Town of North Hempstead v. . P.S. Corp. , 231 N.Y. 447 ( 1921 )

The first question certified is more broadly stated than is necessary for the determination of this appeal which presents only the case of a consent given after the enactment of the statute referred to in the question. It reads as follows:

"Has a public service gas corporation, whose consent from the municipal authorities of a town contains as a regulation a statement prescribing a maximum rate to be charged to private consumers, the right to charge an increased rate by filing a schedule as prescribed by statute specifying the increased rate pursuant to section 66, subdivision 12, of the Public Service Commissions Law, in advance of an order of the Public Service Commission determining and prescribing that the increased rate is just and reasonable?"

The second question, "Was plaintiff's motion properly granted as a matter of law?" presents the actual controversy on this appeal, and is the only one that can be reviewed. (Schenck v.Barnes, 156 N.Y. 316.)

The provisions of Public Service Commissions Law ([Cons. Laws, ch. 48] § 66, subd. 12) in question read as follows:

"* * * Unless the Commission otherwise orders, no change shall be made in any rate or charge, or in any form of contract or agreement or any rule or regulation relating to any rate, charge or service, or in any general privilege or facility, which shall have been filed and published by a gas corporation, an electrical corporation or municipality in compliance with an order of the Commission, except after thirty days' notice to the Commission and publication for thirty days as required by order of the Commission, which shall plainly state the changes proposed to be made in the schedules then in force and the time when the change will go into effect. The Commission for good cause shown may allow changes without requiring the thirty days' notice under such conditions as it may prescribe. No corporation or municipality shall charge, demand, collect or receive a greater or less or different compensation for any service rendered or to be rendered than the rates and charges applicable to such services as specified in its schedule filed and in effect at the time. * * *"

These provisions were in force when the plaintiff gave its consent to the defendant to maintain and operate its gas mains within the town; entered by implication into the terms of such consent; formed part of its obligation; and were notice to the town that the consent was coupled with the provision of the statute that the defendant was empowered to abrogate it as to the rates stipulated therein and was allowed by law to put into operation a new schedule of just and reasonable rates and charges to be made for service (Public Service Commissions Law, § 65, subd. 1) on thirty days' notice to the commission and publication for thirty days as required by order of the commission. (Villageof South Glens Falls v. Public Service Commission, 225 N.Y. 216;People ex rel. City of New York v. Nixon, 229 N.Y. 356,361; Public Service Commission v. Iroquois Natural Gas Co.,184 App. Div. 285; affirmed, without opinion, 226 N.Y. 580;People ex rel. New York Steam Co. v. Straus, 186 App. Div. 787,805; affirmed, without opinion, 226 N.Y. 704.)

After rates are established by the filing of schedules, a review thereof may be had on complaint under Public Service Commissions Law (§§ 71, 72) and the commission will then determine and fix such prices as will in its judgment be adequate, just and reasonable.

This method of increasing rates without first obtaining an adjudication as to their reasonableness may appear defective and illogical, but no constitutional limitation on legislative power interdicts it and no exception in favor of rates stipulated in a municipal consent granted subsequent to the enactment of the Public Service Commissions Law can be read into it without doing violence to the plain language of the statute. The legislative power of rate regulation must, therefore, be upheld so far as it affects franchises of which such statute forms a part. The question of the power of gas companies to increase rates without a prior determination of the Commission as to the fairness thereof when the franchise fixing such rates in connection with the consent of the municipal authorities (Trans. Corp. Law [Cons. Laws, ch. 63], § 61, subd. 1) antedates the statute is not before us. We have already held that the gas company is not remediless in such a case. (Village of South Glens Falls v. PublicService Commission, supra.)

The order appealed from should be reversed, with costs in this court and in the Appellate Division, and the order of the Special Term vacating the temporary injunction should be affirmed. The second question should be answered in the negative and the first question should not be answered.

HISCOCK, Ch. J., HOGAN, CARDOZO, CRANE and ANDREWS, JJ., concur; CHASE, J., deceased.

Ordered accordingly.