Appendix — Gilchrist v. Interborough Rapid Transit Co.

Supreme Court brief1929

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INDEX TO APPENDIX

PAGE

OPINION OF THE SPECIAL STATUTORY COURT, AS

KEPORTED IN 26 bk. (2d) 912 of ae ae gta a” ]

Decree of the Special Statutory Court allow

Ing interlocutory myunction bean aa

ProvisioN oF CONSTITUTION OF THE STATE OF

NeW Yok As TO CONSENTS FOR CONSTRUCTION

OR OPERATION OF STRERT KALLROALS . 53

\rucle Til

$ lS—KRestricnons on laws governing

street railroads 53

Pousuic Skevick COMMISSIONS Law OF THE STATE

or New York—Laws or 1907, Cuartrer 429—

PERTINENT ShCTIONS SHOWN As OF Marcn 19,

1V13, tHe TIME OF MAKING Contract No. 3

(EXCEPT AS OTHEKWISE INDICATED), TOGETHER

WITH NOTES SHOWING, WHERE MATERIAL, THE

AMENDMENTS, LF ANY. BERPORE AND AFTER THAT

DATE $4

\ruicie 1 Public Service Comumissions; Gen

eral Provisions a4

> 2 Definitions 54

Street raslroad S4

(> -Railroad a4

JveeStreet railroad corporation 55

&— Railroad corporation 30

Y—Common carrier 55

SLEEP LISLE SN ELEN E PEERS EAI Wh OES NII ELL LIE III LLL INNS

§ 3—Public service districts............

§$+-—-Public service commissions estab-

lished ; appointment; removal: terms of

REED Sear h sek ten mu

§ 4-a (Added in 1921)-—Transit commis

sion; established; appointment; term:

removal

$>-a (Added in 1Y21) Jurisdiction of

transit commission

Article 2-—-Provisions Relating to Railroads,

Street Railroads and Common Carriers

22-—Rehearing before commission.

§ 23—-Application of article

§ 26-—Safe and adequate service: just and

reasonable charges

28-—Tariff schedules; publication

$2)

oF.

Changes in schedule: notice re

quired

$33-—Transportation prohibited — until

publication of schedules; rates as fixed

to be charged; passes prohibited

Article 3 Provisions Relating to the Powers

of the Commissions in Respect to Common

Carners, Railroads and Street Railroads

349 (lj)--Rates and service to be fixed

by the commission

Amendments of 1910

Amendments of 1921, 1922 and 1923

349 (2)

349 (4)

Second, third and fourth paragraphs

(Added in 1922)

o>}

hil

PAGE

RR a aires cea ORR Tse 71

§$50—Power of commissions to order re-

ORIG OF GURMMNB. ois eek es be eee 71

$51—-Power of commissions to order

changes in time schedules; running of

additional cars and trains........... 72

§ 55—Approval of issues of stock, bonds

and other forms of indebtedness. ..... 73

§ 50—-Forfeitures; penalties .. 2.2... ... 75

§ 57--Summary proceedings .. ........ 75

Article 4+—-Provisions Relating to Gas and

\ Electrical Corporations; Regulation of

Price of Gas and Electricity... .......... 77

$66 (12)—-General powers of commis-

sion in respect to gas and electricity... 77

Arucle 4-a (Added in 1913)——Provisions Re-

lating to Steam Corporations; Regulating

Price of Steam... .. ache abieks cs Ie

$80 (10)—General powers of commis-

sion in respect to steam heating... . 81

Arucle 7—Commissions and Ofhces Abol-

ished; Saving Clause; Repeal. ain ain Ge

$127 ka = SORES eo 84

Arucle VIIL (Added in 1924)—Board of

Transportation faveioa kes 86

§$ 135——-Municipal operation; rates of fare 8&6

RIPSTOP AR Ue 2 Wid De, AEN PROSE GA TARA EAR DS RM 0259 AY) TR Ng

Rapip Transit Act oF THE STATE oF New York

Laws or 1891, Cuaprer 4—“An Act TO

PROVIDE FOK RAPID TRANSIT RAILWAYS IN CITIES

OF OVER ONE MILLION INHABITANTS” —PeErt!

NENT SECTIONS SHOWN ARE As OF Marcu 19,

1913, THE TIME OF MAKING CONTRACT No. 3

(EXCEPT AS OTHERWISE INDICATED), TOGETHER

WITH NOTES SHOWING, WHERE MATERIAL, ORIG

INAL ENACTMENT OF SECTION AND AMENDMENTS,

IF ANY, Up TO Marcu 19, 19]3.

Section + — Public Service Commission to De

termine Necessity for Railroads: Routes.

Plan; Consents; Parks and Streets ex

cepted

Subd. 1 arate

Section 5-— Approval and Consent of Board of

Estimate and Apportionment. or othe:

Board, Consent of Local Authorities

Subd.

" §

Section O—Detailed plans; tunnel for pipes

and wires, work affecting sewers and other

sub-surface structures

sulxd J

Secuion 7 (Repealed in 1909)—Sale of fran

chises at public auction, ete. five-cent fare

provision

section 22-——Private construction, franchise to

construct, maintain and operate

PAGE

TROP SCAT CEE KE SA CHEE ET ED DO DS SO

Section 24—-Connections with other railroads,

stations and ferries (showing changes ac-

complished by the 1912 amendments).... 95

AL ERC Demir ee ert, AF caipel atria AREA 95

CP Rig Sawes < Weak een aaes Seas 100

De ers ay eels Bas 0 4 6OE COT ERS oR 100

a Ee eS eR en eer NT es 102

eae Ppipe rape ri mie rarer S82, 805 Be 103

I EO ee een pe ra oe eae ee 104

Section 27-——-Contract for equipment, mainte-

nance and operation (showing changes ac-

complished by the 1912 amendments).... 105

Bis ak pecan Orcs 105

Gb Ree ae eee 106

= ) 2 ae pee eer Sr 107

Re ee nme rire 109

PE oe ee inn fey 113

Baw ockeer Seva creche ay 115

Baa ee ce vac ee kaa Rake 118

Be Gy chaste bance eo Renee 119

> Se 120

ake Sow red nerd Veer eens 120

Ey PN aye Mh 121

Bah 2 bs pod ROL Rates eee 122

Secuon $0--Plans for maintenance and opera-

tion of road by public service commission. . 123

"TE APRA er eee tyre ye (aera ae 123

section 38— Modification of contracts....... 124

Section 63 ( Renumbered 38 in 1915)—Proviso

in case road constructed by City. ........ 125

Pitre ton ow nteenits ante ¥ poe iy. AD RSILELEE SO IIOT BELL EG SIMS RE See me GR ele Sea

Raitroap Law or tue Stare or New Yorx—

PERTINENT SECTIONS ARE REPRINTED IN THE

PORM IN WHICH THEY WERE IN 1907, with NEW

NUMBERS SHOWN IN PARENTHESES AS IN THE

Consotipareo Laws, CHarrer 481, Laws or

oa .

‘

) § 37—Rates ol tare.

173) § 93—-Conditions upon which consent

shall be given. sale of franchise at public

a’trcUient)

(g ISl) § lO] Rate of fare

(§ 229) §129-— Powers

sulbxl l

TRANSPORTATION CoKPORATIONs< Law oof Tie

State of New Youk—Peeri nent SECTIONS

REPRINTED IN THE FORM IN WHICH THEY WERE

iN 1907, witht New NuwtoERS 1X PAREN THESES

SHOWN AS IN THE KEVISED LAW oF 1926

C$ 1d) § Ol— Powers

(3 So § 45

Gekatee New Yok Cranren CHAPTEK 466,

Laws oF 1901 Provisions grout ATING TERMS

AND CUNDITIONS POR PRANE Itisl GRANTS

§73

Sed

STATUTORY PRuVEstoN Pit FARR Of FINE CENTS

SPVLICABLE TO bievaren Rarieoans

Chapter 743, Laws 1804

Contaact No l——Paovisions AS TU) PARES

Contant No. 2— Provisions vs 7 PARES

Contract No 3 PeRTINENT pagrs

PAGE

126

In,

128

130

132

133

134

135

140

l42

143

144

vil

PAGE

Opening Paragraph, showing the Parties.... 144

From the Recitals:

Intent--Unified Operation for a Single

Mt A Pr ie le ay oi, lH

From Chapter I of Part First (‘General Pro-

visions”), entitled “Outline of Contract and

Definitions” :

Arucle 1 Agreement-——-Umified Opera

tion tor a Single Fare. Modification of

oe ee eS ees |

Article Tl. Defimitions- Existing Rail

roads-— Existing Equipment . eons 0

brom Chapter VII of Part First, entitled

“Miscellaneous”

Arucle NNNA Intent Iexisting Prova

sions of Law m Contract. . .. 146

Article NNAVI Lt any provision held to

be legal, not to affect balance of con-

tract : eee

From Chapter 1 oot Part Third (“The

Lease’), entitled “Length of Term, etc.”:

Article NLVIL The lease ts tor opera

tion tor a single tare eye 147

Article XLVIIL Modifications of Con

tracts Nos. 1 & 2-—Terms synchronized 147

brow Chapter TH] of Part Third, entitled “Ren

tal”

Arnele NLIN. | Determination of Rental 148

Deductions trom Revenue 1449

1 (a) The City’s first preferen

tial 149

6 The Company preferential. 154

Pernice: EAE LI SLAG ORL BD ELEGY ELIE : RESET OD

viii

PAGE

10. The City’s second preferen-

Es v0 sates eS dec 156

Arucle L. The City and Company are to

share equally in remaining profits... | 15x

Article LI The deficits to the City or to

the Company shall be cumulative with

compound interest 158

Prom Chapter HL of Part Third, entitled

“Character of Service, Rate of Fare, ete.”

Arucle LIN. Through operation and free

tramsters at connecting points for a

single fare 158

Pine LN Five cent fare 1sy

ticle LAIN | Reservation of trackage

irvet }su

Prom Chapter IV of Part Third, entitle Ad

ditions and Changes”

Arucle LAX. Enumeration of ¢ ity s ob

ects in taking contract tx)

bikvatao EATENSION CERTIFICATE—PERTINENT

PATS 16!

Opemng Paragraphs, showing the Parties, etc. 16]

From the grant, specifying the term 12

Fron: ‘ticle VL, as to rate of tare

bive-cemt rate on elevated lines and on

wantiy operated lines ln?

trom Article IN, as to provision of trackage

rights and through service

From Arucle X, as to intention of the parties:

City's imerest in profits

y CAN EIOM TIPO SEN ag Rtg 2 AS I

Sh PRET TRINCOMALEE MERGE Ye TNS BA AE RTS

PAGE

l‘rom Article XII, as to compensation payable

to The City of New York:

Deductions from revenue—City’s share to

be one-half of the profits............ 164

From Article VIII as to interrelation of Cer-

tificate and Contract No. 3.............. 171

Opintons oF THE New YorR Court or APPEALS:

Matter of Quinby v. Public Service Commission,

ee Th Wc, Rss vt we ewe Cee ee eee 173

People ex rel. Village of South Glens Falls v.

Public Service Commission, 225 N.Y. 216... 188

People ex rel. City of New York v. Nixon, 229

NN: ¥. 356. . . rere ae pre vee

People ex rel. Garrison v. Nixon, 229 N.Y. 575... 218

People ca rel. Garrison vo Nixon (on reargu

ment), 229 N.Y. of8. .. eae

Town of North Hempstead v. Public Service Cor

poration of Long Island, 231 N.Y. 447 238

SUMMARY OF TYPICAL CASES OF COMMISSION ASSER

11ON AND EXEKCISE OF KEGULATORY POWERS, OVER

APPELLEE, UNDER PosLIC Servick ComM MISSION

Law Pie Aiea 242

Tautrs Stowincg Kater Bases, ACCORDING To

Vagkiots CONTENTIONS OF THE ParTIES HERE-

ro, AND Return THerron Say . 25)

1. The present value of all the property de-

voted to the public service. .... 5 folks 251

A. Computation based on Company's

hgures tor Company-provided prop-

erty and on figures of Commission's

aon » —_ eat : cote, ae i — cnnrtee sie A AY

Wersesssrswressienvnnenngces: RE RRO OATES REE RII EA RMA EE HRA UE a pM

engineers for City-provided prop-

_. (eee ee PEREREPTEORG TY EE Tee

B. Computation based on Transit Com-

mission’s engineers’ reproduction

I 3 hoes i Okc eecbeae ss

€ Computation based on Transit Com

mission's engineers’ reproduction

cost figures with straight line de-

preciation ivennaes

D. Computauion based on the City’s

speerhe deductions (brief, pp. 102-

1S)

The cost of all the property

A. Computation based on Companies’

investinent and Transit Commis

sion’s engineers’ oryinal cost figures

tor City property )

Bo Computation based on Transit Com

Musson 's engineers’ original cost

hgures

C. Computation based on the City’s

specific deductions (brief, pp. 162

1608) trom the Commission's engi

neers figures

The present value of the Company -pro

vided property

‘\. Computation based on Cormpany’s

figures ,

Bo Computation contrasting the figures

of the engineers of the Transit Com.

wussion with the Company's figures

PAGE

261

PAGE

4. The present value of the Company-owned

PET sf bk Resear e ets GaN a eee RES As 263

A. Computation based on the Company's

PIB hase cele aes eee ww os 263

8. Computation based upon the figures

given in the Commission's — brief

(page 197) and the City’s” brief

(page 160) contrasted with the

Company's figures in the preceding

table, 4-A. ee ee

The Company's original investment... .. . 265

A. Computation based on Companies’

investment on the Company's figures 265

‘ss

6. Computation based upon the Transit

Commission's figures (see Commis

sion’s Brief, page 191)........... 266

Kevenues, Expenses and Application of In-

come for Year ended June 30, 1926... .... 267

Revenues, Expenses and Application of In-

come tor Year ended June 30, 1927... .

a SSRN BEPC ME SAE OPE NCEE ELE EOE DREN ESET ARE

Opinion of the Special Statutory Court.

[ As reported in 26 F. (2d) 912; also,

R. 1968-1995.]

INTeRBOkOt GH Rapip TrRANsit Co. v. GILCHRIST et al.

Dhstrict Court, S. D. New York, May 2, 1928.

Decree May 10, 1928.

[*913] In Equity. Suit by the Interborough Rapid

Transit Company against J. F. Gilchrist and others,

consutuung the Transit Commission, the same being

the Metropolitan Division of the Department of Public

Service of the State of New York, and others. On mo-

fon for an injunction pendente lite. Injunction granted.

see, also, 25 F. (2d) 164

James L. Quackenbush, of New York City (William

1. Ransom and Jacob H. Goetz, both of New York City,

and Harry L. Butler. of Madison, Wis., of counsel), for

] man

puaintag

George 1 Nicholson, Corp. Counsel, of New York

City (Charles L. Craig, Joseph A. Devery, Edgar J.

Nohler, and Mo Maldwin Fertig. all of New York City,

i counsel), for detendant city of New York.

Clarence Mo Lewis, of New York City (Samuel Un

termyer, Irwin Untermyer, Robert S. Johnstone, C. D.

Williams, amd G. Hi Stover, all of New York City, of

counsel), tor detendant Transit Commission.

*In this and the succeeding opimons, the figures in [ ] are

the numbers of the pages of the offeial reports

PRESTR TES TEI Ce AVIRA OE EN IN SEE NNT MN ES

Opiaion of the Special Statutory Court.

Murray, Aldrich & Roberts, of New York City (Wil

ham Roberts, of New York City, of counsel), for de

tendant Manhattan Ry. Co.

Betore Manton, Circuit Indge. and Kwox and

Bonny, District Judges

Manton, Circuit Judge. The original bill in this suit

was bled in the forenoon of February 14, 1928. It seeks

to restrain the members of the transit commission of the

metropolitan division of the department of public service

of the state of New York, from enforcing various rate

ltnitations, restricting the rate of fare charged by the

plaintti om its rapid transit railways, operated in the

CHY ot New York, to > cents por pRtssenper, upon the

theory that such limitations have become confiseatory

under the Fourteenth Amendment to the federal Con

“tution Tt asks that they be restrained from interfer

ing with the plainutl, which proposes to charge 7 cents

for passchyer, of such other fare in excess of > cents as

ts Tet Comhiseators Phe court is asked to restrain the

Transit Cattinitsston trom carrying aut threats to do vari

ous things which deny to the plaintiff its day m court,

(°014) for an adjudication of its rights as to rates. and

trom attempting to obstruct amd defeat steps taken by

the plainer? from tune to time, which it claims itis au

thorized to do under the statutes, to obtain relief from

the aheped Comheecatory Scent fay

After thes sant thus commenced, and on the same clay.

the transit comunission and the city of New York, im

three susts in the New York state courts, asked for ny

puretive rehefo om substance requiring the plaintifl to

Opinion of the Special Statutory Court.

charge but 5 cents for each passenger and to restrain it

irom carrying out its proposed increase of fare per

passenger. On February 17, 1928, the plaintiff filed an

ancillary complaint in this court, praying that the de-

fendants be enjoined and restrained from further prose-

cuting or causing prosecution of their respective suits in

the state court, and restraining them from in any wise

interfering with the prosecution of the original action in

this court. A judge of the District Court granted an

order (25 F. [2d] 164) which enjoined and restrained

the defendants from further prosecuting the suits in the

supreme Court of the state. An apphecation was made

and granted tor convening a court of three judges,

pursuant to section 380 of the United States Code (28

USCA § 380)

\ public service corporation which as being actu

ally subjected toa confiseatory limitation of its rates,

whether that be imposed by an order of a regulatory

state body or an act of the Legislature, even though

there be pending in the state court proceedings for the

revision of the order, may seek injunctive relief from a

rederal court, when it appears that it is suffering daily :

trom confiscation under the rate to which it is limited,

and particularly where it appears that it has done all it

could under the state law to obtam rehef without suc

cess. Springteld Gas & kL Co. v. Barker (D. C.), 231

F. 331, 338; Love v. A. T.&S. F.R. BR. Co. (C.C. A),

ISS b. S21, 324) Rules of comity or convenience must

give Way to constitutional rights, and there is no doubt

ol the duty of a District Court to take and retain juris

chetion. Oklahoma Gas Co. v. Russell, 261 U.S. 290,

293, 43 8 Cr 353, 67 L. ed. 659, Monroe Gaslight Co.

v Michwan Pubhe Unilities Co. (DC), 202 F. 139

a RHR D OSTEO LE TL OLLI RE NET IE EE NRO

Optaion of the Special Matutory Court.

