equitable Life Assurance Socicty, 4

Seer Fe te ee 6 oe ee eS 26

Stone v. Y.é M.V.R. Co., 62 Miss. 607, 116 U.S. 307,

Pe RG EE Sins Bel aa Nan ake sta ne eA 26

Stone v. Illinois Central R. Co., 116 U.S. 347... .... 26

Texarkana v. Arkansas-Louisiana Gas Co., 306 U.S.

i Bhs hc ee ies es es 17, 24

United States v. West Virginia, 295 U. 8S. 463, 79

Bi ME 5 ee T CR OL OE Ce Om: 13

United States v. Corrick, 298 U. S. 435, 80 L. Ed.

TN 5 ios here RAST ean 15

iv INDEX

United States v. Idaho, 298 U.S. 105, 109, 80 L. Ed.

I as ed tia se ck ik eases eos 15

United States Fidelity & Guar. Co. v. Koch, 3 Cir. *

I ry es bbs aus 29

Vicksburg Water Works Co. v. Yazoo, etc. Co., 102

I cick vase cs cedes 12

Vicksburg v. Vicksburg Waterworks Co., 206 U.S

Nn i I I sa he be Pee cae 26

Yazoo, etc. R. R. Co. v. McKay, 44 So. 780, 91 Miss.

ee rater alias W tik bi uiy Cu natia ney 24

Statutes Cirep.

Borchard Declaratory Judgment, Annotation, 87 A.

GM NI se so Cate ka ea oe ees 14

pe re ae en ee 13

I I eet eo pe eS po ale sk Wk EA WA 25

Judicial Code, Section 24, as amended, 28 U.S. C. A.,

Section 41(1), 48 Stat. 775, printed as Appendix

re een che Nan és 2

Natural Gas Act (15 U. S. C. A., p. 784, 52 U. S.

Statutes, 821, Section 717(a)) .................. 21

Pes RC I he eke s saree kh vn bids 15

pT a a Gen a 17

Pacers Gee memenyaras Bat. 2... £6 ee. 15

Pond Public Utilities, 4th Ed., 1772, See. 892........ 18

Revised Statutes, Sec. 3224, Sec. 1543, Title 26, U.S.

a re a wt 8 a a 29

Section 24, Judicial Code, as amended, 28 U.S. C. A.,

I ae a ee eee ay dial Vem Gms 8

Section 274d, Judicial Code, 28 U. S. C. A., Section

RRO EPS “ER NS Recreate arnt og Deen eee ae 8

Section 274(d), Judicial Code, 28 U. S. C. A. Section

400, as amended June 14, 1934, Chapter 512, 48

Stat. 955, as amended August 30, 1935, Chapter

829, Section 405, 49 Stat. 1027, Appendix B...... 2

Section 2426 originated in Chapter 231, Mississippi

RR ae Gs Sue ree Bey SG ey 25

Section 400, U.S. C. A., Title 28, Judicial Code 274d. 28

Urgent Deficiencies Act of October 22, 1913.......... 15

MO I. a es es eng ae 5 Gy bs 13

ee er I eis os ee ie ce kas 12

Ot A. Ts By, Rete, GOO... 2. ie 14

_———

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1940

No. 779

CITY OF JACKSON, ET AL.,

Us.

MISSISSIPPI POWER & LIGHT COMPANY.

RESPONSE OF MISSISSIPPI POWER & LIGHT COM-

PANY TO PETITION FOR CERTIORARI, WITH

SUPPORTING BRIEF.

Parties To LITIGATION:

City of Jackson (with its officials), Petitioner in this

Court, was appellee in the Court of Appeals and defend-

ant in the District Court, herein sometimes called (and

so substituted in quotations) City, Petitioner or

municipality ;

Mississippi Power & Light Company, Respondent here,

was appellant in the Court of Appeals and plaintiff in

the District Court, herein called (and so substituted in

quotations) Company, plaintiff or grantee.

‘‘Opinions Below.

‘*No opinion was delivered by the District Court, but

the judgment correctly appears in the petition herein

ld

2

(R. 92). The opinion of the Circuit Court of Appeals

is set forth, (R. 101 to 105 inclusive), (Appendix ©

hereto), and the judgment of the Circuit Court of Ap-

peals is correctly set forth in petition herein, (R. 106).

Otherwise the opinions and judgments below are not

yet officially reported.’’

Questions Involved.

Whether or not the Federal District Court was deprived

by the Johnson Act (Judicial Code, Section 24, as amended,

28 U. S. C. A., Section 41(1), 48 Stat. 775, printed as Ap-

pendix A) of jurisdiction to declare under Declaratory

Judgment Act (Section 274(d), Judicial Code, 28 U. S.

C. A. Section 400, as amended June 14, 1934, Chapter 512,

48 Stat. 955, as amended August 30, 1935, Chapter 829

Section 405, 49 Stat. 1027, Appendix B) that under the

terms of the franchise contract, Exhibit A to the complaint,

there is available from the Jackson Gas Field sufficient

natural gas for the requirements of the City; or differently,

whether or not, there being admittedly an insufficiency of

natural gas therein, Company may have thereasto a judicial

declaration as to its rights under said Exhibit A between

City and Company.

Preliminary Statement.

On June 18, 1940, District Judge Mize dismissed solely

for want of jurisdiction, under the Johnson Act, a petition

for Declaratory Judgment filed by Company against City,

seeking a declaration of Company’s rights under a written

contract, Exhibit A (R. 19), to supply City natural gas,

initially to be taken from the Jackson Gas Field, which

supply Company claimed had become insufficient for the

performance of that thereunder required. This claim the

City both judicially and extra-judicially denied. Compare

Exhibit ‘‘G’’, Ordinance of the City (R. 76), ‘‘There is

3

now a sufficient supply of natural gas in the Jackson Gas

Field to supply all Jackson consumers.’’ (Italics ours, un-

less otherwise noted.)

Upon appeal, on January 17, 1941, the Court of Appeals

for the Fifth Cireuit (Hutcheson, Circuit Judge, delivering

the opinion), declared:

‘Here the City and the Company, under contractual

relations with each other, which oblige the company to

furnish gas at rates fixed in the contract while the

Jackson Field holds out, and specifically relieve it from

so doing when the field has failed, are at loggerheads

over the facts upon which their respective rights and

duties depend and therefore over their respective rights

and duties under the facts.

‘‘The company insists that the field is insufficient,

the city that it is sufficient. Acting upon its view, the

company has made arrangements for bringing in pipe

line gas from a distance and is undertaking to exact

and collect for that gas, higher rates than those pro-

vided for in the contract. The city insisting that the

field is sufficient and the contract still holds is resisting

these efforts.

