Village of Mamaroneck v. Public Service Commission

208 A.D. 330, 203 N.Y.S. 678, 1924 N.Y. App. Div. LEXIS 5041

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: March 5, 1924
• Status: Published

Opinions

McCann, J.:

The defendant, respondent, the New York and Stamford Railway Company, is a domestic corporation organized under the Railroad Law of this State as a consolidation of the Larchmont Horse Railway Company and the Port Chester Street Railway Company. It operates a street surface railway from a point in the city of New Rochelle through the towns of Mamaroneck, Harrison and Rye, and the villages of Larchmont, Mamaroneck, Rye and Port Chester, all located in the county of Westchester, and also through the town, village and borough of Greenwich to a terminus in the city of Stamford, all in the State of Connecticut. Its total mileage including the main line and branches is twenty-six and thirty-seven one-hundredths miles. An order was made on July 22, 1920, which permitted the company to divide its fine into zones for the purpose of establishing zones of fare. Such order provides for a five-cent fare in the village of Mamaroneck and also a five-cent fare in the village of Larchmont but requires the payment of a fare in excess of five cents from without the village of Mamaroneck to points within that village and vice versa. It is conceded that the fares charged by the company pursuant to this order are in excess of that named in the franchises by which the village of Mamaroneck permitted the building and operation of the street railway through its streets. The street railway company has presented a petition to the Public Service Commission asking leave to issue on a three days’ notice a tariff schedule which will increase the rate of fare in the village of Larchmont, the latter village having previously duly consented to such increase. Hearings have been held before the Public Service Commission and the village of Mamaroneck has appeared and opposed the granting of such relief and claims that the provisions of its franchise with the street railway company which restricts the rate of fare to be charged ousted the Public Service Commission of jurisdiction to entertain the proceeding of enforcing the rates as contemplated. The village applied for an order of prohibition which was denied, and from the order of the Special Term denying the same, the appeal is now taken to this court. The franchise agreement urged by the village of Mamaroneck was made on July 19, 1899, with the Larchmont Horse Railway Company and the 13th paragraph thereof reads as follows: “ Said Railway Company shall not charge more than a single fare of five cents for each passenger for one continuous ride in either direction between its terminus in the Village of New Rochelle and its terminus in the Village of Harrison; and upon any other route or fine of railway operated by it in the Towns of Mamaroneck and Harrison.”

The company is charging a single fare of five cents per passenger between the points entirely within the village of Mamaroneck but is charging single fares in excess of five cents between the points mentioned in the above section of the franchise agreement which are outside of the village of Mamaroneck. The main question at issue on this appeal is this — does the agreement between the village of Mamaroneck and the company’s predecessor in respect to rates for transportation outside of the limits of that village, deprive the Public Service Commission of jurisdiction to regulate such rates outside the village?

The merits of the application are in no way involved on this appeal. In discussing the rights of the parties and the decisions of the courts bearing on the same, it is well to bear in mind that the Public Service Commissions Law, being chapter 480 of the Laws of 1910 (Consol. Laws, chap. 48), as amended by chapter 546 of the Laws of 1911, reads as follows:

“ § 49. Rates and service to be fixed by the Commission.

“ 1. Whenever either Commission shall be of opinion, after a hearing had upon its own motion or upon a complaint, that the rates, fares or charges demanded, exacted, charged or collected by any common carrier, railroad corporation or street railroad corporation subject to its jurisdiction for the transportation of persons or property within the State, or that the regulations or practices of such common carrier, railroad corporation or street railroad corporation affecting such rates are unjust, unreasonable, unjustly discriminatory or unduly preferential, or in anywise in violation of any provision of law, or that the maximum rates, fares or charges, chargeable by any such common carrier, railroad or street railroad corporation are insufficient to yield reasonable compensation for the service rendered, and are unjust and unreasonable, the Commission shall with due regard among other things to a reasonable average return upon the value of the property actually used in the public service and to the necessity of maiding reservation out of income for surplus and contingencies, determine the just and reasonable rates, fares and charges to be thereafter observed and in force as the maximum to be charged for the service to be performed, notwithstanding that a higher rate, fare or charge has been heretofore authorized by statute, and shall fix the same by order to be served upon all common carriers, railroad corporations or street railroad corporations by whom such rates, fares and charges are thereafter to be observed.”

