As the Constitution of Michigan separates legislative,
executive, and judicial powers and plainly forbids giving the
judicial department legislative powers, this Court will not, in the
absence of a decision to that effect by the state court, believe
that the legislature, in establishing a railroad commission and
granting power of review to the courts, intended to clothe them
with power to act in a legislative capacity.
Atlantic Coast
Line v. Prentis, 211 U. S. 210,
distinguished. Under the Michigan Railroad Commission Act, as
construed in the light of the provisions of the constitution of
that state, the function of the supreme court of the state in
reviewing an order of the Commission fixing rates is judicial, and
not legislative, and its final order or decree sustaining a rate
established by the Commission as not confiscatory
Page 235 U. S. 403
is
res judicata, and can be so pleaded in another
action in the federal court to prevent the Commission from
enforcing such rates. Where the state court, in construing a
statute of the state, has held that the establishment of rule
regulating public utility corporations is a legislative function,
this Court, in the absence of a clear decision of the state court
to the contrary, assume that the same principle applies also to
rates.
Michigan Telephone Co. v. St. Joseph, 121 Mich. 502
followed.
In any ordinary, even though judicial, proceeding a party is
bound to present his whole case to the court.
Calaf v.
Calaf, 232 U. S. 371.
Whether the Railroad Commission of Michigan did or did not
exceed its jurisdiction in making order establishing rates, the
supreme court of the state had jurisdiction, and one seeking to
review the orders is bound by the decree of that court.
208 F. 864 affirmed.
The facts, which involve the construction of the Michigan
Railroad Commission Act and the effect of a decree of the supreme
court of the state sustaining orders of the Commission, are stated
in the opinion.
MR. JUSTICE HOLMES delivered the opinion of the Court.
This is a bill brought by the appellant, alleging its railroad
to be wholly within the State of Michigan and subject to the
jurisdiction of the Michigan Railroad Commission, to prevent the
enforcement of two orders of the Commission respectively reducing
certain rates and fixing minimum rates for the transportation of
logs. The contention is that the orders take the appellant's
property without due process of law, contrary to the Fourteenth
Page 235 U. S. 404
Amendment. The bill alleges that, after the passing of the
orders, the appellant brought a bill in the state court upon the
same ground among others; that the testimony before the Commission
was introduced with other additional evidence; that, as provided by
the Michigan statutes, this further evidence was transmitted to the
Commission, which did not modify its orders, and that thereafter
the orders were sustained and the bill dismissed by the state
circuit court, and, on appeal, by the Supreme Court of Michigan.
171 Mich. 335. An application for a preliminary injunction in the
present cause was heard by three judges, as required by the
Judicial Code of March 3, 1911, c. 231, § 266, and on their denying
the writ, an appeal was taken to this Court. The decision below is
reported in 203 F. 864.
The ground of the decision below was that the petitioner was
concluded by the judgment of the Michigan court; and, of course, if
the matter properly can be said to be
res judicata, there
is an end of the case. The argument against its being so is drawn
from
Prentis v. Atlantic Coast Line, 211 U.
S. 210, but the applicability of that decision depends
upon whether the state courts, in the hearings before them, were
acting in a legislative capacity or simply were fulfilling their
ordinary function as courts. In Virginia, the state constitution
itself provided for an appeal from an order by the Commission to
the Supreme Court of Appeals, and gave that body power to
substitute such order as, in its opinion, the Commission should
have made. 211 U.S.
211 U. S. 224.
It is with regard to an order upon such a preliminary appeal that
it is said that, even though issuing from a court, it would not be
a judicial act or effect an adjudication, conclusive if questioned
later in a suit. 211 U.S.
211 U. S.
226-227. But the Constitution of Michigan, Art. II,
separates legislative, executive, and judicial powers, and so
plainly forbids conferring those given by the Virginia Constitution
to the Virginia Supreme Court of
Page 235 U. S. 405
Appeals that, in the absence of a clear decision by the state
court, we should not believe that the legislature attempted to
grant or could grant such powers to the courts of Michigan.
The Michigan statutes, though they may not have a perfectly
clear vision of the distinctions developed in
Prentis v.
Atlantic Coast Line, do not attempt to transgress the limits
that the Constitution lays down. The important provisions are that
any common carrier or other party in interest dissatisfied with the
orders of the Commission may bring a suit in the state circuit
court in chancery to set aside the order on the ground that the
rates fixed are unreasonable, and the court is given power
"to affirm, vacate, or set aside the order . . . in whole or in
part, and to make such other order or decree as the courts shall
decide to be in accordance with the facts and the law."
If different or additional evidence is introduced, the court,
before judgment, is to transmit a copy of it to the Commission, and
the Commission may alter or rescind its order, and is to report its
action to the court, and the judgment is to be rendered as though
the last action of the Commission had been taken at first. Public
Acts 1909, No. 300, § 26. Taking the two provisions together, it
seems plain that the words "such other order or decree" in the
first do not embrace a change in the rates fixed, but only such
other orders or decrees as are incident to an equity cause. If the
order of the Commission is to be modified by fixing a new rate,
that is to be done upon the new evidence by the Commission. This
interpretation not only is the natural one upon the face of the
statute, but avoids the difficulty that otherwise would arise under
the constitution of the state. It is true that the supreme court in
the case cited said that "the duty of the courts in the premises is
not essentially different from that of the Commission" (171 Mich.
346), but we agree with the district court of three judges that
this must be taken to
Page 235 U. S. 406
mean only that it is the same in respect of the inquiry, whether
the rate is confiscatory or not. That the establishment of rules is
a legislative function is recognized in
Michigan Telephone Co.
v. St. Joseph, 121 Mich. 502, 506, and, in the absence of a
clear decision to the contrary, we shall assume that the principle
applies to rates.
The distinction between the judicial function of declaring a
rate unreasonable and the legislative one of establishing a rate as
reasonable is developed in
Louisville & Nashville R. Co. v.
Garrett, 231 U. S. 298;
San Diego Land & Town Co. v. Jasper, 189 U.
S. 439,
189 U. S. 440;
In re Janvrin, 174 Mass. 514. And in
Bacon v. Rutland
R. Co., 232 U. S. 134, it
was held that statutory provisions very like those of Michigan,
under a constitution that in like manner separated legislative,
executive, and judicial powers, gave only the last to the courts.
Of course, when once it is established that the bill in the state
court was an ordinary though statutory judicial proceeding, we must
assume that the plaintiff was bound to present its whole case.
Calaf v. Calaf, 232 U. S. 371,
232 U. S. 374.
Whether the Commission exceeded its jurisdiction or not as it
purported to make orders, the Michigan court had jurisdiction, and
the appellant is bound by its decree.
Decree affirmed.