104 Neb. 319 | Neb. | 1920
Lead Opinion
This is an action brought under section 6159-6164, Rev. St. 1913, known as the “Reciprocal Demurrage Act,” to recover demurrage alleged to be due from defendant railroad company for delay in forwarding and delivering carloads of sand and stone. These shipments were all intrastate. The court below rendered judgment for plaintiff, and defendant appeals the case to this court.
Section 6159, Rev. St. 1913, provides, among other things: “In less than carloads, not more than one cent per hundred pounds per day or fraction thereof with minimum five cents as damages, together with all other damages the consignor or consignee may sustain thereby.” Also section 6160 provides, among other things: “Any railroad company failing to give such notices shall forfeit and pay to the consignee or other party whose interest is affected the sum of one dollar per car per day or fraction of a day’s delay on all carload shipments, and one cent per hundred pounds per day or fraction thereof on freight in less than carload lots with minimum charge of five cents per day and not exceeding one dollar per day for any shipment in less than carload, after the expiration of said twenty-four hours, as damages, together with all other damages’sustained thereby.” Section 6162, provides: “The railroad company shall forfeit and pay to the shipper or consignee one dollar pelcar per day for each day or fraction thereof such delivery is delayed as damages and all actual damages sustained thereby.” These quotations show clearly that the legislature intended to provide for a fine or penalty in addition to compensatory or actual damages, if not a fine or penalty, then for double damages. The sections- are clear and unambiguous in their meaning and are subject to no other construction.
An unreasonable regulation which in effect, deprives owners of property used in rendering public service, and operates as a limitation upon the rights of those devoting their property to public use and imposes double dam
A statute which takes property from one individual and gives it to another, not in compensation for any injury sustained, is contrary to the provisions of the Constitution securing property rights of private individuals.
An act of the legislature which provides for double damages comes under the rule in Atchison & N. R. Co. v. Baty, 6 Neb. 37, and is unconstitutional.
If this statute under consideration only provided for liquidated damages, we would not hesitate to apply the rules laid down in Graham v. Kibble, 9 Neb. 182. In Clearwater Bank v. Kurkonski, 45 Neb. 1, the statute permitted a mortgagor to recover $50 as liquidated damages for failing to release a chattel mortgage. We validated that statute. In Hier v. Hutchings, 58 Neb. 334, liquidated damages were prescribed by section 361 of the Criminal Code (Rev. St. 1913, sec. 9255), and were held recoverable, and the section held valid.
■ Where a statute seeks to make a railroad company liable for one dollar per day per car, for delay in forwarding, giving notices, or delivery, and in addition thereto imposes liability for actual damages caused by such delay, the same is repugnant to the state Constitution. If the demurrage is treated as a fine or a penalty, the statute is repugnant to section 5, art. VIII of the Constitution, which provides that all fines and penalties arising under the general laws of this state shall go to the school fund. If treated as liquidated damages, the legislature is acting beyond its authority in seeking to appropriate private property to private use. Under section 21, art. I of the Constitution: “The property of no person shall be taken or damaged for public use without just compensation therefor.” In the instant case the railroad company is liable for all actual damages. When
"We are of the opinion that the quotations in the second paragraph of this opinion taken from sections 6159, 6160, 6162, Rev. St. 1913, were inducements for the passage of the particular sections; therefore sections 6159, 6160, 6162, supra, are unconstitutional.
The judgment of the district court is reversed and plaintiff’s action dismissed.
Reversed and dismissed.
Rehearing
The following opinion on motion for rehearing was filed September 27, 1920. Rehearing denied.
This matter now comes up on rehearing. Former opinion, Sunderland Bros. Co. v. Chicago, B. & Q. R. Co., ante, p. 319.
The action was brought by the plaintiff, who had shipped building material in carload lots over defendant’s railroad, and- is based upon sections 6159, 6160, 6162, Rev. St. 1913, known as the “Reciprocal Demurrage Act,” allowing recovery to the shipper of $1 per day, together with all actual damages sustained for each day’s delay, in shipment and delivery of goods by the carrier.
The sole question presented is whether or not the provision of the statute, allowing $1 per day per car, to
If the allowance to the shipper is in the nature of a penalty, then the provision is in violation of section 5, art. VIII of the Constitution, providing: “All fines, penalties, and license moneys, arising under the general laws of the state, shall belong and be paid over to the counties respectively, where the same may be levied or imposed. * * * All such fines, penalties, and license moneys shall be appropriated exclusively to the use and support of the common schools in the respective subdivisions where the'same may,accrue.”
