168 N.W. 684 | N.D. | 1918
Lead Opinion
This is an action to recover the difference between the statutory rate upon certain coal shipments and an alleged reasonable rate. It arose upon the following facts:
In the year 1907, the legislature of North Dakota passed a statute
It will be noted that the complaint alleges that, by reason of the decree of the United States Supreme Court, the plaintiff Avas coerced and forced to accept and transport shipments for the defendant at rates prescribed by chapter 51 of the Session Laws of North Dakota for the year 1907. The remainder of the paragraph merely states a legal conclusion to the effect that, by reason of said shipments, the plaintiff became entitled to recover from the defendant the difference between
The pertinent inquiry is: what is the basis for the legal conclusion that, by reason of the shipments, the plaintiff became entitled to recover from the defendant? It is elementary that a pleading which states legal conclusions merely does not state a cause of action; it must state facts from which the legal conclusion of liability follows. It is equally elementary that the facts stated must bring the plaintiff within the operation of some rule of substantive law, according to which a liability may be found to exist. Obviously, the relations between a carrier and a shipper are governed by the same basic principles that would control were they between individuals and related to matters not commonly subject to the regulatory power of the state. A departure from these principles in the case of earners is only to be countenanced when their application threatens to embarrass, or does actually
If it be assumed that the shipper acted at all times with full knowledge of the litigation and of its ultimate result, could it then be further assumed that he agreed in fact to pay for the services at a higher rate than that fixed by statute if, perchance, the decree should be modified or reversed at some subsequent time? We think not. A business man acting with full knowledge of the facts that the law in question had been attacked, and that those interested in stopping its action had been defeated after prolonged litigation carried to the highest court in the land, would, we believe, be more' apt to assume that he was justified in dealing with the carrier on the hypothesis of the validity of the law, and in the absence of express protest, that the services of the carrier were rendered voluntarily. By “voluntarily” in this connection is meant in voluntary obedience to a supposed law. Sections 4339-4342 of the Bevised Codes of 1905 (Comp. Laws 1913, §§ 4724 — 4727) require, among other things, that the carriers shall print and keep for public inspection schedules showing the rates which are in force at the given time, and they are required to file such schedules with the Bail-road Commission. Manifestly, if shippers cannot rely upon the rates as so published and filed, the requirement of publication becomes a mere trap for the unwary. In our judgment, it is wholly improper,
But it is urged ‘that the obligation to pay a reasonable rate arose as a matter of law, regardless of any express contract or any contract which might have been implied in fact. But this contention is without merit, for the reason that the elements essential to the implication of a contract in law are likewise lacking. Where there is no contract in fact, either implied or express, the law will not imply one except to support a recovery in favor of a plaintiff on the principle that the defendant has been unjustly enriched at his expense. While authorities In point are singularly lacking, the controlling principle is clearly the same as in case of mistake, and it is elementary that where the defendant is free from responsibility for plaintiff’s mistake, or is responsible in no greater degree than the plaintiff, and where his position is such that the enforcement of restitution would subject him to loss, the defendant is entitled to retain whatever benefit he has derived from the mistake. Woodward, Quasi Contr. § 20. In such cases it may be unfortunate that the law does not attempt to distribute the loss; but, until some other basis, for recovery than that of unjust enrichment is established, the party who has sustained the loss must bear it. To allow the plaintiff, to recover in this action is to visit the consequences of the wrong imposed, without the fault of either, upon one who would be incapable of obtaining reparation from those who are probably the real beneficiaries of the wrong (the consumer of the commodity).
It frequently happens that the risk of certain contingencies affecting a transaction must, as a matter of law, be held to be borne by one party rather than the other. The law always leaves a loss where it
In the case at bar, the plaintiff, from the beginning of the proceedings involving the rate, professed knowledge of the facts upon which its invalidity was ultimately determined. But apparently it was not able to choose the appropriate means of proving these facts. It cannot be said to have supplied its services under a mistake as to the facts, and we can see no just reason for allowing it to shift the burden of the experiment to the shipper.
