City of Kansas City v. Public Service Commission

• Decision Date: 14 January 1919
• Citation: 210 S.W. 381,276 Mo. 539
• Parties: CITY OF KANSAS CITY v. PUBLIC SERVICE COMMISSION et al; KANSAS CITY RAILWAYS COMPANY, Appellant
• Court: Missouri Supreme Court

210 S.W. 381

276 Mo. 539

CITY OF KANSAS CITY v. PUBLIC SERVICE COMMISSION et al; KANSAS CITY RAILWAYS COMPANY, Appellant

Supreme Court of Missouri

January 14, 1919

Appeal from Cole Circuit Court. -- Hon. J. G. Slate, Judge.

Reversed and remanded.

A. Z Patterson and J. D. Lindsay for appellant, Public Service Commission; Clyde Taylor for appellant, Kansas City Railways Co; Frank Hagerman and R. J. Higgins of counsel.

(1) The continuous, successful operation of public utilities -- particularly street car transportation -- during the war crisis is greatly important, not only to state and city, but to the nation, as evidenced by declarations of the nation's highest officials. (2) The power to regulate street railway rates is expressly given to the Commission without reservation or exception. State ex rel. v. Pub Serv. Com., 259 Mo. 728. (3) The power to regulate public utility rates is a branch of the sovereign police power of the State. Such power has not been abridged, and the State, acting throught the Public Service Commission, has the right to alter such rates, notwithstanding any ordinance provisions, and notwithstanding the provisions of Section 20 of Article 12 of the Constitution, or other law. (a) The power to regulate these rates is an exercise of the police power of the State. State ex rel. Sedalia v. Pub. Serv. Com., 275 Mo. 201; State ex rel. Fulton v. Pub. Serv. Com., 275 Mo. 67. (b) The decisions all hold that no city shall be held to have power to suspend the authority of the State to regulate rates (i. e., exercise police power) unless the State has expressly, or by the very clearest implication, granted such power to the city. The state power to regulate is police power, and it is never held to be surrendered where the question is debatable. Milwaukee Elec. Ry. v. Wisconsin Railroad Com., 238 U.S. 179; Home Telephone Co. v. Los Angeles, 211 U.S. 273, 58 L. A. 176; Puget Sound Co. v. Reynolds, 37 S.Ct. 705. (c) Section 20, Article 12, of the Constitution of Missouri does not either expressly, or by such clear implication as to put the matter beyond dispute, delegate to cities authority to contract away the police power of the State to regulate fares. State ex rel. Sedalia v. Pub. Serv. Com., 275 Mo. 201. (d) The Sedalia and Fulton cases make no exception with respect to street car companies from the general rules announced therein. (e) The great weight of authority in other states sustains the propositions that, even where there is a constitutional provision such as Section 20, of Article 12, of the Missouri Constitution, the State may exercise police power to change street car rates imposed by franchises. Atlantic Coast Electric Ry. Co. v. Board of Public Utility Commrs., 104 A. 218; State Public Utilities Com. v. Railroad, 275 Ill. 570; Chicago v. O'Connell, 278 Ill. 591; Woodburn v. Pub. Serv. Com., 161 P. 391.

