Court Opinion

ID: 9885129
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:31:57.303251+00
Date Added: 2024-06-11T07:48:43.807264
License: Public Domain

Mr. Justice Maxwell delivered the opinion of the court: This is an appeal by the Illinois Commerce Commission from a judgment of the circuit court of St. Clair County, reversing an order of the commission, entered February 29, 1952, finding Mississippi River Fuel Corporation (hereinafter called Mississippi) to be a public utility within the meaning of section 10 of the Public Utilities Act of this State, and ordering it to comply with the provisions of that act with respect to its direct sales of natural gas to industrial customers in this State. Mississippi was formed on February 8, 1928, under the laws of Delaware. It built and operates a natural gas pipeline system extending from the so-called Monroe natural gas field in the State of Louisiana and a natural gas field in Texas to the city of St. Louis, Missouri. Its pipeline system also crosses over into southern Illinois and extends through Randolph, Monroe, St. Clair and Madison counties. On June 29, 1929, it entered into a contract for the sale of natural gas in Illinois with a company known as Cahokia Manufacturers Gas Company for resale and delivery to industries in the East St. Louis area. In the Cahokia contract, Mississippi agreed to sell to Cahokia the latter’s requirements of natural gas for resale to such industries. Attached to the contract was a document marked “Exhibit A,” entitled “Probable Consumers of the Mississippi River Fuel Corporation,” which listed certain industries, twenty in number, located in and around Alton, Granite City, Madison and East St. Louis, Illinois. These represented customers with whom Mississippi had already negotiated contracts or was in the process of negotiation, and to which Mississippi by agreement reserved the right to make direct sales. Later in 1929, Mississippi entered into contracts with several of the listed industries for the sale to them of natural gas for their own use, and deliveries of gas under such contracts were inaugurated during that year. In the succeeding six years, Mississippi entered into like contracts for the sale of natural gas to a number of additional industrial customers in the area. In the latter part of 1936, Mississippi made a contract with Illinois Power and Light Company, a gas distributing public utility company, now known as Illinois Power Company, to sell to the latter its requirements of natural gas, for mixture with manufactured gas then being delivered to the public by Illinois Power and Light Company. This contract provided that Mississippi would not sell natural gas in the territory to any other purchaser except industrial consumers, and would sell only to such reserved industrial consumers as were named on a list attached to the contract. Afterward the property of Cahokia Manufacturers Gas Company, mentioned above, passed into the ownership of Illinois Power and Light Company, with which it was affiliated. In 1941, Mississippi made another contract with Illinois Power and Light Company for the sale to it of natural gas, in which it agreed not to sell natural gas to any other person within the district defined in the contract. However, it again reserved the right to sell directly to certain industries listed on an exhibit attached to the contract. In the same year, Mississippi contracted with Union Electric Power Company to sell to the latter its natural gas requirements for resale to customers of all classes in the city of Alton and vicinity. To this contract was likewise appended a list of industrial customers to whom Mississippi reserved the right to make direct sales. Pursuant to these reservations, Mississippi from time to time made individual contracts with most of the listed industrial customers, for sale to them of natural gas for their own use. It appears that it also at times made similar contracts with certain other industrial customers whose names did not appear on the reserve lists, and the Illinois Commerce Commission in its brief attaches importance to this circumstance. Except as it might have given the purchasing companies a right to bring an action for damages for breach of contract, this does not appear to us to be significant. As a consequence of the several transactions described above, Mississippi now supplies natural gas in Illinois from its pipelines directly to twenty-three industries under individual contracts running for two years or less, for their own use, and also sells gas in Illinois to Illinois Power Company and Union Electric Company, in the latter two cases for resale to the general public. Requests by additional industries for gas have been refused by Mississippi. The two sales last named come directly under the terms of the Federal Natural Gas Act, and with respect to them Mississippi is regulated as a “natural gas company” by the Federal Power Commission. The question before this court is whether its direct sales of gas to twenty-three industries in the industrial area extending from East St. Louis to Alton, and in St. Clair and Madison Counties, Illinois, render it a public utility within the meaning of the Illinois Public Utilities Act, so as to make it subject to the jurisdiction of the Illinois Commerce Commission. Mississippi contends that the Commission is bound by an earlier order entered by it on January 14, 1949, in a proceeding docketed by it as No. 36,128, in which it found that Mississippi in making these industrial sales was not being conducted as a public utility, and that the sales in question were not for public use. This order was entered as a result of a citation issued by the commission on March 23, 1948. This citation was the first effort ever made by the commission to take jurisdiction over Mississippi. The commission, however, is not a judicial body, and its orders are not res judicata in later proceedings