Park Bldg. Corp. v. Industrial Commission

• Decision Date: 05 January 1960
• Citation: 9 Wis.2d 78,100 N.W.2d 571
• Parties: PARK BUILDING CORPORATION, Appellant, v. INDUSTRIAL COMMISSION, Respondent.
• Court: Wisconsin Supreme Court

Page 571

100 N.W.2d 571

9 Wis.2d 78

PARK BUILDING CORPORATION, Appellant, v. INDUSTRIAL COMMISSION, Respondent.

Supreme Court of Wisconsin.

Jan. 5, 1960.

Whyte, Hirschboeck, Minahan, Harding & Harland, Kenney & Hays, Milwaukee, Victor M. Harding, Robert V. Abendroth, Milwaukee, of counsel, for appellant.

John W. Reynolds, Atty. Gen., LeRoy L. Dalton, Asst. Atty. Gen., for respondent.

CURRIE, Justice.

The issues on this appeal are as follows:

(1) Was the petitioner put in the position of being faced with two conflicting orders?

(2) Is the Industrial Commission now estopped from enforcing Order 5711 of the 1918 state Building Code as applied to the petitioner's building?

(3) Was it necessary that the state Building Code be filed with the city clerk of Milwaukee as a condition precedent to the code being effective in such city?

(4) Was the commission faced with a contested case which required it to hold a hearing on petitioner's petition and to accompany its decision with findings of fact and conclusions of law?

(5) Will the enforcement of Order 5711 of the 1918 state Building Code deprive petitioner of its property without due process of law?

Was Petitioner Faced with Conflicting Orders?

Sec. 101.15(1), Stats., authorizes any owner of property affected by any general order of the industrial commission to petition the commission for a hearing to determine the reasonableness of the order. Sec. 101.15(4), Stats., provides that, if the commission finds upon investigation that the order covered by the petition is unjust or unreasonable, it 'shall substitute therefor such other order as shall be just and reasonable.'

Sec. 101.16(2), Stats., authorizes any person affected by a local safety order in conflict with an order of the commission to petition the commission for relief. Sec. 101.16(3), Stats., provides that, 'If upon such investigation it shall be found that the local order appealed from is unreasonable and in conflict with the order of the commission, the commission may modify its order and shall substitute for the local order appealed from such order as shall be reasonable and legal in the premises, and thereafter the said local order shall, in such particulars, be void and of no effect.'

The petitioner's original petition to the commission was grounded upon sec. 101.15, Stats. However, by reason of the later amendment thereof, which occurred after the circuit court review proceeding had been instituted, it is the position of the petitioner that the petition was broadened so as to request relief under sec. 101.16, Stats., also. In order to have sec. 101.16 applicable to the instant fact situation, it is essential that there be a local order which conflicts with an order of the commission. The petitioner attempts to achieve this essential requirement by terming the issuance of the 1919 building permit as an 'order of the commission' and the enforcement order of April 29, 1957, as a 'local order.'

The theory under which the petitioner contends that the 1919 building permit constitutes an order of the commission is this: Sec. 2394-52(13), Stats.1917 (now sec. 101.10(13), Stats.), ¹ authorized the commission to delegate its function of approving plans for buildings, such as petitioner's, to the Milwaukee building inspector. The 1918 state building code also provided, 'As the building code is not a statute but an administrative order of the commission, it may be so interpreted, modified, or suspended by the commission at any time.' Therefore, when the city building inspector approved the plans for petitioner's building, which did not provide for enclosing the two stairwells, and issued the building permit calling for the erection of the building according to those plans, such permit was in effect an order that modified Order 5711 of the 1918 state building code.

We are not persuaded by the foregoing argument. Sec. 2394-41(7), Stats.1917 (now sec. 101.01(7), Stats.), defines the word 'order' as follows: 'The term 'order' shall mean and include any decision, rule, regulation, direction, requirement or standard of the commission, or any other determination arrived at or decision made by such commission.' We deem it to be clear from this statutory language that only the commission can make an order, and that it is not a power that can be entirely delegated to some subordinate. The extent to which a public officer or administrative agency may subdelegate to subordinates an express delegated power, such as in the instant case to make an order, is well stated in School Dist. No. 3 of Town of Adams, v. Callahan, 1941, 237 Wis. 560, 576, 297 N.W. 407, 415, 135 A.L.R. 1081, as follows:

'However, the rule that requires an executive officer to exercise his own judgment and discretion in making an order of such nature does not preclude him from utilizing, as a matter of practical administrative procedure, the aid of subordinates directed by him to investigate and report the facts and their recommendation in relation to the advisability of the order, and also to draft it in the first instance. [citing cases] It suffices that the judgment and discretion finally exercised and the orders finally made by the superintendent were actually his own.'