The suit is here upon causes of action stated in the

complaint and supported by affidavits, to Which answers

are filed with accompanying affidavits in opposition. It

is alleged yenerally that the transit commission and the

city of New York are enforeing various rate limitations

nposed by the Legislature. and by acts legislative in

character, of the state of New York, restricting the rate

of fare charged by the plamett on each of the elevated

lines and the subway divisions of the rapid transit rail

Ways operated by the plaintit? within the city to 3 cents

per passenger, in breach of the Fourteenth Amendment

of the Constitution, because such limitations have be

come confiscators

Rehet is sought (a) from limitation imposed by legis

lative acts of the state of New York tchapter 743 of the

laws of 1894) upon rates chargeable on the elevated

railroad lines operated by the plant, which are in

large part owned by the Manhattan Railway Company,

ind are now operated under lease by the plainttt; (bi

tron the rate provision in a certain elevated railroad

extension certincate of March 19, 1973. Kranted by the

Pubhe Service Comumission for the First Distriet, acting

in behalt of the ety of New York, te the plaintiff, and

to pertt the plaintiti, in conformity with and on pur

suance of the Public Service Commission Law and the

jewers conterred and delegated to i by the Legislature.

including the plametiff’s tariff « helules, to establish an

merease th fare chasyealde ln the plaintit? on the ele

vated lines and to secure a determination by the regula

tory authority of the state: (c¢) as to limitations im

posed by the Legislature, or acts legislative in character.

wt the state ot New York. including the plaintiff's tarif

PRR STAT LIE EEO OMAP RTT EET TIT

Opinion of the Special Statutory Court.

schedules on the rates chargeable on the subways of the

rapid transit railroads operated by the plaintiff, which

it owns in part and which are in part owned by the city,

and also the rate provision in contract No, 3, herein re-

ferred to, made March 19, 1913, between the plainuff

and the Public Service Commission of the state of New

York for the First District, acting in behalf of the city

tor rapid transit railroad extensions within the city, in

accordance with the steps taken by the plaintiff in con-

tornuty with and pursuant to the provisions of the Pub-

lic Service Commussion Law and the power and author-

ity conferred upon and delegated to it by the Legislature

to establish an mnerease in tare chargeable on the subway

divisions and to secure a determination by this regula-

Tory authority ot the state

KRehet is sought, not only as to fare chargeable on the

clevated and subway divisions of the rapid transit rail

Was operated ly the plaintiff, considered as separate

unthed systems under the legislation and acts legislative

in character, but also upon all the rapid transit railways

considered as a unihed operation under the legislation

and acts legaslative m character and under the elevated

[ 715] extension certificate and contract No, 3 for rapid

transit railroad extensions of March 19, 1913

Phe ancillary bill filed makes clear the demial, by the

commussion, of a hearmyg as asked when schedules were

hled on bebraary 1, 1028, and moreover that the defend

wuts actively souuht the aid of the state court in enjoin

ig the plamtutt trom: proceeding to enforce its rates as

provided an the schedules. It further appears in the

erminal Inll that two previous applications to the com

=» 2 jth late eae! 4. , be ah eo,

Se Meee ee a keg ee. ce

Opinion of the Special Statutory Court.

mission and its predecessors, asking for an increase in

rate had met with denial, because the commission con-

sidered itself without jurisdiction or power to grant such

relief. From this it is manifest that the commission in

tended never to accord the plaintiff a hearing on its ap

plication, whatever its merits might be. Denial of an

application for a hearing, where the statute provides for

such application, amounts to confiscation, if the rate be

too low. Prendergast v. N.Y. Tel. Co., 262 U.S. 43,

43S. Ct. 406, 67 1. Ed. 853

The Rapid Transit Act, chapter 4. of the Laws of

ISY] of the state of New York, entitled “An act to pro

vide for rapid transit railways in cities of over one mil

hon inhabitants,” provided for the appointment of rapid

transit commussioners in such cities, and that “they shall

have and exercise the specific authority and powers here

matter conferred, and also such other and necessary

powers as may be requisite to the efficient performance

of the duties imposed upon the said board by this act.”

Section 4 provided for the determination of the neces

sity of railways, the fixing of routes, and the approval

and consent of the common council, and section 6 pro

vided that, when the consent of the local authorities and

property owners had been obtained, the board was re

quired to prepare detailed plans and specifications, includ

ME equipment and satety devices. Section 7 provided

tor the sale of the right, privilege. and franchise to con

struct, mamtain and operate the railways, and the terms

of sale “rust also specify the amount of the capital of

any such corporation, and number of shares of capital

stock, © * © and the maximum rates of fare and

treight which such corporation may charge and collect

for the carriage of persons and property.”

i ELT QR

Opinion of the Special Statutory Court.

This act was amended by chapter 729 of the Laws of

1896, section 34, as added by c. 752 of the Laws of 1894,

$9, and amended by section 10, c. 519 of the Laws of

1895, so as to provide that, in case the people should de-

termine that any railway shall be constructed for or at

the expense of the city, the board shall consider routes

and plans previously adopted and proceed therewith, and

that any contract for the construction of said route shall

provide that the person or corporation so contracting

shall, at his own cost and expense, equip, maintain, and

operate the said routes or roads for a term of years, to

be specified in the contract, for not less than 35 or more

than 50 years, and upon “such terms and conditions as

to the rates of fare to be charged and the character of

service to be furnished and otherwise as said board shall

deem to be best suited to the public interest, and subject

to such public supervision and to such conditions, regu-

lations and requirements as may be determined upon by

said board.”

bby chapter 472 of the Laws of 1906, the board of

rapid transit comumissioners was reconstituted, so as to

consist of the mayor, the comptroller, president of the

Chamber of Commerce of the state of New York, and

five persons named in the act, with vacancies to be filled

by the mayor. The board so constituted had specific

powers and duties therein provided for the “efhicient

performance of the duties imposed upon the said board

by this act.” By chapter 429 of the Laws of 1907 there

was substituted for the act creating the rapid transit

railroad commussioners the Public Service Commission

of five members of the First District to be appointed by

the Grovernor By section 3, subd. 6, of that act, the

— LOL EE OIE AONE RES LL ERL ELLER RIEL LOL RERE

Optaion of the Special Statutory Court.

commissioners of the First district’ were given all

powers theretoture conferred upon the board of rapid

transit railroad commissioners under chapter 4 of the

Laws of 1891, and the board of rapid transit railroad

commussioners was abolished by section &3

By chapters 343 and 350 of the Laws of 1926 (sec

tions 431-433) the present transit commission was pro

vided tor, and the duties of the Public Service Commis

sion and transit commission were transferred to it. By

chapter 498 of the Laws of 1909 and chapter 504 of the

Laws of IYL0 various amendments were made to the

Rapid Transit \ct which are unimportant here

dection 49 of the Public Service Comission Law

(chapter 429 ot the Laws of 1907) provides that,

“whenever either commission shall be of opinion * * *

that the rates, fares or charges demanded, exacted,

charged of collected by any common carrier, railroad

corporation or street railroad corporation subject to its

jurisdiction tor the transportation of persons, or prop

erty within the state, or that the regulations or practices

of such © * © street railroad corporation affecting

sich rates are unjust, unreasonable, [°716] unjustly

discruminatory or unduly preferential, or in any wise in

violation of any proviston of law, or that the maximum

rutes, tares or charges, chargeable by any such common

carrier ° © °

of street raslroad COfpotation are imsuth

erent to yield reasonable compensation for the service

rendered, and are unjust and unreasonable, the commis

sion shall * * © determine the just and reasonabic

rates, tares amd! charges to be thereafter observed and

in force as the maximum to be charged for the service

Opinion of the Special Statatory Coart.

to be performed, * * * and shall fix the same by order

to be served upon all common carriers * * * or street

railroad corporations by whom such rates, fares and

charges are thereafter to be observed.” This may be

done by complaint or upon the commission’s own mo-

tion. By the same provision, the carrier is obliged to

comply with and observe orders made by the commission

as to rates of fare.

Plamtiil’s subway division consists of lines which

were constructed under contract No, 1, dated February

21, 1900, contract No. 2, dated July 21, 1902, and con-

tract No. 3, dated March 19, 1913. Contracts No. 1

and No. 2 were made prior to the act creating the Pub-

he Service Commission and the effective regulatory

power granted under section 49 thereof. Contract No.

1 was made by the board of rapid transit commissioners,

on behalt of the city of New York, with John B. Me-

Donald tor the construction by him, at the expense of

the city, and tor lease to him for operation for a term

of years, of a subway known as the Manhattan- Bronx

Rajad Transit Railroad through the east side of Man.

hattan Island to the Bronx. He agreed to equip, main

tain, and operate the same. During the term, such

equipment was to be supplied as his property subject to

the city’s right of repurchase at the end of the term

That contract trom time to time was modified and sup-

plemented

Contract No. 2 was made by the board of rapid transit

commussioners on behalf of the city of New York. with

the consent and approval of the board of estimate and

apportionment of the city of New York, with the Rapid

- — A RAEN RED gs BON i

= LEB TBI ARIS LAIN ES ENS RE EEE MENGE EER LS ESN SE ORE

Opinion of the Special Statutory Court.

Transit Subway Construction Company, for the con-

struction by it at the expense of the city, for lease to it

for a number of vears of a certain railw ay known as

the Brooklyn Manhattan Rapid Transit Railroad, con

necting the southern end of the Manhattan-Bronx Rail

road, so as to form a continuous railway over the route

running southerly from the post office in the borough of

Manhattan under the East River and to the Flatbush

Avenue station of the Long Island Railroad in Brook

Ivn, with an agreement on its part to equip, maintain,

and operate the same during the said term. The equip

ment so supphed was to be the property of the con

tractor, subject to the city’s right to purchase at the end

of the term. This contract was likewise modified and

supplemented trom time to time

On July 10, 1902, and August 10, 1908, MeDonald

and the Rapid Transit Subway Construction Company,

respectively, assigned, with the consent of the board of

rapid transit commissioners, to the plaintiff so much

of the No. Land No. 2 contracts as applied to the lease

of the railways. On July 11, 1911, so much of contract

No. 1 as applied to the construction was duly assigned

to the Rapid Transit Subway Construction Company

On January 30, 1913, so much of contracts No. 1 and

No. 2 as applied to construction were respectively as

signed te the plaintiff

Contract No | contained an ugteenent for lease hry

the city to the contractor for a term of 30 years, ata

rental of an annual sum equal to the annual interest

pivable by the enty Upon all bonds which ut should reste

inorder to provide means for construction, and a fur

ther annual sum equal to 1 per cent upon the whole

Opinion of the Special Statutory Court.

amount of the bonds, with certain abatements during

the first 10 years. Contract No. 2 contained an agree-

ment for leasing, by the city to the contractor, at a

rental consisting in general of an annual sum equal to

the annual interest payable by the city upon all bonds

issued by it in order to provide means for construction,

an annual sum equal to 1 per cent. of the whole amount

of the bonds, with certain abatements during the first

10 vears, and a further annual sum equal to the amount

of the annual interest payable by the city upon bonds

issued to provide means to pay for the acquisition of

rights of way.

Qn March 19, 1913, the city, acting by the Public

Service Commission for the First District, entered into

a contract with the plaintiff for the construction by the

city, and the equipment, maintenance, and operation by

the plaintiff, of rapid transit railways along the routes

known as Seventh Avenue-Lexington Avenue line,

leastern Parkway line, Steinway Tunnel line, and White

Piains Road line. The contract provided for the con-

struction by the city, under separate construction con

tracts, a contribution by the plaintiff toward the cost

of the construction and the equipment of the railway

by the plaintiff at its own expense and for a lease by

the etty [%917] of the railway and equipment to the

plaintii for operation m conjunction with the existing

rathways and existing equipment provided for in con-

tracts No. l and No. 2 “for a single fare * * * of 5

cents Imit no more” for a term beginning January 1,

917, and expiring December 31, 1905-—subject. how-

ever, to earher termination as therein provided. The

original terms of contracts No. 1 and No. 2 were modi-

= SPIRE Ga AES HET pA TG a ISS ORO A

Opiaion of the Special Statutory Court.

fied as to the expiration of the lease and in other par-

ticulars.

By the terms of contract No. 3, it was provided that

the plaintiff should pay as long as the existing railroads

were operated in conjunction with the new extensions,

an additional rental to that contained in contracts No. |

and No, 2. In consideration of the operation of the

railways and existing railway in conjunction with each

other for a single fare, and of the contribution by the

plainttf to the cost of construction of the railways and

of the agreements to modify the terms of contracts

No. Land No. 2, upon the commencement of the opera:

tion of the portions of the railway specified in the con

tracts, the gross receipts, from whatever sources de.

rived, directly or indirectly, by the plaintiff in connec

von with the operation of railways and the existing

railways during the term of the contract, were to be

disbursed to meet obligations therein specified, after

which the city and plaintiff shared the balance in equal

parts.

Contracts No. | and No. 2 provided for a single fare

in the sum of $ cents, but no more Contract No. 3 in

its terms superseded the provisions of contracts No 1

and No. 2 as to the rate of fare. It provided for a

single fare over the entire system of the railways to

be built and the existing railways of “S cents, but not

more.

The Manhattan Kailway Company, incorporated un

der the provisions of the Rapid Transit Act (chapter

64% of the Laws of 1875), was authorized to construct.

maintain, and operate clevated ratlraads along routes

Opinion of the Special Statutory Court.

laid out and designated by the rapid transit commission

under the authority of that act. It was engaged as a

common carrier for many years, and owned elevated

rapid transit railways lying within the city of New

York, and leased them to the plaintiff, which operated

them as part of its general system. The lease, dated

January 1, 1903, was for a period of 999 years, and

as a rental the plaintiff guaranteed interest on mortgage

bonds, paid a cash rental, and guaranteed 7 per cent.

dividends on $60,000,000 of the Manhattan Railway

Company's stock, and this lease was effective when, on

March 19, 1913, by the terms of contract No. 3, the

elevated extension certificates were provided for,

The routes under the certificate to the Manhattan

Railway Company were formally added to the property

leased to the plaintiff for operation. The certificates

granted to the plainuff provided for (1) elevated rail-

road extensions and (2) additional tracks, and that the

plainuff was entitled to charge a single fare, for each

passenger, for one continuous trip in the same general

direction of 5 cents, but not more. The additional con-

tract certificate of the same date, granted to the Man

hattan Railway Company, contained no provision fixing

a rate of tare to be charged thereon.

The Rapid Transit Act was amended in 1912 (chap-

ter 226, subd. 3, $8, Laws of 1912) so as to give addi-

onal authority tor contract No. 3. Section 7+ of the

original act had long provided that the contract should

contain such terms and conditions as to rates of fare to

be charged as said commission shall deem to be best

* Typographical errorshould be 27

Opinion of the Special Statutory Court.

suited to the public interest. This provision was part

of the act several years before 1907 when the Public

Service Commission Law was adopted. The extension

certificate was granted under the authority of section

S4y or the Rapid Transit Act (as amended by chapter

752 of the Laws of 1894), and it is not claimed to have

been given by the amendment of 1912, but it is claimed

to have the authority of section 32-a enacted by chapter

472 ot the Laws of 1906, adopted one year before the

Public Service Commission Act.

The section did not authorize the commission to con

dition an extension certificate upon a stipulation as to

tare It (section 347) designates the subjects to be

embraced in the certificate, but without reference to

fare provisions This challenges legislative purposes

to authorize the insertion or making of a fare provision

otany kind Prior to 184, no provision of fare of any

kind below 10 cents and no restriction upon fares had

been imposed by leyal authorities as a condition of con

stitutional consent Ten-cent limitations were statu

tory. By chapter 7435 of the Laws of 1894, the S-cent

limitation was established, unless the extension certifi

cate of March 19, 1913, or the resolution of the board

of estimate, formally approving the proposed certificate,

amd consenting te the construction and operation of the

extensions in accordance therewith, be a constitutional

cunsent ta a citferent tare

We hold that the Scent himtanen as to the elevated

railway company is statutory under chapter 743 of the

laws of TSS The {*vIs] resolution, even i treated

tT ypengrapdacal error. should be 24

Opiaion of the Special Statutory Court.

as a consent of the legal authority under section 18,

art. 3, of the Constitution of the state, is ineffective to

create any contractual fare limitation, because section

347 of the Rapid Transit Act provided only for such

consents as were necessary to be fulfilled in such cases

of extensions under section 18 of art. 3, which by no

means required fare regulations, but only consent to

construct and operate, Under autoritative decisions

of the state of New York, where consents were granted

after July 1, 1907 (the effective date of the Public

Service Commission Law), municipalities were pre

cluded trom conditioning their consent upon a fare pro-

vision which should be exempt from the application of

the Pubhe Service Commission Law. People ex rel.

