Wright v. Central Kentucky Natural Gas Co., 297 U.S. 537 (1936)

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Wright v. Central Kentucky Natural Gas Co.

No. 551

Argued March 4, 1936
Decided March 16, 1936
297 U.S. 537

APPEAL FROM THE COURT OF APPEALS OF KENTUCKY

Syllabus

A franchise contract between a city and a gas company provided that, if rates proposed by the company were deemed excessive by the city, reasonable rates should be prescribed in proceedings before a state commission; that, pending such proceedings and any subsequent proceedings in court, the company should charge specified temporary rates, part of the collections from which should be impounded, and that, upon the final fixation of rates, the impounded sums should be distributed, under order of the commission or of the court, to the company or to its several customers, as the final determination should direct. Pursuant to these provisions, proceedings were brought and litigated, but, while they were pending, the city and the company compromised their differences by agreeing upon a rate for the future and by providing for distribution of the impounded sums. Upon appeal from a judgment of the state court upholding the compromise over objections by customers who claimed that their rights in the fund were thereby infringed in violation of the contract clause of the Constitution and the due process clause of the Fourteenth Amendment, held:

1. That this Court, in adjudicating these constitutional claims, will examine for itself the franchise contract and the impounding proceedings. P. 542.

2. The customers had no vested rights preventing the city from making the compromise agreement. Id.

3. In making the settlement, as well as in making the original franchise contract, the customers were represented by the city. Id.

260 Ky. 361, 85 S.W. 2d 870, affirmed.

Appeal from a judgment upholding an agreement between a gas company and a city, and an enforcing ordinance, in a suit brought by the gas company against the city for a determination of their validity and a declaration of rights. The appeal here is by consumers of gas who came into the case below by consolidation and intervention.