Burlington, Cedar Rapids & Northern Railway Co. v. Dey

82 Iowa 312 | Iowa | 1891

Lead Opinion

Beck, C. J.

I. In view of the facts that the motion to dissolve the injunction operates as a demurrer to the petition, and that the decision thereon is for review in this case, it becomes necessary to set out fully the pleadings .upon which' the decision was made. They are as follows:

“ Petition in Equity. Your petitioner, the Burlington, Cedar Rapids & Northern Railway Company of Iowa, a corporation, duly organized and existing under and by virtue of the laws of Iowa, complains and says : That defendants, Peter A. Bey, Spencer Smith and F. T. Campbell, compose the board of railroad commissioners of the state of» Iowa. That under and by virtue of chapter 28 of the Acts of the Twenty-second General Assembly, authority is given to said board to fix, establish and publish reasonable maximum rates of charges for the transportation of freight upon railroads within said state. That a schedule of rates has been adopted by said board for petitioner, which was by it duly accepted and adopted as reasonable and just.,

.“Your petitioner would now further show that by the act of the twenty-third general assembly, entitled ‘ An act to amend chapter 28 of the Acts of the Twenty-second General Assembly, giving authority for the making of rates for transportation of freight and cars over two or more lines of railroad within this state, and enlarging the powers and further defining the duties of the board of railroad commissioners,’ a copy of which act is attached hereto and made part hereof, it is provided that all railway companies doing business' in this state, upon the demand of any person, shall establish joint rates for the transportation of freight between points on their respective lines, and shall receive and transport freight and cars over such routes as the shipper shall direct. It is further provided by said chapter 28 of the. Acts of the Twenty-second General Assembly that, when the rates for transportation charges are fixed by the board of railroad commissioners, such rates shall, in all suits brought against any railroad company, wherein is in any way involved the charges of such railroad for the transportation of freight, be deemed and taken in all courts of this state as prima facie evidence that the rate thus fixed is a reasonable and just charge for the transportation of freight and cars upon such roads, and that any greater charge shall be deemed extortion. And it is further provided in said chapter 28 of the Acts of the Twenty-second General Assembly that, for violating the charges or rates thus fixed by the board, the penalty therefor is to forfeit and pay to the state of Iowa not less than one thousand dollars ($1,000) nor more than five thousand dollars ($5,000) for the first offense, and not less than five thousand dollars ($5,000), nor more than ten thousand dollars ($10,000) for every subsequent offense, to be recovered in a civil action, by ordinary proceedings, in the name of the state of Iowa.

“ Your petitioner would now further inform your honor that several demands have been sent to it under the last act, or joint-rate law, demanding that it shall make joint rates with other railroads, as is in said act contemplated. That your petitioner has refused to make such joint rates upon such requests, and still does refuse to make such joint rates with other and distinct railroads. That by said last act of the legislature (known as the ‘ joint-rate act’) it then becomes the duty of the board of railroad commissioners, upon such refusal, and upon application of any person, to establish joint rates between different and connecting roads. That said board has been so requested by interested parties to establish joint rates between petitioner and otlier railroads, and is about to so do and promulgate the same, and such joint rates will be established and promulgated, unless restrained by order of this court; thus subjecting your petitioner to the heavy penalties referred to in the event of non-complying with the joint rates thus to be established and promulgated.

“ Your petitioner now avers that the act of the legislature of Iowa known as the ‘joint-rate bill,’ a copy of which is attached, marked Exhibit A,’ is unconstitutional and void, and said commissioners have no right or authority thereunder to fix a joint rate, or promulgate the same. That said act deprives your petitioner of its rights guaranteed by section 9, article 1, of the constitution of Iowa, in that it deprives your petitioner of its property, and the right to contract, and deprives it of liberty, without due process of law, and prevents its acquiring, possessing and protecting its property as guaranteed by section 1 of article 1 of the constitution.of Iowa, and by like powers of the constitution of the United 'States. That if defendants are allowed and permitted to establish and promulgate such joint rates, although, the same will be void for the reasons stated, yet thereunder your petitioner will be subjected to a multiplicity of suits, by many different persons, to • recover the penalties referred to, and otherwise harassed by vexatious litigation.

“To the end, therefore, that your petitioner may obtain the relief to which it is justly entitled in the premises, and being remediless at law, it now prays the court to grant it a temporary writ of injunction, restraining defendants, and each of them, and as the board of railroad commissioners, from establishing and promulgating joint rates with it' in connection with other railroads, for the shipment of freight and cars over such different railroads, and that upon a final hearing it be ordered and decreed that defendants be permanently enjoined from establishing such joint rates. And, further, your petitioner prays for such other and further relief as may be just and equitable.”

. “Exhibit A.

“An act to amend chapter 28 of the Acts of the Twenty-second General Assembly, giving authority for the making of rates for the transportation of freight and cars over two or more lines of railroad within this state, and enlarging the powers and further defining the duties of the board of railroad commissioners.

