24 S.D. 136 | S.D. | 1909
Chapter 131, p. 196, Sess. Laws S. D. for the year of 1907, is in words as follows:
“An Act to Define and Prohibit Unfair Competition and Discrimination, and to Define the Powers and Duties of the Attorney General in Regard Thereto.
“Be it enacted by the Legislature of the state of South ' Dakota:
“Section 1. Unlawful Discrimination. — Any person, firm, or corporation foreign or domestic, doing business in the state of South Dakota, and engaged in the production, manufacture or distribution of any commodity in general use, that intentionally for the purpose of destroying the competition, of any regular, established dealer in such commodity, or .to prevent' the competition of any person who, in good faith intends and attempts to become such dealer, .shall discriminate between different sections, communities, or cities of this state, by selling isuch commodity at a lower rate in one section, community or city, or any portion thereof than such person, firm or corporation, foreign or domestic charges for such commodity in another section, community, or city, after equalizing the distance from the point of production, manufacture, or distribution and freight rates therefrom shall be deemed guilty of unfair discrmination.
“Sec. 2. Duty of Attorney General. — If complaint shall be made to the Attorney General that any corporation is guilty of unfair discrimination as defined by this act, he shall investigate such complaint and for that purpose he ma}- subpoena witnesses, administer oaths, take testimony and require the production of books or other documents, and, if 'in his opinion sufficient grounds exist therefor, he may prosecute an action in the name of the state
“Sec. 3. Violation — Penalty.—Any person, firm, or corporation violating tire provisions of section one (1) of this act shall upon conviction thereof be fined not less than two hundred dollars nor more -than ten thousand dollars 'for each offense.
“Sec. 4. Remedies Cumulative. — -Nothing in this act shall be construed as repealing any -other act or part of an act, but the remedies herein provided shall be cumulative to all other remedies provided by law.”
The state, brought two actions in the circuit court, one criminal, charging defendant with having broken the above statute, the other civil, seeking under section 2 thereof to forfeit the right of defendant to do business in -this state. Demurrers were interposed to both the criminal information and civil complaint, said demurrers attacking such information and complaint ¡solely upon the ground that they did not allege facts sufficient, in the one case, to constitute a public offense, and in the other case, to state a cause of action; each demurrer being based solely upon the alleged unconstitutionality of the above statute. The demurrers were, both overruled. In the civil case the defendant appealed from the order overruling such demurrer. In the criminal case trial was had, and verdict of guilty rendered, judgment entered, motion for new trial made and overruled. The defendant at all times saved his rights by timely objections and motions raising the questions of constitutionality of the said statute, and duly appealed from the judgment of conviction and order denying new trial. It is admitted by -the appellant that the only question raised by either appeal is the ¡said constitutional questions, and they are the only ones saved by assignments of 'error. The question involved in the tw-o cases o-n appeal being therefore necessarily largely, if not entirely, the same, by agreement of parties and consent of this
The appellant in its brief ha's discussed the issues under the, following headings: “(i) The Statute in Question is Criminal m Its Nature and Penal in Its Provisions, and must be Strictly Construed. (2) No offense is Created by This Statute, Because, While It Defines Unfair Discrimination, Which is in Itself No Offense, It Nowhere Forbids It So as to Make It a Crime. (3) This Daw Cannot be Upheld upon the Theory That Its Purpose and Effect is to Prevent the Establishment of a Monopoly. (4) The Act, by Reason of Arbitrary Classification, Denies the Defendant Equality under the Daw, and is for That Reason Violative of the Constitutions, Both State and Federal. (5) The Act is Invalid Because the Classification of Corporations by Section 2, and the Procedure Therein Provided for is Violative of the Constitutions, Both State and Federal. (6) Whether the Act can be Severed and Some Parts Saved While Others are Condemned. (7) The Act Interferes with Freedom to Contract.”
The briefs on both sides are very full and exhaustive, and are a credit even to the eminent counsel engaged in this case. It will be impossible for us within the limits of this decision to discuss, in detail, .the authorities cited, though we have given them careful consideration. For convenience we will take up the questions raised in the order in which they are treated in the appellant’s brief.
