Pub. Serv. Gas Co. v. Bd. of Pub. Util. Comm'n

• Court: New Jersey Supreme Court
• Writing for the Court: PER CURIAM.
• Citation: Pub. Serv. Gas Co. v. Bd. of Pub. Util. Comm'n, 94 A. 634, 87 N.J.L. 581 (N.J. 1915)
• Decision Date: 14 June 1915
• Parties: PUBLIC SERVICE GAS CO. v. BOARD OF PUBLIC UTILITY COMMISSION et al.

94 A. 634

87 N.J.L. 581

PUBLIC SERVICE GAS CO.

v. BOARD OF PUBLIC UTILITY COMMISSION et al.

Court of Errors and Appeals of New Jersey.

June 14, 1915.

On rehearing. Former opinion (92 Atl. 606) overruled, and judgment affirmed.

Frank Bergen, of Newark, for appellant. George L. Record, of Jersey City, for appellees.

PER CURIAM. Judgment affirmed on opinion of Justice Swayze in the Supreme Court (84 N. J. Law, 476, 87 Atl. 651).

WHITE, J. (dissenting in part). This case and the two city appeals (Nos. 3 and 4 of this term) present appeals by two municipalities upon one side and by a public utility company on the other from the judgment of the Supreme Court with respect to an order by the Public Utilities Commission fixing the rate to be charged the public for gas by the utility company in a district which includes the two municipalities.

I am unable to agree with the Supreme Court that certiorari is not the municipalities' remedy in their cases. I know of no other remedy, and, of course, it cannot be that they have none. The Commission has fixed a rate of 90 cents, and the municipalities are dissatisfied with the order fixing that rate. They think the rate fixed is too high, just as the utility company thinks the rate too low. Neither can bring mandamus, because the Utilities Commission is vested by law with a discretion in fixing the rate. It would be like asking the court to mandamus or order a jury to agree upon a certain smaller named sum as its verdict in a case where a question of fact involving the amount of the verdict was to be decided. The verdict rendered might be too high or too low to accord with the legal principles governing the case; but, while a question of fact remains, a mandamus or a court direction is out of the question. The remedy is to set the verdict aside. So here the remedy is to set the Commission's order aside because erroneous, and the proper procedure to accomplish this is by certiorari, irrespective of whether the claim is that the rate fixed is too high or too low. I think, therefore, that the municipalities' cases cannot be dismissed upon the ground stated by the Supreme Court, and that, that court having in fact passed upon the facts involved, we should, as it seems to me, now consider these cases also upon the merits.

Two principal questions are involved in the cases before us: One, was it improper to allow an element of "going value" in coming to a valuation of the property of the utility company to be protected in a rate-making order? and the other, was it improper to exclude the element of the commercial value of the franchise (not an exclusive one) in reaching such valuation? The municipalities maintain the affirmative of the first proposition, and the gas company the affirmative of the second.

Taking up the first inquiry: It is quite evident from the testimony and from the findings of the Supreme Court that, with the exception of the commercial value of the franchise, the term "going value" in these cases embraced what the Commission thought was the fair present value of all of the elements of the intangible property of the gas company, including the necessary spark of life represented by adequate permission to use its property for the purposes of its incorporation and in the public streets where it was locally authorized to go. To this extent I think the property of the gas company is entitled to protection in rate-making orders, because a failure of such protection permits confiscation. I agree, therefore, with the view of the Commission upon this point. To value the present mere physical property of the company in absolute disregard of its previously discharged burdens assumed and performed in the public interest and clearly contemplated by the legislation, by which it was invited to enter upon the public service, is, in my judgment, confiscatory. Likewise, to value it without considering it as endowed with its life giving permission to continue its public functions would be confiscation.

I therefore favor an affirmance, upon the merits, of the order of the Commission in the cases wherein the cities of Paterson and Passaic complained that "going concern value" had been used as an element of value in establishing the rate.

Coming now to the gas company's appeal, wherein the complaint is that an additional value of the franchise (apart from its life giving function to the company's other property), and dependent upon earnings present and prospective of the company, was not included, I incline to the opinion that the Commission took the proper view of this point also.

I take it that this claim must resolve itself into dependence upon one or both of two propositions, viz.: (1) That the gas company has a property right to continue to charge unreasonably high rates in the future because of the present market value of its securities as a result of its having been suffered to do so in violation of its charter obligations in the past; or (2) that its charter right to charge reasonable rates is of itself a valuable property right which must be permitted, under the guise of its own protection, to...