“Be it enacted by the general assembly of the state of Iowa:

“Sec. 1. That chapter 28 of the Acts of the Twenty-second General Assembly be, and the same is hereby, amended as follows: That said chapter 28 of the Twenty-second General Assembly shall be construed to prohibit the making of rates by two or more railroad companies for the transportation of property over two or more of their respective lines of railroad within this state, and a less charge by each of said railroad companies for its portion of such joint shipment than it charges for a shipment for the same distance wholly over its own line within the state shall not be considered a violation of said chapter 28 of the Acts of the Twenty-second General Assembly, and shall not render sncli railroad company liable to any of the penalties of said act. But the provision of this section shall not be construed to permit railway companies establishing joint rates to make,'by such joint rates, any unjust discrimination between the different shipping points or stations upon the respective lines between which joint rates are established. Any such unjust discrimination shall be punished in the manner and by the same penalties provided in chapter 28 of the Acts of the Twenty-second General Assembly.

“Sec. 2. All railway companies doing business in this state shall, upon the demand of any person or persons interested, establish reasonable joint through rates for the transportation of freight between points on their respective lines within this state, and shall receive and transport freight and cars over such route or routes as ■ the shipper shall direct. Carload lots shall be transferred without unloading from the cars in which such shipments were first made, unless such unloading in other cars shall be done without charge therefor to the shipper or receiver of such carloads lots, and such transfer be made without unreasonable delay; and less than carload lots shall be transferred into the connecting railway’s cars at cost, which shall be included in and made a part of the joint rate adopted by such railway companies, or established as provided by this act. When shipments of freight to be transported between different points within this state are required to be carried by two or more railway companies operating-connecting lines, such railway companies shall transport the same at reasonable through rates, and shall at all times give the same facilities and accommodation to local or state traffic as they give to inter-state traffic over their lines of road.

“Sec. 3. In the event that said railway companies fail to establish through joint rates, or fail to establish and charge reasonable rates for such through shipments, it shall be the duty of-the board of railroad commissioners, and they are hereby directed, upon the application of any person or persons interested, to establish, joint rates for the shipment of freight and cars over the two or more connecting lines of railroad in this state ; and in the making of such rates, and in changing or revising the same, they shall be governed, as near as may be, by all the provisions of chapter 28 of the Acts of the Twenty-second' General Assembly, and shall take into consideration the average of rates charged by said railway companies for shipment within this state or like distances over their respective lines, and rates charged by the railway companies operating such connecting lines for joint inter-state shipments for like distances. The rates established by the board of railroad commissioners shall go into effect within ten days after the same are promulgated by said board, and from and after that time the schedule of such rates shall be prima facie evidence in all of the courts of this state of the joint transportation of freight and cars upon the railroads for which such schedules have been fixed.

“Sec. 4. Before the promulgation of such rates, as provided in section 3 of this act, the board of railroad commissioners shall notify the railroad companies interested- in the schedule of joint rates fixed by them, and they shall give said railroad companies- a reasonable time thereafter to agree upon a division of the charges provided for in such schedule; and, in the event of the failure of said railroad companies to agree upon such a division, and to notify the board of such agreement, the board of railroad commissioners shall, after a hearing of the companies interested, decide the same, taking into consideration the value of terminal facilities, and' all the circumstances of the haul; and the division so determined by the board shall, in all controversies or suits between the railroad companies interested, be. prima facie evidence of a just and reasonable division of such charges.

“Sec. 5. Every unjust and unreasonable charge for the transportation of freight and cars over two or more railroads in this state is hereby prohibited, and declared to be unlawful, and each and every one of the companies making such unreasonable aid unlawful charges, or otherwise violating the provisions of this act, shall be punished as provided in chapter 28 of the Acts of the Twenty-second General Assembly for the making of unreasonable charges for the transportation of freight and cars over a single line of railroad by a single railroad company.

“Sec. 6. This act, being deemed of immediate* importance, shall take effect and be in force from and after its publication in the Iowa State Register and the Des Moines Leader, newspapers published in the city of Bes Moines, Iowa,”

Upon the presentation of the motion to dissolve the injunction, the plaintiff filed the following amendment to the petition: “Your petitioner, by way of amendment to the original bill filed in this cause, further avers:

J-LIirst. That said act known and referred to as the ‘joint-rate bill,’ and the act of which it is amendatory, are unconstitutional and void, in this : That under said acts your petitioner is denied the right of a jury trial, and. denied due process of law, in the protection and preservation of its property, as guaranteed by the ninth section of article 1 of the constitution of the state of Iowa; that its property, or the use thereof, is taken without its consent, and without just compensation, for private and public purposes, and that its right of appeal is so tampered with as to make that right ineffectual ; that in the enforcement of any order promulgated by said railroad commissioners all distinction between law and equitable actions is abolished by said acts, all of which is in direct violation of the sixth section of article 5 of the constitution of the state of Iowa, and which deprives petitioner of that due process of law therein guaranteed.

• “ Second. That said acts áre violative of section 8, article 1, of the constitution of the United States, in that it is a regulation of commerce among the several ■ states.

“ Third. That said acts are void and unconstitutional, because tliey violate section 17 of article 1 of the constitution of Iowa, by imposing excessive fines and unusual punishment.

“ Fourth. That said acts are void and inoperative, because they fail to describe or define the offenses for which the extraordinary penalties are imposed, and impose penalties, by way of attorney’s fees, upon railroad companies for making any defense to actions brought under said acts.

