Calumet Service Co. v. City of Chilton

148 Wis. 334 | Wis. | 1912

Lead Opinion

Marshall, J.

In the foregoing summary, covering a few pages, we have stated, it is thought, the essentials, from any viewpoint, of the fifty-four-page finding required to be examined in order to discover just what was decided in this case as a basis for the judgment. A recast of the findings. seemed necessary. It bas been accomplished by elimination of over nine tenths of the words originally used. The vital matters could, by more study, be covered by still less. It would be a valuable change in administration, one tending to successfully meet some criticism of the law where it is free from fault, the trouble being with its administration, if more attention could be efficiently given to closing an equity case by concise findings of fact, covering singly and concisely the material pleaded, or pleadable, and proved or admitted grounds for redress or defense, avoiding repetition, elaboration, discussion, and all evidentiary matters even to mere evi-dentiary facts. Such is what the Code calls for. To such its letter and spirit restrict the findings. Why not conform thereto, especially since the labor, and the expense, both public and private, are thereby minimized and the case would be, as a rule, more easily understood, the initial judgment be more liable than otherwise-to be securely grounded; in short, since there are many and very valuable advantages, both public and private, in the course suggested and no disadvantages. The court has spoken several times,' quite emphatically, on this subject, and not without effect, though with less, as the case in hand and others which have come to this court indicate, than we had hoped for. This is said with more of desire to lighten the labor of the overworked trial judge than thought of criticising.

The overcaution which often results in such excessively long findings as we have had to deal with here, greatly adds to the necessary labor of trial courts and this court without corresponding benefits, — generally the opposite. Elimination of all which is unnecessary, so far as practicable, and concentration of energy upon essentials, will minimize work while raising the grade of it, and greatly add to efficiency of each unit in the field of trial administration. Without saying more we counsel attention to Farmer v. St. Croix P. Co. 117 Wis. 76, 93 N. W. 830; McKenzie v. Haines, 123 Wis. 557, 102 N. W. 33; McDougald v. New Richmond R. M. Co. 125 Wis. 121, 103 N. W. 244; Fanning v. Murphy, 126 Wis. 538, 105 N. W. 1056; Neacy v. Milwaukee Co. 144 Wis. 210, 222, 128 N. W. 1063.

Tbe briefs of counsel for appellant cover a wide range of subjects. It includes many which, in the judgment here, are not sufficiently material to warrant special treatment. They are all interesting subjects for study. Each was exhaustively and technically treated by the eminent counsel. If the result of the case, from any viewpoint involving doubt, depended upon a discussion of them in detail the mere labor of it would not cause hesitation to meet the situation.

The case is one of great importance as regards the few vital questions. It is especially so as to the main contention,— the real key of the controversy between the parties. It is so important to the vast public interests involved in the public utility field, which the legislature evidently intended to encompass by ch. 499, Laws of 1907 (secs. 1797m. — 1 to 1797m — 108),—and, so far, it has been found to have accomplished the task with such distinguished completeness that the enactment stands as a most consummate effort of legislative wisdom and a model for similar efforts elsewhere,— it is thought that any uncertainty left in the law by the previous judicial tests which have been applied to it, can best be eliminated by confining this opinion and discussion to the particular point, or points, of uncertainty which constitute the real root of this litigation, turning aside all mere technical questions and makeweights. Thus restricted the opinion is liable to be of unusual length.

Are those of the findings of fact which call into activity the questions of law upon which the legitimacy of the judgment complained of depends, sustained by the evidence? That is the first grand division of the subject to be dealt with. If there are other findings not material from the suggested viewpoint they may well, and will, be passed without special mention. Thus brushing aside the inconsequential, we come first to the question of whether respondent’s remote grantor, the Wisconsin Electric Company, acquired an indeterminate permit under the public utility law. The court so found as a fact, and the finding was duly excepted to. In a sense, it was a mixed matter of law and fact, but so far partook of the cast of- the latter that it was properly pleadable as a fact and thus passed upon.

Subsidiary to the foregoing major proposition, is the question of whether the Electric Company, at the time of the surrender proceedings, December 21, 1907, satisfied the calls of sec. 1797to — 1 of the public utility law for a “corporation . . . that . . . may own, operate, manage or control any plant or equipment or any part of a plant or equipment within the state, . . . for the production, transmission, delivery or furnishing of heat, light, ... or power either directly or indirectly to or for the public,” and at the same time satisfied the calls of sec. 1797m — 77 of such law for a “public utility, being ... a corporation duly organized under the laws of the state of Wisconsin, operating under an existing license, permit or franchise.”

There is no question but that the Electric Company complied with all requirements of the surrender feature of the law found in the last mentioned section, or but that if, at the time of the surrender, it had the requisite status to satisfy the - calls aforesaid, it received by operation of law, in consideration of that which it surrendered, an indeterminate permit of the character mentioned in the public utility act and offered to any corporation possessing such status in exchange for its existing privilege. So we turn to the question of competency.

It is useless to discuss at any great length, whether the Electric Company satisfied the full scope of sec. 1797m — 1, since it is clear beyond room for fair controversy, that it responded thereto sufficiently. The comprehensive language, “own, operate, manage or control any plant or equipment or any part of a plant or equipment witbin the state, . . . for the production, transmission, delivery or furnishing of heat, light, ... or power either directly or indirectly to or for the public,” was plainly designed to cover every conceivable situation of the existence of an industry of the nature mentioned. No room was left for controversies over technical ownership or capacity to own. The purpose was to encompass the physical situation, — to deal with the condition whatever it might be, and the person, natural or artificial, whatever might be the particular relation of the person, or persons, natural or artificial, to the physical situation or condition, whether that of owner, operator, manager or controller, and give thereto the status of a public utility. The Electric Company obviously was located somewhere within this broad field. Therefore, it was a public utility, — one essential to capacity to acquire an indeterminate permit under sec. 1791m — 11.

