American Toll Bridge Co. v. Railroad Commission of California

that it also intended some measure of protection to the public’s right to be charged not more than a reasonable toll for the use of the bridge. ... In 1872, when section 2846 was enacted by the legislature, sufficient scope was allowed between both interests, public and private, to permit adequate elasticity in the exercise of. the legislative rate-making function in the light of prevailing economic conditions. Such a statute does not savor of a contract obligation to the grantee. Its object was to delegate to and vest in the designated body the power to regulate tolls as circumscribed by the stated limitation.” 12 Cal. 2d 195 ; 83 P. 2d 6 .

Upon the issue whether the order is repugnant to the contract clause, “No State shall . . . pass any . . . Law impairing the Obligation of Contracts,” this Court, while inclining to the state court’s construction, will decide for itself whether, as claimed by appellant, the franchise by contract limits exertion of sovereign powers to regulate tolls. Georgia Ry. Co. v. Decatur, 262 U. S. 432 , 438. New York Rapid Transit Corp. v. New York, 303 U. S. 573 , 593. And, if it plainly appears that it does, this Court will not hesitate so to adjudge. Detroit United Ry. v. Michigan, 242 U. S. 238 , 251-253. Cleveland v. Cleveland City Ry. Co., 194 U. S. 517 , 524, 536. Detroit v. Detroit Citizens Street Ry. Co., 184 U. S. 368 , 382, 389. St. Cloud Public Service Co. v. St. Cloud, 265 U. S. 352 . Compare Georgia v. Chattanooga, 264 U. S. 472 , 480.

Upon an elaborate review of the California legislation relating to bridge tolls, appellant says that in the first period, 1850 ,to 1857, bridge franchises allowed owners to take only such tolls as the courts of sessions and, later, the county boards should fix annually; that in the second period, 1857 to 1864, tolls were limited to those fixed by county boards annually, subject to change by the legislature that in the third period, 1862 to 1872, general statutes and special acts authorized such rates as the

county boards should annually prescribe, declaring, however, that they should not be so low as to make income less than a specified percentage of a defined base. On that foundation, it maintains that there was an evolution of policy to grant to builders and operators of bridges contract rights as to tolls. In that light it examines the language of §§ 2845 and 2846 and concludes that the proper construction of. the franchise in question is that unless the yield becomes in excess of 15 per cent the license tax must not be increased and the rate of toll must not be diminished.

We assume, without ■ detailed examination, that the legislation so portrayed indicates that in the period next preceding 1872, when the provisions of § 2846 were enacted, the State had adopted the policy of safeguarding operators of toll bridges against rate reduction by county boards below specified levels. But that fact may not be employed to arrive at a construction not indicated by the language used. So far as concerns the point under consideration, the meaning of the statutory provision is plain. Section 2845 requires the county board, when granting the franchise, to fix the license tax within specified limits and a rate of toll, which must not raise annually an income exceeding 15 per cent of base. Section 2846 declares that the license tax and the rate of toll so fixed must not be diminished unless receipts are disproportionate to base. Thus plainly the commands are that at first the tolls must be fixed, but not to produce income above the 15 per cent specified, and that the tolls so fixed shall not be diminished unless yield is disproportionate to the defined base. Neither in text nor in reason is the “fifteen per cent” prescribed as maximum yield tied to, or made the test by which to ascertain whether receipts from tolls are, “disproportionate.” We construe these statutory provisions to negative appellant’s claim that by the franchise in question the State bargained away power to reduce tolls for use, of the Carquinez bridge unless

specifically sets forth the grounds on which appellant claimed the decision to be unlawful. These include the commission’s determination of the various classes of facts usually considered in cases in which prescribed rates are challenged as confiscatory. The petition contains no hint of claim that the commission denied appellant procedural due process. .Nor was that specifiéd in the petition for judicial review. Morgan v. United States, 304 U. S. 1 , on which appellant relies, was decided after filing of that petition and before argument in the California court. That court rightly held it not in point.