“ Fifth. That said joint-rate act is violative of the fourteenth amendment of the constitution of the United States, in that it abridges the privileges or immunities of your petitioner as a citizen, denies it equal protection of the laws, and deprives it of its property and the use thereof, without just compensation or due process of law; that by said acts your petitioner is denied the right and liberty of contracting, with reference to its business, and thus is its property taken from it without its consent, and it is compelled to enter into involuntary, unreasonable and unprofitable contracts with other railroad companies, at the instance of third parties, compelling the operation of its road at a loss; that, in the matter of fixing the joint rates contemplated in said statute, your petitioner is not notified of the time or place when the same are to be fixed by defendants, nor given any opportunity to object to the making of such rates, or to show the unreasonableness of the same; that, under said statute, the joint rates, as thus fixed by defendants, are final and absolute, and thus is your petitioner deprived of its property and the use thereof, without due process of law, and deprived of making reasonable and lawful contracts and profits as other citizens are permitted to do, and hence it is denied that equal protection of the law guaranteed by the constitution of the United States.

“Wherefore your petitioner prays that the temporary writ of injunction issued herein may be continued until the final hearing of this cause, and that upon such final hearing- said injunction may be made perpetual; and your petitioner prays for 'such other and further relief as may be deemed equitable in' the premises.”

The motion to dissolve the injunction is based upon the ground that the statutes assailed are in harmony with the constitution; that the petition does not show that the plaintiff is entitled to the relief prayed for in the petition ; and that the district court has no jurisdiction in the cause for the reason that it is, in fact, an action against the state, and it is not shown that the state had authorized or consented to the bringing of the suit. Chapter 28, Acts, Twenty-second General Assembly, which is amended by chapter 17, Acts, Twenty-third General Assembly, contains many sections. They need not be set out, except such as are brought in question or assailed in the argument of counsel. They will be cited or quoted in the discussion of the questions raised thereon.

II. The original act authorizing rates of charges to be fixed by the railroad commissioners (chapter 28, Acts, Twenty-second General Assembly) contains this provision:

“Sec. 17. The board of railroad commissioners of this^n state are hereby empowered and directed to make, for ) each of the railroad corporations doing business in this state,' as soon as practicable, a schedule of reasonable maximum rates of -charges for the transportation of freight and -cars on each of said railroads, and said power to make schedules shall include the power of classification of all such freights; and it shall be the duty of said commissioners to make such classifications : provided, that the said rates of charges to be so fixed by said commissioners shall not, in any case, exceed the rates which are or may hereafter be established by law ; and said schedules so made by said commissioners shall, in all suits brought against any of such railroad corporations, wherein is in any way involved the charges of any such railroad corporation for the transportation of any freight or cars, or unjust, discrimination in relation therein, be deemed and taken in all courts of this state as prima facie evidence that the rates therein fixed are reasonable and just maximum rates oí charges ior the transportation of freight and cars upon the railroads for which said schedules may have been respectively prepared. Said commissioners shall, from time to time, and as often as circumstances may require, change and revise said schedules, subject to the same provision that the rates fixed are not to be higher than now or hereafter established by law. When any schedule shall have been made or revised as aforesaid, it shall be the duty oi said commissioners to cause notice thereof' to be published for two successive weeks in some public newspaper published in the city of Des Moines, in this state, which notice shall state the date of the taking effect of said schedule, and said schedule shall take effect at the time so stated in such notice, and a printed .copy of said revised schedule shall be conspicuously jjosted by such common carrier in each freight-office and passenger depot upon its line or lines. All such schedules so made shall be received and held in all such suits as prima facie the schedule of said commissioners, without further proof than the production of the schedule desired to be used as evidence, with a certificate of said railroad commissioners that the same is a true copy of the schedule prepared by them for the railroad company or corporation therein named, and that notice of making the same has been published as required by law; provided that, before finally fixing and deciding what the original maximum rates and classification shall be, it shall be the duty of the railroad commissioners to publish ten days’ notice in two daily papers published in Des Moines, setting forth in such notice that, at a certain time and place, they will proceed to fix and determine such maximum rates and classification, and they shall, at such time and place, and as soon as practicable, afford to any person, firm, corporation or common carrier, who may desire it, an opportunity to make an explanation or showing, or to furnish information to said commissioners on the subject of determining and fixing sncli maximum rates and classification ; and, in any event, the original schedule of rates and classification of freights, on all lines of railroads in Iowa, shall be fixed and go- into effect within sixty days from the taking- effect of this act.”

It will be observed, upon consideration of the plaintiff’s petition, that the threatened injury which it seeks to avert by the injunction in this case is the establishing, promulgating and enforcing of what in' the petition are called “joint rates between petitioner and other railroads.” It-is important that we determine, at the door of this discussion, what are these “joint rates,” the fear of which is the ground of the plaintiff’s action. Section 2 of the statute above- quoted provides, that “all railroad companies doing business in this state shall, upon demand of any person or persons interested, establish reasonable joint through rates for the transportation of freight between points upon their respective lines within the state.” Section 3 of the same statute” provides that, “in the event said railway companies fail to establish through joint rates, or fail to establish reasonable rates for such through shipments, it shall be the duty of the board of railroad commissioners, and they are hereby directed, upon application of anv person or persons interested,_ to establish joint rates for the shipment ^Tfreight and_cars over two or more lines * of railroads in this state.” This statute requires the 'railroad companies to establish “through joint rates,” and in default thereof the railroad commissioners are directed to establish such rates. It is plain that the rates required are joint rates of charges for the transportation of freight and cars. See section 17, chapter 28, Acts of the Twenty-second General Assembly, above quoted. And it is eqxially plain that the joint rates of charges cover all the charges for the transportation over two or more roads, as though they constituted one road, the rates fixed determining the whole charges. It is also plain that these joint rates consist of the separate rates of each separate road. As their services in the transportation of the freight or cars are not always equal, because of differences in tbe distances of transportation, and for otlier reasons, tbe reasonable charges wbicb each ought to make cannot be equal. It will be seen at once that the railroad companies, or the railroad commissioners, when establishing joint through rates, must establish a rate for each road which, when united, will be “the joint through-rates.” This is an obvious construction of the statute demanded by its language, “through joint rates” (plural), which the railroad companies and the railroad commissioners are required to establish.

