State Ex Rel. Gas Co. v. Pub. Serv. Comm. , 337 Mo. 809 ( 1935 )

The Commission ruled that the Pipe Line was engaged in intrastate business by selling and distributing industrial gas to consumers both inside and outside the cities of this State. ENGLISH, C., in concurring, was of the opinion that the facts warranted the ruling on the further ground that the Pipe Line had destroyed the corporate entity of the distributing companies.

The majority opinion reverses the judgment of the circuit court affirming the ruling of the Commission. It states that the Pipe Line admitted that it was a public utility. If so, and it is distributing gas in this State, that would be the end of this case, and the judgment of the circuit court should be affirmed. On the oral argument it was stated that the Pipe Line was a public utility. Thereafter, and in the course of the argument, it was stated that it was a "national utility." There are no "national utilities" as those words were used on the argument. We have interstate common carriers, but said company contends that it is not a common carrier. We also have utilities serving local communities and the people of the State. Furthermore, no legislation regulating commerce in gas has been enacted by Congress. The statement that the Pipe Line was a public utility was made arguendo.

The majority opinion proceeds upon the theory that the record presents the question of whether or not the distributing companies were agents of the Pipe Line to sell gas to industries. It quotes from Mechem the rule governing such an agency.

[1] The record presents no question of agency to sell. It presents the question of whether or not the distributing companies are agents of the Pipe Line to transport and deliver gas sold by the Pipe Line to industries. There is absolutely no evidence tending to show a resale of the gas to the industries. The case is not in point. However, it should be noted that said opinion neither sets forth the last paragraph of the quoted section nor the preceding section.

The opinion also states that the Pipe Line sold the gas "at a price to the distributing company of 3½ cents per thousand cubic feet less than the price stipulated in the written contract with the industry." The quoted conclusion of the majority opinion is taken from the brief of the Pipe Line. This amusing and "back-handed" method of statement is an effort on the part of the Pipe Line to appear as vendor of the gas to the Kansas City Gas Company rather than as vendor to the industry. The statement should be taken as an admission that the situation is "ticklish."

The majority opinion thinks that the Pipe Line should be presumed innocent of a violation of Section 5195, Revised Statutes 1929. Of course, there is a presumption that all persons, including corporations, act lawfully, however, such presumption disappears on the appearance of evidence. If, as stated in said opinion, there is no substantial evidence tending to show an agency, why is said presumption invoked. Furthermore, for ought that appears, the Commission may have approved the transportation of gas by the distributing companies. It is admitted that the Kansas City Gas Company receives three and one-half cents per thousand cubic feet for transporting the gas to the Independence distributing company. It is not suggested that the transportation of said gas is a violation of said section.

The majority opinion quotes from Seehorn v. Hall, 130 Mo. 257, l.c. 262, 32 S.W. 643, as follows: "Whether an agency exists, under an ascertained state of facts, is a question of law to be determined by the court." In that case the question of agency was submitted to the jury. I assume that this statement of a familiar rule was made on the theory that the facts are admitted in the instant case. "In some quarters" it is contended that absent conflict in the evidence, the facts are admitted. On the contrary if different reasonable inferences may be drawn from the evidence, the facts are not admitted. For instance, if a case is submitted on an agreed statement, it does not follow that the facts are admitted. Different reasonable inferences may be drawn from said statement.

It also quotes from Reiter v. Anderson (Cal.), 262 P. 415, l.c. 418, as follows: "It is a well-established rule of the law of sales that, where there is nothing indicating a contrary intent, the delivery of possession of goods operates to pass titles; and that in the ordinary sale on credit, title to the goods passes on delivery." This is elementary. But in the instant case there is evidence "indicating a contrary intent."

It also quotes from 21 Ruling Case Law, 819, as follows: "If relations exist which will constitute an agency, it will be an agency whether the parties understand it to be or not. Their private intentions will not affect it." After thus stating the rule the opinion states: "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." In view of the quoted rule from Ruling Case Law, of what consequence is the intent of the Pipe Line.

