159 Wis. 130 | Wis. | 1914
Lead Opinion
That' it was the avowed purpose of ch. 362, Laws of 1905 (secs. 1797 — 1 to 1797 — 36, Stats.), and the acts amendatory thereof, known as the Wisconsin Railroad Commission Act, to secure nondiscriminating, just, and reasonable rates for all services rendered by railroads as common carriers of persons and property within the state is so plain
‘■’Every railroad is hereby required to furnish reasonably adequate service and facilities, and the charges made for any service rendered or to be rendered in the transportation of passengers or property or for any service in connection therewith, or for the receiving, switching, delivering, storing or handling of such property, shall be reasonable and just, and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful.”
Sec. 1797 — 23 declares any undue or unreasonable preference or advantage -or disadvantage to any person, firm, or corporation unlawful and prohibits the same; and sec. 1797 — 24 penalizes rebates, concessions, or discriminations in respect to the transportation of any property within the state. Treble damages are provided for in behalf of the person, firm, or corporation injured thereby in addition to the penalty accruing to the state. Sec. 1797 — 25. These provisions taken in connection with the whole scheme of the act unmistakably point to the conclusion that railroad rates within the state should, after the act took effect, be reasonable, nondiscriminating, and apply to all shippers alike within the territory and for the commodity covered by the tariff rates.
The question therefore arises whether or not the contract between the parties was superseded by the Railroad Commission Act and the filing of tariffs affecting the freight in question in accordance with the provisions of such act. The defendant claims that its contract was in no wise affected by the enactment of the act and the filing by plaintiff of tariffs thereunder, because the contract, being valid when made, could not' by reason of the provisions of the federal and state constitutions prohibiting the passage of any law impairing the obligations of contracts be invalidated by any legislative act. And it relies especially upon the case of Superior v. Douglas Co. T. Co. 141 Wis. 363, 122 N. W. 1023, as being decisive
Does the Railroad Commission Act, irrespective of sec. 1197 — -6, and the filing of tariffs thereunder covering the transportation provided for in the contract supersede it? That it would be superseded except for the constitutional provisions above referred to is quite plain. The act provided that the lowest schedule of rates in force in April, 1905, should constitute the lawful schedule of rates until changed by the filing of other tariffs. Sec. 1797 — 35. Sec. 1797 — 4 makes it' the duty of every railroad to file with the commission a full schedule of rates in force for all services rendered by it within the state. And sub. (c) thereof declared:
“It shall be unlawful for any railroad to charge, demand, collect or receive a greater or less compensation for the transportation of passengers or property or for any service in connection therewith than is specified in such printed schedules, including schedules of joint rates, as may at the time be in force, and the rates, fares and charges named therein shall be the lawful rates, fares and charges until the same are changed as herein provided.”
So it is plain as stated in Frank A. Graham Ice Co. v. C., M. & St. P. R. Co. 153 Wis. 145, 140 N. W. 1097, that the legislature intended to and did provide' for an exclusive method of fixing freight rates, in so far as it could constitutionally do so.
The contract relied upon by the defendant was entered into pursuant to the provisions of sub. 9 of sec. 1828, Stats. 1898, which gave the railroad company the right to regulate the compensation to be paid for transporting passengers and property, and it is conceded by plaintiff that it was valid when made. The corporate power thus granted to the plaintiff to regulate the compensation to be paid for its services was granted subject to the right of the state to amend or annul it.
As pointed out in Kenosha v. Kenosha H. T. Co. 149 Wis. 338, 135 N. W. 848, the contract in the case of Superior v. Douglas Co. T. Co. 141 Wis. 363, 122 N. W. 1023, was in fact saved by the provisions of sec. 1797m — 91 exempting existing contracts from the provisions of the Public Utility Act as to discrimination, whether or not the opinion in the case based it upon that ground. In so far as there is language in that opinion to the effect that a contract for a public utility rate made prior to the passage of the Public Utility Law would be saved by the constitutional prohibition against laws impairing the obligations of contracts, irrespective of the exempting part of the law referred to, it is disapproved.
AAThen the plaintiff filed its tariffs covering the freight rates for the transportation of the freight included in the contract, the latter became inoperative. -The state had then, through the instrumentality and by the method by it prescribed, fixed another rate which became the only lawful rate till changed as provided for in the act. There was no change made in the tariffs filed during the period the freight in question was transported.
Sec. 1797 — 6 provides:
“Nothing in'sections 1797 — 1 to 1797 — 38, inclusive, shall be construed to prevent concentration, commodity, transit and other special contract rates, but all such rates shall be open to all shippers for a like kind of traffic under similar circumstances and conditions, and shall be subject to the provisions*137 of sections 1797 — -1 to 1797 — -38, inclusive, as to the printing and filing of the same. Provided, all such rates shall be under the supervision and regulation of the commission.”
