State ex rel. Kansas City v. Public Service Commission

• Decision Date: 09 June 1975
• Docket Number: No. 58285,58285
• Citation: 524 S.W.2d 855
• Parties: STATE of Missouri ex rel. KANSAS CITY, Missouri, a Municipal Corporation, Relator-Appellant, v. PUBLIC SERVICE COMMISSION of the State of Missouri, and Marvin E. Jones, Chairman, et al., Respondents, Kansas City Terminal Railway Company, Intervenor-Respondent.
• Court: Missouri Supreme Court

Page 855

524 S.W.2d 855

STATE of Missouri ex rel. KANSAS CITY, Missouri, a Municipal Corporation, Relator-Appellant, v. PUBLIC SERVICE COMMISSION of the State of Missouri, and Marvin E. Jones, Chairman, et al., Respondents Kansas City Terminal Railway Company, Intervenor-Respondent.

No. 58285.

Supreme Court of Missouri, En Banc.

June 9, 1975.

Rehearings Denied July 14, 1975.

Aaron A. Wilson, City Atty., Carrol C. Kennett, Asst. City Atty., Kansas City, for relator-appellant.

William M. Stapleton, Sam D. Parker, Kansas City, Thomas J. Downey, Jefferson City, for intervenor-respondent.

FINCH, Judge.

This is an appeal from a judgment affirming an order of the Public Service Commission (P.S.C.) that directed repairs to and reconstruction of certain viaducts over tracks of Kansas City Terminal Railway Company (Terminal) and apportioned the costs thereof between Terminal and Kansas City (City). An opinion affirming that judgment was written in Division I. On the court's own motion, the case was then transferred to the court en banc. After reargument, the divisional opinion failed of adoption and the case is now written on reassignment. We reverse and remand with directions.

No issue is raised as to the right of the P.S.C. to direct the work on the viaducts. The question to be determined is whether the cost thereof is to be borne by Terminal pursuant to a prior contract between it and City wherein Terminal agreed to assume all such expense or whether that contractual provision was abrogated by adoption of the Public Service Commission Act or by the 1963 amendment of that Act.

In 1909 City and Terminal entered into a contract that awarded Terminal a 200 year franchise for the operation of its system within the city, including the right to use city streets and alleys for that purpose. As part of the agreement City agreed to and did vacate various streets, alleys and public places in order to make right-of-way available for Terminal. One hundred and two such tracts were involved. In return, Terminal assumed certain obligations, including an agreement to bear the expense of construction, maintenance and reconstruction, if necessary, of certain specifically designated viaducts over Terminal's tracts, plus such other viaducts or subways as might be required during the term of the franchise. This contract was embodied in an ordinance which was submitted to and approved by the voters of Kansas City and then formally accepted by Terminal. ¹

In 1922 City determined that public necessity required a viaduct over Terminal's tracks at Oak Street and it called upon Terminal to construct such a viaduct pursuant to provisions of the 1909 contract. Terminal refused to comply, following which a proceeding was instituted before the P.S.C. seeking approval of the proposed viaduct and a direction to Terminal to erect it. The Commission approved the viaduct and directed that Terminal should bear the cost of construction and maintenance. Terminal sought review of that order. This court affirmed the order of the P.S.C. insofar as it determined that a viaduct should be constructed at Oak Street in accordance with an approved plan, but reversed the judgment insofar as it allocated the cost of construction and maintenance of the viaduct. State ex rel. Kansas City Terminal Ry. v. Public Service Commission, 308 Mo. 359, 272 S.W. 957 (1925). That opinion held that the decision as to where and when a viaduct should be constructed was one to be made by the P.S.C., but that the Commission should leave for determination in an appropriate forum the interpretation and enforcement of the alleged contract with respect to cost of such viaducts.

Subsequently, City instituted an action in the circuit court to compel Terminal to comply with its contractual obligation to build and pay the cost of the Oak Street viaduct. In Kansas City v. Kansas City Terminal Ry., 324 Mo. 882, 25 S.W.2d 1055 (banc 1929), this court held that the 1909 contract between City and Terminal was a valid contract supported by consideration; that it did not limit, abridge or hamper the exercise of the police power of the state; and that enactment in 1913 of the Public Service Commission Act did not abrogate the 1909 contract or destroy the right of the City thereunder to have viaducts paid for by Terminal. Accordingly, the court directed specific performance of Terminal's obligation to construct and pay for the Oak Street viaduct.

