I dissent. I think the majority members of this Court in subscribing to the prevailing opinion fail to comprehend the extent of the jurisdiction of the Public Service Commission to supervise and regulate public utilities in Utah, and I think by means of an improper and erroneous interpretation of Section 76-6-16, R.S.U. 1933, the so-called "limited review statute," they fail to comprehend the extent of the obligation imposed upon this Court to review the acts of the Commission.
The Public Service Commission of Utah by its order of March 14, 1940, granted its Certificate of Convenience and Necessity No. 534 to the defendant, Airway Motor Coach Lines, Inc., authorizing the Airway Motor Coach Lines, Inc., to render such service as a common motor carrier of passengers for hire between Salt Lake City, Utah, and Murray, Sandy, Crescent, Draper, Midvale, West Jordan, Riverton, Taylorsville, and Bennion, Utah, over certain designated routes, although the applicant had not, as required by law obtained and received the required consent, franchise or permit of the proper county, city, municipal or other public authority as provided under sub-section 3 of Section 76-4-24, R.S.U. 1933. *Page 118
Section 76-6-16, R.S.U. 1933, provides for a review in this court when the applicant or any party to the proceedings deems himself aggrieved by an order of the Public Service Commission of Utah. The procedure, to have such order reviewed in the Supreme Court of Utah, is in accordance with that statute, and simulates certiorari.
Section 76-6-15, R.S.U. 1933 provides that no recourse may be had to the Courts until after a motion for a rehearing shall have been made and denied by the Commission, in accordance with that statute.
The theory of the requirement in Section 76-6-15, R.S.U. 1933 that motion for a rehearing shall be made before the Commission before recourse may be had to the Courts, is to afford the Commission an opportunity to correct any error or abuse, the subject of a motion for a rehearing, thereby eliminating useless litigation when redress can be had before the Commission.
Section 76-6-16, R.S.U. 1933 limits the review to determinewhether the Commission has regularly pursued its authority,including a determination of whether the order or decision underreview violates any constitutional rights of the petitionersunder the constitution of the United States or the State ofUtah. Obviously such constitutional quesions are not dependent on that statute to give them life and vitality, but such questions exist entirely apart from the statute, unless the procedure provided by this statute is an adequate remedy to protect any and all violation of any constitutional provisions. I shall not stop to review this point, because, unless the statutory remedy is adequate, the mere statement of the contention in the light of its environment suffices to destroy it.
A very pertinent question to be determined on this appeal is the construction to be placed on Section 76-6-16, R.S.U. 1933 and the meaning of the phrase: "Whether the commission has regularly pursued its authority."
Utah is committed to the philosophy of a Commission regulation of all public utilities in the State. *Page 119
In Utah, the Commission exercises control over motor vehicle common carriers, within and between municipalities, tosupervise and regulate such motor vehicles in accordance with the terms, purport and meaning of the statutes.
And the extent to which the Commission may exercise supervision and regulate motor vehicle common carriers as well as other public utilities in Utah is covered by Section 76-4-1, R.S.U. 1933, as follows:
"The commission is hereby vested with power and jurisdiction to supervise and regulate every public utility in this state, and to supervise all of the business of every such public utility in this state, and to do all things, whether herein specifically designated or in addition thereto, which are necessary or convenient in the exercise of such power and jurisdiction."
Section 76-6-16, R.S.U. 1933 restricts the question of review by the Supreme Court as to the legality of any order or decision rendered by the Commission to determine "whether the Commissionhas regularly pursued its authority."
I shall not pause here to comment upon the theory and purpose of the law in that particular, but will presently consider that question, and I shall also further on in this opinion consider the power and jurisdiction of the Commission to supervise and regulate public utilities including motor vehicle commoncarriers in Utah as provided by Section 76-4-1, R.S.U. 1933.
In determining whether the Commission has regularly pursued its authority in this case the Supreme Court should ascertain from the record before it whether the Commission has exercised power within its jurisdiction as defined by Section 76-4-1, R.S.U. 1933.
By the Public Utilities Act, the Commission is vested with the power to regulate every public utility in the State. The term "public utility" as defined in the act, embraced every corporation or individual, and every town or city owning or operating any equipment within the State, which we now *Page 120 classify among our public utilities, except as that term may be modified by the holding of this court in the opinion in the case of Garkane Power Co., v. Public Service Commission, 98 Utah 466,100 P.2d 571, 132 A.L.R. 1490.
