Beardsley v. New York, Lake Erie & Western Railroad

Majority

p. 230

Albert H. Beardsley, Respondent, v. The New York, Lake Erie and Western Railroad Company and John G. McCullough et al., as Receivers, Appellants.

(Argued January 29, 1900;

decided March 2, 1900.)

Headnote

Mileage Book Act, Unconstitutional as to Existing Corporations. The Mileage Book Act (L. 1895, ch. 1027), requiring railroad companies to issue mileage books under a penalty for refusal to do so, is unconstitutional as to corporations existing at the time of its enactment, since the statute is an illegal invasion of the property rights of such corporations, as declared by a decision of the United States Supreme Court.

Beardsley v. N. Y., L. E. & W. R. R. Co., 15 App. Div. 251 , reversed.

Appeal from a judgment of the Appellate Division of the Supreme Court in the third judicial department, entered March 2, 1897, affirming a judgment in favor of the plaintiff entered upon a decision of the court on trial at Special Term.

The nature of the action and the facts, so far as material, are stated in the opinion.

Frederick B. Jennings and Melville E. Ingalls, Jr., for appellants.

The Mileage Book Act is unconstitutional and void because it deprives the defendants of their property and liberty of contract without due process of law, and also deprives them of the equal protection of the laws, in violation of article 14, section 1, of the Federal Constitution and of article 1, section 6,' of the State Constitution. [L. S. & M. S. Ry. Co. v. Smith, 173 U.S. 684 .) The law is well settled that a state legislature has no power to regulate fares or freights from one state to another or even the fares within the state of persons traveling to another state. Any attempt to do so is in violation of the commerce clause of the Constitution. (Matter of State Freight Tax, 15 Wall.232; Cooley v. Board of Wardens, 12 How. [U. S.] 299 ; Welton v. Missouri, 91 U. S. 275 ; G. F. Co. v. Pennsylvania, 114 U. S. 196 ; W., etc., Ry. Co. v. Illinois, 118 U. S. 557 ; C. B. Co. v. Kentucky, 154 U. S. 204 ; Hall v. De Cuir, 95 U. S. 485 ; Robbins v. S. T. Dist., 120 U. S. 489 ; The Daniel Ball, 10 Wall. 557 .) The Mileage Book Act is not limited to purely local or internal

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transportation, but clearly attempts and was intended to regulate or affect interstate commerce within the rules as laid down by the decisions, and is unconstitutional and void. (Black on Interp. of Laws,. §§ 24, 26, 42; R. R. Comrs. v. R. R. Co., 26 Am. & Eng. R. R. Cas. 29; W., etc., Ry. Co. v. Illinois, 118 U. S. 557 ; F. L. & T. Co. v. R. R. Co., 24 Fed. Rep. 407 ; P. & S. S. Co. v. Pennsylvania, 122 U. S. 326 ; G. F. Co. v. Pennsylvania, 114 U. S. 196 ; Johnson v. H. R. R. R. Co., 49 N. Y. 455 .) The Mileage Book Act is unconstitutional and void, because it violates the provision of the Constitution which forbids the passage of an act impairing the obligation of contracts. (Pe ople v. O’Brien, 111 N. Y. 1 ; Ball v. R. R. R. Co., 93 Fed. Rep. 513 ; McKenna v. Edmundstone, 91 N. Y. 231 ,233 ; Matter of Comrs. of Central Park, 50 N.Y. 493 .)

