New England Tel. & Tel. Co. v. State, 3728.

• Decision Date: 25 February 1948
• Docket Number: No. 3728.,3728.
• Citation: 57 A.2d 267
• Parties: NEW ENGLAND TELEPHONE & TELEGRAPH CO. v. STATE et al.
• Court: New Hampshire Supreme Court

57 A.2d 267

NEW ENGLAND TELEPHONE & TELEGRAPH CO.

v.STATE et al.

No. 3728.

Supreme Court of New Hampshire.

Feb. 12, 1948.

Rehearing Denied Feb. 25, 1948.

COPYRIGHT MATERIAL OMITTED.

Appeal from Public Service Commission.

Proceeding on the petition of New England Telephone & Telegraph Company for emergency rates. From an order of the Public Service Commission denying the petition, petitioner appeals.

Remanded with directions.

Appeal under the provisions of R.L. c. 414, from an order of the Public Service Commission of New Hampshire, denying the company's petition for emergency rates. The statute, R.L. c. 292, § 10, under which the commission was asked to take emergency action, reads as follows: ‘Whenever the commission shall be of the opinion that an emergency exists it may authorize any railroad corporation or public utility temporarily to alter, amend or suspend any existing rate, fare, charge, price, classification or rule or regulation relating thereto.’ In its order, the majority of the commission made the following finding: ‘We do not find that a state of emergency exists in the company's financial condition and so do not deem it advisable to grant authority to make emergency rates effective immediately under bond.’

Sulloway, Piper, Jones, Hollis & Goffrey, of Concord, and T. Baxter Milne and Robert H. Montgomery, both of Boston, Mass. (F. Hollis, of Concord, orally), for plaintiff.

Ernest R. D'Amours, Atty. Gen., for the State and the Public Service Commission.

BRANCH, Chief Justice.

The finding of the commission that no emergency exists cannot be sustained and must be vacated.

After twenty years of operation under rates fixed by the commission in 1926, the company found itself confronted in 1946 with a company-wide loss of $369,000, which was more than accounted for by a loss of $769,000 on its New Hampshire operations. There has been no catastrophe or change in business methods or procedures to account for such losses, and the company contends that the above losses have been due to the widespread fundamental changes in economic conditions which have taken place since the present rates were fixed in 1926, and especially since the end of World War II. This cause for the company's difficulties was given at least partial recognition by the commission by its finding upon the company's petition next referred to that ‘primarily its financial trouble at the present time flows from increases in wages granted to its employees. * * * No claim, however, has been advanced that the company has been over generous to its employees. * * * No clear pattern is discernible in the evidence before us except that the telephone company is caught in the pattern of wage increases sweeping the country.’ These losses were continued in 1947 and for the first ten months of that year showed a company-wide loss of $644,000 and a loss on New Hampshire operations of $745,000.

In view of the then existing situation, the company filed, upon December 3, 1946, a new schedule of rates estimated to produce a revenue of $1,068,000 for the calendar year of 1947. In December 1946, the commission suspended the effective date of the proposed rates pending a commission investigation and decision thereon, and on July 28, 1947, granted a temporary increase of 10% in rates, which has proved wholly inadequate. 29 N.H.P.S.C. 163. The investigation is still in progress and no date for its conclusion has, or can be, set. At present the company shows a continuing operating loss of more than $40,000 per month, and it is claimed that such losses have impaired the credit of the company to such an extent that it can no longer sell its stock at par and it cannot legally sell it for less. Accordingly the company has been forced to raise money for improvements and extensions of its services by the sale of debenture bonds in the sum of $40,000,000. It now requests approval of a rate schedule to yield additional revenue of $1,680,000.

Under these circumstances we do not think that the present situation of the company can be regarded as anything but an emergency of the precise kind contemplated by the statute, which calls for prompt emergency relief. The present situation of the company is fully as acute as that recognized by the commission in Case DT 2690, Re: Intrastate Railroad Rates, 29 N.H.P.S.C. 271, where the commission said that the evidence before it indicated that ‘a financial emergency exists due to a substantial increase in costs of railroad service through recent non-operating labor awards and costs of material including fuel’, and further, that ‘said interim increase is required to permit the railroads operating in this state to provide adequate and sufficient service and maintain their financial condition upon a reasonably sound basis.’ The difficult position of the company was indicated by the Supreme Court of Virginia in Board of Sup'rs of Arlington County v. Commonwealth, Va., 45 S.E.2d 145, 148, as follows: ‘A publicly regulated monopoly is helpless in times of rapidly mounting costs unless it is given relief by the regulating authority. * * * The manufacturer and the merchant, when prices for raw material, or supplies, or rent, go up, simply charges his customer a larger amount. He can do nothing else. The utility cannot do this without the consent of the Commonwealth through its constitutionally appointed agent, the State Corporation Commission.’

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