City ot New York v, Nixon, 229 N.Y. 356, 128 N. E.

245

\ provision for fare in contract No. 3, as such, does

net apply to elevated railways. The phrase of the certif-

eate that the tare mutations shall apply to one continuous

trip in the same general direction over the railways

(which are defined as including only additional tracks

and the extension of certain trackage rights provided for

by the certiheate) of the Manhattan Railway express

rervice, mdicates an mtent that the tare shall apply to the

latter only where the trip is, in whole or in part, over the

railways, and should not be appheable to trips originating

and ending on the lines of the then existing Manhattan

Railway Company. No fare provision is embraced in the

additwonal contract certificate granted to that company

on the same day, which lends support to the same view

* Typographical error should be 24

MALI IAEA IONS SAID RUS RR a re

Opinion of the Special Statutory Court.

The grant of the regulatory power over rates by the

Legislature to a commission or municipality must be

strictly construed, and must not be extended by inference.

The suspension of police power over rates cannot be ac-

complished by implication, The legislative authority

must be plain, and the intention must clearly and un-

mistakably appear. Home Tel. & Tel. Co. v. Los Angeles,

211 U.S, 273, 29S. Ct. 50, 53 L. Ed. 176.

The provistons of contracts Noo | and No 2 as to

fares were superseded by the provisions of contract No.

3 providing for a rate of fare to be charged in the opera

hon of new and existing railroads as one completed sys

tem. Article 1 of contract No. 3 provided that the new

subway lines shall be operated in conjunction with the

old for a single fare and in accordance with the contract.

The terms of contract No. 3 specifically modified and

changed the provisions of contracts No. | and No. 2 se

as to provide a single fare: .t extended the ride over the

entire system and fora rare of Scents and no more. The

railroad is being presently operated under contract No. 3.

at least so far as the fare charged is concerned

The state Court of Appeals, in considering the valulits

and power to make the contract, has comstrued No. 3 to

supersede the leases of contracts No. Land No. 2, saying

‘But by the proposed contract [No.3] this lease is to be

nextified and superseded by a new apreetpent where by th

city becomes reinvested with a substantial control thereot

and relets them in connection with its new subways unde:

ome comtract for operation as a single and entire system.”

Admiral Realty Co. v. City of NOY, 2060.N. YY) 110, 133.

WN E. 241, 247 (Ann, Cas. L9I4A, 10545.) Tt is not.

Opinion of the Special Statutory Court.

as argued, merely a continuation and extension, supple-

mentary of contracts No. 1 and No, 2. Comparing con-

tracts No. 1 and No. 2 with No, 3 makes it clear that

there were many modifications as to rentals payable to

the city under contracts No. 1 and No. 2. In No. 3a

single fare was intended to be operative, not only over

the lines covered by No. 1 and No. 2, but over the new

subway and during the longer life of the contract. The

fare provisions of No, 1 and No. 2 could not be continued

in effect since each was intended to apply to a different

period and had a different scope of operation. Therefore

the fare provisions of the three contracts could not stand

together, because they apply to different things. Con-

tract No, 3 was a modification and a waiver of fare pro-

Visions of contracts No. 1 and No, 2.

It plaintiff's right to charge a fare inexcess of 5 cents—-

assuming that ‘rate to be confiscatory—were to be de-

termined solely upon the provisions of contracts No. 1

and No. 2, which were made pursuant to specific au-

thority granted by the state Legislature to the board of

rapid transit commissioners to contract for a 5-cent fare,

and were such determination to be unaffected by the en-

actment of the Public Service Commission Law in 1907,

and the execution of contract No, 3, the plaintiff would

net now be entitled to judicial relict. In such case, only

by securing the waiver of the contract rates by an au

thoritative commussion speaking for the state would the

railway company have any standing to ask for a change

af rates in excess of the contract provision, Columbus

Power & Light Co. vy. City of Columbus, 249 U.S. 399,

398. Ct. 349,63 L.Ed. 0609,6 ALL. R. 1648: St. Cloud

Opinion of the Special Statutory Court.

Pub, Service Co. v. [*919] City of St. Cloud, 265 U. S.

352. 44S. Ct. 492, 68 L. Ed. 1050.

But, when contract No, 3 was made, the Public Service

Commission Law had been in force and effect since 1907,

and the fare provisions of that lease are subject to regula

tory revision in the manner prescribed by the Public Serv-

ice Commission Law. The Rapid Transit Act, which

Was a special city law (Admiral Realty Co. v. City of

New York, 206 N.Y. 110, 140, 99 N_ FE. 241, Ann. Cas.

19YT4A, 1054), provided that the rapid transit lines shall

be a part of the system of street and highways of the city,

and the contract declared it to be a matter of public in

terest. The exercise by a municipality of its proprietary

powers over streets ts public in its mature. Contract No.

3 was made in the presence of and with knowledge of the

Pubhe Service Commission Law, which law the authori-

tative decisions of New York courts have held Wits & new

and comprehensive policy of state-wide regulation and

which was in terms applicable to rapid transit railways.

Contract No. 3 must be regarded as qualitied by the

existing restrictions of the Public Service Commission

Law, which, among other things, expressly required that

rates should be just and reasonable and expressly pro

hibited rates which should be unjust and unreasonable,

whether excessive or because noncompensatory, and it ex

pressly provided that rates not conforming: to this legisla

tive standard should be unlawtul, and it empowered rai!

Way carriers to change rates by tiling and publishing

tarifis inorder to conform te the standard, and imposed

the duty, as well as conferred the power, upon the com

THetSstenty tee apply and enfores the st andar pret? AT D DEL iM

Opinion of the Special Statutory Court.

tion of the utilities as well as of the public under sections

26 and 49 of the Public Service Commission Law. For

effect and construction of this act by the state Court of

Appeals, see People ex rel. City of New York v. Nixon,

229 N. Y. 356, 128 N. E. 245; People ex rel. Garrison v.

Nixon, 229 N.Y. §76, 128 N. E. 255; Town of North

Hempstead v. Public Service Corp., 231 N. Y. 447, 132

NE. 144; Public Service Comm. vy. Pavilion Natural

Gas Co., 232 N. Y. 146, 133 N. E. 427; Evens v. Public

Service Comm., 246 N.Y, 224, 158 N. E. 310; People

ex rel. N.Y, Steam Co. v. Straus, 186 App. Div. 787,

174. N. Y.S. 808, affirmed 226 N. Y. 704, 123 N. E. 884;

International Railway Co. v. Public Service Comm., 226

N.Y. 474, 124 N. E. 123.

The public policy of the state of New York in its regu-

latory power over utilities was announced in People ex

rel City of New York v. Nixon, 229 N.Y. 356, 358, 128

N. E. 245, by the Chief Judge, speaking for a unanimous

court, as follows;

“At the date of this franchise, the Public Service Com-

nussion Was empowered by statute to increase ‘the maxi-

mum rates, fares, or charges chargeable by any * * *

street railroad corporation’ when found to be inadequate

to vield a fair return (section 49, Public Service Commis-

sion Law; Consol, Laws, chap. 48). That power came

to the commission through the amendment of the Public

Service Commission Law in June 191] (Laws 1911, c.

S46, People ex rel. Ulster & Del. R. R. Co. vy. Public

Service Commission, 171 App. Div. 607 [150 N.Y. Ss.

1065), and 218 N.Y. 643 [112 N. E. 1071)), if it did

not already exist under the law as first enacted in 1907

Opinion of the Special Statutory Court.

( Laws 1907, ¢. 429, § 49. Cf. the statutes construed in

People ex. rel. Village of South Glens Falls v. Pub. Serv-

ice Comm., 225 N. Y. 216, 223 [121 N. E. 777]; People

ex rel. N. Y. Steam Co. v. Straus, 186 App. Div. 787,

793 (174. N. Y. S. 868], and 226 N. Y. 704 [123 N. E.

884], and Arlington Board of Survey v. Bay State

Street Ry. Co., 224 Mass. 463 [113 N. FE. 273.5 A. LR.

24)).

“Contracts fixing rates, if made before the enactment

of these statutes, were subject at the utmost to the possi-

bility oft the exercise by the state of its police power in

the future, Contracts made thereafter were subject to

a possibility which had become merged in a reality. It

Was no longer a question of what the state might do at

seme indehnite and unknowable time. It was a question

of what the state had already done, drawing upon sources

of energy, reserves of power, till then latent and potential,

and manifesting its will in law. A new public policy had

been initiated. A new right had been declared. Rates

were thereafter to be just and reasonable, alike for car

riers on the one side and for passengers or shippers on

the other. Neither class would be permitted for its own

benefit to set the rule at nought. The state, through its

delegate, the commission, would lower the charges if too

high. It would ratse them, if too low. People ex rel.

NY. Steam Co. v. Straus, supra; Arlington Board of

Survey v. Bay State Street Ry. Co., supra; Postal Tel,

Cable Co. v. Associated Press, 228 N.Y, 370, 375 [127

NE. 256): Armour Packing Co. vy. Ul S., 209ULS. 36

(28 S. Ct. 428, 52 L. Ed. O81]; Union Dry Goods Co

v. Georgia Pub. Service Corp., 248 U.S. 372 [39 8. Cr.

117,63 L. Ed. 309.9 ALL. R. 1420]

Opinion of the Special Statutory Court.

“Rate-making was to be no longer an [*920] affair

of predominantly private interest, in which the state

would interfere without system and with spasmodic and

intermittent action. .\ superintending agency of govern-

ment had taken the matter in hand.

“The question soon arose whether the new rule was

retroactive, and annulled existing contracts in conflict

with its terms. Indisputably it annulled such contracts

between carriers and passengers, or carriers and shippers.

Louisville & Nashville R. R. v. Mottley, 219 U. S. 467

[31 S. Ct. 205, 55 L. Ed. 297, 34. LR. A. ON. S.) 671);

People ex rel. N.Y. Steam Co. v. Straus, supra; Postal

Tel.-Cable Co. v. Associated Press, supra; Producers’

Transp. Co. v. R. R. Comm., California, 251 U.S. 228

[40 S. Ct. 131, 64 L. Ed. 239]. ‘One whose rights such

as they are, are subject to state restriction, cannot remove

them from the power of the state by making a contract

about them. The contract will carry with it the infirmity

of the subject-matter.” Hudson County Water, Co. v.

McCarter, 209 U.S. 349, 357 [28 S. Ct. 259, 52 L. Ed.

828, 14 Ann. Cas. 500]; Union Dry Goods Co. v. Georgia

P.S. Corp., supra, p. 375 [39 S. Ct. 117, 63 L. Ed. 309,

9 AL. R. 1420).”

Later, in Town of North Hempstead v. Public Service

Corporation of Long Island, 231 N. Y. 447, 450, 132

N. ke. 144, the court said, speaking of the provisions of

the Public Service Commission Law:

“These provisions were in torce when the plaintiff

grave its consent to the defendant to maintain and oper-

ate its gas mains within the town, entered by implication

into the terms of such consent, formed part of its obliga-

DR evens WHALEN Av PRS PORT

Opinion of the Special Statutory Court.

tion, and were notice to the town that the consent was

coupled with the provision of the statute that the defend-

ant was empowered to abrogate it as to the rates stipu-

lated therein and was allowed by law to put into operation

a new schedule of just and reasonable rates and charges

to be made for service.”

The police power ts an attribute of sovereignty and ts

primarily vested in the Legislature. The state may au-

thorize a municipality to establish by an inviolable con-

tract the rates to be charged by a publi service corpora

tion for a definite term not grossly unreasonable in point

of time, and the effect of such a contract ts to suspend,

curing the lite of the contract, the governmental power

of fixing and regulating the rates. The surrender by

contract, however, of this governmental power, as well

as the authority to make it, must be closely scrutimzed

tor such a contract has the effect of extinguishing pre

tanto an undoubted power of government; both its exist

ence and authority to make it must clearly and unms

takably appear and all doubts must be resolved in faver

of the continuance of the power. Home Tel. & Tel Co

v. Law Angeles, 2112 US. 268, 273. 29S. Ct. 80, 53 4.

Fd. 176

It the parties have not thus agreed to a S-cent tare,

when that tare becotnes unreasonable, because it ts mon

Coatipensatory oF because it is excessive, the contract fur

nishes no obstacle to the exercise at porisdiction boy the

Public Service Comumisston, and when it fais te act there

is purtsdiction in the tederal courts to protect the corpor:

thom) agaimst comhscation, Southern lowa El Co 4

Chariton, 255 U.S. §39, 41 8. Ct. 400,65 L. Ed. 764:

City of San Antonio vo San Anton Pub. Service Co.

Sey Ne TAR NEAREST TO SRA CRE EO Ae LER OI EE cite MCD TE

Opinion of the Special Statutory Court.

255 U. S. 547, 41S. Ct. 428, 65 L. Ed. 777; City of

Houston v. Southwestern Bell Tel. Co., 259 U. S. 318,

425. Ct. 486, 66 L. Ed. 961; Chicago v. O'Connell, 278

Ill, 591, 116 N. E. 210, 8 A. L. R. 916; City of St. Louis

v. Public Service Comm., 276 Mo. 509, 207 S$. W. 799.

We find nothing in the amendment of the Rapid

‘Transit Act in 1912 which excludes the plaintiff from the

appheation of the regulatory plan and that act contains

no clear and unmistakable evidence of effort to delegate

to the city authority to establish by contract in 1913 un-

changeable rates to be charged by the plaintiff. While

contract No, 3 provides for a 5-cent fare to be charged

in 1913, there is no delegation in any part of the act of

the regulatory power of the state Legislature. Nor was

the Public Service Commission Law on the subject of

regulation in any wise changed. An intention of the

parties that the rates then in question should be subject to

nualineation under the Public Service Commission Law

was not affirmatively expressed, but the state courts have

announced that there must be read into the contracts

made after 1907 the authoritative regulation provided for

by the Public Service Commission Law. People ex rel.

Garrison v. Nixon, 229 N.Y. 576,128 N. E. 255.

It these regulatory powers of the Public Service Com-

Hussten were not mtended to apply te the contractual

rates of the rapid transit railways, express provision to

that effect would be expected. Moreover, the legislation

yovermmng the service and the rates of fares of railroads

or street railways provided for by statutes passed since

1907 places the power in the Public Service Commission

te regulate such rates. indicating that the [7921] regu

PUPAE RP NE IEE EE PIE EO Tae

Opinion of the Special Statutory Court.

latory power had been reserved. Chapter 481 of the

Laws of 1910, § 57; formerly the Railroad Law of 1890

(Laws 1890, ¢. 565), § 37, as amended by chapter 676

of the Laws of 1892; section 229 of the Railroad Law.

Laws 1910, ¢. 481, formerly part of the Rapid Transit

Act of 1875; Laws 1875, ¢. 006. In construing and giv-

ing effect to the provisions of the state statute, we look

to the decisions of the state Court of Appeals. St. Cloud

Pub. Service Co. v. City of St. Cloud, 205 U.S. 352,

357. 44.5. Ct. 492, 08 L. Ed, 1050. Terms of a contract

may be afiected by the exercise of sovereign power, as

where an injured person received a free pass ona line of a

railroad tor life under a contract, and later Congress,

in regulating interstate commerce, forbade the issuance

and use of free pisses, except to certain persons desig

nated, and forbade the charging of any rate other than

that designated in published schedules. Louisville &

Nashville R. R. v. Mottley, 219 US. 467, 31S. Ct. 208,

55 L. Ed. 297, 34 LR. A. UN. S.) 671.) There it was

said, at page 483 (31 50Ct 271) 50 “After the commerce:

act came into effect no contract that was inconsistent

with the regulations established by the act of Congress

could be enforced in any court.” See Hunter v. Pitts

burg. 207 U. S. 161, 28 S. Ce. 40, 52 L. Ea. 181;

Worcester vo Worcester Consolidated St. Ry Co, 196

U.S. 539, 25S. Ct. 327, 49 L. Ed. 393. To change a

comtract rate under the state regulatory plan does not

impair contract mehts under the federal Constitution

Union Dry (aats Co. v. Ga Public Service ( orp, 248

US. 372, 398. Ct 117,63 1. Ed. 09,9 4 LR. 1420

When in 1912 the Legislature of the state amended

the Transit \ct to give authority for contract No 3, §8

Opinion of the Special Statutory Court.

of the act provided that the contract should contain

“such terms and conditions as to the rates of fare to be

charged * * * as said commission shall deem to be best

suited to the public interest.” Indeed, this was in sub-

stance part of the act prior to 1907, when the Public

Service Commission Law was adopted. As pointed out,

, the law had changed the policy existing when the rate

provision was brought into the Rapid Transit Act. By

express terms and by construction of the Court of Ap-

peals of the state, the legislation resulting in the Public

Service Commission Law was applicable to rapid transit

rates and established a public policy prohibitive of per-

manent rates of fare. It declared in effect that no con-

tract provision for a fixed continuing fare was “best

suited™ to or consistent with “public interest,” and by

secuion 26 it provided that “every unjust or unreason-

able charge made or demanded for any such service or

transportation of passengers, freight or property or in

connection therewith or in excess of that allowed by law

or by order of the commission is prohibited.” And sec-

tion 49 of the act established the legislative policy that

a rate Was unjust and unreasonable, if insufficient to

yield a reasonable compensation for the services ren-

dered

Thus the law created the duty of the Public Service

Commission to administer and enforce the new state

policy. That regulatory body had turned over to it all

contractual powers of the former board uader the Rapid

Transit Act. It in effect limited the contractual capacity

for a continuing fixed fare, for it made it the duty of

the Public Service Cominission to make the fare suf

cent to yield reasonable compensation for the services

Opinion of the Special Statutory Court.

rendered and no more. Undoubtedly this new public

policy applied to rapid transit railroad carriers, as well

as other public utilities

With this policy thus established when the Legislature

in 1912 amended the Rapid Transit Act, if it wanted to

depart from the Public Service Commission Law, to

amend it or modify it, or if it intended to grant regula

tory powers under the Rapid Transit Act, it would have

heen an easy matter for the Legislature to have written

into that act a statement excepting the rapid transit

rates from the operation of the Public Service Commis

sion Law. It refrained from doing so by word or fair

unphcation. It left the fare provision of the Rapid

Transat Act as tt was before the adoption of the regu

latory law which established the new policy. It in no

clear and unmistakable phrase expressed an intention to

nor did it delegate regulatory powers to the commission

under the Kapul Transit Act. That had been cared for

by the Public Service Commission Law

Merely permitting the fare provision of the Rapid

Transit Act to continue in the same phrase in which it

existed prior to the adoption of the new policy in 1907

did not repeal the provisions of the Pubhe Service Com

inission Law as to rate making in any particular, The

more reasonable assunyption is that such nonaction in

volved no clear and unnmustakable purpose on the part of

the Legislature (City of Paducah v. Paducah Ry. Co,

261 US. 267, 272, 43:5. Ct. 335. 67 L. Ed. 647) to ex

clude the application of the Public Service Commission

Law. The fare provision of the Rapid Transit Act, as

amended by the Legislature in 1912. did not purport to

Opinion of the Special Statutory Court.

grant unqualified authority to [*922] contract for a

fixed rate for the entire life of the contract.

