Court Opinion

ID: 5204645
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:59:06.949922+00
Date Added: 2024-06-11T08:27:15.743610
License: Public Domain

Kellogg, J. (dissenting):
The Legislature has the power to prescribe a reasonable rate- at which. an individual or corporation engaged in a public service, business shall serve the public. (Lake Shore, etc., Railway Co. v. Smith 173 U. S. 684; People v. Budd, 117 N. Y. 1; sub nom. Budd v. New York, 143 U. S. 517.)
“ If unhampered by contract there is no doubt of • the. power of the State to provide by legislation for maximum rates of charges for railroad companies, subject to the condition that they must be such as will admit of the carrier earning a compensation that under all the circumstances shall be just to it and to the public, and whether they are or not is a judicial question. If the rates are fixed at an insufficient amount within the meaning of that term as given by the courts, the law would be invalid, as amounting to the taking of the property of the company without due process of law.” (Lake Shore, etc., Railway Co. v. Smith, supra, 687.)
We must know the source of such power in order to understand its extent and limitations, and in order to determine whether the. legislation in question is within or .beyond the legislative right. This power does not come from the character of the person per-, forming the service, but from the nature of the service, performed. A corporation is a person within the constitutional provisions guarnteeing the property rights and' equal protection of the law to-all persons. (Id. 690.)
The Legislature, therefore, cannot prescribe a rate, for corpora*223tions wliieli is not prescribed" for individuals in the same class of business: The statute in question applies in terms to corporations and individuals alike.
“ The power of regulation'in these cases does not turn upon the fact that the entities affected by the legislation are corporations deriving their existence from the State, but upon the fact that the "' corporations are common carriers, and, therefore, subject to legislative control. The State in constituting a corporation may prescribe or limit its powers and reserve such control as it sees fit, and the body accepting the pharter takes it subject to such limitations and reservations, and is bound by them. The considerations upon which a corporation holds its franchises are the duties and obligations imposed by the act of incorporation. But when a corporation is created it has the same rights and the same duties, within the scope marked out for its action, that a natural person has.' Its property -is secured to it by the same constitutional guaranties, and in the management of its property and business is subject to regulation by the Legislature to the same extent only as natural persons, except as "the power may be extended- by its charter. The mere fact of a corporate character does not extend the power of legislative regulation. For illustration, it could not justly be contended that the act of 1888* would be a valid exercise of legislative power as to corporations organized for the. purpose of elevating grain, although invalid as to private persons. conducting the" same business.” (People v. Budd, supra, 20.)
“ The attempts made to place the right of public regulation in these cases upon the ground of special privilege conferred by the public on those affected cannot, we think, be supported. The underlying principle is that business of certain kinds holds such a peculiar relation to the public interests that there is superinduced upon it the right of public regulation.” (Id. 27.)
“ The power to enact legislation of this character cannot be founded upon the mere fact that the thing affected is a corporation, even when the Legislature has power to alter, amend or repeal the charter thereof. The power to alter or amend does not extend to the taking of the property, of the corporation either by confiscation or indirectly by other means. The authority to legislate in *224regard, to rates., comes from the power to ..prevent extortion or unreasonable charges or exactions by common carriers or others exercising a calling and using their property in a manner in which the public have an interest.” (Lake Shore, etc., Railway Co. v. Smith, supra, 698.)
All. the authorities referring to the subject rest this power of . regulation solely upon the police, power of the State,, which is the right to legislate concerning the public welfare, the public safety and the public health. Tlie constitutionality of this act depends upon the question whether it is a valid exercise of' the police power. ,
To justify the State .in thus interposing its authority’in behalf of the public it must appear, First, that the interests of the public generally, as distinguished from those of a particular class, require such interference ; and second, that the means are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive upon individuals. The Legislature may not, under the guise of protecting the public interests, arbitrarily interfere with private business, or impose unusual and unnecessary restrictions upon lawful occupations.’”' (Colon v. Lisk, 153 N. Y. 188; Lawton v. Steele, 152 U. S. 133,137.)
