such rates were promulgated with authority and in accordance with law.58 It follows that where such a regulation is attacked in the courts, the burden rests upon the attacking party to show, by evidence or otherwise, that the regulation is invalid because unjust or unreasonable or otherwise unconstitutional,59 and this rule is most often applied in case of rate regulations which will not be held unreasonable unless clearly shown to be so.60 To this rule there is no dissent, and it reached by an experienced administrative body after a full hearing. Darnell v. Edwards, 244 U. S. 564, 569, 61 L. Ed. 1317. So rates fixed must be regarded as prima facie fair and valid notwithstanding the data upon which the commission acted was insufficient, where the rates were not based entirely upon arbitrary conjecture. Railroad Commission of Louisiana v. Cumberland Telephone & Telegraph Co., 212 U. S. 414, 53 L. Ed. 577. 58 Hooker v. Interstate Commerce Commission, 188 Fed. 242. Presumption overcome where company denied the privilege of being heard. San Diego Water Co. v. San Diego, 118 Cal. 556, 38 L. R. A. 460, 62 Am. St. Rep. 261, 50 Pac. 633. 59 Railroad Commission of Alabama v. St. Louis & S. F. R. Co., 195 Ala. 527, 70 So. 645. If the order is such that reasonable men might well differ as to its correctness, it cannot be said to be unreasonable. Minneapolis, St. P. & S. S. M. R. Co. v. Railroad Commission of Wisconsin, 136 Wis. 146, 17 L. R. A. (N. S.) 821, 116 N. W. 905. 60 Lake Forest Water Co. v. Lake Forest, 249 Ill. 382, 94 N. E. 517; McCook Waterworks Co. v. McCook, 85 Neb. 677, 124 N. W. 100. "The courts, in clear cases, ought not to hesitate to arrest the operation of a confiscatory law, but they ought to refrain from interfering in cases of any other kind. Regulation of public service corporations, which perform VII Priv. Corp.-36 their duties under conditions of necessary monopoly, will occur with greater and greater frequency as times goes on. It is a delicate and dangerous function, and ought to be exercised with a keen sense of justice on the part of the regulating body, met by a frank disclosure on the part of the company to be regulated. The courts ought not to bear the whole burden of saving property from confiscation, though they will not be found wanting where the proof is clear. The legislatures and subordinate bodies, to whom the legislative power has been delegated, ought to do their part. Our social system rests largely upon the sanctity of private property; and that state or community which seeks to invade it will soon discover the error in the disaster which follows. The slight gain to the consumer, which he would obtain from a reduction in the rates charged by public service corporations, is as nothing compared with his share in the ruin which would be brought about by denying to private property its just reward, thus unsettling values and destroying confidences. On the other hand, the companies to be regulated will find it to their lasting interest to furnish freely the information upon which a just regulation can be based." Knoxville v. Knoxville Water Co., 212 U. S. 1, 53 L. Ed. 371. The fixing of rates is purely a legislative function, but whether rates already established are just and reasonable is a question for the court. If is reiterated by statutory provisions in many states. And statutes making the findings of the commission prima facie correct and requiring an objector to show, by clear and satisfactory evidence, that the commission's orders are unjust or unreasonable, are valid.61 Moreover, independently of statute, the attacking party must show the invalidity of the regulation by clear and satisfactory evidence, in order to overcome the presumption,62 since the courts will not interfere where the reasonableness of the regulation is involved in doubt,63 but will ordinarily, at least in case of rate regulations, postpone a final decision until after a sufficient lapse to time to actually test the financial results of such regulation.64 Of course, there may be cases where the rate is so low, upon any reasonable basis of valuation, that there can be no just doubt as to its confiscatory nature; and, in that event, there should be no hesitation in so deciding and in enjoining its enforcement without waiting for the damage which must inevitably accompany the operation of the business under the objectionable rate. But, where the rate complained of shows, in any event, a very narrow line of division between possible confiscation and proper regulation, as based upon the value of the property found by the court below, and the division depends upon opinions as to value, which differ considerably among the witnesses, and also upon the court, in