128 N.E. 247 | NY | 1920
Lead Opinion
The appellant, International Railway Company, succeeded to the rights of several railroad companies operating railroads in and through the village of Niagara Falls, the village of Suspension Bridge and the town of Niagara between the two villages, a large portion of which was included in the city of Niagara Falls which was created in March, 1892.
On August 22, 1905, the International Railway Company, desirous of extending its lines in said city, applied to the common council of the city of Niagara Falls for its consent to construct, maintain, operate and use single or double-track extensions of its railroad to be operated by electricity upon and along a number of streets constituting quite extended territory within the city of Niagara Falls, together with the right to construct, maintain and operate turnouts, crossovers, etc., in connection with its existing tracks.
After due proceedings had, the common council granted consent to such extensions upon certain terms, the important one to be considered here being "Said Company shall not charge more than one fare of five cents for each passenger for any continuous ride or passage over its railroad and extensions within the present limits of the city of Niagara Falls." The consent was not to be operative unless the company filed its acceptance in writing of the consent and all conditions therein contained in the office of the clerk of the city of Niagara *337 Falls. The same was accepted and a portion of the extension made.
Upwards of thirteen years thereafter the railway company applied to the public service commission for an order permitting it to increase from five cents to seven cents the rate of fare to be charged passengers upon its road within the city of Niagara Falls. The city of Niagara Falls applied for a writ of prohibition restraining the public service commission from assuming and exercising jurisdiction of the application. The Special Term denied the motion but the order made thereon was reversed by the Appellate Division and the writ granted on the authority of Matter of Quinby v. Public Service Comm. (
Our decision in Matter of Quinby is controlling here. That case was argued at length March 25th, 1918, by counsel representing the parties directly interested. In addition, by permission of the court, counsel representing the public service commission, first district, the New York State Railways Company and a committee of corporation counsels of the municipalities of the state filed briefs. After a due consideration of the questions presented to this court, a decision was handed down April 5th, 1918, determining that an absolute writ of prohibition should be awarded restraining the public service commission from acting upon the application made to it to increase the rates of fare. We distinctly held in that case, without determining the limits of legislative power, that the provisions of the Railroad Law did not disclose a legislative intent to deal with the matter of rates fixed by agreement between local authorities and the railroad corporation, consequently the public service commission was unauthorized to nullify conditions attached to such consents by increasing rates without the consent of the local authorities.
Eighteen months later a motion was made in this *338
court for the re-argument of the appeal, and it was alleged that our decisions in People ex rel. Village of South Glens Falls v.Public Service Commission (
In the instant case we are again asked to overrule our decision in the Quinby case. Here, as in that case, the question of the power of the legislature to confer upon the public service commission authority to abrogate conditions embodied in the agreement between local authorities and a railroad company is not presented, for the legislature has not undertaken to confer such power but has consistently for three successive sessions since the decision in the Quinby case declined so to do. We are now urged to hold that the legislature intended to delegate power to the public service commission to modify the rates prescribed in the contract between the local authorities and the railroad company, against the protest of the municipality, notwithstanding the refusal of three successive legislative bodies to accede to such demand for delegation of power. This we are not prepared to accede to.
The order should be affirmed, with costs.
Concurrence Opinion
I think this case is controlled by our decision in Matter ofQuinby v. Public Service Commission (
I do not say that it is beyond the power of the legislature, either directly or through a commission, to abrogate or modify the conditions of a franchise. If such a question were here, I might agree in that respect with Judge McLAUGHLIN. Because it is not here, I conceive that we are not at liberty to express an opinion on the *339
subject. The courts of this state do not act as the advisers of the legislature to define its powers in advance (Matter of StateIndustrial Commission,
We held in the Quinby case that the instance had not arisen yet. Our ruling was that the legislature had not yet attempted to delegate to the public service commission the power to abrogate conditions in respect of fares, contained in franchise agreements between municipalities and railroads, when the agreements were already in existence at the adoption of the statute. The judges now dissenting attempt to limit the application of that ruling to the city of Rochester, where the controversy arose. No such limitation was suggested as the basis of the decision either when the case was first decided (
The Quinby case cannot be distinguished. It has not been overruled. The only question remaining is whether we shall overrule it now. The single point decided was one of statutory construction. Since that decision was announced, three successive legislatures have been asked to confer upon the public service commissions the power which in our view of the existing statute had been theretofore withheld. In each year the bills embodying the proposed enlargement of jurisdiction failed. The public service commission for the first district has in the meanwhile been reconstituted with its existing powers, and no others (L. 1919, ch. 520; People ex rel. Outwater v. Green,
My vote is for affirmance.
