Goldmann, Conford and Haneman. The opinion of the court was delivered by Goldmann, S.j.a.d.
Respondent Lakewood Water Company filed a notice and statement with the Board of Public Utility Commissioners (Board) seeking an increase in its rates for water and sewer service. After a number of hearings the Board granted rate increases, but not in the amounts sought by the company. Lakewood Township appeals from that part of the order increasing sewer rates. It does not challenge the Board's finding that the existing rates are unjust and unreasonable in that they do not afford the company an opportunity to earn a fair return.
The sole ground of appeal is that the increase in sewer rates was unjustified because the company had not been rendering adequate and proper sewage service. In support of this claim the township adduced evidence that manholes located in Clover Street and Meadow Avenue, Lakewood, had overflowed early in April 1958, covering a considerable area of low ground with raw sewage. There was also testimony relating to the Ninth Street pumping station where raw sewage had been pumped through hoses to a swamp area lying at the rear of the station. It appears that this overflowing and pumping of raw sewage continued for a number of days. Pictures in evidence showed the existing
conditions. The photographer who took them -- a life-long resident of the Lakewood area -- said he could not recall a time when precipitation had been as heavy as it was between January and April 1958. This was the first time he had ever seen sewage in the areas described.
The township sanitation inspector, Conyers, substantially corroborated the photographer's testimony. He testified that the Meadow Avenue manhole had overflowed for many years. The sewer line between Meadow Avenue and Clover Street would break every winter despite attempts at temporary repair. The township also had had trouble previously with the pumping of sewage into the swamp. Conyers characterized the sewage system as inadequate and declared that it had been so during his 11 years as sanitation inspector. The sewer pipes had not been enlarged since the system was installed; in his opinion they were too small. Many of them were in need of repair, and ground waters were being absorbed through defective joints. There was a wooden sewer line in one part of the system that had been in use for some 40 years. Much of the trouble came from having two pipe lines, 12" and 16" in diameter, run into an 18" line, with the resulting backing up of sewage.
Conyers described how the utility company had placed cement blocks and sandbags over the manholes when they overflowed in April 1958, but this had done little good. In fact, two manholes in Meadow Street were still overflowing on the day before the hearing, April 27, 1958. The company had at his request spread a chemical over the exposed sewage, designed to kill bacteria. He testified to the obvious fact that raw sewage constitutes a health menace.
On cross-examination Conyers stated that at the time of the overflow Lakewood's hotels were crowded for the spring holiday season, and that he, too, could not recall so heavy a precipitation as occurred between January and April 1958. He also testified that there had been some trouble with local cesspools, but this was no more than normal. He had seen the sewers overflow even during winters when precipitation was relatively light.
The Board also took the testimony of Assistant Sanitarian Higgs, of the State Department of Health, who appeared for the township. He had investigated the sewage overflow situation soon after it happened. At Clover Street, where the two main pipes formed a junction, the trouble had been "abated" by covering the top of the manhole with tar paper sheathing and sandbags, "effecting an almost airtight seal"; the raw sewage had been covered with a chemical to reduce odor and hasten dewatering. He also saw the overflow at Meadow Avenue and on the line leading over to Clover Street. At the Ninth Street pumping station sewage had been pumped into the swamp to relieve pressure on a 6" wooden main. To him it appeared that "they [the company] were doing everything in their power to straighten this situation up" -- one manhole had already been attended to and, before he left, the Meadow Avenue situation was receiving attention.
On cross-examination Higgs testified that he had advised the township administrator that "the conditions creating the present situation were unparalleled and that a wait and see policy as to immediate progress might be in order." However, on redirect he said he had not investigated the history of sewage overflow for the preceding ten years, and had he known that sewage had overflowed in that period he would not have concluded that the April 1958 situation was "an unparalleled occurrence."
In its decision, determination and order, the Board made but a single reference to the matter of adequate service. It said:
"In connection with the latter point [rate base], and in support of a more general proposition that the Sewer Department does not furnish adequate service, the Township presented other witnesses. The testimony clearly shows that conditions did exist and that the service was improper. However, the testimony shows that the Company attempted to, and did, alleviate the situation as promptly as possible, and that the suggestion of the Assistant Sanitarian, Department of Health, State of New Jersey, was 'conditions ...