195 N.W. 292 | N.D. | 1923
The relator, Hughes Electric Company, is a public utility corporation engaged in the business of selling and distributing’ electricity for light, power, and heat, and also steam for heating purposes in the city of Bismarck and the territory adjacent thereto. The relator Hughes is an officer and stockholder of the Hughes Electric Company. The respondents are the board of railroad commissioners of the state of North Dakota. The action is one to restrain and prohibit the said board of railroad commissioners from proceeding with a hearing under the Public Utility Act. The defendants interposed a general demurrer to the complaint. The trial court sustained the demurrer and the relators have appealed.
The petition alleges that the legislature by chapter 192, Laws 1919, attempted to confer upon the board of railroad commissioners the right to regulate, control and fix rates, charges and services of public utilities of the kind and character of the Hughes Electric Company, and “that assuming and pretending to act by virtue of the authority contained in said chapter 192, of the laws of 1919, the said above named defendants and respondents did, on the 23rd day of October, 1922, deliver to and .serve upon the said Hughes Electric Company, a certain petition, entitled ‘the patrons and consumers of electric current and steam heat with
“That subsequent thereto and on the 9th day of December, 1922, the said defendants and respondents, purporting and claiming to act as the board of railroad commissioners, did serve upon the said Hughes Electric Company a notice of hearing, in which said notice, it was claimed that said petition heretofore referred to, dated October 23d, 1922, hac been received by the said board of railroad commissioners and that a hearing upon the same was, by said notice, fixed and set for Friday, December 29th, 1922 at 10 o’clock a. m. and said board of railroad commissioners did notify the said plaintiff, Hughes Electric Company, that at said time, they were required to be present and that said petition would be considered and acted upon and that the said board of railroad commissioners would enter into a complete investigation of all of the rates, charges and practices of the said Hughes Electric Company for the purpose of determining and fixing reasonable electric and steam heat rates.
“That the said board of railroad commissioners assert, claim and threaten that they will conduct said hearing and investigation and will, upon the said petition, fix and establish the rates and charges to be made by the said Hughes Electric Company in furnishing of electricity and heat in its business and to its customers, and that they will assert and claim the right, power and lawful authority to so fix and establish said rates and charges.”
It is alleged that chapter 192, Laws of 1919, is violative of § 2, of article 4, and the 14th Amendment of the Federal Constitution, and §§ 1, 23 — 25, 82, 83 and 85 of the state Constitution.
The constitutional objections raised by the relators arc:
1. That there is a denial of due process and of the equal protection of the laws because the act “does not provide for a full and complete hearing before judgment with an opportunity to present all competent and relevant evidence and does not provide for a substantial, adequate and judicial review wherein the court may exercise its independent judgment as to both the law and the facts.”
3. That the act contains an unwarranted delegation of legislative powers.
4. Tliat the penalties provided by the act for disobedience of the orders of the railroad commissioners are so severe as to intimidate public utility companies from assailing such orders in the courts, and that, consequently, the right of judicial review is in effect denied. The propositions will be considered in the order stated.
The Public Utilities Act (Laws 1919, chap. 192), contains the following provisions:
Section 3. “The Commissioners are hereby given the power to investigate all methods and practices of public utilities or other persons,' subject to the provisions of this Act; to require them to conform to the laws of this State and to all rules, regulations and orders of the Commissioners not contrary to law; to require copies of reports, rates, cl ass i H cations, schedules and time tables in effect and used by siich utilities or other persons to be filed with the Commissioners and all other information desired by the Commissioners relating to such investigations and requirements.
“The Commissioners may compel obedience to its lawful orders by proceedings of mandamus or injunction or other proper proceedings in the name of the State in any court having jurisdiction of the parties or of the subject matter, and such proceedings shall have priority over all pending cases.
“The Commissioners may change any infra-state rate, charge or toll which is unjust or unreasonable, and may, after hearing and notice, prescribe such rate, fare, charge, or toll as is just and reasonable, and change or prohibit any particular device or method of service in order to prevent undue discrimination or favoritism between persons, localities, or classes of freight.
“Every order entered by the Commissioners shall continue in .force until the expiration of the time, if any, named by the Commissioners in such order or until revoked or modified by the Commissioners unless the same be suspended, modified or revoked by order or decree of a court of competent jurisdiction.”
