271 Pa. 19 | Pa. | 1921
Opinion by
The New Street Bridge Company, appellant, hereinafter called the bridge company, was incorporated by Act of May 3, 1864, P. L. 687. In 1867 it built a bridge from New Street in the Borough of Bethlehem, across the Lehigh River and the Lehigh Coal & Navigation Company Canal, to New Street in South Bethlehem. As originally constructed, the bridge cost $63,150. It is 1,473% feet long, 30 feet wide, including a roadway of 18 feet and two foot passages of 6 feet each, and is supported by two abutments and eight piers. The bridge, since then, has been practically rebuilt, and is to-day a steel and concrete structure. In 1892 the bridge company made a written lease with the Allentown & Bethlehem Rapid Transit Company for the use of a part of the bridge. In 1910 the Lehigh Valley Transit Company, hereinafter called the transit company, intervening appellee, became the successor of the several street rail
The jurisdiction of the commission to determine the matter complained of is challenged for the reason that the bridge company is not a public service company, doing business in the particular matter under inquiry, within the meaning of the act, such as would make it subject to regulatory control. The position assumed comes to this: In the execution of the lease and subsequent performance thereunder, the bridge company was not functioning under its charter as an operating com
For a proper determination of these questions it will be necessary to consider the general structure of the act as it relates to both companies, the jurisdiction of the commission as it attaches to certain acts done by these companies, and the joint exercise of charter functions which, by their nature, are common to both.
Article 1 of the Public Service Act defines the various companies subject to the commission’s control; the extent of authority may be found in other parts of the act. This article also defines properties necessarily a part of
Limiting our discussion to the present inquiry, the Public Service Act, taken in its entirety, clearly recognizes corporations which perform charter obligations in and of themselves. Such classes comprise possibly the largest part of the utilities in the Commonwealth. It also considers corporations which have parted with franchises and property by lease or otherwise, retaining merely a corporate shell, with given powers and privileges to be applied as occasion demands. These may be called lessor or owning companies. The act also assumes a defined control of the lessee or substitute; that is, — the company receiving, under authority of law, by lease or otherwise, the lessor’s franchise and property, undertaking, by such lease and its own charter engagement, all the duties and obligations imposed on the lessor of performing for the lessor its charter responsibility to the State. Such lessee companies may be called operating companies. There may be, degrees of such leasing; we have been speaking of absolute withdrawal from all owning and operating activities or control. There are situations where the company not only owns but operates a part of the property devoted to public use, the remainder being leased to a different concern for operation. Many difficult questions may be presented bearing on these latter conditions; they are here mentioned as an aid in determining the matter before us. Where the lease is an absolute one of a given part of the company’s holdings, the question is not difficult; where there is interchange of facilities or property, mixed with
A lessor or owning company, — in the instant case a bridge corporation designated as a public service company by the act, — has certain duties and liabilities. These may be found in article II, section 1, (g), (h), (k), (1) and (t), — the duty to file contracts, make reports when demanded, furnish maps, profiles, records, etc., for the inspection of the commission, account for proceeds of securities sold, permit its physical property to be crossed by another railroad as ordered, and abide by grade crossing regulations as directed under the act. As lessor or owning company, it has certain powers and limitations of powers, found in article III, sections 2, 3, 4, 5, 6 and 11. These include the right to own property, receive rentals, pay dividends, acquire additional franchises, aid in financing new companies, build crossings, issue bonds, pave streets, and possibly others. It may be noted, in the duties, liabilities, powers and limitations of powers, there is no direct relation to an engagement in service to or for the public, except as to grade crossings. They relate specifically to circumstances in connection with corporate life, in which the public at large is only indirectly concerned. The commission may compel obedience to these duties when occasion arises, or they may be inquired into by complaint if acts are done contrary to law or the order of the commission, as may be noted in article Y, particularly sections 12,14, 18,19, 21 and 22. But such skeleton concerns are none the less public service companies, charged with these duties, lia
A lessee-operating company receives and owns for a given time all franchises and property of every kind and character of the lessor company; it has, in addition to those already mentioned, certain duties and liabilities (article II, section 1) different from those of the lessor company. Lessees must furnish adequate service to the public at just and reasonable rates or compensation; make repairs, alterations and improvements in the service and facilities for the accommodation of the patrons and the public; file tariffs and schedules showing charges, rates and compensation, which must be posted in their places of business, depots, stations, bridges, etc.; make joint rates, and, except as specified in the act, make no changes in a tariff or schedule. Not any of the duties just mentioned are obligatory on a lessor company; it has sold its power and right to do these things, and can regain these rights and powers only on the happening of a condition, viz, surrender, cancellation or annulment of lease. An operating company has powers (article III, section 1) that a lessor company does not have: the right to demand and receive reasonable fares, rates, tolls, charges and compensation for service rendered; to post, publish and file rates; to classify these rates and to increase them; to complain against other public service companies, — and of course it may be complained against. The powers and limitation of powers incident to a lessor are in the lessee.
