Opinion ID: 6258030
Heading Depth: 1
Heading Rank: 3

Heading: City of Philadelphia Repaving Charges

Text: Under a set of agreements between the City of Philadelphia and the PTC, the City agreed to repave the streets after PTC’s abandonment of the tracks. Under the last of these agreements, which resulted in a debt of $843,112 PTC charged $177,000 against income in 1956 and the balance of $666,112 in 1957. In rate proceedings held by the Pa. PUC the PTC was given permission to amortize this latter charge of $666,112 over a period of five years or at the rate of $133,300 per year. Thus it is obvious that the benefits of this 1957 expense item inured to the future as a result, of its inclusion as a rate item for a period of five years. PTC, however, chose to completely charge off this $666,112 in 1957, a practice which is strangely inconsistent not only with the proper, application of the rule governing the propriety of using the deferred charge method, but with the PTC’s handling of the track depreciation and franchise paving items. Thus complete charge-off:of the $666,112. by the PTC in 1957 was erroneous. The sum should have' been spread out evenly over a five year period. Hence, the lower court’s disposition of these three accounting items is affirmed. However, by the application of proper- accounting principles it may develop that the PTC sustained a. net -loss for the year 1956 which would have relieved it of its obligation to make payment of the additional 3% income-interest to the holders of the bonds for that year. For that purpose and for the determination of that problem we are. remanding this case to the court below for further proceedings. If that court finds that a net loss' was sustained in 1956 then it should make provision so that no income-interest is paid for 1957 except to those bondholders who certify to the Trustee and the PTC that they had not held their bonds and received income-interest thereon for the year 1956. The lower court awarded' the Trustee $127,507 in costs relying on Article XIII, Section 1 of the Trust Indenture which binds the PTC to “reimburse the Trustee for all its expenditures, and to indemnify and save the Trustee harmless against any liabilities which it may incur in the exercisé and performance of its powers and duties hereunder.” Of this amount, $75,000 represented attorneys fees. The settled law of this Commonwealth is that attorney’s fees are recoverable from an adverse party to a cause only when provided for by statute, or when clearly agreed to by the parties. We think the broad scope of reimbursement provided by the general provision of the Indenture is sufficiently specific to include attorney’s fees. Accordingly, the award of costs and attorneys fees by the lower court, was proper. The judgment of the. lower court is modified, and as modified, is affirmed and remanded to. that court for further proceedings not inconsistent with this opinion.