State ex rel. Public Service Commission v. Shain

• Decision Date: 08 August 1938
• Docket Number: 35910
• Citation: 119 S.W.2d 220,342 Mo. 867
• Parties: State of Missouri at the relation of Public Service Commission of the State, Relator, v. Hopkins B. Shain, Ewing C. Bland and Robert M. Reynolds, Judges of the Kansas City Court of Appeals
• Court: Missouri Supreme Court

119 S.W.2d 220

342 Mo. 867

State of Missouri at the relation of Public Service Commission of the State, Relator, v. Hopkins B. Shain, Ewing C. Bland and Robert M. Reynolds, Judges of the Kansas City Court of Appeals

No. 35910

Supreme Court of Missouri

August 8, 1938

Writ quashed.

James H. Linton, General Counsel, and Daniel C Rogers, Assistant Counsel, for Public Service Commission.

(1) In fixing a schedule of just and reasonable rates for any public utility, the Public Service Commission is not bound by any hard and fast rule nor is it required to fix rates according to any general formula. State ex rel. Capital City Water Co. v. Pub. Serv. Comm., 298 Mo. 524, 252 S.W. 454; State ex rel. Harrisonville v. Pub. Serv. Comm., 291 Mo. 432, 236 S.W. 858; State ex rel. St. Louis v. Pub Serv. Comm., 329 Mo. 918, 47 S.W.2d 104. (2) Interference by the Kansas City Court of Appeals with the discretionary legislative powers of the Public Service Commission is in conflict with the entire spirit of the Public Service Commission Act, as declared by the Supreme Court. State ex rel. Rhodes v. Pub. Serv. Comm., 270 Mo 566, 194 S.W. 287; Mo. Southern Railroad Co. v. Pub Serv. Comm., 279 Mo. 489, 214 S.W. 379; State ex rel. St. Louis v. Pub. Serv. Comm., 326 Mo. 751, 34 S.W.2d 510, Id., 329 Mo. 918, 47 S.W.2d 104. Fixing of rate schedules is a legislative and not a judicial function. An exercise of the legislative function by the judiciary is in conflict with the following controlling decisions of the Supreme Court of Missouri: State ex rel. Kansas City P. & L. Co. v. Pub. Serv. Comm., 335 Mo. 1248, 76 S.W.2d 350; State ex rel. C. G. W. Railroad Co. v. Pub. Serv. Comm., 330 Mo. 729, 51 S.W.2d 76; State ex rel. Detroit-Chicago Motor Bus Co. v. Pub. Serv. Comm., 324 Mo. 270, 23 S.W.2d 117; Lusk v. Atkinson, 268 Mo. 109, 186 S.W. 703.

H. H. Larimore, Geo. W. Holmes, Thos. J. Cole and R. W. Hedrick for respondents.

(1) The order entered by the Public Service Commission of Missouri in its Case No. 8966 and here under review is invalid because unsupported by testimony. New England Divisions Case, 261 U.S. 185; Interstate Commerce Comm. v. Union Pac. Ry. Co., 222 U.S. 547; Florida East Coast Ry. Co. v. United States, 234 U.S. 167; State ex rel. v. Pub. Serv. Comm., 233 S.W. 425; State ex rel. St. Louis v. Pub. Serv. Comm., 47 S.W.2d 102, 329 Mo. 918; State ex rel. Henson v. Brown, 31 S.W.2d 208, 326 Mo. 230. (2) The order of the Public Service Commission here under review is invalid because the commission is without authority when fixing reasonable maximum rail rates to give consideration to rates by truck or to any competitive situation brought about by reason of truck rates. In prescribing maximum rail rates the commission can consider only transportation conditions affecting transportation by rail and cannot require rail carriers to reduce their rates theretofore established as reasonable by the commission for the purpose of meeting rates established by competing and cheaper forms of transportation, such as motor trucks and water carriers. Wisconsin, Minn. & Pac. Railroad v. Jacobson, 179 U.S. 297; Interstate Commerce Comm. v. Alabama Midland Ry. Co., 168 U.S. 172; Interstate Commerce Comm. v. C. G. W. Ry. Co., 209 U.S. 108; Skinner & Eddy Corp. v. United States, 249 U.S. 557; State ex rel. v. Mo. Pub. Serv. Comm., 270 Mo. 429; State ex rel. v. Mo. Pub. Serv. Comm., 277 Mo. 175; State ex rel. v. Pub. Serv. Comm., 250 Mo. 704; In re Interstate Transit Lines, 18 Mo. P. S. C. 257; Shaw-Fahrer Grain Co. v. Pub. Utilities Comm., 183 N.E. 922; Stockton Port District v. So. Pac. Co., 200 I. C. C. 783; Corporation Comm. of Va. v. A. & R. Ry. Co., 161 I. C. C. 273; Mountain Pac. Oil Cases, 192 I. C. C. 559; Ann Arbor Railroad Co. v. United States, 281 U.S. 659; Oregon & Wash. Lbr. Mfgrs. Assn. v. Union Pac. Ry. Co., 14 I. C. C. 1; Interstate Commerce Comm. v. Union Pac. Ry., Co., 222 U.S. 541, 56 L.Ed. 308, 32 S.Ct. 108; Florida Fruit & Vegetable Shippers' Protective Assn. v. Atlantic Coast Line Ry. Co., 17 I. C. C. 552; Florida East Coast Ry. Co. v. United States, 234 U.S. 167; Winona Oil Co. v. Director-General, 57 I. C. C. 152.

