Acknowledgment by Corporations of the Receipt of Certified Copies of Orders of the Commission Public Service Commissions Law, Section 23. OPINION OF COUNSEL. August 15, 1907. Public Service Commission for the First District, TRAVIS H. WHITNEY, Esq., Secretary: DEAR SIR.I am in receipt of your letter of August 12 inquiring as to the provision of section 23 of the Public Service Commissions Law, respecting notice of corporations to the Commission of the receipt of certified copies of orders, and referring to a letter of William Greenough, said to be an attorney for the New York, New Haven and Hartford railroad. I think that in the case of such a corporation, the notification to the Public Service Commission of the receipt of its order given by the corporation to which it is addressed must be signed by a person or officer duly authorized, and should be acknowledged by him in the form prescribed by law for the acknowledgment of deeds by corporations to be used in this State. I think, however, that the provision for acknowledgment is merely directory, and that a communication admitting the receipt of an order, if signed by the president, secretary or general manager of the corporation, may be accepted by you without acknowledgment, if you wish to do so, but I do not think an attorney can be presumed to have any authority to admit receipt of such orders except, perhaps, after proceedings before the Commission have been instituted, in which he has entered formal appearance, and that in his case a formal acknowledgment of the notification should be required. It will not be proper for you to state to Mr. Greenough that such notification may be sent to the Public Service Commission by mail. It is the duty of the railroad company to give the notification to the Commission required by the section of the law, and it is not material how the notice is transmitted, provided it is received, but you may not authorize any corporation to commit its required notification to the risk of the mails. Very truly yours, (Signed) ABEL E. BLACKMAR, Electricity Rates - Discrimination - Discontinuance of Service - Transportation Corporations Law, Sections 65, 66 Public Service Commissions Law, Section 72. OPINION OF COUNSEL. September 13, 1907. Public Service Commission for the First District: GENTLEMEN.I am in receipt of your communication regarding the complaints made by the Mutual Inspection and Adjustment Company in behalf of Henri Mouquin and of Messrs. Vogler and Vogler, both against the New York Edison Company. The first of these complaints refers to an alleged discrimination in charges, and the second to an arbitrary discontinuance of the electric light connection. It seems to me that both of these complaints are well founded. It was decided in the case of Armour Packing Company against the Edison Electric Illuminating Company, 155 App. Div. 51, that electric lighting companies are by law under an obligation to furnish service without discrimination in price under similar circumstances and conditions. In that case the plaintiff sued to recover payments made to the defendant, on the allegation that the defendant was at the same time and under similar circumstances and conditions furnishing electricity to others at a less rate, and upon demurrer the court upheld the sufficiency of the complaint. In Mr. The complaint of Messrs. Vogler and Vogler is also well founded. Norton's letter to Mr. Whitney accompanying the complaint, he suggests that a report be made upon the following fundamental legal points involved: (a) The right of the New York Edison Company, à monopolistic public service corporation, to cancel their agreements and disconnect service on thirty days' notice, if a customer has paid all bills presented in full. (b) The right of the New York Edison Company to increase its rates to customers after contract has been once entered into." Regarding the first of these propositions. I would report that in my opinion an electrical corporation has no right to cancel and disconnect service arbitrarily, unless the customer is in default in payment of bills duly rendered. Section 65 of chapter 566 of the Laws of 1890, known as chapter 40 of the general laws, requires that gas companies and electric lighting companies furnish services on demand to persons who apply for it in writing, and whose premises are within one hundred feet of a gas main or electric wire. Section 66 provides that the lighting companies may require a reasonable deposit to secure the payment for two months' service. If the applicant for service is willing to make the deposit, and makes a formal demand, it is the duty of the lighting company to make the connection and furnish the service; and it necessarily follows that such a company is without right to disconnect the service arbitrarily. It seems to me equally plain that they have not the right to require a yearly contract as a condition for making the service, for such a requirement in many instances would practically nullify the provisions of section 65 of the law above referred to. I am also of the opinion that the New York Edison Company has no right to increase its rates to customers after contract has once been entered into. The law of 1905 established a maximum of 10 cents per kilowatt hour; but even if the rate established had been an absolute one, contracts theretofore legally made for a less rate would remain binding upon the company. It is elementary that a legislative act cannot impair the obligation of valid contracts already made. In both of these cases the complainants have a complete remedy in the courts. In the case of discrimination, a suit may be brought under authority of the Armour Packing Company case above cited, to recover back the excess paid. In the case of disconnection of service, the complainant may make a formal written demand for