State ex rel. Pugh v. Public Serv. Commission

• Citation: 10 S.W.2d 946
• Decision Date: 16 November 1928
• Docket Number: No. 28385.,28385.
• Parties: THE STATE at Relation and to Use of HUGH O. PUGH ET AL. v. PUBLIC SERVICE COMMISSION and THOMAS J. BROWN ET AL., Members, Appellants.
• Court: United States State Supreme Court of Missouri

10 S.W.2d 946

THE STATE at Relation and to Use of HUGH O. PUGH ET AL. v. PUBLIC SERVICE COMMISSION and THOMAS J. BROWN ET AL., Members, Appellants.

No. 28385.

Supreme Court of Missouri, Division One.

November 16, 1928.

Appeal from Circuit Court of City of St. Louis. — Hon. Anthony F. Ittner, Judge.

REVERSED.

D.D. McDonald and J.P. Painter for appellants.

(1) The right to require of a railroad company that it carry any class of passengers at a merely nominal reward or for only operating expenses cannot be created by local public demand. Kansas City Railroad Co. v. Barker, 242 Fed. 310; Norfolk Railroad Co. v. Conley, 236 U.S. 605; No. Pac. Ry. Co. v. North Dakota, 236 U.S. 585. (2) The mere fact that the rate fixed is discriminatory is not conclusive of its invalidity. 10 C.J. 665, sec. 1083; State v. M.K. & T. Railroad Co., 262 Mo. 507; Penn. Railroad v. Towers, 126 Md. 59; State v. Maine Cent. Railroad, 77 N.H. 425. (3) Arbitrary discriminations alone are unjust. If the difference in rate be based upon a reasonable and fair difference in conditions, which equitably and logically justify a different rate, it is not an unjust discrimination. State v. Railroad Co., 262 Mo. 507; Interstate Comm. Comm. v. Alabama Railroad, 168 U.S. 144; Interstate Comm. Comm. v. Ry. Co., 209 U.S. 108; Bayles v. Railway Co., 13 Colo. 181; Root v. Railroad Co., 114 N.Y. 300; Lough v. Outerbridge, 143 N.Y. 271; Hoover v. Penn. Ry. Co., 156 Pa. St. 220; Commission v. Street Ry. Co., 187 Mass. 436. (4) Railway companies are only bound to give the same terms to all persons alike under the same conditions, and a change of circumstances justifies an inequality of charge. Interstate Comm. Comm. v. B. & O. Ry. Co., 145 U.S. 283. (5) Practical conditions are to be taken into account. Mileage, while a circumstance to be considered with all other facts and conditions, is by no means controlling or the most important. Equal mileage as a basis is impracticable. Ranson v. Ry. Co., 1 New. & McN. 63; Interstate Comm. Comm. v. L. & N. Railroad, 73 Fed. 424. (6) In the circuit court, the burden of proving that the rates fixed by the Public Service Commission in this case were unreasonable and unjustly discriminatory, was with the respondents. Sec. 10535, R.S. 1919; State ex rel. St. Joseph v. Busby, 274 S.W. 1071; State ex rel. Tel. Co. v. Public Serv. Comm., 233 S.W. 425. (7) "If the rates granted are reasonable on any theory, neither the trial court nor this court is authorized to set aside the order of the Commission." State ex rel. St. Joseph v. Busby, 274 S.W. 1067.

Lee A. Hall and John H. Cassidy for respondents.

(1) The burden of proof rested on the carrier to justify its increase of rates under its Schedule 238. It did not carry that burden. Sec. 10457, R.S. 1919. (2) Where proof of a fact lies peculiarly within the knowledge of a party, the burden is on that party to produce that proof, and if he fails to do so then the presumption is that such proof would be against his interest if produced. Schneider v. Maney, 242 Mo. 36. (3) The railroad must not discriminate between its patrons similarly situated. Sec. 10445, R.S. 1919; Sec. 23, Art. 12, Mo. Constitution; Portland Ry. v. Rd. Comm., 109 Pac. 273; Christy v. Ry. Co., 94 Mo. 453; Brown v. Lawrence Co., 1 Mo. P.S.C. 363; Commutation Rate Case, 21 C.C. 442, 27 I.C.C. 552; Kansas City Term. Ry. Co. v. Jones, 251 S.W. 56; 10 C.J. sec. 632, pp. 411, 412. (4) By Sec. 10525, R.S. 1919, it was not intended that the Public Service Commission appeal from any judgment of the circuit court which was favorable to the general public. Any other construction of Section 10525 would put the counsel of the Public Service Commission in the position of representing conflicting interests in the final disposition of cases of this character: The public before the commission and the utility before the courts. Sec. 10416, R.S. 1919, as amended Laws 1923, p. 330.

