Title: State v. Montana-Dakota Utilities Co.
Citation: 89 N.W.2d 94
Docket Number: 7741
State: north-dakota
Issuer: north-dakota Supreme Court
Date: March 31, 1958

89 N.W.2d 94 (1958) STATE of North Dakota, ex rel. PUBLIC SERVICE COMMISSION, Plaintiff and Respondent, v. MONTANA-DAKOTA UTILITIES CO., a foreign corporation, Defendant and Appellant. No. 7741. Supreme Court of North Dakota. March 31, 1958. *95 Cox, Pearce &amp; Engebretson, Bismarck, Earl H.A. Isensee, Minneapolis, of counsel, for defendant and appellant. Leslie R. Burgum, Atty. Gen., and Gerald G. Glaser, Commerce Counsel, Bismarck, for plaintiff and respondent. *96 Richard P. Gallagher, Mandan, amicus curiae. MORRIS, Judge. The defendant and appellant, Montana-Dakota Utilities Co., is a corporation engaged in the operation of public utilities in the state of North Dakota and as such is subject to regulation by the Public Service Commission of the state pursuant to statutory authority and direction. This controversy involves rates charged or to be charged by the appellant for the sale of electric energy. In 1948 the Public Service Commission approved a schedule of rates to be charged by the appellant. On or about April 17, 1957 the appellant filed with the Public Service Commission a new and increased schedule of rates accompanied by a notice that they were to be effective thirty days after the receipt thereof by the Commission which included the statement that: On May 7, 1957 the appellant filed an amendment of the schedule above described. On May 13, 1957 the Commission adopted by unanimous action a motion: On the following day the secretary of the Commission wrote the appellant as follows: Under date of June 4, 1957, which was within thirty days after the filing of the amended schedule, the Commission gave notice to the appellant that an initial public hearing would be held with respect to the reasonableness of the proposed rate schedules on July 1, 1957. On September 10, 1957 the Commission gave notice that the hearing would be resumed. The resumed hearing was completed October 9, 1957. On or about November 2, 1957 the appellant notified the Commission and its consumers by letter that the new rate schedules went into effect on October 5, 1957 and that all service rendered after October 4, 1957 would be billed by the company at the new rates. On November 6, 1957 the Commission instituted this proceeding in the District Court of Burleigh County reciting in substance the facts above set forth and alleging that a hearing had been held by the Commission on the appellant's application and new rate schedule and that the Commission was in the process of reviewing the evidence preparatory to rendering a decision. It was further alleged that on May 13, 1957 the new rate schedule was suspended by the Commission and that the suspension was never modified, revoked or altered. It was also alleged that the rate schedule approved by the Commission in 1948 is still in full force and effect but that unless the Montana-Dakota Utilities Company is restrained by the court it will collect rates from its customers pursuant to its letter of November 2, 1957 and that such rates are in excess of those set out in the schedules of 1948 and are unlawful, unauthorized and improper. The Commission then asked the court to enjoin the appellant from instituting and making effective its proposed new rates pending the further order of the Commission. The appellant answered and alleged the filing of its new rate schedules and the motion *97 of the Commission of May 13, 1957 purporting to suspend the effective date of the new schedules until the further order of the Commission. It also alleged that a hearing was held by the Commission on its own motion to inquire into the reasonableness and fairness of the new rates, which hearing was held on July 1, 1957 and resumed on October 8 and 9, 1957, but that no order had been issued by the Commission up to the date of the answer which was November 27, 1957. Appellant further alleged: This paragraph of the answer sets forth appellant's position with respect to the main issue of this controversy. After a hearing had in the District Court, judgment was entered enjoining the appellant from charging and collecting the proposed rates for 90 days from November 29, 1957 and directing the Public Service Commission to take appropriate action during that period. The Montana-Dakota Utilities Co. appealed from that judgment. At the time the case was argued in this court on February 5, 1958 counsel were agreed that the Public Service Commission had decided the matter and had entered its order accordingly. The primary question is whether it was lawful for the appellant to charge and collect rates pursuant