| Ark. | Feb 9, 1895
Lead Opinion
The demurrer of appellee to the answer of appellants presents four questions of law :
First. Is a person, who goes upon the train of a railway company for the sole purpose of paying an overcharge for transportation, if demanded, and bringing an action for the penalty prescribed by the statute in such cases, entitled to recover such penalty if the company demands and he pays the overcharge?
Second. Was appellee barred from recovering the penalty for such overcharge by reason of champerty ?
Third. Are appellants entitled to any relief in equity on account of a mistake ?
Fourth. Does their answer show that three cents a mile for the transportation of passengers is an unreasonable rate of compensation for the Little Rock & Fort Smith Railway ?
In United States v. Ames, 99 U.S. 35" date_filed="1879-02-18" court="SCOTUS" case_name="United States v. Ames">99 U. S. 35, 47, Mr. Justice Miller said : “Ignorance of the facts is often a material allegation, but it is never sufficient to constitute a ground of relief, if it appears that the requisite knowledge might have been obtained by reasonable diligence.”
Whatever limitations there may be upon the rule as to diligence, stated in the authorities we have cited, it certainly applies where it is the duty of the party to make the inquiry and obtain the information. In this case appellants were prohibited from charging and collecting more than three cents a mile for carrying each passenger over the Little Rock & Fort Smith Railway. It was their duty to the passengers traveling in their trains to ascertain the distance between the stations on their road,, in order to protect them against the payment of excessive rates of fare. One of the appellants, the Little Rock & Fort Smith Railway Company, acquired its road on the 8th of June, 1875, and charged and collected the alleged excessive rates in January, 1891, more than fifteen years after it came into possession of the road. It surely was not excusable for any mistake which was not induced by the appellee and his confederates, if for any.
The demurrer was overruled as to so much of the answer as is in these words: “And defendant says that if it has made an overcharge against plaintiffs, it was induced to do so by the acts of the plaintiff and his co-conspirators, by the conspiracy and combination as aforesaid ; and it did so ignorantly, unintentionally, and by mistake, and that, therefore, it is not liable for violation of the statute, as charged herein.” If appellants were induced by the acts of appellee, and others acting in concert with him, to overcharge, they were allowed to set up that fact in their answer, and cannot, therefore, complain of the court depriving them of their defense in that respect.
Is the constitutional question sought to be raised by the defendant’s answer presented in such a manner as to make it the duty of this court to decide it? It is not, unless it appears that this cause cannot be disposed of without deciding it. As to the duty of courts to decide questions affecting the validity of acts of the general assembly, Judge Cooley says : “Neither will a court, as a general rule, pass upon a constitutional question, and decide a statute to be invalid, unless a decision upon that very point becomes necessary to the determination of the cause. ‘While courts cannot shun the discussion of constitutional questions when fairly presented, they will not go out of their way to find such topics. They will not seek to draw in such weighty matters collaterally, nor on trivial occasions. It is both proper and more respectful to a co-ordinate department to discuss constitutional questions only when that is the very lis mota. Thus presented and determined, the decision carries a weight with it to which no extrajudicial disquisition is entitled.’ In any case, therefore, where a constitutional question is raised, though it may be legitimately presented by the record, yet, if the record also presents some other and clear ground upon which the court may rest its judgment, and thereby render the constitutional question immaterial to the case, that course will be adopted, and the question of constitutional power will be left for consideration until a case arises which cannot be disposed of without'considering it, and wrhen, consequently, a decision upon such question will be unavoidable.”
Have the appellants presented the question as to the validity of the act of April 4th in such a manner as to make it our duty to pass upon it? The right of the legislature to fix the maximum rates of compensation for the transportation of persons and property by railways is unquestioned. Dow v. Beidelman, 49 Ark. 325" date_filed="1887-05-15" court="Ark." case_name="Dow v. Beidelman">49 Ark. 325. But it is said that the courts can inquire into the reasonableness of such rates, and, finding them unreasonable, can declare the act fixing them unconstitutional. Assuming that this contention is correct, the presumption is that they are reasonable, and the burden is on the appellants to affirmatively show that, as to them, they are not. Have they done so? The Ivittle Rock & Fort Smith Railway Company alleges that it caqnot keep up, maintain and operate its railway under the act of April 4, 1887, except at a heavy loss. Why? Two reasons are given: (1) because “the traffic and business over the same, both in passengers and freight, is so small and unremunerative that it cannot, and has not, been able to, operate its railway under said statute as aforesaid without an actual loss;” and (2), “because of its inability under such rate to pay the interest upon its just debts and the cost of maintining and operating its railroad in a safe and proper condition.”