the connection, and if the company refuses to furnish service he may, under the authority of the section above cited recover a penalty of ten dollars and five dollars for each day during which the refusal continues. I now consider the power of this Commission in dealing with these complaints. The provisions regarding the supervision and control of gas and electrical corporations are different from those regarding the control of railroads and street railroads. The only provision in the act for orders against gas and electrical corporations is contained in section 72. It is there provided that "The Commission within lawful limits may, by order, fix the maximum price of gas or electricity to be charged by such corporation or person, or may order such improvement in the manufacture or supply of such gas, in the manufacture, transmission or supply of such electricity, or in the methods employed by such person or corporation as will in its judgment improve the service." It is obvious that these orders are such as refer to the general service and not to the enforcement of the rights of an individual against a corporation in isolated cases. If it is claimed that a general method exists requiring yearly contracts as a condition to service, an investigation might be ordered under section 72, and if such method is found to exist, it could be prohibited by order. The same might be said of discrimination in service, although the concrete case presented seems to me to be an isolated case which could not be made the basis of a general order. If the Commission desires, I will frame an order for such investigation. Yours very truly, (Signed) ABEL E. BLACKMAR, Counsel to the Commission. Hon. MILO R. MALTBIE, Commissioner, Public Service Commission for the First District: DEAR SIR. You have asked me to advise whether in my opinion it would be desirable to extend the inquiry as to the reasonableness of the rates of electric lighting companies to the county of Kings, or as I understood it to the whole of the territory of the First District, and whether it would not be advisable to proceed upon our own motion instead of upon the complaint filed by outside parties. The Merchants' Association proposed to make a complaint against the Edison Electric Lighting Company alone respecting its service and price for electricity, but as the law requires that this Commission shall prescribe the form of complaint. the matter was referred to me. I advised that the complaint be made against all companies serving under the same conditions in the same territory, in order that any question of the legality of the different rates for different companies who are operating in the same territory under the same conditions might be avoided. a There has recently been a decision of a district judge in California to the effect that it is competent for a municipality authorized to fix telephone rates to prescribe different rates for different companies. However, the Supreme Court, in recent case has raised this question as one of importance, but has not yet answered it, because the decision of that case did not require its answer. The more I consider the question the firmer I am grounded in my opinion that in the case where different gas or electrical corporations are serving the same territory under the same general conditions, the rate prescribed must be uniform for all. This principle does not necessarily apply to railroads and street railroad corporations. See page 278. It is primarily a question of policy whether we should extend the present complaint to embrace Kings county or not. Chapter 732 of the Laws of 1905, which prescribes the maximum rate for electricity, provides that the rate shall be ten cents per kilowatt hour in the city of New York except in the Fifth ward of the borough of Queens, and also except that there may be charged twelve cents per kilowatt hour in Kings county. The present maximum rate in Kings county is, therefore, different than that in Manhattan and Bronx. As the Legislature has recognized that different conditions prevail in these different boroughs, and, therefore, that a different rate may be fixed for each, I see no reason for requiring a complainant to include in one complaint the service in these two counties. No criticism can be made of the Commission for considering Manhattan borough first if the complaint is made by an outside party. The question whether this Commission has power to fix a maximum rate upon a hearing or investigation made upon its own motion, is a more difficult one. My first impression was that such proceedings could be instituted either by complaint or upon the motion of the Commission. Further thought has created a doubt on this point. In Article III of the Public Service Commissions Law, which contains provisions relative to the powers of the Commissions in respect to common carriers, railroads and street railroads, no order can be issued affecting rates except upon a complaint made by third parties. The presumption would be that the same practice in this respect would also apply to rates of gas and electrical corporations, and such was the case in the old Gas and Electric Commission Law, chapter 736 of the Laws of 1905. The Gas Commission had no power to fix rates except upon the proceedings instituted by the complaint of outside parties. In cities of the first class complaints as to price must be signed by one hundred customers or purchasers (Section 71). The object of this provision seems to me to prevent an inquiry as to price unless there is official or general dissatisfaction with it. The law also provides elaborate means for carrying on an investigation instituted on such complaint and there would be no doubt about the question that the complaint must be made by third parties except for one sentence which was incorporated in section 