City of Boston v. Edison Elec. Illuminating Co. of Boston

• Decision Date: 01 July 1922
• Citation: City of Boston v. Edison Elec. Illuminating Co. of Boston, 242 Mass. 305, 136 N.E. 113 (Mass. 1922)
• Parties: CITY OF BOSTON v. EDISON ELECTRIC ILLUMINATING CO. OF BOSTON.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

242 Mass. 305

136 N.E. 113

CITY OF BOSTON

v.EDISON ELECTRIC ILLUMINATING CO. OF BOSTON.

Supreme Judicial Court of Massachusetts, Suffolk.

July 1, 1922.

Report from Superior Court, Suffolk County; Franklin T. Hammond, Judge.

Action by the City of Boston against the Edison Electric Illuminating Company, of Boston.A demurrer to the declaration was sustained, and the case reported from the superior court, on the questions raised by the fourth, fifth, and sixth causes of demurrer to the second, third, and fourth counts of the declaration as amended.Affirmed.

The action was brought to recover alleged overcharges for electricity.It was alleged that defendant exacted of its customers, including plaintiff, rates and charges of three different sorts, namely, regular rates and charges, additional rates based on the cost of coal, and certain additional percentage charges.The first count alleged that defendant had erroneously computed the amount due under its rates and charges, and sought to recover the amount of the excess.The second and third counts alleged that the additional charges mentioned were illegal, and sought to recover back the amounts collected thereunder.The fourth count was to recover the total of the two sums covered by the second and third counts.By agreement certain grounds of demurrer were waived.The other grounds, which were sustained to the second, third, and fourth counts, were that neither of the counts set out a cause of action, that the court had no jurisdiction to permit plaintiff to recover on the facts alleged, and that it was not alleged in any of such counts that the rates alleged to be unfair and unreasonable were in excess of rates fixed by the department of public utilities or by its predecessors, the board of gas and electric light commissioners and the board of gas commissioners.E. Mark Sullivan, Corp.Counsel, and Samuel Silverman, Asst. Corp.Counsel, both of Boston (Arthur D. Hill and Richard H. Wiswall, both of Boston, of counsel), for plaintiff.

Johnson, Clapp, Ives & Knight, of Boston, for defendant.

BRALEY, J.

The material allegations of the declaration are as follows:

‘The defendant is a public service corporation organized and existing under the laws of this commonwealth and subject to the provisions of chapter 164 of the General Laws, relating to the manufacture and sale of gas and electricity, and is engaged in the business of furnishing electric light and power to users thereof in the city of Boston and vicinity, and as such public service corporation so engaged is bound to furnish electric light and power to users thereof at reasonable rates, and to charge therefor no more than reasonable rates and prices.’

‘Neither the department of public utilities nor its predecessors, the Boston gas and electric light commissioners and the board of gas commissioners, has at any time made any order relative to the price of electricity furnished or to be furnished by this defendant.On or about December 27, 1906, an association known as the Public Franchise League, composed of residents of the metropolitan district of Boston, filed a petition with the gas and electric light commission, a copy of which, marked ‘A,’ is annexed to and made a part hereof.Thereafter the said gas and electric light commission, after notice to the defendant and notice by publication in all the Boston daily papers and by mail to the mayors of all cities and the selectmen of all towns served by the defendant company, gave a number of public hearings, at which the defendant was represented by counsel and in which it took part, and on or about 29th of May filed a report and made certain recommendations which * * * were printed in the twenty-fourth annual report, * * * pages 20 to 50,' and ‘are hereby incorporated * * * and made a part hereof.’

‘The plaintiff is and for many years has been a user of electric light and power furnished by the defendant, and is dependent upon the furnishing of such electric light and power * * * and is unable properly to perform its municipal and corporate functions if the furnishing of such electric light and power by the defendant is interrupted; there being no other source available from which the plaintiff can obtain such electric light and power in any reasonable practical manner.’During ‘the past six years and more the defendant has exacted of its customers including the plaintiff * * * charges for the electric light and power so furnished rates and charges of three different sorts:

‘First.The * * * regular rates and charges as distinguished from additional rates and charges under the coal clause and the percentage charges hereinafter referred to.

