Chi. & Milwaukee Elec. Ry. Co. v. Pub. Serv. Comm'n of Wis.

• Decision Date: 12 April 1949
• Citation: 37 N.W.2d 42,254 Wis. 551
• Parties: CHICAGO & MILWAUKEE ELECTRIC RY. CO. v. PUBLIC SERVICE COMMISSION OF WISCONSIN.
• Court: Wisconsin Supreme Court

254 Wis. 551

37 N.W.2d 42

CHICAGO & MILWAUKEE ELECTRIC RY. CO.

v.PUBLIC SERVICE COMMISSION OF WISCONSIN.

Supreme Court of Wisconsin.

April 12, 1949.

Appeal from a judgment of the Circuit Court for Dane County; Alvin C. Reis, Circuit Judge.

Affirmed.

Proceedings were initiated by petition of Chicago & Milwaukee Electric Railway Company to the circuit court for Dane county dated May 21, 1947 to review an order of the Public Service Commission of Wisconsin entered March 26, 1947 on petition by the city of Milwaukee dated June 26, 1946 which order authorized the Milwaukee Electric Railway and Transport Company to establish competitive bus service over a street and viaduct over which the petitioner was then operating its street car service under an indeterminate permit. From a judgment of the circuit court for Dane County entered October 25, 1948 affirming the order of the Public Service Commission petitioner appeals. The material facts will be stated in the opinion.

For convenience the petitioner will hereafter be referred to as the ‘Railway Company’ and its competitor as the ‘Transport Company’. Edgar L. Wood and John H. McQuaid, both of Milwaukee, for appellant.

Walter J. Mattison, City Atty., and William A. Ketterer, Asst. City Atty., both of Milwaukee, for respondent City of Milwaukee.

J. Ward Rector, of Madison, for respondent Public Service Commission.

Shaw, Muskat & Paulsen and Van B. Wake, all of Milwaukee, for respondent T. M. E. R. & T. Co.

WICKHEM, Justice.

The Railway Company is an urban street railway corporation organized under the laws of Wisconsin. Its original franchise was dated February 26, 1906 and subsequently amended by ordinances of October 14, 1907 and May 25, 1925. At the time of the petition which initiated these proceedings the Railway Company operated a double track street railway line from Oklahoma Avenue in the south portion of Milwaukee northward along south Fifth Street to West Madison Street, thence in a northwesterly direction to the intersection of South Sixth and West Scott Street. The lines proceeded thence north on South Sixth Street over the Sixth Street Viaduct to the intersection of North Sixth, West St. Paul Avenue and West Clybourn Street. They then proceeded east on West Clybourn to North Fifth Street, north on Fifth to West Wells Street and East on Wells Street to North Second and thence South on North Second to the end of the line at West Wisconsin Avenue. Prior to and at the time of the institution of urban street railway service by the Railway Company the Transport Company operated as a part of a general street railway system in Milwaukee a line commencing on the south at Cleveland Avenue, thence north on South Sixth Street to West Mitchell, thence East on West Mitchell to South First Street, thence north and west over various streets through the downtown section of Milwaukee to North 60th and West Vliet Street.

At the time of the first hearing the Transport Company operated a double track street car line with its southern terminal at West Morgan Avenue and South Ninth Place proceeding north on South Ninth Place to West Euclid Avenue, thence east to south Sixth; North on South Sixth to West Mitchell Street, thence East on West Mitchell to South First Street, thence north as heretofore indicated. As a part of the proceeding initiated by the city of Milwaukee the Transport Company asked for permission to abandon these rail operations provided authority was granted to operate gasoline motor buses over the same route from the southern terminus to West Mitchell Street and thence north on South Sixth Street to West Scott Street. From the intersection of Sixth Street and West Scott Street the new gasoline motor bus service route runs north on South Sixth Street and North Sixth Street to the intersection of North Sixth Street, St. Paul Avenue and West Clybourn Street, its route coinciding to this extent with that of the street car line operated by the Railway Company. Thus, the effect of the order is to permit the Transport Company to operate buses on Sixth Street from West Scott Street to the intersection of North Sixth Street, West St. Paul Avenue and West Clybourn Street, in spite of the fact that for years the Railway Company had operated its street cars over this street without competition from any bus line or street car company. It is this portion of the order that is objectionable to the Railway Company.