‘‘An authoritative determination as to the present

status of the contract and of the rights and duties of

the parties under it is essential in the interests of both

city and company and of the public that both serve.

For such a case, the declaratory judgment act is made

to order. Borchard Declaratory Judgments, pages

187, 188, 417, 424, 426, 433, 436, 566, 606, 101 A. L. R.

694.”’

Thereasto the city seeks certiorari.

Statement of the Case.

Jurisdiction of District Court.

The Company invoked the Declaratory Judgment Act,

predicating Federal Jurisdiction upon (a) diverse citizen-

ship, (b) rights arising under the Constitution, with juris-

dictional amount involved (R. 3).

2d

PIGS MCRL EE RV IS 3 F ——

4

The Complaint.

The Company operates a gas distribution system at Jack-

son, Mississippi (R. 3), having

(1) A perpetual franchise granted February 10, 1860

(Laws Mississippi, 1860, page 438), pursuant whereto gas

works were constructed, a part of which is still operated

by Company ;

(2) A franchise granted to M. H. Grossman (R. 4);

(3) The contract which is the basis of this controversy,

Exhibit A to the Complaint, executed October 20, 1930, and /

epitomized thus:

Section 2. This franchise was for 25 years and was con-

ditioned on Company ‘‘furnishing gas to the City of Jackson

and the inhabitants * * *, that is, natural gas shall

be furnished to the inhabitants of the City of Jackson as long

as commercial natural gas is produced in commercial quan-

tities in the City of Jackson * * * sufficient to supply

the demands of the City of Jackson and its inhabitants and

its industries,’’ (herein called Jackson gas or Jackson

Field).

‘‘Should the grantee herein, through any medium, ex-

cept with the consent of the City of Jackson, raise the

rates stipulated in paragraph 3 hereof during the time

that gas is furnished or can be so furnished in the City

of Jackson * * * then the City of Jackson may

purchase said property on the terms and conditions

hereinafter set forth.

«* * * Company gives option to the City of

Jackson to purchase its natural gas equipment oC ees

the terms of the option’’ are * *

‘Tn the event of the raise of rates as designated in

paragraph3 * * * the City will have four months

from the effective day of this raise * * *, within

which to notify the grantee in writing * * * of

5

its election to exercise its option to purchase * °* *»

at ‘‘the true or actual value of the physical properties,

properly depreciated at that time.’’ (R. 22.)

Section 3. ‘‘Pursuant to the municipality’s rate-making

power, and the terms and conditions upon which this fran-

chise, is given, the municipality establishes the following

rates and charges for natural gas service in Jackson for gas

taken from the Jackson, Mississippi, natural gas field

* * *) and therein were then prescribed the following

rates, domestic, commercial, heating, industrial and munici-

pal, but all said rates were for gas ‘“‘taken from the Jack-

son, Mississippi, natural gas a os ae

Section 5. ‘‘Should Jackson gas field * * * become

insufficient for the performance of that herein required of

grantee, tt may thereafter, and not before obtain natural

gas from other fields and rates therefore shall be fixed here-

under that are just and reasonable.’’

Section 8. ‘‘The grantee shall, as far as practical, furnish

gas * * * from and after the date on which this ordi-

nance goes into force and effect to all individuals, businesses

ind industries, within the corporate limits of the City.’’

The Company’s Complaint then averred:

The Jackson gas field for many months last past, especially 5

at February 7, 1940, and continuously since, was ‘‘insuf- 4

ficient for performance of that requiem * * OY

Particularizing, in part, thereasto:

(a) Gas is drawn directly from the wells, the demand

varies, being greatest between 8 and 9 a. m., (Exhibit B, R.

82). “The maximum available hourly production * * *

at January 19, 1940, (was) not in excess of 1,543,000 Cu.

Pt. per hour * * * yet the maximum requirements of

Company was then and now is (R. 10) 1,778,500 Cu. Ft. per

hour for the Jackson system, (Exhibit B-1), with at least

280,900 Cu. Ft. per hour safety factor, (Exhibit B-2), * * *.”

The demand therefor rapidly is increasing (Exhibit C). ‘It

has increased more than five times since 1930.’’

Exhibit E is a graphic representation of the decline of gas

wells in the Jackson Field. ‘‘Said gas wells in said Jackson

Field will continue to decline, so that within a period of to-

wit, one year or less, there may be no Jackson Gas available

at all, but certainly nothing like an adequate or dependable

supply.’’ (Exhibit E).

(b) As a public utility, without other gas available than

that from the Jackson Field, Company had to anticipate and

being advised by the United Gas Public Service Company

(herein called United, which was a large furnisher of gas)

in 1939 of this condition, a pipeline was constructed, costing

more than $3,000,000, making available at Jackson pipeline

gas.

(c) Company does not own gas gells, has no contract rela-

tion with such owners other than as averred, and the remain-

ing gas ‘‘is not available’? and renders the supply at Jack-

son insufficient.

City wrongly pretends there is no insufficiency as from De-

cember 26, 1939 to January 25, 1940, 780,000 MCF were with-

drawn from the Jackson Field, while the consumption within

the City of Jackson was 530,392 MCF. This claim er-

roneously fails to take into account these essential facts:

(1) The hourly rate of consumption and the gas available

to meet the hourly requirement determines the insufficiency

of the supply ;

(2) Other persons were lawfully entitled to dispose of

the gas (R. 13): therefore, not all of the Jackson field gas

was available to Company ;

(3) Insufficiency must not be allowed to actually oceur,

but arrangements must be made in advance to give a con-

-

7

tinuing dependable supply and Company could not wait un-

til the time of failure to make the supply sufficient ;

(4) The wells were being drained and could not meet

the hourly requirement.

‘*‘Company avers that notwithstanding the excessive

draft, there was not and is not presently, as at Feb-

ruary 7, 1940, or at any time since, nor will there be

from said Jackson gas field at any time in the future

(unless new discoveries are made, which are not now

available), natural gas in commercial quantities suffi-

cient in the Jackson gas field to meet Jackson’s require-

ments under said Exhibit A’’ (R. 14).

‘This gas is wholly inadequate to supply said City’s

demand but will cause in said City a gas famine, with

disastrous results to all concerned. The right thus to

furnish pipeline gas said City wrongfully assumes to

deny and thereasto there is between Company and City

an actual controversy whereasto a declaration is abso-

lutely requisite and essential.’’

Company is continuing to serve to Jackson citizens all

available Jackson gas, but has been required to the extent

of 36.59% to take pipeline gas to supplement the insufficient

local supply, and ‘‘ Company is entitled under said contract

to have this right established and adjudged’’ (R. 15).