Section 4. “The Commissioners shall have the power, after notice
Section 5. “Whenever the Commissioners shall find, after hearing, that the rules, regulations, practices, equipment, appliances, facilities or service of any public utility, or the methods of manufacture, distribution, transmission, storage, or supply employed by it are unjust, unreasonable, unsafe, improper, inadequate, or insufficient, the Commissioners shall determine the just, reasonable, safe, proper, adequate or sufficient rules, regulations, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced or employed, and shall, after hearing, fix the same by its order, rule or regulation. The Commissioners shall prescribe, after hearing, rules and regulations for the performance of any service or the furnishing of any commodity, of a character furnished or supplied by any public utility and, on demand and tender of rates, such public utility shall furnish such commodity and render such service within the time and upon the conditions provided in such rules. . .
Section 24. “All hearings, investigations and proceedings shall be public and shall be governed by this Act and'by the rules of practice and procedure to be adopted by the Commissioners and in the conduct thereof, the technical rules of evidence shall not be applied. No formality in any hearing, investigation or proceeding or in the manner of taking testimony, shall invalidate any order, decision, rule or regulation made, approved or confirmed by the Commissioners.”
Section 30. “Complaint may be made by the Commissioners of its own motion or by any corporation or person, chamber of commerce, board of trade, or any civic, commercial, mercantile, traffic, agricultural or manufacturing association or organization or any body politic or municipal corporation, by petition or complaint in writing, setting
Section 31. “At flic time fixed for a hearing before the Commissioners or a Commissioner, or the time to which the same may have been continued, the complainant and the utility or person complained of, and such corporations or persons as the Commissioners may allow to intervene, shall be entitled to be heard and to introduce evidence. . . ."
Section 32. “The Commissioners may, at any time, upon notice to the public utility affected and after opportunity to be heard as provided in the ease of complaints, rescind, alter or amend any decision made by it. Any order rescinding, altering or amending a prior order or decision shall, when served upon the public utility affected, have the samo effect as is herein provided for original orders or decisions.”
Section S3. “In all collateral actions or proceedings, the orders and decisions of the Commissioners which have become final shall be conclusive.”
Section 34. “Any party to any controversy beard by the Commissioners feeling aggrieved by the decision or by tbe entry of any final order of the Commissioners therein may appeal therefrom the District Court in the district in which the hearings of the Commissioners were held in the matter, by serving notice in writing on all other parties- to
Section 35. “On such appeal the lawfulness of the decision or final order shall be inquired into and determined on the record of the Commissioners as certified to by it. No new or additional evidence shall be taken on such appeal or introduced in evidence by any parties to such hearing on appeal in the district court. Any appeal from any final order of the Commissioners shall not suspend or delay the execution or operation thereof pending the appeal and final determination thereof, but the court in which such appeal is pending may in its discretion suspend in whole or in part the operation of the Commissioners’ order or decision. . . .”
Section 37. “The Commissioners, for the purpose of ascertaining the reasonableness and justice of the rates and charges of public utilities, or for any other purpose authorized by law, shall investigate and determine tlie value of the property of every public utility used and useful for the service and convenience of the public, excluding therefrom the value of any franchise or right to own, operate or enjoy tlie same in excess of the amount (exclusive of any tax or annual charge) actually paid to any political subdivision of the State or County as a consideraron for the grant of such franchise or right by reason of a monopoly or merger. The Commissioners shall prescribe the details of the inventory of the property of each public utility. ...”
Section 38. “The Commissioners, during the making of the valuation herein provided for and for the purpose thereof, shall thereafter in like manner keep itself informed through its experts and other assistants of all extensions and improvements or other changes in' the conditions and values of the property of all public utilities and shall ascertain the value of such extensions, improvements and changes and shall from time to time, as may be required for tbe proper regulation of such utilities, revise and correct its valuation of such property. Such revaluation and correction shall be filed in tbe same maimer as is provided for original reports.”