On December 10, 1934 the Railway Company surrendered its franchise pursuant to sections 193.33, 193.34 and 193.35, Stats. and accepted in lieu thereof the indeterminate permit under which it now operates. On June 28, 1947 in accordance with the permission granted by the order here appealed from the Transport Company instituted gasoline motor bus service over the new route including Sixth Street and the Sixth Street Viaduct. Since that time the Railway Company asserts that there has been a material decrease in its revenues in spite of the fact that the order conditions the provision by specifying that the Transport Company ‘shall not pick up or discharge passengers on such line on South Sixth Street between West Madison Street and West Clybourn Street, both inclusive, except at West National Avenue.’

The Railway Company contends that the order appealed from as well as the judgment of the court below affirming it violates its constitutional rights, is in excess of statutory authority, is based upon unlawful procedure, is unsupported by substantial evidence and is arbitrary and capricious.

In support of these general contentions it is first urged that the rights of the Railway Company under its indeterminate permit cannot be impaired, diminished or destroyed by any action on the part of the city of Milwaukee or of the Public Service Commission which diminishes the value of its rights and property without compensation; that the right of the city to acquire the property of the Railway Company without condemnation under sec. 193.36, Stats. estops the city from diminishing and impairing and destroying the value of property which it may later buy. Reliance is had upon Wisconsin Power & Light Co. v. Beloit, 215 Wis. 439, 254 N.W. 119, 124, in which this court said:

‘The law permits a city to take over in its entirety the plant of a public utility so operating therein if it desires to do so by following the statutory procedure therefor. But it does not permit a city to do so piecemeal by first destroying the property of the existing utility devoted to and its franchise for municipal service and then, after it has by this means depreciated the value of its franchise for private service, take over that franchise and the plant and equipment devoted to that service at its depreciated value, as it might do if the contentions of the defendant herein are sustained.’ See also Wisconsin Public Service Corp. v. Public Service Comm., 230 Wis. 663, 284 N.W. 582.

It is urged that the order amounts to an attempt to diminish the value of the Railway Company franchise rights and property by setting up a competing transportation service over its route and right of way thus diverting business and revenue from it to the Transport Company; that the effect of this is to depreciate its property in advance of any attempt to purchase it and to make applicable to doctrine of the cases above cited. It is urged that the restrictions are wholly ineffective to protect the revenue of the Railway Company that adequate service to the public could have been insured by requiring transfers from buses or street cars of the Transport Company to those of the Railway Company and that there was no occasion for imposing competition upon the Railway Company.

The foregoing argument appears to be founded on the claim that the Railway Company had an exclusive franchise to carry passengers over the Sixth Avenue route. This is not true for several reasons. The franchise was not in terms exclusive. The indeterminate permit for which appellant exchanged its franchise does not purport to be exclusive. As held in City of LaCrosse v. LaCrosse Gas & Electric Co., 145 Wis. 408, 130 N.W. 530 and City of Oshkosh v. Eastern Wisconsin Electric Co., 172 Wis. 85, 178 N.W. 308 there is a clear distinction between street and urban railways and general utilities. Railways serve termini and use public streets. Their relationship to areas is only incidental and there is no ground for an implication that the streets are preempted for their sole use. Indeed, the streets are to be used by other forms of travel and there is no reason or purpose for creating a monopoly. General utilities such as light, water and heat on the other hand serve areas. Ordinarily a monopoly is necessary for economic and other reasons. Hence, there must be a showing that public convenience and necessity require such second utility. This is specifically required by sec. 196.50, Stats.

With respect to street railways it is apparent that as different termini increase or decrease in population the volume and conditions of travel on the public streets necessarily varies and also the demand for new and different services by street railway and common motor vehicle carriers.

‘The purpose of dedicating streets and highways for public use is to permit travel thereover. The means by which travel is effected is secondary; the purpose is primary. LaCrosse City Ry. Co. v. Higbee, 107 Wis. 389, 83 N.W. 701,51 L.R.A. 923. The means may change from time to time, dependent upon man's inventive genius. Not so long ago animal power was the exclusive means of travel, whether used to propel the animal alone, as in walking, or in transporting passengers by means of an animal-drawn vehicle. Naturally, therefore, it was considered that streets were dedicated to the use of walking and driving only-limiting driving to animal power. With the advent of steam and electricity came other power for street travel use. Since the primary use of streets is travel, the...