O'Brien v. Bd. of Pub. Utilities Com'rs

• Decision Date: 03 March 1919
• Docket Number: Nos. 95, 98, 99.,s. 95, 98, 99.
• Citation: 106 A. 414
• Parties: O'BRIEN v. BOARD OF PUBLIC UTILITIES COM'RS et al. (two cases). INHABITANTS OF CITY OF TRENTON et al. v. BOARD OF PUBLIC UTILITIES COM'RS et al.
• Court: New Jersey Supreme Court

106 A. 414

O'BRIEN

v. BOARD OF PUBLIC UTILITIES COM'RS et al. (two cases).

INHABITANTS OF CITY OF TRENTON et al.

v. BOARD OF PUBLIC UTILITIES COM'RS et al.

Nos. 95, 98, 99.

Court of Errors and Appeals of New Jersey.

March 3, 1919.

(Syllabus by the Court.)

Walker, Ch., and Black and White, JJ., dissenting.

Appeal from Supreme Court.

Certiorari by Charles F. X. O'Brien to review orders of the Board of Public Utilities Commissioners increasing rates of the Public Service Railway Company. From a judgment of the Supreme Court (105 Atl. 132) affirming the orders, prosecutor appeals. Affirmed.

Certiorari by the Inhabitants of the City of Trenton and another to review orders of the Public Utilities Commissioners as to rates of the Trenton & Mercer County Traction Company. From a judgment of the Supreme Court (105 Atl. 136) affirming the order, prosecutors appeal. Affirmed.

Charles E. Bird, of Trenton, and George L. Record and Marshall Van Winkle, both of Jersey City, for prosecutors.

L. Edward Hermann, of Jersey City, for Board of Public Utilities Com'rs.

Frank Bergen and Richard V. Llndabury, both of Newark, for Public Service Ry. Co.

Frank S. Katzenbach, Jr., and Edward M. Hunt, both of Trenton, for Trenton & Mercer County Traction Co.

BERGEN, J. The three cases above referred to were argued together, and the legal principles involved in each are sufficiently similar to permit their disposition by one opinion.

Two writs of certiorari were allowed the prosecutor, O'Brien, one to review an order made by the Board of Public Utilities Commissioners allowing the Public Service Railway Company to charge one cent for each transfer of a passenger from one of its cars to another, and the other to review an order allowing the same corporation to charge seven cents for each passenger carried until April 1, 1919, and six cents thereafter. The third writ was allowed the prosecutor, the city of Trenton, to review an order made by the same board permitting the Trenton & Mercer Traction Company to charge six cents for each passenger and to discontinue the sale of six tickets for twenty-five cents a practice theretofore followed by the traction company.

The orders under review were affirmed by the Supreme Court, and the respective prosecutors have appealed from that judgment.

The concise question presented is: Has the Board of Public Utilities Commissioners, a state agent, the power to increase the rate to be charged for transportation service in order to produce a sufficient additional income to meet increased expense of operation growing out of the great advance in the cost of labor and material, principally due to conditions incident to our war with Germany; and, if so, was such power lawfully exercised? Assuming that the rate of five cents existing prior to the new conditions was a reasonable one, then the application of ordinary common sense will unhesitatingly lead every fair-minded person to the conclusion that it would not continue to remain reasonable if the cost of production so advanced as to destroy the basis upon which it was rested. The solution of such a proposition does not require the aid of legal learning; it is a question of economics which any one of ordinary intelligence can apply.

The power to increase the rate; the reasonableness of the increase; the basis used in determining the question of reasonableness; whether the rate is fair to the public in view of the service rendered; and was it lawfully arrived at—are the principal and controlling questions argued on this appeal. Upon the question of power the appellants argue that, where a state agency has by agreement with a public utility corporation fixed a rate, the power of the state to alter or modify that rate is irrevocably taken away, and that, however unjust to the public such a rate may be, the state is powerless to correct it, and that, on the other hand, no relief can be afforded to a public utility corporation, however unreasonable the rate agreed upon may be to the latter.

It is enough to say that this court in two cases, very recently decided, has affirmed the power of the state to alter the rate so as to make it a reasonable compensation for the service rendered and a fair charge to the public therefor. In Collingswood Sewerage Co. v. Collingswood, 102 Atl. 901, it was held by the Supreme Court that the state, through its agent, had the power to increase the rates to be charged to property owners for the use of a sewage system, notwithstanding the fact that the ordinance of the municipality granting its consent fixed the maximum prices or rents that might be charged. This case was subsequently...