The more reasonable view is that there should be con-

tained in the contract “such terms and conditions as to

rates of fare to be charged as the commission shall de-

termine to be best suited to the public interest.” Such

“terms and conditions” should be consistent with the

limitations and provisions of the Public Service Com-

mission Law and be the contractual authority, thus con-

fined to the establishing of temporary rates, and should

not foreclose either party, if and when it became unjust

and unreasonable, either because it was excessive or

noncompensatory, to apply for a change. This does not

destroy all right to fix a fare, it merely limits the con-

tractual powers within the confines of the established

public policy, which prohibited the suspension of the po-

lice power of the state over rates. It means that the con-

tractual determination as to what terms and conditions

as to rates of fare that are best suited to public interest

must be in harmony, and not in defiance of the standard

of public interest which the Legislature had itself de-

clared and established in a law which it made applicable

to all street railways and utilities.

Such a construction takes no undue liberty with the

iare provision of the Transit Act. It restricts general

and uncertain language and prevents nonaction of the

Legislature with respect to the Transit Act from operat-

ing as an amendment to the Public Service Commission

Act. By the language employed in the amendment of

the Transit Act in 1922, it is inconceivable that it was

the intent to vest the citv with unrestrained discretion to

a RATA ETE a in RE RR ere Sess hate CEM Ds.

Opinion of the Special Statutory Court.

suspend the police power over rates and leave it within

its uncontrolled discretion to burden the city for an un

limited period, with an exorbitant or extortionate fare,

or to condemn it to an inefficient service which would

result from a noncompensatory rate

Indeed, section 8, subd. 3, of the act provides: “Every

such contract shall contain such terms and conditions as

to the rates of fare to be charged and the character of

services to be furnished and otherwise as said commis-

ston shall deem to be best suited to the public interest,

amd subject to such public supervision, and to such con

ditions, regulations and requirements as may be deter

mined upon by satd commission, with like approval.”

There was no commission, other than the Public Service

Commission to then or thereafter exercise this power

and duty, beth as to fares and services. Indeed, the

commussion has ever since been constantly exercising

supervision as to service, but has refused to act in the

matter of tares

There has been no contracting away of the right to a

reasonable return as in Southern Utilities Co. v. City of

Palatka, 268 US. 232.45 5. Ct 488, 09 L. Ed 930, and

Columbus Ky, ete, Co. vo City of Columbus, 249 U.S

JW, 89S. Cr. 3849, O3 LE Ed. GV. OA lL. KO WAR In

the latter case, a tranchise was granted a railroad com

pany which sought to surrender it and then brought an

action to restrain the city authorities from compelling it

toaperate its fines ot street railway under the franchises

am! to charge only rates of fare preseribed by the fran

chises, The court held that equity cannot relieve the

company trom a bad bargain At the ume the railroad

e ¥ 2 3 woh % belie Sioa —_—

my Sa RNS tie ee beecadiet

Opinion of the Special Statutory Court.

company sought relief, the Legislature of Ohio had not,

like in the instant case the Legislature of New York had,

in the exercise of state sovereignty, established a regu-

latory plan by which franchises and contract rates may

he regulated upward or downward as conditions justify.

In Henderson Water Co. v. Corporation Comm., ete.,

209 U.S. 278, 40 5. Ct. 112, 70 L. Ed. 273, the parties

were bound by the contract made before the state had

adopted its Corporation Commission Law and thereby

exercised its regulatory power. The corporation applied

ior an increase in rates to the Corporation Commission

and was allowed one-half the amount asked for. It was

not content, but proceeded in the federal court, asking

protection against confiscation. The Supreme Court af

hrined the District Court in its view that the water com-

pany should have apphed for resumption of the hearing

atter a test of six months on the new rates, and ex

hausted its remedy there, before it resorted to a rate

suit. There the state Supreme Court sustained the

power of the commission to fix rates different from the

rates suipulated in the franchise

The claim of the plaintiff here is that the contract

rates could be changed only by resorting to the pro-

cedure of the regulatory plan of the state which dele

gated power to the commission under section 49 of the

Public Service Commission Law and power to the plain

uff under sections 28, 29, to change the rates by the

methods therein preseribed. This it had sought without

avail, previous to the institution of this suit. In South

ern Utilities Co. v. Palatka, 268 U.S. 232,45 S. Ct. 488.

O9 L. Ed. 930, the Florida Legislature had vested the

= non caP8 E 2 eNOS AAT

Opinion of the Special Statutory Court.

city with power to make a rate by contract, but the Leg-

islature had no commission and no regulatory procedure

which the corporation could invoke to bring [*923]

about an increase which it sought. The Supreme Court

held that the corporation was bound by its contract, but

pointed out that “there is nothing in this decision incon

sistent with Southern lowa Electric Co. v. Chariton, 255

Us. 339 [41 S. Cr. 400, 65 Lo Ea. 704]. San Antonio

v San Antonio Public Service Co., 255 U.S. 847 [41

. Ct. 428, 65 L. Ed. 777); and Ortega Co. v. Triay,

20) US. 103 [43 8. Cr. 44, 67 L. Ea. 153)."

In City of Cleveland v. Cleveland Ry. Co, IM US

S17, im sustaining the contract. the court held that the

provisions as to the rate of fares were fixed in the ordi

hance tor a stated time and “no reservation was made of

aright to alter.” In Georgia Ry. & Power Co. v. Town

of Decatur, 262 US. 432.438. Ct. 613. 67 L. ed. 1065,

when the contract was made, the General Assembly had

never exercised authority to fix rates, and the state Su

preme Court held that there was nothing in the Con

sutution of the state which precluded the mmc pality

from contracting as to fares, and that “while the matte:

was one falling within the police power, whose exercise

could not be abridged by contract, it was competent for

the municipality to enter into such a contract where the

state had not exercised and was not secking to exercise

Ss police power over the subject, and that this contract

would remain effective until there should be conflicting

legislative action.”

In Tampa Water Works ) Pampa, YOU Ss 241, 26

s. Ct. 235, 30 L. Ed 170, the state ¢ omsiitution provided

Opinion of the Special Statutory Court.

that “the Legislature is invested with full power to pass

laws for the correction of abuses and to prevent unjust

discrimination and excessive charges by persons and cor-

porations engaged as common carriers in transporting

persons and property, or performing other services of a

public nature, and shall provide for enforcing such laws

Pursuant to thts

by adequate penalues or forfeitures.’

clause, an act Was passed empowering the city authori-

ties to pass an ordinance to prescribe maximum charges

ior water, “such charges to be just and reasonable: Pro-

vided, that this act shall not be so construed as to impair

the validity of any valid contract heretofore entered into

between any city, town or village and any person, firm,

or corporation for the supply of water to such city, town,

or Village or its inhabitants. But this act shall not be

held to vahdate any contract heretofore made.” After

the Constitution, but before this act, the city made a

contract with the water company giving the company

the right to charge certain rates. Thereafter, pursuant

to the constitutional provision and the act referred to,

the city passed an ordinance lowering the maximum

rates to be charged. The court sustained the validity of

the ordinance It followed the interpretation of the

Constitution, act, and ordinance as construed by the

state court, and said

“But so tar asit expressed a power of the Legislature,

of course, as soon as the Constitution went into effect,

that power existed at onee, and contracts afterwards

were made subject to the possibility of its exercise, as it

was exercised by the subsequent statute. * * © The

single question a whether the city of Tampa is bound

tor JO years trom the date of its agreement to permit

Opinion of the Special Statutory Court.

certain specified rates to be charged, even if they have

ceased to be reasonable. We are not prepared to say

that the Supreme Court of Florida was wrong in decid-

ing that it is not bound under the Florida Constitution

and laws.’

It further held that, under the interpretation of the

Constitution given by the Florida courts, the Legislature

Was not at liberty to give up the duty of preventing ex

cessive charges. It was an inalienable power. To like

effect, see San Antonio Traction Co. y. Altgelt, 200 U0.

>. BH, 208. Ct. 261, 50 1. Ed. 491 - Puget Sound Trac

tion, ete, Co. v Reynolds, 244 US. 374, 37S. Ct. 705,

OL. Ed. 1325; City of Houston vo Southwestern Bell

Tel. Co, 239 US. 318, 42S. Ct. 486, 66 L bal. 961,

The rule ts well established that the renunciation of a

sovereign right of this character must be evidenced by

terms so clear and unequivocal as to permit of no doubt

as to their proper construction. Milwaukee Electric Ry.

& Light Co. v. RR. Comm. of Wisconsin, 238 U.S 174,

18D, 35S. Ct. R20, 59 L. Ed. 1254: Home Tel. Co. v. Los

Angeles, 211 U.S. 205, 273, 208. Ct. 30,53 L. Ed. 176.

This construction is consistent with the state court de

cisions to which we should give sanction Denney v.

Pacific Tel. & Tel. Co, 48S Ct. 223,72 L. Ed. — (de

culed Fel, 1928)

it ts argued that the commission, as a state ageney,

could exercise or not, mn its discretion, this power, but

that meanwhile it hes as dormant as though no pubhie

service law had been adopted Constitutional limitations

require the Legislature iself to determine the public

policy as to rates and itself to establish a legislative

Opinion of the Special Statutory Court.

standard to be applied and executed by the delegated

agency. That was what the Legislature did in the Pub-

lic Service Commission Law. It declared a public policy

as to rates and established a standard in the law itself

(section 26). The [*924] commission was created by

the law, not to initiate or establish a public policy or

standard, but to administer and execute that establisived

by the Legislature. Secticn 26 expressly prohibited the

carrier itself from charging or collecting an unreason-

able rate, thereby directly requiring that rates should at

all times be kept reasonable in fact. Section 49 imposes

upon the commission a duty to apply or execute that

mandate of the law

The guaranty of due process of the Fourteenth

Amendment protects the right of a public utility to a

jair return. There ts but one limitation upon the right,

namely, that to has not been contracted away pursuant

to clear and unmistakable legislative authority to sus-

pend the police power over rates. That condition does

not obtain here. As said by Chief Justice White in So.

lowa Il Co. v. Chariton, 255 U.S. 539, 546, 41S. Ct.

400, 402 (05 L. Ed. 704): “And, indeed, the necessity

tor this conclusion becomes doubly manifest when it is

borne in mind that the right here asserted to contract

in derogation of the state law and of the rule of public

policy announced by the court of last resort of the state

is urged by mumeipal corporations whose every power

depends upon the state law.”

We theretore hold that the provisions of the lease in

contract No. 4. “the lessee shall during the term of the

contract be entitled to charge for a single fare upon the

Opinion of the Special Statutory Court.

railroads and existing railroads the sum of 5 cents, but

not more,” was subject to the regulatory law and power

of the Public Service Commission as effectively as

though written in the contract, which means that, when

this fare of 5 cents became unjust and unreasonable, it

was subject to the commission's regulation, This marked

the extreme limit of the power of the parties to contract

as to the tare. When this provision of the contract

hound the plaintiff to a 3-cent fare and the same became

confiseatory, i contravened the express prohibition

against the charging or collecting of unjust and unrea

sonable rates under section 26, and in turn the public

policy which thus inhibited the suspension of the police

power

The complaint, and affidavits in support thereof, show

that for the year ending June 30, 1927, the plaintiff car

ried 1,173,646,256 passengers; of these 359,019,060

were carried by the elevated railroads. During the year

the daily average was about 3,215,469 passengers. The

plaintiff's railway system is divided into the Manhattan

Division and the Subway Division. The total value

(1927) of the property used in the system operated by

the plaintiff is alleged by it to be $898,793,048, of which

$142,894,000 is provided by the Manhattan Railway

Company; $140,579.474 is owned by the plaintiff and

it has provided in addition $272,940,174; $342,380,000

is provided by the city. There is a total, as alleged, of

$556,413,648 of property provided by the plaintiff,

The plaintt? has $35,000,000 par value of common

stock; $162,700,000 refunding mortgage bonds; S44,

331,560 in notes and $2,890,000 in equipment trust

Opinion of the Special Statatory Court.

certificates, which, together with other items, make an

aggregate of its liabilities $403,950,373, which has not

been substantially reduced since June 30, 1927. On that

day, the charges of the plaintiff to its fixed capital, as

defined by the uniform system of accounts, as ruled

by the Public Service Commission, amounted to $4153,-

312,720, which has not been substantially reduced since

then. On January 31, 1928, the Manhattan Railway

Company had outstanding $60,000,000 of common

stock, $40,671,000 in consolidated bonds, $4,523,000 in

second mortgage bonds, and other liabilities of $1,-

851,159, making a total of $107,045,159. At that date

the fixed capital of the company was $112,943,654. The

operation by the plaintiff upon a computation based on

the plaintiff's present value figures of property provided

by the companies, and on the transit commission figures

for the city provided property, shows an actual earned

return of 2.05 per cent. in 1926 and 2.52 per cent. in

1927. The earnings available at the present rate of fare

are $22,622,761.

Using the value of the property thus computed in

1927 at $898,793,048, an 8 per cent. return (McCardle

v. Indianapolis Co., 272 U. S. 419, 47 8. Ct. 144, 71 L.

Ed. 316; Bluefield Water Works & Improvement Co.

vy. Public Service Commission of State of West Vir-

yinia, 262 U.S. 692, 43S. Ct. 675, 67 L. Ed. 1176;

Brush Electric Co. v. Galveston, 262 U.S. 443, 43 5. Ct.

Gi, 07 L. Ed. 1076; Brooklyn Union Gas Co. v.

Prendergast (D. C.), 7 F. (2d) 672, afhrmed 272 VU. S.

S80, 47S. Ct. 199, 71 L. Ed. 421) would require at least

$71.903,492—-which would leave a deficit of $A9,-

280,731. Using this property, the actual return was

Opinion of the Special Matutery Court.

as low as 1.92 per cent. in 1921 and never higher than

2.05 per cent. in 1926. A computation based upon the

present value of the property provided by the plaintiff,

exclusive of city provided property, shows a 3.61 per

cent. return actually earned in 1927; this is reached

upon the assumption that the present value of the com

pany owned and company provided property amounts

to $534,413,048, with a balance of $24,490,775 [*925]

available as a return, leaving a deficit of $24,335,899 in

earnings below an S per cent. return. .\ computation

based alone upon the present value of the company

owned property, exclusive of the city owned property

and company provided property, shows a 4.05 per cent.

return actually earned in 1927

It is argued that, if the plaimutt prevails and there

ts daily confiscation, the city owned property may not

be taken into consideration. The return guaranteed by

the Constitution ts upon the property devoted to public

use. The determination of what rate should be pre

scribed, which wall yield a return that 1s fair and rea

wmable, depends upon the present value of the property

used. (Mtinger v. Brooklyn Umon Gas Co., 272 U. 5

379, 47 S.Ct. 199, 71 LL. ed. 421; State of Missouri

ex rel. pouthwestern Bell Tel. Co. v. Public Service

Comm., 262 U. 3. 276, 43 5. Ct 344, 67 Lo Ed. 981,

31 A. LL R. 807; Willeox v. Consol. Gas Co. 212 U.S

19, 52, 29S. Ct. 192, 53 L. Ed. 382, 48 LR AL (NLS. )

1134, 15 Ann. Cas. 1034, Minnesota Rate Cases, 230

U. S. 352, 33'S. Ct. 729, 57 L. Ed. 1511, 48 LL RL A

(No 5.) DISh. Ann Cas. 1916A, 18 In Willeox

Consol. Gas Co., supra, the court said: “And we concur

with the court below in holding that the value of the

Opinion of the Special Statutory Court.

property is to be determined as of the time when the

inquiry is made regarding the rates. If the property,

which legally enters into the consideration of the ques-

tion of rates, has increased in value since it was ac-

quired, the company is entitled to the benefit of such

increase.”

