Board of Fire Com'rs of Fire Dist. No. 3, Piscataway Tp. v. Elizabethtown Water Co., Consol.
| Decision Date | 26 May 1958 |
| Docket Number | No. 3,T,No. A--107,3,A--107 |
| Citation | 142 A.2d 85,27 N.J. 192 |
| Parties | , 24 P.U.R.3d 343 Formal Complaint of the BOARD OF FIRE COMMISSIONERS OF FIRE DISTRICT NO. 3, TOWNSHIP OF PISCATAWAY, New Jersey, v. ELIZABETHTOWN WATER COMPANY, CONSOLIDATED. ELIZABETHTOWN WATER COMPANY, CONSOLIDATED, Appellant, v. BOARD OF PUBLIC UTILITY COMMISSIONERS, DEPARTMENT OF PUBLIC UTILITIES, State of New Jersey, and Board of Fire Commissioners of Fire Districtownship of Piscataway, Respondents. |
| Court | New Jersey Supreme Court |
John R. Sailer, Elizabeth, argued the cause for appellant.
Howard T. Rosen, Newark, argued the cause for respondent Board of Public Utility Commissioners (Grover C. Richman, Jr., Atty. Gen., attorney).
Sidney M. Schreiber, Newark, argued the cause for New Jersey Natural Gas Co. (Schreiber, Lancaster & Demos, Newark, of counsel).
The opinion of the court was delivered by
We certified this cause on our own motion to review the order of the Board of Public Utility Commissioners requiring appellant Elizabethtown Water Company to extend its facilities to supply water to the respondent Board of Fire Commissioners of Fire District No. 3, Township of Piscataway, and to certain residents of the area involved.
On February 2, 1905 the Piscataway Water Company was incorporated 'for the purpose of constructing, maintaining and operating water works in the Township of Piscataway * * *, and for the purpose of supplying the said township and the inhabitants thereof with water * * *.' Attached to the certificate of incorporation was the necessary approval of the governing body of the township which recited that, pursuant to an authorizing ordinance, consent was given to the incorporators to form the company for the purposes stated.
The franchise thus created constituted a contract between the utility and the municipality, subject, of course, to the state regulatory power. Bourke v. Olcott Water Co., 84 Vt. 121, 78 A. 715, 33 L.R.A.,N.S., 1015, (Sup.Ct.1911); 23 Am.Jur., Franchises, §§ 6, 15, 35; 43 Am.Jur., Public Utilities and Services, § 16. The burden assumed thereby was a community service; it was not limited to the establishment of a system suitable only to the then current needs. Included also was the utility's duty to keep in view the probable growth of the township, both in population and in structural development, and to make gradual extensions of its mains to meet the reasonable demands that would inevitably result. Reid Development Corp. v. Parsippany-Troy Hills Tp., 10 N.J. 229, 234, 8 A.2d 667 (1952); Hackensack Water Co. v. Ruta, 3 N.J. 139, 147, 69 A.2d 321 (1949); Long Branch Commission v. Tintern Manor Water Co., 70 N.J.Eq. 71, 77, 62 A. 474 (Ch.1905), affirmed 71 N.J.Eq. 790, 71 A. 1134 (E. & A.1907); 56 Am.Jur., Waterworks, § 60.
It is not suggested that since 1905 any utilities other than the Piscataway Water Company and the appellant as its successor have supplied water within the franchised limits of the township. The operation is as presently exclusive in fact as the one examined in In re Township of Lakewood, 29 N.J.Super. 422, 102 A.2d 671 (App.Div.1954), rehearing denied sub nom. Lakewood Tp. v. Lakewood Water Co., 30 N.J.Super. 79, 103 A.2d 387 (App.Div.1954). No contention is advanced here (nor was there in the Lakewood case) that the franchise is exclusive in law.
On November 27, 1922 the Piscataway Water Company became consolidated with the appellant Elizabethtown Water Company, and under the agreement the latter expressly assumed all of the obligations and duties of the former. Cf. 23 Am.Jur., supra, § 35.
The township is divided into fire districts pursuant to N.J.S.A. 40:151--1 et seq. Each district is a separate corporate unit managed by commissioners, and each has specifically described geographical limits. The commissioners are given the power to provide means for protection against fires within the defined area, N.J.S.A. 40:151--1, 2; 40:151--27, including, of course, a supply of water with which to combat them. According to a statement appearing in the testimony, Piscataway presently pays over $22,000 annually to appellant for hydrant service.
The record indicates that for 22 years the commissioners of District No. 3 have been concerned about the absence of a water supply for fire-fighting purposes in their area. But appellant has steadfastly refused to extend the mains unless the district would assume the original capital outlay. Over the years, the township has grown and the water facilities have been expanded proportionately. At the present time, service is provided for the 'territory entirely surrounding' the section of District No. 3 which is involved in the application under consideration. The portion to be served by the proposed extension encompasses only a relatively few blocks. The map prepared by the company's chief engineer shows that the new mains, if laid according to the more extensive but only really adequate plan, would serve an area of 51 acres, interlaced with a few streets. The map indicates also that there are existing mains within a block or two blocks to the west and northwest and to the east of the suggested extensions. The situation to the south is not disclosed as the sketch covers only one block from the most southerly of the proposed new mains. However, the inference from the testimony already referred to is that the existing facilities are not far removed. In June 1956, when the water company's engineer visited the location in order to draw the map, there were 60 occupied homes in the area, and ample space remained for many more. Water is provided by wells which were dug by or for the individual owners. The engineer stated that 'several new homes' had been constructed there in the year and a half between the filing of the petition and the date of the hearings. In this connection, he testified further:
According to the secretary of the fire district, these homes have no fire protection and 'if anything should happen now, we would just lose the house, that's all.' Speaking of the home owners, he said also:
to which the company's engineer, who was then on the witness stand, replied:
'Well, we are in the business of selling water in there, but we have to sell it on the pattern which is established for the company.'
The application for extension of the mains was filed with the Board on January 20, 1955. Some time prior thereto, a petition was presented to the fire commissioners signed by 36 home owners in the area, reciting that they
The record discloses that this document was filed with the Board of Public Utility Commissioners, although it was not marked as an exhibit at the hearings. The decision of the Board notes the application of these residents as one of the factors inducing the extension order. It would have been more satisfactory from a procedural standpoint to have had these persons formally join in the petition of the fire district. Our affirmance of the order, as hereafter set forth, is made dependent upon such joinder.
The matter was assigned for hearing to an examiner, who took the testimony of the parties on two separate occasions.
The uncontradicted proof offered by the company shows that the cost of extending the mains to accomplish the plan declared by the examiner to be the only one which would provide worthwhile fire protection service would be $34,570. The engineer testified also that the estimated immediate annual revenue from the fire district and the 36 users would be $1,600, and that, considering the portion of the operating costs of the company properly allocable to this extension, an annual loss of $1,425 thereon would result. However, it is not suggested that such loss cannot be absorbed in the overall revenue without any appreciable effect upon the reasonable return now being enjoyed by the utility. Moreover, for the year 1956 the company expected to spend approximately four and a half million dollars on capital projects. And it conceded that inclusion of the additional $34,570 for the mains in question could have no material effect on its financial condition.
The examiner recommended that the Board refuse to order the extension of the mains at the expense of the company. The primary reasons for his action seem to be that a reasonable return would not be earned from the service, that the revenue to be derived at once would not suffice to meet operating costs, and that a cumulation of this and similar requests for extensions (although not yet made or even suggested or indicated) 'could significantly increase the Company's rate base without providing adequate additional revenue.'
After considering the record, the Board reached a contrary result. In doing so, it said ...
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