H. C. Mandeville for respondent.

The regulation by .a state legislature of domestic railroad tariffs is not an interference with interstate commerce, in the constitutional sense, although -it may incidentally affect such 'commerce. (Munn v. Illinois, 94 U. S. 135 ; C., B. & Q. R. R. Co. v. Iowa, 94 U. S. 163 ; Peik v. C.& N. W. Ry., 94 U. S. 177 ; Shields v. Ohio, 95 U. S. 319 ; Trade Mark Cases, 100 U. S. 96 ; Stone v. F. L. & T. Co., 116 U. S. 333 ; Stone v. I. C. R. R. Co., 116 U. S. 347 ; Stone v. N. O. & N. E. R. R. Co., 116 U. S. 352 ; C., M. & S. P. Ry. Co. v. Becker, 32 Fed. Rep. 849 ; W., etc., Ry. Co. v. Illinois, 118 U. S. 557 .) The Mileage Book Law. is constitutional. (Munn v. Illinois, 94 U. S. 113 ; C., B. & Q. R. R. Co. v. Iowa, 94 U. S. 155 ; Peik v. C. & N. W. Ry., 94 U. S. 164 ; C., M. & St. P. R. R. Co. v. Ackley, 94 U. S. 179 ; W. & St. P. R. R. Co. v. Blake, 94 U. S. 180 ; Stone v. Wisconsin, 94 U. S. 181 ; People ex rel. v. B. & A. R. R. Co., 70 N. Y. 571 ; G. B. Co. v. Smith, 128 U. S. 179 ; B. E. S. R. R. Co. v. B. S. R. R. Co., 111 N. Y. 141 ; People v. Budd, 117 N. Y. 10 , 11.) Commerce is not interstate when its terminals lie within the same state, irrespective of whether the carrying is all done within such state or not. (Gibbons v. Ogden, 9 Wheat. 1 ;

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Ratterman v. W. U. T. Co., 127 U. S. 411 ; L. V. R. R. Co. v. Pennsylvania, 145 U. S. 192 .) All presumptions are in favor of the validity of an act of the legislature, and it is. the duty of the courts to so interpret such acts as that they may be constitutional, if such interpretation is possible. (N. Y. & O. M. R. R. Co. v. Van Horn, 57 N. Y. 477 ; Kerrigan v. Force, 68 N. Y. 385 ; Matter of N. Y. El. R. R. Co., 70 N. Y. 342 ; Matter of Gilbert El. Ry. Co., 70 N. Y. 367 ; People v. Comstock, 78 N. Y. 356 ; People v. Budd, 117 N. Y. 29 ; Curtin v. Barton, 139 N. Y. 513 ; Sage v. City of Brooklyn, 89 N. Y. 196 ; S. M. Co. v. M’Collock, 24 Fed. Rep. 668 ; Grenada County Suprs. v. Brogden, 112 U. S. 268 .),

This action was brought to recover the sum of $50 prescribed by chapter 1027 of the Laws of 1895,, entitled “ An act in relation to the issue of mileage boobs by railroad corporations,” as a penalty for the defendants’ refusal to issue to plaintiff a mileage book entitling the holder to-travel one thousand miles on the lines of their road, as directed by that statute. The complaint alleged the incorporation of the defendant railroad company; that on July 25th, 1893, the-individual defendants were appointed receivers of the defendant corporation, and have ever since continued to operate its. road ; that on July 8, 1895, the plaintiff tendered the defendants the sum of $20 and demanded that they issue to him a. mileage book entitling him to travel one thousand miles in accordance with the provisions of the statute mentioned, and that the defendants refused to issue such book. The defendants demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The.demurrer having been overruled, the defendants, under leave-given to them by the court for that purpose, served an answer-by which, after reserving and insisting that the complaint did not state facts sufficient to constitute a cause of' action, they set up several defenses which, for the disposition of this, appeal, it is unnecessary to detail. By consent, the action was. tried before the court without a jury. The trial court held

p. 233

that the statute of 1895 embraced within its provisions only intra-state transportation and was a valid exercise of legislative authority, and rendered judgment for the plaintiff for the amount of the penalty. The judgment was unanimously affirmed by the Appellate Division, and from the judgment of affirmance this appeal was taken.

