Reports of Cases Determined by the Supreme Court of Appeals of West Virginia from
February 1, 1910, to October 18, 1910. Vol. LXVII. Also known as West Virginia
COAL & COKE RY. CO. V. CONLEY AND AVIS.
Decided March 8,1910.
COAL & COKE RY. CO. V. CONLEY AND AVIS.
1. STATES - ACTIONS AGAINST.
There is no difference between courts of law and courts of equity, in respect to their inability to entertain a proceeding against the state.
Interest on the part of the state, in the subject matter of a suit to which it is not a formal party upon the record, must be immediate and direct, not merely incidental or consequential, to bring such suit within the inhibition of section 35 of Art. VI of the Constitution, declaring "The State of West Virginia shall never be made defendant in any court of law or equity."
3. SAME - Action Against States - Direct Interest.
The interest of the state in the penalties, prescribed by a statute, limiting the charges of railroad companies for transportation of passengers, does not constitute an immediate and direct interest in a suit brought by a railroad company to have such statute declared unconstitutional and void. It is sequential and indirect.
4. SAME - Interest of State.
In such a suit, the real issue is whether the complainant is entitled to charge a higher rate than that prescribed, and amounts to a controversy between citizens over the validity of a law, analogous to that which arises on a writ of habeas corpus.
On an issue between a citizen and an officer, involving the constitutionality of a law, the state, considered an ideal, intangible person, as contradistinguished from the state government, its agent, stands neutral, impartial and inactive, deeming the citizen and the government equally within the protection of the organic law and not favoring either as against the other.
6. SAME - Acts of Officers - Liability of State.
The officers of a state act in a representative capacity and bind it by their acts only in those instances in which they have authority, the law under which they act constituting their power of attorney; and, when, for any reason, such law is void, the act done under it is likewise void and amounts to no more than an individual wrong and trespass.
7. SAME - Suits Against Officers - Interest of State.
A suit against an officer, acting, or threatening to act, under an unconstitutional statute, with the enforcement of which he is charged, is a suit against him in his individual capacity, as for a wrong done by him, and not a suit against the state, unless it directly involves a contract right or liability on the part of the state government or property belonging to it or in its custody..
8. INJUNCTION - Jurisdiction - Enforcement of Statute.
It is no objection to the remedy in such case, that the statute, the application of which in the particular case is sought to be prevented, is not void on its face, but is complained of only because its operation in the particular instance works a violation of a constitutional right.
9. SAME - Enforcement of Unconstitutional Act - Authority of Officer.
Nor is it material that the officer's color of authority for the enforcement of the act is found, not in it, but in the common law or some other statute. That he has some connection with the enforcement of the act is the important and material fact, whatever its source or origin may be.
10. SAME - Jurisdiction - Enforcement of Void Act.
Unconstitutionality of the act is not alone sufficient to confer jurisdiction of such a suit or proceeding in equity. To this there must be added, for such purpose, some right or injury, respecting the person or property, not adequately remediable by any proceeding at law.
11. SAME - Jurdisdiction - Enjoining Criminal Proceeding.
When the two grounds for relief, just mentioned, exist, the remedy in equity is not precluded, though it involves restraint, by injunction, of a criminal proceeding.
12. SAME - Enforcement of Unconstitutional Act - Restraint of Criminal Proceeding.
Under such circumstances, restraint of a criminal proceeding is merely incidental to adequate protection of a personal or property right, and is not founded upon the mere illegality of such proceeding. Its chief object being the maintenance and protection of such right, the bill is not one merely to enjoin, such a proceeding.
13. SAME - Acts of Officers - Unconstitutional Statute.
A. wrong, attempted by an officer under color of a void statute, will be enjoined as readily as one attempted by a private person in violation of law and without color of office, if sufficient grounds for injunction, under the rules and principles governing the subject, are shown. Both acts are trespasses.
14. CARRIERS - Regulation - Enforcement - Injunction.
In ignoring an unconstitutional statute, limiting its charges for transportation of passengers, and appealing to a court of equity for protection against criminal proceedings to compel compliance therewith, a railroad company relies, in part, upon the legal principle, allowing an injured person, under some circumstances, to redress, by his own hands, the wrong done him.