As a further test of the plaintiff’s position, it is proper to inquire what the situation would be had the suit to determine the constitutionality of the rate statute been begun by the carrier as one to enjoin the execution of the law. Had relief been denied in such a proceeding, and later, after a reasonable period of experimentation, had the injunction been- issued by the United States Supreme Court, preventing’ the state- officers from enforcing the law, manifestly the “coercion,” compelling the carrier to apply the statutory rate during the period of experimentation, would not have been of a judicial, but rather of a legislative,, character. Its position would have been precisely that of any individual who yields obedience to an unconstitutional law and sustains a loss in so doing. It could not shift this loss to another who was justified in contracting with it, upon the supposition that its yielding was. voluntary.
If obligation rests upon the defendant as a matter of law it is wholly because of the fact that the state of North Dakota, through its legislature, has denied to the plaintiff rights secured to it by the 14th
In so far as the complaint may be based upon a supposed right to collect a reasonable rate during the period of experimentation, it entirely ignores the effect of the decree of the United States Supreme Court. While the decree was based upon evidence covering a certain period of time, and in this sense looks backward, it nevertheless operated in the future as well. In reality, the plaintiff’s whole case seems properly hinged upon the real meaning and effect of the first decree of the United States Supreme Court.
While the Supreme Court of the United States, in the case of Missouri v. Chicago, B. & Q. R. Co. 241 U. S. 533, 60 L. ed. 1148, 36 Sup. Ct. Rep. 715, explained quite thoroughly the meaning of a decree such as the one involved here, it expressly refrained from deciding whether oi-not excess rates paid pending a decision as to the constitutionality of a rate-fixing statute were recoverable in the absence of a condition to that effect, imposed when the injunction was issued. So that, in dealing with this question, we must dispose of it without an authoritative interpretation of the original decree by the court which entered it. But in the light of well-considered precedent, we think the correct interpretation is that the decree was absolute and bound the plaintiff herein for the time being, and also that the damages flowing therefrom were within the rule of damnum absque injuria. In the case of Russel v. Farley, 105 U. S. 433, 26 L. ed. 1060, Mr. Justice Bradley stated the principle of nonliability, in such a case as follows: “Where no bond or undertaking has been required, it is clear that the court has no power to award damages sustained by cither party in consequence of the litigation, except by making such a decree in reference to the costs of the suit as it may deem equitable and just . . . and if the legal, right is doubtful, either in point of law or of fact, the court is always reluctant to take a course which may result in material injury to either party; for the damage arising from the act of
Where the enforcement of a statutory rate is enjoined, pending an ultimate determination of its validity, the proceedings from the beginning are predicated upon the right of the shippers to command the services at the rate prescribed, and the injunction is only issued to prevent irreparable loss in case the prescribed rate is ultimately held illegal. It follows from this that, when such a suit is determined adversely to the carrier, the shipper may recover whatever difference there may be between the statutory rate, and the rate collected during the progress of the suit. But it is nevertheless appropriate for the court, in enjoining the operation of a statute, to require a bond as an added protection. The right of action upon the bond, however, is not exclusive. Bellamy v. St. Louis, I. M. & S. R. Co. 136 C. C. A. 442, 220 Fed. 816. Where, on the other hand, at the end of an unsuccessful suit, the carrier is restrained from violating the terms of a rate statute, it is manifest that any damages it may sustain through compliance with the injunction are not recoverable. Were the rule otherwise, the injunction, which is merely a continuing expression of the judgment of the court that the statutory rate must be applied, is a judgment deprived of its force as an adjudication of the rights of the parties. The error in the plaintiff’s contention inheres in the failure to recognize the injunction as being the continuing expression of the court until such time as it may be modified or dissolved by a new judgment or decree. During such time, it is impossible that there could have been any other measure of the rights and obligations of the parties than that provided in the decree itself.