before it. It was so held in Illinois Power and Light Corp. v. Commerce Com. 320 Ill. 427, and in other cases. The concept of public regulation includes of necessity the philosophy that the commission. shall have power to deal freely with each situation as it comes before it, regardless of how it may have dealt with a similar or even the same situation in a previous proceeding. Whatever may be the moral obligation of the commission to adhere to the purpose and spirit of its own previous orders, it cannot be said that it is under a legal duty to do so. The 1948 citation by the commission and the resulting order, though they do not have the binding effect sought by Mississippi, nevertheless illustrate the fact that for a period of almost 20 years, during which time the personnel and political complexion of the Illinois Commerce Commission repeatedly changed, that body, by its inaction continuously construed the Public Utilities Act as not applicable to Mississippi. The courts of this State are, of course, not bound by the construction which the commission places upon that statute, but still such a consistent and long-standing administrative interpretation cannot but have persuasive effect. The situation suggests the language in County of Cook v. Healy, 222 Ill. 310: “If it could be said that the language of the constitution was clear and free from any doubt, a contrary legislative and administrative construction would have no weight. (Jarrot v. Jarrot, 2 Gilm. 1.) But where the words of a constitutional provision admit of doubt, the court may and ought to consider a contemporaneous and practical construction given by the legislature and those concerned in the administration of the law, and also any injurious consequences which would follow a different construction. Where a particular construction has been given to a provision and it has been continued for a long term of years and acquiesced in by the public at large, such construction is entitled to great weight and may be equal in force to a judicial construction.” The fact that the natural gas which is sold by Mississippi to the industrial consumers in question comes into the State of Illinois in interstate commerce is not a material circumstance in view of the decision in Pennsylvania Gas Company v. Public Service Commission of New York, 252 U.S. 23. It was there held that natural gas brought into the State of New York by pipeline from the State of Pennsylvania and distributed to the general public in New York directly from the interstate pipeline, represented a situation which, in the absence of contrary regulation by Congress, was local in character and that such sales of gas were subject to control by the State of New York. The present case is therefore not governed by any question of interstate commerce. The case is reduced to the single question whether the sale by Mississippi to the 23 industries in Illinois represents a public utility operation. The question on these facts is an original one in this court and the issue is not positively controlled by any of our earlier decisions. In the case of Chicago District Pipeline Co. v. Commerce Com. 361 Ill. 296, upon which the commission dwells in its brief, the company had voluntarily submitted itself as a public utility within the limits of its professed engagement to sell gas to privately owned public utility companies, and the only issue was whether the commission could lawfully require it to sell also to municipally owned utilities. The language of the opinion, so far as it bears upon the present case, we think supports the position of Mississippi. In the opinion it was stated that that company could not be required to assume a public utility status “beyond the scope of its publicly professed obligation.” In a dissenting opinion which was filed, emphasis was placed upon the fact that the company’s corporate charter did not limit its sales or activities to those so publicly professed. This leads us to note that in the present case, Mississippi’s articles of incorporation, which represent the limit of its corporate power, provide expressly that nothing therein “shall be construed to * * * constitute the corporation a common purchaser of gas or oil, or a public utility corporation.” The commission, though possessed of broad regulatory powers, nevertheless is not vested with authority to require a corporation to act ultra vires, as it has here tried to do. Apart from this, we think that it is entirely clear from the record that Mississippi has never intended to assume the status of a public utility or professed to devote its property to “public use.” The record shows that it did not exercise the right of eminent domain in laying its pipelines in this State, and that it has never taken any municipal or other public franchise to sell its gas. It has not established uniform rates for the industries which buy gas from it. The prices vary with the contracts, and range from 18 cents per 1000 cubic feet for interruptible gas, to 38.41 cents per 1000 cubic feet for firm gas. The mere fact that the thing sold by a company is water or gas or electricity or telephone service, such as are ordinarily sold by public utility companies, does not of itself render the seller a public utility. In Highland Dairy Farms Co. v. Helvetia Milk Condensing Co., 308 Ill. 294, the dairy company drilled wells for water for its own use and, with the consent of the local authorities, laid water mains in certain streets of the city of Highland. Water was sold from these pipes to 16 customers in that community. A number of other persons sought to purchase water service, but it was refused to them. The case arose out of a demand for service by such a prospective customer. The demand being refused, the matter was taken up with the Illinois Commerce Commission, which determined that “The sale of the water in question was not for public use” and that it had no jurisdiction. On appeal, this