Court Opinion

ID: 6688723
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:35:17.937348+00
Date Added: 2024-06-11T16:01:02.661877
License: Public Domain

McCOY, J.
(dissenting). Under the construction of the Warehouse Act, in question in this case, contended for in the former dissenting opinion, I am of the view that the act is constitutional. Under the construction and effect given to the act by the majority opinion, I am of the view that it is unconstitutional and void, in so far as it attempts to make the bailor, as between the bailee and bailor, the conclusive owner of the grain. In this particular the act invades the province of the judiciary, or judicial branch of the government, thus depriving the courts of making judicial investigation of the facts as to ownership■ and awarding judgment according to the facts as revealed by such investigation, so as to, in effect, amount to a denial of due process of law. According to the general law of the land, when a bailee had accounted to, paid, and satisfied the true owner of the paramount title of the bailed property, on sound principles of equity and justice, and according to the dictates of good conscience and common honesty, that was considered, both 'in law and equity, as an accounting, in fact, to the bailor, and which accounting had the legal effect of extinguishing and satisfying the obligation of the bailee to make restitution of the subject of the bailment to the bailor. When the bailee has made such accounting to the paramount owner, such paramount owner steps out of the transaction as to' his rights, and the bailee by equitable assignment and subro-gation steps into the shoes of the paramount owner as to the rights and ownership of the bailed property.
In the case at bar the appellant, .as defendant, when sued by the bailor for the value of the share of grain in question, interposed and alleged as a defense that it had paid and satisfied the true owner for the value of such grain. If these facts were true, as alleged by appellant, at the time this action was commenced, appellant was the equitable owner of the share of grain in question and subrogated to all the rights of the paramount owner thereof, and which in equity and good conscience would entitle appellant to a verdict and judgment in his favor. The effect of *535the majority opinion is to deny and close the doors of the courts to judicial investigation of these facts as to appellant’s ownership by reason of the facts alleged in the answer; in other words, according to the majority opinion, the Legislature, beforehand and in advance, without a trial and without investigation, had already decided, arbitrarily, that the bailor was the conclusive owner of such grain. I cannot believe that such is due process of law. It is taking property out of the hands of the rightful owner without his consent and giving it to one not entitled thereto. In 8 Cyc. 820, the general rule is thus stated:
“The Legislature has-power to give greater effect to evidence than it possessed at common law, and in both civil and criminal proceedings it may declare what shall be prima facie evidence. On the other hand, it cannot prescribe what shall be conclusive evidence, as this would be an invasion of the province of the judiciary.” ,
In the case of People v. Rose, 207 Ill. 352, 69 N. E. 762, the general principle announced in Cyc. was quoted with approval:
“An act of the Legislature, which transf'er3 the property of one man to another without his consent, is not a constitutional exercise of legislative power, because, if effectual, it operates to deprive a man of his property without ‘due process of law.’ ” Taylor v. Porter, 4 Hill (N. Y.) 140, 40 Am. Dec. 274; Rohn v. Harris, 130 Ill. 525, 22 N. E. 587; Hoke v. Henderson, 15 N. C. 1, 25 Am. Dec. 677.
In Taylor v. Porter the court quoted with approval from Justice Story:
“We know of no case in which a legislative act, to transfer the property of A. to B. without his consent, has ever been held a constitutional exercise of legislative power in any state in the Union. On the contrary, it has been constantly resisted, as inconsistent with just principles, by every judicial tribunal in which it has been attempted to be enforced.”
In Hoke v. Henderson it was held that property rights cannot be transferred by legislative act from one person to another, even if the purpose of the enactment was lawful. In Dougherty v. Bethune, 7 Ga. 90, in a case where it was contended that an act of the Legislature made conclusive certain property rights in assignments of assets, the court said:
*536“The Legislature has no power to legislate the truth of facts [as to rights]. Whether the facts upon which rights depend are true or false is an inquiry for the courts to make, under legal forms; it belongs to the judicial department of the government. By the Constitution the legislative and judicial departments are distinct. A citizen is not estopped to deny, in the courts of the country, any mere fact which the Legislature may choose to recite. . If he was, the government would be a despotism, and the Legislature might be a tyi'ant/
In the legislative act in question in the case at bar the Legislature had no power to legislate the truth of and make conclusive the truth of the fact that the bailor was the owner of the property, as between the bailor and bailee. The property rights of the true owner and of the bailee, as the successor in interest of the true owner, could not thus be legislated away. Such fact of ownership is the subject of judicial investigation. In the case of M., K. & T. Ry. v. Simonson, 64 Kan. 802, 68 Pac. 653, 57 L. R. A. 765, 91 Am. St. Rep. 248, the court said:
“The theory on which all these cases proceed is that an act of the Legislature which undertakes to make a particular fact or matter in evidence involving the substantive right of the case conclusive upon the parties, and which precludes inquiry into the meritorious issues of the controversy, is an invasion of the judicial province and a denial of due process of law. The Legislature may regulate the form and the manner of use of the instruments of evidence, the media of proof; but it cannot preclude a party wholly from making his proof. A statute which declares what shall be taken as conclusive evidence of a fact is one which, of •course, precludes investigation into the fact, .and itself determines the matter in advance of all judicial inquiry. If such statutes can •be upheld, there is then little use for courts, and small room indeed for the .exercise of their functions.”
