124 N.E. 123 | NY | 1919
This appeal brings here the question whether the fares established by the so-called Milburn Agreement in the city of Buffalo may be increased by the public service commission if found to be inadequate.
On January 1, 1892, the Buffalo Railway Company the West Side Street Railway Company, and the Crosstown Street Railway Company covenanted with the city of Buffalo for a sufficient consideration to abolish transfer charges, and establish a uniform fare of five cents for a continuous trip upon any portion of their lines. That is the Milburn Agreement, which was thereafter ratified by the legislature (L. 1892, ch. 151). None *477 of these roads was then subject, in the enjoyment of its franchise, to any condition imposed by the local authorities, affecting rates of carriage. Some of the franchises went back to days when the consent of the local authorities was not required by the Constitution (Constitution, art. III, sec. 18, amendment of 1875). None had been coupled with any conditions in respect of rates, except such conditions as had been imposed by the legislature itself. The power to supervise and regulate had been exercised by the legislature in the past, and against these very roads. The Milburn Agreement made no attempt to escape its exercise in the future. On the contrary, there was express provision that "nothing in this contract contained shall be construed to prevent the legislature from regulating the fares of said companies, or either of them." The companies signing that agreement, together with the Buffalo Traction Company, were later consolidated under the name of the International Railway Company. From time to time, upon the application of the consolidated company, the local authorities gave consent to extensions of the route, and, in so doing, again limited the fare to not more than five cents. At the same time, however, they provided that "all the terms, provisions and conditions" of the Milburn Agreement should be deemed a part of the consent. They thus reincorporated the covenant that the fares should remain subject to regulation by the legislature.
In December, 1916, the city of Buffalo, believing the fare to be too high, petitioned the public service commission to fix a just and reasonable rate (Public Service Commissions Law, sec. 49, subd. 1; Consol. Laws, chap. 48). For nearly two years that proceeding remained dormant. The war was at hand; and with it came enormous increase in the cost of maintenance and operation. The question was no longer whether rates should be lowered. The question was whether there was not need, if bankruptcy was to be averted, that rates should *478
be increased (Matter of International Ry. Co. v. Rann,
"Has the public service commission jurisdiction and power under the facts shown in this proceeding to regulate the rate of fare to be charged by the respondent for the transportation of passengers in the city of Buffalo?"
We think the power must be upheld. This is not a case where demand is made upon the commission to abrogate a defeasance reserved by the local authorities as one of the conditions of a franchise. This is a case where the local authorities, in imposing a condition, have consented that the legislature may change it, and have thus renounced the right of forfeiture or revocation that might otherwise be theirs. "Nothing in this contract contained shall be construed to prevent the legislature from regulating the fares of said companies, or either of them." In the light of this provision, amendment by legislation must be held to have been as much within the contemplation of the parties as amendment by agreement *479
(Knoxville Water Co. v. Knoxville,
We do not overlook the provision of subdivision 6 of *480 section 49 of the Public Service Commissions Law (Consol. Laws, chap. 48) that "nothing herein contained shall affect or modify" the terms of the contract of January 1, 1892, between the city of Buffalo and the railroads. Section 49 contains eight subdivisions. The first clothes the commissions with power to regulate rates. The sixth clothes them with power to regulate transfers. The sentence quoted is not a limitation upon the whole section. It is a limitation upon subdivision 6. It is part of a single paragraph which is marked off by separate numerals from those that precede and follow. The meaning is not doubtful. Transfer charges upon these lines are not to be reinstated by the commission. The railroad system is to remain a unit. Rates, however, are to continue subject to the same control that might be exercised if there were in truth a single line. The source of the power to reduce rates is the same as the source of the power to increase them. The legislature surely did not mean, by its qualification of subdivision 6, to withdraw from the commission the power to reduce. If that is so, it has not withdrawn the power to increase. We find in the Milburn Agreement itself the same distinction between changes affecting transfers and changes affecting rates. By the terms of that agreement, transfer charges are abolished without reservation. Rates are fixed provisionally, subject to regulation by the legislature. Neither the statute nor the Constitution prohibits the exercise by the commission, as the delegate of the legislature, of the power thus reserved.
Nothing inconsistent with this ruling is to be found in previous decisions. We held in Matter of Quinby v. PublicService Commission (
No such situation is before us now. The legislature, in regulating the respondent's fares, has not said that local authorities, whose consent was defeasible, shall be deemed to have consented absolutely. It has accepted the consent as written, and availed itself of a power of amendment which was one of the conditions of the grant.
The order should be affirmed, with costs, and the question certified answered in the affirmative.
CHASE, COLLIN, HOGAN, McLAUGHLIN, CRANE and ANDREWS, JJ., concur.
Order affirmed, etc.