West Central Producers Co-Operative Ass'n v. Commissioner of Agriculture

20 S.E.2d 797, 124 W. Va. 81, 1942 W. Va. LEXIS 50

• Court: West Virginia Supreme Court
• Decided: February 24, 1942
• Docket: 9313
• Status: Published

Opinions

Fox, President:

The West Central Producers Co-Operative Association, hereinafter called “West Central,” prosecutes this appeal from an order of the Commissioner of Agriculture, hereinafter called “Commissioner,” entered on the 14th day of August, 1941, refusing to grant to it a permit to operate a public market at Lamberton, in Ritchie County. The action taken by the Commissioner was based upon an application for such permit filed by West Central, a protest on the part of the Ritchie County Livestock. Sales Company, operating a public market at the same point, and hereinafter called “protestant,” and a hearing held upon the issue raised thereby.

West Central was organized under the provisions of article 4, chapter 19 of the Code, and its powers, as defined by said section, include the right to “engage in any activities in connection with the marketing, selling * * * of any agricultural products produced or delivered to it by the members or purchased or received by consignment from other persons. * * It contends that under this grant of power, it has the right to conduct a public market independently of the Public Marketing Act, Chapter 2, Acts of the Legislature of 1939, and explains its action in applying for a permit under said last mentioned act by its desire to avoid the risks and penalties involved in the violation thereof by operating such a market without such permit.

On the other hand, the protestant contends that a public market can only be operated under the provisions of the 1939 act, section 4 of which reads as follows:

“It shall be unlawful for any public market to be operated in this state without first having obtained from the Commissioner of Agriculture of West Virginia a permit therefor. Upon the filing of an application for such permit, the Commissioner shall fix a time and place for hearing thereon, and, after hearing, if it appear that the public interest require the same, and that there is sufficient need for the market in the locality in which it is proposed to be established, shall grant such permit, or deny the same if the contrary appear.”

It is also contended by the protestant that Code, 19-4-4, applying to cooperative associations, does not cover the operation of a public market, and that under the section quoted above, the Commissioner was vested with full power to pass upon the granting or refusal of a permit, so long as such power was not exercised in an improper, arbitrary or capricious manner. To these contentions, the applicant replies that the grant of the power to the Commissioner, even if intended by the Legislature, was an unconstitutional exercise of its authority in that it made an unlawful delegation of legislative powers to the executive department of the state government. The fact that the Commissioner is a constitutional executive officer is urged as differentiating him from the appointive officials of the State, to whom administrative powers are frequently granted by the Legislature, as in instances affecting the Tax Commissioner, the Public Service Commission and other administrative boards and officials.

Any question of fact as to the public interest involved, or the need for the additional public market at Lamber-ton, is foreclosed here by the finding of the Commissioner. This Court, in analogous cases, has many times held that findings of fact by an administrative board or official will not be disturbed on appeal to this Court. We do not interfere with orders of such boards or officials, following a hearing, except where, they have gone beyond their statutory powers, exercised unconstitutional powers, or based their action on a mistake of law. United Fuel Gas Co. v. Public Service Commission, 73 W. Va. 571, 80 S. E. 931; Pittsburgh & West Virginia Gas Co. v. Public Service Commission, 101 W. Va. 63, 132 S. E. 497; City of Huntington v. Public Service Commission, 101 W. Va. 378, 133 S. E. 144; Anchor Coal Co. v. Public Service Commission, 123 W. Va. 439, 15 S. E. 2d 406. Therefore, if the Commissioner had constitutional right to exercise the powers attempted to be vested in him by the act of 1939, and such powers were exclusive as to the right of citizens, associations and corporations who operate public markets, then his holding must be upheld. On the contrary, if West Central had the right to operate a public market under Code, 19-4-4, and that right was not affected or destroyed by Chapter 2, Acts 1939, then the action of the Commissioner, so far as it affected the right of West Central to operate a public market, must be reversed.