court agreed, saying: “A public utility implies a public use of an article, product or service, carrying with it the duty of the producer or manufacturer, or one attempting to furnish the service to serve the public and treat all persons alike, without discrimination. * * * When once determined to be a public utility under the statute the company must furnish all who apply, and the service it furnishes must be without discrimination and without delay. * * *” The same result was reached in City of St. Louis v. Mississippi River Fuel Corporation (C.C.A. 8th), 97 Fed. 2d 726 (1938). The question there was whether a tax imposed by the city of St. Louis upon persons distributing and selling gas “for public use” in the city applied to Mississippi. The court held that it did not, saying: “Appellee sells and delivers natural gas to fourteen industrial customers in St. Louis. Sales to industrial customers are always by special contracts, entered into after negotiations with the customer. The contracts vary as to terms and conditions. They all provide that the gas is to be brought from Louisiana and delivered to the purchaser. Appellee offers no gas to the public directly or generally for any use. * * * By the provisions of the ordinance the tax is imposed only upon every person, firm or corporation engaged in the business of distributing and selling gas ‘for heating, lighting, power and refrigeration for public use in the City of St. Louis, through pipe lines laid in the streets * * *.’ Selling gas ‘for heating, lighting, power and refrigeration’ is not enough to bring appellee within its provisions unless it sells ‘for public use.’ Neither is it sufficient if it had laid its pipe lines in the streets of the city, if such pipe lines are not so laid for the purpose of distributing its gas ‘for public use.’ ” In the case of Danciger v. Public Service Com. 275 Mo. 483, the court reached the same conclusion. There are decisions by this court which, while not entirely determinative, state the applicable principles. For example, in Public Utilities Com. ex rel. Evansville Telephone Co. v. Okaw Valley Mutual Telephone Ass’n., 282 Ill. 336, where the commission ordered a mutual telephone association to cease operations until it complied with the Public Utilities Act, it appeared that the company rendered telephone service only to its members. Under its bylaws, any surplus funds remaining, after payment of its operating costs, were divided equally among the stockholders. This court held that the commission was without jurisdiction. It said: “While it is not necessary that the benefits be received by the whole public * * * still it is necessary that all persons have an equal right to the use, and such use must not be confined to specific privileged persons to make it a public use within the meaning of said act. ‘The question of the nature of a corporation cannot depend upon the number of persons engaged in the enterprise * * * but the * * * purpose for which it is organized must be ascertained by reference to the terms of its charter, and in the case of a corporation organized under a general law such nature and purpose are defined by that law.’ ” A similar case is Public Utilities Com. ex rel. Macon County Telephone Co. v. Bethany Mutual Telephone Ass’n, 270 Ill. 183, where it was held that the mutual telephone association, which by its charter was organized solely to render service to its own members and did so, was not a public utility within the meaning of the act. We do not consider the decision in Panhandle Eastern Pipeline Co. v. Public Service Com. 332 U.S. 507, as conclusive. The United States Supreme Court there declined to interfere with a decision of the Indiana State Supreme Court to the effect that direct industrial sales of gas by the pipeline company were under control of the State regulatory statute. It would, of course, have been most inappropriate for ■ that court to overrule the highest State court in Indiana on a question of the meaning of an Indiana statute. The only Federal question involved was whether direct sales of gas to industrial customers were subject to Federal regulation. The Supreme Court naturally held that they were not, section i(b) of the Federal Natural Gas Act being explicit on that point. It seems clear to us that Mississippi has consistently and with great care confined its industrial gas sales to specific and selected customers, and has done no act by which it has given the reasonable impression that it was holding itself out to serve gas to the public, or to any class of the public, generally. The interest of the general public, in the area served by Mississippi, is in obtaining an adequate supply of gas at reasonable prices from and through the public utility to which Mississippi supplies natural gas for resale. Such public utility is subject to regulation by the Illinois Commerce Commission. Mississippi is subject to the exclusive regulation and control of the Federal Power Commission insofar as the supply of gas furnished by it to the public utility and the rates charged therefor are concerned. The regulation and control of both supply and rates by the Federal Power Commission, so far as Mississippi is concerned, and the regulation of the public utility supplying gas to the general public by the Illinois Commerce Commission adequately protect the general public without converting the remainder of Mississippi’s operation, which is strictly and clearly a private corporate sales activity in competition with other unregulated fuels, into a public utility. Under these circumstances, the circuit court was right in holding that the company’s action in selling gas to a limited group of industrial customers cannot properly be characterized as the devotion of its property to “public use,” within the meaning of the Public Utilities Act of this State. The judgment of the circuit court of St. Clair County is affirmed. , Judgment affirmed.