Coplay Cement Manufacturing Co. v. Public Service Commission , 271 Pa. 58 ( 1921 )

Opinion by

Mr. Justice Kephart,

This is an appeal from a decree of the Superior Court reversing an order of the Public Service Commission and holding that a public service company could not increase its rates while it had a prior increase complained against (before the effective date) undetermined by the commission. The Superior Court fell into error in not considering the general scope and scheme of the Public Service Act, and its applicability to utilities in the performance of their various obligations. It was not intended by the legislature that the commission should be a board of managers to conduct and control the affairs of public service companies, but it was. meant that where certain of their powers and obligations had intimate relation to the public through 'fairness, accommodation or convenience, the commission should have an inquisitorial and corrective authority to regulate and control the utility in the field specifically brought within the commission’s jurisdiction. There are many powers and obligations inherent in a public service company. They exist through statute or common law, or are indispensably necessary to the fulfillment of charter obligations. When the Public Service Act was passed it reached into these rights, powers, privileges and obligations and took over the part relating to public welfare, and embodied them in an act, as being subject to regulation. Such steps created no new powers in the utility except such as affected the commission — its dealings— with the company, if these may be called powers. They are, in effect, certain limitations on the existing powers in the form of requisites necessary to be done or secured before these powers may be exercised by the public service company. All the powers mentioned in article III appertained to the corporate entity before the act and the same may be said of the obligations and duties contained in article II. But neither created an additional franchise or right, nor, what is more important, did they impress on the existing rights, powers and privileges not mentioned, in the act a limitation, restriction or elimination. To sweep away such rights or hamper their exercise because not mentioned in the act would be to deprive the company of the capacity to function, and the public is vitally interested in its continuation. To sustain this conclusion, aside from constitutional questions, the least that can be said is, the Public Service Act should contain positive and explicit language. But the act did not so speak, for we find them specifically safeguarded. Section 12 of article III is a distinct, positive recognition: “Every public service company shall be entitled to the full enjoyment and exercise of all and every the rights, powers, and privileges which it lawfully possesses, or might possess, at the time of the passage of this act, except as herein otherwise expressly provided.” This certainly did not mean abrogation or restriction of these rights. The concern was supposed to move along, performing its ordinary duties as theretofore, subject to the regulation imposed by the act. The rights, powers and privileges not mentioned constitute by far the greater part of corporate life, internal management, control and discretionary power over its property, the proper application, enforcement and enjoyment of the same matters submitted to the commission’s control being among them. In short, the company manages its own affairs to the fullest extent consistent with the protection of the public’s interest, and only as to such matters is the commission authorised to intervene, and then only for the special purposes mentioned in the act.

In considering the reservation in article III, section 12, it is necessary to know, from a full reading of the act, whether the exercise of an existing right or privilege not mentioned therein (here the right to change the rate while another rate is undetermined) should be restricted to secure a fulfillment of its purpose. Is its exercise hostile to the accommodation, convenience or safety of the public? The theory underlying the act must be taken into account. Public service business occupies a peculiar position in the community, — interwoven as it is with communal life, — of a nature monopolistic in character, compelling the public to be its customer whether it will or not, operating under laws with governmental powers not given to ordinary companies. See New Street Bridge Co. v. Public Service Commission, 271 Pa. 19. In determining whether the exercise of a right like that now discussed offends against the regulatory control necessary for such concerns (in the interest of convenience, accommodation and safety, of the public), the authority given the commission should be liberally construed, and that incidentally necessary to a full exposition of the legislative intent be upheld as being germane to the law. Where, therefore, the unrestricted exercise of existing powers tends to nullify the commission’s control, a restrictive use is intended, its extent to be determined by the commission, with a right of appeal to the courts as provided by the act.

The statute imposed on the utilities certain obligations and limitations of powers; certain steps must be taken and certain acts performed before they can do or refrain from doing certain things. This was a part of the scheme to perfect the control necessary to safeguard the public in securing convenience, accommodation and safety. But how can a change of rate injure such control, or in what aspect is the public injured by a change of rate? Safety, accommodation and convenience, as those terms are understood in public utility regulation, do not primarily depend on rates, though indirectly they may be affected thereby. Nor does a change of rate control the commission in determining the reasonableness of rates. The company, not the commission, initiates rates, fares and charges for the kind and character of service furnished or the kind and character of facilities, and the price to be paid therefor. This is done under the same power that it originally possessed before the act, and, moreover, the authority is expressly recognized in the act. Article III, section 1, reads, “It shall be lawful for every public service company to demand, collect and receive fair, just and reasonable prices, rates, fares, tolls, charges, or other compensation for each and every service rendered or to be rendered by it to any person or corporation” ; this is what has been done. There is no limitation on the number of times a company “may demand, collect and receive! fair, just and reasonable rates.” When a given rate, because of business conditions, becomes unfair, unjust and unreasonable, tbe company bas tbe power to demand fair, just and reasonable rates. It initiates rates wben the necessity here defined compels it; tbe wavering scale of reasonableness is tbe standard, and of it utility is tbe sole judge in tbe first instance, subject of course to what may later follow wben tbe commission’s machinery is started. Tbis authority certainly is not hostile to tbe Public Service Act but makes tbe act a more workable one, secures to tbe public tbe service demanded, tbe public being fully protected by complaint and reparation.

