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    MCCHORD v. CINCINNATI, N. O. & T. P. RY. CO., 183 U.S. 483 (1901)

    U.S. Supreme Court

    MCCHORD v. CINCINNATI, N. O. & T. P. RY. CO., 183 U.S. 483 (1901)

    183 U.S. 483

    CHARLES C. McCHORD, James F. Dempsey, and John C. Wood, Appts.,
    v.
    CINCINNATI, NEW ORLEANS, & TEXAS PACIFIC RAILWAY COMPANY.

    CHARLES C. McCHORD, James F. Dempsey, and John C. Wood, Appts.,
    v.
    LOUISVILLE & NASHVILLE RAILROAD COMPANY.

    CHARLES C. McCHORD, James F. Dempsey, and John C. Wood, Appts.,
    v.
    LOUISVILLE, HENDERSON, & ST. LOUIS RAILWAY COMPANY.

    CHARLES C. McCHORD, James F. Dempsey, and John C. Wood, Appts.,
    v.
    CHESAPEAKE & OHIO RAILWAY COMPANY.

    CHARLES C. McCHORD, James F. Dempsey, and John C. Wood, Appts.,
    v.
    SOUTHERN RAILWAY COMPANY in Kentucky.

    Nos. 141-145.
    Argued January 7, 8, 1901.

    Ordered for reargument March 25, 1901.

    Reargued November 11, 12, 1901

    These are appeals from the final decrees of the circuit court of the United States for the district of Kentucky, perpetually 484 [183 U.S. 483, 484]   enjoining Charles C. McChord and others, railroad commissioners of the state of Kentucky, from doing any of the things required by, or from taking any action whatever against complainants under, a certain act of the general assembly of the commonwealth of Kentucky, approved March 10, 1900, which is entitled and reads as follows:

    All the bills sought the same relief, and their averments, excepting those in respect of alleged contracts with the state in relation to rates set up in the bills of the Louisville & Nashville Railroad Company and of the Cincinnati, New Orleans, & Texas Pacific Railway Company, were in substance the same. [183 U.S. 483, 486]   The act of March 10, 1900, was set out in full, its provisions recapitulated, and complainants' view of the legal effect thereof given. The 3d paragraph was: 'All of your orator's rates charged, collected, or received within the state of Kentucky are just and reasonable, and have not been sufficient for many years to give it a fair return upon the reasonable value of its investment, notwithstanding it has at all times operated its property with the strictest economy and in the most skilful manner.'

    It was then averred that it was the duty of the railroad commission to see that the laws relating to all railroads, except street, were faithfully executed, and to exercise a general supervision over the railroads of the state; that its functions were administrative; that it was not established as a court; and that under the state Constitution it could not be permitted to exercise judicial powers. That all common carriers were subject only to the requirement that their rates should be just and reasonable, and they were in case of controversy entitled to have the judg- ment of the courts on that question; but that the act referred to singled out railroad corporations, and deprived them of any opportunity to have a judicial determination of the reasonableness of their rates when disputed, substituted the nonjudicial determination of the railroad commission, and subjected them to penalties, there being no infliction of penalties provided as to other common carriers. That if defendants be permitted to proceed under the act, each complainant 'will be compelled to charge the rates fixed by them, without any opportunity for a judicial investigation and determination as to their reasonableness, and it will thus be deprived of the lawful use of its property, and, in substance and effect, of its property itself, without due process of law, and will also be denied the equal protection of the laws, in violation of 1 of article 14 of the Amendments to the Constitution of the United States.'

    It was further averred that the act was in conflict with clause 3 of 8 of article 1 of the Constitution of the United States, giving Congress the exclusive power to regulate commerce among the states, and with the acts of Congress in that behalf. [183 U.S. 483, 487]   The bills then continued:

    The cases were disposed of on demurrer.

    The Constitution of the state of Kentucky provided:

    The following are sections of the General Laws of Kentucky of 1894:

    Messrs. David W. Baird, Robert J. Breckinridge, Lewis McQuown, Zack Phelps, and Aaron Kohn for appellants.

    Messrs. Walker D. Hines, James P. Helm, Alexander Pope Humphrey, Helm Bruce, Edward Colston, W. H. Wadsworth, H. W. Bruce, Thomas K. Helm, and A. M. J. Cochran for appellees.