Section 39. “The Commissioners, whenever they shall have completed a valuation of the property of any public utility and before such valuation shall have become final, shall give notice by registered letter
Section 40. “For the purpose of ascertaining the reasonableness and justice of the rates and charges of public utilities or for any other purpose authorized by law, the Commissioners may cause a hearing or hearings to be held at such time or times and place or places as the Commissioners may designate to determine the value of the property of public utilities actually used or useful for the convenience of the public, excluding therefrom the value of any franchise or right, to own, operate or enjoy the same in excess of the amount (exclusive of any tax or annual charge) actually paid to any political subdivision of the State or county as a consideration of such franchise or right, and exclusive of any value to the right by reason of monopoly or merger.”
Section 41. “Before any hearing is had, the Commissioners shall give the public utility affected thereby at least thirty days’ written notice, specifying the time and place of said hearing. This provision shall not prevent the Commissioners from-making any preliminary examination or investigation into the matters herein referred to or from inquiring into such matters in any other investigation or hearing.”
Section 42. “The public utilities affected shall be entitled to be heard and to introduce evidence at such hearing or hearings. The Commissioners are empowered io resort to any other source of information available. The evidence introduced at such hearing shall be reduced to writing and certified under the seal of the Commissioners. The Commissioners shall make and file their findings of fact in writing
Relators contend that under § 24 of the act the board of railroad commissioners may adopt such rules and regulations as will in effect deny a hearing. It is said that the commissioners may reject relevant .and competent evidence; and that inasmuch as the court on appeal is restricted to a consideration of the evidence — taken before and certified by the commissioners a party may in effect be denied a hearing according to the law of the land.
In our opinion the contention is untenable. It will be noted that the legislature has provided that the commissioners can act only after notice and hearing. In City Commission v. Bismarck Water Supply Co. 47 N. D. 179, 188, 181 N. W. 596, this court said: “The Public Utilities Act is replete with the requirement of notice and hearing.” The word “hearing” contemplates an opportunity to be heard. That is, not merely the privilege to be present when the matter is being considered but, the right to present one’s contention and to support the same by proof and argument. If the Commissioners act without notice in the cases where the law requires it, their act will be void and of no effect. In City Commission v. Bismarck Water Supply Co. supra, this court ruled that an increase in water rates ordered by the Commissioners without notice and hearing was void. In the opinion in that case it was said: “As we construe the Public Utilities Act, rate increases cannot be ordered except after notice and hearing. And as we read the record certified to us there was neither notice nor hearing of a proceeding for an increase in rates here. Hence, the order granting such increase is void. . . .
“On the oral argument it was contended that the railroad commissioners are authorized to make investigation for themselves and to obtain the necessary information to enable them to act in those matters wherein the Public Utilities Act gives them power to act. The record here does not show that the railroad commissioners initiated any proceeding on their own motion. They purported to be hearing a definite controversy which was being submitted to them. Nor do we believe
“It is also suggested on the oral argument that the railroad commissioners had authority to order an increase in rates if they found that to be necessary to enable the Water Supply Company to do some of the things which the city commissioners had asked that it be required to-do. We do not believe this argument is sound. When in the determination of a matter submitted to a court it becomes apparent that, to-make a full determination, other issues or parties are necessary, the court does not proceed to decide those matters in the absence of issues and parties, but requires issues to be formed and the proper parties to-be bi'ought in. While the board of railroad commissioners is an administrative body, it exercises quasi-judicial powers, and is subject to-the requirement of due notice. If the board of railroad commissioners deemed it desirable, of their own motion, to take up and determine whether the rates of the Water Supply Company ought to be raised,, it should have given notice and afforded hearing thereon before making a determination.”