In the case of Salt Lake City et al., v. Utah Light Traction Co., 52 Utah 210, 173 P. 556, 3 A.L.R. 715, this Court recognized the duty of the Commission, under the Utility Act, to find the facts on the questions under consideration and investigation by it.
The judgment of the Commission must be based upon the facts found, and the facts found must be applicable to the purpose and intent of the law to regulate public utilities.
It is the duty of the Commission, in the exercise of its reasonable judgment to determine the questions presented to it and render its judgment upon the facts found.
The findings of fact contemplated by the legislature are the written statements of the facts on the questions under consideration and investigation, as established by the evidence presented to the commission, and upon which it bases its judgment. The law does not define the kind of findings the commission is required to make.
It is presumed the legislature intended the findings of fact of the commission to be the same kind and character known to our judicial system and employed in our courts and defined in our Code of Civil Procedure at the time the Utilities Act was adopted. See Chapter 26, Title 104, R.S.U. 1933, § 104-26-1 et seq., also McCarthy et al. v. Public Service Commission,94 Utah 304, 77 P.2d 331, citing Southern Surety Co. v. Arter, Tex. Com. App., 44 S.W.2d 913-916, and the analogy drawn therefrom to the adaptability of code procedure before administrative agencies in absence of legislative fiat.
The opinion fails to announce the criterion rule or test by which the commission is guided in forming a correct judgment in exercising its power and jurisdiction to supervise andregulate public utilities as required by Section 76-4-1, R.S.U. 1933. *Page 121
The case of Sheppard v. Owl Refining Co., Tex. Civ. App.68 S.W.2d 1101, 1102, develops the theory that the purpose of a certificate of convenience and necessity is to limit the number of those engaged in a particular business of public interest, and to vest in some official or board the power to withhold such certificate in the public interest.
That case arises out of a regulatory statute to enforce a tax on distributors of motor fuel, and analyses many cases affected with a public interest requiring the issuing of a certificate of convenience and necessity as a prerequisite to engage in such business.
The public interest is and should be the standard to guide the determinations of the commission.
One of the early defects in the commission form of regulation was the practice of public utility corporations to withhold evidence at hearings before the commissions to be later presented in courts, which resulted in a tendency to substitute the old technical process of judicial regulation for commissionregulation. With statutes limiting questions reviewable on appeal the commission regulation attained greater power, respect and prestige in that the parties before the Commission have nothing to gain by withholding evidence at hearings. A lack of appreciation of the philosophy underlying the limited appeal statutes is no doubt responsible for many ill considered cases that rise to inject confusion in clear and logical consideration of the issues in cases of this character. Many laymen and the prevailing opinion in this case construe such statutes as a restriction on the Courts without considering that the purpose of such statute was to enhance the prestige of the Commmission.
So that the greater responsibility is placed upon the Commission to devise and carry into effect the means and methods of control of public utilities with which it is charged by the legislature; and, likewise greater responsibility rests upon the Supreme Court to give to the Commission in its opinion a sufficiently didactic interpretation of the law to determine whether it has regularly pursued its authority. *Page 122 Some opinions would indicate a dereliction in that behalf on the part of some Commissions as well as some Courts.
The Utah statutes provide for the Commission to exercise general supervision, fixes: rates, fares, tolls, charges,regulations, practices, facilities and methods, and may establish uniform accounting systems, make investigations, reports, etc. (See Compiled Laws of Utah 1917, Title 91, now Title 76, R.S.U. 1933, as amended).
The order under review here was made and entered by a divided commission, that is by two members of the Commission. The third Commission member dissented.
Public utilities have certain characteristics that are not possessed by the ordinary business enterprise. These characteristics are not in every case peculiar to public utilities, but taken in the aggregate they are sufficiently important to put the industry in a class by itself.
Public Utilities are closely associated with our conception of civilization and were known and subjected to regulation in ancient and medieval as well as modern times. Probably the oldest public utilities are those connected with water supply and sanitation.