The appellant, under the first heading, has gone into an exhaustive discussion of the rules of construction applicable to criminal statutes, for the purpose of showing, under .the second heading, that the courts cannot read into the statute words so that such statute- can be held to- create an. offense under section 3 of the Penal Code, which provides: “A crime or public offense is an act or omission ’forbidden by law, and to which is annexed, upon conviction, either of the following punishments: * * (3) Fine” — the point made by appellant being that said statute, in question nowhere “forbids” the acts that constitute the offense, and that therefore, under said section 3, Penal Code, there is no offense stated. The state had given this point
Conceding for the' purposes of this discussion that no reference can be made to the word “prohibit” found in the title, to aid in upholding the law, and conceding likewise that nothing can be read into this statute in aid thereof, and that we must look to the plain language of the statute for the prohibition of the said acts, and even disregarding section 10 of our Penal Code, providing: “The rule of common law that penal statutes are to be. strictly construed, has no application to this Code. All its provisions are to be construed according to the fair import of their terms, with a view to effect its objects and promote justice”— still does not section 3 of said statute plainly prohibit the acts set forth in section 1 by prescribing a punishment therefor? It certainly does. One man might say to his child: “To break Mr. Jones’ windows is wrong, and I forbid your doing it.” Another man says to his child: “To break Mr. Jones’ windows is wrong, and if you do it, I will whip you.” Does it need any legal research or extended study of statutory construction for the second child to determine that he, as well as the other child, is forbidden
In State v. Ostwalt, 118 N. C. 1212, 24 S. E. 661, 32 L. R. A. 396, the court said: “It seems never before to have been doubted that the Legislature creates a criminal offense whenever it prescribes that a certain act shall be punishable either by a fine or imprisonment, or forbids it generally, and by implication empowers the court to impose either fine or imprisonment.” Section 15 of the Penal Code of California is in substance the same as section 3 of our Penal Code; it reading as follows: “A crime or public offense is an act committed or omitted in violation of law forbidding or commanding it, and to which is annexed, upon conviction, either of the following pnishments: * * * Third, fine.” In the case of Dyer v. Placer County, 90 Cal. 276, 27 Pac. 197, the court was called upon to determine whether, in the light of such section, a public offense was created by a statute reading as follows: “Every person who shall fraudulently evade, or attempt to evade the payment of his fare for traveling on any railroad, shall be fined not less than five nor more than twenty dollars.” The court, after quoting section 15 of their Penal Code, supra, well said: “To hold that a law which makes it a finable
Before taking up the consideration of those questions raised by appellant which involve the constitutionality of the law before us, it may be proper to consider briefly the purpose in the minds of the legislators in framing the law in question, and m conned ion,, therewith the evil sought to be cured, and, finally, whether such evil brings the remedy within that great body of laws known as “police regulations.” The great and only excusable reason for the prescribing of any rule of conduct is to promote justice between man and his fellows in their relations as members of a social or political body. As was well said by Webster : “Justice is the greatest thing on earth.” Law may be defined as the aggregate of those rules and principles of conduct promulgated by the legislative- authority or established by local custom, and our laws are the resultant derived from a combination of the divine or moral laws, the laws of nature, and human experience, as such resultant has been evolved by human intellect, influenced by the virtues of the ages. Human laws must therefore of necessity continually change as human experience shall prove the necessity of new laws to meet new evils, or evils which have taken upon themselves new forms, or as the public conscience shall change, thus viewing matters from a different moral view point.
