Court Opinion

ID: 9864926
Source: CourtListenerOpinion
Date Created: 2023-09-25 16:17:03.915691+00
Date Added: 2024-06-11T12:32:41.761034
License: Public Domain

Mr. Justice Bouck,
dissenting.
I dissent from the denial of the petition for rehearing.
It is my conviction that the present majority opinion is consistent neither with reason nor with authority. Time has not permitted my preparing a comprehensive dissenting opinion herein. The original opinion, which was automatically withdrawn by the granting of a rehearing, fully expressed my views. I therefore content myself with quoting the withdrawn opinion, not as a pronouncement of this court now in force, for it has ceased to be such; but as an argument based upon the record and showing the fallacy of the majority opinion now on file:
“The plaintiff in error, Colorado Utilities Corporation, broug’ht about by an informal complaint — and later intervened in — a proceeding before the Public Utilities Commission having for its purpose the determination of the question whether, under our public utilities act, Moffat Coal Company is a public utility and as such required to obtain from the commission a certificate of convenience and necessity before supplying electric current *202under a certain contract with the town of Oak Creek in Routt county, Colorado. The commission ruled that the company is not a public utility and dismissed the proceeding. An action having been instituted by the intervening corporation in the district court for the purpose of reviewing and reversing the ruling of the commission, that court affirmed the latter and the intervener thereupon instituted these proceedings in error.
“Oak Creek is an incorporated town. It possesses and exercises all municipal powers conferred upon incorporated towns by statute. It does not operate a municipal electric generating plant. Light and power for the town’s own use and for the use of its inhabitants must, under existing conditions, be procured from other agencies. Until July 1, 1931, the plaintiff in error Colorado Utilities Corporation — a public utility duly authorized by its charter and by the Public Utilities Commission to produce and sell electric current — supplied the town and its inhabitants with that commodity under a franchise granted by the town, which franchise expired at the time above mentioned. For some reason or other, the town declined to renew or extend the franchise. Instead, it proceeded to and did obtain the authority of its electors to construct electric transmission and distributing systems. * * *
“In view of the fact that it would possess only transmission and distributing systems without owning a generating plant, the town on October 15, 1932, entered into a formal contract with the defendant in error, Moffat Coal Company, which contract, because of its supreme importance in the case, we quote in full: [Here was quoted the contract which is set out in the majority opinion and is found at page 194, ante.]
“As stated at the outset, the Public Utilities Commission upheld Moffat Coal Company’s contention that under the above contract the company is not a public utility.
*203“Section 2913, Compiled Laws of Colorado, 1921, defines public utilities as follows: ‘The term “public utility,” when used in this act, includes every common carrier, pipe line corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, person or municipality operating for the purpose of supplying the public for domestic, mechanical or public uses, and every corporation, or person now or hereafter declared by law to be affected with a public interest, and each thereof, is hereby declared to be a public utility and to be subject to the jurisdiction, control and regulation of the commission and to the provisions of this act; Provided, That nothing-in this act shall be construed to apply to irrigation systems, the chief or principal business of which is to supply water for the purpose of irrigation.’
“It is apparent that Moffat Coal Company qualified itself potentially as a public utility by providing- in its charter, through a formal amendment of its articles of incorporation in 1908, that its corporate ‘objects * * * are '* * * to construct and establish a plant or plants with all necessary equipment, rights- and privileges for the manufacture and production of eléctrieity, and to use, furnish, sell and supply the same.’