Much of this language is applicable here. The inquiry which it is sought to have enjoined and prohibited here is not only required to be conducted after notice, but the statute further specifically provides that the utility affected “shall be entitled to be heard and to introduce evidence,” at the hearing. It is not contended that the commissioners have adopted any arbitrary or unreasonable rules and regulations and it has been said that this of itself is a sufficient answer to the constitutional objection. New York ex rel. Lieberman v. Van De Carr, 199 U. S. 552, 560, 50 L. ed. 305, 310, 26 Sup. Ct. Rep. 144. But it is said by the relators that the “constitutionality of the law must be tested not by what has been or is being done under it, but by the things which it authorizes to be done.” State ex rel. Frich v. Stark County, 14 N. D. 368, 103 N. W. 913. This rule, of course, like all others affecting the constitutionality of legislation is subject to the principle that “all constitutional inhibitions . . . and all constitutional guaranties are for the benefit of those persons only whose rights are affected, and cannot be taken advantage of by any other persons.” State ex rel. Linde
The legislature in imposing certain duties and conferring certain powers upon the commissioners said that they must be performed in a certain manner. It said that the commissioners could conduct certain inquiries and make orders with respect to the matters inquired into ; but it said in the most emphatic language possible that any such inquiry must be conducted at a public hearing, after notice to the parties affected, and that such parties “should be entitled to be heard and introduce evidence” at such hearing. It is utterly inconsistent with the whole tenor of the act to impute to the legislature any intention to invest the commissioners with power, by rules and regulations, in effect to deny the parties any hearing whatever. Bor “notice is only for the purpose of affording the party an opportunity of being heard upon the claim or the charges made; it. is a summons to him to appear and speak, if he has anything to say, why the judgment sought should not be. rendered. The denial to a party of the benefit of the notice would be in effect to deny that he is entitled to notice at all, and the sham and deceptive proceeding had better be omitted altogether. It would be like 'saying to the party, appear and you shall be heard; and, when he has appeared saying your appearance shall not be recognized, and you shall not be heard.” Hovey v. Elliott, 167 U. S. 409, 415, 42 L. ed. 215, 220, 17 Sup. Ct. Rep. 841. The presumption is that public officers.' will discharge their duties honestly and in accordance with the rules of law and that presumption is applicable here. New York ex rel. Lieberman v. Van De Carr, 199 U. S. 552, 50 L. ed. 305, 26 Sup. Ct. Rep. 144; Hall v. Geiger-Jones Co. 242 U. S. 539, 61 L. ed. 480, L.R.A.1917F, 514, 37 Sup. Ct. Rep. 217, Ann. Cas. 1917C, 643; Douglas v. Noble, 261 U. S. 165, 67 L. ed. 590, 43 Sup. Ct. Rep. 303.
In Hall v. Geiger-Jones Co. supra, it was urged against the Ohio
“In considering the contentions we must keep in mind that the law fis addressed to a complex situation. . . . The discretion of the commissioner is qualified by his duty, and besides, as we have seen, the statute gives judicial review of his action. Pending such review, we must accord to the commissioner a proper sense of duty and the presumption that the functions intrusted to him will be executed in the public interest, . . . and, as we have said, in cases where there can be a dispute of fact, the statute provides for judicial review, and wo see no legal objection to the designation of a particular court for such review.”
In Mutual Film Corp. v. Industrial Commission, 236 U. S. 230, 59 L. ed. 552, 35 Sup. Ct. Rep. 387, Ann. Cas. 1916C, 296, it was ur-ged that the statute there involved was invalid because “it attempts to delegate legislative power to censors and to other boards to determine whether the statute offends in the particulars designated.” 236 U. S. 239. In considering that question the United States Supreme Court said:
“The next contention of the complainant is that the Ohio statute is a delegation of legislative power, and void for that if not for the other reasons charged against it, which we have discussed. While adminisr tration.and legislation are quite distinct powers, the line which separates exactly their exercise is not easy to define in words. It is best recognized in illustrations. Undoubtedly the legislature must declare the policy of the law and fix the legal principles which are to control in given cases; but an administrative body may be invested with the power to ascertain the facts and conditions to which the policy and principles apply. If this could not be done there would be infinite confusion in the laws, and in an effort to detail and to particularize, they would miss sufficiency both in provision and execution.
“The objection to the statute is that it furnishes no standard of what is educational, moral, amusing, or harmless, and hence leaves decision to arbitrary judgment, whim and caprice; or, aside from those ex
Nor do we think there is any merit in the contention that under § 42 the commissioners are authorized to base their orders upon matters not in evidence, and that hence effective judicial review of the facts may be precluded. The first three sentences in § 42 read: “The public utilities affected shall be entitled to be heard and to introduce evidence at such hearing or hearings. The commissioners are empowered to resort to any other source of information available. The evidence introduced at such hearing shall be reduced to writing and certified under the seal of the commissioners.” Eelators’ objection is leveled at the second sentence. But when this sentence is read in connection with the other two sentences, and the provisions relating to the review of the evidence on appeal, it is apparent that what the legislature intended was to vest the commissioners with power and to confer upon them the duty to see that the full truth was elicited at such heaihng. Iff .'other words the commissioners aré not required to pass judgment and base their order merely upon the evidence presented by the utility
But say the relators: Suppose the commissioners refuse to receive competent evidence, and certify up an incomplete or false record? Then the court is in any event limited to a review of, and must accept,
It is next contended that tbe act is invalid because of unwarranted
1. That the board of railroad commissioners are part of the executive department of the state government, and that powers and duties of the nature delegated and imposed by the Public Utilities Act cannot constitutionally be conferred upon them.