The effort to promote and effectuate justice by means of human laws has been a continuous fight against human selfishness, especially human avarice and greed, a continual effort to protect the weak against the strong. It is -the boast of our law that it protects its wards in the full and free enjoyment of their lives, their liberties, and their property; and the cry that is always heard when any law is attacked on constitutional grounds is that it has, in some manner and to some degree, wrongfully deprived some one of equal protection in those cherished rights of life, liberty, and property. Yet common sense, as well as experience, has taught us that only through restraint can there be liberty; that
Among those things which human experience and the public conscience early recognized as essential and necessary to the highest welfare of all, was the right of free and equal competition in the struggles of life, not the right of freedom -to crush one’s fellows by force of brute strength or the equal brute force of greater wealth or power, but the right to have brute force, wealth, and power so restrained as to place the weakest, poorest, and lowliest on a free equality, before the law, with the strongest, richest, and most powerful. From an early date there have been laws against contracts and combinations in restraint of trade* and such laws became a part of the common law of this country. While practices in conflict with such laws have, at all times, been more or less frequent, yet, owing to industrial conditions existing up to the past 50 years, such practices had never become any serious menace to the rights of mankind; but, with the wonderful advance in industrial pursuits, and the vast accumulatipns of wealth during the past half century, there came new'methods of business, including vast combinations to control the articles of commerce, bringing an awakening of public conscience to the evils thereof,, and, as a result, many statutes were enacted, and even amendments to Constitutions adopted, aiming to the restoration of freedom and equality in commerce. The evils experienced being almost entirely those flowing from monopolies created through combinations, there were enacted what are' known as the “anti-monopoly statutes,” not merely making such combinations in restraint of trade unlawful from a civil point of view, but making such combinations criminal. Thus this state passed its Laws of 1890, 1893, 1897, and 1899, and adopted in 1896, section 20, art. 17, of .the Constitutor which section provides as follows: “Monopolies and trusts shall never be allowed in this state and no incorporated com
The statutes of most states, up to very recent years, were aimed only at monopolies brought about through combinations, so that, in treating of the subject of monopoly, both'text-book writers and judges have spoken of them as though monopoly and combination were ofre and the -same, thus causing many to consider that there could be no monopoly except there was combination, while, as a matter of fact, combination is simply, a means, and but one of many means, by which a monopoly is acquired; monopoly being the end sought, combination a means therefor. It is well to consider the definition of monopoly as given by Webster: “(i) The exclusive power, right, or privilege of selling a commodity; the exclusive power, right or privilege of dealing in some article, or of trading in some market; sole command in the traffic in anything, however obtained; as, the proprietor of a patented article is given a monopoly of its sale for a limited time; * * * a combination of traders may get a monopoly .of a particular product.”
A glance at the above-quoted provision of' our Constitution will show that it is aimed at all monopolies, while it calls attention particularly ,to those acquired through the then prevalent method. While our lawmakers and courts were busy trying to cure the evil of monopoly by destroying combinations created therefor, human ingenuity, prompted by avarice and greed, was also busy devising methods of evading the law and creating a monopoly without combination, and the brains at tne head of the most powerful
To get rid of competition, and thus acquire a monopoly, the man, firm, or corporation possessed of, or controlling, large capital no longer said to his competitor: “Let us combine, and thus obtain a monopoly of the business we are engaged in, and by so doing increase our profits by raising prices to the consumer.” No, that would be criminal, and might lead to trouble, and, too, it was a crude way of acquiring the thing sought. Now he says to a competitor, if such competitor be weaker than he: “Get out of my way. Sell me your business, or I will destroy it by unfair competition” — or in many cases, without giving his victim a chance to sell to him the business he has, he sets about destroying it, and by a method as certain as the passing of -time, a method that need bring to him not even an immediate financial loss. He puts the price of the commodity handled so low, at the point where his victim is in business, as to make it impossible to meet such price except at a loss, and, to offset what loss he suffers at that point, he raises prices at one or more other points. As soon as this practice became quite prevalent, the public realized -that an old evil was being brought upon them by a new method; a method that not only tended as its natural and necessary result to place a monopoly into the hands of the strong, but did not, as before, permit the competitor to share in the fruits of the wrong — an evil bringing loss to the public and wrong and injustice to the weak tradesman. Again human experience, recognizing the laws of God and nature, controlled and guided by an aroused public conscience, evolved a new law, and placed it upon the statute books of this and many other states, a law aimed at monopolies obtained through unfair competion. The question before this court, as it was before the court in case of State v. Drayton, (Neb.) 17 N. W. 768, is, Are these laws constitutional as being within the scope of the police powers, or is the state helpless to grapple with and destroy this new evil, because in so doing it will take from the wrongdoer the full enjoyment of right to life, liberty, and property? We have no hesitancy in saying that this class of legislation comes directly within the intendment of section
We not only believe it can be upheld upon the above theory, but also that it comes under. the scope of proper police regulation as recognized by the authorities, and this, not only because it is intended, and would naturally tend to prevent a wrong to the public, but because we believe it is inherent in -the powers of the state to protect one citizen against “unfair competition” of another citizen, where such "unfair competition” is used as a mean's to, and with the intent to, deprive such other of his rightful enjoyment of property or the use thereof. Can it be held that this evil which threatens the very foundations of our economic system, and through it the very foundations of a free government, cannot be reached, for the reason, forsooth, that it interferes with the right of free contract on the part of the individual guilty of the' wrongful practice? Bear in mind at all times that this law is aimed only at persons who resort to such “unfair” methods with the “intent” to destroy the business of their competitors.