Now regardless of the exact scope of the corporate powers of the Electric Company it clearly was a duly organized corporation under the laws of this state and so had the second essential to acquire the permit. While there seems to be no efficient ground for impeaching the original scope of the organization, a point perhaps not essential to this case, there is no ground which can be urged collaterally, and none that could be by defendant in any event, since there is no question but that it was at least a corporation de facto. Moreover, the city, both in its own behalf and as a state agency, recognized and dealt with it as a corporation for much over a year after the company took over the property from its predecessor. In proceedings before the railroad commission the city insisted by sworn petition that the company was a duly organized domestic corporation; that it became owner of the Bink franchise; that it had duly surrendered the same; and that the city had refused to deal with it under the public utility law for reasons suggested. 2 Eailroad Comm. Eep. 326.

Notwithstanding the foregoing, which we only refer to as an additional ground for the essential of efficient corporate status, the case might well he rested in respect to the matter upon what seems from the record quite plain, i. e. that there was no infirmity in the corporate organization or capacity in any event. But if it were otherwise as to the original scope of the corporate authority, the company possessed ample power because, hy force of the public utility law, the corporate authority was automatically expanded, if necessary, to enable the company to receive the thing given to it for the one surrendered, — the one which it was operating under, regardless of any technical question as to its previous capacity, at the suit of the state, to so operate. No opportunity was left at this point for cavil or complication. If the corporation was ■operating, within the meaning of the law, under the privilege surrendered, and had a right, as against any other claimant, to make the surrender, that gave it corporate capacity to do so. The law, in holding out the consideration for the surrender and inviting acceptance thereof, hy necessary implication afforded the company capacity to deal with the state in .such invited exchange of equivalents. The paramount essential was that the company making the'surrender should he a •domestic corporation, — one referable to Wisconsin law for 'its existence and powers, thus possessing a status enabling the state to shape such powers, if necessary, so as to meet the necessities of the contemplated traffic in privileges, — a corporation amenable to Wisconsin jurisdiction to the fullest extent essential to enable the administrative commission to readily prevent abuse of the privilege granted and compel full ■performance of the duties incident to the grant.

Whether the Electric Company had a franchise, in the •strict technical sense, granted by the city of Chilton to do public utility business therein, though we perceive no good reason why not, independently of any statutory definition, is of little moment. The legislature anticipated room for controversies •over such matters and, ex industria, guarded against it. In that respect tbe most consummate care w,as used in framing tbe law. Tbe legislature did not rest tbe matter, as it might have done, by mere use of tbe term “franchise.” Tbe broad term was used instead, “license, permit or franchise,” — in short, any public privilege of any sort to do any kind of tbe service mentioned within tbe scope of tbe public utility law, followed by tbe term “franchise” as a synonym for tbe entirety. Tbe company bad tbe privilege granted to Bink. That is clear. Tbe appellant confessed it in tbe proceedings before tbe commission, as we bave seen. It was a privilege of some sort to do public utility business in tbe city of Chil-ton, covered by tbe broad phrasing repeatedly therein used, “license, permit or franchise,” and in tbe more concise phrasing in see. 1797m,' — 77, referring to tbe broader one as an entirety for an antecedent “franchise.” Here again note tbe legislative care to guard against prejudicial controversies over tbe subject dealt with. Observe that it was a situation and a condition in the entirety which tbe lawmaking power bad in view. Plainly tbe purpose was not to leave any room for claiming that any part thereof was omitted by grounding tbe claim on technicality as to tbe meaning of words. In tbe popular, if not legal conception, and why not tbe latter is not perceived, a privilege to do anything, not a matter of common right but referable either directly or indirectly to sovereignty as tbe grantor, is a franchise. Tbe legislature evidently bad this conception in mind, yet thought it was synonymous with tbe legal meaning, but to remove all doubt used tbe words, as indicated, “license, permit or franchise,” and “franchise,” interchangeably. So tbe Electric Company bad tbe third essential to competency to acquire an indeterminate permit.

Was tbe company, operating under its existing “license, permit or franchise” within tbe meaning of sec. 1797m — 77 ?' There seems to be no question about that. At tbe date of tbe surrender proceedings, December 21, 1907, tbe company was. furnishing electric current, both to and for the public for all purposes. It continued to thus furnish till January 17, 1908, and till the defendant refused to deal "with it under any circumstances, or to recognize it as having any rights under the public utility law, thus creating a condition rendering temporary suspension necessary to prevent loss, and excusable as the trial court decided. We will say, in passing, that the words “operating under,” etc., in sec. 1797?» — 77, were doubtless used in the same sense as the words “in operation under” in sec. 1797?» — 74 which we shall speak of later. Enough has been said, at this point, to show that the Electric Company had the particular feature here discussed of capacity to surrender its existing permit and obtain a new one in lieu thereof.

So the findings are amply sustained that the Electric Company December 21, 1907, acquired an indeterminate permit. The surrender proceedings in form and substance were without infirmity; the company had all the essentials of capacity to make'the exchange, — (a) It was a public utility; (b) It was a duly organized corporation under the laws of this state; (c) It had a “license, permit or franchise” to do public utility business in the city of Chilton; and (d) It was operating under such “license, permit or franchise.”