We do not think the cooperative association statute, Code, 19-4, was intended to cover or authorize the operation of public markets. True, the language of section 4 of article 4 of said statute is broad in that it covers “any activities in connection with the marketing * * * of any agricultural products,” but Code, 19-2, in effect prior to the enactment of Chapter 2, Acts 1939, covers markets, and in section 3 thereof provides for auction markets, and the Commissioner is given power to regulate them, and authorized to license auctioneers to conduct sales at such markets. It is quite evident that this statute was intended to provide for the public sale of agricultural pro ducts, and on this premise, it may be argued that the Legislature did not intend that public auction markets should be authorized under another article of the same chapter. In the session of 1939, chapter 2, the Legislature enacted a comprehensive statute on the subject of public markets, which we understand was intended to supersede article 2, chapter 19 of the Code. Section 3 of Chapter 2 of the Act provides: “No public market shall hereafter be operated in this state by any person, partnership, firm, association, or corporation except in accordance with the provisions of this act.” Section 5 of the act impliedly recognizes the existence of public markets. It provides: “All public markets in bona fide operation during the year one thousand nine hundred and thirty-eight, shall, on application and proof of such operation, be granted such permit by the Commissioner.” Therefore, existing public markets, however established, could, under these sections, continue to operate only by obtaining a permit as provided therein. The act of 1939 expressly repeals all acts and parts of acts inconsistent therewith, and so it is that whatever rights may have existed to operate a public market either under article 2 and 4 of chapter 19 of the Code, or otherwise, were merged in Chapter 2, Acts 1939, and were protected by that act. As we see the matter, West Central must stand or fall under the act of 1939, if the same be constitutional, because its claim to establish a public market was asserted after the passage of that act, and in view of the actual findings of the Commissioner against it, it is not in any event entitled to a permit, and is not entitled to operate under Code, 19-4. This brings us to the decisive question in the case, which is the constitutionality of Chapter 2, Acts 1939, and particularly section 4 thereof.

West Central raises the question of the constitutionality of the act for the first time in this Court, and protestant contends that it cannot do so on two grounds: (1) that as a general rule, questions of the unconstitutionality of an act cannot be raised for the first time in an appellate court; and (2) that, having applied for a permit under the act, it is estopped to deny its legality under the constitu tion. We do not think either position is tenable. The question of the constitutionality of the act is a judicial one, and, under the applicable statutory procedure, the first opportunity West Central' had to raise the question was in this Court. Certainly the Commissioner did not possess power to pass upon that question. If this were a case coming here on appeal or writ of error from a court possessing judicial power, the authorities cited by protestant would be persuasive; as it is, we do not think they apply. As to the asserted estoppel, we do not think West Central was called upon to assume the risks of the fines and penalties provided in the act against operating a public market without a permit thereunder. These penalties, as provided by section 19 of the act of 1939 are severe, being not less than fifty dollars for the first offense and not less than four hundred dollars for the second offense. It could avoid them by temporarily waiving its claimed right to operate under its charter, and at a cost of ten dollars apply for a permit under the 1939 act. We think it had a right to do so without waiving any rights it might claim to possess under other statutory law. There is, of course, much authority for the proposition that a party who has taken benefits under an act is estopped from contesting its validity, but there are exceptions to this general rule. “The most important and frequent class of exceptions to the general doctrine of waiver or estoppel to assert the invalidity of a law is that where a statute requires a duty which is mandatory in form, accompanied by penalties for failure to obey its provisions, or is otherwise coercive. In such cases the element of voluntary action essential to waiver or estoppel is absent.” 11 Am. Jur. 771, sec. 124. There can be no estoppel where the conduct relied upon as establishing the same is brought about through coercion, and we think the severe terms of the statute operated to compel West Central to seek a permit thereunder, and that, in the circumstances, it was not estopped to deny, thereafter, the right of the Commissioner to prevent it from operating its market, that being the legal effect of his order. In Buck v. Kuyken dall, 267 U. S. 307, 45 S. Ct. 324, 326, 69 L. Ed. 623, 38 A. L. R. 286, Justice Brandeis discussed this matter in the following language:

“The argument is this: Búck’s claim is not that the department’s action is unconstitutional because arbitrary or unreasonable. It is that section 4 is unconstitutional because use of the highways for interstate commerce is denied unless the prescribed certificate shall have been secured. Buck applied for a certificate. Thus he invoked the exercise of the power which he now assails. One who invokes the provisions of a law may not thereafter question its constitutionality. The argument is unsound. It is true that one cannot, in the same proceeding, both assail a statute and rely upon it. * * * Nor can one who avails himself of the benefits conferred by a statute deny its validity. * * * But in the cáse at bar, Buck does not rely upon any provision of the statute assailed; and he has received no benefit under it. He was willing, if permitted to use the highways, to comply with all the laws relating to common carriers. But the permission sought was denied. The case presents no element of estoppel.”

