Prendergast v. New York Tel. Co.
262 U.S. 43 (1923)

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U.S. Supreme Court

Prendergast v. New York Tel. Co., 262 U.S. 43 (1923)

Prendergast v. New York Telephone Company

No. 542

Argued February 21, 1923

Decided April 16, 1923

262 U.S. 43

Syllabus

1. The fact that a public service commission, seven months after it had been temporarily enjoined from enforcing rates fixed by it provisionally for a public service corporation, made final orders fixing rates yielding a much higher return does not, without more, establish that the former rates were confiscatory when they were made, and does not therefore constitute a sufficient basis for dismissing, on motion, an appeal from the temporary injunction. P. 262 U. S. 46.

Page 262 U. S. 44

2. The district court, constituted of three judges, has jurisdiction, under Jud.Code, § 266, to enjoin the enforcement of rates ordered by a public commission, upon the ground that the order is unconstitutional. P. 262 U. S. 47. Oklahoma Natural Gas Co. v. Russell,261 U. S. 290.

3. A bill to enjoin enforcement of rates as confiscatory properly alleges the ultimate facts upon which the claim of confiscation is based, omitting mere statements of evidence. Equity Rule 25, par. 3. P. 262 U. S. 47.

4. In the matter of fixing telephone rates, the Public Service Commission of New York is vested with the final legislative authority of the state, review by the state courts by certiorari being purely judicial. Laws N.Y.1920, c. 925, §§ 1304, 1305, pp. 437, 438. P. 262 U. S. 48.

5. Under the New York Public Service Commission Law, an application to the Commission for a rehearing is allowed, but not required, does not excuse compliance with the Commission's order or its enforcement, except as the Commission may direct, and is addressed entirely to the discretion of the Commission, and any change that may be made upon rehearing does not affect the enforcement of any right arising from the original order. Held that a telephone company, complaining that rates fixed by the Commission were confiscatory, need not apply to it for a rehearing before resorting to the federal court for an injunction, and that failure so to apply was manifestly no ground for denying a temporary injunction when the Commission, by its answer, insisted that the orders in question were correct. P. 262 U. S. 48.

6. For like reasons, it was not necessary that the complaining company should first have exercised the privilege granted by one of the orders, of applying to the Commission for a modification of a classification affecting the rates. P. 262 U. S. 49.

7. The fact that rates prescribed are temporary, to be effective only until the final determination by the Commission, does not prevent resort to the Court to restrain their enforcement pending the continuance and completion of the ratemaking process. P. 262 U. S. 49.

8. To sustain an application for an order temporarily restraining enforcement of rates challenged as confiscatory, the plaintiff is not obliged to offer in evidence testimony taken by the Commission which fixed the rates. P. 262 U. S. 50.

9. A temporary injunction should be sustained on appeal when not contrary to equity or the result of improvident exercise of judicial discretion, and especially when the balance of injury as between the parties favors its issue. P. 262 U. S. 50.

Page 262 U. S. 45

10. The evidence in this case was sufficient without a practical test of the rates involved. P. 262 U. S. 51.

Affirmed.

Appeal under Jud.Code § 266 from an order of the district court temporarily restraining enforcement of orders of the New York Public Service Commission prescribing maximum telephone rates.

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