State Ex Rel. Cities Service Gas Co. v. Public Service Commission , 337 Mo. 809 ( 1935 )

This is an appeal by the Cities Service Gas Company, from a judgment of the Circuit Court of Cole County, where that court affirmed, on a writ of review, an order of the Missouri Public Service Commission. The relator, the Cities Service Gas Company, will be hereafter referred to as the Pipe Line and the Public Service Commission as the Commission.

This cause was instituted by the Commission on its own motion against the Pipe Line; Kansas City Gas Company; Carthage Gas Company; Jackson County Light, Heat Power Company; Joplin Gas Company; St. Joseph Gas Company; City Light Traction Company; Webb City Carterville Gas Company; Ozark Distributing Company; Springfield Gas Electric Company; and Carl Junction Gas Company, to determine if the Pipe Line was a public utility engaged in the sale and distribution of industrial gas in Missouri, and as such required to file schedules of rates. The investigation did not involve the rates charged or the valuation of property. The Commission dismissed as to Carl Junction Gas Company.

The Commission found that the Pipe Line was selling and distributing industrial gas to consumers located in the cities in this State through the Kansas City Gas Company; St. Joseph Gas Company; Joplin Gas Company; Carthage Gas Company; and Webb City Carterville Gas Company, and that it was directly selling and distributing industrial gas from its pipe line in Missouri to consumers in this State outside the cities. The Commission further found that in so distributing industrial gas the Pipe Line was engaged in intrastate business as a public utility, and that it should file with the Commission its schedules of rates and its rules as to terms and conditions for the sale and distribution of industrial gas and thereby submit to the provisions of the Public Service Commission Act of Missouri. The Commission made an order in conformity with the above findings. The order did not include the Jackson County Light, Heat Power Company, Springfield Gas Electric Company, Ozark Distributing Company and City Light Traction Company.

The Pipe Line Company contends (1) that the distributing companies are not its agent in the sale and distribution of industrial gas to consumers in cities of Missouri; (2) that it is not engaged in intrastate business by directly selling and distributing industrial gas to consumers in this State outside of these cities, and that the order of the Commission in so holding imposes a direct burden upon interstate commerce within the meaning of the Commerce Clause of the Federal Constitution.

In its brief the Commission concedes that there is no dispute as to what the Pipe Line is actually doing in Missouri; that "the controversy is over the legal conclusions to be drawn from its action."

The facts upon which the Commission found that the Pipe Line was distributing gas to industries in cities by the distributing companies as its agents are as follows:

The Pipe Line is a Delaware corporation engaged in producing, gathering and selling natural gas, produced and gathered in Texas, Oklahoma and Kansas, and transported by it through its pipe lines into Missouri. The common stock of the Pipe Line except qualifying shares held by the directors, is owned by the Empire Gas Fuel Company, the common stock of which is owned by the Cities Service Company. The other companies mentioned in the report are distributors of gas in Missouri.

The Gas Service Company owns the common stock of the Kansas City Gas Company, Carthage Gas Company, Jackson County Light, Heat Power Company, Joplin Gas Company, St. Joseph Gas Company, Ozark Distributing Company, and Webb City Carterville Gas Company. The entire capital stock of the Gas Service Company is owned by the Cities Service Company. The common stock of the City Light Traction Company is owned by the Cities Service Company. The common stock of the Springfield Gas Electric Company is owned by the Federal Light Traction Company, which company is controlled by Cities Service Company. In other words, the Cities Service Company owns and controls all these companies, including the Pipe Line.

There is an interlocking of the boards of directors of the Gas Service Company, Pipe Line and the distributing companies, and these companies have numerous common officers. In some instances local citizens and active officers have been made directors.

The Pipe Line furnishes all the gas required by the distributing companies, except the Jackson County Light, Heat Power Company, which was under contract with the Missouri-Kansas Pipe Lines Company (now Panhandle Eastern Pipe Line Company), for gas before the Cities Service Company acquired control of it.

