Hammond Lumber Co. v. Public Service Commission

• Decision Date: 11 May 1920
• Citation: 96 Or. 595,189 P. 639
• Parties: HAMMOND LUMBER CO. ET AL. v. PUBLIC SERVICE COMMISSION. [a1]
• Court: Oregon Supreme Court

189 P. 639

96 Or. 595

HAMMOND LUMBER CO. ET AL. v. PUBLIC SERVICE COMMISSION. ^[a1]

Supreme Court of Oregon

May 11, 1920

Department 2.

Appeal from Circuit Court, Marion County; George G. Bingham, Judge.

Suit by the Hammond Lumber Company and others against the Public Service Commission of Oregon. From decree for defendant plaintiffs appeal. Affirmed.

The plaintiffs are owners of large tracts of timber in Columbia county in a region served by the Columbia & Nehalem River Railroad Company, which owns and operates a railroad about 27 miles in length in that county, mainly for the purpose of hauling logs to the Columbia river. The railroad company filed with the Public Service Commission of Oregon its schedule of freight rates, which was contested before the commission by the plaintiffs here, as to the rate to be charged on logs. After a hearing before the commission, in which the plaintiffs and the railroad company were both represented, the commission made an order fixing the rate on logs at certain figures. Dissatisfied with this order, the plaintiffs instituted this suit against the commission to set aside the rates fixed by it. The circuit court affirmed the order of the commission, and the plaintiffs have appealed.

William C. McCulloch, of Portland (Joseph N. Teal, of Portland, on the brief), for appellants.

J. O Bailey and J. C. Veazie, both of Portland (George M. Brown Atty. Gen., J. O. Bailey, Asst. Atty. Gen., and Veazie &amp Veazie, of Portland, on the brief), for respondent.

BURNETT J.

The authority for a suit of this nature is found in L. O. L., § 6910, reading thus:

"Any railroad or other person, persons or corporation interested in or affected by any order of the commission fixing any rate or rates, fares, charges, classifications, joint rate or rates, or any order fixing any regulations, practices or service, being dissatisfied therewith, may commence a suit in the circuit court of Marion county against the commission as defendant to vacate and set aside any such order on the ground that the rate or rates, fares, charges, classifications, joint rate or rates, fixed in such order, is unlawful, or that any such regulation, practice or service prescribed or fixed in such order is unreasonable, in which suit a copy of the complaint shall be served with the summons as in civil actions. The commission shall serve and file its answer to said complaint within ten days after the service thereof,

whereupon said suit shall be at issue and stand ready for trial upon ten days' notice by either party. All suits brought under this section shall have precedence over any civil cause of a different nature pending in said court, and the circuit court shall always be deemed open for the trial thereof, and the same shall be tried and determined as a suit in equity. In all trials under this section, and sections 6911, 6912, and 6913 hereof, the burden of proof (shall) be upon the plaintiff to show by clear and satisfactory evidence that the order of the commission complained of is unlawful, or unreasonable, as the case may be."

Primarily, the right to fix the rate for transportation is lodged in the carrier (chapter 361, Laws 1913), but subject to control and revision by the Public Service Commission, either on its own motion or at the complaint of interested parties (L. O. L. § 6906). The object to be attained, and the canon by which all the activities of the commission are controlled, is to establish a reasonable rate for services rendered or to be rendered by the carrier; every unjust and unreasonable charge being prohibited as unlawful. L. O. L. § 6887. The power to compel railroads to render adequate service and to charge reasonable rates for such service is legislative in its nature, and not judicial. It has been held in State v. Corvallis & Eastern R. R. Co., 59 Or. 450, 117 P. 980, that the appointment of a commission to fix certain rates and practices as reasonable is not a delegation of legislative power; the principle being that, while a legislative assembly cannot delegate its powers to enact laws, it may direct the application of a statute to a specified state of facts which depend upon the existence of certain conditions to be determined in a particular manner. The ascertainment of the conditions governing the reasonableness of rates to be charged for transportation of people and property is confided to the commission and at least in an ancillary sense this may be classed as a branch of the legislative power.

