E. D. Clough & Co. v. Boston & Maine Railroad

"The proprietors of every railroad shall furnish to all persons reasonable and equal terms, facilities, and accommodations for the transportation of persons and property over their railroad. . . .

"If the proprietors of any railroad shall not comply with the provisions of the preceding section, they . . . . shall be liable to the party injured for his damages in an action on the case.

"The proprietors of every railroad shall cause to be posted in their depots a table of prices for the conveyance of persons and property. . . . The rates shall be the same for all persons and for like descriptions of freight between the same points." P. S., c. 160, ss. 1, 2, 3.

In answer to the plaintiffs' claim to recover certain sums alleged to have been illegally collected of them for the transportation of lumber, the defendants offer to show that the sums collected were neither discriminatory nor unreasonable in fact, but were the prices fixed for such service by the defendants' regularly established tariff, and which were charged by them to all persons for like service, and that the amounts charged did not exceed a fair and reasonable return for the service rendered. The plaintiffs' motion to reject the brief statement setting forth these facts is an admission for the purposes of the case in this court of the truth of the facts stated therein. Hence the discussion must proceed upon the ground that the sums paid were fair and reasonable and the same as charged others for like service. The question is: Had the plaintiffs a legal right to have their lumber transported for less than others paid, or for less than a reasonable rate? They do not claim a special personal privilege for a lower rate than others, but contend that railroads leased or united under certain statutes are forbidden to charge for the transportation of lumber a higher rate than was charged upon certain dates named in those statutes.

Section 17, chapter 100, Laws of 1883, authorized the lease or union of certain railroads: "Provided, that the rates for fares and freights existing August 1, 1883, shall not be increased on any part of the roads so leased or united, and the decrease in the operating expenses consequent upon the leasing or uniting of any roads shall *Page 229 be met from time to time by a reasonable and just reduction of fares and freights." Chapter 100, Laws of 1883, appears to have been expressly repealed in 1891. State v. Railroad, 76 N.H. 146, 148; P. S., c. 288, s. 15, p. 776. Whether section 17 was then repealed, and whether the plaintiffs can recover by force of statutory provisions repealed twenty years before, are questions not argued. This provision, with a change of date, was reenacted in 1889 (c. 5, s. 17) and in the Public Statutes (c. 156, s. 42). State v. Railroad, 75 N.H. 327, 330. The later enactments are not conditional in form, and in the Public Statutes the non-applicability of the restriction to lessee roads is made clear. State v. Railroad,76 N.H. 146, 158. But there is no evidence of a purpose as to the question in controversy to do anything except to adopt the meaning of the clause when enacted in 1883, so that the question is: What was meant in 1883 by the condition then imposed, "the rates for fares and freights existing August 1, 1883, shall not be increased," without reference to the possible effect of a repeal of that section?

The plaintiffs claim "that the restriction is specific and particular, and that it forbids the increase of the charge for the transportation of any particular article of freight above what was charged for the transportation of the same article" (State v. Railroad, 76 N.H. 146, 158); or, expressing their contention in another way, that the clause should be understood as if it read: No rate for fares or freights existing August 1, 1883, shall be increased. The defendants say the restriction is general and applies to rates as a whole, and that if they have not collected of the public generally more than was formerly charged for the same transportation, there has been no violation of the statute. If the plaintiffs correctly construe the statute, the admitted excess collection of $2 per car on lumber makes out their case; while on the defendants' contention, if they prove what they say they can there has been no violation of the statute. The question is whether a strict and narrow application of the language, or a general and liberal one, will more probably effect the legislative purpose.