[2] I. I do not agree with the reasoning or the ruling of said opinion on the question of agency. It draws unreasonable inferences, ignores material facts and circumstances in evidence and reviews the case as an action at law. The frequent statements in said opinion that the Commission or its attorney made certain statements and admissions, and the citation of certain authorities therein, show conclusively that the record was so reviewed.

This method of reviewing an order of the Commission is contrary to the rulings of this court. The case is here for determination on the evidence and as a proceeding in equity. The evidence must be considered de novo. [State ex rel. v. Public Service Comm.,271 Mo. 155, 196 S.W. 369; Railroad v. Public Service Comm.,266 Mo. 333, l.c. 346, 181 S.W. 61.]

The Pipe Line had no written contracts with the distributing companies and there was no correspondence indicating the terms or conditions of a contract. In this situation the question of sale or agency must be determined from a consideration of all the facts and circumstances in evidence, the nature of the transaction, the conduct of the parties with reference thereto, and the relationships existing between the Pipe Line and the distributing companies.

The Kansas City Gas Company is typical of the distributing companies. Therefore, only the evidence relating to the industries in Kansas City will be considered. There is no conflict in the evidence.

The majority opinion adopted the argumentative conclusions of the Pipe Line in its brief as the "ascertained facts" of the case. It will not be contended that the evidence does not show the following:

The Pipe Line and Kansas City Gas Company had an "arrangement" by which the latter company solicited contracts with industries in the city. If the efforts of the Kansas City Gas Company were successful, said company had the industry sign a contract, which fixed the price of the gas, set forth the gas requirements and peak load of the industry, the duration of service and contained a clause authorizing a discontinuance of the service without notice to the industry. The Kansas City Gas Company then submitted the contract to the Pipe Line for approval. If the price, terms and the industry itself were satisfactory to the Pipe Line, it approved the contract. If it approved the contract, the Kansas City Gas Company signed the contract. The Pipe Line did not sign the contract. The gas was measured by the meter of the industry, which meter must be approved by the Pipe Line. The Kansas City Gas Company received three and one-half cents per thousand cubic feet for the gas delivered to the industry. It received said sum regardless of the price paid by the industry for the gas. Under said "arrangement" the Kansas City Gas Company absorbed all losses from bad debts and leakage and was responsible to the industries for service.

On the question T.J. Strickler, vice-president and general manager of the Kansas City Gas Company testified as follows:

"Q. The industrial gas is paid for on a basis to be determined? A. The basis that is determined — as a preliminary before a contract is entered into between the individual industry or between the industries as a class and the Kansas City Gas Company — in other words, the Kansas City Gas Company felt that there was a certain industrial market here; it surveyed that market; it arrived at a price at which it felt gas could be disposed of in that industrial market. It then said to the pipe line company: Knowing that there is a certain industrial market for gas and feeling that we know what price that can be disposed of, we can afford to pay the pipe line company such a price, according to the volume of the gas. The pipe line company, having in general agreed to that, that schedule for the price to the industrial consumer was filed with the Missouri Commission.

"Q. The pipe line company did not participate in determining what the price was to the industrial consumer? A. No, sir. The Kansas City Gas Company, being responsible for the service to the industry, felt that it was — it had to work out a price to it which would provide for bad debts, the carrying of the accounts, leakage and such, and maintenance of the lines used in connection with the sale of industrial gas.

"Q. In the sale of industrial gas the Kansas City Gas Company's financial interest is only the rental it receives for the gas going through its mains. Is it not? A. No. It is responsible to the industry for that service. If it can't obtain that industrial gas from the pipe line company, then it would have to seek that service from some other source or discontinue that service. But the Kansas City Gas Company is responsible, for instance, for the bad debts; the Kansas City Gas Company has to stand that loss. There is a loss in leakage in the system, and the Kansas City Gas Company stands that loss at forty cents a thousand cubic feet. If there was a damage suit of any kind, the Kansas City Gas Company would be the party that would be responsible, in so far as any responsibility lying in the handling or operation of its lines.

