22 S.W.2d 993 | Ark. | 1929
At the 47th session of the General Assembly of the State of Arkansas, act No. 55 was enacted for the purpose, as stated in the title, of "regulating the sale, delivery and distribution of ice, and vesting the Railroad Commission with jurisdiction over the same." The question to be determined in this case is whether the General Assembly, under the limitations upon the legislative power in the State imposed by the Constitutions of the United States and of Arkansas, can fix by law the price of manufacturing ice and provide regulations for the delivery and distribution of the same; and also whether those engaged in the manufacture and distribution of ice may be limited in number in any given territory.
It is claimed by the appellee that said act contravenes (a) the due process of law and the equal protection clauses of the Fourteenth Amendment to the Constitution of the United States, and that it is also invalid because it is in contravention of the Constitution of the State of Arkansas and of 2, 3, 18 and 19 of article 2 of the Constitution of the State of Arkansas, because said act deprives the appellees of the right to engage in lawful business, and is a denial of equality of privileges, and authorizes the creation of a monopoly; and (b) that the provisions of the act authorizing the Railroad Commission to fix the price of ice is in contravention of the due process of law and the equal protection clauses of the Federal Constitution and similar clauses of the State Constitution, in that the ice business is not a business affected with a public interest.
1. There has of late years come into being a school of political science, numbering some of the leading thinkers of this country, which affirms that the aphorism, "competition is the life of trade," is illusory and false, and that the best method of protecting the public in the prices it must pay for commodities is that those commodities *773 be manufactured and distributed by monopolies. It is argued that by this means excessive investments and expenses will be eliminated, and therefore an article may be produced and distributed to the consumer at a far less cost than by an unregulated competition. It has been said that "competition is at once an expensive and absolutely ineffective ultimate method of regulating either the rates or the service of the modern municipal public utility, and that the objection to competition is the economic one of the unnecessary duplication of the investment and expense of maintenance and operation of two parallel systems, where one could render adequate service at practically half the cost of the installation, maintenance, and even of operation." Our Legislature evidently had this idea in mind when it provided, by 15 of the act under consideration, that the Railroad Commission should not issue certificates to any person, firm or corporation authorizing the manufacture, sale or delivery of ice at any point where the facilities for the manufacture, sale and distribution of ice already existing are sufficient to meet the public needs therein and in 16 providing the procedure for carrying its provisions into effect; and also when, in 17 of said act, it provided that in any city, * * * place or community where more than one person * * * is engaged in the manufacture, sale or distribution of ice, and the expenses of such may be decreased, or the business conducted in a satisfactory or economical manner, joint operation of the facilities used for the purposes aforesaid may be authorized, and where it is shown that any one or more of the separate businesses cannot be operated at a profit, or that it would be to the public benefit, then one or more of the parties might acquire the property of the others, or that the parties might consolidate their businesses, "it being the purpose to prevent the duplication off unnecessary plants, facilities and service, and to afford the public prompt and continuous service at just and reasonable prices." *774
This may be a sound economic policy, but we cannot consider the expediency of these provisions, for the question for our determination is not that of policy, but of power. In our opinion, these provisions run counter to the genius and policy of our organic law, because the virtual effect of the provisions in the statute adverted to is the creation of monopolies, which are abhorrent to the principles of common law and which are expressly inhibited by the framers of our Constitution, in the Bill of Rights contained in article 2 of the Constitution of 1874. By 2 of said article, the right to acquire and possess property is recognized and its protection guaranteed. By 3 of the article the declaration is made that no citizen shall be deprived of any right, privilege or immunity. By 18 the General Assembly is prohibited from making any grant to any citizen or class of citizens of privileges or immunities which upon the same terms shall not equally belong to all citizens. Section 19 declares that "perpetuities and monopolies are contrary to the genius of the republic, and shall not be allowed." By 29 the declaration is made "that everything in this article is excepted out of the general powers of the government, and shall forever remain inviolate, and all laws contrary thereto or to the other provisions herein contained shall be void."