The short title of the statute was changed to Public Service Commission Law by chapter 134 of the Laws of 1921, and the foregoing quotation was amended by chapters 134 and 335 of the Laws of 1921, by inserting therein, among other provisions, a provision authorizing the regulation of fares “notwithstanding that a higher or lower rate, fare or charge has been heretofore prescribed by general or special statute, contract, grant, franchise condition, consent or other agreement.”

*

The law continued as above quoted until the passage of chapter 891 of the Laws of 1923, which became effective on June first of that year, by which law the amendments of 1921 to the foregoing quotation were repealed and the law made to read substantially as it was before the enactment of the laws of 1921, above cited. Therefore, in construing the various decisions it is necessary to bear in mind that the law prior to 1921 and the law subsequent to June 1, 1923, are the same and that the law of 1921 until June 1, 1923, contained the above quoted clause.

We are confronted upon this appeal with the following questions:

(1) Is the order of prohibition the proper procedure in this case? This question was expressly waived upon the argument and, therefore, needs no further discussion.

(2) Is the law of 1921, or the amendment of 1923, controlling in this case?

(3) What are the powers of the Public Service Commission under the respective laws? ,

The petition of the street railway company for increase of fares was filed with the Public Service Commission previous to the enactment of chapter 891 of the Law's of 1923. A hearing was held but no formal action was ever taken because further proceedings were stayed by the order of prohibition. The village of Mamaroneck insists that the law which became effective on June 1, 1923, controls and the street railway company insists that the law of 1921 controls in defining the powers of the Public Service Commission.

Matter of Quinby v. Pub. Serv. Comm. (223 N. Y. 244) is a case which arose in the city of Rochester. The petition was made by a street railway company for permission to increase its fares in that city. A writ of prohibition was secured by the city. Objections were raised to the jurisdiction of the Public Service Commission to entertain such application on the grounds: First, on section 7 of chapter 359 of the Laws of 1915, amending section 636 of the Charter of the City of Rochester* and fixing a five-cent rate for one ride over the road of any corporation operating a street surface railroad in such city; and, second, upon the like terms and conditions contained in the franchise of the street railroad company as a condition of the consent of the local authorities thereto.

Section 18 of article 3 of the State Constitution reads as follows: “ But 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 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 * *

It was said that “ in the absence of clear and definite language conferring without ambiguity jurisdiction upon the Public Service Commission to increase rates of fare agreed upon by the street railroad and the local authorities we should not unnecessarily hold that the Legislature has intended to delegate any of its powers in the matter, whatever its powers may be.” The question as to whether the Legislature had any authority and if so the extent thereof was expressly reserved in the following language: “ It is, however, unnecessary and, therefore, improper to decide at this time what the limits of legislative power are in this connection.”

Therefore, in so far as the Quinby case is applicable to the one at bar it holds that under the law in effect prior to 1921 the Public Service Commission has no authority to modify or interfere in anyway with a local contract which is made a condition of a franchise granted by a municipality to a street car company for permission to construct or operate its railway within the municipal limits. That case has been much cited, distinguished and explained. It is our belief that the argument therein contained while in that case it affects only urban rates is just as applicable to interurban rates. It has been shown above that the law of 1921 inserted a provision authorizing the Public Service Commission to regulate fares notwithstanding local contracts. It has also been shown that the law of 1923 repealed the provision inserted in 1921; therefore, the statutory law to-day is the same as it was at the time of the Quinby case; hence if the law of 1923 controls in the decision of this case, the Quinby case is binding upon us. It is well to review briefly some of the many cases which have been decided since the Quinby case. Matter of City of Niagara Falls v. Pub. Serv. Comm. (229 N. Y. 336) is a case where a street railway applied to the common council of the city of Niagara Falls for consent to construct and operate its cars upon public highways. The city applied for a writ of prohibition, as in the case at bar, asking that the Public Service Commission be restrained from assuming and exercising jurisdiction. It was held that Matter of Quinby was controlling; it also referred to the fact that in 227 New York, 601, on motion for reargument, the decision in the Quinby case was reiterated. The court says: “ 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.”