III. The establishing of “through joint rates” is the only duty to be exercised in the discharge of the power conferred upon the railroad commissioners by the sections of the statute just cited, which are the occasion of plaintiff’s fears of interference with its rights, whereon this action is founded. The plaintiff does not allege any other ground of action than the threatened establishing of “through joint rates.” No other objections to the statutes in question, pertaining to railroads and rates and joint rates, are made in the petition; none other are before us for consideration. It will be here seen that the statutes under consideration in no way affect the duty, obligations or rights of the plaintiff as a common carrier, further than is done by the regulation of rates of charges. The law relating to the receipts and delivery of freight to connecting lines, and the obligations and rights of consignors and consignees and of the railroads, growing out of the relations arising when such connecting lines exist, are not modified, restricted nor in any way affected by these statutes. In short, the duty of the railroad companies, as to rates and joint rates, is alone affected and regulated by these statutes. These conclusions will be again brought to mind in the further consideration of the case.

IY. The considerations just expressed lead to the conclusion that the power and authority vested in the" state, under which rates of charges for the transportation of freight by railroads are regulated,, may be exercised to establish, what are called “joint through rates.” That the state may fix the maximum charges" lor the transportation of freight by railroads, which shall not be unreasonable, is not disputed in this case. It has been so decided by the United States supreme court, and the doctrine has been recognized by this court. Chicago, Burlington & Quincy Ry. Co. v. Iowa, 94 U. S. 155. In our opinion, no facts or dis- I tinctions in principle exist which deprive the state of ' authority and power to establish “ joint through rates,” while it" may, in the exercise of its constitutional authority, fix rates of freight charges for each separate railroad. When rates, not joint, are fixed, the maxi^ mum charges for specified distances, or per mile, are determined for each separate railroad, as shown by this illustration: Freight is shipped from Cedar Rapids to' Davenport by the Burlington, Cedar Rapids & Northern and the Chicago, Rock Island &> Pacific railroads. The rate of freight charges is fixed by the state from Cedar Rapids to West Liberty, and a separate mte from West Liberty to Davenport. Now, here are two~] separate rates, — a rate for each road. It is not doubted ' that the state may fix these rates, and when that is done the charges for through shipments from Cedar Rajfids to Davenport is the sum of the separate rates. The state, in the exercise of its authority, in accord"with legislative wisdom, may discover that these separate rates, when united, are too small to compensate the carrier, or too large to do justice to the shipper; that justice demands such modification of these separate ■charges that the sum thereof will be reasonable and just, both as tp the railroad companies and the shippers. Thereupon the state, for “through shipments” over the two roads,, fixes rates of charges for each road. The sum thereof, united, constitutes the lawful charge for freight between Cedar Rapids and Davenport. It" clearly appears that the thing • done in the one case is the same as in the other. It is simply the fixing of the rate to be charged by each road. No reason can be given why the state should not fix separate rates, which should apply to the through shipments between stations of different roads. The authority which will authorize the fixing of rates for each road may be exercised, when there shall be through shipments over separate roads, to enlarge or restrict such separate rates, in order to attain the ends of justice. It will clearly be seen that the words, “through joint rates,” simply mean rates which shall be just and reasonable charges for the transportation over the united route. As we have said, these united charges must be so apportioned to the separate roads that each shall receive a just and reasonable part of the joint charge. If the joint rate is fixed by the railroad companies, they will determine the part each shall receive. This will be done by the railroad commissioners, in case the railroad companies fail to fix joint rates ; and the commissioners will consider matters and circumstances which should affect the division. I Acts, 23d Gen. Assem., ch. 17, sec. 4. —

Y. The arranging of what is called “ joint through rates ” is not a thing that is new in the business of railroad transportation. The current history of the country discloses the existence of the practice among railroads to make through shipments of freight without change of cars. Nor is this practice of recent origin. It has existed whenever the business of the roads demanded it. Expedition and economy in transportation induced contracts and arrangements for through shipments between points on connecting roads. It may be that in some cases the managers of the roads refused or failed to enter into such arrangements or contracts, and it may be that in other cases the business of the roads has not been managed wholly in accord with the best interests of the corporations owning them, and with the requirements of the law. But such failure of duty does not establish the right to be exempt therefrom. Surely, the course of business which has been found, by experience of railroad management, to be promotive of economical transportation and increase of business, thereby promoting the interest of the owners of the railroads and the shippers, oug^t to be pursued; and, if the railroad management fail or refuse to pursue it, the state, as it has done in the statutes under consideration, ought to require it to be pursued. This the state can do under the authority it possesses to regulate and control carriers, and provide maximum freight charges.