And im the Minnesota Kate Cases, supra: “The

waking of a just return for the use of the property in-

volves the recognition of its fair value, if it be more

than its cost. The property is held in private owner-

ship, and it as that property, and not the original cost

of it, of which the owner may not be deprived without

due process of law.” Property leased by the operating

company and used in making a return is included in

the valuation. Minn. Rate Cases (C. C.) 184 F. 765,

affirmed 230 U.S. 352, 33.8. Ct. 729, 57 L. Ed. 1511,

48 L. Ro AL (ON. S.) 1151, Ann. Cas. I916A, 18. In

Ba. of Public Utility Com'rs. v. N. Y. Tel. Co., 271

Us. 23. 31, 46 5. Ct. 363, 306 (70 L. Ed. 808), the

court said:

“The just compensation safeguarded to the uulity

by the Fourteenth Amendment is a reasonable return

on the value of the property used at the time that it is

being used for the public service. And rates not sufh-

cent to yield that return are confiscatory. [Citing

cases.) Constitutional protection against confiscation

does not depend on the source of the money used to

purchase the property. lt is enough that it is used to

render the service. * * *”

[he city’s property is carning the return as well as

the plaintifl’s and the plaintifi’s leased railway. All

Opinion of the Special Statutory Court.

must be considered in calculating the capital making

the return and rendering the service.

The denial by the commission of a change of rate ot

fare is a denial of due process of law. The Commis

sion did more than refuse to act. On February 14th,

rejecting the proposed new rates, it instituted imyunc:

tion proceedings to forbid their operation. A forced

continuance of confiscatory rates amounts to a denial

of due process of law. Home Tel. & Tel. Co. v. Los

Angeles, 227 U.S. 278, 33.8. Ct. 312, 57 L. Ed. 510;

Alton Water Co. v. Ul Commerce Comm. (D. C.) 279

F869. Under the present rate of fare, it is established

that upon the investment there would be a continuous

confiscation, and this amounts to taking property with

out due process of law in contravention of the Four-

teenth Amendment to the federal Constitution. Newton

v. Consolidated Gas Co., 258 U.S. 1605, 42 5. Ct. 204,

o6 L. Ed. 538; Oklahoma Operating Co. v. Love, 252

US. 331, 408. Ce. 338, O64 L. Ed. 590; La. Water Co.

v. Public Service Comm,, ete. (DD. C.) 294 F. 954;

Streator Aqueduct Co. vo Snuth, (D. C.) 205 Fk. 385,

Augusta: Aiken Ry. & Electric Corp. vo Ro Ro Comm.

of So. Carolina (C. C. A.) 281 F. 997.) The plain,

having established its claim of confiscation of its prop

erty, is entitled to the myunctive relict it seeks

In conclusion, we take notice of the views expressed

by counsel on the argument, who criticized the plaintufi

for proceeding in the District Court, as said, in an ettort

to defeat the state court of its jurisdiction. This court

takes jurisdiction, not as a matter of discretion o1

comity, but as a matter of duty, and it ts not important

Opinion of the Special Statatory Court.

whether the state court might have heard the case.

There is no discretion or comity. A federal court when

appealed to in protection of constitutional rights over

which it has, by law, jurisdiction, may not avoid as-

suming jurisdiction. Cohens v. Virginia, 6 Wheat. 264,

5 L. Ed. 257. When it properly assumes jurisdiction,

the court may not be spoken of as precipitate in its con-

duct. Because the case is one of local interest only is

entirely immaterial. If the parties are citizens of dif-

ferent states, or there is brought into question consti-

tutional protection, the right of a plaintiff to choose the

federal [*926] court, where there is a choice, cannot

properly be denied. Willcox vy. Consolidated Gas Co.,

212 U. S. 19, 29 S. Ct. 192, 53 L. Ed. 382, 48 L. R. A.

(N.S.) 1134, 15 Ann. Cas. 1034.

Plaintiff did all it could under the state law to obtain

administrative relief and its two applications, even prior

to the present effort to obtain relief were denied, the

claim of the commission being that the contract forbade

its acting im regulation of the rates. This squarely

raised the question of the plaintiff's constitutional right

to protection and this is pressed in the familiar form

of a rate suit and it has established its claim of daily

comhscation

An injunction will issue against the defendants and

their successors, restraining them and each of them,

ther officers, agents, and employees, from in any way

enforcing or attempting to entorce against the plainuft

a rate of fare of 5 cents per passenger for the trans-

portation of passengers upon the rapid transit railroad

lines operated by it or upon it and the Manhattan divi-

Opinion of the Special Statutory Court.

sion and the subway division, or from enforcing or at-

tempting to enforce against the plaintiff orders, direc:

tions, tariff schedules or certificates in so far as they

prohibit or have been or are construed by any of the

defendants or their predecessors, to prohibit the plaintift

from charging for the transportation of passengers on

its railroad lines, a tare per passenger in excess of 5

cents, and the plainttt, until the report of the master

to be appointed to take proofs and the report to this

court, may charge 7 cents per passenger over its rapid

transit railway lines operated by it without interterence

or prohibition by the defendants, their officers, agents,

servants, or employees.

The order will provide that the plainuti shall fle with

the clerk of this court a good and sufhcient bond, in a

sum to be approved by this court, conditioned upon the

prompt payment to the defendants, of all costs and dam

ages which may be incurred or sutfered by any party to

this suit who may be found to have been wrongtully

enjoined or restrained hereby, and further conditioned

so that, in the event that this preliminary injunction

order shall be hereatter dissolved, the plainuti wall

repay to its several passengers atiected thereby, with

interest, in such manner and to such extent as the court

may direct, any sums pard by them for transportation

furnished by the plaintiff trom the date of the entry

of the order and pending the suit in excess of the sums

now chargeable to them of 5 cents per passenger. A

master will be appomted to take proots and report to

this court

Ii the detendants feel aggrieved, and wish to appeal

from the order to be entered herein, a stay will be

Opinion of the Special Statutory Court.

Decree.

granted upon condition that a bond of the city in a

sufficient sum be furnished indemnifying the plaintiff

against further daily confiscation of its property, or if

it be otherwise advised, and the defendants wish to

apply to the Supreme Court for a stay of the order to

be entered until that court hears the appeal, a stay for

a reasonable time will be granted to enable the defend-

ants to make such application to the Supreme Court.

Knox and Bonpy, District Judges, concur.

DECREE.

Per Curtam, ‘This cause came on to be heard under

an order to show cause granted February 28, 1928, upon

the application of the plaintiff, and was argued by coun-

sel, and thereupon, upon consideration thereof, and the

opinion of the court having been filed herein on May 2,

1928, and it appearing to this court that the present maxi-

mum rate of fare of 5 cents per passenger upon the rapid

transit railroad lines operated by the plaintiff, and upon

each the Manhattan division and the subway division

thereof, has been, and now is, and will continue to be,

insufficient to yield a reasonable compensation for the

service rendered and to provide a fair return upon the

fair and reasonable value of the property used by the

plaintiff in the public service, and unjust, unreasonable

and confiscatory of the property used by the plaintiff in

the public service, and will inflict a continuing daily con-

hscation of its property, against which the plaintiff is

entitled to be protected or indemnified, during the pend-

Decree.

eney of this suit; that the enforcement of such maximum

fare of 5 cents and of the legislative acts or acts legisla-

tive in character of the state of New York imposing or

requiring the observance of such rate of fare, contravene

the guaranties of the Fourteenth Amendment of the Con-

stitution of the United States; that the enforcement or

the attempting of the enforcement in any way against

the plaintiff of a rate of fare of 5 cents per passenger

for the transportation of passengers upon the rapid tran-

sit railroad lines operated by it, or upon each the Man-

hattan division and the subway division thereof, or the

enforcement or the attempting of the enforcement against

the plaintiff of legislative acts of the state [%927] of

New York, and particularly the provisions of the Public

Service Commission Law (chapter 429 of the Laws o1

1907, made chapter 48 of the Consolidated Laws by

chapter 480 of the Laws of 1910, as amended and sup-

plemented ), chapter 743 of the Laws of 1894, the Rapid

Transit Act (chapter 4 of the Laws of IS91], as amended

and supplemented}, and the Railroad Law (chapter 481

of the Laws of 1910, as amended and supplemented } .

of orders or directions of the Transit Commission and. or

the Public Service Commission for the First District of

the state of New York; of the tariff schedules published

and filed by the plaintiff, of the contracts Nos. 1, 2 and

3, dated respectively February 21, 1900, July 21, 1902,

and March 19, 1913, and their modifications, and, or ot

the certificates for clevated extensions and third-tracking,

dated March 19, 1913, m so far as the sand statutes,

orders, directions, schedules, contracts, and/or certifi

cates, or any of them, prohibit, or have been or are con

strued by any of the detendants or their predecessors

Decree,

to prohibit, the plaintiff from charging for the transpor-

tation of passengers on the rapid transit railroad lines

operated by it, or on any thereof, a fare per passenger in

excess of 5 cents, will result in immediate, continuing

and irreparable loss and damage to the plaintiff unless a

preliminary injunction is granted herein, as hereinafter

set forth:

It is ordered, adjudged, and decreed as tollows :

Kirst. Pending the final decree in this action, and until

the further order of this court, the defendants John F.

Gilchrist, Leon G. Godley, and Charles G. Lockwood,

constituting the transit commission, the same being the

Metropolitan division of the department of public service

of the state of New York, and the defendant the city of

New York, and their successors, and each of them, and

their privies, and each of their respective officers, agents,

counsel, servants, and employees, and any and every per-

son acting or attempting to act under and by virtue of

the authority of the acts of the Legislature of the state

of New York, the orders or directions of the said transit

commission or its predecessors, the tariff schedules filed

by the plaintiff with the said transit commission or its

predecessors, the contracts Nos. 1, 2, and 3, dated respec-

tively February 21, 1900, July 21, 1902, and March 19,

1913, with their respective modifications, or the certifi-

cates for elevated extensions and third tracking, dated

March 19, 1913, or of any of them, or of any other pro-

vision of statute of the state of New York, be and are

hereby enjoined and restrained—+

(1) From in anv way enforeing or attempting to en-

force, against the plaintiff, a rate of fare of 5 cents per

Decree.

passenger for the transportation of passengers upon the

rapid transit railroad lines operated by it, or upon each

the Manhattan division and the subway division thereof.

(2) From in any way enforcing, or attempting to

enforce, against the plaintiff, the provisions of the said

acts, orders, contracts, tariff schedules, or certificates,

in so far as they prohibit, or have been, or are construed

by any of the detendants or their predecessors, to prevent

the plaintiff from charging for the transportation of

jMissengers on its rapid transit railroad lines, or upon

cach the Manhattan division and the subway division

thereof, a fare per passenger in excess of 3 cents.

(3) From bringing and,or prosecuting any suit, ac-

ton or proceeding to enforce any penalties or forfeitures,

under the said Public Service Commission Law, the said

Railroad Law, the said Rapid Transit Act, chapter 743

of the Laws of 18¥4, or any other law, the said orders

or chrections, the said contracts Nos. i. -_ and 3, or the

said elevated railroad certincates, against the plant,

or by mandamus, injunction, summary proceeding, or

otherwise tu compel compliance by the plauntitf with the

provisions of the said acts, orders, tariff schedules, con

tracts, or certiheates, or any of them, in so tar as they,

or any of them, unpose a maximum rate of fare of 5

cents per passenger, or prohibit the plaintitt from charg

ing a rate of fare of 7 cents jer pAissehiger, of any rate

in excess of 5 cents per passenger, upon the said rapid

transit railroads or upom cach the Manhattan division

and the subway division

(4) From doing any act or thing interfering with

the right or authority of the plaintut forthwith to charge

ASR DEY ; s —

Decree.

or receive for the transportation of passengers by it,

upon the said rapid transit railroad lines, or upon each

the Manhattan division and the subway division, a rate

of fare of 7 cents per passenger.

Second, This injunction is granted, and will be con-

tinued, upon condition that, pending final decree in this

action or until the further order of this court—

(a) The plaintiff shall, from and after the entry of

this decree, except as hereinafter provided, charge and

collect a rate of fare of 7 cents per passenger upon the

rapid transit railroads operated by it, as shown by

[*928] its tariff schedules on file with the Transit Com-

mission and posted in its several stations, and shall issue

to each passenger paying such fare a refund ticket for

each fare paid, such refund ticket to read and be con-

ditioned as hereinafter provided.

(b) Within tive days after the entry of this order,

the plaintiff shall file with the clerk of this court, in form

and tenor first approved by one of the judges of this

court a good and sufficient bond or bonds of a surety com-

pany or companies, in the sum of five million dollars

($5,000,000), conditioned upon the prompt payment by

the plaintiff to the defendants, upon the direction of the

court, of all costs and damages which may be incurred

or suffered by any of them, respectively, who may be

found to have been wrongfully enjoined or restrained

hereby, and further conditioned so that, in the event that

this preliminary mjunction order shall hereafter be dis:

selved, and it shall be finally decided that the plaintutt

was and is not entitled to relict in this action, the plain-

tiff shall promptly repay to its several passengers affected

Decree.

thereby, to such extent as the court may direct and in

the manner hereinafter provided, and/or as the court may

further provide and direct, any sums paid by such pas-

senger for transportation upon the rapid transit lines

operated by the plaintiff, pending the final determénation

and decree in this suit, in excess of the sums now charge-

able to them at the rate of 5 cents per passenger; any

such repayments to passengers to carry and include in-

terest upon such excess sums from and after the 16th

day of the month in which any such fares in excess of 5

cents were paid by any such passenger.

ce) As and when the excess of the amount collected

by the plaintiff over the rate of 5 cents per passenger

shall aggregate the said sum of the bond or bonds so

given by the plaintiff, the plaintiff shall furnish and hile

a similar bond or bonds in a like sum and upon the same

approval and conditions, or in such sum and/or upon

such conditions as the court by further order, upon its

own motion or the application of any party hereto upon

notice, may direct

(d) During the pendency of this action, the plamnttt

shall cause to be placed and kept posted on its bulletin

board or other conspicuous place, in each of its subway

and elevated stations, and in or near all places where

cupies of its tariff schedules are posted, a notice in plain

and conspicuous type and color, in substantially the fol-

lowing form:

“Keep Your Refund Tickets In Order to Protect

Your Rights

“Pursuant to the order entered by the Umited States

District Court for the Southern District of New York

_—

Decree.

on May—, 1928, the Interborough Rapid Transit Com-

| pany has been authorized to charge and collect a fare of

7 cents per passenger, pending final decree in the action

brought by {he company to enjoin the 5-cent rate as con-

fiscatory. The amounts collected by this company in

excess of five (5) cents per passenger will be subject to

the further direction of the court.

“Refund will be made as so directed, if it shall be

finally decided that the company was and is not entitled

to charge and collect a fare of more than 5 cents per

passenger. The company has tiled a bond to insure such

repayment to its patrons. |

“Each passenger, upon paying his fare, will therefore

receive a refund ticket for the excess over 5 cents. These

tickets should be carefully preserved, as they will evidence

the passenger's right to receive repaymnt of such sums

as may be directed by the court, pursuant to the said

order, in the event the said action is finally decided

against the company.

“For a copy of the said order and further information

as to the rates of this company and the regulations ap-

plicable thereto you may examine the copy of its tariff

schedule, on file with each of its ticket agents and in the

offices of the transit commission at No, 270 Madison

Avenue, Borough of Manhattan, New York City.

“Frank Hedley,

“President Interboreugh Rapid Transit

Company.”

The plaintiff shall cause a copy of this order to be filed

and kept with and as a part of its tariff schedule, during

Decree.

the continuance of this preliminary injunction, in all sta-

tions, offices, and places where its said tariff schedule is

now posted or filed.

(e) During the pendency of this action, the plaintiff

shall cause to be placed, in red ink or other distinctive

color or colors, conspicuously on one side of each such

refund ticket issued by it to its passengers at a rate of

fare in excess of 5 cents per passenger, the figure and

word “7 cents” and the words:

“Keep This Slip to Protect Your Rights.”

And on the reverse side of each such refund ticket the

plaintiff shall cause to be [*929] printed a notice in sub-

stantially the following form:

“If it is finally determined that this company is not

entitled to charge more than five cents per passenger,

refund upon this ticket will be made as directed by the

order of the United States District Court.”

(f) If the plaintitf shall, for the convenient opera-

tion of its said rapid transit lines at the said rate of fare

of 7 cents per passenger during the pendency of this suit.

issue and sell any tokens or other evidence of the right

of a purchaser to a single and continuous ride upon the

said lines as in the said tariff schedules provided, any

such token or evidence of the right of the purchaser to

such transportation shall be so accepted for such trans

portation only during the continuance of the seven-cent

fare granted by this preliminary injunction, but shall

be redeemed by the company in cash, at any of its said

stations, at any time upon the request of the holder there

of, upon the presentation of the same and of a like num

Decree.

ber of refund tickets, irrespective of whether this order

is or is not in effect at the time of such presentation for

redemption; other reasonable rules and regulations perti-

nent to any such tokens and refund tickets and not incon-

sistent with this order may be established as a part of the

tariff schedules of the plaintiff.

