67 W. Va. 129 | W. Va. | 1910
Lead Opinion
In the chancery cause of the Coal & Coke Railway Company v. Wm. G. Conley and S. B. Avis, matured and brought on for hearing, on the bill, motion to dismiss, demurrer, answer and depositions, the circuit court of Kanawha county pronounced a decree, on the 16th day of June, 1909, perpetually enjoining, inhibiting and restraining said Conley and Avis from proceeding, as Attorney General of the State and Prosecuting Attorney of Ka-nawha County, respectively, to enforce, against the plaintiff, the penal provision of an act of the legislature, passed on the-20th day of February, 1907, entitled “AN ACT relating to and regu
The jurisdiction. of tbe circuit court is denied on several grounds, one of which is that the suit is, in substance and effect, one against the state, •although .nominally and ostensibly against Wm. G-. Conley and S. B. Avis, and, therefore, within the inhibition of section 35 of Art. VI of the Constitution of' this State, providing that “The State of West Virginia shall never be made defendant in any court of law or equity.” This, defense was set up by a motion to dismiss the bill, as well as by the demurrer, denying jurisdiction on other grounds, as well as the sufficiency of the bill, considered as a bill in equity.
In view of some of.the contentions found in the brief, we observe that there is no difference between courts of law and courts of equitj', in respect to immunity on the part of the state from liability to be sued therein. This inquiry is whether the-suit, irrespective of its form or the forum in which it is prosecuted, is against the state. Therefore, the distinction between proceedings at law and in equity will not be discussed in this: connection.
The State is not a party to the suit by name, but that would be immaterial, if a decision of the question involved mould be,, in substance and effect, one for or against the State. The criterion, then, is the nature and'extent of the State’s interest, if any, in the subject matter; and, upon these inquiries, the provisions of the statute, the status of the parties and the character of the relief sought, are all relevant and material.
Subject to a few trivial exceptions, the act involved limits-the charges of railroad companies, fifty miles long and over, for the transportation of passengers, to two cents per mile, and’ imposes a fine of not less than fifty nor more than five hundred dollars, for each violation of any provision thereof. According-to the allegations of the bill, the complainant had not incurred’ any penalties uncler the act,- at the time of the institution of this suit; but, having found the statute confiscatory in its opera
If the statute is valid, no' pecuniary benefit accrues to the State government under it otherwise than by means of the infliction of penalties for violation thereof, if any, and this is merely incidental. Its primary object is not revenue in the form of penalties. On the contrary, it is limitation of transportation charges in favor of the traveling public, and not of the State. The penal provision was inserted as a sanction te secure observance of the limitation, on the assumption of its sufficiency to deter railway companies from failure in that respect, and, sequentially, of no augmentation of the State’s funds from that source. Therefore, these penalties, like most others, are really for the benefit of the people and not the State, although, if incurred and enforced, they would come into the State treasury. The receipt thereof would be nevertheless merely incidental to the enforcement of a measure dictated by public policy, just as in the case of penalties arising from violation of other laws, enacted under the police power of the State.' If the relief prayed for in the bill and granted by the trial court should be sustained, and. a right to penalties has accrued, it is manifest that the interest of the State in the controversy is indirect and remote, for the reason statéd. But there is another reason which makes this view still more apparent.
The real object of this bill is not protection from penalties.' In other words, it is not a bill to avoid infliction of penalties
As the Eleventh Amendment to the Constitution of the United States denies, to the federal courts, jurisdiction of any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another-state, or by citizens or subjects of any foreign state, what interest, on the part of the
The state, considered in the broad sense of the term, can have no interest in a controversy of this class. The state and the government of the state are two different things, the former being an ideal person, intangible, invisible, immutable; the latter a mere agent, and, within the spirit of the agency, a perfect representative; but outside of that, a lawless usurper. Poindexter v. Greenhow, Id. 290. The supreme law of the state stands over its government, as well as over the citizen, shielding and protecting both in all their rights. It is an attribute of the state as contra-distinguished from the state government. It is to the interest of the state, and its duty to confine is government within the limits of its powers as agent, as well as to restrain the
The government of a state is its mere agent and all its officers act in a representative capacity, binding the state by their acts only in those instances in which they have authority to act for
There is no merit nor force in the suggestion that this rule applies only in those cases in which the statute is unconstitutional on its face. “It is no objection to the remedy in such eases, that the statute, the application of which in the particular case is sought to be prevented, is not void on its face, but is complained of only because its operation in the .particular instance works a violation of a constitutional right, for the cases are numerous where the tax laws of a state, which in their general and proper application are perfectly valid, have been held to become void in particular cases, either as unconstitutional regulations of commerce,' or as violations of contracts prohibited by the constitution, or because in some other way they operate to deprive the party complaining of a right secured to him by the constitution of the United States.” Poindexter v. Greenhow, cited.
Nor does it matter, that chapter 41 of the Acts of 1907 dues not expressly and specifically charge the attorney general of the state and the prosecuting attorneys of the several counties with the duty of enforcing its provisions, or the prosecution of indictments for its violation. In Ex parte Young, 209 U. S. 123, Mr. Justice Peekham said: “The fact that the state officer by virtue of his office has some connection with the enforcement of the act is the important and material fact, and whether it arises out of the general law, or is specially created by the act itself, is not material so long as it exists.”
Coming now to the question of equity jurisdiction, we find the general rule, denying such jurisdiction to restrain the commission of criminal acts and legal proceedings to enforce the criminal law, is invoked by the appellants. This rule is not to be extended beyond the import of its terms. It assumes that the injunction is sought merely to prevent the perpetration of a crime or the prosecution of a criminal, and nothing more.