The Legislature recognized the evil, and acted with full knowledge of the necessity confronting it, and shall we say that it has exceeded its powers in passing a law of this nature ? As said by the court in State v. Drayton, supra: “At the beginning of our investigations we are confronted with the oft-repeated and well-settled doctrine that -no act of the lawmaking power of the state can be held unconstitutional, unless it is clearly violative of the provisions of the Constitution; that, if it is legally possible to sustain legislative enactments, they should not be held void. We are further met with another well-known rule that what is known as the police power is inherent in every government, and does not depend upon legislative’ grants or limitations. Then unless the act under consideration is open to attack as in violation of the written provisions of the fundamental law, or an illegal effort to extend the police power over a subject which cannot be brought within the rightful exercise of that poWer, the law must be sustained. It must also be remembered that with reference • to the
Many attempts have been made to define the term “police power” as applied to legislation. Justice Shaw, in. the case of Com. v. Alger (Mass.) 7 Cush. 53, said: “It is much easier to perceive and realize the existence and source of this power than to mark its boundaries, or prescribe limits to its exercise.” However, in the same case this great jurist gave what is perhaps the best definition ever attempted, defining it as: “The power vested in the Legislature by the Constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth and of the subjects of the same.”
The law books are full of cases where parties have been restrained from “unfair competition,” or have been mulcted in damages for such “unfair competition” in the use of another’s trademark or trade-name, or in the use of trade-marks and trade-names similar to those which had been in use and established by another,
The law in question is certainly constitutional, unless it in some manner conflicts with some express provision of our Constitution or that of the United States, and this brings us to the fourth point suggested by appellant that: “The act, by reason of arbitrary classification, denies the defendant equality under the law, and is for -that reason violative of the Constitutions, both state and federal.” It is the claim of appellant that the law in question violates section 1, art. 14, of the federal Constitution and sections 2 and 18, art 6, of the Constitution of this state; said sections of the state Constitution being in substance the counterpart of the provisions found in the federal Constitution. Appellant has argued at great length, and cited numerous authorities upon the question of what constitutes proper classification in criminal statutes; but, under the view which we take of the statute now before us, it is unnecessary to determine what the proper rules for such classification are, and attempt' to apply them to the provisions of this statute, -for the reason that it appears clear to us that there is absolutely no attempt at classification in this statute.
Appellant says that the following persons are without the law: “(a) Persons who sell at one place only; (b) persons who sell at two or more places, but who, with the intent and purpose of destroying a competitor at one of such places, makes the same low prices which are necessary so to do at both places; (c) persons w'ho sell at two or more places ,and who, with the intent and purpose of destroying a competitor at each place, makes the necessary low prices at all places.” A complete answer to this contention is that the persons above specified are without the law, not because they are left out by any classification created by such law, but rather because in each of said cases there would be lacking one of the elements going' to make up the particular criminal act created by this statute, to wit, discrimination between two points. As we have said, there is no attempt at classification by this act. The only classification claimed by appellant is a classification as to persons, yet this law applies to every existing person, partnership, or corporation, without regard to wealth, age, situation, color, or any other method of distinction. In the, determination of whether a crime has been committed there are always
The appellant in his brief says: "This law in order to be sustained must be brought within the principle that no man ought to be allowed to use his own property, or conduct his own business, so as to destroy the property or business of his neighbor. If such were the scope of the act, the only ’ question would then be whether it was an unwarranted restraint upon the liberty of contract. The evil, if any, which this law is aimed at is not discrimination between places, but ruthless competition, with the purpose, on the part of one competitor, to utterly destroy the business of another.” In this the appellant is only in part correct. The object of this law is, not only the protection of the competitor, while this is without question one of the objects the Legislature had in mind, yet undoubtedly .the prime object was the protection of the public against monopoly.
