Horner v. Oxford Water & Electric Co.

Heard on exceptions to report of referee. The action was instituted by plaintiff, head and proprietor of a prominent and successful boarding school for boys, to restrain defendant company from shutting off the current of electricity supplying lights for said school. The matter in dispute was referred, by order of court, and on the hearing before the referee it was made to appear that defendant company, as assignee of one Millner, was engaged in operating an electric plant and supplying lights for the citizens of Oxford under an ordinance which had been duly ratified by a vote of the electors of the town, and in which it was, among other things, provided, in section 6: "That said H. L. Millner, his successors and assigns, may charge and collect the following maximum rates for light and power furnished by them," and further, that the flat rates may be collected monthly and quarterly, in advance, and the metered rates monthly, after service. Then followed specifications for light for flat rates, making a difference between the charges for domestic and commercial purposes and also maximum rates for meter charges; that shortly after the performance of the contract was entered on, plaintiff having had his house wired and proper appliances installed, entered into a contract, obtaining electricity at the meter rate, and same was furnished and used for some time at meter rate; that plaintiff having become dissatisfied with the charges made against him, chiefly by reason of alleged irregularities as to amount, notified the company that he would no longer accept lights at the meter rate and tendered the amount due for schedule for flat rates. Defendant declined to (537) enter into this arrangement and threatened to shut off the light supplied the school unless the charges for meter rate were paid according to the contract stipulations. The reason for this refusal is set forth in a separate finding, as follows: "In reply to said statement, said Robert Foster Carbutt, superintendent of Oxford Water and Electric Company, informed plaintiff that ``We could not give him a flat rate running twenty-four hours, and that we wanted to keep up the twenty-four hour service and it would be impossible for us to give flat rates under continuous service,'" it appearing that when the ordinance was passed and service entered on, electricity was only supplied for twelve hours.

It appeared further in evidence, on the part of plaintiff, that prior to the notice given by plaintiff the charges per month were very irregular and had greatly increased in amount without just or satisfactory reason. Defendant offered evidence tending to show that the first meter put in was inaccurate, but that this meter had soon been taken out and a new and correct meter installed; that all charges in difference affecting this litigation were estimated by the correct meter.

Second. That the amount of electricity consumed at the school was increased by reason of the larger number of students and the greater number of hours lights were kept burning. There was further testimony offered and set out in case on appeal as follows: "It was in evidence on the part of defendant that the first meter which was installed and which was taken out in May, 1907, ran too slow. It was also in evidence on the part of the defendant that the meter which was installed in September, 1907, and which has remained there ever since, was correct.

It was also in evidence that since May, 1907, no flat rate contract has been made, and that since June, 1908, no one has been furnished with electric lights except by meter rates, but that before this action was commenced the defendant was furnishing the hotel and other private parties at flat rates. There was evidence that it would bankrupt the company to be compelled to furnish all of its customers at flat rates. There was evidence that no company in North Carolina now furnishes electricity by flat rates, and that the meter rate is the only fair and equitable method of furnishing electricity, and that it has been (538) generally adopted all over the country. It further appeared in evidence that the plaintiff was burning his lights on an average of from three to five hours a night (Mr. Horner testified, three and one-half hours on an average during the nine months school), while an ordinary dwelling house burned its lights on an average from one-half to three-quarters of an hour each, per night."

