State ex rel. Bricker v. Industrial Gas Co.
| Decision Date | 25 May 1937 |
| Citation | 58 Ohio App. 101,16 N.E.2d 218 |
| Parties | STATE ex rel. BRICKER, Atty. Gen., v. INDUSTRIAL GAS CO. |
| Court | Ohio Court of Appeals |
Syllabus by the Court.
1. A gas company that supplies natural gas to industrial consumers and a few domestic consumers for profit under private contracts, that has not exercised the right of eminent domain although its lines do cross public property and that has, by conduct of its business and its relationship with the Public Utilities Commission, indicated that it considered itself to be subject to the rulings of that body in conjunction with the purpose clause in its articles of incorporation is a public utility and is subject to the obligations thereof, including the payment of excise taxes penalties and maintenance fees, even though it has not accepted public franchises and does not furnish its product to the general public indiscriminately.
2. A company that has previously been treated as a public utility may change its status as such only by following the law set up for the abandonment of the business of a public utility.
Edward J. Farrell, of Chicago, Ill., T. M. Potter, of New Lexington, and J. R. Fitzgibbon, of Newark, for appellant.
John W. Bricker, Atty. Gen., and William J. Berwanger, of Cincinnati, for appellee.
Plaintiff by a third amended petition prayed for a judgment against the defendant in the sum of $16,679.96, with interest, for excise tax, penalty and maintenance fee for the years 1933 and 1934.
The petition averred that the defendant was a public utility incorporated in the state of Ohio and duly organized and existing under and by virtue of the laws of the state of Ohio, and is engaged in the business of producing, acquiring, distributing, furnishing, supplying, transmitting and selling natural gas for light, power and other purposes in the state of Ohio. The answer of the defendant admits that it is an Ohio corporation but denies that it is a public utility corporation and denies any indebtedness to the state of Ohio as averred in the petition.
The cause came on for trial, a jury being waived, and was submitted to a judge of the Common Pleas Court upon the pleadings and agreed statement of facts, resulting in a finding and judgment for the plaintiff in the sum prayed in the petition. An appeal on questions of law is prosecuted.
There is one question only for this court on the appeal, namely: Did the trial court err in its determination that the defendant was a public utility during the years for which the taxes set out in the petition were charged against the defendant? The agreed statement of facts, somewhat epitomized, is:
1. The defendant is a domestic Ohio corporation, organized, June 30, 1936.
2. The purpose clause in the articles of incorporation of defendant company reads:
'For the purpose of producing, acquiring, distributing, furnishing, supplying, transmitting and selling natural gas for light, power and other purposes and in connection therewith, acquiring, holding, operating and disposing of properties, franchises, rights, privileges and leases and doing all things necessary and incidental thereto.'
3. The defendant corporation since its incorporation has been engaged in the business of piping and supplying natural gas for light, heat and power purposes to consumers within this state in the vicinity of Zanesville, Roseville, Crooksville and Newark and outlying districts.
4. The defendant procures its supply of natural gas from other companies and distributes and sells it for both industrial and domestic purposes.
5. Upon application to the Public Utilities Commission of the state of Ohio, Orton C. Dunn, trustee, was authorized to sell all property rights and other assets of the Hopewell Fuel & Gas Company and the defendant company was authorized to buy such property and assets.
6. Relates to the acquisition by defendant of the assets of the Swingle Gas & Oil Company, a public utility serving natural gas to the territory at Roseville and Zanesville, Ohio.
7. The defendant company filed with the Tax Commission of Ohio a statement of its gross receipts as a public utility for the years 1927 to 1932, inclusive, and paid excise taxes for those years and no report was filed with the commission for the year 1933 and that a report was filed in 1934 under protest.
8. In January, 1934, a protest was filed with the Public Utilities Commission because of the discontinuance of service of natural gas to certain consumers and that the commission in February, 1935, ordered the company to restore its services to such consumers pursuant to the scheduled rates on file with the commission, from which action of the commission no appeal was prosecuted.
9. States the names and locations of the consumers of gas to which the defendant distributed and sold natural gas in the year 1932.
10. Same as '9' for the year 1933.
11. Same as '9' for the year 1934.
12, 13 and 14. State the amount of gas furnished by the defendant company during the years 1932, 1933 and 1934, respectively, which was in 1932, 1,020,638,000 cubic feet; in 1933, 930,420,000 cubic feet; in 1934, 1,092,062,000 cubic feet.
15 and 16. State the gross receipts of defendant company for the year 1933 to be $294,143; 1934, $303,776.
17 and 18. Set forth the amount of excise tax, penalty and maintenance fee charged against he defendant in the years 1933 and 1934.
19. 'That the Industrial Gas Company has never by express grant been authorized to place its pipe lines in any public street, highway, road, alley or way but that the pipe lines of said company do cross and occupy certain public streets, alleys and highways in the territory served by the company.'
20. That the defendant company furnishes natural gas to domestic consumers under special contracts entered into with each customer, although there is on file with the Public Utilities Commission a schedule of rates to be charged and that in the Cambridge district in the years 1933 and 1934 'all domestic consumers with the exception of one were furnished gas as a consideration of pipe line rights of way obtained over the property of such customer and that each customer was billed for the amount of gas consumed at the price agreed upon in the contract.'
21. Relates to gas sold and distributed in the Zanesville district in the year 1933 and shows that there were 19 domestic consumers furnished gas by virtue of special contracts, 13 of whom were furnished gas as a consideration of pipe line rights of way obtained over the property of those customers.
22. 'That all the gas sold for industrial purposes was sold under special contract made to different industrial concerns in Cambridge, Zanesville, Crooksville, Roseville and Newark at different prices.'
23. That the domestic consumers served the natural gas were those whose residences were near the pipe lines of the company; that the company made no extensions to its lines for the sole purpose of furnishing gas service to domestic consumers and that it never held itself out to serve the public domestic natural gas service indiscriminately to the limit of its capacity.
24. That the defendant never exercised the right of eminent domain and that it has not by express writ and grant accepted a franchise to use the public streets, alleys or ways for the purpose of placing its pipe lines, although the lines of the company do cross and occupy certain public streets, alleys and ways.
25. That the defendant sells the greater portion of its gas to selected industrial consumers under a written contract of years and as a rate stipulated in each contract.
26. That the defendant secures the rights of way for its pipe lines by negotiation and contract and in most instances as a part of the consideration therefor agrees to furnish gas to the owner of the property through which the lines pass, which arrangement is made by private contract only.
27. That the defendant has filed its report with the Tax Commission for each year as a public utility, showing all property owned by it, used in connection with or incidental to its operations and that it has paid its property taxes as a public utility.
28. That the defendant has never filed with the Public Utilities Commission of Ohio an application for an abandonment of its services as a public utility and the schedule of rates and regulations of the company heretofore referred to are now on file with the Public Utility Commission.
Upon this factual statement the defendant urges that during the years comprehended in the third amended petition it was not a public utility, but a private trading corporation. We shall not undertake to discuss all the propositions urged, nor to set forth all of the cases cited. The briefs are comprehensive and we have given careful attention to the interesting question presented.
Section 614-2, General Code, sets forth many definitions found in the act creating the Public Utilities Commission and defining its duties and the scope of its jurisdiction. Among other things it is provided:
'The following words and phrases used in this chapter unless the same is inconsistent with the text, shall be construed as follows: * * *
Section 614-2a defines public utility:
'The term 'public utility' as used in this act, shall mean include every corporation, * * * defined in the next preceding section, except such public utilities as operate their utilities not for profit, and except such public utilities as are, or may hereafter be owned or operated by any...
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