Court Opinion

ID: 6694726
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:46:51.211844+00
Date Added: 2024-06-11T16:01:12.183944
License: Public Domain

Douglas, J.,
concurring. I fully concur in the opinion of the Court; b.ut there is a question omitted therefrom which, though perhaps not essential to the present decision of the Court, may become of the greatest importance in view of the Federal question raised, or attempted to be raised, by the defendant. I think there was error in excluding, upon the objection of tire defendant, answers to the following questions asked by the plaintiff, to-wit:
“Q. Mr. Borden, what is the stock of the Atlantic Coast Line worth to-day?” “Q. What was the stock of the Wilmington and Weldon Railroad Company worth twenty years ago ?” “Q. Is not the present value of the original stock of the Wilmington and Weldon Railroad Company, which constituted the balsis of the present stock of the Atlantic Coast Line, today worth $1,900' or $2,000 in the market?” “Q. What dividends are now being received by the holders of the *23original stock of tlie Wilmington and Weldon Railroad Company?” (Record, p. 294).
The questions sufficiently disclose the scope of the proposed enquiry, but would doubtless have been followed by other questions eliciting in greater detail the desired information. In its second exception to the order of the Commission, the defendant claims the protection of the Constitution of the United States in the following words: “The company, therefore, excepts to the order of the Commission in so' far as it is construed as requiring it to run an additional train from Rocky Mount to Selma between the hours above named, because to do so would be requiring the company to perform services without compensation to it for the same, and thereby taking its property without due process of law, and in violation of the Constitution of this State, and in violation of the Constitution of the United States.” (Record, p. 32). In its brief the defendant also says: “Neither the Commission nor the Legislature has the power to require the defendant to run an additional train a.t a loss. The jury finds that to operate this train will impose a daily loss of fifteen dollars upon the defendant, and to compel the defendant to operate this train at a loss would be taking its property without compensation and in violation of the Constitution of this State and of the Constitution of the United States.”
In this view of the case the excluded testimony might become of the utmost importance. We cannot presume that the Corporation Commission intends “to take the property of the defendant without due process of law” or to require unnecessary services without compensation in^ some form or another; but we cannot admit that the defendant can ignore the just demands of the public by creating for its own profit and convenience a condition of affairs that makes one train unprofitable by throwing all the remunerative business on trains that do not make connection. The order of the Commission does *24not require tire defendant to run an additional train, but simply to make connection. It does not necessarily require any additional, unusual or special services, but simply the performance of its essential duties in such a manner as will meet the reasonable convenience of the public. This the defendant can do by making a, through train arrive at Selma a few minutes earlier; but if it prefers to ignore the rights, of those living along its line, whose lands it has taken through the exercise of the right of eminent domain, in order to cater to- its through travel, it cannot justly complain if its public duties require the running of an extra train. The mere fact that through passengers from the North to Florida have the choice of three or more routes, varying but little in time and comfort, is no excuse for an unjust discrimination against that part of the traveling public who are dependent upon local lines. This idea was evidently in the mind of this Court, when, speaking by Rodman, J., in Branch v. Railroad, 77 N. C., 347, upon the necessity for the imposition of penalties, it says on page 350': “The Legislature considered the common law liability as insufficient to compel the performance of the public duty. It must have thought that the interest of local shippers, for whose interest principally the road was built, and against whom the company had a complete monopoly, were being sacrificed by wanton delays of carriage in order that the company might obtain the carriage from points where there were, competing lines by land or water — as from Wilmington to Augusta.” The fact that the defendant in that case was the parent of the present defendant may lend additional significance to the words of the Court.
In this view the profits of the road, both for the present and tire immediate past, would become material. Suppose the witness had answered that no dividend had been paid for years, and that the company was unable to earn anything beyond bare expenses, whereby the stock was almost un*25marketable, would it not bave been competent as tending to prove tbe defendant’s contention that it is unreasonable to demand of it any additional service ? On the contrary, suppose tbe witness bad testified as follows.: That on one share of tbe par value of one hundred dollars in tbe Wilmington and Weldon Eailroad Company, tbe following stock dividends or bonuses bad been issued in addition to large annual dividends; that in 1887 tbe said railroad company bad issued upon this one share of stock as a bonus a certificate of indebtedness in tbe sum of one hundred dollars bearing seven per cent interest; that in 1900 there were issued in lieu of this one share of stock, two shares of one hundred dollars each of preferred stock in tbe Atlantic Coast Line Company and two shares of one hundred dollars each of common stock in the Atlantic Coast Line Company; that in 1897 there was also issued to the holder of the one original share of stock four shares of the Atlantic Cbast Line Company of Connecticut of one hundred dollars each, and in 1900 a certificate of indebtedness of the Atlantic Coast Line Company of Connecticut for four hundred dollars; that all of said stock and certificates of indebtedness were much above par value and receiving handsome dividends; that recently a dividend of twenty-five per cent, had been declared, and that the one original share in the Wilmington and Weldon Eailroad Company had thus developed into thirteen shares of stock and certificates of indebtedness of the par value of $1,300 but of the real value of about $2,500. Suppose it had been further shown that a little over thirty year's ago the State’s half interest in the Wilmington and Weldon Eailroad Company had been bought for thirty-five dollars a share. Suppose further that it was shown that a large part of the alleged indebtedness of the company were certificates of indebtedness issued to the stockholders without any consideration whatever other than the mere capitalization of profits.
*26Would not this evidence bave been competent to prove that the order of the Corporation Commission requiring the defendant to quicken its regular train twenty-five minutes in order to make connection at Selma was not unreasonable; and not “talcing its property without due process of law and in violation of the Constitution of the United States ?” Would not such evidence also tend to prove that it would not be unreasonable to- require the defendant to make such connection even if it did require an extra train at a loss of fifteen dollars per day, if other trains running on the same line of road and by the same places more than made up the difference ?