It will be observed that section 3 of the statute above quoted, providing' for joint through rates, contemplates the practice of through shipments, so long existing, and requires the railroad commissioners to consider the charges made for joint inter-stateshipments and the rates charged by the railroad-companies for shipments within the state. The purpose of the statute is to secure just and reasonable rates for the shippers of this state, and it directs that the practice and course of business of the railroads shall be considered in fixing-such rates. It cannot be that the statute in question will operate to the denial of just compensation to the railroad corporations for the transportation of property. It provides that joint rates fixed under the statutes shall be reasonable. The railroad commissioners, it will Se" presumed, will rightly discharge their duties, and will fix reasonable and just “joint through rates.” If these officers fail in their duty, from errors of judgment or from other causes, the railroads may cause their action to be reviewed and corrected.

YI. Objections to the statutes are urged in the following language: “We contend, therefore, that the freight tramo: . joint rates: power of state to establish. law seeks to compel: First, that two or more companies shall enter involuntarily . mto con tract relations with each other at , the demand of a third person; second, that one company shall surrender its cars to the possession of another, or unload the contents without compensation; third, that, at the demand of a third person, companies shall not only part with the possession of their cars, with no provision in the law as to their return or compensation for their use, but shall accept cars of other companies, and carry the same over its lines without any provision for compensation.”

The statements of facts in this position is not wholly correct. It is not correct that railroad companies are, nnder the statute, compelled to enter involuntarily into contract relations with each other. It is true that the statute requires them to enter into the contract for joint rates, thus imposing upon them the duty so to do ; but it does not provide for enforcing the duty by proceedings recognizing a contract between the parties, if that, indeed, could be done ; nor does it provide for penalties or forfeitures for failure to discharge the duty. It simply provides that, in case of failure to adopt joint rates by the companies, the railroad commissioners shall prescribe them, and the companies shall not be permitted to charge more. In that case, the charges are not made by the companies under a contract, but pursuant to a duty and obligation imposed by law. It is not necessary, in order to support an action against a railroad company for failure to fix joint rates, to hold that it is bound by an obligation as of a contract. Its liability arises by reason of its failure to perform a duty imposed by law. The statute, in its principle and its effect in this regard, is not different from other rules of the law applicable to common carriers, which hold them liable for failure to receive property for transportation. In both cases the carrier is liable for the non-performance of duty.

YII. The course of business of railroad companies, originating in the wants and demands of commerce, 2. —:s¿7¿£—: oars. requires the cars of one company to be delivered to another for transportation. It is presumed that rules relating to compensation for the cars transported are settled by agreement, or under rides recognized and prevailing in the business of transportation by railroads. At all events, the law provides rules under which this matter of compensation may be settled. It is competent for the railroad commissioners^ if it be necessary, to impose rules touching this matter, 1 in order to aid the railroad companies to perform the I duty imposed by the statute to provide for joint rates, or to require or enforce the performance of that duty. The fact that the transfer of cars from one company to another, for the transportation of property over more than one railroad, without breaking bulk, has been practiced so long as to be recognized as of the course of . business, of which we will take judicial notice (Peoria & P. U. Ry. Co. v. Railroad, 109 Ill. 135), is a complete answer to the complaints made in the objections under consideration. Surely a course of business so long pur-N sued, and so extensively prevailing, and demanded by the commerce of this country, cannot, when recognized and required by statute, become so objectionable in ¡ principle, so oppressive in operation, as to require the statute to be declared unconstitutional. A railroadj company, as a common carrier,' is required to receive and transport freight offered to it for transportation. The reasons upon which this rule is founded impose upon it the obligation to haul cars of other companies brought to it for transportation over its own road. Peoria & P. U. Ry. Co. v. Railroad, 109 Ill. 135. As the course of business of the railroad companies and the rules of law require them to transport the cars of other companies, surely a statute prescribing and enforcing the duty thus imposed cannot be regarded as interfering with the constitutional guaranties for the protection of the rights and property of such companies. The statute under consideration provides that freight in carload quantities may be transferred, instead of going-through to destination • without change of cars, the cost of unloading being paid by the company making it. Acts, 23d Gen. Assem., ch. 17, sec. 2. This provision is intended to excuse the duty to transfer cars upon payment of costs of unloading, and is enacted in the exercise' of legislative authority, to regulate the performance of duty by carriers, and prescribe reasonable charges for the transportation of freight.

VIII. Counsel for the plaintiff maintain, upon many grounds, that the statutes in question are in ‘ ' ‘ . conflict with both the state and federal constitutions. It is first urged that they impair the obligation of the contract arising under the plaintiff’s charter. It lias been held by the United States supreme court that railroad corporations are “subject to legislative control as to the rates of fare and freight, unless protected by their charters.” Chicago, B. & Q. Ry. Co. v. Iowa, 94 U. S. 155. This doctrine is recognized by this court. The authority of the state to control rates of freight charges made by railroad companies is not restricted so that it cannot be exercised in fixing the rates to be charged by connecting roads, which are called in the statute “joint through rates.” Joint rates, as explained heretofore in this opinion, are simply the sum of separate rates of the respective roads. The railroad commissioners in fixing" joint rates, under authority of the state, may make just and reasonable orders for the return of cars and for compensation for their use, or for hauling them, and they will consider these matters in fixing the separate rates which together make the joint rate. • The constitutional objection in this point demands no further con-j sideration. ^

