Louisville & N. R. Co. v. Hammer

• Decision Date: 09 March 1951
• Citation: 27 Beeler 700,236 S.W.2d 971,191 Tenn. 700
• Parties: , 191 Tenn. 700 LOUISVILLE & NASHVILLE R. CO. v. HAMMER et al.
• Court: Tennessee Supreme Court

Page 971

236 S.W.2d 971

27 Beeler 700, 191 Tenn. 700

LOUISVILLE & NASHVILLE R. CO. v. HAMMER et al.

Supreme Court of Tennessee.

March 9, 1951.

Walker & Hooker and David M. Keeble, all of Nashville, for appellant.

Arthur M. Fowler, of Loudon, Frank Clement and Val Sanford, of Nashville, for appellees.

G. Edward Friar, of Nashville, Lucius E. Burch, Jr., of Memphis, amicus curiae.

NEIL, Chief Justice.

The Louisville and Nashville Railroad Company filed its petition before the Railroad and Public Utilities Commission of the State of Tennessee in which it sought permission to discontinue Passenger Trains No. 1 and 4 between Knoxville and Copperhill, Tennessee. The petition was filed pursuant to the provisions of Chapter 84 of the Public Acts of 1949. The pertinent part of Section 2 of the Act, and which is deemed to be controlling, reads as follows: 'Upon application by the carrier, the Commission shall authorize the discontinuance of any passenger train when it shall be made to appear that for a period of twelve months or more, the direct operating costs of such train have exceeded the aggregate gross revenues therefrom by more than thirty per cent.'

Upon the filing of the petition due notice of the application was given. Protests were filed by certain Labor Unions, representing employees of the petitioner, as did a number of citizens residing in the counties affected.

It was the contention of the petitioner that the Public Acts of 1949, above referred to, were mandatory since the proof before the Commission showed conclusively that the railroad brought itself within the wording of the provision above quoted and that 'all other matters of evidence, such as the availability of other services etc. are wholly immaterial and irrelevant.'

There was a hearing before the Commission, resulting in a dismissal of the petition, Commissioner Avery dissenting. Thereupon the L. & N. Railroad Co. filed its petition in the chancery court against the Commission, and certain of the protestants, seeking the writ of certiorari, as provided by Code Section 9008-9018 for a review of the order complained of to the end that it be set aside. The writ was granted and the entire record was transferred by the Commission to the chancery court. The Labor Unions moved the court to dismiss the petition because it did not allege that 'it was the first application for the writ of certiorari.' The motion was overruled and an exception taken. Later the defendants filed a demurrer coupled with an answer. The Commission filed a separate answer.

The protestants questioned the constitutionality of Chapter 84, Acts of 1949, on the grounds (1) the body of the Act is broader than the caption, (2) 'the Act violates Art. 1, Sec. 20 of the Constitution in that it seeks to relieve Railroads from the obligation of existing contracts', and (3) that the Act was not retroactive and 'that the period of twelve (12) months after the passage of the Act was not covered by the petition.' Other defenses were interposed relating to the insufficiency of the proof offered by the petitioner to bring itself within the provisions of the Act.

The Chancellor overruled all of the foregoing objections, sustained the petition for certiorari, reversed the order of the Commission, and granted the relief sought. The protestants prayed and were granted an appeal to this Court because of the alleged unconstitutionality of the Statute, which is the basis of the petition before the Commission.

The assignments of error question the ruling of the chancellor upon the several grounds of the demurrer to which we have made particular reference. We find no merit in the assignment that the chancellor erred in allowing petitioner to amend its petition by alleging that it was the first application for the writ of certiorari. McGhee v. Grady, 80 Tenn. 89. Amendments relate back to the filing of the original pleadings. Burgie v. Parks, 79 Tenn. 84; Cooper's Estate v. Keathley, 27 Tenn.App. 7, 177 S.W.2d 356.

The chancellor in his opinion reviewed the respective Journals of the Senate and the House of Representatives in order to determine therefrom the intention of the Legislature; other questions raised by the above assignments of error are also considered in the opinion.

