Case Name: City and County of Denver v. Mountain States Telephone and Telegraph Company et al.
Court: Colorado Supreme Court
Jurisdiction: Colorado
Decision Date: 1919-07-07
Citations: 67 Colo. 225
Docket Number: No. 9443
Parties: City and County of Denver v. Mountain States Telephone and Telegraph Company et al.
Judges: 
Reporter: Colorado Reports
Volume: 67
Pages: 225–288

Head Matter:
No. 9443.
City and County of Denver v. Mountain States Telephone and Telegraph Company et al.
1. Constitution — Construction Of. Narrow and technical reasoning is out of place in the interpretation of a constitution. This rule is not abrogated but rather enlarged by the amendment to Article XX (Laws 1913, 619).
Each word in the constitution' must be given its fair import and the courts must not construe away what the sovereign has embodied in the fundamental law.
2. Article XX — Effect Of. By article XX the sovereign power created a new agency, vesting it with some of the powers previously reposed in the General Assembly. The two agencies are creatures of the same sovereign.; neither has supreme power. Each may exercise the power conferred upon it, but only in the manner and to the extent prescribed.
3. Regulation op Public Service — Natures of th& Power. Whether conferred by the provisions of the constitution or by legislation the power to regulate the public service is of two main classes; one governmental, legislative or public; the other proprietary, commercial, and in this sense quasi private.
The granting by the city to a corporation, of the rights to use the streets of the city, like a similar grant by the General Assembly to use the highways of the state, is the exertion of the proprietary power of the sovereign.
4. Exercise of the Police Power. No exercise of the police power can exhaust it, and no vested right is acquired therein. The inherent and inalienable power to regulate the business of every public utility, operating within the state, and to prescribe the rates to be charged for the service, resides in the sovereign, that is the people. But this power may be exercised by any agency which the constitution creates for the purpose.
5. Constitutional Provisions Conferring the Power in Question, need not be clothed in express words; it is sufficient if it necessarily arises or is fairly implied from, or incidental to, the powers expressly granted, or is essential to the declared objects for which the agency was created.
6. Rate Prescribed by Municipal Corporations, must be reasonable.
7. PubUc Utilities Commission — Jurisdiction Of. The commission has no jurisdiction to regulate the business of a corporation operating a public telephone in Denver.
Writ of Review to PubUc Utilities Commission.
Hon. James A. Marsh, Mr. Thomas H. Gibson, Mr. Norton Montgomery, for City and County of Denver.
Mr. L. J. Williams, Mr. A. P. Anderson, Mr. Grant E. Halderman, for Public Utilities Commission.
Mr. Milton Smith, Mr. Charles R. Brock, Mr. W. H. Ferguson, Mr. Elmer L. Brock, Mr. Floyd F. Walpole, for The Mountain States Telephone and Telegraph Company.
Mr. Charles M. Rose, Mr. M. H. Aylesworth, Messrs. Lee & Shaw, Messrs. Gerald Hughes, Clayton C. Dorsey, Rush L. Holland, John A. Rush, E. W. Hurlbut and Albert L. Vogl, Amici Curiae.

Opinion:
Mr. Justice White
delivered the opinion of the court:
The sole question involved herein is whether the Public Utilities Commission has jurisdiction to regulate the rates to be charged by The Mountain States Telephone and Telegraph Company in its local service within the City and County of Denver. The case does not involve the constitutionality of the Public Utilities Act, but only whether the act is applicable within the aforesaid municipality. The City and County of Denver came into existence by virtue of Article XX of the Colorado Constitution, and that article, as amended at the general election of 1912, measures its powers.
Prior to the aforesaid amendment wé held that the stinted grant of power in section 1 of Article XX was not the only power invested in the municipality, as the purpose of the article was to enlarge the powers beyond those usually granted by the Legislature, and to bestow upon the people of the municipality "every power possessed by the Legislature in the making of a charter for Denver." Denver v. Hallett, 34 Colo. 393, 397, 83 Pac. 1066. And, subsequently, in Londoner v. Denver, 52 Colo. 15, 22, 23, 119 Pac. 156, referring to the Denver-Hallett case, we further declared: "By that decision we determined that the powers enumerated in section 1 of Article XX of the Constitution do not constitute a limitation of the powers conferred upon the municipality; and, moreover, the article conferred upon such people (of the City and County of Denver) every power possessed by the Legislature in making a charter for Denver."
