State ex rel. Harline v. Public Service Commission of Mo.

• Decision Date: 05 December 1960
• Docket Number: No. 23215,23215
• Parties: STATE of Missouri, at the relation of Lillian E. HARLINE, James J. Harline, Harry W. Wintermute, Lucia Wintermute, George G. Kelly, Zakey Kelly, Robert J. Ingraham and Courtenay F. Ingraham, Appellants, v. PUBLIC SERVICE COMMISSION OF MISSOURI, Respondent.
• Court: Missouri Court of Appeals

Page 177

343 S.W.2d 177

38 P.U.R.3d 451

STATE of Missouri, at the relation of Lillian E. HARLINE James J. Harline, Harry W. Wintermute, Lucia Wintermute George G. Kelly, Zakey Kelly, Robert J. Ingraham and Courtenay F. Ingraham, Appellants, v. PUBLIC SERVICE COMMISSION OF MISSOURI, Respondent.

No. 23215.

Kansas City Court of Appeals, Missouri.

Dec. 5, 1960.

R. Jay Ingraham and John F. Ingraham, Kansas City, for appellant.

Glenn D. Evans and Thomas J. Downey, Morris E. Osburn, Jefferson City, F. L. Thompson and Thos. J. Conway, Jr., Kansas City, for respondent.

CROSS, Judge.

This appeal is from a judgment of the Circuit Court of Cole County, on review proceedings, affirming an order of respondent, Public Service Commission of Missouri, dismissing a complaint filed by appellants, resident landowners of Jackson County, Missouri.

It was alleged in the complaint that the Missouri Public Service Company, a public utility corporation supplying electric current to consumers in Jackson County and other areas in Missouri, hereinafter sometimes designated as 'the company', was preparing to locate, maintain and operate a 69,000 volt electrical transmission line in Jackson County from Martin City to Lee's Summit, and to interconnect it with the lines of the Kansas City Power & Light Company, and to acquire, by condemnation, right of way easements upon and over appellants' lands, all without a certificate of public convenience and necessity and without the Commission's permission and approval as required by law.

Complying with the prayer of the complainants for an order upon the company to show cause why it should not desist from the alleged acts, the Commission ordered the company to satisfy the matters of complaint or make answer in writing.

The company filed answer claiming authority for its acts under (1) the Commission's order entered in Public Service Commission Case No. 9,470, on January 18, 1938, granting a certificate of convenience and necessity to a predecessor company, the Missouri Public Service Corporation, and (2) the Commission's order in Case No. 11,892, approving the transfer of corporate rights from the Missouri Public Service Corporation to the Missouri Public Service Company.

Appellants introduced no evidence at the hearing except the record in Case No. 9,470 and the report and order in Case No. 11,892. The company's evidence disclosed it had commenced construction of the eight mile transmission line at a cost of $250,000. The Commission determined that the company was authorized to construct the line under the certificate of convenience and necessity issued in Case 9,470, and that no additional authority was necessary to comply with the statutes governing the matter. Whereupon the Commission dismissed the complaint and denied appellants' motion for rehearing.

The Commission's ruling was certified to and reviewed by the Circuit Court of Cole County, Missouri. The judgment of that court affirmed the order of dismissal made by the Commission. An appeal from the judgment was granted to the Missouri Supreme Court. Appellants invoked that court's exclusive jurisdiction by allegations that the Commission's order of dismissal and its orders in Cases No. 9,470 and No. 11,892 are in violation of the 1875 and 1945 Constitutions of Missouri and the Constitution of the United States.

Finding that no question of constitutional law is presented or preserved for appellate review, the Supreme Court has denied jurisdiction of this appeal and transferred the cause to this court.

Although the order of dismissal in Case No. 13,768 gave rise to this appeal, the critical factor in the controversy is Case No. 9,470. When that proceeding was filed in 1937, the predecessor Missouri Public Service Corporation was operating as an electric utility in certain cities and towns of Jackson County under franchise authority and the Commission's certificate of convenience and necessity. The certificate was limited to those municipalities and allocated no territory beyond their borders.

The utility was also serving some additional patrons in nearby rural areas, by request and upon application. Each extension to those patrons was made under authority of a separate Commission certificate, issued upon separate application, notice and hearing.

