Pub. Serv. Gas Co. v. Bd. of Pub. Util. Com'rs

• Decision Date: 07 July 1913
• Citation: 84 N.J.L. 463,87 A. 651
• Parties: PUBLIC SERVICE GAS CO. v. BOARD OF PUBLIC UTILITY COM'RS et al.
• Court: New Jersey Supreme Court

87 A. 651

84 N.J.L. 463

PUBLIC SERVICE GAS CO.

v. BOARD OF PUBLIC UTILITY COM'RS et al.

Supreme Court of New Jersey.

July 7, 1913.

Certiorari by the Cities of Paterson and Passaic and the Public Service Gas Company to review an order of the Board of Public Utility Commissioners fixing a gas rate. Dismissed as to the Cities of Paterson and Passaic, and order affirmed.

Argued April term, 1913, before GARRISON, SWAYZE, and MINTURN, JJ.

Frank Bergen and Edward A. Armstrong, both of Newark, Thomas N. McCarter, of Rumson, and L. D. H. Gilmour, of Newark, for prosecutors.

Frank H. Sommer, of Newark, for board of utility commissioners.

Edward F. Merrey, of Paterson, Albert O. Miller, of Passaic, and George L. Record, of Jersey City, for the cities of Paterson and Passaic.

SWAYZE, J. The question is the validity of an order of the board of public utility commissioners, fixing the rate for gas in the territory supplied from the Paterson gas plant at 90 cents per 1,000 cubic feet. The former rate was $1.10, with a discount of 10 cents for prompt payment. This rate the commissioners determined to be unjust and unreasonable.

Writs were prosecuted both by the Public Service Gas Company, which claims that the rate fixed is too low, and by the cities of Paterson and Passaic, which claim that it is too high. The cities have obviously mistaken their remedy, since the only effect of a judgment in certiorari is to set aside an existing order, and if the order is set aside the old rate for gas would remain unaltered. Although, therefore, all the parties except the public service commissioners unite in asking that the order be set aside, we ought not to do so when it is manifest that that situation results from a mere mistake in procedure on the part of the cities. Under the new Practice Act it would be our duty to order new writs and pleadings in order that we might completely and finally hear and determine the whole matter in controversy, and grant the proper remedy, if such a course were now possible.

The only remedy that could give the cities the relief they seek is a writ of mandamus commanding the commission to reduce the rate below 90 cents. Under well-settled principles this writ is not available. We do not assume in advance to dictate to an inferior tribunal what judgment it shall pronounce. To do so would draw into this court in the first instance the final determination on the merits of a question upon which the parties are entitled to take first the opinion of the inferior tribunal. Benedict v. Howell, 39 N. J. Law, 221; Mooney v. Edwards, 51 N. J. Law, 479, 17 Atl. 973. The question now involved is not whether, upon an application to this court for a mandamus to compel a public service corporation to furnish gas, we might not determine for ourselves as an original question what would be a reasonable charge, just as the court of chancery determined a reasonable charge for water in Long Branch Commission v. Tintern Manor Water Co., 70 N. J. Eq. 71, 62 Atl. 474. The parties do not appeal to our original jurisdiction, but very properly have resorted to the new procedure provided by the Legislature in the Public Utilities Act of 1911 (P. L. 374). Under that act our jurisdiction is appellate, not original, and the power given (section 38) is the power to set aside the order of the commissioners, not to make or compel them to make a new order.

Our original jurisdiction as it has always existed is not and cannot be affected by the Legislature, but they may provide as they have in this case a new method of procedure. Since the remedy thus provided is not that which the cities really want, and since no other remedy is now open by which the result they desire can be reached, the writs sued out by them must be dismissed, with costs.

The real controversy in the case arises upon the writ prosecuted by the gas company.