Dissenting Opinion
In May, 1919, the appellant, the International Railway Company, a corporation organized under the Railroad Law, while operating a line of street surface railways in the city of Niagara Falls, filed with the public service commission, second district, a petition showing: That since January, 1915, the cost of labor and materials had increased, the former upwards of seventy per cent and the latter upwards of one hundred and twenty per cent; that by reason thereof it was, with the existing rate of fare, unable to pay operating expenses and receive any substantial return on an investment of upwards of $1,600,000; that on the 1st of November, 1918, it defaulted in the payment of interest then due on its refunding and improvement bonds; that it was unable to pay the state, county and city taxes long past due upon its property in such city; that it had many financial obligations which it was unable to meet; that it was absolutely necessary for it to receive increased revenue from the operation of its railways in order to maintain itself and render the service to the public for which it was organized. It, therefore, asked that the public service commission make an order permitting it to charge a fare of seven, instead of five cents, for each adult passenger transported over its lines in said city. The city interposed an answer to the petition, alleging, among other things, that the fare charged by the petitioner on certain of its lines is fixed *342
and limited by a franchise and consent given to operate its cars in the public streets, to a rate not exceeding five cents and by reason of that fact the commission did not have jurisdiction or power to fix a rate in excess thereof. The commission fixed a time and place for a public hearing upon the issues raised by the petition and answer. At the beginning of the hearing the city moved to dismiss the proceeding upon the ground that the commission did not have jurisdiction to pass upon the merits of the petition. The motion was denied and the petitioner then offered proof tending to establish the truth of the facts alleged. At the close of its proof the city again moved to dismiss on substantially the same ground as theretofore stated. The motion was again denied and the city thereupon asked for and obtained an adjournment to enable it to apply to the Supreme Court for a writ prohibiting the commission from proceeding further. The application for such writ was thereafter made and denied, an appeal then taken to the Appellate Division, third department, where the order was reversed as matter of law and not as matter of discretion, and the writ of prohibition granted on authority of Matter of Quinby v. Public Service Commission
(
The only question presented by the appeal is whether the public service commission, assuming that the facts set out in the petition are true, had the power and jurisdiction, against the protest of the city, to approve and authorize street railway fares which were in excess of the fares prescribed in a resolution of the common council adopted on the 22d of August, 1905, under which the International Railway Company was granted the right to operate its railroads upon certain public streets. The answer to the question necessarily turns upon the construction to be put upon certain sections of the Railroad Law (Cons. Laws, ch. 49), the Public Service Commissions Law (Cons. Laws, ch. 48) and the resolution referred to. *343
The International Railway Company was formed by the consolidation of several street surface railways, the franchises of many of which had been obtained prior to the passage of the Railroad Law and contained no provisions limiting the fare to be charged. The city of Niagara Falls was created by chapter 143 of the Laws of 1892, and the Electric City Railway was incorporated in 1904 under the Railroad Law. It obtained from the city consent to, and did thereafter construct and operate a system of railways in certain of its streets. The consent thus obtained limited the fare to be charged to five cents. This railroad was thereafter merged in the International Railway Company.
On the 22d of August, 1905, the International Railway Company obtained from the city of Niagara Falls consent to the construction and operation of a street surface railroad in certain of its streets. The only part, however, which has, up to the present time, been constructed, is a few hundred feet on Eighteenth street between Cleveland and Ontario avenues, to make a connection between the lines of the Electric City and the International Railway Companies.
The resolution of the common council of the city, to which reference has been made, so far as material to the question under consideration, provides:
"Resolved, that consent be and is hereby given pursuant to law to said International Railway Company to construct, maintain, operate and use single or double track extensions of its street surface railroad, to be operated by electricity by the single overhead trolley system, in, upon and along the following streets and portion of streets in said city, viz.:" (Here follow the names of the streets, including Eighteenth street between Cleveland and Ontario avenues.)