Nor does the jurisdiction in equity stand on the mere unconstitutionality of the statute. There is no authority for enjoining acts only because they are attempted or threatened under color of an unconstitutional of otherwise invalid law. To this must be. added the element of irreparable injury to some personal or property right, or inadequacy of legal remedy on some other ground. For many injuries or wrongs, wrought or attempted by
Ground for much contention, and cause of some apparent confusion of thought, is found in the peculiarity of the circumstances and relation of the parties in this cause. Complainant’s redress, of its own vigor and by its own hands, of the immediate and direct injury of which it complains, namely, the unlawful invasion of its property by the very force, effect and operation of the statute, seems not to have duly impressed itself upon counsel. It was -compelled to resort to self-vindication of its right., There was nobody with whom it could put its demand directly in issue by making him a defendant and praying ordinary relief against him. It could not.sue the legislature and make it respond in damages or otherwise, as the author of the wrong, nor the people as the beneficiaries thereof. Self-redress by disobedience of the statute was the only possible direct remedy, but that action amounted to more than a mere remedy. In addition thereto, it was the assumption of a status, that of rightful possessor and defender of property, which the law must maintain by an adequate remedy, one in equity if those afforded by the common law actions do not answer the test of adequacy. Though the wrongful invasion of complainant’s property right is legal and official in form, it is just as ruinous as if it were done by physical force and without color of right. The only conceivable distinction in principle between these two kinds of wrong is that the former is a sort of tyranny, forbidden by the state through its constitutional limitations upon legislative power, and the latter an ordinary trespass. The remedy by injunction is sought to maintain that status and secure enjoyment of that property right by preventing the wrongful acts threatened and not merely to enjoin a criminal action because
If the legal remedies are inadequate to fully protect a party in the situation of the complainant, the foregoing principles and conclusions render it obviously unnecessáry to inquire whether the injunction can be maintained on the ground of prior assertion of jurisdiction of the cause by the equity court. While this principle is invoked in support of the jurisdiction by injunction, it is not perceived that the bill makes a case for anything but injunction. Tested by all the rules of pleading, it is a pure bill ‘of injunction, and there is no other suit pending, nor any other primary relief sought by this bill, to which the injunction is ancillary. The bill asks an injunction to protect a property right in the plaintiff, asserted in the country and not in any court, and nothing more. It is not ancillary to any other suit or judicial measure of relief, but is ancillary to, and protective of' individual action, necessary to the conservation of property and maintenance of a property right. We repeat here that this results from the peculiar nature of the ease, there being nobody, official or unofficial, with whom the complainant can effectively and fully put into direct litigation the right it claims. It cannot get the matter into court for a complete and comprehensive adjudication otherwise than by an indirect and circumlocutory proceeding such as this, and this necessity justifies resort to it under the principle of a remedy for every wrong.
In view of decisions to which reference has already been made, the statement of reasons for the inadequacy of the legal remedies in a case of this kind is really a work of supererogation. That we have numerous precedents ought to suffice fully. However, some of the decisions referred to render the assignment of reasons comparatively easy. In Fellows v. City of Charleston, Judge BRANNON said: “Now, surely, the prosecution of criminal process illegally preventing the construction of a residence on real estate deprives the owner of a very important use of his land, practically taking it from him. * * * Therefore, there is jurisdiction in equity for injunction. And aside from that question, there stands the fact alleged that the city and its constituted officers were hindering and obstructing the erection of the house, and that itself, I think, would sustain the
. Passing, for the present, the question of the sufficiency of the bill, in respect to its subject matter, which is not seriously questioned, we notice an objection to it on the ground of lack of proper parties plaintiff; it being contended that the corporation itself cannot maintain such a bill, and that, conceding, for the sake of argument, the sufficiency of the matter set up in it, it should have been filed by the stockholders. This contention is based upon the fact that the stockholders were the plaintiffs in some suits of this nature, prosecuted in the federal courts. We see no merit in it. The corporation, not its stockholders, is the legal owner of its property and has the right to the custody and control thereof, to the exclusion of its stockholders, except in so far as they "exercise the power to determine who shall be its officers, and what shall be its general policy, by their votes cast in stockholders’ meetings. Under some cir-
Whether the statute complained of is unconstitutional, iñ respect to its operation and effect upon the complainant’s busi
Having ascertained that the penalties imposed by the act under review in that ease were heavy and severe, much more so than those imposed by this act, the Court held it invalid on its face, as denying to the railroad company the equal protection of the laws, guaranteed by the Fourteenth Amendment to the Constitution of the United States. It would be-more plainly violative of a certain clause of the Constitution of this State, section 17 .of Art. Ill, designated the “Bill of' Rights,” declaring as follows: “The courts of this state shall' be open, and every person, for an injury done to him, in his person, property or reputation, shall have remedy by due course-of law; and justice shall be administered without sale, denial or delay.” We say this on the assumption that the interpretation, put upon such statutes by the Supreme Court of the United States, as to their effect upon the right of a person or corporation to resort to the courts for such an inquiry, is sound. The statute involved in that case was more severe in its penalties;
That case involved an inquiry as to the validity of certain legislative acts, prescribing rates to be charged for gas furnished in the City of New York, and imposing penalties for disobedience thereof. The charge of invalidity was that the rates were too low to permit the gas company to obtain a reasonable return on its investment. The federal Supreme Court found' .that it was receiving a fair return on its investment, but that the severity of the penalties imposed tended to obstruct the right of litigation on the question of the reasonableness of the rates, by a sort of intimidation in subjecting the- company to an unreasonable risk. Instead of declaring the act unconstitutional on its face for this reason, the court held that the penal clauses were severable and might be held unconstitutional and void without destroying the other provisions, prescribing rates. In addition to the penalty for violation of the act, there was a requirement of the maintenance of a certain pressure in the mains and pipes, which the court held unreasonable and declared void. After having’ disposed of this phase of the case, Mr. Justice Peckham said: “We are of the same opinion as to the penalties provided for the violation .of the acts. They are not a necessary or inseparable part of the acts, without which they would not have been passed. If these provisions as to penalties have been properly construed by the court below, they are undoubtedly void, within the principle decided in Ex parte Young, 309 U. S. 123, and the cases there cited, because so enormous and overwhelming
The intention of the legislature is the decisive test as to the meaning and operation of a statute. It is the polestar of interpretation and construction,'-and there .are many rules for ascertaining it. The letter of a statute is not always controlling. Sometimes the words of a statute are restrained and limited to a significance short of their ordinary meaning. In other instances, the meaning of a clause is extended beyond the literal import of the terms. Frequently, no single rule will suffice and several must be invoked. Occasionally, one alone is all that need be referred to. They are numerous and many of them have exceptions, which are also rules in a limited sense. It would be utterly impossible to enumerate them in an opinion. Whole volumes have been written as treatises upon the subject. That one which seems to be applicable here is, that a thing which the court can plainly see was not within the intention of the legislature in passing an act is not a part of it. The experience of the. ages of English jurisprudence has abundantly justified the adoption and use of certain presumptions as means for determining' whether a given thing was within the legislative intention or not, among which are these: that there was no intent, in the absence of words specifically indicating it, t© innovate upon, unsettle, disregard or violate, (1) the common law; (2) a general statute or system of statutory provisions, the whole subject matter of which was not directly or necessarily involved in the act; (3) a right or exemption based upon settled public policy; (4) the constitution of the state or the Constitution of the United States. The legislature is presumed also to have known the existing law, common, statutory and organic as well as
