Mobile & Montgomery Railway Co. v. Steiner, McGehee &. Co.

61 Ala. 559

• Court: Supreme Court of Alabama
• Decided: December 15, 1878
• Status: Published

Opinion

STONE, J.

In the case of the State, ex rel. Harrell, v. The Mobile and Montgomery Railway Company, 59 Ala. 321, we construed, in part, the act “ regulating the charges for transportation of freight upon railroads within this State,” approved April 19th, 1873, Pamph. Acts, 62. In that statute it is declared, “ that all railroad companies in the State .... may, for the transportation of local freight demand and receive not exceeding fifty per cent, more than the rate charged for the transportation of the same description of freight over the whole line of its road.” In the case referred to, it is said, “ we can not assent to the argument that the fifty per cent, additional, which the statute allows the corporation to charge for transportation of local freight, means fifty per cent, on tiie charge over the whole line of the' railroad, irrespective of the distance the local freight may be carried. The language of the statute forbids that construction. “ Fifty per cent, more than the rate charged . . . . over the whole line of its road,” are the words of the statute. Pate is the emphatic word of the sentence. In this connection it is employed in the sense of proportion,— a standard of valuation; a rule or measure of assessment. That is, an assessment according to a given standard. The charge for transportation over the whole line is so much, which is equivalent to so much per mile. Local freight must be carried at the same rate, plus fifty per cent. Thus, if the charge over the whole line be 100, the charge over half the line will be 50, plus 50 per cent. — 25-100; equal to 75-100, the true result.” It is contended for appellant that the word rate, in the statute quoted, was employed to express the class or quality of the freight over the whole line of the road, by whose tarriff the legislature intended to graduate the tolls for local freights; and that the permitted charges for transporting local freight, no matter how short the distance, might be raised to a sum which will be equal to fifty per cent, increase on the charge for the same class of freight over the whole line of the road. This would not only give to the word a strained interputation, but would render it meaningless, superfluous and unnecessary. Another clause in the statute expresses that idea in language so plain, that it can not be misunderstood. “The rate charged for the transportation of the same description of freight,” is the language of the law. This is the declared standard by which the legislature intended railroads should be governed in adjusting their tariffs of local freights. We adhere to our former construction of this statute.

It is contended for appellant that the Mobile and Montgomery Eailway Company is not bound by the statute above considered. The Mobile and Montgomery Eailway Company is the successor of the Mobile and Montgomery Eailroad Company, which was formed by the consolidation of two other incorporated railroad companies, and had conferred upon it the powers, privileges, immunities and franchises of each of said original corporations. Those original companies, and the Mobile and Montgomery Eailroad Company had unlimited power and discretion in the matter of levying tolls and charges. They were organized under special charters granted to each. Under the act “to authorize the Governor of the State of Alabama to endorse, on the part of the State, the first mortgage bonds of the Mobile and Montgomery E. E. Co.,” approved February 25th 1870— Pamph. Acts, 175 — the Governor endorsed the bonds of the said company to the extent of two and a half million of dollars, which bonds were received and used by the company in the repair and completion of its road. The eighth section of this act declares “that the endorsement of the bonds of the Mobile and Montgomery Eailroad Company, as herein provided for, is conditioned, that on and after the time fixed for the completion of the said railroad from Tensas to Mobile, ■the said Mobile and Montgomery Eailroad Company shall transport passengers and freight at the same rates as provided for other roads in the general bill, passed at the present session, to furnish the aid and credit of the State to expedite the constructions of railroads.” The time fixed by said act for the completion of the railroad from Tensas to Mobile, was July 1st, 1872.

Section 15 of the act “ to furnish the aid and credit of the State of Alabama for the purpose of expediting the construction of railroads within the State,” approved February 21, 1870, Pamph. Acts, 149, enacts “that as a condition on which the aid is granted by this act, the several railroad companies shall not charge more than four (4) cents per mile for each passenger travelling over their lines; and shall not charge more than twenty-five (25) per cent, higher rates for carrying local freight than they will for carrying through freight.”