the exercise of its judicial discretion, determines that a rate so fixed is unreasonable, that determination must prevail over any presumption in favor of the ordinance. A court cannot control the discretion of the rate fixing body; it has no power to revise or correct an ordinance fixing rates; it has no authority to substitute its judgment for that of the board. It cannot interfere with the collection of rates established "unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of property for public use without such compensation as under all the circumstances is just both to the company and to the public." Per Mr. Justice Peckham in Willcox v. Consolidated Gas Co., 212 U. S. 19, 53 L. Ed. 382, 48 L. R. A. (N. S.) 1134, 15 Ann. Cas. 1034. See also Spring Valley Waterworks V. San Francisco, 192 Fed. 137, 142; Capital 61 State Public Utilities Commission 62 Missouri Rate Cases, 230 U. S. 474, 57 L. Ed. 1571. The invalidating facts must be established by "definite and convincing proof." Allen v. St. Louis, I. M. & S. R. Co., 230 U. S. 553, 560, 57 L. Ed. 1625. 63 Louisville & N. R. Co. v. Railroad Commission of Alabama, 208 Fed. 35, 42. 64 In cases of doubt, rates fixed by law should not be set aside by the courts but should be given the test of a practical trial. Pennsylvania R. Co. v. Public Service Commission of Maryland, 126 Md. 59, 80, Ann. Cas. 1917 B 1144, 94 Atl. 330. the results in the future of operating under the rate objected to, so that the material fact of value is left in much doubt, a court of equity ought not to interfere by injunction before a fair trial has been made of continuing the business under that rate, and thus eliminating, as far as is possible, the doubt arising from opinions as opposed to facts.65 Whether rates established by a carrier itself are presumptively reasonable was in issue in a recent New York case, in which the court said that "the naked fact that a railroad has established and continued a rate for a limited time does not justify the conclusion that it was profitable," since "it may have been established at an unprofitable figure as the result of miscalculation, compelling competition, or of a policy which was willing to endure temporary losses in the hope that thereby there might ultimately be developed a profitable traffic," and hence "in the absence of proofs showing the circumstances under, and the results with which, these lower rates were established and maintained, no court has the right to presume and hold that they were profitable." 66 Furthermore, even if it be assumed that rates were compensatory when established by a company, the presumption does not arise that they continue to be compensatory.67 § 4561. Introduction of new evidence. Where an order of a public service commission is sought to be set aside or enjoined because unreasonable or for any other reason or to be enforced, the court may and should receive new evidence offered by the complainant which is relevant and material as to the question involved,68 except where the legislature has provided otherwise, either expressly or in effect; and usually, in case of a review provided for by statute, this 65 Per Mr. Justice Peckham in Willcox v. Consolidated Gas Co., 212 U. S. 19, 53 L. Ed. 382, 48 L. R. A. (N. S.) 1134, 15 Ann. Cas. 1034. 66 People v. Public Service Commission, 215 N. Y. 241, 247, 109 N. E. 252, aff'g 159 N. Y. App. Div. 546, 145 N. Y. Supp. 513. 67 People v. Public Service Commission, 215 N. Y. 241, 247, 109 N. E. 252. 68 Interstate Commerce Commission v. Alabama Midland Ry., 168 U. S. 144, 175, 42 L. Ed. 414; Missouri, K. & T. R. Co. v. Interstate Commerce Commission, 164 Fed. 645, 649. The hearing may be de novo and may include the taking and consideration of evidence other than that before the commission. Missouri, K. & T. R. Co. v. Interstate Commerce Commission, 164 Fed. 645. Same rule applies in action to enforce order. Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Ry. Co., 56 Fed. 925, 934. right is expressly conferred at least to a limited extent. On the other hand, where a review is provided for by statute, it is sometimes expressly directed that the court shall receive no new evidence, and such a provision is held not to violate due process of law where the complaining party had an opportunity, after notice of the nature of the order asked for, to offer all competent testimony before the commission.69 In some states, where a review is sought in the supreme court, if new testimony has been discovered or new facts developed that have a material bearing upon the matter, the court may remand the cause to the commission for the taking of further testimony.70 § 4562. Scope of review and grounds for attack. The scope of the review by