The Supreme Court of Wisconsin, from the enactments of which state our Public Service Commission statute is copied in large measure, speaking by Mr. Justice Timlin in Minneapolis, etc., Ry. Co. v. Railroad Commission of Wisconsin, 136 Wis. 146, 116 N.W. 905, 17 L. R. A. (N. S.) 821, uses this language:

"This law (ch. 362, Laws of 1905) establishes, and thenceforth assumes, the existence of rates, charges, classifications, and services discoverable by investigation, but undisclosed, which are exactly reasonable and just. It commits to the Railroad Commission the duty to ascertain and disclose that particular rate, charge, classification, or service. The law intends that there is only one rate, charge, or service that is reasonable and just. When the order of the commission is set aside by the court, it is because this reasonable and just rate, charge, classification, or service has not yet been correctly ascertained. When the order of the commission has been rescinded or changed by the commission because of changed conditions it is because there is a new reasonable rate to be ascertained and disclosed applicable to such new conditions and fixed by force of law immediately when the new conditions come into existence. But the theory and the mandate of the law is that this point always exists under any combination of conditions and is always discoverable, although not always discovered. Until it is discovered and made known the former rates and service prevail. The order of the commission is prima facie evidence that the rate, charge, or service found and fixed by it is the particular rate, charge, or service declared by the Legislature in general terms to be lawful and to be in force. If it were conceded that the commission had power or discretion to fix one of several rates, either of which would be just and reasonable, it would be hard to say that this was not a delegation of pure legislative power to the commission. But the theory of this law is to delegate to the commission the power to ascertain facts and to make mere administrative regulations.

"If this court or the circuit court were by the statute in question authorized to investigate the subject anew, to put itself in the place of the commission and search for this reasonable and just rate, with power to substitute its own judgment of what is reasonable and just for the judgment of the commissioners, the statute might be subject to grave criticism. But the courts are not by this statute so authorized. The authority given to the circuit court is not to search for or disclose or declare this 'reasonable and just' rate or service, but merely to determine whether the order of the commission is 'unreasonable'--quite a different thing. We think the Legislature was within its power in conferring upon the courts such authority to inquire whether or not the order of the commission was unreasonable and to vacate the order if so found. In doing so the courts are required to exercise no legislative power, to ascertain and disclose no rates, to declare no rule, or no law unreasonable, but merely to exercise judicial power to ascertain and determine whether the commission has so far failed in its search for this lawful, just, and reasonable rate as to have found instead, and declared, that which is unreasonable. The result of the reversal of the order of the commission is not to establish this fact or ascertain this point of reasonableness, but to leave it undisclosed, leaving the former rates to stand or requiring the commissioners to try over again to find it. In reviewing the order of the Railroad Commission the inquiry is not whether the rate, regulation, or service fixed by the commission is just and reasonable, but whether the order of the commission is unreasonable or unlawful. The nature of the inquiry is changed at this point, and the court is

not investigating for the purpose of establishing a fixed point. Whether or not the order is within the field of reasonableness, or outside of its boundaries, is the question for the court. It is quite a different question from that which was before the commission in this respect. The order being found by the court to be such that reasonable men might well differ with respect to its correctness cannot be said to be unreasonable. From this aspect it is within the domain of reason, not outside of its boundaries. This is the viewpoint of the reviewing court. Doubtless the court may, for the purpose of comparison and to aid it in ascertaining how far the order diverges from a reasonable standard, take evidence of and consider such criterion. But this is only for comparison. The court cannot legally adjudicate or declare this statutory standard.

"Unless the plaintiff is able to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be, the order must stand. The words 'clear and satisfactory evidence' are significant, because at the time of the enactment of this statute they were used in the law of this state to describe a degree of proof greater than a preponderance of evidence and such as was necessary in order to establish fraud by that party to an action upon whom the burden of proof rested [citing authorities]."

A finding without...