The present complaint deals w^th rates, fares and compensation, and this is the avenue through which the public and complainant must pass.to reach the lessor. But as to rates, fares and compensation, the commission’s authority is effective only against such companies as deal in rates, fares, compensations and charges for service to the public; in short, operating companies. It is to such companies the terms (article I) “common carrier,” “conveyance of passengers or property,” “service” or “facility” may be applied with full force. They are apt words; they fit in well to the life and activities of such companies.
The commission has no power to subject lessor or owning companies to the duties or liabilities of operating companies. Its power to enforce obedience is circumscribed by the act, and is comprehended in the simple phrase mentioned in article YI, section 6: “Done or about to be done, omitted or about to be omitted......in violation......of the act.” An owning or lessor company cannot be compelled to do things made impossible, —to operate or to function as an operating company,— any more than the bridge company could be compelled to act as a telephone or water company. Such owning company owes no duty to the public to lease its road or bridge, or to fix a rental therefor. When such company, before the enactment of the Public Service Law, fixed a rental for its entire property and franchises for a term of years, it had not then, nor has it since, done anything prohibited, nor left undone anything required. The law gave it the right to name a substitute to perform its acts, and the legislature recognized this right. Having divested itself of its franchises and facilities, it cannot
When we seek the powers of the commission to investigate a given complaint, it must be referable to some duty or limitation of powers imposed by law on the company to be investigated; the public, by legal enactment, is concerned only with the nonfulfillment of its duties or with unlawful encroachment of powers. Upon cause shown, whether against an owning company or an operating company, the investigation must be limited to the nonperformance of the obligations specifically imposed by law on each concern. As the lessor company could not operate, it could not be affected with any duties of the operating company, nor can it be complained against in relation to these duties; and, because it is paid a certain sum as a rental for its entire property, that sum cannot be inquired into under the guise of a duty enjoined upon an operating public service company (charging reasonable rates), merely because the owning company is, for certain purposes, and all its living purposes, a public service company.
But it is urged that, inasmuch as these companies procured a right from the State to serve the public, they cannot divest themselves of this undertaking and impose it on a substitute, but are primarily liable to the Commonwealth to perform their charter obligations; that inasmuch as the State always had within it the right to regulate and control public service companies, when it exercised that right it gave the commission power and authority to take hold of the companies liable in the first instance, to wit, owning or lessor com-
The duties originally imposed on the lessor companies must be worked out through the operating company and indeed they may have such an effect that, through process of valuation, the underlying lessor’s property may be reached. To secure adequate service at reasonable rates may entail a fair valuation of lessee’s property, used and usable, and therein will-be included every item of property and franchise owned by lessor and lessee, and mentioned in the lease; a fair return upon such property may so materially diminish the receipts that the lessor company may be vitally affected. This adjustment can and may be speedy, and where the lessor absorbs all the profits, so that the lessée' cannot operate, if the public is unjustly affected, relief may follow quickly. The public is not concerned with a good or bad bargain between lessor and lessee. What they do demand in a complaint such as this, — and have a right to demand, — is adequate service at reasonable rates, and
Viewing the question, then, in this light, if the bridge company had leased its entire property and franchise, or had leased a certain part of its property, absolutely to the transit company, divesting itself of all control over the property and franchise for operating purposes for a given time, it would not be within the power of the commission, in a direct proceeding against the bridge company, the underlying company, to reduce the rental. But the bridge company does not meet either specification. There is no unqualified surrender of its property and franchise, or any part of them. To what extent short of these, if any, may the relation of the lessor and lessee exist, so that rentals may be exempt from regulatory control and the compensation paid be beyond inquiry? It is difficult to lay down a rule that would meet each case. A corporation created for public purposes and devoting its property to public uses, may do many minor acts in connection with its major purpose that are not necessary or related to such public duty, but may be incidentally or collaterally