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Garson v. Steamboat Canal Co.

December 31, 1919


Appeal from Second Judicial District Court, Washoe County; Thomas F. Moran, Judge.

Norcross, Thatcher & Woodburn, for Appellant.

Sardis Summerfield, for Respondents.

By the Court, Ducker, J.:

The appellant corporation, the Steamboat Canal Company, is a public utility engaged in the business of delivering water from the Truckee River, through its canal, known as the Steamboat Canal, to a number of users for agricultural and other purposes. In a former year the public service commission of Nevada had established the rate for the delivery and sale of water to such users at $6.50 per miner's inch per annum, and when paid in

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advance on or before June 1 of each year at $6 per miner's inch. On or before May 18, 1918, the Steamboat Canal Company filed with the public service commission a schedule of rates, and therein established a rate of $10 per miner's inch for the irrigation season. The public service commission entered an order suspending the proposed rate for a period of sixty days, and cited the Steamboat Canal Company to appear and show cause why the rates in force should be increased. A number of water users served by the company filed a protest against the proposed increase in rates, and upon issue thus made a hearing was held before the commission, at which all parties interested appeared, in person or by attorney. During the pendency of the proceedings before the commission the rate proposed was suspended by its order for an additional sixty days. The hearing commenced on the 5th day of August, 1918. It was thereafter continued to October 8, and closed on October 9, 1918. Thereafter, on December 4, 1918, the commission entered an order denying the application of the Steamboat Canal Company for an increase in rates for water service to $10 per inch, and ordered that the rate be established at $7.50 per miner's inch for irrigation purposes for the season of 1918 and each successive year, unless otherwise ordered by the commission. It was also ordered that, if prepayment should be made on or before June 1 of each year, the charge should be $7.25 per inch.

The protestants, being dissatisfied with the ruling of the commission, commenced this action in the district court against J. F. Shaughnessy and W. H. Simmons, as the public service commission of Nevada, and the Steamboat Canal Company, and obtained an order of the court granting an injunction pendente lite restraining the enforcement or collection of the rate of $7.50 per miner's inch designated by the order of the commission, or collection of any greater rate than $6.50 per miner's inch. From the order granting the temporary injunction this appeal is taken.

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1. This action was commenced pursuant to section 26 of an act making the railroad commission of Nevada ex officio a public service commission for the regulation and control of certain public utilities, prescribing the manner in which such public utilities shall be regulated, etc., approved March 23, 1911 (Stats. 1911, c. 162); but the respondents contend that the disposition of the appeal must be controlled by the provisions of “An act defining public utilities,” etc., approved March 28, 1919 (Stats. 1919, c. 109), for the reason that it expressly repeals the former act. If this contention were correct, we do not see how it could alter our decision, for the reason that all of the provisions in the former act having any application to the facts of this case have been reenacted in the latter act, and no additional provisions enacted therein have any bearing on the issue. But it is not correct to say that the law of 1919 controls this appeal. All of the facts of the case transpired before it became effective, and furthermore express provision is made in section 44 of the law of 1919 that the repeal of the former act shall not “affect any act done, right established, or prosecution or proceeding commenced under and by virtue of” it.

2. Respondents assert that the order of the public service commission is void, because no authority is given it by law to regulate the affairs of the Steamboat Canal Company, in that its canal, through which respondents are served with water, does not come within the meaning of the words “plant” or “equipment,” used in the statute in defining certain public utilities over which the commission is given supervision. It is conceded that the statute does not otherwise designate the company's property as a public utility. It will be observed that this contention is a radical departure from the complaint, in which the legal right of the commission to supervise and establish water rates for the Steamboat Canal Company is distinctly recognized. In this respect it is alleged in the complaint that the public service commission has authority to fix reasonable rates for

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public utilities operating within the state: that the Steamboat Canal Company is a public utility engaged in the delivery of water for agricultural and other purposes within this state; that the rate heretofore fixed by the public service commission by an order duly made and entered pursuant to law is $6.50 per miner's inch, and that the same is still in force. It is thus seen that respondents have formally asserted in their verified complaint the authority of the public service commission to supervise the water rates of the company, which it now contests. While the statute must control as the source of authority for the commission in this regard, the power to do an act should not be alleged by a party in his pleading and denied by him on appeal.

