*1 189 No. 13,481. Corporation
Colorado Utilities Public v. et
Commission al. (61 849) [2d] P.
Decided Rehearing June 1936. denied October 1936. Messrs. Mr. W. W. Shafroth & Grant, Ellis, Toll, Mr. H. Mr. Morrison Shafroth, Erl Ellis, Jr., Grant, plaintiffs in error. Henry
Mr. Toll, W. *2 Attorney Mr. Richard General, Mr. Paul P. Prosser, Hughes & Mr. E. Conour, Assistant, Messrs. Dorsey, Myles P. for defend Mr. Tallmadge, Berrien Hughes, in error. ants amicus curiae.
Mr. A. Videon, Fred En Banc. opinion Holland delivered Justice
Mr. court. by prosecuted herein is of error Colorado writ
The plaintiff Corporation, to in reverse a error, finding judgment affirming a court district error, in Public Utilities defendant Commission, effect that also a defendant Moffat Coal meaning public utility of sec- error, is not a within chapter Com- 46, tion 2913 of the piled Act, Public Utilities 1921. Laws, incorporated coal min- as a was
ing company September Colorado 1, 1931, about plant Hills, at Oak with main mine located laws, three-quarters from a mile Colorado, which is about com- The Oak a town about inhabitants. Creek, 1,500 pany properties, which it a line over various extended electricity to be for the transmission easements, held used mining operations mine owned in its at another original principal The it, four north of its mine. miles prede- line was in 1927 transmission constructed generated company to October, 1932, cessor. Prior operations mining to for its coal buildings supply lighting it and for used facilities surplus employees, over and above its its needs, and had except any excess Colo- but never of this sold Corporation, emergency rado Utilities nse on occa- understanding then sions and with the distinct that in making operating utility. sale Corporation Colorado Utilities had a franchise from the supply electricity town Oak Creek to to its citizens expired July Owing disagreement, 1931. 1, expira- the town refused to renew the franchise on its September tion and its at inhabitants an election held municipal to build a voted electrical distribu- system, immediately tion thereafter constructed such system. opened negotiations The town then with Moffat energy, for electrical but was advised public utility, that it was not a that it did negotiate not intend to become such that it would not supply any surplus with the town it with of its elec- plaintiff trical unless town in error failed agreement leading to an come to a renewal of the fran- *3 agreement plaintiff chise. No between in error and the town was reached 1932, and October a 15, contract was Company entered into Moffat between Coal and the town, municipal whereby corporation, agreed as a the former supply to and town with furnish the electrical out surplus. electricity The its received the town under this contract was sold and distributed it to its residents. plaintiff complained
November in 21, 1932, error to the Public agreement Commission about the contractual Company
between Moffat Coal and the town, requested require the commission to to the why apply show cause it should not to the commission necessity public for a certificate to convenience and utility. operate as a on its 26, 1932, November own the commission Moffat Com- motion, ordered Coal pany why to show cause an order not made should requiring public utility, operating it from a to desist as hearing was 1932. Moffat .a had December Coal 13, Company ground on that moved for a dismissal it public utility; not was a that it not had dedicated its it any part use; that was property to thereof delivering not a party, indispensable was not a an town; town, that proceeding’; party had no that commission objections party. it a Over the to make permitted company, plaintiff to intervene in error was proceedings party the commission. before February Upon hearing, 25, 1933, the commission, full upheld dis- contentions of denied 17,1933, on March missed and thereafter case, whereupon petition rehearing; inter- intervener’s for peti- plaintiff April its filed 15,1933, now vener, tion error, court court, for a writ of review in the district Company overruling after Coal a demurrer of Moffat May re- 1933. After 23, the turn writ issued the commission, September Coal 1933, on Moffat was filed and writ to dismiss the and the commission moved upon grounds within had acted that the commission authority, jurisdiction, regularly pursued its had had that the final determination discretion, abused its subject questions of made it fact was not any right review; did not violate commission whereby plaintiff plaintiff no interest and that had rightfully party to the action involv- could intervene as ing subject commission; matter before petition not state facts review does sufficient justify This was the case denied, a review. motion 1933, it entered court, tried and October judgment of Moffat order and and the favor judgment is now before us commission. This *4 for review. Company, pre Moffat Coal
Is facts public utility meaning within the of the Public sented, public Act? To be as a it first classed of must that it such because the fact that be determined corporation” “operated it is an “electrical and is for the energy to] purpose supplying public [electrical * ** public for domestic, mechanical or uses or declared * * *” public law to be affected with a interest set supra. out section 2913, undisputed
