Public Service Commission v. Byron

Parke, J., delivered the opinion of the Court. The proceedings in this cause were begun in the Circuit Court of Baltimore City by six residents, taxpayers, purchasers and consumers of electricity in the municipality of Hagerstown, and by the Potomac Edison Company, a public service corporation incorporated by the State of Maryland, which is engaged in the selling and distributing of electric power and current to the public in the municipality and elsewhere, and which is a taxpayer to the municipality. The six individuals instituted the proceedings not only on their own behalf but also on that of all other purchasers and consumers and taxpayers in like situation. The defendants are Harold E. West, J. Frank Harper, and Ezra B. Whitman, in their official capacity as the persons constituting the Public Service Commission of Maryland.

The bill of complaint was founded on these allegations of fact. The municipality owns and operates a municipal electric plant by which the streets and public places of Hagerstown arc lighted, and electric current is distributed and sold to the public in the municipality. On July 28th, 1923, the municipality applied to the commission for a certificate of authority to build, maintain, and operate a new three thousand kilowatt electric plant at an approximate cost of three hundred thousand dollars; and for authority to issue bonds whose principal amount would be three hundred thousand dollars. Upon the protest of the Potomac Edison Company and other taxpayers of the municipality, and after hearings and investigation, the commission filed, on December 31st, 1923, an opinion and order refusing the petition.

The reasons assigned in the opinion for this action were that the commission found that the Potomac Edison Company’s plant provided Hagerstown with an ample and abundant supply of electric current and gave it assurance, under regulation by the commission, of adequate and continuous service at rea ⁴⁶⁸ sonable rates, so that the construction by the municipality of the projected new plant would be a wasteful duplication of facilities. On April 9th, 1926, the municipality renewed its former application, and by. an amendment filed to its second petition, increased its estimate of the approximate cost of the plant to four hundred and twenty-five thousand dollars. The second petition and its amendment were in the form of independent and original proceedings, but the protests filed disputed the rig'ht of the municipality to make the second application, on the ground that it was a rehearing, and that no reason was assigned for a rehearing, as required by section 11 of the Public Service Commission Law (Code, art. 23, sec. 359), and by section 8 of the rules of practice and procedure of the commission. The protestants, also, resisted the granting of the authorization sought because the proposed new plant was not necessary nor as convenient for the public service.

The commission dismissed the objection to the -form of procedure and proceeded to a hearing of the parties in interest, at which testimony was presented by the litigants. The bill of complaint averred that no evidence was introduced tending to' show that the construction of the proposed plant would in any manner improve the character or increase the extent or economy of the electric service available in Hagerstown, or that such construction was necessary or convenient for the public service, but that the uncontradicted evidence did show that the company was rendering safe, adequate, and sufficient electric service at just and reasonable rates; and this it was ready, able, and willing to continue with its existing facilities, which were ample to take care of the increasing electrical demand within the ensuing five years. On this state of the proof, the commission is charged with not finding the construction of the new municipal plant necessary or convenient for the public service, but nevertheless authorizing, on September 29th, 1926, the work to be done and the bonds to be issued. Both on account of the alleged absence of evidence and of the failure of the commission to ⁴⁶⁹ find the building: of the plant necessary or convenient for the public service, the complainants maintain the order was unreasonable and unlawful, and its consequences prejudicial to the rights and interests of the complainants as taxpayers and of the Potomac Edison Company as a public utility already in the same field and prepared to furnish adequate service.

On these allegations and grounds, the complainants prayed that the order of the Public Service Commission of September 29th, 1926, be vacated and set aside, and that they have general relief. On the petition of the commission, the chancellor passed an order nisi making the Mayor and Council of Hagerstown a party defendant, and the municipality later appeared solely for the purpose of denying jurisdiction, on the ground that, although admitting the municipality was a necessary party, yet the municipality, being located in Washington County, could not be made subject to the process of any court other than those of Washington County in respect to the matters in controversy. The plaintiffs demurred to the defendant’s petition that the municipality be made a party defendant, upon the theory that under the statute the commission was the defendant authorized. By express leave of the court the commission filed its combined demurrer and answer, which, while replying to all the allegations of the bill of complaint, reserved its point of the legal insufficiency of the bill of complaint.