The law has long recognized this classification for it has always subjected public utilities to special regulation, bylegislative or judicial regulation or by competition.Competition and regulation are inconsistent policies. If we are to have competition we do not need regulation, if we are to follow the legislative policy and have regulation then we do not need competition. Such certificate should be issued in the public interest.
The factual aspect of the question whether a contemplated service is in the "public interest" is a matter to be determined from the evidence.
The court should not substitute its judgment for that of the commission where there is conflict in determining what is a "public interest." See Gilmer v. Public Utilities Commission,67 Utah 222, 247 P. 284. *Page 123
But the commission can not act arbitrarily, and the acts of the commission and its determination of what is a "public interest" must be in furtherance of its powers and jurisdiction.
The legislature can not delegate to an administrative agency the power to make its own law, but may delegate to it power to determine some fact, or state of things, upon which the law makes, or maintains to make, its own action depend.
And while the court will not substitute its judgment for that of the commission on questions of fact, the order of the commission must be grounded upon some declared policy or regulatory rule based upon legal principles. The commission is amenable to the court on questions of law.
The immediate conscious effect produced in the minds of the commission in a hearing or series of hearings affecting a singlecase, like the instant case, are arbitrary conclusions unless applied with some recognized principle of law. The acts of the commission must be based upon declared or recognized legal principles of law.
To determine whether the commission has regularly pursued itsauthority, includes a determination of whether the order or decision under review violates any declared or recognized legal principle of law.
So that while the court is bound by the facts found by the commission from the evidence, it is not bound by the rule of law applied by the commission to those facts, and it is anomaly if this court is so bound, as the prevailing opinion suggests it is. The commission had before it mixed question of law and fact. This court had before it the legal question of whether the commissionhas regularly pursued its authority.
The holding of the court in the case of Fuller-Toponce TruckCo. v. Public Service Commission, 99 Utah 28, 96 P.2d 722, that where there is evidence to support the findings of the commission this court will not interfere, should *Page 124 prevail only when the commission has applied the facts to somedeclared or recognized principal of law.
Our statutes, unlike some statutes of other jurisdiction, do not provide for any particularly modified kind of evidence, such as "substantial evidence" and "sufficient evidence" etc.
Without going into the question of what is evidence we may say generally that:
"Evidence signifies that which [demonstrates], makes clear or ascertains the truth of the very fact or point in issue, either on the one side or the other." See Lynch v. Rosenberger,121 Kan. 601, 249 P. 682, 683, 60 A.L.R. 376.
So that in exercising its powers and duties the acts of the commission must be based upon some economic interpretation of the needs of the State, promulgated by the commission as a declared policy or some recognized provision of law, such, for instance, as was applied by the Wisconsin Railroad Commission in a telephone case which held the introduction of competition was not warranted because the service was unsatisfactory, due to conditions the occupying public utility could remedy. See the case of Town Line Farmers Independent Telephone Company v. RedRiver Telephone Company, P.U.R. 1916-F, page 211.
The commission as a question of economic interpretation of the law, as will be explained presently, should not permit paralleling of lines, with the attending economic loss in any case where facilities already at the command of the parties are reasonably adapted to their requirements or can be made so by an appropriate exercise of the commission's jurisdiction.
The term "public utility" is used in a very loose sense by people in general, and in a more restricted and defined sense by courts, where among other definitions it has been enigmatically defined as a business "affected with a public interest," which serves only to deepen the mystery of the italicized words, but such definition is indicative of the thoughts *Page 125 by which the legal conception of a public utility becomes concrete, as distinguished from the statutory definition set forth in subsection 28 of Section 76-2-1, R.S.U. 1933, which defines certain public service corporations ipso facto as public utilities.
In the true sense the term "public utility" is based upon the importance, not of the supply of commodities in general, but ofsingle commodities or services in the economy of man, and this conception of the actual fact is entirely foreign to the thought expressed in the prevailing opinion.
The law has recognized many forms of regulation of public utilities, and in addition to others mentioned in this opinion some of the more recent methods have been by perpetual or limited term franchises, indeterminate permits, and the most recent forms of regulation by state or federal commissions. There are other recognized methods of control too numerous to mention.