3. Section 3 of the act of 1911 provides:

“The term ‘public utility' within the meaning of this act shall embrace every corporation, company, individual, association of individuals, their lessees, trustees or receivers appointed by any court whatsoever, that now or hereafter may own, operate or control any plant or equipment, or any part of a plant or equipment within the state for the production, delivery or furnishing for or to other persons, firms, associations, or corporations, private or municipal, heat, light, power in any form or by any agency, water for business, manufacturing, agricultural or household use, or sewerage service whether within the limits of municipalities, towns or villages, or elsewhere; and the public service commission is hereby invested with full power of supervision, regulation and control of all such utilities, subject to the provisions of this act and to the exclusion of the jurisdiction, regulation and control of such utilities by any municipality, town or village.”

If a precise and technical meaning were accorded to the word “plant,” confining it strictly to include only such public utilities of this class which delivered water to consumers through the agency, at least in part, of machinery, as a pumping station or other mechanical apparatus, the intention of the legislature would not, in

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our opinion, be effectuated. It would contravene the spirit of the act to assume that it was intended to make the right of the consumers served by public utilities of this character to the benefit of the commission's control over rates and service dependent entirely upon whether the water delivered flowed into the ditch or pipe, or was forced into the distributing channel by means of machinery, water wheel, or other apparatus. In Brennan v. Sewerage and Water Board, 108 La. 582, 32 South. 560, it was said that “a system of pipes intended for the distribution of water, but with no provision by which that distribution can be made,” may with propriety be called a plant. The term “plant for the delivery of water * * * for agriculture or household use,” as used in the statute, is sufficiently comprehensive in its meaning to apply to the canal and business of the Steamboat Canal Company as a public utility, subject under the statute to the supervision and control of the public service commission.

It is also contended by respondents that the order of the commission establishing the rate of $7.50 per miner's inch is void, for the reason that the commission, in determining this rate, took into consideration evidence taken at former hearings and data on file with the commission relative to the Steamboat Canal Company in its dealings with the water users. The following extracts from the record of hearing held on August 5, showing statements made by the commissioners and Mr. Kearney, attorney for the protesting water users, have considerable bearing on the merit of this contention:

“Commissioner Bartine—There is no question of the value of the property. The commission has passed upon that, and determined that the property has a certain value. It is rather hard for me to see how we can depart from that, unless there is a showing made by the company that we are wrong. We will give you any opportunity that you desire to show that it is an overvaluation. You can take any reasonable time for it. These charges are largely a matter of bookkeeping, and, when the decision is finally rendered it will cover the whole thing.

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“Commissioner Simmons—I want to say, for this commission, that, in view of no testimony having been introduced in this case bearing upon the valuation of the ditch, the commission will avail itself of the data which it already has, and which are official, with reference to the value of the ditch. If you can show that there is a change in the value of the ditch, other than what we now have before us, then that will be given consideration. But in view of the fact that the question of the valuation of the ditch has not been gone into in this case, either by counsel or stipulation, we would use the data that we already have and which are available, in basing our opinion in the present case.

“Mr. Kearney—In regard to that stipulation I would like to say that, if that testimony is used for the purpose of rehearing and reopening the old case, I would object to it.

“Commissioner Bartine—We do not intend to reopen the old case at all.

“Mr. Kearney—As I understand it, the rate of $6 per inch was fixed upon as a reasonable return for a certain valuation found by the commission, after the testimony had been considered. Now, then, I don't want the commission to reconsider that testimony, and find a different valuation at this time, without having an opportunity to be heard.

“Commissioner Bartine—I do not think it will ever be done; so far as I am concerned it will not be. So far as we have gone into this case, the question of valuation does not cut any figure. The application for an advance in rates is based on figures of cost of material and labor.”

It is evident from these statements of the commissioners that the commission had fixed the company's property at a certain valuation at former hearings, and that they intended considering the evidence obtained for this purpose, and would make no change in such valuation without a showing made by the company or the water users. Under the circumstances, no prejudice could have ...

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