Court Opinion

ID: 3519942
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:31:39.903571+00
Date Added: 2024-06-11T14:05:51.577945
License: Public Domain

ON SUGGESTION OF ERROR.
The suggestion of error is addressed more to some of the statements in the opinion heretofore rendered (158 So. 778, 781) than to the correctness of the conclusion reached. We will respond thereto and clear up some of the matters suggested.
In the former opinion, we said that Mr. Sheppard stated that the "Gulf  Ship Island Railroad Company had been leased by the Mississippi Valley Company, which, in turn, was leased by the Illinois Central Railroad Company." The statement is inaccurate in that the Mississippi Valley Company was not leased by the Illinois Central Railroad Company, but it owned the stock of the Mississippi Valley Company.
We also said in the opinion: "It is clear, we think, that the making of rates by the board of directors, being a power in derogation of the sovereign power of the state, cannot be delegated to others. The Legislature manifestly considered that the board of directors would be a safer depository of this power than some other officers or agents of the corporation, and, in fixing the rates, the board of directors are exercising powers not only for the *Page 655 
corporation, but for the public as well. They must and should bring to bear upon it the intelligent judgment and conscientious discretion of all the directors. While this discretion is vested in them, and perhaps their exercise of it could not be controlled by the courts, still it cannot be delegated, because the Legislature conferred it upon the board of directors of the corporation instead of the legal entity."
It is urged that section 4 of the charter provides in reference to the control of the affairs of the company that "they (board of directors) shall also have power and authority to appoint any three or more of their number an executive committee, to do and perform such act or acts and duties as may be required of them by the by-laws of the company; and the acts or doings of said committee, when done or performed in pursuance of authority conferred upon them, and approved by a quorum of the board, shall be as binding and valid in law as though done and performed by the full board."
We think this section has reference to the general management and operation of the railroad in its individual corporate action.
Section 19 of the charter provides for the fixing of rates, and we do not think that section 4 authorizes the board of directors to delegate to an executive committee the power to fix rates.
The statement in the opinion above quoted that it must bring to bear upon the matter the intelligent judgment and conscientious discretion of all of the directors is too broad a statement. A majority of the directors may meet and consider rates, and, if such majority approve the rates formulated, that constitutes the action of the board of directors, but we think it requires a majority of the directors to approve a schedule of rates. Of course, they may employ assistants to get information and give them advice and do much of the detail work, but they must, *Page 656 
themselves, determine the making of proper rates within the charter provisions, and not delegate it to an agent of the directors. If this is a hardship, or is difficult, it is a burden that must go with the privilege and right of making rates.
These rates should be certified by the board of directors to the state railroad commission, there to be filed and kept in that office for the public information, and, when so filed, the commission will determine whether the rates come within the grant of the charter, and within the classification referred to in section 19 of the charter, and, if so, then the railroad commission should approve them, making a note of their filing and its approval on the minutes. The railroad commission need not enter the rates upon the minutes of the commission at large then, but should refer to same in some sufficient manner as by number and date, or other description, that would point the public to the rates and where they could be seen.
We also stated in the opinion heretofore rendered that the rates formulated or adopted by the board of directors should be certified to the commission with a request for approval, and, if need be, coerced by mandamus or certiorari. The railroad commission has the power to say whether or not the rates adopted by the board of directors conform to the power and classification provided by section 19 of the charter, and, if they do conform, they should be approved, as above indicated. If, for any reason, the commission should not be of the opinion that the rates do conform to the provisions of section 19 of the charter, the railroad company should either compel by mandamus, or, if a disputed issue, review the matter by certiorari in the proper court. The rates, if correct, would be effective from the date they were filed with the commission.
Formulation or adoption of rates is a matter in which the public has a vital interest, and the judgment of the *Page 657 
directors that the rates conform to said section 19 of the charter is not necessarily conclusive, and, if the rates are beyond the power of the directors, or unauthorized by said section, the state authorities, the railroad commission in the present instance, have the right to refuse to accept them, and to contest the matter in the courts. Likewise, the railroad directors have the right to resort to the courts to determine that question.
Of course, where the directors do not adopt rates in the manner above indicated, the railroad company may still, through agents, submit to the state railroad commission a schedule of rates for approval, and, if approved, the rates will become effective in like manner as if adopted by the board of directors. But, unless formulated and adopted by the board of directors, as above indicated, the state authorities are not compelled to adopt the rates, and, in such case, the railroad commission would have the power to see that proper rates only are made for the guidance of the public.
Where the board of directors of a railroad company act within their charter powers, as herein indicated, they have the right to fix rates within the limits of the authority of their grant.
The suggestion of error is overruled, but the opinion is amended.
Overruled.