‘‘Wherefore, Company prays * * * upon the

final hearing, a declaration be had as between Company

and City, * * *, that——

‘*(a) Under said Contract, Exhibit A, Company has

a right, as now, and from February 7, 1940, to furnish

in said City pipeline gas, * * *

‘*(b) That under said contract, Company has the

right, if the Court be of opinion that said Company may

not so furnish pipeline gas, to discontinue furnishing

said City and its inhabitants pipeline gas and to leave

3d

ii.

3 ;

Peete

i

8

the City solely dependent upon that portion of the gas

originating from said Jackson field that Company may

supply, and for such other, further, and general relief

as in equity and good conscience may seem meet.’’

(R. 17).

City’s Motion To Dismiss.

The City moved to dismiss upon divers grounds (R. 88).

The Court considered only the Johnson Act and dismissed

solely because of want of jurisdiction (R. 92). Reversal

occurred for the reasons set forth in the opinion of Hutche-

son, Cireuit Judge, appended as Appendix C. Thereto we

refer with great confidence for a thorough vindication of

the Company’s rights.

Statutes Involved.

Section 24, Judicial Code, as amended, 28 U. S. C. A,,

Section 41, (in full Appendix A), may be epitomized thus:

c* * 6 * ©The District Courts shall have original

jurisdiction * * * of all suits of a civil nature

* * * Notwithstanding the foregoing provisions

of this paragraph, no District Court shall have juris-

diction of any suits to enjoin, suspend or restrain the

enforcement, operation, or execution of any order of

* * * any rate-making body * * *, where juris-

diction is based solely upon the ground of diversity of

citizenship, or the repugnance of such order to the Con-

stitution of the United States, where such order (1) af-

fects rates chargeable by a public utility, (2) does not

interfere with interstate commerce, and (3) has been

made after reasonable notice and hearing, and where a

plain, speedy, and efficient remedy may be had at law

or in equity in the courts of such State.’’

Pursuant to Section 274d, Judicial Code, 28 U. S.C. A,

Section 400, Declaratory jurisdiction is provided:

**(1) In eases of actual controversy except with re-

spect to Federal taxes the courts of the United States

9

shall have power upon petition, declaration, complaint,

or other appropriate pleadings to declare rights and

other legal relations of any interested party petitioning

for such declarations, whether or not further relief is

or could be prayed, and such declaration shall have the

force and effect of a final judgment or decree and be

reviewable as such.

‘*(2) Further relief based on a declaratory judgment

or decree may be granted whenever necessary or proper.

The application shall be by petition to a court having

jurisdiction to grant the relief. If the application be

deemed sufficient, the court shall, on reasonable notice,

require any adverse party, whose rights have been ad-

judicated by the declaration, to show cause why further

relief should not be granted forthwith.

“ * * (Mar. 3, 1911, ec. 231, See. 274d, as added

June 14, 1934, e. 512, 48 Stat. 955; as amended Aug. 30,

1935, ¢. 829, See. 405, 49 Stat. 1027.) ”’

The sole issue presented to and decided by the District

Court was as to the sufficiency, vel non, of the Jackson gas

field under Sections 2 (R. 20), and 5, (R. 24), under the

complaint, as between the Company and the City, to give

those rights specifically by the contract, Exhibit A, annexed,

to the Company, when the Jackson gas field became ‘‘insuf-

ficient for the performance of that hereunder required.”’

Thereasto averring such insufficiency, the Company asked

declaratory relief.

Hutcheson, Circuit Judge, on appeal, declared, ‘*‘ For such

a case, the Declaratory Judgment Act is made to order,’’ and

excluded from consideration the merits and ‘‘the question

much discussed in the briefs of both appellant and appellee,

with authorities pointing both ways, whether the Declara-

tory Judgment jurisdiction is discretionary. * * * We

are concerned here with questions neither of discretion nor

of the merits, but only with whether there was jurisdiction,

and we think it plain that there was.’’ (Appendix C.)

10

Point I.

REPLY TO CITY’S PETITION.

i.

The City overlooks a controlling decision, Maryland Cas-

ualty Co. v. Pacific Oil & Coal Co., 85 L. ed. (Adv. Sheets)

455.

Therein, Mr. Justice Murphy stated the facts, in part,

thus:

‘Petitioner claimed that this truck was not one ‘hired

by the insured’ and hence that it was not liable to defend

the action by Orteca against the insured * * *. It

sought a declaratory judgment to this effect against the

insured and Orteca, ‘and a temporary injunction re-

straining the proceedings in the state court pending

final judgment in this suit.

‘‘Orteca demurred to the complaint on the ground

that it did not state a cause of action against him. The

District Court sustained his demurrer and the Circuit

Court of Appeals affirmed. 111 F. (2d) 214. We grant-

ed certiorari on October 14, 1940 ( U.S. "

ante, 56, 61 S €t 25) to resolve the conflict with the de-

cisions of other Cireuit Courts of Appeals cited in the

note."

‘“The question is whether petitioner’s allegations are

sufficient to entitle it to the declaratory relief prayed in

its complaint. This raises the question whether there is

an ‘actual controversy* within the meaning of the De-

claratory Judgment Act (Judicial Code Section 274d,

28 USCA See. 400), since the District Court is without

power to grant declaratory relief unless such a contro-

versy exists. Nashville, C. & St. L. R. Co. v. Wallace,

288 US 249, 259, 77 L ed 730, 733, 53 S Ct 345, 87 ALR

1191; USCA Constitution, Art. 3, See. 2.

‘The difference between an abstract question and a

1 This point thus decided was adverted to before the Court of Appeals

but excluded in its opinion.

11

‘controversy’ contemplated by the Declaratory Judg-

ment Act is necessarily one of degree, and it would be

difficult, if it would be possible, to fashion a precise test

for determining in every case whether there is such a

controversy. Basically, the question in each case is

whether the facts alleged, under all the circumstances,

show that there is a substantial controversy, between

parties having adverse legal interests, of sufficient im-

mediacy and reality to warrant the issuance of a de-

claratory judgment. See Aetna L. Ins. Co. v. Haworth,

300 US 227, 239-242, 81 L ed 617, 620-622, 57 S Ct 461,

108 ALR 1000.

* * 7

‘It is clear that there is an actual controversy be-

tween petitioner and the insured. Compare Actna L.

Ins. Co. v. Haworth, supra (300 US 227, 81 L ed 617,

07S Ct 461, 108 ALR 1000). If we held contrariwise as

to Orteca because, as to him, the controversy were yet

too remote, it is possible that opposite interpretations

of the policy might be announced by the federal courts.