To review these many methods of control that have been employed in the past to regulate public utilities would extend this opinion without corresponding benefit, and without pausing at all to notice these numerous forms of regulation I shall confine my comments in this case to the two methods before us, namely: "`competition' and `regulation' by the statecommission," subject to local limitations of the legislative power which the prevailing opinion throws aside as of no consequence.
The modern movement for regulation of Public Utilities by Commissions dates from about A.D. 1907. Prior to 1907 there were a few commissions with control over public utilities and commission regulation of public utilities prior to 1907 was conspicuously absent.
There were several reasons for the failure of states to create public utility commissions in the period prior to 1907.
One was the belief that the remedy for public utility monopolies was competition. The belief in the efficacy ofcompetition was deep rooted and it took a surprisingly long experience *Page 126 with it before the people clearly perceived its inadequacy as a measure of relief.
There are some who still favor competition in public utility fields, as witness the testimony, opinions and conclusions of those who have so testified in this case, and generally the enthusiasm with which the motor bus is recommended as a competitor of the street railway.
Another reason was the wide spread conviction that the regulation of the public utilities was essentially a municipalfunction, but the prevailing opinion accords the municipality little consideration even in the face of a statute recognizing such right, and the suggestion in the prevailing opinion and the conclusion to be drawn therefrom that the municipality is impotent to do anything about the motor bus competition or regulation is to say the least revolutionary.
I shall not consider the latter method of control, except so far as that method of control may be involved in the failure of the applicant to obtain and receive the required consent, franchise or permit from the proper county, city, municipal or other public authority as required by law, and provided under subsection 3 of Section 76-4-24, R.S.U. 1933.
To say there is no evidence in the record that any of the towns or cities through which the Airways runs required a license or permit does not face the issue. Let us meet the issues without introducing further uncertainties in the law. The burden is upon the Airways to show that it had complied with the statute. Compliance with all statutes are conditions precedent to issuing any certificate of convenience and necessity. Section 76-4-24, R.S.U. 1933, subsection 3, provides that the applicant shall file in the office of the commission evidence to show it has the required consent, franchise or permit.
The supplying of public utilities service as a class requires a very large capital investment of from four to five dollars for every dollar of annual gross receipts, or to state the *Page 127 matter in another way, public utilities expect to turn a capital outlay not to exceed once in four to five years, as against an average turnover for the merchant of five to ten times per year, and the manufacturer once or twice each year; and gives life to large fixed expenses; that is, expenses that do not vary in proportion to the changes in volume of business.
Section 76-4-1, R.S.U. 1933, committed the State of Utah to a philosophy of regulating existing public utilities by placing the regulation of such public utilities in a mandatory commission, with statutory warrant, jurisdiction and power to regulate all public utilities in the State over which it exercises jurisdiction, so that the public may receive the highest grade of service consistent with the earning of a fair return upon their investment.
Under the administration of a mandatory commission nothing can be more suicidal than to have regulation settle down to acomplacent routine which contents itself with mere adjustment of differences.
It cannot be denied that the energetic and progressive competition of the motor bus has had a reasonable influence in the monopolies of the street railroad companies. But the commission, acting in the public interest, should withhold its certificate of convenience and necessity, because it is not in the public interest to require a public service utility to restrict or render inadequate service elsewhere in order to compensate for losses sustained through unnecessary compensation in other parts of its system.
The criterion by which the Commission should be governed in the issuance of a certificate of convenience and necessity is the "public interest" and not the convenience and necessity of any local interest.
Questions involved in this appeal can not be appraised in their proper prospective until they are isolated.
The legislature is a representative body, and it is a cross section of the public, and expresses public opinion upon matters of public policy, and it needs a technical body as an aid *Page 128 in investigation of fact and in securing administration and enforcement.
While it is conclusively presumed a legislature acts only in the "public interest," the Commission, an agency of the legislature, is not protected by such presumption.
So that the Commission, being the agent of the legislature, is the representative of the public as distinguished from a part of the public and the criterion must always be the wholepublic interest, and the commission can not justify its acts upon any hypothesis except the exercising of reasonable judgment in the entire public interest.
Nor should competition be allowed until the commission has found also an ample return on the investment of the competitor is possible. The granting of the certificate of convenience and necessity resting on any other foundation is not grounded on a reasonable exercise of judgment.