15. INJUNCTION - Enforcement of Unconstitutional Law.
In form, a bill filed for such purpose is a pure bill of injunction, not ancillary to any other suit or other direct relief sought by it, but ancillary to a proceeding out of court. Nevertheless its real and substantial purpose is the determination of the validity of the statute, indirect determination thereof arising ex necessitate from lack of any adequate form of direct adjudication upon the question.
16. SAME - When Maintainable - Protection of Possession of Property.
There being no form of action at law, appropriate to the protection of possession and enjoyment of property by the owner thereof, and damages and criminal penalties for trespasses, being inadequate, when recoverable and enforcible, injunction is the proper remedy therefor.
17. SAME - When Maintainable - Grounds.
Neither physical destruction nor injury of property, nor total deprivation of the use and enjoyment thereof, is a sin qua non to judicial remedy, if wrongful. An unlawful arid injurious restraint upon the use and enjoyment thereof in any form, being in law a deprivation of property pro tanto, suffices.
18. CORPORATIONS - Public Service Corporations - Limitation of Rights.
A statute, imposing a limit upon the rates to be charged by a public service corporation differs in nature from many others in that it relates to the use of private property, and there is a constitutional limit of the powers of the legislature, respecting the same, dependent upon a question of fact.
19. SAME - Public Service Corporations - Actions.
A proceeding for the relief of a public service corporation from illegal legislative restraint upon its charges may be prosecuted by such corporation in its own name.
20. CARRIERS - Regulations - Passenger Rates.
Though the public has an interest in the use of' private property, devoted to a public service, as in the case of a railroad, and the legislature may, by statute, limit the charges for such service, it cannot reduce them below the point of fair and reasonable remuneration for the service rendered.
21. CONSTITUTIONAL LAW - Due Process of Law - Railroad Rates.
Legislative reduction of such charges so as to prevent the earning of such remuneration amounts to a taking of private property for public use, without compensation to the owner thereof, and a rate regulating statute, so operating, is void, in so far as it has such effect, being in conflict with section 10 of Art. III of the Constitution of this state and the Fourteenth Amendment to the Constitution of United States, inhibiting deprivation of property without due process of law, and also with the equality clause of said amendment.
22. CORPORATIONS - Public Service Corporations - Rate Regulating Statutes
A public service corporation is entitled to a judicial inquiry as to whether, in point of fact, a rate regulating statute is confiscatory, and, if the legislature has failed to prescribe or designate a mode of determining such question, the party aggrieved may invoke any appropriate remedy therefor in law or equity.
23. STATUTES - Partial Inability - Effect.
If penalties are prescribed in such a statute as a sanction for the due enforcement thereof, and the persons and corporations affected thereby are not expressly or impliedly excepted from the operation of the penal clause, pending such judicial inquiry, and the penalties are so heavy and severe as to expose such persons and corporations to great risk of loss in prosecuting such inquiry, the entire statute is void on its face in so far as it so interferes, unless the penal clause is separable from the rate prescribing clause, in which case the former only is void to the extent aforesaid.
24. CONSTITUTIONAL LAW - Right to Justice - Equal Protection of the Law.
A statute, so obstructing resort to the courts for inquiry as to a fact, limiting the power of the legislature, respecting the subject matter thereof, would conflict with section 17 of Art. III of the Constitution of this state, declaring "The courts of this state shall be open, and every person, for an injury done to him, in his person, property or reputation, shall have remedy by due course of law; and justice shall be administered without sale, denial or delay;" and also with the Fourteenth Amendment to the Constitution of the United States, guaranteeing to all persons the equal protection of the laws.
25. CORPORATIONS - Public Service Corporations - Regulation of Rate.
While obeying such a statute, without question, or merely violating it, by exacting higher rates than it allows, such corporation maintains the status or condition, upon which the legislature intended the penal clause to operate, in the absence of a different intent expressed in the statute.