There is very little for us to write in this case, for the decision of the Supreme Court of the United States in Lake Shore & M. S. Ry. Co. v. Smith ( 173 U. S. 684 ), rendered since the judgment of the Appellate Division, has practically foreclosed all discussion on the question of the constitutionality of statutes of the character of the one before us. In that case, there was before the court for review a statute of the state of Michigan, which enacted that railroad companies within that state should keep for sale one-thousand-mile tickets valid for two years at the price of $20 in the Lower Peninsula and $25 in the Upper Peninsula. The Supreme Court held, through Beckham, J., that the statute was not a valid exercise of the police power of the state, nor of the power of the state to establish maximum prices for the transportation of persons and property “ but an arbitrary enactment in favor of the persons spoken of (those who were able or willing to purchase one-thousand-mile tickets) who, in the legislative judgment, should be carried at less expense than the other members of the community.” It was further held that such legislation was a violation of that part of the Constitution of the United States which forbids the taking of property without due process of law; and, hence, invalid. It is not necessary nor would it be profitable for us to review the discussion or argument by which that result was reached. It is sufficient for us to recognize the point of the decision and that the decision is binding upon us. The statute before us cannot be differentiated in principle, and hardly in detail, from that decided by the Federal court to be in violation of the Constitution of the United States. The provisions of the Constitution of Michigan differ from those of the Constitution of this state. But the case cited was taken to the Supreme

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Court of the United States on appeal from a judgment of the state court. Whether the statute was in conflict with the State Constitution or not presented no question of a Federal nature, but one which it was not within the power of the Supreme Court to review, and so it is stated by Justice Peckham. * The case did present another Federal question, whether the statute had impaired the obligation of any contract entered into between the state and tlie railroad company. That question was not considered, and the decision proceeded solely on the ground that the statute was an illegal invasion of the property rights of the company. In obedience to the law, as declared by the Supreme Court of the United States, we must hold the statute of 1895 is invalid as to corporations existing at the time of its enactment.

The learned counsel for the respondent urges that the objection upheld in Lake Shore, etc., v. Smith was not taken or raised in this case in the courts below. We think this claim is untenable. - It is conceded by the respondent that the appellants, in their attack on the sufficiency of the complaint, did object that the statute was in contravention of both the Federal and State Constitutions, in that it took the defendants’ property without due process of law, but he asserts that the reasoning by which the Supreme Court arrived at its decision in the case cited was not presented. It was enough that the defendants called the attention of the court to the constitutional provision which it was claimed the statute contravened ; the reasoning or argument by which that claim was attempted to be supported is immaterial and would differ in different minds.

The judgment should be reversed and the complaint dismissed, with costs in all of the courts.

This case is necessarily governed by the principles laid down by the Supreme Court of the United States in Lake Shore & M. S. Ry. Co. v. Smith ( 173 U. S. 684 ). While I do not yield assent to the reasoning of that great court in that case, I am compelled to yield to its power and vote for reversal, but not for a dismissal of the complaint.

p. 235

As the action of the courts below was in accordance with the law of this state as it was, apparently if not actually, when they acted, the reversal should be with leave to the plaintiff to apply at Special Term for permission to discontinue without costs, on the ground that the further prosecution of the action has been made impossible by a controlling decision not rendered by a court of this state. (De Barante v. Deyermand, 41 N. Y. 355 ; Cole v. Rose, 65 How. Pr. 520 ; Wellington v. Claason, 9 Abb. Pr. 175 ; Winans v. Winans, 6 N. Y. S. R. 813; Honeywell v. Burns, 8 Cow. 121 ; Hart v. Storey, 1 Johns. 143 ; Merritt v. Arden, 1 Wend. 92 ; Van Buren v. Fort, 4 Wend. 209 ; Lackey v.. M’Donald, 1 Cal. 116 ; Labron v. Woram, 5 Hill, 373 ; Camp v. Gifford, 7 Hill, 169 .)

Parker, Ch. J., Gray, Bartlett, Martin and Werner, JJ., concur with Cullen, J.; Vann, J., concurs in result in memorandum.