It is Moffat its—and predecessors corporate organization, oper- has —since solely mining company, exception coal ated as a with no under the contract with save transaction involved Creek the town Oak hereinafter set out and consid- incorporation August ered. Its articles of were amended containing, among things, the amendment other * ** following: Power establish to construct and “ plant plants necessary rights equipment, or with all privileges production manufacture and electricity, supply and to the same. use, sell and furnish, * * part of the with an This is identical amendment prede- incorporation of a amendment articles of cessor, The Oak December 8, Hills Coal dated grant power 1908. It is contended that and the complaint action brings of Company thereunder, is here made, provisions within the regulations of the Public Utilities Act. We do so regard it. Moffat Coal made no dedication property any part public use; or thereof it made no offer, and did not hold out, itself serve public utility as a as such term is used statute contrary steadfastly above on mentioned but refused engage operations bring in such within as would public utility classification. In its contract the town of Oak which it Creek, is claimed constituted energy, by para- company, with electrical graph specifically 9 thereof, declared that it was not a public utility company; or service the contract holding undertaking it was not itself out or to furnish or individual right residents of the and it town, reserved the of non- performance contract, should Public Utilities jurisdiction body Commission or similar assert over it. generated Do the facts that it more electrical than required mining company; for its own coal use as a *5 194 part a it sold and delivered solicitation,
that generated by municipality; product a a contract surplus limiting of the amount sold less and sale fixing 6 o’clock m. and the time between hours of a. might supply p. it lia- m. when withdraw without 6 company bility make this an electrical contract, under its subject corporation to the control of the Public Utilities not, think and so hold. Commission? We question is: Did become a The real utility by performance con of this the execution and holding requires a An affirmative answer tract? electricity contract, only by ref public. question a can be resolved The itself the contract of, erence and construction to, is follows: “Agreement
‘‘ duplicate Agreement, into in entered This Made and day the Moffat between this 15th of and October, duly organized corporation, and exist- ing of the State of Colo- the laws under and virtue of ‘Company’, party of the first hereinafter called rado, corpora- municipal part, Creek, the Town of Oak and organized existing virtue under and tion, and hereinafter called of the State of Colorado, laws party part, the second ‘Town’,
“Witnesseth: surplus of electrical has “Whereas, operating power its needs over and above properties and for its business coal mines and other willing business, main is to sell incidental to its and as surplus dispose of electrical of some said energy; contract for the erec- the Town about to “Whereas, is electrical transmission of certain tion and maintenance territory systems other in the Town and and distribution being proximity all in the State Town, in the of said consisting systems, transformers, Colorado, the said meters, and other lines, distribution lines, transmission appliances, apparatus, equipment, said Town transmitting, distributing, engage business *6 energy by selling electrical service the electrical and and system through in Town and to the said its said and and thereof; and the inhabitants contracting for the Town is desirous of
“Whereas, surplus power of the said electrical the use some of of energy and of for in the sum
“Now, and consideration Therefore, paid by parties ($1.00) of one dollar each of the to receipt hereby and ac- other, of is confessed knowledged, and in of the mutual further consideration by agreements expressed covenante and hereinafter parties kept performed respectively, hereto, to be and parties agree hereto covenant to and with each and other as follows, to-wit: ‘‘ Company supply 1. The shall furnish the Town and surplus energy, of out electrical of and purchase Company the Town take and shall from during agreement, specified, the term of this hereinafter while in same continues force and all elec- effect, energy trical need and electrical which the Town service shall territory
or use distribution in said Town and hereinabove to and referred covered distribution said system any except all extensions thereof, as limited herein. energy
“2. All electrical shall be delivered Company point boundary Company’s at a on the adjacent property energy Town. Said shall not fifty (150') per exceed one hundred shall be in the form kilowatts hour and
sixty (60) cycles, (3) phase three pressure alternating approximately current at a twenty-two (2200) provided, volts; hundred however, Company surplus if should need its energy operation properties of between the right 6:00 A. 6:00 hours of M. P. M., it shall have the any part surplus, all to use or and to such limit or supply restrict furnished the Town less than one during1 fifty (150) per hundred kilowatts hour said hours any way being If liable to the Town therefor. without any time shall more electrical at said Town need willing Company to furnish the Town than said is able or liberty surplus, supply of its the Town shall be at out Company amount which the is its needs excess any willing or to furnish from other available source able ready again sources, until such time as the supply the the Town. needs of expense supply “3. The Town at its sole shall during agreement maintain the term its distribu- of this system tion above referred to. and transmission “4. That all electrical and electrical service pursuant furnished to the Town agreement terms pany, shall be furnished Com- *7 paid by and received for the Town at the rate and ($.02) point per of two K. at the cents W. as metered H., delivery, necessary of main- meters to be furnished and by any expense. the Town at If tained for reason power by Company regis- the furnished shall fail to be by power tered the the amount of meters, such shall be arbitrarily payment determined shall on the be made during 30-day period basis amount delivered the preceding next such failure. day