This principle disposes of the further question raised as to the assumption of inconsistent positions.

West Central contends that Chapter 2, Acts of the Legislature of 1939, is unconstitutional in that there is an unlawful delegation of legislative powers to an executive officer of the state government. The principal ground on which this position is based is that the delegation of powers is not accompanied by a statement of policy and fixed standards by which the delegated powers may be exercised. In Chapman v. Housing Authority, 121 W. Va. 319, 3 S. E. 2d 502, we held:

“Of course, delegation of discretionary power to an administrative body 'must be accompanied by adequate standards, either prescribed by statute itself or inherent in the subject-matter of the legislation, sufficient to guide its exercise. Otherwise, it will be violative of Art. V of the West Virginia Constitution.”

But in that case, we upheld the act and went so far as to base our action upon standards fixed by an Act of Congress, on which the act of the Legislature under attack was based. The act under attack in this case states a legislative policy. By section 2 it provides:

“All public markets, as defined in section one, are hereby declared to be affected with a public interest and subject to regulation by the state for the general welfare as in this act provided.”

And a public market is defined as:

“* * * any piace 0f business where livestock, poultry, and other agricultural or horticultural products are received and sold at public auction.”

The act goes into detail as to the licensing of weighmen and auctioneers, fees, grading, classification and standards, inspection, keeping records, and charges the Commissioner with enforcement of the act with full authority and power to make rules and regulations necessary to carry out its provisions. No question seems to be raised affecting the validity of the act, except as to section 4 thereof, and as to that section, it is contended that no standard is set up which controls the Commissioner in determining what the public interest may require or the need for a market in any locality.

This raises the question as to whether, in determining the matter of reasonable standards, we shall consider the act as a whole or single out a particular section. We think it fair to say that aside from section 4, the standards set up are sufficient to support the delegation of the legislative power, and the question we must decide is whether, as to section 4, even if the provision for a hearing does not provide an adequate standard, the power delegated is of such nature as to lend itself to any fixed or additional standard of state-wide application for its exercise. If it does not, then we would not be justified, as a practical matter, in striking down the entire act, merely because no rule or standard could be set up governing a matter of what is or is not the public interest. The subject matter of the legislation being one which can be covered by general law, the Legislature would be without power to pass a special act granting a permit.to operate a public market. Constitution, Article VI, Section 39. Therefore, if the attempted delegation of power is unconstitutional we have reached an impasse. We do not think that we are called upon to reason ourselves into this state of utter helplessness. Rather, we prefer to solve the problem from a practical standpoint and resolve doubts in favor of legislative interpretation of its power. We are bound by the elementary rule “that every reasonable construction must be resorted to, in order to save a statute from unconstitutionality.” Hooper v. California, 155 U. S. 648, 15 S. Ct. 207, 211, 39 L. Ed. 297. Supporting this rule, see Railway Co. v. Conley, 67 W. Va. 129-166, 67 S. E. 613; State v. Massie, 95 W. Va. 233, 120 S. E. 514. “If there be any doubt as to the constitutionality of an act, that doubt should always be resolved in favor of the validity of the act.” State v. Furr, 101 W. Va. 178, 132 S. E. 504.