The next subsidiary question is: What was the scope of the privilege ? That is plainly ruled by the letter of the public utility law as analyzed in State ex rel. Kenosha G. & E. Co. v. Kenosha E. R. Co. 145 Wis. 337, 129 N. W. 600, and La Crosse v. La Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530. It was a privilege emanating directly from the state to do the things theretofore privileged by it through the city as a state agency, freed from all conditions or limitations except those of the public utility law. This field was explored so fully in the La Crosse Case that the better way now, as it seems, is to refer thereto respecting matters therein settled instead of indulging in any lengthy rediscussion thereof.

Eo question is raised but that the Bink franchise privileged tbe grantee to generate and convey electric current and distribute it in the city of Chilton to supply the city and its inhabitants with light, heat, and power, and to use the public places of the city and do the things usual to that end. By the terms of the privilege, it contemplated a means of supplying electric current directly to the public by dealing with its inhabitants in their individual capacities, all possessing the common right to be served, and to the city, — the inhabitants thereof in their corporate capacity. That contemplated not’ only supplying, as indicated, but having a supply or capacity to supply from, to satisfy all needs within the corporate limits ■of the municipality. The privilege, as to the corporation, was no less significant than as to the inhabitants, except as regards the ten-year limitation of exclusiveness. As to the mepe preferential element in serving the city in the public utility field, there was no difference.

The Wisconsin Electric Company then was clothed with an indeterminate permit of the full scope mentioned. It manifestly included the privilege to do all things contemplated by the terms “supply to the city or its inhabitants” found in the original grant. That it included supply to the city by the grantee utilizing the current to do the municipal lighting is evident, because such particular use was specified and, as we have seen, made exclusive for a term of years and preferential thereafter, in the Bink franchise.

Thus the principal proposition stated at the outset must be answered in the affirmative. The Wisconsin Electric Service Company, as found, on the 21st day of December, 1901, became the owner of a “license, permit or franchise,” call it what we may, from the state, characterized in the public utility law as an indeterminate permit, of the scope, as regards the privilege feature, of the Bink franchise, as herein determined. The physical things in use and for use in connection therewith, and the existing business to which the privilege was referable, all became, by operation of law, merged in the single thing, the public utility property. The franchise, in such circumstances, is the principal thing and, in general, is inseparable from the rest. The latter really partakes of the nature of the former. Washburn v. Washburn W. Co. 120 Wis. 575, 98 N. W. 539; Chicago & N. W. R. Co. v. State, 128 Wis. 553, 619, 108 N. W. 557. The entire thing is to be considered apart from the franchise to be a corporation which is inherently unassignable, and apart from such property franchises as are unassignable by their terms. The entire privilege element here was susceptible of ownership as property, subject to- the conditions and limitations of the public utility law, and so assignable to any purchaser competent to take thereunder, — a corporation duly organized under the laws of this state, sec. 1797m — 75, Stats. (Laws of 1907, ch. 499).

The corporation which took title from the Wisconsin Electric Service Company seems to have satisfied all the requisites mentioned. If as a purchaser from the grantee of the state the public utility law cannot be referred to as expanding its corporate capacity if necessary to fit the situation, as in case of the original grantee, and so its capacity must be found in its articles, they seem to be sufficient. They specify the “manufacture, sale and distribution of . . . electric currents” for all purposes. That would seem to leave no infirmity in corporate power, since incidental to the broad general purpose there must exist the ordinary and reasonable means of effecting it. But in any event, the mere want of power could not he challenged collaterally. John V. Farwell Co. v. Wolf, 96 Wis. 10, 70 N. W. 289, 71 N. W. 883; Eastman v. Parkinson, 133 Wis. 375, 113 N. W. 649; Security Nat. Bank v. St. Croix P. Co. 117 Wis. 211, 94 N. W. 74.

Further, the third corporation was not much more than a mere conduit through which the property, by due conveyance, passed to and was vested in the fourth corporation, the respondent, which was organized for the particular purpose of acquiring it and performing the public duties incident to its. ownership. It expressly purposed, among others, this: to-“manufacture, distribute and sell electricity . . . for any and all purposes ... to acquire the franchise rights, privileges, contracts, real estate and electric lighting plant at Chil-ton, Wisconsin, for the purpose of reorganization, improvement and operation, and to enjoy all the powers conferred bylaw upon domestic public-service corporations.”

So, still laying aside for the present the effect of the attempted repeal of the Bink franchise, the findings that plaintiff was competent to acquire and own the indeterminate permit aforesaid, and did so August 18, 1908, and continued to be such owner and to actually operate the property and perform its public utility duties from that time down to the time of trial, barring some interferences mentioned in the findings, which need not be more than incidentally referred to, seem to-be supported beyond room for successful challenge. That, the corporation was organized in good faith by those whose money was invested in the property, as found, does not appear-to be assailable.

The next basic question is this: What were the conditions-, and limitations of the rights incident to the indeterminate permit? We have heretofore dealt mainly, with the privilege feature, finding that it includes supplying the city of' Chilton as well as its inhabitants with electric current for heat, light, or power, in short, all purposes, and maintaining- and operating a plant with all essential or convenient accessories to that end. But the mere privilege feature is' one-thing, while the conditions and limitations is another.

The trial court covered the subject of conditions and limitations of the indeterminate permit as matter of fact, and! permissibly so. It is of mixed law and fact, partaking more ■ of the latter than the former.