Appellant also claims that the commission denied it procedural due process by excluding the Antioch, bridge rates from the proceeding. It moved to include with this proceeding an investigation of the Antioch bridge tolls. In support of the motion, it suggested that the bridges are part of a single system but compete with each other; that operations of the Antioch are less satisfactory financially than those of the Carquinez; and that reduction of Carquinez tolls would force reduction of Antioch tolls.

In the first instance, at least, determination of the proper unit for rate making was for the commission. The Antioch bridge is not used or useful to render any service covered by the Carquinez tolls; appellant’s duty to operate either bridge is independent of its obligation to operate the other. . The record discloses no basis on which it reasonably may be held that by limiting the investigation to the Carquinez tolls the commission abused its discretion, and clearly there is no' foundation for the claim that in excluding the Antioch the commission denied appellant procedural due process. See Gilchrist v. Interborough Co., 279 U. S. 159 , 206, 209. Wabash Valley Electric Co. v. Young, 287 U. S. 488 , 495-8. Florida Power & Light Co. v. Miami, 98 F. 2d 180 . International Ry. Co. v. Prendergast, 1 F. Supp. 623 . Cf. Coney v. Broad River Power Co., 171 S. C. 377 ; 172 S. E. 437 .

There is no foundation for the claim that the commission’s procedure violated the due process clause of the Fourteenth • Amendment.

. There remains for consideration the contention that the prescribed rates are confiscatory. The burden is on appellant to show that enforcement of the order will compel it, to furnish the service covered by the reduced rates for. less than a reasonable rate of return on the value of the property used, at the time it is being used, for that service. And, in the absence of clear and convincing proof that the reduced tolls áre too low to yield that return, it

may not be adjudged' that the State by enforcement of the measure complained of will deprive appellant of its property without due process of law. Chicago & G. T. Ry. Co. v. Wellman, 143 U. S. 339 , 344-345. San Diego Land & Town Co. v. Jasper, 189 U. S. 439 , 441, 446. Knoxville v. Knoxville Water Co., 212 U. S. 1 , 8, 16. The Minnesota Rate Cases, 230 U. S. 352 , 433, 452. Brush Electric Co. v. Galveston, 262 U. S. 443 , 446. Aetna Insurance Co. v. Hyde, 275 U. S. 440 , 448.

The terms of the order must first be given attention. It directs appellant to change the items of its schedule of charges, reading as follows: “Passengers (7 years of age and older) on foot or in vehicles . . . $.10. Auto only . . . .60” so as to read: “Passengers'(7 years of age and older) on foot or in vehicles . . . .05. Auto only . . . .45.” Thus, the order extends only to automobiles and passengers. The Carquinez franchise specifies, until otherwise ordered by the commission, tolls applicable to other classes of traffic crossing the bridge, namely, bicycles, carts and wagons, commercial or delivery automobiles and motor trucks, ditchers, harvesters, etc., cattle and stock, motor stages to which commutation rates are applied when operated as specified, freight, hearses, horses, motorcycles, and trailers.

Appellant fails to establish, by allocation or apportionment to the traffic covered by the tolls so reduced, the operating expenses, cost of depreciation, taxes, and contributions to the sinking fund for amortization of investment that are fairly attributable to the service covered by the order; it also fails to establish the amount of property value that is justly assignable to that traffic. Obviously, the return to be yielded by the rfedueed tolls cannot be found without comparison of the revenues to be derived from the service with the amounts of operating expenses and other charges rightly to be made against them. Inadequacy of revenues, from all traffic

does not tend to show that the rates on automobiles and persons prescribed by the commission’s order are too low. The Minnesota Rate Cases, supra, 452-453 . Baltimore & Ohio R. Co. v. United States, 298 U. S. 349 , 372, 378, 381. It follows that appellant is not entitled to a decree that the order is confiscatory.

More need not be written to dispose of the issues presented in this case. But in view of appellant’s earnest contentions, it is not inappropriate to say that the record, considered in the light of its argument, fails to show that the rate reduction will so lessen revenues from the Car-quinez bridge that there will remain less than sufficient, under the due process clause, to constitute just compensation for its use — a reasonable rate of return on the value of the bridge property.

Judgment affirmed.

Mr. Justice Black, Mr. Justice Frankfurter and Mr. Justice Douglas concur in the result.