St. Paul Book & Stationery Company v. St. Paul Gaslight Company
| Decision Date | 18 June 1915 |
| Docket Number | 18,973,19,243 - (41,126) |
| Citation | 153 N.W. 262,130 Minn. 71 |
| Parties | ST. PAUL BOOK & STATIONERY COMPANY v. ST. PAUL GASLIGHT COMPANY |
| Court | Minnesota Supreme Court |
Action in the district court for Ramsey county. A number of corporations and individuals filed a complaint in intervention. The facts are stated in the opinion. Defendant's demurrer to the complaint was overruled by Orr, J., who certified the question presented to be important and doubtful, in his opinion.
From an order overruling its demurrer to the complaint, defendant appealed. Reversed.
From the order sustaining defendant's demurrer to the complaint in intervention, interveners appealed. Affirmed.
Public service corporations -- rates -- injunction.
1. While in a proper action the reasonableness of an established rate may be the subject of judicial investigation and adjudication, courts are without authority to fix by injunction, or otherwise, rates for public service corporations.
Discrimination -- pleading.
2. The complaint does not charge defendant with unlawful discrimination. Facts going to show discrimination must be alleged. General statements of discrimination are insufficient.
Action to enjoin proposed schedule of rates.
3. For practical reasons courts ought not to entertain suits at the instance of individual consumers to enjoin a public service corporation from placing in effect a schedule of rates which does not exceed the maximum fixed by the proper legislative body.
Electricity -- maximum charge in St. Paul.
4. The city council of the city of St. Paul is vested with authority to fix a maximum price which may be charged, by defendant, a public service corporation, having the exclusive franchise to supply electric current within the city.
Electricity -- remedy of individual consumer.
5. The remedy of consumers for discrimination in rates by a public service corporation is ordinarily an action at law for damages, and not by injunction. The complaint of the interveners fails to state a cause of action for relief by injunction.
Halbert & Halbert, John W. Bennett and George G. Chapin, for plaintiffs and interveners.
Butler & Mitchell, for defendant.
This is an action in equity, brought by plaintiff in its own behalf and in behalf of the denizens of the city of St. Paul Minnesota, similarly circumstanced, to enjoin the defendant, a public service corporation, from enforcing an alleged unreasonable and exorbitant schedule of rates adopted by it, which schedule, however, is not claimed to violate the provisions of an ordinance of the city fixing a maximum price for the distribution and sale of electric current by defendant to patrons within the city. The court is also asked to direct defendant to fix just and nondiscriminatory rates, and to compel it to account for its previous dealings with plaintiff, and therein disclose the true value of all its property and business. A demurrer to the complaint was overruled, and the question involved certified as doubtful. Thereafter a large number of parties joined in a complaint in intervention. To this pleading a demurrer was sustained. The correctness of each order is presented by the appeals.
These matters of important bearing appear from the complaint: The plaintiff corporation has for some years past conducted a business in the city of St. Paul wherein it has used electricity for lighting and power purposes, and its business is dependent upon obtaining a supply of electric current. For about two years prior to May 1, 1913, defendant had voluntarily supplied plaintiff with electric current for lighting purposes at a certain rate, which is alleged to be adequate and not unreasonable, unless unreasonably high. And that, during the same time, electric current for power purposes was furnished, upon a different basis of computation, under an agreement between plaintiff and defendant as to price, which price is stated to be remunerative to defendant and not unreasonable, unless unreasonably high. Defendant is a public service corporation holding an exclusive franchise from the city under which it, upon compensation paid, supplies to the city, and to persons and business enterprises within its borders electric current for light and power purposes. The common council of the city of St. Paul by Ordinance No. 3119, approved April 7, 1913, and taking effect May 1, 1913, fixed the maximum price which defendant might charge its customers for electric current. This maximum price is in some degree governed by the quantity consumed during a given time. It is alleged that defendant, using said ordinance as an excuse immediately upon its going into effect, on May 1, 1913, raised the rates theretofore charged plaintiff and other patrons, nearly 70 per cent, and since that time has continued to send plaintiff inadequate and incorrect statements, calling for payment of unreasonable and exorbitant prices for the electricity furnished. There are no averments that the price or rate now fixed and demanded exceeds in any respect the maximum established by the ordinance, or is as high as thereby permitted, or that plaintiff has paid the alleged excessive amounts asked by the statements or bills. Discrimination is charged in general terms.
