Opinion
No. 23800
Decided April 26, 1933.
Public Utilities Commission — Applications for rehearing — Sections 543 and 614-43, General Code — Time of essence and filing within limitation jurisdictional — Orders cannot be attacked after thirty days, when.
1. Time is of the essence of Sections 543 and 614-43, General Code, providing for the filing of applications for rehearing before the Public Utilities Commission of Ohio.
2. The time of filing applications for rehearing before the Public Utilities Commission, under Sections 543 and 614-43, General Code, is a jurisdictional fact, and, if such applications are filed out of time, the Public Utilities Commission has no jurisdiction to entertain same.
3. An order made by the Public Utilities Commission, entered upon the record and service made upon the parties entitled thereto on the same day, cannot be attacked by an application for rehearing filed more than thirty days thereafter. Under such circumstances, the rule is the same, whether the applicant proceeds under Section 543 or Section 614-43, General Code.
ERROR to the Public Utilities Commission.
This cause comes before this court on proceedings in error to an order of the Public Utilities Commission, dated July 26, 1932, a copy of which is as follows:
"This proceeding is before the commission in the nature of an inquiry under what was popularly denominated the 'Pence law,' upon the commission's own initiative, to determine the reasonableness of the rates set forth in a proposed new schedule, filed April 23, 1929, by The Ohio Cities Telephone Company to become effective May 24, 1929, in said company's Dover and New Philadelphia exchange areas.
"On May 20, 1929, the commission, in the absence of any protests, suspended the new schedule for the period of one hundred twenty days, prescribed by the then effective provision of the General Code of Ohio. This new schedule, in chief, increased the rates for subscribers stations twenty-five cents per month. Thereafter, the commission prosecuted the investigation contemplated by law. On August 6, 1929, the company elected to put the new schedule into effect under bond, and the new rates have been collected since September 1, 1929, upon the conditions that the commission might require a refund to subscribers of any excess collections.
"Following the institution of this proceeding, the officials of the two cities entered appearances and have since participated in the making of the record. On March 19, 1931, the commission certified a tentative valuation of the property of the respondent company, used and useful for the convenience of the public in the furnishing of its service. This tentative valuation has been protested by both the cities as excessive, and the company as insufficient. Hearings upon the protests to the tentative valuation were deferred from time to time, with the thought that there might be negotiated an amicable adjustment of the matter between the company and the municipal officials representing the subscribers.
"The commission withheld any participation of these negotiations for a time, but intervened during the early part of the present year and at its insistence, the management of the company, effective March 1, 1932, relinquished the increase and has since been collecting the original rates. The control of the property has passed during the pendency of this proceeding and the attempts to adjust the matter were made entirely by the new management, whom, the protestants generally state, have been most energetic in maintaining and improving the efficiency and adequacy of the service, and this in the face of diminishing patronage. When it developed that the parties were disinclined to accept the responsibility of an agreed determination to the proceeding, the commission assigned the matter for hearing upon the protests to the tentative valuation with the further instructions that the company produce a record of its revenues, expenses and income for the entire period during which the suspended rates were in effect under bond.
"The engineers for this commission, during the pendency of this case, have been considerably handicapped, due to the fact that the books of the company were not available for inspection at the local office of the company and that errors in the appraisal resulted from the fact that the books were not available. It is imperative that the books and records of the company be kept in Ohio and it is so ordered by this commission, that The Ohio Cities Telephone Company bring at once to Ohio all books and records of the operation of this company and that they be kept in Ohio, preferably at the office of the local exchange.
"During the pendency of this investigation, the commission found the company to be using an unsatisfactory billing system, which failed to give to the subscriber the information necessary to check long distance calls and the company was ordered to cease and desist from that practice and to institute a new system of split billing for the benefit of its customers, which new method incurred an expenditure of several thousand dollars.
"Without, at this time passing upon the merits of the protests of either party to the tentative valuation, the record clearly discloses that from the date the company inaugurated the collection of the increased rates, which it has since relinquished, to the date they were discontinued, upon any fair valuation of the company's property, the net earnings for the entire period were not excessive.
"The commission, therefore, in view of the fact that the company is now collecting its old rates which were and are acceptable to its subscribers from the statements in the records, further finds that the company has sustained the burden imposed by law and proven to be reasonable for the entire period such rates were in effect, the rates and charges set forth in said proposed schedule identified as P. U. C. O. No. 5, First Revised Sheet No. 1.
