Southern Ry. Co. v. Com., 4349
| Decision Date | 25 April 1955 |
| Docket Number | No. 4349,4349 |
| Citation | 86 S.E.2d 839,196 Va. 1086 |
| Court | Virginia Supreme Court |
| Parties | SOUTHERN RAILWAY COMPANY v. COMMONWEALTH OF VIRGINIA, ET AL. Record |
Thomas B. Gay, Lewis F. Powell, Jr., H. Merrill Pasco, Arthur J. Dixon and Earl E. Eisenhart, Jr., for the appellant.
J. Lindsay Almond, Jr., Attorney General; C. F. Hicks, Assistant Attorney General and William C. Seibert, Commerce Counsel, for the appellees.
Southern Railway Company, appellant, an intrastate and interstate common carrier of freight and passengers, filed with the State Corporation Commission on September 16, 1953, a petition for authority to discontinue the operation of its passenger trains No. 7 and No. 14 between Richmond and Danville, in Virginia. Four public hearings were held and evidence introduced before the Commission in December, 1953, and February, 1954, and thereafter on July 21, 1954, the order appealed from was entered holding, for reasons stated in a written opinion by Commissioner King, concurred in by Commissioner Hooker, that public convenience and necessity required the continuance of these two trains and denying the petition. Commissioner Catterall dissented and filed an opinion stating his conclusion to be that the appellant had made a clear case for taking the trains off.
On this appeal Southern contends that the order of the Commission was not reasonable and just as provided by § 156(b) of the Constitution of Virginia and was contrary to the Due Process and Interstate Commerce clauses of the Federal Constitution.
Section 156(b) of the Virginia Constitution makes it the duty of the Commission to supervise, regulate and control all transportation and transmission companies doing business in this State in all matters relating to the performance of their public duties, and to require them to establish and maintain all such public service, facilities and conveniences 'as may be reasonable and just.' In the exercise of its powers 'the Commission may require that a public carrier establish, maintain and render only such service, facilities and conveniences as are reasonable and just.' Lynchburg Traffic Bureau v. Commonwealth, 189 Va. 612, 619, 54 S.E. (2d) 66, 70.
The question now to be answered is whether, in view of all the facts and circumstances disclosed by the evidence, it is reasonable and just to require the appellant to continue to operate these two trains. The testimony, which is not in substantial conflict until it enters the fields of opinion and conclusion, is related in the main to the 'controlling criteria' referred to in Atlantic Coast Line R. Co. v. Commonwealth, 191 Va. 241, 247, 61 S.E. (2d) 5, 7: (1) the character and population of the territory served; (2) the public patronage or lack of it; (3) the facilities remaining; (4) the expense of operation as compared with the revenue from it; and (5) the operations of the carrier as a whole.
The two trains sought to be discontinued are, as stated, No. 7, southbound, which leaves Richmond at 3:15 p.m. and arrives in Danville at 7:10 p.m. daily; and No. 14, northbound, which leaves Danville at 12:50 p.m. and arrives in Richmond at 4:40 p.m. daily. These are known as the day trains, as distinguished from the night trains which the Southern also operates between Richmond and Danville, being No. 11, which leaves Richmond at 10:15 p.m. and arrives in Danville at 2:15 a.m.; and No. 12, which leaves Danville at 4:00 a.m. and arrives in Richmond at 8:00 a.m.
The distance from Richmond to Danville on this branch line is 140 miles. There are 36 stops scheduled for No. 7, seventeen of which are flag stops; and 33 stops for No. 14, twelve of which are flag stops. Each of these trains consists of a diesel locomotive, a mail and express car, a combination baggage and passenger car and a passenger coach; and each is handled by a crew of six men, consisting of engineer, fireman, conductor, flagman, baggageman and porter.
The operating experience with respect to these two trains was shown in evidence by the General Statistician of the company by way of exhibits supported by a number of schedules showing in detail the operating revenues and operating expenses for the twelve months from October, 1952, through September, 1953, by the month, as well as passenger traffic statistics for the eight years from 1946 through 1953. This witness testified that the Southern, along with other railroads, was required to keep its accounts in accordance with the uniform system of the Interstate Commerce Commission, and to file an annual report with that Commission and with the State Corporation Commission showing passenger operations separately from freight service. His testimony that the schedules used were prepared in accordance with the standard form approved by the National Association of Railroad and Utility Commissioners (NARUC) was not questioned.
