142 A. 870 (Md. 1928), 52, West v. United Rys. & Electric Co. of Baltimore

Docket Nº:52.
Citation:142 A. 870, 155 Md. 572
Opinion Judge:OFFUTT, J.
Party Name:WEST ET AL. v. UNITED RYS. & ELECTRIC CO. OF BALTIMORE.
Attorney:Thomas J. Tingley and Raymond S. Williams, both of Baltimore, for appellants. Joseph C. France, Charles McHenry Howard, and Charles Markell, all of Baltimore (Henry H. Waters, of Baltimore, on the brief), for appellees. Carville D. Benson, James K. Cullen, and Carville D. Benson, Jr., all of Balt...
Judge Panel:Bond, C.J., and Parke, J., dissenting in part. Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT, DIGGES, PARKE, and SLOAN, JJ. ADKINS, J. (concurring). BOND, C.J. (dissenting). PARKE, J. (dissenting).
Case Date:July 16, 1928
Court:Court of Appeals of Maryland
 
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Page 870

142 A. 870 (Md. 1928)

155 Md. 572

WEST ET AL.

v.

UNITED RYS. & ELECTRIC CO. OF BALTIMORE.

No. 52.

Court of Appeals of Maryland

July 16, 1928

Concurring Opinion, July 23, 1928.

Dissenting Opinions, August 2, 1928.

Appeal from Circuit Court No. 2 of Baltimore City; Joseph N. Ulman, Judge.

Suit by the United Railways & Electric Company of Baltimore against Harold E. West and others. From the judgment, both parties appeal. Affirmed in part, and in part reversed and remanded.

Bond, C.J., and Parke, J., dissenting in part.

Page 871

Argued before BOND, C.J., and PATTISON, URNER, ADKINS, OFFUTT, DIGGES, PARKE, and SLOAN, JJ.

Thomas J. Tingley and Raymond S. Williams, both of Baltimore, for appellants.

Joseph C. France, Charles McHenry Howard, and Charles Markell, all of Baltimore (Henry H. Waters, of Baltimore, on the brief), for appellees.

Carville D. Benson, James K. Cullen, and Carville D. Benson, Jr., all of Baltimore, for residents of Halethorpe.

OFFUTT, J.

The United Railways & Electric Company of Baltimore came into existence on the 4th day of March, 1899, as the result of a merger of all the street railway lines operating in and near Baltimore, with a total authorized capitalization of $76,000,000, of which $38,000,000 was in bonds, $14,000,000 in preferred stock, and $24,000,000 in common stock. The base fare at that time charged by its several constituent companies within the city limits was 5 cents, and by chapter 313 of the Acts of 1900 the consolidated corporation, hereinafter called the Company, was specifically limited to a fare of 5 cents for the transportation of adults and 3 cents for children from any point on its lines within said city to any other point thereon which could be reached directly or by transfer at intersecting points, and that schedule it maintained until 1918.

In the meantime the state, moving with a growing trend throughout the country, had abandoned its traditional policy of regulating public service corporations by direct legislative action, and had by chapter 180 of the Acts of 1910 created the Public Service Commission of Maryland, hereinafter called the Commission, to which it had committed plenary powers in respect to regulating the rates and service of public utilities, and had repealed existing legislation fixing rates for service furnished by such utilities, such repeal to become effective when and as the Commission determined in accordance with the law that such rates should be superseded by others. Gregg v. Public Serv. Com., 121 Md. 30, 87 A. 1111.

And on July 19, 1918, the Company for the first time applied to the Commission for its approval of a schedule of rates under which it would receive 6 cents for adults and a uniform increase of one cent from children between 4 and 12 years of age and riders using commutation tickets. The Commission was unable to hear the application immediately, and the Company on August 28, 1918, with the assent of the Commission, filed a revised schedule, which took effect October 1, 1918, and remained in effect until January 7, 1919, when it was formally approved by the Commission.

On May 23, 1919, the Company applied for a further increase from 6 to 7 cents for cash fares, with four tokens for 25 cents, which it subsequently changed to a request that it be permitted to collect a cash fare of 10 cents, with two tokens for 15 cents, and on September 30, 1919, it was permitted to charge a cash fare of 7 cents, or 6 1/2 cents when tickets or other tokens were purchased. On December 26, 1919, it again applied for an increase in its rate schedule, and the Commission advanced the base fare from 6 1/2 cents to seven cents flat. On March 31, 1924, at the Company's request, the Commission authorized a further increase of the base fare to 7 1/2 cents, and on August 1, 1927, it filed an application for permission to increase its base fare to 10 cents, which was 100 per cent. more than it had charged prior to October 1, 1918, and 33 1/3 per cent. more than it had been allowed to charge from March 31, 1924, until it filed that application, and in connection with that request it alleged an apprehended financial crisis, and urged that it be allowed to put the increase in effect immediately as an emergency measure, pending any hearing that might be had on its application for a permanent increase of its base fare to 10 cents. The application for an emergency rate was denied, but on February 10, 1928, the Commission passed an order which denied the application for an increase of the base fare to 10 cents, but which permitted the Company--

