Court Opinion

ID: 5263563
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:50:37.461904+00
Date Added: 2024-06-11T08:28:06.834446
License: Public Domain

Putnam, J. (dissenting):
The revision of the city charter by Laws of 1901, chapter 466, amended section 472, the part here material being: “ The commissioner of water supply, gas and electricity is hereby authorized to examine into the sources of water supply of any private companies supplying The City of New York or any portion thereof or its' inhabitants with water, to see that the same is wholesome and the supply is adequate, and to establish such rules and regulations in respect thereof as are reasonable and necessary for the convenience of the public and the citizens; and the said commissioner may exercise superintendence, regulation and control in respect of the supply of water by such water companies, including rates, fares and charges to be made therefor, except that such rates, fares and charges shall not, without the consent of the grantee, be reduced by the said commissioner beyond what is just and reasonable; and in case of a controversy, the question of what is just and reasonable shall be finally determined as a judicial question on its merits by a court of competent jurisdiction.”
This complaint averred that defendant, a corporation organized undér the Transportation Corporations Law, had for over ten years been supplying water to consumers in the second ward of the borough of Queens, at certain rates specified; that in November, 1920, defendant had notified its consumers that on January first it would supply water under a new schedule of rates, really a fifty per cent increase; that about December twenty-third the city commissioner, acting under above section 472 of the charter, directed defendant not to put this increased schedule into effect, and offered a hearing after February first, with a thirty-day notice of such hearing to consumers, However, that no application for such hearing *173was made, but instead the higher schedule had been put into effect, and in May, 1921, new bills had been sent out at the increased rates; that such bills had a notice to the effect that in case of non-payment on June fifteenth, the defendant, on twenty-four hours’ notice, could discontinue the service, which would not be resumed except on paying all arrearages, plus five dollars costs for turning the water off and on, and the cost of replacing pavements. The complaint charges this advance was illegal, especially after the city’s notice.
The relief sought was a declaration of such illegality, also that defendant and its officers be enjoined from refusing to supply water, and from discontinuing the service now furnished.
The motion papers for injunction have an affidavit on behalf of residents of the Elmhurst section of Queens borough, to the effect that they request the city to take this protective action; also that over 1,300 residents have petitioned the city for appropriate action to restrain the defendant from imposing and enforcing such excessive rates. There is a like affidavit from the Ridgewood section.
Mr. Meyer, president of defendant, deposes that this water company was formed under the Transportation Corporations Law in 1893, and began supplying water to Newtown, which, in January, 1898, became the second ward of the borough of Queens. The defendant company absorbed the Manhasset Water Company and now furnishes water to 200,000 premises in Queens, and about 850 premises in the town of North Hemp-stead. In Queens it supplies water for fire protection and street sprinkling, having on its lines over 1,700 hydrants. Since 1912, there being no express agreement fixing its compensation, defendant bills the city forty-five dollars a year per hydrant; but the city pays only twenty dollars on account — and defendant presents to the city disputed claims for the difference.
The learned court at Special Term found that the city was not affected by the increased rate here in question; also that section 472 of the city charter, if construed to give the commissioner of water supply, gas and electricity the rate-fixing power, would be unconstitutional. He also was of opinion that there was here no controversy between the city and defendant as to a just and reasonable rate.
*174This defending water company owes its existence to the Transportation Corporations Law. Section 80 permits the formation of water companies. Section 81 provides for contracts by such companies with municipalities for “ pure and wholesome water at reasonable rates and cost,” also for contracts for water for extinguishment of fires and for sanitary purposes. The Transportation Corporations Law confers no rate-making power either on the municipality or upon any Public Service Commission.
It has been held that the power to make special regulations to shut off water, or to hold a new occupant for prior unpaid water rates, is to be strictly construed. (See Turner v. Revere Water Co., 171 Mass. 329.)
A private water company, by accepting its charter, was held to abuse its franchise if it failed to furnish water, and that it was its duty" to supply all who should apply for water, on reasonable terms. (Lumbard v. Stearns, 4 Cush. 60. See, also, City of New York v. Jamaica Water Supply Co., 181 App. Div. 49; affd., 226 N. Y. 572.)
Regular and continued service by such a water company for a series of years, of itself, imports a contract, so that, pending determination of its claims, the water company may be enjoined from cutting off the consumer from its system. (McEntee v. Kingston Water Co., 165 N. Y. 27; Pond v. New Rochelle Water Co., 183 id. 330.) The decision of Meara v. Citizens Waterworks Co. (110 Misc. Rep. 738), relied upon by defendant, was where there had been no increase of rates.
