Court Opinion

ID: 5260235
Source: CourtListenerOpinion
Date Created: 2022-01-06 18:40:38.47957+00
Date Added: 2024-06-11T08:28:04.058693
License: Public Domain

Blackmar, J. (dissenting):
The complaint alleges that the Public Service Commission has made an order that on and after August 1, 1920, to and including July 31, 1921, the maximum price to be charged by the defendant for gas shall be one dollar and forty cents per *81,000 feet for gas sold and consumed, except that the defendant is authorized, not later than October 1, 1920, to change the standard of quality. As the action was brought before this last-mentioned date, the change of standard is not before us. The complaint goes on to allege in substance that the order of the Public Service Commission is void; that the rate prescribed by statute has been adjudged confiscatory and void as to defendant; that defendant is attempting to put the rate prescribed by the Public Service Commission in force, and that the rate is unreasonable and unduly compensatory to defendant. There is a demand for a judgment which if granted will affect the schedule of rates to all defendant’s consumers.
It is claimed that the decision of the Court of Appeals in People ex rel. Municipal Gas Co. v. P. S. Comm. (224 N. Y. 156) establishes as matter of law that the order of the Public Service Commission is void in that it authorizes a charge in excess of the rate fixed by statute, and may be disregarded in a collateral attack. That decision was rendered in a case where there was a statutory rate fixed and in force, and the court held that the power of the Public Service Commission was limited, by the terms of the statute conferring it, to fixing rates below the statutory limit. But in the case at bar it appears on the face of the complaint that, in a suit in equity the statutory rate has been adjudged confiscatory and void as to this defendant. Undoubtedly, as is said in the prevailing opinion herein, the statute still exists; but the effect of the judgment is that it is void as to the defendant. Such being the case, I think that the decision in the Municipal Gas Company case does not apply. If it does, we are driven to the conclusion that, as to the defendant, the whole conprehensive plan of State control of rates through the Public Service Commission has broken down. It is not necessary so to hold; it is inconsistent with the declared policy of the State so to hold; and in ' my opinion it is error so to hold.
In order to hold that the Commission had power to fix the rate in question it is not necessary to do violence to the words of the statute. I proceed within its letter. The statute empowers the Commission to fix the maximum price of gas “ not exceeding that fixed by statute to be charged by such *9corporation.” (Public Service Commissions Law, § 72, as.amd. by Laws of 1920, chap. 542.) Since the rate of eighty cents has been declared confiscatory and the court has adjudged that it is not applicable to this defendant, there is no price fixed by statute to be charged by the corporation.
But whatever we may think of the power of the Commission to fix a rate in excess of eighty cents, yet the Commission had general jurisdiction over the defendant company and over the subject-matter. It certainly had power to fix a rate within the limits of the statute. If it was not warranted in exceeding eighty cents, this was an error in law and should be corrected by certiorari. The Public Service Commissions Law presents a comprehensive plan whereby all questions of reasonableness of charges of public service corporations where the Legislature has not directly acted, shall be settled by Commissioners whose special knowledge in this field of operation and whose facilities for investigation render them more fitting depositories of that power than the courts. .Their decisions may be directly reviewed by certiorari. But they cannot be attacked collaterally unless entirely void as beyond the power of the Commission. If I am right, the Public Service Commission which fixed the price in question acted within its general jurisdiction, and if, contrary to my opinion, it erred as fixing too great a rate, that should be corrected by direct review and not disregarded as void.
The subject-matter of this action concerns the charge to the plaintiff alone. He does not represent the public and can raise no question of the validity of the. general schedule of charges. As has been seen, this power has been conferred upon the Public Service Commission. The allegation of his complaint is thatjthe rate is “ unreasonable, excessive and exorbitant, and is more than sufficient to reasonably compensate the said defendant for its public service during a period when commodities necessary to comfortable existence should be furnished to the consumer at as low a rate as possible.” He prays, among other things, “ That it be decreed that the rate of $1.40 per thousand cubic feet for illuminating gas is, as to this defendant, unreasonably compensatory and void.” It is manifest that the claim of the plaintiff is that the defendant is making too much money. But with this the plaintiff has no *10concern. As between the plaintiff and the defendant the only question is whether one dollar and forty cents per 1,000 cubic feet is unreasonable for the service rendered. Whether it is compensatory to the defendant is not the issue. That inquiry is pertinent only when a public service corporation claims that a rate fixed by statute or by the Commission is confiscatory. An essential element of such inquiry is whether the statute permits reasonable compensation to the ■ corporation, which naturally involves the financial return to the company in its operation under the prescribed rate. Betweeen the individual and the company no such questions arise. (Cotting v. Kansas City Stock Yards Co,, 183 U. S. 79; Canada Southern Railway Co. v. International Bridge Co., 8 App. Cas. 723.) In the Cotting case Mr. Justice Brewer quotes from the English case {supra, 96), as follows: “ It certainly appears to their Lordships that the principle must be, when reasonableness comes in question, not what profit it may be reasonable for a company to make, but what it is reasonable to charge to the person who is charged.”
Prescribing a general rate for service is a legislative and not a judicial act.' It may be exercised by the Legislature directly or by an administrative body to which the power is delegated.' In the absence of such regulation, the power to fix the charges is vested in the corporation itself; and although a question may arise as to the reasonableness of the charge, depending upon the service rendered, as between an individual and the corporation, such power never concerns the power of the corporation to establish a system of rates. In the absence of such legislative regulation, the courts have no power to determine the question. (People ex rel. Linton v. B. H. R. R. Co., 172 N. Y. 90; Honolulu R. T. Co. v. Hawaii, 211 U. S. 282; Northern Pacific Railroad v. Dustin, 142 id. 492; People v. N. Y., L. E. & W. R. R. Co., 104 N. Y. 58.) The bill of complaint, concerning the plaintiffs rights only, furnishes no justification for this suit in equity.
If the order of the Public Service Commission is void, the defendant has the power to establish its own rates. The presumption is that they are reasonable, and a mere allegation of the pleadings that they are unreasonable, without evidence to support it, does not justify an injunction. In this record ■ there is not a scintilla of evidence tending to show that the *11rates are unreasonable, and yet the court at Special Term has upon this record granted an injunction and exercised legislative functions of prescribing a maximum rate, so substituting its judgment for that of the Public Service Commission and the defendant.
I think the order should be reversed and the motion denied.