“5. 10th Com- On or before the of each month the pany shall render the Town a statement for electrical during preceding the Town furnished the month payment by therefor the shall be made Town within days receipt any five after the If for such statement. neglect, reason the Town or fail, shall refuse to make payment any Company in full for said amount due the thirty (30) days payment within after the Com- due, ’ pany right option upon days shall have the ten writ- ten notice to the Town of such default to terminate this any Company and after such the contract; termination, obligation liability no shall be under or further here- under. Except provided pay-
“6. as otherwise all herein,
197 Company the from the ments due Town con- under this the tract shall made out revenue to be be received operation municipal the Town from the light of its electric By system. entering into this contract the Town does any obligation payments not incur make out general any provided, funds or fund raised taxation; pay Company the Town collect the however, shall for Company electrical the delivered at a rate not specified provided than less in Section hereof; and pay lights further Town shall for street municipal greater other at rate service than that charged provided other consumers in said Town; and any if further that reason for the Town not be should pay Company able to all in full from amounts due it light Town out the Town’s electric revenue, Town pay shall liable for and shall be bound to any Company and all deficiencies. indemnify The Town shall and hold harmless “7. any injury damage and all or or claims for
injury damage persons occurring property or or in delivery point, side of Town’s and for or all costs expenses resulting any from such claim or claims, carry compensation the Town em- shall insurance on all ployees any way handling with the dis- connected power. reg- tribution of Suitable rules and delivery ulations for from agreed parties to the Town shall be between two possibility order to avoid accidents. contemplated agreement “8. That service *8 day shall on commence the first after com- month pletion system of distribution Town and not July later than and service there- shall continue period twenty (20) years, period after for a of twenty (20) years of be shall deemed and taken as provided, term of Com- contract; however, this that the pany right have the to shall terminate this contract giving six months’ written notice of termination to period rights and at end of six months Town, such all party obligations shall cease. Neither hereunder shall interrup- damages of because other for be liable to the when or to take current such to deliver tions or failure interruptions shall to or take current or failure deliver of interference Grovern- war, of Grod, be caused acts explosions, authority, or other fires, mental accidents, beyond parties, Com- and the the control of causes any making pany of from deliveries shall be relieved power commotion, civil riots, of strikes, lock-outs, in case making impossible any it disturbance, so-called labor or capacity. operate normal mines to its Company or is not a service “9. The by entering into contract is not hold- this power undertaking ing to furnish itself out or energy the individual residents and or or to territory prox- in the of the Town or inhabitants other nothing in imity shall in this contract Town and said Company place any way under be construed company. obligations rights, service or of a duties, any or similar Commission Should the Public Company, any jurisdiction body such assert over performing Company option shall have performing, with- best, not as shall deem contract or any any liability taken action on account out premises. hereby Company agreed con-
“10. It is power surplus tracting only part of its to sell such may energy own of its not need the conduct as it right Company to sell The reserves the business. provided, energy fit, as it sees others, other mines or surplus energy long after has so right properties, operating the Town shall have own exceeding surplus needs, to the extent to such fifty (150) per which shall hour, kilowatts one hundred any purchasers right prior other any entering contract into from the purchasers to other of electrical for the sale right. prior expressly provide for such shall
199 agreed agreement It “11. is understood and that this herein and all of covenants inure to contained shall binding upon assigns and be successors parties respectively. hereto parties pursuant
“In Witness Whereof, hereto, by respective official their action Boards of Directors presents have caused these Trustees, executed corporate duly their names, their authorized officers, respective corporate day and attested their seals, year first hereinabove written. Company,
“Moffat Coal By E. S. President. .Kassler, “Attest: Secretary.”