The rule of distinction between penalties and damages is stated in Haffke v. Coffin, 89 Neb. 134, 138 (quoting from Brennan v, Clark, 29 Neb. 385) as follows: “In construing a contract to determine whether or not a provision therein for the payment of a stipulated sum in case-of default by one of the parties is to be considered as a penalty or liquidated damages, the court will consider the subject-matter, the language employed, and the intention of the parties. If the construction is doubtful, the agreement will be considered a penalty merely. If damages result from the performance or omission of acts, which damages are certain or can be ascertained by evidence, the stipulated sum is considered as a penalty ; but, where the acts or omissions occasioning damages are not susceptible of measurement by a pecuniary standard, the sum stipulated ordinarily will be regarded as liquidated- damages. ’ ’
That rule has been repeatedly followed by this court and is the rule generally recognized in other states. 17 C. J. 937, sec. 235, 945, sec. 238.
The purpose of liquidated damages is to furnish compensation for an injury sustained, and, if the amount provided does not bear a reasonable relation to the damage which might be contemplated by the parties, or if it is apparent that it was intended to more than cover
In the two cases last-above mentioned, the court held that there the damages were easily ascertainable, and the amount provided must have been intended as a penalty, as there was no need for liquidating the amount by agreement.
In the case of Atchison & N. R. Co. v. Baty, 6 Neb. 37, and Grand Island & W. C. R. Co. v. Swinbank, 51 Neb. 521, a statute, which compels a railroad company to pay the owner of live stock killed upon the track double value of the property, has been held to provide a penalty and to be unconstitutional and void, since it is apparent that more than mere compensation is provided by the statute.
The plaintiff in this case relies upon the holding in Graham v. Kibble, 9 Neb. 182, and the cases which have followed that case, citing it as authority. Phœnix Ins. Co. v. Bohman, 28 Neb. 251; Phœnix Ins. Co. v. McEvony, 52 Neb. 566; and Hier v. Hutchings, 58 Neb. 334.
The rule, as stated in the case of Graham v. Kibble, supra, and as followed in the cases just above cited, is entirely consistent with the rule stated in the beginning of this opinion. In all of these cases statutes were involved which provided that a party could recover from a public officer a certain stipulated amount in damages, in case of the wrongful act or oppression of the officer in charging excessive fees, or in arresting a party who had been released on habeas corpus, etc.
In the case of Graham v. Kibble, supra, the amount of damages allowed by statute was $50,- in case a public officer should charge excessive fees. It was argued that the statute provided a penalty. The court’s decision, however, was based upon the proposition that the amount provided was in the nature of liquidated damages, though a part of the opinion by way of dictum discussed the
By reason of the court’s dictum in the case of Graham v. Kibble, that the amount allowed was a penalty, such provisions have later been referred to as penalties in the cases following that case. In the case of Phœnix Ins. Co. v. Bohman, supra, the court stated that the statute, allowing a party to recover $50 against an officer taking excessive fees, was highly penal in its nature. In that case and in the case of Phœnix Ins. Co. v. McEvony, supra, and of Hier v. Hutchings, supra, the constitutionality of the statute was not reasoned or discussed, hut the statute was sustained simply on the authority of Graham v. Kibble. It further appears that-those statutes should have been expressly sustained as providing liquidated damages, as was done in the former case.
The cases so far discussed, then, are in complete harmony, so far as the question has been expressly considered, upon the rule of determining between liquidated damages and a penalty. The plaintiff urges that the case of Clearwater Bank v. Kurkonski, 45 Neb. 1, is a case in favor of the constitutionality of the statute .in question. The statute in that case provided for the recovery of $50 liquidated damages and also for actual damages sustained. It is apparent that the amount allowed, $50, if given in addition to actual damages, was
That the legislature could provide liquidated damages, if it was apparent that the amount provided was intended to be compensatory only, has been held in the case of Cram v. Chicago, B. & Q. R. Co., 84 Neb. 607, 85 Neb. 586. In that case, however, the statute was upheld on the ground that the amount allowed was to cover damages only, and the court stated that, if more than that amount had been allowed, the provisions must have been construed as a penalty.
