Court Opinion

ID: 8015075
Source: CourtListenerOpinion
Date Created: 2022-09-09 02:03:25.438569+00
Date Added: 2024-06-11T16:36:16.843573
License: Public Domain

DISSENTING OPINION.
GANTT, J.
Upon such consideration as I have been able to give it, I find myself unable to concur in the opinion of the court. The information alleges, and the demurrer of the Terminal Railroad Association admits, that it is a railroad company of the State of Missouri, which has acquired the railroad properties of the “Terminal Railroad Company,” “a railroad corporation organized for the purpose of constructing a standard gauge railroad from place to place on the eastern boundary line of the State of Missouri opposite the city of St. Louis where the present bridge known as the *306Eads Bridge” crosses the Mississippi river at the foot of Washington street in said city, thence from said place on the eastern boundary line of said State to a place near Poplar street and the western limits of the city so as to make suitable connections with the tracks of the Union Depot Company, the Missouri Pacific, the St. Louis, Iron Mountain & Southern Ry. Co., the St. Louis, Kansas City '& Northern and other railroads having termini at said city, the length of said railroad to be as near as may be six miles. It is also averred and admitted that the Union Railway and Transit Company was a railroad company, organized under the laws of this State and that said railroad company and the Terminal Railroad of St. Louis were consolidated into one railroad company under the name and style of the Terminal Railroad Association of St. Louis, and that on the twenty-sixth day of July, 1889, said Terminal Railroad Association was in control of all the properties of the St. Louis or Eads Bridge Company, the Tunnel Railroad Company, the Union Depot Company and the Terminal Railroad of St. Louis and from that date operated said railroads and exercised every and all the rights, privileges and franchises to them belonging; all of which said property constituted the larger part of the terminal, switching, and car storage facilities, subject to use by persons and corporations engaged in business in St. Louis and used by them in transferring and switching the products so dealt in or manufactured by them to and from the railroad tracks and lines of railroad companies running to and from the various factories, manufacturing establishments, freight depots, warehouses, private tracks and switches and in switching and conveying freight and passenger cars from and to the switches, side tracks, depots, warehouses, and termini of the various railroads running into said city; that such conditions continued to exist until the construction of the railroad bridge known as the ‘ ‘ Merchants Bridge” erected at the city of St. Louis for railroad purposes *307across the Mississippi river, and from the foot of Ferry street in said city of St. Lonis across to the State of Illinois by the St. Lonis Merchants Bridge Company and the organization of the St. Louis Merchants Bridge Terminal Railway Company; that said Merchants Bridge is parallel to the said St. Louis or Eads Bridge and about two miles distant and. north thereof. It is further averred that said St. Louis Merchants Bridge Terminal Railway Company was incorporated under the general law of this State at that time providing for the incorporation of railroad companies and known as article 2, chapter 21, Revised Statutes 1879; that said company was organized to construct, maintain and operate a standard gauge railroad within the corporate limits of St. Louis; that on the eighth day of May, 1893, the articles of incorporation of said last-named company were amended so as to authorize it to construct, maintain and operate its standard gauge railroad within the corporate limits of the city of St. Louis from union depot, then being constructed near Twentieth and Market streets in St. Louis, to the northern city limits of St. Louis near the Chain of Rocks, and from a point where the lines of said railroad cross North Market street southwardly to Carr street in said city, also from a point or points near where the line of said railway crosses Ferry street in said city eastwardly into the State of Illinois, and from a point at or near Bulwer street where the line of said railway crosses Pope avenue northwardly to a point at or near the intersection of Morin and Florissant avenues in said city, the length of said railway to be fifteen miles.