The Pipe Line operates three sixteen-inch lines to the Missouri-Kansas State Line and delivers at the city gate to the Kansas City Gas Company of Missouri all the gas required by said company except small quantities delivered to it by the American Pipe Line Company and Wyandotte County Gas Company, which companies are owned by Cities Service subsidiary companies. It also operates a twelve inch line from Ottawa, Kansas, to Sedalia, Missouri, serving that city, and with lateral lines serving other cities in Missouri. It also operates a ten inch line to Springfield, Missouri, serving that city and with lateral lines serving other cities in southwest Missouri. It also serves other sections of the State and serves consumers along its lines in this State outside said cities.

It furnishes natural gas for domestic purposes to the distributing companies at the city gate at forty cents per one thousand cubic feet, except at Carthage, Webb City and Carterville, where the gas is furnished under a different plan. It also furnishes industrial gas to these companies in these cities and directly furnishes industrial gas from its lines in Missouri to customers in this State outside of these cities. It maintains sufficient pipe line capacity to furnish gas for domestic purposes in cities during the winter season. However, the amount of gas furnished to the distributing companies for these purposes during the spring, summer and fall seasons of the year is greatly reduced.

It had no written contract with most of the distributing companies, and there was no correspondence indicating the terms or conditions of a contract. It had written contracts with the Springfield Gas Electric Company and Ozark Distributing Company executed prior to the control of these companies by the Pipe Line.

There is on file with the Commission the schedules of rates of the distributing companies for both domestic and industrial gas. The rate to the public for domestic gas is in excess of forty cents per one thousand cubic feet, the purchase price. The rates for industrial gas are as low as fifteen cents per one thousand cubic feet.

On the question of agency the Kansas City Gas Company is typical of the distributing companies. It receives all its gas requirements from the Cities Service Gas Company, except a small amount furnished by the American Pipe Line Company and Wyandotte County Gas Company. It has on file with the Commission two schedules of rates for the sale of gas at less than forty cents per thousand cubic feet.

First, the rate to industrial consumers who use over 200,000 cubic feet per month begins with a charge of $2 for the first one thousand cubic feet of gas and slides down to fifteen cents per thousand cubic feet for all gas used over 50,000 cubic feet per month.

Second, the rate to customers using gas under boilers with a monthly consumption exceeding 150,000 cubic feet per month, begins with a charge for the gas used to operate the customers' equipment for one hundred hours at maximum of twenty-five cents per thousand cubic feet and slides down to a rate of twenty cents per thousand cubic feet for all gas used in excess of the hundred hour use and 3,000,000 cubic feet per month.

In 1930 it furnished 8,237,268,000 cubic feet of industrial gas at an average rate of 14.2 cents to fifty industrial customers and sixty-four boiler customers in Kansas City, receiving therefor $1,170,875.31. However, industrial customers paid from fifty cents to $2 per thousand cubic feet for gas purchased on the first three steps. It also furnished 7,396,165,000 cubic feet of gas to domestic customers, for which it paid a flat rate of forty cent per thousand cubic feet.

It also paid forty cents per thousand cubic feet for 191,555,000 cubic feet of industrial gas furnished to customers, and paid for all gas above 5,000,000 cubic feet the various rates charged each industrial customer, less three and one-half cents per thousand cubic feet. It received said three and one-half cents regardless of the amount paid for gas by the different industrial customers, and absorbed the expense of service, leakage and bad debts. The total amount of the readings on the industrial and boiler customers' meters was deducted from the city gate meters to determine the amount of domestic gas.

The fuel business of industries in Kansas City is solicited by the Kansas City Gas Company. In doing so it competes with coal and oil. If the negotiations are successful the contract is reduced to writing and signed by the Kansas City Gas Company and the industry. It contains a shut-off clause in favor of domestic customers and states the price, gas requirements, peak load, duration of service and possibly other terms. It must be submitted to the Pipe Line for its approval. If the price, terms and the industry itself are satisfactory to the Pipe Line it approves the contract. The gas is measured by the meter of the industry, which meter must be approved by the Pipe Line. The amount received by that company from industrial gas is determined by the consumption of each industrial consumer and can be determined only by calculations based upon each consumer's bill. The bill of each consumer must be analyzed because they buy on different steps, depending on consumption, and in each case on sales at less than forty cents per thousand cubic feet, the Pipe Line receives the selling price to each industrial consumer on the various steps, less three and one-half cents per thousand cubic feet.