In the case of Smith v. Chicago, St. P., M. & O. R. Co., 99 Neb. 719, the court, in construing the statute involved in the Gram case, said that, though the statute provided for liquidated damages, that 'remedy was in addition to the common-law remedy, and that the shipper had a right to elect and waive the statutory penalty and recover his actual damages as at common law. .The reasoning in that case makes it apparent that the court considered both remedies could not be allowed. The decision seems to have gone a great limit, however, in allowing the shipper to elect whether he shall recover his actual damages instead of the liquidated damages provided, if it is understood that such election is given for those damages which arise purely from delay, and not from other acts of the carrier. The very purpose of providing liquidated damages is to reduce the damages,
It is true that the statute in question was held to be constitutional in the case of Sunderland Bros. Co. v. Missouri P. R. Co. 101 Neb. 119, but the only constitutional questions raised in that case were as to whether or not the statute imposed a burden on interstate com-, merce, and the questions now involved in the instant case were not raised.
The statute under consideration allows the shipper to recover both actual damages sustained by him, by reason of the delay in shipment, and in addition $1 per car for every day’s delay. It is manifest then that the $1 per car is an amount that much in excess of the actual damages sustained, and that much in excess of compensation to the shipper, and must be considered in the, nature of a penalty.
If the legislature had intended that the $1 should cover liquidated damages for all those injuries sustained by the shipper, due to the delay in shipment, that would
In other words, the damages, resulting from delay in the shipment of various commodities, is so variable with regard to the different kinds of commodities to be shipped that the amount of liquidated damages fixed at $1 could not bear any reasonable relation to the damage sustained by the shipment of each of those respective commodities, and the legislature must have intended that, in addition to the $1 to be recovered for delay, the shipper could also recover all of his actual damages sustained by reason of the delay, together with the amount provided.
It is suggested that the rule in the case of Atchison & N. R. Co. v. Baty, supra, is out of line with the general holding in other states. We are unable to agree with that conclusion. It is true that in other states penalties have been imposed for a violation of statutory duty, and these penalties have been, in many instances, recoverable by the individual, instead of by the state. Those states, however, do not, so far as our attention has been called, have such a constitutional provision as the one we have in this staté, providing that all fines and penalties shall be appropriated exclusively to the use and support of common schools.
The cases in other jurisdictions discuss the validity of penalty statutes, as affected by general constitutional provisions, such as the requirement of due process of law and equal protection of the law, and under those constitutional provisions such penalty statutes are not prohibited.
It is further pointed out that the supreme court of Iowa has held directly contrary to the Baty case. Tredway v. The S. C. & St. P. B. Co., 43 la. 527. That case holds only that a statute allowing double damages does
Cairo & St. L. R. Co. v. Peoples, 92 Ill. 97, is cited as holding directly contrary to the Baty case. In that case the Illinois court said (p. 102): “The case of Atchison and Nebraska Railroad Co. v. Baty, 6 Neb. 37, cited, cannot be regarded as a controlling authority. That case seems to regard ‘double damages’ for stock killed or injured as purely a penalty, a proposition to which we cannot fully yield our assent. Considering double damages as penalty, the conclusion reached by the court in the case cited was inevitable, as the Constitution of that state, as the opinion declares, provides that ‘all fines and penalties * # * shall be appropriated exclusively to the use and support of common schools,’ and hence the decision that no private individual could recover the penalty.” The court further pointed out that in-Illinois there was no such constitutional provision as the one in Nebraska.
It seems clear that our former opinion, holding that the statute provides a penalty, is right, under the numerous decisions of this court, and that the opinion should be adhered to.
The motion for rehearing is therefore
Overruled.
Dissenting Opinion
dissenting.
The effect of. the majority opinion is to leave the railroad companies free to impose demurrage charges upon the shipper for failing to unload cars seasonably, but to deprive him in many cases of any adequate remedy for the failure of the carriers to perform their duty with respect to the delivery of cars or freight. The act was passed to meet a long-felt defect in the law, and I feel
The constitutionality of reciprocal demurrage statutes has been assailed in a number of states, and they have generally been upheld, the courts generally holding that the provisions that a reasonable amount be paid by the railroad for failure to furnish or deliver cars, or by a shipper for the undue retention of cars, are reasonable regulations intended to aid the carrier against the undue retention of cars required for other shippers, and to afford, the shipper relief against delay in the delivery of freight. Yazoo & M. V. R. Co. v. Keystone Lumber Co., 90 Miss. 391, 13 Ann. Cas. 964, and note; Patterson v. Missouri P. R. Co., 77 Kan. 236, 15 L. R. A. n. s. 733; Hardwick Farmers Elevator Co. v. Chicago, R. I. & P. R. Co., 110 Minn. 25,19 Ann. Cas. 1088.