IX. It is urged by the plaintiff’s counsel that the statute is in conflict with the fourteenth amendment of i. —:—:—= law. the constitution of the United States, “in that, without due process of law, and without just compensation, it takes away from the corpora-tors funds invested by them upon certain specified trusts, and applies these funds to uses to which the owners never consented.” We understand this objection, in effect, to be this: That by the statute the plaintiff or its stockholders are deprived of property without due process of law. The power of the state Is ' exercised through designated officers, the railroad commissioners, by proceedings specially provided to enforce the authority of the state. They are designated by the Code special proceedings, in which rights may be established and remedies enforced, and are pursued in many, cases. Code, sec. 2504. Railroad corporations acquire lands to be occupied by their roads by special proceedings. Surely, the same character of proceedings may be invoked to enforce the performance by them of lawfully imposed duty. Tlie proceedings provide for notice to tlie railroad companies, and that they shall be heard in regard to the questions of joint rates. Acts, 23d Gen. Assem., ch. 17, sec. 4. It is a mistake to suppose thafrN “ due process of law” is found only in law or chancery ) actions. Special proceedings, applicable to specified subject-matter, and conformable to the rules requiring notice and the acquisition of jurisdiction, and which affect all persons alike, whose property or rights come within the lawful scope of the proceedings, are prosecuted with “due process of law.” 6 Amer. & Eng. Ency. Law, tit. “Due process of law.” The statutes are designed to prevent railroad corporations from charging unreasonable rates for the transportation of property. Surely, it cannot be claimed that they are deprived of property and property rights by restrictions against unreasonable charges. ^

In this connection counsel repeat objections founded upon what they term “enforced contractual relations” between the railroad companies. We have shown that these joint through rates are often agreed upon by the railroad companies. They determine, in the common course of business, the division of charges, and where and to whom they shall be paid. Under the statute in question, it is made the duty of the railroad companies to establish joint through rates. If they fail to perform the duty, the railroad commissioners will establish the rates as they should have done, and will do just as they should have done and could have done, — prescribe the time and place of payment, and the division of charges. There will be no more difficulty in obeying the~ requirements of the railroad commission than in performing their own agreements for joint through rates, entered into in the course of their business. It is plain 'that the rights of the plaintiff will not be invaded under this statute, and it will suffer no oppression. ^

X. It is argued that the statutes are void for the reason the railroad commissioners are not a judicial ' body, and ought not to be permitted to fix . rates which, shall be regarded as prima < facie reasonable, Tlie question of the reasonableness}, ■of the rates, it is argued, ought to be judicially determined ; and so it can be if the action of the commission is not satisfactory to the railroad company. The pro^ vision of the statute that the rates fixed by the commissioners shall be regarded as prima facie reasonable is not of an unusual character, and was enacted in the ■exercise of the undoubted power of the state to prescribe rules of evidence in all proceedings under the laws of the state. The law presumes the acts of officers of tlie state to be rightly done, and gives them faith accordingly. This rule is not unlike the provision of the statute complained of by the plaintiff. The courts oí law and chancery are open to the railroad corporations for proceedings to review the acts of the commis•sioners in fixing rates of charges.

XI. It is urged that the statutes are in conflict with section '8, article 1, of the constitution of the United inter-state States, in that it is an attempt to regulate commerce between the states. The position is based upon these alleged facts. The plaintiff’s road, in its route between Burlington and Rock Rapids, passes through a part of Minnesota. Trains running between these cities would pass through •another state, and, therefore, counsel conclude shipments between these cities, on these trains, is inter-state commerce. We need not determine whether traffic between ■cities of the same state is merchandise, which, pursuant to the traffic, is transferred from one city of the state to •another, by a route partly in another state, by a railway company organized under the laws of the state, which carries the merchandise within the jurisdiction ■ of the other state, is inter-state commerce. See, on this question, Commonwealth v. Railroad, 17 Atl. Rep. (Pa.) " 179, and State v. Railroad, 41 N. W. Rep. (Minn.) 1047, recognizing adverse rules, the first maintaining that •such a transaction is not inter-state commerce. The petition does not allege that defendants are about to fix joint rates between Burlington and Rock Rapids. If ifll ■be not lawful for them to do so, we will presume, when j called on to act, they will not fix such, a joint through, rate. We would not annul a statute on the ground of a 'fear of its erroneous execution in one particular. Upon the question of law presented by counsel we intimate no opinion.

NTT. Chapter 28, Acts of the Twenty-second General Assembly, provides that, when recovery is had for ' attorney fees, violation, attorney’s fees are adjudged against the defendant. It is insisted that a privilege is here granted to a suitor which is withheld from other citizens. All citizens, having litigation of the character indicated, have equal rights to recover-attorney’s fees. The legislature may prescribe rules permitting recovery of double damages or attorney’s, fees in one class of cases, and deny it in all others. There is no inequality therein forbidden by the constitution and laws.

XIII. It is insisted that the provision imposes a. “penalty for exercising the right of defense.” It will be seen that, if the defense is established, there can be no penalty ; if it be not, it will be rightly imposed.