The act “ to constitute the purchasers of any railroad hereafter sold under the authority of any law of this State a body corporate and politic,” approved December 17,1873 — Pamph. Acts, 56 — provides “ that in each and every case in which any railroad may hereafter be sold by the State of Alabama, or by any commission, officer or agent of said State, or under any proceeding, judicial or otherwise authorized by law, the purchasers at any such sale may constitute themselves into a body politic and corporate, and shall have and possess all the powers and franchises which belonged to the company or corporation originally owning the railroad so purchased, including the power to purchase and hold real estate and the franchise to be and exist as a corporation under such name as the purchasers may select and adopt,” &c. This act was amended March 20th, 1875 — see Pamph. Acts, 132 — by adding new sections thereto. Sections two and three define, and probably enlarge the meaning of the word purchasers, as found in the before recited act, and contain a proviso, “ that the rights of any and all persons vested before the taking effect hereof shall not be impaired, or affected thereby.” Section four shows clearly that what is meant by constituting themselves a body politic and corporate under the statute amended, is, in effect, a reincorporation, but a reincorporation with “ the powers and franchises which belonged to the company or corporation originally owning the railroad.” That is, as to ownership of property, and liability for debts and engagements of the former company, it is a new corporation. The franchise, faculties, powers, are but a continuation of the old. These, the new corporation succeeds to, precisely as they were surrendered or lost by the defunct corporation. Does the new corporation acquire the franchise and powers, relieved of the restraints and functional disabilities under which the law had rightfully placed its predecessor? Ever since the great case of Dartmouth College v. Woodward, 4 Wheat., it has been conceded that, as a rule, the legislature has no power to take away or impair the powers of a private corporation, which have been granted and acted upon. The abridgment of such granted corporate powers, is an impairment of the obligation of the contract of incorporation, as entered into by the legislative grant. — Cooley’s Const. Lim. 279, and note 2. But when in the precedent law, constitutional or otherwise, power is reserved to revoke, change, or modify the powers granted, the rule is different. Accepting the charter having such condition, is valid and binding on the corporators, and the stipulation becomes a part of the organic law of the corporation. To the extent of the power reserved, the legislature is untrammeled by the charter. And so, this legislative inviolability may be bargained away by the corporation ; and when so bargained away for a valuable consideration received, the effect is more than a mere personal contract. It is a modification of the corporate franchise, and to that extent, limits the corporate powers. — Monongahela Nav. Co. v. Coon, 6 Penn. St. 379; Mass. Gen. Hospital v. State Mutual Life Assurance Co., 4 Gray, 227, 234; State v. Maine Cen. R. R. Co., 66 Me. 488. Under the undisputed facts in this case, we think the Mobile and Montgomery Railroad Company surrendered its absolute right to fix the rate of tolls for the transportation of passengers and freight, and bound itself not to charge more than four cents per mile for each passenger travelling over its line, and not more than twenty-five per cent, higher rates for carrying local freight than the rate charged for carrying through freight. We think, also, that this limitation on its powers inhered in its organic law, precisely as if it had been incorporated in its original charter. When, then, the purchasers of the railroad, under the act approved December 17th, 1873, constituted themselves a body politic and corporate under the name of the Mobile and Montgomery Railway Company, they acquired the powers and franchises of the former corporation, modified and limited as above expressed.

But before the appellant railway company constituted itself a corporation under the act approved December 17th, 1873, the tariff of tolls fixed by the act approved February 21st,, 1870, was changed by the act approved April 17th, 1873. Pamph. Acts, 62. By the later statute, railroads were permitted to charge five cents per mile, and no more, for transportation of passengers, and “ may, for the transportation of local freight demand and receive not exceeding fifty per cent, more than the rate charged for the transportation of the same description'of freight over the whole line of its road.” This, it will be perceived, is a material increase of the tariff rates fixed by the act of 1870. The record does not positively show that the railway corporation availed itself of this increase of rates, but there is much in the record tending to prove it did. If it w'ere necessary to the decision of this case, we possibly might feel ourselves bound to presume the corporation did adopt this increased tariff of charges, as persons, natural or artificial, generally accept tendered benefits and bounties. Aside from this, however, we hold that when the purchasers acquired the franchise and powers of the Mobile and Montgomery Railroad Company by constituting themselves a body politic and corporate under the name of the Mobile and Montgomery Railway Company, it organized them in the condition they were in before the sale; namely, with the statutory restraint they were under as to charges for transportation of freight and passengers.

It is contended, that while the Mobile and Montgomery Railroad Company may have been bound by the limitations on its power to charge for transportation of local freight under the eighth section of the act approved February 25th, 1870, copied above, this did not authorize the imposition of the penalties declared in the act of April 19th, 1873; and that, to the extent of those penalties, the later statute impairs the obligation of the contract. There are several answers to this objection. First, it took away no chartered right of the company. It only provided a penalty for the violation, by the corporation, of its duty, as declared by the law under which it existed, and exercised its corporate powers. It had no authority to violate this law; and hence, the statute neither weakened nor impaired any power granted to the corporation. Second, the act which imposed the penalties, conferred on the railroad the right or privilege of increasing materially, and beneficially to itself, its tariff of tolls for transportation of passengers and local freight. Ve probably might presume this grant was made at the request of the railroad corporations affected by it; and, as intimated above, that the railroad accepted the grant, by availing itself of the privilege the law tendered to it, by increasing its rate of charges as therein authorized. But, third, if the corporation did act under the statute, by increasing its tolls up to the standard therein authorized, then it accepted the statute, and can not be heard to renounce its burdens, while claiming and enjoying its benefits. Fourth, the corporation being bound to transport local freight at a rate not exceeding twenty-five per cent, above its tariff of charges on through freight, the legislature had authority to compel the observance of this duty, by the imposition of penalties for its violation. Such impositions of penalties does not impair the •obligation of the contract. The statutes fixing the rate of charges for transportation of passengers and local freight, furnish evidence that the legislature felt it to be its duty to erect this barrier against the power of the corporation to oppress the public. If the rates on local freights, carried short distances, are fixed too low, the remedy is not with us.