The findings are to the effect that only the privilege feature-of the old franchise, survived the surrender for its equivalent; emanating directly from tbe state; tbat all tbe conditions and limitations of tbe old one and all contract features between tbe city and tbe owners of tbe privilege inherent in tbe grant,, were extinguished by tbe surrender and superseded by tbe “conditions and limitations” of tbe public utility law. Is. tbat finding correct ?

Tbe stated proposition is ruled in tbe affirmative by tbe letter and spirit of tbe public utility law and by tbe previous decisions of this court. State ex rel. Kenosha G. & E. Co. v. Kenosha E. R. Co. 145 Wis. 337, 129 N. W. 600; Manitowoc v. Manitowoc & N. T. Co. 145 Wis. 13, 129 N. W. 925; La Grosse v. La Grosse G. & E. Co. 145 Wis. 408, 130 N. W. 530. After tbe full discussion of tbe subject in tbe last case cited, it does not seem best to go over tbe matter again, at. least, more than briefly or incidentally.'

Tbe court there called attention to tbe significant language of sec. 1191m — 71, “shall . . . receive by operation of law in lien thereof, an indeterminate permit . . . and such public utility shall bold such permit under all tbe terms, conditions and limitations of this act.” Tbat negatives, as was said, “any idea tbat the legislature contemplated tbe so-called, indeterminate permit would be subject to any conditions or limitations of tbe surrendered grant; that any limitation or condition was in legislative contemplation, except those 'of' this act’ independently of tbe scope of tbe mere privilege feature and appropriate police regulations. Tbe idea was tbe exchange of a privilege held upon specified conditions and limitations mentioned therein or attached thereto for a new one of equal dignity” as to tbe privilege feature, “subject only to tbe conditions and limitations of this act.” Tbe court, further, after quoting sec. 1191m — 11, said:

“Does not tbat language tell, without judicial aid, its own plain story, contemplating as to old franchises, in their en-tireties, a complete severance of all relations between sovereign authority, — whether exercised directly or through municipal agencies, — and the owners of the franchises, by an optional exchange of old ones for new ones, equivalent as to the privilege element, denominated indeterminate permits ? There is no suggestion in the statutes of coercion, no hint of a purpose to take away from franchise owners anything other than by their consent; exchanging in each case a privilege with new incidents for an old one with its incidents; a complete change from an existing to a new condition.” . . .

“Bx industria the legislature said, The filing of such declaration shall be deemed a waiver by such public utility of the right to insist upon fulfilment of any contract theretofore entered into relating to any charge or service regulated by this act.’ All such matters were henceforth to be referable to the public utility law under the supervision of the state commission. Such statute was made unmistakably exclusive as to everything affecting the service, its character, and charges therefor to consumers, whether public or private. The extinguishment of the obligatory features of the old franchise as to one side by necessary inference operated to extinguish such features as to the other. Such must have been the legislative purpose. . , . The thing existing after consummation of an exchange upon which respondent’s business was dependable, was the new privilege, emanating directly from the state, denominated an ‘indeterminate permit;’ a permit to do the things theretofore licensed by the state through the municipality as a state agency, but now unconditionally, except as specified in the public utility law.”

So it follows that the fifteen-year limitation of the Bink franchise, the condition in respect to the repeal of the privilege, and all other conditions and limitations mentioned therein, ceased to exist on the 21st day of December, 1907. The most significant thing at this point is the extinguishment of the repeal feature.

What are the conditions and limitations of the new privilege found in the public utility law? Everything of that nature, inherent in the old grant, or which, as between the state, acting through the city, and the grantee of the old privilege, formed part of the consideration for the grant, were by the same mutuality which originated them, extinguished, in consideration of tbe incidents of the substituted privilege, — the conditions and limitations of the public utility-law.

What are the substituted conditions and limitations mentioned ? They are various. The determination of this case does not require reference to all of them. There are several features designed to give to the municipality adequate protection. One of primary importance is the right of the municipality to take over the property by purchase upon “terms and conditions determined by the commission.” Sec. 1797m— 78. The public utility charges are required to be “reasonable and just.” Sec. 1797m — 3. The municipality as a consumer, as well as representative of its inhabitants, is made competent to challenge before the commission the reasonableness or justness of any of the rates, tolls, charges, or schedules, or anything affecting efficient performance of the public utility duties. Eull power in this field is given the commission for efficient regulation, in harmony with the requirement that the service shall be efficient and charges reasonable. See. 1797m — 43 and associate sections. Ample power as regards police regulation is reserved to the municipality. Sec. 1797m — 87. Subject to the special right reserved to the city, not having to do with rules and charges for service, the whole field is placed under the supervision of the commission with power to enforce the dominant purpose of the grant to render it as certain as practicable that all public utility service rendered “either directly or indirectly to or for the public” shall be reasonable as to character, and reasonable and just as to charges.

In consideration of submitting to full control by the commission and the right of the municipality, at its option, to take over the property as indicated, certain conditions and limitations in favor of the grantee are attached to the new privilege. The dominant feature thereof is that the franchise shall not only be perpetual, subject to the conditions .and limitations of tbe law, — indeterminate as it is said,— but shall be subject to such conditions exclusively. In other words, the idea is that the grantee, under state control, and subject to prescribed limitations and supervision, shall have a “monopoly,” as it has been several times called by the railroad commission, in its administrative work, and by this •court, within the field covered by the privilege, as to rendering the particular public utility service, whether directly or indirectly, to or for the public.

