Graham v. Philadelphia

6 A.2d 78, 334 Pa. 513, 1939 Pa. LEXIS 662

• Court: Supreme Court of Pennsylvania
• Decided: March 20, 1939
• Docket: 226; 157, Misc. Docket, 7
• Status: Published

Opinions

In order to aid the City of Philadelphia in its effort to balance the budget, which has been too long delayed, we make the following order, to be followed later by an opinion giving our views on the various questions propounded. We wish to emphasize what was said at oral argument that this court is not responsible for the wisdom of the plan or the policy to be employed in balancing the budget for the fiscal year 1939. Our sole duty is to pass on the legal questions involved, which we now do.

We hold that the City has the power to sell and assign the rentals payable under the operating contract or lease with the Philadelphia Gas Works Company; that the transaction does not constitute an increase of debt in contravention of Article IX, sections 8 and 10 of the Constitution of Pennsylvania; that it is not necessary to secure the approval of the Public Utility Commission to the lease contract or the proposed contract to sell to the Philadelphia Corporation; that the City has the power to contract to pay from current revenues any deficit in the rentals so sold or assigned occasioned by any act of the Assembly regulating rates for gas either directly or through a commission. Such current revenues to pay such deficits may be obtained by a special tax to be levied by future councils of the City. The City is empowered to apply the proceeds of the transaction now before us to all the purposes specified in the record now before the court.

The City of Philadelphia does not by this transaction and cannot under it assume any direct or indirect liability in the nature of a debt that might be assessed against either the property, or the revenues of the City, other than the possible deficit that might result from future legislation, to be paid from current revenues raised by the special tax.

As the above answers all questions necessary to the constitutional and legal validity of the proposed transaction, we do not deem it necessary to decide whether the rates for gas from the City-owned Gas Works are subject to regulation by the Pennsylvania Public Utility Commission, or whether the General Assembly of the Commonwealth of Pennsylvania can, during the period of the assignment, of itself regulate or appoint a governmental agency to regulate these rates.

Bill dismissed.