"Resolved, that this consent be given upon the express condition that all of the provisions of Article IV of the Railroad Law pertinent to this consent shall be complied with by said company. *344
"Resolved, that the further terms upon which this consent is given are as follows: * * * Said Company shall not charge more than one fare of five cents for each passenger for any continuous ride or passage over its railroad and extensions within the present limits of said City of Niagara Falls. * * * For the purposes of this subdivision the railroad of The Electric City Railway Company within said City of Niagara Falls shall be deemed an extension of the railroad of International Railway Company and the right to transfer to and from the railroad of The Electric City Railway Company within the city shall be recognized by said International Railway Company."
The conclusion at which I have arrived renders it unnecessary to examine the different franchises of the railroads merged in the International Railway Company or consents given to build or extend and maintain street surface railways in the public streets of the city, other than the one given and accepted under the resolution of the common council of the city of Niagara Falls quoted. The conditions imposed in granting this franchise had the effect of imposing similar conditions upon the rights theretofore acquired by railway companies to occupy public streets, whether by consent of the municipal authorities, or by the merging of other franchises, irrespective of the time when such rights were acquired. (Public Service Commission v. Westchester StreetR.R. Co.,
The Railroad Law was passed in 1890 (Chap. 565); the Public Service Commissions Law in 1907 (Chap. 429). Each was revised and amended in 1910 and on the same day became, respectively, chapters 480 and 481 of the Laws of that year. Various provisions of the former Railroad Law deemed to be inconsistent with the Public Service Commissions Law were omitted and the act *345
throughout bears evidence of an attempt to harmonize and make it consistent with the provisions of the Public Service Commissions Law; e.g., section
Before considering the effect of the Railroad Law and the Public Service Commissions Law, as bearing upon the question to be answered, it may not be out of place to state a few general principles of law, the correctness of which I do not believe can be successfully challenged. The state, acting through the legislature, has, by virtue of its police power, the right to regulate the fare to be charged by a street surface railroad corporation. This right or power, whichever it may be called, is an attribute of *346
the state sovereignty. It is something which the state cannot sell or give away, either in whole or in part. It is a power which underlies the Constitution and is predicated upon the law of necessity. It belongs to the state because it is sovereign, and is a necessity for the existence of the government. It is something the state cannot surrender because to do so would be to surrender a sovereign power. It is as enduring and indestructible as the state itself. (People v. Adirondack Ry. Co.,
It is suggested, not by counsel, that the state, in the exercise of its discretion, by an act of the legislature in terms so clear and unequivocal as to permit of no doubt, may vest in a municipality the authority to enter into an inviolable contract for a reasonable period regulating the rates to be charged by a public utility by suspending, during such period, its authority to interfere with or change such rates. This, however, is a question not presented by the appeal and is not considered or passed upon.
The provision in the Constitution of the state that "No law shall authorize the construction or operation of a street railroad except upon the condition that the consent of the owners of one-half in value of the property bounded *347
on, and the consent also of the local authorities having the control of, that portion of a street or highway upon which it is proposed to construct or operate such railroad be first obtained * * *" (Art. 3, sec. 18) does not in any way affect the right or power of the state to fix and regulate the fare to be charged by a public service corporation. This provision of the Constitution is not, either by express language or implication, a surrender by the state to property owners or to the municipalities of the supreme right to govern or regulate the fares or charges of street surface railroad corporations as the public welfare or interest necessitates or demands. It is simply a limitation upon the general power of the legislature; a limitation, however, in one respect only, and that is that the legislature shall not pass a law authorizing the construction of a street surface railroad which does not enact that the designated consents shall be first obtained. The provision has no bearing whatever upon the inherent power of the state to regulate the fare to be charged by a public service corporation. The power to regulate such fares is essentially a legislative function. (Home Tel. Tel. Co. v.City of Los Angeles,
If it be true, as indicated, that the state, as an attribute of sovereignty in the exercise of police power, has the right to regulate fares of a public service corporation, with the right to delegate such power to an agent, the inquiry necessarily follows, in order to answer the question propounded, whether it has, in fact, delegated this power to the public service commission. I assert with the utmost confidence that such power has been so delegated.
