270 F. 812 | W.D. Pa. | 1918
It appears from the petition of the city of McKeesport that it embraces within its limits what was formerly the borough of Reynoldton; the latter being now the Tenth ward of the said city. It appears, also, that the Pittsburgh Railways Company, which is now in the hands of receivers appointed by this court, was, at the time of the appointment of said receivers, operating lines, of railway formerly owned and operated by the Dravosburg, Reynold-ton & McKeesport Passenger Railway Company and the McKeesport Passenger Railway Company, both of which corporations, by various mergers, agreements, consolidations, and sales, have become part of the system of the Pittsburgh Railways Company.
With respect to the first of said two passenger railway companies, the borough of Reynoldton granted to the former a franchise by •ordinance, which, among other things, provided that no license tax for borough purposes should be levied on said company for said franchise until after the expiration of five years from the beginning of operations, but further provided as follows:
“After the expiration of said period of five years, said company shall pay into the borough treasury such sums as license as counsel may hereafter provide for.”
With respect to the second of said passenger railway companies, the city of McKeesport, then the borough of McKeesport, passed an ordinance similar to that which is described as the ordinance of the borough of Reynoldton. The period of 5 years expressed in both of said ordinances was later extended to a period of 15 years.
After the said several companies had commenced operations, and after the expiration of the periods of 15 years, as mentioned in the said ordinances, the city of McKeesport passed two ordinances, one as successor of the borough of Reynoldton, levying a license fee of $2,000 per year, and the other as successor of the borough of McKees-port, levying a license fee of $8,000 per year, and provided for notice ■of such licenses to be given to the Pittsburgh Railways Company. In addition to the license fees fixed by the ordinances, there is a 10 per cent, penalty provided for in case of failure to pay the same, when due, under the terms of the ordinances.
The petition prays for an order directing the Pittsburgh Railways Company, and the receivers thereof, to pay certain of such license fees which are in default. The court cannot close its eyes upon the picture, so often presented in this case, of a largely extended street railway system, serving, as it does, various municipalities, perhaps exceeding 50 in number. Every one of said municipalities is more ■or less dependent upon said system for the reasonable accommodation
In Borough of Wilkinsburg v. Public Service Commission, 72 Pa. Super. Ct. 423, it was squarely held that the franchise of a street railway company conferred in accordance with llie provision of the Constitution, “'that no street passenger railway shall be constructed within the limits of any city, borough or township without the consent of its local authorities” (Const. Pa. art. 17, § 9), docs not remove the subjects contained therein from the domain of legislative action, and that the general law designed to affect all public service corporations of the state applies equally to companies operating under ordinances which regulate the rates, as a condition precedent to the consent of the municipality, or under franchises in which the rates are not so regulated. In that case, the question was whether or not' a street railway company could increase its passenger fares in Wilkinsburg, notwithstanding the fact that the ordinance of the borough granting the right to the company to lay its tracks in the streets prescribed certain maximum rates to be charged.
It is not necessary to review the authorities at great length. They confirm the principle that such contracts as we are considering in this case are not inviolable. If the public who use the instrumentalities of the public service corporation must pay a fair return upon the fair value of the property of such corporation, it is plain ’that the users must pay enough for the service to meet all the necessary expenses of operating the utilities afforded by such corporation, as well as the fair return upon the fair value thereof. The car riders, therefore, are called upon to pay all the expenses of operating the street •railway system, and as well to pay to the owners a fair return upon the fair value thereof. The amount to be paid by the car rider necessarily depends, therefore, to a considerable extent, upon the contractual obligations to be met by the Railways Company. Such contractual obligations seem to be matters for the consideration of the Public Service Commission of Pennsylvania in the first instance. In other words, it is for the Public Service Commission of Pennsylvania, in the first instance, to determine whether any contract which has a relation to the fare to be paid by passengers is a valid contract or not. If such obligations of the Railways Company require the passenger to pay an excessive fare, the Public Service Commission may take cognizance thereof, because that Commission was inaugurated to determine rates to be charged by public service corporations, as well as to prevent discrimination with regard thereto.
As we have noted above, there are many municipalities which are served by the Pittsburgh Railways Company. The car rider upon a portion of the system, who may never have been in McKeesport ■or Reynoldton, in theory, is required to pay some portion of his fare in order to meet the demands of the city of McKeesport, if the contracts in this case are valid. Again, the car rider in the city of McKeesport
It appears in some part of the record in this case that the city of McKeesport has an annual bill against the Pittsburgh Railways Company for street cleaning, and it has appeared, time and again, that the city of Pittsburgh has an annual claim against the Pittsburgh Railways Company for street cleaning to the amount of $87,-000, and that the city of. Pittsburgh charges tolls upon its bridges for the transportation of the car rider. It is doubtful if, in either- city, the cars, with the present motive power, make as much dirt as one huckster’s wagon, and it appears, so far as the city of Pittsburgh is concerned, that no one pays any tolls on the bridges except the car rider. Those who ride in taxicabs, and indeed all others, pay nothing. As all these payments do increase the expenditure's of the Pittsburgh Railways Company, they must, of necessity, have their effect upon the amount required to be paid by the car riders. The various questions, being matters which affect rates, surely ought to be matters-within the cognizance, in the first instance, of the Public Service Commission of Pennsylvania. It is a matter of common knowledge that 5-ton automobile trucks pay nothing to the municipalities for the-use of their streets, where as the car riders must pay for the passage of cars over tracks built expressly for their use.
The foregoing are but a few of the many observations which might be expressed to show the lengths to which the various municipalities have gone in their treatment of the street railway corporation. We-have not overlooked the fact that there are police powers vested in-municipalities, but we have in mind the distinction which is to be-drawn between the powers of a municipality when acting in its governmental capacity — i. e,, police powers — and those which belong" to it in its proprietary or quasi private capacity. Los Angeles v. Los Angeles Gas Corp., 251 U. S. 32, 40 Sup. Ct. 76, 64 L. Ed. 121. Again, we necessarily recognize that the question whether a municipal ordinance is within the power conferred by the Legislature upon the municipality is one of state law. Atlantic Coast Line v. Goldsboro, 232 U. S. 548, 34 Sup. Ct. 364, 58 L. Ed. 721.
We have wandered far afield in making many of the observations-hereinabove set forth, but have done so because of- the great importance of. the questions suggested and the great need for securing the-proper co-operation between the various municipalities and the system of railways in the hands of the court. To return, however, to the-path pointed out by the petitioner in this case, we must consider the proposition, raised by it, that because of previous litigation the right of the petitioner to recover the franchise taxes imposed by the ordinances has been judicially determined.
This court must refuse the petition of the borough of McKeesport, because it does not appear that the contract upon which it relies is a valid contract. This conclusion should not be accepted as a decision by the court that the contract is invalid, but as a statement that the validity of the contract has not been shown to the satisfaction of the court. Before this court will recognize any obligation on the part of the Pittsburgh Railways Company, or the receivers, to pay the sums sought to be recovered by the petitioner, the question of the validity of the contract must be determined in the first instance by the Public Service Commission of the state of Pennsylvania. If the Public Service Commission shall determine that the contract relied upon by the petitioner is valid, then the petitioner may renew its application to this court for the payment of such sums as may be proper.