In fact, those decisions and other declarations of this court of like character made it clear that the power invested in the City and County of Denver by Article XX, prior to its amendment, could be determined by ascertaining whether the Legislature in the absence of Article XX could have conferred upon the municipality the power in question. People v. Cassidy, 50 Colo. 508, 117 Pac. 357; Speer v. The People, 52 Colo. 325, 122 Pac. 768; People v. Prevost, 55 Colo. 199, 134 Pac. 129; Moore v. Perkins, 56 Colo. 17, 137 Pac. 55, Ann. Cas. 1914-D 1154.
Under the rule of constitutional interpretation those deductions were inevitable. "Narrow; and technical reasoning is misplaced when it is brought to bear upon an instrument framed by the people themselves, for themselves, and designed as a chart upon which every man, learned and unlearned, may be able to trace the leading principles of government. A constitution is to be construed as a frame of government or fundamental law," and not as a mere statute. Cooley on Const. Limitations, 7th Ed., p. 93.
This judicial rule, which we applied in the interpretation of Article XX, was in no sense abrogated by the amendment thereto, but rather enlarged and confirmed thereby. The amendment confirms in the people of the municipality the power set out in sections 1, 4 and 5 of the article, and invests them with "all other powers necessary, requisite or proper for the government and administration of its local and municipal matters," including the power "to amend, add to, or replace the charter of said city or town, which shall be its organic law and extend to all its local and municipal matters." It then declares that "said charter and the ordinances made pursuant thereto in all such matters shall supersede within the territorial limits, and other jurisdiction of said city or town, any law of the state in conflict therewith." It then provides: "The statutes of the State of Colorado, so far as applicable, shall continue to apply to such cities or towns, except insofar as superseded by the charters of said cities or towns or by ordi nances passed pursuant to such charters." And further declares that "All provisions of the charters of the City and County of Denver which provisions are not in conflict with this article, and all elections and electoral votes heretofore had under and pursuant thereto, are hereby ratified, affirmed and validated as of their date." At and prior to the time of the adoption of. this amendment the charter of the City and County of Denver contained the following: "Section 280. All power to regulate the charges for service by public utility corporations is hereby reserved to the people, to be exercised by them in the manner herein provided for initiating an ordinance."
Prior to the adoption of Article XX, all ordinary legislative power of the people was vested in the General Assembly. The General Assembly, however, was only a crear ture of the Constitution and, therefore, an agent of all the people. By that article the sovereign created another agency, to-wit, the City and County of Denver, and vested in .it some of the power previously residing in the first agency. It invested the second agency with the exclusive power "in the making, altering, revising or amending" charters for the City and County of Denver, and by the constitutional amendment in 1912 invested it with "all other power necessary, requisite or proper for the government and administration of its local and municipal matters." These two agencies are creatures of the same sovereign people, and the source of their authority is the same. Neither agency has either supreme or inherent power, for that power resides only in all the people, upon whose will all government is founded. Bill of Eights, secs. 1, 2, article II. Each agency may exercise the power which the sovereign has invested in it, but only to the extent and in the manner and form prescribed. We must not be confused by the us© of the word "state" when the mere machinery of government. is meant.- The sovereign in Colorado — the people thereof — has surrendered nothing, bartered nothing away,' or in any sense abdicated. The powers with which munici pal corporations are endowed, whether created directly by the sovereign through constitutional grant or by the General Assembly through legislative enactment, are divided into two main classes, so that municipal corporation^ act in two distinct capacities. One is governmental, legislative or public; the other is proprietary, commercial and, in this .sense, quasi private. Pond on Public Utilities, Sec. 2. This is equally true, however, of the General Assembly. The granting of the right by the city to a public service corporation to use the streets of the municipality or the granting by the General Assembly to such a corporation the right to use the highways of the state, is the exertion of the proprietary power of the sovereign. The regulation, however, of the business of such public service corporation, whether performed by the Legislature or the municipality, is an exertion of the governmental power of the sovereign. Indeed, the governmental regulation of a business, whatever its character, is always the exertion of the police power, and, therefore, law-making. In the exercise of this power no agent can exhaust it and no vested right may he acquired therein. Such governmental power is inherent in the sovereign and may be exerted, withdrawn and re-exerted according to the judgment, whim or caprice of the sovereign. The ever-existing, inher ent and inalienable power resides in the sovereign, to-wit, the whole people of Colorado, to regulate the business of every public utility operating within the limitations of the state and to make and to remake, as changed conditions may require, a maximum schedule of rates to be charged for the service rendered by such utility. It does not follow, however, that this function can only be discharged through an agency created by the Legislature. It may be performed through other agencies which the sovereign has also created, and invested with power in the premises. The police-power "is not above the constitution, but is bounded by its provisions." People v. Gillson, 17 N. E. 343, 346, 109 N. Y. 389, 14 Am. St. 465. It may be exercised by any agency which the constitution creates for that purpose.