We should say, in passing, that the term “monopoly” as thus used is to be taken in the sense of a mere exclusive privilege granted for a consideration equivalent; monopoly only in the sense that the field of activity is reserved to the grantee, — the mere element of exclusiveness. A privilege of that sort, where there is a consideration equivalent to the public, though often spoken of as a “monopoly” is essentially •different from one of the character regarded as odious at common law and prohibited in many state constitutions; a privilege from the sovereign to the individual as a mere favor to the latter for his aggrandizement, or as such and the personal advantage of the individual sovereign grantor, the thing granted being by way of limitation, of what would otherwise be of common right, to the particular grantee. The term “monopoly” as it has been used to characterize the privilege in question, has been sanctioned in many jurisdictions, they sometimes differentiating it from “monopoly,” in the offensive sense, and sometimes not, it being assumed, from the very nature of the case, that the word would be taken in its popular and common, rather than in its technical sense. In this line to justify, or rather explain the use of the term by the commission and the court, reference may be had to the following illustrations: State v. Milwaukee G. L. Co. 29 Wis. 454; Davenport G. & E. Co. v. Davenport, 124 Iowa, 22, 98 N. W. 892; Ludington W. S. Co. v. Ludington, 119 Mich. 480, 78 N. W. 558; Bartholomew v. Austin, 85 Fed. 359; Charles River Bridge v. Warren Bridge, 11 Pet. 420, 607; New Orleans G. Co. v. Louisiana L. Co. 115 U. S. 650, 6 Sup. Ct. 252; International T. C. Co. v. Hanks D. Asso. 111 Fed. 916. In tbe latter case it is said that tbe word “monopoly” •as now commonly used, and used in .tbe patent law, is not a monopoly at all in tbe ancient sense. According to tbe logic of Jndge Stoey in tbe Charles River Bridge Case, to be sucb tbe privilege must not only be made exclusive by sovereign authority but be something theretofore of common right.

So while, in common parlance, it is proper to characterize tbe exclusive privilege in question, a monopoly, it is one purchased by giving an equivalent to tbe public, as in case of a patent allowed by tbe federal government. It is a grant for :a public, not for a private purpose, and not a grant of that which without it would be of common right. It has none of the essentials of tbe monopoly so offensive, anciently, in tbe ■eye of tbe law.

While perhaps tbe term “exclusive privilege” is tbe better term to apply to the right in question, tbe word “monopoly” has been used in tbe books with reference to sucb franchises. Tbe use of it seemed proper and in tbe particular matter it has been a bandy word. It was doubtless more suggestive than tbe term “exclusive privilege,” as regards tbe general ■conception by tbe administrative commission of tbe real purpose of tbe law, and that here, in regard to a matter supposed to be pretty clear though not yet specifically passed upon, and now before us for tbe first time for that purpose.

A few general observations at this point, in regard to tbe ground gone over, and passing remarks respecting matters which were immaterial at tbe start, or have been rendered so by tbe conclusions already reached, and we will return to the subject of whether tbe exclusive privilege in question excludes tbe city of Ghilton from going into tbe electric lighting business, even to tbe extent of doing its own lighting, except under tbe conditions and limitations of tbe public utility law; that is either by taking over the existing plant owned by respondent, or demonstrating to the commission, in due proceedings to that end, that public convenience and necessity require it, notwithstanding the existing public utility. To establish the negative of that proposition is doubtless the main purpose of this litigation.

Notwithstanding the care, — the comprehensiveness at all points of the public utility law, and the manifest purpose of it to remedy all the mischiefs of the old situation, prominent among them being the contests between owners of existing public utilities and others, including the municipality, striving to acquire the field, or some part of it, often to the great prejudice of all concerned, and manifest injustice to innocent, investors, and notwithstanding the general trend of administration of the law by the commission, stopping just short of a definite stand on the particular point, and notwithstanding the plain logic of the decisions of this court, stopping short, it is true, of an adjudication of the particular matter, — it has remained, as we have suggested, so far, a mooted question as-to whether the exclusive privilege of the public utility law acts prohibitorily upon the municipality as well as others desiring to invade the field of exclusiveness, as regards serving-the public in the aggregate, — that is doing the municipal lighting, as well as serving patrons in general in their individual capacities.

To recur to the suggested general remarks before closing upon the final point, — as we have seen, respondent possessed an indeterminate permit at the time this action was commenced. As to electric service, it covered the whole field intended by the public utility law to be reserved to the holder of such a permit. We shall not spend time discussing the circumstances of the temporary suspension of service under the privilege. The privilege still existed. It could only be superseded or annulled by some proceeding under the law, directly to that end, so long as there was no abandonment. None was taken. Tbe city, instead of submitting to tbe statute' and proceeding thereunder, proceeded in defiance of it. In good faith we may well conclude, through misconception of its rights, but in defiance, nevertheless. After acquitting it of any bad intent, the fact still remains that its action was utterly void in attempting to repeal the franchise which had, in legal effect, been merged into the new franchise and so passed beyond municipal authority to disturb it. It follows, necessarily, that defendant had no power .to build a municipal plant for encroachment upon respondent’s exclusive field, which, manifestly, from the findings well supported, was the purpose, even laying aside for the moment the subject of municipal lighting. Having no such authority, clearly, it had no authority to issue bonds to pay for carrying out its ultra vires purpose.