connected with the duty of performance of charter obligations. Ground is necessary for tollhouses and depots; it is lawful to lease to individuals land not in actual use or that can be spared therefrom; such leasing is a purely private contract. There are other acts not indispensable to a fulfillment of charter undertakings that may be exempt. It must be borne in mind, every point of contact, having a close relation to duties and liabilities under the act, between the public as such and a public service company, are made subject to regulation. In the instant case, as between bridge company and transit company, there is a dual control of the operating agency. Both companies jointly use the roadbed. They jointly perform the obligations of their respective charters, and as such are oper
When the bridge company made its lease with the transit company, it was carrying out the purposes of incorporation. It had a highway for people and movable property to cross the river; it permitted that highway to be used in part and at stated intervals by the transit company. This use could not be called exclusive; it would be exclusive only while the car was moving across the bridge, and such reasoning, could be applied to any vehicle traveling thereon. True, it enabled the transit company not only to perform its charter requirements, in getting people over the river, and permitted it to connect with its railway at either end of the bridge, thus, by a continuous route, meeting its further demand of service to the public; but the bridge company operated over the same right-of-way; the highway was open for public travel the entire length and breadth of the bridge and was interfered with, so far as the transit company was concerned, only when a car was traveling across it. In this position, however, the transit company occupied no higher place as to the bridge company than a motor car, a buggy or a foot passenger crossing the bridge, even though the transit company was operating on the bridge and fulfilling its charter requirements. .There was not a total severance of charter responsibility on the part of the bridge company. It had not so divested itself of property and franchises as to be exempt from control. The bridge company was functioning for all purposes as an operating company, and it was doing this when the lease was executed. The carriage of passengers by the
As to the transit company’s right to be on the bridge, the question is not so much how it gets there, as that the commission found it there; its right to be there cannot be tested here, nor will the fact that it was there under a lease hinder an adjudication to compel adequate service at reasonable rates against the bridge company. If it should be determined by the commission, after due hearing, the rate for this class of service is high and its result affects an arrangement between the bridge company and someone else, the reduced rate is none the less the lawful rate and the only rate that can be charged for that service, even though it does incidentally reduce the terms of a consumer’s contract. We agree with the Superior Court, the right to occupy the bridge did not depend on the lease alone. The structure was dedicated to public use, and, having held its property open for such service as street cars, it cannot now, at least during the life of the lease, deny the right of the company to be there.
Assuming this to be a service charge, as it is, within what limits may the commission regulate such contracts? Although a service charge, it is part of a contract in writing between the parties. We need not reyiew the authorities sustaining the power of the commission as a government agency to control contracts of this nature, or to exercise regulatory control over service companies: Relief Electric Light, Heat and Power Company’s Petition, 63 Pa. Superior Ct. 1; German Alliance Ins. Co. v. Lewis, 233 U. S. 389; Chicago and Alton R.
Where a public service company sells its commodity or service to another like company, and a charge is lodged against the rate for such service, the complaint must be made and acted on as any other complaint having due relation to earnings from all services and costs, capital and operating, and not merely to find, without more, “respondents were able to pay from its receipts dividends which we deem more than a just return.”
. We conclude there is not sufficient in the record to justify the order made. While there was some evidence as to probable cost, there was no attempt at allocation on any theory that could justify the order. There is nothing to support a, conclusion that this service was more profitable than others, or that it should have been preferred for the deduction of excess earning. The company may be earning too much; it should be told, when one-sixth of its revenue is cut off, how much it could earn, or the basis on which it can be found. The total revenue was $34,000. This-is cut to some $28,000, and the total decrease taken from the special rate of the transit company.
The order of the Superior Court is reversed, as is that of the commission. The case is remitted to the commission with directions to reconsider the matter, proceed to hearing and make such order as provided by law; appellee to pay costs.
See also the next case.