E. M. Harber, City Counselor, M. A. Fyke and E. F. Halstead, Assistant City Counselors, for respondent.

(1) At the time of the making of the franchise contract between respondent city and appellant railways company it was the settled law of this State, never since from any source until quite recently questioned, and so far as we know never questioned by this court, that the parties to said franchise contract had the right to make same. That the city could without the consent or interference from any source whatever, determine under the provisions of Section 20, Art. 12, of the Constitution of this State, upon what terms or conditions, if at all, it would permit the use of its streets for a great, or any number of years to be occupied and used by a street railroad, and upon such terms and conditions imposed by the city being accepted become valid and binding upon each of the parties thereto, and could only be changed or modified by consent of both. Hovelman v. Ry. Co., 79 Mo. 632; Faith v. Railroad, 105 Mo. 548; Railway v. Railway, 105 Mo. 571; State ex rel. Subway Co. v. St. Louis, 145 Mo. 551; Railway Co. v. Railway Co., 148 Mo. 645; State ex inf. v. Railway Co., 151 Mo. 183; Railway v. Kirkwood, 159 Mo. 252; National Subway Co. v. St. Louis, 169 Mo. 319; Kansas City v. Ry., 187 Mo. 155; Railway v. Railway, 190 Mo. 256; St. Louis v. Railway, 263 Mo. 439. The rule is general, without exception, that where a muncipality has the power to refuse the use of its streets to a public service company, the power to impose conditions, prescribe rates for such use, is vested in such municipality. Noblesville v. Gas Co., 157 Ind. 162; Shreveport Traction Co. v. Shreveport, 122 La. 147; City of Kalamazoo v. Kalamazoo Circuit Judge, 166 N.W. 998; Simons v. Tel. Co. 99 Md. 141, 63 L. R. A. 727; Murphy v. St. Railway, 199 Mass. 279; New Orleans Gas Co. v. New Orleans, 115 U.S. 650; Freeport Water Co. v. Freeport, 180 U.S. 587; Cleveland v. Cleveland City Ry. Co., 194 U.S. 517; Vicksburg v. Vicksburg Water Co., 206 U.S. 496; Cleveland v. Cleveland Elec. Ry., 201 U.S. 529; Home Tel. Co. v. Los Angeles, 211 U.S. 265; Louisville v. Tel. Co., 224 U.S. 649; Detroit United Ry. v. Detroit, 229 U.S. 39; McChord v. Railway Cos., 183 U.S. 483; Boerth v. Detroit, 152 Mich. 657; Muncie Gas Co. v. Muncie, 160 Ind. 97, 60 L. R. A. 822; Railroad v. Baltimore, 21 Md. 93; Pringree v. Mich. C. R. Co., 118 Mich. 314, 53 L. R. A. 274; Bessemer v. Water Co., 152 Ala. 391; Newark v. Gas Co., 65 Ohio 210; Gas Co. v. Mendenhall, 142 Ind. 538; Richmond v. Indiana, 168 Ind 82. Where such power is given by the paramount law, the state constitution, to municipalities to consent or not consent to the use of its streets by street railroad companies, as by the constitution of this State, Pennsylvania, New York, South Dakota, then such municipalities have ample and full power to impose conditions as to rates, and this too without the consent or interference or authority of the Legislature in any way, and upon such condition being accepted by street railroad company, it becomes a valid and binding contract which cannot be changed, abrogated or in any wise interfered with, except by the parties thereto, the very purpose of such provision in the Constitution being to put an end to the Legislature's interference, the power to grant or refuse such consent, being a "gift directly from the Constitution, needs no help or permits any interference from the Legislature." Allegheny v. St. Ry. Co., 159 Pa. 411; Plymouth v. R. R. Co., 168 Pa. 181; West Chester Borough v. Tel. Co., 227 Pa. 384; People v. O'Brien, 111 N.Y. 1; Kittinger v. Traction Co., 160 N.Y. 377; City v. Tel. Co., 25 S.D. 409; City v. Tel. Exchange Co., 189 F. 289; Motor Co. v. City of Omaha, 147 F. 1; City v. Bovre & M. Tr. Power Co., 88 Vt. 304; Tel. Co. v. Commonwealth, 161 Ky. 543. Where, as here by the fundamental law, the Constitution, municipalities have been given the exclusive power to say whether or not a street railroad company shall occupy their streets, we most earnestly insist, being justified in such insistence not only by the frequent, timely and unanswerable utterances of this court, but substantially all others, that such sole power granted to muncipalities necessarily carries with it the right to fix, and this too without any interference from any other source whatsoever, the rate of fare to be charged by such street railroad for the privilege thus granted. McCullough v. Maryland, 17 U.S. 421; Detroit v. Detroit Citizens Ry., 184 U.S. 368; Milville v. St. Ry., 159 Pa. 411; Philadelphia v. R. R. Co., 143 Pa. 444; Plymouth Tp. v. Railway, 168 Pa. 181; Philadelphia v. Railway, 177 Pa. 382; West Chester Borough v. Tel. Co., 227 Pa. 384; People v. O'Brien, 111 N.Y. 1; Kittinger v. Traction Co., 160 N.Y. 377; City v. Tel. Co., 25 S.D. 409; City v. Tel. Exchange Co., 189 F. 289. As to the authority of city to impose conditions, where the right is given to it by constitution or statute to grant or deny the use of its streets, the rule is subsantially universal that in the granting of such right the city has the power to impose such condition as it sees fit. Railroad v. Leavenworth, 1 Dillon, 393; Commission v. Water Co., 70 N.J.Eq. 71; Mager v. Grima, 8 How. (49 U.S.) 400; Pasadena v. Terminal Co., 109 Cal. 315; Sutherland on Statutory Construction, sec. 391; Beach on Public Corporations, sec. 1314; 2 Lewis' Sutherland Statutory Construction, secs. 508, 510, 511; Thorp on Public Officers, sec. 1342; State v. Railroad, 242 Mo. 355; State ex rel. v. Roach, 267 Mo. 316; Tranbarger v. Railroad, 250 Mo. 55; People v. Gillison, 109 N.Y. 389; Whitley v. Terry, 82 N.Y.S. 89; Gas Co. v. La. Co., 115 U.S. 661. (2) The respondent city in entering into contract here was exercising its proprietary power, in pursuance of the power conferred upon it by the Constitution and its charter. The exercise of such powers is not subject to be destroyed by the police power of the State. State ex rel. Subway v. St. Louis, 145 Mo. 551; State v. Roach, 267 Mo. 316; Tranbarger v. Railway, 250 Mo. 46, 55; State ex rel. St. Louis v. Gas Co., 102 Mo. 472. (3) When at the time a contract is made the same is valid by the laws of the State, as then expounded by the departments of the governments and administered in its courts of justice, its validity and obligations cannot be impaired by any subsequent, even constitutional, ordinance, act of the Legislature or decisions of the courts. State v. Miller, 50 Mo. 133; Hunter v. Pittsburgh, 207 U.S. 179; Newburyport Water Co. v. Newburyport, 193 U.S. 561; Los Angeles v. Los Angeles City Water Co., 177 U.S. 558; Harmon v. Auditor, 123 Ill. 135; Marshall v. Selliman, 61 Ill. 221; Ohio Life Ins. and Trust Co. v. DeBott, 57 U.S. 429. (4) The State cannot by virtue of the police power, rescind, modify or deprive the city of the benefits accruing to it, under its contract with...