It was found by the referee that the charge against plaintiff was according to specifications of the ordinance as to meter rates and was a reasonable charge for electricity consumed. The referee held that under the franchise the plaintiff had the right at his election to change from the meter to the flat rate, and that the charge should be estimated against plaintiff as for commercial purposes, and that the injunction should be made perpetual forbidding defendant from shutting off light for nonpayment of the meter rate. On the hearing before the lower court the ruling was reversed as to the right of plaintiff to make the change, the court holding that defendant company had the option to charge its patrons either for flat or meter rates, and entered judgment that the injunction be dissolved, and plaintiff excepted and appealed. We are of opinion that the judge below has correctly construed the contract or ordinance and that the rights of the parties thereunder have been properly determined. The defendant company having dedicated its property to the public service, it thereby became the subject of reasonable regulation and control for the public benefit and by the public agencies properly designated for the purpose. Subject to this principle the municipal corporation had the power to fix upon a maximum charge reasonable in its terms and which defendant would have no right to disregard. Even with such maximum rates properly established, our decisions are to the effect that the charges must be reasonable and without discriminations as between citizens receiving the same kind and degree of service, and that in the absence of more specific legislative regulation the rates may under some circumstances be made the subject of judicial scrutiny and control. Griffin v. Water Co. (539)122 N.C. 206; Rushville v. Gas Co., 132 Ind. 5. It is shown that the charge made against plaintiff in this instance according to meter rates is reasonable. So far as appears then from the findings of fact or the proof the ordinance is a valid regulation fixing the maximum rates stated and requiring defendant company to supply electricity within the rate to all persons living within the corporation who should apply for it, but we agree with his Honor in holding that as to the method of rating, the said ordinance not improperly left and referred this question to be determined by the contract of the parties. This not only appears from a perusal of the ordinance by which "H. L. Millner, his successors and assigns, are authorized to charge and collect the following maximum rates for light and power furnished by them, etc., specifying the flat and meter rates," but in so far as the ordinance expresses a contract between the company and the municipality, and both parties to this controversy seem to have so treated it, the same is subject to the principle of interpretation generally applicable, "That when a promise is in the alternative, as to do a thing one way or another, the right of election is with the promisor in the absence of an express provision to the contrary." 7 A. E. (2 Ed.), 125; Homesly v. Elias,75 N.C. 573; Exchange and Building Co., 90 Va. 83; Powell v. Duluth,91 Minn. 53; Paige on Contracts, sec. 1391; 1 Farnham Waters, sec. 163. We find no evidence in the record supporting the suggestion made that defendant's assignor, as an inducement, had given assurance that he would furnish electricity according to the method of rating selected by the householder or purchaser, and if there had been, it should not in our opinion be allowed to affect the plain and explicit terms of the ordinance. Nor do we think that the action of the company should be held to discriminate unjustly against the plaintiff in view of the facts in evidence; that the charge made against the plaintiff is a fair and reasonable charge for the electricity actually consumed and correctly measured; that the company is endeavoring to furnish a full service of twenty-four hours, a change made from the original method of (540) half time with the desire and intent to benefit the entire public, and that the flat rate originally provided for under this measure of service would speedily bankrupt the company; that no flat rate contract had been made since May, 1907, and since June, 1908, no one had been furnished electricity except by meter rates. In Powell v. Duluth, supra, on facts not dissimilar to those presented here, the Court said: "The only ground upon which appellants can assail the act of the commissioners in refusing to place them upon the flat rate basis is that it resulted in a discrimination between them and other consumers who pay at flat rates or that the meter rates were unreasonable; but according to the evidence and the findings, the meter rates were reasonable. If it appeared that other consumers, upon the flat rate system, had an advantage and were enjoying a privilege not accorded those using meters, and that the commissioners were arbitrarily making such discrimination, there might be some ground for complaint. But such is not the case. On the contrary, the evidence and findings are to the effect that a large majority of those using meters save money by so doing. The fact that according to appellant's experience with a meter prior to the time it was taken out showed their water bills to be more than the flat rate, does not establish discrimination, nor prove that the rate by the meter is unreasonable. It is found by the court that all consumers situated as appellants have been similarly treated, and it does not appear that the method adopted by the board to gradually bring consumers upon the meter basis is illegal or arbitrary, or that it resulted in discrimination."

Upholding as we do the decision of the judge below that under the ordinance and the facts in evidence, the plaintiff may be lawfully subjected to the meter rate, we further concur in the position of his Honor that the question whether plaintiff could be charged under the flat rate as domestic or commercial, is no longer material, and for that reason is not considered or passed upon.

We are of opinion that there was no error in dissolving the injunction, and the judgment to that effect is

Affirmed.