So regardless of whether defendant complied with the forms of law in respect to building a municipal lighting plant and issuing bonds therefor, or either, the statutes to which its actions are referable, from any viewpoint, were rendered inoperative by the public utility law, except upon compliance by the city with the conditions and limitations therein, including the specified conditions precedent to capacity to build a municipal lighting plant such as it proposed to build. That it did not do, and did not propose to do, rendering respondent helpless as regards protecting its privilege, investment, business, and field therefor, guarañteed by the public utility law, other than by commencing this action. That the attitude of appellant and its acts committed and threatened, cast a serious cloud on respondent’s property rights and privileges and was destructive thereof, rendering irreparable loss imminent, as found, and that it was remediless to successfully and adequately meet the mischief except by an appeal to the jurisdiction of equity, in the judgment of this court, is well supported in the record. That gave respondent ample capacity to sue as it did.

Thus the findings which are material to some substantial relief embodied in the judgment, covering as they do some mixed matters of law and fact, are approved. As there are no further questions of fact, or of that nature, which may well be referred to, we turn to the scope of relief granted, as the second major division of the subject presented.

It is insisted that the judgment went too far by, in terms or effect, enjoining appellant from proceeding to build and operate a plant of its own for the purpose of municipal lighting, except conditioned upon a successful appeal under the public utility law for permission to invade the field claimed by respondent to be reserved to it subject to the conditions and limitations of such law.

This particular phase of the judgment counsel insist is legitimate, because it amounts, as said, to no more than a judicial declaration of the law, not dependable upon the form of the decree. That is the final, and we repeat, probably the dominant matter of controversy in the litigation.

Stating the proposition concisely: Does the public utility law, in the circumstances of this case, afford to the operator, under an indeterminate permit, preferential right to do the municipal as well as the private lighting, so that the municipality can no more invade the field itself than it can by a rival company, or the latter independently, all being in that respect subject to the judgment of the commission as to whether public convenience and necessity require the disturbance because efficient, adequate service at reasonable and just rates therefor is not obtainable under the existing franchise ?

As before suggested, in terms or effect, during discussion of the findings of fact complained of, it would seem that the affirmative of this last question, basic and dominant as it is, follows inevitably from the logic, if not the letter, of La Crosse v. La Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530. It was there held that, the evident intention of the legislature, expressed in unambiguous language, when read in the light of tbe situation dealt with, was, by treaty with the owner of existing franchises, to displace the old situation, in its entirety, with all its complications, the growth of years, and we may add, with all its bitter controversies, the like of which is pictured in this case, and to substitute a new situation, all looking to unity, in practical effect, of a multitude of diverse units corresponding to the many outstanding franchises, and others in prospect, harmonizing by making them referable to a single standard, to wit, the public utility law, and to an ultimate single control, to wit, control by the trained impartial state commission, so as to effect the one supreme purpose, i. e. “the best service practicable at reasonable cost to consumers in all cases and as near a uniform rate for service as varying circumstances and conditions would permit; a condition as near the ideal probably as could be attained.” Certainly, that great object might well have aroused legislative ambition to a high plane, and inspired legislative wisdom accordingly, as it did in fact. Completeness of the law, so far as tested, and its success under the efficient conservative administration of it by the commission, bear witness to that. As, in effect, suggested in the La Crosse Case, the evident purpose of the law to produce the ideal condition indicated, and the means designed to that end, are so plain, and, we may add, so legitimate from all constitutional viewpoints heretofore suggested, or reasonably apprehended, and from all viewpoints of public and private economy and sound- public policy, that, if to leave the door open where there is an existing privilege covering the field, as in this case, to municipal invasions to any extent, would greatly disturb the harmony of the system the legislature purposed constructing, and prevent the full accomplishment of the end sought to be attained, judicial construction, if that were necessary to determine the meaning of the law, should rather lean towárd preventing such result.

In the further treatment, appreciating the somewhat repetitious character of it, but deeming that justifiable to bring out tbe final result with as much clearness as practicable, we will refer to some significant features of tbe statute.

We must keep in mind, as suggested in tbe La Crosse Case, that tbe state was competent to take to itself all authority as regards tbe scope of tbe privilege, — regardless of anything inhering in or connected with tbe old one, — by consent of tbe owners of tbe latter, cannot be doubted. Tbe municipalities acted wholly as state agencies. As principal, it was competent for tbe state to make new arrangements with its grantees in place of tbe old ones.

We must further keep prominent tbe supreme purpose before stated: service as efficient as practicable at as low rates as just and practicable under tbe circumstances of each particular situation. That is shown in tbe premise portion of tbe act. Tbe first section (sec. 1797m — 1) deals with definition of terms, giving to each such comprehensiveness as not to leave any fair ground for claiming that any part of tbe situation to be dealt with was overlooked, either in tbe details of tbe plan, or tbe means of effecting it.

Treating of tbe new privilege, it was given a name so comprehensive as to include, without room for doubt, as before indicated, every sort of an existing privilege in tbe public utility field to serve tbe public. Note tbe significance of tbe term “either directly or indirectly to or for tbe public.” In this, we repeat, nothing is left out, service to tbe public in tbe aggregate as well as in individual capacities, was unmistakably included.

Tbe next section (sec. 1797m — 2) deals with administration, giving tbe commission tbe broadest of legitimate powers in that regard so as to enable it to supply all details of administrative work. Note tbe language: “Tbe railroad commission of Wisconsin is vested with power and jurisdiction to supervise and regulate every public utility in this state and to do all things necessary and convenient in tbe exercise of such, power and jurisdiction.” There is administrative authority to the limit, including quasi-legislative as well as quasi-judicial power.