2. That the act “does not in certain particulars, lay down rules and methods for the board invested with the power to follow in arriving at its conclusions and performing its functions.”
In our opinion neither contention is tenable. The first is completely answered by the constitution which provides: “The powers and duties of the . . . commissioners of railroads . . . shall be prescribed by law.” N. D. Const. § 83.
The second contention, we think, has been so completely settled adversely by the decisions already cited as to require no further consideration here. It is sufficient to say that no provision has been pointed out wherein the legislature has abdicated its law-making function and attempted to confer that power upon the commissioners. It has it is true, authorized an administrative board, within the limits prescribed by the legislature, to adopt certain rules and regulations, and further authorized such board to see that the legislature’s will as expressed in the statute is carried out by the persons or corporations over whom such board is given administrative powers. But to this there is no constitutional objection. 6 R. C. L. p. 179; McKinley v. United States, 249 U. S. 397, 63 L. ed. 668, 39 Sup. Ct. Rep. 324; New York ex rel. Lieberman v. Van De Carr, 199 U. S. 552, 50 L. ed. 305, 26 Sup. Ct. Rep. 144; Brazee v. Michigan, 241 U. S. 340, 60 L. ed. 1034, 36 Sup. Ct. Rep. 561, Ann. cas. 1917C, 522; Hall v. Geiger-Jones Co. 242 U. S. 538, 61 L. ed. 480, L.R.A.1917F, 514, 37 Sup. Ct. Rep. 217; Douglas v. Noble, 261 U. S. 165, 67 L. ed. 590, 43 Sup. Ct. Rep. 303.
See, also Selective Draft Law Cases (Arver v. United States) 245 U. S. 365, 62 L. ed. 349, L.R.A.1918C, 361, 38 Sup. Ct. Rep. 159, Ann. Cas. 1918B, 856; State ex rel. Linde v. Taylor, 33 N. D. 76, L.R.A.1918B, 156, 156 N. W. 561, Ann. Cas. 1918A, 583.
It is also contended that the. statute is invalid because it delegates judicial powers to the commissioners. In their brief relators say:
These contentions have already been answered, and need no further consideration.
It is asserted, however, that the terms “unearned values” or “unearned increment” includes “going value;” and it is said that under the rule established by the authorities “going value” is an element which must be included in the valuation for rate making purposes. In passing, it may be said that the terms “unearned values” and “unearned increment” seems to be at least as definite as “going value.” The merit of the objection, however, is not here. Tor the relators concede that the commissioners have construed the terms “unearned values” and “unearned increment” to apply only to land values. In other words, there is no contention that the Commissioners have applied or intend to apply the terms to the injury of the relators. Hence, they cannot be heard to assert that the statute is rendered invalid on account of these provisions, for, “a litigant can be heard to question the validity of a statute only when, and in so far as, it is applied to his disadvantage.” Rindge Co. v. Los Angeles County, 262 U. S. 700, 67 L. ed. 186, 43 Sup. Ct. Rep. 689. See also State ex rel. Linde v. Taylor, supra.
It is also contended that the statute is invalid because the penalties imposed for violation of an order of the railroad commissioners are so severe as to intimidate utility companies into compliance with such orders regardless of their invalidity.
A sufficient answer is that the penalty provisions of the act arc not involved. “A litigant can be heard to question the validity of a statute only when, and in so far as, it is applied to his disadvantage.” Rindge Co. v. Lon Angeles County, supra. The penalty provisions can become involved only after an order of the railroad commission is
Our conclusion is that the Public Utilities Act is not vulnerable to any of the attacks made upon it in this action.
The order appealed from is affirmed.