For the federal court, in a judgment not binding on

Orteca might determine that petitioner was not obli-

gated under the policy, while the state court, in a sup-

plemental proceeding by Orteca against petitioner,

might conelude otherwise. (Citing cases).

‘*Thus we hold that there is an actual controversy

between petitioner and Orteea, and hence, that peti-

tioner’s complaint states a cause of action against the

latter. However, our decision does not authorize issu-

ance of the injunction prayed by petitioner. (Citing

Cases).”’

This decision clarifies and settles the right to proceed in

the District Court for a declaration, notwithstanding the

pendency in the State Court of a complaint. The City, with

deference, overlooks that at the same time there was pend-

ing before District Judge Mize (a) this complaint for a

Declaration; and (b) the complaint by the City for sub-

stantially specifie performance by the Company. Having

a

12

both causes in the same Court, the District Judge remanded

one and dismissed the other.

This cause (Maryland Casualty Company case) wrought

the requisite clarification as to declarations.

9

ae

Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 239-242,

61 L. ed. 617, 620-622, 57 S. Ct. 461, 108 A. L. R. 1000, mis-

applied.

With deference, this decision of this Court was properly

followed and applied by Judge Hutcheson, for the City

said the Jackson field was sufficient, the Company said it

was insufficient. Se assuming, the Company arranged to

import pipeline gas to avert a gas famine. The City has

fixed no rate for pipeline gas (there being no Public Serv-

ice Commission and the sole power being in the City to

regulate rates). The Company, as the owner of the pipeline

gas, collected therefor that which it deemed a reasonable

price. Almaras v. Hattiesburg, 180 So. 394, 181 Miss. 752;

Vicksburg Water Works Co. v. Yazoo, etc. Co., 102 Miss.

504, 59 So. 825; Bell v. Kaye, 127 Miss. 165, 89 So. 919.

It was not otherwise provided by statute, hence the Com-

pany has the primary right to fix the price of its property

sold. 13 C. J. S. 277, page 328; Skinner & Eddy Corpora-

tion v. United States, 249 U.S. 564, 63 L. ed. 772, 777; Inter-

slate Commerce Commission v. Alabama, etc. Co., 168 U.S.

168, 42 L. ed. 414, 423; Cincinnati etc. v. Interstate Com-

merce Commission, 162 U. 8S. 197, 40 L. ed. 935, 989. Pur-

suant to this collection by the Company for the pipeline

gas thus furnished, the City presently claims an option

upon the Company’s property and by reason of the suffi-

ciency, vel non, there is also brought about an option, vel

non, Whereasto judicial declaration is requisite, neither hay-

ing aught to do with rates,

=

13

When the declaration is made as to sufficiency, vel non,

it must be assumed that the City will not become a violator

of the law and leave undone those things that it ought to do

or do those things that it ought not to do. Mr. Justice Reed

in Milk Wagon Drivers Union v. Meadowmoor Dairies, Inc.,

U.S. Law Week, February 10, 1941, 4187, said:

‘*Tt is a postulate of reasoned thinking that the judi-

cial decrees will be faithfully carried out.’’

To have the City advise this Court in advance that it

should not make a declaration as to a justiciable contro-

versy because the City will not conform thereto, is not a

well-conceived argument. It savors of taking advantage of

one’s own wrong, (Allegans suam turpitudinem non est

audiendus, Broom’s Legal Maxims; 2 ©. J. 1148) of chal-

lenging constituted authority. We have no doubt when and

if it be adjudged as a fact that the Jackson gas field is

insufficient, the City will conform to that adjudication.

Should it not so do, there is for this failure adequate rem-

edy, (a) under the Declaratory Judgment Act in a Court

“having jurisdiction’’; (b) independently of this statute,

by reason of the inherent power of the Federal Court as a

Court. Compare Julian v. Central Trust Co., 193 U. 8. 93,

112, 48 L. ed. 629, 639; Gunter v. Atlantic Coast Line R. Co.,

200 U. S. 273, 292, 50 L. ed. 477; Munroe v. Raphael, 288

U.S. 485, 489, 77 L. ed. 910, 24 A. L. R. 1084; Bethke v.

Grayburg Oil Co., 5 Cir., 89 Fed. (2) 536, Certiorari denied,

302 U.S. 730, 82 L. ed. 564.

3.

City overlooks other controlling decisions of this Court

rendering Certiorari not requisite.

Compare Currin v. Wallace, 306 U. S. 1-5, 83 L. ed. 441;

Nashville, etc. R. Co. v. Wallace, 288 U.S. 249, 77 L. ed. 730,

87 A. L. R. 1191; United States v. West Virginia, 295 U. S.

—

ReRipcteni 4

eee:

14

463, 79 L. ed. 1546; Borchard Declaratory Judgment, Anno-

tation 87 A. L. R. 1205; 101 A. L. R., Annotation 689.

Wherefore, there is naught further requisite for this

Court to do in that regard.

4.

The City overlooks other decisions dealing with the John-

son Act and construing Federal statutes somewhat similar.

(a) Compare Corporation Commission v. Carey, 296 U.S.

452, 80 L. ed. 325; Mountain States Power Co. v. Public

Service Commission, 299 U.S. 170, 81 L. ed. 101; Driscoll v.

Edison Light € Power Co., 307 U. S. 108, 83 L. ed. 1134;

Petroleum Exploration v. Public Service Commission, 304

U. S. 209, 214, 82 L. ed. 1294, 1299, and the Fifth Circuit

has sought thereto to conform. City of El Paso v. Texas

City Gas Co., 5 Cir., 100 Fed. (2) 501.

(b) The provision of the Johnson Act is no jurisdiction

‘*to enjoin, suspend or restrain the enforcement, operation

or execution of any order of any rate-making body,’’ thus

directly withdrawing jurisdiction only when that sought

was by injunctive process. The Johnson Act does not as-

sume to deny jurisdiction of a proceeding to ‘‘annul’’ or

“‘vacate.’’

Compare the following:

(1) Section 266, where in Public Service Commission v.

Brashear Freight Lines, Inc., 306 U. S. 207, 83 L. ed. 608,

610, this Court said:

‘*Section 266 as originally enacted applied only to

eases in which an interlocutory injunction was granted

or denied and the purpose was to make interference by

such an injunction with the enforcement of state legis-

lation a matter for the adequate hearing and full de-

liberation which the presence of three judges was likely

to secure. Cumberland Teleph. & Teleg. Co. v. Louis-

iana Pub. Serv. Commission, 260 U. S. 212, 216, 67 L.

15

ed. 217, 222, 43 S. Ct. 75; Stratton v. St. Louis S. W.