(g) The plaintiff shall bring this cause to trial and to

final decree with all convenient speed.

Third. During the pendency of this suit, the plaintiff

shall file, on the 16th day of the month following and on

the 16th day of each and every month thereafter, in the

office of the clerk of this court, a statement verified by

its president, vice president, comptroller, secretary, or

other authorized officer, showing the amounts charged

and collected by it during the preceding calendar month,

from passengers on the rapid transit railroads operated

by it. in excess of a rate of fare of 5 cents per passenger ;

such verified statement also to certify that the sum so

shown is all that has been so charged and collected during

such preceding calendar month.

Fourth. (1) Hon. John Proctor Clarke is hereby ap-

pointed special master to take the testimony and evidence

upon the issues herein, make all needed computations and

fully hear the facts, and to report to the court his find-

ings of fact and conclusions of law, together with the

evidence, for the advisement of the court: Provided that

nothing herein contained shall be construed as meaning

that the special master’s findings of fact shall be final, but

only that he shall find the facts for the purpose of aiding

the court and making his recommendations. The said

master shall, before submitting to the court his final re-

Decree.

port, and in accordance with the practice in this court,

prepare and serve on the solicitors for the respective

parties hereto a draft of such report.

(2) The said special master shall hold a session on

May —, 1928, at 10.30 o'clock in the forenoon, at a place

to be determined and announced by him, for the purpose

of fixing at that time the date when he will proceed to the

hearing of the testimony and evidence in this cause.

After the master shall have entered upon said hearing,

he shall proceed as speedily as practicable.

(3) The said master shall report to the court, at the

earliest practicable date, all the testimony and evidence

received by him, together with his findings of fact and

his recommendations as to the facts and the law.

Fifth. At any time while the preliminary injunction

hereinbefore granted remains in force, any party hereto,

or his or its successors or assigns, may apply, upon notice,

to vacate, modify, or change the terms of this order, be-

cause of any change of circumstances since the entry

hereof, or for any additional relief to which he or it may

deem himself or itself entitled by reason of any acts oF

events occurring after the entry of this order.

Sixth. (1) [f an appeal from this order ts taken by

the defendants, or any of them, to the Supreme Court o:

the United States, then, upon condition that, on or before

May 28, 1928, a gu! and suffictent bond or bonds of the

city of New York and/or other responsible corporation

be filed by or in behalf of the defendants or any of them,

in the sum of $5,000,000 and in a form and tenor to be

approved by one of the judges thereof, conditioned tor

siete

Decree.

the indemnifying of the plaintiff against further daily

confiscation of its property during the pendency of such

appeal, a stay of the taking effect and operation of this

injunction and of each of the various provisions of para-

graph “Second” of this order, until the hearing and

determination of such appeal, is hereby granted, and if

it shall appear at any time before an appeal is heard and

determined that such bond is inadequate protection, an

application will be entertained for further indemnity.

(2) The defendants having given notice of intention

to appeal from this order and having applied to one of the

Justices of the [*930] Supreme Court of the United

States for a stay of the taking effect of this order, when

entered, until that court hears and determines such ap-

peal, and May 14, 1928, having been appointed by the

Supreme Court when such application by the defendants

for such a stay may be heard, it is hereby ordered that a

stay of the taking effect of this injunction and of the

several provisions of paragraph “Second” of this order

is hereby granted to the defendants, until the hearing and

determination by the Supreme Court of such application

for a stay pending appeal from this order.

(3) The stay granted to the defendants by subdivision

(2) of this paragraph is granted, and shall continue in

joree, only upon condition that the defendants, and each

of them, shall make their application to the Supreme

Court for a stay so that the same may be heard by the

full court on Monday, May 14, 1928, or such other days

as appointed by the court, and shall seasonably submit all

papers in suppert of such application within the times

allowed by the court; and the stay granted to the defend-

“7

Decree.

ants by subdivision (1) of this paragraph shall be in

effect only upon condition that the defendants, and each

of them, appealing from this order, shall perfect and

prosecute any such appeal and print and file the tran-

script of record and all necessary papers to that end,

promptly and without unreasonable delay, and shall, with

all convenient speed thereafter, serve a notice of applica-

tion to the Supreme Court to advance the said appeal for

early hearing upon the calendar of the said court.

Provision of Constitution of the State of New York

as to Consents for Construction or Operation

of Street Railroads.

ARTICLE IIL.

$18. Cases IN WHICH PRIVATE OR LOCAL BILLS

SHALL NOT BE PASSED.

GENERAL LAWS TO PROVIDE FOR ENUMERATED CASES.

RESTRICTIONS ON LAWS GOVERNING STREET RAIL-

ROADS.

* . ” . * *

But no law shall authorize the construction or opera-

tion of a street railroad except upon the condition that

the consent of the owners of one-half in value of the

property bounded on, and the consent also of the local

authorities having the control of, that portion of a street

or highway upon which it is proposed to construct or

operate such railroad be first obtained, or in case the

consent of such property owners cannot be obtained, the

Appellate Division of the Supreme Court, in the depart-

ment in which it is proposed to be constructed, may, upon

application, appoint three commissioners who shall deter-

mine, after a hearing of all parties interested, whether

such railroad ought to be constructed or operated, and

their determination, confirmed by the court, may be

taken in lieu of the consent of the property owners.

(Amendment of 1874, in effect January 1, 1875;

amended in 1901.)

Public Service Commissions Law of the State of

New York.

LAWS OF 1907, CHAPTER 429.

Pertinent sections shown are as of March 19, 1913, the

time of making Contract No. 3 (except as otherwise

indicated), together with notes showing, where ma-

terial, the amendments, if any, before and after that

date.

ARTICLE I.

Pustic Service COMMISSIONS; GENERAL PROVISIONS.

§ 2. Derinitions.

5. The term “street railroad,” when used in this chap

ter, includes every railroad by whatsoever power oper

ated, or any extension or extensions, branch or branches

thereof, for public use in the conveyance of persons or

property for compensation, being mainly upon, along,

above or below any street, avenue, road, highway, bridge

or public place in any city, village or town, and including

all equipment, switches, spurs, tracks, ryght of trackage,

subways, tunnels, stations, terminals and terminal facili”

ties of every kind used, operated or owned by or m con

nection with any such street ratiroad; but the said term

“street railroad.” when used in this chapter, shali not

include a railroad constituting of used as part of a trun

line railroad system

6 The term “railroad,” when used in this chapter,

includes every ratiroad. other than a strect railroad, by

Public Service Commissions Law—Section 2 (subds. 6, 7, 6 and 9).

whatsoever power operated for public use in the convey-

ance of persons or property for compensation, with all

bridges, ferries, tunnels, equipment, switches, spurs,

tracks, stations and terminal facilities of every kind used,

operated or owned by or in connection with any such

railroad.

7. The term “street railroad corporation,” when used

in this chapter, includes every corporation, company, as-

sociation, joint-stock association, partnership and person,

their lessees, trustees or receivers appointed by any court

whatsoever, owning, operating or managing any street

railroad or any cars or other equipment used thereon or

in connection therewith.

8. The term “railroad corporation,” when used in this

chapter, includes every corporation, company, associa-

tion, joint-stock association, partnership and person, their

lessees, trustees or receivers appointed by any court what-

soever, owning, operating or managing any railroad or

any cars or other equipment used thereon or in connec-

tion therewith.

Y The term “common carrier,” when used in this

chapter, includes all railroad corporations, street railroad

corporations, express companies, car companies, sleeping-

car companies, freight companies, freight-line companies,

and every corporation, company, association, joint-stock

association, partnership and person, their lessees, trus-

tees or receivers appointed by any court whatsoever, own-

ing, operating or managing any such agency for public

use in the conveyance of persons or property within this

state: but the said term common carrier, when used in

this chapter, shall not include an express company unless

Public Service Commissions Leaw—Sections 3 and 4.

the same is operated wholly or in part upon, or in con-

nection with a railroad or street railroad,

§3. Pusiic service pistricts. There are hereby

created two public service districts, to be known as the

first district and the second district. The first district

shall include the counties of New York, Kings, Queens

and Richmond. The second district shall include all

other counties of the state.

Phis section (3) was repealed by Chapter 134 of the Laws of

iv@i. Prior to its repeal it was amended by the addition of the

word “Bronx,” added by Chapter 422, Laws of 1916

§ 4. Pusric servick COMMISSIONS ESTABLISHED, AP-

POINTMENT; REMOVAL; TERMS OF OFFICE. There shall

be a public service commission for each district. and each

commission shall possess the powers and dutics herein

after specified, and also all powers necessary or proper

to enable it to carry out the purposes of this chapter.

The commission of the first district shall consist of five

members, and the commission of the second district shall

consist of five members, to be appointed by the governor.

by and with the advice and consent of the senate, one ot

whom designated by the governor shall, during his term

of office, be the chairman of the commission of which he

is amember. Each commissioner shall be a resident of

the district for which he is appointed. * * *

By Chapter 263 of the Laws of 1919 the Commission for the

First District was reduced to one member

By ——— 134, Laws of 1921, the above portion of Section 4

eas by restricting the Public Service Commnussion estab-

lished to a single body of five commissioners and by eliminating

the requirement as to residence. By the same act a new section,

4-a, was added, the pertinent part of which reads as follows

“§4-a TRANSIT COMMISSION, ESTABLISHED, APPOINTMENT;

team; wewovar. There shall be a transit commussion for cities

Pablic Service Commissions Law—Section 5 (subds. 1 and 2).

containing a population of more than one million inhabitants,

according to the last preceding federal census or state enumera-

tion, which shall possess the powers and duties hereinafter speci-

fied, and also all powers necessary or proper to enable it to carry

out the purposes of this chapter. The commission shall consist

of three members to be appointed by the governor, by and with

the advice and consent of the senate, for terms of five years from

the date of appointment. A member of the commission desig-

nated by the governor shall, during his term of office, be the

chairman of the commission. * * *’

$5. Jurispicrion oF comMissions. 1. The juris-

diction, supervision, powers and duties of the public serv-

ice commission in the first district shall extend under this

chapter :

a. To railroads and street railroads lying exclusively

within that district, and to the persons or corporations

owning, leasing or operating the same.

Repealed. 2. And in addition thereto the Commis-

sion in the First District shall have and exercise all pow-

ers heretofore conferred upon the Board of Rapid Tran-

sit Railroad Commissioners under Chapter 4 of the Laws

of 1891, entitled “an Act to provide for rapid transit rail-

ways in cities of over one million inhabitants,” and the

Acts amendatory thereof, together with such other and

necessary powers as may be requisite to the efficient per-

formance of the duties imposed upon said board by said

Act.

This entire subdivision was repealed by Chapter 520 of the

Laws of 1919. ais ms

By Chapter 134, Laws of 1921, a new section, 5-a, was added,

reading as follows:

“§ S-a. JURISDICTION OF TRANSIT COMMISSION. The jurisdic-

tion, supervision, powers and duties of the transit commission

shall extend under this chapter:

“1. To railroads, street railroads and stage or omnibus lines

or routes lying exclusively within a city containing a population

of over one million inhabitants according to the last preceding

federal census or state enumeration ; and to the persons or corpo-

rations owning, leasing or operating the same;

Pablic Service Commissions Law—Section 22.

“2. To street railroads and stage or omnibus lines or routes,

any portion of which lies within such city, to all transportation

of persons or property thereon within such city or between a

point within such city and a point within the state outside the

territorial limits of such city, to the persons or corporations own-

ing, leasing or operating the said street railroads or stage or omm-

bus lines or routes; provided, however, that the public service

commission shall have jurisdiction over the operation of the lines

of said street railroad or stage or ommibus lines or routes as lies

within the state outside the territorial limits of such city, and

over the persons or corporations owning, operating or leasing

the same, so far as concerns the construction, maintenance, sta-

tionary equipment, terminal facilities, stations and local trans-

—, facilities of said street railroads or stage or omnibus

ines or routes within the state outside the territorial limits of

such city.”

§ 22. REHEARING BEFORE COMMISSION, After an

order has been made by a commission any corporation

or person interested therein shall have the right to apply

for a rehearing in respect to any matter determined

therein, and the commission shall grant and hold such

a rehearing if in its judgment sufficient reason therefor

be made to appear; if a rehearing shall be granted, the

same shall be determined by the commission within

thirty days after the same shall be finally gubmitted, An

application for such a rehearing shall not excuse any

corporation or person from complying with or obeying

any order or any requirement of any order of the com

mission, or Operate in any manner to stay or postpone

the enforcement thereof except as the commission may

by order direct. Li, after such rehearing and a con

sideration of the facts, including those arising since the

making of the order, the commission shall be of opinion

that the original order or any part thercof is in any

respect unjust or unwarranted, or should be changed,

the commission may abrogate or change the same. An

order made after any such rehearing abrogating or

Public Service Commissions Law—Sections 22, 25 and 26.

changing the original order shall have the same force

and effect as an original order, but shall not affect any

right or the enforcement of any right arising from or

by virtue of the original order.

ARTICLE 2.

PROVISIONS RELATING TO RAILROADS, STREET RalIL-

ROADS AND COMMON CARRIERS.

§ 25. APPLICATION OF ARTICLE. The provisions of

this article shall apply to the transportation of passen-

gers or property from one point to another within the

state of New York, and to any common carrier perform-

ing such service.

§ 26. SAFE AND ADEQUATE SERVICE; JUST AND REA-

SONABLE CHARGES. Every corporation, person or com-

mon carrier performing a service designated in the pre-

ceding section, shall furnish, with respect thereto, such

service and facilities as shall be safe and adequate and

in all respects just and reasonable. All charges made or

demanded by any such corporation, person or common

carrier for the transportation of passengers or property

or for any service rendered or to be rendered in con-

nection therewith, as defined in section two of this chap-

ter, shall be just and reasonable and not more than

allowed by law or by order of the commission having

jurisdiction and made as authorized by this chapter.

Every unjust or unreasonable charge made or demanded

Public Service Commissions Law—Scctions 26 and 28.

for any such service or transportation of passengers

or property or in connection therewith or in excess of

that allowed by law or by order of the commission is

prohibited.

§ 28. Tarirr SCHEDULES; PUBLICATION. Every com-

mon carrier shall file with the commission having juris-

diction and shall print and keep open to public inspec-

tion schedules showing the rates, fares and charges for

the transportation of passengers and property within

the state between each point upon its route and all other

points thereon; and between each point upon its route

and all points upon every route leased, operated or con-

trolled by it; and between each point on its route or

upon any route leased, operated or controlled by it and

all points upon the route of any other common carrier,

whenever a through route and joint rate shall have been

established or ordered between any two such points.

If no joint rate over a through route has been estab-

lished, the several carriers in such through route shall

file, print and keep open to public inspection, as afore-

said, the separately established rates, fares and charges

applied to the through transportation. The schedules

printed as aforesaid shall plainly state the places be-

tween which property and passengers will be carried,

and shall also contain the classification of passengers or

property im force, and shall also state separately all

terminal charges, storage charges, icing charges, and

all other charges which the commission may require to

be stated, all privileges or facilities granted or allowed,

and any rules or regulations which may in anywise

change, affect or determine any part, or the aggregate

of, such aforesaid rates, fares and charges, or the value

Public Service Commissions Law—Section 28.

of the service rendered to the passenger, shipper or

consignee. Such schedules shall be plainly printed in

large type, and a copy thereof shall be kept by every

such carrier readily accessible to and for convenient

inspection by the public in every station or office of such

carrier where passengers or property are respectively

received for transportation, when such station or office

is in charge of an agent, and in every station or office

of such carrier where passenger tickets for transporta-

tion or tickets covering sleeping or parlor car or other

train accommodation are sold or bills of lading or re-

ceipts for property are issued. All or any of such sched-

ules kept as aforesaid shall be immediately produced by

such carrier for inspection upon the demand of any

person. A notice printed in bold type and stating that

such schedules are on file with the agent and open to

inspection by any person and that the agent will assist

any such person to determine from such schedules any

transportation rates or fares or rules or regulations

which are in force shall be kept posted by the carrier in

two public and conspicuous places in every such station

or office. The form of every such schedule shall be

prescribed by the commission and shall conform in the

case of railroad corporations as nearly as may be to

the form of schedule required by the interstate com-

merce commission under the act of congress entitled

“An act to regulate commerce,” approved February

fourth, eighteen hundred and eighty-seven and the

acts amendatory thereof and supplementary thereto.

Where any similar schedule is required by law to be

filed with both commissions they shall agree upon an

identical form for such schedule. The commission

SOP TERE TEST TRA ES

“a

Public Service Commissions Law—Sections 28 and 28.

shall have power, from time to time, in its discretion,

to determine and prescribe by order such changes in

the form of such schedules as may be found expedient,

and to modify the requirements of this section in respect

to publishing, posting and filing of schedules either in

particular instances or by general order applicable to

| special or peculiar circumstances or conditions

$29. CHANGES IN SCHEDULE, NOTICE REQUIRED.