Moreover, the regulation of rates to be charged by public utilities has long been recognized as a proper municipal function. McQuillin on Munic. Corp., Sec. 34; Dillon on Munic. Corp., 5th ed., Sec. 1325; Wyman on Public Service Corp., Sec. 1410.
In the case of Home Telephone Co. v. Los Angeles, 155 Fed. 554, 211 U. S. 265, 271, 53 L. Ed. 176, 20 Sup. Ct. 50, it is said: "The power to fix, subject to constitutional limits, the charges of such a business as the furnishing to the public of telephone service, is among the powers of government, is legislative in its character, continuing in its nature, and capable of being vested in a municipal corporation." These authorities demonstrate conclusively that prior to the adoption of Article XX, the General Assembly of the State of Colorado could have invested the City and County of Denver with the governmental power to regulate the rates to be charged by public utilities for local service within its territorial limits. It, therefore, has such power under the repeated decisions of this court hereinbefore cited.
But apart from this, Article XX invests the City and County of Denver with exclusive power to make, alter, revise or amend its charter, and the amendment invests it "with all other power necessary, requisite or proper for the government and administration of its local and municipal matters." Could language be stronger ? Clearly this is an. express grant of full and complete power of local self-government. It necessarily includes the power, whether of eminent domain, taxation, or police, necessary to modem, progressive and efficient local self-government. Indeed, the growth of cities has been the productive force broadening and extending the police power. It is indispensable to self-government in all our municipalities. In fact, it is the very soul and spirit thereof. It is inconceivable that the health, education and welfare of a great city could be properly safe-guarded, extended and protected without telephones, street railroads and other like public utilities. Cities have produced new social, industrial, commercial, safety and health conditions, and the problems of government resulting from them. Clearly then the regulation of the instrumentalities essential to deal with such problems is peculiar to such communities and, therefore, a local or municipal matter. Indeed, those residing outside the city limits are only incidentally, if at all, interested in, or concerned with, the rate a public service corporation receives for its service within such municipality. If the rate therein be fixed by the city, it must be a reasonable rate. This is equally true if the rate be imposed by a central body. We are unable to perceive the force of the point that respondents seek to make that a distinction exists between utilities which operate only within a charter city and those which operate within and without. The only distinction apparent is that the former only performs one duty — it serves a local community; the latter serves the same community and renders an additional service. In either event, the service rendered among the inhabitants of the city is a local matter. This is clearly pointed out by the Federal courts in Home Telephone and Telegraph Co. v. The City of Los Angeles, supra, in the following language: "Nor is there anything contrary to these views in the Constitution for the simple reason that the regulation of the charges of a public service corporation within the limits of a city is a municipal affair; that the streets of a city are public highways in which the people of the whole state are interested; that the opening and widening of the streets are municipal affairs. The regulation of telephone rates in the city would seem to be more clearly a matter of local concern than the control of the streets."