“ The legislative determination as to what is a proper exercise of the police power, is subject to the supervision of the court, and in determining the validity of an act it is its duty to consider not only what has been done under the law in a particular instance, but what may be done under and by virtue of its authority. Liberty, in its broad sense, means the right not only of freedom from servir tu de, imprisonment or restraint, but the right of one to use liis faculties in all lawful ways ; to live and work where he will, to earn his livelihood in any lawful calling and to pursue any lawful trade or avocation.” (Fisher Co. v. Woods, 187 N. Y. 90, 95.)
“ It cannot be reiterated too often that the police .power must be exercised within its proper sphere,, and by appropriate methods. Whenever a statute arbitrarily strikes down private rights, invades personal freedom or confiscates or destroys private "property, it is repugnant to the Constitution and should not be permitted to stand, no matter how laudable its purpose or beneficial its effect;” ( Wright v. Hart, 182 N. Y. 330, 344.)
*225“In every case that comes before this court, therefore, where legislation of this character is concerned and where the protection of the Federal Constitution is sought, the question necessarily arises: Is this a fair, reasonable and appropriate exercise of the police power of the State or is it an unreasonable, unnecessary and arbitrary interference with the right of the individual to his personal liberty, or to enter into those contracts in relation to labor which may seem to him appropriate or necessary for the support of himself and his family ? Of course, the liberty of contract relating to labor, includes both parties to it. One has as much right to purchase as the other to sell labor.” (Lochner v. New York, 198 U. S. 45, 56.)
“ The provisions of the State and of the Federal Constitutions protect every' citizen in the right to pursue any lawful employment in a lawful manner. He enjoys the utmost freedom to follow his chosen pursuit and any arbitrary distinction against or deprivation of, that freedom by the Legislature, is an invasion of the constitutional guaranty.” (People v. Williams, 189 N. Y. 131, 134.)
“In a broad sense, whatever prevents.a man from following a useful calling is an invasion of his ‘ liberty,’ and whatever prevents him from freely using his lands or chattels is a deprivation of his ‘ property.’ ” (People v. Havnor, 149 N. Y. 195, 199.)
The Legislature cannot declare it a misdemeanor for a real estate agent to sell land in first and second-class cities without written authority (Fisher Co. Case, supra), nor declare fraudulent, as to creditors, a sale of merchandise in bulk unless certain conditions are complied with (Wright Case, supra), nor prohibit an employer from requiring that his employees shall not join- a labor union (People v. Marcus, 185 N. Y. 257), nor prescribe the hours which á baker shall be employed' (Lochner Case, supra), nor provide that a woman shall not work in a factory between nine f. m. and six A. m. ( Williams Case, supra), nor require railroad companies-to issue mileage books (Lake Shore, etc., Railway Co. v. Smith, supra).
The above authorities and the cases referred to by them show that the Legislature has no power to determine at what price a merchant shall sell his dry goods or groceries, upon what terms a farmer shall sell his horse or farm produce, nor how long a laborer shall work.or what he shall receive for his work.
*226Gas and electricity, are the commodities which the defendant sells, the products of its labor and its property, and the constitutional rights above referred to surround it and protect its property . and business in the same way that the property and business of an individual are protected. It is just as much for the public welfare, the public safety and the public health to have cheap bread, millc, groceries and clothing as cheap gas, electricity and railroad fares. By "what right then may the Legislature regulate the price of the latter, and be powerless to interfere with that of the former %, The answer to this question is so easy and is so well understood that it is usually overlooked, and lawyers and judges have sought for more remote and complicated reasons, which are -alike unconvincing and irrelevant! The reasons usually assigned are the power to "regulate corporations, supposed grants and benefits received from .the public,.' the right to regulate monopolies and a‘ dedication of. -the property to the public, i. e., an unnatural partnership by which one partner is to furnish the capital and the labor and tlie other partners direct him how to carry on his business and take his product at a price fixed by them. If these reasons, or any of them, are valid, it would naturally follow, as many -of the earlier cases suggested, without deciding, that the only remedy against oppressive regulation is an appeal to the Legislature or an abandonment of the business.
