Slate Belt Electric Street Railway Co. v. Public Service Commission
Slate Belt Electric Street Railway Co. v. Public Service Commission
Opinion of the Court
Opinion by
From the voluminous record accompanying this appeal we gather the following facts, which are practically without dispute except as stated, and which sufficiently indicate the nature of the questions presented for our determination:
The proceeding originated in a petition or complaint filed in August, 1918, with the Public Service Commission by the appellant. It detailed at length the nature and importance of the public service carried on by the complainant, an operating street passenger railway company, in the transportation of passengers, freight and United States mail. It averred its dependence on the intervening respondent for its supply of electric power, by force of which its cars were operated. It alleged that as long ago as 1912 and 1913, two written- contracts
The Intervening Power Company filed its answer denying many of the facts averred in the complaint, and especially setting up that the complainant had frequently defaulted in the payment of the sums due under the original contract and had thus rendered necessary a substantial modification of the same, which had been observed during a sufficient length of time to enable the complainant to make good the' considerable sums in which it had defaulted; that owing to conditions that existed in the summer and fall of 1917, the price of coal, which constituted the chief element of cost in the production of electric power, had so advanced and become so uncertain that it. was impossible for the power company to make any approximately accurate estimate in advance of the cost of producing its power from month to month. It, therefore, on November 15, 1917, filed with the Public Service Commission a new schedule of
The commission, with great propriety in our judgment, concluded it was not within its functions to undertake to enforce private contracts between two corporations, even though both were public service companies. That its proper duties were to ascertain whether or not the power company was performing its public service at reasonable and lawful rates, and that it would not and could not, in the discharge of its public duties, create or enforce rates that were to be dependent upon private or individual contracts made with particular consumers, with the idea of establishing such rates, and thus placing them beyond the control of the State, or its duly authorized commission. We shall, therefore, briefly consider the two questions, and the only two that seem to us to be involved in a review of the order made by the Public Service Commission.
In Schaper v. Railway Co., 265 Pa. 109, the appellant had granted and conveyed an easement through his own land to the railway company, in consideration of which it obligated itself to thereafter sell round-trip tickets and books of tickets at certain rates. Later on new schedules increasing these rates were filed with the Public Service Commission, and duly became effective. The appellant sought to have his contract enforced and specifically performed. In affirming the decree of the court below dismissing his bill, the Supreme Court thus strikes at the very root of all such cases: “The contract which the appellant would specifically enforce, was valid when made, but the parties to it entered into it subject to the power of the State to change the rates in the future in the exercise of its governmental authority: Vide Louisville & Nashville R. R. Co. v. Mottley, 219 U. S. 467, and cases there cited.” Once more the exact question we have before us was most carefully considered in the case of Leiper v. B. & O. R. R. Co., 262 Pa. 328. Again there was a grant by the appellant of a right-of-way through and over the land of the appellant, and the consideration for the grant was a contract to carry the stone from the appellant’s quarries at freight rates not exceeding those detailed in the contract. At the expense of some brevity, we quote from the opinion óf Mr. Justice Fox a statement of the controlling principle, than which no language of ours could possibly be more lucid: “Where the rights of individuals under a contract which otherwise be perfectly valid, are in conflict with the ‘general well-being of the State’ the rights’ of the individuals must give way to the general welfare. It therefore follows that when, as in this case, the parties enter into a contract with a public service corporation relating
2. The commission has found that the rate complained of, under the operation of the so-called coal clause of the schedule, was not so uncertain' and indeterminate as to
Reference
- Full Case Name
- Slate Belt Electric Street Railway Company v. The Public Service Commission
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- 4 cases
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- Public service companies — Contracts—Bates—Change of rates — ■ Specific performance — Equity. Wherd the lights of individuals under a contract which would otherwise be perfectly valid are in conflict with “the general well-being of the State” the rights of the individuals must give way to the general welfare. It therefore follows that when two public service companies enter into a contract relating to rates they are presumed to do so with the knowledge that the right of the State to exercise its police power in the future is expressly reserved, and that where the common weal and the interests of the public demand that the provisions of the contract thus entered into shall be modified, it can be done without any violation of the provisions . of the Constitution of the United States with reference to the impairment of the obligation of 'contracts. The regulation of the rates to be charged by any and every public service company is but an exercise of the police power inherent in every government and absolutely necessary for the continuance of its well-being. Where two public service companies enter into a contract providing for a supply of electric power, .the rates to be charged by the company furnishing the power are subject to supervision and control by the Public Service Comüiission and the contract has no binding force, when its terms conflict with the rates fixed in the method prescribed by the Public Service Company Law. Public service companies — Bates—Coal clause. * A clause in the rate schedule of a public service company, regulating the price of electric power upon the varying price of coal, is not so uncertain and indeterminate as to be, necessarily, either arbitrary or unreasonable, during the unusual conditions created by the war. Where the commission has found that such a rate is reasonable irr conformity with the law, the appellate court will not set aside such a finding on appeal.