To the general rule above announced-there is a well-recognized exception in relation to estoppels. It seems to be conceded that the rule is well-stated in Cooley’s Const. Lirns. 453-526:
' “But there are fixed bounds to- the power of the Legislature oyer this subject which cannot- be exceeded. As to what shall be evidence and -which party shall assume the burden of proof in civil cases, its authority is practically unrestricted; but it has no *537power to establish rules which, under the pretense of regulating" the presentation of evidence, go so far as altogether to preclude a party from establishing his rights. Except in thosé cases which fall within the familiar doctrine of estoppel at the common law, or other reasons resting upon like reasons, it would not, we apprehend, be in the power of the Legislature to declare that a particular item of evidence should preclude a party from establishing his rights in opposition' to it. In judicial investigations the law of the land requires an opportunity for trial, and there can be no trial if only oné party is suffered to produce his proofs. A statute, therefore, which should make a tax deed conclusive evidence of a complete title and preclude the owner of the original title from showing" its invalidity, would be voidf because not being a law regulating evidence, but an unlawful confiscation of property.”
The question then suggests itself: Does the statute in question ‘Jail within the familiar doctrine of estoppel at common laza, or other reasons resting upon like reasons,” or does it fall within the class of statutes attempting to legislate a conclusive evidentiary fact as to the right of ownership of property that would prevent ■a party from wholly making his proof as to the real facts, and which in effect would amount to a denial of the right to a trial on the issue of ownership, and an effectual denial of due process of law? The very express wording of the act itself would-seem to indicate that it would fall within the latter class of statutes, for section 495 of the act reads:
“And such receipt shall be deemed '* * * conclusive evidence of the fact that the party to whom * * * issued, * * * is the owner of such grain”
—and this regardless of what the true facts as to ownership of ■such grain might be. There has been some criticism of the soundness of the opinion of the Kansas court in M., K. & T. v. Simonson Case in Yazoo Ry. Co. v. Bent, 94 Miss. 681, 47 South. 805, 22 L. R. A. (N. S.) 821, on the ground that the particular statute under consideration in the Kansas case involved only purely contractual matter which was inherently and properly the subject of estoppel, and did not in any manner involve a conclusive rule of evidence as to the ownership of property in conflict with the state and federal Constitutions as to due process of law. How*538ever this may -be, the soundness of the Kansas decision, as applied to a conclusive rule of evidence affecting constitutional property rights, so as to amount to a denial of due process of law, has never been questioned, but, on the contrary, has been approved by courts and law writers as embodying a sound legal doctrine. 8 Cyc. 821; People v. Rose, supra.
The statute under consideration in the Kansas case in substance provided that the wights expressed in. railway bills of lading, issued by .railway companies for property shipped, were conclusive, as between the railway company and the shipper. The Kansas court held this statute unconstitutional, and that the railway company, when sued for loss or damage to the freight represented by the bill of lading, notwithstanding the conclusive effect of the statute, should be permitted to show the true weight of the property, as a basis of recovery in such actions. In the Mississippi case the court had under consideration a statute in substance providing that the statements contained in bills of lading issued by railway companies were conclusive evidence in favor of bona fide holders for value of such bills of lading. This statute was held constitutional and not to be in violation of the constitutional provisions relating to due process of law, but that this statute fell within the exceptions as to estoppels mentioned in the foregoing quotation . from Cooley on Constitutional 'Limitations, on the ground and upon the reasoning that the statute did not involve the ownership of the property ait aill, but related to a purely substantive contractual matter within the voluntary control of the parties and properly and inherently the subject of estoppel, that the railway company and the shipper by the bill of lading having voluntarily fixed the weights, and the amount of the freight charge made by the company being fixed and gauged by such weights, it would then be unjust and inequitable and a ground for estoppel to permit the railway company to say that the weights were other than as stated in the bill of lading, and that it was within the pow.er of the Legislature to make such estoppel conclusive. The Mississippi _ case questions the soundness of the Kansas case on the ground that the Kansas statute also fell within the estoppel mentioned in Cooley.