26. SAME - Public Service Corporation - Rate Regulating Statute - Penalty - Enforcement.
By the institution of a suit to determine whether such a statute is confiscatory in its operation in a particular case, such corporation alters its status from that of a mere corporation, engaged in the public service, to that of a contestant of the legislative claim of right to take its property without due process of law; and, in the absence of expression of intent to the contrary, it is presumed the legislature did not intend to affect, or interfere with, the assumption or maintenance of such status, nor to legislate upon the subject of such remedy; and the penal clause of such a statute, silent on the subject of remedy, has no application, while a suit is pending, in good faith, for the determination of such question.
27. CONSTITUTIONAL LAW - Statutes - Construction - Presumptions.
In determining the meaning of a statute, it will be presumed, in the absence of words therein, specifically indicating the contrary, that the legislature did not intend to innovate upon, unsettle, disregard, alter or violate, (1) the common law; (2) a general statute or system of statutory provisions, the entire subject matter of which, is not directly or necessarily involved in the act; (3) a right or exception based upon settled public policy; (4) the constitution of the state; nor (5) the Constitution of the United States.
28. STATUTES - Construction - Legislative Intent.
It is the duty of a court to restrain the operation of a statute within narrower limits than its words import, if the court is satisfied that the literal meaning of its language would extend to cases which the legislature never designed to include in it.
29. CONSTITUTIONAL LAW - Construction of Statutes - Presumptions.
Courts will never impute to the legislature intent to contravene the constitution of either the state or the United States, by construing a statute so as to make it unconstitutional, if such construction can be avoided, consistently with law, in giving effect to the statute, and this can always be done, if the purpose of the act is not beyond legislative power in whole or in part, and there is no language in it expressive of specific intent to violate the organic law.
30. CARRIERS - Regulation of Rates - Suit to Determine Validity - Penalty.
By the application of these rules and principles, a railroad company is excepted from the operation of the penalty clause of chapter 41 of the Acts of 1907, during the prosecution by it, in good faith, of a suit to determine whether said statute is confiscatory in its operation and effect, as applied to such company.
31. CRIMINAL LAW - Excessive Punishment.
When applicable, the penal clause of said chapter does not contravene section 5 of Art. III of the Constitution of this state. The fines thereby imposed are not excessive.
32. CARRIERS - Regulation of Rates - Amendment of Statute.
Covering only a part of the subject of railway rate legislation, chapter 41 of the Acts of 1907 does not wholly repeal former legislation, relating to the same subject, either by implication or express provision. It impliedly amends chapter 227 of the Acts of 1872-3, as amended by chapter 42 of the Acts of 1885, repealing such former legislation only so far as it is clearly inconsistent therewith.
33. SAME - Regulation of Rates - Lease Roads - "Single Railroad."
For the purposes of chapter 227 of the Acts of 1872-3, as well as chapter 41 of the Acts of 1907, two railroads, operated in connection with one another, under a lease of one by the other, or otherwise, constitute a single railroad.
34. SAME - Regulation of Passenger Rates.
Chapter 41 of the Acts of 1907 divides steam railroads into two classes for the purposes of passenger rate regulation, subjecting all railroads, as above defined, fifty miles long and over, to a limit of two cents per mile, in the case of adults, with trivial exceptions, and leaving all others subject to the former legislation, applicable to them at the date of the passage of said act.
35. SAME - Regulation of Rates.
The proviso in said chapter 41 of the Acts of 1907, saying "Nothing in this act shall apply to any railroad in this state under fifty miles in length and not a part of, or under the control, management or operation of any other railroad, over fifty miles in length, operating wholly or in part in the state," is construed as meaning the same as if it had said "Nothing in this act shall apply to any railroad in this state under fifty miles in length and not a part of, or under the control, management or operation of any other railroad, whose entire length is over fifty miles. .
36. SAME - Regulation of Rates - "Under the Control, Management or Operation."
The words, "under the control, management or operation," are used in the appositive, not the alternative, sense, and mean the same as the words, "a part of."
37. RAILROADS - Operation - Railroads Controlled by Other Roads - "A. Part of."
A railroad owned, controlled or operated by another, but not connecting therewith, is not a part thereof.