It should be stated that only eight million cubic feet of gas for domestic purposes is distributed in Kansas City during the summer season, whereas, during the winter season there is distributed in that city seventy-five million cubic feet of gas for said purposes. Therefore, if the Pipe Line sells no industrial gas during the summer season, sixty-seven seventy-fifths of its pipe line capacity and gas reserves are idle.

The amount of gas delivered by the Pipe Line to the Kansas City Gas Company, for domestic purposes is determined by deducting the total amount of gas distributed to the industries from the amount of gas delivered at the city gate.

[1] The question whether the relation between Pipe Line and the Kansas City Gas Company is that of vendor and vendee, or principal and agent must be determined by their acts and conduct. "If relations exist which will constitute an agency, it will be an agency, whether the parties understand it to be or not. Their private intention will not affect it. It is not essential that any actual contract should subsist between the parties or that compensation should be expected by the agent; and while the relation, in its full sense, invariably arises out of a contract between the parties, yet the contract may be either express or implied." [21 R.C.L. 819.] "Whether an agency exists, under an ascertained state of facts, is a question of law to be determined by the court." [Seehorn v. Hall, 130 Mo. 257, l.c. 262, 32 S.W. 643.] "The person alleging the existence of an agency must bear the burden of establishing the fact." [21 R.C.L. 820.]

1 Mechem on Agency (2 Ed.), page 30, section 48, the author says:

"These doubtful cases are to be determined, not by the name which the parties have seen fit to apply to their contract but by its true nature and effect. The essence of sale is the transfer of the title to the goods for a price paid or to be paid. Such a transfer puts the transferee, who has obtained the goods to sell again, in the attitude of one who is selling his own goods, and makes him liable to the person from whom he received them as a debtor for the price to be paid and not liable as an agent for the proceeds of the resale. The essence of agency to sell is the delivery of the goods to a person who is to sell them, not as his own property but as the property of the principal, who remains the owner of the goods and who, therefore, has the right to control the sale, to fix the price and terms, to recall the goods, and to demand and receive their proceeds when sold, less the agent's commission, but who has no right to a price for them before sale or unless sold by the agent."

"Agency may also be defined as the relation created by express or implied contract or by law, whereby one party delegates the transaction of some lawful business with more or less discretionary power of another, who undertakes to manage the affair and render to him an account thereof." [Burkhalter v. Ford Motor Co. (Ga.), 116 S.E. 333.]

[2] We do not agree with the Commission that the evidence justifies the conclusion that the Pipe Line is selling industrial gas to industries located in Kansas City and that the Kansas City Gas Company is the agent of the Pipe Line in these transactions.

The Commission does not contend that the corporate entity of these companies should be disregarded. But it does contend that the "unity of control" and the "community of interest" should be considered with other evidence in determining whether or not the Pipe Line is engaged in intrastate commerce. It cites in support of this proposition the case of Western Distributing Co. v. Public Service Commission of Kansas, 285 U.S. 119, and the case of Smith v. Illinois Bell Telephone Co., 282 U.S. 133. These cases hold that where a utility makes a contract with an affiliated company; that in a rate case where such contract affects the operating expenses of the utility so as to affect the rates, that the burden is on the utility to establish the fairness and reasonableness of such contract. These cases do not discuss the question of agency, but simply hold that where one corporation controls another corporation through stock ownership, then the two companies are not dealing at arms length with each other, and in making contracts that might affect the rates the public must pay to the utility, it has the burden to show that such contracts are reasonable. In the recent case of Dayton Power Light Co. v. Public Utility Commission of Ohio, 78 L. Ed. 1267, the Supreme Court of the United States reaffirmed that doctrine. That court in citing the Western Distributing Co. v. Kansas Public Service Commission Case, supra, said:

"Even so, the burden of proof was on the buyer of the gas to show that in these transactions with the affiliated seller the price was no higher than would fairly be payable in a regulated business by a buyer unrelated to the seller and dealing at arm's length. [Western Distributing Co. v. Kansas Public Service Commission, 285 U.S. 119, 124, 76 L. Ed. 655, 658, 52 Sup. Ct. 283.]"