We think Chancellor Wade was correct in his ruling upon each and every question. The opinion is as follows:

'One of the questions presented to the Courts for determination is whether or not the above quoted section of the 1949 Act is mandatory or directory in so far as the duties of the Commission are concerned.

'It is a general rule of law that the word 'shall' ordinarily is construed as being mandatory and not directory when used in constitutions or statutes. Rounds v. State, 171 Tenn. 511 .

'The history of this legislation is reflected in the 1949 Journal of the Legislature and shows that Senate Bill 160, the Act in question, was originally introduced in the Senate by Senator Kemmer. It provided (Section 3) that the Commission could authorize the discontinuance of passenger service:

"Whenever the evidence shows that such passenger service, together with the entire service rendered by such common carrier has been and is being carried on at a loss, without reasonable probability that such condition will in the future change for the better; * * *.' However, before the passage of said bill in the Senate and before the bill was sent to the House, this particular section was amended to read, as follows:

"Upon application by the carrier, the Commission may, in its discretion, authorize the discontinuance of any passenger train when it shall be made to appear that for a period of twelve months or more the direct operating costs of such train have exceeded the aggregate gross revenues therefrom by more than thirty percent.'

'Prior to passage of the bill in the Senate, an effort was made to eliminate the phrase 'may, in its discretion', and substitute in lieu thereof the word 'shall'.

This effort was defeated the first time said issue was before the Senate.

'The bill went to the House in the form quoted above,

'On motion of Mr. Bomar, in the House, Senate Bill No. 160 was amended by striking out the above words 'may, in its discretion, authorize', and substituting in lieu thereof the words 'shall authorize'.

'The bill passed the House in that form, and the Senate then concurred in that amendment.

'Taking into consideration the applicable law and the facts surronding the enactment of the statute in question this Court can reach no other conclusion but that said section should be construed as being mandatory and not directory in so far as the Utilities Commission is concerned.

'Another contention made by the defendants herein in an effort to resist the discontinuance of the trains in question is that by reason of certain contractual and charter obligations the petitioner is obligated to operate its passenger trains forever. The Supreme Court of Tennessee in the case of N. [Nashville,] C. & St. L. Railway v. Hannah, et al., 160 Tenn. 586 [27 S.W.2d 1089, 70 A.L.R. 837], has held to the contrary. In the case of Meacham v. Louisville & Nashville Railroad Company, 293 Ky. 642, 169 S.W.2d 830, the argument of the protestants was effectively answered in the following manner:

"The answer to this argument is that while a railroad is a private corporation, yet it is a quasi public agency, and one contracting with it must have contemplated the fact that when public necessity and convenience required the abandonment of a particular part of its line, it would not be bound by a contract to operate that line in perpetuity.'

'The proof in this cause is uncontradicted and shows that the direct operating costs of the two trains in question for a period of twelve months, ending March 31, 1949, exceeded the aggregate revenue therefrom not only by 30% (the percentage set forth in the statute) but by 177%. For the fifteen months ending June 30, 1949, the operating costs exceeded the revenues by 181%. The Act prescribed 'a period of twelve months or more.' A reasonable construction to be placed on the Act in so far as a period of time within which to figure the deficit and operating expenses in the twelve month period immediately before the application. This particular period must show a 30% deficit but the applicant is not precluded from showing a longer period of time in order to develop that the losses were not seasonable or temporary.

'The Court is of the opinion that the method of accounting used by the petitioner in establishing the direct operating costs and the gross revenues from Intra-State operation was a feasible one and one recognized by other major railroad companies.

'Having reached the conclusion that the Act in question is constitutional and that the petitioner has conclusively proven that it is entitled to the benefits of the portion of the Act hereinabove quoted, the Court is constrained to hold that the order of the Commission denying the petitioner the right to suspend its passenger trains nos. 1 and 4 was null and void and that said petitioner is entitled to the relief sought.

'Signed

'Wm. J. Wade, Chancellor.'

Counsel for the Commission has filed a brief, with the Court's permission, contending that it would be error to hold that Chapter 84, Acts of 1949, was mandatory, and the chancellor was otherwise in error in overruling the Commission relative to the railroad's method of determining costs etc. There was no appeal from the chancellor's ruling by the Commission.

We do not understand that errors may be assigned where no appeal was prayed...