38. STATUTES - Construction - Amendment by Implication.
In construing a statute, amending existing law by implication, such existing legislation is to be considered not only as an act in pari materia, but also as a live, operative and effective law, in so far as it is not repealed, determining, in part, the meaning of the new provision by its force and effect for both must stand and operate together as far as possible.
39. CONSTITUTIONAL LAW - Equal Protection of the Law.
Legislative classification of railroads, according to the length of the line of the road, treating connecting roads, operated under one management, as a single road, for the purposes of rate regulation, is founded upon substantial differences, having direct and just relation to the purposes, of the legislation, and is not in conflict with the clause of the Fourteenth Amendment to the Constitution of the United States, guaranteeing to all persons the equal protection of the laws, when the rates, prescribed by it, apply alike to all roads of the same class.
40. SAME - Discrimination.
Subjection of one class of railroads to an inflexible passenger rate, and another class to a variable one, based on annual gross earnings, does not work discrimination, invalidating the law under said constitutional amendment.
41. SAME - Rate Legislation - Validity.
Failure to regulate charges of railroads under six miles in length and electric lines and street railways, otherwise than by the inhibition of unreasonable charges, does not invalidate railroad rate legislation, applicable to steam railroads and unimpeachable upon any other ground.
42. CARRIERS - Regulation of Rates.
Chapter 41 of the Acts of 1907 is, in all respects, valid on its face.
43. CONSTITUTIONAL LAW - Regulation of Rates - Reasonable Rates.
In respect to their operation in any particular case, railroad rate statutes are presumed to be valid, and the burden of showing the contrary is upon a railroad company asserting it.
44. CARRIERS - Regulation of Railroad Rates - Enforcement of Statute.
Since a suit to have a statute declared confiscatory in its effect upon the complainant's business interferes with the operation of a legislative act, and all the facts, bearing upon the issue, are within the knowledge of the complainant, no bill for such purpose should be entertained nor any injunction awarded, except upon the showing of a strong and complete prima facie case.
46. SAME - Regulation of Rates - Reasonable Rates.
Ordinarily, the right to the rate of returns, generally realized upon similar investments in the locality of the one under consideration in any given case, is deemed reasonable and fair and guaranteed to the investor, if he can earn it, and the rate is allowed upon the amount actually invested in good faith, fictitious valuations, indicated by over issues of stocks and bonds, not representing actual money, being rejected.
46. SAME - Regulation of Rates - Reasonable Profits.
Under exceptional and peculiar circumstances, what would ordinarily be a reasonable rate of profit on the entire investment is disallowed, as being more than the service is worth to the public and therefore unjust to it.
47. SAME - Regulation of Rates - Bill to Invalidate Statute.
A bill, filed by a railroad, charging an absolute loss on the transportation of passengers, occasioned by the operation, of the statute, and less than a reasonable return for the entire service rendered by it, verified by oath and accompanied by statements, showing in detail the gross income, expenses and net earnings, sworn to and sustaining the allegations of the bill proper, is sufficient as a bill to invalidate a rate regulating statute.
48. CONSTITUTIONAL LAW - Regulation of Rates - Reasonable Compensation.
A statutory passenger rate, so low as to forbid the earning of reasonable compensation for carrying passengers, and thus contribute to insufficiency of net income on the entire traffic at the road to comply with the constitutional guarantee of right to a fair return on the investment, is confiscatory in its operation and effect upon such road and void.
49. CARRIERS - Regulation of Rates.
That a new railroad was built without expectation of an immediate realization of a fair return on the investment is not a circumstance, justifying disallowance of such return, if it can be earned without exaction of unreasonable rates.
50. SAME - Regulation of Rates - Net Earnings.
Earnings of a railroad company, applied to the purchase of additional equipment, extension of its lines and other Improvements, must be regarded as a part of its net earnings upon an inquiry as to whether a rate statute is confiscatory.
51. SAME - Regulation of Rates - Enjoining Enforcement of Statute.
A decree, enjoining the enforcement of a rate statute as confiscatory, should contain a clause saving to the defendant the right to proceed at any time in the future, in any appropriate way, to obtain a vacation thereof, if, under altered conditions, it is no longer confiscatory.
Appeal from Circuit Court, Kanawha County.
