Muskogee Gas & Elec. Co. v. State

• Decision Date: 06 January 1920
• Docket Number: 10635.
• Citation: 186 P. 730,81 Okla. 176,1920 OK 6
• Parties: MUSKOGEE GAS & ELECTRIC CO. v. STATE et al.
• Court: Oklahoma Supreme Court

186 P. 730

81 Okla. 176, 1920 OK 6

MUSKOGEE GAS & ELECTRIC CO. v. STATE et al.

No. 10635.

Supreme Court of Oklahoma

January 6, 1920

Syllabus by the Court.

The Corporation Commission was created and endowed with legislative, executive, administrative, and judicial powers.

The power to fix rates is legislative, whether exercised by the Legislature directly or by an administrative body under delegated authority.

The legislative power of the Corporation Commission over rates is not confined to prescribing permanent rates, but may be exercised as the exigencies of the times and changing conditions demand, and the Corporation Commission has authority to prescribe temporary rates when the necessity therefor is apparent.

The rate-making power of the Corporation Commission is not limited to any particular theory or method; and the commission may, if it has the necessary facts before it prescribe a temporary schedule of rates to be effective until the commission has had time to make an investigation and a valuation of the property of the public utility.

The power of the Corporation Commission to prescribe rates is not limited to complaints filed, but is inherent in the authority delegated to the commission, and the only question of notice that can be raised by a public utility is that prescribed for notice and hearing for the utility itself.

The rule against the admissibility of hearsay evidence does not apply to exhibits made by the complainant from the books of a public service corporation where such corporation is confronted with the exhibits and given an opportunity for cross-examination and rebuttal.

The inquiry of a board of the character of the Corporation Commission should not be too narrowly constrained by technical rules as to the admissibility of evidence. Its function is largely one of investigation, and it should not be hampered in making inquiry pertaining to rates of a public utility by those narrow rules which prevail in trials at common law.

The fixing of rates is not a judicial function, and the right to review the conclusions of a board with legislative power such as that exercised by the Corporation Commission is limited in determining whether the board acted within the scope of its authority or the order is without foundation in evidence or a constitutional right of the public utility has been infringed upon by fixing rates which are confiscatory or insufficient to pay the cost of the service and return to the utility a reasonable profit on the investment.

Findings of fact made by the Corporation Commission are by section 22 art. 9, of Constitution prima facie just, reasonable and correct.

The requirement of section 22, art. 9, Constitution, that the Corporation Commission certify on appeal all the facts upon which the order appealed from was based, and which may be essential for the proper decision on the appeal, as well as a written statement of the reasons upon which the order appealed from was based is not fulfilled by certifying the evidence-and an order which states merely the conclusions reached by the commission.

When the Corporation Commission upon making an order prescribing the rates which a public utility may charge for electric services fails to make a finding of facts and to certify the same to the Supreme Court on appeal from its order, the Supreme Court may under said section of the Constitution remand the case to the commission, with directions to find the facts upon which the commission based its order, and to certify the same to the court, before the appeal is finally decided.

The Corporation Commission having failed to certify the facts upon which the order appealed from herein is based and which are essential for a proper decision of the appeal, it therefore becomes the duty of the court to remand the case to the Corporation Commission for such finding of facts.

Appeal from Corporation Commission.

From an order of the Corporation Commission prescribing a temporary schedule of electric rates for Muskogee and Ft. Gibson, Okl the Muskogee Gas & Electric Company appeals. Remanded, with direction to certify the finding of facts on which order was based.

Paul Reiss, of Oklahoma City, for appellant.

S. P Freeling, Atty. Gen., for the State.

O. R. Thraves, of Nowata, for Corporation Commission.

HIGGINS J.

Order No. 1561 of the Corporation Commission, issued in cause No. 3686, prescribed a temporary schedule of rates for electric service for Muskogee and Ft. Gibson. Appellant contends that said order is invalid for the reason that it is temporary and experimental, and was put into effect only until such time as the commission could secure data upon which to make a valuation of the property of the company and a permanent schedule of rates, and because the order goes beyond the complaint in prescribing rates for Ft. Gibson, and for the further reasons that the evidence fails to sustain the order.

The first contention strikes at the very foundation of the fundamental law creating the commission and defining its duties, and, if sustained, must work a result quite as surprising and disastrous to the appellant as to the patrons of the company and the general public, for, if the commission were limited to prescribing rates to instances where it had made a complete inventory and valuation, there could be little or no relief from rapidly fluctuating prices brought about by war conditions and incident to the reconstruction period.