For these reasons alone the commission has not regularly pursued its authority in this specific instance. If the rates of the Traction company are excessive, and its service is inadequate, the Commission has had jurisdiction and authority at all times since its creation to require the Traction company to render adequate service at reasonable rates. That is the only reason for the existence of the commission.
If we are to return to regulation by competition let the local municipalities decide it for themselves. We certainly do not need a commission to tell a local democratic municipality whether it may or may not permit competition between utilities using the streets of such municipality.
So that the commission's finding is insufficient to support its judgment in the exercise of a reasonable judgment. Either ithas not regularly pursued its authority in regulating both the Traction company and its rates; or it failed to exercise a reasonable judgment in issuing its certificate of convenience and necessity, thereby approving unrestricted and ruinous competition, which is not in the public interest, and not only will that part of the local public directly affected by the competition suffer, but such suffering will *Page 129 be passed on to the public generally who have reason to expect the highest grade of service of the existing public utility and who are not otherwise directly involved in this case, and that is the only basis upon which the commission can justify its existence.
In the development of legislative policies the initiative must be taken by the commission, since they are in close touch with the problems, that is why the commission was created.
There are those who oppose commissions because of what appeared to them to be a usurpation of legislative prerogatives. That question need not trouble us here because the battle ground upon which this issue was finally decided was the courts.
An understanding of this conflict may be observed in connection with litigation of the Interstate Commerce Commission.
Section 12 of the Interstate Commerce Act of 1887, as amended March 2, 1889, and February 10, 1891, provided in part (See, Page 15 Hamlin's Inter-State Commerce Acts, Copyright, 1907, Little, Brown Co.):
"* * * That the Commission hereby created shall have authority to inquire into the management of the business of all common carriers subject to the provisions of this act, and shall keep itself informed as to the manner and method in which the same is conducted, and shall have the right to obtain from such common carriers full and complete information necessary to enable the commission to perform the duties and carry out the objects for which it was created; and the commission is hereby authorized and required to execute and enforce the provisions of this act, * * * and for the purposes of this act the commission shall have power to require, by subpoena, the attendance and testimony of witnesses and the production of all books, papers, tariffs, contracts, agreements, and documents relating to any matter under investigation."
The Interstate Commerce Commission was opposed on the theory that such legislation constituted an unlawful delegation of power. The Utah Commission possessed all of these powers. *Page 130
The Interstate Commerce Commission Act quoted above was construed in the case of Interstate Commerce Commission v.Brimson, 1894, 154 U.S. 447, page 473, 14 S. Ct. 1125,38 L. Ed. 1047, and when properly understood there is no conflict between that interpretation and the holding of this court in the Rowell case. See Rowell et al. v. State Board of Agriculture,98 Utah 353, 99 P.2d 1. In the Brimson case Justice Harlan quotes from Chief Justice Marshall in the case of McCulloch v.Maryland, 17 U.S. 316, 4 Wheat. 316, page 409, 4 L. Ed. 579, page 602.
"It is a settled principal of constitutional law that `the government which has a right to do an act, and has imposed on it the duty of performing that act, must, according to the dictates of reason, be allowed to select the means; and those who contend that it may not select any appropriate means, that one particular mode of effecting the object is excepted, take upon themselves the burden of establishing that exception.'" [154 U.S. 477,14 S. Ct. 1132, 38 L. Ed. 1047].
The constitutional validity of such legislation depends upon what duties are delegated. The distinction between what duties may or may not be delegated has been drawn upon the ground that the legislature cannot delegate its power to make a law, but it can make a law to delegate a power to determine some fact or state of things upon which the law makes, or maintains to make, its own action depend.
The distinction is cleared up further in the case of Ruggles v. Collier, 43 Mo. 353, where it was said that the legislative power implies a judgment and discretion on the part of those who exercise it, and a special confidence and trust on the part of those who confer it, and that consequently the legislative power cannot be delegated.
This gives us the distinction between a delegation of power to make a law, and the delegation of power to administer a law which has already been made. The former contemplates discretion as to what the law shall be and this may not be delegated by a legislature, while the latter contemplates the exercising of discretion in its administration, *Page 131 and may be delegated. See State v. Chittenden, 127 Wis. 468,107 N.W. 500.