A monopoly is said to be "an exclusive right granted to one person or class of persons of something which was before of common right." 41 C.J. 82. Bouvier's Law Dict. defines monopoly as "a grant by the sovereign power of the State, by commission or otherwise, by which the exclusive right of buying, selling, making, working or using anything is given." In Seattle v. Denker,
Power to grant an exclusive franchise, where it is shown in the particular case to be justified as a measure for the safety or interest of the public, is unquestioned, but it is essential that the thing granted be something that is not of natural or common right. For instance, one person cannot be restricted in his right to use and enjoy his property in a particular manner in order that another may use his property in that manner to a greater profit than he could if each was left free to use his own as he pleased. Commonwealth v. Bush (Ky.), 26 Am. Rep. 189.
In the case of New Orleans Gas Co. v. Louisiana Light Co.,
The right of the Legislature to prohibit absolutely the engaging in a given calling cannot be doubted, where *776
such calling is inherently injurious to the public health, safety or morals, or has a tendency in that direction (State v. Armstrong,
This court, in the case of Ex parte Deeds,
In Lewis v. State,
In the case of Replogle v. Little Rock,
In the case of Balesh v. Hot Springs, 173 Ark. 662,
In the case of Scougal v. State of South Dakota,
Before a statute can be held unconstitutional, it must appear to be in conflict with some constitutional provision, or be opposed to natural right or the fundamental principles of civil liberty. Statutes are presumed to be constitutional and will not be held to be invalid unless expressly or impliedly forbidden. Dabbs v. State,
2. By 1 of the act under consideration the Legislature has declared "that the use of ice is a public necessity; that the use, manufacture, sale, delivery and distribution thereof within the State of Arkansas has direct relation to the health, comfort, safety and convenience of the public, the same being a prime necessity of life and monopolistic in its nature, and the price, manufacture, sale and delivery and distribution of ice within the State of Arkansas is hereby declared to be a public business impressed with a public trust and subject to public regulation as hereinafter enacted." By 4 of the said act the Railroad Commission of Arkansas is clothed with the power to make and adopt reasonable and just rates and charges for the price of ice manufactured or sold in the State, and for the delivery and distribution thereof, and may adopt all necessary rates, rules, regulations and charges to govern and regulate the manufacture, sale, delivery and distribution of ice and to prevent unjust discrimination and extortion in such business.
The appellees in this case contend that the Legislature is without power, through any of its agencies, to fix the price of ice or to formulate rules for its delivery and distribution, because it contravenes the due process of law and equal protection clause of the Federal Constitution and similar clauses of the State Constitution, and that the ice business is not a business affected with a public interest. It is admitted that, if the manufacture and sale of ice is a business affected with a public interest, the Legislature had the power to enact laws by which the price of the product and its manufacture and distribution might be regulated. As is said by Mr. Chief Justice *781
Taft in the case of Wolff Packing Co. v. Industrial Court,
In Wolff Company v. Industrial Co., supra, it is said: "The circumstance of its alleged change from the status of a private business and its freedom from the regulation into one in which the public have come to have an interest, are always subject to a judicial inquiry," and, where the classification is obviously unreasonable and arbitrary, courts may disregard it. But, as is said in Lindsay v. Gas *782
Company,
A number of cases have been cited to sustain this view, notably that of Wolff Packing Co. v. Industrial Court, supra; Williams v. Standard Oil Co.,
Under the provisions of the above act the Industrial Court heard a dispute between the Wolff Company and its employees respecting wages the latter were receiving, and made an order as to wages, increasing them over the figures to which the company had recently reduced them. That controversy reached the Supreme Court of the United States on appeal, where, in considering it, the court said: "It is very difficult under the cases to lay down a working rule by which readily to determine when a business has become clothed with a public interest. All business is subject to some kind of public regulation; but when the public becomes so peculiarly dependent upon a particular business that one engaging therein subjects himself to a more intimate public regulation is only to be determined by the process of exclusion and inclusion, and to gradual establishment of a line of distinction. We are relieved from considering and deciding definitely whether preparation of food should be put in the third class of quasi-public businesses, noted above, because, even so, the valid regulation to which it might be subjected as such could not include what this act attempts." And further: "We are considering the validity of the act as compelling the employer to pay the adjudged wages, and as forbidding the employees to combine against working and receiving them. The penalties of the act are directed against effort of either side to interfere with the settlement by arbitration. Without this joint compulsion, the whole theory and purpose of the act would fail."
It will be seen from the above quotations from the decision that the court did not undertake to consider or decide that the manufacture of public food, clothing, etc., were businesses not affected with a public interest and not subject to a proper regulation by the State.
