Gregg v. Laird

Stockbridge, J.,

delivered the opinion of the Court.

The General Assembly of 1892 by an Act, Chapter 387, undertook the regulation of the rates to be charged by Telephone Companies for the service rendered to their subscribers. The rental fixed by the Act was what is known as a flat rate of six dollars and fifty cents per month for one telephone, and a lesser rate where the customer had two or more instruments. The service rendered at that time was what is- called the grounded circuit. As improvements were made in the apparatus, the metallic circuit came into use, and in 1894, the Legislature of that year by Chapter 207, amended the Act of two years earlier by providing that any person, firm or corporation might, by special . contract, agree with - the Telephone Company for special equipment or service, at such rates and upon such terms and conditions as might bo stipulated in the contract. There were then two rates in force for the furnishing of telephone service, one a flat rate of $78.00 per annum, and the other a contract rate which might be varied according to the character of the service afforded.

In 1910 the Legislature passed an Act entitled “An Act fo Create a Public Service Commission, and prescribing its powers and duties, and to provide for the regulation and control of Public Service Corporations and Public Utilities.” (Chapter 180 of the Acts of 1910, page 338.)

This Act was, in the main, like similar Acts passed in a number of the States, in response to a supposed popular demand for a more effective and stringent regulation of firms or corporations engaged in the conduct of public utilities.

On January 2nd, 1912, the Pubilc Service Commission of Maryland promulgated an order prescribing the rates of charges for telephone service in the City of Baltimore, to be effective on and after May list, 1912, with an option to flat rate subscribers to continue their flat rate contracts until the first of October^ 1912. These rates were included in seven distinct schedules, under which service for residences was placed on a flat rate basis, and a measured rate was substituted for the. flat rate theretofore prevailing for business service. The order further provided that the rates so prescribed should be the only charges made for local telephone, messages for a period-of three years from May 1st, 1912. An order dated April 25th, 1912, recited that numerous complaints had been made with regard to the interpretation given to the order of January 2nd, and then the order proceeds to amplify and make additions to some of the provisions of that order which do not enter into the present case.

By an order passed by the Commission on September 26th, 1912, the order of the 2nd of January was still further modified by extending the period during which the flat rate subscribers might continue their contracts on that basis from October 1st, 1912, to April 1st, 1913. and granted to the Protective Telephone Association the right to show cause against the proposed revision up to January 1st, 1913. On October 29th, the Public Service Commission passed a fourth order, by the terms of which January 1st, 1913, was set as the date on which the measured rates provided for in the orders of January 2nd, and April 25th 1.912, should become operative. By a letter of the Telephone Company dated December 18th, 1912, the plaintiffs were notified that on December 31st, their flat rate contract would be discontinued. Five days later the bill of complaint was filed, praying for an injunction to restrain any interference with the flat rate which' the plaintiffs had been enjoying. A demurrer to the bill of complaint was sustained by the Circuit Court of Baltimore City, and the bill dismissed. It is from that action that this appeal is taken.

A large number and variety of objections have been urged against the action of the Commission, most of which depend upon a careful examination and construction of the Act itself, in which adjudications elsewhere can have little force unless there is identity in the phraseology of the two Acts.

The most serious of the attacks made is that which is directed against the constitutionality of the Act. This is claimed to result from an attempt to invest the Commission with powers both legislative and judicial, possibly administrative as well, and therefore to be inimical to Article 8 of the Declaration of Rights, “that the legislative, executive and judicial powers of. government ought to be forever separate and distinct from each other; and no persons exercising the functions of one of said departments shall assume or discharge the duties of any other.” Whát has the Commission done in this ease l It has had hearings upon rates proposed to be adopted for the services to be rendered by a public utilities corporation, and has by its order promulgated the rates which the company shall be permitted to charge to those mailing use of the service. Nowhere is the nature of such an Act better characterized than in the opinion by Justice Holmes, in Prentis v. Atl. Coast Line, 211 U. S. 210, when he says: “The establishment of a rate is the making of a rule for the future and therefore an act legislative, not judicial in kind. Proceedings legislative in nature are not proceedings in a Court, no matter what may be the general or dominant character of the body in which they may take, place. That question depends not on the character of the body, but upon the character of the proceedings. The decision upon them can not be res judicata when a suit is brought. And it does not matter what inquiries may have been made as a preliminary to the legislative act. Most legislation is preceded by hearings and investigations, but the effect of the inquiry and of the decision upon it, is determined by the nature of the act to which the inquiry and decision led up. The nature of the final act determines the nature of the previous inquiry. So when the final act is legislative the decision which induces it can not he judicial in the practical sense, although the questions considered might he the same that would arise in the trial of a case.” And the same holding is made in The Home Telephone Co. v. Los Angeles, 211 U. S. 274. Following these cases it must he held that the order of the Public Service Commission complained of in this case was a legislative rather than a judicial or administrative act, or a combination of any two of them, and consequently not objectionable on the constitutional ground.