The chancellor overruled the demurrer to the bill of complaint, and sustained the demurrer to the petition of the commission, asking that the Mayor and Council of Hagerstown be made a codefendant, and these rulings raise the two questions: Was the municipality a necessary party defendant? And was the cause properly begun before a judge of the Supreme Bench of Baltimore City in the Circuit Court of Baltimore City? 1. Since the action is not of common law origin but of purely legislative creation, an answer to both inquiries must be sought in the statutory law. ⁴⁷⁰ By the Public Service Commission Law, section 11 (Code, art. 23, sec. 359), the right is given to any company, corporation, association, person, or partnership, subject to any of the provisions of the act, or any other person or party in interest, to proceed in the courts to vacate, set aside, or have modified any order of the commission on the grounds that such order is unreasonable or unlawful, and that the right so conferred shall be exercised in the manner as particularly set forth in a later section. The section to which reference is thus made was section 43 of the act, as now embodied in section 404 of article 23, and its most pertinent paragraphs follow: “404.

Any corporation subject to this sub-title, or any of the provisions of this sub-title, and any person in interest being dissatisfied with any order of the commission, fixing any rate Or rates, tolls, charges, schedules, joint rate or rates, or any order fixing any regulations, practices, acts or sendee, may commence any action in the circuit court of any county, or before any judg’e of the supreme bench of Baltimore City, or any court of Baltimore City of appropriate jurisdiction which may be adopted for the purpose, against the commission as defendant to vacate and set aside any such order on the ground that the rate or rates, tolls, charges, schedules, joint rate or rates, fixed in such order is unlawful or that any such regulation, practice, act or service fixed in such order is unreasonable, in which action a copy of the complaint shall be served with the summons. “The answer of the commission to the complaint shall be served and filed within twenty days after service of the complaint, whereupon said action shall be at issue and stand ready for trial upon fifteen days’ notice to either party. “All such actions shall have precedence over any civil cause of a different nature pending in such court, and the said court shall always be deemed open for the trial thereof, and the same shall be tried and determined as other civil actions.” ⁴⁷¹ While any corporation subject to the provisions of the statute or any person in interest may become plaintiff, the language of the statute plainly prescribes the commission as the only necessary defendant. The proceedings authorized are confined to the orders of the commission; and the grounds of attack are limited either to their unlawfulness or to their unreasonableness, and any redress sought is against- the commission, since it alone had the power to pass the objectionable order. The relief obtainable is consequently from the action of the commission in the exercise of an indivisible power to pass lawful and reasonable orders in the performance of its statutory duties.' If any corporate or private interest is adversely affected, it may attempt to enforce its position under the section cited, and hence its failure so to proceed is an indication of satisfaction or acquiescence in the order, which by statute will not be set aside or changed unless in the authorized action its opponent shall show by clear and satisfactory evidence that the order complained of is unlawful or unreasonable. Code, art. 23, sec. 408.

This presumption of the lawfulness and reasonableness of the order is founded on the assumption by the Legislature that the action of the commission would not be taken save in the public welfare and for sufficient cause. By the statute nominating the commission to maintain the legality and reasonableness of its own order, the commission became the statutory public defender or representative of all interests save those which are participating in the attack upon the order, since any one not objecting becomes through acquiescence identified with the public, whose rights and interest always are the primary concern of the commission, which at once asserts and protects them through its official position as defendant. The case at bar is a concrete illustration of an instance where the minor particular proprietary interest of the municipality of Hagerstown is coincident with and an element of the public’s larger general interest, whose guardianship and care are committed by the statute to the commission as the defendant in these proceedings. Thus ⁴⁷² in this capacity the commission becomes the official representative of the municipality in its proprietary rights and interests as a public utility.

See North Dakota v. Chicago & N. W. Ry. Co., 257 U. S. 485, 490 ; Wichita Railroad & Light Co. v. Kansas Public Utilities Commn., 260 U. S. 48 ; Smith v. Illinois Bell Telephone Co., 270 U. S. 587, 592 ; Commonwealth of Pennsylvania v. West Virginia, 262 U. S. 553, 595 ; City of New York v. New York Telephone Co., 261 U. S. 315, 316 ; In re Engelhard & Sons Co., 231 U. S. 646, 651 . That this is the import of' the statute finds confirmation xn the requirement that the answer of the commission shall be served and filed within a specified time, whereupon the action shall be at- issue and ready for trial upon notice to either party; in the provisions that, if the evidence introduced by the plaintiff be different from or additional to that offered at the hearing before the commission, the court, unless the parties shall stipulate to the contrary, shall transmit the evidence to the commission, and stay the proceedings, in order to give the commission an opportunity to consider if any alteration should be made in its original order, and then to report its conclusion to the court for its action on the original or the modified order, as the case may be; by the privilege granted to “either party to said action” to appeal; and by the tenor of all the other provisions of the statute. Article 23, sections 404, 405, 407, 408.

