Chesapeake & Potomac Tel. Co. v. Public Service Commission

• Decision Date: 05 December 1952
• Docket Number: No. 92,92
• Citation: 93 A.2d 249,201 Md. 170
• Parties: CHESAPEAKE & POTOMAC TEL. CO. v. PUBLIC SERVICE COMMISSION. PEOPLE'S COUNSEL et al. v. PUBLIC SERVICE COMMISSION.
• Court: Maryland Court of Appeals

Page 170

201 Md. 170

93 A.2d 249

CHESAPEAKE & POTOMAC TEL. CO. v. PUBLIC SERVICE COMMISSION.

PEOPLE'S COUNSEL et al. v. PUBLIC SERVICE COMMISSION.

No. 92.

Court of Appeals of Maryland.

Dec. 5, 1952.

Charence W. Miles, Baltimore (Wm. G. Gassaway, Washington, D. C., William B. Rafferty and Miles, Walsh, O'Brien & Morris, Baltimore, and Stephen H. Fletcher, Washington, D. C., on the brief), for C. & P. Tel. Co.

Joseph Allen, People's Counsel and Ward B. Coe, Jr., Asst. People's Counsel, Baltimore, for Counsel.

H. Donald Schwaab, Asst. City Sol., Baltimore (Thomas N. Biddison, City Sol., Edwin Harlan, Deputy City Sol. and Hugo A. Ricciuti, Asst. City Sol., Baltimore, on the brief), for city of Baltimore.

Charles D. Harris, Gen. Counsel, Baltimore, for Public Service Commission.

Before MARKELL, C. J., and DELAPLAINE, COLLINS and HENDERSON, JJ.

HENDERSON, Judge.

The appeal in this rate case is from an order of the Circuit Court No. 2 of Baltimore City dismissing a bill of complaint filed by the appellant against the Public Service Commission of Maryland, except to the extent that certain relief prayed therein was granted, and remanding the case to the Commission for further proceedings. The bill of complaint had been filed pursuant to the provisions of Sections 358 and 415, Article 23 of the Code of 1939, Sections 15 and 74, Article 78 of the Code of 1951, praying that paragraphs (1), (3) and (4) of the Commission's order No. 48888 entered in case No. 5176 on March 11, 1952 be declared illegal and set aside. The Commission, the People's Counsel and the Mayor and City Council of Baltimore filed demurrers which were overruled. Answers were then filed by all parties. After the demurrers had been filed but before they were overruled the People's Counsel and the City filed a cross-bill seeking to vacate the Commission's order on other grounds. Answers were filed by the Company and the Commission, the cases were consolidated and heard on bills and answers without the taking of additional testimony. The court dismissed the cross-bill, except to the extent that certain relief prayed therein was granted. The People's Counsel and the City appealed from this order and the Company also appealed. The court granted a stay of its orders pending appeal, conditioned upon the Company filing a bond in the amount of $1,000,000. An appropriate bond was duly filed and approved.

A preliminary question is raised by the cross-appellants, that their demurrers to the original bill should have been sustained on the ground that the Company could not appeal from those parts of the Commission's order that denied a rate increase to the full extent sought, and at the same time accept the benefits of the partial relief granted. To understand the contention made it is only necessary to quote the concluding paragraphs of the Commission's opinion: 'We have found the rate base to be $118,279,156. We have determined that a rate of return from 5.75% to 6% is reasonable and fair. The Company should therefore be permitted to earn a net of from $6,900,000 to $7,100,000. It, therefore, appears that the Company requires at least from $300,000 to $500,000 additional net income to enable it to earn the rate of return which this Commission has fixed as fair and equitable. * * * the Company may reasonable expect additional gross revenue in the amount of $943,000 annually as the result of a 10cents coin box charge. Giving effect to the current 52% tax rate would result in increased net revenue of $452,640 which, in the opinion of the Commission, is sufficient to give the Company a reasonable return.

'The Commission is of the opinion that the Company should be permitted to increase its local coin box telephone call charge from 5cents to 10cents and that its application for increased rate in other respects should be denied.'

The doctrine of election by the acceptance of benefits under a judgment is subject to certain limitations; as, for example, where there is no controversy as to the appellant's right to the amount for which the judgment was given. See note 169 A.L.R. 985. In the instant case the Commission found that the Company was entitled to the limited relief granted and the cross-appellants did not challenge the Company's right to that relief until after the demurrers had been filed. However, we think the doctrine is inapplicable on a broader ground.

