51 So. 918 | Miss. | 1910
Lead Opinion
delivered the opinion of the court.
The state of Mississippi, by the attorney-general, R. V. Fletcher, filed the bill herein against the Louisville & Nashville Eailroad Company, a foreign corporation, to' enjoin it from engaging further in intrastate commerce in this state because of its action in removing a cause to- the United States circuit court in violation of chapter 122 of the Laws of 1908. This statute (Laws 1908, p. 131) is as follows:
“An act prescribing the terms and conditions on which foreign public service corporations shall engage in business in this state, and fixing penalties for violation of same.
“Section 1. Be it enacted by the legislature of the state of Mississippi, that any foreign railroad, sleeping car, electric railway, telegraph or telephone corporation, or other public service corporation whatsoever, now engaged in business in this state, or which may come into the state hereafter, and engage in business here, which shall, when sued in any court of this state, remove such cause to a federal court of this state, or which shall institute any suit in a federal court of this state, which it could not maintain if it were not a domestic company incorporated and organized under the laws of this state, shall:
“(a) Forfeit its right to, and be prohibited from engaging in intrastate commerce within this state;
“(h) Forfeit’its right of eminent domain, and be prohibited from further exercising the same in this state.
“And any such corporation so removing a cause to the federal court, or instituting a suit therein, and which shall thereafter continue to engage in intrastate commerce within this state, shall forfeit not less than two hundred dollars nor more than five*41 thousand dollars for every such offense, and each day such corporation shall continue to so engage in such commerce shall be a separate offense; the penalty in such case to be recovered by an action in the name of the state, at the relation of the attorney general, or any district attorney in whose district such offense may occur, and when so recovered shall be paid into the state treasury.
“Section 2. That this act take effect and be- in force from and after its passage.”
The cause comes to this court on an appeal by the state from a decree sustaining a demurrer to the bill and dismissing the suit. The facts as set out in the bill are that the Louisville & Nashville Railroad Company is a corporation organized under the laws of Kentucky, owning and operating a line of railway through the states of Kentucky, Tennessee, Alabama, and Mississippi ; that it is a common carrier engaged in the business of transporting freight and passengers for hire through and in the state of Mississippi, and has in this state a number of stations ■where trains axe regularly stopped for receiving and discharging freight and passengers; that its business is in part interstate commerce; that in August, 1908, 'the state of Mississippi and the Mississippi railroad commission filed a suit in the chancery court of Hancock county against the said Louisville & Nashville Railroad Company to enjoin it from disobeying an order of the commission relative to the stopping of trains at Bay St. Louis, in said county; that the said defendant company appeared in said suit, and by appropriate proceedings removed the same to the United States circuit court for the southern division of the southern district of Mississippi; that notwithstanding such removal defendant continues to engage in intrastate commerce in this state, and will as its business and its lines are extended exercise the right of eminent domain. The prayer of the bill is for a decree that the defendant has forfeited its right to do any intrastate business within this state, or exercise the right
The preliminary question of jurisdiction presents little difficulty. We have no hesitation in holding that a sovereign state can resort to its court of equity to enjoin the continued prosecution of a business sought to 'be conducted within the state by a foreign corporation in alleged violation of tire public policy of the state. Assuming that the continuance of such business of intrastate commerce is violative of such public policy as declared in the statute, it was not incumbent on the state to remain inactive and be content with the recovery of penalties after they had been incurred. “The restraining power of equity extends through the whole range of - rights- and duties which are recognized by the law, and would be applied to every case of an intended violation were it not for certain reasons of expediency and policy which control and limit its exercise.” 3 Pomeroy, Eq. Jur. § 1338. These reasons of expediency confine the jurisdiction to cases in which the legal remedy is not
We are thus brought to a consideration of the principal question, viz.: Is the act of 1908 valid as applied to a foreign railroad corporation owning and operating a line of railroad in this state and engaged here in both interstate and intrastate commerce; or, to state the case as it is somewhat more narrowly presented by this record: Where a foreign railroad company has been permitted to enter this state and acquire its right of way and build and .equip its railroad, and has for many years used the same in both domestic and interstate ‘transportation, can the state forfeit its right to further engage in intrastate commerce
The qxxestion of the validity of state statutes providing that the right of a foreign corporation to further engage in business-in the state shall terminate if it removes a suit brought against it in the state court to- the United States court is one that has often been considered by the United States supreme court. By quite a long line of decisions beginning with Home Ins. Co. v. Morse, 20 Wall. 445, 22 L. Ed. 365, and culminating in Security Mutual Life Ins. Co. v. Prewitt, 202 U. S. 246, 26 Sup. Ct. 619, 50 L. Ed. 1013, it is now settled beyond all controversy that, while a state may not exact of a foreign insurance corporation as a condition of entering into the state and continuation to do business therein a contract to surrender the right of removal of caxxses to the federal courts, it may nevertheless validly enact that if such corporation shall remove a case to the federal court its right to further" do business in the state shall cease. In other words, the state cannot exact an agreement in advance that the corporation will not remove a cause, but may compel the corporation to abstain from the federal courts or else cease to do business in the state. The reasoning on which this conclusion is based may be summed up in the following clause of" the opinion in Security Mutual Ins. Co. v. Prewitt, supra: “As a state has power to refuse permission to a foreign insurance-company to do business at- all within its confines, and as it has-power to withdraw that permission when once given without stating any reason for its action, the fact that it may give what some may think a poor reason or none for a valid act is immaterial.”
