69 S.E. 391 | S.C. | 1910
Lead Opinion
November 29, 1910. The opinion of the Court was delivered by The above stated cases were heard and will be considered together, as the second grows in part out of the first. At the session of 1905, a committee of the legislature was appointed, under a concurrent resolution, to investigate the affairs of the State Dispensary, 24 Stat., 1220. The resolution was very broad in its scope, and authorized the committee, among other things, to investigate all transactions connected with the dispensary and its management, present and past, and the connection of any of its officers with any corporation, concern or individual, contracting for the sale of goods to the State for the dispensary, and ascertain the financial standing of the business.
The investigations of the committee resulted in an act, passed in 1907, authorizing the appointment of a commission, to be known as the State Dispensary Commission, *280 whose duty it was to close out the entire business and property of the State Dispensary, collect all debts due, and pay "all just liabilities" of the State growing out of said business. The Commission was given "full power and authority to investigate the past conduct of the affairs of the dispensary." It was also clothed with all the power and authority conferred upon the committee, which had been appointed under the resolution above referred to. 25 Stat., 835. The act of 1907 was amended in 1908 so as to give the Commission "full power to pass upon, fix and determine all claims against the State growing out of dealings with the dispensary; and to pay for the State any and all just claims which have been submitted to and determined by it, and no other." 25 Stat., 1289.
Appellant presented to the Commission a claim for $23,013.75, as the balance due it by the State for bottles and demijohns furnished to the dispensary under contracts made with the Board of Directors from and including April, 1906, until the business was closed out by the Commission. Appellant had also furnished the dispensary practically all the bottles and demijohns used since about December, 1902; but all accounts prior to April, 1906, had been settled.
Upon the filing of this claim, the Commission went into an investigation of all past dealings of appellant with the dispensary; and after hearing a great deal of testimony and argument thereon, rendered its decision, dated November 17, 1909, which will be set out in the report of the case.
The conclusion and finding of the Commission was that, in pursuance of a conspiracy between some of the directors of the dispensary and some of the appellant's officers or agents to defraud the State whereby legitimate competition was destroyed, appellant had a monopoly of the business of furnishing glass to the dispensary from the date of its beginning business, in 1902, until April, 1906: and that the prices paid it for glass during that period exceeded the fair *281 market value thereof by $51,432.99. Therefore, allowing appellant's claim of $23,013.75, the Commission found that appellant was indebted to the State in the sum of $28,419.24, the difference between the amount of its claim and the sum it had fraudulently collected from the State.
From that decision this appeal was taken, under the provisions of the statute, giving every claimant the right of appeal to the Supreme Court, "as in cases at law." Appellant concedes that the jurisdiction of this Court is limited in such cases to a review of alleged errors of law. Many of the exceptions question the findings of fact on the ground that there is no testimony to support them. If that were so, they might be corrected as errors of law. But, after a very careful consideration of the testimony, we have failed to discover that any of the findings of fact are wholly unsupported by testimony. It would unnecessarily prolong this opinion to discuss in detail the evidence, which covers 650 printed pages, to point out that which tends to support the findings of the Commission, which are material to its decision. It would be an unprofitable task. Besides, any expression or opinion by this Court upon the sufficiency of the evidence upon any point might result in prejudice to others whose rights may be affected by the same testimony and facts inferable therefrom in other litigation which may grow out of the transactions in question. In this connection, it may not be out of place to say that we do not agree with appellant's counsel that the finding of the Commission of a conspiracy to defraud the State is an impeachment of the character for honesty and integrity of every stockholder, director and officer of the company. Corporations, like individuals, are bound by the acts of their agents within the scope of their authority, even those fraudulently done; and while the legal consequences of such acts must be visited upon the principals, it by no means follows that the principals can justly be charged with guilty participation in them. It is but fair to say that there is not a particle of *282 testimony tending to show that some of the stockholders, directors and officers of the company had any knowledge of the transactions which fell under the condemnation of the Commission.
