Baltimore & Ohio R. R. v. Public Service Commission, Appeal, No. 138

Appeal, No. 138 | Pa. Super. Ct. | Apr 16, 1917

Opinion by

Head, J.,

Before entering upon a discussion of the exacti questions presented for our consideration by this appeal, it may not be amiss to describe briefly the situation exhibited by the record.

In the spring of 1915 several railroad companies operating lines in Western Pennsylvania filed with The Public Service Commission schedules of proposed changes in their rates affecting the transportation of milk. Among these was the Baltimore & Ohio Railroad Company, the present appellant, and it is the appeal of that company alone we have before us. No complaint having been made from any source against the tariff filed by this appellant within the statutory period of thirty days, its proposed rates became effective rates. The law so provides.

Of course, even after the rates filed by this appellant became effective it was still competent for any one affected by them to complain to the Public Service Commission that the rates in force were unreasonable. But in such case the law casts upon the complainant the burden of proving that the effective rates attacked are unreasonable. This provision of the law is not a mere matter of form but carries with it a substantial right to the public service company whose legally effective yates are challenged. In other words, under such circumstances, the public service company is placed by the law in the position of a defendant in an ordinary action at law. He is not required to produce any evidence until the plaintiff has, prima facie at least, offered proof which, if unanswered, would warrant a judgment in Ms favor. We are not to be understood as saying that in such a case the complainant is debarred from the benefit of evidence that may exist only in the records of the carrier. In civil proceedings such evidence is always available to the adverse party under well established rules and the Act of 1913, Article YI, Section 1, makes ample provision for such cases.

As to the railroad companies, other than this appellant, whose proposed rates were complained of before they became effective, the burden of proof to establish the reasonableness of the prdspective change of .rates is placed on the carrier, thus putting it in the attitude of a plaintiff who must make out his case. The Public Service Commission, doubtless in an effort to save time,, heard together all of the complaints including that against the effective rates theretofore lawfully established by this appellant. We cannot say, as matter of law, this of itself took away any substantial right of this appellant because, legally speaking, what is called “the burden of proof” is one thing; the order of the production of evidence is another. Cross actions have often been sue-' cessfully tried together and verdicts and judgments rendered just to both of the parties interested. But that, some confusion at least, if not some real difficulty, arose in this instance will become apparent upon a more critical examination of the record as it afféets this appellant. To this we now turn our attention.

On April 24,1915, R. W. Wilson, intervenor in this appeal, filed with the Public Service Commission his petition. Its material averments were these, to wit: (a) That he resided in Washington County, Pennsylvania, and was a shipper of milk on the railroad system of respondent; (b) that in 1911 respondent had established certain rates for the transportation of milk on its Pittsburgh division between Pittsburgh and Wheeling; (c) that on or about March 15, 1915, respondent filed new tariff schedules which, since April 15, 1915, had gone into effect; (d) that the new tariff of charges “on its said Pittsburgh division”, were excessive, unreasonable, etc.; (e) that the petition was filed in his own behalf “as a shipper on the said Pittsburgh division of the railroad system of respondent and in behalf of all other shippers on said division of said system affected by said tariff, etc.”; (f) that respondent be required to answer the charges herein made, etc. The answer of the appellant was fully responsive to the petition on every material averment. Thus was made up the issue which called into active exercise the conceded powers of the Public Service Commission. In the report of the commission disposing of this issue, with the many others considered at the same time, there appear twenty-seven findings of fact. Excluding for the. moment from our consideration two schedules or tables of rates to which we shall refer, they are all of a general character without any indication of the fact or facts established by the evidence on which it could or should be judicially determined the existing effective rates of the appellant carrier should be set aside and “reasonable rates” substituted. The report declares “that the rates complained of are an increase of practically 100 per cent, above the present rates on milk.” Upon what evidence, applicable to this appellant, could such a conclusion rest?