The facts before the court are that the particular charge is a reasonable one, and that the total charge for freight transportation collected and received by the defendants was $500,000 less in each year than the rates of 1883 would have yielded, and the collections for freights and fares $1,000,000 less. In the aggregate, the rates have not been increased, but have been decreased to the extent stated. Upon these facts, in a proceeding by the state to enforce *Page 230 the state's contract in behalf of all the people of the state, it would be difficult to find a violation of the statute which would authorize equitable interference to secure to the plaintiffs an unreasonably low-rate at the probable expense of the rest of the public. State v. Railroad,75 N.H. 327. The result of the plaintiffs' contention as to the meaning of the statute is that the purpose of the legislature, if they understood the effect of what they were doing, was not to benefit the public generally, not to prevent taxation of the public as a whole more for railroad transportation than it was then paying, not to equalize transportation charges throughout the state; but that they did intend to benefit favored individuals or localities, to enable those who were procuring transportation at less than actual cost to continue to do so to the end of time at the public expense, and to perpetuate the inconsistent and discriminatory rates then in force. The plaintiffs do not present these considerations as the probably legislative purpose, but they say the legislature adopted the schedules of rates in existence as the maximum schedules beyond which no rate should be raised, as a convent boundary and as a definite limitation; in short, that the legislature attempted legislation in detail as to rates.

The method of statutory interpretation here followed has been so fully explained in recent times that it would be idle to repeat at length the authorities, many of which are set forth in the defendants' brief. The question is what the words used meant to those using them. To ascertain that, the circumstances under which the language was used, the probable purpose, the general policy on the subject, prior legislation upon the subject, the entire legislation at the time, and the reasonableness or otherwise of one construction or the other, are matters competent for consideration. Glover v. Baker, 76 N.H. 393, 403; State v. Railroad,76 N.H. 146; Opinion of the Justices, 73 N.H. 625, 626; Opinion of the Justices, 72 N.H. 605, 607; State v. Railroad, 70 N.H. 421, 423; Opinion of the Justices, 66 N.H. 629, 658, 659, 661, 663.

The legislation of 1883 was a change of policy, authorizing railroad incorporation by general law, substituting consolidation, with regulation by a commission, for enforced competition. State v. Railroad, 76 N.H. 146,149. The movement for a change was inaugurated in 1881 by parties who sought a general railroad law, with the purpose, it was charged, of paralleling the Concord Railroad. The changes of policy in these respects made at the next session in 1883 were accurately defined. Acting upon the suggestion *Page 231 of the governor, a railroad commission with greatly increased powers was created. If legislation in detail as to rates, was also intended as a change of legislative policy, it is reasonable to that language of equal definiteness would have been used, and that language which is at least equally as susceptible of a general as of a particular application would not have been adopted.

In 1850, the legislature provided: "Every railroad corporation in this state shall, in the month of August in each year, agree upon and fix their rates or tariffs of toll for the transportation of freight and passengers over their road. . . . Such corporation shall, on the first day of September in each year, post up at all the stations and depots on their road a copy of such rates or tariff of tolls. . . . Such corporation shall not, for one year after the rates of toll are posted as aforesaid, . . . charge or receive any higher rates of toll, fare, or freight than shall be filed upon and posted as aforesaid." Laws 1850, c. 953, s. 4. In 1852 it was enacted: "Any railroad corporation in this state shall establish from time to time . . . the rates or tariffs of tolls, . . . and the rates thus established . . . shall be the same for all persons and for the like descriptions of freight, . . . and no rates of fare or freight shall be at any time advanced except on thirty days' notice established and posted as aforesaid." Laws 1852; c. 1277, s. 1. The language of either of these sections would have expressed what the plaintiffs claim was meant. These provisions are to be found the General Laws, where, after requiring the posting of a table of prices for the conveyance of persons and property, the statute enacts that "such prices shall not be raised." G. L., c. 163, ss. 1, 2. But the clause in question contains no reference to an existing table of prices or schedule of rates.