The first exception alleging error of law is that after the testimony had been taken, and the argument was about to commence, one of the commissioners stated to appellant's attorney that, from his recollection and knowledge of the testimony, there was a doubt in his mind whether the State owed appellant anything; that he was under the impression, from the testimony, that it showed that appellant owed the State a large sum of money on account of overcharges; and asked that his argument be directed to that point. It is contended that this statement showed that the mind of the commissioner was prejudiced against appellant's claim, and that he was thereby disqualified to participate in the deliberations of the Commission. Such a contention is clearly untenable. The commissioner distinctly stated that the impression made upon his mind was from reading the testimony. Ordinarily, the mind of every intelligent man is impressed one way or the other as to the weight of evidence and its sufficiency to establish the facts in issue as he hears or reads it. There is no impropriety in the trier of facts stating to counsel the impressions so made upon his mind, that he may have the opportunity of so presenting the evidence as to remove the impression, if possible. It is common practice for Judges to state to counsel the bent of their minds as to the law or facts, so as to direct argument to the questions involved, and we have never heard the practice questioned or condemned. On the contrary, it is a distinct advantage to counsel in arguing a cause.
The next contention of appellant is that the Commission is not a Court, but a special tribunal of limited power, and that it exceeded its authority in undertaking to fix and *283
determine appellant's liability to the State, and then set off its claim against the liability so fixed. It is conceded that the Commission is not a Court, though its duties necessarily involve, to some extent, the exercise of judicial functions, as is always the case where judgment and discretion are to be exercised. It was created under Section 2 of Article XVII of the Constitution, which provides that "the General Assembly may direct by law in what manner claims against the State may be established and adjusted." State v. Dispensary Commission,
The question, therefore, whether the Commission had authority to entertain a "set off" or "counterclaim" in favor of the State against a claimant, in the technical sense in *284 which those terms are used in legal proceedings is not germane or material to the present inquiry. To what purpose should the Commission investigate, unless it announced the result of its investigation? We see no error, therefore, in the Commission stating its findings as the result of its investigation.
The findings of the Commission, however, are controlling only in its determination of the non-liability of the State upon appellant's claim. They have not the force or effect of a judgment, concluding appellant in any other proceeding — such, for instance, as the State might institute in the proper Court to recover the amount found by the Commission to be due it by appellant.
The exceptions assigning error in admitting in evidence certain testimony which had been taken by the investigating committee, appointed under the resolution hereinbefore referred to, cannot be sustained; because the record fails to show that objection was made to its introduction; on the contrary, it appears that it was introduced by consent. Besides, appellant was represented by counsel before the committee and cross-examined the witnesses, except one, whose affidavit was admitted without objection; and after the testimony was admitted, the Commission offered appellant opportunity to introduce testimony in rebuttal or to impeach the witnesses.
The next assignment of error is in admitting testimony to show that other manufacturers of glass had put in bids with the directors of the dispensary which were lower than the bids of appellant, which were accepted by the directors; and that appellant had, during the time it was furnishing the dispensary, sold bottles of the same kind to other buyers in smaller quantities at lower prices, because in dealing with the other buyers it had to meet competition, the contention being that appellant's bids having been accepted and contracts awarded upon them, such testimony was irrelevant. The testimony was clearly *285 relevant, because it tended to prove the charge of a conspiracy to defraud the State. If it be true, as contended, and as some of appellant's witnesses testified, that these smaller quantities were sold at lower prices merely to get rid of its remnants or surplus product, which was a very small per cent. of its output, that was a fact for the consideration of the Commission in determining the weight and sufficiency of the evidence, but it could not affect its relevancy.
We proceed next to dispose of the issues raised in the second case stated at the head of this opinion. These arise principally out of an act approved February 23, 1910, and what was done by the defendants under the provisions of that act, which, it will be noted, was passed subsequent to the decision of the Commission upon the claim of the plaintiff. The provisions of the first five sections of the act pertinent to this case are, in substance: That, in addition to the powers conferred by all previous acts, the Dispensary Commission shall have power to pass upon, fix and determine claims of the State against any person, firm or corporation heretofore doing business with the State Dispensary, and settle and receipt therefor; that the findings of the Commission under its provisions shall be final, and, upon the finding by the Commission that any person, firm or corporation is indebted to the State, the dispensary auditor and officials having charge of the funds of any county dispensary which may be indebted to such person, firm or corporation, shall pay to the Commission the amount so found to be due the State, or so much thereof as the funds in their hands due to such person, firm or corporation will pay, and the receipt of the Commission shall be a sufficient voucher therefor: that the Commission may, by its order, stop the paying out of any funds of any county dispensary by any officer having charge thereof. Sections 7 and 9 of the act are as follows: *286
Sec. 7. "The State Dispensary Commission is hereby empowered to pass all orders and judgments and do any and all things necessary to carry out the purposes of this act; and all judgments rendered by them for any claim due the State shall be a lien on the property of the judgment debtor situated within this State, and a transcript of said judgment shall be filed in the office of the clerk of the Court of Common Pleas in each county where any property of such judgment debtor is situated.