The investigation under review did not involve the question of rates, and therefore, it is not important that Pipe Line and the distributing companies were affiliated companies.

In the case of Houston v. Southwestern Bell Telephone Co., 66 L. Ed. 961, l.c. 964, the Supreme Court of the United States said:

"Under the circumstances disclosed in the evidence, the fact that the American Telegraph Telephone Company controlled the company (Southwestern Bell Telephone Company) and the Western Electric Company by stock ownership is not important beyondrequiring close scrutiny of their dealings to prevent impositionupon the community served by the company." (Italics ours.)

The fact that the Pipe Line fixes the price at which industrial gas is sold by the Kansas City Gas Company does not of itself create the relation of agency. It has many times been held that the vendor has a right to fix the price at which the vendee may sell the merchandise. [Banker Bros. Co. v. Commonwealth of Pennsylvania, 56 L. Ed. 168; Standard Fashion Co. v. Magrane-Houston Co., 66 L. Ed. 653; Watkins Medical Co. v. Holloway, 182 Mo. App. 140, 168 S.W. 290; Burkhalter v. Ford Motor Co., supra; Reiter v. Anderson (Cal.), 262 P. 415; Rawleigh Co. v. Trerice (Mich.), 195 N.W. 79; Chapman v. Dowling Hardware Co. (Ala.), 88 So. 748.]

The evidence shows that the Pipe Line and the Kansas City Gas Company made an arrangement by which the latter company would solicit contracts with industries and to submit each contract to the Pipe Line, each contract was required to contain a shut-off clause. The contracts were in writing and signed by the industry and the Kansas City Gas Company. The Pipe Line was not a party to the contract. If the contract was approved by the Pipe Line, it furnished to the distributing company the quantity of gas required under the contract, at a price to the distributing company of three and one-half cents per thousand cubic feet less than the price stipulated in the written contract with the industry. The Pipe Line delivered the gas at the city gate to the distributing company the same as it delivered domestic gas. The evidence shows that the distributing company was responsible to the industry for the service, that the Pipe Line was paid for the gas, regardless of the fact that the industry may not have paid for the gas, and that the Pipe Line was paid for all gas that came through the meter at the city gate, which included gas that leaked out of the mains of the distributing company. The Kansas City Gas Company may defer the collection of bills so far as the Pipe Line is concerned, or it may rebate or compromise any bill. "It is a well-established rule of sales that, where there is nothing indicating a contrary intent, the delivery of possession of goods operates a passing of title; and in the ordinary sale on credit title to goods passes on delivery." [Reiter v. Anderson, supra.] We find nothing in the evidence to show an intent on part of the Pipe Line to retain title after the gas was delivered to the distributing company at the city gate.

The Commission does not contend that the transaction is one of agency because the amount received by the Pipe Line for industrial gas can be determined only by calculations based upon each consumer's bill. But it does contend that the above-stated method of determining the amount received by the Pipe Line for industrial gas should be considered with other facts in determining the question of sale or agency. We cannot see where this fact would have much bearing on the question one way or the other. It is a well-settled rule of law that where it appears that there has been a delivery of property, in accordance with the terms of a contract of sale, the title to property passed although the property must be later measured, weighed or counted so as to ascertain the total amount due the vendor. [Odell v. Railroad, 109 Mass. 50; Burrows v. Whitaker, 71 N.Y. 291; McMillan v. Schweitzer, 87 Mo. 402.]

While not controlling, we think it significant that the Pipe Line did not have a franchise with the cities to deliver gas to industries.

We would have to assume that the Pipe Line was violating Section 5195, Revised Statutes 1929, without evidence proving that fact. That section provides, among other things, a franchise cannot be transferred in whole or part without permission from the Commission. The Pipe Line lacks authority to engage, by agent or otherwise, to transport gas through the mains located in the streets of Kansas City.

We think the facts in this case show that the distributing companies are liable for the price to be paid for the gas delivered to them by the Pipe Line and not the proceeds of the resale of the gas. There is no substantial evidence to sustain the finding of the Commission that the Pipe Line was selling gas to industries through the distributing companies as its agents.