At another place in its brief the appellant, after referring to the principle of law that courts are not bound by the mere form or pretense of a statute, but that it should look at the substance thereof to see whether the same is really what it purports to be, and whether, while purporting to be within some constitutional limitation, as within -the police power, it is not in fact an invasion of some constitutional provision, says: “Applying this principle,
It may be well again to revert to the history and origin of this legislation.. Legislation of this class, including as it does the so-called anti-monopoly laws, is all directed to the prevention of monopoly. Monopoly and competition being the exact opposites, anything tending to destroy competition -tends -towards monopoly. As we have stated, at the time the statutes against unlawful combinations in restraint of trade were passed, -that was the only means or method of creating monopolies that had come into such common use as to be recognized as a public menace. While those statutes forbid “combinations and contracts” of certain kinds, they were forbidden, not because “combinations and contracts” were in themsélves subjects for police regulation, but were forbidden merely as they might be used ais a method or means of creating a monopoly, laws against monopolies being within the scope of •police regulation. So it is .in the case of the statute before us. Mere “discrimination” is not the thing aimed at, nor even “unfair competition,” but the evil sought to be prevented is monopoly, and the Legislature is merely condemning that class of “discrimination and competition” which experience had taught the public
It is not for the courts to say whether the Legislature has passed a wise law, or whether they should. have made it more broad. With shrewd advisors to point out to their clients new methods by which monopolies may be obtained without breach of existing laws, it may happen that the Legislatures will soon see the necessitiy of passing new legislation reaching the conditions suggested by appellant in illustrations “a,” “b,” and “c,” above referred to. That is for the Legislature to determine. Experience, so far, has taught us that, while such acts set forth in “b” and “c” may be morally wrong, there is no great public menace from the same, for the reason that parties do not so frequently resort thereto under the circumstances suggested, owing, perhaps, to the certainty of immediate loss .and the uncertainty of the parties being able to recoup such loss. Legislatures therefore have disregarded any public danger from such conditions, and ■have left the individuals to their remedy on the civil side of the courts.
The plea of appellant in its final analysis is: “I am guilty of the acts condemned by your lawmakers, but there are other - rascals who do these same things by other means, and you cannot punish me unless you punish them.” The acts condemned by this statute do not reach the sole dealer mentioned in appellant’s illusr tration “a,” because it would be impossible for him to commit the offense; it does not reach those mentioned in “b” and “c,” because, fortunately perhaps for them, whether wisely or not, the
This brings us to the next point raised in appellant’s brief, to wit: “The act is invalid because the classification of corporations by 'section 2, and the procedure therein provided for, is violative of the Constitution, both state and federal.” The appellant has argued at great length that the law cannot punish the corporation differently than it punishes an individual, and contends that this law before us attempts so to do. It seems to be very much wrought up over the alleged fact that upon domestic corporations there is imposed the “death penalty,” and upon foreign corporations “banishment,” in addition to the punishment provided against individuals. Again, it seems to> us, the appellant has entirely failed to recognize the questions of law involved herein. What it claims to be an additional penalty imposed against the corporation is really the voluntary forfeiture by it of its franchise or permit, the statute containing a provision for the determination by the proper court whether in any case, the implied contract existing between it and the state has been broken and its right to' existance forfeited. Let it not be understood that this court admits that there can be no different punishment for a criminal offense imposed against a corporation than that imposed against an individual. We are of the opinion that there can be such a classification of punishment, the same as there can be different punishments imposed as against different individuals, if such distinction in punishment is based upon reasonable grounds, having relation to the crime and nature and condition of parties. People ex. rel. Duntz v. Coon, 67 Hun, 523.
