CHICAGO, B & Q R. CO. v. CRAM(1913)
[228 U.S. 70, 71] The state of Nebraska enacted a law requiring railroads conveying live stock to convey the same at a rate of speed so that the time consumed in a journey from the initial point of receiving the stock to the point of feeding or destination should not exceed one hour for each 18 miles travel, including the time of stops at stations or other points. It is provided that where the initial point is not a division station, and on all branch lines not exceeding 125 miles in length, the rate of speed shall be such that not more than one hour shall be consumed in traversing each 12 miles of the distance, including stops at stations or other points, from the initial point to the first division station or over said branches. The time consumed in picking up and setting out, loading or unloading stock at stations, shall not be included in the time required.
It is further provided that upon branch lines not exceeding 125 miles in length, live stock of less than six cars in one consignment, the railroad company may designate three days in each week as stock-shipping days, and publish and make public the days so designated. After notice of ten days of the days selected and designated, the schedule provided in the act shall only apply to such stock-shipping days. It is provided that a carrier 'violating any provisions of the act shall pay to the owner of such live stock the sum of $10 for each hour for each car it extends or prolongs the time of transportation beyond the period here limited as liquidated damages, to be recovered in an ordinary action, as other debts are recovered.' The act was approved March 30, 1905. Mebraska Session Laws 1905, chaps. 107, 506.
Defendant in error brought an action against plaintiff in error in the district court of Garfield county, for the sum of $1,770, being the aggregate of twenty-five violations of the act for stock delivered to the railroad July 14, [228 U.S. 70, 72] 1905, and subsequent dates, for transportation in full carloads, each violation being made a cause of action, the amount of each varying with the time of prolongation of the transportation of the stock.
There was alleged in the cause of action no ground of recovery other than the statute and the delay in the transportation of the stock. In other words, the time consumed in the transportation of the stock, such time being given and alleged to be 'longer than permitted by the statutes of Nebraska, to the damage of the plaintiff . . . as provided for by statutes.'
A demurrer was filed to the petition, charging that the statute violated the due process and equality clauses of the 14th Amendment of the Constitution of the United States; that the plaintiff (defendant in error) sought 'to recover property or money from the defendant without its consent and for the private use of the plaintiff, without compensation, and which recovery, if had, would amount to confiscation of the property of the defendant, in violation of the provisions of article 14 of the Amendments of the Constitution of the United States; that the recovery, if permitted, would be the recovery of a penalty under an act of the legislature which is penal in its character, and was not such a right as the plaintiff could have or enforce, in violation of 5, art. 8, of the Constitution of Nebraska.'
The demurrer was overruled and the defendant answered, alleging the following: The shipments were duly and properly made without unnecessary delay, and the consignments carried were each and all duly delivered to the consignee in accordance with the contracts made for the shipment of the stock, and without any fault or negligence on the part of the defendant company.
A written contract for each shipment was duly made and entered into by plaintiff and defendant, by which it was contracted and agreed that the shipments would [228 U.S. 70, 73] not be carried within any specified time, nor to arrive at destination for any particular market.
The damages sought to be recovered are in reality a penalty or forfeiture, and that a recovery by plaintiff would be in violation of the due process and equal protection clauses of the 14th Amendment of the Constitution of the United States.
The plaintiff's cause of action is for the recovery of a penalty sought to be imposed upon the defendant contrary to the provisions of article 8, 5, of the Constitution of Nebraska, and plaintiff had no right or authority under the law to prosecute the action, or to recovery therein.
An amended answer was filed which repeated the above, and alleged that the stock was accepted and carried according to the laws, rules, and usages that regulated and governed common carriers, and in accordance with the schedules for the movement of trains, as established and in force at the times the shipments were made. The line of the defendant's railroad was alleged, the manner of conducting its business, the times of receiving the various shipments, their arrival at particular stations and at destination.
A replication was filed to the answer, denying its allegations.
The case was tried by the court without a jury, and judgment was rendered for plaintiff in the sum of $1,640 and costs.
The supreme court decided that the judgment was excessive in the amounts of $250 and $170, and those sums, in accordance with the order of the court, were remitted by the plaintiff, and with those reductions the judgment was affirmed. 84 Neb. 607, 26 L.R.A.(N.S.) 1022, 122 N. W. 31, 85 Neb. 586, 26 L.R.A.(N.S.) 1028, 123 N. W. 1045, 19 Ann. Gas. 170.
Messrs. Halleck F. Rose, Jhn F. Stout, and James E. Kelby for plaintiff in error.
[228 U.S. 70, 77] Messrs. E. J. Clements and S. H. Cowan for defendant in error.
Statement by Mr. Justice McKenna:
[228 U.S. 70, 81] Mr. Justice McKenna delivered the opinion of the court, after stating the case as above:
The case is here in a simple aspect. There was no attempt made to explain or justify the delays in the shipments, and any attack on the statute on the ground that it includes delays resulting from the act of God, or cause over which the carriers have no control, is precluded by the construction put upon the act by the supreme court of the state.
The only proposition, then, which is presented, is whether the statute is beyond the power of government, and therefore offends the 14th Amendment of the Constitution of the United States by depriving plaintiff in error of its property without due process of law.
This is contended upon two grounds: 1. That statute, as considered by the supreme court of the state, is a legislative determination of the quantum of damages arising from a breach of a private contract for the shipment of live stock, and a legislative determination of damages wholly distinct and apart from the exercise of police power, and not a punitive measure to enforce compliance with the commands of the statute. 2. The statute, being declared of such character, is 'a usurpation of functions which are exclusively judicial, contrary to the law of the land,' and repugnant to the provisions of the 14th Amendment.