The practice, also, is in accord with the view here expressed, as is illustrated by these instances which, while not wholly analogous, are yet cases in which the authorized statutory litigation or judicial review was carried on between the utility corporation as plaintiff and the Public Service Commission as the sole defendant. Public Service Commn. v. Northern Central Rwy. Co., 122 Md. 355 ; Public Service Commn. v. Phila., B. & W. R. Co., 122 Md. 438 ; Public Service Commn. v. Brooklyn & Curtis Bay Light and Water Co., 122 Md. 612 ; Northern Central Rwy. Co. v. Public Service Commn., 124 Md. 141 ; Pennsylvania R. Co. v. Public Service Commn., 126 Md. 59 ; Public Service Commn. v. United Rwys.

Co., ⁴⁷³ 126 Md. 478 ; Havre de Grace Bridge Co. v. Public Service Commn., 332 Md. 16 . And see City of Superior v. Douglas County Telephone Co., 141 Wis. 363 ; Gates v. Public Service Commn., 86 Or. 442 . As the municipality was interested in the outcome of the proceedings, it would have been a proper party, and upon application could have been made, in the discretion of the trial court, a defendant. Benson v. Public Service Commn., 141 Md. 398 ; Chenoweth v. Public Service Commn., 143 Md. 622 ; Wichita Railroad and Light Co. v. Kansas Public Utilities Commn., 260 U. S. 48 .

The municipality not only failed to intervene, but, when it was sought to be made a party by the commission, it resisted, because the complaint had not been filed in a court of Washington County. However, all that the municipality asked was granted by the commission, which cannot be said to have been antagonistic to the municipality, whose counsel appeared in co-operation with those of the commission before the reviewing court, and were on brief and heard in the argument on appeal. There was, therefore, no material disadvantage to the municipality in not being a party, especially since, when this case came on for trial, it was submitted on the record made before the commission at the hearing upon which the commission grounded its order. The record at bar presents facts and circumstances so different from those before the Supreme Court of the United States in Texas v. Interstate Gommerce Gommission, 258 U. S. 158 , that the decision is not applicable to the instant case.

In the case cited the proceedings were not instituted in the proper forum, and with the United States made a party defendant in its capacity as the representative of the public, so as to bring the action within the statutory provisions for the review of the orders of the Interstate Commerce Commission. Pages 163-165. North Dakota v. Chicago & N. W. Rwy. Co., 257 U. S. 485, 490 .

And see Wichita Railroad & Light Co. v. Kansas Public Utilities Commn., 260 U. S. 48 . 2. The second point on the demurrers was that the suit should have been brought in Washington County. The argu ⁴⁷⁴ ment in support of this contention depends upon the unwarranted assumption that the Mayor and Council of Hagerstown was a necessary party, since, if it were not, the commission, by appearing generally in a court haying jurisdiction over the subject-matter, waived any question of venue, whose interposition as a defence to the action is the privilege of the defendant. Fairfax v. Chambers, 75 Md. 604, 614, 615 ; Gemundt v. Shipley, 98 Md. 657, 662-664 ; Hodgson v. Southern Bldg.

Assn., 91 Md. 439, 452-453 ; Ireton v. Baltimore, 61 Md. 432, 434 ; Carroll v. Lee, 3 G. & J 504, 509-10; Brooks v. Delaplaine, 1 Md. Ch. 351, 352 ; Harrison v. Morton, 87 Md. 671 ; United States v. Hvoslef, 237 U. S. 1, 11, 12 ; Thames & Mersey Marine Ins. Co. v. United States, 237 U. S. 19, 23 ; St. Louis & San Francisco B. Co. v. McBride, 141 U. S. 127, 130 ; Central Trust Co. v. McGeorge, 151 U. S. 129, 135 . Independently of the waiver of the point by the commission, the proceeding was properly begun in Baltimore City by the complainant, who was given the right to select the court of review. The proceedings authorized by section 404 of article 23 are not in their nature what is commonly known as an action at law or in equity.

