Allegheny Heating Co.'s Appeal

A preliminary injunction will not be decreed against a natural gas company incorporated under tbe Act of May 29,1885, at the suit of numerous customers of the company, to restrain it from increasing its charges from 50 to 100 per cent, over the rates established when it began business.

Appeal, No. 233, Oct. T. 1888, from C. P. No. 2, Allegheny Co., to review a decree awarding a preliminary injunction on a bill in equity, at Oct. T. 1888, No. 388. Steeeett, J., absent. Bill in equity by Benjamin Waddinton and forty-seven others against the Allegheny Heating Company to restrain the defendant from enforcing an increased charge for gas. The bill, in substance, averred: 1. The defendant was incorporated Feb. 22, 1882, under the Act of 18Y4, and on June 23, 1885, accepted the Natural Gas Act of May 29, 1885, P. L. 29. 2. The defendant’s business is the supply of natural gas in the city of Allegheny. It has entered into the streets and laid pipes. N atural gas has come into use as a fuel and is produced and supplied to consumers in Allegheny at a great profit, owing to tbe great quantities found in the immediate vicinity of the city. The transportation and supply of natural gas is a public use. It is the duty of defendant to furnish natural gas at reasonable prices, which will allow a fair and reasonable profit to the stockholders and at uniform rates. 3. Defendant obtains its gas from the Philadelphia Co., and pays that company one-half of its gross receipts therefor, and that company owns and controls a majority of defendant’s stock. 4. Defendant laid its pipes as fast as practicable and solicited contracts, representing generally, that gas would cost no more than coal; other companies were also soliciting contracts to furnish gas, among which was the People’s Natural Gas and Pipeage Co., chartered Nov. 23, 1885, and the Ohartiers Co., which had begun to lay down pipes, so that Oct. 15, 1887, and before and after, there was competition between these companies in Allegheny. They had adopted prices which were about these : Kitchen range..........$16 per year. Six-hole cook stove........14 “ Four-hole cook stove........14 “ Open grates $6 per year for first, and $5 per year for others. Furnaces, hall and room stoves, corresponding rates; and these rates were about the same as it would cost for coal. 5. Plaintiffs are consumers of gas'under contracts with defendant entered into about Oct. 1,1887. At that date, defendant solicited them to take gas, and about that date they entered into contracts agreeing to pay the rates stated in the preceding paragraph. These rates were a little more than, or about the same as, coal would cost them, but owing to the convenience from use of gas, they entered into contracts. These prices were reasonable and are now reasonable and sufficient, and would and did enable the stockholders to realize large profits. Plaintiffs were also informed that natural gas would not exceed the cost of coal. Believing this, they expended large sums in gas fittings and pipes to connect with the gas mains. The fittings and pipes are of no other use. 6. The People’s Natural Gas and Pipeage Go. and the Chartiers Co., about May 15, 1888, made a consolidation contract or arrangement with defendant by which all competition ceased. The two former companies are not making any new contracts, and payments under old contracts are required to be made at defendant’s office. The patrons of all those companies, whose contracts are about to expire, have received notice that the price of gas will be increased from 50 to 100 per cent. 7. The defendant has grown from a capital of $100,000, only partially paid, to have about $600,000, invested in pipes and other construction. It has paid no dividends, but the profits have been expended in new construction. 8. Notices have been sent to plaintiffs, and all consumers whose contracts are about to expire, that they must make contracts for a year from Oct. 1, 1888, at an advance of from 50 to 100 per cent., or purchase meters and pay 10 cents per thousand feet net, or, in default, the gas will be turned off. 9. Plaintiffs’ contracts are about to expire, and they have been notified of the advance, and fear that defendant will turn off the gas. 10. Turning off the gas will work great and irreparable injury to plaintiffs and other consumers. 11. The new rates are unreasonable, unjust and excessive. 12. Defendant unjustly discriminates in its charges. It charges Holdship & Rankin, oil refiners, only 6 cents per thousand feet, and so with many other persons whose names are unknown. 13. There are many others who have similar complaints, but are not named as plaintiffs because too numerous, and many of them are unknown, but this bill is filed for their benefit as well as that of plaintiffs. 14. Plaintiffs agree to pay for gas by fire or thousand feet such amount as the court shall deem to be reasonable and proper. The prayers were: 1. A preliminary injunction to restrain turning off gas, upon the payment of old rates, pending the trial. 2. That the court may fix what is reasonable to be paid and restrain defendant from charging more, or from shutting off the gas, so long as the prices fixed by the court are paid. 3. That the court may fix what shall be paid by all consumers, and defendant to be restrained as in 2d prayer. 4. General relief. Numerous affidavits were filed by both parties, in support and denial of the allegations of the bill. In defendant’s affidavits it was averred that, on account of expense in laying new lines to new fields, etc., the Philadelphia Co. charged them about 30 per cent, more for gas;' and in no case had the increase charged by the defendants been more than was fair under the circumstances. Defendant’s affidavits further alleged : The company furnishes gas by two plans, viz.: by measurement, at 10 cents per 1,000 feet; or a fixed sum per year, according to the number of fires and the area to be heated. A thousand feet of gas is equivalent, in heating capacity, to a bushel of coal. Before the introduction of gas, coal was about 8 cents per bushel. At that price, gas at 10 cents is cheaper than coal. By the plan of a fixed sum per year, gas can he burned in the fire-places without limit, except their capacity. In fixing these rates, it is necessary to examine each fire-place, the size of the room or area to be heated, and to take into consideration that there may be a waste of gas. The company has increased the price of gas by this plan from 25 to 50 per cent., but in no case has the increase been larger than a fair consideration of all the circumstances required. The company has urged upon all its consumers the mutual benefit of economizing in the use of gas, which is accomplished by the use of meters, and about 50 per cent, of the consumers are taking by that plan. The plaintiffs are all persons who use gas by the contract plan and refuse to adopt the measurement plan. The defendant further denied discrimination. The company has a different rate for manufacturing establishments and dwellings. Holdship & Rankin are classed with manufacturing establishments, at regular rates. The court below granted the injunction, in an opinion reported in 6 Pa. C. C. R. 96, by White, J. The following decree was entered: “And now, Oct. 17, 1888, this cause came on to be heard, on motion for preliminary injunction, on bill and affidavits filed at this term, and was argued by counsel and, therefore, upon consideration thereof, it is ordered, adjudged and decreed that, upon plaintiffs’ filing bond as hereinafter directed and paying up all arrears as hereinafter directed, “ That the defendant, the Allegheny Heating Oo., its officers, agents and employees, and each of them, are hereby enjoined and restrained from shutting off the gas supply through and by defendant’s pipes and mains from plaintiffs’ houses and fires in the city of Allegheny, or from interfering with or disturbing in any way, the said supply of natural gas to plaintiffs so long as plaintiffs shall pay or tender payment to the said defendant of the same rates and charges, and in the same installments as heretofore paid for said supply of gas, until further order of court, provided that payment be made for arrears now due under old rates, within five days from this date. “ That the plaintiffs shall give bond to the said defendant company with sureties satisfactory to defendant company or approved by court, in a sum three times as great as their annual gas bill heretofore, conditioned to pay whatever increased price, if any, may be finally determined, and the arrears of increase, with the right in defendant company, if an increase is finally allowed and the arrears of increase be not paid within thirty days, to shut off the gas and proceed on the bonds for the arrears.” The assignment of error specified the action of the court in entering the decree, as above, quoting it.