We start with the Supreme Court of the United States. Prior to 1862, a note had been executed for $1,400.00, payable in gold and silver coin. In that year, Congress passed an act, authorizing the issuance of United States notes and providing that they should be lawful money and “a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid,” the interest referred to being that on bonds and notes of the United States. After the passage of this act, the amount due on the bond was tendered in United States notes and refused. Litigation ensued which was carried to the Supreme Court of the United States and that Court held that, although the letter of the Act of Congress covered and included prior debts, payable in gold and silver coin, it was not the intention of Congress to make the notes, issued under that act, a legal tender in payment of.such debts. In delivering the opinion, Chief Justice Chase said it was not necessary to examine the question whether the clauses of the currency act, making the United States notes a legal tender, were warranted by the Constitution. He proceeded to. examine, the previous legislation, relating to coinage and currency, and then took up the currency acts themselves, and, ascertaining that there was no intention on the part of Congress to do away with gold and silver as a medium of payment, his conclusion was that Congress did not intend the notes to be a legal tender for a debt made payable in gold and silver, notwithstanding the act said they should be a legal tender in payment of all debts, public and private. Thus the letter of the statute was restrained and limited so as to exclude, from its operation, that
It is equally well settled at common law and in the states of the Union generally. Every student of the law will readily recall the familiar illustration of its operation given in the text books. An Act of Parliament made the drawing of human blood a criminal offense, but it was ’judicially declared that a barber might nevertheless bleed a man without violation thereof, because it was unreasonable to say the legislature intended to inhibit the performance of á necessary surgical operation. The Statute 1 Eliz. 2 made it a felony for a prisoner to break out of a jail, but the court said it was no offense for a prisoner to break out of a jail in order to save his life when the prison was on fire. Reniger v. Spogassa, Plow. 13. In Reeves v. Ross, 62 W. Va. 7, this Court embodied the principle in the following declaration of law: “A statute, general in the sense of operativeness throughout the state, but limited in its purpose and object, and intended by the law making body to become effective as a part of the general system of law, relating to
In miost of the instances of implied exception from the letter of a statute, given thus far, the legislative tribunal had full power to do those things which the court held it had not done. They did not lie beyond the domain of legislative power by reason of any constitutional limitation. The courts were not called upon to consider anything but the question of legislative intent. It was admitted that the legislature could have done, in most of them, what the courts held it had not done. This is probably not true of the legal tender cases cited, but it is probably true of all the others. If these, things had been placed beyond the limits of legislative power by constitutional provisions, the presumption of the lack of intention, on the part of the legislature, to overstep the limits of its power and do violence to the organic law, would have made the implication of intent to except them still more apparent. The courts will never impute to the legislature intent to contravene the constitution if it can be avoided, and it can always be avoided, if there is no language in the statute, expressing intent to do so, and effect, consistent with the limitations of legislative power, can be given to the statute. “The elementary rule is ■ that every reasonable construction must be resorted to, in order to save a statute from unconstitutionalityMr. Justice White, in Hooper v. California, 155 U. S. 648. See also Parsons v. Bedford, 3 Pet. 433; United States v. Coomes, 12 Pet. 72; Brewer v. Blougher, 14 Pet. 178; Grenada County v. Brogden, 112 U. S. 261; Presser v. Illinois; 116 U. S. 252; Life Indem. Co. v. Jarman, 187 U. S. 205; Typewriter Co. v. Piggott, 60 W. Va. 532; Robey v. Sheppard, 42 W. Va. 286; Bridge v. Kanawha County, 41 W. Va. 658; State v. Workman, 35 W. Va. 267; Slack v. Jacob, 8 W. Va. 612; Opinion of Justices, 41 N. H. 553.
Both of these great cardinal rules of interpretation and construction, as well as many other subsidiary ones, sustain the view that the legislature,-in passing the act, involved here, never
The application of these rules, made here, may be doubted because there is no precedent for them, no decision in which it has been made under exactly the same conditions, and because its application produces, in practical effect, a partial suspension of a provision of the act without any express affirmative declaration of legislative intent to suspend it. That the application of the principle is new is not a serious objection. The rules of construction are as old as the law. We are always making new applications of old principles. As .the subject now under consideration is comparatively new, the precedents directly applicable are not numerous. Some old or new principles must be applied. Why a new rather than an old? Why one old rather than another? 'Why not those we invoke rather than others, if the result of their application is more just to the legislature and the general public than that of others of no greater dignity would be? Why adopt a construction that will wholly or partially destroy the statute for all purposes, when such a result can be avoided by the application of well settled legal principles? It
While there is no precedent, as we have admitted, for our application of the rule of construction, there is none against it. On this basis, there is equality. But all the considerations upon which the same application is made in other cases are present. This weighs very heavily in favor of it. What stands against it? First, the supposed adjudications to the contrary in Ex parte Young and Wilcox v. Consolidated Gas Co.; second, the letter of the statute; and third, putting it into effect without having written the exception in it in express terms. The adjudications of the Supreme Court of the United States do not touch this question. It is not mentioned in any of them and was not even suggested by counsel.1 If it had been, it might be argued with plausibility that the two decisions referred to are against our view; but. as it was not, they cannot be considered as affecting it at all. This is a new question. .The effect of penalties in a statute of this kind was never discussed in any court, so far as we have been able to find, until the Cotting Case arose in 183 U. S. In that there was no decision upon it. It next arose in the Young Case and the court seems there to have declared the entire statute void. From this course, the 'court deviated when the Wilcox Case was decided. There, the penal clause only was declared void. Whether, in either case, the court intended to hold the statute or penal
Though the Federal Supreme Court has not, so far as we have been able to find, either adopted or rejected the process of reasoning by which we have reached our conclusion, there are judicial expressions in its decisions which seem to embody the conclusion itself. In Railway Co. v Minnesota, 134 U. S. 418, 460, Mr. Justice Miller, in a concurring opinion, said: “But until the judiciary has been appealed to to declare the regulations made, whether by the legislature or by the commission, voidable for the reasons mentioned, the tariff of rates so fixed is the law of the land, and must be submitted to both by the carrier and the parties with whom he deals. * * * * * * * That until ' this is done it is not competent for each individual having dealings with the carrying corporation, or for the corporation with regard to each individual who demands its services, to raise a contest in the courts over the question which ought' tó be settled in this general and conclusive method.” In some of the other decisions of that court, this doctrine is reiterated.
