Catering Co. v. Detroit City Gas Co. , 230 Mich. 564 ( 1925 )

The learned circuit judge was clearly right in holding the arbitration agreement between the city and the Detroit Gas Company void. This being true, the award of the arbitrators could not operate in the nature of a franchise. Discussion of the point that a franchise requires a submission to ballot is unnecessary.

In Taylor v. Public Utilities Com'n, 217 Mich. 400, this court was divided upon the question of whether private citizens, users of gas, could invoke action by the commission. The writer then entertained the opinion, and still retains it, that jurisdiction given the commission by the statute, upon application of a municipality, is conditioned upon application by a municipality. Such is the language of the statute. Act No. 419, Pub. Acts 1919, § 4 (Comp. Laws Supp. 1922, § 8164 [4]), provides:

* * * "In any case where a franchise under which a utility is, or has been, operated, including street railways shall have heretofore expired or shall hereafter expire, the municipality shall have the right to petition the commission to fix the rates and charges of said utility in accordance with the provisions of this act, or to make complaint as herein provided with reference to any practice, service or regulation of such utility, and thereupon said commission shall have full jurisdiction in the premises."

If the statute should be extended to make it inclusive of users of gas such extension must come by way of legislation and not judicial determination. The statute grants the city right to apply to the commission and have the rates fixed and this right should be exercised. Failure to exercise such right by the city does not bring the issue of rates to court except the rates exacted be shown in fact to be unreasonable. In the absence of evidence the circuit court could not, and this court cannot, determine the rates charged to be unreasonable.

The bill should be dismissed with costs against plaintiffs.

BIRD and STEERE, JJ., concurred with WIEST, J.