This and other broad statements in the opinion in the Prewitt case seem to have been qualified in Western Union Tel. Co. v. Kansas, 216 U. S. 1, 30 Sup. Ct. 190, which held, in keeping
It is to be observed that the demurrer to the bill does not sufficiently point out the provisions of the state and federal Constitutions which tire act of 1908 is thought to violate. It merely avers that there is no valid law forfeiting the right of the railroad company to engage in intrastate commerce. We are
The record before us presents no question under the contract clause of the federal Constitution. It certainly cannot be contended in the light of the authorities that where a foreign corporation is doing business in a state merely through comity or acquiescence or even under a license given without valuable consideration there is a contract binding the state not to exercise its power to exclude. It is true that if the entry into the state was under a statute prescribing certain terms and conditions which were met and in return for which the corporation was given the right for a certain time to do business in the state a contract would arise that might not be violated by the state. Such was the holding in American Smelting Co. v. Colorado, 204 U. S. 115, 27 Sup. Ct. 198, 51 L. Ed. 393. We are not cited to any contract or action under any statute having the force of a contract by or under which the appellee was originally admitted or permitted to continue in business in the state.
The next and quite the most serious contention of the appellee is that the enforcement of the prohibition contained in the act of 1908 would have the necessary effect of depriving it of its property without due process of law. More fully stated appellee’s position is this: That it has within the state a line of railroad with stations and other property devoted and adaptable only to railroad purposes; that it has for many years been lawfully engaged in this state in both domestic and foreign commerce, and that the value of this property will be largely de
But giving' full effect to this salutory principle we cannot affirm that the necessary effect of enforcing the prohibition
In Newport & Cincinnati Bridge Co. v. United States, 105 U. S. 470, 26 L. Ed. 1143, the United States supreme court had before it the question whether the right of a railroad company to erect and maintain a bridge over a navigable stream, a franchise granted with a right of revocation, could be withdrawn without depriving the company of its property without due process of law. Responding to the argument the court said: “A withdrawal of the franchise might render property acquired on the faith of it, and to be used in connection with it, less valuable, but that was a risk which the company voluntarily assumed when it expended its money under the limited license which alone congress was willing to give. It was optional with the company to accept or not what was granted; but, having accepted, it must submit to the control which congress, in the legitimate exercise of the power that was reserved, may deem it necessary for the common good to insist upon. We are aware that this is a power which may be abused, but it is one congress saw fit to reserve. Eor protection against unjust or unwise legislation, within the limits of recognized legislative power, the people must look to* the polls, and not to the courts. It would
The argument drawn ab inconvenienti is applicable to every forfeiture by a state of a charter and every prohibition of a continuance by a corporation- of business in the state. The- disaster, if such it is to be viewed, is not peculiar to railroad companies. The difference is one in degree only. -We cannot assent to the idea that a corporation, ean secure exemption from forfeiture of its charter, or that a foreign corporation admitted into a state by its comity can transform that comity into- a perpetual right by the mere extent or nature of its investments. Constitutional limitations upon the powers of the- state do not have regard to the degrees of transgression. If a state cannot terminate the corporate existence of a domestic railroad corporation for any declared and recognized grounds of forfeiture, because the consequences to the corporation will be disastrous, then it would follo-w that it could not forfeit the charter of any corporation whatever, since every forfeiture must be attended with some loss. The force of this position seems to be appreciated by counsel for appellee, who concede that for violations of law and misuser forfeiture of charters may be enforced under the police power of the state, .whereas it is argued the act of 1908 cannot be referred to that power of the state. We think in this view counsel have fallen into error. The police power of the state is not limited to the suppression of what is- disorderly, unsanitary, -or offensive, but embraces regulations designed to promote the public convenience. Bacon v. Walker, 204 U. S. 311, 27 Sup. Ct. 289, 51 L. Ed. 499; Chicago, etc., R. Co. v. Illinois, 200 U. S. 561, 26 Sup. Ct. 341, 50 L. Ed. 596; L. S. & M. R. R. Co. v. Ohio, 173 U. S. 285, 19 Sup. Ct. 465, 43 L. Ed. 702.
