A-11931, DECEMBER 28, 1925, 5 COMP. GEN. 448

A-11931: Dec 28, 1925

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IS APPLICABLE TO GAS FURNISHED BY SUBSIDIARY COMPANIES OF THE TWO NAMED COMPANIES FOR USE IN PUBLIC BUILDINGS SITUATED OUTSIDE OF THE DISTRICT OF COLUMBIA. THERE IS FOR CONSIDERATION WHETHER THE PROVISION IN THE ACT OF SEPTEMBER 1. HEREINAFTER QUOTED IS APPLICABLE TO GAS FURNISHED THE BUREAU OF ANIMAL INDUSTRY IN MONTGOMERY COUNTY. THE CONTENTION HAS BEEN MADE THAT BECAUSE THE GAS IN QUESTION IS FURNISHED BY THE GEORGETOWN GAS LIGHT CO. THE PROVISION ABOVE QUOTED IS NOT APPLICABLE. IS GIVEN AS AT 1339 WISCONSIN AVENUE NW. WAS INCORPORATED UNDER THE LAWS OF MARYLAND TO SELL GAS WITHIN THAT STATE. OF THE DISTRICT OF COLUMBIA AT ALL TIMES CONTROLLED THE STOCK OF THE MARYLAND COMPANY AND FURNISHED IT WITH ALL ITS GAS UNTIL BOTH COMPANIES WERE TAKEN OVER BY THE WASHINGTON GAS LIGHT CO.

A-11931, DECEMBER 28, 1925, 5 COMP. GEN. 448

PURCHASES - GAS FOR USE OF PUBLIC BUILDINGS THE RESTRICTION IN THE ACT OF SEPTEMBER 1, 1916, 39 STAT. 716, AS TO THE PAYMENT OF A HIGHER RATE THAN THAT SPECIFIED THEREIN TO THE WASHINGTON GAS LIGHT COMPANY OR THE GEORGETOWN GAS LIGHT COMPANY FOR GAS FURNISHED FOR USE IN ANY OF THE PUBLIC BUILDINGS OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA, IS APPLICABLE TO GAS FURNISHED BY SUBSIDIARY COMPANIES OF THE TWO NAMED COMPANIES FOR USE IN PUBLIC BUILDINGS SITUATED OUTSIDE OF THE DISTRICT OF COLUMBIA.

DECISION BY COMPTROLLER GENERAL MCCARL, DECEMBER 28, 1925:

IN CONNECTION WITH THE SETTLEMENT OF THE ACCOUNTS OF THE DISBURSING CLERK, DEPARTMENT OF AGRICULTURE, THERE IS FOR CONSIDERATION WHETHER THE PROVISION IN THE ACT OF SEPTEMBER 1, 1916, 39 STAT. 716, HEREINAFTER QUOTED IS APPLICABLE TO GAS FURNISHED THE BUREAU OF ANIMAL INDUSTRY IN MONTGOMERY COUNTY, MD., NEAR THE DISTRICT OF COLUMBIA. THE PROVISION IN QUESTION READS:

THAT HEREAFTER NO PART OF ANY MONEY APPROPRIATED BY THIS OR ANY OTHER ACT SHALL BE USED FOR THE PAYMENT TO THE WASHINGTON GAS LIGHT COMPANY OR THE GEORGETOWN GAS LIGHT COMPANY FOR ANY GAS FURNISHED BY SAID COMPANIES FOR USE IN ANY OF THE PUBLIC BUILDINGS OF THE UNITED STATES OR THE DISTRICT OF COLUMBIA AT A RATE IN EXCESS OF 70 CENTS PER ONE THOUSAND CUBIC FEET.

THE CONTENTION HAS BEEN MADE THAT BECAUSE THE GAS IN QUESTION IS FURNISHED BY THE GEORGETOWN GAS LIGHT CO. OF MONTGOMERY COUNTY, MD., THE PROVISION ABOVE QUOTED IS NOT APPLICABLE.