That decision was made prior to the amendment of the then named Public Service Commissions Law in 1921. McLaughlin, J., wrote a dissenting opinion in this case in which he holds that “ The State may increase or diminish a rate fixed in a franchise or contract ” and that the Legislature has constitutional power to modify such rates.

Following is his language: “ Whatever power the State had in this respect was inherent, an attribute of sovereignty, of which it could not be deprived by the contracting parties any more than it could of its own existence.”

In this view three of his associates concurred. It is interesting to note that in a separate opinion written by Cardozo, J., he states that the only question involved in the Quinby case was one of statutory construction.

In People ex rel. Village of South Glens Falls v. Pub. Serv. Comm. (225 N. Y. 216) there was no constitutional question involved. It arose over the granting of a franchise to use a public street for the laying of gas mains, a part consideration for such franchise being that the price of gas was to be limited. It was held that the Legislature had the power to regulate and that such power had properly been conferred upon the Public Service Commission. The contract in question was authorized by the Transportation Corporations Law which gave to gas companies the power to lay pipes with the consent of municipal authorities under such reasonable regulations as they might prescribe. It held that the rate regulation in that case was a police power and one which might be regulated without impairing the obligation of the contract.

The decision in the Glens Falls case is placed upon the ground that the Legislature by subdivision 5 of section 66 and by section 72 of the then named Public Service Commissions Law, which apply solely to gas and electricity, distinctly delegated the authority to the Public Service Commission to modify local contracts. This was not the situation in the Quinby case. That case also states that while the power of the Legislature to deal with such local contracts was specifically reserved in the Quinby case “ the opinion [in the Quinby case] clearly intimated that such power did exist.” The constitutional provision regarding street railways not having been at issue in the Glens Falls case, there is nothing in such opinion which is in any way controlling in the case at bar.

Matter of Koehn v. Pub. Serv. Comm. (107 Misc. Rep. 151) is a case where a railroad (not a street railway) was built and operated .on private property. It is said in that case that the constitutional provision with reference to consents for the construction or operation of street railways “ was intended to confer upon the localities power to impose conditions, if at all, pertinent to the grant of such consents so far as the municipality had a city purpose to protect, not inconsistent with the public interests of the State at large.”

It was also said, “ assuming, therefore, that these municipalities had the power to fix rates of urban fare as a condition of the granting of consents to an urban railroad, did they have any authority, implied in this constitutional provision, to fix rates of interurban fare as a condition of the granting of consents to such an interurban fine as is here in question? Does it serve a public purpose of the city to fix rates of fare to and from other municipalities? It is my opinion that the consideration asked by the city cannot be something which is not germane to the public purpose for which the city and its government exists and certainly not something which is contrary to the public policy of the State.”

The discussion in that case is valuable as showing the reasons which are applicable to the case at bar. It states that “ the fixing of interurban rates of fare is normally a legislative function to be exercised in the interest of the general public, beyond the control of any city in the absence of clear warrant of authority therefor. It certainly was not intended to permit a city to invade the sovereignty of the State, where, as in the fixing of interurban rates, the rights of other municipalities and the inhabitants of the State generally are involved and where thus a State issue rather than a local concern is clearly indicated.”

It is also said that “ the Legislature has never meant to leave any such unusual power in any municipality under the sanction of the constitutional provision but has reserved full authority in itself for that purpose, and has given such power to its own agent, the Public Service Commission.”

It was also pertinently stated: “ Can the city of Tonawanda to-day fix a rate of fare by a condition in a consent which has effect outside its own boundaries and thus deprive the Public Service Commission of jurisdiction clearly given to it? That would be putting the railroad system of the State at the mercy of some of its cities, in a matter concerning not only the inhabitants of those cities, but all the inhabitants of the State.”