It has been strenuously argued on behalf of the appellants that there has been no express repeal of the Acts of 1892 and 1894, by which a maximum charge was established by the Legislature; that repeals by implication are never favored by the Courts, and that the Public Service Act recognizes that rates, fixed by the Legislature, may co-exist with rates established by the Commission, provided there is no conflict between them. That repeals by implication are not favored is perfectly true, but the difficulty with this contention of the appellants is that in sec. 31 % of the Act of 1930 (Ch. 180, p. 375), it is provided, “that all Acts or parts of Acts heretofore, passed and now existing, prescribing or limiting the price at which.any gas corporation or electric corporation, or any other corporation subject to this Act, may furnish, sell or dispose of its gas, electricity, or other product or utility are hereby repealed, it being the intent of this Act that the powers of the Commission hereby created to ascertain the price of such gas or electricity or other product or utility as provided for herein, shall supersede all such Acts or parts of Acts aforesaid.” A more sweeping repeal is rarely to be met with. By express terms it relates not merely to gas and electrify, but to all other products and utilities produced or furnished by any corporation subject to the operation of the Act; Telephones arid telephone service can not be declared otherwise than as a utility, and telephone companies ai’e undoubtedly Subject to the operation of the.Act. ' Any.possible doubt- as--to that is removed by section 39 which declares: “That this Act shall apply to telegraph companies, telephone companies, telephone lines and telegraph lines within this State and to persons and corporations engaged in the transmission of intelligence within this State by telephone or telegraph.”

It is a well recognized rule that all statutes upon the same subject matter are to be harmonized as'far as possible, and this is true whether the Acts relating to the same subject were passed at different dates, separated by' long or short intervals They are all to be compared harnionized if possible, and, if not susceptible of a construction which will make all' their provisions harmonize, they are made to operate together so far as possible consistent with the evident intent of the latest enactment. Sutherland on Statutory Construction, section 283. This rule of construction is applied even when the constitutionality of a statute is called in question. Chief Justice White has expressed it as follows in U. S. v. Del. & Hudson Co., 213 U. S. 366: “The duty of the Court in construing a statute which is reasonably susceptible of two constructions, one of which would rénder it unconstitutional and the other valid, is to adopt that construction which saves its constitutionality (Knights Templar v. Jarman, 187 U. S. 197) and this includes the duty of avoiding a construction which raises grave and doubtful constitutional questious, if the statute can be reasonably construed so as to avoid such questions. (Harriman v. Int. St. Com. Comn., 211 U. S. 407.)” Bearing this rule in mind, and looking to the manifest intent of the Legislature, it is perfectly apparent that the purpose ivas to place all corporations handling public utilities under'the supervision and control of the Public Service Commission, and with power in- the Oomtiiission to regulate the rates charged for service, but that until the Cotiimissiou did so regulate the charge any act or acts'in force respecting- them should remain unimpaired.

' It has been urged that the effect-of the Act, -if' it has-ati-y effect at’ all, is to invest the Commission with' the power.- of repeal of an Act of the Legislature, and -that this is beyond the power of the Legislature to do. The all sufficient answer to this contention is, that the Legislature itself has repealed the prior enactments, only leaving it to the Commission to fix the time when such repeal shall become operative. That the Legislature itself can establish the rates to be charged by corporations operating pubile utilities, and change them from time to time is admitted. The only limit thereto is that such rates shall not be confiscatory; and it is settled by a long line of decisions in this State that the regulation of various agencies dealing with the public may be made either by the Legislature directly or through a board to which such power may be delegated. Singer v. State, 72 Md. 464; State v. Broadbelt, 89 Md. 565; State v. Knowles, 90 Md. 646; Scholle v. State 90 Md. 729; State v. Hyman, 98 Md. 596.