[3] The Pipe Line next contends that it is engaged in interstate business by directly selling and distributing industrial gas to consumers in this State, outside of the cities.

It has fifteen written contracts with industries in Missouri, outside of the cities, to sell them industrial gas. However, it is only furnishing gas to twelve industries. The gas is sold at rates varying from fifteen cents to seventy cents per thousand cubic feet, depending upon the size of the plant and the number of cubic feet the industry consumes. Each contract contains a shut-off clause. One customer pays a flat rate of eighteen cents per thousand cubic feet, whereas another customer pays seventy cents per thousand cubic feet for the first 150,000 cubic feet per month, and thirty-five cents per thousand cubic feet for the balance of the gas consumed. The other rates vary but are similar. The contracts are signed by the industry in Missouri and signed by the Pipe Line at Bartlesville, Oklahoma. The individual companies pay for the gas at the office of the Pipe Line in that city.

Q.R. Dungan testified that he was office manager of the Pipe Line and lived in Bartlesville, Oklahoma. In his testimony he referred to selling gas to these twelve industries at "wholesale," evidently he meant in large quantities, as the gas was not resold, but used by the industries. He also testified that the Pipe Line would serve all customers with industrial gas along its main lines in this State on terms satisfactory to it. His testimony on this point is as follows:

"Q. What would be the minimum amount of gas sales for which you would tap one of your pipe lines to furnish? A. Well, there is a fixed minimum. It depends again upon the condition of the sale. An industry that would use a million feet a month would be entirely different from one that would use a million feet a year, and another thing that would be considered is whether the peak load came in the summer or the winter time, and other conditions under which the gas would be sold.

"Q. What are the factors you would take into consideration in determining whether or not you would tap the line in order to put on the industry? A. The first would be the class of sale, and that would determine the time of the peak demand; also the character of the sale, whether it is 24 hours a day or less, or whether it is 7 days a week or less, whether the peak is in the summer or in the winter, whether the industry will take a contract which has what we call a shut-off clause where we discontinue that service in case of increased demands for domestic gas."

Cross-examination by Judge MAYER:

"Q. Mr. Dungan, you were talking about if an industry along your line or off of your line wanted to take gas from the pipe line company, outside of the city limits, I mean: you would serve it to them? A. Yes.

"Q. You mean, after bargaining with them, if you could fix a price to suit the pipe line company, you would do it? A. Yes, sir.

"Q. And if you couldn't, you would refuse to do it? A. Yes, sir.

"Q. If you can make a bargain that is satisfactory you would sell, but if not, you would refuse it? A. Yes, sir.

"Q. And if you do sell, it is based on a contract between that particular industry and the pipe line company? A. Yes, sir."

It is admitted that the gas came into this State from either Kansas, Oklahoma, or Texas. It is, therefore, interstate commerce when it comes into this State. If the Commission is correct in its order, it must cease to be interstate commerce at some point before it is delivered to the industry. "That the transportation of gas through pipe lines from one state to another is interstate commerce may not be doubted. Also, it is clear that as a part of such commerce the receivers might sell and deliver gas sotransported to local distributing companies free from reasonable interference by the State." (Italics ours.) [Public Utilities Commission v. Landon, 249 U.S. 236, l.c. 244.]

In the recent case of East Ohio Gas Co. v. Tax Commission, 75 L. Ed. 1171, l.c. 1174, the Supreme Court of the United States stated the rule in respect to when gas was delivered from one state to another was interstate commerce, and when such gas became intrastate commerce in the following language:

"The transportation of gas from wells outside Ohio by the lines of the producing companies to the state line and thence by means of appellant's high pressure transmission lines to their connection with its local systems is essentially national — not local — in character and is interstate commerce within as well as without that state. The mere fact that the title or the custody of the gas passes while it is enroute from state to state is not determinative of the question where interstate commerce ends. [Public Utilities Commission v. Landon, 249 U.S. 239, 245, 63 L. Ed. 577, 586, P.U.R. 1919C, 834, 39 Sup. Ct. 268; Missouri ex rel. Barrett v. Kansas Natural Gas Co., 265 U.S. 298, 307-309, 68 L. Ed. 1027, 1029, 1030, 44 Sup. Ct. 544; Peoples Natural Gas Co. v. Public Serv. Commission, 270 U.S. 550, 554, 70 L. Ed. 726, 729, 46 Sup. Ct. 371; Public Utilities Commission v. Attleboro Steam Electric Co., 273 U.S. 83, 89, 71 L. Ed. 549, 553, 47 Sup. Ct. 294.] But when the gas passes from the distribution lines into the supply mains, it necessarily is relieved of nearly all the pressure put upon it at the stations of the producing companies, its volume thereby is expanded to many times what it was while in the high pressure interstate transmission lines, and it is divided into the many thousand relatively tiny streams that enter the small service lines connecting such mains with the pipes on the consumers' premises. So segregated the gas in such service lines and pipes remains in readiness or moves forward to serve as needed. The treatment and division of the large compressed volume of gas is like the breaking of an original package, after shipment in interstate commerce, in order that its contents may be treated, prepared for sale and sold at retail. [State ex rel. Caster v. Flannelly, 96 Kan. 372, 383, 384, P.U.R. 1916C, 810, 152 P. 22; West Virginia M. Gas Co. v. Towers,134 Md. 137, 143, 145, P.U.R. 1919D, 332, 106 A. 265; Cf. Atlantic Coast Line Railroad Co. v. Standard Oil Co.,275 U.S. 257, 269, 72 L. Ed. 270, 275, 48 Sup. Ct. 107; Brown v. Maryland, 12 Wheat. 419, 6 L. Ed. 678; Leisy v. Hardin, 135 U.S. 100, 34 L. Ed. 128, 3 Inters. Com. Rep. 36, 10 Sup. Ct. 681.] It follows that the furnishing of gas to consumers in Ohio municipalities by means of distribution plants to supply the gas suitably for the service for which it is intended is not interstate commerce but a business of purely local concern exclusively within the jurisdiction of the state."

Also in the case of Missouri ex rel. Barrett v. Kansas Natural Gas Co., 68 L. Ed. 1027, l.c. 1030, the Supreme Court of the United States said:

"The business of supplying, on demand, local consumers is a local business, even though the gas be brought from another state and drawn for distribution directly from interstate mains; and this is so whether the local distribution be made by the transporting company or by independent distributing companies. In such case the local interest is paramount, and the interference with interstate commerce, if any, indirect and of minor importance. But here the sale of gas is in wholesale quantities, not to consumers, but to distributing companies for resale to consumers in numerous cities and communities in different states. The transportation, sale, and delivery constitute an unbroken chain, fundamentally interstate from beginning to end, and of such continuity as to amount to an established course of business. The paramount interest is not local but national, admitting of and requiring uniformity of regulation. Such uniformity, even though it be the uniformity of governmental non-action, may be highly necessary to preserve equality of opportunity and treatment among the various communities and states concerned."

One of the main pipe lines of the company runs from the State of Kansas to the city of Sedalia in this State. From this main pipe line a lateral pipe line runs north to the city of Lexington, where the gas is delivered to the distributing company for resale to domestic consumers of that city. In oral argument of this case in this court the Commission admitted the delivery of gas to the distributing company in Lexington was interstate commerce, and the gas in that instance did not become intrastate commerce until it reached the distributing pipe lines of that company for resale to the domestic trade. But in arguing this case, the Commission contended that if an industry was served in the vicinity of Warrensburg, the interstate movement ceased at the point that the gas left the main pipe line and entered the lateral pipe line that served the industry. In both instances there was a previous contract with the Pipe Line for the sale of the gas before it left the foreign state and it was delivered direct to the purchaser in this State without any storing or holding to be served on demand. We can see no distinction in these two instances mentioned. Both are interstate commerce.

In the case at bar, the only reasonable inference to be drawn from the evidence, is that the gas is delivered from the foreign state directly to the industrial consumer in this State in compliance with a contract that was in existence between such consumer and the Pipe Line. We think it is immaterial whether the Pipe Line owns all or part of the lateral pipe line that the gas passes through from the main pipe line to the industry as it was a continuous movement. It, therefore, follows that under rules announced in the East Ohio Case, supra, and Barrett v. Kansas Natural Gas Co., supra, that the Pipe Line was engaged in interstate commerce when it was delivering gas to the twelve industries and that the Commission does not have jurisdiction of the Pipe Line on account of these sales, unless it is given jurisdiction on account of other questions hereinafter discussed.