The claim that this contract is saved under the clause “transit and other special contract rates” is not well taken. The section quoted refers to rates made'in the future under the - supervision and regulation of the commission and complying with the requirements of the section. It does not relate to special contracts existing at the time the law took effect. The very purpose of the act was to abolish all existing private, secret, and special contracts and traffic arrangements and to place all shippers in future upon an equality so far as practicable. The abuses under the old system consisted chiefly in favored shippers and favored^localities, resulting in discrimi-nations and inequalities enabling the favored shippers to crash competition and the favored localities to thrive at the expense of those less favored. These were some of the more important abuses the act sought to abolish. It's effect would in a large measure be rendered nugatory had existing contracts and tariff agreements been preserved. In order to strike at the root' of the evil it was necessary for the state to resume full control of its rate-regulating power and to start ^with a clean slate. This it did by providing that' in future all railroad transportation rates within the state should be under the supervision and control of the commission, subject to the provisions of law relative thereto. As to the invalidity generally of contracts inconsistent with published tariffs, see 4 Ruling Case Law, 603 et seq. and cases cited.
The circuit court should have entered judgment for the amount of the tariff rate, viz. $3,217.04, less any payments made thereon, with interest on such sum from March 16, 1912, the time of the commencement of the action.
By the Court. — Judgment reversed, and cause remanded with directions to enter judgment as indicated in the opinion.
Dissenting Opinion
(dissenting). Eor reasons I stated in Milwaukee E. R. & L. Co. v. Railroad Comm. 153 Wis. 592, 630, 142 N. W. 491, I cannot agree to the decision here. Such decision, naturally, though not necessarily, follows from the logic of the former case, the infirmity of which I sought to point out and which was likewise exhibited, as I think, in the opinion of Mr. Justice TiMLiN, though by a line of reasoning of his own he was able to concur in the result. I shall continue t'o dissent from the majority view before, until it shall have been passed upon by the federal supreme court, which I firmly believe will result in its being condemned.
There is no more important feature of our constitutional system than the one prohibiting legislation impairing the obligations of contracts. This court has vindicated such feature over and over again. It extends to corporations as well as individuals. There is no difference, as has often been held and is clearly pointed out by abundance of authority in the opinion of Mr. Justice TimliN referred to, as well as in my own.
True, there is the reserved power to alter or amend corporate charters, though contractual in nature, but that does not extend further than the corporate grant which is conditioned upon such power. It does not justify supersession of existing business contracts, legitimately made upon consideration parted with. It does not justify confiscation of property, tangible or intangible. It does not extend to and authorize impairment of any ordinary business contract', — any not inhering in and essentially a part of the corporate privilege, as this court has heretofore held. Those contracts are just as sacred, — just as clearly within fundamental protection, — as contracts between individuals. The one involved in this case is, to my mind, clearly of that nature and, as I
The novel idea, as I understand it, is that there is an inherent power, — one above the constitution, so to speak, or, at least, not limited by it, state or national, to deal at pleasure with corporate contracts though made under the usual power to do what an individual might lawfully do in conducting the same or similar business. It will be discovered that my brother Timlin industriously sought, and to his satisfaction found, a pathway, consistent with the logic of the Dartmouth College Case, to reach the conclusion pronounced before, as a condition of concurring with it.
Had the instrumentalities so positively asserted before and applied now, been efficiently thought of in Att’y Cen. v. Railroad Cos. 35 Wis. 425, it would not have been deemed necessary, or even feasible, to reach tibe conclusion which so logically, as was thought, could only be seen through the vista of reserved power to alter or amend corporate charters.
I think I do not misunderstand the effect of the former decision. It is to the effect that the state possesses the sovereign power to fix the compensation which a public utility corporation may demand for service, superseding existing contracts containing all essential elements of mutuality as to promises; and even characterized by a paid consideration upon one side to be compensated for in futuro; that the exercise of such power does not need the aid, nor fall within the purview, of the fundamental reserved power to alter or amend corporate charters. Ho authority is cited to support that' doctrine. It seems to rest on the idea- that changed conditions may give rise t'o legitimate judicial modification or change of
I have thought best to express myself here in general terms, without-citation of authority. Reference to my opinion and that of Mr. Justice TimxiN iii the former case will furnish ample in the matter of illustration.
There is no point where there lias been greater effort to securely intrench rights than that relating.to contracts. We see that im the Northwest Ordinance which preceded the national constitution, and again in the latter, in the form of a prohibition upon the power of the states, and again in our state constitution, in the form of a limitation of legislative power.
It is also within the broad guaranty upon which our whole constitutional fabric was constru&tcd. There is no exception other than under the reserved power. Whatever measure of inherent power to interfere, destructively, with the obligations of contracts, is possessed by the lawmaking power, as an original matter, is limited by the fundamental law the same as the police power, which at one time was thought to be above constitutional restraint.
This case "furnishes a striking illustration, of the harmful effect of the new doctrine. The respondent, in effect, bought and paid for the privilege it claims. The interference is not with the power to make contracts, nor power to execute existing contracts which have been fully satisfied up to date, so that nullifying them cannot work hardship by taking away, without consideration, a valuable purchased right; but' with a property right acquired, contractually, for a consideration parted with, — a right which is as essentially property as any tangible thing respecting invested capital. Such property is. confiscated in fact. That is the real effect of the doctrine upon which the decision in this case is grounded.