DocketNumber： Docket No. 25
Judges： Bird, Brooke, Clark, Moore, Sharpe, Steeee, Steere, Stone
Filed Date： 4/10/1920
Status： Precedential
Modified Date： 10/18/2024
Application was made to the Michigan railroad commission by the Michigan State Telephone -Company for leave to put into effect a new schedule of rates and methods for the telephone service in its Detroit exchange area, which includes the city of Detroit, the villages of Highland Park, Hamtramck, St. Clair Heights, Grosse Pointe, Grosse Pointe Park, Grosse Pointe Farms, Grosse Pointe Shores, River Rouge, Oakwood, Ecorse and some township territory. The schedule proposed a change in the method of furnishing service from a rental basis per line, instrument and equipment to a service basis or charge for each message. There were two exceptions from the message rate, that is, one-party and two-party residence telephones of which there are in round numbers 18,386. All other telephones, numbering about 82,694, were to be on the message basis.
It is the claim of the telephone company that the schedule was necessary to produce a reasonable return on the fair value of the property used. It was claimed that when measured service should be put into effect there would be fewer telephone calls than under the flat rate schedule, and that the improvement of the
It is claimed that in the Detroit exchange the congestion is so great that good service on the flat rate basis is a physical impossibility, but with message or metered rates the situation would be different, so that central would be obtained more quickly and connection made with greater dispatch and the operators be relieved of the work of making a large number of noneffective attempts to complete a connection. It is also claimed the present rate schedule does not produce an adequate revenue; that the company has been unable to pay any dividends, on the $6,000,000 of common stock outstanding since September, 1914. The company claimed that the total present value shown by the appraisal filed by the company is $12,974,937. The city claimed it was less than $8,000,000. The commission found it is $10,913,191.
The taking of testimony was begun before the commission on April 20, 1916, and continued from time to time until April 17, 1917. Twenty-two hundred pages of testimony were taken. Exhibits embodying calculations, computations, comparisons and other figures, comprising hundreds of pages, were also introduced. The greater portion of the testimony related to the valuation of the property; much of it related to the service as given and the necessity of changing to measure or message rates.
Considerable testimony was directed to the service rendered to the Michigan State Telephone by the American Telephone & Telegraph Company and the payment made by the Michigan State Telephone Company to the American Telephone & Telegraph Company therefor. This is the so-called 4%% contract.
On the completion of the testimony the commission had the matter under consideration for several months. Under date of January 30, 1918, it made an order establishing a schedule of rates. At the same time that the order establishing the rate schedule was made, an opinion concurred in by two members of the commission was filed. The conclusions reached by the commission did not agree, except in two particulars, with the claims of either party. As respects the valuations, the findings were between the figures claimed by the respective parties. The commission agreed with the claim of the company as to the contract with the American Telephone & Telegraph Company, and that the rate of return to the defendant company should be 8 per cent.
Before the schedule of rates and the order became effective, the city brought this suit to enjoin the putting of the schedule into effect. The taking of testimony before the trial judge having been concluded, and his conclusions reached, the record was referred back to the commission in pursuance of the statute. The commission declined to change its order in any particular, and wrote a further opinion to show the propriety, of its order. This report being filed, all of the testimony taken before the commission was read in open court and the matter argued and submitted. From a decree setting aside many parts of the order made by the commission the case is brought here by appeal.
It is the claim of the city that because of its so-called home-rule charter that it has the sole power to fix tele
It is the contention of the city that the commission used a wrong method in arriving at the value of the property as a basis for fixing rates. It claimed, and the city offered testimony to show, that the original cost to the present corporation should control. We quote from the brief:
“Deducting this now from the total investment of the Detroit exchange, from which the toll property has already been excluded, we have as the actual investment of this utility in the Detroit exchange, $7,299,-148. This we submit is a fair value upon which the fair return of this utility should be computed.”
As to this phase of the case the trial judge expressed himself in part as follows:
“No matter how much I am impressed with the idea that fair present value cannot be determined under the reproduction cost new — less depreciation method, without considering original cost or actual investment, I cannot in view of the holding in the case of City and County of Denver v. Denver Union Water Co., 246 U. S. 178 (38 Sup. Ct. Rep. 278), decided March 4, 1918, condemn that method and set the order of the commission aside for such reason. In that case the court reaffirmed its approval of the reproduction cost new — ■ less depreciation method of appraisal for rate purposes, saying:
“ ‘There can be no question of the company’s right to adequate compensation for the use of its property employed, and necessarily employed, in the public service; nor can it be doubted that the property must be valued as property in use. * * * What we have said establishes the propriety of estimating complainant’s property on the basis of present market values as to land and reproduction cost, less depreciation as to structures.’
*402 “Such approval there of that method, bars disapproval here, even though were this an original matter before me I would not adopt such method.”
We think the case cited by the learned judge was directly in point and is controlling.'
Another question discussed at great length by counsel called “going value” or cost of establishing the business is regarded as important. The company claimed before the commission that it should be allowed $1,-115,950 as the cost of establishing the business, and the commission allowed $835,215 for this in the rate base. We quote from the opinion of the trial judge:
“The commission «allowed 8% of the value of the tangible property for the cost of establishing the business, the theory being That purely as a matter of value the live going exchange is worth at least as much more than the dormant one as it would cost to put the dormant exchange into the active condition/ This, of course, estimates the cost of establishing the business, not on actual cost to the investors or consideration of whether such cost has been met in the past out of rates collected, but upon a consideration of a theoretical establishing of the business at the time of the appraisal. * * * In the case at bar the cost of establishing the business was not based upon unrequited sacrifices of the investors, nor a consideration of the invested capital, return thereon, expenditures, operating cost, maintenance, financial history of the company, etc., but upon an assumption that because the business is now in operation it would cost $835,215 under existing expense conditions to bring it to its present efficiency point of service. * * *
“The method adopted leaves out all consideration of the actual history of the company, its rates as formerly fixed by itself, its management whether efficient or otherwise, its operating expenses whether proper or not, its expenditures for equipment or extensions whether now in the tangible appraisal or not; its revenue and what has been done with it, and its return to the investors, and instead of finding what sacrifice, if any, the investors have made to produce the utility ser*403 vice before the commission, cost of establishing the business is based upon a fluctuating premise, which has nothing to do with the expense to the company in fact, and is well illustrated in the following question put to Mr. Hagenah and his answer:
“ ‘Q. Of course, if we did this thing over again next year, and your wages had increased 40 per cent., it would give a still higher cost of organizing the business.
“ ‘A. It would tend to increase the amount, yes.’ * * *
“The case at bar shows the need of going into the history of this company. In the first instance, the business now being conducted by the company was not established by it but another company, and the sale on foreclosure to this company did not transfer to this company, so as to have it go into the rate base, the cost to the former company of establishing its business. The same can be said of the purchase of competing companies by this company.