R. Co., 282 U. S. 10, 14, 75 L. ed. 135, 137, 51 S. Ct. 8.

The amendment that the requirement of a court of

three judges should also apply to the final hearing on

the application for a permanent injunction was to end

the anomalous situation in which a single judge might

reconsider and decide questions already passed upon

by three judges on the application for an interlocutory

injunction. ’’

Compare Note, 83 L. ed. 1193; Phillips v. United States,

85 L. ed. 460.

(2) Ex Parte Bransford, 310 U. S. 354, 84 L. ed. 1249.

(3) Commerce Court, Procter & Gamble Co. v. United

States, 225 U.S. 281, 56 L. ed. 1091, where the excision was

to ‘‘annul’’ and ‘‘set aside.’’

(4) Section 316 of the Packers and Stockyards Act,

United States v. Corrick, 298 U. S. 435, 80 L. ed. 1263, 1266.

(5) Urgent Deficiencies Act of October 22, 1913, Shanna-

han v. United States, 303 U. S. 596, 599, 82 L. ed. 1039,

1041.

(6) United States v. Idaho, 298 U. 8. 105, 109, 80 L. ed.

1070, 1074; Powell v. United States, 300 U. S. 276, 286, 81

L. ed. 643, 644.

Hence, the excision of jurisdiction by the Johnson Act

under these decisions would not include the present suit.

5.

Further of the City’s Petition with Company’s comments

thereon and thereasto.

(a) The City sharply presents the issue thus:

‘The Company had fully complied with the contract;

that the Jackson gas field is presently insufficient for

the performance of the contract; that Company has

sought, obtained and is furnishing pipeline gas from

foreign fields at rates initiated by it (Company) but

not approved by the City as the rate-making power;

4d

16

that the City claims that the Jackson field is still suf-

ficient’’,

and with this issue thus put by the City, the prayer of the

Complaint is—

(1) Under said Contract, Exhibit A, Company has a

right, as at now, and upon February 7, 1940, to furnish in

said City pipeline gas, and that the rates prescribed by Sec-

tion 3 of the Contract do not apply thereto (pipeline gas).

That Section 3 rates do not apply was conceded in the City’s

brief (page 74), ‘‘The only rate agreed upon in the contract

franchise we admit is for natural gas from the Jackson

gas field, but if that becomes insufficient, within the terms

and provisions of the contract franchise, the Company is

required to obtain natural gas from other fields, then in the

language of the contract ‘rates therefor shall be fixed here-

under that are just and reasonable’,’’ but Section 3 (R.

22) can leave no doubt thereasto.

(2) ‘*That under said contract, Company has the right,

if the Court be of opinion that said Company may not so

furnish pipeline gas, to discontinue furnishing said City

and its inhabitants pipeline gas and to leave the said City

solely dependent upon that portion of the gas originating

from said Jackson field that Company may supply, and for

such other, further, and general relief as in equity and good

conscience may seem meet’’ (R. 17).

Hence, with this factual controversy existent, whereun-

der the City would take no step until it was adjusted, this

complaint for declaration was filed, and when made, this dec-

laration would, if favorable to the Company, cancel the

City’s claim for an option upon the Company’s plant and

place the parties litigant in such a status as that each could

do that specifically provided by the contract, for the City

had covenanted when pipeline gas was essential, to vouch-

17

safe thereasto just and reasonable rates. (Section 5, R.

25). So, for Jackson gas, Section 3 prescribed specific rates,

for pipeline gas, Section 5 provides for reasonable and just

rates, and the contract as an entirety was for judicial con-

struction, as to sufficiency, vel non, vouchsafing the respec-

tive parties different rights.

(b) The City claims, ‘‘We submit, therefore, that this is

essentially a rate case,’’ and therefore, any declaration in

the District Court would contravene the Johnson Act.

Thereto, the Company replies:

(1) The legislative history thereof in Appendix D dem-

onstrates that there was no withdrawal of jurisdiction in

such a cause.

(2) This could never be a rate case,—only a contract

case.

Columbus R., Power & Light Co. v. Columbus, 249 U. S.

399, 63 L. ed. 669, 6 A. L. R. 1684; note 74 L. ed. 236; Tex-

arkana v. Arkansas-Louisiana Gas Co., 306 U. S. 188, 83

L. ed. 598.

In the Texarkana Case, pursuant to a somewhat similar

contractual provision in its franchise, the Texas City sought

rates operative in the Arkansas City, and this Court said,

Off. Ed., page 195, L. ed. page 603:

‘‘Another bill was filed by the Texas City in May,

1934, seeking substantially the same relief * * *. The

two actions were consolidated. Later motions, plead-

ings and the decree in the two cases are the same.’’

Adverting to the cause as reported 97 Fed. (2), page 7,

5 Cir., Hutcheson, Circuit Judge, said:

‘On May 22, 1934, the City secured an order of dis-

missal of its suit then pending, and on the next day

filed substantially the same suit as a new proceeding

in the state court. This suit was also removed to the

18

Federal court, where, that court holding that the dis-

missal of the City’s petition in the first had not ef-

fected dismissal of defendant’s counterclaim, the City

obtained a reinstatement of its first suit, and an order

consolidating the two suits for trial.’’

The Johnson Act became effective May 14, 1934, and

neither this Court, the Court of Appeals nor the District

Court thought that such a suit was prohibited by the John-

son Act, and we rely confidently on that decision.

(3) Section 3 of the Contract here covers the rates for

Jackson gas—with a 950 B. T. U. content, and not pipeline

gas with 1,050 B. T. U. content, (R. 4), wherefor the City,

when rates therefor are to be fixed must, Section 5, recog-

nize rates ‘‘hereunder that are just and reasonable.’’ So

that in the same contract, we have rates for Jackson gas,

Section 3, rates for pipeline gas, Section 5, and the sole

question hereunder is sufficiency, vel non, option, vel non,

and naught else. When sufficiency or insufficiency is ad-

judged, the City will be presumed to be law-minded. Omnia

pracsumuntur legitime facta donec probetur in contrarium.

Broom’s Legal Maxims, 948.. Omnia praesumuntur rite et

solemniter esse acta donec probetur in contrarium. Broom’s

Legal Maxims, 944.

(c) The City’s petition contends that the Company is

not ‘‘at liberty to initiate higher rates for pipeline gas on

the assumption that the Jackson field is insufficient.’’

Our answer is:

(1) The City (with sole power to regulate rates) has not

acted thereasto for pipeline gas;

(2) Neither the District Court nor the Chancery Court

of Hinds County may fix rates.

