80 Pa. Super. 549 | Pa. Super. Ct. | 1923
Opinion by
The Scranton Railway Company is the owner and operator of approximately ninety-two miles of street railway in Lackawanna and Luzerne Counties, extending from Forest City on the north to the City of Pittston on the south. Of this ninety-two miles of track about one-half is within the City of Scranton. The portion of the track within the City of Scrajaton, constituting an integral and essential part of the system, was built under fran
The Public Service Commission, upon the return of the record, proceeded with the inquiry necessary to a valuation of the property of the railway company. The City of Scranton did not appoint an engineer to represent it and the conference as finally consummated consisted of an engineer representing the railway company and the chief of the Bureau of Engineering and his assistants of the Public Service Commission. The City of Scranton participated in the engineering conference only to the extent of supplying such information as Dr. Snow, the chief engineer of the Public Service Commission, requested and agreeing through its engineering department to some of the unit prices used by the conference. The
The views of counsel for the parties in this case expressed in their briefs and at their oral arguments, as to the principles which must govern the exercise of our ju
The contention of the appellant as to the effect upon the jurisdiction of this court, in appeals of this character, of the decision of the Supreme Court of the United States in Ohio Valley Water Co. v. Ben Avon and the subsequent action of the Supreme Court of Pennsylvania in that case, fails to give due consideration to the principles involved in the determination of the only question considered in that proceeding. While the rates for the transportation of persons and property within the limits \ of the State are primarily for its determination, the question whether they are so unreasonably low as to deprive jfche carrier of its property without such compensation as |the Constitution of the United States secures, and, therefore, without due process of. law, cannot be so conclu- ; sively determined by the legislature of the State, or by ' regulations adopted under its authority, that the matter ¡I may not become the subject of judicial inquiry. A public service corporation is a person within the meaning of
It is not the province of the courts to enter upon the merely administrative duty of framing a tariff of rates for carriage. It is within the scope of judicial power and a part of judicial duty to restrain anything which, in the form of a regulation of rates, operates to deny to owners of property invested in the business of transportation '¡that equal protection which is the. constitutional right of all owners of other property. “The equal protection of the laws which, by the Fourteenth Amendment, no state can deny to the individual, forbids legislation, in what
The Public Service Company Law authorized common carriers to charge just and reasonable rates, and prohibited unjust, unreasonable or discriminatory exaction's. It confided to the Public Service Commission the duty of investigating, holding hearings, at which parties interested should be permitted to submit evidence, and empowered the commission to determine the facts and conditions, in each case, which must control in the fixing of rates to be charged. “The basis of all calculations as to the reasonableness of rates to be charged by a corporation maintaining a highway under legislative sanction must be the fair value of the property being used by it for the convenience .of the public”: Smyth v. Ames, supra. “The value of the property is to be determined as of the time when the inquiry is made regarding the rates. If the property which legally enters into the consideration of the question of rates has increased in value since it was acquired, the company is entitled to the benefit of such increase. This is, at any rate, the general rule. We do not say there may not' possibly be an exception to it where the property may have increased so enormously in value as to render a rate permitting a reasonable profit upon such increased value unjust to the public”: Wilcox v. Consolidated Gas Co., 212 U. S. 19. The Public Service Company Law recognizes these principles and empowered the Public Service Commission to investigate and, after hearing, determine the fair value of the property of any public service company, used and useful for the public service, and to make re-valuations of such property from time to time. The legislature not’ only authorized such valuations of property, but conferred upon the commission extensive powers in making such investigations and (in article V, sectión 20) specifically set forth many matters and things having a bearing on such value which it shall be proper for the commission to take into consideration in arriving at
The jurisdiction of this court to set aside a finding of fact by the Public Service Commission, no constitutional question being involved, is dependent on the following provisions of the Public Service Company Law: “Article YI, section 23. In all cases the orders of the commission shall be prima facie evidence of the reasonableness thereof, and the burden of proving the contrary shall be upon the appellant or appellants,” etc. “Section 24. If the court shall, upon the record, find that the order appealed from is unreasonable or based upon incompetent evidence materially affecting the determination or order of the commission, or is otherwise not in conformity with law, it may enter a final decree reversing the order of the commission.” The burden of proving the finding unreasonable is upon the appellant. The proceedings before t'he commission having been in strict compliance with the provisions of the statute the determination óf the question must turn upon the sufficiency of the evidence to support the finding of the commission. “In cases like
