People ex rel. Hubbard v. Colorado Title & Trust Co.

• Decision Date: 07 December 1918
• Docket Number: 9448,9457.
• Citation: 178 P. 6,65 Colo. 472
• Parties: PEOPLE ex rel. HUBBARD, Atty. Gen., v. COLORADO TITLE & TRUST CO. et al. PUBLIC UTILITIES COMMISSION OF STATE OF COLORADO v. SAME.
• Court: Colorado Supreme Court

178 P. 6

65 Colo. 472

PEOPLE ex rel. HUBBARD, Atty. Gen., v. COLORADO TITLE & TRUST CO. et al.

PUBLIC UTILITIES COMMISSION OF STATE OF COLORADO v. SAME.

Nos. 9448, 9457.

Supreme Court of Colorado, En Banc.

December 7, 1918

Error to District Court, El Paso County; J. W. Sheafor, Judge.

Suit to foreclose railroad mortgage by the Colorado Title & Trust Company, as trustee, wherein A. E. Carlton was appointed receiver of the Colorado Midland Railroad Company, and applied for court order allowing abandonment of service upon and directing sale of the road and all its equipment. Such order was entered without notice to the Public Utilities Commission of the state, and thereafter the Board of County Commissioners of Park County, and others filed complaints with the Commission against it permitting the junking of the road; individual protests being also filed. The railroad and receiver filed pleas to the jurisdiction of the Commission. The Commission objected in the district court to the portion of its order directing the receiver to cease operations on the road, and moved for a modification or vacation on the ground that the court was without jurisdiction to enter such an order, the receiver and the railroad filing pleas to the jurisdiction. The Attorney General, Leslie E. Hubbard appeared and asked leave to file petition in intervention raising the same question, claiming that the jurisdiction of the Commission was exclusive. The Commission, ruling on the question of its jurisdiction, overruled demurrers before it and held it had exclusive jurisdiction, and the district court ruled that it had jurisdiction to enter its order. The people, by the Attorney General, and the Public Utilities Commission bring error. Reversed, with directions to the district court to vacate the portion of its order directing the receiver to cease operations upon and to dismantle the road.

These cases present the question whether the Public Utilities Commission of this state has exclusive and original jurisdiction regarding the cessation of operation upon, and the abandonment and dismantling of, the Colorado Midland Railroad, and whether the receiver of the road should apply to this commission for leave to cease operation and the abandonment and sale of the line, and whether that portion of the district court order directing and commanding the cessation of operation upon, and the dismantling of, the road by the receiver without the consent of the commission is null and void as having been made without jurisdiction. In other words, does the Public Utilities Act of 1913 (Laws 1913, p 464), as amended in 1915 (Laws 1915, p. 393) and 1917 (Laws 1917, pp. 415, 418) confer upon the Commission, regardless of the court's order appointing a receiver, exclusive jurisdiction to pass upon the question of operating abandoning, or the dismantling and 'junking' of a line of railroad lying wholly within the state.

The Colorado Midland, completed about 1889, was operated under the name of the Colorado Midland Railway Company until June 1, 1917, when it was taken over and operated by the Colorado Midland Railroad Company. Two million dollars in bonds, secured by a deed of trust, were issued by the latter company to the promoters of the new organization for money they invested in the road, and the Colorado Title & Trust Company was named trustee. In December, 1917, the property was taken over by the United States Railroad Administration, but was released June 21, 1918.

July 1, 1918, the Trust Company began a foreclosure suit in the district court of El Paso county. The bill alleged that the Midland could not longer be operated as a railroad, that no purchaser could be found who would buy the property as an entirety and undertake to operate it as a railroad, and prayed that its operation be discontinued, that it be dismantled and sold, and asked for the appointment of a receiver, which was accordingly done without opposition; the railroad company appearing and consenting thereto. The next day, July 2d, the receiver filed in court his application, asking for a court order allowing the abandonment or service upon and directing the sale of the road and all its equipment in lots and parcels and at public or private sale. The court thereupon entered an order, permitting and directing the receiver to sell, either in separate parcels or otherwise as he might determine, the road and its entire properties and equipment, and to remove and sell the rails and tracks, and to permanently abandon and discontinue service thereon, and not further operate it as a railroad, the order to become effective August 5, 1918. It is a 'junking' order to permanently cease operations upon, tear up the track, dismantle the road, and to sell its component parts. Under the order it no longer was to be used as a railroad or devoted to public service. This order was entered July 2d without notice to the Public Utilities Commission, but was not to go into effect until August 5th to comply with general order No. 15 of the Public Utilities Commission, which provides as follows:

'In the matter of abandonment and discontinuance of tracks and service of steam and electric carriers. It is hereby ordered, by the Public Utilities Commission of the State of Colorado that no electric street railroad, interurban railroad or steam railroad shall discontinue its service or abandon its line of railroad, or any part thereof, or remove its tracks, or any part thereof, without first having filed with this commission a written notice of its intention to discontinuance, abandon or remove its service or tracks, or any part thereof, within the state of Colorado; said notice to be filed with the commission thirty days prior to the discontinuing of its service, or the abandonment or removal of its tracks, or any part thereof.'

July 3d a copy of the court order was filed with the commission, along with written notice of the intention of the receiver to discontinue service August 5th and thereafter remove the tracks. Thereupon the board of county commissioners of Park county, and a large number of other complainants, filed complaints with the commission against its permitting the 'junking' of the road; individual protests were also filed in addition to the formal complaints. The railroad and the receiver were served with notice of these complaints, and filed pleas to the jurisdiction in the nature of demurrers challenging the jurisdiction of the commission. They claimed the commission had no jurisdiction, and that the court had exclusive jurisdiction, and also took the position that the commission was without jurisdiction to proceed in the premises because the district court had already signed and entered a decree discontinuing operations upon and dismantling the road, and claimed it had the constitutional right to enter such an order which deprived the commission of jurisdiction, and that the commission would be in contempt of court if it interfered with the receiver in carrying out the order of July 2d. Complainants claimed the commission had exclusive jurisdiction in such matters, and that the court was without jurisdiction to enter such an order. Argument before the commission upon the question of jurisdiction was begun July 25th and concluded at 4:30 July 26th, and then taken under advisement until July 30th, at which time the commission would again convene, and the commission announced that in the meantime it would appear before the court that entered the order and endeavor to secure a modification thereof, and further stated that, if the commission determined July 30th that it had jurisdiction, evidence would them be taken.

July 29th the commission appeared, as announced, in the district court, and objected to that portion of the order directing the receiver to cease operations upon and dismantle the road and moved the court to either modify or vacate the order. The motion was based upon the ground that the court was without jurisdiction to enter such an order, such power being vested exclusively, as it was alleged, in the commission. To this motion the receiver and the railroad filed pleas to the jurisdiction in the nature of demurrers. The Attorney General then appeared at the same time (July 29th), and asked leave to file a petition in intervention, which raised the same question, namely, that of discontinuing operations upon and dismantling the road; he claiming on behalf of the state that in these matters the jurisdiction of the commission was exclusive. The motion of the commission and the motion of the Attorney General came on July 29th for hearing before the court that entered the order, and after argument were continued to August 3d. Meanwhile, July 30th, the commission met pursuant to adjournment and made its final ruling on the question of jurisdiction, overruling the demurrers, and holding it had exclusive jurisdiction, and would proceed immediately with the taking of testimony, and would allow one day on a side only. Complainants objected to so short a time and moved for a continuance on account of the large number of their witnesses and the alleged physical impossibility of procuring witnesses from so far away along the line of road, and, the motion being overruled, introduced no evidence, though one individual protestant introduced some testimony. The receiver and the company introduced their evidence. The commission then took the matter under advisement. August 3d the motions in the district court came on again, pursuant to continuance, for hearing and final determination, and the court then ruled that it had jurisdiction to enter the order of July 2d, and overruled both motions, leaving the order of July 2d in full force and effect. At midnight, August 4th, service was abandoned, and August 5th the...