If the party engaging in such service has agreed in advance that the Legislature may regulate the manner in which his business shall be conducted and fix the price of his product, he is not in a .position to complain of unreasonable legislation in those . respects. In Purdy v. Erie Railroad Co. (162 N. Y. 43) it was held that the mileage book law which had been declared unconstitutional as to existing-railroads, was valid as to' companies beginning their business after’the passage of the law, Judge Cullen saying (at p. 49): “ Therefore, a regulation as to the price of transportation which would be an illegal exaction when sought to .be imposed on exists ing corporations, solely by legislative fiat, may, in the case of future corporations, be the mere performance- of the obligation of a contract.”
Mr. Justice Brewer, in Cotting v. Kansas City Stock Yards Co. (183 U. S. 79, 91), says: “ There has been no further ruling than that the State may prescribe and enforce reasonable charges.”
*227“ From the earliest period of the common law it has been held that common carriers were bound to carry for a reasonable, compensation. They were not at liberty to charge whatever sum they pleased, and even where the price of carriage was fixed by the contract or con vention of the parties, the contract was not enforceable beyond the point of reasonable compensation. From time to time statutes have been enacted in England and in this country, fixing the sum which should be charged by carriers for the transportation of passengers and property, and the validity of such legislation has not been questioned. But the business of common carriers, until recent times, was conducted almost exclusively by individuals for private emolument, and was open to everyone who chose to engage in it. The State conferred no franchise and extended to common carriers no benefit or protection, except that general protection which the law affords to all persons and property within its jurisdiction.” (People v. Budd, 117 N. Y. 19.)
And at page 20: “ The principle of the common law that common carriers must serve the public for a reasonable compensation became a part of the law of this State, and from the adoption of the Constitution has been part of our municipal law.”
Before the day of railroads, private individuals operated stage coaches and performed the duties of common carriers. The common law determined that the calling was affected with a public interest, and charged upon it the duty of furnishing to all the public alike a reasonable service at a reasonable price. Of course, the operators used the public roads ; so did every one, and in every business. If the stage driver owned the right of way upon which he traveled, he was still a common carrier and was charged with the duties pertaining to that calling.
The following situation illustrates that the duty arises from the nature of the calling, and not otherwise. A man owns a large tract of land, with a manufacturing plant in the center. A railroad runs across each end of it, he having conceded the right of way. Upon a private right of way he runs stage coaches and a trolley line for hire between the railroad stations. He also builds a road connecting those points, and along the road he builds houses and rents "them to his employees and others, and a village thus grows up, he owning all the land and all the houses. His plant is furnished with an *228electric light system, from which he sells electricity to the villagers, but the wires extend along the private right of way and do not approach or cross the road. He operates the meat market, the milk route, supplies ice .and a general store. The reasons usually assigned, above stated, as the basis for a legislative regulation of prices are all found wanting here. But in running stages and trolley cars for a fare, and selling electricity, he enters upon & calling which the common law has regulated, and he cannot control the price. In the other matters the price is subject to the agreement of the parties, and he may refuse to sell excejit at his own price.
Supplying the public with gas and electricity for a price (People ex rel. Woodhaven Gas Co. v. Deehan, 153 N. Y. 528, 533) and operating public elevators for profit, and certain other callings, have-been determined to be so affected with a public interest that they are charged with the common-law rule applicable to common carriers that the service must be ■ reasonable to all alike and at a reasonable price, and those engaging in such calling are charged with that duty, and are deemed in advance to- agree to such conditions.
The fact that the person rendering the service has the. right to make reasonable regulations with reference to his business, resulted in the public permitting, him to fix the rate.. This often led to exorbitant charges and extortion, and called with aloud voice for a remedy. While the person performing the service had the legal right to receive a reasonable rate, he had not the right arbitrarily to fix. that rate. Having agreed to render the service at a quantum, meruit, it is repugnant to the law governing such transactions that one party may arbitrarily' and conclusively fix the price. 'It is, therefore, reasonable for the Legislature, in, the exercise of its police power, to reverse the situation' and name a reasonable price. But it is as clearly illogical and unfair that the public shall fix a final and conclusive price, as it would be to permit the person furnishing the service so to do.. A reasonable price fixed by either party invades no right; an unreasonable price fixed by either party" is illegal at common law. Before any statute was passed regulating the rate to be charged every patron of such a-service and the party furnishing it had the common-law right at any time to bring the other into a court of justice and have' the reasonableness of the rate adjudicated. . The common law imposes the duty of a reasonable rate ; no. *229other could be exacted. But the law did not execute itself, and it is necessary and proper for the Legislature to require an observance of the common-law contract price. In other words, no new regulation infringing upon property rights is necessary or proper, but a regulation is necessary and proper to administer and carry into .effect the common-law rate. Strictly speaking, it is a mistake to say that the Legislature, or a commission created by it, may in any case fix the rate. The common law fixes the rate; the Legislature or the act of the commission is simply an enforcement of the common-law rate. “ In fact the common-law rule which requires the charge to be reasonable is itself a regulation as to price. Without it the owner could make his rates at will and compel the public to yield to his terms, or forego the use.” (Munn v. Illinois, 94 U. S. 113, 134.)
