Va.-western Power Co v. Commonwealth Ex Rel. City Op Clifton Forge

• Citation: 99 S.E. 723
• Parties: VIRGINIA-WESTERN POWER CO. v. COMMONWEALTH ex rel. CITY OP CLIFTON FORGE et al.
• Decision Date: 12 June 1919
• Court: Supreme Court of Virginia

99 S.E. 723

VIRGINIA-WESTERN POWER CO.

v.COMMONWEALTH ex rel. CITY OP CLIFTON FORGE et al.

Supreme Court of Appeals of Virginia.

June 12, 1919.

Appeal from State Corporation Commission.

Complaint by the Commonwealth of Virginia, on the relation of the City of Clifton Forge, against the Virginia-Western Power Company. From an order of the State Corporation Commission defendant appeals, the case being consolidated with appeals by the same defendant from other orders entered by the Corporation Commission on complaints by the Commonwealth of Virginia, on relation of the City of Buena Vista, of the Town of Covington, and of the Town of Lexington against the same defendant. Orders affirmed.

The above-entitled cases are separate appeals from a similar order of the State Corporation Commission in each case refusing to approve the schedule of rates hereinafter mentioned so far as they apply to services within the corporate limits of the cities and towns which are the defendants in error before us, on the ground that, such rates being in excess of those agreed upon in the franchises hereinafter mentioned, the commission is without authority or jurisdiction to approve of them.

The plaintiff in error, the Virginia-Western Power Company (hereinafter designated as such, or as the Company), is a public service corporation, and operates a public utility, as defined by statute, and, in the operation of such utility, the Company generates and furnishes electric current to its customers for light, power, and heating purposes. It has for some years been furnishing electric current to the public as its customers, within the corporate limits of the defendant in error cities and towns, at rates of charges fixed for the respective franchise periods by the respective franchises giving the authority to do such business in such municipalities to the extent that such rates of charges are fixed at all by such franchises. None of such franchises fixes any rates of charges for such current for heating purposes. In Clifton Forge the maximum rates of charges to the customers aforesaid therein, other than the municipality, for said current, are fixed by the franchise for lighting purposes only. In Buena Vista, Covington, and Lexingtonthe rates of charges to said customers, other than the municipalities, for such current, are fixed by the franchises for lighting and power purposes only, maximum rates being so fixed in Buena Vista, maximum and minimum rates in Lexington, and specific and minimum rates in Covington. Such rates of charges as are fixed by the franchises purport to be irrevocably fixed thereby for the whole period of the respective franchises, and none of such periods have yet expired.

None of the defendants in error have any provisions in their charters, which are claimed to give any municipal authority on the subject of irrevocably fixing the rates aforesaid during the whole franchise period, except the town of Lexington. That has in its charter the following provision:

" * * * But no company shall occupy, with its works or any appurtenances thereof, the streets, sidewalks, or alleys of the town, without the consent of the mayor and council, duly entered upon its records."

The franchises aforesaid were all granted after the sections of the Constitution of Virginia of 1902 and the statutes presently to be referred to and quoted went into effect.

Sections 124 and 125 of said Constitution, so far as material, provide as follows:

"Sec. 124. Consent of Corporate Authorities Necessary to Use of Streets, Alleys, or Public Grounds by Certain Companies or Persons.—No * * * electric heating, electric light or power * * * company, nor any corporation, association, person or partnership, engaged in these or like enterprises, shall be permitted to use the streets, alleys, or public grounds of a city or town without the previous consent of the corporate authorities of such city or town.