Yan Holt Grarrett,
(Seal)
“The Town of Oak Creek, By Joseph Mayor.” Mathews, “Attest:
Ed Clerk.” Sumner,
(Seal) under its had amended charter, generate energy, and sell electrical but express power such charter it not have a did do so as public utility. had charter However, contained such express provision, necessarily it would not follow that public utility statutory bringing it is a it within the definition it term, acted; therefore, so unless public utility upon depends whether it is or is not what powers upon it does and not conferred quoted charter. The contract above is not contract public, municipal with the but is one entered into corporation proprietary capacity. municipal- in its The ity responsible connection with acts commodity of to its citizens. That a mu- may nicipality generate, sell and distribute electrical submitting to its inhabitants without itself to the ques- control Public Utilities Commission cannot be lay The tioned. town residents or could no consumers against the con- complaint Moffat *10 They, by that their had determined votes, their tract. a representatives, could construct dis- officials, town the expect They right tributing system. elec- the to had energy supplied officials to them such be trical would power was the dissatisfied, rate and if at a reasonable change the condition. theirs to Company not Moffat Coal It clear that is energy supplying operating purpose electrical for the operating equally public. it was clear that the It to is company mining not been declared a as such had coal and public a coal interest.” As a law be “affected with to con company, mining fall within the definition it did not could public and therefore utilities statute tained by legislative utility except public not to a be declared by the a sale between action. There is no distinction capacity, proprietary company municipality, in its private surplus energy, to a of the same of enterprise. commodity, and a sale provides one sale, for one The contract not for sale customer, to one community particular at or inhabitants large. company as to no concern no control and The had electricity disposition nor sold, or distribution charges with the It contracted therefor. had made price. product It fixed at a stated town to had a furnish right it re contract that would condition its so doing product, payment it so ceive for its excess charged fixing participate of rates to be did legal with it contracted sense, In a had to the consumer. being enterprise, two one between contract a business corporations. with its Moffat Coal did What municipality energy, what the did electrical other way purchased, affected the in no the electrical corporations relationship contract. of the two under electricity furnished under The solely the control of under contract was a matter this municipal corporation, Public Utili which the and over receiving jurisdiction. Whether no ties Commission had this contract or neither the not, any part nor could demand such service from it, Company by right, Moffat Coal as it if the could do com- pany public utility meaning was a within the of the act, holding ready willing out itself as such, to con- tract for such service. finding to what
As effect public utility, subject regulation as such, would municipality question have is beside the Having no needs discussion here. determined that public utility by is not a reason of its amended municipality, charter or virtue of its contract with the disadvantages, we leave the latter to benefits or as the may case be, contract it has chosen to make.
Judgment affirmed. *11 dissent. Mr. Justice Hilliard Mr. Justice Bouck Mr. Justice Bouck, dissenting. petition rehearing.
I from the denial dissent of the for my present majority opinion It is conviction that the authority. is consistent neither with reason nor with my permitted preparing comprehensive Time has not dissenting opinion original opinion, herein. The automatically by granting withdrawn of a rehear- fully ing, expressed my my- I views. therefore content quoting opinion, pro- self with the withdrawn not as a nouncement of this court now in force, it has ceased argument upon such; be but as an based the record and showing fallacy majority opinion now on file: plaintiff Corpora- error,
“The Colorado Utilities broug’ht by complaint tion, about an informal later —and proceeding intervened in—a before the Public having purpose Commission for its determination of question public whether, under act, our utilities utility is a and as such re- quired to obtain from the commission a certificate con- necessity venience before electric current with the of Oak Creek in contract town under a certain county, The commission ruled that Colorado. Routt pro- and dismissed the is not a by having ceeding. been instituted the inter- An action corporation purpose vening in the district court for the ruling reversing reviewing of the commission, the latter and the intervener there- affirmed that court proceedings upon in error. instituted these possesses incorporated It town. “Oak Creek an municipal powers conferred in- and corporated all exercises operate statute. It does not towns Light generating plant. municipal electric for the town’s own use and for the use its inhabitants procured existing from other under must, conditions, July plaintiff agencies. in error Colo- Until 1, 1931, utility duly Corporation author- rado Utilities —a charter and the Public Utilities Commission ized supplied produce the town and sell electric current — commodity a fran- and its inhabitants granted expired chise which franchise at town, other, time mentioned. For some reason above In- the town declined to renew or extend the franchise. proceeded authority to and did stead, obtain electric transmission and distribut- electors construct * * * ing systems. possess only “In view of the fact that it would trans- systems distributing owning mission without generating plant, the town on October entered 15, 1932, *12 formal contract with the defendant in error, into a Moffat supreme which because of its contract, quote [Here importance in in case, we full: opin- majority quoted which the contract is set out page ante.] ion at and is found 194, outset, Commis- “As Public Utilities stated at Company’s upheld contention that sion company public not a the above contract the is utility. Compiled Colorado, 1921,
