State ex rel. McCue v. N. Pac. Ry. Co.

• Decision Date: 16 April 1909
• Citation: 120 N.W. 869,19 N.D. 45
• Parties: STATE ex rel. McCUE, Atty. Gen., v. NORTHERN PAC. RY. CO.
• Court: North Dakota Supreme Court

19 N.D. 45

120 N.W. 869

STATE ex rel.McCUE, Atty. Gen.,

v.NORTHERN PAC. RY. CO.

Supreme Court of North Dakota.

April 16, 1909.

Syllabus by the Court.

Chapter 51, p. 73, Laws 1907, amending and re-enacting section 4395, Rev. Codes 1905, prescribing maximum coal rates for the transportation by common carriers of coal in car load lots within the state, is not violative of section 8, art. 1, of the Constitution of the United States, known as the “commerce clause,” which confers upon Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes;” nor does it violate the fourteenth amendment of the federal Constitution, nor section 13 of the Constitution of North Dakota. providing, in effect, that no person shall be deprived of life, liberty, or property without due process of law.

The legislative assembly possesses the undoubted power, under section 142 of the Constitution of North Dakota, to prescribe maximum rates for the transportation by common carriers of commodities between points within the state, provided the rates thus prescribed are reasonable.

The act in question is presumptively valid, and the burden is upon the carrier to prove that the rates therein prescribed are clearly unreasonable.

Where the constitutionality of a law is made to depend upon the existence or nonexistence of some fact or state of facts, the determination thereof is primarily for the Legislature, and the court will acquiesce in its decision, unless it clearly appears that such decision was erroneous.

Evidence examined, and held not sufficient to overcome the prima facie presumption that the rates prescribed by said act are reasonable.

The proper test as to whether the rates thus fixed are reasonable or unreasonable is not whether the rate fixed on the particular commodity is sufficiently high to enable the carrier to earn a fair compensation after allowing for the legitimate cost to the carrier of transporting the same, but whether, under such rates, it will be enabled from its total freight receipts on all its intrastate traffic to earn a sum, above operating expenses reasonably necessary for such traffic, sufficient to yield a fair and reasonable profit upon its investment. It is within the power of the Legislature to reduce the freight on a particular article, provided the carriers are enabled to earn a fair profit upon their entire intrastate business.

Application by the State, on the relation of T. F. McCue, Attorney General, against the Northern Pacific Railway Company for injunction. Writ granted.T. F. McCue, Atty. Gen., and E. P. Kelly, for plaintiff. Ball, Watson, Young & Lawrence and C. W. Bunn, for defendant.

FISK, J.

By chapter 51, p. 73, Laws 1907, which became effective July 1, 1907, the legislative assembly of this state amended and reenacted section 4395, Rev. Codes 1905, which establishes maximum coal rates for the transportation by common carriers of car load lots of coal within the state. It is conceded that this statute has at all times been wholly ignoredby defendant and other carriers of freight in this state by their charging and exacting for such service higher rates than those prescribed therein; their contention being that said statute is unconstitutional, and hence void, for the reason, among others, that the rates thus prescribed are unreasonably low and confiscatory, and hence said act is violative of the fourteenth amendment to the federal Constitution, and section 13 of the state Constitution. On August 7, 1907, the Attorney General filed, by permission of this court, a petition, duly verified, in which are set forth the essential facts, showing defendant's violation of said statute, and praying that this court issue its prerogative writ of injunction to restrain defendant, its agents and employés, from committing the acts complained of. Such petition is entitled in the name of “State of North Dakota ex rel. T. F. McCue, Attorney General, as Plaintiff, against Northern Pacific Railway Company, as Defendant.” Similar proceedings in all respects were at said time also commenced against the Great Northern Railway Company and the Minneapolis, St. Paul & Sault Ste. Marie Railway Company. Pursuant to plaintiff's motion in that behalf, an order to show cause returnable on September 16th was issued by the chief justice requiring defendant to appear and show cause, if any it had, why such writ should not issue permanently enjoining it from committing the acts complained of. In response to such order to show cause, defendant made its return, setting forth, in substance, that chapter 51, Laws 1907, aforesaid, is void for the reasons: (1) That it violates the commerce clause of the Constitution of the United States (article 1, § 8), which provides that: “Congress shall have power * * * to regulate commerce with foreign nations and among the several states and with the Indian tribes.” (2) The maximum rate fixed by said act is “unremunerative, unreasonable, inadequate, and confiscatory, and violates the fourteenth amendment of the federal Constitution, also section 13 of the state Constitution.” Such return also alleges that the maximum rates thus fixed by chapter 51 are greatly less than corresponding rates as fixed by law in Minnesota and by the railroad commissioners in the states of Iowa and Illinois, and a comparison of the rates in these various states is set out therein. By stipulation of counsel the clerk of this court was appointed referee for the purpose of taking and reporting to the court the testimony offered by the respective parties upon the issues thus framed. On November 20, 1907, such referee duly qualified by taking the oath required by law, and on the following 14th day of July, 1908, the taking of testimony was commenced at the general offices of defendant in the city of St. Paul, Minn., and was concluded on December 16, 1908, at Fargo, in this state, and the same was thereupon reported to the court, and on March 29, 1909, the cause was finally submitted for decision.