[4] The Commission also contends that the Pipe Line owns all the gas that it transports and is therefore not a common carrier and because it availed itself of the power of eminent domain under Section 20, Article II, of the Constitution of Missouri it is a public utility and should not be heard to say that it is not engaged in intrastate business. In availing itself of this power it filed suits in this State to acquire by condemnation an easement in certain lands herein to be used as a right of way for its pipe lines. In the petition in these suits it alleged: "That it is a corporation organized for the purpose among other things, of transporting and carrying gas by means of pipes and pipe lines laid underneath the surface of the ground through the States, among others, of Oklahoma, Kansas and Missouri, for the distribution and sale of gas as a public commodity, and for the public use and convenience; . . . that to carry out such purpose in the State of Missouri plaintiff has the permission and authority of the Public Service Commission of the State of Missouri to lay said pipe line underneath the surface of the ground through Missouri . . . and through the tracts and parcels of land which plaintiff asks herein to appropriate for said public use."

The Commission relies upon the case of Producers' Transportation Co. v. Railroad Commission, 176 Cal. 499, affirmed251 U.S. 228. In that case the court held that inasmuch as the plaintiff had alleged in its petition in its condemnation cases that it was a common carrier, that it would be estopped from later denying that fact. The Pipe Line in that case was wholly within that State, and no question of interstate commerce was involved. That case is not in point. We think the test is not what powers the Pipe Line alleged, in its condemnation petition that it had under its charter but what it was actually doing. On principle, our case of Sate ex rel. Danciger Co. v. Public Service Co., 275 Mo. 483, l.c. 493, 205 S.W. 36, is in point. The question in that case was whether the relator was a public utility. In that case we said:

". . . It is enough to say that in determining whether a corporation is or is not a public utility, the important thing is, not what its charter says it may do, but what it actually does. [Terminal Taxi Cab Co. v. Kutz, 241 U.S. 252.]"

The Pipe Line is a foreign corporation licensed to do business in this State and secured a permit from the Commission to lay pipe lines in this State. It had the same powers as a domestic corporation. Section 4596, Revised Statutes 1929; Southern Illinois Bridge Co. v. Stone, 174 Mo. 1, 73 S.W. 453; and under Section 1340, Revised Statutes 1929, it had the power to condemn land to lay pipe lines if for public use.

In the case of Ozark Pipe Line Co. v. Monier, 69 L. Ed. 439, the Supreme Court of the United States said:

"Nor is it material that appellant applied for and received a Missouri license or that it had the power thereunder to exercise the right of eminent domain. These facts could not have the effect of conferring upon the state an authority, denied by the Federal Constitution, to regulate interstate commerce. The state has no such power even in the case of domestic corporations."

We think that because the Pipe Line condemned land and applied to the Commission for a certificate to lay the pipe lines did not estop it from denying that it was engaged in intrastate commerce.

The Pipe Line admits it is a public utility, but contends that if it is engaged solely in interstate commerce, then the Commission does not have jurisdiction of it. On the authority of Public Utilities of Rhode Island v. Attleboro Steam Electric Company, 71 L. Ed. 549, we think the Pipe Line is correct in its contention. In that case the court said:

"The test of the validity of a state regulation is not the character of the general business of the company, but whether the particular business which is regulated is essentially local or national in character; and if the regulation places a direct burden upon its interstate business it is none the less beyond the power of the state because this may be the smaller part of its general business. . . . Plainly, however, the paramount interest in the interstate business carried on between the two companies is not local to either state, but essentially national in character."

We think that the Pipe Line was engaged in interstate commerce and that it was not subject to the jurisdiction of the Commission. From what we have said it follows that the judgment of the circuit court should be reversed. It is so ordered.Ellison, Hays and Leedy, JJ., concur; Collet, J., not sitting because of his connection with Public Service Commission;Gantt, J., dissents in separate opinion in which Frank, C.J., concurs.