to the new schedule after October 4, 1957. The case is here for trial de novo on demand of the appellant. This controversy involves the interpretation and application of two statutes. The first is Section 49-0505, NDRC 1943 which provides: The appellant contends that under this section a public utility may file a new schedule of rates regardless of the origin or source of the old ones and that the new schedule when accompanied by proper notice to the commission will become effective thirty days after filing unless suspended pursuant to the procedure provided by the succeeding Section 49-0506, NDRC 1943 without reference to whether rates to be charged are increased or decreased by the new schedules. The Commission points to Section 49-0511, NDRC 1943 which provides that: It is argued that in this case a schedule of rates was approved by the Commission December 8, 1948 which can be changed only by another order of the Commission *98 or by the decree of a court of competent jurisdiction in a proper case. It is particularly urged that Section 49-0505, NDRC 1943 is not applicable where the rates filed exceed those named in an outstanding unrevoked order of the Commission. The source of the three sections above referred to is Chapter 192, Session Laws N.D.1919 which was our first comprehensive regulatory statute pertaining to rates, charges and services of public utilities. The identical language of Section 49-0511 is to be found in Section 3 of the original act. See also Section 4609c3, 1925 Supplement to Compiled Laws. Section 49-0505, NDRC 1943 is an amendment of the first paragraph of Section 14 of the original Act which read: This paragraph was amended to read in its present form by Chapter 207, Session Laws N.D.1937. In rate litigation arising prior to the amendment the expressions of this court are in accord with the views expressed by the Commission: However, Chapter 207, Session Laws N.D.1937 wrought a drastic change in procedure pertaining to the promulgation and adoption of rates and other specified matters involving rates and services of public utilities. The discretionary power of the Commission was greatly enlarged. No longer did the statute compel it to hold a hearing or make any finding with respect to every proposed increase in rates by a public utility. Where rate schedules were filed and noticed pursuant to Section 49-0505 non-action by the Commission resulted in the proposed rates becoming effective. The amendment came in conflict with Section 3 of Chapter 192, Session Laws N.D.1919 (Section 49-0511, NDRC 1943) and to the extent of the matters particularly covered by the amendment it superseded and repealed that older and more general statute. Sutherland Statutory Construction, 3rd Ed., Sec. 2022; State ex rel. Lofthus v. Langer, 46 N.D. 462, 177 N.W. 408; Hagstrom v. Estherville School Dist. No. 43, 67 N.D. 56, 269 N.W. 93. Having determined that Section 49-0505, NDRC 1943 is applicable to the schedules filed by the appellant with the Public Service Commission it follows that Section 49-0506 is also applicable and these two sections *99 must be considered together in determining if or when the schedules filed by the appellant became effective. It is interesting to note that our original Public Utilities Act, Chapter 192, Session Laws N.D.1919, contained a number of similar provisions and some of the identical language found in the Illinois Public Utility Act (Laws 1913, page 478). Section 36 of that Act corresponded in a large measure to Section 14 of our original Public Utility Law. See Illinois Bell Telephone Co. v. Commerce Commission, 304 Ill. 357, 136 N.E. 676, 677. In interpreting the Illinois statute in that case the court said: The Illinois act also provided that the Commission should make findings before allowing a rate increase to become effective but that provision was repealed in 1921, S.H.A. ch. 111 2/3, §§ 1 et seq., 91. Antioch Milling Co. v. Public Service Co. of Northern Illinois, 4 Ill. 2d 200, 123 N.E.2d 302, 305, wherein the court said: Section 49-0506, NDRC 1943 provides that when a notice or schedule resulting in an increase or decrease in any rate is filed with the Commission, the Commission upon a complaint or its own initiative may order a hearing upon due notice: This section further provides that on the hearing the Commission shall establish rates which it shall find to be just and reasonable. At the hearing the burden is on the utility to show that a proposed rate is just and reasonable. The language quoted from this section appears in substantially the same form in the second paragraph of Section 14 of our original Public Utilities Act. In City of Edwardsville v. Illinois Bell Telephone Co., 310 Ill. 618, 142 N.E. 197, 