"Sec. 125. Sale of Corporate Property and Granting of Franchises by Cities and Towns.— The rights of no city or town in and to its * * * streets, avenues, parks, bridges, and other public places, and its gas, * * * and electric works shall be sold except by an ordinance or resolution passed by a recorded affirmative vote of three-fourths of all the members elected to the council, or to each branch thereof when there are two, and under such other restrictions as may be imposed by law; * * * no franchise * * * shall be granted for a longer period than thirty years. Before granting any such franchise or privilege for a term of years, except for a trunk railway, the municipality shall first, after due advertisement, receive bids therefor publicly, in such manner as may be provided by law, and shall then act as may be required by law. * * * Every such grant shall * * * make adequate provision by way of forfeiture of the grant, or otherwise, to secure efficiency of public service at reasonable rates, and the maintenance of the property in good order throughout the term of the grant. Nothing herein contained shall be construed as preventing the General Assembly from prescribing additional restrictions on the powers of cities and towns in granting franchises

* * * or as repealing any additional restriction now required in relation thereto in any ex isting municipal charter." (Italics supplied in the body of the last section quoted.)

Section 156 (b) of said Constitution confers upon the State Corporation Commission the power and duty of supervising, regulating, and controlling certain corporations, as to which it is provided that "the authority of the commission * * * shall be paramount, " but electric light and power companies are not among such corporations. As to such last-named companies, however, it is provided in this section of the Constitution that the authority of the State Corporation Commission—

"to prescribe any other rules, regulations, or requirements * * * shall be subject to the superior authority of the General Assembly to legislate thereon by general laws: Provided, however, that nothing in this section shall impair the right which has heretofore been, or may hereafter be, conferred by law upon the authorities of any city, town or county to prescribe rules, regulations or rates of charge to be observed by any public service corporation in connection with any service performed by it under a municipal or county franchise granted by such city, town or county, so far as such services may be wholly within the limits of the city, town or county granting the franchise * * * " (Italics supplied.)

Section 156 (c) of the said Constitution, so far as material, provides in respect to the State Corporation Commission as follows:

" * * * The commission may be vested with such additional powers and charged with such other duties (not inconsistent with this Constitution) as may be prescribed by law, in connection with the visitation, regulation or control of corporations, or with the prescribing and enforcing rates and charges to be observed in the conduct of any business where the State has the right to prescribe the rates and charges in connection therewith." (Italics supplied.)

Subsequent to the going into effect of the Constitution the statutes contained in 1 Pollard's Code Va. 1904, §§ 1033d, 1033e, and 1033f, were enacted.

Section 1033d is precisely in the same language as section 124 of the Constitution, above quoted.

Section 1033e is precisely in the same language as section 125 of the Constitution, above quoted, except that the words "by the following section" are substituted for the words "by law, " in that part of such section of the Constitution which has reference to the manner in which the bids for the franchise shall be received, and the following sentence is substituted for the last sentence of such section of the Constitution, namely:

"Nothing herein contained shall be construed as repealing any additional restriction now required in any existing municipal charter, in relation to the powers of cities and towns in granting franchises."

Section 1033f provides that the ordinance proposing to make the grant of the franchise, after its terms have been fixed upon, shall be advertised. It also provides for the manner of advertising, receiving, and acting on the bids for the franchise, and that "the highest and best bid" shall be accepted, and that the ordinance granting the franchise shall be enacted "as advertised, without substantial variation, except as to the insertion of the name of the accepted bidder, " with the power in the municipal authorities, however, "to reject a higher and accept a lower bid" if of opinion that "some reason affecting the interest of the city or town makes it advisable so to do." Such statute also provides that—

"No amendment that releases the grantee, or his assignee, from the performance of any duty required by the ordinance granting the franchise, or that authorizes an increase in the charges to be made by such grantee or assignee, for the use by the public of the benefits of such franchise, shall be granted unless and until notice of such proposed amendment shall be given to the public" by certain advertisement prescribed in the statute. (Italics supplied.)

Such statute also contains the following provisions to secure the compliance both of the grantor and the grantee of the franchise with their obligations in the premises, namely:

The grantee is required to "execute a bond with good and sufficient security; in favor of the city or town, in such sum as said city or town shall determine, conditioned upon the constructing and putting into operation and maintaining the plant or plants provided for in the franchise, right, or privilege granted."

And it is further provided that—

"The corporation courts of the cities and the circuit courts of the counties in which the towns may be situated shall have jurisdiction by mandamus * * * to enforce compliance by said cities or towns and by all grantees of franchises, * * * with...