21 A.2d 912 | Pa. | 1941
The Bell Telephone Company of Pennsylvania filed a bill in equity asking for an injunction restraining the defendants from enforcing against it Section 702* of the Public Utility Law of 1937, as amended by Act of *111
September 28, 1938, P. L. 44 (
The appellants renew their objection to the bill, insisting that where a statute requires commission approval of a contract between a public utility and an affiliated interest as a precedent to its validity, one who comes within the terms of the statute but who has failed to make the required application and against whom no attempt has been made to impose penalties cannot complain that the statute is unconstitutional. They suggest that the constitutionality of this section might be raised either by making contracts without prior approval from the commission and raising the constitutional question when penalties for the violation are attempted to be enforced, *112 or by complying with the section, and if at any time approval is refused, arguing the constitutionality of the act on appeal.
We have no doubt about the right of the Court of Common Pleas of Dauphin County in the exercise of its equitable powers to entertain a bill to enjoin an administrative agency of the Commonwealth from exercising powers not conferred on it or unconstitutionally conferred on it. That point has been decided too frequently to be longer in doubt: Martin v. Baldy,
As to the alternative suggestion it is sufficient to say that the remedy is inadequate. The company was not under obligation to submit to the enforcement of an unconstitutional law. The chancellor found as a fact that appellee enters into more than thirty contracts a year for which it would be required to secure the approval of the commission. Much of its equipment must be obtained from an affiliate, the Western Electric Company, or otherwise it would be embarrassed in exercising its franchises and in furnishing service to the public with *113 resultant injury to it and the public. It was also found that compliance by plaintiff with § 702 would subject it "to expense in each case in the preparation of and the hearings on such applications, and also subject plaintiff to the expense incurred by the Commission in the investigation of and hearings on such applications. . . . These expenses plaintiff would be unable to recover back. There might be delay in the commencement and completion of projects for which such contracts and orders were made or given, due to the necessity of preparation of and hearings on said applications and decision thereon. There would also be delay in the extension, replacement, or improvement of plaintiff's facilities for public service." When we consider that such hearings frequently cause delay of months and even years, it is clear that the company does not have an adequate or sufficient remedy.
It is the contention of the appellee, sustained by the court below, that § 702 unlawfully delegates legislative powers to the commission and is therefore unconstitutional. As the conclusion of that court seems so clearly right, it will not be necessary to consider other objections to the section raised by the company. While we approach the subject with the presumption that the section is valid and constitutional, there are, nevertheless, constitutional limitations upon the power of the legislature to delegate its authority. This is firmly established by previous decisions of this court as well as by those of the Supreme Court of the United States. The constitution of this Commonwealth, in Articles II, § 1, provides: "The legislative power of this Commonwealth shall be vested in a General Assembly which shall consist of a Senate and a House of Representatives." In Boro. of W. Phila., 5 W.
S. 281, 283, we said: "Under a well-balanced constitution, the legislature can no more delegate its proper function than can the judiciary." The limits upon the power to delegate authority are set forth in the leading case of Locke's Appeal,
We are here concerned with that portion of § 702 which requires the prior approval of the commission before the utility may make effective or modify any contract with an affiliated interest and our first inquiry is whether the company is affected by the alleged unconstitutional *115 features of the section. The elementary facts found by the court or shown by the pleadings demonstrate that it is. The operating territory of the Bell Telephone Company of Pennsylvania is confined to Pennsylvania but it is surrounded by territory of other Bell companies owned or controlled by the American Telephone and Telegraph Company, so that each has an affiliated interest with the others within the meaning of the Public Utility Law. By reason of the long distance telephone service rendered there is necessarily a close working interest among the affiliates. The lines are not only connected but the method of conducting intercommunications makes necessary the use in common of poles, ducts and other spaces with the result that there are many contractual dealings in varied forms. The appellee has no purchasing department of its own, no warehouses, no organization for disposing of equipment which is junked, no engineering force for installing central office equipment. All this service is performed by an affiliate, the Western Electric Company. It must make many contracts with that company that come within the terms of the section and it is frequently necessary to modify such contracts.
The Western Electric Company manufactures about 23,000 items which are used by this utility and less than 3,000 of them can be obtained elsewhere. It would greatly increase the cost of equipment to the appellee if it were deprived of this source of purchase. The delays incident to applications and hearings would seriously affect the service rendered by the company and entail much engineering and legal expense.
There is no explicit standard set up in this section to guide the commission and we do not understand that the appellants contend that there is. They seek to find such guide by reference to the whole act. The appellants' argument becomes somewhat hard to follow at this point for they do not make clear whether the alleged implicit standard is merely public interest or something more *116 definite. The form of this section would seem to indicate that the legislature did not intend to set up any standard for the commission in approving contracts, for its power to approve or disapprove is untrammeled by any conditions while the right of the commission to withdraw its approval previously given is conditioned on a finding of public interest.
Even if we were to consider that public interest can be implied as the standard for approval, that term would not be a proper standard unless further defined or limited in its meaning. To hold otherwise would be to reject the rule that the legislature may not delegate its authority to legislate since in any such delegation there is an implication that the power will be exercised in the public interest. Before any commission can decide whether a contract is contrary to public interest, it is necessary to find what is or what is not in the public interest. The power to make such determination rests with the legislature and without such declaration the commission would be without a standard or criterion. The phrase "public interest" as used in this connection is "a concept without ascertainable criterion." At best the term is too vague and elastic to furnish a standard. As we have said: "In all such occasions, nevertheless, the legislative body must surround such authority with definite standards, policies and limitations to which such administrative officers, boards or commissions, must strictly adhere and by which they are strictly governed. . . . If the legislature fails, however, to prescribe with reasonable clarity the limits of the power delegated or if those limits are too broad its attempt to delegate is a nullity: Schechter Poultry Corp. v. UnitedStates,
There are undoubtedly situations where the courts have been able to gather a definite and clear standard or criterion for the guidance of commissions and similar *117
bodies by resort to an entire act and the context. Such were the situations in Texas v. U.S.,
It is conceded that the legislature may forbid contracts between affiliates which are inimical to the public interest and that the legislature may establish primary standards which such contracts must meet and then delegate to the commission the power to determine the facts which place such contracts within or outside the legislative prohibition. The objection to the course followed here is that the commission is not restrained in any respect by a standard or norm. It is the prerogative of the legislature and not of the commission to determine what the public policy shall be. When this has been done the commission may then determine whether a state of facts shows a compliance with that predetermined policy.
The act as a whole covers many sorts of utilities and a multiplicity of subjects that naturally arise in serving the public, but when we examine it with the purpose in view of finding whether there is any standard that may be employed in interpreting § 702, we find only a general *118
purpose to regulate rates and to assure adequate service without discrimination. The relation of § 702 to rates is exceedingly tenuous for it is specifically provided by § 705 (
It is well settled that the commission is not the financial manager of the corporation: Chambersburg Gas Co. v. P. S.C., supra (p. 227); Springfield v. Springfield Gas Elec. Corp.,
The decree of the court below is affirmed at the costs of the defendants, but the plaintiff shall bear the expense of printing its own briefs.