The next section deals with the great object of the act. “Every public utility is required to furnish reasonably adequate service and facilities. The charge made by any public utility . . . shall be reasonable and just, and every unjust or unreasonable charge for such service is prohibited and declared unlawful.” Around the objective feature, all the balance of the provisions of the act are grouped, existing public utilities being necessarily placed in one group, and prospective public utilities in another, each for the necessary special treatment, to bring all under the single system and single control to effect the single purpose of promoting the public good without injustice to any one.

That one of the principal mischiefs sought to be remedied by the new system, was elimination of the conditions promo-tive of hostilities between municipalities and public utility companies, after making large investments by permission and invitation to serve the public directly as well as indirectly,— bitter controversies, sometimes for good reasons and sometimes not, but in any event at the expense of consumers .of the product, — seems quite certain.

It likewise seems certain that one of the major means for attaining the desired end was elimination of excessive investments, and excessive expenses caused by two or more public utilities, each with its separate property and fixed charges, where the need of the consumers only required one, and elimination of risk to investors by encroachments, or threatened encroachments, upon an occupied field of public service without any public necessity therefor. Doubtless an unvarying and invariable economic law was squarely faced and appreciated, that all such subjects for elimination represent waste, which if not avoided would, in the main, fall on the product, increasing the cost of service per unit and be paid by the consumers. It was the interests of consumers which was the prime subject of legislative solicitude; such object to be conserved without injustice to others.

In the situation pictured it could not have escaped legislative consideration, and, necessarily, would not have been considerately left unguarded against, that in the cities and villages of the state, in general, public utility service at the lowest practicable rates with the highest practicable efficiency, is impossible without combining the municipal service with that to others.

Further, it could not well have escaped appreciation and been left unguarded against, that one of the fruitful sources of waste to ultimately fall, largely if not wholly, on consumers, and fruitful sources of wasteful controversies and injustice to owners of existing investments, many of whom were bondholders as in this case, was opportunity for municipalities to unreasonably menace existing investments by threatening to displace, or actually displacing, in whole or in part, existing public utilities in cases where proper regulation would secure efficient operation; ample efficient service in the whole field, thus creating waste in many ways and to a large amount in the aggregate, to the impairment-of efficiency, in general, and' enhancement in cost, per unit of service to the customer, contrary to the purpose of the act.

In the light of the foregoing, strongly indicating that the' legislature must have intended that the new privilege, where the old one occupied the whole field, in that it was granted to-provide for service to the public directly as well as indirectly, and there was no other public utility at the time of the surrender of the old franchise, should be exclusive, let us turn further to the letter of the law.

«Sec. 1797m — 79 provides four distinct methods by which a municipality may become the owner of a public utility plant and conduct public utility business: 1st. By constructing a plant; 2d. By purchasing an existing plant by agreement;. 3d. By condemnation of an existing plant whether operating under a public privilege or not; 4th. By purchase of an existing plant through the commission as provided in the act. In each case the power is granted “subject to the provisions of this act.” Such provisions, in all cases of the existence of a privately owned plant, operated as in this case, require a permit from the commission upon a showing of public necessity and convenience. In that there is an unmistakable prohibition by implication. But plainer still is sec. 1797m — 74:

“.No municipality shall hereafter construct any such plant' or equipment where there is in operation under an indeterminate permit as provided in this act, in such municipality a public utility engaged in similar service, without first securing from the commission a declaration, after a public hearing of all parties interested, that public convenience and necessity require such municipal public utility.”

The words “similar service” plainly relate to the words in preceding sections, “either directly or indirectly to or for the public;” the words “public utility” relate as distinctly, to a municipality performing the service, whether “directly or indirectly to or for the public,” as tó a private corporation, and the words “operating under an existing permit” do not suggest, necessarily, in continuous operation, — absence of momentary or reasonable cessation. Excusable, temporary suspensions, involving no purpose to abandon, the owner being willing and seasonably, under the circumstances, able to resume and doing so, as in this case, satisfies the calls for a “public utility operating under,” etc.

The law must be given a reasonable, — sensible,—construction, at all points, to the end that the legislative intent shall not fail, instead of looking with favor upon technical assaults upon it.

In this connection it should be remembered that in the proceedings before the railroad commission to displace respondent defendant grounded its claim on ownership by the Electric Company, a domestic corporation, of the indeterminate permit, but that the company was not operating thereunder, and the petition was denied upon substantially the same grounds upon which respondent prevailed in this case, — particularly that it possessed an indeterminate permit and was excusable for the delinquencies claimed to have occurred. Thus there was an adjudication, to all intents and purposes, of the precise point, as it seems, which we now have in hand, so far as the commission had jurisdiction.

The conclusion which must result from the foregoing is that the relief granted respondent is not excessive. The field of exclusiveness of the privilege, in the circumstances of this case, includes municipalities, whether desiring to invade the forbidden territory for municipal lighting only, or for other or all purposes.

Thus the care with which the public utility law'was framed as regards harmony of parts, and completeness and efficiency of details to accomplish the single purpose of promoting the highest attainable good of customers without injustice to existing vested interests, or prejudicial interference with competency. for municipal ownership on a fair basis, is again vindicated. With the wisdom of the law we have nothing to do except as that may aid in understanding it. However, we may well say, that, in so far as the matter has come before this court, has been vindicated by the wise, efficient administration of it by the commission.