Prior to 1883, the legislature had in no instance, it is believed, attempted to regulate rates in detail. If advanced knowledge on the scientific construction of rates renders such a policy wise, there is no evidence such policy was then known to the legislators. The details of rate-making were by the several railroad charters placed in the hands of the directors, with certain provisions by which "the authorized net profits were made the standard of reasonable tolls." State v. Railroad, 69 N.H. 35,47. Sections 11 and 13, of chapter 128, of the Laws of 1844, which has been called a general railroad law, govern the same subject. Section 11 provided that in any and every year when the net receipts exceeded the average of ten per cent of the expenditures from the commencement of operations, the *Page 232 excess should be paid into the state treasury; and section 13 provided that "the rates of toll for freight of passengers and merchandise, when the net income of the stock shall exceed ten per cent, shall be subject to alteration and revision by the legislature, according as they shall deem just and expedient."

"The general statute was not a change of policy, but of method. Its purpose was not to obtain revenue, but to enforce the established policy of the state. The profits of the proprietors of railroads were limited to ten per cent for the sole purpose of securing to the public reasonable rates of toll. . . . Ten per cent annual profits remained, as before, the standard of reasonable tolls." State v. Railroad, 69 N.H. 35, 48. "The object to be attained is the same under either section — the limitation of tolls to reasonable rates." State v. Railroad, 70 N.H. 421, 430. These sections were not repealed in 1867, but were then reenacted, were in force in 1883, and are upon the statute book today. P. S., c. 157, ss. 19, 20; G. L., c. 158, s. 5; Ib., c. 159, s. 9; G. S., c. 144, s. 5; Ib., c. 145, s. 9. They disclose a settled legislative policy for the regulation of railroad tolls in gross and not by specific enactments as to particular rates. The statute requiring the sale of mileage books at two cents per mile is the only instance of a specific rate declared by legislative act that is recalled. Laws 1909, c. 107; Laws 1913, c. 92.

In 1883, the act before referred to, requiring uniformity of rates and equal facilities to all persons, was in force. G. L., c. 163, s. 2. It was not repealed in 1883, but the penalty of five hundred dollars for its violation was that year increased to one thousand dollars, by an act approved the same day as the consolidation statute. Laws 1883, c. 105. In 1879, the legislature prohibited railroads from making a higher charge for transportation by the carload to a station than was charged for like transportation for a greater distance. Laws 1879, c. 55. This provision, omitting the limitation to carload lots, was reenacted in 1883. Laws 1883, c. 100, s. 27. By section 26 of the same chapter, the directors of railroad corporations were required from time to time to "establish reasonable rates for the transportation of passengers and freight over their railroads." By section 4, chapter 101, of the same session (the companion act creating the board of railroad commissioners), it was made the duty of the board "to fix tables of maximum charges for the transportation of passengers and freights upon the several railroads operating within this state, and shall change the same from time to time as in the judgment of said board the public good may require." *Page 233

One other consideration remains: the knowledge available in 1883 of the character of the then existing rates. It is unnecessary to take into consideration the conclusion of the public service commission, reached in 1912 after most laborious and exhaustive investigation, in which the rates existing in 1883 and 1889 are characterized as "inconsistent, discriminatory, and unscientific," as "antiquated classifications and haphazard tariffs." Pub. Serv. Com. Rep., Nov. 30, 1912, pp. 357, 366. If it could be said that the legislation was enacted with the light of this information, it would not require argument or consideration to conclude that, if another meaning could be extracted from the language, the legislature did not intend one which would impose such a condition upon the state. But though such information was not at hand in 1883, it was known at that time that there were a large number of independent railroads in the state. A few of them were operated under joint traffic agreements, but most of them were operated as independent roads, each competing with others for business and making rates at competitive points calculated to get business that naturally belonged to their competitors, making up what they lost on such business by charging those living at non-competitive points enough more than a fair price to make up for their loss on competitive business. Each road was a law unto itself as far as its charges for fares and freights was concerned. It could not have been understood that a uniform system of rates existed over all the roads of the state, or over any one road. The increase in the penalty for inequality of treatment and the reenactment with increased application of the long and short haul statute indicate conclusively that there was dissatisfaction with the existing arrangement of rates. There was more than a suspicion of discriminations for the benefit of favored shippers. The journal of the house (1883, p. 568) shows the introduction of a resolution for an investigation as to any unjust discrimination in fares and freights upon the Boston, Concord Montreal and Northern Railroads.

