Public Service Commission v. Pavilion Natural Gas Co.

195 A.D. 534, 187 N.Y.S. 363, 1921 N.Y. App. Div. LEXIS 4790

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 28, 1921
• Status: Published

Opinions

Van Kirk, J.:

A stipulation in a franchise granted by a village to a gas company, fixing the maximum price which it will charge for gas furnished to the inhabitants of the village, is a contract; but it is a contract which is subject to the police power of the State and may be modified for the public welfare. The exercise of this power rests in the Legislature, which may confer the exercise of the power upon the Public Service Commission. The Legislature has conferred this power upon the Public Service Commission. (Pub. Serv. Comm. Law, § 66, subd. 5; Id. § 72;* People ex rel. Village of South Glens Falls v. P. S. Comm., 225 N. Y. 216, 223.) In this case the Public Service Commission has not exercised its power and the power has not been otherwise delegated by the Legislature than to the Public Service Commission.

The delegation of this power must be distinct and express. Subdivision 12 of section 66 of the Public Service Commissions Law

* grants power to require every gas company to file its rates and charges made, and provides how such charges may be changed, but it does not purport to give the gas company power to change its franchise contract by simply giving thirty days’ notice to the Commission and by publication for thirty days to the public. This would empower the gas company to change its rate by default and not under the police power of the Legislature, exercised directly or indirectly. It seems a perfectly consistent construction of the statute, giving effect to all its parts, to hold that subdivision 12 applies to cases where a maximum rate, for gas to be furnished to inhabitants of the village, is not fixed by the franchise contract, or where the proposed change is within the maximum rate; and that, where there is a franchise contract fixing such maximum rate, and the proposed rate exceeds it, subdivision 5 applies; otherwise one party to the contract would be authorized to change that contract without distinct and express authority from the Legislature. (Town of North Hempstead v. Pub. Serv. Corp., 193 App. Div. 224.)

The judgment should be reversed and a new trial granted, with costs to appellant to abide the event.

All concur, except Kiley, J., dissenting, with an opinion.

Since amd. by Laws of 1920, chap. 542.— [Rep.