It is not necessary to declare the penalty clause wholly void, if void at all, but only so far as it interferes with the remedy. It is clearly separable in this respect as well as in respect to its connection with the rate prescribing clause. An insolvency law, void so far as it attempts to discharge obligations created before its passage, is valid in so far as its operation is prospective. Sturrges v. Crowninshield, 14 Wheat. 122. ’ A statute, imposing taxes upon all merchandise transported, is valid as to commerce wholly within the state and void as to articles carried through, into or out of the state. Railroad Co. v. Pennsylvania, 15 Wall. 232. A statute, authorizing state coupons to be received for all taxes, is not altogether void because certain special taxes and dues are, by the state constitution, required to be paid in cash. McCulloch v. Virginia, 172 U. S. 102.
It is said this st.atute makes an arbitrary classification of railroads for the purposes of regulation, not founded upon any substantial difference in situation or circumstances, or any reason growing out of such differences, and is, for that reason, unconstitutional on its face. In view of controversy as to what classification is made, it is necessary to determine this question,
The Constitution of this state made it the duty of the legislature to pass laws, from time to time, “applicable to all railroad corporations in the state, establishing reasonable maximum rates of charges for the transportation of passengers and freight, and providing for the correction of abuses, the prevention of unjust discrimination between through and local or way freight and passenger tariffs, and for the protection of the just rights of the public,” and to enforce such laws by adequate penalties. Cons. Art. XI., section 9. In obedience to this mandate, the legislature passed, on December 27th, 1873, chapter 227 of the Acts of 1872-73, classifying all railroads, according to their gross annual earnings per mile, as a basis for the determination of maximum passenger rates, and setting maximum limits for such charges. It also classified all kinds of property for the purposes of transportation and fixed maximum rates of compensation for its carriage. It was made expressly applicable to all corporations, companies,' public carriers or individuals, then owning or operating, or that might thereafter own or operate, any railroad in this state. It contained this provision, further defining a railroad for the purposes of the act: “Whenever any railroad corporation, as lessee or otherwise, operates any other railroad in connection with its own road, the provisions of this act as to charges for carrying freight and passengers shall apply to such other road, so operated, in like manner as if the same were a part of the line of the road owned by the corporation operating the same; and for such purpose all lines of railroads operated by the same company shall be considered as one and the same road.” Section 13 of that act provided as follows: “This act shall not be held to apply to any city or street railroad.” This section was amended by chapter 42 of the Acts of 1885 so as to read as follows: “This act shall not be held to apply to any city or street railroad, or to any railroad whose entire length does not exceed six miles. But in no case shall anjr railroad charge more freight or fare, than is authorized by its charter; and in no case, shall such charges be unreasonable.” The act was not otherwise amended or affected in respect to rates or classification, until the passage of the chapter now under consideration. This act says all railroad corpora
As it is urged that railroads under fifty miles in length are left unregulated, we must inquire whether this new act repealed all former legislation relating to railroad charges, or only so much' thereof as is inconsistent with it. While all classes of railroads are mentioned by the act, it does not prescribe any rates for railroads under fifty miles in length or electric lines and street railways. It is a rate prescribing act. That is its main purpose. That purpose does not extend 'to railroads under fifty miles in length. The act contains no expression of intent or legislative will concerning their rates. The prescription of rates stops with railroads fifty' miles long and over. All others are expressly excepted by the positive and emphatic declaration that nothing' in the act shall apply to them. Its interpretation must be the same as if it had said all railroad corporations organized and doing business in this State under the laws or authority thereof, except railroads under fifty miles in length and not a part of, or under the control, management, or operation of any other railroad, over fifty miles in length, and electric lines and street railways owned or operated in this State, shall be limited in their charges, &c. That is the substance and' common sense of it. It mentions railroads under fifty miles in length and electric lines and street railways, not for the purpose of bringing them under the
This construction, conceded ior the purposes of argument, it is next insisted that it does not result in a separation of railroads, other than electric lines and street railways, into two classes, one including all the railroads fifty miles long and over, and the other all roads under fifty miles in length, because the •terms of the proviso negative this view. The language of that portion of the act is somewhat inapt. Its true meaning is not disclosed by mere inspection. It excludes, in terms, every railroad under fifty miles in'length and -not a part of, or under the control, management or operation of any other railroad, over fifty miles in length. It excludes, in the first instance, all roads under fifty miles in length, not controlled by other railroads. Then it seems to say such a road is not excluded, even though controlled by another road, unless such other road is over fifty miles in length. Out of this confusion of terms, comes the contention that a railroad just fifty miles long is not classified at all, and that any number of railroads under fifty miles in length may be connected up and operated together and still not brought within the operation of this act. It is also urged that it is a classification, not by mileage, but by ownership and control or with reference to the persons who own and control railroads. Another suggestion is, that the ownership by a trunk line of a small disconnected railroad, lying, it may be, a hundred miles away, would be brought within the operation of the act. The basis of all these contentions is the phrase “over fifty miles long.” Of course some effect ought to be given to these words because the legislature put them in for some purpose. But no rule of construction requires effect to be given to them according to every possible meaning they may have. It suffices to give them some reasonable effect. In order to ascertain the function they were intended to perform, we may examine and consider' them from every possible standpoint. In other words,