In so far as the practice of the United States Supreme Court in qualifying decrees in rate cases as being “without prejudice” sheds light
The foregoing reference to the qualified decrees and to the reason which seems to have moved the court to enter them seem to indicate clearly that, while the decree was absolutely binding as an adjudication of the rights of the parties down to the time of its entry, it also had the effect of letting the future take care of itself. As to the future, therefore, adopting the construction of the decree most favorable to the plaintiff in this suit, it has simply rendered the service at a rate which both the legislature and the judiciary have determined to be applicable, and it has rendered the service without any other contract on the part of the shipper than would arise from the mere delivery of his goods for transportation according to the prescribed rates. The prescribed rates are either applicable or they are not applicable at the time the goods are delivered for shipment. The legislature and the Supreme Court of the United States have considered that they are applicable; and during the period embraced in this controversy it is inconceivable that either the shipper or the carrier should have been
This case is readily distinguishable from that of C. L. Merrick Co. v. Minneapolis, St. P. & S. Ste. M. R. Co. 35 N. D. 331, 160 N. W. 140. In that case, the shipper was allowed to recover the difference between the rate prescribed and collected by the carrier and the statutory rate upon shipments made after the statute went into effect and before the carrier was restrained from violating the statute; whereas, here, the carrier seeks to recover for having done exactly that which it was compelled to do by the decree of the court as a condition to being permitted to secure a dissolution of the injunction. In a case in which a shipper has been permitted to recover the difference between a rate charged and some lower rate, the result has been merely to give to the shipper the benefit of a violated regulatory measure, with which the carrier was not, for the time being, complying. For all purposes of such a situation, the regulatory provision fixes the absolute criterion of reasonableness, and, it having been prescribed by competent authority, a departure therefrom is a distinct breach of the obligation of the carrier. In the case at bar, the effect of the first judgment of the United States Supreme Court was to fix a criterion of reasonableness based upon the statute which should control until the decree might subsequently be modified.
In addition to tho reasons assigned, there are strong practical considerations which weigh against the maintenance of an action such as the one at bar. In the case of Van Patten v. Chicago, M. & St. P. R. Co. 81 Fed. 545, which was a suit to recover damages on the ground that the charges exacted by the carrier were unreasonable, it was held that it was competent and proper for the carrier to show in defense that, in obedience to the Interstate Commerce Act, it adopted, printed, and posted a schedule of rates, and that the charges complained of were in accordance with those contained in the schedule. Commissioner Prouty of the Interstate Commerce Commission later criticized this result (Cattle Raisers’ Asso. v. Ft. Worth & D. C. R. Co. 7 Inters.
Judge Shiras, in the case referred to (page 551), said: “In the present case, however, the proposition of the plaintiff is that, after the carrier, in obedience to the requirements of the act, has adopted, printed, and posted schedule of rates [which was done in this case under § 4727, Comp. Laws 1913], and for the past five years has received and transported grain, charging the schedule rates therefor, and the shipper, without protest or demur, has delivered his grain for shipment, knowing the schedule rate, and has paid the charges in conformity with the established rate, he may now, and at any time within the period of the Statute of Limitations, bring an action at law for damages, not on the ground that more than the schedule rate was exacted, or that the schedule itself provided for unequal, and therefore unjust, rates, but solely upon the ground that the schedule rates, though uniform and properly proportioned, were greater than they should have been; and thus the question is presented whether the Interstate Commerce Act, considered as a whole, authorizes and provides for an action of this kind. If it can be maintained, it results in the holding that it was the intent of Congress to place upon the courts and juries of the country the duty and burden of establishing the rates of transportation for interstate commerce, and upon the common earlier the burden of transportation, with the right to ultimately retain as pay therefor the rate fixed by the verdict of a jury rendered perhaps five years after the rendition of the services. How is it possible for a jury to pass understandingly upon the question which inheres in the establishment of a properly proportioned and equalized schedule of transportation rates ? . . . Now the theory of the plaintiff is that
“But, suppose the case involved but a single shipment, would the difficulty be remedied, if the theory of the plaintiff is to prevail ? How could the jury fairly and understandingly deal even with the case of a single shipment, provided the duty is placed upon the jury of determining what a fair and reasonable charge for the particular service would be, unless some standard, already recognized and established, is given them for their guidance? It is impossible for the jury to deal with the questions of the total cost of building, equipping, and operating tho line of a railway as a whole, the proportionate cost of the particular transportation in question, the total amount of business done over tho entire system, the total burden properly to be laid upon the total business for transportation charges, and the proper proportionate share which the particular shipment should bear.”