"Q. The net on all steps where an industrial consumer pays less than forty cents — the net proceeds which the Kansas City Gas Company receives, is the same, namely 3½ cents. Is it not? A. Yes, sir; that is correct.

"Q. The pipe line company receives all of the proceeds of the sale of gas, according to the schedule, at less than forty cents — less 3½ cents, does it not? In other words, where gas is sold on your industrial schedule at less than forty cents, the pipe line receives all the proceeds per thousand cubic feet less 3½ cents? A. Well, you would have this situation in mind, that where an industry has failed to pay its bill or for various reasons the bill is not paid, the Kansas City Gas Company has to pay the pipe line company for that gas, but it does not receive any money. In other words, the distributing company has to take the loss. And the same way — I have an industry in mind which has been behind in its bills all the way from two weeks to several months and there is possibly some question in my mind as to whether we are really going to receive the payment, but that gas was paid for at the time to the pipe line company, but the distributing company does not receive any money until the bill is paid by the company that used the gas.

"Q. The pipe line company is primarily interested, is it not, in the price at which industrial gas is sold, because it receives the purchase price of that industrial gas, or a large part of it — less 3½ cents — does it not? A. I don't think it is any more interested than the Kansas City Gas Company, because the Kansas City Gas Company wants to make an earning there to apply on its income.

"Q. The Kansas City Gas Company receives a net of 3½ cents for industrial gas which it carries through its mains and delivers to industrial customers where the selling price is less than forty cents? A. Yes, sir.

"Q. And the more industrial gas it carries through its mains, the more three and a half cents per thousand cubic feet it will get? A. Yes, sir.

"Q. In all cases where the Kansas City Gas Company receives three and a half cents per thousand cubic feet, the pipe line company receives the selling price less 3½ cents per thousand cubic feet? A. Yes, sir.

"Q. Well, is not the pipe line company more interested in the selling price of that gas than the distributing company, because it is the one that receives the net proceeds, less 3½ cents? A. I don't know that they are more interested. There may be more profit to the distributing company than the pipe line company. I am not in a position to know that they may not be any more interested than the distributing company. I do not know what it costs the pipe line company to deliver that gas, and their net profit from the sale of that gas may not be any more than the net profit of the distributing company.

"Q. I understood you to say that the Kansas City Gas Company fixes the price at which industrial gas is sold? A. Yes, sir.

"Q. If the Kansas City Gas Company, which is interested in the 3½ cents it gets, would fix the price at 4 cents per thousand cubic feet, it could probably sell lots more industrial gas and make more three and a half cents per thousand cubic feet. A. Yes.

"Q. Would the pipe line company stand for that? A. I am not in a position to say what the pipe line company would do, Judge.

"Q. Under the circumstances, does the pipe line company give the Kansas City Gas Company complete freedom in fixing that industrial schedule? A. That industrial schedule is fixed, as I have said, in this way: The Kansas City Gas Company surveys the market and says, we feel that we can sell gas at a certain price, and says to the pipe line company, we can afford to pay you so much for that gas. And the pipe line company has said, we will take it providing you submit each one of these contracts so that we know the amount to be furnished and the conditions under which it is to be furnished.

"Q. I don't understand how the distributing company can care what the selling price of industrial gas is, so long as it is getting 3½ cents per thousand cubic feet no matter what the selling price is. Can you explain that? A. No.

"Q. Why is it that the pipe line company will let you fix the price for the sale of industrial gas when it is the one — practically the only one interested in what it sells for, because it gets the difference between the selling price and 3½ cents? A. We are interested in selling it just as cheap as we can sell it.

"Q. Then why don't you sell it for five cents? A. There might be an additional volume of sales if we did, and the Kansas City Gas Company might figure that it could afford to sell it — if it sold it for 5, it might be able to pay the pipe line company 3½ cents for it and still sell it for 5 if it felt that there was an increased volume it could make an earning on. The volume enters into any consideration of it."