“The intangible value of $835,215 placed in the rate base by the commission is set aside.”
In the brief filed m personam by the railroad commission, its conclusion on this feature of the case is stated in part as follows:
“The learned circuit judge announces that ‘the terms “going value” and “going concern value” and “cost of establishing business” have grown to have the same meaning in rate making cases and will be so treated in this opinion.’ Going, value is perhaps a too broad term to be used accurately in this case. It is often used to define a value resulting from the ability of a business to earn more than a fair return upon the value of the property. No proofs were offered in this matter as to such an element of value and no consideration was- given to it by the commission. It is very apparent that such an element of value should not be considered in a rate making case. The cost of establishing the business as- considered in this case consisted of actual investment of money by the owners, or loss of adequate return during earlier years when the installed plant facilities were in excess of public requirements. The investigation and the proof submitted was confined to the actual elements of utility*404 value which cost the company money to produce and which could be measured in dollars and cents. * * *
“Again, there are the costs attending the organization of competent departmental forces, the teaching and training of operators, the training of expert workmen, etc. Engineers by their observations and experience have come to know that it costs about so much to meet these expenses of establishing business. It is not a cost attaching solely to the early years of the organization but one that follows it through as long as it continues to grow. Each time an extension is made economy requires the prompt establishment of the business in that locality to the full capacity of the installed facilities. Some of the witnesses testified that a term of one and one-half years was required after each installation of plant facilities to complete this establishment of the business. This testimony seems not to have been fully understood by the trial judge.
“These items of cost might have been returned to the owner as dividends prior to the adoption of the accounting system had the earnings of the company been sufficient for that purpose. The dividend record of the defendant company which is a part of the evidence in this case seems to show conclusively that the owners or investors were never so reimbursed. It should be kept in mind in considering this item, as well as all others, that the values of property in this proceeding were being determined, not from records, but by a physical examination of the property, made by men of experience, who testified as to their judgment. It has been well said that after all methods of determining value have been considered, that question is still to be determined by the exercise of judgment. In the absence of records of such disbursements in and about the establishment of the business properly segregated, their amount can only be determined in the same manner that other elements of value are determined, viz.: from the testimony of engineers, who by reason of their long experience and investigations have become experts upon such subjects.”
There was much testimony offered upon each side as to this feature of the case.
Another question which is argued with great earn
“The four-party line service is unreasonable and discriminatory and was so intended by its proposer, the telephone company; the scheme of the company being to drive the four-party line subscribers to take the two-party line service rather than to put up with the annoyance of reporting their letter at each call; having limited service for the flat rate and a measured service beyond two calls a day. It is true that the commission did not adopt the proposal of the company to give but fifty calls a month for the fiat rate but this does not change the purpose the company had in mind.
“The four-party line service was originally installed by the company as a cheap service to attract subscribers and has proved so popular as to overload the lines of the company, and while the old service contracts put a limit on calls per day, the company has, in fact, given unlimited service, but now in an effort to rid itself of a condition it claims is embarrassing to its business, the company wants and expects this new rate and its measured service and regulation to accomplish the end •of forcing subscribers to give up that kind of service and take the two-party line service, or in default thereof pay more for four-party line service than for two-party line if the telephone is used to an extent it should be used to justify having one at all. * * *
“The rate and its measured service for the four-party line telephone is unreasonable and viewed from the standpoint of the two-party line rate and service, having in mind the telephone as something more than a parlor ornament, is in accord with a studied scheme on the part of the company to discriminate so unjustly against the use of the four-party line service as to compel subscribers to go to the two-party line service. •* * * The rate fixed for four-party line service is unreasonable and unjust and is set aside.”
One member of the commission thought the rate fixed was discriminating and should not prevail. The viewpoint of the majority of the commission may be stated as follows:
*406 “An investigation disclosed that nearly 50 per cent, of the patrons in Detroit were being served by what is called four-party line” residence telephones. In other' words, four subscriber stations were being served by one wire and one switch board connection. This class of residence service was designed to give to persons in. Detroit desiring only a limited number of calls per day, a low priced service. The existing four-party line residence rate attempts to limit the calls to two incoming' and two outgoing calls per day. It was not found practical to enforce this rate for reasons fully stated in the record. Under these conditions many persons in Detroit became four-party line subscribers and some of them made very extensive use of their telephones. This excessive use created a congestion of business in the exchange, placed a too great burden upon the operating force and confusion very naturally resulted. It is very necessary that that condition be corrected and the commission conceived it to be within its province to correct it by imposing such conditions and such rates as would leave that class of service open only to the persons for whom it was originally designed, namely, persons having but little use for the telephone. If this four-party line residence rate is to be continued in Detroit for the benefit of those subscribers whose need of service is small and whose ability to pay is limited, it must be closed to those whose service requirements are better fitted by a one- or two-party line. To do otherwise makes it possible for a comparative few to take advantage of this low priced service and so abuse it by excessive use as to practically destroy it and to greatly impair service generally throughout the whole exchange area. The commission’s schedule is designed to make it economical for each patron to select a class best suited to his service requirement.”
Another controverted question grows out of what is known in the record as the 4%% contract. In relation to that phase of the case, the trial judge said in part as follows:
“The Michigan State Telephone Company in 1904 entered into a contract .under which it agreed to pay the American Telephone & Telegraph Company 4%%*407 of its total gross earnings as a consideration for the use of telephone instruments furnished by the American Telephone & Telegraph Company, and it is claimed the latter company agreed to finance, engineer and furnish accounting and legal services under the contract. * * *
“At the time the contract was made in 1904 the American Telephone & Telegraph Company was not a stockholder in the defendant company, but has, since then become owner of about 97 % of its Common stock and something over 50% of its preferred. * :li * The city contends that the American Telephone & Telegraph Company should be paid a fair rental value for its equipment leased to defendant company or held in reserve for it, and no more, when it comes to the matter of rates to be paid by the public. * * * It
claims the telephone instruments were bought by the American Telephone & Telegraph Company from the Western Electric Company, the stock of which is owned by the American Telephone & Telegraph Company; that they.cost the American Telephone & Telegraph Company $2.13 per set in 1915, including a 20% profit to the Western Electric Company, and that a proper rental charge should not exceed forty cents per annum for each instrument. The company claims that the American Telephone & Telegraph Company not only furnishes the instruments, but through its general staff and otherwise renders engineering, accounting, legal and financial services, and keeps abreast of all improvements in telephonic equipment and methods of operation, and that such matters are to the great advantage of the defendant company and in money value exceed all sums paid under the contract. To this the city replies that the contract does not obligate the American Telephone & Telegraph Company to do any of these things. * * *
“The expense of the defendant 'company, arising out of the 4%% contract, and now put on the public in full to meet, brings the public squarely to the point where it may question not only the legality of the contract but as well be heard upon the subject of the amount that in equity and good conscience shall be taken under public authority for the benefit of the American Telephone & Telegraph Company under*408 such contract. Money so exacted from the public for utility service paust bear a true relation to benefits conferred by- the receiver and the public has. an undoubted right to question the expenses the defendant asks be taken care of in the rates the public must pay, and a right to see the contract. * * *
“The ^holding of the commission that this 4%% per annum is a fixed charge and may be collected from rate payers for the American Telephone & Telegraph Company under the contract with the defendant company is set aside and the sum to be collected of the rate payers should be fixed at forty cents per year per set of instruments furnished by the American Telephone & Telegraph Company, including the 3% in reserve.”