“It is further stated that on the second day of January, 1892, a contract and agreement was entered into between the St. Louis Terminal Railway Company as party of the first part and the St. Louis Merchants Bridge Terminal Railway Company as party of the second part, both of said parties being the corporations hereinbefore, described, bearing the respective names *308aforesaid. By the terms of said lease it is stated that the St. Louis Terminal Railway Company is the owner of a certain line of railroad in the State of Missouri, between the point of intersection of the tracks of the two respective companies to said lease, in the city of St. Louis, and the point of connection of the tracks of the said St. Louis Terminal Railway Company and the St. Louis and San Francisco Railway Company at a point near Arloe station, in the county of St.-Louis. Said lease also states that the St. Louis Merchants Bridge Terminal Railway Company owns, controls, and operates a railroad extending from a point near the union depot in the city of St. Louis to and over the bridge across the Mississippi river to the State of Illinois, to a point in the State of Illinois opposite said city of St. Louis known as the Merchants Bridge, and thence from said Merchants Bridge to a point of connection of the tracks of both parties to said agreement at or near the intersection of Morin avenue and Florissant avenue in said city of St. Louis, at which last-named point the line of railroad owned, controlled, and operated by the said St. Louis Merchants Bridge Terminal Railway Company intersects, joins, and connects with the line of railroad of the St.. Louis Terminal Railway Company.
“By the terms of said lease, and in consideration of the conveyance and the agreement therein contained and hereinafter mentioned, the St. Louis Terminal Railway Company leased, demised and let unto the said St. Louis Merchants Bridge Terminal Railway Company, its successors and assigns, free from all liens and encumbrances of every kind, excepting a certain mortgage in said lease described and hereinafter mentioned, for the full term of .forty years from and after the second day of January, 1892, the line of railroad of the said St. Louis Terminal Railway Company as the same then existed or may at any future time be located, constructed, maintained or operated or acquired between the point of intersection of the tracks of the said parties at or near *309the intersection of Morin avenue and Florissant avenue, in the city of St. Louis, to a point of connection of the railroad of the said St. Louis Terminal Railway Company with the St. Louis and San Francisco Railway near Arloe station aforesaid, and all the real estate, right of way, double tracks and crossovers in said line provided to be purchased and constructed, together with the right, privilege, and franchise of maintaining and operating said part of said railroad, and regulating, fixing, charging, collecting and receiving all freights, tolls and charges for the use thereof, for the transportation of persons and property upon or over the same as it then was or as it may be at any time in the future be constructed, maintained or acquired.”
The Attorney-General then states the full terms of the said lease, and then proceeds as follows:
“Informant further states that upon the organization of the said St. Louis Merchants Bridge Terminal Railway Company, and by means of the various depots, switches, side-tracks, track connections then constructed and to be constructed by it in said city, and all rights, franchises, privileges, and services thereto belonging, there was provided for the people of St. Louis, and all persons and corporations engaged in business therein, and all persons and corporations in said city requiring railroad connections, tracks, switches, freight cars, terminal and railroad terminal facilities, including depots, warehouses, car storage therein, switching facilities, and railroad track and terminal connections with various railroads running into, through, and from said city of St. Louis, competition with the switching and terminal facilities of the aforesaid Terminal Railroad Association of St. Louis; that said Merchants Bridge Terminal Railroad Association as then constituted was, and as the tracks, switches, depots, side tracks, and all other instruments of terminal and railway transfer traffic are now located, is, as originally intended to be, a competitor of the said Terminal Railroad Associa*310tion of St. Louis, owning and operating competing lines of tracks, side tracks, switches, and terminal facilities and equipments with the lines of tracks, side tracks, and switches of the said Terminal Railroad Association of St. Louis and in the city of St. Louis. ’ ’
The specific routes of the “Merchants Bridge Terminal Railway Company” and of the “Terminal Railroad Association of St. Louis” are set forth at length in the information and from which it appears that both companies have tracks into the union station. It is then charged that said St. Louis Merchants Bridge Terminal Railway Company was incorporated for the purpose of engaging in the same kind and character of business as that of the respondent, the Terminal Railroad Association of St. Louis, and to compete with the said respondent in the terminal railroad and transfer business in said city.
It is then averred at length that by an agreement, of August 17, 1893, the Terminal Railroad Association of St. Louis acquired and became the successor to all the properties of the Merchants Bridge Terminal Railway Company and the lease of the St. Louis Terminal Railway Company of date of January 2, 1892, and assumed its obligation, and since entering into said contract the respondent dictates, formulates and controls the policy and business of the said Merchants' Bridge Terminal Railway Company, fixes and regulates and controls the .tolls, charges and prices to be paid in all freight and freight cars handled, transferred and conveyed by said Merchants Bridge Railway Company and the object of said agreement is to prevent competition of said Merchants Bridge Company. That said agreement so made between said competitive companies is illegal and void; that said contract is in violation of section 17 of article 12 of the Constitution of Missouri and that said lease is in conflict with and violative of section 1062, Revised Statutes of Missouri, 1899, and against the public welfare and public policy of this State.
