State v. Public Service Commission

• Decision Date: 16 February 1927
• Docket Number: No. 24165.,24165.
• Parties: STATE ex rel. ST. LOUIS WATER CO. v. PUBLIC SERVICE COMMISSION et al.
• Court: Missouri Supreme Court

291 S.W. 788

STATE ex rel. ST. LOUIS WATER CO. v. PUBLIC SERVICE COMMISSION et al.

No. 24165.

Supreme Court of Missouri, Division No. 1.

February 16, 1927.

Appeal from Circuit Court, Cole County; J. G. Slate, Judge.

Certiorori proceeding by the City of Kirkwood and the West St. Louis Water & Light Company, succeeded by the St. Louis Water Company, to review orders of the Public Service Commission fixing valuation of properties of the West St. Louis Water & Light Company, and prescribing certain rates for the City of Kirkwood. From a judgment setting aside the order of the Public Service Commission the Water Company appeals. Reversed and remanded.

Charles M. Polk, of St. Louis, for appellant. R. C. Powell, of St. Louis, and L. H. Breuer, of Rolla, for respondents.

LINDSAY, C.

This is an appeal from a judgment which set aside an order of the Public Service Commission, fixing the value, for rate-making purposes, of the whole of the property of relator water company, and the value of that part of it used and useful in supplying water to the city of Kirkwood, and establishing rates at which the company should supply water to that city. Pending the am peal, the St. Louis Water Company has succeeded to all the rights of the West St. Louis Water & Light Company, and the present company and its predecessors will be referred to as the water company. The company furnished service to numerous cities and coin. munities in St. Louis county, owning distribution systems in most of them ; but two cities, Kirkwood and Webster Groves, owned their distribution systems, and the company supplied water in wholesale quantities, and at wholesale rates to those cities, taken by the cities at the city limits. This action, however, directly concerns only the city of Kirkwood, although the rates and service prescribed by the Public Service Commission am plied to the city of Webster Groves, but the latter city was not a party to the proceeding for review.

On November 23, 1901, the predecessor of the present company entered into a contract with the city of Kirkwood under the terms of an ordinance, whereby the company undertook to supply the city with water for all its purposes, at certain rates graduated according to the quantity used. The contract ran for 20 years, with the right granted to the city at the expiration of 20 years to have the contract extended or renewed, for a period of 10 years. The city of Webster Groves, in 1902, also entered into a like contract with the water company for a period expiring October 21, 1923, but its contract contained no provision for a renewal. The rate provided in the contract with the city of Kirkwood was $16.66 2/3 per day for 100,000 gallons or less ; for water in excess of 100,000 gallons and up to 200,000 gallons per day, 16 2/3 cents for each 1,000 gallons used; and for water in excess of 200,000 gallons per day, 13⅔ cents for each 1,000 gallons. The contract also specified the pressure to be maintained, and provided for a penalty against the company for failure to maintain a water pressure in accordance with the term of the contract.