Under section 38 we are given jurisdiction to set aside the order of the commissioners, when it clearly appears that there was no evidence before the board to support reasonably such order, or that the same was without the jurisdiction of the board. On its face this section confers jurisdiction upon this court, but a jurisdiction of a limited character, only to be exercised when it clearly appears that there is no evidence before the board to support their order, or where the order is without their jurisdiction. If this language is taken literally, we should be powerless in any case within the jurisdiction of the board to set aside its order if there was any evidence to support it, no matter how overwhelming the evidence to the contrary might be. It is needless to say that such a literal construction of section 38 would bring it into conflict with our Constitution. It needs no act of the Legislature to confer on us the power to review the action of an inferior tribunal, and the Legislature cannot limit us in the exercise of our ancient prerogative. That the Legislature did not intend to do so is made clear by a consideration of the whole act. We are, by the express terms of section 38, authorized to set aside the order when it is without the jurisdiction of the board. The jurisdiction of the board to fix rates is, by section 16c, limited to cases where the existing rate is unjust, unreasonable, insufficient, or unjustly discriminatory or preferential. The only words important for the present case are "unjust" and "unreasonable," since the commissioners themselves went no further in their adjudication. To determine then whether the commissioners had jurisdiction, we must first determine whether the existing rate was unjust and unreasonable, and in determining that fact we are not limited to the question whether it clearly appears that there was no evidence before the board to support reasonably its order; section 16c does not purport to limit the scope of our inquiry into the fact, and we must therefore determine it in the usual way, according to the whole of the evidence. Indeed, section 38 itself makes a distinction between the evidence required to support the order and that required to sustain the jurisdiction. In the former case the language literally construed would prevent setting aside the order unless there was an absence of any evidence to support it. In the latter case all that section 38 requires is that it should clearly appear that the order was without the jurisdiction of the board. When the Legislature, in section 38, required that the absence of jurisdiction should clearly appear, it probably had in mind the rule applicable when the court is dealing with the validity of the verdict of a jury upon a rule to show cause, or with the determination of commissioners of assessment as to the amount of special benefits, or the determination of the state board of taxation as to the valuation of property. In these cases there is a presumption in favor of the action of the inferior tribunal, because in each case that tribunal is acting in a judicial capacity, and may fairly be supposed to preserve a judicial attitude. The same rule has been sometimes applied in rate cases, but with less reason.

The presumption in favor of the acts of a judicial or quasi judicial tribunal does not apply with the same force to a legislative tribunal, nor to a tribunal which possesses not only to some extent the powers of a court, but also to some extent the powers of a public prosecutor. A legislative body prescribing a rule for future conduct is not limited by the same considerations of justice as a tribunal required to do justice in accordance with existing rules; and one in the position of a public prosecutor can hardly be supposed to preserve a Judicial frame of mind; he is rather in the position of one who is judge in his own cause. Under the Public Utilities Act, the commissioners are given extensive powers of legislation, and are given the power of initiating proceedings themselves. The manner in which these powers shall be exercised involves often a consideration of large questions of public policy or business wisdom. For example, in this very case the commissioners have fixed a rate for the Passaic district alone, to the exclusion of all other parts of the state in which the gas company by its charter may operate. Whether it is wise to segregate in this way a thickly settled territory in which gas may be manufactured in large quantity and distributed at comparatively small expense, so as to give the inhabitants of the populous districts the advantage of their density of population, or whether it is wise to determine the rate by a consideration of the facts throughout the territory served as a whole, so that the smaller towns may profit by the economies resulting from business on a large scale, and so that the charge for distribution through miles of pipe where consumers are few may be reduced by entering into an average with the cost of distribution through short lines of pipe where consumers are many, is a question of public or business policy, not a question of law or abstract justice to be tested by fixed rules. In such a case there may perhaps be a fair presumption that the action of the commissioners is dictated by wise policy, but hardly that its action is just and reasonable. In addition, disobedience to the order of the commission subjects to a penalty of $100 per day, and in some cases amounts to a misdemeanor, so that the public service company is entitled to the benefit of the ordinary rules that require penal and criminal statutes to be construed strictly. All these considerations lead us to the conclusion that, if there is any presumption in favor of the order of the commissioners, it depends like the opinion of the court of another state upon the strength of the reasoning by which it is supported.

This is subject, however, to the qualification that in legislative action the courts will not merely substitute their judgment for that of a legislative body. We must therefore determine for...