The suggestion that ownership or control of one railroad by another, when they are not connected and operated together, nor
This construction of the statute eliminates practically all of the special grounds upon which the classification has been denounced as being arbitrary and discriminative, leaving, as the principal matter for determination in this connection, the inquiry, whether a classification by road mileage is arbitrary and founded upon no substantial difference in circumstances, or conditions between the two classes, calling for or justifying, in law, the application to each of a different limitation upon rates.While both classes are engaged in the carrying of passengers and freight, it is-obvious that, in respect to the volume of business done, there is a very substantial difference between them; and the relation of fixed charges to the volume of business in all commercial and industrial enterprises, giving an immense advantage to large concerns over smaller ones, is a fact, forming the basis of a well established rule or principle, determining the value of investments and dominating the policy of financiers, promoters and industrial and commercial operators. In a. well organized and efficiently managed concern, doing a large volume of business, the fixed charges as well as other expenses, compared with the amount of business transacted and the gross income, are proportionately lower than those of a smaller concern,
' In Pacific Express Co. v. Seibert, 142 U. S. 339, a classification of express companies, founded upon a difference in means of transportation, one class using railroad and steamboat companies under contracts "of hire, and the other their own vehicles, was sustained and held not to make an invidious discrimination. In Western Union Telegraph Co. v. Indiana, 165 U. S. 304, a statute, providing a remedy for compelling certain corporations to pay their taxes, different from that provided in respect to other persons and corporations, was sustained under the following declaration of-law: “In enforcing the collection of taxes one rule may be adopted in respect of the admitted use of one kind of property, and another rule in respect of the admitted use of another, in order that all may be compelled to contribute their proper share to the burdens of government.” This right of classification for purposes of remedy rested upon the difference between these corporations and almost all other kinds of companies and individuals in respect to the character of tangible property used by them and the public inconvenience resulting from compulsion of payment of taxes by the ordinary process of distraint. Chief Justice Fuller said: “The legislature had deemed it the wiser course to leave the method of coercing payment in each case to the flexible jurisdiction of a court of chancery rather than to prescribe a method which might be suited to one ease and not to another.” In Railway Co. v. May, 207 U. S. 267, a statute in the state of Texas, imposing a penalty of twenty-five dollars on railroad companies in favor of the owners of farms contiguous to railroads, for allowing Johnson
These precedents and principles, made and declared by that court which stands first and supreme as an expounder of the
Lack of sufficient ground for making the act applicable to roads less than fifty miles long, controlled or operated by another road, and excepting from its operation railroads less than fifty miles long not so controlled and operated, has been suggested. Short roads of the first class, tested by all the considerations applicable to the question, hereinbefore set out, properly belong to the long'road class. In operation, management, control and function, they are parts of thé long railroads. They are controlled by the same general officers, so as to avoid the necessity of the maintenance of a separate and distinct body of officials. The addition of a few short branch lines to a. through line adds practically nothing to the cost of general management, and the short lines so connected up are practically relieved of that burden. The same considerations enter largely into the matter of equipment, maintenance and other burdens. Their fixed charges are greatly reduced, while every independent short road must maintain its own corps of managing officers, and separate equipment and repair shop. So there is- ample ground for this classification.
Exception of electric lines and street railways is also relied upon as constituting an invidious discrimination. It is said these and six mile railroads are left wholly unregulated. This statement is erroneous. Section 13 of chapter 227 of the Acts of 1872-73 limits the charges of such railroads, by inhibiting the exaction of unreasonable fares and freights. The regulation is a very general one, but it is a regulation nevertheless. As a general rule, electric lines in this State are mere urban and interurban local lines, and their charges are far below those of steam railroads. In most instances, there is a good and sufficient reason for failure, on the part of the legislature, to prescribe rates for them. This is, or may be, done by the cities and towns, granting the franchises. They are so obviously and essentially different from the great commercial steam railroads, that the right of the legislature to except them from the operation of this act cannot
Nor do we perceive any illegal discrimination in the establishment of an inflexible rate of two- cents a mile for railroads fifty miles long and over, and a variable or flexible rate, based on gross annual earnings for railroads under fifty miles in length. The considerations that justify the establishment of one rate for one class of railroads and another rate for a different class, uphold the fixing of a flat rate for one class and a flexible rate for the other. This does not enter into the matter of classification at all. The fixing of a rate for each class of railroads, after a proper classification has been made, is a separate and distinct thing, relating to the class and not effecting a classification.