The majority of the commission refer to this contract in its opinion and we quote from it:
“The American Telephone & Telegraph Company, itself a large corporation, financed by the issuance of its own securities, and occupying the same relative position to telephone companies of several other States, is able with practicability, to and does maintain extensive laboratories, and offices where careful experiments are constantly being made, designed to produce improvements and economies in the service. It employs engineers, accountants, auditors and others whose services are highly beneficial to telephone companies, whose employment would be impossible to any of these associated companies individually. The cost to any individual company of maintaining a staff of skilled assistants of like character and ability would be prohibitive; yet under this arrangement the Michigan State Telephone Company now has the benefit of all that these men do or produce in the way of improvements, refinements or economies in telephone facilities, service or methods of operation. True the results of the investigations and experiments of these men, once they are achieved may be given to many associated companies as readily as to one, but that does not lessen the value of them to any one of the associated companies.
_ “The Michigan State Telephone Company’s securities are taken and handled by the American Telephone & Telegraph Company at uniformly low interest rates*409 and without large discounts. This service is one, the value and importance of which it is impossible to calculate." Much of its materials and supplies are furnished to it through the Western Electric Company at prices, upon terms and of a quality comparing very favorably with those of other supply houses. These items were considered of such definite importance by Mr. Burch that he very properly took them into consideration in the computation of interest during the period of construction. The same benefits .accruing during that period continue to the company. A lengthy statement of the services and benefits accruing to the Michigan State Telephone Company, through its association with the American Telephone & Telegraph Company, is a part of the proofs in this case. * * *
“The effect of this arrangement is that the State Company is given the benefit of the services of the most efficient engineers, accountants, traffic men, patent lawyers and others possible to secure. They are furnished with certain standard parts of all telephone sets, which are kept in repair for them. They are aided in their financial matters extensively. These are services which the company needs, which are useful to it, inuring to the benefit of its patrons, which, if they could otherwise be had at all, certainly could not be obtained at any less cost than under their contract with the American Telephone & Telegraph Company. It is apparent that this contract should receive the approval of the commission. * * *
“The facilities used by public utility companies are the property of such companies. Their affairs, subject to the restrictions of the law, are subject to the management and control of their governing body. They are at liberty to make contracts, to purchase facilities and property deemed by them to be necessary and proper for the conduct of their business, to finance their.operations according to the dictates of their judg-' ment, and so long as this management is fairly economical and so long as it is honest and does not amount to a fraud upon the public, the commission has no power to interfere. This principle of law is well stated by Justice Brewer in the case of the Interstate Commerce Commission v. Railway Co., 209 U. S. 108 (28 Sup. Ct. Rep. 493), where he says:
*410 “ ‘It must be remembered that railroads are the private property of their owners; that while, from the public character of the work in which they are engaged, the public has the power to prescribe rules for securing faithful and efficient service and equality between shippers and communities, yet in no proper sense is the public a general manager.’
“This same principle is enunciated in Great Northern R. Co. v. Minnesota, 238 U. S. 340 (35 Sup. Ct. Rep. 753), and in Chicago, etc., R. Co. v. Wisconsin, 238 U. S. 491 (35 Sup. Ct. Rep. 869, L. R. A. 1916A, 1133); the supreme court of New York in the case of People, ex rel. Power Co., v. Stevens, 203 N. Y. 7 (96 N. E. 114), said:
“ ‘The discretion of a public service commission cannot override the discretion of the officers of a corporation in the management of its affairs.’
“It follows, in the opinion of the commission, that unless the contracts between the Michigan State Telephone Company and the American Telephone & Telegraph Company, under which certain facilities are furnished and certain engineering, accounting and other services are rendered to the Michigan State Telephone Company and between the Michigan State Telephone Company and the Western Electric Company, under which the applicant company purchases certain of its supplies and materials, amount to a fraud upon the public by reason of the price paid by the Michigan State Telephone Company being excessive, then the disbursements of the Michigan State Telephone Company, in pursuance of these contracts, must be considered legitimate and proper charges upon its revenues. It was made to appear upon the hearing before the commission by Mr. Burch that the prices and terms at which the Western Electric Company furnished property and facilities to the Michigan State Telephone Company were very favorable, that the facilities furnished by the Western Electric Company were a good standard, the world over, and furnish an excellent basis for fixing unit prices.”
The commission made an allowance of 5.6% as depreciation reserve. In relation to that phase of the case the trial judge was of the opinion that there is
The remaining question calling for consideration is the rate of the return that the telephone company is entitled to. The commission thought it should be 8%, while the trial judge thought 7% was sufficient
Before we can solve the important questions involved we must consider the powers conferred upon the commission, and second, how far the court will go .in reviewing the acts of the commission.
The defendant company contends:
“That the making of a rate schedule is a legislative function and that a court cannot exercise such a function. As the court may not make rates itself, neither may it make the rate base, for the rate follows from the establishment of the rate base, almost by mere mathematical calculation. For a court to undertake to establish the rate base is to assume the whole substance of the rate making power, leaving the legislative department but the shadow or empty shell. On a bill filed by the utility to review an order establishing rates, on the ground that the order is confiscatory, ■quite a different situation is presented. There the. court is enforcing a constitutional mandate which is •of higher sanction than the legislative power — a mandate which the court is empowered and which it is its duty to enforce as against the action of the legislative power. On a bill filed by a party other than the utility there is no constitutional mandate to be enforced by-the court. The legislative department is as competent to determine what are just and reasonable rates as is the judicial department. In fact, in point of law, the railroad commission is more competent than a court, as the members are required to have knowledge of traffic and transportation matters as a qualification for their appointment. The commission considers such matters from day to day, while a court has them presented but now and then. For a court to determine*412 that some rate other than that fixed, by the commission is the just and reasonable rate which ought to be charged, is nothing short of a plain substitution of its judgment for the judgment of the commission and a palpable invasion of legislative power. Of course,, what is said here does not apply to questions of law.”
The city contends in substance that every issue which was open before the commission is likewise open before the court; that the court has power and that it is its duty to consider every question of fact and make its determination thereon; that the plaintiff is required but to satisfy the burden of proof, as a plaintiff is always required to do; in short, that there is no substantial function of the commission which the court may not perform and is called upon to perform.
