APPEALS by the Public Service Commission from (1) a
final order of the County Court of Onondaga County (BREED, J.), entered January
7, 1955, which confirmed the report of commissioners of appraisal appointed in
a proceeding to condemn the Onondaga County properties of defendant-respondent
New York Water Service Corporation, and (2) an order of the same
court (BREED, J.), entered February 17, 1955, which denied a motion
made by the Public Service Commission pursuant to section 18 of the
Condemnation Law, for abandonment and discontinuance of the proceeding.
Kent H. Brown, Joseph J. Doran, George H. Kenny, Edward D. Cohen and Lawrence M. De Vore for appellant.
George W. Cregg for Onondaga County Water Authority, respondent.
George R. Fear on for New York Water Service Corporation and another, respondents.
The Public Service Commission appeals from (1) the final order of the Onondaga County Court confirming the report of commissioners of appraisal appointed in a proceeding to condemn the Onondaga County properties (the Syracuse Plant) of the defendant-respondent, New York Water Service Corporation, and (2) the order of the same court denying its motion, pursuant to section 18 of the Condemnation Law, for abandonment and discontinuance of the proceeding. In an unusual alignment of interests, we have both the original parties appearing in this court as respondents in support of the award as made--$8,650,000 plus the cost of additions, betterments, and construction work in progress. The two appeals present substantially the same issues and may be considered together.
The Onondaga County Water Authority (hereinafter referred to as the 'Authority ') was created by chapter 675 of the Laws of 1951 (Public Authorities Law, art. 5, tit. 6), with power to condemn any water-supply system within the territorial limits of Onondaga County in the manner provided by the Condemnation Law (Public Authorities Law, § 1129). Its corporate existence is to continue until all its bonds and liabilities have been paid or discharged, and thereupon all its rights and liabilities shall vest in the County of Onondaga (Public Authorities Law, § 1128, subd. 2).
On May 21, 1953, the Authority duly authorized the acquisition of the Syracuse plant of the defendant, New York Water Service Corporation (hereinafter variously referred to as the 'Corporation', 'Owner' or 'Company').
Thereafter, and having obtained the required consent of the Water Power and
Control Commission, on September 28, 1954, the Authority caused its petition to
be verified and this condemnation proceeding was begun. A copy of the petition
with the requisite notice having been served upon the appellant, the
by section 5-a of the Condemnation Law was served upon the Onondaga
County Court late in November, 1954. The judgment of condemnation appointing
commissioners of appraisal was entered December 2, 1954. The report of the
commissioners was handed down January 3, 1955. On January 6, 1955, the order
confirming the report was granted and a copy served upon the Public Service
Commission. After entry of the final order, the Public Service Commission moved
for the order to abandon and discontinue.
At the outset it is important to note that no party to this proceeding is challenging the judgment of condemnation. All concur that the propriety of that judgment rests solidly upon the necessity for the acquisition by the Authority. Thus, aside from some preliminary questions as to the status of the appellant in this court, the issues involved are those in regard to the amount of the award and the obligations and powers of the Public Service Commission in this proceeding to condemn the property of a public utility subject to the jurisdiction and regulations of the commission.
Fundamentally, the case is a test of the powers of the Public Service Commission under the 1952 amendments to the Condemnation Law (L. 1952, chs. 508, 515), bringing up for the first time the nature and effect of those amendments, enacting section 5-a and amending sections 14, 15 and 18. It is provided in section 5-a that a copy of the petition and notice of time and place of presentation must be served on the Public Service Commission at least thirty days prior to presentation. It then becomes the duty of the commission to certify to the court, after a hearing on notice to all parties: (1) the annual net earnings which the utility system involved might reasonably be expected to continue to produce in the hands of the condemnee; and (2) the rate base and rate of return from which that estimate is derived. This certification shall be served upon the court and the commissioners of appraisal, and they shall not determine the compensation to be made to the owners until thirty days after the required certification has been received. The amendment to section 14 provides that the commissioners shall determine the compensation with 'due regard * * * to the anticipated earnings of such company as certified'. The 1952 amendments also direct service, prior to entry, of a copy of the final order confirming the report upon the Public Service Commission, and provide: 'Thereafter such commission
shall be a party to such proceedings for all purposes'.
(Condemnation Law, § 15.) (Emphasis supplied.) In the event that the final
order of confirmation
directs payment of an amount which is (1) not a capitalization of the
certified earnings of the system, or (2) in the opinion of the Public Service
Commission, is so excessive or insufficient as to be not in the public
interest, the commission is directed to make application to the court for the
exercise of its discretionary prerogative of directing abandonment and
discontinuance of the proceeding (§ 18).
In this particular proceeding, both the Authority and the Public Service Commission have meticulously conformed to the requirements of section 5-a. After being duly served with a copy of the petition and having held a prompt hearing, the Public Service Commission on November 29, 1954, made its certification pursuant to the statute. Anticipated annual net earnings were certified as $237,000, being a 6% return upon a rate base of 'capital actually expended,' certified to be $3,950,000 as of June 30, 1954. The commissioners of appraisal did not make their award until January 3, 1955, more than thirty days after the certification had been served upon them. The final order, upon motion of the Authority unopposed by the defendant corporation, was served upon the Public Service Commission and thereafter entered in the Onondaga County Clerk's Office. Following the entry of the final order, the Public Service Commission filed its notice of appeal there from.
The status of the Public Service Commission in this court is questioned by both the plaintiff and defendant. The contention is, first, that the commission is not a party to this proceeding, or, if held to be a party, it has no right to appeal from either order. We feel there is no merit in these contentions. The statute gives to the Public Service Commission something more than an absolute
right to be a party or to intervene. In a proceeding to condemn the property of a public utility over which it has regulatory powers, the commission is made a party 'for all purposes' by legislative mandate. There was, therefore, no necessity for an application to the court under section 193-b of the Civil Practice Act for permission to intervene. That procedural statute relates to a right which in the discretion of the intervenor may or may not be exercised. The language is 'shall be' and not 'may become' a party. (Condemnation Law, § 15.)
Nor do we agree with respondents that the Public Service Commission, even as a party, has not been vested by statute with the right to appeal. Section 19 of the Condemnation Law permits an appeal to be taken to the Appellate Division from ...