“ To limit the rate of charges for services rendered in the public employment or for the use of property in which the public has an interest was. only changing a regulation which existed before, and established no new principle in the law, but only gave a new effect to an old one.” (Budd v. New York, 143 U. S. 517, 538.)
In speaking of the common-law duty to furnish service at a reasonable price Mr. Justice Brewer, in Cotting v. Kansas City Stock Yards Co. (supra, at p. 97), says: “ The authority of the Legislature to interfere by a regulation of rates is not an authority to destroy the principles of these decisions, but simply to enforce them. Its prescription of rates is prima facie evidence of their reasonableness.” Prima facie the maximum rate as fixed by the Legislature is reasonable. (Lake Shore, etc., Railway Co. v. Smith, supra, 695, 696.)
It is manifest that while the reasoning of the cases as to the basis of the rule are not at all times harmonious or satisfactory, the result of all is that the price must be reasonable — that is, the common-law price. Therefore, it follows that this common-law duty and right is the real source of the power to regulate rates. At the time the statute in question was passed the defendant was engaged in a business the nature of which charged it with the duty, and gave it the property right, of furnishing "gas and electricity at a reasonable price, and gave it the right to have the reasonableness of the price determined by the adjudication of the courts in case it was controverted. Any legislation which imposes an unreasonable price upon. *230it, or deprives it of its rights' to have the reasonableness of "the .price determined by a cSurt of justice, deprives it of its property without due process of law, and denies it the equal protection of the law; The law is forcibly and concisely stated in 8 Cyc. 1067: “ The Legislature, itself or through a railroad commissioner, etc., prescribes the • rates. The courts decide whether it is sounjust and unreasonable.as to conflict with the constitutional guaranties. The Legislature - cannot say finally that a rate is just .and-reasonable, nor can the court revise ■ or change the rates- or. say what would be- a reasonable and just rate.”
We must not be misled' by the use of the term “ maximum rates ” in this class of legislation. There can be but one reasonable price for the same article at the saíne .time in the same place. A reasonable price cannot, be so.unreasonable that another and different rear sonable price can take its place at the caprice of one of the -contract-, ing parties. As-the contract between the producer .and the public is that he shall have a reasonable price for such service as is required of him and the Legislature' has fixed the infice, it is presumed that the price so fixed is a reasonable price, which does not admit of another -so-called reasonable price. (Brooklyn Union Gas Co. v. City of New York, 188 N. Y. 334.) A proper -construction of the words -“ maximum rate ” is that it is the. reasonable rate, with permission to the party furnishing the service to do business .at an inadequate profit or at a loss if lie desires. A person lias the legal right to furnish such service at less than its reasonable value, or even to give it awajq and so long as reasonable service is furnished and. all are treated alike,, he is within his constitutional rights unless li'is creditors or the. lunacy authorities interfere. An attempt to fix a maximum price so large that under the most unfavorable conditions it will prbducé a reasonable price to the producer, would clearly be an unreasonable price under .the most favorable conditions;, or under ordinary conditions.
It is not'conceivable that in a great' State like this the Legislature can prescribe a uniform price* for supplying gas and electricity in' every locality. The various climatic conditions, the distances .of the various plants from the supply of coal and oil and from -the factories producing its appliances and machinery, and the amount of service required, the price of labor, and the various other conditions *231which readily occur to the mind, show clearly that a reasonable price in some large cities might be a very unreasonable price in some small villages. It would seem that a statute declaring a uniform rate. throughout the State, applicable to. every locality and every plant, would upon its face be unreasonable. These conditions render it not only reasonable, but almost a necessity, if any regulation as to .price is to be made by the pyiblic, that each locality shall be treated by itself, and an administrative commission which may visit, the various. localities, take evidence, make investigations in various ways and ascertain tile exact situation in each locality, is a most just and effective means of determining in the first instance what price shall be charged in a particular place.