“Section Laws of de- public “public utilities follows: ‘The util- fines as term every ity,” in this act, when used common includes pipe corporation, gas corporation, line carrier, corporation, corporation, telegraph corpora-
telephone corporation, person municipality operating tion, water or public purpose supplying
for the of for domestic, corporation, public every uses, mechanical or person or now or declared to be hereafter law affected public hereby interest, thereof, awith and each is de- public subject to be a clared and to be jurisdiction, regulation control of commission provisions nothing- act; Provided, of this That apply irrigation sys- act shall be construed to principal supply the chief tems, or business of which is to purpose irrigation.’ for the of water apparent Company qualified “It is that Moffat Coal potentially public utility by providing- itself as a in its through charter, incorporation a formal amendment of its articles of * ** ‘objects corporate that its '** * plant plants are to construct or and establish a necessary equipment, rights- privileges all for production eléctrieity, manufacture and to use, supply sell furnish, same.’ “By quoted, the contract hereinabove brought has itself within the we think letter —and within spirit says part the statute —of * * ‘ * * * * utility” “public every includes electric * ** corporation operating purpose public for domestic, uses’; the it seems clear mechanical for current for purchase
that the town’s lights municipal purposes street and other is for meaning language within the uses of the reasonable quoted. arrangement ‘public Such an to sell for uses’ itself sufficient constitute the seller a utility. purpose Moreover, where, here, chief manifestly supply a contract is inhabitants necessary town, who are ultimate with the consumers, *13 204 us, mechanical it seems uses,
current for domestic
get
penetrate
substance,
form
at the
when we
nothing
purpose
more or
that the execution of such a
for such ‘domestic’
than
also
less
company’s
fully
if
and ‘mechanical’
as
uses,
agents
performing
A
private
the distribution.
were
agreed upon,
process
but
similar to the one here
agency,
constituting
private corporation
another
Corpora
Power Co. v.
in Southern Oklahoma
condemned
is no
“True, did itself *14 utility. public expressly stipulated It it into a shall expressed intention, how- not be so considered. Such an stipulation effectuate the face of does not the a ever, contrary inevitably following interpretation the result upon places which the law and liabilities concrete supra. People facts, facts. Davis ex These rel., v. govern. attempted
not the avoidance, must qualifications “The various reservations whereby retains contract, power the ostensible n withholding all or con- some the current deprive company of tracted its not or relieve the for, do utility. public appears, character far as as a now So supply agreed upon might maximum extent of continue any period twenty years undiminished for the without interference with the amount of current needed purposes town for the named of itself and its inhabitants. paid by price Since the the town by contract fixes the to be price charged is, to be the town’s inhabitants required great greater, the is contract, be as even it plain arrangement whole is alien that the to the notion any having subjected rates for the inhabitants regulation with whatever. It is not consistent the funda- mental idea shall have within ultimate consumer recognized impartial procuring reach his a method of an hearing decision the issue as to the rates whether charged By very are reasonable or not. it contract has made, the town has as the arbiter abdicated lawful of that issue. Under the of this facts and circumstances consequence permitted case, such a cannot be unless private corporation placed regulation is itself public protection utility for the of the consumer. Company hold, therefore,
“We that Moffat Coal be- utility thing's comes a it whenever does the it has agreed do, contract and as such it will sub- ject utilities Since is statute. clear that carry it intends to out the it was contract, incumbent procure it to first a certificate convenience and neces- sity, intervening as contended Colorado Utilities 206 By deciding
Corporation. is that Moffat Coal juris- regulatory not under mat- ‘erred as a Utilities Commission diction, the Public by any supported decision is ‘not law’; ter of testimony,’ ‘in accordance with evi- nor substantial testimony, tested the uncontradicted and ‘when dence,’ Chicago unjust Co. v. Denver it is Co., and unreasonable.’ 74, 171 85. Colo. Pac. declining' commission, the district “In to reverse the prejudicial the reasons error. For court committed judgment court is reversed stated the district Commission that court will order Public Utilities authority to exercise its as such set aside its decision and in relation to Moffat commission *15 hearing whether a certificate view a on the issue of necessity be convenience and should should granted.” nothing spells,
The contract here as I view it, involved twenty-year more or than contract less Creek. But services to rendered Oak manifestly (1) opinion Mr. Justice means Holland’s might any ultimate in Oak Creek who hereafter consumer grievance or serv have a bona fide as to rates against the Moffat Coal Com ice could obtain no redress pany according opinion, company to that because, (2) public utility corporation, a con not a that such against Oak the town of sumer could obtain redress no voluntarily contract the town has tied since Creek, for two whole so as to abdicate decades, own hands regulation of such self- absence might possess, imposed contractual restrictions (3) created the decision constitutes that the situation judicial repeal regulatory legislation unjustified Assembly govern obviously the General intended before, respect exactly as the one us. I must such cases part bringing fully un have a about such decline to consequences these. toward