When we come to apply the principles hereinbefore stated to the record and evidence, this case presents no serious difficulty. We have examined with care the voluminous printed record and report of the evidence certified to us by the commission, and are not convinced, that the finding of the commission was without substantial competent evidence to support it. There was a conflict of the evidence as to the original cost of construction of the property. The engineering conference submitted a detailed report as to such original cost, finding it to have been $7,899,064.56, which did not include $566,199.52 which had been expended for superseded property. Dr. Snow, the chief engineer of the Public Service Commission, who was a member of the engineering conference, was examined and cross-examined orally and explained the engineering estimate as to the original cost of construction. The appellant, who was complainant below, submitted much evidence, some of which consisted of the opinion of experts, tending to establish that the original cost’ of the property was only $5,585,333.74. The commission accepted, with some modifications, the report of the engineering conference, of which its chief engineer was a member. It may here be said that there was no satisfactory evidence produced by either of the parties which would enable a court to come to any definite conclusion as to the actual original cost of construction. Some of the subsidiary companies, which had become merged in the Scranton Railway Company, had com
This report, concerning the details of which the chief engineer of the Public Service Commission was examined and cross-examined at length, estimated the cost of reproduction of the property new undepreciated, at unit prices of the several dates, respectively, as follows: No. 1, Prices of November 1, 1919, $10,706,975.42, to which amount it added certain items for development cost, or
The appellant complains that the valuation of land, in the report of the engineers upon reproduction cost, is too high. The valuation of this land, upon the several bases of reproduction cost, above set forth, was as follows: No. 1, $243,783.50; No. 2, $195,026.80; and No. 3, $182,-337.63. The appellant contended that such valuation should be, as of the several dates, No. 1, $177,251; No. 2, $141,800.80 and No. 3, $132.938.25. It1 appeared in evidence that the engineering conference had employed two real estate experts to ascertain the values of the tracts of land used by the respondent in the public service. Those experts differed in their estimates, and the conferees took the average between them. The appellant had notice of who the experts were, and yet did not call them or any other persons to testify as to the value of the land, and now contends in its brief that the engineers should have taken the lowest value placed by either of the experts, upon the land in question. This appellant had full knowledge of the valuation which the engineering conference had put upon the land, and did not see fit to call a single witness to challenge that item of the report. We cannot' say, in such circumstances, that the commission ought to have entirely disregarded the report of the engineers. Another matter which the appellant
The commission did not1 accept in its entirety the report of the engineers as to the reproduction cost of the property, but reached the conclusion that the reproduction cost new, exclusive of going concern value and accrued depreciation, as of the several dates, should be fixed as follows: As of November 1,1919, at $10,075,000; as of unit process for the period 1914 to. 1919 inclusive, at $7,000,000; and under 1914 prices at $6,300,000. The commission found that in each instance the amounts found for depreciation by the report of the engineers should be deducted from these figures. It is important here to observe that the Public Service Commission, in arriving at the conclusion that the reproduction cost, as of the several dates, should be fixed in the amounts above stated, expressly excluded any allowance for brokerage, or the cost of financing the construction. Since this finding by the commission the Supreme Court has expressly decided that a reasonable brokerage, paid in marketing the bonds of a utility company, for the purpose of obtaining money to construct its plant, should be allowed as a principal item, in determining the value of
The appellant argues that even if the valuation of the property of the railway company is sustained, the rates of fare fixed by the final order of the commission will produce a revenue in excess of a reasonable return upon the property of the appellee used in the public service. The argument on this branch of the case depends upon the assumption that there will be a very considerable increase in travel after people get used to paying the eight-cent fare, and that the revenues of the company will thus be greatly increased. This is largely a matter of speculation and theory; and we would not be warranted in placing upon a foundation so insecure a decision that the determination of the Public Service Commission is unreasonable and not in conformity with law.
The order of the Public Service Commission is affirmed and the appeal dismissed at cost of the appellant.