3 Pond Public Utilities, 4th Ed., 1772, See. 892; Southern

Bell Tel. etc. Co. v. Railroad Commission, 5 Fed. (2) 77,

authorities supra. No approval of the rates fixed for pipe-

ie eR eae ee eet ee ee en a tee

19

line gas is sought, directly or indirectly. Even if such were

sought and such approval were beyond the power of the

District Court, just as this Court dissolved the injunction

in the Maryland Casualty Company Case, so here it could

delete from the relief that as to rates. Note the complaint

in its entirety was dismissed, and if but one right was

claimed therein within the Court’s jurisdiction, then as to

that right, jurisdiction remained.

(3) There is one factual issue: is the Jackson gas field

sufficient or insufficient? On that, the evidence will have

to be heard unless this Court should, as would the courts

in Mississippi, take judicial knowledge of the reports made

to the Oil & Gas Commissioner. As Appendix EK, we make

reference to supplemental figures filed by the City, showing

the absolute necessity of that herein asked, which figures

were made a part of the City’s brief in the Court of Ap-

peals. Under those figures, in Janua ‘y, 1939, as given, the

total consumption in Jackson (which we think is too small)

was 419,570 MCF; in February, 1939, 390,046 MCF; in

January, 1940, 529,416 MCF: in February, 481,917 MCF:

and the total monthly produetion of the field since May,

1940, has not exceeded 515,669 MCF, and as at November,

1940, had declined to 378,131 MCF, thus balanced against

the high point of January, 1940, leaving an actual monthly

deficit of 151,285 MCF, and this on the face of the City’s

interpretation of production figures.

Thereasto, we insert as Appendix K, a graph, adopting,

but without admitting the City’s figures to be correct, and

show the monthly production and the monthly consumption.

Therefrom, the Court will see that the monthly production

is presently below the monthly consumption in winter

weather, and relief might be appropriately had under the

City’s admission therein made,

20

(4) The City contends in its statement that ‘‘thereby

(Company) conceding that more gas is produced in the

Jackson field than is distributed by the respondent locally’’,

but, with deference, no such concession is made and for the

purposes of the jurisdictional question, it is admitted that

the field is insufficient.

(5) We disregard in large measure the contention of

the City as to the suit remanded to the State Court because

there was in the Court of Appeals, and probably would be

here, conflict between counsel as to what therein appeared.

Not being in the record, we therefore do not further advert

to it.

Point ITI.

REPLY TO CITY’S BRIEF.

Preliminary Statement.

The City consolidated the Specifications of Error and the

reasons for granting the petition into four points in the

City’s argument, and to avoid prolixity and the overlapping

in the Specifications, we reply only to these four.

i

The City contends this complaint is essentially ‘‘a rate

case’’ and the Company may not do indirectly what it cannot

do directly, hence the Johnson Act divests jurisdiction,

We reply:

(a) To save prolixity we refer to and reiterate Point I,

Subdivision 5 (b). (This is a contract case, not a rate case).

(b) The District Court and the Court of Appeals passed

on no question other or further than relief under a contract.

The three sections of the contract wereasto a declaration

is sought are as follows:

Section 2,

‘‘Natural gas shall be furnished to the inhabitants

of the City of Jackson as long as commercial natural

LT NS Re eee EE SRR IEEE A I A ED

21

gas is produced in commercial quantities * * * su ficient

to supply the demands of the City of Jackson * * * .”°

Section 3,

‘*Pursuant to the municipality’s rate-making power,

and the terms and conditions upon which this franchise

is given, the municipality establishes the following rates

and charges for natural gas service in Jackson for gas

taken from the Jackson, Mississippi, natural gas field.”’

Section 5,

** Should Jackson gas field * * * become imsufficient for

the performance of that hereunder required of the Gran-

tee, it may thereafter, and not before, obtain natural gas

from other fields * * * .”?

So long as the Jackson gas field was sufficient, though the

rates in Section 3 were phenomenally low (being the lowest

in the United States except at Monroe, Louisiana, where

they were the same), Company did not attack or question

that rate structure and does not now do so. The Jackson

field has become insufficient.

Pursuant to what Company assumed to be its rights under

ixhibit A, it brought into Jackson the requisite gas to sup-

ply the deficiency, under a contract with the United, who

made deliveries therefor from its pipelines at City Gate,

amounting, as at February 7, 1940, to 36.59% of all the

natural gas consumed in Jackson. (Tr., 15). Having been

compelled to pay to the pipeline for this interstate gas, mov-

ing under the Natural Gas Act, (15 U.S. C. A. p. 784, 52

U.S. Statutes, 821, Section 717 (a)), Company established

as to all consumers at Jackson the ratio existing between

the pipeline gas and the Jackson field gas consumed during

the month. For the proportion of gas from the Jackson

Field, Company charged the Jackson rates prescribed in

Section 3. For the proportion of the pipeline gas, it charged

reasonable rates, predicated upon the cost of pipeline gas,

as to which pipeline gas, the City has not yet taken any

regulatory action. The City challenged Company’s declara-

22

tion of insufficiency, declaring by ordinance (Tr., 76),

‘«There is now a sufficient supply of natural gas in the Jack-

son field to supply all Jackson consumers.’’ The City admits

Company’s right to supply pipeline gas if the Jackson field

be ‘‘insufficient’’.

Herein, the District Court dismissed in its entirety, deny-

ing the right of the Company to have even an adjudication

as to the option on its property, vel non, by reason of suffici-

ency of the Jackson field, vel non. Surely, the existence of an

option is appropriate for declaration.

‘‘The Company contends that a proper construction

of the franchise, Exhibit A, in view of the facts pre-

vailing, is that the Jackson gas field is now insufti-

cient for the performance of its obligation under the

franchise to supply the City of Jackson, its citizens

and its industries, and that, therefore, the Company is

free to supply gas derived from sources other than the

Jackson field, and under the franchise the Company

is not required to continue furnishing gas imported

over pipelines at the rates for Jackson field gas pre-

seribed in Section 3 of the franchise contract.

‘“‘The nub of the controversy is the fact, vel non, of

the sufficiency of the natural gas in the Jackson field to

supply the City of Jackson, its industries and its inhab-

itants, within the meaning of the Jackson Franchise

contract.

‘*We now proceed to point out, in the absolute, mat-

ters which are not involved in the controversy.

‘*No question of restraining any order of the govern-

ing body of the City of Jackson or any other govern-

mental body is involved. No injunctive relief, directly

or indirectly, is sought (R. 20—Section 20 of the Com-

plaint). No application for an injunction has been

made by the Company.

