City of New York v. Maltbie

Decision Date27 April 1937
Citation8 N.E.2d 289,274 N.Y. 90
CourtNew York Court of Appeals Court of Appeals


Action for declaratory judgment by the City of New York against Milo R. Maltbie, chairman, and others, constituting the Public Service Commission of the State of New York, and another. From an order of the Appellate Division (248 App.Div. 39, 289 N.Y.S. 562), which affirmed an order of the Special Term (159 Misc. 276, 287 N.Y. S. 868), dismissing the complaint, the plaintiff appeals by permission.

Orders affirmed. Appeal from Supreme Court, Appellate Division, Third department.

Paul Windels, Corp. Counsel (Joseph L. Weiner and Herman Horowitz of counsel), for appellant.

Jackson A. Dykman and Jules Haberman, both of Brooklyn, for respondent Jamaica Water Supply Co.

George E. McVay, Gay H. Brown, and Raymond J. McVeigh, all of Albany, for respondent Public Service Commission.

HUBBS, Judge.

The complaint in this action prays for a declaratory judgment adjudging that the Public Service Commission has no jurisdiction to fix, investigate, or regulate hydrant rates for hydrant services heretofore or hereafter rendered by the defendant Jamaica Water Supply Company to the City of New York; that the hydrant rate heretofore fixed for such hydrant service be declared null and void; and that the Public Service Commission and the other defendants be enjoined from doing any act or commencing any suit in law or equity based upon the order made by the commission on January 23, 1936, in so far as it fixed a hydrant rate to be paid by the plaintiff to the Jamaica Water Supply Company.

The respondent moved under rule 106 of the Rules of Civil Practice to dismiss the complaint on the ground that it does not state facts sufficient to constitute a cause of action. The Special Term granted the motion, and the order has been affirmed by the Appellate Division.

Broadly stated, the position of the appellant is that the Public Service Commission was without jurisdiction to make the order which it made. The determination of that question involves an examination of the relevant statutes, particularly sections 471 and 472 of the Greater New York Charter (Laws 1901, c. 466), which purport to vest in the commissioner of water supply, gas, and electricity authority to fix in the first instance the ‘rates, fares and charges' to be paid to water companies, and article 4-B of the Public Service Law, § 89-a et seq. (Consol.Laws, c. 48; Laws 1931, c. 715, § 3), which respondents contend confers upon the Public Service Commission jurisdiction over rates to be charged municipalities for water for public uses by private water companies.

Section 471 provides in substance that all contracts concerning the public water supply shall be made only in accordance with the provisions of the act. Section 472 reads in part: ‘The commissioner of water supply, gas and electricity * * * may exercise superintendence, regulation and control in respect of the supply of water by such water companies, including rates, fares and charges to be made therefor.’

Those sections were enacted in the city charter in 1897 (Laws 1897, c. 378). Prior to January 1, 1934, the respondent Jamaica Water Supply Company furnished water to the city for fire protection and other purposes. For such hydrant services the city by contract agreed to pay, and did pay, $45 per hydrant per annum. On or about January 10, 1934, the commissioner, purporting to act under section 472 of the charter, without notice to the water company, suspended the rate of $45 per hydrant and fixed the rate at $18.50 per hydrant and offered to pay that rate to the water company. The water company refused to accept the reduced rate. It, however, continued to furnish hydrant service and billed the city for the same at the old rate. In so doing it acted without a contract with the city.

In October, 1934, the Public Service Commission, upon its own motion, commenced an investigation of the rates charged for water sold by the defendant water company. Notice of the hearing was duly served upon the city. It did not, however, appear at the hearings and took no part in the investigation. After extensive investigation and hearings, the Public Service Commission fixed the rate to be charged by the water company for hydrant service at $40 per hydrant per year and also fixed the rate to be charged for water for domestic use. The water company thereafter in accordance with the terms of the order, filed with the commission a tariff schedule fixing the charges and rates as prescribed in the order of the commission. Thereafter this action was commenced to secure a declaratory judgment declaring the order of the commission null and void in so far as it fixed a rate to be paid for hydrant service.

It is conceded that prior to July 1, 1931, when article 4-B of the Public Service Law (Laws 1931, c. 715, § 3) became effective, the commission was without authority to make the order in question. Article 4-B extended the jurisdiction of the commission over water works corporations and the Legislature therein prescribed the commission's powers and authority for the regulation of and methods for ascertaining the reasonable prices and rates to be charged for water. Section 89-a, the first section of the new statute, reads:

§ 89-a. Application of article. This article shall apply to the sale, furnishing and distribution of water for domestic, commercial and public purposes, not including bottled water.’

Section 89-c provides:

§ 89-c. General powers of commission in respect to water supply. The commission: 1. Shall have general supervision of all water-works corporations, as hereinbefore defined, having authority under any general or special law or under any charter or franchise to lay down, construct or maintain pipes, conduits, ducts or other fixtures in, on or under the streets, highways and public places of any municipality, for the purpose of furnishing or distributing water for domestic, commercial or public uses.’

Section 5 of the Public Service Law, the general section conferring jurisdiction upon the commission for the regulation and fixing of rates for public utilities, was amended at the same time that article 4-B was enacted by adding a new subdivision, 5-a (Laws 1931, c. 715, § 2). Section 5 reads in part:

Jurisdiction of public service commission. The jurisdiction, supervision, powers and duties of the public service commission shall extend under this chapter. * * *

‘5-a. To the furnishing or distribution of water for domestic, commercial or public uses and to water systems and to the persons or corporations owning, leasing or operating the same.’

Subdivision 5-a reads practically the same as the preceding five subdivisions relating to railroads, gas and electric corporations, steam plants, telephone lines and telegraph lines, except the words ‘public uses' have been added.

From a reading of the various sections quoted, it seems quite apparent that the Legislature has attempted to adopt a comprehensive scheme for the regulation of water companies and for the fixing of rates. That its jurisdiction extends to the fixing of rates for the use of water by municipal corporations seems clear from the use of the new words ‘public uses' contained in subdivision 5-a of section 5 of the Public Service Law, and the use of the same words in article 4-B. The use of those words can only refer to use of water by municipal corporations. If they do not have that meaning, their use is entirely without purpose or meaning. We cannot attribute to the Legislature any such lack of purpose in the use of words. Were it not for section 472 of the city charter, no doubt could exist as to the intent of the Legislature. The Legislature in enacting article 4-B of the Public Service Law did not expressly repeal that section. The city charter being a statute enacted by the Legislature, it was at...

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