Citizens Passenger Railway Co. v. Public Service Commission

114 A. 642, 271 Pa. 39, 1921 Pa. LEXIS 453
CourtSupreme Court of Pennsylvania
DecidedJuly 1, 1921
DocketAppeal, No. 315
StatusPublished
Cited by58 cases

This text of 114 A. 642 (Citizens Passenger Railway Co. v. Public Service Commission) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Citizens Passenger Railway Co. v. Public Service Commission, 114 A. 642, 271 Pa. 39, 1921 Pa. LEXIS 453 (Pa. 1921).

Opinion

Opinion by

Mr. Justice Simpson,

Originally there were a number of street passenger railway companies in the City of Philadelphia, operating under separate charters, and each limited to a specific route of travel. Believing that combination would be more profitable, favorable legislation was obtained, one road would lease others, and those owned and leased would be run as a single system. Ultimately many of them were leased by the Philadelphia Traction Company, which, with its leased lines and those still operating under their original charters, were later leased by the Union Traction Company; and it, in turn, with all its leased lines, was leased by the Philadelphia Rapid Transit Company, which is now the sole operating company in the city. This latter lease is the only one to which the last-named company is a party; but thereby, as by all the other leases, it was provided'that the lessee company should carry out the terms and conditions of [44]*44the preceding leases, for which its lessors were responsible. Those contracts provided for specified rentals, to be paid by the lessee to the lessor, sufficient to cover the fixed charges of the latter and a stated dividend to its stockholders; and, since the leases included the franchises of the original companies, the latter were denuded of everything except their mere corporate existence. All this occurred long before the Public Service Company Law of July 26, 1913, P. L. 1374, went into effect; and those contracts, of course, are of binding force, according to their terms, unless the State constitutionally can interfere and actually has interfered therewith on behalf of the public.

On the theory that the State has legally acted by the Public Service Company Law, the Cliveden Improvement Association, a voluntary organization of citizens of the City of Philadelphia, filed with the Public Service Commission a complaint against the Philadelphia Rapid Transit Company alone, which referred, however, to the leases of the underlying companies, and prayed “a separate valuation of the property and facilities controlled by the [Philadelphia Rapid Transit] company wherein the value of the property and facilities represented by each lease......[shall be] determined as a unit separate and apart from all the other property and facilities controlled by the company.” An answer and a replication were duly filed, but since none of these proceedings have any relation, other than historical, to this appeal, they will not be considered further.

The United Business Men’s Association of Philadelphia, and George J. Campbell, a taxpayer of the city, later applied for and, being given leave to intervene in the controversy thus begun, also filed a complaint (in which W. A. Dunlap, as a taxpayer, was substituted for George J. Campbell), against seventeen of the original passenger railway companies, — but not joining the Philadelphia. Rapid Transit Company as a defendant,— alleging that respondents therein still have the duty but [45]*45have ceased to furnish to the public adequate service and facilities at reasonable rates, that they were receiving a grossly excessive return for the property which they had originally owned, but which was now used by the Philadelphia Rapid Transit Company, and prayed the commission to inquire into the fairness of the leases, to value the property of these respondents, to determine what would be a fair compensation therefor, and to reduce to such a reasonable basis the rentals the underlying companies should thereafter receive from the Philadelphia Rapid Transit Company, in order that the latter would be able to “furnish service and facilities to the public such as would be in accordance with the standards of the commission and the needs of the people.” Still later, the United Business Men’s Association of Philadelphia and the said George J. Campbell, filed another intervening complaint (which it afterwards amended) against all of the underlying companies, — but not the Philadelphia Rapid Transit Company, — enlarging and slightly changing, though not substantially altering, the original intervening complaint and prayer thereof, save that, as stated, it brought in more defendants, and also definitely averred the Philadelphia Rapid Transit Company had no charter rights to operate cars on any street of the city, but is running them “solely as agent or lessee of the respondent underlying companies; and that said underlying companies cannot escape their duty to the public or exact from the public unreasonable compensation, and place themselves beyond the reach of the public laws by merely making contracts between themselves and the holding companies.”

To these intervening complaints, certain of the respondents filed answers, not material to be here considered, but each of twenty-two of them separately demurred, alleging certain objections, the vital one being that the “complaint and amended complaint.....do not state a cause of action within the cognizance of the commission.” The commission overruled the demurrer, di[46]*46rected each demurrant “to file answers to the complaint within ten days from the date of the service of this order, and......that a time for hearing upon the complaints and answers be fixed in September, when the commission will proceed to hear, investigate and duly consider all matters put in issue by the complaint and answers.” Thereupon the twenty-two demurrants prosecuted separate appeals to the Superior Court, upon the hearing of which the City of Philadelphia was given leave to intervene and defend, and it and the original complainants moved to quash the appeals on the ground that the order complained of was not the subject of an appeal. The Superior Court overruled the motions to quash, sustained the demurrers and reversed the orders of the commission, so far as related to each of the appellants here. Upon application by the City of Philadelphia, the United Business Men’s Association and George J. Campbell, and the Public Service Commission, we allowed each of them to appeal to this court, so far as related to twenty-one of the decrees entered by the Superior Court, with the result that we have to consider sixty-three appeals, including the present one, the arguments here being limited by us to the three questions hereinafter stated, the first one of which is: “Were the orders of the Public Service Commission, here in question, of a character appealable to the Superior Court?”

This question we answered in the negative, in Peoples Natural Gas Co. v. Public Service Commission et al., 268 Pa. 285; but, since the brief opinion there rendered seems to have been misunderstood, we will here set forth at length our reasons for this conclusion, which depend, of course, on the correct interpretation and coordination of article VI, section 17, of the Public Service Company Law (as amended by the Act of June 3,1915, P. L. 779, 781), and section 31 of the same article; by the former of which an appeal is allowed to the Superior Court “within thirty days after the filing of any finding or determination by the commission,” and by the latter it is [47]*47recognized that the Court of Common Pleas of Dauphin County, in a proper case, may issue an “injunction..... modifying, suspending, staying or annulling any order of the commission, or of a commissioner.”

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Bluebook (online)
114 A. 642, 271 Pa. 39, 1921 Pa. LEXIS 453, Counsel Stack Legal Research, https://law.counselstack.com/opinion/citizens-passenger-railway-co-v-public-service-commission-pa-1921.