The testimony of this witness is argumentative, evasive and contradictory. He either knew or had been told that this situation also was "ticklish."

In the face of the above-stated facts and the testimony of the witness Strickler, the majority opinion ruled that there was no substantial evidence tending to show agency. In view of said ruling I make inquiries as follows:

(a) If the Kansas City Gas Company owns the gas sold to industries within the city, why is it impossible for the industries to purchase from said company the gas? The evidence shows conclusively that the industries cannot do so. Every detail of the transaction must be approved by the Pipe Line.

(b) If the Kansas City Gas Company owns the gas sold to the industries within the city, why is it necessary for said company to enter into an "arrangement" with the Pipe Line, whereby the Kansas City Gas Company becomes a solicitor of contracts for the sale of gas to the industries? If the Kansas City Gas Company owns the gas, there would be no necessity for said arrangement. The Kansas City Gas Company would solicit said contracts on its own account.

(c) If the Kansas City Gas Company owns the gas, why is it necessary to submit the contract signed by the industry to the Pipe Line before the Kansas City Gas Company signs the contract?

(d) If the Kansas City Gas Company owns the gas, why is the Pipe Line alone interested in the price paid for the gas by the industry?

(e) If the Kansas City Gas Company owns the gas, why does it receive 3½ cents per thousand cubic feet regardless of the price paid by the industry for the gas?

"The essential attributes of ownership of property, real and personal, are the rights in the owner to control, handle, and dispose of the thing owned. Converse v. Kellogg (N.Y.), 7 Barb. 590; Hill v. Cumberland Valley Mut. Protection Co., 59 Pa. (9 P.F. Smith) 474." [Hardinge v. Empire Zinc Co., 148 P. 306, l.c. 312.] If the Kansas City Gas Company has a scintilla of control of the transactions whereby industrial gas is sold to consumers in Kansas City, I am unable to discover.

Instead of answering these questions presented by the record, the majority opinion, as above stated, adopted the argumentative conclusions of the Pipe Line as the "ascertained facts" in the case, and then, without the suggestion of a reason, solemnly announced that there was no substantial evidence tending to show that the Pipe Line sold gas to the industries. I suspect that the bench, the bar and the public would appreciate an effort on the part of the majority opinion to answer these questions.

I also make inquiry as follows:

(f) If the Kansas City Gas Company owns the gas sold to the industries within the city, why does the Pipe Line fix the price to be paid for said gas?

The majority opinion attempts to answer this question by stating that "it has many times been held that the vendor has a right to fix the price at which the vendee may sell the merchandise, citing 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 v. Trerice (Mich.), 195 N.W. 79; Chapman Co. v. Dowling Hardware Co. (Ala.), 88 So. 748."

In those cases it was held that a manufacturer could lawfully fix a blanket retail price for the article manufactured. In the instant case the evidence shows that the Pipe Line did not fix a blanket price. On the contrary the industries were charged different prices.

Furthermore, those cases ruled purely private transactions. The public, as such, was in no way interested. I assume that no one will contend that the price to the consumer of a utility commodity can be fixed by either the wholesaler or retailer of said commodity. The price of said commodity is under the supervision of the Commission. The cases are not in point.

But the Pipe Line leans heavily on the absorption of leakage and bad debts by the Kansas City Gas Company, the liability of said company to the industry for service, and the absence of the Pipe Line's signature from the contract with the industry for the sale of the gas.

It is elementary that an agent or bailee to transport and deliver may lawfully increase its liability above its ordinary liability by contract or "arrangement." Furthermore, it should be noted as follows:

(a) There is no evidence on the question of leakage. It may be inferred if the leakage was consequential, the Pipe Line would have produced evidence tending to show that fact.

(b) It is common knowledge that all utility commodities are sold for cash on the meter reading. Furthermore, the written contracts with the industries provide for discontinuance of service without notice. On failure of the industry to pay, service could instantly be discontinued. In this situation the loss on account of bad debts could not be consequential.

