Hessey v. Capital Transit Co.

• Decision Date: 08 June 1949
• Docket Number: 163.
• Citation: 66 A.2d 787,193 Md. 265
• Parties: HESSEY et al., Public Service Commission, v. CAPITAL TRANSIT CO.
• Court: Maryland Court of Appeals

66 A.2d 787

193 Md. 265

HESSEY et al., Public Service Commission, v. CAPITAL TRANSIT CO.

No. 163.

Court of Appeals of Maryland

June 8, 1949

Appeal from Circuit Court of Baltimore City; W. Conwell Smith, Chief Judge.

Suit by Capital Transit Company against John H. Hessey and others constituting the Public Service Commission of Maryland, to set aside an order of the commission dismissing the application of the company to discontinue shuttle service on a certain line. From a decree restraining commission from enforcing its order and directing commission to permit company to abandon line, the commission appeals.

Affirmed.

Charles D. Harris, General Counsel for Public Service Commission, and Philip H. Dorsey, Jr., People's Counsel before the Public Service Commission, both of Baltimore, for appellant.

Clarence W. Miles and Harrison L. Winter, both of Baltimore (F. G Awalt and Daryal A. Myse, both of Washington, D. C., on the brief), for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, GRASON, HENDERSON, and MARKELL, JJ.

DELAPLAINE Judge.

Capital Transit Company operates a passenger transportation system by electric railway cars and motor buses in the District of Columbia and also in Prince George's and Montgomery Counties in Maryland. In November, 1947, the company filed applications with the Public Service Commission of Maryland for permission (1) to charge a fare of five cents for each zone radiating a distance of about one mile and a half from the District line, and (2) to discontinue its shuttle cars operating between Branchville and Beltsville in Prince George's County.

At the hearing upon the applications in January, 1948, the transit company informed the Commission that in the year ending September 30, 1947, it lost on its operations in Maryland $117,963 on its rail lines and $470,191 on its bus lines. On April 22, 1948, the Commission entered an order on each application. On the first application it authorized the company to charge a fare of five cents for each Maryland zone on condition that it would sell tokens or tickets in multiples of five for fifteen cents for use by school children, each token or ticket to be good for a ride in one zone. The company appealed from that order, but it was affirmed by the Circuit Court of Baltimore City. The Court of Appeals, however, upon finding that the operations in Maryland were conducted at a heavy loss, held that the order for a three-cent fare for school children was arbitrary, unsupported by substantial evidence and unlawful. Capital Transit Co. v. Bosley, Md., 62, A.2d 267, 271.

We now have before us the application to abandon the line between Branchville and Beltsville. This line, built by the company in 1902, is a single-track line about three miles long. The original cost of the line, including the track and cable, was $115,393.94. The company also spent $996 for land, $3,221 for buildings, $660 for furniture and shop equipment, and $20,290 for two street cars. The two cars, which have provided the shuttle service at certain intervals, have been making connections with the street cars running between Washington and the Branchville loop, and with buses running to and from Greenbelt and the University of Maryland at College Park. Because of protests of residents of the area served by the line, the Commission dismissed the application to discontinue it on the ground that its operation is required by public convenience and necessity. The company, appealing from that order to the Circuit Court, alleged in its bill of complaint that the annual operating expenses, taxes and depreciation of the line far exceeded the annual revenue from it. The Court sustained a demurrer to the bill, whereupon the company filed an amended bill and a transcript of all the evidence before the Commission. On December 6, 1948, the Court passed a decree restraining the Commission from enforcing its order and directing the Commission to permit the company to abandon the line. From that decree the Commission appealed to this Court.

It is a mandate of the Legislature that no common carrier, railroad corporation or street railroad corporation shall abandon or discontinue in whole or in part the exercise of any franchise or right, in so far as it is then actually being exercised for the public service, without the permission and approval of the Public Service Commission first obtained after due hearing, and the determination by the Commission that the present or future public convenience or necessity permit of such abandonment or discontinuance. In all proceedings in which the permission or approval of the Commission shall be applied for, the Commission may require that it be shown by clear and satisfactory evidence that the granting of such permission or approval is required by or consistent with the public interest; and when such proof is required the burden of proof shall be upon the applicant. Code 1939, art. 23, secs. 389, 390.

The Public Service Commission Law further provides that any person or corporation subject to any of the provisions of the statute, or any other person or party in interest, shall have the right to commence an action in the appropriate court against the Commission as defendant to set aside or have modified any order of the Commission on the ground that the order is unreasonable or unlawful. Code 1939, art. 23, secs. 359, 415; Bosley v. Dorsey, Md., 60 A.2d 691. The decisions of the Commission are prima facie correct and are subject to review. An order of the Commission will not be disturbed except upon clear and satisfactory evidence that it is unreasonable or unlawful, but an order will be set aside if the Commission exceeded its jurisdiction or arbitrarily disregarded the rights of the parties. Code 1939, art. 23, sec. 419; Public Service Commission v. Byron, 153 Md. 464, 479, 138 A. 404; Howard Sports Daily v. Public Service Commission, 179 Md. 355, 364, 365, 18 A.2d 210; Bosley v. Quigley, Md., 56 A.2d 835, 841.

In this case the protestants asserted that the railway line from Beltsville to Washington has been more convenient than the buses on the Washington-Baltimore Boulevard for many persons who live nearer the track than the boulevard. They said that the shuttle cars have been especially convenient for the school children. Aside from those who use their own automobiles, about 50 per cent of the residents of the area between Branchville and Beltsville have been using the railway, while the other 50 per cent have been using the buses. One of the protestants, D. K. Hart, a resident of the Hollywood section of Berwyn, told the Commission: 'While we would certainly hate to see the bus service on the Baltimore Boulevard done away with, it is not particularly desirable for the younger children and for ladies in the evening after dark because of the very heavy highway traffic.'

However, the issue of paramount importance in this case is whether it is possible for Capital Transit Company to run the shuttle cars between Branchville and Beltsville without a loss. It is agreed that the cost of operation of a railroad line includes not only the expenses incurred exclusively for traffic on that line, but also a fair proportion of the expenses incurred for all traffic of which that in question forms a part. Banton v. Belt Line Ry. Corporation, 268 U.S. 413, 45 S.Ct. 534, 537, 69 L.Ed. 1020. In the instant case the company informed the Public Service Commission that for the year ending September 30, 1947, the cost of operation, taxes and depreciation of the shuttle line amounted to $57,355, while the revenue therefrom totalled only $22,440. Thus in one year the company suffered a loss of $34,915 from the operation of the three-mile line.

It is a recognized principle that a railroad company organized and conducted for private corporate profit, but devoting its property to the use of the public, does not do so irrevocably or absolutely, but upon condition that the public will supply sufficient traffic on a reasonable rate...