The legality of such commissions has béen sustained by the courts of many of the States and by the Supreme Court of the United' States. Changing conditions from time to. time determine what is a reasonable rate, and an order of an administrative commission can better enforce such rate than an act of the Legislature. Such legislation is a reasonable exercise of the police power. Legislation gives the power to the Commission, but its duties are administrative only, viz., to compel an observance of the existing laws. It is the proper function of the" Legislature, and of the Legislature alone, to impose upon property and persons duties not already existing. If the common-law rule that parties engaged in this service must serve all alike, give a reasonable, service at a reasonable price, does not apply to parties engaged in a service of this kind, and is not the foundation of this class of legislation, then the regulation of rates as to such service is a legislative act, and the duty imposed springs from legislation alone, and it is difficult to understand how the Legislature may delegate its functions and allow some other body to impose a. new duty upon persons and property.- If the power to regulate arises only from an understanding that the person will carry on his business subject to legislative Control, this means that he is willing to take the judgment and discretion of the.Legislature on each particular subject in which he is sought to bn controlled. The legislative judgment and discretion which he contracted for does not allow the Legislature to impose upon him the judgment and discretion of an unknown commission. The act of the Commission in .fixing the rates is legislative, if in the absence of such act *232no legal limit as to rate existed. It is administrative if there was a legal regulation of the rates* and the Commission is simply, to name and enforce the: common-law' rate. The common-law duties,, as stated, furnish a broad and secure foundation upon which -may rest all legislation necessary and proper to protect the public interests. In the absence of such duties, the right.,in.each case, is problematical, and the acts of such coinmissions of doubtful, validity. .
Like every administrative board or executive officer, the. Commission must,know the facts upon- which it is to act, and it may-grant hearings, take testimony and do various acts which naturally pertain . to a court, of justice, but it-is not thereby made a court of justice. Its acts are still administrative, and not judicial. (People ex rel. Lodes v. Department of Health, 189 N. Y. 187,193.) The Legislature may through its various committees grant hearings, determine facts and make regulations based upon its conclusion .therefrom. It does not thereby become , a court, nor its acts judicial. - The hearing is one step, in acquiring the necessary information upon which "the Commission may in' part base its administrative order, In. Chicago, etc., R. Co. v. Minnesota (134 U. S. 418) the Minnesota,statute sought to make the order of such a commission a final decision, of the-rights of the parties, but the court held-it an unreasonable exercise of the police power,- saying (at p. 457): “It deprives-the company of its right to a judicial investigation, by due process of law, under, the forms and with the machinery provided by the wisdom of successive ages, for the.investigation judicially of the truth of a matter in controversy, and substitutes therefor, as an absolute finality, the action of a railroad commission which, in view of the powers- conceded- to- it. by -the State court cannot be regarded as-clothed with judicial functions or possessing, the machinery of a." court of justice.”. -A reading Of .the statute -considered in. that case shows that notice-was .contemplated and served, and the'company appeared' and was heard.
In Reagan v. Farmers' Loan & Trust Co. (154 U. S. 362) a Texas Statute provided, for a hearing after notice,, that, the order of the commission should be conclusive, and be deemed and accepted to be reasonable and fair, and should not be controverted until finally found otherwise in an action brought against the commission ' in a court of. competent jurisdiction in Travis county, Tex." The *233statute then regulated the action by which such decision should be reviewed. It was held that an action could be maintained in the United States court for an adjudication, that the rate so fixed by the commission was unreasonable, the court saying (at p. 397): It is doubtless true, as :a general proposition, that the formation of a tariff of charges for the transportation by a common carrier of persons or property is a legislative or administrative rather than a judicial • function. Yet it has always been recognized that, if a carrier attempted to charge a shipper an unreasonable sum, the courts had jurisdiction to inquire into that matter and to award to the shipper any amount exacted from him in. excess of a reasonable rate ; and also in a reverse case to render judgment in favor of the carrier for the' amount found to be a reasonable charge. The province of the courts is not changed, nor the limit of judicial inquiry altered, because the Legislature instead of the carrier prescribes the rates. The courts are not authorized to revise or change the body of rates imposed by a Legislature or a commission ; they do not determine - whether one rate is preferable to another, or what, under all circumstances, would be fair and reasonable as between the carriers and the shippers; they do not engage in any mere administrative work; but still there can be no doubt of their power and duty to inquire whether a body of rates prescribed by a Legislature or a commission is unjust and unreasonable, and such as to work a practical destruction to rights of property, and if found so to be, to restrain its operation.”