(c) The Kansas City Gas Company receives all of its gas requirements from either the Pipe Line or lines controlled by the Pipe Line. Indeed, the evidence shows that the Pipe Line either owns or controls all of the gas available for distribution in the territory under consideration. It follows that the Kansas City Gas Company must procure the gas distributed to the industries from either the Pipe Line or lines controlled by said company. In this situation the contracts with the industries protect the vendor from liability for failure of service by providing that the vendor does not by this contract undertake to furnish the vendee a full and uninterrupted supply of gas for the period named in the contract and by providing that the supply of gas may be discontinued to the industry without notice on account of accidents, breaks in line, repairs, shortage of gas, etc. Thus vanishes the claim of liability on the part of the vendor for failure of service.

(d) Of course, the majority opinion does not contend that the absence of the Pipe Line's signature from the contract with the industries is conclusive on the question. The country is alive with contracts executed in the name of an agent. This method is frequently used to conceal the real party in interest. Indeed, in this case the evidence shows that, under said "arrangement," said method was used to conceal the fact that the Pipe Line was the real party in interest.

Furthermore, on again reading the testimony of Strickler it will be noted that he continually "sent up" the theory of absorption of leakage, bad debts and liability for service on the part of the Kansas City Gas Company "as a smoke screen" to hide the activities of the Pipe Line as the dominant company.

In this connection he testified that "if there was a damage suit of any kind, the Kansas City Gas Company would be the party that would be responsible in so far as any responsibility lying in the handling or operation of its lines." This statement is not startling. All agents to transport and deliver are liable for negligence "in the handling or operation of its lines."

It also should be stated that even if the Pipe Line does not disregard the corporate entity of the distributing companies, the relationships existing between the companies should be considered on the question of agency. "Unity of control" and "community of interest" furnish an opportunity and a fertile soil for coercion on the part of a dominant company.

I think said relationships should be considered on the authority of Western Distributing Co. v. Public Service Commission of Kansas, 285 U.S. 119; Smith v. Illinois Bell Telephone Co., 282 U.S. 133; Dayton Power Light Co. v. Public Utility Commission of Ohio, 78 L. Ed. 1267, and Houston v. Southwestern Bell Telephone Co., 66 L. Ed. 961.

On a consideration of this question, the majority opinion states that "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 arm's 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." After making said statement, it rules that in the instant case no question of rates is involved and therefore it is not important that the Pipe Line and distributing companies are affiliated companies.

I am unable to follow this course of reasoning. It is true that in the instant case there is no question of increasing or decreasing rates. But in this case the record presents the question of whether or not the Commission has jurisdiction to consider the question of increasing or decreasing rates. If it has jurisdiction of both the Pipe Line and the distributing companies, it has authority to regulate the industry gas rates. The principle announced in those cases is that in transactions between affiliated companies involving a public interest, close scrutiny of the dealings of said companies is enjoined upon the courts to prevent imposition upon the public. Clearly, the cited cases are in point. The majority opinion, with as much reason, could have ruled that a principle of law announced in a replevin suit to recover possession of a horse would not be authority in a replevin suit to recover possession of a cow.

In Berkey v. Third Ave. Ry. Co., 244 N.Y. 84, l.c. 95,155 N.E. 58, Mr. Justice CARDOZO, then Judge of the New York Court of Appeals, said: "Dominion may be so complete, interference so obtrusive, that by the general rule of agency a parent will be a principal and a subsidiary an agent."

The evidence considered, I submit that it would be a travesty on justice to reverse the judgment of the circuit court on the question of agency.

[3] II. I next consider the question of whether or not the Pipe Line has destroyed the corporate entity of the distributing companies.

At the hearing before the Commission certain officials testified that the business transactions between the Pipe Line and the distributing companies were under "arrangements or oral undertakings," whatever that may be. An official for one of the distributing companies testified that he was familiar with the terms of said "arrangement or oral undertaking" only so far as he had "put it into operation."