‘If the District Court upon the merits should find

as a fact, under the Jackson franchise contract, that

the supply of gas from the Jackson gas field was suffi-

cient for the requirements of the City of Jackson, its

—

23

industries and its inhabitants, the Company would be

obligated to supply Jackson field gas at the rates pre-

scribed by Sections 2 and 3 of the contract (R. 20, et

seq.). Inasmuch as in such an event the Jackson gas

field would be found sufficient, the question of any obli-

gation or right to supply pipe line gas would cease to be

involved.

‘*On the other hand, if the District Court should find

the supply of gas from the Jackson field to be insuffi-

cient under the Jackson franchise contract, the com-

pany would become entitled under Section 5 of the Jack-

son franchise contract to supply natural gas from other

fields at rates which shall be fixed that are just and rea-

sonable, or to supply artificial or manufactured gas at

rates therefor which shall be fixed that are just and

reasonable (R. 25).

‘Thus, there is nothing injunctive or restraining

about any finding which the District Court could prop-

erly make in the course of resolving this controversy.

Construction of the franchise contract in light of exist-

ing facts is all that is involved in the controversy.”’

(ec) By the Johnson Act, Federal jurisdiction was di-

vested only where the suit was ‘‘to enjoin, suspend or re-

strain the enforcement, operation or execution”’ thereof.

This suit does not seek, directly or indirectly, to ‘‘enjoin,

suspend or restrain the enforcement, operation or execu-

tion’’ thereof.

This suit does not seek, directly or indirectly, the enforce-

ment, operation or execution, but asks that a franchise con-

tract, not an order, be judicially interpreted in order that it

may thereafter be put in operation and executed as the

parties were by its terms obligated. Compare Texarkana v.

Arkansas Louisiana Gas Co., 306 U. S. 188, 83 L. ed. 598;

Interstate Natural Gas Co. v. Louisiana Public Service Com-

mission, (D. C. La.), 33 Fed. Supp. 50, 59; 34 Fed. Supp. 980.

‘*There is no substance to petitioner’s assertion that

the decision of the Cireuit Court of Appeals herein con-

24

flicts even with that of the District Court rendered in

1935 in Mississippi Power & Light Co. v. City of Jack-

son, 9 Fed. Supp. 564. In that case the complaint

sought to enjoin temporarily and permanently an Ordi-

nance of the City of Jackson establishing electric rates,

It was an out and out rate case, seeking to restrain the

rate fixing ordinance, quite apart from any franchise.

7 e case at bar more nearly resembles the case of An-

derson, Clayton & Co. v. Wichita Valley R. Co., State

of Texas, Intervenor, 15 Fed. Supp. 475, affirmed 92

F. (2d) 105, certiorari denied 302 U. S. 747, rehearing

denied 302 U. S. 780. In the District Court for the

Southern District of Texas, Anderson, Clayton & Com-

pany had sought successfully to have determined

whether certain shipments of cotton were shipments

in ‘‘interstate’’ and ‘‘foreign’’ commerce within cer-

tain rate regulations promulgated under the Interstate

Commerce Act. The District Court held that the com-

plainant was entitled to a declaratory judgment with

respect to the character of the shipments within the

purview of those certain rate schedules and that the

rate schedules of the Texas Railroad Commission did

not apply.’’

The Jackson gas field is insufficient and Company, there-

fore, has the right to introduce pipeline gas. The Company

may be compelled to serve as a public utility, State ex Rel.

v. Benson, 108 Miss. 779, 67 So. 214. It must make reasonable

and proper efforts to accommodate itself to a failure of the

gas supply, Railroad Co. v. Blum Co., 88 Miss. 188, 42 So.

282; Yazoo, etc. R. R. Co. v. McKay, 44 So. 780, 91 Miss. 150;

Oklahoma Natural Gas Co. v. Corporation Commission, 88

Okla. 51, 211 Pac. 401, 31 A. L. R. 330, and the Company must

be vouchsafed by declaration those rights given by Exhibit

A as to putting into operation and execution that validly

obtained as to supplying Jackson with pipeline gas when

and after the Jackson field became insufficient.

(d) The Johnson Act in no way applied, directly or in-

directly, to the course of conduct followed in this cause.

25

(e) Assuming, but not conceding, the franchise contract

to have been an order and the action one to enjoin it, yet the

Johnson Act divested jurisdiction only after reasonable

notice and hearing. The City declared that the supply was

sufficient, and having thus declared, they would take no

further action thereasto. This made, under the decisions of

this Court, the Johnson Act inapplicable.

(f) The City having declared by ordinance the supply

sufficient, without notice, refused to act further, and further

approach would have been futile as the City still maintains

the supply is sufficient. Hence, no further application was

requisite. Hills v. National Albany Exchange Bank, 105

U.S. 319, 26 L. ed. 1053.

(g) Furthermore, it is very doubtful whether Section

2426 provides a reasonable notice, as required by the John-

son Act. Compare Mississippi Power Co. v. Aberdeen, 11

Fed. Supp. 952; but see Mississippi Power & Light Co. v.

Jackson, 9 Fed. Supp. 564.

(h) Section 2426 may be unconstitutional as assuming to

vest this jurisdiction in the Chancery Court. Compare Sec-

tion 156, Constitution of Mississippi, providing :

‘*Section 156. The Cireuit Court shall have original

jurisdiction in all matters civil and criminal in this state

not vested by this Constitution in some other court, and

such appellate jurisdiction as shall be prescribed by

law.’’

Section 2426 originated in Chapter 231, Mississippi Laws

1904, so that as at 1890, the date of the Constitution, there

was no revisory jurisdiction in the Chancery Court and no

Court in Mississippi may fix rates. Authorities, supra.

(i) Griffith v. Vicksburg Waterworks Co., 88 Miss. 371,

40 So. 1011 did not involve this statute. As to further litiga-

ADT

RBA LIE ARAL LLNDLYS SERRE RD DD WAL TIGA OEP EN Mae PENI iby OLD dated Win DOA OR

26

tion about the water rights in Vicksburg, see Vicksburg v.

Vicksburg Waterworks Co., 206 U. S. 496, 51 L. ed. 1135.

(j) City of Laurel v. Mississippi Gas Co., 49 Fed. (2) 219

merely dealt with the right to regulate rates. Presently

there are no rates in Jackson for pipeline gas. It may well

be that the Company’s fixation thereof under the act of 1860

is conclusive whereby the Directors ‘‘of said Gas Light

Company * * * shall make all needful rules and regulations

for the management of said Gas Works and fix the terms

and conditions on which gas will be supplied to consumers.”’

Gulf & Ship Island R. Co. v. Laurel Oil & Fertilizer Co., 159

So. 838, 172 Miss. 630; Stone v. Y. & M. V. R. Co., 62 Miss.

607, 116 U.S. 307, 29 L. ed. 636; Stone v. Illinois Central R.

