Mountain View Rural Telephone Co. v. Interstate Telephone Co.

• Decision Date: 02 May 1935
• Docket Number: 6208
• Citation: 55 Idaho 514,46 P.2d 723
• Parties: MOUNTAIN VIEW RURAL TELEPHONE COMPANY, a Copartnership, Respondent, v. INTERSTATE TELEPHONE COMPANY, a Corporation, Appellant; CLAGSTONE RURAL TELEPHONE COMPANY, LTD., a Corporation, et al., Intervenors and Respondents
• Court: Idaho Supreme Court

46 P.2d 723

55 Idaho 514

MOUNTAIN VIEW RURAL TELEPHONE COMPANY, a Copartnership, Respondent, v. INTERSTATE TELEPHONE COMPANY, a Corporation, Appellant;

CLAGSTONE RURAL TELEPHONE COMPANY, LTD., a Corporation, et al., Intervenors and Respondents

No. 6208

Supreme Court of Idaho

May 2, 1935

PUBLIC UTILITIES-RATES, FIXING OF-ELEMENTS TO BE CONSIDERED-PUBLIC UTILITIES COMMISSION-REVIEW OF PROCEEDINGS-STATUTES CONSTRUCTION OF-CONSTITUTIONAL LAW.

1. Generally, main elements in fixing reasonable rates for services rendered by public utility, such as telephone company, are costs of rendering service on economical and efficient basis, fair return to utility on its property used and useful in such service, and fairness to consumers.

2. Statute limiting court to determination of question whether Public Utilities Commission regularly pursued its authority on appeal therefrom presupposes and necessitates findings by Commission on ultimate facts necessary to support its conclusions (I. C. A., sec. 59-629; Const., art. 5, sec. 9).

3. In fixing telephone company's rates for exchange service rendered for another telephone company, Public Utilities Commission should have found valuation of both companies' properties, used in connection with such service, and considered their respective services in connection with long distance calls on question of reasonable rate for exchange service.

4. Burden was on telephone company in proceeding before Public Utilities Commission by other such companies to reduce former company's rate for exchange service on ground that increased rate was never legally inaugurated to establish increase over previous contract rate (I. C. A., secs. 59-622, 59-623).

5. While courts may not legislate or substitute their opinion or judgment for that of legislature, they will determine true meaning of statute, where it is clear that words have been inadvertently or mistakenly used therein or omitted therefrom.

6. Court must harmonize conflicting statutes and give them reasonable and sensible construction, if possible.

7. Word "not" should be read into section of statute authorizing Public Utilities Commission to conduct hearing concerning propriety of public utility's rate on filing of schedule stating rate, rule or regulation increasing or resulting in increase of any rate, before word "increasing," in order to harmonize it with preceding section prohibiting public utility from raising rate without showing before and finding by Commission that increase is justified (I. C. A., secs. 59-622, 59-623).

8. Increased rate, promulgated by telephone company for exchange service rendered to other telephone companies, without showing before or finding by Public Utilities Commission that increase was justified, held not legally in effect (I. C. A secs. 59-622, 59-623).

APPEAL from the Public Utilities Commission of the State of Idaho.

Appeal from order of Public Utilities Commission reducing rates. Reversed in part and remanded for further proceedings.

Reversed and remanded, with directions. No costs awarded. Petitions for rehearing denied.

Charles P. Lund and Richards & Haga, for Appellant.

The order fixing a $ 4 rate per annum per phone is arbitrary, unreasonable and unjust, and without the issues as announced and defined by the Commission during the progress of the hearing, and is contrary to the evidence. (Ann Arbor R. Co. v. United States, 281 U.S. 658, 50 S.Ct. 444, 74 L.Ed. 1098; Southern P. Co. v. Interstate Commerce Com., 219 U.S. 433, 31 S.Ct. 288, 55 L.Ed. 283; Northern Pacific R. Co. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429, 59 L.Ed. 735, Ann. Cas. 1916A, 1; Reagan v. Farmers' Loan & Trust Co., 154 U.S. 362, 14 S.Ct. 1047, 38 L.Ed. 1014.)

Bert H. Miller, Attorney General, J. W. Taylor, Assistant Attorney General, and Hawkins & Hawkins, for Respondents.

The Public Utilities Commission, in making classification of service and consumers, and in fixing rates, should take into consideration only such property, equipment, investment and expense as are affected or concerned in the matters under consideration, and as are necessary to arrive at a fair and just decision. (Covington & Lexington, Turnpike Co. v. Sandford, 164 U.S. 578, 17 S.Ct. 198, 41 L.Ed. 560; 10 C. J. 418.)

Even if this court should hold that the said rate of $ 4 per annum per phone is not justified, the said Order No. 910, fixing the rate for locally owned lines at 50 cents per month per phone would be in full force and effect, since lawful means were never taken to change it. (I. C. A., sec. 59-622.)

