Court Opinion

ID: 5808478
Source: CourtListenerOpinion
Date Created: 2022-01-12 18:42:05.704605+00
Date Added: 2024-06-11T08:42:47.015526
License: Public Domain

Sweeney, J. P. (dissenting).
We are unable to agree with the majority’s conclusion that the Public Service Commission, on this record, had the implied power to impose restrictions on the payment of cash dividends by Jamaica. We, therefore, dissent and vote to affirm.
The majority has amply narrated the pertinent facts. In our view, although the Public Service Commission is empowered to examine the accounts, books, contracts, records, documents and papers of any waterworks corporation, and after a hearing, to prescribe the accounts in which particular outlays and receipts shall be entered, charged, or credited (Public Service Law, § 89-c, subd 7), it lacks the power to restrict the payment of cash dividends. (Cf. Matter of Quinby v Public Serv. Comm., *13223 NY 244; People ex rel. New York Rys. Co. v Public Serv. Comm., 223 NY 373.)
The majority finds support for the commission’s exercise of power in the general mandate of the Public Service Law to assure safe and adequate service at just and reasonable rates. (Public Service Law, § 89-b, subd 1; § 89-c, subd 4; § 89-j.) Broad regulatory powers and the necessity to protect the public interest do not authorize the commission to encroach upon the right of the utility to administer its corporate affairs according to its own judgment. (See Matter of Rochester Gas & Elec. Corp. v Maltbie, 298 NY 867.) It is only under certain circumstances (not here present) when "the public interest is unfavorably affected by a course of management adopted to evade the law” that the commission may intrude into the managerial operations of a utility. (Cf. Matter of New York State Elec. & Gas Corp. v Public Serv. Comm. of State of N. Y., 245 App Div 131, 134, affd, 274 NY 591.) At the time the orders of the commission which are here under attack were issued, Jamaica had retained earnings, or surplus, and there would be, therefore, no money illegally paid if a cash dividend on its common stock were declared. (See, e.g., Business Corporation Law, § 102, subd [a], par [6]; § 510, subd [b].) Consequently, reliance by the majority on Matter of New York State Elec. & Gas Corp. v Public Serv. Comm, of State of NY. (supra) and subdivision 1 of section 89-b, subdivision 4 of section 89-c and section 89-j of the Public Service Law is unwarranted.
The order and judgment should be affirmed.
Larkin and Reynolds, JJ., concur with Herlihy, J.; Sweeney, J. P., and Main, J., dissent and vote to affirm in an opinion by Sweeney, J. P.
Order and judgment reversed, on the law, without costs, and judgment directed to be entered in favor of petitioner for the relief demanded in the petition and order to show cause.