This method of transacting business called for an explanation. Thereupon an attorney for the distributing companies testified in effect that no lawful contract covering the business transactions between the Pipe Line and the distributing companies could be drawn. He cited Landon v. Court of Industrial Relations of State of Kansas, 269 F. 411, as sustaining said statement. I have read the opinion in said case. It does not rule that a valid contract for the sale and purchase of gas could not exist between the Pipe Line and the distributing companies. Indeed, it is unthinkable and unbelievable that the Pipe Line could not enter into a valid contract with an independent distributing company for the sale and purchase of gas. I think the explanation given by the attorney should itself be explained.

Other officials testified that the business transacted between the Pipe Line and the distributing companies was under a "day to day arrangement." This means that said business was transacted under an hour to hour arrangement, minute to minute arrangement or second to second arrangement. In other words, the Pipe Line could discontinue the supply of gas to the distributing companies without notice. All know that an independent affiliated company would not transact business under such an "arrangement." Clearly, the Pipe Line is dealing with itself when it supplies gas to the distributing companies. The separate existence of the distributing companies as corporations is a "mere sham." [Martin v. Development Co. of America, 240 F. 42.]

Furthermore, the proceeding before the commissioner was directed against the Pipe Line. It may be inferred that the distributing companies were parties to facilitate the production of records. They did not appeal from the order of the Commission. At the hearing before the commissioner the attorneys for the distributing companies, while appearing as such, in fact represented the Pipe Line. Thereafter, one of said attorneys appeared before the Commission, the circuit court and this court as attorney for the Pipe Line. This tends to show domination on the part of the Pipe Line. It also would be significant if said attorney was, in fact, the attorney for both the Pipe Line and the distributing company. Furthermore, the witness Strickler, in giving his testimony in this case, made valiant efforts to protect the pipe line. This also tends to show domination on the part of said company.

Furthermore, the evidence on the issue of agency shows that the Pipe Line controls the distribution of industrial gas to consumers. If the distributing companies were independent companies they would not permit this domination on the part of the Pipe Line.

Furthermore, the Cities Service Company owns all the common stock of both the Empire Gas Fuel Company and the Gas Service Company, except the shares necessary to qualify directors. The Empire Gas Fuel Company owns all the common stock of the Cities Service Gas Company except the shares necessary to qualify directors. And the Gas Service Company owns all the common stock of the distributing companies except the shares necessary to qualify directors.

Thus it appears that the Cities Service Company, through its subsidiary companies, owns and controls all the common stock of the distributing companies except qualifying shares for directors. It follows that the Cities Service Gas Company, as a subsidiary of the Cities Service Company, controls the common stock of the said companies.

The question was considered and ruled in Gallatin Natural Gas Co. v. Public Service Comm. (Mont.), 256 P. 373. In that case many authorities on the question are cited, l.c. 377, 378, 379. In this connection it should be stated that the opinions in Chicago, etc., Ry. Co. v. Minn. Civic Assn., 247 U.S. 490, and United States v. Reading Co., 253 U.S. 26, 61, 63, may be read with profit.

There is no evidence in the record indicating a single uncontrolled act on the part of the distributing companies. The Pipe Line has totally destroyed the corporate entity of said companies. In other words, the Pipe Line and the distributing companies are one and the same business activity. It also follows that the gas transported by the Pipe Line into this State and distributed by the distributing companies is a local and intrastate business. If so, it is selling and locally distributing gas to industries in the cities.

[4] III. I next consider the condemnation of private property by the Pipe Line.

It is stated in the majority opinion that the Pipe Line secured a permit from the Commission to lay pipe lines in this State. There is no evidence in the record on the question. The statement authorized an examination of the records of the Commission to learn the facts. I have made the examination, and the record follows:

On January 10, 1929, the Commission heard the application of the Pipe Line for a certificate of convenience and necessity to construct seventy-three miles of pipe line in southwest Missouri. On the evidence the Commission issued a certificate and ordered said company to file, subject to the approval of the Commission, a schedule of rates for gas service in Missouri. The Commission retained jurisdiction to make further orders if necessary. The Pipe Line did not file a schedule of rates. Of course, the order granting said certificate was not valid until the company filed said schedule.