Having thus considered all matters relied upon to sustain the view that the statute is unconstitutional on its face, we conclude that it does not, in terms, contravene or violate either the Constitution of this State or any provision of the Fourteenth Amendment to the Constitution of the United States. In the consideration thereof, we have been impressed with a strong sense of duty, on the one hand, -to abstain from and avoid any arbitrary or indefensible conclusion, for the mere purpose of
These conclusions subject every railroad in the state, not less than fifty miles long, to the passenger rate limitation, prescribed by the act. If, in the case of any particular railroad of that class, this rate of two cents per mile does not permit compensation for the use of the money invested in it, such railroad has a just cause of complaint against it and a right to be relieved from the operation thereof, under section 10 of Art. Ill of the Constitution of this State and the Fourteenth Amendment to the Constitution of the United States, each inhibiting deprivation of any person of his property without due process of law, and also under the guaranty of the equal protection of the laws to all persons, afforded by the latter. The talcing of private property for public purposes, Avithout compensation to the OAvner thereof, is termed confiscation, and the right to confiscate property can be legally exercised only against the public enemies, as a military measure. Citizens are protected from it in this country by the constitutional guaranties, just referred to. Afi attempt on the part of the state to take the corpus of a citizen’s property for public use, without compensating him therefor,-under color of-law, is a void and Avrongful act, confiscatory in form only, not in reality, because contrary to law, but called confiscatory for convenience. As the right to use property for any lawful purpose to the extent of the realization therefrom of a return or reward, commensurate with the reasonable and just value of such use, is an element of “property, property itself pro lanío, since, Avithout the right of such use, it would be wholly or partially.valueless, according to the extent'' of the restraint upon its use, deprivation of the use thereof, or denial of the power to earn such reasonable and just return or reward, by the use thereof, in whole or in part, Avithout compensation therefor, amounts to such wrongful talcing there
What constitutes a fair and reasonable return for the use of invested capital has never been definitely settled by the adoption of any particular standard for all purposes and to govern under all conditions. It seems to be difficult, if not impossible, to lay down any rule or principle that will operate equitably and justly under all circumstances. Ordinarily, the return generally realized upon similar investments in the locality of the one under consideration is deemed fair and guaranteed to the investor, and the estimate is based upon the amount actually invested in good faith, fictitious valuations, indicated by over
The result of these and other decisions is that almost every case must be dealt with in the light of its own peculiar facts and circumstances, it being impossible to lay down any rule for invariable application to all. In respect to the rate of compensation, there ought to be less uncertainty, but as to it the circumstances of each case seem to have some bearing,. and, besides, what is said on the subject is often somewhat confused with the discussion of the value. This is especially true of those cases in which the value of the service to the public is discussed. In almost every case, it is possible to begin the.dis- "
Before discussing the allegations of the bill, charging confiscation of the complainant’s property, in the sense hereinbe-fore defined, as the result of the operation of the statute, we deem it advisable to make some observations concerning the practice in cases of this peculiar and exceptional class. The effect of such a suit is to give the complainant immunity from the penalties of the statute, as we have already shown. Until the suit is brought, it is a railroad or other public service corporation, carrying passengers and freight or performing some other public service, and presumptively bound by the statute, the penal clause ¿s well as the rate prescribing clause. After it has obtained a standing in court, its status is entirely differ
That the bill in this case complies with these requisites is not seriously, or at least, plausibly or effectively, questioned. No-substantial defect therein is pointed out. It avers an actual cost of transportation of passengers in excess of two- cents per mile. It shows the revenue from passenger traffic, beginning-with June, 1907, and ending with April, 1908, ivas $14,566.67 less than for the corresponding period in the previous year,, when the three cent rate was in force, although more passengers were carried in said last period, and says passengers were-carried at a loss during both periods. It further avers that the-passenger traffic would have yielded $55,458.00 more for the-year ending June 30, 1908, than for the year ending June 30,.
The evidence does not materially change the case made by the bill. The correctness of the items we have been discussing seems not to have been seriously challenged by the defendants. At any rate, it is not successfully impeached. Although the defendants introduce an expert witness who examined, criticised and analyzed the statements exhibited with the bill and others filed with the depositions for the complainant, he did not express the opinion that, the charge for operating expenses was excessive or that the estimate or statement of the cost of the road, was too high. On the subject of operating expenses, he said the percentage thereof to revenue, for ■ all of the roads operated in the state of Ohio, as shown tyy the report of the state railroad commissioner of that state, was 70. Exclusive of the earnings of the Davis Colliery Company, which the complainant holds under a lease, the operating expenses of this road are 89 per cent, of its revenue, and including the receipts from the colliery company, 84 per cent. .This is higher than the percentage in the state of Ohio, but that state is comparatively level and the percentage basis included all the roads in the state, the old as well as the new, and by far the greater
The main defense is predicated, not on alleged incorrectness of the plaintiff’s showing as to the'cost of the road and the amount of its operating expenses, but on the apportionment of common operating expenses between the freight and passenger departments. That made by the railway company, on what is known as the “Revenue Train Mileage” basis, makes a far less favorable showing for the passenger business than the “Car Mileage” basis, insisted upon by the defendant. The difference is very great and the results contradictory. From June, 1906, until May, 1907, inclusive, the passenger car miles amounted to 590,553, .and the freight car miles to 2,528,295. From June 1907, until May, 1908, inclusive, the difference was greater. The revenue train miles for the first period amounted to 195,721 and the freight to 153,649, and an apportionment of mixed train mileage brought these figures up to 199,777 and 165,824, respectively. The mixed trains were apportioned on the basis of 75 per cent, for freight and 25 per cent, for passenger. As the freight car mileage was more than four times that of the passenger car mileage, while the passenger revenue train mileage exceeded the freight revenue train mileage, it is obvious that an apportionment of expenses on the latter basis would make a much less favorable showing for passengers than an apportionment on the former basis, because more than half the common operating expenses would have
None of these statements include any dividends on stock or interest on bonds. No payment of either dividends or interest is shown by the statement of expenses paid, but the record shows a statement of the amount necessary to cover interest, which is commented upon in the briefs as being unreasonable, but, as it has not been paid, it has no material bearing upon the issue. The total net earnings, amounting to $133,711.05, therefore, constitute the entire fund to which the stockholders and
