State ex rel. Consumers Public Service Co. v. Public Service Com'n

• Citation: 180 S.W.2d 40,352 Mo. 905
• Decision Date: 03 April 1944
• Docket Number: 38680
• Parties: State of Missouri at the Relation of Consumers Public Service Company, Missouri Power & Light Company and Missouri Public Service Corporation, Appellants, v. Public Service Commission of the State of Missouri and Frederick Stueck, John A. Ferguson, Charles L. Henson, Paul Van Osdol and Kyle D. Williams, Members of the Public Service Commission of the State of Missouri, Iowa Utilities Company, a Corporation, and Grundy Electric Cooperative, Inc., a Corporation
• Court: United States State Supreme Court of Missouri

180 S.W.2d 40

352 Mo. 905

State of Missouri at the Relation of Consumers Public Service Company, Missouri Power & Light Company and Missouri Public Service Corporation, Appellants, v. Public Service Commission of the State of Missouri and Frederick Stueck, John A. Ferguson, Charles L. Henson, Paul Van Osdol and Kyle D. Williams, Members of the Public Service Commission of the State of Missouri, Iowa Utilities Company, a Corporation, and Grundy Electric Cooperative, Inc., a Corporation

No. 38680

Supreme Court of Missouri

April 3, 1944

Rehearing Denied May 2, 1944.

Appeal from Cole Circuit Court; Hon. Sam C. Blair, Judge.

Affirmed.

Paul D Kitt, A. Z. Patterson and Patterson, Chastain & Smith for appellants.