*311I. Section 17 of article 12 of the Constitution of Missouri is in these words:
“No railroad or other corporation, or the lessees, purchasers or managers of any railroad corporation, shall consolidate the stock, property or franchises of such corporation with, or lease or purchase the works or franchises of, or in any way control, any railroad corporation owning or having under its control a parallel or competing line; nor shall any officer of such railroad corporation act as an officer of any other railroad corporation owing or having control of a parallel or competing line. The question whether railroads are parallel or competing lines shall, when demanded, be decided by a jury, as in other civil eases.”
The demurrer raises in limine the question whether the Merchants Bridge Terminal Railway Company and the Terminal Railroad Association of St. Louis are railroads or railroad corporations within the meaning and spirit of said section 17 of article 12 of the Constitution.
In the opinion of the majority they are not. We are not able to concur in that view. The language of the above provision of the Constitution is broad and comprehensive enough to include these terminal railroads. There are no words of exception in the section and nothing in the context which limits the scope of the words, “no railroad or other corporation or the lessees, purchasers or managers of any railroad corporation,” to trunk line railroads traversing the length and breadth of the State.
These railroads were both organized under the general railroad law of this State to construct, maintain, and operate standard gauge railroad's in this State.
Having accepted their charters from- the State under the general railroad law of the State they are estopped to deny that they are railroads within the meaning of the Constitution which prohibits any railroad from consolidating with a parallel or competing rail*312road. These companies are chartered under our general railroad act, and section 1163, Revised Statutes 1899, defines the term “railroad corporation” to mean all corporations, companies or individuals owning or operating or which may hereafter own or operate any railroad in this State.
The existence, privileges and powers of these two-railroads all depend upon the legislative enactments under which they were organized. By that law they were created railroad companies. Can they now, having availed themselves of the franchises and powers they possess and from which they take caste and color, be relieved of all the burdens .and restrictions which this law of their creation imposes upon them? We are clearly of the opinion that they can not. When we consider .further that they have main tracks and switches just as other railroads have, and that they maintain and operate trains thereon drawn by their own locomotive engines it is impossible to distinguish them from other railroads organized under our general laws for the incorporation of railroads. While it may be urged that they do not own their own passenger or freight cars, it is obvious that this does not militate against the view we have taken. Every railroad in this State is compelled to accept, from connecting railroads their cars loaded with freight and carry them over their lines. So that while these two railroad corporations may not have provided themselves with cars in which to transfer freight and passengers, there is nothing to prevent them from so doing whenever they shall elect to do so. In carrying freight for other companies and transferring and switching their cars for them they are engaged in a legitimate exercise of their franchises as railroad companies.
But it is said that the framers of the Constitution and the people when they adopted it did not have terminal railroads in view when they inserted section 17 of article 12 in the Constitution and did not intend that *313section to apply to termmal companies and that the evil which they sought to prevent, to-wit, consolidations to shut out competition, was the apprehension they felt that the great trunk lines then in existence and those to be built from Kansas City to St. Louis and between other distant termini might all pass under one management and thereby deprive the people and shippers of that natural competition which was deemed necessary for their protection, and not to termmal companies which would afford equal facilities for all roads having a common terminus. It is true that it often occurs that the words of a statute or constitution may be broad enough to cover a specific case when in fact the spirit and true meaning of the law would exclude it. Many illustrations of this rule of construction suggest themselves and it is not necessary tó cite instances. In our opinion both of said companies are railroad corporations within the spirit and letter of the Constitution. Were they parallel or competing companies? Competition is just as beneficial between terminal companies as it is between other railroads. It is averred in the information that the purpose of constructing and maintaining the Merchants Bridge and the Merchants Bridge Terminal Railroad Company’s railroad was “to engage in the same hind and character of business as that of the Terminal Railroad Association of St. Louis, the respondent herein, in the terminal and railroad and transfer business in St. Louis.” It does not need any argument to demonstrate that the incorporators of the Merchants Bridge and Merchants Bridge Terminal Railroad would not have invested millions of dollars in those enterprises if they had not felt that the business of St. Louis would justify them in so doing, nor that they intended to enter the field as a competitor for some of the business which it is alleged up to that time was practically monopolized by the Eads bridge and the respondent, the Terminal Railroad Association of St. Louis. More than that, it appears that the Merchants Bridge Railway Com*314pany had already acquired rights of way and built its tracks to a point near the union station in St. Louis and a great system of switch and warehouse tracks and connections and had already projected a line through and around the western limits of the city of St. Louis, to tap the St'. Louis and San Francisco Railway Company at Arloe station, thus enabling it to connect with the Missouri Pacific, Wabash and Frisco systems west of the city and thereby made itself a direct competitor for eastern and western bound freights over the Merchants Bridge which it controlled. That it was not fully completed is not an argument that it was not a competitor, but a cogent reason why its competitor should be alert to acquire it before it had succeeded in becoming as formidable as it promised to be.