This contention of the appellant fails to take into consideration the purpose for which the commission was created and the powers conferred upon it through the Constitution and the laws enacted by the Legislature. The Corporation Commission was created and endowed with legislative, executive, administrative, and judicial powers. St. L. & S. F. Ry. Co. v. Williams et al., 25 Okl. 662, 665, 107 P. 428, 430; Okl. Gin Co. v. State, 158 P. 629, 631.

In Ft. S. & W. Ry. Co. v. State, 25 Okl. 866, 868, 108 P. 407, 408, this court said:

"The power lodged in the commission to promulgate rates is a legislative power, and its exercise by the commission involves legislative discretion and policy. Any rule that would require the commission, before it promulgates any order fixing a rate, to have before it evidence that would establish to a mathematical certainty the reasonableness of the proposed rate, would greatly hinder, if not almost entirely prevent, the commission from exercising that power."

The power to fix rates is legislative, whether exercised by the Legislature directly, or by an administrative body under delegated authority. Chicago, M. & St. P. Ry. Co. v. State Public Utilities Com., 268 Ill. 49, 108 N.E. 729.

In Lincoln Tract. Co. v. City of Lincoln et al. (Neb.) 171 N.W. 192, P. U. R. 1919C, 927, it is said:

"Unless there has been specific legislation that might limit or affect this power given to the commission, it would seem that the people have

given this commission all the control over common carriers that they themselves could exercise."

In O'Brien v. Board of P. U. Com., 92 N. J. Law, 587, 106 A. 414, P. U. R. 1919D, 774, 778, it is said:

"From time immemorial the Legislature, in granting charters to railroad companies, has fixed the rates to be charged without the slightest consideration of the value of the property, because in most instances the property was not in existence to be valued when the rates were fixed, nor, so far as we know, has the right of the Legislature to change rates by legislation been successfully assailed because there was no valuation of the property, unless it has been shown that the rates are confiscatory or unreasonable, and what the Legislature may do it may delegate to its agent to do within the limits of the delegated power."

In Public Service Gas Co. et al. v. Board, P. U. C., 84 N. J. Law, 463, 87 A. 651, L. R. A. 1918A, 421, affirmed in 87 N. J. Law, 597, 92 A. 606, 94 A. 634, 95 A. 1079, L. R. A. 1917B, 930, L. R. A. 1918A, 421, 426, it is said:

"A just and reasonable rate, therefore, is necessarily rather a question of business judgment than one of legal formula, and must often be tentative, since the exact result cannot be foretold. Willcox v. Cons. Gas Co., 212 U.S. 19, 53 L.Ed. 382, 48 L. R. A. (N. S.) 1134, 29 S.Ct. 192, 15 Ann. Cas. 1034; N. P. R. Co. v. North Dakota, 216 U.S. 579, 54 L.Ed. 624, 30 S.Ct. 423."

The particular powers conferred on the Corporation Commission over transportation and transmission companies by the Constitution have been extended by the Legislature over gas, electric, and water companies. Guthrie Gas, Light, Fuel & Imp. Co. et al. v. Board of Education, 166 P. 128, L. R. A. 1918D, 900; City of Pawhuska v. Pawhuska Oil & Gas Co., 166 P. 1058; Id., 250 U.S. 394, 39 S.Ct. 526, 63 L.Ed. 1054; City of Durant v. Consumers' Light & Power Co., 177 P. 361.

The legislative powers of the Corporation Commission over rates is therefore not confined to prescribing permanent schedules, but may be exercised as the exigencies of the times and changing conditions demand.

State Public Utilities Commissions have generally recognized and sanctioned temporary rates to meet emergencies, or determine by experiment or trial what rates would be just, and such rates have been common during the war and the present reconstruction times. It would be impracticable to attempt an exhaustive list of such cases, but the following are typical In re Electric Rates, Okl. Gas & Elec. Co. for Okl. City and Town of Britton (Okl.) P. U. R. 1918D, 216; Re United Railways Co. (Mo.) P. U. R. 1919F, 264; Re Tutwiler (Tenn.) P. U. R. 1919E, 312; Re Plymouth Gas & Light Co. (Mass.) P. U. R. 1919C, 486; Re Home Tel. Co. (Ind.) P. U. R. 1919C, 209; Lincoln Tract. Co. v. City of Lincoln et al., supra; ...