The procedure is not an original one, but the complaint arises from an order passed at the conclusion of an issue which has been heard and determined by a competent tribunal and in such a manner as to cause dissatisfaction to any corporation subject to the act or to any other party in interest. Meither the decision of a litigated question by a public body having jurisdiction of the subject-matter, nor the right to have such decision reviewed, constitutes a cause of action for either party. Here the contemplated proceeding can only vacate or set aside the order for either its unlawfulness or its unreasonableness. If it be invalid on either specified ground, -it is so because of the nature or the form of the commission’s order, which a court has no power to alter, change, modify or substitute its own decree for, but can only accept or reject in the form finally formulated by the commission.

If an error within the limitations imposed by the statute ⁴⁷⁵ be shown to exist in the order passed by the commission, and the complaint of the party aggrieved and the answer of the commission be filed, the trial is not de novo, and the statute requires a transcript of all the papers, proceedings and evidence before the commission, except such as are omitted by the stipulation in writing of the parties, to be filed in the trial court, and the plaintiff, but not the defendant, may offer evidence. If the plaintiff’s testimony is found by the court to be different from or additional to that offered upon the hearing before the commission, the court is bound to transmit a copy of this evidence to the commission, and to stay further proceedings for fifteen days from the date of such transmission, unless the parties shall both agree to the contrary. Upon the receipt of this evidence, the commission shall consider the same, and may alter, modify, amend or rescind its former order, and shall report its action to the court within ten days from the receipt of the evidence. Should the commission rescind its order, the action will be dismissed; but if the order should be changed in any way, the amended order shall take the place of the original, and the court’s judgment shall be rendered upon the amended order; but, if the original order should neither be rescinded nor changed by the commission, the court’s judgment shall be rendered upon the original order.

The court’s judgment will either sustain or strike down the order as ultimately framed by the commission, and either party has the right of appeal to this tribunal. Article 23, secs. 4:06, 405, 407. It thus appears that the statutory review provided is sui generis, and neither the practice in civil actions at law or in equity afford any precedent for the' solution of where such an anomalous statutory proceedure should have been instituted. Consequently, section 409 of article 23, providing that “in all actions and proceedings in court arising under this sub-title, all process shall be served and the practice and rules of evidence shall be the same as in civil actions, except as otherwise herein provided,” imposes no limitation upon the meaning of the language employed in section 404, that the party complaining “may commence any action in the ⁴⁷⁶ circuit court for auy county or before any judge of the supreme bench of Baltimore City, in any court of Baltimore City of appropriate jurisdiction which may be adopted for the purpose, against the commission as defendant.” ISTor is this language to be restricted by any limitation imposed upon the jurisdiction of any of the courts named, since the Constitution of Maryland expressly conferred upon the Legislature the power to enlarge their power, authority, and jurisdiction in all justiciable matters.

Constitution, art. 4, par. 3, sec. 20, par. 4, sec. 39; Code, art. 26, sec. 38. The portion of the statute under consideration clearly and specifically provides for the selection by the plaintiff of the forum for the complaint. It did not provide, as it might have done, that the proceedings should be instituted in a court of Baltimore City, the place prescribed for the principal office of the commission, or in a court having jurisdiction over either where the complainant resided, the hearing was held, the order was operative, or the subject-matter of the order was located. Arkansas: Digest of Stats. 1921, secs. 1698, 1609.

Georgia: Code 1926, sec. 2625. Alabama: Civil Code 1923, secs. 9809, 9620. Arizona: Rev. Stats. 1913, title 9, secs. 2343, 2284A. Wisconsin, 1 Stats. 1925, secs. 196, 41.

Connecticut: 2 Gen. Stats. 1819, sec. 3643. Illinois: Hurd Rev. Stats. 1925, ch. 111, sec. 72 (P. S. C. Law, sec. 68). Missouri: P. S. C. Law, sec. 111 (Rev. Stats. 1919, sec. 10522), sec. 11 (10420).

Idaho: 1 Stats. 1919, sec. 2505. Oregon: 2 Laws 1920, sec. 6083. Indiana: 3 Burns Annot. Stats. 1926, sec. 12749 (P. S. C. Law, sec. 78).