The court in that case concludes by holding that this was not a case which was controlled by the constitutional provision and, therefore, the rule in the Glens Falls case rather than the Quinby case was applicable.

Matter of Fleming (117 Misc. Rep. 373) was a prohibition proceeding brought to restrain the increase of rates. The headnote states: “ While a city although having no constitutional authority to prescribe the rate of fare may impose as a condition to the giving of its consent to the operation of a street railway within the corporate limits that a stipulated rate of fare shall be charged, the. Legislature has full power to determine the conditions that local authorities may attach to railroad consents to be given in the future.”

The rate which is fixed as a consideration for the contract is subject to regulation by the Legislature. The substance of the argument in that case, as applicable here, is that the city cannot prescribe a fare but can impose a condition of a stipulated fare; that the Quinby case dealt only with the powers of cities over corporations, in the absence of legislative control; and that no city can take away the regulatory or police power of the State, and the conclusion reached was that the local franchises were made with the implication that the Legislature had the right to regulate the fare and that the Commission had jurisdiction to grant the relief asked for so far as the local franchises within the city of Troy were concerned. In connection with this, however, it must be remembered that in the Fleming case the court read into the contract the provisions of section 181 of the Railroad Law with reference to the control of rates of fares within the limits of a city.

People ex rel. Garrison v. Nixon (229 N. Y. 575) (1920) is a case which was decided upon the question of procedure, but the dissenting opinion of Crane, J., is instructive as a reiteration and exhaustive discussion of the right of the Legislature to override conditions imposed by local franchises. The opinion, in which two of the judges concur, says: “ The power to regulate fares is one of the police powers of the State Legislature. * * * ” and that “ consents * * * given to all these railroads were subject to these laws and the power of the Legislature through the Public Service Commission to regulate the rate of fare.”

People ex rel. New York & N. S. T. Co. v. Pub. Serv. Comm. (175 App. Div. 869) (1916), which is cited as conclusive against the appellant herein, was overruled by the Quinby case. The force of the opinion in People ex rel. South Shore Traction Co. v. Willcox (133 App. Div. 556) (1909), apparently favoring the appellant, is much modified by the holding on appeal (196 N. Y. 212) which is an affirmance but which refuses to hold to the extent of the opinion in the Appellate Division and expressly limits its effect to the matters there at issue.

In the case of People ex rel. New York, W. & B. R. Co. v. Pub. Serv. Comm. (193 App. Div. 454) (1920) the Appellate Division, First Department, recognizes the fact that the question now before us had not been settled when that decision was rendered. The following appears in the opinion: ‘ ‘ With respect to such conditions imposed by the municipal authorities in the exercise of their right conferred by section 18 of article 3 of the State Constitution to grant or withhold the consent to the construction and operation of a street railroad for the construction of which the consent of the owners of one-half in value of the property bounded on the street or highway is also required, the power and authority of the Legislature effectively to increase the rate of fare without the consent of the municipal authorities so that there may be no forfeiture of the grant by the latter, has down to the present been left in doubt.”

