Gregg v. Laird

• Decision Date: 30 April 1913
• Citation: 87 A. 1111,121 Md. 1
• Parties: GREGG et al. v. LAIRD et al.
• Court: Maryland Court of Appeals

87 A. 1111

121 Md. 1

GREGG et al. v. LAIRD et al.

Court of Appeals of Maryland

April 30, 1913

Appeal from Circuit Court of Baltimore City; Carroll T. Bond, Judge.

Action by Maurice Gregg and others against Philip D. Laird and others, comprising the Public Service Commission, and others. From a judgment in favor of the defendants, plaintiffs appeal. Affirmed.

Geo Stewart Brown and J. S. T. Waters, both of Baltimore, for appellants.

Charles H. Carter and W. Cabell Bruce, both of Baltimore, for appellees. Charles J. Bonaparte, of Baltimore, amicus curiæ.

STOCKBRIDGE J.

The General Assembly of 1892 by an act (chapter 387) undertook the regulation of the rates to be charged by telephone companies for the service rendered to their subscribers. The rental fixed by the act was what is known as a flat rate of $6.50 per month for one telephone, and a lesser rate where the customer had two or more instruments. The service rendered at that time was what is called the grounded circuit. As improvements were made in the apparatus, the metallic circuit came into use, and in 1894 the Legislature of that year, by chapter 207, amended the act of two years earlier by providing that any person, firm, or corporation might, by special contract, agree with the telephone company for special equipment or service, at such rates and upon such terms and conditions as might be stipulated in the contract. There were then two rates in force for the furnishing of telephone service, one a flat rate of $78 per annum, and the other a contract rate, which might be varied according to the character of the service afforded. In 1910 the Legislature passed an act, entitled "An act to create and establish a public service commission, and prescribing its powers and duties, and to provide for the regulation and control of public service corporations and public utilities." Acts 1910, c. 180. This act was, in the main, like similar acts passed in a number of the states, in response to a supposed popular demand for a more effective and stringent regulation of firms or corporations engaged in the conduct of public utilities. On January 2, 1912, the Public Service Commission of Maryland promulgated an order prescribing the rates of charges for telephone service in the city of Baltimore, to be effective on and after May 1, 1912, with an option to flat-rate subscribers to continue their flat-rate contracts until the 1st of October, 1912. These rates were included in seven distinct schedules, under which service for residences was placed on a flat-rate basis, and a measured rate was substituted for the flat rate theretofore prevailing for business service. The order further provided that the rates so prescribed should be the only charges made for local telephone messages for a period of three years from May 1 1912. An order dated April 25, 1912, recited that numerous complaints had been made with regard to the interpretation given to the order of January 2d, and then the order proceeds to amplify and make additions to some of the provisions of that order which do not enter into the present case. By an order passed by the commission on September 26, 1912, the order of the 2d of January was still further modified by extending the period during which the flat-rate subscribers might continue their contracts on that basis from October 1 1912, to April 1, 1913, and granted to the Protective Telephone Association the right to show cause against the proposed revision up to January 1, 1913. On October 29th the Public Service Commission passed a fourth order, by the terms of which January 1, 1913, was set as the rate on which the measured rates provided for in the orders of January 2, and April 25, 1912, should become operative. By a letter of the telephone company dated December 18, 1912, the plaintiffs were notified that on December 31st their flat-rate contract would be discontinued. Five days later the bill of complaint was filed, praying for an injunction to restrain any interference with the flat rate which the plaintiffs had been enjoying. A demurrer to the bill of complaint was sustained by the circuit court of Baltimore city, and the bill dismissed. It is from that action that this appeal is taken. A large number and variety of objections have been urged against the action of the commission, most of which depend upon a careful examination and construction of the act itself, in which adjudications elsewhere can have little force unless there is identity in the phraseology of the two acts.

The most serious of the attacks made is that which is directed against the constitutionality of the act. This is claimed to result from an attempt to invest the commission with powers both legislative and judicial, possibly administrative as well, and therefore to be inimical to article 8 of the Declaration of Rights "that the legislative, executive and judicial powers of government ought to be forever separate and distinct from each other; and no persons exercising the functions of one of said departments shall assume or discharge the duties of any other." What has the commission done in this case? It has had hearings upon rates proposed to be adopted for the services to be rendered by a public utilities corporation, and has by its order promulgated the rates which the company shall be permitted to charge to those making use of the service. Nowhere is the nature of such an act better characterized than in the opinion by Justice Holmes in Prentis v. A. Coast Line, 211 U.S. 210, 29 S.Ct. 67, 53 L.Ed. 150, when he says: "The establishment of a rate is the making of a rule for the future, and therefore is an act legislative, not judicial, in kind. *** Proceedings legislative in nature are not proceedings in a court, *** no matter what may be the general or dominant character of the body in which they may take place. *** That question depends, not upon the character of the body, but upon the character of the proceedings. *** The decision upon them cannot be res judicata when a suit is brought. *** And it does not matter what inquiries may have been made as a preliminary to the legislative act. Most legislation is preceded by hearings and investigations. But the effect of the inquiry, and of the decision upon it, is determined by the nature of the act to which the inquiry and decision lead up. *** The nature of the final act determines the nature of the previous inquiry. *** So when the final act is legislative the decision which induces it cannot be judicial in the practical sense, although the questions considered might be the same that would arise in the trial of a case,"--and the same holding is made in Home Telephone Co. v. Los Angeles, 211 U.S. 274, 29 S.Ct. 50, 53 L.Ed. 176. Following these cases, it must be held that the order of the Public Service Commission complained of in this case was a legislative, rather than a judicial or administrative, act, or a combination of any two of them, and consequently not objectionable on the constitutional ground.

It has been strenuously argued on behalf of the appellants that there has been no express repeal of the Acts of 1892 and 1894, by which a maximum charge was established by the Legislature, that appeals by implication are never favored by the courts, and that the Public Service Act recognizes that rates fixed by the Legislature may coexist with rates established by the commission, provided there is no conflict between them. That repeals by implication are not favored is perfectly true, but the difficulty with this contention of the appellants is that in section 31 1/2 of the act of 1910 it is provided that "all acts or parts of acts heretofore passed and now existing,...