Unless the comm:iussion otherwise orders no change shall

be made in any rate, fare or charge, or joint rate, fare

or charge, which shall have been filed and published

by a common carrer in comphance with the require

ments of this chapter, except after thirty days’ notice

to the commission and publication for thirty days as

required by section twenty-eight of this chapter, which

shall plainly state the changes proposed to be made im

the schedule then in force, and the tme when the

changed rate, fare or charge will go into effect, and all

proposed changes shall be shown by printing, fling and

publishing new schedules or shall be plainly imdicated

upon the schedules m force at the time and kept open

to public inspection. The commission, for good catuse

shown, may allow changes in rates without requiring

the thirty days’ notice and publication herem srovided

for, by duly filing and publishing in such manner as

it may direct an order specifying the change so made

and the time when ut shall take effect. all such changes

shall be imunedtately indicated upon its schedules by

the common carrer

Public Service Commissions Law—Section 28.

by Chapter 240 of the Laws of 1914 the section was amended

by adding thereto at the end the following sentences:

“Whenever there shall be filed with the commission by any

common carrier as detined in this act any schedule stating a new

individual or joint rate, fare or charge, or any new individual or

joint classification, or any new mdividual or joint regulation or

practice affecting any rate, fare or charge, the commission shall

have and it is hereby given authority, either upon complaint or

upon its Own imtiative withcat complaint, at once, and if it so

orders without answer or other formal pleading by the interested

earner or carners, but upon reasonable notice, to enter upon a

hearing concerning the propriety of such rate, charge, fare, classi-

fication, regulation or practice; and pending such hearing and

decision thereon, the commission upon filing with such schedule,

and delivering to the carrier or carners affected thereby, a state-

ment i writing of ats reasons for such suspension, may suspend

the operation of such schedule and defer the us¢ of such rate,

fare, charge, classification, regulation or practice, but not for

longer period than one hundred and twenty days beyond the

wme when such rate, fare, charge, classification, regulation or

practice would otherwise go into effect, and after full hearing

whether completed before or after the rate, fare, charge, classi-

heation, regulation or practice goes into effect, the commission

may make such order in reference to such rate, fare, charge,

classificafon, regulation or practice, as would be proper in a

proceeding mutiated after the rate, fare, charge, classification,

egulation or practice had become effective. Provided, that if any

such hearing cannot be concluded within the period of suspension,

as above stated, the commission may, in its discretion, extend the

tame of suspension for a further period not exceeding six months.

At any hearing imvoling a rate mereased after the first day of

lenuers. 1924. or of @ rate sought to be mereased after this sec-

yor as amended takes effect, the burden of proof to show that

he oncrease an rate or proposed merease m rate 1s just and rea-

wonalle shall be upon the common carner, and the Commission

may give to the hearmg an I deetsron of such questions preference

over all other questions pending before st and decide the same

speedily as prrssible

rapter 134 of the Laws of 1921 the section was further

unended tw adding a sentence mmmediately preceding the last

ventence added by the Act of 1914, reading as follows: “The

commmesion may as authorized by subdivision one of section

forty mine establish temporary tates for any penod of suspension

winder this section

jhe same Act of 1921 changed the last sentence added by the

Act of VOT) so as te make the same read as follows: “At any

bearing mvolvimg a rate the burden of proof to show that the

Public Service Commissions Law—Section 33 (sabd. 1).

change in rate if proposed by the common carrier, or that the

existing rate, if on motion of the commission or in a complaint

filed with the commussion it is proposed to reduce the rate, ts

just and reasonable shall be upon the common carrier; and the

commission may give to the hearmg and decision of such ques-

tions preference over all other questions pending before it and

decide the same as speedily as possible ”

$33. TRANSPORTATION PROMIBITED UNTIL PUBLICA

TION OF SCHEDULES; KATES AS FINED TO BE CHARGED,

PASSES PRotBITED, 1. No common carrier subject to

the provision of this chapter shall after the first day ot

November, ninetcen hundred and seven, engage or par

ticipate in the transportation of passengers or property,

hetween points within the state, until its schedules of

rates, fares and charges shall have been filed and pub

lished im accordance with the provisions of this chapter

No comuneon carner shall charge. demand, collect or re

ceive a greater or less or different compensation for

tratisportation Of passengers or property, of for anys

service in connection therewith, than the rates, fares and

charges applicable to such transportation as specified in

its schedules filed and in effect at the time, nor shall any

such carrier refund or remit in any manner or by any

device any portion of the rates, fares, or charges so

speciiied, nor extend to any shipper or person any privi

leges or facilities in the transportation of passengers or

property except such as are regularly and uniformly

extended to all persons and corporations under like

circumstargpces

LE LOLRA LAELLIL LER LO EAI ORE RS SR Pe tLe! Oe es cee oe uae oe Lk, aE

Public Service Commissions Law—Section 49 (subd. 1).

ARTICLE 3.

PROVISIONS RELATING TO THE POWERS OF THE Com-

MISSIONS IN ReEspeEcT TO COMMON CARRIERS,

RAILROADS AND STREET RAILROADS.

$49. RATES AND SERVICE TO BE FIXED BY THE COM-

“uission. 1. Whenever either commission shall be of

opinion, after a hearing had upon its own motion or

upon a complaint, that the rates, fares or charges de-

manded, exacted, charged or collected by any common

carrier, railroad corporation or street railroad corpora-

tion subject to its jurisdiction for the transportation of

persons or property within the state, or that the regula-

tons or practices of such common carrier, railroad cor

poration or street railroad corporation affecting such

rates are unjust, unreasonable, unjustly discriminatory

or unduly preferential, or in anywise in violation of any

provision of law, or that the maximum rates, fares or

charges, chargeable by any such common carner, rail

road or street railroad corporation are insufficient to

vield reasonable compensation 101 the service rendered,

and are unjust and unreasonable, the commission shall

with due regard among other things to a reasonable aver

age return upon the value of the property actually used

ine the putea service and to the necessity ol making

reservation out of income tor surplus and contingen

cies, determine the just and reasonable rates, fares and

charges to be thereafter obse: ved and in force as the

maxim te be charged tor the service to be performed.

notwithstanding that a higher rate, fare or charge has

been heretofore authorized by statute, and shall fix the

same bv order to be served upon all common carriers,

_—_— a i ee wn ea 1 ci Se NEEL EIEIO ee

Public Service Commissions Law—Sectiona 40 (sabd. 1).

railroad corporations or street railroad corporations by

whom such rates, fares and charges are thereatter to

he observed.

As orgomally enacted by Chapter azy, Laws of 1907, this

section gave the commission power to fix and determine just

and reasonable rates, fares and charges of any common carne:

railroad corporation or street’ railroad corporation when ut

appeared, or was made to appear that such fates were “unjust,

unreasonable, unjpustiy discrumimatory of unjust'y preferential of

in anywise im viclation of any provision of law

In the comselidation of 1410, Chapter 480, Laws of I¥lu,

the section was amended by the insertion of a clause permitting

the commissson's power of regulation over rates to be exercised

where it appeared that “the maxmnum rates, tates or charges

chargeable by any such common carrer, ratiroad or street rail

road corporation are mouffiorent to yield reasonable compen

sateen for the service rendered and arc unyust and unreasonable,”

and “notwithstanding that a haeher rate, fare of charge had been

heretofore authorised by statute [he same act also added a

lauer specifying that the cugutgissies > determination ay to what

1 | feasonable rate should be made “with duc regard, amony

wther things, to a reasonable return upon capital actually expended

armed ta the mececesits for m ak ng te ervatnets cart of mcame tor

SUEY tts and comtimiwpencies

By Chagmer S46 of the Laws of 19121. the subdivision wap

aiperdied to read in the farm shown above

Phere were subsequent amencdinents in Tel) bw Chayacr 144

ter 89; As comteuteed cn the 1924 aneeecimeent the sulbdivtston a

the law as tt statds today In the following reprint the bods

of thee text so the sculsdrvisse: as ct was after the scoond armend

ment of 1921. the claus added by the 1997 amendment is

umdertioed the wmngie word added by the 1985 amendment a

ss. while the matics ‘rx ac out by that amend

witho [hea kets

“) Whenever either commission shall be of opinion,

after a hearing had upon ite own tetion or upen a com

plaint, that the rates, fares or charges demanded. exacted,

charged or colleete! by any commen carrier, railroad

corporation of street railroad corporation sulject to its

TGA ETT TELE MERIT etal aig PNR UAE Ge BE TT SIM —

Public Service Commissions Law—Section 40 (subd. 1).

jurisdiction for the transportation of persons or property

within the state, or that the regulations or practices of

such common carrier, railroad corporation or street rail.

road corporation affecting such rates are unjust, uprea-

sonable, unjustly discriminatory or unduly preferential,

or in anywise in vielation of any provision of law, or that

the maximum rates, fares or charges, chargeable by an)

such common carrier, railroad or street railroad corpora:

tion are insufficreat to vield reasonable compensation for

the service rendered, and are unjust and unreasonable,

the commission shall with due regard among other things

to the estimated prospective earning capacity of such

property at the rate of fare at the time fixed and existent

and to a reasonable averuge 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 reasonabe rates,

fares and charges to be thereafter observed and in force

as the maximum to be charged for the service to be per

formed. notwithstanding that « higher [or lower) rate,

farcoreharge has been heretofore aathorized [ prescribed ]

by general or special statute, {contract, grant, franchise

condition. consent or other agreement.) and shall fix the

same by order to be served upon all common carriers,

railroad corporations or street railroad corporations by

whom such rates, fares and charges are thereafter to be

observed Dprovided. however, au\thing herein contained 1,

to the contrary votwithstanding, that, except in the case

na mwen carner other than a street rmulroad corpora

;

‘

an:

cm bat proposed by the commission to be included in

he plan of nea lustment under the provisions of article b

oy oof this ehapter, the transit, commission shel mat fF d

nhowse or gulbortve the increase of any rate of far fe

prescribed by any such general or special statute. cop '

trnaet, grant, franchise, conditions, cousent or other prec

ment except as part of aod as may tw provided In such

pout a real yustinedl \ua such change in rate, fure oF

Public Service Cominissions Law—Section 49 (subd. 1).

charge shall be upon such terms, conditions or safeguards

as the commission may prescribe.

“If it shall be made to appear to the satisfaction of the

commission that the public interest requires a change in

the rates, fares or charges demanded or collected by any

person, firm or corporation subject to its jurisdiction, or

that such change is necessary, for the purpose of provid:

ing safe, adequate and efficient service, or for the preserva

tion of the property, the commission, apon such terms,

conditions or safeguards as it deems proper, may authorize

an immediate reasonable temporary increase or decrease

in such rates, fares and charges pending a final determina

tion of the rates, fares and charges to be thereafter ob

served by sach person, firm or corporation, provided, how

ever, anything herein contained to the contrary notwith:

standing, the transit commission shall not authorize any

such change prior to the adoption of a plan of readjust

ment under the provisions of article six of this chapter,

unless, pending the completion of the valuations of the

railroad property which if proposes Co include in any such

plan and during the preparation of such plan, the com

mission shall, as the mesualt of its studies and investiga

tiona, find such change to be necessary in the public inter

est for the accomplishment of one or more of the purposes

to be achieved by such plan as specified in said article,

and in such event the commission shall require as condi

tions precedent to such change the execution of any such

stipulations by the railread companies and others as in

its judgiwent shall be necessary to further and protect the

consummation of such plan The terms, conditions, or

enfeguatia preserilesd may inclade provisions for the pur

powes for which the additional revenuc derived from any

such temporary increase may te expended and for the

impounding thereef until the same ehall be applied to the

parpames ws speci fiend } At any bearing involving a rate,

the burden of proof to show that the change in rate if

prerpe mas! by the commen carrier, of that the existing rate,

os — St AE RISER MN AE LON BERS LIE DRL NLL ES BIG L OEM I

¥ ce Kn PAPER

—_—— PRE TRUE RY PRLS G BRI ELLIE ® STE EE RTE RMIT OILS IS HEE ARDS

Public Service Commissions Law—Section 49 (subds. 1, 2 and 4).

if or motion of the commission or in a complaint filed

with the commission it is proposed to reduce the rate, is

just and reasonable shall be upon the common carrier;

and the commission may give to the hearing and decision

of such questions preference over all other questions pend-

ing before it and decide the same as speedily as possible.”

($49) 2. Whenever the commission shall be of opin-

ton, alter a hearing, had upon its own motion or upon

complaint, that the regulations, practices, equipment,

appliances, or service of any such common carrier, rail

road corporation or street. railroad corporation in

respect to transportation of persons or property within

the state are unjust, unreasonable, unsafe, improper or

inadequate, the commussion shall determine the just,

reasonable, sate, adequate and proper regulations, prac-

uices, equipment, appliances and service thereafter to

be in torce, to be observed and to be used im such trans-

portation of persons and property and so fix and pre-

scribe the same by order to be served upon every com

mon carner, railroad corporation and street railroad

corporation to be bound thereby; and thereafter it shall

be the duty of every common carner, railroad corpora

tion and street railroad corporation to observe and obey

each and every requirement of every such order so

served upon it, and to do everything necessary or proper

m order to secure absolute compliance with and observ-

ance of every such order by all of its officers, agents

and employees

4 Thais subdivision as at existed in 1913 consisted of a

single paragraph (which still remams m the law), authorizing

the Commission in certain cases to direct through carnage of

woperty in cafs over interchange tracks or switch connections

Seewuen two different carmers By Chapter 153, Laws of 1922,

there was added to this subdivision, three new paragraphs read-

ing as follows

Public Service Commissions Law—Section 49 (subd. 4).

“In case upon the termination of a lease or otherwise the

owner or lessor of a raped transit ratlroad resumes operation

thereof and thereupon such owner or lessor or the lessee dis:

contintes of threatens to discontinue or refuses or threatens

to refuse to permit operation over any extension or extensions

of such rapid transit railroad or railroads or any of them, or

discontinues or threatens to discontinue or refuses or threatens

to refuse to permit operation over other railroads on whi h

such lessee had operated under trackage mghts, then and im

either of those events the commussion may order that through

cars for the transportation of passengers shall be operated over

such extension or extenstons and over the tracks of such other

railroad over whieh such lessee may have had trackage mghts,

and the commission shall have power, after a hearmg, to require

by order such operating. including the night to order such switch

or other cotitections or interchange tracks as may be necessary

and if so required, to determine as to the division of the expense

of the maintenance and operation thereof The commission may

after a bearing, prescnbe the terms and conditions upon which

such operations shal! be conducted and the manner im whach re

ceipts and capenses shall be apy rtaoned

“Pending the hearimg or hearings provided for herem, and

the determinatiotis and orders of the commussson thereon, the

commision shall have power, of mits padgment the public anter

ext feeputfes ft, tu teetic a tettijarrary conde: ert LE@ LL) 4 said rapid

transit radroad commpamees ty receive from each other, and trans

pert for Cas bh other, such cars over cach other's tracks by way of

switch commection of mterchange track, and af no such swatch

cota tion of interchange track exists, to construct and maintam

said switch commectson or unter Lange track, and upon the comple

ren of saul hearing or hearing: and the determinations and of

ders of the Commmuisssom thereatter made, the terms of the receipe

arsed Cracesperrtat x { cars, and the readustmment of compensation

arad CNpectier tive tved, shall take effect as of the orginal date of

such temporary order of the connenissseth

“Li wpe the caparation of cater termination of a lease, the

free trateder of iter: hatage { passengers, theretofore in effect

aid parostte:! bey the leaeee of a raped trane:t ratlroad at any prants

of ps wits between the lines of the rared trams railroads owned of

leasexd amd operated bey at. ce chewcomstis ged of co threatened to be

ddeecuertinvaed, the censuses elall have peorwer by order to require

the oxnmpanoes, by 4 heh the saud times of raj 4d tramert ratlroads

sugy tee copergatesd fier the terminate { the trase, to continer of

re-establish sh through routes formerly exiting, and to estab

heh posot cates. fares and charges for the transportation of pms

wenge ts theterss af the manoer proveded by sulahsisson three of

thi weteon

TW ASSET EERE EY Pg EIT SIE SRO ERR BSAC RTT

Public Service Commissions Law—Sec, 49 (subd. 6) and Bec, 50.