It must be conceded there is a want of uniformity in the decisions of the courts. In the opinion of the trial court the following is stated:
“If any authority outside of the statute and the decisions of the Supreme Court of Michigan is needed, it can be found. The public service commission law of Missouri in its provisions relative to court review is. substantially like ours. In Chicago, etc., R. Co. v. Public Service Commission, 266 Mo. 333 (181 S. W. 61), it was said:
“ ‘At the very threshold of the case we are met with the contention. of coijnsel for respondents to the effect that the findings of the commission, under the act of its creation are final and conclusive upon this and other courts of the State which might he called upon to review its actions. We are not able to lend our concurrence to that contention. * * * The trial in this court is practically de novo. * * * This court under the plain mandate of the statute quoted will consider the entire record, and give to the findings of the commission such weight and consideration as we may deem them entitled to under the law and evidence.’
“Upon a motion for re-hearing it was said:
“ ‘It is urged that we were in error in holding that we would*413 not be bound by the findings of fact made by the commission in this case. The original opinion holds that these cases must be heard as cases in equity. From that opinion we do not desire to depart. The act says that they shall be so heard. That means that we will consider the evidence ds novo. In equitable procedure this court is not bound by the findings of fact made by the chancellor nisi. We may yield to the judgment of the commission on the facts (if the circumstances of the cause appeal to us) as we may yield to the judgment of the chancellor nisi in •equity, upon the facts, but not otherwise.’
“In the case of Lusk v. Atkinson, 268 Mo. 109 (186 S. W. 703), the claim was again made that the court had no power to review the action of the commission, but the court said:
“ ‘The public service commission has no power to expound authoritatively any principle of law or equity. * * * In providing for a review, by the present writ; of the findings and orders of the public service commission, the legislature carefully bore in mind this distinction, and hence, by Section 111 of the constituting act, it provided for a transfer of the final orders and findings of its administrative agency (public service commission) by writ of review, to the circuit court, for the purpose of testing the reasonableness or lawfulness of its actions. * * * The paragraph indicating the scope and method of review thus lodged in the circuit court concludes in the following terms:
“ ‘ “The circuit, courts of the State shall always be deemed open for the trial of suits brought to review the orders and decisions of the commission, as provided in this act, and the same shall be tried and determined as suits in equity.”
“ ‘This latter quotation from the statute is absolutely decisive of the first contention made in support of the action of the public service commission, for it states in expressed terms that the hearing in the circuit court “shall be tried and determined as suits in equity.” It is perfectly obvious that the power of court to review thus provided for in the act of the legislature makes the hearing in the circuit court, as well as the determination of the correctness of its action on an appeal to this court, turn solely on the question of the preponderance of the competent evidence adduced on the original hearing before the public service commission, unaffected, as far as the reviewing courts are concerned, by any conclusions of fact or law arrived at by the public service commission when the matter was undergoing investigation before it. * * * It follow's that the evidence*414 contained in the present record is fully reviewable by us, and the correctness, of the findings of the public service commission and its affirmance by the circuit court, must be tested by the preponderance of proof afforded by the evidence contained in the record.’
“In 1917 the supreme court of Missouri was asked to reconsider its holdings in the two above cases, and Mr. Justice Blair, after calling attention to the commission law, making orders of the commissioner prima, facie lawful and reasonable, and placing the burden of proof upon those seeking to set the order aside, and to show by clear and satisfactory evidence that it is unreásonable or unlawful, expressed his opinion that the conclusions reached in the cases in the 266th and 268th Mo. should be- reconsidered, but the court reaffirmed its former holdings. State, ex rel. Wabash R. Co., v. Public Service Commission, 271 Mo. 155 (196 S.W. 369). * * *
“In determining whether a rate fixed by the commission is unreasonable or unlawful on the facts and circumstances disclosed by the record:
“ ‘The rights of all interested parties should be considered. In such consideration the processes and standards of reasoning and computations that are afforded by law or by common experience, and the dictates of right and justice should be applied.’ Louisville, etc., R. Co. v. Railroad Commission, 63 Fla. 491 (58 South. 543, L. R. A. [N. S.] 189).”
The trial judge continuing said:
“This court does not engage in administrative work, but passes on the merits of the case de novo and forms, its independent judgment with regard thereto, and upon this issue the findings of fact of the commission are not made evidence and are of no binding effect. The rates must not be unreasonable to the public, and when this court is given power to decide such a matter, it follows that such power must be exercised upon a consideration of the evidence and the legal rights involved. The legislature could not deprive either the company or the people of the right of judicial review, by making the finding of the commission final and conclusive as to what are reasonable charges. Even though the statute had been silent upon the subject,*415 the right of judicial review would exist. The legislature could not prevent the court from reviewing the question of whether, the rates are unreasonable.”
A case which arose in this State in relation to railroad rates is considered and discussed in the case of Detroit, etc., R. Co. v. Railroad Commission, 203 Fed. at page 864, and 235 U. S. 402 (35 Sup. Ct. Rep. 126).
An interesting discussion of the principles involved is found in the case of Interstate Commerce Commission v. Railroad Co., 215 U. S. 452 (30 Sup. Ct. Rep. 155). In the case of Interstate Commerce Commission v. Railroad Co., 222 U. S. 541 (32 Sup. Ct. Rep. 108), the following appears in the opinion:
“In determining these mixed questions of law and fact the court coniines itself to the ultimate question as to whether the commission acted within its power. It will not consider the expediency or wisdom of the order, or whether on like testimony it would have made a similar ruling.
“ ‘Tie findings of the commission are made by law prima fade true, and'this court has ascribed to them the strength due to the judgments of a tribunal appointed by law and informed by experience.’ Illinois Cent. R. Co. v. Interstate Commerce Commission, 206 U. S. 441 (27 Sup. Ct. Rep. 700).
“Its. conclusion, of course, is subject to review, but when supported by evidence is accepted as final; not that its decision, involving as it does so many and such vast public interests, can be supported by a mere scintilla of proof — but the courts will not examine the facts further than to determine whether there was substantial evidence to sustain the order.”
