State ex rel. Hughes v. Milhollan

• Decision Date: 28 September 1923
• Citation: 195 N.W. 292,50 N.D. 184
• Parties: STATE ex rel. HUGHES et al. v. MILHOLLAN et al.
• Court: North Dakota Supreme Court

50 N.D. 184

195 N.W. 292

STATE ex rel.HUGHES et al.

v.MILHOLLAN et al.

Supreme Court of North Dakota.

Aug. 20, 1923.

Rehearing Denied Sept. 28, 1923.

Syllabus by the Court.

The Public Utilities Act (chapter 192, Laws 1919) provides for a judicial review upon both law and facts of all orders made by the board of railroad commissioners, fixing, establishing, or changing rates.

For reasons stated in the opinion it is held that the Public Utilities Act, conferring upon the board of railroad commissioners authority to conduct certain inquiries, and make orders relating to public utilities, is not void as vesting legislative or judicial powers in administrative officers.

A litigant can be heard to question the validity of a statute only when, and in so far as, it is applied to his disadvantage.

Additional Syllabus by Editorial Staff.

The word “hearing” contemplates not only the privilege to be present when the matter is being considered, but the right to present one's contentions, and to support the same by proof and argument.

Appeal from District Court, Burleigh County; Jansonius, Judge.

Action by the State, on the relation of E. A. Hughes and another, against Frank Milhollan and others, as the Board of Railroad Commissioners and as members thereof. From an order sustaining a demurrer to the complaint, the relators appeal. Affirmed.

Edw. B. Cox, of Bismarck, and Divet, Holt, Frame & Thorp, of Fargo, for appellants.

Geo. F. Shafer, Atty. Gen., and John Thorpe, Asst. Atty. Gen., for respondents.

CHRISTIANSON, J.

The relator, Hughes Electric Company, is a public utility corporation engaged in the business of selling and distributing electricity for light, power, and heat, and also steam for heating purposes in the city of Bismarck and the territory adjacent thereto. The relator Hughes is an officer and stockholder of the Hughes Electric Company. The respondents are the board of railroad commissioners of the state of North Dakota. The action is one to restrain and prohibit the said board of railroad commissioners from proceeding with a hearing under the Public Utility Act. The defendants interposed a general demurrer to the complaint. The trial court sustained the demurrer, and the relators have appealed.

[1] The petition alleges that the Legislature by chapter 192, Laws 1919, attempted to confer upon the board of railroad commissioners the right to regulate, control, and fix rates, charges, and services of public utilities of the kind and character of the Hughes Electric Company, and-

“that assuming and pretending to act by virtue of the authority contained in said chapter 192, of the laws of 1919, the said above-named defendants and respondents did, on the 23d day of October, 1922, deliver to and serve upon the said Hughes Electric Company, a certain petition, entitled ‘the patrons and consumers of electric current and steam heat within the city of Bismarck, county of Burleigh, and state of North Dakota, petitioners, against Hughes Electric Company, a corporation, respondents', which petition purported to be signed by one F. O. Hellstrom, as attorney and by some nineteen alleged patrons and consumers of electricity or steam heat furnished by the said Hughes Electric Company.

That subsequent thereto, and on the 9th day of December, 1922, the said defendants and respondents, purporting and claiming to act as the board of railroad commissioners, did serve upon the said Hughes Electric Company a notice of hearing, in which said notice it was claimed that said petition heretofore referred to, dated October 23, 1922, had been received by the said board of railroad commissioners, and that a hearing upon the same was, by said notice, fixed and set for Friday, December 29, 1922, at 10 o'clock a. m., and said board of railroad commissioners did notify the said plaintiff, Hughes Electric Company, that at said time they were required to be present, and that said petition would be considered and acted upon, and that the said board of railroad commissioners would enter into a complete investigation of all of the rates, charges, and practices of the said Hughes Electric Company, for the purpose of determining and fixing reasonable electric and steam heat rates.

That the said board of railroad commissioners assert, claim, and threaten that they will conduct said hearing and investigation, and will, upon the said petition, fix and establish the rates and charges to be made by the said Hughes Electric Company in furnishing of electricity and heat in its business and to its customers, and that they will assert and claim the right, power, and lawful authority to so fix and establish said rates and charges.”