Co., 116 U.S. 347.

(k) The City then relies upon Aetna Casualty & Surety

Co. v. Quarles, 4 Cir., 92 Fed. (2) 321, which is not in any

way contra, for the same day the same Judge decided Ste-

phenson v. Equitable Life Assurance Society, 4 Cir., 92 Fed.

(2) 406, and in New York Life Ins. Co. v. Roe, 8 Cir., 102

Fed. (2) 28, 31, our conception is sustained.

All questions as to the merits and the discretion were

expressly excluded from consideration by the Court of Ap-

peals, and that presented to the District Court was solely

a jurisdictional question. The merits of the controversy

were not touched in dismissing, the District Court did so

because of the supposed limitation of the Johnson Act.

The question of an exercise of discretion as to the propriety

of a declaration was not properly before the Court and

necessarily is not before this Court on this petition, which

does not reach any aspect of the merits, but involves the

simple issue of jurisdiction.

27

The Company has entered upon the discharge of its duty

to distribute natural gas from foreign fields and therefore

what initially was optional, has become probably obligatory.

2.

The City next contends: ‘‘It was never the purpose of

the Declaratory Judgment statute to permit the trial of

a case piecemeal or to make any adjudication unless it dis-

poses of the whole controversy,”’

Whereto, we reply:

(a) These matters substantially covered, supra.

(b) These aspects are thoroughly settled, with defer-

ence, by the decisions of this Court, and that hereunder

sought is well within the rule thus laid down, and if the

District Court adjudges the Jackson field insufficient, there

will be no difficulty in having the City conform thereto.

(c) Pendency of a suit in a State Court in personam

never deprived one entitled to relief in the Federal Court

from proceeding there.

McClellan v. Carland, 217 U. S. 281, 54 L. ed. 762, 767;

Pennsylvania v. Williams, 294 U. S. 176, 183, 79 L. ed. 814;

Kline v. Burke Construction Co., 260 U. 8. 226, 67 L. ed. 226;

Kelleam v. Maryland Casualty Co., U. 8. Law Week, Feb-

ruary 18, 1941, 4204.

3.

The city next contends that the pendency of the suit in

the Chancery Court remanded thereto by the District Court

is a bar to the prosecution of this cause in the District

Court.

Thereto we have replied fully, swpra, and the Court of

Appeals expressly refused to pass on this point.

28

4.

Counsel’s final point has to do with ‘‘The opinion com-

plained of, we submit, is contrary to the principles an-

nounced by other Courts of equal dignity in reference to

tax cases.’’

Our reply is:

The City relies upon:

(a) Sears, Roebuck & Co. v. Roddewig, 24 Fed. Supp. 321,

but this had to do with the Iowa use tax. Compare 292 N.

W. 130, 238 Iowa ——, and was reversed by this Court on

February 17, 1941, U. S. Law Week, February 18, 1941,

4198, with the Chief Justice and Mr. Justice Roberts dis-

senting. The Johnson Act was not mentioned directly or

indirectly.

(b) William B. Schaife & Sons Co. v. Driscoll, 3 Cir., 94

Fed. (2) 664, and inadvertently refer to the Johnson Act

as having been there involved. With deference, therein

Counsel err. Said that Court:

‘““By Act of June 14, 1934, ce. 512, 48 Stat. 955, Jud.

Code, See. 274d, 28 U.S. C. A. See. 400 and note, Con-

gress authorized the finding of declaratory judgments

in certain types of cases in the federal courts. What-

ever would have been the status of the case at bar under

the original Declaratory Judgment Act, a subsequent

Act of Congress of August 30, 1935, c. 829, 49 Stat.

1027, Sec. 405, 28 U. S. C. A. See. 400, specifically ex-

cluded questions of federal taxation from the opera-

tion of the Declaratory Judgment Act.’’

Note Section 400, U. S. C. A., Title 28, Judicial Code 274d.

‘*In cases of actual controversy except with respect

to Federal taxes the courts of the United States shall

have power upon petition, declaration, complaint, or

other appropriate pleadings to declare rights and other

legal relations of any interested party petitioning for

29

such declaration, whether or not further relief is or

could be prayed, and such declaration shall have the

force and effect of a final judgment or decree and be

reviewable as such.’’

Compare, also, Revised Statutes, Sec. 3224, Sec. 1543,

Title 26, U. S.C. A.:

‘‘No suit for the purpose of restraining the assess-

ment er collection of any tax shall be maintained in

any court.”’

(c) a‘ suother point, the City mentions Southern Pacific

Co. v. McAdoo, 9 Cir., 82 Fed. (2) 121, but therein naught

contra is found.

(d) At another point, the City mentions Automobile Ins.

Co. v. Freundt, 7 Cir., 103 Fed. (2) 613, but, note, further,

Chase National Bank v. Citizens Gas Co., 7 Cir., 113 Fed.

(2) 217, and naught contra is found.

(e) At another point, the City mentions United States

Fidelity & Guar. Co. v. Koch, 3 Cir., 102 Fed. (2) 288 in no

way conflicts with that herein contended for.

(f) Lake Erie Provision Co. v. Moore, 11 Fed. Supp. 522,

may be disregarded. Compare Currin v. V/allace, 306 U.

8. 1, 83 L. ed. 441.

Hence, there is no such conflict as calls for a uniform rule

to be announced here, unifying the law, for, with deference,

as to all hereunder claimed, the fundamental decisions ap-

plying the principles of law applicable are remarkably har-

monious. The City has already had one appeal and is not

entitled to another.

The importance of maintaining the Federal jurisdiction

is vital to this Company’s rights. Hence, this appeal there-

for is earnestly made. The opinion of the Court below,

Bs

with deference, is correct and the petition should be denied,

there being no adequate ground therefor assigned.

30

Respectfully,

MakceLLus GREEN,

_ Jackson, Mississippi;

R. A. Henperson,

2 Rector St., New York City;

A. M. NELson,

Jackson, Mississippi;

Forrest B. Jackson,

Jackson, Mississippi;

Garner W. GREEN,

Jackson, Mississippi;

Attorneys for Respondent.

Rew & Prisst,

2 Rector St., New York City.

Green & GREEN,

Jackson, Mississippi.

Jackson, Younc & FRIEnp,

Jackson, Mississipm, Of Counsel.

I, W. E. Morse, of Counsel for Petitioner, acknowledge

receipt of copy of the foregoing Response of Mississippi

Power & Light Company with Supporting Brief, this the

25th day of February, 1941.

W. E. Morss,

Of Counsel for Petitioner.

REGIE LG AOE IID OS ESAT TE EELS ALG SERIO iS PHONEMES NG ep TENN eR ENE 4a