Jamaica Water Supply Co. v. City of New York , 279 N.Y. 342 ( 1939 )

This action was brought against the city of New York by plaintiff to recover payment at the rate of forty-five dollars per hydrant for services for water supplied by the plaintiff during the years 1934, 1935 and 1936. Upon the argument of the motion defendant conceded its liability for the amount sought to be recovered for the period from March 1, 1936, to December 31, 1936, at the rate of forty dollars per hydrant, and took no appeal from that portion of the order which granted summary judgment for that amount for that period. Thus the only question remaining upon this appeal is whether plaintiff is entitled to partial summary judgment for the period from January 1, 1934, to February 29, 1936. Both the Special Term and the Appellate Division denied the motion for summary judgment, the latter upon the ground that there are issues of fact which compel the denial of summary judgment and relegate the parties to a trial, so that the facts arising from the dealings of the plaintiff with the defendant may be there put in evidence.

For upwards of twenty years prior to 1929 the rate for this hydrant service furnished by the plaintiff to the city was eighteen dollars per hydrant per annum, as fixed in the year 1908. For a time previous to 1929 plaintiff had been urging a higher rate. In the latter part of 1929 the then Commissioner of Water Supply retroactively fixed forty-five dollars as the hydrant rate to be paid to plaintiff, effective as of January 1, 1929. The action of the Commissioner was promulgated by the following:

"Letterhead of Commissioner of Water Supply, Gas and Electricity

"NEW YORK, December 20, 1929

"JAMAICA WATER SUPPLY COMPANY

"Fire Hydrant Rental

"The Jamaica Water Supply Company having filed claim with the Department of Finance for the payment of additional hydrant rental for the eight-year period ending December 31, 1928, continues its demand for payment for hydrant rental service at the rate of forty-five dollars ($45.) per annum per hydrant.

"Therefore, acting under authority of Section 472 of the Charter, on the basis of reports submitted by the Chief Engineer and filed with the Comptroller, and being advised by the Engineer that the hydrant rental asked by the company for the current year is the fair and reasonable value for hydrant rental service rendered by the Jamaica Water Supply company, I hereby fix and establish the rate of forty-five dollars ($45.) per annum per hydrant, effective as of January 1, 1929.

"(Signed) JOHN J. DIETZ, "Commissioner."

The above fixed an annual rate and, though stating the date of beginning, specifies no date of termination. The rate so fixed was acted on by both parties for the succeeding four years. On January 10, 1934, the then Commissioner suspended the previously fixed rate as of January 1, 1934. Subsequently the Commissioner attempted to fix a rate of eighteen dollars and fifty cents per hydrant, effective January 1, 1934. This offer, in contrast with the forty-five dollar rate fixed in December, 1929, was not accepted by the plaintiff and never became effective. After January 1, 1934, plaintiff continued to supply the city with water but without any agreement as to price, unless certain proceedings before the Public Service Commission entitle it as a matter of law to have judgment for the claimed rate. We now consider these proceedings. In 1931, pursuant to the enactment of article 4-B of the Public Service Law, plaintiff filed with the Commission two tariff schedules, P.S.C. No. 1 and P.S.C. No. 2. P.S.C. No. 1 was to be effective until November first, at which time P.S.C. No. 2 was to take effect. P.S.C. No. 2 was suspended by the Public Service Commission and never became effective. On September 25, 1933, plaintiff filed a third schedule, P.S.C. No. 3, to be effective November 1, 1933, then superseding P.S.C. No. 1. This P.S.C. No. 3 the Commission approved without prejudice to an investigation.

