U.S. Supreme Court OHIO BELL TELEPHONE CO. v. PUBLIC UTILITIES COMMISSION, 301 U.S. 292 (1937)

[Page 301 U.S. 292, 307]

of the purpose of the Commission, while rejecting evidence of value in respect of exchanges under bond, to wander afield and fix the composite value of the system without reference to any evidence, upon proofs drawn from the clouds. As there was no warning of such a course, so also there was no consent to it. We do not presume acquiescence in the loss of fundamental rights.

Third: The allocation of excess income among the subscribers to exchanges and also among toll patrons is challenged by the appellant, the state retorting with the contention that there has been no denial of due process in the manner of partition, whatever may be said as to the possibility of inaccuracy or error.

We find it unnecessary at this time to choose between these two contentions. A court is not required to define the proper method of allocation until there has been a proper ascertainment of the thing to be allocated. When that has been done, there may be agreement or acquiescence in respect of the manner of division. Moreover, upon another hearing the problem may be eliminated if value, revenues and expenses are proved for each exchange.

Fourth: The same reasons that make it unnecessary to fix the method of allocation relieve us of the duty of passing upon other problems, such as those of going concern value and depreciation reserve, which cannot be disposed of adequately until the value of the physical plant has first been ascertained.

The decree is reversed and the cause remanded for further proceedings not inconsistent with this opinion.

Ordered accordingly.

Reversed and remanded. Footnotes

[Footnote *] The stipulation states that the testimony and exhibits 'shall, however, be considered upon four issues involved in this cause and four only, viz.:'1. The earnings of the Western Electric and the reasonableness of such earnings.'2. The cost to the American Telephone and Telegraph Company of rendering services under the license contract and the reasonable amount which should be allocated in that respect to The Ohio Bell Telephone Company.'3. The separation and apportionment of the property, revenues and expenses of The Ohio Bell Telephone Company as between its intrastate and interstate property, revenues and expenses.'4. Rate of return.'