Philadelphia v. Philadelphia Rapid Transit Co.

Opinion by Me. Justice Stewart, Prior to the organization of the Philadelphia Rapid Transit Company, here the appellee, the lines of street railways in the city of Philadelphia were owned and operated by several independent companies. With a view to unify these to the extent of bringing them under a common system and management, the Philadelphia Rapid Transit Company by lease and otherwise acquired control of all of them. This control, while it allows each company to retain its separate existence, commits to the traction company the operation, management and regulation of each line of railway. The several companies differed both in their charter rights, and in their municipal privileges and obligations as well. To make these latter fixed, fair and uniform, to supersede former regulations, and to define and regulate the relations thereafter to be observed between the city and the railways — so reads the agreement— the contract of July 1,1907, was entered into between the city and the traction company. In its entirety the contract does [551] not concern us. It is quite enough to say of it that the advantages derived thereunder are reciprocal. It is only the limitation imposed by a proviso in the contract on the right of the company to change the rates of fare that calls for consideration here. The proviso is as follows: “Provided, however, That the present rates of fare may be changed from time to time, but only with the consent of both parties hereto.” At the time the contract was entered into, the regular fare charged on each line for a continuous ride in the same car, irrespective of distance traveled, whether for a square or to the terminus, was five cents. This fare was uniform throughout the city. For reasons of its own, not that it was compelled by law or ordinance to do so, the traction company had been accustomed to offer to the public cards or slips containing six printed, detachable tickets, each entitling the holder to a single continuous ride, for twenty-five cents. Each ticket was regarded as the equivalent of a five cent fare, and secured to the holder the same privileges. In addition, the company had in force at the date of the contract a system of free transfers which allowed one who paid a single fare, whether in cash or by ticket, to complete his ride on certain connecting roads without further charge. For reasons not necessary to discuss, the traction ‘company has since the date of the contract discontinued such privilege when the fare is paid by ticket, and' allows it only in cases where a cash fare has been paid. The bill complains that this action of the company is a change in its established rates of fare in force when the contract was entered into, inasmuch as it requires now a cash payment of five cents to secure the same transfer ride which before could be had on a ticket costing but four and one-sixth cents; and since the change was made without the consent of the city, an injunction was asked for to restrain the company from discriminating in the way indicated. The question thus presented is a very narrow one. The expression “rates of fare” as used in the proviso is more or less inapt, and therefore lacks definiteness. We are not aided in its interpretation by anything elsewhere appearing in the contract. The proviso is left to speak for itself. Strictly speaking, the traction com [552] pany had no established rates of fare when it entered into this contract. A rate is the measure of a thing by its ratio or relation to some fixed standard. When a certain sum is determined for a particular service, unless it is proportional and comparative according to a recognized standard, it is not a rate, but a charge. The compensation which this company was accustomed to receive for the facilities it afforded had relation to no standard. The five cent fare for one continuous ride was not measured by distance traveled or anything else that would suggest proportion; and the same must be said of every other fare it required. None of them was determined by ratio. It is quite evident, however, that the reference in the proviso was to the charges and fares the company was receiving at the date of the contract; it could be to nothing else. Accepting this as the meaning, it is necessary, first, to inquire what these several charges were. We have referred to one— five cents for a single continuous ride in the same car. Another was, eight cents for a single change from one car to another on certain intersecting lines. It is not denied that these charges fall within the meaning of the proviso. No attempt has been made to change these in any particular. It is contended that there was also a third .charge, distinguishable from those mentioned, which also falls within the proviso, viz.: twenty-five cents for six tickets when purchased together, each ticket being the equivalent of a five cent cash fare, and entitling the holder to equal service. It must be conceded, we think, that if this were a distinct charge within the contemplation of the parties, the change that is complained of with respect to it would be violative of the terms of the contract, since the ticket is no longer the full equivalent of a five cent fare, in that it will not now purchase the same facilities in the way of transfer. The question is — was it such a charge? The case turns upon the answer. The sum of twenty-five cents distributed upon six tickets makes the cost of each, considered separately, four and one-sixth cents. This simple statement would seem to show such a reduction in cost to the purchaser as would warrant a conclusion that the company had two charges for the same service, that is, the continuous ride, one [553] five cents, and another four and one-sixth cents. But this method of differentiating does not express the whole truth as we need to know it for a proper determination of the question. Clearly the four and one-sixth cents charge is not all the company exacts in the way of payment when it sells by ticket. One ticket cannot be purchased for that sum. In order to get one the purchaser must buy six, and pay twenty-five cents before he gets any service whatever in return. It results that the company gets the benefit of this advance payment without interest. Where all the six tickets are used promptly, the advantage derived by the company in this respect may be too slight to be considered; but, as everyone knows, all are not used promptly; and it is not mere speculation to say that the general average would show a very substantial benefit enuring to the company from this source, an advantage which could be very fairly regarded as the full equivalent of the amount abated. Whatever the company gains in this way is at the cost of the party purchasing, of course. These considerations would indicate that in adopting this charge for tickets the company had no intention of departing from the five cent standard charge for a continuous ride; but that what was intended, and all that was intended, was an equitable adjustment on the basis of a five cent fare for a continuous ride, which would advantage its patrons in the way of convenience without entailing loss upon the company. If any other purpose controlled, it is not apparent what it was. The company was all the while adhering to this five cent charge for the general public. The ticket arrangement was one of its own devising, adopted not because forced upon it, but at its own pleasure. If the purpose was to reduce the charge, the question at once arises, to what end? It will hardly be contended that it was to gratify a generous impulse prompted by an overabundant income. No more can it be supposed that it was done with a view to increase the company’s revenues through an enlarged traffic. The average individual would not be likely to take more rides during a month or year because of a reduction of five-sixths of a cent upon each ride. It is quite as inconceivable that its purpose was to give in [554] dividuals who, without inconvenience to themselves, could spare twenty-five cents at any time, the advantage of a lower fare than was charged those who could conveniently spare no more than five cents each time they traveled. The only reasonable explanation is that in adopting the ticket system the object was to afford an additional convenience for a consideration in the way. of advance payment, which would equal the amount of the abatement in the fare in dollars and cents. Indeed, we think it so evident that the purpose of the company was to adhere to the five cent charge as a basis, that we are unable to see how the complainant in contracting with the company with respect to the matter of its fares, could have had any reason to suppose that the ticket system introduced any other. It is only by supposing that the understanding of the parties with respect to it was wholly different from what the transaction on its face imports as to its meaning and purpose, that we can read this ticket system into the terms of the proviso, and there is nothing in the case as presented that would give us warrant for so doing. If, then, it is not “a rate of fare” within the meaning of the proviso, but a mere regulation for the convenience of the public involving no change in charge — and this is our conclusion — it follows that the traction company in restricting its application in the manner complained of was strictly within its rights, and the concurrence of the city was not required. The decree is affirmed and the bill dismissed at the costs of appellant.