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Iowa-illinois Gas & Electric Co. v. Perrine





Appeal by defendants from the Circuit Court of Rock Island county; the HON. RAY I. KLINGBIEL, Judge, presiding. Heard in this court at the May term, 1953. Order reversed. Opinion filed July 15, 1953. Rehearing denied October 6, 1953. Released for publication October 6, 1953.


On October 30, 1952, the plaintiff, an Illinois Corporation engaged in furnishing gas and electric service in the cities of Rock Island, Moline, East Moline and in various Iowa cities and in certain rural areas in both Illinois and Iowa, filed with the Illinois Commerce Commission its schedule No. 2, asking that its electric rates be increased to take effect on December 1, 1952. On November 18, 1952, the Commission entered an order setting the rates down for hearing on December 9, 1952, and suspending the effectiveness of the proposed rates until March 29, 1953. On November 21, 1952, the plaintiff filed its motion requesting that the Commission enter an order that the rates set forth in schedule No. 2 be made effective at once as temporary rates and be kept effective until a final determination is made by the Commission of proper and reasonable rates to be charged by the plaintiff.

On January 5, 1953, the instant verified complaint was filed by the plaintiff, Iowa-Illinois Gas and Electric Company, in the circuit court of Rock Island county making the members of the Illinois Commerce Commission and the Attorney-General of Illinois defendants. The complaint prayed for a temporary injunction restraining the defendants (a) from enforcing any of the provisions of the suspension order entered by the Commission on November 18, 1952; (b) from interfering in any way with plaintiff's charging and collecting the rates for electric service set out in its schedule No. 2; (c) from instituting any proceedings to enforce the suspension order issued by the Commission on November 18, 1952; and (d) from taking any steps or instituting any suits to impose fines upon, or recover penalties from, plaintiff because of its failure to charge the rates set forth in its previous rate schedule No. 1 or its action in charging and collecting, after the issuance of a temporary injunction, of its rates set forth in its schedule No. 2. The complaint concluded by praying that upon a final hearing the temporary injunction be made permanent.

Accompanying the complaint were copies of the proposed rate schedule No. 2 filed with the Commission by the plaintiff on October 30, 1952, the suspension order issued by the Commission on November 18, 1952, the motion filed by the company with the Commission on November 21, 1952, for temporary rates and, also, a copy of plaintiff's rate schedule No. 1. On January 5, 1953, plaintiff filed its motion for a temporary injunction, and in support of that motion, the affidavits of its vice president in charge of operations, of Charles H. Bartlett and Peter Antonelli, engineers, of Paul Grady and S. Lloyd Nemeyer, public accountants, and of R. Harvey Tinsman, secretary-treasurer of plaintiff, were filed.

On January 9, 1953, the defendants entered their special and limited appearances and moved the court to change the venue of the action to either the circuit or superior court of Cook county or to the circuit court of Sangamon county because none of the defendants resided in Rock Island county and because no part of the transaction, out of which the alleged cause of action arose, had occurred in Rock Island county. This motion, after hearing, was denied.

Leave was thereafter granted Moline Consumers Company, Le Claire Hotel, Inc., Eagle Signal Corp., Frank Foundries Corp., and Moline Iron Works to intervene, and on January 15, 1953, the verified joint-answer of the defendants to the complaint was filed and also a reply to the motion of the plaintiffs for a temporary injunction was filed, together with affidavits of Fred Kleinman, Chief of Accounts and Finance of the Illinois Commerce Commission, Herbert Johnson, an economist on the staff of the Illinois Commerce Commission, James J. Danaher, Cyrus J. Colter, J.G. Van Keuren, and Dale E. Sutton, members of the Commission, and Milton Mallin, assistant Attorney General of the State of Illinois. Subsequently other parties intervened by leave of court, additional affidavits were filed, and on February 19th and 20th, 1953, hearings were had upon the application of the plaintiff for a temporary injunction and, from an order entered on February 27, 1953, granting a temporary injunction as prayed, this appeal is prosecuted.

It is first contended by appellants that the circuit court of Rock Island county did not have jurisdiction to hear and determine this case and erred in denying their motion to transfer it to the circuit court or superior court of Cook county or to the circuit court of Sangamon county. The Civil Practice Act (Ill. Rev. Stat. 1951, chap. 110) sec. 7 [1951; Jones Ill. Stats. Ann. 104.007] provides that every civil action shall be commenced in the county where one or more defendants reside or in which the transaction or some part thereof occurred out of which the cause of action arose. Counsel insist that none of the defendants reside in Rock Island county and that the transaction out of which this cause of action arose took place either in Sangamon or Cook county.

The action which initiated this proceeding was the filing by appellee of the proposed increased rate schedule No. 2 on October 30, 1952. While this schedule was filed by appellee with the Commission in Sangamon county and although the hearings upon plaintiff's motion that the rates set forth in that schedule be made effective immediately as temporary rates were had in either Sangamon or Cook county, it does not follow that the transaction out of which the controversy arose occurred only in Sangamon county or Cook county.

Smith v. Williams, a Florida case, reported in 35 S. (2d) 844, involved an order entered by the Florida Industrial Commission affecting the personal and property rights of operators of private employment agencies located in Dade county, Florida. It was an original prohibition proceeding filed in the Supreme Court of Florida by members of the Industrial Commission of that State against Ross Williams, a judge of the circuit court in and for Dade county, Florida, seeking to prohibit him, as such judge, from entertaining a suit brought in that county. The suit which the members of the Commission sought to prohibit the Dade county circuit court from entertaining was filed in the circuit court of that county by several owners and operators of private employment bureaus which were operating under licenses issued to them by the Commission. The object sought was a declaratory decree declaring invalid a certain resolution and rules which the Commission had adopted and of which the plaintiffs had been advised by the Commission that if they did not conform thereto they would be prosecuted and their licenses revoked. The complaint also prayed for an injunction restraining the Commission from enforcing said resolution and rules. The circuit court of Dade county assumed jurisdiction, granted a preliminary injunction, which it refused to dissolve, and ruled the Commission to answer the cause within thirty days. It was then that the Commission instituted the instant proceeding in the Supreme Court.