    Mr. Chief Justice Fuller delivered the opinion of the court:

    By the decrees the railroad commission of the commonwealth of Kentucky was permanently restrained from proceeding under the act of March 10, 1900, which was alleged and held to be unconstitutional.

    Conceding that the mere fact that a duly enacted law is unconstitutional does not entitle a party to relief by injunction against proceedings in compliance therewith, it is contended that ground of equity jurisdiction existed here in the want of [183 U.S. 483, 495]   adequate remedy by the ordinary processes of law for the threatened consequences of the exercise of the power to fix rates in multiplicity of suits and irreparable injury.

    It is insisted that according to the terms of the act the order of the commission fixing the rate, toll, or compensation which the railroad companies may charge is self-executing, and that no duty to enforce it is imposed on the commission; that the companies are shut up by the act to the final determination of the commission that they have charged more than a just and reasonable rate; and that on the trial of indictments for failure to observe the rates made by the commission the courts cannot entertain any inquiry as to the reasonableness of the rates so fixed, because such inquiry is unwarranted by the statute, and because such an investigation would be illusory and worthless; and that, even if the question of constitutionality could be raised in defense, yet that if such order be permitted to be entered of record and notified as provided, the companies, if they do not comply, will be at once exposed to innumerable prosecutions, and to financial ruin by the accumulation of penalties before a judicial decision as to the validity of the statute could be had, if it should then happen that the statute is upheld.

    However all this may be, we think it is not to be doubted that these bills cannot be maintained if it appear that the commission is charged with the duty of enforcing the orders it may enter fixing rates. The objection that before this is done the commission is required to exercise judicial functions in determining that the companies have charged or received more than a just and reasonable rate goes to the validity of the act. The fixing of rates is essentially legislative in its character, and the general rule is that legislative action cannot be interfered with by injunction.

    It is true that in Railroad Commission Cases, 116 U.S. 307 , sub nom. Stone v. Farmers' Loan & T. Co. 29 L. ed. 636, 6 Sup. Ct. Rep. 334, 388, 1191, the suit was brought to enjoin the railroad commission of Mississippi from proceeding under the provisions of a certain statute therein mentioned against a railroad company, but the question of jurisdiction does not seem to have been raised. The case was considered on its merits, and the bill di- [183 U.S. 483, 496]   rected to be dismissed. Mr. Chief Justice Waite, speaking for the court, among other things, said: 'As yet the commissioners have done nothing. There is, certainly, much they may do in regulating charges within the state, which will not be in conflict with the Constitution of the United States. It is to be presumed they will always act within the limits of their constitutional authority. It will be time enough to consider what may be done to prevent it when they attempt to go beyond.'

    In New Orleans Waterworks Co. v. New Orleans, 164 U. . 471, 482, 41 L. ed. 518, 524, 17 Sup. Ct. Rep. 161, 165, the general rule was stated and applied, and Mr. Justice Harlan, who delivered the opinion of the court, said: 'We repeat that when the city council shall pass an ordinance that infringes the rights of the plaintiff, and is unconstitutional and void as impairing the obligation of its contract with the state, it will be time enough for equity to interfere, and by injunction prevent the execution of such ordinance. If the ordinances already passed are in derogation of the plaintiff's contract rights, their enforcement can be prevented by appropriate proceedings instituted directly against the parties who seek to have the benefit of them. This may involve the plaintiff in a multiplicity of actions. But that circumstance cannot justify any such decree as it asks.'

    The rule was also applied by Mr. Justice Field in Alpers v. San Francisco, 32 Fed. 503, where complainant sought an injunction to restrain the passage of an ordinance which he alleged would impair the obligation of a contract he had with the city. Mr. Justice Field said: 'This no one will question as applied to the power of the legislature of the state. The suggestion of any such jurisdiction of the court over that body would not be entertained for a moment. The same exemption from judicial interference applies to all legislative bodies, so far as their legislative discretion extends. . . . The courts cannot in the one case forbid the passage of a law nor in the other the passage of a resolution, order, or ordinance. If by either body, the legislature or the board of supervisors, an unconstitutional act be passed, its enforcement may be arrested. The parties seeking to execute the invalid act can be reached by the courts, while the legislative body of the state or of the munici- [183 U.S. 483, 497]   pality, in the exercise of its legislative discretion, is beyond their jurisdiction. The fact that in either case the legislative action threatened may be in disregard of constitutional restraints, and impair the obligation of a contract, as alleged in this case, does not affect the question. It is legislative discretion which is exercised, and that discretion, whether rightfully or wrongfully exercised, is not subject to interference by the judiciary.'