This court in the case of People ex rel. Village of Brownville v. Pub. Serv. Comm. (198 App. Div. 391) (1921) has held directly on the principal point at issue herein. The facts in that case and the instant case are quite analogous. In both cases .there is a franchise defeasible in case of a non-compliance with the prescribed rates whether for urban or interurban service. The franchise in each case was made prior to the passage of section 49 of chapter 429 of the Laws of 1907. This case is not cited on any brief presented in this appeal, but it is the law of this court and holds that a contract such as that with the village of Mamaroneck is one “ with the terms of which no interference by a Public Service Commission [is] permissible.” The Brownville case was decided under the law as it existed prior to the amendment of 1921, as referred to. It is true that in the instant case the village of Larchmont is not litigating the change in its own franchise. It consents thereto. The change, however, affects directly the Mamaroneck franchise and establishes a discriminatory rate. The difference between the two cases, however, presents no different argument. In each case there is a contract between the village and the street railway company, and whether urban or interurban the Public Service Commission cannot interfere therewith. The statute applies to both cases, and the Mamaroneck franchise cannot be attacked indirectly through a modification of the Larchmont franchise any more than it can be attacked directly. Without rehearsing the various arguments and the dicta appearing in the cases above cited, and in other cases which might be referred to, we conclude that the Legislature has authority to regulate rates of fare which are prescribed by a contract which is a part of the consideration for the granting of the construction and operation of a street railway within or without a municipality under the provisions laid down in section 18 of article 3 of the State Constitution, and that such authority may be delegated to the Public Service Commission. We are also of the opinion that the Public Service Commission when properly authorized has such powers. If the Legislature desires to give the Public Service Commission the authority, which is claimed in this case, it is a simple matter to enact a law to that effect. It would have simplified matters if the Legislature had not repealed the law which granted those very powers. The Legislature passed the acts of 1921 and we are simply carrying out its intent as expressed in the act of 1923 in prohibiting the Public Service Commission from exercising the powers which had been given and subsequently taken away. It follows that the law prior to the acts of 1921 and the law subsequent to June 1, 1923, are the same under the rule and argument in the Quiriby case, to wit, there can be no control by the Public Service Commission because of the fact that the law during those periods provided no specific and definite authority for the Public Service Commission to interfere with such contracts. However, the law of 1921 gave such specific authority and we hold that the Legislature had the authority to so delegate it.

We now come to another important question in this case — which law controls in this proceeding, the law of 1921 or the law of 1923?

Section 93 of the General Construction Law reads: “ Effect of repealing statute upon existing rights. The repeal of a statute or part thereof shall not affect or impair any act done, offense committed or right accruing, accrued or acquired, or liability, penalty, forfeiture or punishment incurred prior to the time such repeal takes effect, but the same may be enjoyed, asserted, enforced, prosecuted or inflicted, as fully and to the same extent as if such repeal had not been effected.”

Section 94 of the same law reads: “ Effect of repealing statute upon pending actions and proceedings. Unless otherwise specially provided by law, all actions and proceedings, civil or criminal, commenced under or by virtue of any provision of a statute so repealed, and pending immediately prior to the taking effect of such repeal, may be prosecuted and defended to final effect in the same manner as they might if such provisions were not so repealed.”

Those sections are cited as authority for holding that the powers of the Public Service Commission as in existence at the time of the fifing of such petition are preserved for the purposes of this proceeding. We cannot concur in such conclusion. The Public Service Commission derived its authority from the Legislature. It was a delegated power to be exercised in behalf of such body. It was analogous to a revocable power of attorney, the authority under which had not been executed. Such power having been delegated, the Public Service Commission could act only while its authority continued. Had it acted its order would have been in effect the act of the Legislature. Its power having been revoked, its authority ceased at once. Sections 93 and 94 of the General Construction Law do not apply. There is no right affected as referred to in the former section neither is this an action or proceeding within the meaning of the latter section as such terms are defined by sections 11-a and 46-aof the General Construction Law (as added by Laws of 1920, chap. 917), which were revised from sections 3333 to 3335, inclusive, of the Code of Civil Procedure.

In conclusion we hold that the Public Service Commission has no authority in this case to modify the rates of fares provided in the franchise with the village of Mamaroneck but such authority while delegated to such Commission by chapters 134 and 335 of the Laws of 1921 was taken away by chapter 891 of the Laws of 1923 and that such authority did not continue for the purpose of granting the application now before this court.

The order appealed from should be reversed on the law, with costs, and the motion for an order of prohibition granted, without costs.

Cochrane, P. J., concurs; H. T. Kellogg and Van Kirk, JJ., concur in result; Hinman, J., dissents, with an opinion.

See. also, Laws of 1922, chap. 153, amdg. said § 49, subd. 1.— [Rep.

See Laws of 1907, chap. 755.— [Rep.