In 1921, the water company, in anticipation of the expiration on November 23, 1921, of the 20-year period of its contract with the city of Kirkwood, filed with the Public Service Commission its application to have classification made of the cities and towns in St. Louis county, which owned their distribution systems, and which purchased their water from the company ; asked that a schedule of rates be fixed for such cities, and that rules and regulations concerning the service to them be established. The company in its application asked for a rate of 25 cents per 1,000 gallons of water delivered to said cities. By a later application, a rate of 40 cents for 1,000 gallons was asked. The city of Kirkwood filed its protest, setting up the terms of the ordinance, and alleged that the ordinance contract had been extended by it for a further period of 10 years ; alleged that the proposed rates were contrary to the contract, and that the rates under the contract were just and reasonable and ought not to be increased. The city of Webster Groves filed no formal protest, but appeared at the hearings before the commission. The commission suspended the increased rates pending a hearing, entered upon an inquiry, and, after the taking of testimony, made a report of its findings on August 16, 1922, and made orders based thereon. In re West St. L. Water & Light Co., 12 Mo. P. S. C. R. 513. The commission found $2,181,000 to be the fair present value of the whole property of the water company, as of January 1, 1922, for the purpose of fixing just and reasonable rates; found as of that date that the fair present value of that portion of the property of the water company, used and useful in furnishing water service to the city of Kirkwood, was $76,157.32, and the fair present value of that portion furnishing water to the city of Webster Groves was $161,700. The commission, by its order, fixed the rate for water furnished to the city of Kirkwood after September 1, 1922, at 25 cents per 1,000 gallons, and the rate for the city of Webster Groves from and after October 1, 1923, the date of the expiration of the contract, at 21% cents per 1,000 gallons ; and in each instance, provided for a penalty of 5 cents if the city should fail to make payment before the 10th of the month following that in which the service was rendered. It also fixed the minimum pressure to be maintained by the water company. The water company and the city of Kirkwood filed their applications for a rehearing, further testimony was taken by the commission, and the applications were overruled. Thereafter the water company sued out a writ of review, as did also the city of Kirkwood. The city of Webster Groves did not join in asking for a review. The water company proposed to, and did, continue to render service to Webster Groves until October 1, 1923, in accordance with its contract. The cause was submitted upon the record and evidence before the Public Service Commission. The court, in rendering judgment setting aside the order of the commission, specified as the grounds therefor: That the commission overvalued the property of the water company as of January 1, 1922; overvalued the property of said company claimed to have been devoted to the service of the city of Kirkwood; that the allocation by the commission of property devoted to the service of the city of Kirkwood was too high ; that the order fixed too high a rate for water to be delivered to that city ; that it provided for an unreasonably low pressure for water delivered to said city ; and, that the order discriminated against Kirkwood in the rates fixed for it.

The circuit court by its judgment suspended the same pending final determination upon appeal, upon the condition that, if an appeal should be taken, the water company should give a bond conditioned for the repayment to the city of the excess collected ; and by further order the court required that the difference between the new rate and the old rate, paid by the city, should be impounded, and placed monthly as a special trust fund in the Central Missouri Trust Company at Jefferson City, pending determination upon appeal, said fund then to be ordered paid to the city, or to the water company, as might be determined upon final judgment.

In this statutory proceeding of review it has been held that this court is not bound by the findings made by the Public Service Commission, but may determine for itself questions of fact from the evidence before the commission. State ex rel. Ozark P. & W. Co. v. Public Service Commission, 287 Mo. 522, 229 S. W. 782; State ex rel. St. Louis & San Fran. Ry. Co. v. Public Service Commission, 294 Mo. 364, 242 S. W. 938; State ex rel. Case v. Commission, 298 Mo. 303, 249 S. W. 955. But it was also held that in these proceedings, by virtue of the provisions of sections 10534, 10535, R. S. 1919, rates fixed by the commission are prima facie reasonable and lawful, and the burden of showing them to be unreasonable and unlawful is upon the party seeking to annul or set them aside. State ex rel. City of Harrisonville v. Public Service Commission, 291 Mo. 432, 236 S. W. 852; State ex rel. City of St. Joseph v. Busby et al. (Mo. Sup.) 274 S. W. 1067.

The city of Kirkwood is not represented in this court. It is not necessary to notice, except in a brief way, the contention of the city, made before the commission, that by the extension of the term of the contract the rates therein provided were not subject to change by the commission. That question is settled adversely to the contention of the city in numerous cases. State ex rel. City of Sedalia v. Commission, 275 Mo. 201, 204 S. W. 497 ; City of Fulton v. Commission, 275 Mo. 67, 204 S. W. 386 ; City of St. Louis v. Commission, 276 Mo. 509, 207 S. W. 799.

In 1915, upon complaint of certain residents of St. Louis county against the rates and regulations of the water company, the commission, in order to determine the questions raised, held a hearing and fixed the value of the property of the company as of June 1, 1915, as a basis for fixing reasonable and just rates, and also considered the rates and regulations brought in question. It fixed the fair value as of the date mentioned, at $1,625,000. See Pine Lawn v. West St. L. W. & L. Co., 4 Mo. P. S. C. R. 162. Upon a review proceeding brought by the company, the action of the commission was sustained by the circuit court. The company appealed from that judgment, assailing, however, not the rates and regulations fixed, but only the valuation, which it claimed was too low. This court (W. St. L. W. & L. Co. v. Commission, 197 S. W. 340) affirmed the judgment of the circuit court, upon the ground that, under the circumstances, the question of correctness of the valuation was one not necessary to be reviewed, and was but a moot question. Upon the hearing of the application in...