And again (at p. 398): “ ‘ The question of the reasonableness of a rate of charge for transportation by a railroad company, involving as it does the element of reasonableness, both as regards the company and as regards the public, is eminently a question for judicial investigation, requiring the process of law for its determination.’ ”
And at page 399 : “ These cases all support the proposition that while it is not the province of the courts to enter upon the merely administrative duty of framing a tariff of rates for carriage, it is within the scope of judicial power and a part of judicial duty to restrain anything which, in the form of a regulation of rates, operates to deny to the owners of property invested in the business of transportation that equal protection which is the constitutional right of all owners-of other property. There is nothing new or strange in this. *234It lias always been a part of the judicial function to determine whether the act of one party (whether, that party be a single individual,-an organized body, or the public as a whole)- operates, to divest-the other party of any-rights, of person or property. In every constitution is the guarantee against the taking of private property .for public purposes without just compensation. The .equal protection of the laws which, by the Fourteenth Amendment,* no State can deny to the individual, forbids legislation, in whatever, form it may be enacted, by which the property of one individual is, without compensation, wrested from .him for the benefit of another, or of the public. This, as has' been often observed, is a government of law,, and not a government of men, and it must never be forgotten that under such a government With its constitutional limitations and guarantees, the forms of law and the machinery of government, with -all their reach and power, must in their' actual workings stop on the hither side of the unnecessary- and iiricompensated' taking or destruction. of any private property legally acquired and legally held.” ' ' " '.
Again: “ The Legislature has power to fix'rates, and the extent of judicial interference is protection against unreasonable rates.” (Chicago, etc., Railway Co. v. Wellman, 143 U. S. 339, 344; Reagans v. Farmers’ Loan & Trust Co., 154 id. 362, 398 ; Smyth v. Ames, 169 id. 466, 523; Lake Shore, etc., Railway Co. v. Smith, 173 id. 684.)
This judicial review means due process of law. “ Due process of law means law in its regular course of. administration. through the courts of law ’ (Miller on the Constitution, vol. 2, p. 664); or ‘ a regular trial according to the course and usage of the common law.’ (Lincoln’s Const. Hist. vol. 4, p. 37.)” (People v. Johnson, 185 N. Y. 219,228.)
“ To say, as has been-, suggested, that ' the law of the land ’ or ‘ due. process of law,’may-mean the very act of legislation which deprives the citizen of his rights, privileges or property, leads to a simple absurdity. The Constitution would then mean that - no -person shall be deprived of his property or rights, unless the Legislature shall pass a law to effectuate the wrong, and this would be throwing the restraint entirely away. The' true interpretation -of *235these constitutional phrases is, that where rights are acquired by the citizen under the existing law, there is no power in any branch of the government to take them, away; but where they are held contrary to the existing law, or are forfeited by its violation, then ' they may be taken from him — hot by an act of the Legislature but in the due administration of the law itself before the judicial tribunals of the State. The cause or occasion for depriving the citizen of his supposed rights must be found in the law as it is, or at least it cannot be created by a legislative act which aims at their destruction. Where rights of property are admitted to exist the Legislature cannot say they shall exist no longer; nor will it make any difference, although a process . and a tribunal are appointed to execute the sentence.” (Wynehamer v. People, 13 N. Y. 378, 392, 393.)
“ It is plain, therefore, both upon principle and authority, that these constitutional safeguards, in all cases, require a judicial investigation, not to be governed by a law specially enacted to take away and destroy existing rights, but confined to the question whether, under the pre-existing rule of conduct, the right in controversy has been lawfully acquired and is lawfully possessed.” (Id. 395.)
