Borough of Bellevue v. Ohio Valley Water Co.

• Decision Date: 20 April 1914
• Docket Number: 73
• Parties: Bellevue Borough, Appellant, v. The Ohio Valley Water Company
• Court: Pennsylvania Supreme Court

91 A. 236

245 Pa. 114

Bellevue Borough, Appellant, v. The Ohio Valley Water Company

No. 73

Supreme Court of Pennsylvania

April 20, 1914

Argued March 17, 1914

Appeal, No. 73, Oct. T, 1914, by plaintiffs, from decree of C.P. Allegheny Co., April T., 1914, No. 435, In Equity refusing preliminary injunction in case of The Borough of Bellevue, a Municipal Corporation, W. C. Bradley and M. C Ryan, Citizens and Taxpayers of said Borough v. The Ohio Valley Water Company. Affirmed.

Bill in equity to enjoin defendant water company from increasing its rates. Motion for preliminary injunction. Before EVANS, J.

From the record it appeared that a contract had been entered into between the Borough of Bellevue and the water company which fixed the rates to be charged for the use of water. Subsequently the water company increased its rates and the borough and certain citizens filed a bill restraining the water company from enforcing its new rates.

Further facts appear in the opinion of the Supreme Court.

The court refused the preliminary injunction. Plaintiffs appealed.

Error assigned was the decree of the court.

Decree affirmed at the cost of the appellants.

Leonard K. Guiler, with him David L. Starr, for appellants. -- The ordinance under which the water company acquired its franchise constitutes a contract, binding upon both parties, and enforceable in equity: Carlisle Gas & Water Co. v. Water Co., 188 Pa. 51; Penna. Water Co. v. Pittsburgh, 226 Pa. 624; Bellevue Boro. v. Mfrs. Light & Heat Co., 238 Pa. 388; Dorrance v. Bristol Boro., 224 Pa. 464; White Haven Boro. v. Water Co., 209 Pa. 166; Hydro-Carbon Fuel Co. v. Plumb, 182 Pa. 463; White v. Crawford, 84 Pa. 433; New Cumberland Boro. v. Water Company, 232 Pa. 531; Lehigh-Coplay Water Co. v. Coplay Boro., 11 Pa. D.R. 602; Allegheny v. Railway Co., 159 Pa. 411; Point Bridge Co. v. Pittsburgh Railways Co., 240 Pa. 105; Muncy Elec. Light, Heat & Power Co. v. People's Elec. Light, Heat & Power Co., 218 Pa. 636.

Wm. Watson Smith, of Gordon & Smith, for appellees. -- The contract relied upon by plaintiff is not enforceable because it is for an unlimited period, and therefore against public policy: Turtle Creek Boro. v. Pennsylvania Water Co., 243 Pa. 415; Pennsylvania Railroad Co. v. Philadelphia County, 220 Pa. 100; Osborne v. San Diego Land & Town Co., 178 U.S. 22; Carson Lumber Co. v. St. Louis & San Francisco R.R. Co., 198 F. 311.

Before BROWN, MESTREZAT, POTTER, ELKIN and MOSCHZISKER, JJ.

OPINION

MR. JUSTICE ELKIN:

We fully agree with the general conclusions reached by the learned court below, and nothing contained in this record, or said in the argument, would warrant us in disturbing the decree refusing the motion for a preliminary injunction. If the case in any of its aspects involves the reasonableness or unreasonableness of water rates, it is a sufficient answer to say that the section of the Act of April 29, 1874, P.L. 73, which gave courts the power to determine questions of this character was repealed by the Public Service Company Law, approved July 26, 1913, P.L. 1374. In other words the legislature took this power away from the courts and conferred it upon the Public Service Commission. Hereafter, so long as the Act of 1913 remains in force, the question of the reasonableness of rates established by public service corporations, must in the first instance be submitted to the Public Service Commission when challenged. This is now the declared statutory policy of the law, and it is binding not only upon the interested parties, but upon the courts as well. We do not know that this position is seriously controverted by learned counsel for either side of the present controversy.

It is argued, however, and with much force, that there is an existing contract between the borough and the water company fixing the rates to be charged, and that the courts are always open to protect the contractual rights of the parties on one side, and to enforce their obligations on the other. This is true, and if there was a valid binding contract in the present case, it would be necessary to sustain the contention of appellants. The case therefore turns upon the continuance and validity of the contract relied on. The contract in question was made...