In Williams v. Standard Oil Co., supra, the court held that the business of dealing in gasoline, whatever its extent, is not a business affected with a public interest, because gasoline was one of the ordinary commodities *784 of traffic differing in no essential respect from a great variety of other articles commonly bought and sold by merchants and private dealers in the country, and that there was nothing to justify the conclusion that the sale of gasoline was a monopoly in the State of Tennessee. It is in fact a matter of common knowledge in this State that the business of selling gasoline is highly competitive, and we may reasonably assume that such conditions exist in Tennessee, and were known to the court.
Tyson v. Banton, supra, was a case involving the validity of an act of the Legislature of New York which sought to regulate the price of theatre tickets. A majority of the court held that the business of selling theatre tickets was not a business necessary in its nature and differed widely in character and degree from a business which was necessary to the comfort and happiness of the public; that it bore no relation to the commerce of the country, but that the public merely derived ease and amusement by reason of its operation; that theatres were mere private enterprises, and that the sales of theatre tickets were interdependent transactions standing, both in form and effect, separate and apart from each other and terminating in their effect with the instances. However, to the conclusion and judgment of the majority four justices dissented, their dissent being voiced in a very able opinion by Justices Holmes and Stone.
In Fairmont Creamery Co. v. Minnesota, supra, involving the validity of a Minnesota statute prohibiting any person, etc., buying milk or cream from discriminating between different localities by paying a higher price in one than in another, in holding the statute unconstitutional, the court said: "The real question comes to this: May the State, in order to prevent some strong buyers of cream from doing things which may tend to monopoly, inhibit plaintiff in error from carrying on its business in the usual way heretofore regarded as both moral and beneficial to the public, and not shown now to be accompanied by evil results as ordinary incidents? * * * *785 The statute itself ignores the righteous distinction between guilt and innocence. * * * It is not permissible to enact a law which, in effect, spreads an all-inclusive net for the feet of everybody upon the chance that, while the innocent will surely be entangled in its meshes, some wrongdoers also may be caught."
"It is very difficult to lay down a working rule by which it may be determined when a business has become `clothed with a public interest,'" but it seems fairly certain, from the cases which have passed upon that question, that, where these conditions arise in a given case, then a business may be said to be affected with a public interest, to-wit, when it is such that the public must use its commodities in such manner as to make it of public consequence; where the nature of the service rendered has become indispensable for the convenience and happiness of the people, and where it is fairly probable that excessive charges and arbitrary control of the business may arise.
The leading case perhaps on this subject is that of Munn v. Illinois,
After reviewing the growth of the State and of the businesses regulated by the act under consideration, the court continues: "This indicates very clearly that, during the twenty years in which this peculiar business had been assuming its present `immense proportions,' something had occurred which led the whole body of the people to suppose that remedies such as are usually employed to prevent abuses by virtual monopolies might not be inappropriate here. For our purposes we must assume that, if a state of facts could exist that would justify such legislation, it actually did exist when the statute now under consideration was passed. For us the question is one of power, not of expediency. If no state of circumstances could exist to justify such a statute, then we may declare this one void, because in excess of the legislative power of the State. But, if it could, we must presume it did. Of the propriety of legislative interference within the scope of legislative power, the Legislature is the exclusive judge. Neither is it a matter of any moment that no precedent can be found for a statute precisely like this. It is conceded that the business is one of recent origin, that its growth has been rapid, and that it is already of great importance. And it must also be conceded that it is a business in which the whole public has a direct and positive interest. It presents therefore a case for the application of a long-known and well-established principle in social science, and this statute simply extends the law so as to meet this new development of commercial progress. There is no attempt to compel these owners to grant the public an interest in their property, but to declare their obligations, if they use it in this particular manner. * * * It is insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed with a public interest, and that what is reasonable is a judicial, and not a legislative, question. As has already *787 been shown, the practice has been otherwise. In countries where the common law prevails, it has been customary from time immemorial for the Legislature to declare what shall be a reasonable compensation under such circumstances, or, perhaps, more properly speaking, to fix a maximum beyond which any charge made would be unreasonable. Undoubtedly, in mere private contracts, relating to matters in which the public has no interest, what is reasonable must be ascertained judicially. But this is because the Legislature has no control over such a contract. So, too, in matters which do affect the public interest, and as to which legislative control may be exercised, if there are no statutory regulations upon the subject the courts must determine what is reasonable. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge, as one of the means of regulation, is implied. In fact, the common-law rule, which requires the charge to be reasonable, is itself a regulation as to price. Without it the owner could make his rates at will, and compel the public to yield to his terms, or forego the use. * * * We know that this is a power which may be abused; but that is no argument against its existence. For protection against abuses by Legislatures, the people must resort to the polls, not to the courts."