It was the contention of the Commission that the circuit court of Dade county was not vested with jurisdiction to hear the injunction proceedings, inasmuch as the order of the Commission was entered at Tallahassee, in Leon county, where it had its official residence and chief headquarters. In dismissing the prohibition proceeding and holding that venue was properly laid in Dade county, the court stated that there were two types or classes of cases in which rules and regulations promulgated by state agencies may be brought into question in suits properly instituted for such purpose and that the proceeding pending in Dade county circuit court sought to obtain direct judicial protection from an unlawful invasion of the constitutional rights of the plaintiff within the county where the suit was instituted. The court then stated: "In the proceeding at bar it is shown that the plaintiffs maintain places of business in Dade County. Their personal and property rights are directly threatened with the infringement or curtailment in Dade County by the enforcement there of rules promulgated by the Florida Industrial Commission which are asserted by the plaintiffs to be unconstitutional and in direct violation of the statute conferring the rule-making power on the Commission with respect to the business of the plaintiffs in Dade County sought to be regulated. Whether the plaintiffs are correct in their contention that their constitutional rights in Dade County are being or will be unlawfully invaded by the enforcement of rules promulgated by the Commission is not before us for determination. Whatever the true facts may prove to be, the plaintiffs do have the right to have this question presented by their bill judicially determined in a suit instituted for that purpose in the jurisdiction where the alleged wrong is threatened and to seek to have relief from the operation of unconstitutional acts of the Commission which may be shown to have been committed in that jurisdiction."

In Montana-Dakota Utilities Co. v. Public Service Commission of Montana [111 Mont. 78], reported in 107 P.2d 533, it appeared that the plaintiff was engaged in furnishing natural gas to consumers in Valley and Phillips counties, Montana. The Public Service Commission of that State had, after hearings, entered an order reducing gas rates in the territory served by the plaintiff, and the plaintiff, deeming the order unlawful and unreasonable, instituted the instant proceeding in Lewis and Clark county against the Commission seeking to enjoin the enforcement of that order. The Commission sought to have the proceeding transferred to Valley county or to Phillips county on the ground that the cause of action arose in those counties and no part thereof arose in Lewis and Clark county. The trial court denied the motion of the Commission for a change of venue, and the Commission appealed. The Supreme Court reversed the order of the trial court denying the motion of the Commission for a change of venue, and in its opinion referred to the appropriate section of the Montana Code which provides that certain actions must be tried in the county where the cause, or some part thereof, arose and stated that the contention of the plaintiff to the effect that the order of the Commission of which it complains was entered in Lewis and Clark county where the office of the Commission is located and, therefore, that county had jurisdiction loses sight of the real cause of action. The court then said: "The cause of the action is the threatened enforcement or operation of the order in Valley and Phillips counties. It is not the mere making of the order, but the place where it is put in operation, that determines where the cause of action arose. Operation of the order is what is alleged will injure plaintiff. . . . It is the operation of the order that the action seeks to enjoin. True, the complaint also seeks to set aside the order, but only because its operation allegedly would injure plaintiff by confiscating its property. The operation of the order will be accomplished, if at all, in Valley and Phillips counties where the order is made applicable. It is our view that the cause of action arose in Valley and Phillips counties and not in Lewis and Clark county."

The matter complained of in the instant proceeding is the enforcement by the Commission of its suspension order of November 18, 1952, and the refusal of the Commission to enter an order in conformity with the motion of appellee of November 21, 1952, requesting that its proposed rate schedule No. 2 become effective immediately. The purpose of the instant proceeding is to prevent confiscation of plaintiff's property used by it in rendering electric service to its customers residing in Illinois and largely in Rock Island, Henry, and Whiteside counties. The parties vitally interested in having rate schedule No. 1 continued in force and rate schedule No. 2 suspended were the customers of the plaintiff residing in those counties. The plaintiff's properties are there located, and in those counties are the places where the plaintiff and its customers transact their business. According to the complaint, its properties in those counties are threatened with confiscation if the Commission interferes with the collection of the rates set forth in schedule No. 2. The order of the Commission suspending the operation of that schedule took effect and became effective where appellee's property, business, and customers were located. In our opinion the circuit court of Rock Island county had jurisdiction to hear and determine this proceeding and the chancellor did not err in denying appellants' motion to transfer the cause to another county. See also Cecil v. Superior Court in and for Los Angeles County, 59 Cal.App. (2d) 793, 140 P.2d 125.

Counsel for appellant insist that the office of a temporary injunction is to maintain the status quo until a hearing can be had upon the merits of a controversy, and insist that the order entered in this cause is a temporary mandatory injunction, the effect of which was not to maintain the status quo but to fix the electric rates the company was permitted to charge. Counsel further contend that the chancellor lacked jurisdiction to issue the order appealed from inasmuch as the instant complaint was filed in the circuit court before the Commission had acted upon the Company's request for a temporary increase of rates, and further that the showing made by appellee does not disclose a case of confiscation.

It was the contention of appellee before the chancellor and it is insisted by its counsel in this court that the Commission was guilty of unreasonable arbitrary and capricious conduct in failing to act upon appellee's motion for temporary rates; that the effect of the act of the Commission in suspending the operation of rate schedule No. 2 is to confiscate appellee's electric properties in Illinois; that the appeal provisions of the Illinois Public Utilities Act do not afford appellee an adequate ...

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