Kansas City Railways Company v. Public Service Commission
| Decision Date | 16 February 1918 |
| Citation | 201 S.W. 74,273 Mo. 173 |
| Parties | KANSAS CITY RAILWAYS COMPANY, Appellant, v. PUBLIC SERVICE COMMISSION |
| Court | Missouri Supreme Court |
Appeal from Cole Circuit Court. -- Hon. J. G. Slate, Judge.
Affirmed.
Clyde Taylor and Charles A. Stratton for appellant.
(1) The Public Service Commission was without authority to make an order requiring this appellant to pay a fee for authorizing an issue of bonds to take up other bonds. Laws 1913, sec. 21 p. 567. (2) This appellant's obligations were not limited to those which it primarily created, but included those which it assumed. Cone v. Wood, 108 Iowa 266. (3) Statutes generally should be so construed as to give words and phrases their plain and ordinary and usual meaning. R. S. 1909, sec 8057. (4) A refunding of a debt is merely a funding anew, and not the creation of a new debt. In re Pounds Estate, 166 Mo. 419; Manly v. Bd. of Commissioners, 46 Colo 491. (5) A statute relating to fees or costs should be strictly construed. Ford v. Railway, 29 Mo.App. 616; State ex rel. v. Holladay, 67 Mo. 64; State ex rel. v. Gordon, 245 Mo. 28; Shedd v. Railway Co., 67 Mo. 690; State ex rel. v. Wofford, 116 Mo. 223; Gammon v. Lafayette Co., 76 Mo. 676; Bank v. Refrigerator Co., 236 Mo. 414; State ex rel. v. Brown, 146 Mo. 406; State ex rel. v. Adams, 172 Mo. 7. (6) "Strict construction of a statute" defined. Lagler v. Railways, 42 Ind.App. 592; Moore v. Tel. Co., 164 Mo.App. 165; Priest v. Capitain, 236 Mo. 462.
Alex Z. Patterson and James D. Lindsay for respondent.
(1) The bonds upon which the fee or tax in issue was assessed, are reorganization bonds, not refunding bonds. They are within the general enacting terms of Section 21, but they are not within the proviso. Public Service Commission Act, secs. 21, 57, 62, Laws 1913, p. 567 et seq. (2) The proviso in statutes undertaking to limit general provisions, is to be strictly construed. A party claiming an exemption for his benefit under the terms of the proviso must show a clear right to that exemption. 36 Cyc. 1162; Brown v. Patterson, 224 Mo. 639; Lewis's Sutherland on Statutory Construction (2 Ed.), secs. 351, 352; Ex Parte Lusk, 82 Ala. 519; State v. Telephone Co., 104 Minn. 270; Towson v. Denson, 74 Ark. 302; Clark's Appeal, 58 Conn. 207. (3) The rule invoked by appellant, and the cases cited, that statutes authorizing the collection of fees are to be strictly construed, will not apply here. That rule was stated in cases where the officer claimed from the State a fee for his individual benefit, or demanded for his individual benefit by virtue of his official relation to the State, a fee from another. In such cases the strict rule is applied for the benefit and protection of the State. The rule is here sought to be applied adversely, against the State. Ford v. Railway, 20 Mo.App. 616; State ex rel. v. Holladay, 67 Mo. 64; State ex rel. v. Gordon, 245 Mo. 28; Shedd v. Railway Co., 67 Mo. 690; State ex rel. v. Wofford, 116 Mo. 223; Gammon v. Lafayette Co., 76 Mo. 676; Bank v. Refrigerator Co., 236 Mo. 414; State ex rel. v. Brown, 146 Mo. 406; State ex rel. v. Adams, 172 Mo. 7.
The appellant began this proceeding in the circuit court of Cole County to review on certiorari an order of the Public Service Commission, whereby the appellant was required to pay fees to the commission amounting to nearly ten thousand dollars, for services rendered appellant by the Commission in connection with a bond issue of about twenty-eight million dollars. The circuit court affirmed the order of the Commission and from that judgment appeal is taken.