Upon all this evidence, the conclusion seems irresistible that, in 1883, it was not intended to establish the existing rates as a maximum schedule of prices in detail. If such was the intention, there is no reason why some such term, or the expression "table of prices" found in the statute which was then under amendment, was not used, or why the particular language of the statutes of 1850 or 1852, before referred to, was not employed. It is not without significance that when by the same legislature, and as a part of the same legislation, *Page 234 the duty of establishing maximum rates was imposed upon the railroad commissioners, the duty was defined to be "to fix tables of maximum charges." Laws 1883, c. 101, s. 4. If the legislature had intended to make the existing tables or schedules of charges a fixed maximum in detail, it can reasonably be assumed that they would have used the language they employed in placing the duty as to detail upon the commissioners. The policy of the state as to legislative regulation of freight tariffs had always been, and is now (State v. Railroad, 69 N.H. 35, 47) unless this statute is an exception, a regulation in gross and not in detail. If it had been the intention to reverse the established policy of the state in that respect, it is probable that language clearly and unmistakably expressing such intention would have been used.

Although the commissioners were authorized to fix the maximum rates, the legislative definition of reasonableness was not altered. In the judgment of the legislature, reasonable tolls were tolls which did not produce a net income exceeding ten per cent. For the roads leased or united, a new basis was provided — the gross amount of the rates then existing. Upon such interpretation, the, directors could make from time to time reasonable tolls as required by the statute; the commission could establish maximum tolls in detail, changing them from time to time as the public good required; and the provisions for equality to individuals and rates proportionate to service, insisted upon as part of the same legislation, could all be carried into effect. It is obvious that if the roads and the commission were bound to cast-iron schedules in detail, the main legislative purpose of justice and equality could not be carried out unless the basic schedule was originally fair and just, and certain always to remain so. It is also certain that no exhaustive investigation was made in 1883 to ascertain what the rates then were; and it is a reasonable conclusion that the legislature could not have intended to establish the details of those rates as fixed marks for all time, without having first made some attempt to establish their reasonableness and justice. As the law stood undisturbed at this session, railroads were entitled to charge such tolls as would yield a net income not in excess of ten per cent. Few, if any, of the roads earned that income; but united, there would be no legislative barrier in the way of such an increase as would produce such an income, rendering probable a large increase in rates as the legitimate result of consolidation. Some limitation was necessary, and that was found in the amount then being paid for such service. *Page 235

The legislation went further. It being claimed that the proposed consolidation would result in economies in management, it was further provided: "And the decrease in the operating expenses consequent upon the leasing or uniting of any roads shall be met from time to time by a reasonable and just reduction of fares and freights." Laws 1883, c. 100, s. 17. The profit of consolidation was reserved to the people of the state. The privilege of consolidation was granted upon the condition that the cost of transportation should not be increased, and the profit of the change in management be reserved for the people and not for favored individuals or localities. The section itself recognizes justice and reasonableness as the true basis of rates; and it is not probable that the legislature adopted as such basis, as between different individuals and places, tables or schedules of rates which the legislators did not know to be reasonable and just. It cannot be assumed they did not know that changes in conditions in the future might make the existing ratios and classifications unreasonable and unjust. The necessity for change "from time to time" was recognized in the power of fixing rates given the commissioners by section 4 of chapter 101, and to the directors of railroad corporations by a subsequent section of the chapter under consideration (s. 26). It is not probable that the contingency was not foreseen in which justice and reason would require increasing the rate on some subjects of transportation to render feasible lower rates on others.