    In Southern Pac. Co. v. California Railroad Comrs. 78 Fed. 236, the law of California provided that the commissioners might 'enforce their decisions, and correct abuses through the medium of the courts;' and, in substance, that after the rate was made by the commission, a copy of the order should be served on the corporation affected thereby, and that twenty days thereafter the rate should take effect. A bill was filed before the twenty days had expired; and Mr. Justice McKenna, then Circuit Judge, held that it was the duty of the commissioners to enforce the rate, and that an injunction would lie. The railroad commission had made an order reducing the grain rates of the company 8 per cent, and had passed a resolution declaring that its general charges were 25 per cent too high, and that 'this board proceed at once to adopt a revised schedule of rates in accordance here with, in order that the same may be in force before January 1, 1896.' The court enjoined the enforcement of the 8 per cent reduction, which had already been made, but declined to restrain the 25 per cent reduction, because no decisive action had been taken.

    Reading the various sections of the General Statutes of Kentucky, set forth in the statement preceding this opinion, as in pari materia with the act of March 10, 1900, which should be done, since they are parts of one system, having the same general objects in view, we think it apparent that the duty devolves on the commission to enforce the rates it may fix under the latter act. By 816 extortion was defined to be charging more than a just and reasonable rate. Section 817 defined unjust discrimination, and 818 forbade undue or unreasonable preference.

    Section 819 denounced the same penalties on conviction of [183 U.S. 483, 498]   the offense of extortion, or of unjust discrimination, or of unreasonable preference, and provided for prosecution by indictment, or by action in the name of the commonwealth, on information filed by the board of railroad commissioners; that the railroad companies should be liable in damages to the party aggrieved; and also that prosecution by indictment should only be had on the recommendation or request of the railroad commission.

    By 829 the commission was empowered to hear and determine complaints under 816, 817, and 818, and to enforce their awards in the courts.

    The duty was imposed on the commission to initiate indictments under 820 for charging greater compensation, in the aggregate, for a shorter than for a longer haul.

    Section 821 made it the duty of the commission to see that the laws relating to railroads should be faithfully executed, and to exercise a general supervision over the railroads of the state.

    So that unless the act of March 10, 1900, operated to repeal the provisions of the prior law, by withdrawing from the commission the duty of enforcing the rates it might fix, it was its duty so to do, and indictments were to be found at its instance.

    Section 816 read thus: 'If any railroad corporation shall charge, collect, or receive more than a just and reasonable rate of toll or compensation for the transportation of passengers or freight in this state, or for the use of any railroad car upon its track or upon any track it has control of or the right to use in this state, it shall be guilty of extortion.'

    In Louisville & N. R. Co. v. Com. 99 Ky. 132, 33 L. R. A. 209, 35 S. W. 129, this section was considered. The court held that the section could not be enforced as a penal statute for want of certainty, and said:

    The court referred to and quoted from Chicago, B. & Q. R. Co. v. Jones, 149 Ill. 361, 24 L. R. A. 141, 4 Inters. Com. Rep. 683, 37 N. E. 247; and Chicago, B. & Q. R. Co. v. People, 77 Ill. 443, in which it was held under a similar statute that the want of certainty in lack of reference to a standard under its 1st section was obviated by its 8th section providing for the making by the railroad and warehouse commissioners of schedules of reasonable and maximum rates, which, being done, the supreme court of Illinois said: 'There will be a standard of what is fair and reasonable, and the statute can be conformed to and obeyed.'

    Such being the state of the law, the act of March 0, 1900, was passed.

    The mischief to be cured in respect of extortion, as defined by 816, was the want of certainty, and the remedy provided was the fixing of the rates by the railroad commission.