‘Second.Certain additional rates under and by virtue of the terms of a clause which the defendant in or about the year 1918 added to its pre-existing regular rates and charges; said clause being commonly known as the ‘coal clause’ and being as follows: ‘Whenever during any month in which electricity is furnished under this schedule the costs at its stations of a sufficient amount of coal used by the company to do the work of a long ton of coal under the conditions prevailing during the calendar year 1916, and according to the provisions of its contracts then in force, applying the specifications therein to all kinds of coal, exceeds the cost of such long ton at its stations during the year 1916, then for each and every one cent of such excess cost a charge will be made, in addition to the prices named in this schedule of 1 1/4 cents per thousand kilowatt hours for all kilowatt hours (whether measured by meter or estimated) sold under this schedule.’

The coal clause was so modified in the defendant's schedule of rates corrected to May 11, 1921, as to read:

‘The total cost of coal used by the company at its generating stations during each calendar month in excess of $3.689 per long ton will be divided by the kilowatt hours manufactured and purchased during the month, and the resulting amount per kilowatt hour, adjusted to cover the average losses in low tension service, will be charged for each kilowatt hour sold under this schedule.(In certain schedules a further modification has been made providing for adjustments for losses in high tension service.)

‘Third.Certain further additional charges which the defendant in or about the year 1918 added to its pre-existing regular rates and charges amounting in certain instances to five per cent. of the amount of the defendant's regular charge first referred to.’

‘Fifth.The nature and conduct of the defendant's business is such that all information relative to the basis of the various charges * * * for electricity and relative to the cost at the defendant's stations of a sufficient amount of coal used by the defendant to do the work of a long ton of coal under the conditions prevailing during the calendar year 1916, and according to the provisions of its contract then in force, as well as all other information necessary for the computation of charges for electricity is exclusively within the control of the defendant.Said information is of a highly technical nature, so that it is impossible for the defendant's customers, including the plaintiff, to ascertain without laborious and expensive investigation whether or not charges which the defendant purports to exact for electricity and under the terms of said coal clause are correctly computed in accordance with the terms thereof and whether any or all of the said charges are reasonable charges for the electricity supplied.The defendant's customers, including the plaintiff, are and at all times have been obliged to accept and to pay such charges as have been computed by the defendant without knowing and without any opportunity to know whether or not such charges are reasonable.’

The second and third counts further allege that the defendant's regular charges as above described during the time covered by the declaration have been in excess of a reasonable charge for the electric light and power furnished, and the defendant also has exacted additional rates and charges for all light and power furnished between May 1, 1918, and August 12, 1921, especially under the terms of the coal clause.The amount collected by the use of the coal clause in addition to all other rates and charges is fixed at $41,448.20.It is also alleged that a percentage charge was imposed amounting in some instances to five per cent. of its regular charge for similar service.The amount paid is placed at $29,868.99.The action therefore is to recover $71,748.19, upon the ground that the money was illegally exacted.The causes of demurrer now relied on are that the courts have no jurisdiction of the causes of action as stated in counts 2, 3, and 4, either at common law, or under our statutes.

The defendant is a public service corporation whose chartered functions are to furnish electricity for public and private illumination and motive power for which it can lawfully exact a reasonable compensation.G. L. c. 164, §§ 5-33;Weld v. Gas & Electric Light Commissioners, 197 Mass. 556, 557, 84 N. E. 101;Chicago, Milwaukee & St. Paul Railway v. Tompkins, 176 U. S. 167, 20 Sup. Ct. 336, 44 L. Ed. 417, and note.A jury could find, on evidence supporting the specific allegations, that the charges demanded and collected under the percentage and coal clauses which were added to its regular rates were in excess of reasonable prices for what it contracted to furnish to the plaintiff.A public service corporation which supplies electricity is ordinarily under the same obligation to the public to refrain from exorbitant and unreasonable rates as a common carrier whose charges for transportation if in excess of such rates may be recovered back in an action at common...