Alexandria Water Co. v. Alexandria

• Citation: 163 Va. 512
• Parties: ALEXANDRIA WATER COMPANY v. CITY COUNCIL OF ALEXANDRIA, INTERVENOR.
• Decision Date: 15 November 1934
• Court: Supreme Court of Virginia

Page 512

163 Va. 512

ALEXANDRIA WATER COMPANY v. CITY COUNCIL OF ALEXANDRIA, INTERVENOR.

Supreme Court of Virginia, Richmond.

November 15, 1934.

Present, Campbell, C.J., and Holt, Epes, Hudgins, Gregory and Chinn, JJ. * * Mr. Justice Browning was sick and did not sit when this case was reargued, and has not participated in the decision of it. The case was assigned to Mr. Justice Epes at the Wytheville term 1934 to prepare the opinion therein.

1. STATE CORPORATION COMMISSION — Commission without Jurisdiction to Revoke Charter or Local Franchise — Proper Procedure Is by Quo Warranto — Case at Bar. — In the instant case the water company petitioned the State Corporation Commission to be permitted to put in effect increased rates and charges. Its petition was opposed by the city which declared that the water company's charter imposed the duty to provide an adequate supply of water for fire protection purposes free of charge, that the company was not complying with this provision and praying that the company be compelled to comply therewith or its franchise rights in the streets of the city be cancelled. In its order the Commission made no reference to the prayer of the city that the franchise be revoked but in its opinion properly disposed of the question by saying that even if the company was guilty of having violated its charter, the Commission was without jurisdiction to revoke its charter or the local franchise therein granted; and that the proper procedure in such a case was by writ of quo warranto in the circuit or corporation court in which the principal office of the corporation in the State was located.

2. JURISDICTION — Consent Cannot Confer Potential Jurisdiction. — It is axiomatic that consent cannot confer potential jurisdiction.

3. SUPREME COURT OF APPEALS — Appeal from State Corporation Commission — Supreme Court of Appeals Is Limited to Judicial Review of Commission's Order. — Except in transmission and transportation company cases, the Constitution of Virginia does not either expressly or impliedly empower or permit the Supreme Court of Appeals to exercise any legislative power or function upon an appeal from an order of the State Corporation Commission, or empower the General Assembly to confer upon it the power to do so; and upon an appeal from an order of the Commission the Supreme Court of Appeals, except in transportation and transmission company cases, is limited by the Constitution to a judicial review of the Commission's order.

4. SUPREME COURT OF APPEALS — Appeal from State Corporation Commission — Application of Rule of Stare Decisis — Case at Bar. — In the instant case, an appeal from an order of the State Corporation Commission fixing rates for a water company, the Supreme Court of Appeals was of the opinion that it should apply the principle of state decisis and adhere to the decision in Aetna Ins. Co. Com., 160 Va. 698, 168 S.E. 859, holding that except in transmission and transportation company cases the Supreme Court of Appeals is not expressly or impliedly empowered or permitted to exercise any legislative power or function upon an appeal from an order of the State Corporation Commission but is limited to a judicial review of the Commission's order.

5. STATE CORPORATION COMMISSION — Fixing Rates — Exercise of Legislative Power. — While a commission, such as the State Corporation Commission of Virginia, is empowered to act in prescribing rates only within the limits imposed by the Constitution of the United States upon a State legislature and within such other constitutional and statutory limits as may be imposed by the State of its creation, and is required in prescribing rates to proceed according to certain rules of procedure which commonly pertain to judicial procedure, yet its action in prescribing rates for future application is the exercise of a legislative power.

6. STATE CORPORATION COMMISSION — Rates — Commission without Power to Retroactively Condemn Rates. — The Virginia State Corporation Commission has no power to make a retroactive condemnation of a rate of a transportation or transmission company or of any other company.

7. SUPREME COURT OF APPEALS — Review of Order of State Corporation Commission Prescribing Rates. — When the Supreme Court of Appeals is called upon to review upon appeal an order of the State Corporation Commission prescribing rates for any company, it is reviewing a legislative action; and its review is a true review; that is, it is not a review in either an independent direct attack or a collateral attack upon the order.

