223 N.Y. 373, People ex rel. New York Rys. Co. v. Public Service Commission of First Dist.

• Docket Number: .
• Citation: 223 N.Y. 373
• Date: 14 May 1918
• Parties: THE PEOPLE OF THE STATE OF NEW YORK ex rel. NEW YORK RAILWAYS COMPANY et al., Appellants, v. THE PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK FOR THE FIRST DISTRICT et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 373

223 N.Y. 373

THE PEOPLE OF THE STATE OF NEW YORK ex rel. NEW YORK RAILWAYS COMPANY et al., Appellants,

v.

THE PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK FOR THE FIRST DISTRICT et al., Respondents.

New York Court of Appeal

May 14, 1918

Argued April 24, 1918.

COUNSEL

Richard Reid Rogers and J. Lufton Mason for New York Railways Company, appellant. The commission was without power to make the order requiring this relator to set aside each month a sum equal to twenty

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per cent of its gross operating revenue to cover maintenance and depreciation. (People v. Willcox, 200 N.Y. 423; People ex rel. D. & H. Co. v. Stevens, 197 N.Y. 1; People ex rel. B. L., H. & P. Co., 203 N.Y. 7.)The depreciation order was in conflict with the orders made in the same proceeding approving the reorganization of the Metropolitan Street Railway Company and the issue of the bonds thereunder. (People ex rel. T. A. Ry. Co. v. Public Service Comm., 203 N.Y. 299.)

Burt D. Whedon and S. Sidney Smith for Frank L. Hall et al., appellants. The order of the commission requiring New York Railways Company to expend or set aside each month for maintenance and depreciation twenty per cent of its gross operating revenue was not authorized by the Public Service Commissions Law and is, therefore, void. (People ex rel. N.Y. etc., R. R. Co. v. Willcox, 200 N.Y. 423; Matter of Quinby v. Public Service Comm., 223 N.Y. 244; Vil. of Fort Edward v. H. V. Ry. Co., 192 N.Y. 139; People ex rel. S. S. Traction Co. v. Willcox, 196 N.Y. 212; People ex rel. D. & H. Co. v. Stevens, 134 A.D. 99; Railroad Comrs. v. O. R. & N. Co., 17 Ore. 65; Interstate Commerce Comm. v. Cincinnati Ry. Co., 167 U.S. 479; Siler v. L. & N. R. R. Co., 213 U.S. 175; United States v. Chase, 135 U.S. 261; United States v. Sheldon, 2 Wheat. 119; United States v. Wiltberger, 5 Wheat. 95; United States v. Morris, 14 Pet. 475; United States v. Hartwell, 6 Wall. 385; United States v. Reese, 92 U.S. 214.)

Oliver C. Semple and William L. Ransom for respondents. The uniform system of accounts prescribed by the commission for street railroad corporations required the company as a legal obligation to provide for maintenance and depreciation of its properties out of earnings. (People ex rel. K. C. Lighting Co. v. Straus, 178 A.D. 840;

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People ex rel. B. O. Co. v. Public Service Comm., 153 A.D. 129; Interstate Commerce Commission v. Goodrich Transit Company, 224 U.S. 194; Kansas City Southern Co. v. United States, 231 U.S. 423; People ex rel. B. H. R. R. Co. v. Tax Comrs., 69 Misc. 646; People ex rel. N.Y. & Q. Gas Co. v. McCall, 219 N.Y. 84.)The commission had power, under the law, to make the order objected to, because such an order, requiring the company to fulfill its legal obligation, was necessary in order to carry out the purposes of the enactment of the Public Service Commissions Law; in fact, to prevent the defeat of those purposes. (People ex rel. D. & H. Co. v. Public Service Comm., 140 A.D. 839; People ex rel. Bridge Operating Co. v. Public Service Comm., 153 A.D. 129; People ex rel. U. & D. Co. v. Public Service Comm., 171 A.D. 607; People ex rel. K. C. Lighting Co. v. Willcox, 156 A.D. 603; People ex rel. B. H. R. R. Co. v. Public Service Comm., 157 A.D. 698; People ex rel. United Traction Co. v. Public Service Comm., 167 A.D. 498; People ex rel. R. L. & R. R. Co. v. McCall, 169 A.D. 925; Public Service Comm. v. N.Y. Rys. Co., 77 Misc. 487; Public Service Comm. v. N.Y. & Q. C. Ry. Co., 170 A.D. 580; People ex rel. L. I. R. R. Co. v. Public Service Comm., 170 A.D. 429.) It being the relator's legal duty to make provision for replacement, currently out of earnings, in order that the value of the property invested may be kept unimpaired and that the property may be kept such as can render adequate service at reasonable rates, the public service...