71, which is in other respects taken almost verbatim from the old Gas and Electric Commission Law. The sentence is as follows: "If an investigation be instituted upon the motion of the Commission the person or corporation affected by the investigation may be permitted to appear before the Commission at a time and place specified in the notice and answer all charges which may be preferred by the Commission." This clause inserted in the midst of the section regulating the method of proceeding upon a complaint would seem to refer to this same subject matter, namely, the regulation of price of gas and electricity; but as section 71 limits, the causes of complaints filed by third persons to "either the illuminating power, purity, or price of gas, or the initial efficiency of the electric incandescent lamps supplied, or the regulation of the voltage of the supply system used for incandescent lighting or price of electricity sold and delivered in such municipality," and as there are other causes of complaint suggested by section 66 of the law. it may still be that the clause above quoted refers to investigations instituted by the Commission under section 66, which may involve other subjects than the price of gas and electricity. If this clause occurred in any other section than section 71, we should not doubt this fact. In my opinion, therefore, the safe construction is that the action of the Commission in determining the initial efficiency of the electric incandescent lamp supply or the regulation of the voltage of the supply system, or the price of elec tricity sold, is limited to cases where complaints are filed as provided in section 71. but orders of any other character may be issued upon proceedings instituted by the Commission itself. If the Commission thought that the price of electricity should be investigated and no person was ready to file a complaint, I would advise that jurisdiction be assumed on the motion of the Commission and the question tested in the courts; but so long as other parties stand ready to file the complaint, I believe that the Commission should not act on its own initiation. I am sending a communication the Commission suggesting a form of complaint. to (Signed) Yours very truly, ABEL E. BLACKMAR. Electricity Fixing Rates Investigations - Public - Public Service Commissions Law, Sections 45, 66, 71. OPINION OF COUNSEL. December 5, 1907. Public Service Commission for the First District: You will notice that the resolution does not involve an inquiry into the organization and capitalization of the companies or into the cost of the manufacture and distribution of electricity. The reason why I have omitted these subjects of inquiry is, that I have serious doubts as to whether the law justifies an inquiry into these subjects upon an investigation made on the motion of the Commission. As these The Commission has no power under the act, as I believe, to make an order fixing the maximum price of electricity after a hearing made upon its own motion, but can proceed only upon a complaint filed as provided in section 71. elements of inquiry which are omitted are pertinent only to the question of fixing the proper price, an inquiry into them cannot be made on the motion of the Commission, unless other provisions of the act expressly authorize it. A careful analysis of the law shows that an inquiry into these subjects is not expressly authorized except on a hearing made upon a complaint. The provisions of section 71, regarding the method of bringing about an inquiry into the price upon a complaint made by third parties is a strong impression of legislative intent that such inquiry shall not proceed upon the motion of the Commisssion. This Commission has no general powers of investigation and cannot exercise such powers except in furtherance of the purposes of the act or as expressly permitted; and as I have reached the conclusion that the act contains no general provisions authorizing an investigation into these subjects and that these subjects are pertinent only to an investigation for the purpose of fixing the price, which can only be had upon complaint, I am of the opinion that we cannot properly include those subjects in the resolution which I present. With respect to the general powers of investigation, the article of the law which is applicable to gas and electric corporations differs widely from the articles applicable to railroads, common carriers and street railroads. Articles 2 and 3, referring to these latter agencies, contain an express authorization of a general investigation into the general condition and capitalization of the companies (see section 45); but such general authorization is not found in the article relating to gas and electric corporations. Subdivisions 2 and 5 of section 66 seems to me to authorize such an investigation as this resolution provides for, but I cannot find any warrant in the act for extending it to the subjects which I have omitted. Yours respectfully. (Signed) ABEL E. BLACKMAR, Electric Current Sale of, in Cases in which Manufacturer Does OPINION OF COUNSEL. November 15, 1907. Hon. MILO R. MALTBIE, Commissioner, Public Service Commission, First District: DEAR SIR.-- I am in receipt of your letter of November 13th. asking whether a person owning an electric light plant and supplying current for his own house, may supply current to another person, in the same block, without using the street and without extending wires or allowing mains upon the property of the third party; also whether the rule is different in the case where the wire is run over a third party's premises, but with his consent. It has been held in the case of Fanning v Osborne. 