Benwood-McMechen Water Co. v. City of Wheeling

Decision Date20 June 1939
Docket Number8867.
Citation4 S.E.2d 300,121 W.Va. 373
CourtWest Virginia Supreme Court

Rehearing Denied Sept. 25, 1939.

Syllabus by the Court. Jay T. McCamic, Russell B. Goodwin, and Benjamin L. Rosenbloom all of Wheeling, for petitioner City.

Frank C. Dunbar, of Columbus, Ohio, for respondent Water Company.

FOX President.

The City of Wheeling, a municipal corporation, owns and operates a water plant. The Benwood-McMechen Water Company, a private corporation, owns and operates a water plant in Benwood and McMechen. The City of Benwood adjoins Wheeling on the south and borders on McMechen. The parties will hereafter be referred to as the "city" and "Water Company."

In the year 1927, complaint was made by citizens of Benwood and McMechen, before the public service commission, that the water service of the Water Company had become unsatisfactory and on September 7, 1927, the commission directed the Water Company "to undertake to procure from the City of Wheeling a supply of healthful water and serve the same to its customers". Following this order, the Water Company did apply to the city for water service, and a temporary agreement was entered into on September 24, 1927, under which water was furnished to the Water Company until October, 1928 at which time it formally applied to the city for water service, upon a form then used by the city for customers desiring such service, and the acceptance of this application in connection with the original agreement has been treated as a contract under which the city was to furnish water to the Water Company "at the published rates", of the city water department. Water was so furnished at a point within the city under the terms of the latter agreement. It appears that the city, under its charter, and under Section 1, Article 12, Chapter 8 of the Code, also furnished water to persons and corporations located outside its limits, and for this service made an additional charge of twenty-five per cent over that imposed upon customers within the city. The Water Company paid the intra city rates, but about 1930, the City demanded the payment of the extra charge for outside customers, and instituted its suit in 1933 to recover therefor. This court, in City of Wheeling v. Benwood-McMechen Water Company, 115 W.Va. 353, 176 S.E. 234, refused to allow such recovery. Following the decision in that case, the city continued to bill the Water Company at what it termed the outside or higher rate, and in March, 1938, the Water Company filed its complaint against such billing, before the public service commission, praying that an order be made, commanding the city to cease and desist from its claim which, it was contended, was contrary to the holding of this court in the case cited above. To this complaint, the city filed its answer and cross petition, in which it attempted, in effect, to reopen the controversy as to the applicable rate to be charged for service under the existing contract, asserting that there was due it a large sum of money, and praying that an order be made requiring the Water Company to pay said sum. The city also asserted that "it is entirely optional with the City of Wheeling whether it shall continue to furnish water or not"; that it desired to discontinue service under said contract, and prayed that it be permitted to cease, upon a day to be named by the commission, from further supplying water to the Water Company, and upon this and other pleadings filed, a hearing was had.

On September 28, 1938, the public service commission entered an order requiring the city to cease and desist from its practice of billing the Water Company at the higher rate, and also denying the city's request for authority to discontinue the furnishing of water to the Water Company. In the statement of reasons for the entry of said order by the commission, filed herein on January 16, 1939, the following appears:

"If it is necessary, and we believe it is, for the defendant to obtain authority from this commission before discontinuing service to the complainant, it should have supported its request for such authority with competent evidence, which it failed to do. Nowhere in the record that we are in duty bound to consider in this proceeding can there be found any evidence to support a finding that it would be in the public interest for the defendant to discontinue service to the complainant. To do so would not be in the interest of the defendant's other customers, particularly those located within its corporate limits, for the reason that it has been clearly shown, we think, that the complainant is not only a profitable customer, but that the profit, based on the estimates of its principal witness, as shown by the records in the cases which have been made a part of the record in this proceeding by reference, amounts to over $5,000.00 annually. This amount, if the service should be discontinued, would be lost to the city and would have to be made up by its other customers if its revenue proved to be insufficient. *** The commission's findings are not adjudications, and findings by it are not res adjudicata. Its findings are predicated on the evidence adduced as to the conditions prevailing at the time the matters involved are presented and are intended to be effective for a reasonable time in the future and until it is shown by competent evidence that the conditions have changed. *** The way was left open for the defendant to renew its application to discontinue the service at any time that conditions might justify such action on its part. Since the defendant offered no evidence to support its request for authority from this commission to discontinue service to the complainant, it follows that its request for such authority should be denied, unless the defendant is correct in its contention that the only authority the commission has in this matter is to fix the date at which the service may be discontinued."

The city asked for an appeal from and suspension of the order of September 28, 1939, and this court, on February 21, 1939, granted the review and appeal prayed for "in so far only as the said commission held that the City of Wheeling did not have the right to terminate the existing contract between the said City and the complainant, Benwood-McMechen Water Company, for the furnishing of water by the said city to the said company, under the conditions set up in the record ***."

It will be apparent that the sole question here involved is whether or not the city may terminate the contractual relation between it and the Water Company, and discontinue the service heretofore provided thereunder, upon reasonable notice of its intention to do so. It is conceded that such service may not be discontinued, nor the contract terminated, except upon reasonable notice; but it is contended that the contract aforesaid, being for an indefinite period, can be terminated by either party thereto upon reasonable notice, and without any showing of cause for such action.

Obviously the service was rendered under the contract existing between the two utilities. It was a contract which, with the consent of the public service commission, they had the right to make, but it was confined to the two utilities and did not extend to the public served by each. ...

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