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September 27, 1954


Appeals, Nos. 146, 147 and 148, March T., 1954, from order of Court of Common Pleas of Washington County, No. 5146, in Equity, in case of Lucian J. Ciletti et al. v. City of Washington et al. Order set aside with a procedendo. Bill in equity. Decree entered sustaining defendants' preliminary objections, with limited leave to file an amended complaint, before CARSON, P.J., CUMMINS and WEINER, JJ., opinion per curiam. Plaintiffs appealed.


Clyde P. Bailey, with him Anthony L. Marino, Eugene C. Sloan and Weller, Wicks & Wallace, for appellants.

Elder W. Marshall, with him Gilbert J. Helwig, Alexander R. Curran, Barron P. McCune, Williams S. Yard, Meyer Goldfarb, Charles Denby, Reed, Smith, Shaw & McClay; Morgan, Lewis & Bockius, and Bloom, Bloom & Yard, for appellees.

Before Stern, C.j., Stearne, Jones, Bell, Chidsey and Musmanno, JJ.

Author: Chidsey

[ 378 Pa. Page 642]


Lucian J. Ciletti, George H. Krause and Allan Schultz, citizens, residents and taxpayers of the third class City of Washington, Washington County, Pennsylvania, on their own behalf and in behalf of other citizens and taxpayers of the City of Washington and of the Borough of East Washington, on December 4, 1953, filed a complaint in equity against the City, the Borough, the Washington-East Washington Joint Authority, The Citizens' Water Company and Mellon National Bank and Trust Company, Trustee. Plaintiffs sought to enjoin the defendants from the imposition and collection of sewer rentals or charges, and to have the court declare fraudulent, unlawful, unconstitutional and void various ordinances and agreements under which the defendant Authority has proceeded to provide sewer service to the defendant municipalities.

Before hearing upon plaintiffs' application for a preliminary injunction, a preliminary objection to the complaint in the nature of a demurrer that it failed to set forth a cause of action was sustained with a limited leave to the plaintiffs to amend.*fn1 The plaintiffs

[ 378 Pa. Page 643]

    have appealed. Ordinarily where preliminary objections are filed and leave to amend is granted, such action by the court below will be considered interlocutory and not an appealable final decree. However, plaintiffs contend that the leave to amend was so limited in scope that the court's order was definitive and final in effect.

From the averments of the complaint, it appears that the City and Borough had passed ordinances authorizing the creation of the Authority for the purpose of constructing and/or otherwise providing facilities necessary to furnish the treatment of sewage wastes from the City and Borough. The charter of the Authority gave it some additional related powers. The Authority sold sewer revenue bonds in the principal amount of $2,650,000, under the terms and conditions of a trust indenture with Mellon National Bank and Trust Company as trustee, to provide debt service payments required under the terms of the indenture and to provide for the expense of operating the sewer system; the Authority entered into agreements with the City and Borough providing that the Authority would render sewage service to the municipalities in return for certain annual service charges measured by the requirements for operating the systems and debt service on the bonds. These agreements provide tha the municipalities shall levy rates and charges against users of the sewer system in order to provide the funds necessary to make the service charge payments. Ordinances were enacted by the City and Borough in furtherance of these agreements. These agreements further authorized the Authority to collect the sewer charges so levied, to deposit such charges in separate accounts of the municipalities and to make withdrawals from those accounts in order to take care of the annual service charges due from the municipalities to

[ 378 Pa. Page 644]

    the Authority. Further, the Authority entered into a service agreement with Citizens' Water Company of Washington, a privately owned corporation, under the terms of which the Water Company agreed to take care of all billing, collecting and adjusting activities. The Authority employed a consulting engineer to handle all problems in the operation and maintenance of the sewage and treatment system and this was in conformity with the terms of the trust indenture and the agreements with the municipalities. The Authority also entered into a contract with the Municipal Management Company, under the terms of which the Management Company acts as general manager of the sewer business, and agrees to maintain the Authority's general books of account, to hire and discharge all personnel, do all purchasing of material and supplies, to supervise the adequacy of sewer rate schedules and the inspection of new machinery ...

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