The Attorney General advances the following propositions: “(1) The Legislature has the right to regulate and fix rates for the transportation of coal in this state. (2) Presumptively, chapter 51, Laws 1907, is valid. (3) The burden of proving that the rates are unreasonable is upon the defendant. (4) The proposed rate is not unreasonable, even though it is not compensatory, provided the defendant is earning a fair profit upon its entire business in this state. (5) Chapter 51, Laws 1907, in no way amounts to a regulation of interstate commerce.”

The correctness of the first proposition is not challenged by defendant's counsel, provided the same is qualified so as to restrict such right to the regulating and fixing of rates which are reasonable; and the Attorney General concedes that it should be thus qualified. The rule is, of course, too well settled to admit of dispute that the Legislature has the power to fix and regulate rates to be charged by common carriers upon intrastate traffic, provided such rates are not confiscatory, but are reasonably remunerative. Section 142 of our Constitution expressly confers such power upon the Legislature.

Upon the second and third propositions, which are that the statute in question is presumptively valid, and that the burden of proving that the rates therein fixed are unreasonable is upon defendant, counsel for the railway company, while stating that these questions are not of controlling importance in view of the state of the proof, argues that such presumption does not obtain in this case, and that the burden is upon the state to show that the rates fixed by said statute are reasonable. No authorities are cited in support of these contentions, and we believe none exist. We know of no exception to the general rule that a statute is presumptively valid, and will be upheld unless it clearly contravenes the organic law of the state or of the United States or a valid statute or treaty thereof. This is so elementary as to require the citation of no authorities, but see Sutherland on Statutory Construction, p. 417; 2 Lewis' Sutherland Statutory Construction (2d Ed.) § 497; In re Spencer, 149 Cal. 396, 86 Pac. 896, 117 Am. St. Rep. 137, 9 Am. & Eng. Ann. Cas. 1105. From the opinion in the latter case, we quote: “The presumption always is that an act of the Legislature is constitutional, and, when this depends on the existence or nonexistence of some fact or state of facts, the determination thereof is primarily for the Legislature, and the courts will acquiesce in its decision, unless the error clearly appears. Bourland v. Hildreth, 26 Cal. 184;State University v. Bernard, 57 Cal. 612;Matter of Madera Irrigation District, 92 Cal. 310, 28 Pac. 272, 675, 14 L. R. A. 755, 27 Am. St. Rep. 106;Sinking Fund Cases, 99 U. S. 718, 25 L. Ed. 496; 1 Tiedeman on Police Power, 10, note; Cooley on Constitutional Limitations (7th Ed.) 228. ‘Every possible presumption is in favor of the validity of a statute, and this continues until the contrary is shown beyond a rational doubt. One branch of the government cannot encroach on the domain of another without danger. The safety of our institutions depends in no small degree on a strict observance of this salutary rule.’ Sinking Fund Cases, 99 U. S. 718, 25 L. Ed. 496. ‘The delicate act of declaring an act of the Legislature unconstitutional and void should never be exercised unless there is a clear repugnancy between the statute and the organic law. * * * In a doubtful case the benefit of the doubt is to be given to the Legislature; but it is to be remembered that the doubt to which this rule of construction refers is a reasonable doubt, as distinguished from vague conjecture or misgiving.’ Bourland v. Hildreth, 26 Cal. 184.”

This brings us to the main and controlling proposition in the case, which involves the question of the reasonableness of the rates thus established. Does the...