In Brooklyn Union Gas Co. v. City of New York (supra) it was held, the plaintiff having furnished and the defendant having received gas pursuant to a statute fixing the price, that the defendant could not question the reasonableness of the price for the gas so received. If we . reverse the situation it may follow that if defendant furnish gas pursuant to a statute fixing the price, it cannot thereafter make a claim against the purchaser for the gas so furnished at other than the price so fixed. In such cases the parties by furnishing and receiving gas may be held to have assented to the price. It may be that a rate so fixed must be challenged in a direct action or proceeding to have the rate declared void, and that the parties cannot contest the statutory price for gas which has been furnished and used, presumably, under the terms of the statute. It is not material here to consider what the particular remedy is. That there is a legal remedy in the courts is beyond question.
It follows from this reasoning that before the enactment of the' statute in question the defendant was by common law charged with *236the legal duty and clothed with the legal right-of receiving a reasonable compensation for its service, and the courts of justice were always open to it to protect such rights. To prevent extortion and to force upon the defendant the performance of its legal duty, the observance of its contract with the public, the Legislature may name a reasonable rate, or may create an administrative Committee charged with that duty. When fixed, such rate is binding until it is adjudged to be unreasonable, by a court of competent jurisdiction. Where A seeks in the courts to require B to observé his legal duty and carry out his contract to A, the questions of confiscation and destruction of property are not discussed; the only question is what are the contract obligations of the parties, and when those obligations are determined the judgment of the court follows. That is the situation here. The defendant is the owner .of its plant, and may carry on its business in its own way subject, however, to-the duties and . contract-obligations it owes to the public. The nature of its-calling charges upon it, and its property, "only the obligation of furnishing gas and electricity to all alike in a reasonable manner and. at a reasonable price. ■ That is the only contract between the parties. If the public seeks to enforce upon it obligations and conditions beyond that duty, and beyond the terms of the contract, it is a-proper question for . the courts to decide just what' the contract is, and to require its performance according to the letter and the spirit thereof. No legislation can destroy or change the effect of the contract between the parties, or deprive either of them of the right to have the court adjudge the obligations and.duties arising under such contract.
The legislation in question, passed while the defendant was engaged in its present -business, is not a reasonable exercise of the police power and imposes upon defendant obligations beyond and outside of its legal duty, and is, therefore, unconstitutional. The provision of the statute* that the Commission fix a rate “ within the limits prescribed by law,” requires" it to fix a reasonable rate and recognizes that the common law prescribes a rate.- The provision" that the Commission shall give notice and hold a public hearing; and after such hearing “and upon such investigation as may have *237been made by the Commission or its officers, agents or inspectors ” may fix the maximum price, etc., would be a proper procedure for a purely administrative commission but not for a court. The statute* provides: “ The price so.fixed by the Commission shall be the maximum price to be charged by such person or corporation for gas or electricity in such municipality for a term of three years and until after the expiration of such term, such Commission shall upon complaint, as provided in this section, again fix the price of such gas or electricity.” The complaint referred to is a complaint made by the consumers, or by the local authorities only. It is further provided † that the orders of the Commission may be enforced by mandamus, and that upon proof that the order has been made and has not been complied with after notice thereof, the court may issue a mandamus to enforce it. The word “ may ” in a public statute giving a remedy of this kind means “ must.”
It is evident that these provisions of the statute attempt to fasten upon the defendant the order of this administrative commission as a final and conclusive determination of its rights.. The only defense admissible in the mandamus proceeding is either that the order was not made or that it has been complied,with. The order may be based not only upon the evidence and proceedings had before the Commission at the public hearing, but upon an ex parte statement of the officers, agents and inspectors of the Commission, or one of the Commissioners, as to what they discovered upon a private investigation of the plant, books and methods of such corporation, and which investigations the statute contemplates shall be made before the notice and public hearing. The defendant has no means of knowing what such ex parte reports are, and consequently it has no opportunity of controverting the conclusions reached by such officers or agents, or examining them with relation thereto. Until the judge presiding at a trial may adjourn court and take the ex parte statements of the sheriff, the stenographer, the ‘deputy sheriffs in attendance, and the other officers and employees of the court, this investigation cannot be considered as due process of law.