In 1969 information reaching the P.S.C. caused it to undertake an investigation of the safety of the Prospect Avenue and Main Street viaducts over Terminal's tracks in Kansas City. Both Terminal and City were ordered to appear and present facts concerning the safety of these viaducts and the Commission ordered the employment of an engineering firm for the purpose of making a study thereof. Meanwhile, in 1970, Terminal made emergency repairs to the Oak Street viaduct and, at its request, that viaduct was included in the P.S.C. proceedings. Terminal filed a motion requesting the P.S.C. to allocate costs between it and the City. ² Before ruling thereon, the Commission ordered Terminal and City to present their agreement on the repairs needed on the various viaducts and allocation of those costs. No agreement was made, the City taking the position that under the 1909 contract Terminal was contractually obligated to pay all of the costs and that the validity of that contract had been established in litigation between the parties in the second Oak Street case.

On March 22, 1972, the P.S.C. issued its report and order in this proceeding. Included therein was this finding:

'This Commission has jurisdiction of this cause under Section 389.640, RSMo 1969, V.A.M.S., to determine the safety of the above mentioned viaducts carrying city streets over railroad tracks, and to order repairs and reconstruction thereof if such are needed, and to allocate the cost thereof.' ³

In addition, the P.S.C. order stated:

'City contends that the cost of repairs and reconstruction should be allocated in accordance with the provisions of the Franchise Ordinances of 1909 and 1911, which City asserts are contracts between it and Terminal. Assuming the ordinances are such contracts, they were not entered into after October 13, 1963, and only contracts entered into after that date are binding on this Commission under the terms of 389.640. The Commission is, therefore, obligated to apportion costs in accordance with the factors and standards set out in that statute.'

Having concluded that under amended § 389.640 ⁴ the 1909 contract was not applicable and was not to be applied, the P.S.C. then proceeded to apportion to the City 90 per cent of the cost of the viaduct repairs and engineering with the remaining 10 per cent to be paid by Terminal. The entire cost of reconstruction of the viaducts at Prospect and Main was allocated to the City on the basis that this work was not of any benefit to Terminal.

The City filed application for review of the foregoing order in the Circuit Court of Cole County. That court affirmed the order of the P.S.C. and City appealed.

The City, in seeking reversal of the order allocating costs, relies primarily on the decision of this court in the second Oak Street case. It points out that Terminal and City (the same parties as those herein) there litigated the same question as now raised; namely, did the enactment of the Public Service Commission Act vesting authority in the P.S.C. to allocate costs of railroad crossings necessarily abrogate and supercede the obligation of Terminal under the 1909 contract to bear all of such costs? City insists that since this court in the second Oak Street case held such contract to be valid and that its provisions as to payment by Terminal for such installations did not interfere with the exercise of the state's police power and that such provisions were not abrogated by the enactment of the Public Service Commission Act, the issue has been settled.

If that decision stands, it necessarily is decisive of the issue raised by City's appeal unless, as the P.S.C. and the circuit court held, the amendment of § 389.640 in 1963 has altered the situation. The order of the P.S.C. is based on the premise that it did, and that under the terms of the 1963 amendment only contracts dated after October 13, 1963, may govern how costs may be apportioned. We reject that interpretation, it being our conclusion that the 1963 amendment does not affect the validity or applicability of the 1909 contract. We do not construe the language in the proviso added by the amendment as saying or implying that the P.S.C. shall ignore a contract dated before October 13, 1963. It does not address itself to the question of prior contracts. It deals only with what occurs after its effective date (October 13, 1963) and simply says that if thereafter the railroad and public agency agree on apportionment of costs, the P.S.C. shall abide thereby. It says nothing that would justify a conclusion that the legislature intended by the amendment to nullify an earlier contract, particularly one previously held by this court to be valid and binding on the parties thereto. Furthermore, if the second Oak Street case correctly concluded that constitutional limitations against impairment of the obligation of contracts precluded impairment by the 1913 Public Service Commission Act of Terminal's obligation as to costs under the 1909 contract, it seems obvious that such limitations likewise would preclude impairment or abrogation thereof by the 1963 legislative amendment. For both of these reasons we hold that the P.S.C. and the circuit court were in error in holding that the 1963 amendment obligated the P.S.C. to ignore the 1909 contract and to apportion the costs on the basis of benefits.

Terminal asserts that even if the 1963 amendment did not have the effect of abrogating the 1909 contract still the court should affirm because the second Oak Street case on...