It is alleged that chapter 192, Laws of 1919, is violative of section 2 of article 4, and the Fourteenth Amendment of the federal Constitution, and sections 1, 23, 24, 25, 82, 83, 85 of the state Constitution. The constitutional objections raised by the relators are:

(1) That there is a denial of due process and of the equal protection of the laws because the act “does not provide for a full and complete hearing before judgment with an opportunity to present all competent and relevant evidence, and does not provide for a substantial, adequate, and judicial review wherein the court may exercise its independent judgment as to both the law and the facts.”

(2) That there is an unwarranted delegation of judicial power to the board of railroad commissioners.

(3) That the act contains an unwarranted delegation of legislative powers.

(4) That the penalties provided by the act for disobedience of the orders of the railroad commissioners are so severe as to intimidate public utility companies from assailing such orders in the courts, and that, consequently, the right of judicial review is in effect denied.

The propositions will be considered in the order stated. The Public Utilities Act (chapter 192, Laws 1919) contains the following provisions:

Section 3: “The commissioners are hereby given the power to investigate all methods and practices of public utilities or other persons, subject to the provisions of this act; to require them to conform to the laws of this state and to all rules, regulations and orders of the commissioners not contrary to law; to require copies of reports, rates, classifications, schedules and time tables in effect and used by such utilities or other persons to be filed with the commissioners and all other information desired by the commissioners relating to such investigations and requirements.

The commissioners may compel obedience to its lawful orders by proceedings of mandamus or injunction or other proper proceedings in the name of the state in any court having jurisdiction of the parties or of the subject matter,and such proceedings shall have priority over all pending cases.

The commissioners may change any intrastate rate, charge or toll which is unjust or unreasonable and may, after hearing and notice, prescribe such rate, fare, charge or toll as is just and reasonable, and change or prohibit any particular device or method of service in order to prevent undue discrimination or favoritism between persons, localities, or classes of freight.

Every order entered by the commissioners shall continue in force until the expiration of the time, if any, named by the commissioners in such order or until revoked or modified by the commissioners, unless the same be suspended, modified or revoked by order or decree of a court of competent jurisdiction.”

Section 4: “The commissioners shall have the power, after notice and hearing, to enforce, originate, establish, modify or adjust and promulgate tariffs, rates, joint rates, tolls and charges of all public utility corporations and whenever the commissioners shall, after hearing, find any existing rates, tolls, tariffs, joint rates or schedules unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any of the provisions of this act, the commissioners shall, by an order, fix reasonable rates, joint rates, tariffs, tolls, charges or schedules to be followed in the future in lieu of those found to be unjust, unreasonable, insufficient, or unjustly discriminatory or otherwise in violation of any provision of law. * * *”

Section 5: “Whenever the commissioners shall find, after hearing, that the rules, regulations, practices, equipment, appliances, facilities or service of any public utility, or the methods of manufacture, distribution, transmission, storage, or supply employed by it are unjust, unreasonable, unsafe, improper, inadequate or insufficient, the commissioners shall determine the just, reasonable, safe, proper, adequate or sufficient rules, regulations, practices, equipment, appliances, facilities, service, or methods to be observed, furnished, constructed, enforced or employed, and shall, after hearing, fix the same by its order, rule or regulation. The commission shall prescribe, after hearing, rules and regulations for the performance of any service or the furnishing of any commodity, of a character furnished or supplied by any public utility and, on demand and tender of rates, such public utility shall furnish such commodity and render such service within the time and upon the conditions provided in such rules. * * *”

Section 24: “All hearings, investigations and proceedings shall be public and shall be governed by this act and by the rules of practice and procedure to be adopted by the commissioners and in the conduct thereof, the technical rules of evidence shall not be applied. No informality in any hearing, investigation or proceeding or in the manner of taking testimony, shall invalidate any order, decision, rule or regulation made, approved or confirmed by the commissioners.”

Section 30: “Complaint may be made by the commissioners of its own motion or by any corporation or person, chamber of commerce, board of trade, or any civic, commercial, mercantile, traffic, agricultural or manufacturing association...