"The commission, at this time directs the attention of all subscribers, of the company, to the fact that no further increase may be made in the company's rates and charges until the commission, pursuant to law, shall authorize the same. It is therefore,
"Ordered, that said proposed schedule be and hereby the same is cancelled, effective as of March 1, 1932, that the respondent and its sureties be and hereby they are relieved from all responsibility under the bonds duly filed herein, and that this proceeding be, and hereby it is closed without further record."
The proceeding before the commission, known as advanced utility rate proceeding No. 335, was commenced on April 23, 1929, by the Ohio Cities Telephone Company, serving the cities of Dover and New Philadelphia. On that date the company filed a schedule of proposed increased rates amounting to an increase of twenty-five cents per station for all classes of service, such proposed rates to become effective May 24, 1929, in the Dover and New Philadelphia exchange areas. This proceeding, it is claimed, was commenced under the provisions of Section 614-20, General Code, then commonly known as the Pence Law. Under the provisions of that act the commission on May 20th suspended the proposed increased rates for a period of one hundred and twenty days and ordered the matter assigned for hearing on June 20, 1929.
On June 4 a resolution passed by the city council of New Philadelphia protesting the increase of rates was filed with the commission.
On June 20 a hearing was held, at which time no counsel appeared for either city, although notices of the order of May 20 assigning the matter for hearing had been sent to all parties concerned.
At this hearing the company proffered certain book values, revenue and expense studies, and shortly after the hearing furnished an inventory. At the close of that hearing the matter was referred to the engineering department of the commission for investigation.
The record does not disclose any further hearings until May 19, 1932. In the meanwhile, the company having elected to put into effect its proposed increased rates, the commission on August 7, 1929, fixed bond, and the company commenced collecting the increased rates under such bond on September 1, 1929.
On March 13, 1931, the report of the commission's engineers was filed and on March 19, 1931, the commission issued its order tentatively fixing the valuation of the company's property, used and useful, at $807,764.05. A copy of this order is as follows:
"This day, after full hearing, due notice of the time and place of which was given to all parties in interest, this matter came on in pursuance to the inquiry by the commission to determine the reasonableness of the proposed increased rates, for telephonic service of The Ohio Cities Telephone Company, in its Dover and New Philadelphia exchange areas, set forth in first revised sheet No. 1, P. U. C. O. No. 5, filed April 23rd, 1929, to become effective May 24, 1929, the operation of which was, upon protest, suspended by the commission on May 20th, 1929, for the statutory period of one hundred and twenty days, at the expiration of which said proposed schedule was placed in effect, under bonds duly given herein, and
"The commission, coming now to value the property of said respondent, used and useful for the convenience of the public, in the furnishing of its telephonic service in said exchange areas, and after considering the evidence and exhibits offered at the hearing, and having completed an independent inventory and valuation of said property and being fully advised in the premises, the commission finds the value of the several kinds and classes of property of The Ohio Cities Telephone Company, used and useful for the convenience of the public in the furnishing of telephonic service to its subscribers, and to the public in its Dover and New Philadelphia exchange areas and of said property as a whole, as of January 1st, 1931, with unit cost as of August 21st, 1929, to be as set forth in the following summary.
"(The grand totals of which are, reproduction value, $883,933.92, depreciation $76,169.87, present value $807,764.05.)
"Namely: * * *
"The commission further finds that because
"(a) The going concern value in the property has been duly considered, and recognized and is reflected within the items composing said valuation and the allowances for overheads and intangibles and is fairly, reasonably and truly reflected and shown thereby;
"(b) Of the absence of any showing that the stockholders have suffered any sacrifice in the development of the business of the company for which they have not been recompensed by the rates charged to the public;
"(c) Of the lack of competition due to the practical monopoly enjoyed by the respondent, and
"(d) Of the clear duty of the commission to include in its valuation only those elements which are manifestly fair both to the utility and to the consumer, no additional allowance is necessary for going concern value. It is, therefore,
"Ordered, that notice of such valuation so placed upon said property be transmitted by registered letter to said The Ohio Cities Telephone Company, and to the mayors of Dover and New Philadelphia, Ohio; all as provided for under Section 499-12 of the General Code of Ohio. It is further
"Ordered, that all inventories, valuations, transcripts and exhibits be filed and considered as a part of the record herein. It is further
"Ordered, that the commission reserve the right, in the event it shall determine the aforesaid inventory to be incomplete and inaccurate or that said valuation is incorrect, to make such changes therein as may be necessary before said tentative valuation shall become final."