Minnesota: Gen. Stats. 1923, sec. 4650. Instead of limiting the forum to a definite jurisdiction, the law conferred upon the plaintiff the privilege of commencing “any action in the circuit court for any county or before any judge of the supreme bench of Baltimore City of appropriate jurisdiction which may be adopted for the purpose.” The language is clear, apt and definite, and commits to the complainant the choice of the forum. In order to reach a different conclusion it would be necessary to interpolate an ambiguity where clarity and precision prevail.

Wachter v. McEvoy, ⁴⁷⁷ 125 Md. 399, 407 . The party which selects the forum is the one which has the sole right to offer any testimony, and this involves a burden of procuring witnesses and a primary obligation for costs, which would commonly be a sufficient deterrent to any abuse of this right through the choice of a remote or inconvenient jurisdiction. The court, however, is not concerned with the wisdom of the provision. It is sufficient to find a lawful and unambiguous expression of legislative intent.

Where a valid privilege is granted, it may not be withdrawn or circumscribed by judicial construction. A specific statutory designation of the forum for review presents a number of practical objections, which may well have been in the legislative mind when it made the deliberate decision to leave the matter to the action of the plaintiff in every particular case. In the removal of cases, the court has the power to designate any other trial court of competent jurisdiction in any part of the state, which is somewhat analogous to the privilege of the plaintiff under section 404. So far as this Court is cognizant, no substantive evil has developed from the provision in question; and the appeals to this Court reveal a practice in accordance with the views here expressed.

Public Service Commn. v. Brooklyn & Curtis Bay Light & Water Co. (1914), 122 Md. 612 ; Northern Central Rwy. Co. v. Laird (1914), 124 Md. 141 ; Yeatman v. Towers (1915), 126 Md. 513 ; Pennsylvania Railroad Company v. Towers (1915), 126 Md. 59 ; Havre de Grace etc. Co. v. Towers (1918), 132 Md. 16 . The case of Brenner v. Brenner, 127 Md. 189 , involved the construction of a provision of the Workmen’s Compensation Act, presenting points of difference which distinguish it from the instant case, as will sufficiently appear from the preceding discussion. 3. The answer of the commission admitted many of the allegations of the bill of complaint; supplemented others by the statement of additional facts; denied the material averments upon which the relief of the complainants depended, and thus brought the proceeding to an issue both of law and of fact.

The issue of law was raised by the com ⁴⁷⁸ plainant assigning as a ground for the unlawfulness of the order that neither in the order itself nor in the opinion was there a specific recital or finding that the construction of the proposed plant was necessary or convenient for the public service. This position is at variance with the declaration of the statute that the commission’s orders “shall not be declared inoperative, illegal or void for any omission of a technical nature in respect thereto,” and that a substantial compliance with the requirements of the law shall be sufficient. Code, art. 23, see. 411. The special provision of the act, made applicable by section 347 to a municipal corporation operating an electric light and power plant, is section 390 of article 23, enacting that: “Eo gas corporation or electrical corporation incorporated under the laws of this or any other state shall begin construction or exercise any right or privilege under any franchise hereafter granted or under any franchise heretofore granted, but not heretofore actively exercised, without first having obtained the permission and approval of the commission.” Hagerstown v. Littleton, 143 Md. 591, 595-598 .

Eo hearing or finding of facts is here exacted as a condition precedent to the granting of the permission or approval of the commission for the proposed construction, as was the case with the public service commission law of Kansas, construed by the Supreme Court of the United States in Wichita etc. Co. v. Public Utilities Commn., 260 U. S. 48, 55, 56, 58, 59 , which, while it held that the Kansas act necessitated a precedent express finding of fact, did not go so far as to declare that the evidence of such finding must exclusively appear in the recitals of the order itself. See Manufacturers’ Ry. Co. v. United States, 246 U. S. 457, 487 . Eo provision of the Maryland act has been cited, and none has been found, in terms requiring the embodiment in the order of a finding of fact that the construction of a proposed public utility plant is necessary or convenient for the public service.

As the order is dependent upon the prior determination by the commission that the proposed construction is so necessary or convenient as to be reasonable, the existence of ⁴⁷⁹ the order is in itself sufficient evidence of the prior action on the facts, which, while justifying its passage, did not confer jurisdiction upon the commission over the subject-matter. Crisfield v. Ches. & Pot. Telephone Co., 131 Md. 444, 447 ; Gregg v. Public Service Commn., 121 Md. 31 . Eurther, the