Maux v. The People, 52 Colo. 562, 123 Pac. 101, does not conflict with the doctrine just quoted from the California case. On the contrary, it is in perfect harmony therewith. In the Mauff case we held that elections are public in char acter, of governmental and state-wide importance rather than of local interest, and, therefore, must be under the control and regulation of the Constitution and general laws, and that the City and County of Denver, under article XX, prior to the amendment in 1912, had no authority to legislate upon or otherwise control its municipal elections. Such holding was inevitable because of the provisions of Sec. 11, Art. 7, of the Constitution, which required the General Assembly to pass laws to secure the purity of elections, and as this constitutional ,dqty was imposed upon the General Assembly, and not upon 'municipalities, and the right to vote came from the sovereign and can only be fully protected, and enforced by the same authority, electidns were not purely local or municipal matters.
The contention of respondents that the police power to regulate the rates to be charged by public utilities may not be invested in a municipality, unless the intention so to do is contained in express language, is untenable. There is a marked distinction between the investment or delegation of such power, and the delegation or investment of the authority to surrender by contract such power of government. In the latter specific authority for that purpose is required. The authorities cited in support of the contention clearly disclose the distinction, which is fundamental. The police power is lodged in the people of the state. It is one of the highest attributes of sovereignty. The exercise of this power is essential to the good order and general welfare of organized society. It is continuing in its nature, and if it can be bargained away at all, it can only be by words of positive grant, or something which is in law equivalent. The investment or delegation to a subordinate agency to exercise the police power differs materially from the investment or delegation of authority to suspend or bargain that power away. The case of Denver, etc., Ry. Co. v. Englewood, 62 Colo. 229, 161 Pac. 151, involved an attempted exercise of the latter power. In the one instance the power remains to be exercised either by the agency in whom it is invested, or recalled and exercised by the sovereign. In the other instance the power is gone, and may not be reclaimed during the life of the contract. The police power to control public utilities need not be granted or invested in a subordinate agency in express words. It is sufficient if it necessarily arises from, or is fairly implied in, or is incidental to the powers expressly granted, or is essential to the declared objects and purposes for which the agency was created. Denver v. Hallett, supra.
However, were the law otherwise, the Constitution has expressly authorized the people of the municipality to regulate the charges for service by public utilities operating therein. Prior to the adoption in 1912 of the amendment to Article XX of the Constitution, the City and County of Denver had attempted, at least, to exercise the power of regulating public utilities. Section 280, supra, of its charter had been enacted and such charter with that section therein was on file in the 'office of the Secretary of State. The constitutional amendment expressly approved, "ratified, affirmed and validated" such charter and each and every provision thereof "not in conflict with" Article XX. It further declared that such charter and the ordinances made pursuant thereto in local and municipal matters shall supersede within the territorial limits of the municipality, any law of the state in conflict therewith. This provision of the charter was in substantial effect written into the Constitution. It was adopted by reference, for there is nothing in the charter provision in question Avhich is in any wise in conflict with the article. We can not assume that the constitutional ratification, affirmance and validation of the various charter provisions had reference only to the municipal election at which they were adopted. The language of the Constitution is otherwise. It not only ratifies such elections, but expressly designates the charter provisions themselves and ratifies and validates them. Each word embodied in the Constitution must be given its meaning and courts should not construe away that Avhich the sovereign has embodied in its fundamental law. With the wisdom of the measure we have no concern. That question belongs solely to the people in their sovereign capacity.
The constitutional article in question is different from the so-called "Home Rule" provisions in the constitutions of other states. Therefore, authorities from other states aid but little in ascertaining the intent and purpose of the article in question. It has no counterpart in the constitutions of other states. In other states the power to make a charter for "Home Rule" cities is subject to the constitution and laws of the state. With us the only constitutional provision that may affect the charter is Article XX, and legislative acts in conflict with the charter provisions enacted in pursuance of Article XX have no force and effect within the municipality. .
We are clearly of the opinion that The Public Utilities Commission had no jurisdiction in the premises, and its order, therefore, is reversed and held for naught.
Judgment reversed.
Decision en banc.
Teller, Burke and Denison, JJ., specially concurring.
Mr. Justice Garrigues, Mr. Justice Scott and Mr. Justice Bailey dissenting.