| Minn. | Oct 15, 1872
By the Court.
This action was brought to test the constitutionality of Gen. Laws of 1871, ch. 24, entitled “an act to regulate the carrying of freight and passengers on all railroads in this state.”
By the rates established by said act the defendant would have been entitled to demand and receive of the plaintiffs, for
The sum actually claimed by the defendant, viz.: f 1, was in accordance with the rates of freight upon property of that kind, established by the regular published tariff bills of defendant, and was the same rate and no greater than that usually charged by defendant for such service. It was stipulated by the parties, in and for all the purposes of this action,-that, if such act is valid, operative, and applicable to the defendant in this case, then and in such case judgment should be for the plaintiffs, otherwise for the defendant.
The defendant derives its existence, and its various rights and franchises, so far as is material to the present question, under the following acts of the legislature of the Territory and State of Minnesota.
Laws 1855, ch. 27; 1857, Extra Session, sub. ch. 2 of ch. 1; lb. ch. 15 ; Special Laws 1862, ch. 19 ; Special Laws, 1866, ch. 9.
By none of them is any authority to charge any toll for freight or passengers carried over its road expressly granted to defendant.
But the court below finds as follows :
“1. That under and by virtue of the defendant’s act of incorporation, and the several other acts pertaining to the subject matter, accepted and acted on by the defendant, it, prior to the passage of said act of 1871, possessed the implied right to transport passengers and freight over its road, and make and receive some charges for such service.
“2. That this right, though one arising by necessary implication only, is one of the essential franchises of the corporation, which became vested in the company immediately upon its acceptance of its charter, and immediately became as sacred as any other of its rights.”
Whether or not the district court was right in thus conclu
We are, nevertheless, of the opinion that the act in question is valid, operative and applicable to the defendant in this case. It is admitted to be so, unless it conflicts with those provisions of the state and federal constitutions which prohibit the passage of laws impairing the obligation of contracts, or unless it is an usurpation by the legislature of judicial authority.
The contract between the state and the defendant is, (as we assume,) that it may make some charges for such service as aforesaid. Its charter may be amended by any subsequent legislature in any manner not destroying or affecting defendant’s vested rights. Sec. 15.
The act in question fixes a maximum toll for the transportation of such goods as those in question in this case over the defendant’s road. Does it impair the obligation of the contract above stated, for the state thus to fix a limit to the amount the defendant may charge 1
The right to demand and receive some toll, is, we assume, one of its essential franchises.
A franchise, which, in England, is a branch of the royal prerogative, subsisting in the hands of a subject, in this country can only be derived from the legislature. Franchises are here, as in England, privileges of the sovereign in the hands of the subject. Whoever claims an exclusive privilege with us must show a grant from the legislature. A privilege or immunity of a public nature, which cannot be legally exercised without legislative grant, is a franchise. 2 Bl. Com. 37; 2 Kent, 459; People vs. Utica Ins. Co. 15 Johns. 358.
Nor is there now any question, at least in this court, that the right to make and maintain a railway, and take tolls or fares, is such a privilege or immunity, for the same reason that the right to build an ordinary road, and levy tolls thereon, is, viz.: that a railroad is but an improved modern highway, one which it- is the duty and interest of the government to construct, where the public interest and convenience demand it. Davidson vs. Commissioners of Ramsey Co. 18 Minn. 482; 18 Wend. 47; Sharpless vs. Mayor, &c. 21 Penn. St. 147; 25 Vt. 433, 441. See also, Olcott vs. Supervisors Fon du Lac Co., U. S. Supreme Court, Dec. Term, 1872.
This franchise of the defendant, is a-privilege of the sovereign in the hands of the subject. The subject is, indeed, in the present case, an artificial being; but the sovereign might have placed this privilege in the hands of a natural person, and it might have been his property, as it is the defendant’s property.
In the use the defendant shall make of its property, this defendant is as entirely subject to legislative control as such supposed natural person would have been. 11 Minn. 515.
The franchise in question, being a privilige of the sovereign,
It was, therefore, entirely competent for the legislature, in conferring such franchise, to retain authority to control the defendant in its exercise. Possessing such .right originally, it must continue to possess it j that is to say, it must retain it in any given case, in so far as it does not part with it by conferring exemption therefrom upon the recipient of the franchise.