THE ADDRESS OF THE GEORGETOWN GAS LIGHT CO., AS WELL AS THAT OF THE GEORGETOWN GAS LIGHT CO. OF MONTGOMERY COUNTY, MD., IS GIVEN AS AT 1339 WISCONSIN AVENUE NW., WASHINGTON, D.C., AND MR. F. K. HEUPLE SIGNS AS SECRETARY OF BOTH COMPANIES. DURING THE YEAR 1924 THE GEORGETOWN GAS LIGHT CO. REPORTED TO CONGRESS (SEE P. 168, REPORT PUBLIC UTILITIES COMMISSION) AS FOLLOWS:

CORPORATIONS CONTROLLED BY RESPONDENT: GEORGETOWN GAS LIGHT CO. OF MONTGOMERY COUNTY, MD.; SOLE CONTROL; ESTABLISHED THROUGH TITLE TO ALL SECURITIES OF THE COMPANY AND ALL PROPERTY OF THE COMPANY; WHOLE AND DIRECT.

CONTROL OF THE RESPONDENT: SOLE CONTROL BY THE WASHINGTON GAS LIGHT CO. THROUGH PURCHASE OF ALL CAPITAL STOCK, AUTHORIZED BY PUBLIC UTILITIES COMMISSION OF THE DISTRICT OF COLUMBIA.

FOR MANY YEARS THE WASHINGTON GAS LIGHT CO. AND THE GEORGETOWN GAS LIGHT CO. MANUFACTURED AND SOLD GAS WITHIN THE DISTRICT OF COLUMBIA UNDER TWO SEPARATE DISTRICT CHARTERS. LATER THE GEORGETOWN GAS LIGHT CO. OF MONTGOMERY COUNTY, MD., WAS INCORPORATED UNDER THE LAWS OF MARYLAND TO SELL GAS WITHIN THAT STATE. IT APPEARS THAT THE GEORGETOWN GAS LIGHT CO. OF THE DISTRICT OF COLUMBIA AT ALL TIMES CONTROLLED THE STOCK OF THE MARYLAND COMPANY AND FURNISHED IT WITH ALL ITS GAS UNTIL BOTH COMPANIES WERE TAKEN OVER BY THE WASHINGTON GAS LIGHT CO., WITH OFFICES AT 411 TENTH STREET NW., WASHINGTON, D.C., WHICH HAS SINCE FURNISHED THE GAS FOR ALL THREE COMPANIES. WHILE THE WASHINGTON GAS LIGHT COMPANY OWNS ALL THREE COMPANIES, BY OWNING ALL THE STOCK OF EACH, IT APPEARS TO OPERATE UNDER THREE CHARTERS, TWO IN THE DISTRICT OF COLUMBIA UNDER THE PUBLIC UTILITIES COMMISSION OF THE DISTRICT AND ONE IN MARYLAND UNDER THE MARYLAND LAWS. IT ALSO APPEARS THAT EACH COMPANY CONTINUES TO ENTER INTO CONTRACTS WITH USERS OF GAS WITHIN ITS RESPECTIVE DISTRICT THE SAME AS BEFORE THE PURCHASE OF ITS STOCK BY THE WASHINGTON COMPANY.

IT IS A RULE OF LAW THAT WHERE A CORPORATION IS SO ORGANIZED AND CONTROLLED AND ITS AFFAIRS ARE SO CONDUCTED AS TO MAKE IT MERELY AN INSTRUMENTALITY OR ADJUNCT OF ANOTHER CORPORATION, THE TWO MAY BE TREATED AS ONE, IN DISREGARD OF FICTIONAL LEGAL DISTINCTIONS. SEE 34 OP.ATTY.GEN. 353. AND PARTICULARLY IS SUCH RULE FOR APPLICATION IN MATTERS INVOLVING CONTRACTUAL RELATIONS WITH THE GOVERNMENT. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES HEREINBEFORE STATED IT MUST BE HELD THAT THE STATUTORY PROVISION, SUPRA, IS APPLICABLE TO GAS FURNISHED THE GOVERNMENT THROUGH THE AGENCY OF THE GEORGETOWN GAS LIGHT CO. OF MONTGOMERY COUNTY, MD., AND THE ACCOUNTS AND CLAIMS INVOLVING PAYMENTS THEREFOR WILL BE SETTLED ON THAT BASIS.