The apportionment of operating expenses, on the basis of car mileage, was adopted by the defendants as a means of showing earnings on passenger traffic in excess of the cost thereof, under the impression that the disclosure of any profit at all on that branch of the complainant’s traffic would defeat this bill. If it is a correct basis and the legal proposition assumed is sound, such must be the result, but, if the legal proposition is unsound, the result does not follow. Kelief sought by the bill is not based solely upon the loss sustained in the carrying of passengers. It charges lack of reasonable compensation oh its entire traffic, both freight and passenger, due, in part, to the limitation imposed by the statute upon, charges for carrying passengers. The question arising upon this charge is, whether less than two and one-half per cent., assuming the correctness of the calculations of defendant’s expert witness, is reasonable compensation. If it is unreasonably low, the deficiency has been, in part, produced by this statute, for the railroad com-< pany would have earned more money on the carriage of passengers, but for its interference. In Railway Co. v Day, 35 Fed. Rep. 866, decided July 27, 1888, Mr. Justice Brewer said: “The rule, therefore, to be laid down is this: That where the proposed rate will give some compensation, however small, to the owners of the railroad property, the courts have no power to interfere. Appeal must then be made to the legislature and the people. But where the rates prescribed will not pay some compensation to the owners, then it is the duty of the courts to interfere, and protect the companies from such rates. Compensation implies three things: Payment of cost of service, interest on bonds, and then some dividends.” In ascertaining the meaning of the court in that case, all of this language must be considered. While it says the courts have' no power to interfere as long as some compensation is allowed, it does not mean that only the cost of transportation and some additional compensation are to be
This right to a fair return for the use of invested capital, such as is generally realized in a community in which the enterprise is located, is qualified, as we have shown, by unusual and abnormal conditions when they exist, such as over capitalization or a more costly plant than the public service justifies. None of these circumstances are present in this ease. It is not shown that the railroad has any fictitious value upon which it asks a return. There is a large capitalization in the form of stocks and bonds, but that is not .made the basis of this application for relief. Nor has it been shown that the road and its equipment are in any respect beyond the requirements of the public service. The only circumstance of this kind urged, in justification of the low rate, is the newness of the road. In this connection, it is said the builders could not have expected the usual return upon their investment within so short a period of time, and must have been looking to the future for a return sufficiently large to reimburse them for the losses to be sustained during the first few years of operation. We do not regard this view as being well founded. They have no assurance of returns in the future, in excess of a fair return on their money for each future year. Should the legislature see. fit to intervene, on behalf of the public, future rates may be held down to a fair annual return, =o as to prevent any reimbursement for past losses. In our opinion, the railroad company has the right to earn reasonable compensation for the use of its property now, if it can do so without imposing unreasonable rates on the public, rates disproportionate to the value of the service rendered. In this connection, we deem it just to say that the service of this railroad may be worth more to the traveling public and especially to the people living along its line, under the circumstances, than the service of some other railroad, differently situated. The building thereof enabled them to travel to, from and through, the section of country, traversed by it much more cheaply than they could otherwise have done. The railroad has displaced the horse,
This being true and the complainant having earned practically nothing on its passenger traffic, above cost of transportation,^ and less than two and one-half per cent, of its investment on its entire traffic, and it further appearing that larger earnings from passenger traffic would have been realized, but for the operation of this statute, ire are' clearly of the opinion that it is confiscatory in its effect upon this railroad. On the basis of apportionment adopted by the complainant, which seems to be better sustained than that of the defendants, there has been an actual loss on the passenger traffic. One statement of the defendants shows a mere bagatelle of profit, $1,633.66. This is the best showing that can be made in favor of the statute. The other" one is manifestly unfair and unjust.
Having concluded, as above indicated, that the act of 1907, limiting passenger fares on complainant’s railroad to two cents a mile, is unconstitutional in its operation and effect upon said company, because it reduces, or compulsorily contributes to the reduction of, the net earnings below the point of reasonable remuneration, it becomes necessary to determine what shall be the final disposition of the case. Shall the decree, as pronounced in the court below, based upon the assumption of total invalidity, enjoining enforcement of the act unconditionally and without limitation as to time, be affirmed, or should it be so modified as to give leave to the defendants and their successors in office to move for a vacation thereof, in case it shall happen, at any time in the future, or even now, that the earnings will be sufficient, under the operation of this act, to -amount to reasonable and just compensation? If the latter course is justified by the general principles of equity procedure, it becomes necessary to inquire whether the defendants, on the happening of such an event, have any in,-
The error of the trial court, in failing to make this provision, results, as we have indicated from its erroneous conclusion, concerning the character of the statute as disclosed by its terms. Declaring it unconstitutional on its face, the decree perpetually enjoined and restrained the defendants from enforcing said act against the complainant, its officers, agents and servants and from prosecuting, or attempting to prosecute, indictments against it, as well as all civil and other criminal proceedings for violation of the act. The two parts are consistent but the premise for the second partially fails. It also enjoined all other persons from like proceedings, though the attorney general and prosecuting attorney of Kanawha county were the only persons made defendants to the bill. It should have been limited to the defendants, since no other persons were parties or in anywise bound by the decree. It should also have saved to the defendants the right to move, at any time, for a vacation thereof and to. have the same vacated, whenever it shall be made to-appear that the act is no longer confiscatory in its operation. In so far as it .declares the statute void on its face and purports to enjoin persons not parties to the suit, it will be reversed and annulled. In so far as it declares the .statute confiscatory in its operation and effect, as applied to the complainant, and enjoins the defendants from proceeding against it and allows costs against them, it will be modified by the insertion of a clause, saving to the defendants and their successors in office -the right to institute, in the circuit court of Kanawha county, at any time, any proper proceeding for vacation thereof, and, as so modified, this portion of it will be affirmed; all of which will be certified to the circuit court of Kanawha county.
The appellants will be allowed costs here. In the court below, the statute was held ^oid on its face and the injunction accordingly made perpetual. In these respects, we have
Reversed in part, Affirmed in part, and Modified.
The act is constitutional as to every railroad that may earn a just return under it. The conclusions announced in the opinion of Judge Pofeenbarger have my concurrence.
Concurrence Opinion
I concur in the decree holding the act, in its application to the Coal & Coke Railway Company, unconstitutional as confiscatory in limiting the rate so low as not to allow a fair return on the cost of the railroad, the capital invested in it. But I do not agree to all of the foregoing opinion. Upon the question, whether the act is violative of the Fourteenth Amendment this Court must follow the national Supreme Court. That court has settled it that where the penalties for violation of a rate act are so severe that they intimidate the railroad company from appealing to the courts for relief, from fear of ruin, from multiplied .penalties pending litigation to test the act, it deprives the company of property without due process of law, and denies the equal protection of the law by shutting them out from the courts. Ex parte Young, 209 U. S. 123; Wilcox v. Consol. Gas Co., 212 Id. 19; Beale & Wyman Rate Regu., sections 351, 382. Now, let a school boy take pencil and slate, and he will tell us what the total penalties would come to against this railroad company in only a few months litigation at $50 for each ticket. His figures would show ruin, bankruptcy, confiscation, to the company. But the act allows any penalty up to $500 per passenger. What the total at $100 ? At $150 ? At $200? Colossal wreck! This shows the penalty section void under the Fourteenth Amendment, by those cases. The same line of reasoning would say that it violates the state constitution, article 3, section 10, that no person shall be deprived of property without due process of law. Then there is section 5, -same article, “excessive fines shall not be imposed”. To think of a fine of $500 for an overcharge of a few cents for a passage ticket. To think of multitudes of fines being imposed.