It follows, as respects this franchise, that the sovereign, which conferred it, retains its original fight to control the defendant in its exercise of the same, in so far as it has not surrendered its authority.
The contract here, we assume, is that the defendant may take some tolls. That is what the sovereign granted it. To the extent to which such a grant necessarily involves exemption from legislative control, as aforesaid, the sovereign has surrendered such original right of control — no further. “ The legislature may also from time to time regulate the use of the franchise, and limit the amount of the toll which it shall be lawful to take, in the same manner as they may regulate the amount of toll to be taken at a ferry, or for grinding at a mill, unless they have deprived themselves of that power by a legislative contract with the owners of the road.” Per Walworth, Ch. in Beekman vs. Saratoga & Schenectady R. R., 3 Paige, 45.
The position above quoted was not necessary to the decision of the case before the chancellor ; but we cite it as expressing our own views, as well as those of an eminent jurist, on this point, expressed when railroads were in their infancy. It is one of those plain and simple propositions, as it seems to us, upon which, because it is so indisputably true, there can be no accumulation of authorities.
“ The legislature,” says Ch. J. Parker, “ having originally the right to grant the exclusive privilege of transportation over public waters, and to establish tolls, etc., the grant of this privilege would always be considered as subject to the superintendence of the legislature, unless that was expressly surrendered.” Charles River Bridge vs. Warren Bridge, 7 Pick. 511.
Has the state surrendered it with respect to this highway ? Is an agreement that the defendant may take some tolls, expressly, or by necessary implication, an agreement that the state will never assume to regulate the use of the franchise and limit the amount of tolls the defendant may take %
This question must be answered in the negative. The state, we assume, has conferred upon the defendant the right to make some charge, i. e. to take some toll. Not any specified rates of toll, nor to take tolls within any designated limits, nor to take reasonable tolls. The right conferred is simply to take tolls. If this right cannot, in the nature of things, exist, along with'the right aforesaid in the legislature, to regulate •its use, and limit the amount of tolls the defendant may take,, then of course the right of contract is gone.
But it is obvious that the two can co-exist, e. g. a right simply to take some toll can be exercised to its full extent under a law fixing a maximum rate of toll; for, in taking such maximum rate, some toll is taken, and the extent of the right is only to take some toll.
As, therefore, the fixing of maximum rates of toll by the act of 1871, does not interfere with defendant’s right to take some tolls, it is not unconstitutional, as impairing the obligation of any contract between tbe defendant and the state, and it was competent for the legislature to enact it in tbe exercise of its
Nor is the act in question an usurpation, by the legislature, of judicial authority. The legislature represents the sovereign in two capacities. First, it represents the sovereign as a party contracting with the defendant; Second, as the sole law-making power. In the latter capacity it acts for the sovereign in exercising the sovereign right of control over franchises in the hands of the subject, and as this right of control can only be exercised through the establishment of some rule of conduct, that is to say, by some law, it is necessarily the function of the legisl ature, as 'the sole law-making power, to establish such rule of conduct by legislation.
We have said that the franchise in question is not the right to take reasonable tolls. As the respondent contends that it is, and its argument to prove this act unconstitutional is wholly based on that proposition, it is necessary to state the grounds of our own opinion.
The right to take some toll under this charter is, as the court below found, but an implied right. It arises by “ necessary implication only,” if it arises at all. It can also be by necessary implication only, if at all, that it is a right to take reasonable toll.
“Whatever is essential to the enjoyment of the thing granted will be necessarily implied in the grant.” Co. Lit. 56 a; Plowd. 317; Saunders case, 5 Co. 12 a; Morton, J., in Charles River Bridge vs. Warren Bridge, 7 Pick. 345, 459.
Without undertaking to pass upon the correctness, if this position applied, as the learned judge applied it, to grants from the state, the converse of the proposition will probably be admitted to be true, viz.: that nothing, which is not thus essential, will be thus implied. It is certainly not essential to the enjoyment of a right to take some toll that the toll to
The court below, however, finds as follows on this point, viz.:
“3d. That in the absence of any provision in the charter, or other acts accepted'by the defendant, fixing the amount of the charges for such service, the law, as in other like cases, fixes them at reasonable rates.”
