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CITY PHILADELPHIA v. PENNSYLVANIA PUBLIC UTILITY COMMISSION ET AL. (03/09/53)

March 9, 1953

CITY OF PHILADELPHIA
v.
PENNSYLVANIA PUBLIC UTILITY COMMISSION ET AL.



COUNSEL

Whie and Ballard, Spahr, Andrews & Ingersoll, Philadelphia, for Phila. Transp. Co., intervening appellee.

Before Rhodes, P.j., and Hirt, Reno, Dithrich, Ross and Gunther, JJ.

Author: Rhodes

[ 173 Pa. Super. Page 41]

RHODES, President Judge.

On February 29, 1952, the Philadelphia Transportation Company filed with the Pennsylvania Public Utility Commission new tariffs prescribing increased bus and rail fares. The tariffs provided for the elimination of the token rate of 131/3 cents (3 tokens for 40 cents) for a single vehicle ride and for the charing

[ 173 Pa. Super. Page 42]

    of a straight 15 cent fare; for an additional 3 cent charge for two vehicle rides; and for an increase in the suburban zone fare from 8 cents to 10 cents. The former tariffs had been in effect from February 6, 1951.

The City of Philadelphia, on March 8, 1952, filed a complaint with respect to the new tariffs.

The Commission on March 24, 1952, suspended the operation of the new tariffs from April 1, 1952, their proposed effective date, to October 1, 1952, and by an order of the same date instituted an investigation on its own motion for the purpose of determining the fairness, justness, reasonableness, and lawfulness of the rates and charges for transportation service of the Company, including those in the proposed tariffs. On September 22, 1952, the Commission extended the suspension period for an additional three months to January 1, 1953.

On March 29, 1952, the Company had filed a petition for temporary rates. On July 1, 1952, the Commission entered an order prescribing temporary rates for the Company. This Court, on July 17, 1952, after an appeal filed by the City and after hearing, granted a supersedeas staying the aside order of the Commission prescribing temporary rates. Thereafter, on August 6, 1952, this Court, on petition of the Company, remanded the temporary rate proceeding to the Commission for further hearing and consideration.

Consolidated hearings in the Commission's own investigation and in the various complaint proceedings were then held by the Commission. The Company later formally withdrew its petition for temporary rates. On December 23, 1952, the Commission issued its order dismissing the complaints and vacating he suspension of the proposed tariffs. The City of Philadelphia, on December 26, 1952, filed with this Court its petitions for

[ 173 Pa. Super. Page 43]

    appeal and supersedes. On December 30, 1952,this Court, after hearing, denied the supersedes. The new rates accordingly be came effective on December 31, 1952.

The commission in its final order of December 23, 1952, found that the rates proposed in the new tariffs -- Tariff Rail-Pa. P.U.C. No. 17 and Supplement No. 66 to Tariff Bus-Pa. P.U.C. No. 4 -- would not produce an excess in fair return upon the fair value of the Company's plant; and that the rate structures contained no unlawful discrimination. The Commission also found that the Company's net annual income available for return under the proposed tariffs would be $5,001,905 which a was an acceptance of the Company's estimated yield.

On this appeal from the Commission's order the City's contentions may be summarized as follows:

(1) That the Commission has no jurisdiction over City-owned high speed lines; (2) that the Commission could not authorize an increase in rates without the consent of the City to such increase under the agreement of July 1, 1907, between the City and the Philadelphia Rapid Transit Company, predecessor to the Philadelphia Transportation Company; (3) that the return under the new tariffs will be grossly excessive; (4) that the Commission erred in failing to make a finding of fair value of the Company's property as it exists today.

Jurisdiction: The city has contended throughout these proceedings that the Commission has no jurisdiction over the City-owned high speed lines and facilities which are leased by the City to the Company. These lines are the Broad Street Subway, Frankford Elevate, and Busteton Surface Lines.

The City-owned lines and facilities were leased to the Company under various lease agreements which

[ 173 Pa. Super. Page 44]

    were approved by the Commission. The Company has operated its own facilities together with the City-owned lines and facilities as a single unified transportation system, and the same general rate structure has been applicable to all parts of the unified system regardless of ownership of the different parts thereof. The various leases between the Company and the City provided that the rates of fare charged on the City-owned lines shall be the same as the rates charged by the Company on its lines.

The Public Service Company Law of July 26, 1913, P.L. 1374, and its amendments (repealed), expressly exempted municipal corporations from its provisions. Section 1 of that Act defined the term 'Facilities' as including 'all plant and equipment of a public service company, which includes all tangible real and personal property, *** owned, operated, leased, licensed, used, controlled, furnished, or supplied for, by, or in connection with, the business of any public service company: Provided, however, That no property owned by the Commonwealth of Pennsylvania, or municipality thereof, at the date when this act becomes effective, shall be subject to the Commission or to any of the terms of this act, except as elsewhere provided herein.' Under the Act of 1913, it was held that the exemption from Commission jurisdiction, as to rate regulation, applied to a municipally owned plant operated under a contract by an agent of the city. Ferguson & McDowell v. Public Service Commission, 82 Pa. Super. 238. See Wilson v. Public Service Commission, 116 Pa. Super. 72 ,176 A. 510; Barnes Laundry Co. v. Pittsburgh, 266 Pa. 24, 109 A. 535.

Section 2(10) of the Public Utility Law of May 28, 1937, P.L. 1053, 66 P.S. § 1102, contains a provision similar to the Act of 1913 defining 'Facilities' of a public utility and exempting property owned by a municipal

[ 173 Pa. Super. Page 45]

    corporation. This section provides as follows, the italicized words being added by the amendatory Act of March 21, 1939, P.L. 10, NO. 11: "Facilities' means all the plant and equipment of a public utility, including all tangible and intangible real and personal property without limitation, and any and all means and instrumentalities in any manner owned, operated, leased, licensed, used, controlled, furnished, or supplied for, by, or in connection with, the business of any public utility: Provided, however, That no property owned by the Commonwealth of Pennsylvania, or any municipal corporation thereof, at ...


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