Schedule 1 of Exhibit 7 shows that passenger operations on the Southern were at a loss of $10,448,686 for 1950; $14,147,271 for 1951; and $13,366,504 for 1952. Schedule 2 is a composite of the underlying figures shown in detail on twelve other schedules.
Exhibit 8-A, showing the passenger traffic statistics on trains 7 and 14 for the eight-year period of 1946 through 1953, states for each year the average number of passengers per trip and the average passenger revenue per trip, as follows:
Average number Average Passenger
of Passengers Revenue
Year Per Trip Per Trip
1946 110.22 $124.31
1947 69.09 79.26
1948 52.52 66.06
1949 44.04 52.14
1950 34.99 40.67
1951 32.47 39.76
1952 27.36 38.59
1953 22.69 33.12
Jan. 1954 21.94
From this table, the accuracy of which is not questioned, it appears that from 1946, the first year after the war period, during which railroads generally made a profit on passenger service, there has been a constant decrease in the number of passengers using these two trains until in 1953 the average per trip was little more than one-fifth of the 1946 average, and the passenger revenue per trip had diminished to little more than one-fourth. The average of approximately 23 passengers per trip in 1953 does not, of course, mean that all traveled from Richmond to Danville. Schedules covering the month of September, 1953, show where the passengers handled by No. 7 for that month got on and off. Of 461 who got on at Richmond, 97 rode only a distance of ten or twelve miles. For the twelve months ended September, 1953, the average miles per passenger on the two trains was 56, the average number of passengers on the trains at one time was 9.6, and the average passenger revenue per train mile was 24.91 cents.
These figures deal only with revenue passengers and in that respect it is agreed that they are correct. However, there was evidence that in addition to the revenue passengers transported for the month of September, 1953, train No. 7 hauled 422 non-paying passengers, or 'deadheads', and No. 14 hauled 104, presumably officers and employees of the railroad riding on passes. The appellee argues that this personnel would be entitled to reimbursement for travel expenses if they used other means of transportation and that some place should be given to this item in statements of revenue received or expenses saved. There was, of course, no revenue from these sources and the amount saved would be speculative and of doubtful value in an accounting of revenue and expenses.
Schedule 2, above referred to, covered operations of the two trains for the twelve months from October, 1952, through September, 1953, and shows these results:
Revenues ...................................... $ 83,906.34
(Including Passengers $25,460.26
Mail $43,909.75; Express
$14,118.30)
Expenses ....................................... 170,739.60
(Direct Actual $93,292.12; Direct
Apportioned $77,447.48)
Loss ............................................ 86,833.26
These figures show a revenue per train mile of $0.82 as compared to an expense per train mile of $1.67; that is, a cost of $2.04 to earn $1.00.
The expenses are those applicable to passenger service alone, as distinguished from common expense applicable to both freight and passenger operations, such as maintenance of right of way and structures depreciation, taxes and administrative expenses, none of which is included in the schedule.
The direct actual expenses of $93,292.12 include as major items wages of train crews $64,384.69, payroll taxes $2,706.24, train fuel $14,550.34 and station employees $10,522.85. Neither the Commission nor the appellee questions that the payment of these direct actual expenses was made as claimed. It is argued only that there might be a saving in the handling of mail at Richmond; that some other employees might take care of cleaning the Richmond station; that fewer crew members might be employed or a substitute service supplied at less expense. However, railroad management is generally in the hands of persons skilled in that field. It is not to be presumed that they would needlessly lose money year after year if it could reasonably be avoided. No practical basis for reduction of the amounts spent appears in the evidence. As pointed out in Atlantic Coast Line R. Co. v. Commonwealth, supra, a railroad company having no power to fix rates has little control over its revenues, and its control of expenses, particularly wages, is limited by its employment contracts made with well-organized and nation-wide labor organizations.
In the direct apportioned expenses of $77,447.48, the major items are: Enginehouse expenses $3,208.60, passenger locomotive repairs $21,160.54,...
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