Section
In 1907 the Public Service Commissions Law (Chap. 429) was passed. Section 49 then provided, among other things, as to the power of the commission to fix fares of street surface railroad corporations. Subsequently it was discovered that certain sections of the Public Service Commissions Law and the Railroad Law were somewhat in conflict. For the purpose of making them harmonious, the legislature, in 1910, revised and amended both acts and section
Reading this section of the Public Service Commissions Law in connection with section
What is the answer to this conclusion? Two are *351
suggested. (1) That it impairs the obligation of the contract entered into in 1905 between the city of Niagara Falls and the railroad company. But no rule of law is better settled than that a municipality cannot, by a contract with a public service corporation, bar the legislature, so far as fares are concerned, from changing or abrogating such contract when made. All such contracts are, as heretofore pointed out, made subject to the future action of the legislature. Both parties contract with reference to the exercise of that power. (Buffalo E.S.R.R. Co. v. Buffalo St. R.R. Co., supra; Union Dry Goods Co. v. GeorgiaP.S. Corp., supra; Milwaukee Electric R. L. Co. v. RailroadCommission of Wisconsin,
The state may increase or diminish a rate fixed in a franchise or contract. This is so well settled that the citation of authorities ought not to be necessary. It is the federal rule. (See authorities before cited.) It is the rule established in many of the states. (In re Searsport Water Co., 108 Atl. Rep. 452, and authorities there cited. See, also, authorities cited in 3 A.L.R. 746.)
I assert there is a clear, well-defined and fundamental distinction between the Quinby and the instant case. The only question presented in the Quinby case was whether the public service commission had jurisdiction to raise the fare of street surface railroads in the city of Rochester from five to six cents, and it was held that it did not clearly appear such power had been given to it. The contract between the street surface railroads and the city of Rochester was entered into in 1890 under the Railroad Law as it then existed, the provisions of which, so far as pertinent, were read into it. The Public Service Commissions Law was not, as previously pointed out, enacted until 1907. Obviously, so far as this contract was concerned, the public service commission had no power to fix fares prior to such enactment. The most that should be claimed was that intermediate the passage of the Public Service Commissions Law and its revision in 1910, the public service commission had power to fix fares. In 1910, by section
If it could be claimed that power was given to the public service commission by the amendment to section
I am of the opinion, for the reasons stated, that the public service commission of the second district is invested with power to increase the fares on the petitioner's railroads in the city of Niagara Falls in case the proof, after investigation, shall warrant the conclusion that the present fares are insufficient to yield reasonable compensation for the services rendered and are unjust and unreasonable.
The order of the Appellate Division should be reversed *354 and that of the Special Term affirmed, with costs in this court and the Appellate Division.
Dissenting Opinion
The authority of the public service commission to regulate and increase rates of fare on street surface railroads in the city of Rochester, where such rates had been fixed as a condition of the consent of the local authorities to the operation of the road, was denied in Matter of Quinby v. Public Service Commission
(
When the case of People ex rel. Village of South Glens Falls
v. Public Service Commission (
Although, as shown by Judge McLAUGHLIN herein, the decision in the South Glens Falls case is not in conflict *355 with what was necessarily decided in the Quinby case, it was a substantial disapproval of what was said in the Quinby case except so far as it was therein held that the public service commission had no jurisdiction to raise the rate of fare in that particular case.
This court in Matter of International Railway Company v.Public Service Commission (
The decision in the Quinby case was made without necessarily determining that the reserve police power of the legislature has been contracted away or that the legislature directly or through the public service commission is without power and authority inherent or otherwise to regulate and modify conditions attached to a consent by local authorities.
In view of the subsequent decisions of this court the decision in the Quinby case should not be deemed a precedent except to the extent that the questions involved were necessarily decided in reaching the conclusion that was therein announced.
I concur in the opinion of Judge McLAUGHLIN for reversal.
ANDREWS and ELKUS, JJ., concur with HOGAN, J.; CARDOZO, J., concurs in memorandum, in which ELKUS, J., also concurs; McLAUGHLIN, J., dissents in opinion, in which CHASE, J., concurs in memorandum, and in which COLLIN, J., also concurs; ANDREWS, J., also concurs in so much of opinion of McLAUGHLIN, J., as holds that the legislature has constitutional power to modify rates fixed in the local franchise.
Order affirmed. *356