In the case of Meyer v. Berlandi, 39 Minn. 438, 40 N. W. 513, 1 L. R. A. 777, 12 Am. St. Rep. 663, where the court had *539under consideration a statute making certain acts of laborers or those who furnished materials, and who -filed mechanics’ liens therefor, conclusive evidence against the owner of the property, the Supreme Court of Minnesota, speaking through Mr. Justice Mitchell, said:
“In short, if a willful trespasser should go upon the land of another against his will or without his knowledge and erect a building on it, and the owner * * * did not institute * * ;|c injunction against the trespasser, he would be conclusively deemed to have consented to the -erection of the -building, and his land be subject to a lien in favor' of the trespasser. * * * The bare statement of such a proposition is sufficient. A man cannot be thus deprived of his property without his consent. The Legis-’ lature mav doubtless establish rules of evidence, but to enact a law making evidence conclusive which is not so necessarily in and of itself, and thus preclude a party from showing the truth, would be nothing short of confiscation of property and a destruction of vested rights without due process of law.”
Under the construction given to the Warehouse Act in this state, a trespassing thief who deposits grain in a public warehouse would thereby acquire a conclusive right of ownership to the grain deposited as against the bailee warehouseman who had become unfortunate enough by equitable assignment to stand in the shoes of the original and rightful owner by having paid him for his grain. I do not believe such right of property can thus be conclusively taken away from _ the bailee warehouseman, and thereby close his mouth and deprive him of the opportunity of showing the facts and the truth as- to the real, just, and equitable ownership of such property. It is not due process of law. It is the same principle referred to in the Minnesota case as to trespassers--acquiring a mechanic’s lien against the owner of the property.
In speaking- of conclusive rules of evidence created by legislative acts, Wigmore, in his work on Evidence (volume 2, §§- 1345-1354), in substance says: In such ways various constitutional provisions may be violated, but the legislative attempt is-invalid, not because it deals with a rule of evidence, but because it deals with a constitutional rule of property; that a statute which-deals with some rule of substantive law, such as creating a contractual estoppel, cannot be obnoxious to the present principle, as-*540where the terms of a bill of lading or a policy of insurance are declared to be conclusive in certain respects. On the other hand, a' statute making a tax deed conclusive' evidence of title is ineffectual as far as it virtually sanctions the divestiture of property whose owner is not at fault. The essential facts which are- constitutionally required for a taking of due process of law cannot be abolished by the Legislature. So, too, any other statute dealing with property or personal rights is to be tested by the question whether the legislative act is constitutionally forbidden. The- judicial function under the Constitution is to apply the law; to apply the law necessarily implies the determination of the facts; to determine facts necessarily involves investigation; to forbid investigation is to forbid the exercise of an indestructible judicial function; to make a rule of conclusive evidence compulsory upon the judiciary is to attempt an infringement upon their exclusive province.
My majority Associates cite section 1353, Wigmore, Bv., as substantiating their contention, and quote the following therefrom :
“On the one hand, so far as a so-called rule of conclusive evidence is not a rule of evidence at' all,- but a. rule of substantive law, it is clear that the Legislature is not infringing upon the prerogative of the judiciary.”
They have lost sight of the “on the other hand” contained in this section from Wigmore, and' have failed to cite or quote the succeeding paragraph of the same section, which is as follows:
“It is true that such; statutes may in some other aspect be invalid because of express constitutional limitations of legislative power as to some substantive right. For example, in either of the above instances, if the statute was enacted to govern notes and deeds made prior to its passage, it might violate the constitutional prohibition against laws -impairing the obligation ’ of contracts or taking property without due process .-of law. • Again, ■ a law providing that an assessor’s or collector’s- deed of land sold for taxes shall be conclusive evidence that all due proceedings have been taken in'the forfeiture may be obnoxious to the-prohibition against taking property without due process; for the law in effect provides that the property may be taken although in fact due proceedings have not been had- — in short, while purporting to make a rule *541of evidence, it really makes a rule of property law by' which .certain acts are declared unnecessary which the Constitution has declared necessary. In such ways, various constitutional provisions may be violated; but the legislative attempt is invalid, .not because it deals with a rule of evidence, but because it deals with a constitutional rule of property.”