OPINION

Tipton, J.

This is certiorari to the Kansas City Court of Appeals to review the judgment of that court in the case of State ex rel. and to use of Alton Railroad Co. et al. v. Public Service Commission et al., reported in 110 S.W.2d 1121, wherein that court reversed the judgment of the Circuit Court of Cole County which affirmed the report and order of the relator in fixing a maximum rate for bituminous coal and bituminous coal briquettes of steam railroads, in intrastate carload lots, for distances from 25 to 95 miles.

Respondents, in their opinion, stated the facts as follows:

"It appears that the Public Service Commission in case No. 8966, of May 6, 1935, instituted an investigation as to the reasonableness and lawfulness, etc., of intrastate charges in carload lots, by steam railroads, of the products set forth above. The appellants herein were made defendants in said investigation.

"It appears that there had been two previous orders made by the commission concerning intrastate shipments of the kind here in issue, to-wit: Order No. 6608, 18 Mo. P. S. C. 546, and order No. 7210, 18 Mo. P. S. C. 555.

"We gather from the record, and from a copy of the report, that the commission had prescribed in the above orders intrastate rates from all coal origin points in Missouri, to destination in Missouri.

"We gather, further, that instant investigation involves the question of scaling down the aforesaid rates to meet a change of condition growing out of use of public highways for increased motor carriage by trucks.

"The reasons upon which the order in this case is predicated is exposed as follows:

"'The general expression of these retail coal dealers who handle rail-hauled coal exclusively is that while such coal is generally better prepared than truck-hauled coal and their services are more valuable than those of truck operators because they maintain a storage supply, extend credit and generally are reliable respecting weights, they have fared very poorly in meeting the truck-hauled competition and cannot further reduce retail prices unless mine prices or transportation costs are reduced.'"

The questions decided by respondents as stated in the opinion are as follows:

"Point II of appellants' brief (this brief was filed in this court) presents a constitutional question.

"This question was disposed of in the Supreme Court on the grounds that same had not been raised in petition for review.

"It follows that there are but two points presented for our review.

"Point I is as follows: 'The order entered by the Public Service Commission of Missouri, and here under review, is clearly invalid because unsupported by testimony.'

"Point III is as follows: 'The order of the Public Service Commission here under review is clearly invalid because such Commission is wholly without authority when fixing reasonable maximum rail rates to give consideration to rates by truck or to any competitive situation brought about by reason of truck rates. Any testimony having to do with rates by truck is wholly incompetent, irrelevant and immaterial when the Public Service Commission is called upon to fix reasonable maximum rail rates, and such Commission erred in receiving and giving any effect to such testimony.'

"Points I and III are closely allied by reason of the fact that the testimony which has application, if so, must be considered with respect to the authority of the commission to act in the matter."

In passing on these questions, the respondents ruled that:

"In reviewing the orders of the Public Service Commission, this court must confine itself to a construction of the statute in determining as to whether or not the commission acts within the authority of the statute.

"From an examination of Section 5167, Revised Statutes 1929 (Mo Stat. Ann., sec. 5167, p. 6573), we conclude that the commission has authority, on its own motion or upon complaint, upon a hearing, to determine and fix just and reasonable rates, fares, and charges for common carriers operating in the state of Missouri, and to enforce same as maximum to be charged.

"We conclude that the commission, in the case at bar, had full authority to act within the scope of authority given.

"In the determination of rates, the statute, supra, specifically provides matters that must be considered as follows: 'The commission shall, with due regard, among other things, to a reasonable average return upon the value of the property actually used in the public service and to the necessity of making reservation out of income for surplus and contingencies, determine the just and reasonable rates, fares and charges to be thereafter observed and in force as the maximum to be charged for the service to be performed, notwithstanding that a higher rate, fare or charge has been heretofore authorized.'

"We do not hold, of course, that the above is all that can be considered by the commission; but we do hold that an order of the commission should not stand that does not give full consideration of above matters.

"It is evident, from the showing of the record herein, that the commission by its order herein is attempting to readjust short haul rates in Missouri to conform to conditions that have...