regulate rates because of a general welfare clause in its charter.54 So power conferred upon a municipality to regulate the use of its streets does not authorize it to regulate the charges of a public service company,55 nor does power conferred to regulate the manner of construc "and every by-law, ordinance and regulation that it may deem proper for the health, order or good government of said city;" nor because of a provision in the charter "that the rates of fare and freight upon said railroad shall be subjected to the approval" of the municipality; nor because of a statute providing that the company shall be liable to such regulations as are other railroads incorporated by separate act or acts by the laws of the state, where the charter of one street railroad incorporated by separate act authorized the city to regulate rates of fare thereon; nor because of a reservation made by the city in the ordinance authorizing the company to use the streets, wherein it was provided that the company should be subject to all the laws and ordinances now in force and such as may be hereafter made." Old Colony Trust Co. v. Atlanta, 83 Fed. 39, aff'd 88 Fed. 859. In Indiana, the statute of 1887 providing that municipalities shall have power to provide by ordinance reasonable regulations for the safe supply, distribution and consumption of natural gas within the limits of the municipality, does not confer power to fix reasonable maximum rates that may be charged to consumers. Lewisville Natural Gas Co. v. State, 135 Ind. 49, 21 L. R. A. 734, 34 N. E. 702, overruling Rushville v. Rushville Natural Gas Co., 132 Ind. 575, 15 L. R. A. 321, 28 N. E. 853, and followed in Noblesville v. Noblesville Gas & Improvement Co., 157 Ind. 162, 166, 60 N. E. 1032. "The power to forfeit for failure to comply with the terms of the grant, or for failure to comply with the reasonable provisions of any ordinance regulating the use of the streets, does not, we think, carry with it the implied power to fix maximum rates for telephones."' Jacksonville V. Southern Bell Telephone & Telegraph Co., 57 Fla. 374, 49 So. 509, 511. The power to "regulate" does not include the right to alter rates. Shreveport Traction Co. v. Shreveport, 122 La. 1, 129 Am. St. Rep. 345, 47 So. 40. 54 Cumberland Telephone & Telegraph Co. v. Memphis, 200 Fed. 657; St. Louis v. Bell Tel. Co., 96 Mo. 623, 2 L. R. A. 278, 9 Am. St. Rep. 370, 10 S. W. 197; Bluefield Water Works & Improvement Co. v. Bluefield, 69 W. Va. 1, 33 L. R. A. (N. S.) 759, 70 S. E. 772. The general rule is that a municipality has no authority to regulate rates under the power conferred upon it to regulate the use of its streets nor under a general welfare clause of the charter, giving it authority to pass all such ordinances, not inconsistent with the provisions of the charter or laws of the state, as may be expedient in maintaining the peace, good government, health and welfare of the city. Jacksonville v. Southern Bell Telephone & Telegraph Co., 57 Fla. 374, 49 So. 509. 55 St. Louis v. Bell Tel. Co., 96 Mo. 623, 2 L. R. A. 278, 9 Am. St. Rep. 370, 10 S. W. 197. Statutory authority conferring on municipalities power to provide for the lighting of streets and giving gas companies the right to lay down pipes in the streets "subject to such regulations as any such city or vil lage may by ordinance impose" is not a delegation of power to regulate tion,56 or the "construction, maintenance and operation, 57 nor power to regulate public service companies, coupled with the power to license and tax them.58 So, since the power to regulate rates is not a power pertaining to the government of the municipal corporation, it does not follow as an incident to a grant of power to frame a charter for a municipal government.59 § 4483. Regulating rates outside municipality. Of course, a municipality cannot regulate rates as to corporations outside of the municipal limits.60 However, as a condition of granting a franchise to use streets, a municipality may make a certain rate a condition of granting the franchise to a street railway or interurban line, although the rate covers in part points outside the municipality; 61 but it has been held in California that a municipality, as rates. Mills v. Chicago, 127 Fed. 731. Power to regulate and control the use of, does not confer power to fix rates. Tacoma Gas & Elec. Light Co. v. Tacoma, 14 Wash. 288, 44 Pac. 655. 56 South McAlester-Eufaula Tel. Co. v. State, 25 Okla. 524, 106 Pac. 962. 57 A statute giving a municipality power to regulate by future ordinances the "construction, maintenance and operation" of all railway lines, does not give the municipality power to regulate fares. Minneapolis v. Minneapolis St. R. Co., 215 U. S. 417, 54 L. Ed. 259. 