Had any State commission to regulate water rates been set up, as such bodies now control other public utilities, a different situation would be presented in which. Morrell v. Brooklyn Borough Gas Co., No. 2 (231 N. Y. 405) would apply. The constitutional right to delegate to the municipality the power to fix rates "for water furnished cannot longer be doubted. (Owensboro v. Owensboro Waterworks Co., 191 U. S. 358.) The only check on raising these rates is this charter provision not to fix rates, but rather to bring such a controversy in court. How could that question come into court, unless the commissioner could be informed of the basis for this advance of rates? The commissioner’s letter did not abrogate a rate already established. It suggested that defendant explain its *175increase. It was proper that this showing should be public, upon notice to the consumers. Possibly such an explanation might have obviated this controversy. Defendant’s refusal left it to the commissioner to come into court.
Under the Transportation Corporations Law, section 81, defendant’s water supply to consumers in Newtown necessarily was through a contract, which contract by consolidation passed to the city of New York. Hence the city, as successor, was in privity with defendant and had a legal standing to enforce all such contract obligations. Indeed, it is probably the only party now entitled to maintain such action. (Wainwright v. Queens County Water Co., 78 Hun, 146; Silberberg v. Citizens Water Supply Co., 116 Misc. Rep. 595.)
I am unable to agree that by ignoring the commissioner’s request, and immediately raising rates and putting into effect defendant’s purpose to cut off all who may be behind in payment of such new rates, the defendant can now maintain that it has escaped any “ controversy ” over the reasonableness of these increased rates. The defendant, by its direct steps of enforcement, chooses to act as if superior to any such supervision or even inquiry, and in effect disputes the commissioner’s standing. These attitudes plainly open a “ controversy ” over the rates, and as to any reasonable basis for the proposed increase, within the purpose of this section. To say that the city has no guardianship of the interests of these consumers is either to ignore the plain words of the charter, or to question the power of the Legislature to provide such supervision over a vital public service.
Though the complaint asserts a plenary power of the commissioner to regulate and control water rates, with a claim that, against the commissioner's objection, such increases are illegal, these, however, are mere conclusions which are never good ground of demurrer. A plain and concise statement of the material facts is all that is required of a complaint. (Code Civ. Proc. § 481; now Civ. Prac. Act, §§ 241,255.) In my view, the city’s averments of fact show a disputed question of right, and raise a controversy, which should be judicially determined. That the remedy against a private water company is vested in the municipality, and not confined to the suit of the consumers has been long settled. (Farmers’ Loan *176& Trust Co. v. Galesburg, 133 U. S. 156; City of St. Cloud v. Water, Light & Power Co., 88 Minn. 329; Grand Haven v. Grand Haven Water Works, 99 Mich. 106; Brymer v. Butler Water Co., 172 Penn. St. 489; 179 id. 231; Village of Bolivar v. Bolivar Water Co., 62 App. Div. 484.) Private water rates in England are usually based upon value or rental of the property supplied, and have long been subject to judicial determination. (Rook v. Mayor, etc., of Liverpool, 7 C. B. [N. S.] 240; Sheffield Water Works Co. v. Bennett, L. R. 7 Exch. 409.) Under such an act, a dispute must be first determined by the justices, even before payment of a disputed water rate can be enforced by action in* a County Court. (New River Co. v. Mather, L. R. 10 C. P. 442.)
It is well settled that our courts of equity have a like power.
Having referred to the New Jersey statute for ten-year contracts with water companies, thus permitting a revision every decade, Pitney, V. C., said: “ Independent of such statutory provison, I think it is the province and the duty of the municipality, whenever opportunity offers, to exercise its power in the protection of its inhabitants against extortion, and to secure them a supply of water and of gas from corporations assuming to furnish those commodities at reasonable rates.” (Long Branch Comn. v. Tintern Manor Water Co., 70 N. J. Eq. 71, 73.) And in that case the court considered and determined what should be reasonable rates, both for public and private consumption. Its decision was unanimously affirmed by the Court of Errors (71 N. J. Eq. 790).
When the Legislature has committed such question to this court, I cannot doubt our competency to pronounce upon the merits of a new water rate, or like change in the terms of water service. On the initiative of the city, through its commissioner, the controversy is before us judicially to say whether or not the advanced rates now about to be put into operation are reasonably justified.
Hence I would reverse, and enjoin defendant from cutting off the water supply of any private consumer, as now threatened.
Kelly, J., concurs.
Judgment and orders affirmed, with costs.