Wash. Southern Ry. Co v. Commonwealth Ex Rel

• Decision Date: 08 June 1911
• Citation: 71 S.E. 539,112 Va. 515
• Parties: WASHINGTON SOUTHERN RY. CO. v. COMMONWEALTH ex rel. STATE CORPORATION COMMISSION.
• Court: Virginia Supreme Court

112 Va. 515

71 S.E. 539

WASHINGTON SOUTHERN RY. CO.

v. COMMONWEALTH ex rel.STATE CORPORATION COMMISSION.

Supreme Court of Appeals of Virginia.

June 8, 1911.

1. Commerce (§ 62^*) — Establishment of Rates—Objections.

Where a carrier, in the unrestrained course of business, adopted a lower schedule of charges for intrastate and interstate passenger service than the rate allowed by the State Corporation Commission for intrastate business, it cannot object to the rates fixed by the commission as substantially burdening interstate commerce.

[Ed. Note.—For other cases, see Commerce, Cent. Dig. § 81; Dec. Dig. § 62.*]

2. Carriers (§ 12*) — Reasonableness of Rates.

The rule that the reasonableness of railroad rates prescribed by state authority for passenger traffic wholly within its limits must ordinarily be determined by the intrastate business, and that the value of the property employéd, cost of maintenance, operating expenses, and the like, must be considered in fixing fair rates, is applicable to railroads doing a substantial intrastate business, but not to a railroad built and operated essentially for interstate purposes, and where the intrastate business is merely incidental and too inconsiderable to make it feasible to fix a reasonable maximum rate on the basis of comparative values.

[Ed. Note.—For other cases, see Carriers, Dec. Dig. § 12.*]

3. Carriers (§ 18*) — Establishment of Rates — Decision of State Corporation Commission—Appeal—Presumptions.

Under Const. 1902, §§ 156d, 156f (Code 1904, pp. ccliv, cclv), authorizing appeals from orders of the State Corporation Commission establishing rates which will be regarded as prima facie reasonable, the burden of showing the unreasonableness of rates fixed by the commission rests on the carrier, appealing from the order of the commission; and, unless it does so, the determination of the commission will be affirmed.

[Ed. Note.—For other cases, see Carriers, Dec. Dig. § 18.*]

Keith, P., and Cardwell, J., dissenting.

Appeal from State Corporation Commission.

Proceedings on the relation of the State Corporation Commission for the establishment of a maximum intrastate passenger rate for the Washington Southern Railway Company. From an order of the commission, the railway company appeals. Affirmed.

Hill Carter, for appellant.

The Attorney General, for appellee.

WHITTLE, J. This appeal is from an order of the State Corporation Commission of June 23, 1910, establishing a maximum intrastate passenger rate for the Washington Southern Railway Company of 2 1/2 cents, instead of 3 cents, per mile for each passenger.

The contention of the company in its petition to the commission was that the former rate of 2 cents per mile was confiscatory.

The litigation between the State Corporation Commission and some of the more important railroads in the state touching the subject of intrastate passenger rates is a matter of public knowledge and germane to the present inquiry. Prior to April 27, 1907, no restriction by state authority had been placed upon the right of railroads to fix their own schedule of rates for carrying passengers, and the uniform rate established by them in Virginia was 3 cents per mile. At that date, the commission fixed the general maximum intrastate rate at 2 cents per mile. Whereupon, several of the principal railroads obtained injunctions from the judge of the Circuit Court of the United States for the Eastern District of Virginia, restraining the commission from the enforcement of the rate prescribed, upon the allegation that such rate was confiscatory. The state strenuously denied the jurisdiction of a federal judge to enjoin the action of the commission, insisting that these rate orders were the orders of a state court of competent jurisdiction, and that by express provision of section 720 of the Revised Statutes of the United States (U. S. Comp. St. 1901, p. 581) the United States courts are forbidden "to stay proceedings in any court of the state. * * * " On appeal, the Supreme Court of the United States (November 30, 1908), by divided court, reversed the decree of the Circuit Court. See Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 29 Sup. Ct. 67, 53 L Ed. 150. The decision of the majority, however, was considered inconclusive and unsatisfactory by both parties to the litigation, and the suit in the Circuit Court of the United States was not further prosecuted. It seems that, before the opinion of the Supreme Court was announced, a compact had been entered into between the litigating railroad companies and counsel for the state that, whatever the result might be, a rehearing of the matter of rates on the merits would be allowed the railroads by the commission. The rehearing thus agreed upon was accordingly had, and the commission settled upon a general maximum intrastate passenger rate of 2 1/2 cents per mile. Their action in that regard has been acquiesced in by all of the leading railroads in the state, and the injunction proceedings in the Circuit Court of the United States dismissed.

The Washington Southern Railway Company extends from Quantico (the northern terminus of the Richmond, Fredericksburg & Potomac Railroad), a distance of 36 miles, to the southern end of the bridge across the Potomac river at Washington. The company was originally formed by the consolidation of the Alexandria & Fredericksburg Railroad with the Washington Railroad. The old road has been practically relocated, rebuilt, and double-tracked. As one of the witnesses describes the situation, the present road bears the same relation to the old road as the two straight lines of the dollar mark to the letter "S." Hence the road practically carries double capitalization, and the expense of rebuilding it was materially increased by reason of the nature of the route selected for relocation and the high grade of construction. The road is located between the Potomac river, on one side, and a range of bluffs, on the other, and, beyond the immediate vicinity of the northern terminus, passes through an extremely sparsely settled territory. It was rebuilt almost exclusively for the accommodation of interstate traffic, which composes 95 per cent of its entire business.

The road is controlled (through stock ownership) by the Baltimore & Ohio, the Chesapeake & Ohio, the Atlantic Coast Line, the Seaboard Air Line, the Southern, and the Richmond, Fredericksburg & Potomac Railroads, and forms the link between the Northern and Southern connections of these great systems. The intrastate traffic is a mere incident to the substantial business of the company, and is so inconsiderable and comparatively of such minor...