In a rate-making case, Louisville, etc., R. Co. v. Garrett, 231 U. S. 298 (34 Sup. Ct. Rep. 48), the court said in part:
“When the legislature, or the body acting under its authority, establishes the rate to be thereafter charged by the carrier, it is the duty of the courts to enforce the rule of law so made unless the constitutional limits of the rate-making power have been transgressed. The*416 rate-making power necessarily implies a range of legislative discretion; and so long as the legislative action is within its proper sphere, the courts are not entitled to interpose and upon their own investigation of traffic conditions and transportation problems to substitute their judgment with respect to the reasonableness of rates for that of the legislature or of the railroad commission exercising its delegated power. It may be assumed that the statute of Kentucky forbade arbitrary action; it required a hearing, the consideration of the relevant statements, evidence and arguments submitted, and a determination by the commission whether the existing rates, were excessive. But, on these conditions being fulfilled, the questions' of fact which might arise as to the reasonableness, of the existing rates in the consideration preliminary to legislative action would not become, as such, judicial questions to be re-examined by the courts. The appropriate questions for the courts would be whether the commission acted within the authority duly conferred by the legislature, and also, so far as the amount of compensation permitted by the prescribed rates, is concerned, whether the commission went beyond the domain of the State’s legislative power and violated the constitutional rights of property by imposing confiscatory requirements. Stone v. Farmers’ Loan & Trust Co., 116 U. S. 307, 331 (6 Sup. Ct. Rep. 334); Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 397-399 (14 Sup. Ct. Rep. 1047); Smyth v. Ames, 169 U. S. 466, 526 (18 Sup. Ct. Rep. 418); San Diego Land & Town Co. v. National City, 174 U. S. 739, 754 (19 Sup. Ct. Rep. 804); San Diego Land & Town Co. v. Jasper, 189 U. S. 439, 466 (23 Sup. Ct. Rep. 571) ; City of Knoxville v. Knoxville Water Co., 212 U. S. 1, 8, 17 (29 Sup. Ct. Rep. 148); Willcox v. Consolidated Gas Co., 212 U. S. 19, 41 (29 Sup. Ct. Rep. 192); Minnesota Rate Cases, 230 U. S. 352, 433, 434 (33 Sup. Ct. Rep. 729). Undoubtedly a State may permit appeals to its courts from the rate-making orders of its railroad commission and, upon the review of such orders, it may expressly authorize its judicial tribunals to investigate and decide questions which otherwise would not belong to them, or even to act legislatively (Prentis v. Atlantic Coast Line Co., 211 U. S. 210 [29 Sup. Ct.*417 Rep. 67]). But the guaranties of the Fourteenth Amendment do not entitle the carrier to the exercise by the courts of such extra-judicial authority.”
In the case of the People, ex rel. New York & Queens Gas Co., v. McCall, 245 U. S. 345 (38 Sup. Ct. Rep. 122), it is said in part:
“The court of appeals of New York decided that the public service commission was created to perform the important function of supervising and regulating the business of public service corporations; that the State law assumes that the experience of the members of the commission especially fits them for dealing with the problems presented by the duties and, activities of such corporations; that the courts in reviewing the action of the commission have no authority to substitute their judgment as to what is reasonable in a given case for that of the commission, but are limited to determining whether the action complained of was capricious or arbitrary and for this reason unlawful; and that it was clearly within the power of the commission to make the order which is here assailed.
“This interpretation of the statutes of New York is conclusive, and the definition, thus announced, of the power of the courts of that State to review the decision of the public service commission, based as it is in part on the decision in Interstate Commerce Commission v. Railroad Co., 215 U. S. 452, 470 (30 Sup. Ct. Rep. 155), differs but slightly, if at all, from the definition by this court of its own power to review the decisions of similar administrative bodies, arrived at in many cases in which such decisions have been under examination. Typical cases are: Baltimore & Ohio R. Co. v. Pitcairn Coal Co., 215 U. S. 481-494 (30 Sup. Ct. Rep. 164) ; Kansas City Southern R. Co. v. United States, 231 U. S. 423, 443-4 (34 Sup. Ct. Rep. 125) ; Louisiana Railroad Commission v. Telegraph Co., 212 U. S. 414, 420-2 (29 Sup. Ct. Rep. 357) ; Interstate Commerce Commission v. Railroad Co., 222 U. S. 541-547 (32 Sup. Ct. Rep. 108), and Cedar Rapids Gas Light Co. v. Cedar Rapids, 223 U. S. 655, 668 (32 Sup. Ct. Rep. 389). * * *
“Corporations which devote their property to a pub-*418 lie use may not pick and choose, serving only the portions of the territory covered by their^ franchises which it is presently profitable for them to serve and restricting the development of the remaining portions by leaving their inhabitants in discomfort without the service which they alone can render. To correct this disposition to serve where it is profitable and to neglect where it is not, is one of the important purposes for which these administrative commissions, with large powers, were called into existence, with an organization and with duties which peculiarly fit them for dealing with problems such as this case presents, and we agree with the court of appeals of New York in concluding that the action of the commission complained of was not arbitrary or* capricious, but was based on very substantial evidence, and therefore that, even if the courts differed with the commission as to the expediency or wisdom of the order, they are without authority to substitute for its judgment their views of what may be reasonable or wise. Since no constitutional right of the plaintiff in error is invaded by the order complained of, the judgment under review must be affirmed.”
In Manufacturers R. Co. v. United States, 246 U. S. 457 (38 Sup. Ct. Rep. 383), Justice Pitney, speaking for the court, used the following language:
“Whether a preference or advantage or discrimination is undue or unreasonable or unjust is one of those questions of fact that have been confided by congress to the judgment and discretion of the commission (Interstate Commerce Commission v. Railway Co., 168 U. S. 144, 170 [18 Sup. Ct. Rep. 45]) and upon which its decisions, made the basis, of administrative orders operating in futuro, are not to be disturbed by the courts except upon a showing that they are unsupported by evidence, were made without a hearing, exceed constitutional limits, ■ or for some other reason amount to an abuse of power. This results from the provisions of sections 15 and 16 of the commerce act as amended in 1906 and 1910 (34 U. S. Stat. 589-591, chap, 3591; 36 U. S. Stat. 551-554, chap. 309), expounded in familiar decisions. Interstate Commerce Commission v. Railroad Co., 215 U. S. 452, 469-470 (30*419 Sup. Ct. Rep. 155); Interstate Commerce Commission v. Railroad Co., 222 U. S. 541, 547 (32 Sup. Ct. Rep. 108); Proctor & Gamble Co. v. United States, 225 U. S. 282, 297-298 (32 Sup. Ct. Rep. 761); Interstate Commerce Commission v. Railroad Co., 227 U. S. 88, 91 (33 Sup. Ct. Rep. 185).”
We quote from the opinion of Justice Canty in Steenerson v. Railway Co., 69 Minn. 353 (72 N. W. 713), as follows:
“While the district court takes the evidence de novo, it cannot put itself in the place of the commission, and try the facts in controversy de novo. The district court can review the findings of the commission only so far as to determine whether or not the rates fixed are so unreasonable as to be confiscatory, just as an appellate court reviews the verdict of a jury for the purpose of determining whether it is so excessive that it cannot stand. Under the statute, the district court should in this case have determined to what extent the rates fixed by the commission should be modified, so that such rates would not be confiscatory, just as an appellate court often determines how much an excessive verdict shall be cut down, so that it may stand for the balance, and a new trial be denied. The court below held that it had no jurisdiction to determine to what extent the rates here in question should be thus modified, and in this it erred. Of course in determining whether the rates fixed are confiscatory, the court must incidentally consider what are reasonable rates, but it must also resolve every reasonable doubt on that question in favor of the findings of the commission.”