The purpose of the constitutional provision now under consideration was obviously to prevent railroad monopolies, by denying rival or competing lines the, right to consolidate themselves into one company. The policy thus indicated has been adopted in the Constitutions of various States, notably Pennsylvania, article 16, section 12, and article 17, sec. 4; Illinois, article 11, sec. 11; Michigan, article 19, sec. 2; Nebraska, article 11, sec. 3; West Virginia, article 11, sec. 11; Arkansas, article 17, sec. 4; Texas, article 10, sec. 5; Colorado, article 15, secs. 5 and 13, and in Missouri, article 12, sec. 17, in all of which no railroad is allowed to consolidate with a parallel or competing line — and in a number of said States a railroad is not permitted to lease or purchase such competing line, or the officers thereof to act as officers of the other.
In other States, the same result is secured by statutory provisions. What are parallel or competing railroads within the meaning of this provision of our Constitution has been before the courts and the conclusion reached that the true meaning of section 17 of article 12 of our Constitution is that when it speaks of competing roads it means roads that are substantial competitors *315for business, a competition that would have an appreciable effect on rates, the controlling idea being to encourage competition, and that when it-speaks of “parallel or competing” lines it does not mean lines which are merely geometrically or geographically parallel, but the governing thought is competing lines. [Kimball v. Railroad, 46 Fed. 888; State v. Railroad, 24 Neb. 143, 32 Amer. and Eng. R. R. Cases 388; Railroad v. State, 75 Tex. 434.]
In Railroad v. Jarvis (U. S. Circuit Court of Appeals), 15 Am. and Eng. R. R. Cases (New Series) 459, the court said, “Were these two railways ‘parallel or competing lines ’ within the meaning of the Constitution 1 ’ ’ After saying they were both designed as belt lines intended to connect the termini of many railroads terminating at East St. Louis with the river transfers to the city of St. Louis, the court said: “We can not doubt that these lines are parallel lines within the meaning and intent of the constitutional provision. The term parallel is not employed in the Constitution in its merely geographical sense. It does not mean two lines of railway that are equidistant from each other. That would be a narrow construction of the constitutional provision, which would defeat its purpose. It means lines of railway having the same general direction and therefore likely to come in competition with each other. We think they were designed to be competing lines of railway.”
When it is considered that these two railroad corporations each owned or controlled a railroad bridge across the Mississippi river connecting the union station in St. Luois in which all the railroads from the west concentrated and each connecting with the railroads running into East St. Louis from the north, east and south, and that each had its switches and connections with the various manufacturing plants of the city of St. Louis and bearing in -mind always that under our Missouri statutes each was compelled, if required, to connect with other railroads *316or suffer them to connect with them, and each to carry and accept for shipments all cars in bulk tendered to them for forwarding, it is impossible to reject the conclusion that in the sense of the Constitution and our statutes they were competing lines and that they came within the purview of the statute forbidding them to consolidate with each other by outright sale or by the lease and contract alleged in the information. We can not accept the reasoning that they are not such competing lines as are forbidden by the Constitution to consolidate. Without further extending this opinion we think the information sufficiently avers that they were competing lines and that the demurrer confesses as much.