Bill by Coal & Coke Railway Co. against the Attorney General of West Virginia and the Prosecuting Attorney of Kanawha County, to enjoin them from enforcing the two cent passenger rate law. Decree for plaintiff, and defendants appeal.
Reversed in part, Affirmed in part, and Modified.
Price, Smith, Spilman & Clay, for Coal & Coke Railway Co., and H. T. Wickham, Simms, Enslow, Fitzpatrick & Baker, and Chilton, MacCorkle & Chilton as Amici Curiae and as counsel for The Chesapeake & Ohio Railway Co.
William G. Conley, Attorney General, and S. B. Avis, Prosecuting Attorney, for appellants.
In the chancery cause of the Coal & Coke Railway Company v. Wm. G. Conley and S. B. Avis, matured and brought on for hearing, on the bill, motion to dismiss, demurrer, answer and depositions, the circuit court of Kanawha county pronounced a decree, on the 16th day of June, 1909, perpetually enjoining, inhibiting and restraining said Conley and Avis from proceeding, as Attorney General of the State and Prosecuting Attorney of Kanawha County, respectively, to enforce, against the plaintiff, the penal provision of an act of the legislature, passed on the 20th day of February, 1907, entitled, "AN ACT relating to and regulating passenger rates upon railroads in the state of West Virginia, and prescribing penalties for the violation thereof," and popularly known as the "Two Cent Rate Act;" deeming said act void on its face for several reasons and confiscatory in its operation upon said company. From this decree, Conley and Avis have appealed.
The jurisdiction of the circuit court is denied on several grounds, one of which is that the suit is, in substance and effect, one against the state, . . . .
. . .
The real object of this bill in not protection from penalties. In other words, it is not a bill to avoid infliction of penalties lawfully imposed, or to make an issue of act as to whether or not the complainant has incurred a penalty under a valid statute. It is filed on the assumption that the statute, which, it is said, purports to inflict these penalties, is unconstitutional and void and that the complainant incurs no penalty in doing the forbidden act. Its object is protection of the complainant in the exercise of its alleged right to manage, control and operate its property free from molestation by attempts to enforce the militation of the statue as to rates of fare. It is not in form a bill to declare a statue unconstitutional. Such a bill cannot be filed. The declaration of unconstitutionality must be incidental to some relief sought, just as construction of a will, deed or other some relief sought, just as construction of a will, deed or other instrument must be incidental to a prayer for relief. Nevertheless, freedom from the restraint imposed by the statute is its real and substantial object. The necessity for some such circuitous remedy is due to the failure of the legislature to provide any direct method of testing the reasonableness and validity of the limitation prescribed by the act. If the allegations of the bill are true, the limitation complained of is absolutely void, because it contravenes the constitution of the State and the Fourteenth Amendment of the Constitution of the United States, and, as neither this act nor any other provides any direct remedy for redress of the wrong done by this invasion of private right, the complainant was forced to invoke a principle well known to the law, namely, the redress of its own grievances by ignoring the statute and treating it as if it did not exist. . . .
. . .
Having thus considered all matters relied upon to sustain the view that the statute is unconstitutional on its face, we conclude that it does not, in terms, contravene or violate either the Constitution of this State or any provision of the Fourteenth Amendment of the Constitution of the United States. . . .
. . .
Having concluded, as above indicated, that the act of 1907, limiting passenger fares on complainant's railroad to two cents a mile, is unconstitutional in its operation and effect upon said company, because it reduces, or compulsorily contributes to the reduction of, the net earnings below the point of reasonable remuneration, it becomes necessary to determine what shall be the final disposition of the case. . . .
. . . In so far as it [the circuit court] declares the statute void on its fact and purports to enjoin persons not parties to the suit, it will be reversed and annulled. In so far as it declares the statute confiscatory in its operation and effect, as applied to the complainant, and enjoins the defendants from proceeding against it and allows costs against them, it will be modified by the insertion of a clause, saving to the defendants and their successors in office the right to institute, in the circuit court of Kanawha county, at any time, any proper proceeding for vacation thereof, and, as so modified, this portion of it will be affirmed; all of which will be certified to the circuit court of Kanawha county.
. . .