Elizabethtown Gas Light Co. v. Bd. of Pub. Util. Com'rs

• Decision Date: 07 August 1920
• Citation: 111 A. 729
• Parties: ELIZABETHTOWN GAS LIGHT CO. v. BOARD OF PUBLIC UTILITY COM'RS.
• Court: New Jersey Supreme Court

111 A. 729

ELIZABETHTOWN GAS LIGHT CO.

v. BOARD OF PUBLIC UTILITY COM'RS.

Supreme Court of New Jersey.

Aug. 7, 1920.

Certiorari by the Elizabethtown Gas Light Company against the Board of Public Utility Commissioners to review its order as to gasrates. Order sustained and case remanded for rehearing.

Argued before Justice SWAYZE, sitting alone, pursuant to the statute.

George S. Hobart and Clement K. Corbin, both of Jersey City, and William M. Wherry, Jr., of New York City, for prosecutors.

L. Edward Herrmann, of Jersey City, for Public Utility Commission.

Joseph T. Hague and Harold Depew, both of Elizabeth, and Frederick M. P. Pearse and Wesley Benner, both of Newark, for municipalities.

SWAYZE, J. There are writs on behalf of the gas companies in this case, and in other cases where different municipalities are concerned, and there are writs on behalf of some of the municipalities. The cases were all argued together, and in the view I take can be considered together. The gas light companies complain because the public utility commissioners did not allow them as large an increase in the rate for gas as they think just. The municipalities complain because they think the amount allowed too high. All that I need consider are the objections raised by the gas light companies. The general principles are settled by what was said in Public Service v. Public Utility Board, 84 N. J. Law, 463, 87 Atl. 651, L. R. A. 1918 A, 421, affirmed on opinion 87 N. J. Law, 597, 92 Atl. 606, 94 Atl. 634, 95 Atl. 1079, L. R. A. 1917 B, 930, L. R. A. 1918 A, 421, and O'Brien v. Public Utility Board, 92 N. J. Law, 44, 105 Atl. 132. The only question that need be dealt with in the present case is the application of those principles to the facts. The companies claim that there was an undervaluation of their property, first, because the commissioners adopted as the standard of value the average prices prevailing for five years preceding January 1, 1916; second, because they disregarded the only evidence as to going concern value, and adopted an arbitrary sum not sustained by any evidence at all; and, third, because they arbitrarily omitted what is called the overhead valuation on land owned by the companies, being, as I understand it, the cost of acquiring and assembling the land employed by the companies for the manufacture of gas.

I think it entirely clear that the failure to allow for prices at the time to which the rates apply, July 1, 1919, was an error. It is not denied that prices were very much higher in 1919, and are very much higher now, than the average for the years 1911 to 1916. So notorious is this that the Supreme Court of the United States has referred to it in an opinion as a matter of common knowledge. Lincoln Gas Co. v. Lincoln, 250 U. S. 256, at page 268, 39 Sup. Ct. 454, 63 L. Ed. 968. In that case, on its own responsibility, the court suggested that in its opinion the decree ought to be modified to permit the complainant to make another application to the courts for relief. It would be manifestly unjust to apply to a gas company a standard of value different from that applied to others. To what extent the increase in prices may be due to an inflation of the currency or to any particular cause we do not know. What we do know is that the...