Case Name: Jamaica Water Supply Company, Appellant, v. City of New York, Respondent
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1939-01-10
Citations: 279 N.Y. 342
Docket Number: 
Parties: Jamaica Water Supply Company, Appellant, v. City of New York, Respondent.
Judges: 
Reporter: New York Reports
Volume: 279
Pages: 342–354

Head Matter:
Jamaica Water Supply Company, Appellant, v. City of New York, Respondent.
Argued October 20, 1938;
decided January 10, 1939.
The following question was certified:
“ Should the plaintiff have had summary judgment as prayed for in the notice of motion?”
Jackson A. Dykman and Jules Haberman for appellant.
In the absence of a contract between a municipality and a waterworks corporation, the Public Service Commission has complete jurisdiction to regulate rates for water supplied to a municipality. (City of New York v. Maltbie, 159 Misc. Rep. 276; 248 App. Div. 39; 274 N. Y. 90.) A tariff schedule filed in accordance with the Public Service Law (Cons. Laws, ch. 48) and not suspended becomes effective upon the expiration of thirty days with the same force and effect as if the rates contained in it had been directly prescribed by the Legislature. (Town of North Hempstead v. P. S. Corp., 231 N. Y. 447; Public Serv. Comm. v. Pavilion Nat. Gas Co., 232 N. Y. 146; Midland Realty Co. v. K. C. Power & Light Co., 300 U. S. 109; People ex rel. N. Y. Steam Co. v. Straus, 186 App. Div. 787; 226 N. Y. 704; People ex rel. Village of S. Glens Falls v. P. S. Comm., 225 N. Y. 216; Public Service Comm. v. Iroquois Nat. Gas Co., 184 App. Div. 285; 226 N. Y. 580.) No contract existed for the supply of water between plaintiff and defendant at the time of filing: its tariff schedules nor at any time thereafter. (Staten Island Water Supply Co. v. City of New York, 144 App. Div. 318; Harlem Gas Co. v. Mayor, 33 N. Y. 309; City of New York v. Citizens Water Supply Co., 199 App. Div. 169; 235 N. Y. 584; Silberberg v. Citizens Water Supply Co., 116 Misc. Rep. 595; 208 App. Div. 818; City of New York v. Maltbie, 274 N. Y. 90.)
William, C. Chanter, Corporation Counsel (.Herman Horowitz and Davidson Sommers of counsel), for respondent.
Prior to January 1, 1934, the Public Service Commission had no jurisdiction to fix rates for hydrant services furnished to the city. (City of New York v. Maltbie, 274 N. Y. 90; Staten Island Water Supply Co. v. City of New York, 144 App. Div. 318.) Even if the Public Service Commission had jurisdiction to fix the hydrant rates, the filing of plaintiff’s schedules did not have the effect of estabhshing a legal hydrant rate. (City of New York v. Maltbie, 274 N. Y. 90; Matter of Dry Dock, E. B. & B. R. R. Co., 254 N. Y. 305; City of New York v. New York Edison Co., 196 App. Div. 644.)

Opinion:
Crane, Ch. J.
Article 4-B of the Public Service Law (Cons. Laws, ch. 48), added by the Laws of 1931, chapter 715, section 3, places water works and water companies under the jurisdiction of the Public Service Commission. The method of procedure is the same as that applicable to other rate-fixing bodies. The company files schedules of its rates, which become effective unless they are reduced or modified by the Commission. Subdivision 10 of section 89-c, concerning the powers of the Commission, reads: " Shall have power to require every water-works corporation to file with the commission and to print and keep open to public inspec tian schedules showing all rates and charges made, established or enforced or to be charged or enforced, all forms of contract or agreement and all rules and regulations relating to rates, charges or service used or - to be used, and all general privileges and facilities granted or allowed by such corporation; but this subdivision shall not apply to state, municipal or federal contracts. Unless the commission otherwise orders, no change shall be made in any rate or charge, except after thirty days' notice to the commission and publication of a notice to the public of such proposed change once in each week for four successive weeks in a newspaper having general circulation in the county or counties containing territory affected by the proposed change, which notice shall plainly state the changes proposed to be made in the schedule then in force and the time when the change will go into effect. No such corporation shall charge, demand, collect or receive a greater or less or different compensation for any service rendered or to be rendered than the rates and charges applicable to such service as specified in its schedule filed and in effect at the time;
The plaintiff filed schedules with the Commission in 1933. The rates therein stated became effective unless disapproved by the Commission. To ascertain whether such charges were fair and reasonable or should be disapproved, that body could hold hearings and make investigations. The Commission held hearings and a schedule rate of $45 was approved as taking effect in November, 1933. Its record reads (Exhibit E), " Issued: September 25, 1933 — Effective: November 1, 1933." If there had been a contract with the city regarding rates, or the parties so understood, the hearing and approval of the Public Service Commission would not have been given, as the statute did not so require. In fact, there was no contract.