There is a wide distinction between interpretation and review of validity, and upon the theory of ascertainment of legislative intent for interpretation, it is proper to review not only the history and title of the act, but contemporary history, the original bill, matters of common knowledge, the purposes motivating enactment of the law, and the object to be accomplished. (Colburn v. Wilson, 24 Idaho 94, 132 P. 579; Wood v. Independent School Dist., 21 Idaho 734, 124 P. 780; State v. Brodigan (concurring opinion of Talbot, C. J.), 37 Nev. 245, 141 P. 988 (990).)

To make a legislative intent operative, it is proper to strike out even whole clauses inconsistent therewith or to interpolate omitted words. (Lamkin v. Sterling, 1 Idaho 92; Pioneer Irr. Dist. v. Bradley, 8 Idaho 310, 68 P. 295, 101 Am. St. 201.)

GIVENS, C. J. Morgan, J., and Sutphen and Rice, D.JJ., concur. Budge, J., did not participate. Holden and Ailshie, JJ., deemed themselves disqualified.

OPINION

GIVENS, C. J.

Prior to 1926, appellant's predecessor in interest had entered into contracts with various rural, privately owned, co-operative, telephone lines of which respondent was and is one, there being some twenty others, for exchange service rendered by appellant at the rate of 50 cents per phone per month for some lines, others at 75 cents, and others having no contracts at all at various similar amounts.

In 1926, appellant's predecessor in interest gave notice of cancelation of this rate and inauguration of the rate of 75 cents, which since that time has been paid by the users of respondents' lines. In 1932 these lines filed the action herein before the Public Utilities Commission, urging two things: First, that the rate of 1926 was never legally inaugurated because there had been no compliance with I. C. A., sec. 59-622, and that I. C. A., sec. 59-623, did not apply because of what is contended is the correct though substituted language of the latter section, and second, that the rate of 75 cents was unreasonable, unjust and excessive.

Several hearings were had by the Commission and the rate ultimately reduced to $ 4 per year, from which decision appellants seek relief, mainly on the ground that the Commission failed to find the value of appellants' property used and useful in rendering this service involved as a rate base. Respondents' position is that the service rendered involves no additional equipment and is a mere overflow service.

These rural lines and all of their equipment up to the city limits or up to the central telephone exchanges are owned by respondents. The equipment, however, within the central exchange stations is owned and operated by appellant and at least the connections of respondents' lines with the central exchange consist of equipment which would not be needed if this service were not rendered. We do not mean to indicate that other portions of the plant and equipment are not necessary in such use. It is quite generally held and so recognized by the Commission and this court that the two main elements entering into the fixing of reasonable rates are first, cost to the utility rendering the service on an economical and efficient basis, and a rate that will bring a fair return to the utility rendering the service, on its property used and useful in such service, and second, what rate will be a fair one to the consumer; such harmonizing of the two sometimes rendering necessary a compromise between them. (Murray v. Public Utilities Com., 27 Idaho 603, 150 P. 47, 50, L.R.A. 1916F 756.) The court said therein, "The rate fixed must be a fair one to the consumers, but it must also be sufficient to assure the proprietor a fair and safe return on his investment. . . ." (Consumers' Co., Ltd., v. Public Utilities Com., 41 Idaho 498, 239 P. 730; Boise Artesian Water Co. v. Public Utilities Com., 40 Idaho 690, 236 P. 525.) In State ex rel. Puget Sound Power & L. Co. v. Department of Public Works, 179 Wash. 461, 38 P.2d 350, the court held, in fixing the rates, the Commission should base them upon value of service to consumer, the ability of the consumer to pay, prevailing economic conditions, and all of the other facts and circumstances which bear upon the question of what is reasonable and sufficient compensation. (Cases there cited.) In Telluride Power Co. v. Public Utilities Com. of Utah (Utah) 8 F.Supp. 341, the court said, ". . . . the worth of the service is an important element for just consideration in fixing reasonable rates, reasonable to both utility and customer." (Smyth v. Ames, 169 U.S. 466, 18 S.Ct. 418, 42 L.Ed. 819; Northern P. Ry. Co. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429, 59 L.Ed. 735, Ann. Cas. 1916A 1; Norfolk & W. Ry. Co. v. Conley, 236 U.S. 605, 35 S.Ct. 437, 59 L.Ed. 745; Brooks-Scanlon Co. v. Railroad Com. of Louisiana, 251 U.S. 396, 40 S.Ct. 183, 64 L.Ed. 323; Bluefield Water Works & I. Co. v. Public Service Com., 262 U.S. 679, 43 S.Ct. 675, 67 L.Ed. 1176; United Rys. & Elec. Co. v. West, 280 U.S. 234, 50 S.Ct. 123, 74 L.Ed. 390; Oklahoma G. & E. Co. v. Corporation Com., (D. C.) 1 F.Supp. 966.) The first element necessarily requires a valuation of the utility's property so used and useful. (Teton Valley Power, etc., v....