It is true that these practical considerations should not have weight as against a clear legal right; but since they inhere in, and are so thoroughly characteristic of, the particular matter in controversy, it is only reasonable to suppose that they were present in the mind of the court when the decree in question was entered, and that the court purposely granted the relief unconditioned as to the consequences of a possible future modification. Surely the United States Supreme Court did not intend that, during the entire period its first decree should be in operation, the parties whose business would be affected favorably or unfavorably by the experiment should be left to the uncertainties incident to numerous subsequent jury trials in order to determine the rate applicable to shipments of coal.
The order appealed from is affirmed.
Concurrence Opinion
(concurring specially). It was stated upon the argument by counsel for both parties that no objection was made because of any mere technical or amendable defect in the complaint. The defendant asserted and stood squarely upon the proposition that the complaint on its face showed clearly that no cause of action existed or could exist against it under the facts pleaded. And that this, and this alone, was the theory on which the demurrer was interposed and on which it had been argued in the court below, and on which it was asserted in this court.
The questions presented in this case are by no means easy to determine. That the constitutional rights of the plaintiff have been infringed upon and its property taken without due process of law cannot be denied. The rate statute became effective July 1, 1907. State ex rel. McCue v. Northern P. R. Co. 19 N. D. 46, 25 L.R.A.(N.S.) 1001, 120 N. W. 869. It was sustained by the decision of this court, filed April 16th, 1909. Ibid. This judgment was affirmed by the United States Supreme Court in a decision filed March 14, 1910. Northern P. R. Co. v. North Dakota, 216 U. S. 579, 54 L. ed. 624, 30 Sup. Ct. Rep. 423. The case was subsequently reopened and the carrier submitted proof of the receipts and expenses chargeable against the lignite coal traffic for the year commencing July 1, 1910, and ending June 30, 1911. State ex rel. McCue v. Northern P. R. Co. 26 N. D. 438, 145 N. W. 135. Upon the proof thus submitted the United States Supreme Court held the rate confiscatory and violative of the 14th Amendment. Northern P. R. Co. v. North Dakota, 236 U. S. 585, 59 L. ed. 735, L.P.A.1917F, 1148, P.U.P.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1.
In a subsequent ease, involving the right of a shipper to recover a sum paid in excess of the statutory rate, it was demonstrated, or rather it was conceded, that there was no substantial change in the cost of handling the intrastate lignite coal traffic on the line of the plaintiff railroad at any time between the 1st day of July, 1907, and the 1st day of July, 1911. C. L. Merrick Co. v. Minneapolis, St. P. & S. Ste. M. R. Co. 35 N. D. 331, 338, 160 N. W. 140. Hence, it is established by former adjudications that the rate established by the statute was, in fact, as to the plaintiff confiscatory at all times.
It is undisputed that the plaintiff consistently and vigorously assert
It would seem to follow as a necessary corollary to the rule stated that where a common carrier is compelled to carry goods at a confiscatory rate under such circumstances as clearly to indicate that the service was performed involuntarily, it ought to be entitled to recover from the person who received the benefit of such involuntary service the difference between the amount received and what would amount to a reasonable compensation for the service performed.
But is the right of the carrier (if any) to recover concluded by the decree putting the rate into effect ? At the time the case of C. L. Merrick Co. v. Minneapolis St. P. & S. Ste. M. R. Co., supra, was submitted, the writer was inclined (as were, in fact, all the members of this court) to hold that the first decree, which was qualified as “without prejudice,” had been superseded by the final decree. And that the rights of the parties in the C. L. Merrick Go. Case must be measured by the final decree in the rate ease. But while the C. L. Merrick Co, Case was pending for decision, the Supreme Court of the United States handed down a decision in Missouri v. Chicago, B. & Q. R. Co. 241 U. S. 533, 60 L. ed. 1148, 36 Sup. Ct. Rep. 715. In that case tbe court held that a decree in a rate case, although qualified “as ‘without prejudice,’ not to leave open the controversy as to the period with which the decree dealt and which it concluded, but in order not to prejudice the rights of property in the future, if from future operations and changed conditions arising in such future it resulted that
It may also be observed that, although the plaintiff’s complaint shows that its property has been taken away and handed over to others without just compensation, it does not show, nor can it reasonably be inferred, that plaintiff’s loss was occasioned by any act of the defendant. On the contrary, it appears that such loss was occasioned by the actions of the legislature and of the coui*ts. It would have been possible to have protected the rights of the plaintiff, as well as of the shippers, by proper provision in the first decree, but no such provision was made. And while it is apparent that plaintiff has sustained loss, and that someone has received a benefit corresponding to such loss, it does not necessarily follow that the defendant received such benefit. It is quite
The order sustaining the demurrer should be affirmed.
