State v. Boston & M. R. R.

• Decision Date: 02 November 1909
• Citation: 74 A. 542,75 N.H. 327
• Parties: STATE v. BOSTON & M. R. R.
• Court: New Hampshire Supreme Court

74 A. 542

75 N.H. 327

STATE

v. BOSTON & M. R. R.

Supreme Court of New Hampshire. Rockingham.

Nov. 2, 1909.

Transferred from Superior Court, Rockingham County; Pike, Judge.

Information in equity by the Attorney General, in behalf of the state, against the Boston & Maine Railroad to restrain defendant from demanding excessive rates. Questions of law on demurrer, and answer transferred from the superior court. Demurrer overruled.

Information in equity, asking for an injunction to restrain the defendants from demanding or receiving rates in excess of the maximum rates established by law for the transportation of freight upon and over any of the lines of railroad operated by them within the state under the authority conferred by chapter 100, p. 70, Laws 1883, chapter 5, p. 35, Laws 1889, and chapter 156, Pub. St. 1891. The defendants filed a demurrer and answer.

Edwin G. Eastman, Atty. Gen., for the State.

Mitchell, Foster & Lake and Branch & Branch, for defendant.

BINGHAM, J. This is an information Drought by the Attorney General in behalf of the state, in which he gives the court to understand and be informed that the defendants are a public service corporation, operating railroads by virtue of leases or anions made and sanctioned under acts of the Legislature passed in 1883 and 1889, and incorporated in the Public Statutes of 1891; that the authority conferred for leasing or uniting under the first act was granted upon the condition that the rates for fares and freights on lines leased or united thereunder should not be increased over those in existence August 1, 1883; that under the second act it was conferred upon the condition that the rates in existence at the time of the passage of the act should not be increased on lines leased or united under it; that under the Public Statutes of 1891 the authority conferred was upon the condition that the rates upon and over a railroad leased under its provisions or upon and over a railroad passing into the possession of a new corporation formed by a union of two or more corporations should not be increased above those in existence July 24, 1889; that, adopting and acting under the provisions of said laws, the defendants have become the lessees of various lines of railways, and as such lessees are operating 906 out of a total of 1, 190 miles of railway in the state; that their system reaches every city and large town in the state, and controls the transportation at all points therein except a few north of the White Mountains; that, by leasing and uniting under the authority conferred by said laws, the defendants accepted the conditions thereof as to maximum rates which it might charge for fares and freights on all lines so leased or united and now operated by them; that, notwithstanding the conditions and limitations imposed by said acts and accepted by the defendants, they have unlawfully increased the rates for freight on all the lines leased or united under each of said acts beyond the maximum charges therein authorized, and since 1903 have unlawfully demanded and received, and now unlawfully demand and receive, from citizens of New Hampshire, and the public generally, upon all commodities transported over their leased or united lines, rates for freight in excess of the rates authorized and established by law, to the great damage of the state, of all its citizens, and of the people generally within the state. The Information concludes with the following prayers: (1) That the defendants be required to answer forthwith; (2) that certain freight schedules be filed; (3) that hearings be had without delay; (4) that the defendants, their servants and agents, be strictly enjoined and commanded not to demand, receive, or collect from citizens of New Hampshire or the public generally rates for the transportation of freight upon or over any of the lines so leased or united, in excess of the maximum rates established by law; and (5) for such other relief as may be just.

