Public Service Commission of Indiana v. City of La Porte

• Decision Date: 09 January 1935
• Docket Number: 25941
• Parties: PUBLIC SERVICE COMMISSION OF INDIANA et al. v. CITY OF LA PORTE et al
• Court: Indiana Supreme Court

193 N.E. 668

207 Ind. 462

PUBLIC SERVICE COMMISSION OF INDIANA et al. v. CITY OF LA PORTE et al

No. 25941

Supreme Court of Indiana

January 9, 1935

Appeal from Superior Court, St. Joseph County; Orlo Deahl, Judge.

Suit by the City of La Porte and others against the Public Service Commission of Indiana and others. From the decree, defendants appeal, and plaintiffs file cross-error.

Reversed with instructions.

James M. Ogden, Atty. Gen., Geo. W. Hufsmith, Deputy Atty. Gen Darrow, Rowley & Shields, of La Porte, and Schubring, Ryan Clarke & Petersen, of Madison, Wis., for appellants.

Smith Rees & Smith, Sallwasser & Sallwasser, and Leonard R. Henoch, all of La Porte, for appellees.

OPINION

FANSLER, Chief Justice.

On December 27, 1929, upon petition of appellant La Porte County, Indiana, Telephone Company, the Public Service Commission of Indiana made an order fixing and increasing the rates to be charged the public for service and permitting the issuance of additional securities by that company. Within thirty days thereafter appellees instituted this action to enjoin the operation of the order. Issues were formed, and there was a trial by the court. The facts were found specially, and conclusions of law stated thereon. A decree was entered enjoining the rates fixed in the order as unreasonable and unlawful, but holding that part of the order which fixed the value of the property of the company for rate-making purposes, and authorizing the sale of securities, to be reasonable and lawful.

Appellants separately and severally assign error upon the overruling of their motions to make the complaint more specific and to strike out parts of the complaint, and upon the overruling of their separate and several demurrers to the complaint.

Appellants' motion to make more specific and their demurrer are based upon the theory that the action constitutes a collateral attack upon the order of the Public Service Commission, and that an injunction can issue only if the orders of the commission are void. Their position is that section 78 of the Acts of 1913, c. 76, as amended by the Acts of 1927, c. 258, p. 747, gave appellees the right to appeal to the courts from the decision of the Public Service Commission; that this appeal must be taken in the same manner as appeals from boards of county commissioners, sitting as a court, to a circuit court; that the act is still in force, notwithstanding the Acts of 1929, c. 169, p. 530; that it provides a remedy at law; and that therefore an action for injunction is a collateral attack, and must fail unless facts are alleged which would be a sufficient basis upon which to enjoin a judgment of a court in a collateral proceeding.

The right to affect property or persons by legislation is limited by the federal and state Constitutions, and the statutes conferring powers upon the Public Service Commission must, if possible, be so construed as to bring them within constitutional limits. The power of the courts to confine administrative boards and commissions within their constitutional jurisdiction, and to enjoin unreasonable administrative or legislative orders or regulations, is not derived from the statute, but exists through and under the Constitution. Pittsburgh, etc., R. Co. v. Railroad Com., etc. (1908) 171 Ind. 189, 86 N.E. 328, 334.

In passing upon the orders of the commission, the courts do not review for error, since the commission acts ministerially and the courts judicially.

These principles were discussed and approved by this court in Re Northwestern Indiana Telephone Co. (1930) 201 Ind. 667, 171 N.E. 65. It was pointed out that the Public Service Commission is purely an administrative or legislative body without judicial powers. The act of 1927 was held unconstitutional in so far as it sought to empower the court to control the administrative or legislative discretion of the commission, but it was held constitutional in respect to its provision authorizing the courts to pass upon the reasonableness of the orders of the commission. The act of 1929 covers the same subject-matter as the act of 1927, and was obviously drawn with a view to eliminating the objectional features of the earlier act and conforming to the decision of this court respecting the subject-matter. In the later act the word 'appeal' is eliminated, and it is provided that those adversely affected by any ruling of the commission may commence an action to vacate, set aside, or enjoin the ruling or order on the ground that it is 'insufficient, unreasonable, unlawful, or procured by fraud or other unlawful methods.' Section 1. Section 6 of the act provides that the action shall be tried and determined as other civil actions except as to certain procedural matters expressly provided for. Appellees' complaint, therefore, constitutes a direct attack upon the order of the commission. There is no allegation that the order was procured by fraud or other unlawful methods. Reliance is placed upon allegations intended to show that the rates and values fixed are too high, and therefore unreasonable, and that they are unlawful because unreasonably high.

The only questions presented for the determination of the trial court involve the reasonableness of the commission's order. The court properly tried the case de novo under the rules of procedure applicable to the trial of any civil action triable by the court without a jury. The statute provides for the introduction in evidence of a transcript of the proceedings and evidence taken before the commission. This is merely a rule of evidence designed to expedite the trial since the statute contemplates that other and different evidence pertinent to the subject-matter may be heard. In such a case the trial court is not concerned with the question of whether the rates or other orders of the commission are exactly those indicated by the evidence taken before the commission, nor with the question of whether they are the rates and orders which the court would have made under the evidence taken before the commission, if the court were sitting as an administrative commission, nor whether they are the rates and orders that the court would have made under all the evidence. The court has no rate-making power, and is not concerned with rate-making or other ministerial action except to confine the orders of the commission within reasonable bounds.

Courts will recognize that the commissioners are selected with a view to their special qualifications, knowledge, training, and experience pertinent to the subject-matter committed to their administration, and that different inferences may be reasonably drawn from given facts; that rates and regulations cannot be fixed with exactness. The of the commission is not so limited that it is required in its orders to reach the same result that the court would reach under the same circumstances. The law will tolerate any variation from such a result that may be accounted for by reasonable differences in views or opinions. Nor is the sufficiency of the evidence heard by the commission to sustain its findings a true criterion. The commission may make an order upon evidence which, under the rules applicable to judicial proceedings, would be wholly insufficient to sustain the finding, yet if, you all of the facts and evidence heard by the court (which may differ from and be in addition to the evidence heard by the commission), the order seems reasonable, it will not be enjoined. Nor will the fact that a ruling of the commission seems reasonable, upon the evidence heard by the commission, prevent an injunction, if, upon all of the evidence heard before the court, it is clearly unreasonable.

Appellants assert that the act of 1929 is merely expressive of the common law in actions where administrative officers have exceeded their authority, or where the orders were...