Robert H. Griswold, Harry H. Frank, McNees, Wallace & Nurick, all of Harrisburg, for appellant.
Edward C. O'Connor, of Sayre, for Borough of Sayre.
Charles E. Mills, of Sayre, Borough of Athens, Frank A. Sinon, Rhoads & Sinon, Harrisburg, for intervening appellees.
Jack F. Aschinger, Asst. Counsel, William J. Grove, Asst. Counsel, Charles E. Thomas, Counsel, all of Harrisburg, for Pennsylvania Public Utility Com.
Before Rhodes, P. J., and Hirt, Reno, Dithrich, Ross and Arnold, JJ.
The Borough of Athens and the Borough of Sayre, acting under section 34, clause 7, of the Act of April 29, 1874, P.L. 73, 15 P.S. § 1353, seek to acquire by purchase the waterworks and water service properties owned by The Sayre Land Company situated in and adjacent to the respective boroughs. Accordingly, on June 1, 1949, each borough filed an application by petition with the Pennsylvania Public Utility Commission for a certificate of public convenience evidencing approval by the Commission of such acquisition by the respective boroughs. The procedure was in accordance with that outlined in Mercer Water Co. v. Pennsylvania Public Utility Commission, 159 Pa. Super. 69, 46 A.2d 597, and Womelsdorf Consolidated Water Co. v. Pennsylvania Public Utility Commission, 160 Pa. Super. 298, 50 A.2d 548. Cf. Pottstown Borough v. Pennsylvania Public Utility Commission, 144 Pa. Super. 220, 19 A.2d 610. The petitions of the boroughs set forth that The Sayre Land Company, incorporated in 1879 for the purpose of purchasing, improving, and selling real estate, constructed a reservoir, waterworks, and distribution system which it operated in supplying water to the public for compensation in the boroughs of Athens and Sayre. The petitions further stated that The Sayre Land Company on May 27, 1885, leased its reservoir, waterworks, and distribution system to The Sayre Water Company, a corporation having the same officers, directors, and shareholders, at an annual rental of $5,000; that by supplemental lease dated May 28, 1896, and still in effect, The Sayre Water Company pays The Sayre Land Company a rental equivalent to its net earnings, less six per cent on its capital stock of $5,000 par value. Copies of the leases between The Sayre Land Company, lessor, and The Sayre Water Company, lessee, were attached as exhibits to the petitions. To these petitions The
Sayre Land Company filed no answers. Cf. Womelsdorf Consolidated Water Co. v. Pennsylvania Public Utility Commission, supra, 160 Pa. Super. 298, 299, 50 A.2d 548.
On September 22, 1949, the applicant boroughs filed with the Commission identical petitions for access to the books, records, and property of The Sayre Land Company in order that the boroughs might secure the data required to compute the purchase price to be paid for the waterworks and property, which are the basis of the respective applications, under the formula set up by section 34 of the Act of April 29, 1874, P.L. 73, 15 P.S. § 1353. This Act fixes the price of such works and property as 'the net cost of erecting and maintaining the same, with interest thereon at the rate of ten per centum per annum, deducting from said interest all dividends theretofore declared.' The petitions of the boroughs for access to the books, records, and property of The Sayre Land Company also set forth in detail averments as to the relationship of the land company and the water company; and copies of the leases between the two corporations were included.
On November 1, 1949, The Sayre Land Company filed motions to dismiss the boroughs' petitions for access to the books, records, and property of that company. The motions to dismiss expressly reserved the 'right to answer on the merits, if so required.' The motions averred, inter alia, that the 'Mere ownership of property capable of being used in furnishing water service which is leased to a water company operating under the jurisdiction of, and regulation by the Pennsylvania Public Utility Commission does not constitute the owner of such property a public utility within the ...