Dissenting Opinion
(dissenting). This is an appeal from an order sustaining a general demurrer to the complaint. It avers that at different times between the 30th day of July, 1910, and the 1st day of June, 1915, the plaintiff received and transported coal by the carload for the defendant between points in North Dakota; that the defendant by reason thereof became obligated to pay to the plaintiff the lawful and reasonable rates for such transportation; that the defendant has at all times refused to pay such reasonable rates, and has paid only the rates prescribed by chapter 51 of the Laws of 1907. It avers that the plaintiff refused to comply with chapter 51, and the attorney general brought a suit to compel such compliance. The state supreme court sustained the same. State ex rel. McCue v. Northern P. R. Co. 19 N. D. 45, 25 L.R.A.(N.S.) 1001, 120 N. W. 869. The United States Supreme Court affirmed the decision without prejudice because of defective proof. 216 U. S. 579, 54 L. ed. 624, 30 Sup. Ct. Rep. 423. That by reason of said decisions and by compulsion during part of the year 1910 and until June, 1915, the plaintiff put in force the rates prescribed by chapter 51. That in July, 1911, on due application the state supreme court made an order reopening its judgment and appointing a referee to take additional testimony, and on such testimony it was again adjudged that the plaintiff keep the rates prescribed by chapter 51. State ex rel. McCue v. Northern P. R. Co. 26 N. D. 438, 145 N. W. 135. That on June 11, 1915, the judgment of the state court was reversed and the action dismissed, with costs, $1,878.82. 236 U. S. 585, 59 L. ed. 735, L.R.A.1917F, 1148, P.U.R.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1.
The complaint avers that § 142 of the state Constitution is the sole authority for the regulation of rates, and it provides that the rate fixed by the legislative assembly or Board of Railroad Commissioners shall remain in force pending the decision of the courts, and that during the time of said shipments until July, 1915, by reason of the wrongful mandates of the courts, the plaintiff was compelled to accept and trans
Disregarding some errors and omissions which counsel agree to waive, the complaint fairly shows that the plaintiff performed services for the defendant at its request in the transportation of coal, and that by compulsion the plaintiff accepted for such services $26,000, less than the reasonable value of the same, and the defendant has refused to pay such reasonable amount. Now it is manifest that if one party may compel another to perform services at less than the reasonable value of the same, he may compel performance without any value at all. If a party may take the services or the property of another without just-compensation, he may take it withoiit any compensation, and that is simple robbery. Of course, if the plaintiff voluntarily performed the services for the compensation received — as contended by the defendant — then it cannot recover an additional sum. The defense contends that at the date of the first decree of the United States Supreme Court, the statutory rate was lawful because it was not adjudged unlawful on the testimony submitted, but in that there is a fallacy. If chapter 51 fixed the rate at half the reasonable value or less than the reasonable value, the rate never became lawful by reason of a failure to make proof or the necessity of an experiment to demonstrate the fact. It is quite possible that on a trial the evidence may show that the services were voluntary and made without protest at the compensation fixed by statute, but the averments of the complaint are otherwise.
Here is a fine specimen of specious reasoning. It must be conceded that at the date of the first decision of the United States Supreme Court the statutory rate was lawful. Therefore the decree declaring' the same lawful was not erroneous, and therefore said decree only compelled the plaintiff to obey a valid law. Can it be said that a decree of a court compelling the defendant to comply with the valid law is coercive ?
The question is, Was the law valid? If it was a valid law at the time of the first decree, it was valid at the time of the second decree and it has always been valid. If a statute was void at the time of the
The complaint shows, by force of this statute and the court decisions, the plaintiff has been compelled to carry loads of coal for defendant at a loss or without just compensation, and that such loss amounts to over $26,000. Hence, the complaint does state a good cause of action.
Order sustaining demurrer should be reversed.