Sec. 9. "In all cases pending before the said State Dispensary Commission, upon any claim or claims against any person or persons or any corporation or corporations owning any real estate in any county in this State, the said Commission shall file in the office of the clerk of Court in each county where such real estate is situated a notice of the pendency of such cases, and the said notice so filed shall be full notice to all persons whomsoever claiming any title to or lien upon such real estate acquired subsequent to the filing thereof, and the debt found by said Commission to be due the State shall have priority over the claims of all creditors, except creditors secured by mortgage or judgment entered and recorded prior to the filing of such notice, and the said real estate, in the hands of any person or persons whomsoever, shall be liable for the payment of such debt so found to be due the State."
Within a few days after the approval of the act, to wit on February 26, 1910, the Commission, by its attorneys, filed in the office of the clerk of the Court for Richland county, in which county plaintiff owned real estate, a notice, headed or entitled. The State v. Carolina Glass Co., and signed by the Attorney General and other counsel representing the State. The notice was as follows: "Notice is hereby given to all whom it may concern, that the above stated cause has been instituted, and is now pending before the State Dispensary Commission for the recovery against the Carolina Glass Company of $29,000.00, the amount *287 which has been found to be due from the said defendant to the State of South Carolina owing to overcharges made by said defendant in selling goods to the State Dispensary, and this notice is given in accordance with the terms of an act of the legislature passed in February, 1910, and duly approved by the Governor." About the same time, notice was served on the plaintiff, pursuant to the provisions of the act, that the Commission would proceed to pass upon, fix and determine the claim of the State against the plaintiff on account of the overcharges growing out of its dealings with the dispensary. Notice was also served on the County Dispensary Board of Richland county, requiring that board to pay to the Commission the amount due by said board to the plaintiff.
Another feature of the case grows out of an agreement alleged to have been made between the attorneys for the plaintiff and the attorney representing the State with regard to payments for shipments of glass made by plaintiff to the county dispensaries after November 20, 1909. At the date of the decision of the Commission on plaintiff's claim, several of the county dispensaries were indebted to plaintiff for glass shipped prior to the decision, and plaintiff was under contract to make further shipments. But, fearing that payment of the amounts due it by the county dispensaries might be stopped by order of the Commission, and being unwilling, in view of the possibility of such action, to make further shipments, without an agreement that payment therefor would not be withheld, the attorney representing the State in the matter of claims against the plaintiff and others for overcharges against the dispensary, agreed with plaintiff's attorney that payments for all shipments made after November 20th would not be interfered with by the Commission. There seems to have been some misunderstanding between the attorneys as to what the agreement was, or as to whether there was any agreement, with regard to the amounts then due the plaintiff for shipments previously *288 made. No steps, however, were taken by the Commission or the State's attorneys to stop the payment of such debts, and plaintiff continued to collect them, as well as those accruing after November 20th.
Upon the filing and serving of the notices above mentioned, this action was commenced in the original jurisdiction of this Court, to enjoin the defendants from ordering the sums due to plaintiff by the county dispensaries withheld or paid over to the Commission, on the ground that the act of the Commission in fixing and determining the liability of plaintiff to the State was an excess of authority conferred by the statutes, and, therefore, null and void, and on the ground that the notice requiring the county board to pay to the Commission the amounts due by it to plaintiff, in so far as it affected shipments made subsequent to November 20th, was a violation of the agreement with plaintiff's attorneys. Plaintiff also asks that the Commission be enjoined from asserting or claiming a lien upon its real estate in favor of the State by virtue of the notice filed with the clerk of Court for Richland county, on the ground that the sections of the act giving the State such lien upon the judgment of the Commission, or the right to acquire it by reason of such judgment, are unconstitutional.
Under the provisions of the Constitution (Art. VIII, Sec. 11) and statutes (25 Stat., 463) the county dispensaries are conducted "under the authority and in the name of the State." Therefore, the officers in charge of them are agents of the State and the funds arising from the sale of liquors through them are the funds of the State, and the debts due for goods sold to them are the debts of the State. In exercising the powers conferred upon it by the legislature, the Dispensary Commission is also the agent and representative of the State, "subject to no interference, except that of the General Assembly itself," and a suit brought against it is, in effect, a suit against the State. State v. Dispensary Commission,
The claim that the State has a lien upon the real estate of the plaintiff by virtue of the provisions of Section 7, and by virtue of the notice filed with the clerk of Court under the provisions of Section 9 of the act of 1910, presents a serious and delicate question. Unless the provisions of Section 7 must be construed to be retroactive, the lien cannot be claimed under this section. The rule is too well settled to require discussion that a *290 statute will not be construed so as to have retroactive effect, unless such construction is required by its express terms, or by a necessary implication. There are no words in the act expressly giving any of its provisions retroactive effect, and there is no necessary implication from the language used that the Legislature intended that it should have such effect. Therefore, when the Legislature said, in Section 7, that "all judgments rendered by them (the Commission) for any claim due the State shall be a lien on the property of the judgment debtor situated within the State," it meant all judgments rendered after the passage of the act. As the only judgment, in any sense of the word, rendered by the Commission against the plaintiff was rendered before the passage of the act, no lien upon the property of the plaintiff was given or intended to be given by virtue of that judgment.
