Court Opinion

ID: 6737036
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:16.720111+00
Date Added: 2024-06-11T16:01:49.347013
License: Public Domain

Spalding-, Oh. J.
(concurring). The foregoing opinion follows as closely as possible the recent decisions of the Supreme Court of the United States in cases relating to railroad rates. The decisions of that court must, of course, control those of this body in actions of this nature, when the questions or principles are the same.
While the Supreme Court has laid down no very tangible- rules as methods of proving valuation, operating expenses, etc., it seems by a process of elimination to have disapproved the methods of proof adopted by the railroads in the case at bar.
About the nearest approach I can see to its stating a rule for valuation is found in the recent Minnesota Rate Cases, wherein it is said that, “for purposes of establishing rates, the valuation apart from any improvements it may make, cannot properly extend beyond the fair average of the normal market value of land in the vicinity having a similar character,” and other remarks indicating, as said by Judge Goss in expressing the views of this court, that “the actual reasonable market value of railroad property is the basis upon which to determine the percentage of returns yielded by net revenues.” It would seem to me that the reasonable market value of a trunk line of railroad is about as indefinite a basis from a practical standpoint as can be imagined. The history of the last twenty-five years would appear to indicate that railway properties have no value when placed upon the market, in any degree commensurate, either with their fair and honest cost, or their earning capacity, or the value of their stocks and bonds on the market.
If the cost of replacement of the road and equipment is a proper criterion, how can it be replaced, without providing for superintendence, surveying, engineering, and the other preliminary expenses, which are as essential and necessary elements in the construction of a road as are the materials for bridgés or station buildings ?
It is possible that the great court which passed upon these questions only intended its disapproval of proof of the nature offered by the roads, *503to go to tbe extent of rejecting tbeir method of reaching the cost of these elements in replacing transportation lines, because seemingly based upon an arbitrary percentage and without an attempt to show what the actual cost would approximate. The same may be said with reference to the damages which necessarily must be paid to property owners whose property is taken or injured. The observation of every intelligent man conversant with railroad building in a part of the country where lines of many roads are being constantly extended can only lead to the conclusion that, in practice, railways are compelled, either by voluntary payment or through the medium of the courts, to pay far more for the acreage composing the right of way, and the damages to property occasioned hy constructing the lines, than private individuals would have to pay for the same items for other purposes; but, if the railroads are to be constructed or extended, these are elements which someone must pay for, and if the roads are not to he allowed to charge a rate which will furnish a reasonable return on the amount invested for these purposes, I am not quite clear as to who will be found willing to advance the sums to be expended for these items, and which are expenses which must he incurred before the road can he operated or even constructed.
I am constrained to state my impression from a consideration of the authorities and the evidence submitted in the several cases, that the state of the law at this writing is such as to render it a practical impossibility for a common carrier to establish the facts necessary to its protection against confiscation through the medium of confiscatory rates. This applies as well to methods of distributing the receipts and expenditures between interstate and intrastate traffic, as to the proof of value of the plant. The methods of proof adopted by the roads in the instant cases were the same employed in several of the cases to which reference has been made in the main opinion herein, the most recent of such cases, however, not having been decided until after the proof was taken in the cases at bar, hence, the railroads find themselves provided only with proof which has met the condemnation of the Supreme Court of the United States, and which therefore must be held inadequate by this court.