Trenton & Mercer County Traction Corporation v. Inhabitants of City of Trenton

• Decision Date: 14 October 1915
• Citation: 227 F. 502
• Parties: TRENTON & MERCER COUNTY TRACTION CORPORATION et al. v. INHABITANTS OF CITY OF TRENTON et al.
• Court: U.S. District Court — District of New Jersey

227 F. 502

TRENTON & MERCER COUNTY TRACTION CORPORATION et al. v. INHABITANTS OF CITY OF TRENTON et al.

United States District Court, D. New Jersey.

October 14, 1915

On application for preliminary injunction to restrain the city of Trenton and its mayor from proceeding under a certain ordinance of the city, passed on October 22, 1909, and to restrain the board of public utility commissioners of New Jersey from continuing a certain order made by them on August 17, 1915, and from conducting a hearing, and taking jurisdiction of the case in which the order was made.

Frank S. Katzenbach, Jr., Edward M. Hunt, and George W. MacPherson all of Trenton, N.J., for plaintiffs.

Charles E. Bird, of Trenton, N.J., and George L. Record, of Jersey City, N.J., for defendant city of Trenton and its mayor.

Frank H. Sommer, of Trenton, N.J., for defendant Board of Public Utility Commissioners.

Before WOOLLEY, Circuit Judge, and RELLSTAB and HAIGHT, District judges.

HAIGHT District Judge.

Three of the plaintiffs are the owners of a street railway system in the city of Trenton, N.J., and the fourth is operating the system as lessee. Many years ago one of the predecessors in title of the plaintiff, the Trenton Street Railway Company, began to sell to such persons as wished them six tickets for 25 cents, each ticket good for one fare of 5 cents. This practice was continued until September, 1909 when it was discontinued for about two weeks, but, after some conferences and negotiations with the city officials, was restored, and has since been followed by the various operating companies. On October 22, 1909, the city passed an ordinance which required the sale of six of such tickets for 25 cents on all cars operated by the Trenton Street Railway Company in the city. On August 13, 1915, the lessee company notified the city and the board of public utility commissioners of New Jersey of its intention to discontinue the sale of such tickets. In this notice it claimed that the ordinance of October, 1909, was invalid, and asserted its right to charge a fare of five cents for each passenger over five years of age, within the limits of Trenton, by virtue of certain alleged contracts between the city and the companies of which it is lessee. Thereupon, on motion of the city, the board on August 17, 1915, made an order suspending the proposed change until November 16, 1915, and fixing a date for hearing on the merits. The plaintiffs were not represented before the board when the order was made. They claim that it was made without notice to them and without affording them an opportunity to be heard. The bill also alleges that the mayor of the city has threatened, pursuant to the power vested in him by the ordinance before mentioned to revoke the licenses of the cars operated by the lessee company, in case the latter refuses to continue to sell six tickets for 25 cents.

After the order was made by the board the plaintiffs filed a bill in this court, wherein they pray that the board may be enjoined from continuing the order of August 17th, from conducting a hearing, and from taking jurisdiction of the matter at all, and also an injunction against the city and its mayor from enforcing the penalty prescribed in the ordinance. Upon the filing of the bill an application was made to the writer of this opinion for a preliminary injunction. An order to show cause why the injunction prayed for should not be allowed, was granted, but without an ad interim restraint. It being considered that one or more of the questions presented, if the plaintiffs' contentions were sound, would make the provisions of the act of March 4, 1913, c. 160, 37 Stat. 1013 (Comp. St. 1913, Sec. 1243), applicable, the application for the preliminary injunction, upon the return of the order to show cause, was heard by three judges, one of whom is a Circuit Judge.

The grounds upon which the plaintiffs claim that they are entitled to relief in this court are two: First. That certain ordinances of the city of Trenton and the acceptance thereof by some of the plaintiffs and their predecessors constituted contracts which could not be altered or changed by the city or the state of New Jersey, and which would be impaired, contrary to the provisions of section 10 of article 1 of the federal Constitution, by the enforcement of the ordinance of October, 1909, and the continuance of the order of August 17, 1915, or any order which the board might thereafter make which did not recognize their right to charge a straight five-cent fare. Second. That the order of the board was made without notice to the plaintiffs, and without affording them an opportunity to be heard, and thus deprived them of property without due process of law, contrary to the fourteenth amendment.

We have found it unnecessary to consider the interesting question presented by the first contention, as to whether contracts such as the plaintiffs claim do in fact exist. The second ground requires a determination as to whether the order complained of was in fact made without notice to the plaintiffs and without affording them an opportunity to be heard, and, if so, whether notice was necessary before the board could have legally made it. The board of public utility commissioners was created by an act of the New Jersey Legislature approved April 21, 1911 (P.L. 1911, p. 374), and was thereby vested with certain defined powers-- among them to fix just and reasonable rates to be charged by various public utilities, included in which are street railway companies, whenever it should determine any existing rate to be unjust, unreasonable, or insufficient, and to hear and determine whether any increase, change, or alteration in rates, which might thereafter be made by any public utility would be just and reasonable. The board was also vested with power, 'pending such hearing and determination' of the latter question, to order, for a period not exceeding three months, the suspension of the increase, change, or alteration until it should have approved the same. It is by virtue of the last-mentioned power that the board presumed to act in making the order in question. After the lessee company sent the notification to the board of its intention to discontinue the sale of six tickets for 25 cents, the latter caused a copy of the same to be sent to the mayor of the city, with a letter...