“By the contract hereinabove quoted, the company has brought itself within the letter — and we think within the spirit — of that part of the statute which says ‘ “public utility” includes * * * every * * * electric corporation * * * operating for the purpose of supplying the public for domestic, mechanical or public uses’; for it seems clear that the town’s purchase of current for street lights and other municipal purposes is for public uses within the reasonable meaning of the language quoted. Such an arrangement to sell for ‘public uses’ is of itself sufficient to constitute the seller a public utility. Moreover, where, as here, the chief purpose of a contract is manifestly to supply the inhabitants of the town, who are ultimate consumers, with the necessary *204current for domestic and mechanical uses, it seems to us, when we penetrate the form and get at the substance, that the execution of such a purpose is nothing more or less than supplying the public also for such ‘domestic’ and ‘mechanical’ uses, as fully as if the company’s private agents were performing the distribution. A process similar to the one here agreed upon, but with another private corporation constituting the agency, was condemned in Southern Oklahoma Power Co. v. Corporation Commission, 96 Okla. 53, 220 Pac. 370. It is no answer to the question before us to say that the company’s sale is to the town as a single individual customer only. The doctrine of cases like State ex rel. Pub. S. Com. v. Spokane & 1. E. R. Co., 89 Wash. 599, 154 Pac. 1110, cited by the defendants in error, has no application to this situation. A municipality can indeed acquire and operate a municipal plant, and so bring itself within the principle laid down in such cases as Holyoke v. Smith, 75 Colo. 286, 226 Pac. 158, and Lamar v. Wiley, 80 Colo. 18, 248 Pac. 1009, thus taking over the rate-fixing power and placing itself beyond the control of the Public Utilities Commission. -The municipality cannot, however, refrain from municipal production of electric current and become in effect the mere distributing agent of a private electric corporation in the sale of current to its inhabitants where such current is produced entirely by the private corporation and is supplied by the latter to the municipality at an agreed price, the private corporation expressly fixing a minimum rate by stipulation that the current shall be resold at the same or a greater price. Compare Davis v. People ex rel., 79 Colo. 642, 247 Pac. 801, and Acquackanonk Water Co. v. Board of Public Utility Com’rs, 97 N. J. L. 366, 118 Atl. 535. The evils aimed at by regulatory statutes governing public utilities would, if this procedure were judicially sanctioned, be placed beyond the control which the legislature intended to, and in our opinion did, establish.
“True, the company did not intend to convert itself *205into a public utility. It expressly stipulated that it shall not be so considered. Such an expressed intention, however, does not effectuate the stipulation in the face of a contrary result inevitably following the interpretation and liabilities which the law places upon the concrete facts. Davis v. People ex rel., supra. These facts, and not the attempted avoidance, must govern.
“The various qualifications and reservations in the contract, whereby the company retains the ostensible power ■ of withholding all or some of the current contracted for, do not deprive or relieve the company of its character as a public utility. So far as now appears, the maximum extent of supply agreed upon might continue undiminished for the period of twenty years without any interference with the amount of current needed by the town for the named purposes of itself and its inhabitants. Since the contract fixes the price to be paid by the town and the price to be charged the town’s inhabitants is, by the contract, required to be as great or even greater, it is plain that the whole arrangement is alien to the notion of having the rates for the inhabitants subjected to any regulation whatever. It is not consistent with the fundamental idea that the ultimate consumer shall have within his reach a recognized method of procuring an impartial hearing and decision of the issue as to whether the rates charged are reasonable or not. By the very contract it has made, the town has abdicated as the lawful arbiter of that issue. Under the facts and circumstances of this case, such a consequence cannot be permitted unless the private corporation is itself placed under regulation as a public utility for the protection of the consumer.
“We hold, therefore, that Moffat Coal Company becomes a public utility whenever it does the thing's it has by its contract agreed to do, and as such it will be subject to the public utilities statute. Since it is clear that it intends to carry out the contract, it was incumbent upon it to procure first a certificate of convenience and necessity, as contended by the intervening Colorado Utilities *206Corporation. By deciding that Moffat Coal Company is not a public utility and is not under the regulatory jurisdiction, the Public Utilities Commission ‘erred as a matter of law’; its decision is ‘not supported by any substantial testimony,’ nor ‘in accordance with the evidence,’ and ‘when tested by the uncontradicted testimony, it is unjust and unreasonable.’ Denver Co. v. Chicago Co., 64 Colo. 229, 262, 171 Pac. 74, 85.
“In declining' to reverse the commission, the district court committed prejudicial error. For the reasons stated the judgment of the district court is reversed and that court will order the Public Utilities Commission to set aside its decision and to exercise its authority as such commission in relation to Moffat Coal Company with a view to a hearing on the issue of whether a certificate of convenience and necessity should or should not be granted.”
The contract here involved spells, as I view it, nothing more or less than a twenty-year contract for public utility services to be rendered to the public of Oak Creek. But Mr. Justice Holland’s opinion manifestly means (1) that any ultimate consumer in Oak Creek who hereafter might have a bona fide grievance as to electrical rates or service could obtain no redress against the Moffat Coal Company because, according to that opinion, this company is not a public utility corporation, (2) that such a consumer could obtain no redress against the town of Oak Creek, since by contract the town has voluntarily tied its own hands for two whole decades, so as to abdicate the power of regulation which in the absence of such self-imposed contractual restrictions it might possess, and (3) that the situation created by the decision constitutes the unjustified judicial repeal of regulatory legislation obviously intended by the General Assembly to govern exactly such cases as the one before, us. I must respectfully decline to have a part in bringing about such untoward consequences as these.