Thereafter the Pipe Line made application to the Commission for another certificate of convenience and necessity to construct lines in Missouri for the purpose of transporting gas from Oklahoma and Kansas into this State. The application was denied on the ground that it involved transportation in interstate commerce. Thereafter the company dismissed other applications for certificates.

The Pipe Line owns all the gas transported through its lines. It contends that it is not a common carrier. If so, it could not condemn private property. [Sec. 20, Art. II of the Constitution.] To evade this provision of the Constitution, it made applications to the Commission for said certificates. And, even though it was without authority from the Commission, it instituted suits in the courts of this State and condemned private property for private use. In the petition in said suits it alleged "that it is a corporation organized for the purpose, among other things, of transporting and carrying gas by means of 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 majority opinion proceeds upon the theory that criticism is directed against the allegation in said petitions as to the power of the company under its charter. It quotes from State ex rel. Danciger Co. v. Public Service Comm., 275 Mo. 483, l.c. 493. 205 S.W. 36, as follows:

". . . . 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 rule is correctly stated. But absent criticism of said allegation of the petition, the rule is without application. The criticism is directed against the allegation that the company had the permission and authority of the Commission to lay pipe lines in this State. This conduct on the part of the company and its attorneys was a fraud on the Commission, the courts, and the people of this State.

On the point the majority opinion also cites Sections 4596 and 1340; Southern Illinois Bridge Co. v. Stone, 174 Mo. 1; Ozark Pipe Line Co. v. Monier, 69 L. Ed. 439.

It is certain that Section 4596 gives to a foreign corporation no greater power than to a domestic corporation. It would not be contended that a domestic corporation could condemn private property for private use.

Under Section 1340 the Pipe Line had power to condemn land if for public use. But the Pipe Line did not condemn land for public use. It condemned land for use as a carrier of its own gas.

The Southern Illinois Bridge Co. case also is not in point. It ruled that our Constitution did not prohibit the Legislature from conferring on a foreign corporation the right to condemn private property for public use.

The Ozark Pipe Line Corporation obtained a license from this State to engage "exclusively in the business of transporting crude petroleum by pipe line." The line extends from Oklahoma through Missouri and to Illinois where the oil, transported as a common carrier, is delivered. Oil is neither received nor delivered in this State. We attempted to collect an annual franchise tax from the corporation It was ruled that said corporation was engaged only in interstate commerce and that the tax could not be collected. The point was made that the corporation was also authorized to engage in local business. It was ruled that "the power to tax depends upon what was done and not upon what might have been done." It also was ruled that the receipt of a Missouri license and the power thereunder to exercise the right of eminent domain did not authorize the collection of the tax.

I am unable to account for the citation of this authority. The corporation, being an interstate common carrier, is authorized to condemn private property.

However, this fraudulent conduct on the part of said company is not material to any issue in this case. If the question was whether or not said company was a common carrier, it would be material.

On a consideration of said conduct on the part of the company the majority opinion made the statement above set forth and other statements. If the question was ignored, it might be misunderstood. For this reason I have given my views.

[5] I concur in the ruling of the majority opinion that the Pipe Line is engaged in interstate business by directly selling and distributing industrial gas to consumers in this State, outside of the cities.

However, it is not proper to infer "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 said consumer and the Pipe Line." The twelve contracts with the industrial consumers outside of the cities are in evidence. It is provided in said contracts as follows: "Vendor agrees to sell and deliver to Vendee, and Vendee agrees to purchase and receive from Vendor at Vendor's meter located at Vendee's lime plant at ____ Mo., subject to the terms and conditions herein, etc."

For the reasons stated, the judgment of the circuit court affirming the ruling of the Commission on the question of the sale of gas to industries in the cities should be affirmed, and the judgment of said court affirming the ruling of the Commission on the question of the sale of gas to industries outside the cities should be reversed. Frank, C.J., concurs.