I cannot concur in the construction of the proviso as to the union of railroads under fifty miles in length in the above opinion. It seems to me to render that proviso inoperative, and to be against the letter and plain meaning of its words; but I shall not discuss this matter. I think one road of less than fifty miles may lease another, though they make over fifty miles together. A lease, after this consolidation, of a third might change it. I do not think it necessary to do so,' as I do not think1 this proviso an arbitrary „ discrimination denying equal protection of the law. I admit that the question is grave and nice; but 1 must remember the rule universally applied, that courts never hold an act void as repugnant to the constitution unless such decision is unavoidable. I am inclined to think this discrimination is within the power of the state under the Fourteenth Amendment; but lot that be as it may, in doubt I would refuse to overthrow the act under this head.
As I have said at the outset I agree to hold the act as confiscatory as applied to this railroad, neither section enforceable It appears that the rate forbids the railroad from earning a fair
Being of opinion that the penalty section is void, and this suit being an injunction to prevent prosecution under it only, I ■ would sustain the injunction. I would sustain it also because, as applied to this particular railroad, it'is confiscatory. If the act had reasonable penalties, I would regard the penalties valid and enforceable, and overcharges recoverable by civil action, against a railroad company earning a fair return. As it is, it is civilly enforceable against such companies. And it will be civilly enforceable against this company when its earnings warrant it; but I do not believe it is penally enforceable.
(concurring) :
I concur in the conclusions reached on all points covered by the syllabus. The question on which I have had the greatest difficulty is covered by points 25 to 31, inclusive, of the syllabus. I am thoroughly satisfied now that the fines and penalties imposed by section 2 of the Act of 1907, when wil-fully- incurred, are not so excessive as to be void, either under the Federal constitution, or the provisions of our State constitution against the imposition of “excessive fines,” and “cruel and inhuman punishment.” They are not out of proportion to fines imposed for violations of many other statutes. The statute which the Act of 1907 repealed in part imposed a fine of not less than one hundred nor more than five hundred dollars for each offense. Besides, from 1872 to 1879 the statute gave right of action in favor of the aggrieved party for five hundred dollars, with costs and a reasonable attorney’s fee, this provision having in the latter year been repealed. Grant v. B. & O. R. R. Co., 66 W. Va. 175. These fines were never regarded excessive, and no railroad ever suffered from them by reason of mistake or otherwise. Other instances of
It can not be assumed that the statute will be wilfully violated, and the penalties so successively incurred as to become confiscatory of the property of the offending railroad. The statute can be condemned only because it imposes upon railroad com-
Dissenting Opinion
(dissenting):
I can not agree to the construction given to the act in question by the majority of my associates. I think its language is too plain to admit of judicial construction. The Act provides : “That all railroad corporations organized or doing business in- this state under the laws or authority thereof shall be limited in their charges for the transportation of any person with ordinary baggage, not exceeding one hundred pounds in weight, to the sum of two cents per mile, or fractional part of a mile, * * # *.” So much of the act is certainly clear, and if it stopped at this point it would, without doubt, apply to all railroads in the state, without regard to their length, or by whom owned or operated. But section 1 does not stop here; it contains the following clause: “and provided, further, that nothing in this act shall apply to any railroad in this state under fifty miles in length and not a part of, or under the control, management or operation of any other railroad, over fifty miles in length, operating wholly or in part in the state.” This proviso is a part of the act, and it should he given the effect .which the legislature intended it to have. Its language is no more doubtful than .the first part of the section. It simply excludes from the operation of the two-cent rate all railroads under fifty miles in length which are “not a part of, or under the control, management or operation of any other railroad, over fifty miles in length, operating wholly or in part in this state.” This necessarily includes within the operation of the two-cent rate all railroads, without regard to their length, which are either a part of, or under the control, management or operation of, another railroad- over fifty miles in length,
What just reason can be assigned for applying the two-cent rate law to a railroad under fifty miles in length, if it happens ' to be operated by another railroad over fifty miles in length, and exempting it from the operation of the two-cent rate law if it happens to be operated by another railroad under fifty miles in length? Is this not denying equal protection of the law to corporations similarly situated? There is no law in this state prohibiting a large railroad company from purchasing the _ property of another, or acquiring control over it, whether the small railroad connects with the tracks of the large one or not. Then why should not the same rule of regulation apply to the small railroad, whether operated by another railroad over fifty miles in length or‘ by one under fifty miles in length? The act does not require the lines to connect. The two-cent rate is made to apply whether the road controlled connects with the line of the controlling road or not.
I do not think any light is thrown upon the Act in question by reference to the old Act of 1872-3, because the classification under the two acts are altogether different. TJnder the Act of 1872-3 the rate was regulated on the basis of gross earnings per mile of railroad, and it had no reference whatever to’ the length
Furthermore, this state is in the process of development. It is necessary for the building of many more miles of railroad before all the natural wealth of the state can be made available, and the policy of the state heretofore has been to encourage railroad building; and certainly the legislature could not have had this policy in mind at the time of the passage of this act, because, instead of encouraging development, it operates to discourage and retard it. No railroad corporation owning a line less than fifty miles in length would want to extend its line beyond fifty niiles, if its earning capacity is to be reduced by such an extension,.thereby subjecting itself to the two-cent rate regulation.
I am fully aware of the delicacy of the task, presented to the court, of passing upon the constitutionality of a legislative enactment, but at the same time courts can not avoid the performance of a plain duty when the task is presented to it. It is the province of the legislature to enact laws; and it is the duty of the courts to interpret and apply them', according to the facts in any given case. Each represents a distinct branch of the state government; and the powers of both are limited by the Constitution of the State, and bjr the Constitution of the United States, and it is the duty of the court, whenever it appears that the legislature has, by the passage of an act, transgressed the constitutional limitations, to. declare the act unconstitutional. The court must administer.justice according to law; the Constitution of the United States is the supreme law of the land. Any legislative enactment that is in conflict with the constitution is not law and must be so declared by the court. In the administration of justice for the protection of individual and property rights, the courts recognize no distinction between persons; the law protects the property of the corporation with the same impartial vigilance that it does the property of the peasant; to the eye of Justice they appear the same, and “weighed in- the balance, hero dust is vile as vulgar clay.'”
I would affirm the decree of the lower court without modification, thus making the injunction absolute and perpetual.