The statute is declared unconstitutional on the authority of Atchison & N. R. Co. v. Baty, 6 Neb. 37. It was decided in that case that the legislative authority cannot reach the life, liberty, or property of the individual, except he is convicted of a crime, or when the sacrifice of his property is demanded by a just regard for the public welfare; and it is said that the imposition of double damages is a penalty or fine, and that “this penalty or fine is by the statute given to the party claiming damage for the accidental loss of his property, and hence the- act must come in conflict with that provision of the Constitution which declares that ‘all fines and penalties,’ etc., ‘shall be appropriated exclusively to the use and support of common schools.’ ”
This portion of the opinion was overruled very soon after its announcement, and judgments based upon a contrary view have many times been affirmed by this court.
There is now practically no difference of opinion among the leading courts of the country on the main’ proposition that the state has power to impose a penalty for a violation of a duty imposed by statute, and that
The Humes case has been repeatedly followed in the federal courts. But the question here is not whether the power to impose a penalty or a fixed sum of damages exists, but whether the penalty, by virtue of the constitutional provision quoted in the opinion, belongs to the common school fund of the state. In the Baty case, decided in 1877, this court so held. But in Graham v. Kibble, 9 Neb. 182, decided in 1879, .the court, after quoting the constitutional provision, and saying it was not intended by this provision to prevent the passage of
Graham v. Kibble was followed in Deering & Co. v. Miller, 33 Neb. 654; Clearwater Bank v. Kurkonski, 45 Neb. 1; Phœnix Ins. Co. v. McEvony, 52 Neb. 566; Hier v. Hutchings, 58 Neb. 334; Cram v. Chicago, B. & Q. R. Co., 84 Neb. 607; and Smith v. Chicago, St. P., M. & O. R. Co., 99 Neb. 719. In Everson v. State, 66 Neb. 154, the provision of the Criminal Code providing that, in
A like construction has been given to similar provisions in the constitutions of other states.
In Indiana a statute provided a penalty of $100 for the failure to transmit telegraph messages as therein provided, to be recovered by the party aggrieved in a civil action. In Western Union Telegraph Co. v. Ferguson, 157 Ind. 37, the statute was assailed because the Constitution gave all fines and forfeitures to the school funds of the state. The court said, among other things: “The first objection has been held to be ill-founded in Burgh v. State, 108 Ind. 132; Toledo, St. L. & K. C. R. Co. v. Stephenson, 131 Ind. 203; State v. Indiana & I. S. R. Co., 133 Ind. 69, 18 L. R. A. 502; and Judy v. Thompson, 156 Ind. 533. * * * The giving to an aggrieved party a civil right of action for fixed punitive damages against administrators .for malfeasance, against public officers for extortion, against mortgagees for failing-after demand to release mortgages on the public records, against telegraph companies for violation of statutory duties, and the like, does not deprive the school fund'of any of its sources of revenue.”
In North Carolina the statute provided that a railroad company that allowed freight to remain unshipped for more than five days shall forfeit and pay the sum of $25 each day said freight remains unshipped to any person
In Missouri, under similar constitutional provisions for double damages, it was held that “both of these provisions refer only to such fines, penalties, and forfeitures as the legislature might provide should accrue to the state.” The opinion says this section clearly refers to penalties accruing to the public, and not to penalties recovered by private persons for their own use. Barnett v. Atlantic & P. R. Co., 68 Mo. 56; State v. Wabash, St. L. & P. R. Co., 89 Mo. 562.
The statute here is declared void because it provides for both actual damages and a fixed sum as a penalty. No statute should be declared void, if a reasonable construction will make it valid.
Even if the court adheres to the main point decided in the Baty case, which I am convinced was erroneous, in
I feel satisfied that there is no constitutional provision which prevents the legislature from imposing a reasonable penalty for the violation of a statute regulating common carriers, and providing that the proceeds of the penalty may go to the party injured.
