Chicago Pipeline Co. v. Commerce Com. , 361 Ill. 296 ( 1935 )

A certificate of public convenience and necessity was granted in 1933 by the Illinois Commerce Commission, appellant, to the Chicago District Pipeline Company, appellee. The order of the commission permitted appellee to maintain and operate two gas pipelines owned by it upon condition that it would convey, deliver and sell gas at wholesale to corporations, both municipal and private, engaged in the sale and delivery of gas to the public. From this order appellee perfected its appeal to the superior court of Cook county, which upon consideration vacated and set aside the order of the commission. By this direct appeal the judgment of the superior court is assailed as erroneous.

The chief controversy hinges about the restrictive condition imposed upon appellee in the commission's order. Appellee's petition only asked for leave to sell gas at wholesale to privately owned public utility companies located along its pipelines in LaSalle, Grundy, Kendall and Will counties. By an amendment appellee also asked for consent and approval of a contract with the Public Service Company of Northern Illinois for the purchase of the latter's 20-inch pipeline extending from a point in Cicero to the city limits of Chicago. These were the issues presented to the commission which it took for determination upon exhibits and testimony produced at the hearing. No issue was raised and no evidence was heard as to any proposed sale of gas to any municipal corporation.

Two weeks after the cause had been submitted to the commission and marked "heard and taken," the village of Hinsdale presented its petition asking leave to intervene in the cause. The petition recited, among other things, that it was a municipal corporation authorized by the laws of this State to acquire, own and operate a distribution system for the supply of gas to its inhabitants; that it was situated within relatively close proximity to one of appellee's pipelines, and that in case such village acquired a gas-distribution system, its situation would make feasible a connection with appellee's pipeline, through which a supply of gas might be obtained. The petition urged that no certificate of convenience and necessity be granted to appellee until its supply of gas was made available for purchase at wholesale, not only by public utility companies but also by any municipality which might qualify itself to own and operate a gas-distribution system. The prayer of the petition for leave to intervene was granted, together with leave to argue the case orally and file written briefs.

The superior court did not err in holding that the village of Hinsdale was improperly permitted to intervene and become a party to the proceeding before the commission. The disputed clause in the commission's order undoubtedly arose from such intervention, as no issue of the right of municipalities to buy gas for public distribution had previously been raised. The village of Hinsdale was not a party to the proceeding and appeared only as a possible future owner of a gas-distribution system. It offered no evidence of any kind. Nothing in the record shows that it now owns, in the past has ever owned or has any plan or prospect of owning in the future a municipal gas system. Its petition to intervene stated its interest to be "in case it acquires a gas-distribution system." This recital gave it no present right to complain or intervene. (Public Utilities Com. v. Marseilles Land Co.295 Ill. 522.) Its statutory right to acquire a gas-distribution system at some future time, if its inhabitants then desire it, was insufficient to confer upon it any interest in the pending proceeding. Whatever interest it possessed was altogether remote, expectant and contingent. Under these circumstances the Commerce Commission exceeded its powers in entering an order not based upon any petition of the parties properly before it and wholly unsupported by any evidence heard or taken. Altonand Southern Railroad v. Commerce Com. 316 Ill. 625; PublicUtilities Com. v. City of Dixon, 292 id. 521; Washington v.Fairchild, 224 U.S. 510.

The order entered by the commission was predicated upon the assumption that appellee, as a public utility, could not limit the scope of its public engagement to the sale of gas to other privately owned public utility companies, and thus, in effect, discriminate against municipal corporations. On this point it reasoned that once a public utility dedicates its property to a public use it thereafter becomes affected with a public interest and thus "subject to comprehensive regulation by the State." The principle of State regulation of all public utilities is well enough established, but in Illinois its application has never been extended to permit such unlimited or so-called "comprehensive" regulation as was attempted in this case. We have held privately owned business is clothed with a public use only to the extent that it may be formed to deal with a particular class of patrons, (People v. Ricketts, 248 Ill. 428,) or to the extent of the interest created, (Austin Bros. Transfer Co. v. Bloom, 316 Ill. 435, ) or held out for that purpose. (Public Utilities Com. v.Monarch Refrigerating Co. 267 Ill. 528.) In the case at bar appellee's public engagement extended only to the supply of gas at wholesale to all public utilities located along its pipelines. The legislature has not yet given the Commerce Commission any regulatory powers or jurisdiction over municipally owned and operated utilities. In fact, municipally owned and operated utilities are expressly excluded from the statutory definition of public utilities in this State; (Cahill's Stat. 1933, chap. 111a, par. 25; Smith's Stat. 1933, chap. 111 2/3, par. 10;) and this definition, though attacked as arbitrary and unreasonable, was upheld in Springfield GasCo. v. City of Springfield, 292 Ill. 236, and sustained in257 U.S. 66. No unlawful or unreasonable discrimination could therefore result in appellee's failure or refusal to extend its service beyond the scope of its publicly professed obligation. Nor can any legal sanction be found to authorize the commission's attempt to withhold a certificate of convenience and necessity from appellee until it agreed, as a condition subsequent, to sell gas to municipalities. Orders of this character, dependent upon submission to a collateral condition beyond the statutory and constitutional power of the commission to impose, have been repeatedly condemned. (United States v.Chicago, Milwaukee, St. Paul and Pacific Railroad Co.282 U.S. 311; People v. Public Service Com. 262 N.Y. 39, 186 N.E. 195;People v. Public Service Com. 227 id. 248, 125 N.E. 438.) On this point appellant's citations of contrary authority are beside the point, as they involve cases where the utility has voluntarily undertaken to render service in the community or area involved.

What we have said above largely disposes of the material legal issues involved in this appeal. The other points raised are similar, inter-related and to a certain degree moot in character. Thus, as argued by appellant, "it is proper and lawful for the commission to require that a public utility rendering wholesale service shall sell gas, upon reasonable application, to municipal as well as private corporations owning and operating gas-distribution systems." If the facts before us presented such an issue an inquiry would then be pertinent. As said before, no evidence was offered that public convenience and necessity would be served by the sale of gas to any municipal corporation for re-sale. Nor was there any finding of fact on this point — a natural result when no evidence was produced upon which such finding could be based. Section 65 of the Public Utilities act (Cahill's Stat. 1933, chap. 111a, par. 84; Smith's Stat. 1933, chap. 111 2/3, par. 69;) in part provides: "At the conclusion of such hearing the commission shall make and render findings concerning the subject matter and facts inquired into and enter its order based thereon." This requirement is mandatory and cannot be disregarded. (Kewanee and Galva Railway Co. v. Commerce Com.340 Ill. 266; Chicago Railways Co. v. Commerce Com. 336 id. 51;Northern Illinois Traction Co. v. Commerce Com. 302 id. 11.) Without such specific findings in the record the order is void. Chicago Railways Co. v. Commerce Com. supra; Chicago andEastern Illinois Railway Co. v. Commerce Com. 341 Ill. 277;Business Men's Ass'n v. Commerce Com. 337 id. 149.

The judgment is affirmed.

Judgment affirmed.