102 N. Y. 441, that the right to construct and operate a street railway is a franchise which must have its source in the sovereign power and that the construction and maintenance of a street railway by any individual or association of individuals, without legislative authority, would constitute a public nuisance. I think the same rule would apply to the construction and operation and transmission of electricity where the use of a public street was necessary in the conducting of the enterprise in the State of New York. In a case, however, where no use of the public street or public property is necessary, and the consent of a third party for the use of his property is obtained, as in the case you mention, I think there is no franchise exercised and that no legislative authority is necessary. I find in a recent text-book, known as Joyce on Electric Law, section 184-a, a statement, based upon a Maryland case not long since decided, that the right to produce and sell electricity as a commercial product without legislative authority or franchise, is a business which is not a prerogative of government, but is opened to all who may desire to engage therein, like the manufacture and sale of any other commercial product, but the use of city streets for the purpose of delivering electricity to the consumer is a franchise which must be derived directly or indirectly from the State. I am of the opinion, therefore, that one who owns an electric plant may supply current to another person in the same block. without using the street and may extend his wires upon the property of the third party, with his consent, for the purpose of supplying electricity, and may supply the same in that manner without legislative authority or procuring a franchise so to do. Very truly yours. (Signed) ABEL E. BLACKMAR, $50 Express Companies - Discrimination and Preference Clause in Contract as Affecting Adjustment of LiabilityPublic Service Commissions Law, Sections 31, 32, 35. TRAVIS H. WHITNEY, Esq., Secretary, Public Service Commission, First District: DEAR SIR.I have your letter of the 6th inst., transmitting the file of correspondence relative to the claim of Spear & Company against the Adams Express Company. In the letter of Spear & Company to you of the 12th of September last, they say: "We made a shipment by Adams Express on Nov. 16, 1906, to E. P. Leeven & Co., 475 Broadway, New York City. "The goods were never delivered by Adams Express Co., and they offered to settle for the lost merchandise for $50.00. "They claim that your commission will not allow them to pay more than $50.00 for any claim." "Kindly advise us whether they are correct in this assertion, and oblige." I confine myself to the inquiry contained in this letter, for, although in some of the later letters the complainant seems to have the impression that the Commission is about to enforce the payment of its claim, that is not within the duties of the Commission, and Spear & Company must take such action in the courts as they are advised by their counsel. The correspondence file does not contain the express receipt referred to in the letters, but I assume it to have been in the usual form and to have limited liability thereunder to $50, and I also assume, for the purposes of this case, that such a limitation is not affected by the provisions of the Public Service Commissions Law. The Public Service Commissions Law, by sections 31, 32 and 35, prohibits discrimination. Section 32 is especially broad, providing : "Section 32. Unreasonable preference. No common carrier shall make or give any undue or unreasonable preference or advantage to any person or corporation or to any locality or to any particular description of traffic in any respect whatsoever, or subject any particular person or corporation or locality or any particular description of traffic to any prejudice or disadvantage in any respect whatsoever." And I can understand how the general counsel to the express company, looking at it from the company's standpoint, might say that in settling claims in excess of its strict contractual liability it would run some risk of being called to account by one of the Commissions. Going back, however, to the primary purpose of the act, we find that the two underlying evils of discrimination it was intended to prevent was inequality in rates and inequality in service. This case has proceeded beyond that point; there is no objection to the rate charged, and the service is under attack only in that the property entrusted to the express company has been lost. The claim is made for a money equivalent of the goods lost. The only difficulty in answering an inquiry like the present one is that the recognition of excessive or baseless claims might furnish a ready method by which the common carriers, if they so desire, could evade the prohibition of discrimination in rates. that is, a carrier could allow a rebate under the guise of an allowance for property lost or damaged. But in spite of this difficulty I do not think that there is any authorization for the Commission to interfere with a just and bona fide attempt to adjust liability. Whether the claimants could recover in an action at law more than the $50 offered in settlement I do not attempt to determine, but I think that even if they could not. the excess payment is a matter between the express company and its stockholders and is not subject to regulation by the Commission any more than would be the extent of its employees' compensation or the adjustment of any other kind of liability. I should, therefore, suggest that you advise Spear & Company that without considering the details of their claim. that this Commission has no objection to any adjustment they may make with the Adams Express Company, provided that it is a bona fide adjustment and not an attempt to evade the prohibition against discrimination in rates or service. I return herewith the correspondence file transmitted to me. (Signed) Yours very truly, ABEL E. BLACKMAR, See page 239 |