We also quote from the opinion of Justice Mitchell in the same case:'
“Courts should be very slow to interfere with the deliberate judgment of the legislature or a legislative commission, in the exercise of what is confessedly a legislative or administrative function. To warrant such interference it should clearly appear that the rates fixed are so grossly inadequate as to be confiscatory and hence in violation of the constitution. It is*420 not enough to justify a court in holding a rate "unreasonable,’ and hence unconstitutional, that if it was its province to fix rates, it would^in its judgment have fixed them somewhat higher. Any such doctrine would result, in effect, in transferring the power of fixing rates from the legislature to the courts, and making it a judicial, and not a legislative function. When there is. room for a reasonable difference of opinion in the exercise of an honest and intelligent judgment, as to the reasonableness of a rate, the courts have nought to set up their judgment against that of the legislature or of a legislative commission. In my opinion, it is only when a rate is manifestly so grossly inadequate that it could not have been fixed in the exercise of an honest and intelligent judgment that the courts have any. right to declare it to be confiscatory. This seems to be substantially the doctrine suggested in Spring Valley Water Works v. Sehottler, 110 U. S. 347-354 (4 Sup. Ct. Rep. 48), which, so far as I can discover, is the first case in which that court suggested any modification or limitation of the doctrine of the so-called ‘Granger Cases.’ And I think it is the doctrine which the courts must finally settle down on, unless they are prepared to assume the function of themselves fixing rates.”
We quote from the opinion in State v. Railway Co., 130 Minn. 57 (153 N. W. 247, Ann. Cas. 1917B, 1201) :
“The principles on which the court acts in determining whether or not an order of the commission is reasonable, have been the subject of much controversy, but the law on that subject is now pretty well settled. The legislature never intended that the court should put itself in the place'of the commission, try the matter anew as an administrative oody, substituting its findings for those of the commission. A statute which so provided would be unconstitutional as a delegation to the judiciary of nonjudicial powers. Steenerson v. Railway Co., 69 Minn, 353, 375 (72 N. W. 713) ; Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 226 (29 Sup. Ct. Rep. 67); Oregon, etc., Nav. Co. v. Fairchild, 224 U. S. 510, 527 (32 Sup. Ct. Rep. 535) ; Bacon v. Railroad Co., 232 U. S. 134 (34 Sup. Ct. Rep. 283) ; Detroit, etc., R. Co. v. Railroad Commission, 235 U. S.*421 402 (35 Sup. Ct. Rep. 126). The making of regulations which require a carrier to afford proper transportation facilities to the public, is legislative or administrative and not judicial in its nature. State v. Railway Co., 123 Minn. 463 (144 N. W. 155). The courts must not usurp legislativé or administrative functions by setting aside a legislative or administrative order on their own conception of its wisdom. Interstate Commerce Commission v. Railroad Co., 215 U. S. 452, 470 (30 Sup. Ct. Rep. 155). In Steenerson v. Railway Co., 69 Minn., 353, 375 (72 N. W. 713, 716), a rate case, this court, in construing the statute then in force, which was broader than the one now in force, held that it was the intention of the legislature that the court on appeal should ‘review the findings of the commission in the same manner as the appellate court reviews the findings of the jury on a trial in the court below. And for this purpose the court may “examine the whole matter in controversy, including matters of fact, as well as questions of law,”5 but that the district court can review the findings of the commission only so far as to determine whether or not the rates fixed by the commission are reasonable. This presents a situation-somewhat anomalous in that the court may receive evidence in order to determine whether findings of fact are sustainable, but we can conceive of no other fair construction of this statute that will at the same time confine the court within its constitutional powers. The court, on appeal from the order of the commission, must distinguish, then, between the legislative power to establish regulations and the judicial power to determine upon the reasonableness of regulations already established.”
In Minneapolis, etc., R. Co. v. Railroad Commission, 136 Wis. 146 (116 N. W. 905, 17 L. R. A. [N. S.] 821), we find the following language in the opinion:
“The commission has the charge' and determination of interests vast in amount, delicate and complicated in their legal and economic relations, affecting the happiness and prosperity of all the people of the State, and involving the consideration and protection of private rights of the most sacred character. Experience*422 tends to show that public officers, as well as private citizens, are apt to rise in character and dignity to meet great responsibilities, but to shift responsibility where opportunity of shifting is easily afforded and thereby to deteriorate in efficiency and in character. Besides this, the work of the commission requires much expert knowledge of the difficult subject of transportation and rates, the consideration and application of economic as well as legal principles, and an intimacy with local and State traffic conditions. Consequently, unless required to do so by the mandate of law, the circuit courts should interfere as little as they may with the determinations and the work of the railroad commission. But courts, too, are bounden to duty, and cannot throw off at will that which is imposed upon them by law fairly construed and properly understood. * * *
“If this court or the circuit court were by the statute in question authorized to investigate the subject anew, to put itself in the place of the commission and search for this reasonable and just rate, with power to substitute its own judgment of what is reasonable and just for the judgment of the commissioners, the statute might be subject to grave criticism. But the courts are not by this statute so authorized. The authority given to the circuit court is not to search for or disclose or declare this ‘reasonable and just’ rate or' service, but merely to determine whether the order of the commission is ‘unreasonable’ — quite a different thing. We think the legislature was within its power in _ conferring upon the- courts such authority to inquire whether or not the order of the commission was unreasonable and to vacate the order if so found. In doing so the courts are required to exercise no legislative power, to ascertain and disclose no rates, to declare no rule or no law unreasonable, but merely to exercise judicial power to ascertain and determine whether the commission has so far failed in its search for this lawful, just and reasonable rate as to have found instead and declared that which is unreasonable. The result of the reversal of the order of the commission is not to establish this fact or ascertain this point of reasonableness, but to leave it undisclosed, leaving the former rates to stand or requiring the commis*423 sioners to try ovep again and find it. In reviewing the order of the railroad commission the inquiry is not whether the rate, regulation, or service fixed by the commission is just and reasonable, but whether the order of the commission is unreasonable or unlawful. The nature of the inquiry is changed at this point, and the court is not investigating for the purpose of establishing a fixed point. Whether or not the order is within the field of reasonableness or outside of its ‘boundaries, is the question for the court. It is quite a different question from that which was before the commission in this respect. The order being found by the court to be such that reasonable men might well differ with respect to its correctness cannot be said to be unreasonable. From this aspect it is within the domain of reason, not outside of its boundaries. This is the viewpoint of the reviewing court. Doubtless the court may, for the purpose of comparison and to aid it in ascertaining how far the order diverges from a reasonable standard, take evidence of and consider such criterion. But this is only for comparison. The court cannot legally adjudicate or declare this statutory standard.
