Columbia River Telephone Co. v. Department of Public Works

• Decision Date: 19 July 1928
• Docket Number: 21062.
• Citation: 269 P. 6,148 Wash. 395
• Court: Washington Supreme Court
• Parties: COLUMBIA RIVER TELEPHONE CO. v. DEPARTMENT OF PUBLIC WORKS.

269 P. 6

148 Wash. 395

COLUMBIA RIVER TELEPHONE CO. v. DEPARTMENT OF PUBLIC WORKS.

No. 21062.

Supreme Court of Washington, En Banc.

July 19, 1928

Appeal from Superior Court, Yakima County; A. W. Hawkins, Judge.

Action by the Columbia River Telephone Company against the Department of Public Works, to review an order entered in a proceeding instituted to value the property of the plaintiff. From a judgment affirming the order, the plaintiff appeals. Affirmed.

Cleland & Clifford, of Olympia, for appellant.

John H Dunbar and H. C. Brodie, both of Olympia, for respondent.

PARKER J.

The appellant telephone company seeks in this court reversal of a judgment of the superior court for Yakima county, affirming an order of the State Department of Public Works finding and fixing the value of appellant's public service property appellant contending that, in so far as the department refused to consider and add to the valuation of its property a substantial amount based upon so-called going concern value, its order is erroneous and prejudicial to appellant.

The department refused to consider going concern value as an element in the value of appellant's public service property, manifestly because of the department's view of the provisions of section 10441, Rem. Comp. Stat. under which it was proceeding in making the valuation. That section, in so far as we need here notice its language, reads as follows:

'The Commission [now the Department of Public Works] shall ascertain, as early as practicable, the cost of construction and equipment, the amount expended in permanent improvements, and proportionate amount of such permanent improvements charged in construction and to operating expenses respectively, the present as compared with the original cost of construction, and the cost of reproducing in its present condition the property of every public service company.

'It shall also ascertain the amount and present market value of the capital stock and funded indebtedness of every public service company. * * *

'It shall also ascertain the total market value of the property of each public service company operating in this state used for the public convenience within the state. * * *

'It shall also ascertain the probable earning capacity of each public service company under the rates now charged by such companies and the sum required to meet fixed charges and operating expenses. * * *

'It shall also ascertain the density of traffic and of population tributary to every public service company, and the conditions which will tend to show whether such traffic and population is likely to continue, increase or diminish. * * *

'It shall also ascertain whether the expenditures already made by any public service company in procuring its property were such as were justified by the then existing conditions, and such as might reasonably be expected in the immediate future and whether the money expended by such company has been reasonable for the present needs of the company and for such needs as may reasonably be expected in the immediate future.

'The commission is hereby authorized to cause a hearing or hearings to be held at such time or times and place or places as the commission may designate for the purpose of ascertaining the matters and things provided for in this section.

'The commission shall, before any hearing is had, notify the company concerned of the time and place of such hearing, by giving at least thirty days' written notice thereof, specifying that at the time and place designated a hearing will be held for the purpose of ascertaining the value of such company's property within the state, which shall be a sufficient complaint to authorize the commission to inquire into the matters designated in this section.

'All companies affected shall be entitled to be heard and introduce evidence at such hearing. The evidence introduced at such hearing shall be reduced to writing and certified under the seal of the commission.

'The commission shall make and render findings of fact in writing covering all matters in this section mentioned concerning which it is directed to inquire into, and shall make findings upon all matters concerning which evidence may have been introduced before it shall tend to show the value of the property used by such company for the public convenience.'

That section further provides for a review in the superior court of the department's findings and fixing of value, and correction thereof by that court, if found by the court to be 'unfair, unwarranted or unjust,' and for appeal from the decision of the superior court thereon to this court, and further provides that the findings of the department, or as they may be finally by the courts corrected or directed to be corrected, 'shall be conclusive evidence of the facts stated in such findings as of the date therein stated under conditions then existing, * * * and such facts can only be controverted by showing a subsequent change in conditions bearing upon the facts therein determined,' and further provides that the department shall, 'from time to time, cause further hearings to be had for the purpose of ascertaining the betterments, improvements, additions, and extensions made by any public service company to its property subsequent to the date of any prior hearing.'

This is not a rate-fixing proceeding, though its final determination may furnish evidence pertinent to some future inquiry looking to the change of appellant's present established rates charged and collected by it. It is manifestly because the final determination of this proceeding will be evidence of the value of appellant's public service property, as of the date of the valuation so made, that appellant seeks to have now included therein a substantial amount as going concern value.

It will be noticed that section 10441, Rem. Comp. Stat., specifies in considerable detail the elements of...