In closing, we again confess that much discussed by counsel has not been mentioned at least specifically. There was no need of it. Ho question, however, has been passed over without testing it carefully for materiality. With much care to eliminate all inconsequentials, the discussion has been so extended as to make the opinion quite long, and necessarily so, because of the endeavor to respond fully to the effort of counsel to secure treatment of the vital points in all reasonable aspects. The facts being determined, and. we must say, in passing, as to pure matters of fact, there was little or no room in the evidence for ■ serious controversy, the result turned wholly on the terms of the statute in which we find little or no ambiguity. So, necessarily, the great range of treatment by counsel, supported by numerous authorities, was largely outside the real case in hand. No part of that, it is thought, has escaped attention.

By the Court. — The judgment is affirmed.

The following opinion was filed February 23, 1912:

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Concurrence Opinion

Timlin, J.

I concur in the decision of the court and in much that is said in the opinion of Mr. Justice Marshall. In so doing I understand the court does not attempt to decide that by the surrender of the pre-existing franchise and the acceptance of an indeterminate permit an irrepealable contract is created between the municipality and the public-service company. It is said in the opinion: “The dominant feature thereof is that the franchise shall not only be perpetual, subject to the conditions and limitations of the law— indeterminate as it is said, — but shall be subject to such conditions exclusively.” If this is meant to say or suggest that “indeterminate” means “perpetual,” subject only to the conditions presently existing in the statute, I do not agree with it. Indeterminate does not mean perpetual; it means “not determinate; indefinite; not distinct or precise as to limits, character, or meaning; vague; as, indeterminate symptoms; an indeterminate series; indeterminate feelings or ideas; not fixed or known beforehand; not predetermined as tó date, place, or the like; as, an indeterminate appointment; not leading to a definite end or result; as, an indeterminate debate. In criminal law a sentence which fixes the period or amount of punishment only within certain limits, leaving the exact term or amount of punishment to be determined by the executive authorities, usually a board of managers.” This is the definition given in Webster’s New International Dictionary. See, also, sec. 4971, Stats. (1898). I consider the* public utility law subject to repeal or amendment like other statutes., and I feel sure tbe legislature bad no intention of’ making it otherwise. This case does not call for tbe decision of any such question, but I fear tbe opinion may be misunderstood.

Tbe following opinion was filed March 4, 1912:

Marshall, J.

Since this case was concluded, I have discovered a mistake in tbe opinion I wrote for tbe court in La Crosse v. La. Crosse G. & E. Co. 145 Wis. 408, 130 N. W. 530. I take tbe whole responsibility for it and confess there-is little, if any, excuse for tbe inadvertence. I take this occasion for correcting tbe error so far as I can.

On page 417 of tbe opinion, speaking of a privilege, such-as was grantable to an individual as well as to a corporation, this language was used: “Tbe entirety was a state grant and so under legislative control like any other corporate state franchise.” Tbe idea tbe language might naturally convey" was not in mind. Of course such a privilege might be the-franchise or property of a corporation, but not a corporate franchise. Tbe two things are radically different. It is incomprehensible, that I could have thus confused tbe two in-, view of tbe former confusion which found place in tbe books, after tbe correct doctrine was declared in Att'y Gen. v. Railroad Cos. 35 Wis. 425, 560, which difficulty was removed in. State ex rel. Att’y Gen. v. Portage City W. Co. 107 Wis. 441, 83 N. W. 697, followed by Linden L. Co. v. Milwaukee E. R. & L. Co. 107 Wis. 493, 83 N. W. 851, and In re Southern Wis. P. Co. 140 Wis. 245, 122 N. W. 801, — tbe initial corrective-case having been written by me. As said, in terms or effect, in all, it is only a franchise by act of incorporation, or a corporate charter, or a privilege inhering therein as a part of the-organic act which is a corporate franchise, and so within. sec. 31, art. IV, of the constitution prohibiting the granting of corporate powers or privileges by special act and within sec. 1, art. XI, as to legislative power to grant corporate charters, but reserving the right to repeal, alter, or amend. To be within such, the franchise must be “essentially corporate,” using the language of the chief justice in the Linden L. Co. Case quoted from that of Chief Justice Ryan in Att’y Gen. v. Railroad Cos., “That is, as we understand it, franchise by act of incorporation.” The mere governmental privilege, not corporate, is a thing of proprietary nature, which, as indicated in In re Southern. Wis. P. Co., supra, may be granted to a corporation as well as to an individual, or to the latter and be sold to the former, or, in general, pass from owner to owner like any other property.

The logic of the foregoing is most distinctly stated as matter of elementary law in the Water Power Cases, ante, p. 124,. 134 N. W. 330, where the court declared grants of such franchises, without reservation, not subject to recall.

It would be most unfortunate if after all the labor in La Crosse v. La Crosse G. & P. Co., supra, and here, to make the meaning of the public utility law unmistakable and give significance to the condition of stability the legislature purposed creating thereby, the old confusion were revived through my passing remark in the former case, or if the clarity hoped for from the two cases were disturbed by the thought that a mere legislative privilege of proprietary nature to do one thing is different from such a privilege to do a different thing, as regards whether a corporate franchise or not. What power of change exists as to a privilege granted under the public utility law because of its being subject to the conditions and limitations thereof, is another thing, as has been iterated and reiterated over and over again.

Case Details

Case Name: Calumet Service Co. v. City of Chilton

Court Name: Wisconsin Supreme Court

Date Published: Feb 20, 1912

Citation: 148 Wis. 334

Court Abbreviation: Wis.