In Reagan v. Farmers' Loan & Trust Co. 154 U.S. 362" date_filed="1894-05-26" court="SCOTUS" case_name="Reagan v. Farmers' Loan & Trust Co.">154 U. S. 362, which was an action against State railroad commissioners to restrain the enforcement of rates, charges and regulations prescribed by them, because they were unjust and unreasonable, a demurrer to the bill was filed. Mr. Justice Brewer, in speaking of general allegations in' the bill similar to those contained in appellants’ answer, said: “There are often, in pleadings, general allegations of mixed law and fact, such as of the ownership of property and the like, which, standing alone, are held to be sufficient to sustain judgments and decrees, and yet are always regarded as qualified, limited, or even controlled by particular facts stated therein. It would not, of course, be tolerable for a court administering equity to seize upon a technicality for the purpose or with the result of entrapping either of the parties before it. Hence, we should hesitate to take the filing of the demurrers to these bills as a direct and explicit admission on the part of the defendant that the rates established by the commission are unjust and unreasonable.”
The rule, as stated by Mr. Justice Brewer, applies forcibly in this case. Appellants attempt to show, in their answer, the unreasonableness of the rates fixed by the statute in two sentences. In the first they make the general allegation “that, under the terms and rates prescribed by said statute, it (railroad company) cannot keep up, maintain and operate its railway except at a heavy loss.” In the second sentence they repeat the same allegation as follows : “that said statute forbidding this defendant from charging any one passenger a greater rate than three cents a mile is entailing a great and daily loss upon this defendant, which will, in the end, amount to a total confiscation and destruction of its property, rights and franchises.” After making the first general allegation, they specialize or state the particular facts as follows: “The traffic and business over the same, both in passengers and freight, is so small and unremunerative that it cannot, and has not been able to, operate its railway under.said statute as aforesaid without actual loss.” Why states these facts? Obviously to show in what way the loss occurred — to show the reasons for making the general allegation. They could serve no other purpose. To emphasize the reason they had already given, they expressly say that the reason they make the general allegation is ‘ ‘because of its (company’s) inability under such rate to pay the interest upon its just debts and the cost of maintaining and operating its railroad in a safe and proper condition.”
The general allegation in the answer as to the effect of the act of April 4 upon the road, limited or controlled by the particular facts, therefore means that the road could not be operated without loss, because the traffic and business over the same are too- small and unremunerative to pay the interest upon its just debts and the cost of maintaining and operating it in a safe and proper condition. According to this interpretation, the answer does not show, directly or indirectly, expressly or impliedly, or in any other manner, that the rate of three cents a mile for the transportation of passengers is unreasonable. As to the transportation 'of property our attention has not been called to, and we have failed to find, any statute fixing rates. The fact that the business and traffic are small and unremunerative does not show that the passenger rate of three cents a mile is unreasonable. That might be so, and a rate which would defray the expenses of operating the road or make it profitable would be exorbitant and oppressive to the shipper and passenger, and unreasonable. In other words, it might be so, and no reasonable rate would be sufficient to defray expenses. The additional fact that the traffic and business of the road, when operated according to the act of April 4, and no passenger was charged exceeding three cents a mile, would not pay the interest on the debts of the railway company, and the expenses of operating the road, does not show that the maximum passenger rate of three cents a mile is unreasonable. Rates of transportation sufficient to enable the road to realize a sum large enough to defray current repairs and expenses and pay a profit on the reasonable cost of building the road and equipping it ought to be reasonable. The earnings of a road might be sufficient for this purpose, and yet not large enough to pay expenses and interest on its debts. Large and unnecessary debts might have been contracted through extravagance, enormous salaries, and mismanagement, exceeding the cost of building and equipping the road, and bearing a rate of interest amounting to more than a reasonable profit on the capital necessary, when judiciously expended, to construct and equip the road. Like some individuals as to their business, railway companies can reach a point through extravagance, losses and mismanagement, when no reasonable rate or profit will enable them to maintain their roads and pay the interest upon their debts, and when failure and a sale of the road to other parties become inevitable.
The demurrer was properly sustained.
Por the error indicated the judgment of the circuit court is reversed, and the cause is remanded for a new trial.
Concurrence Opinion
concur in the judgment on the ground of disqualifying bias of the jury, but dissent as to the insufficiency of the pleadings, holding that the answer is sufficient on demurrer, that the defects complained of should be reached by motion, and that the plaintiff is not shown to be a “ party aggrieved,” as contemplated by the act.