Opinion
07-24-1931
JUNCTION WATER CO. v. RIDDLE.
Palmer Bradner, of Newark (Herbert M. Ellend, of Newark, on the brief), for complainant. Gebhardt & Gebhardt, of Clinton, for defendant.
Syllabus by the Court.
The control of public streets is vested in the governing body of the municipality in which they are located. Special rights therein granted by the municipality to private persons should be tested at law.
Syllabus by the Court.
An individual supplying several houses, owned by him and occupied by tenants, with water service through mains and conduits laid partly on his own land and partly in the public streets, does not thereby become a public utility within the meaning of that term as used in section 15, chapter 105, P. L. 1911, p. 376, as amended, Supplement Comp. St. 1925-1930, p. 1487, § *167—14.
Syllabus by the Court.
An individual or corporation does not become a public utility unless it owns, operates, manages, or controls a (utility) plant or system for public use under privileges granted by the state.
Syllabus by the Court.
The right to sell water is not a prerogative of government, but a business in which any person may engage without legislative authority.
Syllabus by the Court.
The true criterion by which to judge of the character of the use of any plant or system alleged to be a public utility is whether or not the public may enjoy it of right or by permission only.
Syllabus by the Court.
The board of public utility commissioners has general supervision and regulation of, jurisdiction and control over, all public utilities for the purposes specified in the Public Utility Act, with complete power to enforce its orders' and decrees.
Syllabus by the Court.
Matters within its jurisdiction should Be litigated before that board and resort had to the courts only for purposes of review or enforcement of its orders or decrees.
Syllabus by the Court.
A franchise granted by a municipality to a public utility corporation and approved by the board of utility commissioners is not exclusive.
Syllabus by the Court.
The regulation and control of public utilities vested in the board of public utility commissioners by chapter 195, § 15, P. L. 1911, as amended (Comp. St. Supp. § *167—14), is for the benefit of the state and its citizens, and not for the benefit of established utilities.
Syllabus by the Court.
A public utility corporation operating under a valid franchise granted by a municipality has no standing in this court to challenge the right of another corporation or individual to engage in a competing business under a franchise granted by the same municipality on the ground that such franchise has not been approved by the board of public utility commissioners.
Suit by the Junction Water Company against Frank G. Riddle.
Decree dismissing the bill.
Palmer Bradner, of Newark (Herbert M. Ellend, of Newark, on the brief), for complainant.
Gebhardt & Gebhardt, of Clinton, for defendant.
BERRY, Vice Chancellor.
The bill is for an injunction to restrain the defendant from supplying water to certaindwellings owned by him in the borough of Hamilton. The facts are not in material dispute. The complainant was incorporated in May, 1898, under P. L. 1876, p. 318, and since July 12, 1898, has been operating a system of waterworks under a franchise granted by the borough. The defendant is the owner of nine houses in the borough, one of which he occupies himself and the other eight of which he rents to tenants. In June, 1930, the defendant, becoming dissatisfied with the service of the complainant, began the laying of mains and conduits to connect Lis houses with an artesian well on one of his properties. The work was completed July 29, 1930, and since August 1, 1930, he has been supplying water to his nine houses from this well and through pipes and conduits, most of which are laid upon his own lands, but some of which are laid and maintained in the public streets by permission of the borough. He makes no separate charge to his tenants for water service, and there has been no increase in rent since that service was installed, but I think the cost of such service is necessarily reflected in the rent charged. Defendant's houses are still connected with the complainant's mains, but the water has been turned off. The defendant does not now, and does not intend to, supply water service to any properties other than his own, nor to any persons except his tenants, all of whom are apparently satisfied with the service which he gives.
Complainant contends that the defendant has no legal right to maintain pipes and conduits on his own property or in the public streets of the borough for the purpose of supplying water to the houses owned by him; also that the defendant is a public utility and operating a public utility plant without the approval or consent of the board of public utility commissioners.