The Constitution ordains (Art. I, Sec. 14) that "the legislative, executive and judicial powers of the government shall be forever separate and distinct from each other, and no person or persons exercising the functions of one of said departments shall assume or discharge the duties of any other." This language is as strong as it is simple and clear. The Legislature therefore cannot assume to itself the exercise of judicial powers. Seegers v. Parrott,
It follows that any attempt to confer upon the Commission judicial powers, except in so far as the exercise of such powers may be necessarily incident to the duty of investigating and ascertaining the truth with respect to the management of the dispensary, and the just liabilities of the State growing out of dealings with the dispensary, is violative of the Constitution. The exercise of judicial functions, or quasi judicial functions, is often necessary, as an incident, to the exercise of the powers conferred by the Constitution upon the other co-ordinate branches of the government, as in all cases where the exercise of judgment and discretion are required. But this is not the judicial power vested in the Courts. It would be difficult to give an exact definition of the words "judicial power" as used in the Constitution, which would be applicable to all cases which might arise, and we shall not attempt it. The lines of demarcation between the powers of the three departments of government are often shadowy and illusive; but in the main they are clear, well defined and well understood.
The Constitution assumed the existence of an organized society, and when it vested the judicial power in the Courts, it had reference to the judicial power then existing, and such as the people then understood to be vested in and exercised by the Courts.
There can be no doubt or difficulty therefore as to those powers, which, from the earliest periods in the history of our constitutional forms of government, have been exercised *292 by the Courts in the due and orderly interpretation and administration of the law. It has always and universally been deemed the prerogative of the Courts to enforce and protect rights, prevent and redress wrongs, punish offenses against the public, and determine the rights, obligations and liabilities of persons arising out of their relations to and dealings with each other. It would not be contended for a moment that the Legislature could, even upon the fullest, fairest and most deliberate investigation, after due notice, pass a valid act declaring that a particular individual is indebted to the State in a given amount, and by legislative fiat create a lien upon his property. Such an act would not only be an unwarranted usurpation of judicial power, but would also be an infringement of the constitutional guaranty that no person shall be deprived of his property without due process of law or be denied the equal protection of the law. If, then, the Legislature itself could not pass such a judgment, it cannot confer upon a commission the power to do so. The creature cannot be greater than the creator. The investigation of the dealings between the plaintiff and the State, the hearing of evidence and argument upon the facts and the law applicable thereto, and the determination of the rights of the plaintiff and the State growing thereout are so clearly an exercise of judicial power that the bare statement of the proposition is sufficient without argument to illustrate its truth. It was held to be such by this Court in State v. Dispensary Commission, supra, where, at page 333, the Court said: "Their (the Commission's) discretion is a judicial discretion, and their action, without respect to the validity of claims, judicial action." So long, therefore, as the action of the Commission was confined to the investigation of all dealings, past and present, with the dispensary, and the determination of the just liabilities of the State growing out of them, it was, as we have seen, based upon constitutional authority, and was valid and binding. But we find no authority in the Constitution for the Legislature *293 to provide by law how claims of the State against others shall be established or adjusted, except through the Courts. We conclude, therefore, that in so far as the act of 1910 attempts to confer upon the Commission power to pass final judgment upon the claim of the State against the plaintiff, it is unconstitutional, null and void. And, as the lien which the act attempts to create is based upon the unauthorized act of the Commission, it is likewise null and void.
The judgment of this Court is that the decision of the Commission upon plaintiff's claim against the State be affirmed, and that the defendants be enjoined from asserting or claiming any lien upon plaintiff's property under or by virtue of the notice filed in the office of the clerk of Court for Richland county, and that said notice be cancelled of record.
November 29, 1910.
Addendum
On consideration thereof, the within petition is dismissed.