Section 16(c), Article 78 of the Code of 1951 provides that 'All orders of the Commission shall take effect within such reasonable time as it shall prescribe, and shall continue in force until its further order, or for a specified period of time according as shall be prescribed in the order, unless the same shall be suspended or modified, or set aside by the Commission, or be suspended or set aside by a court of competent jurisdiction.'

Section 16(d) of the same article provides that 'Any company, corporation, association, person or partnership subject to any of the provisions of this sub-title or other person or party in interest, including the People's Counsel shall have the right to proceed in the courts to vacate, set aside or have modified any order of said Commission on the grounds that such order is unreasonable or unlawful, as hereinafter more particularly set forth.'

It seems clear from these provisions, taken in connection with the provisions as to the finality of Commission orders and the rights of immediate appeal contained in Section 55(c) and Sections 74 and 77, cf. Potomac Edison Co. v. Pub-Service Commission, 165 Md. 462, 169 A. 480, that the orders of the Commission should normally take effect forthwith. In the absence of a stay by the Commission or injunction by the Court, we cannot find that an appellant has any option in the matter. It would seem to follow that an appellant should not be put to an election. If we assume, without deciding, that an appeal from an order opens for review the whole subject matter, to the extent that it is inseparable, it is still not incumbent upon an appellant to specifically object to every part of the order, if the complaint is only addressed to a part, particularly where a modification rather than a complete reversal is sought. In these respects the case of a utility, exercising a statutory right of appeal from the action of a regulatory administrative body, is distinguishable from the case of a private litigant. The cross-appellants have cited no case, in Maryland or elsewhere, that has applied the doctrine of election to appeals of the character under consideration.

In Valparaiso Lighting Co. v. Public Service Commission, 190 Ind. 253, 129 N.E. 13, 17, cited by the cross-appellants, the court stated that the doctrine of election and estoppel did not apply to orders of a commission establishing rates. It is true that the court also pointed out that the rates for gas and electricity, contained in the single order in that case, could be treated as separable, so that the decision was not as broad as the principle announced. However, in Department of Public Utilities v New England Telephone and Telegraph Company, 325 Mass. 281, 90 N.E.2d 328, 333, it was squarely held that the company could avail itself of a limited rate increase without abandoning the right to court review of the validity of the order. The practice has been followed without challenge in Maryland and elsewhere. Cf. Public Service Commission v. United Railways & Electric Co., 155 Md. 572, 142 A. 870; Hudson & Manhattan Railroad Co. v. United States, 313 U.S. 98, 61 S.Ct. 884, 85 L.Ed. 1212; Lowell Gas Co. v. Department of Public Utilities, 324 Mass. 80, 84 N.E.2d 811, 813; Alabama Public Service Commission v. Southern Bell Telephone & Telegraph Co., 253 Ala. 1, 42 So.2d 655; New England Telephone & Telegraph Co. v. State, 95 N.H. 353, 64 A.2d 9; Southern Bell Telephone & Telegraph Co. v. Georgia Public Service Commission, 203 Ga. 832, 49 S.E.2d 38.

The cross-appellants contend that under Maryland law the Commission is not required to base rates on the 'fair value' of a utility's property. Under Section 55(a), Article 78 of the Code of 1951, unchanged since its adoption by chapter 180, Acts of 1910, the Commission is directed, in an appropriate case, to 'ascertain the fair value of property of any corporation subject to the provisions of this Article and used by it for the convenience of the public.' The cross-appellants contend, however, that this section is limited in its application and does not apply to rate making; that the only standards for fixing telephone rates are in Section 70(a) providing that rates be 'just and reasonable and not more than allowed by law or by order of the Commission and made as authorized by this sub-title.' They argue that the words 'just and reasonable' should be construed as coextensive with the requirements of the fourteenth amendment to the federal constitution, as laid down in the latest Supreme Court cases, to prohibit confiscation, not to prescribe a valuation method.

We think the contention is unsound. In Havre de Grace & Perryville Bridge Co. v. Towers (Public Service Commission), 132 Md. 16, 27, 103 A. 319, 323, a rate case, the court quoted Section 442 of Article 23 (now Section 55, Article 78 of the Code of 1951) and said: 'What the commission in this case was authorized to ascertain under the section referred to was the fair value of the property.' In Miles v. Public Service Commission, 151 Md. 337, 344, 135 A. 579, 582, 49 A.L.R. 1470, the court said: '* * * the very purpose of authorizing the commission to ascertain the value of the property of the various public service corporations is to enable it to fix the rates which the corporation is permitted to charge the public for the service rendered.' Again, in Public Service Commission v. United Railways & Electric Co., 155 Md. 572, 579, 602, 142 A. 870, 872, the court said: 'The contral dominating question presented by the appeal is whether the schedule of rates promulgated...