58 St. Louis v. Bell Tel. Co., 96 Mo. 623, 2 L. R. A. 278, 9 Am. St. Rep. 370, 10 S. W. 197. 59 State v. Missouri & K. Tel. Co., 189 Mo. 83, 88 S. W. 41, holding that ordinance of Kansas City fixing maximum rate to be charged by telephone companies for service in the city was void, although expressly authorized by the freeholder's charter, where state had not delegated to the city the power to exercise such authority in framing its charter. Where the power to fix rates is a right reserved by the people of the state, it cannot be held to be an incident to the right to frame a free holder's charter. State v. Superior Court King Co., 67 Wash. 37, L. R. A. 1915 C 287, Ann. Cas. 1913 D 78, 120 Pac. 861; Tacoma Gas & Elec. Light Co. v. Tacoma, 14 Wash. 288, 44 Pac. 655. 60 Home Tel. Co. v. Carthage, 235 Mo. 644, 48 L. R. A. (N. S.) 1055, Ann. Cas. 1912 D 301, 139 S. W. 547; Southwestern Telegraph & Telephone Co. v. Dallas (Tex. Civ. App.), 131 S. W. 80. A franchise limiting the rates of a telephone company does not apply to rates outside of the municipality. Moberly v. Richmond Tel. Co., 126 Ky. 369, 103 S. W. 714. of 61 Massachusetts. Selectmen Westwood v. Dedham & F. St. R. Co., 209 Mass. 213, 95 N. E. 81. Michigan. Vining v. Detroit, Y. A. A. & J. Ry. Co., 133 Mich. 539, 95 N. W. 542; Coy v. Detroit, Y. & A. A. Ry., 125 Mich. 616, 85 N. W. 6. New Jersey. Atlantic Coast Elec. R. Co. v. Board of Public Utility Com'rs, 89 N. J. L. 407, 99 Atl. 395. New York. Public Service Commission v. Westchester St. R. Co., 206 N. Y. 209, 99 N. E. 536. Wisconsin. Manitowoc V. Manitowoc & N. Traction Co., 145 Wis. a condition of granting a franchise to use the streets to an interurban railway, cannot fix the rates of fare between two cities.62 § 4484. Courts. Unless power so to do is conferred on the courts. by a valid statute,63 or where a court sits in a legislative capacity, as it does in a few states in reviewing rate regulations, they have no power to establish and fix rates,65 but can only enjoin the enforcement of a rate where it is held by the court to be so unreasonable as to be confiscatory. The reason for this is that the fixing 13, 140 Am. St. Rep. 1056, 129 N. W. 925. 62 South Pasadena v. Los Angeles Terminal Ry. Co., 109 Cal. 315, 41 Pac. 1093. 63 See In re Janvrin, 174 Mass. 514, 47 L. R. A. 319, 55 N. E. 381; Pioneer Telephone & Telegraph Co. v. Bartlesville, 40 Okla. 583, 139 Pac. 694. Constitutionality of statute creating court of visitation, see State v. Johnson, 61 Kan. 803, 49 L. R. A. 662, 60 Pac. 1068. 64 Pioneer Telephone & Telegraph Co. v. Bartlesville, 40 Okla. 583, 588, 139 Pac. 694. The constitution of the state sometimes expressly provides that the supreme court, on appeal, where it reverses an order fixing rates, may itself substitute such order as, in its opinion, the commission should have made at the time of entering the order appealed from. See Prentis v. Atlantic Coast Line R. Co., 211 U. S. 210, 53 L. Ed. 150, construing Constitution of Virginia but not deciding as to the power of the court to fix rates. 65 Atchison, T. & S. F. R. Co. v. United States, 232 U. S. 199, 58 L. Ed. 568; Prentis v. Atlantic Coast Line R. Co., 211 U. S. 210, 53 L. Ed. 150; Osborne v. San Diego Land & Town Co., 178 U. S. 22, 44 L. Ed. 961; Montana, W. & S. R. Co. v. Morley, 198 Fed. 991; Pocatello v. Murray, 173 Fed. 382; Brymer v. Butler Water Co., 179 Pa. St. 231, 36 L. R. A. 260, 36 Atl. 249, 39 Wkly. Notes Cas. 439; Ball v. Texarkana Water Corporation (Tex. Civ. App.), 127 S. W. 1068; Madison v. Madison Gas & Electric Co., 129 Wis. 249, 264, 8 L. R. A. (N. S.) 529, 116 Am. St. Rep. 944, 9 Ann. Cas. 819, 823 with note, 108 N. W. 65. A court cannot fix a reasonable rate, in connection with enjoining an unreasonable rate. Pacific Gas & Electric Co. v. San Francisco, 211 Fed. 202. "It follows, therefore, as a corollary of this doctrine, that courts have no power to prescribe a schedule of rates and charges for persons engaged in a public or quasi public service, because that is a legislative prerogative, and that the legislature has no power to forestall the judgment of the courts by declaring that a tariff or schedule prescribed by it is a finality, and thus prevent an inquiry into the reasonableness thereof by the courts in a controversy properly challenging such reasonableness. The legislative prerogative is the power to make the law, to prescribe the regulation or rule of action. The jurisdiction of the courts is to construe and apply the law or regulation after it is made. The two functions are essentially and vitally different." Western U. Tel. Co. v. Myatt, 98 Fed. 335, 342. This rule was applied to the charges of a warehouse company in Gulf Compress Co. v. Harris, Cortner & Co., 158 Ala. 343, 24 L. R. A. (N. S.) 399 with note, 48 So. 477. of rates is in the nature of a legislative function rather than a judicial function.66 The court, on review, cannot itself fix rates even where the statute expressly authorizes it "to decide such cases on their merits.” 