It is obvious that the power of the state to enact legislation similar to that of the statute in question must be referred to the power to promote the convenience of the people of the state, and
Our attention is called to the case of Southern R. R. Co. v. Greene, 30 Sup. Ct. 287. The question, and the only question decided in that case, was stated in the opinion as follows: “When a corporation of another state has come into the taxing state, in compliance with its laws, and has therein acquired property of a fixed and permanent nature, upon which it has paid all-taxes levied by the state, is it liable to a new and additional franchise tax for the privilege of doing business within the state, which tax is not imposed upon domestic corporations doing business in the state of the same character as that in which the foreign corporation is itself engaged V’ The court, following the cases of Gulf, C. & S. F. R. Co. v. Ellis, 165 U. S. 150, 17 Sup. Ct. 255, 41 L. Ed. 666; Cotting v. Kansas Stockyards Co., 183 U. S. 79, 22 Sup. Ct. 30, 46 L. Ed. 92; and Connolly v. Union Sewer & Pipe Co., 184 U. S. 540, 22 Sup. Ct. 431, 46 L. Ed. 679, held that where a railroad company had lawfully come into the state, and with its sanction established a business of a permanent character requiring for its prosecution a large amount of fixed and permanent property, it is a person within the jurisdiction of the state, and as such is entitled, under the equal protection of the law clause of the
As we construe these decisions, the extent of their holding is that so long as the corporations are lawfully in the state with their property and lawfully doing business there, they are entitled to protection against discrimination under the laws.. The cases cited do not deal with the right to exclude foreign corporations or to impose conditions on their continuing in the state. They merely hold that during their lawful continuance in the state they are entitled to equal protection of the laws. It seems to us that the argument for appellee resolves itself into this: That no condition can be imposed on the continuance in business in a state of a foreign corporation having property in the state unless at the same time the same condition is imposed on the continuance of the corporate existence of domestic corporations of the same kind. We are not willing to go to such a length. It would be impossible to apply that rule to the condition of removing a case to the federal court since the right of removal cannot be conferred or regulated by state laws, neither can all the grounds for removal by foreign and .domestic corporations ever be the same. The statute in the Prewitt case applying as it did to foreign corporations alone could not have been upheld as constitutional if it had been requisite to its constitutionality that it be applied to domestic as well as foreign insurance companies.
But we cannot, even by silence, appear to assent to the proposition that in enforcing the prohibition of this statute the state is acting arbitrarily. The railroad company, when it entered the state and made its investments, and from time to time enlarged its operations, must be taken to have acted in full recognition of the suspended power of the state to impose conditions on its doing business in the state. It seems to have deliberately
To the objection that the act in question in so far as its prohibition is sought to be applied to a railroad company engaged in business in this state will be in conflict with section 184 of the Constitution of 1890, which makes railroads common carriers and imposes other duties on them, it is sufficient to say that this section was not meant to limit the power conferred and recognized elsewhere in the Constitution to repeal charters or forfeit their franchises. Nor can the section have any effect in limiting thg power of the state in its control over the admission and exclusion of foreign corporations.