These general ideas were applied in the case of Minneapolis,St. P. S. Ste. M. Ry. Co. v. Wisconsin R.R. Comm., 1908,136 Wis. 146, 116 N.W. 905, 17 L.R.A., N.S., 821. See page 164 of 136 Wis., 116 N.W. 905, page 911, 17 L.R.A., N.S., 821, where the court discusses the inherent power of the legislature under the state constitution to delegate any power not legislative which it may itself rightfully exercise, and where a preliminary determination of a fact or group of facts is necessary before enforcing a law.
The gist of the opinion appears from the following extract:
"* * * If it were conceded that the commission had power of discretion to fix one of several rates, either of which would be just and reasonable, it would be hard to say that this was not a delegation of pure legislative power to the commission. But the theory of this law is to delegate to the commission the power to ascertain facts and make administrative regulations. * * *"
and, therefore it is valid.
Objection has been raised to the provisions of such laws giving the commission power to compel the attendance of testimony of witnesses and the producing of records, etc., as being usurpation of judicial power and an invasion of personal liberty. This barrier has been leveled, since it is now held that this power of a commission is merely incidental to its duty to investigate and does not constitute a delegation of pure judicial power nor an invasion of personal liberty.
The commission is a permanent administrative body whose services are continuously available for purposes of investigation, and for adjusting conflicts between public utilities and their patrons. They give to these problems their exclusive attention and soon build up in the course of their investigations and their adjustments of disputes, an apparatus of administrative working rules, and a basis of *Page 132 technical facts upon which a coordinated and predictable policy of detailed control may rest.
Even if competition is permitted, the limited amount of space in the city streets will make it impossible to have more than a few motor bus lines, or other forms of transportation facilities engaged in the same branch of public utility service in the same territory.
The prevailing opinion fails to take into account that the development era of public utilities coincided with the period when the spirit of individualism was supreme in economic affairs. I refer to outstanding developments which a person of average observation must see surrounding him everywhere in the United States, which govern the principles both legal and economic, that underlie the regulation of public utilities by commissions. The Utah laws are similar to those of the average states not governed by Constitutional provisions.
Opinions have been rendered in Appellate Courts of many states covering all phases of regulations by Commissions and construing "limit appeal statutes."
Either the weight of authority as reflected by these opinions of these states, which may almost be selected at random, are all wrong or the prevailing opinion fails to comprehend that we have long since passed from the stages of economic individualism in matters affecting the regulation of Public Utilities.
This dissenting opinion is submitted in the spirit of constructive criticism. It must be apparent that in my opinion the prevailing opinion in this case is fundamentally wrong because competition and regulation are inconsistentpolicies, and that regulation of Public Utilities by the Commission is the declared public policy of this State.
Some commissions, notably California, where Public Utilities are controlled by a commission under constitutional provisions have allowed competition under a declared policy promulgated to give an economic interpretation to a certificate of convenience and necessity. *Page 133
But the action of the California commission was based on an economic interpretation of the needs of the State. The commission taking the position that the State of California has just begun to develop, and in the major portion of the territory in which competition is permitted there is room for a larger development and, therefore, adequate business for each of the competing utilities.
The decision of the California Railroad Commission has been severely criticized. See the case of Pacific Gas and ElectricCo. v. Great Western Power Co., 1912, 1 Cal. R.R. Comm. Dec. 203.
It has been asserted that the remedy for the evils of poor service and excessive rates is not competition, which leads to duplicate investments upon which the public is pledged to pay a return. Competition and regulation are inconsistent policies.
The term "convenience and necessity" is a misnomer unless given economic interpretation by administrative commissions. Extensions may be proposed or demanded by consumers which, while convenient and necessary for one group, are an extravagant burden upon the rest of the particular community and the rest of the state.
Upon this general principle of law the case of RailroadComm. v. Shupee, Tex. Civ. App. 57 S.W.2d 295 is timely and analogous.
The Texas statute limits the review to the question of whether the order of the commission is "unreasonable" and "unjust."
The Utah statute limits the question to whether thecommission has regularly pursued its authority, etc.