“Unless the plaintiff is able to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be, the order must stand. The words ‘clear and satisfactory evidence’ are significant, because at the time of the enactment of this statute they were used in the law of this State to déscribe a degree of proof greater than a preponderance of evidence and such as was necessary in order to establish fraud by that party to an action upon which, the burden of proof rested. Bannon v. Insurance Co., 115 Wis. 250, 258 (91 N. W. 666) ; Shaw v. Gilbert, 111 Wis. 165 (86 N. W. 188); Dallman v. Clasen, 116 Wis. 113, 117 (92 N. W. 565) ; Harrigan v. Gilchrist, 121 Wis. 127, 313 (99 N. W. 909). * * *
“Patience on the part of the public and on the part of the carrier, and time, will be necessary. The notion that commissions of this kind should be closely restricted by the courts and that justice in our day can be had only in courts is not conducive to the best results. Justice dwells with us as with the fathers, it is*424 not exclusively the attribute of any office or class, it responds more readily to confidence than to criticism,' and there is no reason why the members of the great railroad commission of this State should not develop and establish a system of rules and precedents as wise and beneficent within their sphere of action as those established by the early common-law judges. We find the statute well framed to bring this about.”
In Citizens Telephone Co. v. Railroad Commission, 157 Wis. 498 (146 N. W. 798), it is said:
“In determining the correctness of the trial court’s finding of fact upon the evidence adduced, the nature of the proceeding and statutes governing it must be considered. In an action to set aside the order of the railroad commission ‘the burden of proof shall be upon the plaintiff to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable.’ *• * * Sections 1797-16, Stats. 1913. An examination and study of the evidence in the case convinces us that the circuit court erred in holding that the plaintiff has shown ‘by clear and satisfactory evidence that the order of the commission * * * is unlawful.’ The inquiry before the circuit court and the principles that must guide it in a review of an order made by the commission were declared in the case of Minneapolis, etc., R. Co. v. Railroad Commission, 136 Wis. 146, 165 (116 N. W. 905), and is applicable here. It is there said:
“ ‘In reviewing the order of the railroad commission the inquiry is not whether the rate, regulation or service fixed by the commission is just and reasonable, but whether the order of the commission is unreasonable or unlawful.’ * * *
“The plaintiff failed to show ‘by clear and satisfactory evidence that the order of the commission is unlawful/ and the circuit court erred in awarding judgment vacating the order.”
In Menasha Woodenware Co. v. Railroad Commission, 167 Wis. 19, 26 (166 N. W. at page 438), it is said:
“The commission by a majority of its members, found the existence of all of the above-mentioned es*425 sential conditions, and hence made the order complained of. In these actions brought to vacate that order, under section 1797-16, Stats. Wis., the court does not try these questions of fact like a court of first instance; it only determines whether the order of the commission is ‘unlawful or unreasonable,’ and upon this question the burden of proof is upon the plaintiff to show the fact by clear and satisfactory evidence. As well said by the late Mr. Justice Timlin in the_ case of Minneapolis, etc., R. Co. v. Railroad Commission, 136 Wis. 146 (116 N. W. 905, 17 L. R. A. [N. S.] 821):
“ ‘Whether or not the order is within the field of reasonableness, or outside its boundaries, is the question for the court. It is quite a different question from that which, was before the commission in this respect. The order being found by the court to be such that reasonable men might well differ with respect to its correctness cannot be said to be unreasonable.’
“See, also, Citizens’ Telephone Co. v. Railroad Commission, 157 Wis. 498 (146 N. W. 798).”
We do not need to go outside of the statutes and decisions of this State to find the law applicable to and controlling of the questions involved in the case before us. By Act No. 300 of Public Acts of 1909 (2 Comp. Laws 1915, § 8109 et seq.), the legislature created the Michigan railroad commission and gave it certain powers over the various railroad companies of the State. Some of the provisions of this act have been the subject of judicial determination and a reference to the opinions in those cases will be helpful here. By Act No. 206, Public Acts of 1913 (2 Comp. Laws 1915, § 6689 et seq.), the legislature gave to the railroad commission certain powers with reference to the telephone lines of the State. In section 3 of the act is found the following language:
“All charges made for any service rendered, furnished or performed, or to be rendered, furnished or performed within the State by any telephone company shall be reasonable and just, and every unjust and unreasonable charge for such service is prohibited and*426 declared to be unlawful; and the commission shall have power to make, alter, amend or abolish any rate or charge for any service, and may regulate by rules or orders any service or facility.” * * *
It may be said, parenthetically, the words “and may regulate by rules, or orders any service or facility” are broad enough to justify the schedule of rates as applied to the four-party lines, if in the judgment of the commission this schedule would relieve the congestion of the telephone lines generally, and do away with the physical impossibility to give good service — would improve the service. As every user of a telephone on the four-party line is given the same rate, and everyone having a telephone on the two-party line pays the same rate as everyone else having a telephone on that line, it cannot be said the rate is discriminatory.
Section 4 of the act makes unjust discrimination and rebating unlawful. Section 12 provides for the hearing by the commission of any complaint against the telephone company. Section 14 provides for the commencement of a proceeding in chancery to vacate or set aside any order made by the'commission, “the hearing thereof and the same shall proceed, be tried and determined as other chancery suits.” Section 17 provides for an appeal of the case to the Supreme Court. Section 18 reads:
“In all actions under this section the burden of proof shall be upon the complainant to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.”
As long ago as 1899 in Michigan Telephone Co. v. City of St. Joseph, 121 Mich. 502 (47 L. R. A. 87), Chief Justice Grant, speaking for the court, said:
“It is conceded by the learned counsel for both parties that that part of the decree by which the court assumed the right to establish reasonable rules and reg*427 ulations is void. This is a legislative or administrative function, and not a judicial one. The court has power to put the proper authorities in the defendant city in motion to adopt reasonable rules and regulations, and to pass upon the validity of such action when taken. This is the extent of its authority. Houseman v. Kent Circuit Judge, 58 Mich. 364; City of Manistee v. Harley, 79 Mich. 238. Other courts recognize the same rule. Reagan v. Trust Co., 154 U. S. 362 (14 Sup. Ct. Rep. 1047) ; Appeal of Norwalk St. Ry. Co., 69 Conn. 576 (37 Atl. 1080, 38 Atl. 708, 39 L. R. A. 794) ; Nebraska Telephone Co. v. State, 55 Neb. 627 (76 N. W. 171, 45 L. R. A. 113).”