This order does not contain the detail by account numbers as found in the order appearing in the certified transcript.
A protest to this valuation finding was filed by the company on April 17, 1931, which was general and did not contain any detailed specifications of error. No protest was filed by counsel for either municipality. The commission in its final order of July 26, 1932, erroneously states that the tentative valuation had been protested by both the cities as excessive and the company as insufficient. The record discloses, however, that this was not the case.
On June 29, 1931, the matter was referred to the commission's engineers for an accounting study of revenues and expenses. Hearings were postponed from time to time until May 19, 1932. Although no docket entries disclose the fact, the history of what transpired between the valuation finding and the resumption of hearings in May, 1932, is stated in the record by counsel for the company. Briefly this statement shows that there were frequent conferences held between representatives of the cities and the company in an effort to settle the matter without going through all the expensive and involved steps of a rate proceeding. As a result of these conferences and at the suggestion of the commission the company voluntarily returned to its old rates on March 1, 1932. After actually putting the old rates into effect the company was unable to reach an accord with the councils of the two cities, resulting in a further hearing beginning May 19, 1932. At that hearing it was definitely stated by representatives of both Dover and New Philadelphia that they were perfectly willing to accept the valuation prepared by the commission's engineers and were prepared to go ahead and defend it if necessary. It was further stated, directly answering the question of a commisioner, that they had no protest.
On June 1, 1932, the final hearing was had, and at this time counsel for the cities introduced a report on the company's revenues and expenses prepared by an accountant for the commission. Some further testimony relative to valuations covering the period down to February 29, 1932, was introduced by the company, and the company's witness testified that the report of the commission's accountant closed May 31, 1931.
Following these hearings the commission made its finding and order dated July 26, 1932. Copies of such finding and order were mailed to counsel of record, being the city solicitors and the company attorney.
On August 31, 1932, thirty-six days after the issuance of this order, a petition for rehearing was filed by the city solicitors on behalf of the cities. On the same date the commission made the following entry:
"Before the Public Utilities Commission of Ohio.
"In the matter of the proposed increased rates of The Ohio Cities Telephone Company, applicable to Dover and New Philadelphia exchanges, filed to become effective May 24, 1929.
"Advanced Utility Rate Proceeding No. 335. "Entry"This thirty-first day of August, 1932, came the protestants herein, the city of Dover, and New Philadelphia, and proffered a petition asking for the reasons and upon the grounds set forth therein a rehearing, with respect to the matters and things decided and determined by the finding and order entered by this commission upon its records on the 26th day of July and on said day served upon the parties hereto, whereupon and it appearing that such petition for rehearing was not proffered for filing 'within thirty days after such order made by the commission was entered upon its records.' It is
"Ordered, that said petition for rehearing be, and hereby the same is rejected.
"To which order of the commission rejecting its said petition for rehearing, the said city of Dover and the said city of New Philadelphia then excepted here now except, and their exceptions here are noted of record."
Proceedings were instituted here to reverse the order of the Public Utilities Commission.
Mr. Herman W. Seikel and Mr. Clarence W. Ferrell, city solicitors, for plaintiffs in error.
Mr. John W. Bricker, attorney general, Mr. Thomas J. Herbert and Mr. Donald C. Power, for defendants in error.
The primary question in this case is whether or not the Public Utilities Commission erred in its order of August 31, 1932, when it rejected the petition of plaintiffs in error for a rehearing of the order made July 26, 1932.
Plaintiffs in error claim that they had no notice of the order made July 26, 1932. If they had no notice, they were in time with their application for a rehearing. If they had the notice required by law, then they were out of time, under either Section 543 or 614-43, General Code.
A complete statement of fact is made in this case, as it was necessary so to do in order to determine the question of jurisdiction.
An order finding tentative valuations was made March 19, 1931, and the commission, apparently upon its own motion, made the order of July 26, 1932. No question is raised as to the time of filing the petition in error in this court, as it was filed in time.
The Public Utilities Commission is an administrative board. A transcript of its docket entries, certified by its superintendent of investigation, is a part of the record in this case.
