Chicago, M. & St. P. Ry. Co. v. Board of Railroad Com'rs

• Decision Date: 20 May 1926
• Docket Number: 5884.
• Citation: 247 P. 162,76 Mont. 305
• Parties: CHICAGO, M. & ST. P. RY. CO. v. BOARD OF RAILROAD COM'RS.
• Court: Montana Supreme Court

247 P. 162

76 Mont. 305

CHICAGO, M. & ST. P. RY. CO. v. BOARD OF RAILROAD COM'RS.

No. 5884.

Supreme Court of Montana

May 20, 1926

Rehearing Denied June 11, 1926.

Appeal from District Court, Silver Bow County; Wm. E. Carroll Judge.

Action by the Chicago, Milwaukee & St. Paul Railway Company against the Board of Railroad Commissioners of the State of Montana. Judgment for plaintiff on demurrer, and defendant appeals. Affirmed.

E. G Toomey, of Helena, for appellant.

Murphy & Whitlock, of Missoula, for respondent.

CALLAWAY C.J.

This action was brought by the plaintiff railway company in the district court of Silver Bow county (the city of Butte being the principal place of business of plaintiff in Montana) to review and annul an order of the defendant board directing the installation of an industrial spur track near Roundup and to enjoin further proceedings thereunder. The board filed a general demurrer to the complaint, which, being overruled, it refused to plead further. Thereupon defendant's default was entered, and judgment was entered in favor of the plaintiff, from which the board has appealed.

At the threshold we observe that, while the board of railroad commissioners is a public agency of dignity and importance, vested with extensive powers and duties, and whose acts are valid prima facie (section 3809, R. C. 1921; State ex rel. Board of Railroad Commissioners v. District Court, 53 Mont. 229, 163 P. 115), it has such powers and such only as are conferred upon it by statute either expressly or by necessary implication.

Counsel agree that the order complained of is based upon section 3833, R. C. 1921, which reads as follows:

"The board of railroad commissioners of the state of Montana shall have power and authority, after such investigation as they may deem necessary, and under such rules and regulations as they may establish with reference thereto, to compel railroads or railways or other companies or corporations operating and holding themselves out to be common carriers in the state of Montana, to extend or construct commercial or industrial spurs from constructed lines or tracks at stations or from within station limits; provided, the length of such commercial or industrial spurs or tracks shall be not to exceed two miles from the headblock to end of track."

This statute is attacked by the plaintiff as unconstitutional upon several grounds, the chief of which is that it assumes to delegate legislative powers to the board of railroad commissioners. With this main objection the others are interwoven.

The difficulty of defining the line which separates legislative power to make laws from administrative authority to make regulations has frequently been the subject of controversy. United States v. Grimaud, 220 U.S. 506, 31 S.Ct. 480, 55 L.Ed. 563; Cook v. Burnquist (D. C.) 242 F. 321. Decisions touching the question more or less thoroughly are many, and are far from harmonious State ex rel. Chicago, M. & St. P. Ry. Co. v. Public Service Commission, 94 Wash. 274, 162 P. 523. The general rule of course is that neither Congress nor the Legislature (unless the Constitution of the particular state so authorizes, and Montana's does not) may delegate legislative power. Congress, it has been said, and the rule is applicable here, "may not delegate the choosing of policies nor the duty of formally enacting the policy of the law, but it may formulate the policy as broadly and with as much or as little detail as it sees proper and it may delegate the duty of working out the details and the application of the policy to the situation it was intended to meet." John B. Cheadle, "Delegation of Legislative Functions," 27 Yale Law Journal, 892.

Mr. Justice Lumpkin, speaking for the Supreme Court of Georgia in Southern Ry. v. Melton, 133 Ga. 277, 65 S.E. 665, said:

"Unless the Legislature could pass an act outlining the governing principles in somewhat general terms, and leave the railroad commission, to fill in the details, the power of the Legislature on the subject would be practically useless and impossible of execution."

And see, generally: Atlantic Coast Line R. R. Co. v. North Carolina Corp. Com., 206 U.S. 1, 27 S.Ct. 585, 51 L.Ed. 933, 11 Ann. Cas. 398; Louisville & N. R. R. Co. v. Garrett, 231 U.S. 298, 34 S.Ct. 48, 58 L.Ed. 229; State v. Atlantic Coast Line R. R. Co., 56 Fla. 617, 47 So. 969, 32 L. R. A. (N. S.) 639; State v. Public Service Com., 270 Mo. 547, 194 S.W. 287; St. Louis, I. M. & S. Co. v. State, 99 Ark. 1, 136 S.W. 938.