The defendants have filed an answer and demurrer, and insist that the proceeding should be dismissed for the reasons (1) that there is an adequate remedy at law; (2) that the Attorney General has no authority to institute this proceeding, that in such case he can only proceed by quo warranto under chapter 240 of the Public Statutes of 1891, for a forfeiture of the grant; (3) that the Railroad Commission, under chapter 155 of the Public Statutes of 1891, is the only tribunal given authority to institute a proceeding of this nature; (4) that the state has lost its right to enforce the provisions of the act relating to maximum rates through laches, acquiescence, and waiver; (5) that no ground is stated for the exercise of the equity powers of the court; (6) that the lines leased by the defendants form parts of interstate routes; (7) that the authority to regulate commerce between the states is exclusively vested in Congress, the right of the state in the regulation of rates being limited to intrastate business; (8) that it does not appear, but that the increase in rates made by the defendants relates wholly to interstate transportation; (9) that the true construction of the statutes will not sustain the information, and, when so construed, the only effect of the provision as to rates is to inhibit the use of the rights resulting from lease or union to increase them. At the argument of the cause the state waived its prayer for discovery, and the first question we will consider is the one raised by the ninth objection of the defendants, pertaining to the construction of the statutes upon which the proceeding is founded.

Section 17, c. 5, p. 41, Laws 1889, and section 42, c. 156, Pub. St. 1891, are, so far as the questions in this case are concerned, merely re-enactments of a part of section 17, c. 100, p. 74, Laws 1883. The authority to lease and unite roads and to establish rates for fares and freights conferred by chapter 100, p. 70, Laws 1883, was granted upon the following condition: "Provided, that the rates for fares and freights existing August 1, 1883, shall not be increased on any part of the roads so leased or united, and the decrease in the operating expenses consequent upon the leasing or uniting of any roads shall be met from time to time by a reasonable and just reduction of fares and freights." There is no divergence of opinion among counsel that in the construction of this act its meaning is to be ascertained from the language used, viewed in the light of the circumstances in which it was passed. When so viewed, the defendants' contention is that the act does not provide for an establishment of maximum rates; that its only purpose is to inhibit the use of the powers resulting from lease or union to arbitrarily increase rates; and that this is manifest from the provision in the statute that a "decrease in the operating expenses consequent upon the leasing or uniting of any roads shall be met from time to time by a reasonable and just reduction of fares and freights"; that, "provision being made in express terms for a reduction of rates to correspond with anticipated reduced cost of operation under leases or unions, it logically follows, and is plainly implied, that Increased cost of operation might be met * * * through an increase of rates." In other words, that, as the last clause in this section of the act expressly provides for a reduction of rates in case a lease or union should result in a decrease of operating expenses, there must by implication be read into the preceding clause a limitation upon the prohibition there stated, restricting its meaning simply to a prohibition against an arbitrary or unreasonable increase of rates, leaving it open to railroads taking the benefits of the act to reasonably increase their rates for any cause.

If this contention is sound, and the act does not provide for a maximum schedule beyond which the rates cannot be raised, then the clause in question would seem to serve no useful purpose; for the act establishing the Board of Railroad Commissioners, which became a law on the same day as chapter 100, and, as the defendants' counsel contend, was a companion piece of legls lation with it, provides that it "shall be the duty of said board to fix tables of maximum charges for the transportation of passengers and freights, * * * and shall change the same from time to time as in the judgment of said board the public good may require." Laws 1883, p. 79, c. 101, § 4. If the defendants' construction were to be given the statute, it would be reasonable to suppose that the Legislature, having the two measures under consideration at the same time, would have omitted the provision as to rates from chapter 100, and left the question of maximum rates to be regulated by the Railroad Commissioners under chapter 101. This, bow-ever, they did not do; and a resort to the proceedings of the Legislature leading up to the enactment of the law clearly shows that the language used was not intended to convey the meaning which the defendants seek to place upon it. On the contrary, it appears that it was intended to limit the power to increase rates on roads leased or united under the act to the maximums staled in the schedules referred to in section 17. An investigation of the legislation on the subject discloses that in the original bill presented to the Legislature, of which chapter 100 is a redraft, the provision in question read as follows: "Provided, that the rates for fares and freights shall not be increased on any part of the road of said new corporation by such leasing or uniting." In the hearings before the railroad committee of the house, when it had this legislation under consideration, the clause "by such leasing or uniting" was objected to by the opponents of the measure, as eliminating from the prohibition all its restrictive qualities. In the redraft of the bill these words were stricken out. and this clause was made to read: "Provided that the rates for fares...