Industrial Gas Co. v. Public Utilities Commission of Ohio
| Decision Date | 17 May 1939 |
| Docket Number | 27227. |
| Citation | 21 N.E.2d 166,135 Ohio St. 408 |
| Parties | INDUSTRIAL GAS CO. v. PUBLIC UTILITIES COMMISSION OF OHIO. |
| Court | Ohio Supreme Court |
Syllabus by the Court.
1. Whether a corporation is operating as a public utility is determined by the character of the business in which it is engaged.
2. A public utility is bound to serve to the extent of its capacity those of the public who need the service and are within the field of its operations, at reasonable rates and without discrimination (Section 614-12 et seq., General Code); this duty does not permit such a public service corporation to pick out good portions of a particular territory, serve only select customers under private contract and refuse service (which it alone can give) to the remaining portions of territory and to other users.
3. A corporation that furnishes service in the supply and distribution of natural gas to such substantial part of the public as to make its service a matter of public concern welfare and interest, subjects itself to regulation by the Public Utilities Commission.
4. A public utility cannot divest itself of its duties as such (1) by changing the purpose clause of its articles of incorporation, (2) by not exercising the right of eminent domain, (3) by not holding itself out to serve the public or any class of the public generally, or (4) by selling to select consumers by private contract only.
On April 13, 1938, the Industrial Gas Company, relying on Sections 504-2 and 504-3, General Code, as a basis therefor filed with the Public Utilities Commission of Ohio an application to withdraw its properties from service to domestic users of gas and to be declared not subject to the jurisdiction of the commission on the ground that it was no longer a public utility and therefore not subject to the control of and regulation by the commission.
On hearing before the commission, evidence was adduced to show that in March, 1938, the company's articles of incorporation were amended to read: 'For the purpose of producing, acquiring, distributing and selling, natural gas for industrial use, only, and, in connection therewith, acquiring, operating and disposing of leases and other properties incident thereto.'
The evidence further disclosed that the company operates a natural gas transmission system in Muskingum, Licking, Perry and Morgan counties, Ohio, with its principal place of business at Newark, Ohio, but owns no gas wells. Its properties consist of pipe lines, measuring stations, regulating stations and certain buildings. The company, operating approximately fifty miles of pipe lines, serves nineteen industrial and twelve private consumers located in Crooksville, Roseville, Zanesville, Newark and adjacent vicinities, all under written contracts which stipulate the price to be paid for gas; but the appellant does not hold itself out to serve either the public or the users of industrial gas generally and has refused or failed to agree with, and did not serve certain industrial users of gas in its territory. The twelve private customers have been 'given the privilege of buying gas as a part of the grounds for right of way grants' across their property. No proceedings of condemnation have ever been instituted to acquire property or right of way.
This evidence was not rebutted and the facts are not in dispute.
The commission found that the company was a public utility within the definition of Sections 614-2 and 614-2a, General Code, and denied the application. Thereupon the company appealed to this court.
Brewer & Farrell, of Chicago, Ill., J. R. Fitzgibbon, of Newark, and T. M. Potter, of New Lexington, for appellant.
Herbert S. Duffy and Thomas J. Herbert, Attys. Gen., and W. W. Metcalf and Kenneth L. Sater, both of Columbus, for appellee.
Is the appellant, The Industrial Gas Company, a public utility under the undisputed facts? If so, it is subject to regulation and, moreover, the order of the appellee, the Public Utilities Commission, denying release therefrom, must be affirmed.
Under Sections 614-2 (amended 116 Ohio Laws, pt. 2, 309, effective April 5, 1937), 614-2a and 614-3, General Code, a person, partnership, association or corporation 'engaged in the business of supplying natural gas for lighting, power or heating purposes to consumers within this state' or 'in the business of transporting natural gas * * * through pipes or tubing, either wholly or partially within this state' is denominated a public utility and declared subject to regulation. (Italics ours.) These sections are all-embracing in that they attempt to bring within public regulation () all those engaged in such businesses. Appellant contends that it is not a public utility and that any attempt to make it such by legislative fiat is violative of federal and state Constitutions. However, the constitutional question need not be considered if this court reaches the conclusion that appellant is in reality a public utility.
Regarding the scope of its operations, appellant asserts:
Appellant operated as a public utility and submitted to regulation for many years prior to the amendment of the purpose clause of its articles of incorporation. In...
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