Another reason may be urged why the present appellant is bound by the statutes above, which fix the rate of railroad charges. It was incorporated, as we have shown, after we came under the dominion of the constitution of 1868. By section one, article thirteen, of that constitution, it is ordained that “ corporations may be formed under general laws, but shall not be created by special act, except for municipal purposes. All general laws and special acts passed pursuant to this section, may be altered, amended or repealed.” The last sentence of the section above quoted, with the first somewhat modified, is retained in the constitution of 1875, section one, article fourteen. "We hold that the Circuit Court did not err in holding the appellant amenable to the statutes fixing a maximum tariff of rates for transportation of freight.

We have shown above that any demand and payment of charges for transportation of local freight, above fifty per •cent, increase on the rate of the same description of freight ■over the whole line of the railroad, is- excessive and illegal. It is in positive disregard and violation of the mandate of the law. It is contended for appellant, first, that inasmuch as the statute has declared the rate of tolls, and has given a penalty for its violation, this remedy is exclusive, and none other can be resorted to. Second, that the payments were voluntarily made, and therefore can not be recovered back. We do not think there is any thing in either of these objections. In regard to the first, any violation of a statute, or disregard of a statutory duty, by which another suffers pecuniary loss, gives to the injured party a right of action for the damages sustained. — Satterfield, Ex’r. of Grey, v. Mobile Trade Co., 55 Ala. 387. And where the wrong* consists in the unauthorized demand of money, and its payment under such unauthorized demand, this is money had and received by the demandant for the use and benefit of the payor, unless the case falls within the principle of money voluntarily paid; and a count for money had and received is sufficient for its recovery. The second objection. Railroads have so expedited and cheapened travel and transportation; have so driven from their domain all competing modes of transportation, that the public is left no discretion but to employ them, or suffer irreparable injury in this age of steam and electricity. They have their established rates of charges, and these the shipper must pay, or forego their facilities and benefits. To object or protest would be an idle waste of words. The law looks to the substance of things, and does not require useless forms or ceremonies. The corporation and the shipper are in no sense on equal terms, and money thus paid to obtain a necessary service, is not voluntarily paid, as the law interprets that phrase. In the case of the Chicago and Alton Railroad Co. v. the C., V. & W. Coal Co., 79 Ill. 121, the court, in reply to the objection that the money was voluntarily paid, said: “ It can hardly be said these enhanced charges were voluntarily paid by appellees. It was a case of life or death with them, as they had no other means of conveying their coals to the markets offered by the Illinois Central, and were bound to accede to any terms appellants might impose. They were under a sort of moral duress, by submitting to which appellants have received money from them which in equity and good conscience they ought not to retain,” The case of Parker v. G. Wes. R. R. Co., 7 Man. & Gr. 253, was a suit by a shipper to recover back excessive charges paid the railroad. It was objected that the payment was voluntary. The court, C. J. TlNDALL, said: “We are of opinion that the payments were not voluntary. They were made in order to induce the company to do that which they were bound to do without them; and for the refusal to do which an action on the case might have been maintained.” The case was assumpsit for money had and received, and the court ruled that the action was well brought. To the same effect are the following authorities : 2 Greenl. Ev. § 121; Caldwell v. Pedin, 3 Watts, 327; Harmony v. Bingham, 2 Ker. 99; Bos. & S. Glass Co. v. City of Boston, 4 Metc. 181; Chandler v. Sanger, 144 Mass. 364; Stephen v. Daniels, 27 Ohio St. 527; Tuttle v. Everett, 51 Miss. 27; Howe v. State, 53 Miss. 57; Robinson v. Ezzell, 72 N. C. 231; First National Bank v. Watkins, 21 Mich. 483; Atwell v. Zeluff, 26 Mich. 118; McKee v. Campbell, 27 Mich. 497; Carew v. Rutherford, 106 Mass. 1; L. & I. Railroad Co. v. Pattison, 47 Ind. 311. The case of Potomac Coal Co. v. C. & P. Railroad Co., 38 Md. 226, is not in harmony with the above, but we decline to follow it.

