City of Fort Smith v. Department of Public Utilities

• Decision Date: 31 January 1938
• Docket Number: 4-4915
• Parties: CITY OF FORT SMITH v. DEPARTMENT OF PUBLIC UTILITIES
• Court: Arkansas Supreme Court

113 S.W.2d 100

195 Ark. 513

CITY OF FORT SMITH v. DEPARTMENT OF PUBLIC UTILITIES

4-4915

Supreme Court of Arkansas

January 31, 1938

Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann Judge; affirmed.

Affirmed.

Fadjo Cravens, for appellant.

J T. Hornor, Jr., Thomas Fitzhugh, Blake Downie, Edw. B. Downie and John Mohler, for appellees.

MCHANEY J. MEHAFFY, J., dissents.

OPINION

MCHANEY, J.

On June 23, 1936, appellant adopted ordinance No. 1711, entitled: "An ordinance determining and regulating the character of service to be furnished by telephone companies to the users of telephone service in the city of Fort Smith, Arkansas; providing penalties; declaring an emergency and for other related purposes." Section 1 thereof made it unlawful for appellee telephone company to require the users of its service to install or permit the installation of pay telephones or coin box telephones wherein a coin must be deposited to make a telephone call therefrom, or to fall or refuse to install and maintain telephone service upon the payment of flat rates applicable to the type of service demanded, or to refuse to install and maintain such telephone service at such place on the subscriber's premises as he may determine. Section 2 requires the furnishing of such service to applicants therefor as soon as reasonably possible after demand, and not later than 10 days thereafter. Section 3 fixes the punishment for a violation of the ordinance and § 4 declares an emergency, making it immediately effective.

Thereafter, appellee telephone company, hereinafter called the company, filed with appellee, Department of Public Utilities of the State of Arkansas, hereinafter called the department, what was designated as an appeal from said ordinance and complaint against appellant. It alleged its capacity as a foreign corporation; that it was engaged in the telephone business in the city of Fort Smith and in many other cities in this state; and that it has now, and for many years has had, in force certain rules, regulations and practices defining its service which are filed with the department and which are a part of every contract between it and its customers in this state, one of which rules is § C of art. V, as follows: "Use of Customer Service. Customer telephone service, as distinguished from public and semi-public telephone service, is furnished only for use by the customer, his family, employees or business associates, or persons residing in the customer's household . . . The telephone company has the right to refuse to install customer service or to permit such service to remain on premises of a public or semi-public character when the instrument is so located that the public in general or patrons of the customer may make use of the service. At such locations, however, customer service may be installed, provided the instrument is so located that it is not accessible for public use." It further set out the passage of said ordinance by appellant and challenged its validity on four grounds: (a) that it was passed without notice to it; (b) that the department had theretofore assumed jurisdiction of the subject-matter of said ordinance in another case pending before it, which deprived appellant of jurisdiction under the provisions of § 15 (e) of act 324 of 1935, and which cause is still pending; (c) that the enactment of said ordinance is an unlawful and arbitrary act of appellant, designed to compel it to furnish free telephone service to non-subscribers in that it would permit subscribers to allow the indiscriminate use by others of the subscriber's telephone, contrary to the tariffs on file with the department and contrary to the contracts between it and its various subscribers, in which telephone service is restricted; and (d) that its failure to observe said ordinance will subject it to the heavy penalties thereby imposed. It prayed "that the department issue an order suspending the operation, effect and enforcement of said ordinance, pending a hearing upon the validity thereof; and, if, after investigation and hearing, the department is of the opinion that there is a sufficient public demand for a flat rate semi-public service to justify its inauguration, a rate be prescribed therefor." It also prayed that this case be consolidated with the case then pending and for all other relief.

Appellant appeared specially before the department and moved to dismiss for the reason that it was given express authority to pass said ordinance by § 15 of said act 324 of 1935, and that the purpose of the appeal was to have the department determine the validity or invalidity of such ordinance, which is a judicial function, requiring the exercise of judicial power, and which, under the Constitution, was vested solely in the courts named in Art. 7, § 1, thereof, and that the department was not so named, and did not have the power to determine the validity of said ordinance. The department entered an order overruling the motion to dismiss and suspended the ordinance pending an investigation of the reasonableness of the rule put into effect by it and until its final order, such suspension to take effect upon the filing of a bond by the company conditioned to pay any damages or refunds occasioned by such suspension order. Said order announced a determination by the department to investigate, on its own motion, the reasonableness of said rule V-c and the enforcement thereof throughout the state. It thereafter entered upon such investigation and on September 29, 1936, rendered an elaborate opinion, and findings of fact, among others, that: "The department finds that the so-called city rule promulgated and put into effect by the city of Fort Smith through the passage of ordinance No. 1711, approved June 23, 1936, is unjust, unfair and inequitable to the telephone subscriber in that city and is, therefore, unreasonable.

"The department further finds that it should cancel, set aside and hold for naught said city rule and order and direct the company to restore said rule C to its tariffs applicable to telephone service in Fort Smith." An appropriate order was made in accord with its findings.

Thereafter, appellant sued out certiorari in the Pulaski circuit court to quash the order of the department, on the same ground asserted on its motion to dismiss. The writ was granted directing the department to send up the record of proceedings before it, which was done. On response of the department, and by leave of court, the company intervened. On a trial in the circuit court, appellant's petition to quash was denied, and the case is here on appeal.

The only question presented by this appeal is whether the department attempted to exercise judicial power in the action taken by it in the premises. All parties concede that the department is not a court and that it cannot exercise judicial powers. The department is an administrative body, created by the legislature, and, as such, it may perform only such duties and exercise such jurisdiction delegated to it by the legislature as the lawmaking body itself could constitutionally exercise. The dispute arises over the question as to whether the department's order in this case was legislative, and therefore valid, or judicial and, therefore, void.

Before determining this question, it may be helpful to consider the applicable provisions of the statute under which the parties have proceeded. Act 324 of the Acts of 1935, p. 895, is entitled "An act providing for the better regulation of certain...