That the defendant is within his rights in the laying of mains and conduits on his own lands and supplying through them his houses with water from an artesian well also owned by him and located on his own lands, I consider too plain for argument. With respect to his right to lay and maintain pipes and conduits in the public streets of the borough, the control of such streets being vested in the municipality by law (P. L. 1897, p. 296, § 28, as amended by P. L. 1914, p. 348; 1 Cum. Supp. to Comp. St. p. 172, § 24—28; see, also, "An Act Concerning Municipalities," chapter 152, P. L. 1917, p. 319, 2 Cum. Supp. to Comp. St., p. 2228, § *136—2201(c), Union Towel Supply Company v. Jersey City, 99 N. J. Law, 52, 123 A. 254), it is elementary that such rights should be tested at law (Tucker v. Freeholders, 1 N. J. Eq. 282; E. M. Harrison Market v. Montclair, 105 N. J. Eq. 222, and cases cited therein at page 224, 147 A. 502).
Nor do I think the defendant can said to be a public utility, or operating as such, within the meaning of that term as used in the act creating the Public Utility Commission (Supplement to Comp. St. 1925-1930, p. 1487, § 15 [section *167—141). Tinsupplying of water exclusively to houses and property owned by the defendant, notwithstanding that such water is consumed by tenants who are part of the public, is not, in my judgment, supplying water "for public use" . as contemplated by that act. The board of public utility commissioners has already gone further and said that one supplying water to his own dwelling and to the dwellings of a few neighbors is not thereby constituted a public utility, even though he charges for such service. In the Matter of Alfred W. Hill Water Service, 8 N. J. P. U. Reports, page 450, at page 454. While, of course, that statement is not binding on this court, it is interesting to note the trend of modern thought among utility specialists.
A water company, or an individual, does not become a public utility unless it owns, operates, manages, or controls a (water) plant or system for public use, and does this under privileges granted by the state. East Jersey Water Co. v. Board of Public Utility Commissioners, 98 N. J. Law, 449, 119 A. 679; Acquackanonk Water Co. v. Board of Public Utility Commissioners, 97 N. J. Law, 366, 118 A. 535. But "the right, however, to sell water is not prerogative of government, but is a business in which any person may engage without legislative authority." Atlantic City Water-Works Co. v. Consumers' Water Co., 44 N. J. Eq. 427, at page 132, 15 A. 581, 584. It is only with respect to the special use of the streets for pipes, mains, etc., that a grant from the state or its subdivisions is necessary. Id. A true criterion by which to judge of the character of the use of any plant or system alleged to be a public utility is whether or not the public may enjoy it of right or by permission only; Olmsted v. Proprietors of Morris Aqueduct, 47 N. J. Law, 311; Paterson v. East Jersey Water Company, 74 N. J. Eq. 49, at page 102, 70 A. 472; and it is not suggested that the public has any right to demand water service from the defendant.
Assuming, however, that the defendant is a public utility and operating under municipal consent not approved by the board of public utility commissioners (An Act Concerning Public Utilities, chapter 195, P. L. 1911, p. 384, § 24, 2 Cum. Supp. to Comp. St., p. 2892, § *167—40), complaint should be addressed to that board, as it has "general supervision and regulation of, jurisdiction amicontrol over, all public utilities" (chapter 195, P. L. 1911, p. 376, § 15, as amended by chapter 146, P. L. 1926, p. 226, Supplement to Comp. St. 1925-1930, p. 1487, § *167—14]), with complete power to enforce its orders and decrees. Chapter 195, P. L. 1911, p. 387, § 33, as amended by chapter 168, P. L. 1924, p. 379, 2 Cum. Supp. to Comp. St., p. 2895, § *167— 53; Board of Public Utility Commissioners v. Sheldon, 95 N. J. Eq. 408, 124 A. 65; Board of Public Utility Commissioners v. Lehigh Valley Railroad Company, 106 N. J. Law, 411, 149 A. 263, at page 267 (Court of Errors and Appeals, 1930).