If only the commission has the power to make an order in the first instance, it necessarily follows that any modification of such order must also be by act of the commission and not some subordinate such as a city building inspector. We experience no difficulty in determining that the building permit does not constitute an order of the commission in the sense in which the word 'order' is used in sec. 101.16, Stats. Therefore, there is no merit to the petitioner's contention that the enforcement order of April 29, 1957, is a local order which conflicts with an order of the commission. Petitioner's petition to the commission raises no issue under sec. 101.16, Stats., and the commission's consideration of, and action upon the same, is controlled by sec. 101.15, Stats.

Estoppel

Petitioner's petition for review in the circuit court contains the following paragraph:

'That the Wisconsin Industrial Commission is estopped by reason of its conduct and by reason of the authority granted to the Building Inspector of the City of Milwaukee from now raising any question as to the alleged non-compliance with the alleged orders of the Building Code referred to herein.'

There undoubtedly are situations in which equitable estoppel ought to be invoked against a government. We so held in Libby, McNeill & Libby v. Wisconsin Dept. of Taxation, 1952, 260 Wis. 551, 51 N.W.2d 796. We deem the following comment by Prof. Kenneth Culp Davis made in his recently published Administrative Law Treatise is apposite as to the trend of the law with respect to invoking estoppel against a government (Vol. 2, p. 541, sec. 17.09):

'Even though the courts commonly assert without qualification that equitable estoppel does not apply to governmental units, and even though numerous holdings are based upon such assertions, still the number of holdings in which governmental units are estopped is substantial and growing, both in the federal courts and in the state courts.

'Since the doctrine of equitable estoppel is founded upon ideas of what is a fair adjustment when one party has relied to his detriment upon what the other party has held out, it is hard to see why the ideas of fairness should differ when one of the parties happens to be a governmental unit, especially when the subject matter relates to property or business dealings and not to the processes of carrying out governmental policies.' (Emphasis supplied.)

There are certain situations in which estoppel should not be permitted to be invoked against a government, or one of its agencies. Strong reasons of public policy exist why estoppel should not be invoked against the government, or an agency of government, when it is sought to exercise the police power for the protection of the public health, safety or general welfare. We quote with approval from the Comment Note entitled, 'Applicability of doctrine of estoppel against government and its governmental agencies,' 1 A.L.R.2d 338, 340-341:

'As a general rule the doctrine of estoppel will not be applied against the public, the United States government, or the state governments, where the application of that doctrine would encroach upon the sovereignty of the government and interfere with the proper discharge of governmental duties and with the functioning of the government, or curtail the exercise of its police power * * *.'

Order 5711 of the 1918 state building code, which required that stairwells in buildings such as petitioner's be enclosed, was promulgated by the commission to protect public safety. Therefore, there can be no estoppel invoked against the commission, or its deputized agent, in enforcing such safety order.

The principal ground for here asserting that estoppel should be invoked is that the commission knowingly permitted building inspector Harper to waive the requirements of such safety order with respect to buildings constructed of fire resistant materials. In the recent case of Connor Lumber & Land Co. v. Industrial Comm., 1959, 6 Wis.2d 171, 176, 94 N.W.2d 145, 148, the contention was raised that the employer should be relieved of a penalty, which was imposed by reason of its failure to comply with a safety order of the building code, because an inspector of the commission had acquiesced in the manner in which the building had been constructed by the employer. In rejecting such contention, we stated:

'Neither the commission nor any of its employees has any statutory power to waive such a violation.'

Necessity of Filing Code with City Clerk

Sec. 2394-52(5), Stats.1917 (now sec. 101.10(5), Stats.), expressly authorizes the commission 'To ascertain, fix and order such reasonable standards, rules or regulations for the construction, repair and maintenance of places of...