I take this section, taken as a whole, to mean that the constitutional provision as to due process of law cannot be violated either by a rule of substantiae lam or by a rule of conclusive evidence. While- a legislative made rule of substantive law, in. some instances, might not infringe upon the prerogative of the judiciary, still such act, nevertheless, would be invalid if it infringed upon the constitutional prohibition against taking property without due process of law. ' In other words, a legislative .act, which deals with a constitutional rule of property so as to deny due process of law, is just -as invalid as would be a legislative act making a conclusive rule of evidence which infringed upon the prerogative .of the judiciary. ■
One of the contentions in this case is that the provision of section 495 of the Warehouse Act in -question, which deems the storage receipt conclusive -evidence as to- the ownership of the stored grain, as applied to the circumstances of this case, is a taking of property without due process of law, in violation of the federal and state Constitutions. The illustration, to shozv constitutional illegality, used by both Judge Cooley and Prof. Wigmore, is that of a legislative act making a tax deed conclusive evidence of ownership, because it deals with a rule of constitutional property right. In further illustration of these rules as to conclusive evidence and substantive law, Wigmore, in section 1354, in substance, says: A statute which in reality -deals with some rule of substantive law cannot be obnoxious to the principle that it infringes upon the province of the judiciary,-although it may -be obnoxious to some constitutional'' proviso which protects the rule of substantive law in question. Thus. a statute which enlarges the rules of contracts by creating an -estoppel is constitutional, as where the terms -of a bill-o-f lading or a policy o-f insurance are declared to be conclusive in certain respects; - on the other hand, a statute making a tax deed conclusive evidence of ownership is ineffectual, so far as it sanctions the divestiture of property, as the essential *542facts which are constitutionally required for a taking by due process of law cannot be abolished by the Legislature, although the unessential details are entirely within legislative control. So, too, any statute dealing with property rights is to be tested by the question whether any legislative alteration of these rights is constitutionally forbidden. It is most certainly true, as appears from the authorities, that contractual relations, such as grow out of bills of lading, or insurance policies, or other contracts, in certain respects, may be, by the Legislature, declared to be conclusive as estoppel's, whether as a rule of evidence or a rule of substantive law, when the effect of the act is not to divest a party of his ownership of property without due process of law; but, whenever such act has the effect of divesting such owner of his property without his consent and without an opportunity of being heard upon the merits -of the question of his ownership, it is not due process of law, and such act is consequently void, whether it be a rule of conclusive evidence or a rule of substantive lam. Neither act is within the rule or principle that permits the Legislature to create estoppels, or conclusive rules of evidence, or substantive law “in certain respects” in relation to contractual rights.
The act in question on its face expressly purports to create a ■conclusive rule of evidence as to the ownership■ of property. Tin re seems, however, to be some divergence of opinion as to whether such an act is in fact a rule of conclusive evidence or a matter of substantive law. When applied alone to the objection that the act infringes upon the province of the judicial branch of government, it might be material to determine whether or not the rule established by a legislative act was in fact a rule of evidence or a matter of substantive law; but where the objection is made that the legislative rule violates a constitutional property right, so ■as to amount to a denial of due process of law, it becomes immaterial whether the act is a “so-called rule of conclusive evidence” or “a rule of substantive law,” as such- property right cannot be violated by either of such legislative rules. The legislative act in question expressly purports upon its face to make a conclusive rule as to the ownership of property. In this very case the defendant, without its consent, and without an opportunity of being heard upon the merits, is divested of its ownership in the property by means of this legislative act. Every existing reason *543agcánst the constitutionality of a statute that would make a tax deed conclusive evidence of ownership of land sold for taxes also exists against a statute making the holder of a storage receipt the conclusive owner of the stored grain. The storage receipt would operate to divest title and ownership just as effectually as would the tax deed. The public .officer- who issued the tax deed is no more a public officer fo-r the purposes of the deed than is the operator of the elevator for the purposes of the effect of the receipt. The statute in both cases, regardless of the facts, and without investigation, forces upon the parties the conclusive rule of ownership. There is no chance for the exercise of volition by the parties, and herein lies the vital distinction between statutes of the class here under consideration and the statutes in the Kansas and Mississippi cases. It cannot be said that the true owner, or his assignee, of property covered by a tax deed, knew what the Taw was, and should not have let his property be sold for taxes, if he did not desire to be bound by such deed, any more than it would be said that the warehouseman knew what the law was, and should not have issued the receipt, if he did not wish to become bound according to the statute. Neither can it be said that the warehouseman should not have become the equitable owner of the grain, because there is no lazv forbidding him from so doing, any more than there is a law against a person bécoming the equitable owner of real estate covered by a tax deed. The conclusive effect given to a tax deed does not relate to such assignment, neither does the conclusive effect of a grain receipt relate to the question of such assignments.
I cannot -believe that a law is valid which has the effect of taking property out of the hands of one justly entitled thereto and giving it to one clearly not entitled thereto, without even giving the one from whom it is thus taken an opportunity of being heard as to the facts of his ownership. The demurrer to the answer should have been overruled, and defendant given the opportunity to place before the trial court the evidence upon the merits as to its ownership of the grain in question.
SMITH, P. J., concurs- in the views of Justice McCOY.