# Appendix — Gilchrist v. Interborough Rapid Transit Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0224%3A06 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1929 - **Citation:** 279 U.S. 159 ## Text 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 3 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) 62 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 iv 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. l , " § 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 93 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 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 vi 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 YO 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 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 3 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 4 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 6 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 x 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 9 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 10 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 12 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 13 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 14 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 15 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 16 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 18 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 19 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 20 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] 21 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 2? 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 23 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 24 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 25 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 26 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 27 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. 28 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 29 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 30 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 31 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 32 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 33 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 34 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 35 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 3 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 37 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 38 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 3Y 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- 40 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 41 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- 42 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 43 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 44 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 — 45 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 46 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 _— 47 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 48 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 49 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- 50 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 51 7 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 52 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. 53 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.) a 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 55 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 56 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 Ne 57 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; 58 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 59 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 60 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 61 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 62 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 63 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 5 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 tt 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 65 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 06 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 are hapter 133. os PRE? bev ©) ajter 123. and m 1923 by ©) a} 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 — 67 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 ; ; ; je ‘ 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 ae 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 Os 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 ti [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386007_0224%3A06. Public record. Not legal advice.