199, the court, in commenting on similar language in the Illinois Act, said: When Sections 49-0505 and 49-0506, Compiled Laws N.D.1943 are construed together the powers and duties of the Public Service Commission with respect to the procedure to be followed when a proper schedule and notice with respect to change of rates is filed seems clear. The Commission has 30 days after filing to exercise its discretion as to whether or not it will hold a hearing with respect to the propriety of the rate. If it decides to hold a hearing it must do so upon due notice. If no notice is given the rate becomes effective at the end of thirty days by virtue of the statute. The Commission also, for a good cause shown, may allow rate changes to become effective in less than the thirty days. If the Commission orders a hearing upon due notice This suspension is wholly dependent upon the issuance by the Commission of an order for hearing on notice. Once the hearing is so ordered the statute provides a suspension of the rate "pending the hearing and decision thereon" which is limited to 120 days beyond the time the rate would have gone into effect had no hearing been ordered. However, the limitation of 120 days is not necessarily final. The suspension terminates at the end of 120 days "unless the commission extends the period of suspension *101 for a further period not exceeding six months." This extension is a matter that rests in the discretion of the Commission. Thus it appears that a rate becomes effective on the expiration of 30 days from the time of filing or such lesser time as the Commission may grant unless a hearing on notice is ordered, in which event the proposed rate is suspended pending the hearing and decision of the Commission with a limit of 120 days on that suspension subject to the power of the Commission to extend the suspension for as long as 6 months. The difficulty in this case arises from the fact that the Commission neither followed the statute nor based its action upon it. Its only action with respect to the suspension of rates was a motion adopted May 13, 1957 stating: The motion makes no reference to a hearing. At the time the motion was passed no hearing had been ordered. None was ordered until June 4, 1957. At the time the motion was made no power of suspension was vested in the Commission. No suspension either statutory or pursuant to the discretion of the Commission can exist except "pending the hearing and decision thereon." The action taken by the Commission on May 13 was wholly abortive and void. This becomes abundantly clear when we consider that had the Commission not some three weeks later ordered a hearing the proposed rate would have gone into effect under the mandate of the statute 30 days after the filing of the amended schedule regardless of the motion of May 13 and there would have been no suspension, statutory or otherwise. In United States v. Baltimore &amp; Ohio R. Co., 284 U.S. 195, 52 S. Ct. 109, 111, 76 L. Ed. 243, the court considered an order of the Interstate Commerce Commission entered on November 5, 1927 which directed: Section 15, Par. (2) of the Transportation Act, 49 U.S.C.A. § 15(2) provided that: The court said: The Public Service Commission had no power or authority to take the action that it did on May 13. It then had no power of suspension. Later, by virtue of the hearing ordered on June 4, the 120 day suspension provided by the statute became effective. The Commission made no decision and no attempt to extend the period of suspension with the result that the schedule of rates filed by the appellant became effective at the end of the statutory period, which was October 5, 1957. The trial court determined as a conclusion of law that: See also Manhattan Transit Co. v. United States, D.C., 24 F. Supp. 174; Carlsen v. United States, D.C., 107 F. Supp. 398; Long Island Railroad Co. v. United States, D.C., 140 F. Supp. 823. The same construction has been given to a Pennsylvania suspension statute. City of Philadelphia v. Pennsylvania Public Utility Commission, 164 Pa.Super. 96, 63 A.2d 391; Equitable Gas Co. v. Pennsylvania Public Utility Commission, 174 Pa.Super. 450, 102 A.2d 235. The power of suspension under the provisions of Section 49-0506, NDRC 1943 has been entrusted to the Public Service Commission only, to be exercised in the manner therein provided. The Public Service Commission failed to suspend the rates proposed in the new schedules filed by the Montana-Dakota Utilities Co. beyond October 4, 1957 and the trial court was without power to restrain the collection of such rates as a matter of its own discretion. The judgment appealed from is therefore reversed. GRIMSON, C. J., and SATHRE, JOHNSON and BURKE, JJ., concur.