Judgment reversed, etc.

Cases cited

Beardsley v. New York, L. E. & W. Railroad 15 App. Div. 251 N.Y. App. Div. 1897-03-03 p. 230
Lake Shore & Michigan Southern Railway Co. v. Smith 173 U.S. 684 SCOTUS 1899-04-17 p. 230, p. 233, p. 234
Welton v. Missouri 91 U. S. 275 SCOTUS p. 230
Gloucester Ferry Co. v. Pennsylvania 114 U. S. 196 SCOTUS 1885-04-13 p. 230, p. 231
Wabash, St. Louis & Pacific Railway Co. v. Illinois 118 U. S. 557 SCOTUS 1886-10-25 p. 230, p. 231
Covington & Cincinnati Bridge Co. v. Kentucky 154 U. S. 204 SCOTUS 1894-05-26 p. 230
Hall v. DeCuir 95 U. S. 485 SCOTUS p. 230
Robbins v. Shelby County Taxing District 120 U. S. 489 SCOTUS 1887-03-07 p. 230
The Daniel Ball 10 Wall. 557 SCOTUS p. 230
Philadelphia & Southern Steamship Co. v. Pennsylvania 122 U. S. 326 SCOTUS 1887-05-27 p. 231
Johnson v. Hudson River Railroad 49 N. Y. 455 N.Y. 1872-05-21 p. 231
People v. O'Brien 111 N. Y. 1 N.Y. 1888-11-27 p. 231
McKenna v. Edmundstone 91 N. Y. 231 N.Y. 1883-01-23 at 233 p. 231
In re Commissioners of Central Park 50 N.Y. 493 N.Y. 1872-12-10 p. 231
Shields v. Ohio 95 U. S. 319 SCOTUS p. 231
Stone v. Illinois Central Railroad 116 U. S. 347 SCOTUS p. 231
Stone v. New Orleans & Northeastern Railroad 116 U. S. 352 SCOTUS p. 231
Munn v. Illinois 94 U. S. 113 SCOTUS p. 231
Chicago, Burlington, & Quincy Railroad v. Iowa 94 U. S. 155 SCOTUS p. 231
Peik v. Chicago & North-western Railway Co. 94 U. S. 164 SCOTUS p. 231
Chicago, Milwaukee, & St. Paul Railroad v. Ackley 94 U. S. 179 SCOTUS p. 231
Winona & St. Peter Railroad v. Blake 94 U. S. 180 SCOTUS p. 231
Stone v. Wisconsin 94 U. S. 181 SCOTUS p. 231
Alling v. Fahy 70 N. Y. 571 N.Y. 1877-09-25 p. 231
Gibbons v. Ogden 9 Wheat. 1 SCOTUS 1824-03-02 p. 231
Ratterman v. Western Union Telegraph Co. 127 U. S. 411 SCOTUS 1888-05-14 p. 232
Lehigh Valley Railroad v. Pennsylvania 145 U. S. 192 SCOTUS 1892-05-02 p. 232
Hoffmanv. Union Ferry Co. 68 N. Y. 385 N.Y. 1877-02-18 p. 232
People ex rel. Hatfield v. Comstock 78 N. Y. 356 N.Y. 1879-10-07 p. 232
De Barante v. Deyermand 41 N. Y. 355 N.Y. 1869-12-21 p. 235
Cole v. Rose 65 How. Pr. 520 N.Y. Marine Ct. p. 235
Wellington v. Claason 9 Abb. Pr. 175 N.Y. Sup. Ct. p. 235
Honeywell v. Burns 8 Cow. 121 N.Y. Sup. Ct. p. 235
Cock v. Fellows 1 Johns. 143 N.Y. Sup. Ct. p. 235
Champenois v. White 1 Wend. 92 N.Y. Sup. Ct. p. 235
Champlin v. Petrie 4 Wend. 209 N.Y. Sup. Ct. p. 235