Mr. Justice Harlan, in Union Bridge Co. v. United States, 204 U.S. 364, 27 S.Ct. 367, 51 L.Ed. 523, declared that "a denial * * * of the right * * * to delegate the power to determine some fact or the state of things upon which the enforcement" of an act "depends would be 'to stop the wheels of government' and bring about confusion, if not paralysis, in the conduct of the public business." And, it may be added, that a denial of the right would go far towards abnegating the power of the state over public utilities. The ultimate doctrine of the Union Bridge Case seems to have been followed consistently by the Supreme Court of the United States. United States v. Grimaud, supra; Wichita R. R. v. Public Utilities Com., 260 U.S. 48, 43 S.Ct. 51, 67 L.Ed. 124. The last-cited case arose over an order made by the defendant Public Utilities Commission of Kansas. The order was declared void. In the course of the opinion Mr. Chief Justice Taft said:

"The maxim that a Legislature may not delegate legislative power has some qualifications, as in the creation of municipalities, and also in the creation of administrative boards to apply to the myriad details of rate schedules the regulatory police power of the state. The latter qualification is made necessary in order that the legislative power may be effectively exercised. In creating such an administrative agency the Legislature, to prevent its being a pure delegation of legislative power, must enjoin upon it a certain course of procedure and certain rules of decision in the performance of its function. It is a wholesome and necessary principle that such an agency must pursue the procedure and rules enjoined and show a substantial compliance therewith to give validity to its action."

Necessarily, the extent of the course of procedure and of the rules of decision are for the determination of the Legislature. We think the correct rule as deduced from the better authorities is that if an act but authorizes the administrative officer or board to carry out the definitely expressed will of the Legislature, although procedural directions and the things to be done are specified only in general terms, it is not vulnerable to the criticism that it carries a delegation of legislative power.

But the power must not be so arbitrary in character as to transgress the "due process clause" of the state or national Constitution. It would be difficult to couch a statute in more general terms than those employed in the one we are considering. Counsel for plaintiff are justified in saying that whether or not a hearing shall be ordered and the carrier afforded an opportunity to introduce testimony relative to the necessity or propriety of an order requiring construction, or whether the investigation shall be ex parte, is left entirely to the board itself. The statute does not undertake, even in the most general terms, to prescribe the conditions under which the board may compel the carrier to construct a spur. It does not provide that the board may issue its order when reasonable public necessity requires it; there is no indicated rule of decision. It does not require as a condition to the making of the order that the board shall give the carrier notice and a hearing; it does not contain even that procedural direction. On the contrary, it assumes to authorize the board only after such investigation as they may deem necessary, and under such rules and regulations as they may establish with reference thereto to compel common carriers to extend and construct commercial or industrial spurs.

The intention of the Legislature in passing this statute is not easy to determine. Did it intend to depart from a well-established policy? When chapter 135 of the Laws of 1917, now section 3833, supra, was passed, chapter 136 of the Laws of 1909 (Session Laws 1909, p. 204), sections 3827 to 3832, inclusive, R. C. 1921, was upon the statute books. Sections 3827, 3828, and 3829 assumed to confer authority upon the railroad commission to do certain acts using the express words, "after notice and hearing." Section 3829 assumed to give the commission authority to compel railroad companies to construct certain industrial or commercial spurs "after notice and hearing." The applicability of section 3829 to the present proceeding has neither been suggested nor argued by counsel, and we expressly reserve an opinion with respect to it. If, however, the Legislature, in enacting chapter 135 of the Laws of 1917, now 3833, intended to substitute that section for 3829, it would appear that it intended to do away with the provision for notice and hearing, and to substitute in lieu thereof the discretion of the board-in effect permitting that body to determine whether it would give notice of the proceeding and whether it would accord to the carrier a hearing.

When we conceive that the board's order to the carrier to construct the spur track is in effect a taking of property for it requires the carrier to use its property and spend its money (State of Washington ex rel. R. & N. Co. v. Fairchild, 224 U.S. 510, 32 S.Ct. 535, 56 L.Ed. 863), it would seem clear that an order to the carrier made without notice and without a hearing in effect would deprive the carrier of its property without...