It is the concession of the contentions that had the statute been considered by the supreme court a police regulation, the objection made to it would be without [228 U.S. 70, 82] foundation. But, meeting the effect of the concesion, plaintiff in error asserts that if the court had so ruled, defendant in error would have had no right of action, because, under 5, article 8, of the Constitution of the state, all penalties must be appropriated to the use and support of the common schools.
The court found no conflict between the law and the Constitution of the state. Section 5, article 8, however, was not discussed in any of the opinions. Other provisions of the Constitution were considered and the contentions based on them decided to be untenable. The omission is not important to our inquiry, and we shall assume, as plaintiff in error contends, that the court regarded the statute as giving compensation for damages for injuries suffered, rather than penalties for omission of duties prescribed. It does not follow, however, that the court decided that the statute was not passed in exercise of the power of the state to regulate the conduct of the carriers in the performance of their duties to the public. The opinion of the court makes the contrary manifest. The court said: 'In the instant case the enforcement of the law, as we view the record, will not deprive defendant of any constitutional guaranty, state or national. Defendant's property is affected by a public interest; having devoted that property to a use in which the public have an interest, it must, to the limit of the interest thus acquired by the public, submit to the control of such property for the public good. . . . The public is interested not only in being permitted to have its property transported for a reasonable compensation, but also in having that property, especially if subject to rapid depreciation, transported with reasonable promptness and care. . . . It is a matter of common knowledge that live stock confined in a freight car deteriorates in condition, and that if the animals are to be placed on market within a short time of the termination of the transportation, the depreciation is not confined to a [228 U.S. 70, 83] shrinkage in weight, but to many other factors difficult to prove, but actually existing, and seriously affecting the market value of said property. As the damage accruing from the protracted confinement of stock is difficult to prove with reasonable exactitude, and yet always exists, the legislature has the power to provide for liquidated damages. Such legislation is not unsound in principle and has been upheld in many courts.' [84 Neb. 611, 26 L.R.A. (N.S.) 1022, 122 N. W. 31.]
The court, in illustration of its views and the quality of the statute, compared it to 4966 of the Revised Statutes of the United States (U. S. Comp. Stat. 1901, p. 3415), which provides for a liability of $100 for the first infringing performance of a copyrighted dramatic piece, and $50 for the second performance, as, the court said, 'a reasonable liquidation of damages which the proprietor had suffered from the wrongful acts of the defendant.'
The court also adduced two examples from statutes of the state, sustained by decisions, in both of which $50 was given as liquidated damages; in one, against an officer for collecting a fee greater than allowed by law; in the other, against a mortgagee for failing to release a chattel mortgage; and $500 against an officer for rearresting a person after his discharge on habeas corpus.
Answering the objection that the legislature might subject an occupant of a public office to damages for particular unlawful acts, and not have such power over others, the court said that the reason applied as well to 'like provisions in statutes passed to regulate public carriers in the transaction of their business.'
It is clear from the excerpts from the opinion of the court that it considered the statute as passed to regulate public carriers, and to give damages against them for the omission of the duties prescribed by it, which, though existing, could not be exactly estimated or proved. The [228 U.S. 70, 84] court, therefore, only announced and applied the principle of liquidated damages. It would seem, too, by the examples it adduced from other statutes of the state, to reject the view asserted by plaintiff in error, that even if the statute be regarded as imposing penalties upon the carriers, it was thereby made to conflict with 5, article 8, of the state Constitution, and could not be made payable to the party injured. This was declared in Clearwater Bank v. Kurkonski, 45 Neb. 1, 63 N. W. 133, and sums provided to be recovered by other statutes were decided in other cases to be in the nature of penalties. Graham v. Kibble, 9 Neb. 184, 2 N. W. 455; Phoenix Ins. Co. v. Bohman, 28 Neb. 251, 44 N. W. 111; Phoenix Ins. Co. v. McEvony, 52 Neb. 566, 72 N. W. 956; Deering v. Miller, 33 Neb. 655, 50 N. W. 1056. These cases are distinguishable from those cited by plaintiff in error in which the court disapproved a statute which purported to give double damages, and the court, in the case at bar, explicitly distinguished them from cases in which liquidated damages were provided for. In other words, the court decided that the statute imposed only compensatory damages, fixing them at a sum certain because of the difficulty 'of the ascertainment of the actual damages suffered by the aggrieved person.'
We need not extend the discussion. We repeat, the case is here in a simple aspect. Two propositions only are involved: (1) the power of the legislature to impose a limitation of the time for the transportation of live stock; (2) to provide a definite measure of damages which may be difficult to estimate or prove. It is too late in the day to deny the possession of the first power, and we think the other is as fully established, and that the statute was enacted to meet conditions which had arisen from the conduct of carriers, and which, in the judgment of the legislature, demanded a remedy. And the court confined the act strictly to culpable violation of its requirements. To the plea of extra expense which might be incurred by [228 U.S. 70, 85] obedience to the statute, the court said it could be compensated by extra charge.
The contention is made that the statute impairs the obligation of the contracts which existed between plaintiff in error and defendant in error; but that contention was not made in the court below and cannot therefore be made here. Besides, there is no evidence of the contracts in the record. Contracts were pleaded, and there appears to have been some attempt to introduce them in evidence, but unsuccessfully, and they were stricken from the bill of exceptions. But, assuming the contracts may be considered on this record, a complete answer to the contention that the statute impairs their obligation is, they were made subsequently to the statute, and therefore are subject to it.