It is against the common-láw rights of the defendant, which is entitled to receive a reasonable price for its product as conditions *238change- from time to time, that the Legislature may dictate a price binding upon it for three years, and perpetually,, unless the local authorities or the customers desire a change. Heretofore, when the producer fixed the price, we may assume that the margin- of profit was so large that it was not seriously affected by the changes in the cost, of the different items going to make up its product. But now a -change -has taken place, and it is assumed that the price of gas and electricity will be regulated so as to give only a fair profit from the business. The difference between- a profit and loss to the producer may be made up entirely by the' changes in the price of wages, material, coal, oil, copper and other things entering into the expense account. The experience of the last three years has demonstrated that what was a reasonable price three years ago is- an unreasonablprice now. The Commission is not required to fix á present reasonable price for gas and electricity,.but a price which, will be reasonable for a' period of three years, allowing, them to forecast the future and to determine at their will whether times will be good or bad during that time. A conscientious commission, under this statute, is not performing its-duty by .considering .the mere cost at the present time, for the rate to be fixed extends into the future, and we do' not know whether it is decreed, by this order.that prices of everything shall gó still higher or that they shall recede to the basis - of three years ago. The provision that the consumers, or the municipality, after three years may make complaint, and have the price again adjusted, but giving the. producer no right to a rehearing, denies to the defendant the equal protection of the law. The plain, meaning of the statute is. that if anything going tó make up the price of gas and electricity falls in the market, the public may have a reduction in the price, hut if everything advances, the defendant must perpetually sérve at the same price.
An appeal to .the Appellate Division is permitted, in which case the Commission appears by the Attorney-General as. a. party to the litigation.* The right- to appeal from the act of an administrative board does not make the act of that board, or the result;of the appeal, due process of law, or make final an order which is only prima,facie evidence of reasonableness; We have seen .that it is *239not a part of the duty of the court to prescribe rates, but that its full duty is performed when it decides whether a given rate is reasonable or unreasonable. The Appellate Division has no knowledge as to how far the things seen by one of the Commissioners, or their officers, agents or inspectors, have entered into the determination. It is evident that the decision of an appellate court upon such a record is not the judicial investigation which is the common-law fight of the defendant. If this court were to go outside of- its functions, and undertake the administrative duty of fixing a rate, it is bound by the provision of the statute which, in substance, requires a rate to be fixed which shall be reasonable for three years, and as against the company forever unless the other party to the controversy asks to have it changed. It follows that if' the order of the Commission is improper, for the reasons suggested, no action of the Appellate Division can give it validity,, and this court may Well refuse to become an administrative commission. The court nmy properly limit its inquiry to a review of the order of the Commission, and give judgment affirming or annulling it.
Reference is made to the Public Service Commissions Law (Laws of 1907, chap. 429) which went into- effect shortly after, the order in question was made, and it is urged that the defendant is not injured by this order even if the provisions of the statute under which it was made are unconstitutional. -The new statute* permits the Commission to grant rehearings upon its orders; it is not given the power to grant rehearings upon orders made by the former Commission. There is no provision ^in the new statute which relieves the defendant from the force of the order appealed from. Its only remedy is the judgment of the court. The validity of the present order must be determined by the terms of the statute under which it was made.
The contention that if the order of the Commission is void we have no right to -review it is unsound-. The statute, so far as it creates a commission is valid, and that commission has the right to make various orders, many of which are proper, and an appeal, is permitted to this court from any of its orders. The rule in the Purdy Case (supra) indicates the validity of such an order, if made *240as to a business established after the statute was passed.. The question here presented is whether.the. order in question is. .one which the Commission-was authorized to make.-' ' .
In my judgment the order is'invalid, It should,, therefore, be annulled, with costs.
Sewell, J., concurred.
Order affirmed, with costs.

See Laws of 1888, chap. 581.— [Rep.

 U. S. Const. 14th Amendt., § 1.— [Rep.

Laws of 1905, chap. 737, § 17.—[Rep.

Laws of 1905, chap. 737, § 17.— [Rep.

 See § 20.—[Rep.

See § 19.— [Rep.

 See § 22.— [Rep.