"to charge and collect for the transportation of persons over its several street railway lines, in Baltimore City and vicinity, a base rate fare of 8 1/3 cents when tickets or fare checks are purchased, or 9 cents cash, for the conveyance of each passenger over 12 years of age, and 5 cents for each child between the ages of 4 and 12 years, between any of the points designated in the schedule of the said Company filed with the Commission pursuant to the requirements of the Commission's Order No. 8240 entered in case No. 1682 on May 26, 1924, or between intermediate points, in either direction, on any of such lines, except in so far as the zones on any of the said lines are hereinafter modified or changed. That the first fare zone on the Halethorpe line be and it is hereby extended to the terminus of the said line at Halethorpe, effective from and after midnight of February 12, 1928."

The Company, being dissatisfied with that order, on March 13, 1928, filed in circuit court No. 2 of Baltimore City a bill of complaint, in which it asked that that order be nullified in so far as it or any previous order of the Commission prevented it from charging a flat 10-cent fare, or from continuing the first and second Halethorpe zones, and it further asked that the Commission be enjoined from enforcing that order or any prior order limiting the Company's rates. The Commission answered the case was set down, evidence offered by the Commission, the Company, and intervening persons interested in the matter, and after argument submitted for decree, and on May 11, 1928, a decree was filed, vacating the order in so

Page 872

far as the same purports to limit the rates of the plaintiff, except, however, as to that portion of said order which extended the first fare zone on the Halethorpe line to the terminus of said line at Halethorpe, as to which latter provision in said order the bill of complaint is hereby dismissed," and enjoining the defendants from enforcing that or any other orders of the Commission in so far as they limit or purport to limit the rates of fare to be charged by the Company. From that decree the Company and the Commission appealed, the Company on the ground that the court erred in abolishing the second zone on the Halethorpe line, and the Commission on the ground that the court erred in vacating so much of its order as affected the rate of fare to be charged by the Company, and in enjoining it from enforcing such order.

It may be noted that the relief granted in the decree is not precisely that prayed in the bill. The Commission by its order did three things: It refused the Company's application for a 10-cent fare, it fixed an 8 1/3-cent fare, and it consolidated the two Halethorpe zones in one. The appellee, in its bill, asks that all orders of the Commission which limit its rate or prevent it from charging a 10-cent fare be set aside, and that the Commission be enjoined from enforcing any such orders. The decree does not refer to a 10-cent fare at all, but vacates all orders of the Commission, so far as they purport to limit the "rates of the plaintiff," and it based that ruling upon the Commission's "election" not to have the case remanded to them. But the court clearly had no right to fix the Company's rates, since its function was judicial, and confined to determining whether the order of the Commission was valid or invalid, and if in its judgment the action of the Commission was unlawful it should have remanded the case to the Commission for such further action as might be appropriate, for even if in fact the 8 1/3-cent rate allowed was inadequate to allow the Company a fair return on the value of its property, that fact did not oust the jurisdiction of the Commission to fix the Company's rates, nor did it authorize the court or the Company to fix them, for under the statute the power to do that is in the Commission alone. Gregg v. Public Service Commission, supra; Chenoweth v. Pub. Serv. Com., 143 Md. 626, 123 A. 77; Havre de Grace Bridge Co. v. Public Service Commission, 132 Md. 24, 103 A. 319, Code, art. 23, 375.

But, as the decree reads, it not only vacates the order of the Commission of February 10, 1928, but in effect all other orders, affecting the Company's rate schedules, and it therefore either terminates this proceeding entirely, and leaves the Company free to file a new application for increased rates, or it leaves the question of rates altogether at the discretion of the Company. But neither of those alternatives was authorized by anything in the statute; but, if the order was invalid, because it was unfair, confiscatory, unlawful, or for any reason, it should have been vacated, and the case remanded to the Commission, for further proceedings in accordance with such guides, rules, and standards as the court might by appropriate order or decree direct.

The central dominating question presented by the appeal is whether the schedule of rates promulgated by the Commission is insufficient to yield such an income as will give to the Company a fair return on the value of its property. In the argument of the case it was said that the Commission had limited the Company to a return of 6.26...

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