A complete answer to appellant’s contention regarding forfeiture being an additional punishment and unconstitutional, is found in section 20, art. 17, of the Constitution of this state, hereinbefore quoted in full. An examination of such section will show that, in the class of cases covered by such section, the Legislature is not only fully authorized to enact a law like section 2 of the statute before us, but is directed to do so in certain cases; and, whether or not the wrongful acts set forth in section x of this statute are sufficient to justify the Legislature, under :said consti
But regardless of said section 20 of article 17 of the Constitution of this state, there can be no question of the constitutionality of the section now before us. While it is true that corporations are entitled to the equal protection of the law, yet there is ■one thing that wé should never loose sight of — the inherent rights of a corporation are entirely separate and distinct from those of a natural person. A natural person does not seek entry into this world, and he is born into the world with all the inalienable rights of a man, rights not given him by any earthly power, but by his Creator; which rights he retains undiminished, except in so far as he may surrender them for the good of the public, and which rights governments are instituted to secure. A corporation comes into existence through its own volition and upon its own seeking; it has not even the right of existence inherent in itself; it has only such rights as man gives to it. As was said by Justice Brown in Hale v. Henkel, 201 U. S. 43, 26 Sup. Ct. 370.: “Upon the other hand, the corporation is the creature of the statute. It is presumed to be .incorporated for the benefit of the public. It receives certain special privileges and franchises, and holds them subject to the laws of the state and limitations of its charter.” In brief, man was not created for corporations, but corporations were created for man; and the only excuse that can ever justify the creation of this artificial person is that through it the public shall receive some benefit. As was said by Justice Weaver in McGuire v. C., B. & Q. R. Co., 131 Iowa, 367, 108 N. W. 911: “The destinction between them is fundamental and ineradicable. The natural person has certain inalienable rights for which he is not indebted to organized society. He is born to them. The constitution and the laws recognize them, and provide safeguards for them, but do not create them. The corporate person has
At the creation of every corporation, in consideration of the rights and powers given to it by the state, there is the implied covenant or agreement, on the part of such corporation, that it will use the powers given it to the benefit of the public; and, as an incident to such implied agreement, there is attached the condition that, in case of a serious breach of such implied covenant and agreement, the corporation shall forfeit its right to exist, it having ceased to be of public benefit. So by the common law it was early recognized that corporations may forfeit their charters by the misuser thereof. It was also a part of the common law that, while corporations so forfeit their charters, such question of forefeiture could not be raised collaterally, and that, in order to make such forfeiture effective against the corporation, it was necessary for some court to adjudge the forfeiture. Angell and Ames on Corporations (loth Ed.) § 774; 2 Kent’s Com., *306, *313; Lumbard v. Stearns, 4 Cush. (Mass.) 60; Mumma v. Potomac Co., 8 Pet. 287, 8 L. Ed. 945; State v. Minnesota Central Railway Co., 36 Minn. 246, 30 N. W. 816. This forfeiture under the common law could arise only in case of some wrongdoing affecting the public, but it was not necessarily such a wrong as constituted a crime. The states recognized this right of forfeiture, and many, if not all, have passed statutes similar to that ■found in chapter 26 of the Code of Civil Procedure of this state. Section 571 of such Code, being one of the sections of said chapter 26, provides for an action by the state’s attorney, in the nature of quo' warranto, to annul the charter of a corporation upon certain grounds, among which is whenever such corporation shall “violate the provisions of any law, by which such corporation shall have forfeited its,charter or articles of incorporaton, by abuse of its power.” Under such a section it will be found that the courts have frequently adjudged forfeiture of franchises, and that, even in cases where the wrongful conduct of the corporation did not amount to a criminal offense.