The contention that one terminal company offered better facilities for the transfer business and in fact secured more competition than two or more such companies would or could have offered does not commend itself to our judgment. It is the argument advanced in favor of all monopolies, but it is contrary to the words and spirit of the Constitution, and we must believe that if these railroad corporations had each remained a bidder for the immense traffic which is carried on in transferring freight and passengers to and from St. Louis across the Mississippi river under fair and open competition, cheaper and more equitable rates to shippers and the travelling public would have been the inevitable result and such was the purpose of the Constitution.
But it is maintained that even if our laws made no provision for the acquisition by one railroad of the properties of another at the date of the contract or lease of 1893, still as the Legislature of this State at the regular session in 1903 (Laws 1903, p. 127) expressly authorized such purchase when this proceeding was commenced it had become the policy of the State to permit such acquisition and the State can not now be heard to say the contract or lease of 1893 is against its public policy. Two answers can be made to this contention.
*317First, the act of 1893 is prospective in its terms and does not apply to any previous unauthorized consolidation. It is the settled rule of construction of statutes in this State that statutes shall operate prospectively only unless it clearly appears that they shall retroact upon prior contracts and rights. [Hatcher v. Railroad, 62 Ill. 477; 1 Rorer on Railroads, pp. 59 and 592.]
Secondly, the act of 1903, like the act of 1871, by its terms limits the right of acquisition to railroads which shall form continuous lines with the railroad so consolidating with the same, and if we are right in our view that these roads were parallel or competing lines, that act is no authority for the contract of 1893. Acts permitting railroads to extend their lines by acquiring other railroads so as to make a continuous line have ever been construed to negative the right to acquire competing or parallel lines.
The power to rent from, sell, lease or consolidate with any parallel or competing company does not exist in the absence of legislation permitting these things to be done and can not be implied from a prohibition extending to parallel or competing lines. [Railroad v. State, 75 Tex. 434; State v. Railroad, 24 Neb. 143.]
The permission to consolidate with lines which when accomplished will form a continuous line implies the exclusion of all others. That the defendant can not justify its acquisition of the Merchants Bridge Terminal Railway Company’s properties by virtue of the authority given to the Union Depot Companies by our laws, I think is evident, because the capital stock of Union Depot Companies is limited by the act authorizing their incorporation to ten millions of dollars (sec. 1164, R. S. 1899), whereas the capital stock of the respondent is alleged to be, and the demurrer admits it to be, $50,000,000, and it is not fair to assume that defendant was violating the charter of the Union Depot Company by capitalizing it for $40,000,000 more than our *318laws permit. The consolidation then can not be sustained under the authority conferred upon depot companies.
The extent to which this court should go in decreeing a forfeiture is another question. While the respondent has exceeded its powers in making the contract of 1893 it does not necessarily follow that it should be ousted altogether of its franchises and properties. On the contrary the rule in this and other courts has been to oust it in the first instance only to the extent of depriving it of rights unlawfully acquired. Such was the rule declared by the Supreme Court of Nebraska in State v. Railroad, 24 Neb. 143, which, like this, was a quo warranto proceeding. The court in that case forfeited the illegal lease only. And in State ex inf. v. Lincoln Trust Co., 144 Mo. l. c. 599, it was said, “We are not disposed to enter judgment of ouster from such franchises as are legally possessed by them, but judgment of ouster from the exercise of the franchises not granted them as herein indicated will be entered.”
While the State is not barred by the lapse of time, still courts may properly so frame their judgments or decrees as not to work unnecessary injury. The vast amount of capital invested legitimately by the respondent should not be forfeited because respondent made the contract or lease of 1893. Justice will be subserved by compelling respondent to exercise its franchises within the limits of its charter powers and by depriving it of those which it has no right to exercise. The judgment of ouster should go to the extent of adjudging the com tract of 1893 void, as in contravention of the Constitution, and in ousting its officers of all control of the Merchants Bridge Terminal Railroad Company and its properties, and requiring said companies to maintain and operate said systems as competing lines.
Robinson, G. J., and Marshall, J., concur.