67 If the statute gives the supreme court power to "set aside" the order of the commission, it must either set aside or affirm the order in toto and cannot either revise or modify the order. 68 C. Regulation of Rates as Violating Constitutional Provisions § 4485. Interference with interstate commerce. It is elementary that a state has no jurisdiction over rates for interstate transportation and that an attempt to regulate such rates by the state or under its authority is void; 69 but it may fix the intrastate rates of an interstate railroad or the like,70 notwithstanding the corporation was organized under an act of Congress.71 Furthermore, since rates for water transportation, where not connected with transportation by a railroad, have not been regulated by Congress, a state may regulate rates for transportation wholly by water between two ports in the state over the high seas.72 Whether the regulation of intrastate rates of an interstate railroad imposes a direct burden upon interstate commerce and creates unjust discriminations between localities within the state and those in adjoining states, has been considered at length by Justice Hughes in the celebrated Minnesota Rate Cases decided by the Supreme Court of the United States in 1912.73 66"Concisely stated, to prescribe a tariff of rates and charges is a legislative function; to determine whether existing or prescribed rates and charges are unreasonable is a judicial function." Western U. Tel. Co. v. Myatt, 98 Fed. 335. "Prescribing or regulating rates for public service corporations falls within the domain of legislation, and courts should not intrude." St. Paul Book & Stationery Co. v. St. Paul Gaslight Co., 130 Minn. 71, L. R. A. 1918 A 384, Ann. Cas. 1916 B 286 with note, 153 N. W. 262. 67 Seward v. Denver & R. G. R. Co., 17 N. M. 557, 46 L. R. A. (N. S.) 242, 131 Pac. 980. 68 Erie R. Co. v. Board of Public Utility Com'rs, 90 N. J. L. 271, 100 69 Railroad Commission of Ohio v. Worthington, 225 U. S. 101, 107, 56 L. Ed. 1004; Louisville & N. R. Co. v. Eubank, 184 U. S. 27, 46 L. Ed. 416. 70 See § 4478, supra. 71 Reagan v. Mercantile Trust Co., 154 U. S. 413, 38 L. Ed. 1028. 72 Wilmington Transp. Co. v. Railroad Commission of California, 236 U. S. 151, 59 L. Ed. 508, aff'g 166 Cal. 741, 137 Pac. 1153, where state commission of California regulated rates of steamship companies between San Pedro and Catalina Island. 73 Simpson v. Shepard, 230 U. S. In the case of a bridge across waters between two states which is an instrument of interstate traffic, one of the states has no power to regulate the rates of toll thereon.74 Interstate ferries, so far as operated in connection with interstate railroads, are within the Interstate Commerce Act passed by Congress, and hence their rates cannot be regulated by the states.75 But regulation of ferry rates, where no interstate railroad is concerned, on a stream between two states, by one of the states, is not invalid as a regulation of interstate commerce, where Congress has not legislated in regard thereto, although the power of the state can extend only to transactions within its own territory and the ferriage from its own shore.76 § 4486. Due process of law. Regulation of rates is invalid as a violation of due process of law where the rates fixed are so low as to be confiscatory in their nature,77 or where notice and a hearing are not afforded to the corporations whose rates are regulated,78 or where the penalties prescribed for violation of the rate regulations are so great as to in effect preclude a resort to the courts to determine the validity of the rate regulations.79 § 4487. Denial of equal protection of the laws. What has already been stated as to the unconstitutionality of regulations in general as violating the equal protection of the laws 80 applies equally well to rate regulations, at least in most cases. Generally speaking, a classification for rate purposes, of all railroads or other corporations, of the same class, whether the classification is according to the length of the line, the amount of business done, or the like, does not violate the equal protection of the laws provision; and the state or a commission may fix different passenger rates for different carriers.81 |