An additional ground of objection urged by the appellants is that the only mode by which the Commission acquires jurisdiction over a utilities corporation is through an investigation instituted by that body or by its authority, or upon the complaint of some party feeling aggrieved by the action of the Commission; that the proceeding in this case came under neither of those heads, but was originated by the Telephone Company submitting to the Commission a schedule of proposed rates and asking the approval of them by the Commission. This is substantially the allegation of the first paragraph of the bill of complaint, and must be taken on demurrer as admitted. The bill does not, however, charge the Commission with acting in bad faith, or being derelict in the performance of any duty resting upon it. Assuming that the Telephone Company was the original actor in the proceeding, it was the plain duty of the Commission before passing any order or adopting any schedule to satisfy itself of the reasonableness of the charges proposed to be made for tbe service to be rendered. To have done less than this would have' been a dereliction of duty, and until the contrary is alleged and made to appear by proof, the presumption in favor of th¿'proper performance' of duty by a public official must control. ' In no respect' then does that which is alleged to have been done in this case differ from an investigation instituted by the Commission, concluded by an order by the Commission based upon the investigation so made.

Complaint is also made that in the present case the action of the Commission amounts to the granting of an execution before judgment is entered against the appellant. The line of argument upon this point is difficult to follow.

■ The original order of the Commission of January 2nd 1912, bore upon its face every appearance of finality. There were formally adopted a large number of schedules, and as to those which were reserved for future action, none of them could have affected the appellants. Immediately upon the passage of that order the appellants could have applied to the Commission for a rehearing under the provisions of section 11 of the Act, wherein it is provided “that after an order has been made by the Commission, any party interested therein may apply for a rehearing in respect to any matter determined therein, and the Commission may grant and hold such a rehearing, if, in its judgment, sufficient reason therefor be made to appear,” but it is not alleged that the present appellants, or any of them, ever applied for such a rehearing. So far as can be judged from their conduct they acquiesced in the order which had been made by the Commission. Some suggestion was made in the argument that the act was invalid because it made no provision for an appeal to the Courts from an order of the Commission. It is true that the Act does not use the word “appeal” in connection with a resort to the Courts to obviate the effect of an order, but the rights of parties who may feel aggrieved by the action of the Commission are fully guarded and protected by the provision of'section 43 of the Act “that any corporation subject to this Act, or any of the provisions of this Act, 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-niáy-commence' 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, 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,” * * * provided such action or suit be begun within 60 days after the entry or rendition of the order. Section éS then gives an express right of appeal to this Court from any judgment rendered in any action or suit so had. The order of the Commission now complained of was made on the 2nd January, 1912, no application for a rehearing by the Commission appears to have been made at any time, and the bill of complaint in this case was not filed until "December 23rd following, more than eleven months later. The same policy of masterly inactivity appears to have been adopted with regard to the order of the Commission of April 25th. These facts have been somewhat fully recited because of the complaint that these appellants have been virtually denied a hearing, and an execution issued against them without an opportunity to be heard. The facts appearing in this record do not in any way support this contention.

A motion was made in the Court below, but not passed on, to dismiss the complaint of the appellants as to the orders of January 2nd, April 25th and September 26th, upon the ground that ás to those orders and each of them, the suit was not instituted within the time allowed by the Act. Nor is it necessary to pass upon them now. This is the first case which has come to this Court involving the Act creating the Pubilc Service Commission, and even if the position taken by the counsel for the Commission is well founded a disposal of the case upon that ground would be to some extent an evasion of the questions involved. It has, therefore, seemed wiser to consider the several objections urged upon this Court and squarely meet the issues presented. Nor has there been much in the way of citation of authorities, for the reason that in a case of this character the important element is the act itself and the phraseology of it; for as was said by Justice Moody, in Home Telephone Co. v. Los Angeles, 211 U. S. 274, “no case, unless it is identical in its facts can serve as a controlling precedent for another, for differences, slight in themselves, may through their relation with other facts, turn the balance one way or the other.”

For the reasons indicated the decree appealed from will be affirmed.

Decree affirmed, with costs to the appellee.