These are hypothetical answers on both sides. Where the truth may be was peculiarly within the knowledge of the defendant upon whose objection it was excluded. It cannot be contended that such an investigation would be an impertinent inquisition into' private affairs, as property taken for a public purpose under the power of eminent domain is indelibly impressed with a public use. This has been too often decided by the Supreme Court of the United States to be any longer an open question. Two cases will be sufficient for my purpose. In Railroad Co. v. Wellman, 143 U. S., 339, the Court says, on page 345 : “A single- suggestion in this direction: It is agreed that the defendant’s operating expenses for 1888 were $2,404,516.54. Of what do these operating expenses consist ? Are they made up partially of extravagant salaries; fifty to one hundred thousand dollars to the president, and in like proportion to subordinate officers? Surely, before the courts are called upon to adjudge an act of the Legislature fixing the maximum passenger rates for railroad companies to be unconstitutional, on the ground that its enforcement would prevent the stockholders from receiving any dividends on their investments, or the bondholders any interest on their loans, they should be fully advised as to what is done with *27the receipts and earnings of the company; for if so advised it might clearly appear that a prudent and honest management would within the rates prescribed secure to the bondholders their interest, and to the stockholders reasonable dividends. While the protection of vested rights of property is a supreme duty of the courts, it has not come to this that the legislative power rests subservient -to the discretion of any railroad corporation which may, by exorbitant and unreasonable salaries, or in some other improper way, transfer its earnings into what it is pleased to' call 'operating expenses.’ ”
The Corporation Commission Act (chap. 164, Laws 1899), in section 2 provides as follows: “Provided, that in fixing any maximum rates or charge or tariff of rates or charges for any common carrier, person or corporation subject to the provisions of this act, the said Commission shall take into consideration if proved or may require proof of the fair value of the property of such carrier, person or corporation used for the public in the consideration of such rate or charge or the fair value of the service rendered as in determining the fair value of the property so being used for the convenience of the public. It shall furthermore consider the original cost of the construction thereof and the amount expended in permanent improvements thereon and the present compared with the original cost of construction of all its property within the State of North Carolina; the probable earning capacity of such property under the particular rates proposed and the sum required to meet the operating expenses of such carrier, person or corporation, and all other facts that will enable them to determine what are reasonable and just rates, charges and tariffs.”
The ease of Cotting v. Stockyards Co., 183 U. S., 79, is cited by the defendant; but does not seem to sustain its contentions. In the opinion in that case appears the following dear distinction between those corporations which, like rail*28road and telegraph companies, are created for a public purpose, and endowed with certain governmental powers, such as that of eminent domain, and those corporations which are only incidentally devoted to public use, receiving no governmental powers and not impressed with any permanent public purpose. The Court says, on page 93: “Now, in the light of these decisions and facts, it is insisted that the same rule as to the limit of judicial interference must apply in cases in which a public service is distinctly intended and rendered and in those in which without any intent of public service the owners have placed their property in such a position that the public has an interest in its use. Obviously there is a difference in the conditions of "these cases. In the one the owner has intentionally devoted his property to the discharge of a public service. In the other he has placed his property in such a position that, willingly or unwillingly, the public has acquired an interest in its use. In the one he deliberately undertakes to do that which is a proper work for the State. In the other, in pursuit of merely a private gain, he has placed his property in such a position that the public has become interested in its use. In the one it may be said that he voluntarily accepts all the conditions of public service which attach to like service performed by the State itself. In the other, that he submits to only those necessary interferences and regulations which the public interests require. In the one he expresses hi willingness to do the work of the State, aware that the State in the discharge of its public duties is not guided solely by a question of profit. It may rightfully determine that the particular service is of such importance to the public that it may be conducted at a pecuniary loss, having in view a large general interest. At any rate, it does not perform its services with the single idea of profit. Its thought is the general public welfare. If in such a case an individual is willing *29to undertake tbe work of tbe State, may it not be urged that he in a measure subjects himself to the same rules of action, and if the body which expresses the judgment of the State believes that the particular services should be rendered without profit he is not at liberty to complain? While we have said again and again that one volunteering to do such services cannot be compelled to expose his property to confiscation, that he cannot be compelled to submit its use to such rates as do not pay the expenses of the work, and therefore create a constantly increasing debt which ultimately works its appropriation, still is there not force in the suggestion that as the State may do the work without profit, if lie voluntarily undertakes to act for the State he must submit to a like determination as to the paramount interests of the public? Again, wherever a purely public use is contemplated the State may, and generally does, bestow upon the party intending such use some of its governmental powers. It grants the right of eminent domain by which property can be taken, and taken not at the price fixed by the owner, but at the market value. It thus enables him to exercise the powers of the State, and exercising those powers and doing the work of the State, is it wholly unfair to rule that he must submit to the same conditions which the State may place upon its own exercise of the same powers and the doing of the same work ? It is unnecessary in this case to determine 'this question. We simply notice the arguments which are claimed to justify a difference in the rule as to property devoted to public uses from that in respect to property used solely for purposes of private gain, and which only by virtue of the conditions of its use becomes such as the public have an interest in. In reference to this latter class of cases, which is alone the subject of the present inquiry, it must be noticed that the individual is not doing the work of the State. He is not using his. property in the dis*30charge of a purely public service. Pie acquires from the State none of its governmental powers. His business in all matters of purchase and. sale is subject to the ordinary conditions of the market and the freedom of contract.”