In 1929 the Commissioner of Water Supply, Gas and Electricity wrote a letter in the form of an order fixing rates:
" Letterhead of Commissioner of Water Supply, Gas and Electricity
" New York, December 20,1929.
" Jamaica Water Supply Company
" Fire Hydrant Rental
" The Jamaica Water Supply company having filed claim with the Department of Finance for the payment of additional hydrant rental for the eight-year period ending December 31,1928, continues its demand for payment for hydrant rental service at the rate of forty-five dollars ($45.) per annum per hydrant.
" Therefore, acting under authority of Section 472 of the Charter, on the basis of reports submitted by the Chief Engineer and filed with the Comptroller, and being advised by the Engineer that_the hydrant rental asked by the company for the current year is the_fair and reasonable value for hydrant rental service rendered by the Jamaica Water Supply company, I hereby fix and establish the rate of forty-five dollars ($45.) per annum per hydrant, effective as of January 1, 1929.
" (Signed) JOHN J. DIETZ,
" Commissioner."
This was not a contract. He had no authority to make a contract, and the fact that it was acted upon and the water furnished at such rates did not create a contract.
The parties appeared before the Public Service Commission after a schedule was filed and produced evidence. At first one of the schedules was rejected; a later schedule was approved and became the rate per hydrant which this company could charge the city. To repeat: The Public Service Commission had no power to conduct these proceedings or to approve or reject any rates fixed by contract. The words are, " but this subdivision shall not apply to state, municipal or federal contracts." No schedules, therefore, could be required to be filed when the matter was covered by city contract. The plaintiff complied with this law because there was no contract; filed its schedules, which became effective until disapproved. They were approved, as above stated: However, it is immaterial whether the parties thought there was a contract or not or whether they were in doubt about it. The schedules were filed stating the rate; they became effective by statute, unless there were a contract, a real contract, between the city and the water company. No such contract existed. The company is, therefore, entitled to recover the rate approved by the Public Service Commission, and in effect from January 1, 1934, to February 29, 1936.
The only answer or claim of the city is that the order of December 20, 1929, of the Water Commissioner constituted a contract. It is not such a contract as the city was authorized to make, and the Commissioner had no power to enter into a contract; neither was the order in the form of a contract, or considered to be a contract. It has none of the elements of a contract and is not such in fact. The city then takes the position, as does the dissenting opinion, that this might have been a contract by acquiescence or by acknowledgment. This may be very true so far as it has been executed and the water paid for, but it is not true for any period after the Public Service Commission took hold of the matter and the plaintiff filed its schedules as required by subdivision 10 of section 89-c of the Public Service Law. Whatever informal arrangement may have theretofore existed, whatever order of the Water Commissioner the plaintiff may have obeyed, these all terminated when the plaintiff complied with the Public Service Law and its water schedules were approved as of November, 1933. The plaintiff's proceedings have been regular and_in_ accord anee with law. In no particular has the city pointed out wherein it has failed to comply with the provisions of the Public Service Law for the fixing of rates; whereas, on the other hand, the city failed to make a contract for the supply of water, as it could have done, and is seeking to transform an informal letter of a commissioner into a formal, binding contract.
There are no questions of fact to be determined, and the motion of the plaintiff for summary judgment for the period in question should be granted.
The orders should be reversed and the motion granted, with costs in all courts. The question certified is answered in the affirmative.