In Michigan Cent. R. Co. v. Wayne Circuit Judge, 156 Mich. 459, it is said:
“We do not construe the provisions- of this act to lodge in the courts the power to establish rates. The power conferred upon the courts, is solely to determine whether the rates are confiscatory or unreasonable. If the courts should so find, they are not authorized to determine what are reasonable, but the matter must again be referred to the commission to establish other rates.”
In Michigan Cent. R. Co. v. Railroad Commission, 160 Mich. at p. 368, it is said:
“This brings us to the question as to whether or not there was any evidence before the commission tending to show that the rates theretofore in effect were unreasonable. It should be borne in mind that undér the statute all'the rates fixed by the commission are prima facie lawful and reasonable, and that the burden of proof was upon the railroads to show by satisfactory evidence that the order was unreasonable. It was well said by the court in Missouri, etc., R. Co. v. Interstate Commerce Commission, 164 Fed. 650:
“ ‘In approaching the consideration of a case like 'this, the conrt should start with the presumption that the order is valid, and was made after careful consideration and correct determination of every question of fact underlying it, and it should he accorded that respect and influence which ought to attend, and does attend, the action of a legislative or administrative hoard, whose*428 members are, in point of ability, learning and experience specially qualified to determine such matters. In short, the burden of showing that the facts are such as to render the order invalid rests upon the carrier assailing it, and unless the case made on behalf of the carrier is a clear one, the order ought to stand.’
“There is no doubt that had the railroad companies offered in evidence before the commission many things that were peculiarly within their knowledge, the commission would have been greatly assisted. But as they saw fit to offer no testimony there, nor on the hearing of the case, after a reading of the testimony offered before the commission, we are clearly of opinion that there was evidence before that body upon which it was justified in making the order.”
In Detroit, etc., R. Co. v. Railroad Commission, 171 Mich. 335, Justice Ostrander, speaking for the court, said:
“We apprehend that the words ‘reasonable and just’ in the statute do not mean nonconfiscatory, as the word ‘confiscatory’ is usually defined. The legislature has not fixed the freight rates to be charged by complainant beyond this: It has prohibited and made unlawful every unjust and unreasonable charge. It permits reasonable and just rates to be charged for services performed. It has confided to the Michigan railroad commission the power, with the duty to ascertain, in proper cases, whether a rate is reasonable and just or unreasonable and .unjust, and to thereupon make an order in conformity with the facts. The facts being found, it is the legislature which speaks, approvingly or disapprovingly as the case may be. The important business of the commission with respect to rates is ascertaining facts. Its. findings are not conclusive, but have the effect of establishing prima facie that the rates considered are reasonable and just and therefore lawful, or are unreasonable and unjust and unlawful. Its orders stand until modified or set aside by it or by the courts. The duty of the courts in the premises is not essentially different from that of the commission. No different conclusion was stated in Michigan Cent. R. Co. v. Wayne Circuit Judge, 156 Mich. 459 (16 Ann. Gas. 832). It is only after determining that the rate*429 fixed by the commission is unreasonable that the court may set it aside. Presumptively, the findings and orders of the commission are right. If attacked, the complainant has the burden of showing ‘by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.’ ”
In Re Briggs, 178 Mich. 28, Justice STONE, speaking for the court, said:
“The jurisdiction of the circuit court, in chancery, in the instant case was strictly statutory, and it was not exercising its general equity jurisdiction, as in ordinary chancery cases. By the provisions of section 12 of Act No. 138, Public Acts of 1911 (3 How. Stat. [2d Ed.] § 7233), William L. Jones, being dissatisfied with the order of the railroad commission, had the right to commence an action in the circuit court, in chancery, against the commission as defendant, to vacate and set aside such order as unreasonable, and on leave of the court the Cass County Home Telephone Company might intervene as a defendant as. it did. Clearly there is no general equity jurisdiction in the circuit court, in chancery, to declare an. order ¡of a commission or body unreasonable. . The entire proceeding in the circuit court, in chancery, was statutory, and the court was not acting in the exercise of its general equitable jurisdiction.
“By the provisions of section 16 of the act the orv.er of the railroad commission was prima facie lawful and reasonable, and should have been continued in force pending the chancery suit, and the burden of proof was upon the complainant in that suit to show by clear and satisfactory evidence, that the order of the commission complained of was unreasonable. Michigan Cent. R. Co. v. Railroad Commission, 160 Mich. 355.”
It is said that in the 1913 act there is no provision that the order of the commission shall be, prima facie, lawful and reasonable. A reference to the provisions of section 18 of the 1913 act which has already been quoted, will show that this contention is a distinction without a difference.
“The_ interest of the public in a proper regulation of public service corporations is continually becoming more vital and important, and any action of the State through its organized boards and commissions in the exercise of that power should not be set aside by the courts, except in instances of the clearest necessity. This is the view taken by the legislature. Section 18 (2 Comp. Laws 1915, § 6706) of the act explicitly declares that:
“ 'In all actions under this section the burden of proof shall be upon the complainant to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.’
“What rates would be required to prevent the surrender of complainant’s telephones by such residents and business houses of the city as now employ them is not shown by the record. Nor is it shown that an adjustment of rates, tolls and charges by the commission under its powers as we have construed them could not be so made as to obviate the injurious results which complainant apprehends from an enforcement of the order. And from the very nature of the order it is within the power of the commission to rescind it if it is found to operate unduly to complainant’s injury.”
In Traverse City v. Railroad Commission, 202 Mich. 580, Justice Steere, speaking for the court, said:
“The status of telephone companies, recognized at common law as analogous to common carriers, and sometimes held to be such, is settled in this State by the statute so classifying them. That the State may regulate charges of common carriers, and the power to fix the rates which they may charge the public for their services is a legislative and not a judicial function, is now elemental; the judicial function, or power of the courts, being limited to determining whether any particular rate fixed by the legislature or its duly authorized agency is reasonable or otherwise.”
The printed record contains more than 2,000 pages. The commission, the trial judge and this court were aided by oral arguments and carefully prepared printed briefs. The briefs in this court contain more than 700 pages with many authorities cited. The testimony covered every possible phase of the case; as might be expected the experts did not agree and it is impossible to reconcile the conflicting testimony. The commission gave the parties in interest a long and patient hearing. The commission was not agreed in all respects, but a majority of them fixed a schedule of rates that they deemed just and reasonable. If the schedule of rates had been put to actual test and had been found to be unjust and unreasonable the commission had the right, and it would be its duty, to so change them that they would not be unjust and unreasonable.
There are other questions raised by the record and discussed by counsel which have had our careful con
A careful consideration of this voluminous record, of'the briefs and oral arguments of counsel, convinces us that the complaining party has not met the burden put upon it by section 18, Act No. 206, Pub. Acts 1913, “to show by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable.”
The decree of the court below is reversed and the bill of complaint is dismissed with costs in favor of the defendant.