courts of governmental regulations depends somewhat upon whether or not there is an express statute relating thereto. Of course, if there is such a statute the terms thereof, so far as they are constitutional, are controlling.71 However, there are certain rules independent of statute, and which generally are not affected by any statute, which are well settled as to the scope of review and grounds of attack. For instance, in Minnesota, it is said that the order "may be vacated as unreasonable if it is contrary to some provision of the federal or state constitution or laws, or if it is beyond the power granted to the commission or if it is based on some mistake of law, or if there is no evidence to support it, or if, having regard to the interests of both the public and the carrier, it is so arbitrary as to be beyond the exercise of a reasonable discretion and 69 Washington v. Fairchild, 224 U. S. 510, 56 L. Ed. 863, reviewing Washington statute. A state statute which limits the evidence which can be heard in court to that heard before the public service commission does not violate the due process of law provision. Louisville & N. R. Co. v. Greenbrier Distillery Co., 170 Ky. 775, 187 S. W. 296. A provision in a statute that on a review of the finding of a commission by the court, the latter shall confine itself to evidence introduced before the commission, does not constitute a denial of due process of law, since the court is not bound by the findings of the commission, and the party af fected has the right, on the hearing 70 Seward v. Denver & R. G. R. Co., 71 Fall River V. Public Service Com'rs, 228 Mass. 575, 117 N. E. 915. In Oklahoma, under its Constitution, the Supreme Court, in reviewing the order of the public service commission, sits in a legislative and administrative capacity. In re Intrastate Express Rates, 40 Okla. 237, 254, 138 Pac. 382. 1 judgment." And this statement of the law may be said to represent the view of the courts of this country.73 For example, in respect to rates, the Federal Supreme Court says it is settled that the orders of the Interstate Commerce Commission (and it seems that this applies equally well to orders of state commissions) are final "unless (1) beyond the power which it could constitutionally exercise; or (2) beyond its statutory power; or (3) based upon a mistake of law. But questions of fact may be involved in the determination of questions of law so that an order, regular on its face, may be set aside if it appears; that (4) the rate is so low as to be confiscatory and in violation of the constitutional prohibition against taking property without due process of law; or (5) if the Commission acted so arbitrarily and unjustly as to fix rates contrary to evidence, or without evidence to support it; or (6) if the authority therein involved has been exercised in such an unreasonable manner as to cause it to be within the elementary rule that the substance, and not the shadow, determines the validity of the exercise of the power."74 The scope of the inquiry, it would seem, is the same whether the proceeding is one to enforce the order or one to prevent its enforcement.7 75 Now it is well to take up these grounds of attack, involving the scope of the review, one by one, and consider how far the courts may go in reviewing these regulations. And first, the unconstitutionality of the regulation. Included in this is whether the regulation deprives the company of property without due process of law, which embraces. the question of the reasonableness of the regulation,76 whether the regulation impairs the obligations of any contract, whether the regulation deprives the company of the equal protection of the laws,78 and whether the regulation violates any other provision of the fed eral or state constitutions. In this connection, it is now well settled, to the corporation of a reasonable 72 State v. Great Northern R. Co., 130 Minn. 57, 61, Ann. Cas. 1916 B 1201, 153 N. W. 247, followed in State v. Great Northern R. Co., 135 Minn. 19, 159 N. W. 1089. 73 The right of the courts to review the regulation of rates by a commission is limiting to determining (1) whether the board acted beyond the scope of its authority, or (2) the order is without foundation in the evidence, or (3) a constitutional right has been infringed upon by fixing rates which are confiscatory or so unreasonable as to prevent a return profit on the value of its property used. Chicago, M. & St. P. R. Co. v. State Public Utilities Commission, 268 Ill. 49, 57, 108 N. E. 729. 74 Interstate Commerce Commission v. Union Pac. R. Co., 222 U. S. 541, 547, 56 L. Ed. 308. 75 Missouri, K. & T. R. Co. v. Interstate Commerce Commission, 164 Fed. 645. 76 See §§ 4397-4402, supra. |