The Legislature in setting up that board and investing it with its broad powers (West Jersey & Seashore Railroad Company v. Board of Public Utility Commissioners, 87 N. J. Law, 170, 94 A. 57, 59; Atlantic Coast Electric Railway Company v. Board of Public Utility Comm'rs, 92 N. J. Law, 168 at page 175, 104 A. 218, 12 A. L. R. 737) undoubtedly intended that questions such as that here involved should first be considered and disposed of by that board; and, while the act does not and could not derogate from the constitutional authority of the courts (Erie Railroad Company v. Board of Public Utility Commissioners, 87 N. J. Law, 438, 95 A. 177; Passaic Water Company v. Board, 90 N. J. Law, 714, 103 A. 1053), resort to the courts should be had, by the board, in matters within its jurisdiction, only when necessity arises for enforcement of its orders or decrees, and, by others, only for review of such orders or decrees. But, even if resort could be had to this court for relief in the first instance in this controversy, it does not appear that complainant has any standing to seek such relief. Although the complainant is operating under a franchise granted by the municipality, that franchise is not exclusive. Atlantic City Water Company v. Consumers Water Company, 44 N. J. Eq. 427 at page 433, et seq., 15 A. 581. And in Healy v. Sidone (N. J. Ch.) 127 A. 520, 521 (1923), it was held that the operation of a bus line in violation of an ordinance requiring municipal approval will not be restrained at the suit of another transportation company operating with such approval. In that case the complainant invoked section 33 of the Public Utility Act (supra) as authority for its suit, but Vice Chancellor Learning said that it is not "clear that that section relates to the enforcement in this court of duties of public utilities at the instance of an individual or corporation." I think it is clear that that section does not relate to such enforcement. It relates only to the enforcement of its own orders and decrees by the board itself in the appropriate court. In Elizabethtown Gaslight Co. v. Green, 46 N. J. Eq. 118, 18 A. 844, it was held that, until it is made clearly to appear that a statutory condition was imposed in favor of a suitor, or for his benefit, so that he has a clear right to demand its observance, his position with respect to such condition is merely that of a stranger without right to complain of its breach; and that it is only the parties to a grant made subject to conditions, or those in whose behalf or for whose benefit these conditions are imposed, that have a right to ask that they shall be performed, or to seek protection against their breach or redress for their, violation. See opinion of Justice Swayze in Public Service Railway Company v. Reinhardt, 93 N. J. Eq. 461, at page 470, 115 A. 747, 119 A. 878, affirming the decision of this court, reported in 92 N. J. Eq. 365, 112 A. 850.
There is nothing in the Public Utility Act to suggest that it was enacted for the benefit of those owning, operating, or controlling public utilities. The board of public utility commissioners is the successor of the Railroad Commission, which had general supervision of all railroads operating in this state. By the Public Utility Act the name of the old commission was changed and the jurisdiction extended to include all public utilities. In West Jersey & Seashore Railroad Company v. Board of Public Utility Commissioners, supra, it was held that the regulation and control of utilities was vested in that board for the benefit of the state and its citizens. In that case the court had under consideration the question of the necessity of approval by the board of a lease by one railroad company to another. Chief Justice Gummere, speaking for the Court of Errors and Appeals, said that the requirement of approval by the board was "for the purpose of preventing a lease from being made which, in its judgment, embraced provisions which would be inimical to the interests of the state and its citizens, or which omitted provisions which were requisite for the protection of those interests." The same reasoning applies to the requirement of approval by this board of franchises granted by a municipality. See Fornarotto v. Public Utility Commissioners, 105 N. J. Law, 28, 143 A. 450. That the board's disapproval of franchises in some instances inures to the benefit of a public utility already operating in a particular municipality, does not indicate that approval was required for its especial benefit. On the contrary, it is required in the public interest and to insure adequate service by one utility, where, if there were more than one authorized to give the same service in the same locality, neither could supply adequate or satisfactory service, as neither could operate with profit if the business of the community were divided. Hunter v. Public Utility Commissioners, 141A. 90,1 N. J. Misc. R. 408; Motor Transport Co. v. Board of Public Utility Commissioners, 104 N. J. Law, 234, 140 A. 793. This power of approval is intended also for the protection of the investing public, the value and stability of whose securities might be seriously affected by unnecessary competition where adequate service at reasonable rates is already being furnished by the operating utility. Such benefits as accrue to establish utility corporations from the requirements of section 24 of the act are the incidental result, and not the primary purpose, of the Legislature.
I will advise a decree dismissing the bill.