The question which is presented for decision is whether we may say, as a matter of law, that the plaintiff intended to file these schedules for the purpose only of fixing a rate for the future, or whether the plaintiff filed these schedules solely for the purpose of the information of the Commission and as showing that the plaintiff was not relying on establishing a new rate schedule, but was relying upon and merely filing the order of the Commissioner of December 20, 1929. Did these schedules fairly give notice to the city that they would have the effect of establishing a new rate pursuant to the Public Service Law? Or were these schedules filed solely for the purpose of giving information to the Commission that plaintiff was relying on the order of the Commissioner, made December 20, 1929, pursuant to which they were still supplying water, and which order had never in any way been revoked nor had the city made any dissent to the carrying out of this order. The schedule, in fixing the rate of forty-five dollars per hydrant, refers to it as a rate fixed by order of the Commissioner of Department of Water Supply, Gas and Electricity, dated January 1, 1929, and had appended thereto and as a part thereof a copy of this order of the Commissioner. Furthermore, the schedule refers to this order as a contract. Also, this order was listed in the table of contents under the heading "contracts" and was grouped with plaintiff's contracts with other municipalities. Furthermore, these schedules nowhere invoked the authority of the Commission. Also, in this connection, it is important to note the contrasting language used by the plaintiff in its schedule P.S.C. No. 4, which was filed in 1936 after the Public Service Commission had investigated and fixed a hydrant rate of forty dollars. No reference is made in P.S.C. No. 4, as there was in all the other schedules, either to contracts or to a rate fixed by order of the Commissioner of Department of Water Supply, Gas and Electricity of New York, dated January 1, 1929. In addition, this latter schedule, P.S.C. No. 4, is not based on the 1929 order of the Commissioner but is "issued in compliance with order of the Public Service Commission made in case No. 8356." The foregoing would seem to leave little doubt that P.S.C. Nos. 1, 2 and 3 were filed solely for the information of the Commission. It does not negative such construction to consider that if these schedules were filed solely for the information of the Commission there was less likelihood of an investigation by the Public Service Commission than if they had been filed by the plaintiff for the purpose of establishing a rate. And apparently that was the effect, for it was not until three years later, or January, 1934, when the city, by revoking the rate of forty-five dollars, which had been established by common consent, compelled the filing of a schedule, and started an investigation with the result of fixing the rate at forty dollars.

On the foregoing facts there is little doubt but that we might hold, as a matter of law, that these schedules were filed solely for the purpose of informing the Commission that the plaintiff was relying on the rate fixed by common consent, based upon the order of the Commissioner, which was appended to such schedules. As the opinion at Special Term well said, "True, the schedules filed by the plaintiff from time to time (PSC No. 1, water; PSC No. 2, water, and PSC No. 3, water) contained the rates to be charged to the defendant, but those rates were therein referred to as `fixed by order of the Commissioner of Department of Water Supply,' etc., and that order was appended to such schedule." (167 Misc. Rep. 863, 866.)

It is not necessary, however, for us to go so far as to hold that these schedules were filed as a matter of law for the information of the Public Service Commission that the plaintiff was relying on the 1929 order of the Commissioner fixing the rate at forty-five dollars. It appears in the record that subsequent to the filing of these schedules certain proceedings took place between the plaintiff, the City of New York and the Commission. The Commission directed a hearing. A hearing was had before the Public Service Commission, on notice to the Acting Commissioner of Water Supply and plaintiff attended this hearing. Apparently the city appeared but asserted that it would not be bound by any valuations approved in the proceeding. On December 20, 1932, the Public Service Commission rejected Schedule No. 2 without prejudice to an application for a review of the rates and charges by the plaintiff. It may be that out of the appearance of the plaintiff and defendant before the Public Service Commission and the action of the Commission in connection therewith, that it will be found as a fact that these schedules were filed not solely for the purpose of the information of the Commission, in the hope of continuing to supply water pursuant to the 1929 order of the Commissioner, but for the purpose of establishing a rate under the Public Service Law, wholly apart from the rate fixed by the order of the Commissioner.

If the trial court reaches the conclusion that these schedules were filed merely to inform the Public Service Commission that the plaintiff was relying upon the 1929 order of the Commission then there remains another issue of fact, namely, the reasonable value of the water supplied, which also must await the trial. If, on the other hand, it is found that the plaintiff by these schedules intended to disregard the 1929 order of the Commissioner of Water Supply and attempt to fix a new rate, then the plaintiff will be entitled to judgment for the period in question at the rate of forty-five dollars per hydrant.

It follows that the order appealed from should be affirmed, with costs, and the question certified answered in the negative.

LEHMAN, O'BRIEN, HUBBS and LOUGHRAN, JJ., concur with CRANE, Ch. J.; FINCH, J., dissents in opinion in which RIPPEY, J., concurs.

Orders reversed, etc.