XIY. It is urged that the statute is void for-uncertainty, in that it does not define the offense for statute: certainty as to offenses charged. which the penalties provided may be imposed. These offenses are explicitly defined in chapter 28, Acts of the Twenty-secon5. General Assembly, sections 11, 23. It is said that the statute is uncertain, because it does, not prescribe what shall constitute a reasonable rate. It declares that the rate nxed by the commission shall b q prima facie evidence that it is-reasonable. But it permits the accused. to show in defense that it is not reasonable. The law requires reasonable rates to be charged. What constitutes such rates is a question of fact to be determined under the rules of the law. ButS it is said that the commissioners’ rate would not secure the' accused from conviction if it be shown that the charges fixed by the commissioners are excessive,— greater than is reasonable. But the purpose of the provisionauthorizing the commission to fix rates is to-determine a maximum rate, beyond which the railroad/ company may not charge. It may charge the rate fixed,/ bnt no more. In prosecutions to recover penalties,foi the jdolation of the statute, the state is precluded from! c denying that the commissioners’ rates are unreasonable^ NY. It is urged that” the fines imposed by the statutes lor its violation are excessive, and forbidden by ’ —4 section 17, article 1, of the state constitution. —4 The fines are intended to enforce obedience to the law by corporations having great incomes and controlling vast properties. The legislature, in exercise of its wisdom, fixed penalties which, if imposed upon individuals, might appear excessive, but when imposed upon the corporations would be esteemed no greater than is necessary to enforce obedience to the statute. The railroad companies have a ready and efficient way of avoiding these severe penalties, namely, by obeying truly the laws of the state. If they do this, they are in no danger of the penalties; if they do not, they are in no condition to complain of the laws.

NYI. It is insisted that the rates established under\ authority conferred by chapter 17, Acts of the Twenty-third General Assembly, are absolute, and, 10-upon the questions of their justice and reasonableness, are final and conclusive. The third section confers such authority upon the railroad commissioners. It is insisted that this section fails to provide that the rates shall be only prima facie ■ evidence that they are just and reasonable. It is Claimed by counsel that the last sentence is unintelligible, — at least so uncertain as to be incapable of' construction. It may be assumed for the purpose of the •argument, that this position is correct. It is evident that this section is not wholly in the language used in its enactment by the general assembly; the history of the law supports this conclusion. The- act containing the provision is amendatory to chapter 28, Acts of the Twenty-second' General Assembly, and confers authority to fix joint through rates, which was not done in the prior statute. That statute provides that the-rates fixed by the railroad commissioners shall be prima, facie evidence that they are just and reasonable. The-amendatory statute provides that in making joint rates, and in changing and revising the same, the railroad commissioners shall be governed, as nearly as may be, by all the provisions of the act to which it is amendatory, and that the punishments and penalties provided in the prior act shall be inflicted for the violation of the amendatory act. See sections 1 and 5. No other punishments and penalties are -prescribed. It will be-observed that section 5, in express language, declares-that the punishments and penalties contemplated by the act shall be inflicted for unjust and unreasonable-charges. The charges fixed by the railroad commit sioners are, under the statute, prima facie evidence of their reasonableness. For the violation of the law in-charging more than reasonable joint rates.as determined by law, punishments and penalties are alone provided. We conclude that, according to the obvious construction of the two statutes, read together, the joint rates are not absolute, but are prima facie evidence only of' their reasonableness and justice. The construction of the statute we have adopted gives it effect ; that" insisted upon by the plaintiff would defeat it. We are-required, under the familiar rules of the law, the statute being susceptible of conflicting and doubtful construction, to adopt that one which supports the statute in all its parts, and if the statute in some of its provisions-be so indefinite, uncertain or unintelligible as to be-incapable of enforcement, or be void because of conflict with the constitution, or for any other reason, we must sustain the statute in all its parts which are not subject to such objections.

NYU. Another familiar rule of the law requires, courts to uphold statutes unless they are so plainly and palpably in conflict with the constitution as to leave no-doubt or hesitation in the judicial mind of their invalidity. Stewart v. Supervisors, 30 Iowa, 9; Railroad v. Supervisors, 67 Iowa, 199; Gates v. Brooks, 59 Iowa, 510; Morrison v. Springer, 15 Iowa, 304. It cannot be fairly claimed that the statutes in question are plainly and without a doubt unconstitutional.

XVIII. Counsel for the plaintiff insist that the order of the district court, in overruling the motion “‘denim™facts admitted. to dissolve the injunction, must be affirmed on this ground: The motion to dissolve aqmits the allegations of the petition. It is claimed one of these allegations is “that joint rates, as contemplated by the statute, would so reduce plaintiff’s income as to render its business imremunerative..” It is insisted that, upon this admission, it must be held that the statute in question would have the effect to deprive the plaintiff of its property. Without inquiry whether the effect of the statute upon the plaintiff’s business, as claimed, would be ground of holding it involved, and enjoining its enforcement, we think the loss of plaintiff’s property is not shown in the plaintiff’s petition. The language of the petition upon which counsel base the position under consideration is this: “That by said acts your petitioner is denied the right and liberty of contracting with reference to its business, and, therefore, is its property taken from it without consent, and it is compelled to enter into- involuntary, unreasonable and unprofitable contracts with other railroad companies, at the instance of third parties, compelling the operation of its road at a loss.” What is averred here as to the deprivation of property, and the future operations of the road at a loss, are mere conclusions as to supposed effects. It does not amount to an allegation of facts. It is the mere statement of a conclusion that the road would be operated at a loss because plaintiff would be compelled by the statute to enter into involuntary, unreasonable and unprofitable contracts. The allegation in question is, indeed, a conclusion based upon another conclusion as to the supposed operations of the statute.

