State ex rel. Lemke v. Chi. & N. W. Ry. Co.

• Decision Date: 01 October 1920
• Citation: 46 N.D. 313,179 N.W. 378
• Court: North Dakota Supreme Court
• Parties: STATE ex rel. WM. LEMKE, Asst. Atty. Gen., v. CHICAGO & N. W. RY. CO. et al.

46 N.D. 313

179 N.W. 378

STATE ex rel.WM. LEMKE, Asst. Atty. Gen.,

v.CHICAGO & N. W. RY. CO. et al.

Supreme Court of North Dakota.

Sept. 17, 1920.

On Motion to Modify, Oct. 1, 1920.

Syllabus by the Court.

The Board of Railroad Commissioners, pursuant to an application by the carriers, conducted a hearing attended throughout by one member of the board and a part of the time by two members. Several days thereafter a meeting of the board was held, at which the subject-matter of the application was discussed, but concerning which there was no vote taken on any matter presented in the application, although it is claimed an agreement as to disposition was reached. The minutes of the board do not show what action, if any, was taken. Subsequently an order was issued, under the seal of the board and signed by the secretary, disposing of the application, the secretary stating that such order was released pursuant to an understanding with one member of the board. It is held:

(1) The purported order is void for lack of proper action by the Board of Railroad Commissioners, and the carriers are restrained from putting into effect rate increases based upon the purported order, and are required to refund increased charges which have been collected pursuant to such purported order.

Additional Syllabus by Editorial Staff.

The Board of Railroad Commissioners possesses only the authority conferred upon it by the Constitution and the statutes, Laws 1919, c. 192, §§ 34, 35, 42, 43, Laws 1919, c. 194, and Comp. Laws 1913, §§ 4731, 4741, and its action as to any subject-matter within its jurisdiction, to be valid, must be in substantial conformity with the governing statutes and consonant with due process of law.

On Motion to Modify.

Under Laws 1919, c. 194, § 10, a member of the Board of Railroad Commissioners, who had attended the hearings on an application by carriers for a rate increase, could not properly yield his assent to its order increasing rates without having heard or read the evidence, nor does anything in Transportation Act Cong. Feb. 28, 1920, justify such consideration, in view of Laws 1919, c. 192, §§ 35, 43, relating to the effect of the board's record as evidence.

Original petition for an alternative writ of injunction by the State of North Dakota, on the relation of William Lemke, Assistant Attorney General, against the Chicago & Northwestern Railway Company, Sam Aandahl and others, as the Board of Railroad Commissioners of North Dakota, and others. Injunction issued pending certain events.

This is an original application for an alternative writ of injunction restraining the respondent railway companies from continuing to charge rates and fares according to schedules filed under a purported order of the Board of Railroad Commissioners. Upon presentation of the application an order was issued out of this court requiring the defendants to show cause why they should not be permanently enjoined from charging any increase in intrastate passenger or freight rates and from further continuing to charge the alleged unlawful increase in intrastate freight and passenger rates put into effect by them on September 1, 1920. Pending the hearing and the further order of the court they were enjoined from charging such rates and fares so put into effect, unless the increased charges be kept separate and apart and be subject to the order of the court.

The petition alleges that on September 1, 1920, the respondent railway companies increased their passenger rates 20 per cent. on intrastate commerce and their intrastate freight rates 35 per cent.; that said increases are unjust, unreasonable, extortionate, and unlawful; that the increases were made pursuant to the authority of a purported order of the Railroad Commission issued August 24, 1920. The authority of the Railroad Commission to issue the order is denied, and it is further alleged that the same was never presented and adopted at a legal meeting of a majority of the board; that in fact two of the three commissioners were opposed to the order and to the increased rates and had never given their consent or approval to the same.

It is also alleged that there had never been a proper hearing before the commission at which the public and shippers were given a fair opportunity to protect their interests; that the levels of intrastate freight and passenger rates of North Dakota are higher than in Minnesota and South Dakota by 40 per cent. and 28 per cent., respectively; that the intrastate freight rates are made for the purpose of giving advantage to milling, packing, and other industries in Minneapolis, St. Paul, and other large cities, and, because of unjust discriminations, are destructive to similar industries in this state. The petition avers:

“That the intrastate rates in force August 31, 1920, were just and reasonable and not confiscatory and permit a reasonable profit.”