Under those circumstances, and with applications on file for service requiring extended lines, the utility filed in Case No. 9,470 its application for a certificate of convenience and necessity allocating to it a designated service area in rural Jackson County, and other counties for which it had obtained county franchise authority.

Upon notice and hearing, the Commission made findings that the authority sought by the application would be beneficial to the public and should be granted, and entered its order, in part, as follows: 'That the Missouri Public Service Corporation be and is hereby authorized to construct, maintain and operate electric transmission lines and distribution systems over, along and across the highways of the Counties of Jackson * * *, with authority to furnish electric service to all persons in the area for which this certificate is granted and in conformity with the extension rules that the applicant, from time to time, may have on file with this Commission and in effect'. The order contains other provisions of limiting and regulatory nature.

Appellants charge the trial court with error in affirming the order of dismissal for the alleged reason that such action was arbitrary, unreasonable, unlawful and in violation of constitutional guarantees. The points briefed by appellants will be disposed of without deciding a constitutional question. Appellants made no claim that any statute is unconstitutional, but say that the Commission's acts and orders are not in compliance with statutory provisions. Since the jurisdiction of the Commission is fixed by statute, and since the validity of that statute is not attacked, the case may be properly decided by a construction of the statutes for the purpose of determining whether or not the Commission exceeded its statutory authority. State ex rel. Orscheln Brothers Truck Lines, Inc. v. Public Service Commission, 338 Mo. 572, 92 S.W.2d 882, loc. cit. 884(4, 5). These views have been expressed by the Supreme Court in ruling that no constitutional question has been raised or preserved.

The basic issue for decision is: Must a public utility obtain an additional certificate of convenience and necessity from the Commission to construct each extension or addition to its existing transmission lines and facilities within a territory already allocated to it under a determination of public convenience and necessity?

That issue is raised by appellants' principal contention that the 1938 certificate of convenience and necessity conferred no authority upon the company to construct the planned transmission line. They insist that the law required an additional, specific order of approval from the Commission for that particular line, or any other additional line, to be granted only upon the company's application, due notice and hearing. Appellants argue that the Commission's order in Case No. 9,470 is null and void, ab initio, as an unlawful attempt to surrender and re-delegate the state's police powers by abandoning its statutory duties of regulation to the utility company; and, that subsequent orders based upon it are also void.

All corporate powers of the Missouri Public Service Commission are derived from the state by virtue of its charter, which includes all enacted statutes. The company derives from Section 351.385, V.A.M.S. all powers necessary or convenient to effect any or all of the purposes for which it was formed. The following specific powers are conferred upon it by Section 393.010: '* * * full power to manufacture and sell and to furnish * * *electricity * * * and * * * to lay conductors for conveying * * * electricity * * * through the streets, alleys and squares of any city * * *' and 'to set their poles, piers, abutments, wires and other fixtures along, across or under any of the public roads, streets and waters of this state * * *'.

Since 1938, the company and its predecessor have exercised those corporate powers by operating a public utility and furnishing electricity to the inhabitants in an area of Jackson County under a Public Service Commission certificate of convenience and necessity. None of those powers have been derived from the Missouri Public Service Commission.

The certificate of convenience and necessity granted no new powers. It simply permitted the company to exercise the rights and privileges already conferred upon it by state charter and municipal consent. State ex inf. Shartel ex rel. City of Sikeston v. Missouri Utilities Co., 331 Mo. 337, 53 S.W.2d 394, 89 A.L.R. 607. The certificate was a license or sanction, prerequisite to the use of existing corporate privileges.

The company had the legal duty to serve the public in the certificated Jackson County area. The corporate charter is a contract which impliedly obligates the corporation to furnish the service for which it was created to render. Section 393.130 specifically requires that 'every electrical corporation * * * shall furnish and provide such service instrumentalities * * * as shall be * * * adequate * * *'. The Jackson County franchise implies an obligation to serve the public in return for the privileges granted by it. The certificate of convenience and necessity is a mandate to serve the area covered by it, because it is the utility's duty, within reasonable limitations, to serve all persons in an area it has undertaken to serve. State ex rel. Ozark Power & Water Co. v. Public Service Commission, 287 Mo. 522, 229 S.W. 782; State ex rel. Kansas City Power & Light Co. v. Public Service Commission of Missouri et al., 335 Mo. 1248, 76 S.W.2d 343; State ex rel. Federal Reserve Bank of Kansas City v. Public Service Commission, 239...