XIX. It is also insisted that, as the dissolving of an injunction is a matter resting largely in the discretion of the court, the refusal of the court below will not be disturbed unless it appears suon discretion has been abused. But this rule does not apply to cases ' dissolution ón cretion of tri^l court involving questions of law arising upon the face of the petition itself. If it appear upon the face of the pleadings that, as a matter of law, the injunction ought not to' have been granted, it will be dissolved. Surely, the. operations of a statute of a state will not be suspended' by injunction for conflict with the constitution, under this doctrine of discretion, when the petition therefor,' upon its face, shows that it is constitutional, or. that, it is not clearly and without doubt unconstitutional. • The failure to dissolve the injunction, upon proper motion, was not done in the exercise of judicial discretion. The enforcement and obedience to the rules of law are not left to the discretion of the court.

XX. The views just expressed, and the rules upon which they are based, dispose of another position of ____ "answer. ' counsel, namely, that the' injunction will not be dissolved on motion, because the facts alleged in the petition are not denied by answer, and that the relief sought will not be effectual if the injunction be not maintained. But there are no issues of fact raised by this motion, — they are all of law. The issues involve the validity of the statutes in question. If they be held valid, no facts are alleged in the petition which will defeat them. \

XXI. Much is said in argument attacking the^ justice and policy of the statutes. With these things 14» Statutes: public policy, we have nothing to do. They are for the ^ ^ j consideration of the legislative department of the government alone.

These views dispose of all questions arising in thn case, and lead us to the conclusion that the judgment of the district court ought to be reversed.

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Dissenting Opinion

Rotiirocic, J.

(dissenting). — It appears to me that the foregoing opinion is unsound in its reasoning, and wrong in its conclusions, upon two questions involved in the record in the case. These questions involve the validity of certain provisions found in chapter 17, Laws, Twenty-third G-eneral Assembly. ~T~ believe that parts of that act are plainly invalid, and ought not to be upheld by this court; and it is proper to say here that the question as to the power of the legislature to authorize the railroad commissionei’s to establish and promulgate joint rates for the transportation of freight over connecting lines of railroad is not necessary to be determined in this case. The question! is, does the said act, by reason of its plain language, \ violate the constitution of the United States, and of \ this state in so far as it compels a common carrier to perform service without compensation, or to surrender its property to another carrier, and thus deprive it of its property without due process of law?

The first question arises upon the second section of the act. It is therein provided that “ carload lots shall be transferred without unloading from the_cars in which such shipments were first made, unless such unloading in other cars shall be done without charge therefor to the shipper or receiver of said carload lots, and such transfer be made without unreasonable delay.” This provision of the law is absolute. It seeks to compel the initial carrier to deliver its loaded cars to the connecting carrier without any rule or regulation for its return, and without its consent, or to unload the contents of the ■car into other cars without compensation. It is apparent that the initial carrier is compelled by the act to name to the shipper a joint through rate over all lines of road which the shipper may designate. The law attempts to compel the initial carrier, if the freight be paid in advance, to account to all other carriers for •their proportion of the charges, or, if the freight be paid to the last carrier, it becomes the agent or collector for all the others. This enforces contractual! Telations against the will of the parties, and it is no 1 •answer to say that it is not in the nature of a contract, I that it is a rule or regulation prescribed by law. / lc partakes of the nature of a contract, by whatever name it may be called ; and the fact, that carriers over~[ connecting lines do, by contract, make through shipments, is no reason why they should not be allowed to make their own contracts at least so far as to protect themselves in the collection of their freight charges, and in the control of their cars. They should have this power, or the law should provide for such regulations as would protect them in their undoubted rights

The second question is whether, by the act undeib consideration, the joint rates fixed by the commissioners are to be regarded as absolute. The last part of \ section 3 of the act is unintelligible. What is intendea thereby cannot be determined without the interpolation of words, so as to give meaning to that which is absolutely unmeaning. I am not aware that any court has ever, under the guise of construction, entered upon the field of legislation to the extent required to hold that the act provides that,the schedule of rates shall be prima facie evidence that the same are reasonable and just; and the attempt to find ground upon which to hold the act valid, by reference to the act of which it purported to be amendatory, it seems to me is equally unwarranted.

Without elaborating these questions, I conclude that no court ought to be called upon to uphold an act like this, which attempts to control the most important rights without the semblance of an effort to protect the parties affected thereby. In addition to the failure- to make the third section intelligible, the second section requires that, if the initial carrier-does not deem it prudent to deliver its car to the connecting line for any reason, such as that the car is-required to transact its own business,' or that it may have to institute legal proceedings to procure its return, the contents shall be unloaded “in other cars” without unreasonable delay. It is to be supposed that this-means other cars, the property of the connecting line.. It cannot discharge its obligation by unloading in a warehouse, if the connecting carrier neglects to furnish other cars. It appears to me that it will be time enough. to authorize the establishment oí through rates when a law shall be passed making provision for the protection of the rights of property which are everywhere and at all times regarded as sacred, and of which the owner cannot be deprived even by legislative authority, without due process of law. In my opinion, the order and judgment of the district court should be aeeirmed.

■KOBÍNSON, J., concurs in this dissent.

Case Details

Case Name: Burlington, Cedar Rapids & Northern Railway Co. v. Dey

Court Name: Supreme Court of Iowa

Date Published: Feb 9, 1891

Citation: 82 Iowa 312

Court Abbreviation: Iowa