The Texas case is very illustrative in defining, as a matter of law, the distinction between a "public convenience" and a "public necessity" as distinguished from such a question of fact. The Texas case holds as I do in this opinion, that the court's review will determine whether the commission has regularly pursued its authority which is to say to keep the commissionwithin the law. The italicized words *Page 134 being the language of the Texas court. So it is seen that by construction the courts uphold the legislative policy to regulate utilities, but the prevailing opinion adopts a method of regulation by competition which has long since been discarded almost everywhere.
The term "authority" as used in Sec. 76-6-16, R.S.U. 1933 is used to express a derivative power.
In commenting on the definition of power the court in the case of Martin v. Oregon R. Nav. Co., 58 Or. 198-203, 113 P. 16, 19, the Court quotes from the Century dictionary and defines "authority," as follows:
"`Authority' means power to act, whether original or delegated * * *, but the term is usually used to express a derivative power."
The power of the commission is derived from Section 76-4-1, R.S.U. 1933.
And the insertion in the statutes of the term "whether thecommission has regularly pursued its authority" implied the legislative intention was to restrict the authority of the commission to the powers delegated to it by the legislature. Otherwise the public utilities would be regulated by the whims and caprices of men, instead of regulated by a system of laws, enforced through the agency of a mandatory commission composed of men.
Neither the commission nor this court has any prerogative or power to change the public policy of the state as declared by the legislature of Utah. I do not believe the commission would have issued its certificate of convenience and necessity to Airway in this case if it had been informed that competition andregulation are inconsistent policies.
This court long ago in its opinion should have given the commission a sufficiently didactic interpretation of the law so that it would know whether it was regularly pursuing itsauthority. I am mindful of the so-called excesses the utilities in the country are charged with having perpetrated, and the public clamor for adequate regulation. But we may as well meet the problem where we find it. What can it be claimed *Page 135 the prevailing opinion in this case has established? Certainly it has not attempted to assist in carrying out the public policy of this state as declared by the legislature. On the contrary it has undertaken to reverse the declared legislative policy.
We are going to have utilities with us always and the law must regulate them. This court is not here to say whether that method of regulation shall be by competition or regulation by a mandatory commission. That is a legislative prerogative and not a judicial question. And the legislature has spoken. And the duty of this court is plain, but the court has failed to measure up to the duty imposed upon it.
In governmental law, the term "authority" has been defined as meaning legal power; a right to command or to act; the right and power of public officers to require obedience to their orderslawfully issued in the scope of their public duties. See, Black's Law Dictionary.
The verb to "supervise" is defined in 60 C.J. Title: "Supervision" p. 1164, and is distinguished from "regulation" inRe James, 97 Vt. 362, 123 A. 385. The power to regulate implies the power to prescribe rules and regulations for the conduct of the business regulated. (See, Title: "Regulate" Para. 3, p. 1174, also Paras. 5 and 6, subdivisions D and E, under Title: "Regulate" 53 C.J. 1175 et seq.)
The term "regulate" is synonymous with the power to make "by law," "order," "ordinance" and "rule." 53 C.J. Title: "Regulation" Para. 7, p. 1179, 1180.
Many definitions of the meaning of the term "regulation" may be found under the title "Regulation," 53 C.J. p. 1177, et seq., but I will not stop to review these definitions as the question has been passed upon by this court in the case of Ogden City v.John Doe Leo, 54 Utah 556, 182 P. 530, 531, 5 A.L.R. 960, when this court had before it the question of the construction of Sec. 570x38, Compiled Laws of 1917, which is as follows: *Page 136
"* * * among other things, expressly confers power upon all the cities of this state to `license, tax and regulate * * * restaurants, hotels, taverns, theaters, opera houses, music halls, boarding houses, eating houses, chop houses, lodging houses,' etc."
The statute 570x87 further authorizes all cities to pass all ordinances and rules, and make all regulations,
"not repugnant to law, necessary for carrying into effect or discharging all powers and duties conferred by this chapter, and such as are necessary and proper to provide for the safety, and preserve the health, and promote the prosperity, improve the morals, peace, and good order, comfort, and convenience of the city and the inhabitants thereof," etc.