The attempt by this suit to fix or establish reasonable and just rates for the future must fail. Prescribing or regulating rates for public service corporations falls within the domain of legislation, and courts should not intrude. Interstate Commerce Com. v. Ry. Co. 167 U.S. 479, 17 S.Ct. 896, 42 L.Ed. 243; Nebraska Tel. Co. v. State, 55 Neb. 627, 76 N.W. 171, 45 L.R.A. 113; City of Madison v. Madison Gas & Electric Co. 129 Wis. 249, 108 N.W. 65, 8 L.R.A. (N.S.) 529, 116 Am. St. 944, 9 Ann. Cas. 819.
We are also clear that no cause of action for wrongful discrimination is stated in the complaint. No allegation is found that less rates were exacted from any other patron than were demanded from plaintiff for like service. Facts showing discrimination must be pleaded. It is not sufficient to make a general allegation to that effect. We take it, that no contention of discrimination is based upon the graduation of the maximum rate in the ordinance itself -- it permitting a lower maximum where a larger quantity is supplied in a given time than where the quantity is less during the same time. All discrimination is not unlawful. Valid reasons may exist for different rates for current furnished for lighting purposes from that for power purposes, and for making some distinction based upon the quantity supplied during a given time.
The important and decisive question presented by the demurrer to the complaint is, whether, at the suit of a consumer of a commodity supplied by a public service corporation, the court can inquire into the reasonableness of rates fixed by the proper legislative body, and enjoin such rates if found exorbitant. It is well settled now that a public service corporation may seek and obtain the aid of the court enjoining the enforcement of unreasonably low rates, no matter by what authority established. Chicago, M. & St P. Ry. Co. v. Minnesota, 134 U.S. 418, 10 S.Ct. 462, 702, 33 L.Ed. 970. And, at first blush, a just and necessary corollary of that rule would seem to demand that the same right be accorded the consumer to have a judicial determination whether a rate, established by legislative authority, is so unreasonably high that its enforcement should be enjoined. Justice Miller, in his concurring statement in the last case cited, seems to be of that opinion. Of course, by technical refinement a legal distinction in the position occupied by a public service corporation and its patrons may be made. The former is compelled to furnish the commodity or service, whereas the latter may accept or reject the same at pleasure. Hence only the public service corporation, and not its possible patrons, can, under a strict construction, be held to be deprived of property without due process of law through unreasonable rates. This is the reasoning of the supreme court in Brooklyn Union Gas Co. v. City of New York, 50 Misc. 450, 100 N.Y.S. 570. While it is not specifically referred to in the opinion by Judge Gaynor, on appeal in the same case, speaking for the court in the appellate division (115 A.D. 69, 100 N.Y.S. 625) nor by the Court of Appeals, when the case came there in 188 N.Y. 334, 81 N.E. 141, 15 L.R.A. (N.S.) 763, 117 Am. St. 868, the result reached was that the city could not raise the question of the unreasonableness of the rate demanded, since it did not exceed the maximum permitted by statute. See also Pinny & Boyle Co. v. Los Angeles Gas & Electric Co. 168 Cal. 12, 141 P. 620. We are not strongly impressed with the proposition that, at the present time, the inhabitants of our large cities can dispense with the utilities supplied by the public service corporations, if the price seems too high. They are dependent upon these corporations for matters of daily need and comfort, such as light, water, power and the like. If these necessities may be obtained only upon the payment of exorbitant prices, it really results in an enforced taking from the consumer of whatever he pays in excess of a reasonable compensation. But there is a practical side to the question which should weigh heavily against the courts entertaining actions, at the instance of the individual consumer, to destroy rates, or render of no effect a maximum price fixed by competent legislative...
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