The fees charged, to which the appellant objects, were authorized, as claimed by respondent, by Section 21 of the Public Service Commission Act, Laws 1913, p. 567. This section provides that the Commission may charge as fees for a certificate authorizing the issuance of bonds, notes, or other evidences of indebtedness, one dollar for each one thousand dollars of the face value of the authorized issue, or fraction thereof, up to one million dollars; and fifty cents for each thousand dollars over one million dollars and up to ten million dollars; and twenty-five cents for each one thousand dollars over ten million dollars; with a minimum fee in any case of $ 250. The section then contains this proviso:
"Provided, that no fee shall be charged when such issue is made for the purpose of guaranteeing, taking over, refunding, discharging or retiring any bond, note or other evidence of indebtedness up to the amount of the issue guaranteed, taken over, refunded, discharged or retired."
The appellant claims that the order in this case is covered by the proviso and the Commission had no authority to charge such fees; that the bonds were issued for the purpose of refunding an existing indebtedness of the company. In order to determine the purpose and character of the bonds it will be necessary to consider the facts leading up to the creation of the appellant company.
In 1913 the street railway systems and the electric light and power properties in Kansas City were being operated by receivers appointed by the Federal court, the order of appointment having been made in June, 1911. At the time of the appointment of the receivers, the Metropolitan Street Railway Company was operating all the properties as the owner, having acquired them from several different companies and consolidated them into one system. These several properties were subject to separate mortgages, which had been executed by the several owning companies at different times. The several companies had received franchises from Kansas City under which the properties were being operated by the receivers and all these franchises were soon to expire.
It does not appear at whose instance nor in what kind of a proceeding the receivers were placed in charge of these consolidated properties and the Metropolitan ousted from control, but it does appear that the city claimed the franchises had been forfeited. In the proceeding there were decrees of foreclosure, presumably of the several mortgages, under which all the properties were sold and the appellant herein became the purchaser of all the street railways and other property necessary for their proper operation; while another company, the Kansas City Light & Power Company, became the purchaser of the electric light and power properties which were involved in the litigation.
Before such foreclosures Judge William C. Hook of the Federal Circuit Court, under whose authority the properties were operated by the receivers, formulated a plan for what is termed the "reorganization of the Metropolitan Street Railway System at Kansas City." "The plan" was not a court order, but the formulation of an agreement between the parties interested, under which the several properties might be operated for the advantage of the public service, and under which the creditors of the several companies might be saved their investments. The plan contained, among other things, provisions as to how anyone who might have "an interest to subserve or protect" might be a party to it. This applied to bondholders, mortgagees, etc., as well as stockholders, and any of these parties could become interested in the new company to be formed. The appellant company then was incorporated. Who the stockholders were does not appear, whether they comprised all or a part of the original stockholders in the Metropolitan Company, or of the other original companies, or whether they were bondholders, or strangers. The new company first procured from Kansas City a franchise whereby it could operate its street railways upon the streets for a term of thirty years. This franchise, it appears, was one of the principal assets of the new company, which was presented as security for the loans to be procured thereafter on the property. The plan provided that as further security for the bonds to be issued $ 6,300,000 of the surplus earnings should be used for extension and additions to the property. The plan then provided for the issuance by the appellant company of bonds of various grades, amounting in all to about twenty-eight million dollars, secured by mortgage on the appellant's property, to be purchased under the foreclosure sales above mentioned, with contemplated extensions, and upon the new franchise. The Kansas City Light & Power Company acquired at the same time and under the same conditions and under the same plan the electric lighting and power properties that previously had belonged to the several companies. The result, as aptly stated by the respondents, was, "the reorganization was the working out of a plan whereby the two distinct and new companies holding distinct properties should emerge out of the corporate ashes of the numerous old companies." It was only with the Railways Company that the order under consideration here had to do.
The plan of reorganization contemplated the approval of the Public Service Commission, to which application was made by the appellant for authority to exercise the rights and privileges granted under the franchise, and for an order approving the reorganization of the properties which the new company should control, and permitting the issuance of the securities mentioned. Objection was made to this application by certain citizens of Kansas City, and an exhaustive hearing was had before the Commission. The report of this proceeding is before us in a voluminous record covering several hundred pages, showing the work which the Commission did in examining all matters touching the organization and the contemplated indebtedness of the new company, before authorizing the issuance of the bonds under consideration. When this work was done and the bonds...
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