It is contended for appellant that the penalties imposed by the act approved April 19th, 1873, Pamph. Acts, 62, were repealed by the act “ to prevent excessive charges by railroad companies,” approved March 17th, 1875, Pamph. Acts, 243. The language of the former statute is, " any railroad company, manager, agent or officer, violating the provisions hereof, shall be liable to the party injured thereby in double the amount of the overcharge; but in no case shall the penalty be less than twenty dollars.” The language of the latter statute is, " that any officer, manager or agent of any railroad company, lessee, association or corporation managing or operating any railroad in this State, who violates the provisions of an act entitled 'an act regulating the charges for transportation of freight upon railroads within this State,’ approved April 19th, 1873, shall be guilty of a misdemeanor, and upon conviction thereof shall be fined not less than one hundred, nor more than five hundred dollars for each offense.” There are no words in the statute expressing the intention to repeal the former law, but the argument is that the later enactment is repugnant to the former, and therefore repeals it by implication. The former statute imposes a penalty, to be recovered in a civil suit by the party injured against the railroad company, its manager, agent or officer. The latter enactment seeks to uphold the police authority of the State, and declares a violation of the statute to be a misdemeanor in the officer, manager or agent, by whom it is violated. And, to so frame the statute as to embrace all conceivable infractions of the law, the statute makes the officer,, manager or agent alike liable, whether he derives his au thority from the railroad company, from a lessee thereof, or from an association or corporation managing or operating the road. Such is our construction of the statute, and we do not think the legislature intended to declare that the railroad corporation, lessee, or any association or corporation that might be managing or operating the railroad, should, as such, be indictable. We hold there is no repugnancy in the two statutes, and the later enactment does not repeal the former.

There is nothing in the argument, that the repeal of the act entitled “an act to furnish the aid and credit of the State of Alabama for the purpose of expediting the construction of railroads within the State,” operates as a release of railroad corporations from the restraint imposed by the fifteenth section of that act, or the Mobile and Montgomery Railroad Company, or its successor, from the obligations imposed by the eighth section of the act, under which it received the indorsed bonds of the State. The repealing statute could not divest the rights which had vested under it. — See Pamph. Acts 1874-5, 269; Wood v. Hustis, 17 Wis. 416.

The clause, “ not exceeding fifty per cent, more than the rate charged for the transportation of the same description of freight over the whole line of its road,” found in the act of April 19, 1873, does not mean the pro rata allowance which may fall to this road, under the distribution of the products of transportation of through freights proper; those freights which, in their transit, pass over more than one railroad, and merely traverse this road, as a stage in a more extended shipment. We know that much of the freight falling within this description, travels the entire length, or greater part of its journey without change of cars, and in this way, much labor and expense are avoided in the matter of loading and unloading cars. We know, too, that it is the policy of railroad corporations to so connect their lines, as to effect a long, continuous, connected line of transportation; and that under such arrangement, the saving of labor and increase of business resulting from such connection, enable each road to accept as its share of the sum realized from this branch of its business, a sum which would fall much below fair remuneration for receiving, loading, transporting, unloading and delivering the same quantity and description of freight, whose departure and destination were each within the limit of the one road. Hence, we hold that the words, “over the whole line of its road,” mean and only mean freight which is taken on at one terminus, and discharged at the other. Thus construed, they furnish an equitable standard by which to graduate the charge for transporting local freight; for it, like the other, involves the labor of receiving, loading, transporting, discharging and delivering. It results that all the testimony of rates on what may be called through freight; that is, freight brought from, or carried to, a point beyond the termini of appellant’s road, was improperly received; and in this the Circuit Court erred.

The allowed increase is “ fifty per cent, more than the rate charged for the transportation of the same description of freight over the whole line of its road.”' The testimony tends to show that these rates frequently varied, to meet the exigencies caused by competing routes of transportation. ¥e suppose there might be other reasons for changing, from time to time, the tariff of tolls. The prevailing rate charged at the time of shipment, is what the legislature meant: not a rate which had prevailed, or might be afterwards adopted. This rate, like the charge for any other description of work and labor, is not in its nature continuous. It may vary with each rising and setting of the sun. It maybe that the range of rates never fell below, nor rose above given sums. However this may be, the rates of any particular time in the past furnish no reliable guide for ascertaining present rates.

Various exceptions were reserved to the admission of evidence, and to charges given and refused, but it is believed the foregoing opinion covers the material points raised by the record, and will furnish a solution of the questions likely to arise on another trial.

Reversed and remanded.