It must be admitted that the Commissioner is given wide discretionary powers in reaching a finding on questions of public interest and need for a market, but this discretion can only be exercised after fixing a time and place for a hearing, and after such hearing is held, and an appeal may be taken from any action taken by the Commissioner. Of course, this discretion cannot be abused. It is axiomatic that no public official, however broad his powers, can exercise the same in a fraudulent, arbitrary or capricious manner. The doors of the courts are always open to redress grievances suffered by citizens through the fraudulent, arbitrary or capricious exercise of governmental power. But the rule which requires the setting up of standards must be interpreted in a reasonable way. In some matters, standards may be set up. As to the act in question, reasonable standards were set up for its administration, unless it be as to the granting of permits under section 4, wherein the action of the Commissioner is made to depend on public interest or need, and he is authorized after hearing to pass on these ques tions. From the very nature of the discretionary powers delegated, with respect to a finding on these points, the fixing of a standard for their exercise is well nigh impossible. What standard could the Legislature set up to control the discretion of the Commissioner of Agriculture in determining whether the public interest required the establishment of a market at a certain point, or, to put it another way, the need of a market at that point? These questions could only be determined according to the facts of a particular situation, and would hardly be the same as to any two localities in the state. Any standard as to distances between markets or surrounding population would be more or less arbitrary, and of little, if any, value. We are unable to see how any standard governing what is termed a public interest, or need for a market, could be set up to control the discretion of the Commissioner in relation thereto. The question of public interest, need of additional service on the part of public utilities, or businesses affected with a public interest, the granting of permits and certificates of convenience which depend upon a finding with reference thereto by an administrative board or official, are, in our opinion, not susceptible of being controlled by any fixed standard which the Legislature might set up, and we think this fact has been recognized in legislative history, as the same affects governmental activities which are exercised by executives and administrative boards and officials, under legislative delegation of power. For example, the Commissioner of Banking, without any standards to guide his actions, is authorized by Code, 31-4-3, to determine whether or not a charter shall issue to any banking institution in this state, and in State v. Hill, 84 W. Va. 468, 100 S. E. 286, the lodging of such discretion in the Banking Commissioner was upheld, although the question of unconstitutionality on the point here presented was not raised. In Swearengen v. Bond, Auditor, 96 W. Va. 193, 122 S. E. 539, this Court upheld the legislative act which empowered the State Auditor to refuse a certificate of authority or license to act as an insurance agent to one “whom he finds not trustworthy and competent to transact the business for au thority to do which application is made.” No standards are set up for the exercise of power by the Public Service Commission in the following particulars: the power to regulate utilities as authorized by Code, 24-2-1, and 2; the granting of certificates of public convenience and necessity for the construction, equipment or operation of any public utility enterprise in this State, authorized by Code, 24-2-11; and the provisions for obtaining consent of the Public Service Commission for the performance of certain acts is provided in Code, 24-2-12. By Chapter 50, Acts of the Legislature of 1937, the Public Service Commission of West Virginia was granted authority to regulate transportation of passengers and property for hire over the public highways of this State, and in this act, as amended by Chapter 86, Acts of 1939, section 5 thereof, the Public Service Commission is granted the authority to issue certificates of convenience and necessity “if the commission finds from the evidence that the public convenience and necessity require the proposed service or any part thereof,” and it is therein provided that it may impose “such terms and conditions as in its judgment the public convenience and necessity may require.” It is also authorized to determine whether or not a person holding a certificate of convenience is furnishing adequate and sufficient service to meet public needs; and also that before granting the certificate it shall take into consideration existing transportation facilities to determine whether or not the same are reasonably sufficient and adequate, on the question whether an additional certificate covering the same route or territory shall be issued. Similar powers, with respect to the use of state highways, were at one time vested in the State Road Commission, with no standards set up for their exercise. The authority of the Public Service Commission to exercise the discretionary powers in these particulars has not been questioned, and therefore, we have no decision of this Court on that exact point. It is clear, however, that the Legislature has heretofore assumed that it had the right to delegate its powers, with respect to such matters, to administrative boards and officials, without attempting to set up specific standards by which they may be determined. We think the legislative policy, in this respect, may be upheld from the inherent nature of the discretionary powers so delegated. If the Public Service Commission was properly delegated the power to grant or refuse to grant permits and certificates of convenience, depending upon the public interest or need, adequacy of existing service, and matters of like nature, we see no reason why the Legislature could not vest in the Commissioner of Agriculture the power to determine whether the establishment of a public market, in a particular locality, was not in the public interest or whether there was need therefor.. The granting of such a power is based upon the general principle that when the state takes over the regulation of a public utility or any business affected with a public interest, and undertakes to regulate same, it will endeavor to avoid destructive competition, not in the public interest.

Believing that the statute under consideration is constitutional; that the Commissioner of Agriculture had power to act thereunder; and being confronted with the finding of fact by the Commissioner, which, in the circumstances, we cannot disturb, the order appealed from is affirmed.

Affirmed.