The report incorporates two schedules of rates pertaining to this appellant. The first exhibits the rates or tariffs in effect before April 15, 1915; the second those that became effective after that date, and these were the rates charged in the complaint as being unreasonable. As the commission also finds that 90 per cent, of the intrastate milk carried into Pittsburgh is produced within a radius of thirty-five miles of said city and is generally shipped in five-gallon cans, we . print only the portions of the schedules necessary to show the actual increase of rates established by this appellant in the zone of activity referred to.

Bates of the Baltimore and Ohio Bailroad Company, Pittsburgh Division, in effect before April 15, 1915:

Zones. 5 gallons. 10 gallons.

1 to 25 miles, .............. 10c 20c

Over 25 to 30 miles, .............. 10c 20c

Over 30 to' 35 miles, ........ 10c 20c

Bates complained of for the Baltimore and Ohio Bail-road Company, in effect after April 15,1915:

In cents per can.

Zones. Milk.

Size of can in gals.

Miles. 8 10 5

Cents. Cents. Cents.

17 20 1 to 25 inc., ..... 11

18 21 Over 25 to 30 inc., ..... 11

19 22 Over 30 to 35 inc., ..... 12

What do they conclusively show? As to five-gallon cans the increase within a thirty-mile zone was from ten to eleven cents per can, or ten per cent. Pushing back the zone boundary to thirty-five miles, the increase was two cents per can, or twenty per cent. As to ten-gallon cans, up to twenty-five miles there was no increase. From twenty-five to thirty miles, one cent per can, or a five per cent, increase. From thirty to thirty-five miles, an increase of two cents, or ten per cent. These figures, adopted by the commission in its report, do not furnish any warrant for the finding as against this appellant “that the rates complained of are an increase of practically 100 per cent.”

Did the complainant produce evidence that would support the conclusion the increase in rates shown by the schedules just considered resulted in “an unreasonable rate”? The decisions of our Supreme Court, by which the Public Service Commission, as well as this court, must be bound, have marked some boundary lines beyond Avhich we cannot go in ansAvering the question now under consideration. In Brymer v. Butler Water Co., 179 Pa. at page 231, we read: “Fixed charges and the costs of maintenance and operation must first be provided for, then the interests of the owners of the property are to be considered. They are entitled to a rate of return, if their property will earn it, not less than the legal rate of interest; and a system of charges that yields no more income than is fairly required to maintain the plant, pay fixed charges and operating expenses, provide a suitable sinking fund for the payment of debts, and pay a fair profit to the owners of the property, cannot be said to be unreasonable.” This language is quoted with approval, if indeed it is not emphasized, in the opinion of Mr. Chief Justice Mitchell in Penna. Railroad Co. v. Philadelphia County, 220 Pa. 100" court="Pa." date_filed="1908-01-20" href="https://app.midpage.ai/document/pennsylvania-railroad-v-philadelphia-county-6249236?utm_source=webapp" opinion_id="6249236">220 Pa. 100. There was, as the report of the commission shows, considerable evidence offered, both by complainants and respondents, in the line of expert testimony on rate making.- What impression did this testimony make on the minds of the tribunal who were to determine the important questions involved? The report itself answers: “If the service of the' railroad companies was isolated and we were furnished with the value of the entire investment required and used solely to carry this traffic, together with the cost of operation and the gross and net receipts for a definite period, we might base our conclusion on a more concrete basis. But such is not the case. We are without definite data as to the cost to the railroad companies for carrying milk and cream. The railroad companies did furnish the commission with certain evidence of values of terminals and other property and also furnished evidence of the increase of the traffic, as well as the general increase of cost of carrying the same, and in a general way the facilities required for the increased service and investment needed to meet the demands made on the railroad companies. Yet no sufficient facts or bases were supplied on which we might reach a definite conclusion or fix the rates on a cost of service basis.” On what basis then are they to be fixed? How meet the requirements of the decisions above referred to unless those upon whom the burden of proof rested furnish to the commission such evidence as will fairly enable them to determine that the rate complained of yields a revenue above and beyond the cost of service including the several items referred to in the cases?