(1) It is unlawful for the Public Service Commission to authorize the sale of the electric property of the Iowa Utilities Company to the Grundy Electric Cooperative, Inc., a private corporation, which property thereafter would be withdrawn from the public service and be devoted solely to the furnishing of electricity to the stockholders of the Grundy Electric Cooperative, Inc., and will not thereafter be under the control and supervision of the Public Service Commission of Missouri. The order is detrimental to the public interest consequently unlawful. Report and Order of Public Service Commission, in Case No. 10205, on application of Van Buren Light, Power & Ice Company to sell its electric public utility to the Black River Electric Cooperative, entered May 18, 1942, refusing to authorize the transfer. Report and Order of the Public Service Commission of Indiana, in Case No. 15864, on application of Indiana Service Corporation to extend electric service to United States Army, Paul Baer Field (Adams-Wells Rural Electric Membership Corporation Intervenor and Objector), entered January 22, 1943, denying intervenor's objection. Report and Order of the Public Service Commission of Indiana, in Case No. 15863, on application of Henryville Electric Light & Heat Company to sell its electric system to Clark County Rural Electric Membership Corporation, entered February 25, 1943, refusing to authorize the transfer. (2) For more than thirty years it has been the uniform and settled practice of the Public Service Commission to authorize or to reject, under Sec 5651, R.S. 1939, the transfer of utility properties and systems upon showings and upon consideration as to the effect upon the public interest of such transfers. Here, the Commission has refused to find and determine whether the sale of the electric property of the Iowa Utilities Company to the Grundy Electric Cooperative, Inc., was in the public interest or detrimental to the public interest. Such action was therefore an arbitrary refusal by the Commission to determine an essential issue before it, an essential prerequisite to its order, and its order is capricious, arbitrary and unlawful. Sec. 5651, R.S. 1939; Re Queen City Mutual Tel Co., 1 Mo. P.S.C. 44; Re Duenweg Water Works Co., 1 Mo. P.S.C. 61; Re Astor, 1 Mo. P.S.C. 102; Re Eicholtz, 1 Mo. P.S.C. 105; Re Cameron Tel. Co., 7 Mo. P.S.C. 49; Re Kansas City Gas Co., 9 Mo. P.S.C. 25; Re Lafayette Tel. Co., 11 Mo. P.S.C. 644; Re Central P. & L. Co., 12 Mo. P.S.C. 614; Re Butler Tel. Co., 12 Mo. P.S.C. 623; Re Union El. L. & P. Co., 13 Mo. P.S.C. 507; Re Platte Valley L. & P. Co., 14 Mo. P.S.C. 284; Re West Mo. P. Co., 14 Mo. P.S.C. 473; Re Watts Eng. Co., 14 Mo. P.S.C. 48; Re C.T. Brotherton, 16 Mo. P.S.C. 327; Re Scotia Tel. Co., 20 P.S.C. 109; Slater v. Shell Oil Co., 103 P.2d 1043. (3) The Public Service Commission Act is limited to the police power of the State. Every order of the Public Service Commission is an exercise of that sovereign and unyielding police power, which may never be abridged. The act is to be liberally construed with a view to public welfare, and the dominating purpose in creation of the Public Service Commission Act being promotion of the public welfare. Secs. 5651, 5707, R.S. 1939; Sec. 5, Art. XII, Mo. Constitution; 12 C.J., sec. 430, p. 920, sec. 423, p. 812; State ex rel. v. Public Serv. Comm., 56 S.W.2d 398, 331 Mo. 1098; State on inf. Barker v. Kansas City Gas Co., 254 Mo. 515, 163 S.W. 854; State ex rel. Mo. Southern R. Co. v. Public Serv. Comm., 259 Mo. 704, 168 S.W. 1156; State ex rel. City of Kirkwood v. Public Serv. Comm., 50 S.W.2d 114, 330 Mo. 507; State ex rel. Laundry v. Public Serv. Comm., 34 S.W.2d 37, 327 Mo. 93; State ex rel. v. Blair, 146 S.W.2d 865, 347 Mo. 220; State ex rel. St. Louis v. Public Serv. Comm., 73 S.W.2d 393, 335 Mo. 448; State ex rel. Kansas City v. Public Serv. Comm., 257 S.W. 462, 301 Mo. 179; Chicago & Alton R. Co. v. Tranbarger, 238 U.S. 67, 35 S.Ct. 678, 59 L.Ed. 1204; State ex rel. Anderson Motor Serv. Co. v. Public Serv. Comm., 134 S.W.2d 1069, 234 Mo.App. 470; State v. Public Serv. Comm., 76 S.W.2d 343, 335 Mo. 1248. (4) If authorization of the transfer of public utility properties to rural electric cooperatives without consideration of the public interest is required by the Missouri Rural Electric Cooperative Act, whereas all other transfers of similar properties do require such consideration, as construed by the Public Service Commission, such act has provided an arbitrary and unlawful classification, violative of the 14th Amendment of the Federal Constitution. Such classification is obnoxious because destitute of reasonable basis. Russell v. Croy, 164 Mo. 69, 63 S.W. 849; Santa Clara County v. Southern Pac. R. Co., 18 F. 385; Smith v. Cahoon, 51 S.Ct. 582, 283 U.S. 553; Frost v. Corp. Comm. of Okla., 49 S.Ct. 235, 278 U.S. 515; Franchise Motor Freight Assn. v. Seavey, 235 P. 1000; Connolly v. Union Sewer Pipe Co., 184 U.S. 540, 22 S.Ct. 431; United States v. Yount, 267 F. 861. (5) Arbitrary classifications, without reasonable basis, in the imposition of liabilities or granting of immunities are likewise obnoxious under provisions of Section 30, Article II, of the State Constitution. Sams v. St. Louis & M.R. Co., 73 S.W. 686, 174 Mo. 53; George v. Chicago, R.I. & P.R. Co., 113 S.W. 1099, 214 Mo 551; State ex rel. Wyatt v. Ashbrook, 55 S.W. 627, 154 Mo. 375. (6) The Public Service Commission erroneously construed the Rural Electric Cooperative Act, Laws of Missouri, 1939, page 298 (Chap. 7, Art. 33, R.S. 1939), to be a declaration by the Legislature granting to cooperatives the absolute uncontrolled right to purchase a public electric utility devoted to public service, operated under the control and supervision of the Public Service Commission; that said Rural Electric Cooperative Act withdrew from the Commission the right, power and duty to determine the public interest and repealed Sec. 5651, R.S. 1939, depriving the Commission, in making an order on an application by an electric public utility to sell its property to an electric cooperative, from determining the public interest and to make its order on that determination. The Rural Electric Cooperative Act does not repeal the Public Service Commission law. State ex rel. v. Brown, 105 S.W.2d 909, 340 Mo. 1198; State ex rel. v. Taylor, 18 S.W.2d 474, 323 Mo. 15; St. Charles v. Inter Insurance Exchange, 108 S.W.2d 626. (7) The Rural Electric Cooperative Act (Laws 1939, p. 298, Chap. 7, Art. 33, R.S. 1939) violates Section 28, Article IV, of the Constitution of Missouri. Subsection (a) of Section 29 of that act (Subsec. (a), Sec. 5415, R.S. 1939) declares that rural areas include towns and villages not in excess of fifteen hundred inhabitants, but no such purpose is expressed in the title. The title restricts the scope and operation of the act to "rural areas," but the Act makes its provisions applicable to cities, towns and villages with population of 1,500 or less. Certainly there was nothing to indicate, much less "clearly expressed" by the title, that electric operation by cooperatives was authorized in 500 or more cities and towns in Missouri and that regulation by the Public Service Commission of electric utility service therein was withdrawn. Where the title is restrictive, the Act must be also. Sec. 28, Art. IV, Mo. Constitution; Fidelity Adjustment Co. v. Cook et al., 95 S.W.2d 1162, 339 Mo. 45. City of Columbia v. State Public Serv. Comm., 43 S.W.2d 813, 329 Mo. 38; State ex rel. Dept. Penal Inst. v. Becker, 47 S.W.2d 781, 329 Mo. 1041; Williams Lbr. & Mfg. Co. v. Ginsburg, 146 S.W.2d 604, 347 Mo. 119. (8) The sole issue before the Commission in this proceeding, and an essential finding prerequisite to its order, was the determination of the public interest by the proposed transfer; the Commission found and declared that to be the issue. The public interest on this application being the essential matter for the Commission to determine, and that determination being solely within the jurisdiction of the Public Service Commission, the Commission necessarily must have determined the public interest in the first instance before this court can or will adjudge the matter. Without that determination there is no valid order for the court to review. Southwest Mo. Ry. Co. v. Public Serv. Comm., 219 S.W. 380, 281 Mo. 52; State ex rel. v. Presiding Judge, 138 S.W.2d 1012, 345 Mo. 1096; State v. Public Service Co., 289 S.W. 785, 316 Mo. 233; State ex rel. v. Pub. Serv. Comm., 51 S.W.2d 73, 330 Mo. 729; State ex rel. v. Brown, 31 S.W.2d 208, 326 Mo. 230; State v. Chicago Motor Bus Co. v. Public Serv. Comm., 23 S.W.2d 115, 324 Mo. 270; 51 C.J., sec. 144, p. 81. (9) The Public Service Commission in authorizing the sale erroneously considered the interest only of the stockholders of the Iowa Utilities Company and the Grundy Electric Cooperative, Inc., and not the interest of the public. (10) The Grundy Electric Cooperative, Inc., does not have the charter power to purchase the electric property of the Iowa Utilities Company. (11) The...