Central Steam Heat & Power Co. v. Railroad Commission , 192 Wis. 595 ( 1927 )

Vinje, C. J.

The order of the Railroad Commission -was a simple denial of the application. It reads:

“It is therefore ordered that the application of the Central Steam Heat & Power Company for authority to issue securities as amended by letter dated August 17, 1926, herein-before referred to, be and the same hereby is denied.”

The letter of August 17, 1926, is as follows:

“It is contemplated that the present directors of the company will subscribe for $26,000 of the common stock, so that the control of the company will remain in the present directors of the company.”

The findings of the Commission, though not germane to any question involved in the appeal, but as explanatory of its action, are thus fairly summarized by its counsel:

“The Commission found that the amount of the securities would exceed the value of the property; that the projects could not be financially successful; that the securities would not be a safe investment; that the proposed expenditures were excessive; and that the amount of securities to be issued exceeded the amount reasonably necessary therefor.”

The findings required by the statute (sub. (2), sec. 184.09) to be made are as follows: “It shall find and determine the amount of such stock, certificates of stock, bonds, notes, or other evidences of indebtedness, reasonably necessary for the purposes for which the same are to be issued.” And having found these facts, if the proposed issue otherwise complies with the statutes, and there is no showing that it does not, except as to the amount asked, the Commission shall issue “a certificate of authority stating: (a) The amount of such stocks, certificates of stock, bonds, notes, or other evidences of indebtedness reasonably necessary for the purposes for which they are to be issued, and the character of the same; (b) the purposes for which they are to be issued, and (c) the terms upon which they are to be issued.” Sub. (3), sec. 184.09.

It is difficult to conceive of language more simple and more specific both as to what shall be found and as to what the certificate shall contain after the prescribed findings are made. The claim is that plaintiff asked for too large an issue of indebtedness. Granted. What is the statutory duty of the Commission when too large an issue is requested? Plainly to determine the reasonable amount, not to deny the application. The statute places upon the Commission the duty to ascertain the amount of indebtedness that may reasonably be issued against the assets of the public utility. The Commission did not meet that duty in the present case, and the circuit court, under the provisions of sec. 184.16, should have reversed its order as both unreasonable and unlawful because of its failure to comply with the statutory requirement to determine the reasonable amount necessary.

There is no power in the circuit court to direct the Commission to find that a certain amount is reasonably necessary where the Commission has not acted upon that subject at all. Findings that too much is asked; that the project could not be financially successful, or that the securities would not be a safe investment, are findings outside the statutory field, and do not answer the plain calls of the statute. The language used in Wisconsin Southern R. Co. v. Railroad Comm. 185 Wis. 313, 317, 201 N. W. 244, in no way militates against our declaration of the Commission’s statutory duty, and even if it did it could not change the plain terms of the statute or the Commission’s duty under it. It was there said:

“Until the company secures this certificate the bonds should not be issued because the company cannot use the proceeds to build the road, and to permit the company to sell its bonds before it has any power to build the railroad which is to be security for the bonds issued would be contrary to the very clearly expressed legislative intent to give to the Railroad Commission power to protect the people of the state from investing their money in bonds which are not adequately secured.”

• The statute- does provide for security because there must be a finding by the Commission that the amount of securities to be issued is reasonably necessary for the purposes for which they are to be issued. In the absence of such a finding the statutory security would be wanting. Whether such security is in all cases adequate may be doubted, but we need go no further than did the legislature. It stopped when it had provided for a finding that a certain amount of indebtedness may reasonably be issued against the assets of the utility.

By the Court. — The judgment of the circuit court is reversed, and the cause is remanded with directions to the circuit court to remand the case to the Commission to find and determine the amount of common stock, of preferred stock, and of bonds, reasonably necessary for' the purposes for which they are to be issued, and having made such finding to issue a certificate of authority accordingly, and in conformity with the statute.