An illustrative case is that of People of New York v. North
Several of the states, in passing law's against combinations in restraint of trade, have specifically provided that the state’s attorney or Attorney General should' have power, and it should be his duty, to bring action for annulment of corporate franchises where the corporations are charged with doing the acts forbidden, thus putting those -statutes exactly upon the same standing as the statute at bar; and the discussions- found in the decisions of these cases all show that the remedy thus provided for is purely civil in its nature; that it is not in the least in the way of a penalty 01-punishment for a crime, but merely that the courts may adjudicate
We would call special attention to the case of State ex rel. Kohler v. Cincinnati, W. & B. R. Co., found in 47 Ohio St. 130, 23 N. E. 928, 7 L. R. A. 319, the act complained of not appearing to be a crime, but it being charged that there was a misuse of 'the franchise. The act complained of was the giving by a railroad company to one shipper of crude oil a different rate than was given to another, by the providing of a certain rate where oil was shipped in a tank car, and a greatly different rate per gallon where oil was shipped in car load lots in barrels. We desire to quote briefly from this case, as it bears directly upon a point hereinbefore discussed in this opinion, to wit, that there is more than one way of creating a monopoly; that it is not essential that there be any combination between individuals or corporations. The court says: “The justification interposed is that this was not done pursuant to any confederacy with the favored shippers, or with any purpose to inflict injury on their competitors, but in- order that the railroad companies might secure freight that would otherwise have been lost to> them. This we do not think sufficient. We are not unmindful of the difficulties that stand in the way of prescribing a line of duty to a railway company, nor do we undertake to say they may not pursue their legitimate objects, and shape their policy to secure benefits to themselves, though it may press severely upon the interests of others; but we do hold that they cannot be permitted to- foster or create a monopoly by giving to a favored shipper a discriminating rate of freight. As common carriers, their duty is to carry indifferently for all who'may apply, and in the order in which the application is made, and upon the same terms; and the assumption of a right to make discriminations in rates for freight, such as was claimed
. We think, therefore, that it will readily be seen, and must be admitted, that provisions such as section 2 of this act are constitutional, because if not, then our general statute providing for actions to declare forfeiture of franchises would be unconstitutional, in that it would have to be held that such statutes also adds a penalty for a crime committed by a corporation other than that provided in case the defendant is 'a natural person. It must be conceded that, if it is within the legislative power to enact such statutes separate and distinct from the criminal statutes, there can be no grounds for claiming that it is Unconstitutional simply to combine them in the same statutes under separate sections, as has been done by so many of the states under their statutes regulating trusts and combinations. We might suggest that this ground of unconstitutionality now under discussion seems never to have been raised in any of the cases we have cited arising under these antitrust statutes, from which we conclude that the fact that these provisions are constitutional is universally conceded. Such a provision is found in the statute under consideration in the case of State v. Drayton, and in that case the question now before us was not raised.
Sections 1 and 3 of this act, if standing alone, would make a complete penal statute; and if section. 2 had been omitted, there is no doubt but that the remedy provided for by section 2, could have been obtained under the general statute providing for actions to annul charters, at least against domestic corporations, and, if such general statute is not broad enough to provide for action against foreign corporations, there can be no question but under the common law such action could have been brought, ahd this, regardless of the fact that defendant had not been convicted under section 3. Plow, then, can it be held that section 2 is unconstitutional, when no one will claim the general statute not to be conr stitutional? It is therefore clear that the Legislature had every power to declare the forfeiture, and to direct the Attorney General to bring this class of actions. The Legislature also would
The appellant has cited the case of Phipps v. Wisconsin Central Railway Co., 133 Wis. 153, 113 N. W. 456, contending that said case is an authority in support of its position; that the .provisions in section 2 as to procedure are unconstitutional, in that they apply only to corporations, and not to persons'or partnerships. A reading of said case will -show that it has no bearing on the point involved herein, for the reason that, as the action provided for in section 2 is an action against a corporation, and it would be impossible for there to be a proceeding for like purpose against a natural person, there is no infringement of any constitutional right providing such procedure. Consolidated Rendering. Co. v. State, 207 U. S. 541, 28 Sup. Ct. 178; Hammond Packing Co. v. State of Arkansas, 212 U. S. 322, 29 Sup. Ct. 370.