The prayer for relief asks that the defendants be restrained from continuing to charge the higher rates on intrastate traffic which were put in force on September 1st. To the petition there is attached the affidavits of Frank Milhollan, a member of the Board of Railroad Commissioners, V. E. Smart, rate expert and statistician for the board, and a certified copy of the purported opinion and order complained of.

The Milhollan affidavit states in substance that on August 21, 1920, there was a meeting of the Board of Railroad Commissioners at which the question of increasing freight and passenger rates was discussed; that some notice of the hearing had been given 16 days prior thereto, but it did not receive general publicity; that there were present at the hearing attorneys for the various railroads, but none representing the interests of the public and the shippers; that no final determination or decision of the matter was reached at this meeting, nor at any subsequent meeting; that the affiant was not then and is not now satisfied that the railroads are entitled to the increase sought; that no opportunity was given the affiant to read the transcript, or to consider the evidence submitted by the railroads as to the reasonableness of the increased rates; that there has been no subsequent meeting of the commissioners, and no legal meeting has been held at which the increases were authorized; that Commissioner C. F. Dupuis, on or about the 24th day of August, caused the secretary of the commission to issue the order granting the increases complained of; that the rates were subsequently, on September 1, 1920, put into effect without authorization by the Board of Railroad Commissioners and are contrary to the rates established by law; that neither affiant nor the chairman of the board, Sam Aandahl, ever saw the order until after it was issued; that neither of them signed it, and that, prior to the hearing above referred to, Commissioner Dupuis had held a meeting on August 12th and 13th, at which hearing, he (Dupuis) was the only commissioner present; that affiant is informed and believes that the railroads were represented at that meeting by their attorneys; and that four or five members of different shipping concerns were also present and protested against the increase. The affiant also swears to the disparity between the levels of the intrastate rates in North Dakota as compared with the rates in Minnesota and South Dakota, resulting in unjust discrimination prejudicial to the shipping interests of North Dakota and preferential to those of Minnesota and South Dakota, as recited in the complaint.

The affidavit of the rate expert and statistician recites the meeting of August 12th and 13th, at which Commissioner Dupuis presided, and at which the other two members of the commission were not present, except Milhollan, who was there for two or three hours on the latter date; that the representatives of the railroads submitted evidence in support of their request for increased rates which did not convince the affiant of the necessity for the increase being applied to intrastate rates; that there was another meeting of the board on August 21st, at which meeting affiant was present the greater part of the time and at the conclusion thereof, and so far as affiant knows the board did not vote on the increase and that affiant knows of no other meeting since; that during the forenoon of August 23d Mr. Dupuis directed affiant to prepare a tentative report, opinion, and order; that so far as affiant knows this report was never finally adopted at a legal meeting of the Board of Railroad Commissioners. This affidavit also supports the allegations of the complaint respecting disparity between the levels of the intrastate rates in North Dakota as compared with those of Minnesota and South Dakota.

The certified copy of the order identifies the matter pending before the commission as case No. 1592, received May 18, 1920, heard August 12 and 13, 1920, and decided August 24, 1920. It recites as appearing for the commission, C. F. Dupuis, vice chairman, Fred Bremier, director of division of utilities, and V. E. Smart, rate expert and statistician. It further recites representation of the carriers by their attorneys and officials, giving the names, and other appearances on behalf of three commercial clubs of the state and the Employers' Association of North Dakota. It is unnecessary to refer at length to the matters recited in the order. Suffice it to say for purposes of this proceeding that the order purports to authorize the increases complained of, although it does not authorize all of the increases for which the carriers, asked, such, for instance, as increases in rates on milk and cream and surcharges on sleeping and parlor car fares. It contains the further and concluding provision that the case shall be kept open and further hearings ordered, for the purpose of adjusting discriminations cited in the report, and for inquiring into the reasonableness of individual class and commodity rates and passenger fares...