109 Kan. 545 | Kan. | 1921
The opinion of the court was delivered by
This action was brought in the district court of Reno county by the city of Hutchinson, and L. D. Ferguson, for himself and 3,590 other telephone subscribers of
The contention of the telephone company is that the rate formerly prescribed by the industrial court and utilities commission had formerly been the subject of litigation in the district court of Shawnee county,; wherein the parties were substantially the same as in this case, and that court had found and adjudged the fates to be unreasonably low, noncompensatory and confiscatory and enjoined their enforcement, and that as there was identity of subject matter and parties, the district court of Reno county was without authority to enjoin the fixing of higher rates than those adjudged to be confiscatory. It appears that an action was brought in the district court of Shawnee county by the telephone company against the court of industrial relations, the attorney of that tribunal, and also the attorney-general of the state, alleging that the rates prescribed in six cities of the state, including the city of Hutchinson, were unreasonably low and confiscatory. It was shown that in the summer of 1920 the telephone company had made application to the court of industrial relations for authority to put into effect increased rates in the six cities and that on March 18, 1921, when the action was brought in the district court of Shawnee county, no order had yet been made. Alleging that the delay was unreasonable, arbitrary, and resulted in the taking of property without due process of law, the action was brought to enjoin the court of industrial relations and officers from, enforcing the rate alleged to be confiscatory. The case was heard and on March 26, 1921, that court made findings as
As to the applications made to the court of industrial relations for an increase in rates, it was found that they had been made to the court in three of the cities, including Hutchinson, on July 22,1920, and in three other of the cities on September 3,1920. The hearing in the case of the city of Hutchinson was on October 15, 1920, and the latest one of the six cities was Winfield on October 28,1920. It was also found that the applications for increase as to Hutchinson and several other of the cities had been pending before the court of industrial relations for a period of approximately eight months, and that during that time applications of a like character in a number of cities had been disposed of, some in a few days, some in a month, and that out of fifty-two like applications the average time required for decision was about two months. It was further found that the court had made no request for additional information or evidence, and that a majority of its members regarded the hearings as completed, and had stated to the officers of the company that they had arrived at a decision and were preparing, orders with reference to same. The court therefore held that the delay and nonaction on the part of the court of industrial relations were arbitrary, unjust and oppressive, and operated ■ as a denial to plaintiff of a right to a decision within a reasonable time and constituted a confiscation of its property, without due process of law. Because of the change in the law transferring the jurisdiction over utilities to the public utilities commission, the court made an order enjoining the enforcement of the confiscatory rate but provided that before promulgating and charging other rates, the telephone company should exe
Although the court of industrial relations had jurisdiction and control over the public utilities of the state for a time, the legislature of 1921 created a public utilities commission, and conferred upon it all the powers and duties vested in the court of industrial relations relating to public utilities, and the act became effective on March 15, 1921. (Laws 1921, ch. 260.) When this appeal was submitted no order or decision had been made by the utilities commission upon the pending application of the telephone company to establish reasonable rates, and the appeal must be determined according to the status of the case when the judgment was rendered and the appeal submitted.
The district court of Shawnee county had complete jurisdiction of the parties and of the subject matter and its judgment, finding that the rates formerly prescribed were unreasonable and confiscatory, is binding upon all the parties. No appeal has been taken from that judgment and the sufficiency of the testimony upon which the judgment was based was not open to consideration or review in this action. Notwithstanding that the rates established by the commission had been adjudged to be confiscatory and unconstitutional, and had been enjoined by a court of competent jurisdiction, the district court of Reno county made an order enjoining the telephone company from imposing or collecting any increase of rates beyond the schedule previously allowed by the commission which had been set aside because they were illegal and confiscatory. It must be conceded that that judgment operated to set aside and annul the established rates and after its rendition no established rates were in force. The tele
“These having been removed the company was left free to take the initiative. The modified judgment will leave the telephone company without any rate. It must then fix the rate it will charge. This rate will be in effect until the public utilities commission fixes a different rate. The rate fixed by the commission will then be subject to examination by the courts and may be set aside. This rule will confine the courts to the exercise of their proper functions. It will leave the public utilities commission free to act under the law, and it will prevent the public utility from being compelled to render service at less than a compensatory rate.” (p. 141.)
As there stated, when the company fixes the rates it would charge, these are to be deemed the legal rates and to remain in effect until the commission establishes different rates. The legislature hás vested the. commission with authority to fix rates, and within constitutional limitations its power is primary and plenary. It has full and exclusive power and supervision of all public utilities and upon a hearing may fix rates, fares, charges, rules, regulations, classifications or schedules, and if any are found to be unreasonable, unjust, unfair or in anywise in violation of law, it may change them and substitute others that are determined to be just, reasoñable and necessary. (Gen. Stat. 1915, §§ 8340-8343.) Under the statutes, the rate-making functions have been committed to the commission and any complaint of existing rates, whether made by the utility or its patrons, as to rates or practices, must be presented to it. The utility is not required to perform service for less than a fair rate on the facilities employed in serving the public; and on the other hand, the utility cannot demand for the service more than the services rendered are reasonably worth. The question of the reasonableness of rates is primarily for the commission and the courts are powerless to interfere until action has been taken by the commission. Other cases bearing upon the subject are The State, ex rel., v. Gas Co., 88 Kan. 165, 127 Pac. 639; Railroad Co. v. Utilities Commission, 95 Kan. 604, 148 Pac. 667; The State, ex rel., v. Postal Telegraph Co., 96 Kan. 298, 150 Pac. 544; City of Seammon v. Gas Co., 98 Kan. 812, 160 Pac. 318;
Plaintiffs urge that they should not be required to await the action of the “slow-moving” commission to investigate and revise the rates promulgated by the utility, but should be permitted to go into a court of equity at once and enjoin the collection of a rate deemed to be unreasonable and excessive. However, we have seen that rates promulgated by the utility when established rates are set side, are to be treated as legal rates until otherwise provided by the commission. This conception and rule was announced on January 8,1916 (Telephone Co. v. Utilities Commission, supra), and since that time there have been several sessions of the legislature in which a number of amendments of the utilities act have been made, but the legislature has not seen fit to change the rule or provide that rates promulgated by a utility after a decree annulling commission rates, may be interfered with or enjoined by courts before rates are established by the commission. Since that interpretation was announced it has been uniformly recognized that when rates fixed by the commission are held to be void and there are no existing rates, the utility may fix a rate which will continue in effect until different rates are made and substituted by the commission, and there has likewise been legislative acquiescence in this view. So far as the matter of delay in making application and obtaining a revision of such rates is concerned, it is not necessary that it should be a long one as it may be assumed that the tribunal appointed by. law will act with reasonable promptness and dispatch. It has been furnished with engineers, experts and other facilities for expeditious inquiry, and we may assume that the commission will act as expeditiously as the circumstances may require. Doubtless there will be some complaints which will require extended inquiry and considerable time to ascertain what are reasonable and just rates, but ordinarily such cases will be disposed of speedily. If the commission should fail to act on. an application of complainants or there should be unreasonable and unnecessary delay the courts are open to them and they could by mandamus compel action by the commission. (The State, ex rel., v. Postal Telegraph Co., supra.) As al