In the case of Leep v. Railway Co.,
Not a great many years ago, the business of ginning cotton was purely a private business, the owners of many small farms having their own private gins, and, where the farms were too small to warrant this, each small neighborhood having its own community gin. The gins were operated by horses or mules; their construction was simple and their cost small, and at that time and under those conditions they were not the subject of State regulation. However, the ginning industry has completely changed, so that now the great modern ginneries gin many times the number of bales in a day that the old-fashioned horse gin could produce, and serve large territories and great numbers of people. Therefore many of the cotton growing States have found that this business has become affected with public interest, and have passed various regulatory statutes, which have been uniformly upheld as a valid exercise of legislative power.
In the case of Simms v. State,
In Tallahassee, etc., Co. v. Holloway,
Act No. 55 of the Acts of 1929 has declared the use of ice a public necessity, having direct relation to the health, comfort, safety and convenience of the public, and monopolistic in its nature, and the business of the manufacture, sale and distribution of ice is declared to be a public business. As we have seen, in order for a *790 business to be said to be clothed with a public interest, the use of its commodities by the public must be such as to make it of public consequence or be of such nature that the service rendered has become indispensable for the convenience and happiness of the people, and where it is fairly probable that excessive charges and arbitrary control of the business may arise. This is in effect the legislative declaration as to the business of the manufacture, sale and distribution of ice in the State of Arkansas. Is such a classification so unreasonable that no state of facts can be conceived that would sustain it? If it is of such nature, then it is the subject of judicial inquiry, and may and ought to be held invalid. We do not think, however, that such classification is unreasonable or arbitrary. It is a matter of common knowledge that the use of ice is universal in all the urban communities of this State; that it is both convenient and necessary for the comfort and wellbeing of a large proportion of our citizens; that the cost of machinery for the manufacture of ice and its installation is beyond the reach of the average citizen, and that in all of the smaller towns there is no competition, and the manufacture and sale of ice is conducted by a single manufacturer. These facts warrant the assumption on the part of the Legislature that the business is monopolistic in its nature.
The learned Chief Justice, in the case of Munn v. Illinois, supra, might well have been discussing the growth and character of the ice business in Arkansas and the necessity for its regulation when, after giving a history of the growth of the business then being considered by the court, he said: "This indicates very clearly that during the twenty years in which this peculiar business has been assuming its present immense proportions, something had occurred which led the whole body of the people to suppose that remedies such as are usually employed to prevent abuses by virtual monopolies might not be inappropriate here. For our purposes we must assume that, if a state of facts could exist that would justify *791 such legislation, it actually did exist when the statute now under consideration was passed."
When the rules which have been stated by the cases cited supra, which determine what constitutes a business affected with a public interest, are applied to the ice business, it is manifest that a state of facts may well be conceived to exist which will clothe that business with a public interest. The Supreme Court of Oklahoma has so decided in the case of Okla. Light Power Co. v. Corp. Commission,
That the ice business is a business clothed with a public interest has also been held in the case of Denton v. Denton Home Ice Co., 18 S.W. (Tex.) 606, 2d ed.; also in the case of Tombstone v. Macia,
We therefore conclude that the legislative declaration that the ice business is one properly the subject of governmental regulation is not arbitrary or unreasonable, and must be upheld by this court.
3. Having determined that 15, 16 and 17 of the act under consideration are void as within the inhibition of the Constitution, and that it is within the power of Legislature to declare the sale and distribution of ice a business affected with a public interest, and as such the subject of proper legislative regulation, we have lastly to consider and determine whether the act is severable — that is, whether or not the act may stand with 15, 16 and 17, supra, eliminated, or whether the remaining sections are so related to the unconstitutional ones that the whole act must fall.