And it was held in that case:
"* * * The statute thus confers ample power upon cities to make all reasonable and proper regulations of the various business enterprises mentioned in the statute. * * *"
Section 76-4-1 is a grant of power to the commission by the legislature to regulate every public utility in the state, and that statute is just as broad as Section 570x87 Compiled Laws of 1917, construed by the court in the case of Ogden City v.Leo, supra.
The statutory authority contemplates that the commission itself will be controlled by a plan based upon the "public interest" and economic condition found in the state. In formulating such a plan the commission is circumscribed only by the public interest.
The commission should adopt some economic interpretation so that its working rules and regulations could bring into common action a consistent and homogeneous policy upon which a coordinated, predictable and settled course of action may rest in all of its operations.
Such action is desirable and necessary as a safeguard to the public interest, for the reason that along with the legislative power to establish a virtual monopoly, the commission was given the power to compel the monopolies to serve the *Page 137 public more faithfully than had been the practice before the passage of the law, and if the commission fails as it has in this case then the legislation fails and usurpation of power results.
Thus, in the case of Re Ashmead et al., P.U.R. 1916D, page 10, the commission denied applications for certificate of convenience and necessity and directed the occupying street railway company to make certain designated improvements and extensions, and to reroute certain existing lines, and gave an economic interpretation of its policy:
"* * * It is the policy of the state of New York since the passage of the Public Service law to protect existing public utilities from unrestricted and ruinous competition and by efficient regulation to compel them to furnish a high quality of service after being permitted to earn a fair return upon the investment."
And, this brings me to the consideration of the final question in this case, which is the failure of the applicant to obtain and receive the required consent, franchise or permit from the proper county, city, municipal or other public authority as provided under subsection 3 of Section 76-4-24, R.S.U. 1933.
It is not intended by the law that the requirements of a certificate of convenience and necessity shall substitute State commission for the municipal authorities, when by either constitution or statute of the state the consent of municipality is required before the certificate of convenience and necessity shall issue.
A constitutional provision requiring consent of the local authority is a limitation on the legislative power.
Article 12, § 8 of the Constitution of Utah, is, as follows:
"* * * No law shall be passed granting the right to construct and operate a street railroad, telegraph, telephone or electric light plant within any city or incorporated town, without the consent of the local authorities who have control of the street or highway proposed to be occupied for such purposes." *Page 138
Subsection 3 of Section 76-4-24, R.S.U. 1933, provides in part, as follows:
"* * * Every applicant for such a certificate shall file in the office of the commission such evidence as shall be required by the commission to show that such applicant has received the required consent, franchise or permit of the proper county, city, municipal or other public authority. * * *"
I do not intend to graft the provisions of Section 76-4-24, R.S.U. 1933, upon the provisions of Article 12, Section 8 of the Constitution of Utah, but the philosophy underlying both the statute and the constitutional provision springs from the same conception of local self-government.
The philosophy underlying Section 76-4-24, R.S.U. 1933, and Article 12, Section 8 is the same.
The state under the police power and through the Commission reserves the right to say whether the exercise by the grantee of the rights and privileges covered by a certificate of convenience and necessity will promote the public convenience and necessity of the locality in which the rights are to be exercised.
If it decides to the contrary, it has the power to withhold the necessary certificate; if it decides in the affirmative, it is its clear duty to grant the certificate but subject to the limitations it has imposed upon itself by a declaration of policy.
Such limitations as the State has imposed upon itself may be found in subsection 3 of Section 76-4-24, R.S.U. 1933, or by constitutional limitation imposed upon its legislative power.
The police power represents the heart of the problem of public utility regulation from both a legal and political point of view.
The general purpose is the regulation of utility conduct in the "public interest."
The "police power" as Dean Pound points out, is
"not a definite, specially limited and specially defined power like the *Page 139 power of Congress over the interstate commerce. Indeed the significant thing in police power is not power but purpose."
So that both the framers of our Constitution and our legislature have through Section 76-4-24, R.S.U. 1933, and Article 12, Section 8 of the Constitution of Utah protected the right of local self-government of cities and incorporated towns by preserving their rights to control the burden upon their streets through withholding a franchise within the limitation of the law, and where such consent is not given a limitation is imposed upon the Public Service Commission, who can issue a certificate of convenience and necessity only where such consent has been granted under the law.
MOFFAT, C.J., having disqualified himself did not participate herein.