But another question arises, not free from difficulty. The Public Service Commission, under the act creating it, is empowered not only to hear and determine complaints as to rates, etc., made by shippers or others interested, but “the commission may also, upon its own motion, and upon such notice as it may deem reasonable under the circumstances, institute any similar inquiry or investigation and fix a time and place for a hearing, etc.” Did the Public Service Commission determine to conduct an investigation into the broad question of ascertaining what Avould be reasonable rates for the intrastate transportation of milk? Did it give proper notice to those who would be affected by the results of such an investigation? Was it the object of the proceeding to determine whether the complainant and those associated with him, shippers of milk on the. Pittsburgh division of the appellant railroad company, had shown just cause for action by the commission concerning the rates complained of? The record does not clearly answer. The hearing appears to have been conducted by counsel for the complainant. The lengthy printed discussion between the acting commissioner and counsel for complainant and the several carriers apparently had for its object the discovery of an order of procedure that would get on the record, in the quickest and most convenient way, the testimony called for in the subpoena served on the officials of the several carriers. With the record as it now is before us, it would be difficult to answer the assignment of error alleging that the order by the commission goes far beyond the relief prayed for in the petition which apparently was the foundation of the proceeding.

The order of the commission complained of fixed rates for milk carried into Pittsburgh up to the distance of one hundred miles. Whether or not that distance westward towards the Ohio state line would reach or cross that line, we do not know. What rates have been established by the Interstate Commerce Commission for the transportation of milk from Ohio into Western Pennsylvania, we are not advised. Whether or not the rates established by the Public Service Commission would or would not bring about a discrimination in favor of the Pennsylvania shipper as against the one living in Ohio, we cannot now say because of the absence from the record of the necessary facts.

The functions of this court upon appeals from orders of The Public Service Commission have been plainly stated in Borough of Mount Union v. Mount Union Water Co., 63 Pa. Super. 337" court="Pa. Super. Ct." date_filed="1916-07-18" href="https://app.midpage.ai/document/mount-union-borough-v-mount-union-water-co-6279061?utm_source=webapp" opinion_id="6279061">63 Pa. Superior Ct. 337, and in West Virginia Pulp Co., v. The Public Service Commission, not yet reported. We have declared in those decisions that the statute exhibited no legislative intent to convert the Superior Court of Pennsylvania into a second administrative tribunal or to place upon the shoulders of the judges of that court the duty of examining and weighing all of the evidence and determining for itself what would be a reasonable rate for the transportation of any commodity.

Establishing a schedule of the rates or tolls that a public service company may lawfully demand is one of the most complicated and important of all of the many important tasks imposed by the legislature on the Public Service Commission. The proper determination of such questions necessarily involves the consideration of many matters and things far removed from the atmosphere of an appellate court of law. After a patient and careful examination of the record in this case, recognizing as we do that the controlling question was peculiarly within the jurisdiction of the Public Service Commission, we have determined to send hack this record with a direction for a further consideration of the question by the commission. We deem it our right that the record should present facts found by the commission from the evidence that will clearly enablé us to determine in the discharge of our duties whether or not the conclusion reached by the commission is a reasonable one and in conformity with law. We have indicated in this opinion what we regard as important and material facts not brought before us by this record. If the evidence will warrant the Public Service Commission in finding the facts which will support the order it has made, then the difficulties under which we labor have been merely matters of procedure and can be corrected by an amended report. If the evidence will not warrant such findings, then it would appear to be the duty of the Public Service Commission to dismiss the complaint for lack of such proof as would warrant its interference with the legally established and effective rates complained of.

The order of the Public Service Commission, in so far as it affects this appellant, is reversed and set aside and the record is remitted to the commission with direction to reconsider the order as it relates to this appellant and make such further report as will be warranted by the law and the evidence, the costs of this appeal to be paid by the intervenor.