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New Jersey Suburban Water Co. v. Town of Harrison

Decided: August 11, 1938.

NEW JERSEY SUBURBAN WATER COMPANY, A CORPORATION, PLAINTIFF-RESPONDENT,
v.
TOWN OF HARRISON, DEFENDANT-APPELLANT



On appeal from the Essex County Circuit Court.

For the plaintiff-respondent, George W. C. McCarter.

For the defendant-appellant, Michael J. Bruder and Anthony P. Kearns.

Before Justices Case and Donges.

Case

The opinion of the court was delivered by

CASE, J. Plaintiff, a water utility, contracted in 1903 with defendant, one of the municipal corporations of the state, to deliver to defendant, over a term of years and at a named rate, the town water supply, distribution to consumers to be made by the defendant. In 1924 the parties entered into an extension and supplemental agreement, in force during the period sued upon, renewing and continuing the terms of the earlier agreement "with the exception that the price to be paid by the Town for all water supplied by the company to the Town during the said additional period of fifteen years herein agreed upon, shall be at the rate of One Hundred Four and 25/100 ($104.25) Dollars per million gallons instead of Eighty-two and 50/100 ($82.50) Dollars per million gallons [the amount fixed under the agreement of September 15th, 1903], but subject, however, to the right and privilege for either the Company or the Town at any time during the said additional term of fifteen years to apply unto the Board of Public Utility Commissioners of the State of New Jersey or any other State Board having jurisdiction over the same, to change the said rate for water which is being fixed under this agreement by the parties hereto." After the making of the extension agreement, but before the event next mentioned, the town made application for and received from the Board of Public Utility Commissioners an order reducing the water rate from $104.25 to $99 per million gallons. On April 30th, 1936, the company filed with the Public Utility Commissioners a lengthy petition, simultaneously serving a copy upon the municipality, which contained as paragraph 2 this:

"The Schedule of rates presently effective is $99.00 per million gallons. Your petitioner as of June 1st, 1933, will increase its rate to the sum of $151.91 per m.g.;"

And as its closing paragraph this:

"Your petitioner hereby files its schedule effective June 1st, 1936, of a rate of $151.91 per million gallons, and prays that the same will be fixed and allowed by your Honorable Board."

This and the other data contained within the petition was in compliance with the board "Conference Ruling Number Fifteen Applying to Changes in Rates by Public Utilities," one of the regulations set up by the ruling being that written notice containing the information therein required should be mailed to the office of the board at least thirty days prior to the date when the proposed change of rate was to be made effective. Section 17(h) of the act concerning public utilities, chapter 195, Pamph. L. 1911, as amended by chapter 150, Pamph. L. 1926, provides that:

"When any public utility as herein defined shall increase any existing individual rates, joint rates, tolls, charges or schedules thereof * * * the board shall have power either upon written complaint or upon its own initiative to hear and determine whether the said increase, change or alteration is just and reasonable. * * * The board shall have power pending such hearing and determination to order the suspension of the said increase, change or alteration until the said board shall have approved said increase, change or alteration, not exceeding three months. If such hearing shall not have been concluded within such three months, the board shall have power during such hearing and determination to order a further suspension of said increase, change or alteration for a further period not exceeding three months. It shall be the duty of the said board to approve any such increase, change or alteration upon being satisfied that the same is just and reasonable."

Up to May 3d, 1937, when the summons in the present suit issued, there had been no order by the board either granting, denying or suspending the ...


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