($49) 8& No passenger joint rate, fare, charge,

through route or transfer shall be required between

any rapid transit railroad and any other rapid transit

railroad or any railroad operated as a street surface

railroad, nor between « sireet surface railroad and any

railroad operated wholly by steam, or any railroad op-

erated a distance of over fifty miles partly by steam and

partly by electricity,

By Chapter 14, Laws of 1921, there was added to the fore

going subdivision as a prefix the words) “Except as may be pro-

vided by the Transit Commission ”

$50. POWER GF COMMISSIONS TO ORDER REPAIRS OK

cnances. If in the judgment of the commission having

jurisdicuon, additional tracks, switches, terminals or

terminal facilities, stations, motive power, or any other

| property, construction, apparatus, equipment, facilities

or device for use by any common carrier, railread cor-

poration or street railroad corporation in or in connec-

ution with the transportation of passengers or property

ought reasonably to be provided, or any repairs or im

provements to or changes in any thereof in use ought

reasonably to be made, or any additions or changes in

onstruction should reasonably be made thereto in order

to promote the security or convenience of the public or

cmiplovees, or in order to secure adequate service or fa

cilities for the transportation of passengers or property,

the commussion shall, after a hearing cither on its own

motion or after complaint, make and serve an order di

recung such repairs, improvements, changes or addi-

tions to be made within a reasonable ume and in a man

ner to be specthed therein, and every common carrier,

railroad corporation and street railroad corporation is

PSqericseayes genase ERA : qh age Can Maen ae hg PEAR AY He RI

Public Service Commissions Law—Sections 50 and 51.

hereby required and directed to make all repairs, im-

improvements, changes and additions required of it by

any order of the commission served upon it. If any

repairs, improvements, changes or additions which the

commission has determined to order require joint action

hy two or more of said corporations, the commission

shall, before entry and service of order, notify the said

corporations that such repairs, improvements, changes

or additions will be required and that the same shall be

made at their joint cost, and thereypon the said corpora

tions shall have thirty days or such longer time as the

commission may grant within which to agree upon the

part or division of cost of such repairs, improvements,

changes or additions which each shall bear If at the

expiration of such time such corporations shall fail to

file with the commission a statement that an agreement

has been made for a division or apportionment of such

repairs, improvements, changes or additions the com

mission shall have authority, after further hearing, to

fix in its order the proportion of such cost or expense to

be borne by cach corporation and the manner in which

the same shall be paid and secured But this section

shali not be construed to authorize the commission to

require {Wo of more ratiread corporations to umite i

the crection of a unten station

$5] Powe ao CoM MESS Tdo *% Ter RTP R CHANGES IN

TIME SCMEDULES, RUNAING OF ADDITIONAL CAKS AND

reains Ef. in the rudgment of the commussion having

uriediction, any railroad Coppuration ct street ratlraad

Corpor atic ‘does mest run trams cnough or CATs cnough

Of possess of operate motive power enough, reasonably

to accommmertate the traffic, passenger and freight, trans

PERERA) PET On ee

Public Service Commissions Law—Sections 51 and 55.

ported by or offered for transportation to it, or does not

run its trains or cars with sufficient frequency or at a

reasonable or proper time having regard to safety, or

does not run any train or trains, car or cars, upon a

reasonable time schedule for the run, the commission

shall, after a hearing either on its own motion or after

complaini, have power to make an order directing any

such railroad corporation or street railroad corporation

to increase the number of its trains or of its cars or its

motive power or to change the time for starting its

trains or cars or to change the time schedule for the

run of any train or car or make any other suitable order

that the commission may determine reascnably neces-

sary to accommodate and transport the traffic, passenger

or freight, transported or offered for transportation.

$85. AprROVAL OF ISSUES OF STOCK, BONDS AND

OTHER PORMS OF INDEBTEDNESS. A common carrier,

railroad corporation or street railroad corporation or-

ganized or existing, or hereafter incorporated, under or

by virtue of the laws of the state of New York, may

issue stocks, bonds, notes or other evidence of indebted

ness pay able at periods of more than twelve months

after the date thereof, when necessary for the acquisi-

tion of property, the construction, completion, extension

or improvement of its facilines, or for the improvement

or maintenance of its service or for the discharge or

lawtul refunding of its obligations or for the reim

bursement of moneys actually expended from income or

from any other TOTES s in the treasury of the corpora:

tron not secured by or obtained from the issue of stocks,

honds, netes or other evidence of indebtedness of such

corporation, within five years next prior to the filing of

~ sen ——

Public Service Commissions Law—Section 55.

an application with the proper commission for the re-

quired authorization, for any of the aforesaid purposes

except maintenance of service and except replacements

in cases where the applicant shall have kept its accounts

and vouchers of such expenditure in such manner as to

enable the commission to ascertain the amount of mon

eys so expended and the purposes for which such expen

diture was made; provided and not otherwise that there

shall have been secured from the proper commission an

order authorizing such issue, and the amount thereot

and stating the purposes to which the tssue or proceeds

thereot are to be applied, and that, in the opinion of the

commission, the money, property or labor to be procured

or paid for by the issue of such stock, bonds, notes or

other evidence of indebtedness is or has been reasonably

required for the purposes specified in the order, and that

except as otherwise permitted in the order in the case of

bonds, notes and other evidence of indebtedness, such

purposes are not, in whole or in part, reasonably charge

able to operating expenses or to income; but this pro

viston shall net apply to any lawtul issue of stock, to the

lawtul execution and delivery of any mortgage or to the

lawtul issue of bonds thereunder, which shall have been

duly approved by the board of ratlroad commissioners

before July first, nineteen hundred and seven. * * *

The remainder of the section relates to administrative details

and specifies certam exceptions as to mdebtedness incurred for a

peri less than twelve maths where commission approval is

unneressary, also himitations upon the aggregate amount of the

security issucs approved with relation to the capital actually

paid im

EGER FOE LER EE MLE LLIN: CLUES EEL REINS LOPE ARE NS OIE

Public Service Commissions Law—Sec. 56 (subds. 1, 2) and Sec. 57.

§ 56. ForreirurE; PENALTIES. 1. Every common

carrier, railroad corporation and street railroad corpo-

ration and all officers, and agents of any common car-

rier, railroad corporation or street railroad corporation

shall obey, observe and comply with every order made

by the commission, under authority of this chapter so

long as the same shall be and remain in force. Any

common carrier, railroad corporation or street railroad

corporation which shall violate any provision of this

chapter, or which fails, omits or neglects to obey, ob-

serve or comply with any order or any direction or re-

quirement of the commission, shall forfeit to the people

of the state of New York not to exceed the sum of five

thousand dollars for each and every offense; every vio-

lation of any such order or direction or requirement, or

of this chapter, shall be a separate and distinct offense,

and, in case of a continuing violation, every day’s con-

tinuance thereof shall be and be deemed to be a separate

and distinct offense.

2. kvery otheer and agent of any such common car-

ner or corporation who shall violate, or who procures,

aids or abets any violation by any such common carrier

or corporation of any provision of this chapter, or who

shall fail to obey, observe and comply with any order of

the commission or any provision of an order of the com-

mission, or who procures, aids or abets any such com-

mon carrier or corporation in its failure to obey, ob-

serve and comply with any such order or provision, shall

be guilty of a misdemeanor

£37. SUMMARY PROCEEDINGS. Whenever either com-

mission shall be of opinion that a common carrier, rail-

AP i SOE

Peblic Service Commissions Law—Section 57.

road corporation or street railroad corporation subject

to its supervision is failing or omitting or about to fail

or omit to do anything required of it by law or by order

of the commission, or is doing anything or about to do

anything or permitting anything or about to permit any

thing to be done, contrary to or in violation of law or of

any order of the commission, 1 shall direct counsel to

the commussion to commence an action or proceeding in

the supreme court of the state of New York in the name

of the commission tor the purpose of having such vio

lations or threatened violations stopped and prevented

ether by mandamus or mnyunction Counsel to the com

mussion shall thereupon begin such action or proceeding

by a petition to the supreme court alleging the violation

complained of and praying for appropriate relief by way

of mandamus or injunction It shall thereupon be the

duty of the court to spectty the time, not exceeding

twenty days after service of a copy of the petition,

within which the common carner, railroad corporation

or street railroad corporation complained of must an

swer the petition In case of default im answer or after

answer, the court shall wnmediately inquire into the

facts and circumstances im such manner as the court

shall direct without other or formal pleadings, and with

out respect to any technical requirement. Such other

persis of corporations as the court shall deem neces

sary or proper to join as parties in order to make tts

order, judgment or writs effective, may be joined as

partes upon application of counsel to the commission

The final padgment in any such action or proceeding

shall esther distniss the action or proceeding or direct

that a wrt of mandamus of an injunction or both issuc

ELE LEE IEP SEE LELEDLE LEME ELE LLG ALLELE LAER EEE DID AA ICN

Public Service Commissions Law—Sections 57 and 66 (subd. 12).

as prayed for in the petition or in such modified or other

form as the court may determine will afford appropriate

relief.

ARTICLE 4.

Provisions Retatine to Gas AND ELECTRICAL CoRPO-

KATIONS: REGULATION OF Price oF Gas

AND ELECTRICITY.

$66. GENERAL POWERS OF COMMISSION IN RESPECT

TU GAS AND ELECTRICITY. Each commission shall * * *:

12. Have power to require every gas corporation,

electrical corporation and municipality to file with the

commission and to print and keep open to public inspec-

tion schedules showing all rates and charges made, estab-

lished or enforced or to be charged or enforced, all forms

of contract or agreement and all rules and regulations

relating to rates, charges or service used or to be used,

and all general privileges and facilities granted or allowed

by such gas corporation, electrical corporation or munici-

pality; but this subdivision shall not apply to. state,

municipal or federal contracts. Unless the commission

otherwise orders, no change shall be made in any rate or

charge, or m any form of contract or agreement or

any rule or regulation relating to any rate, charge or

service, or im any general privilege or facility, which

shall have been filed and published by a gas corpora-

tion, an electrical corporation or municipality in com-

pliance with an order of the commission, except after

thirty days’ notice to the comnmussion and publication for

thirty days as required by order of the commmssion, which

—_— eter TY ‘ : rj ATE SERA EE SS I a

PEG EET Fore

Public Service Commissions Law—Section 66 (subd. 12).

shall plainly state the changes proposed to be made im

the schedule then in force and the time when the change

will go into effect. The commission for good cause

shown may allow changes without requiring the thirty

days’ notice under such conditions as it may prescribe

No corporation or municipality. shall charge, demand,

collect or recetve a greater or less or different compen

sation for any service rendered or to be rendered than

the rates and charges applicable to such services as spec

fed in its schedule bled and tn etlect at the time; nor shall

any corporation or municipalty retund or remit in any

manner or by any device any portion of the rates of

charges so speerhed, mor to extend to any person of cot

poration any form of comtract or agreement, or any rule

or regulation, or any privtlege or taciity, except such

as are regularly and umtormily extended to all persoms

and corporations under lhe circumstances. The com

mission shall have power to presertbe the form of every

such schedule, and trom tune toe time prescribe by order

such changes tin the form thereot as may be deemed

wise. The commission sill also have power to establish

such rules and regulathons to carry into effect the pro

vistotis of this subdiviston as it may deem necessary, and

to modify or amend such rules or reqmulations from time

to time. Nothing in this chapter shall be taken to pro

hibit a gas corporate from establishing a slid scule

upward rate, for natural gas, begenming at a fixed price

perournt for a simall consumption and then increasing: Une

price per unt as the comsumption is increased = When

ever thete shall be tiled with the ccanmissnay by any Rats

corporation, ciectrical corporation or mumecipality, as

defined ym this chapter. ary wc broader te stating a new ft

Public Service Commissions Law—Section 66 (subd. 12).

or charge, or any change in any form of contract or

agreement or any rule or regulation relating to any rate,

charge or service, or in any general privilege or facility,

the commission shall have and it is hereby given au-

thority, at any time within sixty days from the date

when such schedule would or has become effective, either

upon complaint or upon its own initiative without com-

plaint at once, and, 1 it so orders, without answer or

other formal pleading by the interested corporation, but

upon reasonable notice, to enter upon a hearing concern-

ing the propriety of such rate, schedule, form of contract

or agreement, or rule or regulation relating to any rate,

charge or service, or any general privilege or facility;

and pending such hearing and decision thereon, the com

mission, upon tiling with such schedule and delivering

to the corporation affected thereby, a statement in writ-

ing of its reasons therefor, may suspend the operation

of such schedule and defer the operations of such rate,

charge, torm of contract or agreement, rule, regulation,

service, general privilege or facility, but not tor a longer

period than one hundred and twenty days beyond the

tune when such rate, charge, form of contract or agree

ment, rule, regulation, service, general privilege or

facility would otherwise go into effect; and after full

hearmp, whether completed betore or after the rate,

charge, form of contract or agreement, rule, regulation,

service, general privilege or facility goes into effect, the

Commission may make such order in reference to such

rate, charge, form of contract or agreement, rule, regula

thon, service, general privilege or facility as would be

proper ina proceeding begun after the rate, charge, form

of contract or agreement, rule, regulation, service, gen

Pablic Service Commissions Law—Section 66 (subd. 12).

eral privilege or facility had become effective. Provided

that, if any such hearing cannot be concluded within the

period of suspension as above stated, the commission muy

in its diseretion extend the time of suspension for a fur

ther pertad, not exceeding six months. The commission

may, as authorized by section seventy-two, establish tem

porary rates or charges for any period of suspension un

der this section. At any hearing involving a rate, the

burden of proot to show that the change or proposed

change 1 proposed by the corporation, or that the exist

ing rate, if on metion of the commissten, or mm a com

plant fled wath the comumissioan, itis propesed to reduce

the rate, ts pust and reasonable shall be upon the corpo

ration; and the cammission may give to the hearmng and

decision of such questions preference over all other ques

toms pormding before to and decide the same as speedily

as possible The schedule, rates, charges, form of con

tract of agreement. rule. regulation, service, general

privilege or facility in torce when the new schedule, rate,

charge, form of contract, rule, regulation, service, gen

eral privilege of facility was fled shall continue m forces

during the periad of the suspension provided for in

this section unless the cammissioen shall establish a tem

porary rate or charge as authorized by section seventy

two of this chapter

The fret part of Secteon 1, duwn % was originally enacted

ty Chapter $90 of the Laws of i710

The senterxe teetacen ' and * of this sulefivieeon was inserted

by Chapter $42 of the Laws of 1¥20

The tealame of the secteas after ' was uiserted by the Law:

of i931, Chapter 134

caianiein ania eemminatese ste cupnisanse eee

i UAL ARLINGTON FIP OEE REA ELE LED IE LIE ERLE BD NEE EIA a

Public Service Commissions Law—Section 80 (subd. 10).

ARTICLE 4-A.

PROVISIONS RELATING TO STEAM CORPORATIONS; REGU-

LATING Prick OF STEAM.

Added by Laws of 1913, Chapter 505

S800 GENERAL POWERS OF COMMISSION IN RESPECT

TU STEAM HEATING. Each commission shall * * *:

10. Have power to require every steam corporation,

person or municipality to tile with the commission and

to print and keep open to public inspection schedules

showing all rates and charges made, established or en-

torced or to be charged or enforced, all forms of contract

or agreement and all rules and regulations relating to

rates, charges or service used or to be used, and all gen:

eral privileges and facilities granted or allowed by such

steam corporation, person or municipality; but this sub-

division shall not apply to state, mumicipal or federal con-

tracts. Unless the commission otherwise orders, no

change shall be made m any rate or charge, or in any

orm of contract or agreement or any rule or regulation

relating to any rate, charge or service, or in any general

privilege or taciity, which shall have been filed or pub

lished by a steam corporation, person or municipality im

compliance with an order of the commission, except

after thirty days’ notice to the commission and the pub-

heation for thirty days as required by order of the com

nussion, which shall plainly state the changes proposed

to be made in the schedule then in torce and the time

when the change will go into effect. The commussion for

good cause shown may allow changes without requir

SRR

Public Service Commissions Law—Section 80 (subd. 10).

ing the thirty days’ notice under such conditions as it

may prescribe. No corporation or municipality shall

charge, demand, collect or receive a greater or less of

different compensation for any service rendered or to be

rendered than the rates and charges applicable to such

services as specified in its schedule filed and in etlect

at the (ime; nor shall any corporation, person or munici

pality refund or remit in any manner or by any device

any portion of the rates or charges so specthed, nor to

extend to any person of Carporatian any form of con

tract or agreement, or any rule or repulation, or any

privilege or facility, except such as are regularly and ani

formly extended to all persems and corporauions under

hke circumstances. The commission shall have power

to prescribe the form of every such schedule, and trom

time to time preseribe by order such changes im the form

thereof as may be deemed! wise The commussion shall

also have power to establish such rules and regulations

to carry into effect the provistoms of thes stblivisten as

to may deem nevessary, and to tea \ oor armed sich

rules or regulations trom Gime to time.) Whenever there

shall be filed with the cognmissionm by any steam corpora

trom, pacer: cr tmunicipaiity as deftrned om this chapte:

any schedule stating a pew rate of charge, or any chang:

many form of contract of agreement of any rule on reg

lateots relating to any rate, charge oF service, or im ans

general privilege or facility, the commission shall hav

and its bereby given authority at any time within sixty

days from the date whet such schedule would or has be

come effective, cither upon complaint or upon its ow!

inittative without complaint at omer, amd, riot se order»

without anewer or other formal pleadmge by the inter

; MS

REE RINE INE LN EAL LATER

Public Service Commissions Law—Section 80 (subd. 10).

ested corporations, but upon reasonable notice, to enter

upon a hearing concerning the propriety of such rate,

schedule, form of contract or agreement, or rule or regu-

lation relating to any rate, charge or service or any gen-

eral privilege or facility; and, pending such hearing and

decision thereon the commission, upon filing with such

schedule and delivering to the corporation affected there-

by, a statement in writing of its reasons therefor, may

suspend the operation of such schedule and defer the

operation of such rate, charge, form of contract or agree-

ment, rule, regulation, service, general privilege or fa-

city, but not for a longer period than one hundred and

twenty days beyond the time when such rate. charge,

torm of contract or agreement, rule, regulation, service,

general privilege or facility would otherwise go imto

effect; and after full hearing, whether completed before

or after the rate, charge, form of contract or agreement,

rule, regulation, service, general privilege or facility goes

into effect, the commussion may make such order in refer-

ence to such rate, charge, form of contract or agreement,

rule, regulation, service, general privilege or facility as

would be proper in a proceeding begun after the rate,

charge, form of contract or agreement, rule, regulation,

service, general privilege or facility had become effective.

Provided that af any such hearing cannot be concluded

within the period of suspension as above stated, the com-

mussion may in its discretion extend the tine of suspen-

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