8. APPEAL AND ERROR — Appeal from Order of State Corporation Commission Prescribing Rates — True Review. — In a true review of an order of a commission prescribing rates or taking other legislative or administrative action, the review conceivably may be: (A) To try the trial or proceedings had before the commission, that is, to pass upon the jurisdiction of the commission, as determined by the law and the jurisdictional facts, the regularity or adequacy of the procedure, as determined by constitutional provisions, statutory provisions, and self-imposed rules of the commission, and the good faith of the commission, involving at times the question whether the commission has acted arbitrarily or without any substantial evidence to support its conclusions or action; (B) to reconsider the commission's conclusions of law or of fact upon which its conclusions of law are based or to which they are applied; (C) to reach a conclusion of law, or of fact upon which a conclusion of law is based or to which it is applied, where a commission has failed to do so or has reached a wrong conclusion; (D) to reconsider the conclusions of the commission as to the legislative or administrative policy to be applied in the premises and its findings as to the facts upon which it predicated its determination of the legislative or administrative policy.

9. APPEAL AND ERROR — Appeal from Order of State Corporation Commission Prescribing Rates — Purely Judicial Review. — A purely judicial review of an order of a commission prescribing rates or taking other legislative or administrative action comprises (A) a review of the trial or proceedings had before the commission; (B) a reconsideration of the commission's conclusions of law and of fact; (C) reaching a conclusion of law, or of fact upon which a conclusion of law is based or to which it is applied, where a commission has failed to do so or has reached a wrong conclusion. Such a review excludes any review of the conclusions of the commission as to the legislative or administrative policy to be applied in the premises or its findings as to the facts upon which it predicated its determination of the legislative or administrative policy.

10. APPEAL AND ERROR — Appeal from Order of State Corporation Commission Prescribing Rates — Purely Judicial Review — Review of Findings of Fact. — Upon a purely judicial review of an order of a commission prescribing rates or taking other legislative or administrative action, a review of findings of fact is purely incidental to the court's power to decide the questions of law presented. For instance, in a rate case a court, if limited to a purely judicial review, has no power to review the commission's finding as to the value of the property in question, except in so far as it may be necessary to determine the ultimate question of whether the commission has exceeded its powers in prescribing the rates prescribed by it.

11. JUDICIAL NOTICE — Purification of Water by Filtration. — It is a matter of common knowledge that many large cities obtain their water supply from streams into which higher up the sewage of other cities, towns, and villages has been discharged, purifying and making it potable by filtration and purification treatments; and that the water supplied in these cities is potable, pleasant to the taste, is used with safety by the inhabitants, and considered safe by health officials and sanitary experts.

12. STATE CORPORATION COMMISSION — Water Rates — Deduction of Property Not Necessary to Protect Against Pollution — Case at Bar. — In the instant case, an appeal from an order of the State Corporation Commission prescribing rates for a water company, appellant contended that the Commission erred in excluding two certain parcels of land from the property on which appellant was entitled to receive a return from rates charged its customers and that these two parcels, part of a tract located on one of the two sources of water supply, were very useful and necessary to protect its purity, but it appeared that appellant owned only a small portion of the area of the water shed draining into its reservoir; that on this water shed there was a suburban development of some size; that appellant owned only a small part of the land between its reservoir and filtration plant and that the latter was a modern plant capable of supplying a fine grade of water.

Held: That it could not be said that there was no substantial evidence to support the decision of the Commission and that the Supreme Court of Appeals was not able to say upon an independent examination of the evidence that, as a matter of law the Commission had gone beyond the limits of its jurisdiction, or transcended the limits of the legislative or administrative discretion vested in it or acted arbitrarily or in bad faith or had been guilty of an illegal interference with the managerial affairs of the company.

13. STATE CORPORATION COMMISSION — Fixing Rates of Public Utility — Valuation of Property of Water Company — Estimate of Reproduction New Cost — Consideration of Allowances for General Overheads. — In considering allowances for general overheads in making an estimate of reproduction new cost, to find the value of the property, used and useful, of a water company, in a proceeding to fix rates, certain administrative and legal costs, engineering and supervision cost, and interest on the money expended...