LINDSAY, C.

The appeal of the Public Service Commission is from a judgment setting aside an order of the commission which approved a schedule of increased rates, for passenger service, upon the line of the St. Louis-San Francisco Railway Company between St. Louis and certain suburban towns. The railway company, on February 11, 1926, filed its local passenger tariff number 238 with the commission providing for increased fares on ten-ride and fifty-ride commutation tickets, between St. Louis and Tower Grove, and Tower Grove and Meramec Highlands and intermediate points. Protests were filed, a hearing was had, and an order made approving the new rates. Upon the evidence and exhibits before the commission, the circuit court, upon the review proceeding instituted by the protestants, made the following findings of facts:

"1. That the St. Louis-San Francisco Railway Company wholly failed to sustain the burden of proof imposed upon it by express statutory provisions (Section 10457, R.S. Mo. 1919) justifying the increased rates sought to be charged under its schedule 238.

"2. The rates specified in said schedule are discriminatory in that they provide for a substantially greater rate per mile for certain station, e.g., Webster Groves, than for other stations similarly situated, e.g., Gratiot on the east and Valley Park on the west.

"3. The tariff in said schedule is discriminatory in that it fails to provide for a fifty-ride, sixty-day limit individual ticket for points east of Keyes Summit at a rate comparable to other localities similarly situated.

"4. The reduction of the time limit made by said schedule on ten-ride bearer tickets from ninety days to thirty days is arbitrary and wholly unsupported by any evidence justifying such change, and such change discriminates against the members of the families of suburbanites who are not regularly employed in business."

Thereupon, the circuit court reversed, or set aside, the order of the commission, and remanded the cause for further proceedings not inconsistent with the order of the court. It appears from the statement in the briefs that, after the proceedings mentioned, the railway company changed the time limit on ten-day ride bearer tickets, from thirty days as was provided in said schedule, to ninety days, thereby eliminating the question involved in the fourth finding of the circuit court. The assignment of error and the questions discussed in the briefs arise upon the first three of the above mentioned findings.

The railway company took no appeal from the judgment, and counsel for respondents suggest that the statutes do not contemplate that under the circumstances of this case the commission should take an appeal. They call attention to Section 10416, Revised Statutes 1919, as amended (Laws 1923, page 330), wherein the duties of the general counsel of the commission are set forth. They suggest that since by the section last mentioned the general counsel is required to represent the public in all rate hearings before the commission, the statute should not be so construed as to place him in the position of representing conflicting interests — the public before the commission, and the utility company before the courts. However, the section referred to also requires the general counsel to represent the commission in all actions in reference to any act or order done or made by the commission; and the commission, by Section 10525, is given the right to appeal from any judgment rendered in any review proceedings; so that the right of the commission to appeal herein, and the duty of the general counsel to represent the commission, cannot be doubted.

The record shows that prior to the filing of the schedule for increased rates, the railway company had made application for permission to discontinue this service, on the ground that it was being rendered at a loss, and the commission denied the application in part. Having made a finding in that proceeding that the service entailed a loss, and having ordered a continuance and permitted an increase in rates, the commission doubtless thought its action should be sustained, and took this appeal.

The commission and the circuit court, upon the same evidence reached opposite conclusions upon the question whether an increase in rates was justified, and also upon the question whether the rates were unjustly discriminatory. The case is here for determination upon that evidence; and, under the uniform rulings of this court the evidence is to be considered de novo; and, while on the one hand it is urged that under the provisions of the statute, the findings and order of the commission reach the circuit court with the presumption of right action, and on the other, that the findings and order of the circuit court reach this court with the presumption of right action, nevertheless, the cause is here for determination as in a suit in equity, and this court is not bound by the findings of the commission, nor by the contrary findings of the circuit court. [State ex rel. Power & Light Co. v. Public Service Commission, 310 Mo. 333, and cases there cited.]

The first inquiry is directed to the question whether under the evidence, the commission was justified in granting the increase in rates. In the determination of this question there was, and is, no inquiry into the value of the property used in rendering the service, nor of a net return upon a valuation of the property so used. The question is one merely on the one hand of revenue derived from the service, and on the other of the cost of the service. The testimony and the exhibits introduced on behalf of the railway company were to the effect that for the year 1923, the revenue from this service was $150,099.46, and for the year 1924, $125,887.26, and for the year 1925, $87,841.95. This testimony, as to the revenues, was accepted by the commission, there being no countervailing testimony.

On the question of the cost of the service, the protestants introduced James D. McSpadden, a public accountant, who testified that ...