Having held as we did at the outset that the main ground of equity jurisdiction in this suit is the restraining of defendant from engaging further in intrastate commerce, we do not now decide whether, as incidental to this jurisdiction, the suit is maintainable also to collect penalties, and whether the penalties are so excessive as to amount to a denial of the equal protection of the laws within the principle announced in Ex parte Young, 209 U. S. 123, 28 Sup. Ct. 441, 52 L. Ed. 714, 13 L. R. A. (N. S.) 932. These features of the case do not seem to have received any separate consideration by the court below. We are not prepared to hold that the statute is unconstitutional on its face, because the penalties are excessive. Whether, as applied to the appellee, they will be so viewed can be more intelligently determined in the light of the facts when developed than on the record as now presented.
Reversed and remanded, with leave to answer in sixty days from the filing of the mandate in the court below.
Reversed.
Anderson, J., being disqualified, having been of counsel in tbe case before bis appointment to tbe bench, recused himself and C. H. Alexander, Esq., a member of tbe supreme court bar, was selected and presided in bis place.
Dissenting Opinion
delivered the following dissenting opinion.
I dissent from the opinion and judgment of the majority of the court in this case. I do not, however, care to elaborate on
It is said in the opinion in chief that, “while a state may not exact of a foreign insurance corporation, as a condition of entering into the state and continuation to do business therein, a contract to surrender the right of removal of causes to the federal courts, it may nevertheless validly enact that if such corporation shall remove a case to the federal court its right to further do business in the state shall cease. In other words, the state cannot exact an agreement in advance that the corporation will not remove a cause, but may compel the corporation to abstain from the federal courts or else cease to do business in the state” — citing the case of Security Ins. Co. v. Prewitt, 202 U. S. 246, 26 Sup. Ct. 619, 50 L. Ed. 1013.
It seems to me that the distinction stated-is one without a
After the delivery of the foregoing opinions the counsel for appellee presented an elaborate suggestion of error.
delivered the following response to the suggestion of error:
Since the rendition of the opinion in this cause, the supreme court of the United States has handed down an opinion in Herndon v. Chicago & Rock Island R. R. Co., 218 U. S. 135, 30 Sup. Ct. 633, and appellee in a suggestion of error invokes it as decisive against the constitutionality of the statute of 1908 (Acts 1908, c. 122). One question in that ease was whether the Missouri statute denied to foreign corporations Within
This brings .us to the question of the construction of the act of 1908. The most casual reading of the act discloses an obvious clerical error in the insertion of the word “not” in the clause “which it could not maintain if it were not a domestic corporation.” Since the interpolation of this word renders the provision meaningless and self-destructive, we are compelled, in order to give some effect to the clause, to- hold that the word crept into the act through a clerical error. To speak of a foreign corporation exercising a right which it could not maintain if it were not a domestic corporation involves a contradiction in terms; and, looking to the obvious meaning of the whole statute, to the context, and to the grammatical construction of the clause itself, we hold that the word “not” must, under well-settled rules of statutory construction, be read out of the statute. Bobo v. Commissioners, 92 Miss. 792, 46 South. 819; 26 Am. & Eng.
We hold, therefore, that the qualifying clause refers to both the preceding clauses, and the true meaning is that if the foreign public utility corporation removes a cause which it could not remove if it were a domestic corporation, or if it institutes any suit in a federal court which it could not institute if it were a ■domestic corporation, the forfeiture denounced by the statute will be incurred. As persuasive of this view of the legislative intent that the act does not apply to any and every removal to the United States court, the subsequent clause of the statute imposes the forfeiture or penalties on any such corporation so removing a cause, thus implying that not every removal will sub
Neither the Herndon case, supra, nor any of the cases cited in the opinion therein, condemns the statutes involved oh the ground that they deprive the foreign corporation of property without due process of law. There is some language in the concurring opinion of Justice White in Western Union Tel. Co. v. Kansas, 216 U. S. 1, 30 Sup. Ct. 190, which seems to show his view to be that the summary enforcement of the-prohibition of the statute involved in that case would have that effect. In other opinions the courts have adverted to the fact that the foreign corporations have made investments in the state of a permanent nature, but these observations will be found to have reference to the question whether the foreign corporation was within the jurisdiction of the state, and therefore entitled to the equal protection of its laws.
On the record as it is now presented, we do not find any reason to alter our conclusion as announced in the original opinion, and the suggestion of error is overruled.