State ex rel. North Carolina Utilities Commission v. Southern Ry. Co., 537

• Decision Date: 25 May 1966
• Docket Number: No. 537,537
• Court: North Carolina Supreme Court
• Parties: STATE of North Carolina ex rel. NORTH CAROLINA UTILITIES COMMISSION et al. v. The SOUTHERN RAILWAY COMPANY et al.

Page 210

148 S.E.2d 210

267 N.C. 317

STATE of North Carolina ex rel. NORTH CAROLINA UTILITIES COMMISSION et al. v. The SOUTHERN RAILWAY COMPANY et al.

No. 537.

Supreme Court of North Carolina.

May 25, 1966.

Joyner & Howison, by W. T. Joyner, Jr., Maupin, Taylor & Ellis, by Frank W. Bullock, Jr., Simms & Simms, by R. N. Simms, Jr., Raleigh, for defendant appellants, Henry J. Karison, Washington, D.C., Southern Railway System, Charles B. Evans, Jacksonville, Fla., Atlantic Coast Line Railroad Co., James L. Howe, III, Va., Richmond, Seaboard Air Line Railroad Co., of counsel.

Thomas Wade Bruton, Atty. Gen., George A. Goodwin, Asst. Atty. Gen., for North Carolina Department of Agriculture.

Edward B. Hipp, Raleigh, for North Carolina Utilities Commission.

Cicero P. Yow, City Atty., Wilmington, by Edward B. Hipp, Raleigh, for City of Wilmington.

Bryant, Lipton, Bryant & Battle, by Victor S. Bryant, Durham, for protestant, The American Tobacco Co.

Boyce, Lake & Burns, by F. Kent Burns, Raleigh, for F. S. Royster Guano Co., Smith-Douglass Co., Inc., W. R. Grace & Co., V-C Chemical Co., Carolina Nitrogen Co., and Heide Warehouse Co.

Albert W. Kennon, Durham, for protestant appellee, Wm. Muirhead Construction Co., Inc.

PLESS, Justice.

In determining this appeal the railroads are confronted with the statutes and decisions of the Court, which provide that the burden of proving the justification for increased rates is on them. They are required, too, to show that the proposed rate is just and reasonable. 'G.S. § 62--75. BURDEN OF PROOF.--In all proceedings instituted by the Commission for the purpose of investigating any rate, service, classification, rule, regulation or practice, the burden of proof shall be upon the public utility whose rate, service, classification, rule, regulation or practice is under investigation to show that the same is just and reasonable. In all other proceedings the burden of proof shall be upon the complainant.' They must also overcome the presumption that the order of the Commission is prima facie correct, G.S. § 62--94(e) provides the scope of review on appeal, in part, as follows:

'Upon any appeal, the rates fixed, or any rule, regulation, finding, determination, or order made by the Commission under the provisions of this chapter Shall be prima facie just and reasonable * * *' Stated another way, the shippers and customers of the railroads have no burden of proving anything; the previous rates are presumed to be fair and reasonable--so are the orders of the Commission.

This Court is not expected to determine freight rates, that is to the function of the Commission. The right to fix or approve the rates to be charged by public service corporations for the services rendered the public rests in the Legislature. The General Assembly may act directly or delegate its authority to a Legislative Agency or Commission for that purpose. 'It is the prerogative of that agency to decide that question. It is an agency composed of men of special knowledge, observation, and experience in their field, and it has at hand a staff trained for this type of work. And the law imposes on it, not us, the duty to fix rates.' State ex rel. Utilities Com. v. Southern Bell Telephone & Telegraph Co., 239 N.C. 333, 80 S.E.2d 133.

In 73 C.J.S. Public Utilities § 32, p. 1056 it is said that: A Utilities Commission 'is an expert, technical body which devotes its time and talents to the administration of some of our largest and most complex businesses.'

'That a specially trained body of experts in charge of public utility matters is necessary and should be expected and permitted to dispose of such questions in the exercise of their best judgment unless their action is arbitrary or unreasonable is the basis of the principle of commission control as expressed in the case of State Public Utilities Commission ex rel. City of Springfield v. Springfield Gas & Electric Co., 291 Ill. 209, 125 N.E. 891, P.U.R.1920C, 640: 'The law is settled in this state that the matter of rate regulation is essentially one of legislative control. The fixing of rates is not a judicial function, and the right to review the conclusion of the Legislature or administrative body, acting under authority delegated by the Legislature, is limited to determining whether or not the Legislature or the administrative body acted within the scope of its authority, or the order is without substantial foundation in the evidence, or a constitutional right of the utility has been infringed upon by fixing rates which are confiscatory or insufficient to pay the cost of operating expenses and give the utility a reasonable return on the present value of its property. Chicago, Milwaukee & St. Paul Railway Co. v. State Public Utilities Com., 268 Ill. 49, 108 N.E. 729, (P.U.R.1915D, 133); State Public Utilities Com. ex rel. Mitchell v. Chicago & West Towns Railway Co., 275 Ill. 555, 114 N.E. 325, Ann.Cas.1917C, 50, (P.U.R.1917B, 1046). The Public Utilities Act gives the courts power to determine whether or not evidence has been properly received or rejected, and whether there is sufficient evidence in the record to support the finding of the commission. If the order does not contravene any constitutional limitation and is within the constitutional and statutory authority of the commission and has a substantial basis in the evidence, it cannot be set aside by the courts. The court is without authority to set aside such an order unless it is against the manifest weight of the evidence. * * * It is clear from the salary fixed for the commissioners and the great power vested in the commission by the Public Utilities Act that the Legislature intended to create an office of dignity and great responsibility. It is, therefore, not to be expected that through fear of popular disfavor the commission will coyly toy with the situation. It sits to administer justice to individual and corporation, the weak, the strong, the poor, the wealthy, indifferently, fearing none and fawning on none. The notion that commissions of this kind should be closely restricted by the courts, and that justice in our day can only be had in courts, is not conducive to the best results. There is no reason why the members of the Public Utilities Commission of this state should not develop and establish a system of rules and precedents as wise and beneficial, within their sphere of action, as those established by the early common-law judges. All doubts as to the propriety of means or methods used in the exercise of a power clearly conferred should be resolved in favor of the action of the commissioners in the interest of the administration...