    In so providing, the act, while repeating many of the provisions of 819, did, indeed, omit reference to an action by way of information and to liability in damages, and it also [183 U.S. 483, 500]   omitted the provision that indictments should be made only on the recommendation or request of the railroad commission; but it does not therefore follow that it was the legislative intention, without any expression thereof in terms, to repeal so important a provision.

    Was the provision repealed by necessary implication? 'We say by necessary implication, for it is not sufficient to establish that subsequent laws cover some or even all of the cases provided for by it [ the prior law]; for they may be merely affirmative, or cumulative, or auxiliary.' Story, J., Wood v. United States, 16 Pet. 362, 10 L. ed. 995.

    Repeals by implication are not favored, and are only allowed to the extent that repugnancy exists, and, in order to give an act not clearly intended as a substitute for an earlier one the effect of repealing it, the implication of the intention to do so must necessarily flow from the language used, bearing in mind the necessity and occasion of the law. And where it is plain that the new law is in aid of the purposes of the old law, the latter will not be held to be abrogated except so far as there is palpable inconsistency.

    We do not think that it was intended to repeal the provision of 819 requiring indictments to be found only on the recommendation or request of the commission, and still less that it was intended to circumscribe in this particular the general duty of the commission to see that the laws relating to railroads should be faithfully executed.

    Dealing as we are with the statutes of Kentucky, we are gratified to find these views confirmed by the court of appeals of that commonwealth, in Illinois C. R. Co. v. Com. decided October 25, 1901, its opinion having been furnished us at the close of the argument, and since reported in 23 Ky. L. Rep. 1159, 64S.W.975.

    In that case the railroad company was indicted under 820, and fined for charging more for a shorter than a longer haul. The indictment was returned before the railroad commission had determined whether the company should be exonerated as provided by that section. The judgment was reversed, and Hobson, J., speaking for the court, said: [183 U.S. 483, 501]   'In the construction of statutes the cardinal aim of the court is to arrive at the intention of the legislature. The court will presume that the legislature meant something by all the provisions of the statute, and will endeavor to give them all a fair effect. If the legislature had intended indictments to be found for each offense, regardless of action by the railroad commission, we see no reason why the section might not have stopped with the first sentence defining the offense and providing for its punishment, for by the next section (Ky. Stat. 821) it is made the duty of the commission 'to see that the laws relating to all railroads, except street, are faithfully executed;' and under this provision it would be the duty of the commission to see to violations of the preceding section. . . . From the section as a whole it is clear that the legislature had in mind providing for the exoneration of the railroad from its provisions in proper cases, and exempting the carrier from criminal liability to this extent. It therefore provided for an investigation by the railroad commission, a determination by it whether it deemed it proper to exonerate the railroad, and for the enforcement of its decision by indictment by the grand jury in case the railroad was not exonerated. To allow the carrier to be indicted in advance of any action by the railroad commission under this section would be to deprive it of all opportunity for exoneration. The legislature had no such result in mind, but clearly aimed to secure to the carrier a hearing on this question.

    The 4th section of the act of the general assembly of [183 U.S. 483, 502]   Kentucky of April 6, 1882 (Acts 1881, p. 66, chap. 790), entitled 'An Act to Prevent Extortion and Discrimination in the Transportation of Freight and Passengers by Railroad Corporations, and in Aid of That Purpose to Establish a Board of Railroad Commissioners, and Define its Powers and Duties,' set forth in the edition of the Kentucky Statutes of 1887, p. 1021, and referred to by the court, provided for the infliction of penalties on railroad companies convicted of extortion or unlawful discrimination, and that the offender should be 'prosecuted by indictment or by action in the name of the commonwealth, upon information filed by the board of railroad commissioners;' and also that the companies should be liable in damages to the parties aggrieved. The act of March 0, 1900, does not appear to have been intended to change the settled legislative policy that indictments should be found on the recommendation of the commission.

    The result of these considerations is that the duty of enforcing its rates rests on the commission, and that none of the consequences alleged to be threatened can be set up as the basis of equity interposition, before the rates are fixed at all. Whether after they are determined their enforcement can be restrained is a question not arising for decision on this record, and we are not called on to dispose of other contentions of grave importance which were pressed in argument as if now requiring adjudication.

    Decrees reversed and cases remanded to the Circuit Court, with a direction to sustain the demurrers and dismiss the bills.

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