State v. Spokane & I. E. R. Co.

• Decision Date: 15 February 1916
• Docket Number: 12838.
• Citation: 154 P. 1110,89 Wash. 599
• Court: Washington Supreme Court
• Parties: STATE ex rel. PUBLIC SERVICE COMMISSION OF WASHINGTON v. SPOKANE & I. E. R. CO.

154 P. 1110

89 Wash. 599

STATE ex rel. PUBLIC SERVICE COMMISSION OF WASHINGTON v. SPOKANE & I. E. R. CO.

No. 12838.

Supreme Court of Washington

February 15, 1916

Department 1. Appeal from Superior Court, Spokane County; Bruce Blake Judge.

Mandamus by the State on the relation of the Public Service Commission of Washington, against the Spokane & Inland Empire Railroad Company. From a judgment granting the writ, respondent appeals. Remanded, with directions to deny the writ.

Graves Kizer & Graves, of Spokane, for appellant.

W. V Tanner, Atty. Gen., and Scott Z. Henderson, Asst. Atty. Gen., for respondent.

MOUNT J.

Respondent brings a mandamus proceeding to compel a disclosure of private contracts. The appellant is a traction company operating a street railway system in the city of Spokane, and some interurban lines running out of Spokane into the surrounding country. It maintains a power plant which generates about 12,000 horse power. Its present average need for its operations is about 9,000 horse power. Some years ago, at a time when its own power plant had not been completed, appellant entered into a contract to take each year 3,800 horse power from the Washington Water Power Company, a power company operating in the same territory. With the development of its own plant giving approximately 12,000 horse power and the contract holding it to take 3,800 horse power from the Washington Water Power Company, appellant has a yearly supply of approximately 16,000 horse power, or about 6,000 or 7,000 horse power more than its present average need, although at times it uses as much as 12,000 horse power. This surplus it has sold under private contract to others, and it has been put to various uses, its customers being a land company, one or two farmers, who use the power for irrigation purposes, two manufacturing plants, a grain elevator, an irrigation company, and three or four individual owners of local electric light plants in towns and villages in the vicinity of Spokane. The object of this proceeding is to compel appellant to submit its private contracts to the Public Service Commission, it being the theory of the Commission that it has jurisdiction over that part of the appellant's business which heretofore has been regarded as private and in which the state had no interest; that it cannot make an adequate and intelligent survey of the rates charged by appellant in its service to the public without them; and, further, that to regulate the rates for traction purposes, it must have a disclosure of all contracts and all activities yielding a revenue to appellant, whether they be private, entered into with individuals, or affect a public service only.

We understand the law in this state to be that companies furnishing electrical energy may or may not be public service corporations, depending upon the objects for which they were organized and the business in which they are engaged, the logic of the cases being that we will judicially inquire whether the sale of power is a selling to the public generally or is only an incident to the business in which the company is engaged, as, for instance, a sale pending a time when its surplus will be needed to accomplish its assumption of duty to the public, for it has been held that a public service corporation can anticipate its future needs and develop energy reasonably in excess of present requirements. The character of such companies and their relation to the public has been frequently considered by this court. We find no departure from our first holding that a sale of electrical energy or power for private enterprises is not an engaging in a public business and gives such companies no right to assert the sovereignty of the state. Healy Lumber Co. v. Morris, 33 Wash. 490, 74 P. 681, 63 L. R. A. 820, 99 Am. St. Rep. 964; State ex rel. v. White R. P. Co., 39 Wash. 648, 82 P. 150, 2 L. R. A. (N. S.) 842, 4 Ann. Cas. 987; State ex rel. v. Superior Court, 42 Wash. 660, 85 P. 666, 5 L. R. A. (N. S.) 672, 7 Ann. Cas. 748; State ex rel. v. Olympia, 46 Wash. 511, 90 P. 656; State ex rel. v. Superior Court, 50 Wash. 13, 96 P. 519; State ex rel. v. Superior Court, 51 Wash. 386, 99 P. 3; State ex rel. v. Superior Court, 52 Wash. 196, 100 P. 317, 21 L. R. A. (N. S.) 448; Tacoma v. Nisqually Power Co., 57 Wash. 420, 107 P. 199; State ex rel. v. Superior Court, 70 Wash. 486, 127 P. 104; State ex rel. v. Superior Court, 71 Wash. 84, 127 P. 591. In all of these cases the company was asserting the right of eminent domain in order to avail itself of the rights and privileges granted by statute to public service corporations. In the absence of controlling legislation the court refused to extend the right. In the Nisqually Power Company Case we even held the use of the word 'private' in a legislative act to have been inadvertent and therefore surplusage. The court has not inclined to the thought that corporations not directly engaged in the sale of power to the public generally should be clothed in the garb of the state, in the absence of an unquestioned intent on the part of the Legislature so to do.

The case at bar is presented from the other angle. The company is insisting that its contracts with private individuals for the sale of excess power are of no concern to the state because they pertain to private business in no way affecting the public, while the state is insisting that such contracts are essential to an intelligent exercise of its admitted function to inquire into and regulate appellant's traction rates. In other words, appellant rests upon the law as we have heretofore found it to be, and respondent insists that the court has indicated a purpose to relax the rule in the later cases ( State ex rel. Clark v. Superior Court, 62 Wash. 612, 114 P. 444; State ex rel. Lyle v. Superior Court, 70 Wash. 486, 127 P. 104; State ex rel. Weyerhaeuser v. Superior Ct., 71 Wash. 84, 127 P. 591; State ex rel. Mountain Tim. Co. v. Sup'r Ct., 77 Wash. 585, 137 P. 994), or, if not, the act of 1911 (Sess. Laws, p. 543) is ample to sustain the right of respondent to inquire into and control that part of the business of appellant which has heretofore been considered as private and not a proper subject of state control.

To review the cases in detail would serve no purpose. We have discovered in them no purpose to depart from our former holdings. There may be some expressions in cases involving collateral questions which seemingly touch the question under discussion and which may give impulse to the thought that we had it in mind to modify some of our decisions, but the fact remains that wherever the exact question has been submitted to the court, it has held to the doctrine of the earlier cases, that is, that the sale of power to be used by others for traction purposes, lighting, manufacturing, etc., is not a public use, and that the sale of surplus power, or the difference between the ordinary requirements and the peak load by a corporation which does do a public service business, when such surplus is not in use, is only an incident to the public employment of which the law will take no notice. Notwithstanding the criticisms of counsel, there is sound reason for our former holdings, to which we shall advert when discussing the next phase of the case.

The final and controlling question is whether the act of 1911 has extended the jurisdiction of the Public Service Commission over power companies regardless of the character of the business in which they are engaged. Counsel for respondent says:

'We may rest our case on the proposition that, irrespective of any question of eminent domain, the contracts of appellant are 'clothed with a public interest,' and therefore subject to regulation, and that the determination of the policy of regulation is for the Legislature.'

Counsel for appellant admits:

'The sole question in the case is whether the defendant's power business is a public business, in view of the uses to which the power sold by it is put, and is therefore subject to the jurisdiction of the Public Service Commission. If it is within the legislative power to make public a business conducted as defendant's power business is, undoubtedly the Legislature has done so, and the case was rightfully decided. It is an electrical company, and owns an electric plant within the

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