By 1 of act No. 65 of the Acts of 1929 the declaration is made that the use of ice is necessary, that the manufacture, sale and distribution of same is monopolistic in its nature, and subject to public regulation. Sections 2, 3 and 4 grant to the Railroad Commission jurisdiction over the ice business, empowering it to fix prices and rates for the sale, delivery and distribution, and to adopt such rules as might be necessary to carry *793 into effect the powers granted. Section 5 prohibits unjust discrimination, defines same, and fixes penalties for such. Section 6 provides for the printing and publishing of schedules of rates and charges. Section 7 defines the offenses for violation of the rules of the Commission fixing the prices for charges for distribution, for unjust discrimination, and for soliciting or accepting any discrimination. Section 8 requires those engaging in the manufacture, etc., of ice to file with the Commission a schedule of rates and charges for sale and delivery, with a statement giving information as to locality, capacity, persons in charge, etc., and provides for procedure for hearings regarding orders fixing rates. Section 9 provides for procedure for amending or changing regulatory orders. Section 10 and 11 provide that rates fixed shall be deemed just until otherwise found by the Pulaski Circuit Court, and provides for appeals from orders of the Commission and procedure therefor. Section 12 authorizes the inspection of books and papers. Section 13 requires answers to questionnaires, and provides the penalty for failure to make same under oath within a specified time. Section 14 provides for license fees, etc. Section 16 has no relation to any portion of the act except the section immediately preceding (15), which authorizes the Railroad Commission to deny permit to make or sell ice in a locality where it may determine the facility for those purposes already sufficient. Section 16 provides for the procedure for carrying into effect the provisions of 15. Section 18 authorizes the Commission to adopt rules governing its proceedings, to regulate the manner of necessary investigations and hearings, and that same be public, and grants power to compel the attendance of witnesses and for production of books and papers, and to administer oaths. Section 19 empowers the Commission to employ assistants and regulate their salaries and all expenses to be paid out of funds derived from license fees, etc., and requires the Commission to make *794 an annual report of its proceeds, receipts and disbursements. Section 20 exempts those who make ice solely for their own use or for consumption by their employees. Section 21 repeals all laws in conflict. Section 22 provides that "if any section or part of this act shall be held to be invalid, it shall not affect the remaining portions thereof."
Even though the Legislature might not have expressed its will that valid parts of a statute should be preserved, though a part might be unconstitutional, it is the duty of the court to accomplish this purpose if, as stated in Cooley's Constitutional Limitations, 6 ed. p. 210, "a statute attempts to accomplish two or more objects, and is void as to one, it may still be in every respect complete and valid as to the other. But if its purpose is to accomplish a single object only, and some of its provisions are void, the whole must fail, unless sufficient remains to effect the object without the aid of the invalid part."
The General Assembly of 1917 enacted a special statute creating an improvement district, and authorized the assessment of personal property, as well as real estate, to raise funds to provide for the construction and maintenance of the improvement, and provided that, if any part of the assessment should be declared to be void, then only that part of the property which it was legal to assess should be assessed to defray the cost of the improvement. In the case of Snetzer v. Gregg,
In Sallee v. Dalton,
In the case of Snetzer v. Gregg,
In the case of Nixon v. Allen,
Examining the act in the instant case in the light of the decisions of this court and applying to its construction the rules therein announced, we conclude that the act is not dependent upon 15, 16 and 17, supra. They do not "touch at some angle nearly all the provisions of the act;" they are not "to this act as is the hub to a wheel and the foundation pillars of a building," but seek to accomplish a different purpose to the remainder of the act, and are neither necessary nor helpful for carrying it into effect. Without the invalid sections (15, 16 and 17) we have a comprehensive and workable plan for the regulation, sale, delivery and distribution of ice, and those sections are not indispensable or helpful in carrying this purpose into effect. The remaining sections of the act do not relate to and are not dependent upon the invalid sections. We are therefore of the opinion that the act is severable, especially with the aid of the expression of the legislative will that it should be so construed, and with such declaration it is manifest that the Legislature intended that the plan regarding the price and distribution of ice should stand, even though those *797 sections inserted, by which were given to the ice manufacturers a monopoly, should be unconstitutional.
It follows from what we have said that 15, 16 and 17, supra, must be stricken from the act, and that the remainder of the act is a valid exercise of the legislative power and an expression of its will, and therefore must stand.
Inasmuch as the cases brought to this court on appeal were for the purpose of preventing the appellees from engaging in the ice business in Fort Smith and Jonesboro, Arkansas, the decree of the court in each case, in so far as it holds the act in question unconstitutional as to 15, 16 and 17 and dismisses the complaint of the appellants for want of equity, is affirmed.