In closing this branch of the case we refer again to the case of State v. Standard Oil Co., supra, which involved the construction of an anti-trust statute. The first section of such statute defined a trust; the second prescribed a punishment therefor; the third declared a violation of the statute by a corporation to work á forfeiture of its charter, and that it might be ousted by quo' warranto; the fourth provided that all foreign corporations or persons not resident of -the state violating the act should forfeit their right of doing, business within the state, and that it should be the duty of the Attorney General and county attorney to enforce such provision by injunction, or by other proper proceedings. This act was attacked as unconstitutional, and the court said: “In construing an act of the Legislature all reasonable doubts must be resolved in favor of its constitutionality. If sections 3 and 4 provide penalties for crime, they violate the Constitution, and are absolutely void, for they deny the right of trial by jury (Const, art. 1, §§ 6, 11; State v. Moores, 56 Neb. 1, 76 N. W. 530), and the right to a tidal on an indictment or information (Const, art. 1, § 10). Furthermore, a corporation can violate the law only by transgressing section 2. That section declares the penal consequences of the transgression, and it would not be competent for the Legislature to add another penalty and enforce each by a separate action. Const, art 1, § 12. The true construction of sections 3 and 4 is that they are merely declaratory of the common law, and that they provide for ousting corporations by civil action from the exercise of powers and privileges which have
The views herein expressed in relation to the constitutional questions raised render it unnecessary for us to discuss the next point raised by appellant, to wit, “whether the act can be severed, and some parts saved, while others are condemned.”
The last contention made by appellant is that: “The act interferes with freedom of contract.” Counsel for appellant frankly state that they avail themselves- largely of the reasonings and authorities in the briefs filed in the Drayton Case, and we would feel fully justified in resting our decision solely upon the reasoning of the court in the said case, and upon what has been hereinbefore stated, -which tends to bear upon this question. It will be seen by a study of this statute that it in no manner' restrains the defendant from the making of any contract that is morally right and just. It does not even forbid the defendant from fixing prices for the express- purpose of destroying competition, providing the defendant fails to discriminate between different points.
Before closing we wish to add a few words to what we have already said in relation to the point that the acts forbidden tend toward the creation of a monopoly, and that for that reason 'the statute comes within section 20, art. 17, of our Constitution. Human experience certainly teaches that men are usually controlled by some motive, either laudable or otherwise, in their business transactions with their fellow men; and, when the public, as in the case at bar, sees any person or corporation establishing a radically different price at a point of competition from that fixed at another point, it is the natural conclusion, based upon human experience, that such party has some ulterior motive, that he is not fixing such prices out of any feeling of kindness toward the people of such' community, but that he expects eventually to obtain benefit therefrom; and it is therefore the conclusion of the public that it is the motive of such wrongdoer to drive the competitor out of business, and thereafter recoup such loss .as he may have suffered during said process of destruction by an increase in price after-a monopoly has been acquired. As was well said by the Supreme Court in People v. North River Sugar Refining
Summarizing all we have said herein: The lawmakers of this state, taking notice of a business practice known to all men, and which "had grown in rapid strides during past years, until it was threatening the welfare and liberties of a free people by its tendency to create monopolies in the articles of commerce, thus leaving ¿he consumers the helpless prey to the avarice of the holders of such monopolies, passed the law in question to ■ cure the above-mentioned evil; the law is sufficient in form as a criminal statute, as it set out clearly the acts condemned as wrongful, and forbade the same by providing a penalty for the doing of such acts; it is also sufficient in form as a civil statute designed to declare a forfeiture of corporation franchises and licenses in case of misuse of such franchises and licenses by the doing of the wrong condemned-; it provides a method of procedure to have such forfeiture adjudicated, practical and consonant with the end in view; .it brings under the purview of the criminal provisions every person, partnership, and corporation in existence, and under the civil, provisions, every. corporation, domestic and foreign, and is therefore free from any attempt at classification of persons covered thereby; its civil provisions are-in no sense a penalty for the crime, .but a provision .directing the proper tribunal ..to determine whether the corporation had broken its contract with the
The order of the trial court sustaining the demurrer in the civil case is affirmed, as is the judgment of said court and order denying a new trial in the criminal case.