Section 499-12, General Code, provides that when the Public Utilities Commission has completed the valuation of any public utility it shall give notice by registered letter, and, if such public utility or the major portion thereof is situated in any municipality, to the mayor of such municipality.
The certificate of the superintendent of investigation shows that the cities were served with notice July 26, 1932. While this is not conclusive, there is nothing in the record to refute it. Were this not an administrative board, such certificate would in all probability be incompetent as a self-serving declaration; but no objection has been interposed to this record, and the only denial of notice appears in the brief of counsel for the plaintiffs in error.
The law relative to the practice of administrative boards has heretofore been given a liberal interpretation by this court in the case of State, ex rel. Automobile Machine Co., v. Brown, Secy. of State, 121 Ohio St. 73, which at page 76, 166 N.E. 903, quotes with approval the case of Industrial Commission v. Brown, 92 Ohio St. 309, 110 N.E. 744, L.R.A., 1916D, 1277. Administrative practice consistent and generally unchallenged will not be overturned except for very cogent reasons, if the scope of the command is reasonably definite and certain.
The order of July 26, 1932, as a matter of fact passed upon the reasonableness of the rates set forth in the schedule filed by the Ohio Cities Telephone Company on April 23, 1929, to become effective May 24, 1929.
This proceeding must have been instituted either under Section 543 or Section 614-43, General Code. So much of Section 543 as is applicable to this case reads as follows:
"No cause of action arising out of any order or decision of the commission shall accrue in any court to any corporation or person unless such corporation or person shall have made, before the effective date of said order or decision, application to the commission for a rehearing."
Section 614-43, General Code, in part, reads:
"Upon the application of any person, public utility or railroad aggrieved thereby, the commission may, upon written petition therefor, filed within thirty days after any order made by the commission shall have been entered upon its records, grant a rehearing of the matter upon which such order was based."
Section 614-41, General Code, provides (102 Ohio Laws, 560):
"All orders made by the commission shall, of their own force, take effect and become effective operative thirty days after service thereof, unless a different time be provided in the order."
This court has heretofore held that an application for a rehearing must be filed before the Public Utilities Commission, and action taken thereon, before a petition in error will be entertained here. City of Tiffin v. Public Utilities Commission, 110 Ohio St. 659, 145 N.E. 32. This case was followed in the case of Travis v. Public Utilities Commission, 123 Ohio St. 355, 175 N.E. 586, in which it was held, in paragraph six of the syllabus, that time is of the essence of these statutes, and whether or not an application is filed within the time required by law becomes a jurisdictional fact.
Sections 543 and 614-43, General Code, were discussed by this court in the case of the Red Eagle Bus Co. v. Public Utilities Commission, 124 Ohio St. 625, 180 N.E. 261, as follows:
"There is an apparent contradiction between Section 543 and Section 614-43, General Code, because the latter section authorizes the filing of an application for rehearing at any time within thirty days after the order is made by the commission. That section further authorizes notice of the rehearing, such notice to state the time and place, and further authorizes additional evidence. The provisions of the latter section confirm the theory that Section 543 can only apply when the order by its terms does not become effective until more than thirty days after the order is made."
These sections can be reconciled. As has been stated by counsel, where a "forthwith" order is made the party aggrieved could not file an application for rehearing under Section 543, whereas Section 614-43 would be available to him for a period of thirty days from the time the order was entered on the record. The commission might issue an order effective in sixty days. By the terms of Section 543 an application could be made at any time before the expiration of the sixty days. The petition in error would, however, have to be filed within the sixty-day period.
The Public Utilities Commission has some procedural rights that must be protected by the court. If no time was fixed in this order, and the proceeding was instituted under Section 543, General Code, then the order became effective by virtue of Section 614-41, General Code, thirty days after service of the order. All the evidence along this line shows that the order was entered on the record of the commission on July 26, 1932; hence the application for rehearing necessarily would have to be filed on or before August 24, 1932. We are of opinion that the application for rehearing of the order of July 26, 1932, came too late when it was filed on August 31, 1932, or thirty-six days after the issuance of the order.
The Public Utilities Commission committed no error in dismissing the application for rehearing, and its order is affirmed.
Order affirmed.
WEYGANDT, C.J., DAY, ALLEN, JONES and MATTHIAS, JJ., concur.
KINKADE, J., not participating.