Its reasons for the conclusions are thus stated:
“ On this point it would seem that there can be no essential difference between this and any ordinary contract, similar in character, between private individuals; the contract, on the one hand, calling for the performance of certain labor or other duties, and, on the other, no compensation being specifically fixed. The law in that case, as in this, would fix the compensation at a reasonable one, to be determined, in case of controversy, by judicial examination and determination, from all the facts of the case.”
The district court here, as it seems to us, confounds two entirely different things. The “ other like cases,” by which the court was guided in arriving at its said conclusion, are the contracts between private individuals above mentioned. As, if one agrees to perform work and labor for me and I agree that I will pay him for it, without more, he can recover upon a quantum meruit, because the law implies a promise on my part to pay him what such service was reasonably worth..
But that is not a “ like case” to thé contract before us between the state and this defendant, with respect to which our inquiry is, what did the state grant %
The contract before us is not a contract by the defendant, on the one hand, to perform labor or other service for the state, and by the state, on the other hand, to pay defendant for the same. It is a contract by which the state granted to
The state may be supposed to have been moved to make the grant by considerations of the benefit expected to accrue to the public by the making and maintenance of this highway by the defendant.
The service for which the district.court finds that the defendant is entitled to receive what it is reasonably worth, is performed for those who travel and send goods over its road, those as to whom, if the defendant were an ordinary carrier on the highway, the law, in the absence of a special contract, would imply a promise to pay what such service, was reasonably worth.
The contract the district court had in mind was a supposed implied contract between defendant and these plaintiffs, for instance, or any other individual for whom it carries freight, that, in consideration of such carriage, the consignor will pay a quantum meruit therefor. But it takes toll by virtue of no such implied contract.
The title of the defendant to its right to demand compensation for this service is not derived to it upon common law principles, and is not to be measured by the rules of the common law; and whether it may lawfully demand compensation from a person, who uses its highway for the carriage of goods in the only way in which it can be used, depends upon the language of its charter, and not upon the rules of the common law. Perrine vs. Canal Co., 9 Howard, 172.
The right to exact tolls, or charge freights, is granted for a service to the public. The defendant is compellable to permit the public to use this highway in the way in which it can be used. Olcott vs. Supervisors, supra.
Being a public highway, the defendant’s road, under this
It is certain that the defendant’s right to toll does not rest upon any implied promise, on the part of these plaintiifs, for instance, or any other consignor, to pay it what the transportation of their property was reasonably worth.—Perrine vs. Canal Co., supra.
The defendant oums the right to levy a toll. It was an attribute of sovereignty, and the sovereign has granted it to the defendant. The contracts between individuals, to which the district court refers, have no analogy therefore, to the contract before us. They furnish no basis for a conclusion that, in the present case, the sovereign has agreed with the defendant that it may demand and receive from those who use its road what such use is reasonably worth.
The state granted to defendant this right to levy some toll. The contract does not fix the rates of toll which it may levy. The only logical conclusion is, that the defendant may fix them itself, subject to legislative superintendence.
What was said by Mr. Justice Morton in the Charles river bridge case is applicable here, except as to any argument from usage. “ It is apparent, from the examination of the several acts and the usage under them, that the college took and held the (ferry) franchise, subject to the general superintendence and regulation of the legislature of the commonwealth. Neither the management of the ferry, nor the number of boats, to be employed, nor the rate of toll is established
It may be asked if this is the only limit, if the defendant can oppress the public with impunity by exacting excessive tolls, so long as the legislature does not see fit to interfere 1
It is not necessary to consider how, upon our assumption aforesaid, it might have been under the defendant’s original act of incorporation, and other acts relating to it prior to the act of Feb. 28th, 1866. That act, which the defendant accepted, extended the time for its performance of the conditions, .upon which any right on its part to the franchises which it now owns was contingent, but upon the express condition that it should “ be bound to carry freight and passengers upon reasonable terms.” There was, therefore, prior to the act of 1871, that express limitation upon any discretionary right.to fix the rate of toll and fare.
Nor does the act of 1866 imply any surrender by the state of its power to regulate tolls. There can be no plainer non sequitur than to say that, because the defendant cannot right
As these considerations dispose of the present ■ case, it is unnecessary to consider whether, supposing the conclusion of the district court last above noticed to be a correct one, its conclusion that the act of 1871 aforesaid was unconstitutional would necessarily follow; and as to that we give no opinion. In conformity with the agreement of the parties the judgment appealed from must be reversed, and judgment entered for the plaintiffs.