But tbe right to initiate is subject to a limitation imposed on tbe utility; it becomes effective as provided by section 1(f), article II. “A rate becomes, on tbe effective date, an effective rate, and, as such, it is a collectible rate, or one that may be sued for. There can be no legal rate except tbe last tariff rate published as provided by law, and tbe effective rate thus published supersedes all prior rates covering tbe service therein called for”: Suburban Water Co. v. Oakmont Boro., 268 Pa. 243, 249. Generally speaking, tbe only limitation imposed by tbe act on tbe initiation or change of rates is that mentioned in article II, section 1(f). There are three exceptions not material but which we shall name: (1) a change within three years of a rate determined by tbe commission after a bearing (mentioned in article II, section 1 (f)); (2) a rate subject to automatic adjustment in relation to dividends and profits, and (3) a sliding scale.

Tbe new schedule was filed a year after tbe one to which tbe undetermined complaint bad been filed by a consumer. It increased tbe cost of service. This new schedule superseded tbe prior one, and was tbe only collectible rate. Tbis conclusion does not give rise to multiplication of issues, in that a new complaint must be filed to tbe new rate, nor a duplication of effort, nor an increase in costs, nor an anomaly of proceeding. It must be remembered the real issue before tbe commission is a complaint as to rates, and though a change in tbe rate lias been filed, the commission may, — and it has the power under the act, — consolidate these several schedules of rate increase, and cause the complaint, the record and the evidence to be taken as a complaint, record and evidence in connection with the new rate. Ample authority exists in the act to prevent any injustice or unnecessary expenditure of money on the part of a consumer. Furthermore, the commission has the power to take speedy action to safeguard the public by quickly striking down the sharp practices suggested by appellee, which it says may occur where successive increases are made.

Governmental control over these essential elements of corporate existence must be carefully exercised. The commission and the utility are not dealing with a purely legal proposition, subject to inflexible rules of law, but with an ever changing economic condition, with powers adapted to fit recurring changes in economic life. To attempt to confine it or the utility to the sometime unwieldy procedure adopted by the courts would be subversive of all the good intended by the act. The business disposed of by this body, with the speedy and expeditious manner in which it is conducted, is enormous. Certain matters before it must assume a legal aspect, as appears from the act. But subjects like that now before us (frequency of change of rate of utility) are not to be adjudged by technical legal procedure. They are regulated by economic laws which, so far, courts or legislatures have not been able to control. What may be an adequate rate to-day, next month may be quite unreasonable, and this through circumstances beyond the control of the commission, utility or courts. Therefore the right to initiate and change is fundamental to the company, as the act imposes the severest kind of penalties for charging a rate that is not a published rate; the legislature, with evident intent, did not disturb this heretofore existing right. But, on the other hand, when the rate is changed, the act expressly recognizes the right of placing it completely in the commission’s control and power to safeguard the public in every way. When an action of assumpsit is instituted, the stage is set; the future takes care of itself. With these concerns the stage setting is constantly changing; no one, at present, will be vain enough to guess, in times such as now exist, what the next setting may be.

No little argument has been devoted to the question that this should be reviewed in the same light as a proceeding in equity to restrain the collection of an unreasonable rate. In addition to what we have already said, we are referred to no act of assembly or action of the court (except as to artificial gas and water companies) which authorizes the court to interfere in the matter of rates. In fact it was very early held that “there is no restriction upon the rates they may charge for roadway use and transportation by themselves”: Boyle v. Phila. and Beading Bailroad Co., 54 Pa. 310. We are not merely deciding an equitable proceeding governed by the rules heretofore applied, where the courts have been asked to restrain the collection of unreasonable rates. What we are endeavoring to do is to uphold the commission in its effort to sustain the Public Service Act as a workable one for the best interest of the public as well as the utility.

The order of the commission was an entirely proper one. It had no jurisdiction to restrain or prevent a corporation from exercising its right to change its rate when it appeared necessary to them.

The decree of the Superior Court is reversed and the order of the commission is reinstated; appellee to pay the costs.