In argument in favor of the plaintiffs' contention, it is said that there were expressions used by counsel and witnesses at hearings before committees of the legislature and in other places, tending to show that it was understood the prohibition would apply to specific rates. There is little evidence of that character. If there is any and it is competent, the opinions of individual counsel and witnesses as to what a written document will mean when executed, or what they think it means after execution, can be of very little weight. In most instances, the language used is the language of the act and helps neither side. It is to be remembered that the provision originated in 1883. In 1881, the attempt to get a general railroad law failed. In 1883, the controversy was between the Hobbs bill for an unlimited general railroad law, with right of the new railroad to lease generally, and the Colby bill, with its more limited provisions for new railroads and authority for lease and union of existing lines. After the practical failure of the Colby bill, the controversy in 1887, to which most of the documentary evidence *Page 236 relates, was between the Concord and the Boston Maine Railroads over the possession of the Northern and the Boston, Concord Montreal Railroads. This was not a contest between consolidation and competition, but a right to obtain the fruits of the policy of consolidation upon which the state had already entered. Whatever was said in 1887, no legislation was founded thereon. The contest was undecided. In 1889, the territory was, divided by agreement, and the legislation necessary to render the Colby act effective was adopted without a struggle. State v. Railroad, 76 N.H. 146, 149, 150. Obviously, what may have been said in the bitter struggle of 1887 has little tendency to show what was meant in 1883 or 1889. It may however be remarked, that at hearings before the legislature in 1887 evidence was introduced of the average cost per ton per mile of existing tariffs, and similar comparisons, are to be found in the commissioners' reports for 1886 (p. 28) and 1887 (p. 128). In 1888, the commissioners say (p. 52): "Since 1884, the railroad charges in New Hampshire have been reduced upon the basis of the business done about $400,000 per annum." If evidence of this character is competent, there is proof that the total amount charged for transportation to the public was under consideration.

Upon all the evidence competent for consideration, it seems more probable that the legislature did not intend to make the existing schedules in detail the maximum, but laid down as the measure of reasonableness the gross sum then received for the amount of traffic carried — the average charge per ton per mile. If the defendants can show that from each of the roads over which the plaintiffs' lumber has been transported they have not increased the average charge per ton per mile, they are not guilty of a violation of the statute. The evidence offered is competent. Further offer of proof is made as to decrease in fares. Such evidence is also competent. The expression "fares and freights" is naturally collective. It might not require much evidence to sustain the conclusion that "and" meant "or"; but the sole basis of reasonable rates recognized in the statutes is the tolls from fares and freights together — the net receipts from transportation. There is nothing in the act upon which to differentiate the two sources of revenue. Section 11, chapter 128, Laws of 1844, is based on "net receipts," and section 13 provides for the regulation of "the rates of toll for freight of passengers and merchandise."

It might be urged that this construction gives little protection *Page 237 to the individual shipper. No one feeling that an unlawful toll had been collected of him would be prepared to litigate with a railroad the question of its entire receipts in 1883 and at the time complained of. But the legislature did not give in terms the right of recovery for a violation of the statute by the railroad. If the shipper has such a remedy, it stands upon other grounds than a statute creating it. That no such remedy was specifically given tends to show it was not understood a situation had been created in which such a remedy would be useful. The railroad commission were required to fix "tables of maximum charges," and to "change the same from time to time." By section 2, chapter 5, Laws of 1893, they were required to do so "upon the petition of any party interested." If the plaintiffs felt that they were charged an unjust, unreasonable, or illegal rate, they had a prompt and inexpensive remedy by application to the commission.

It is contended that the question was settled in State v. Railroad,75 N.H. 327. It is true that in the opinion the provision is spoken of as providing "a maximum schedule beyond which the rates cannot be raised" (p. 330), and on page 331 it is said of the law of 1883: "It appears that it was intended to limit the power to increase rates on all roads leased or united under the act to the maximums stated in the schedules referred to in section 17." This last expression may be considered an inadvertence, as no schedules are mentioned in section 17, but it cannot fairly be interpreted as an intentional decision of a question at that time unsuggested by any one. The case relied upon was before the court upon demurrer to the bill which alleged that the defendants had raised the rates "upon all commodities transported." Whether the maximum was the total existing charge, or the charge on particular subjects, or for particular services, was a question not presented by the pleadings nor argued to the court. After the decision on the demurrer, the defendants filed an answer in which they claimed, among other things, that there had been no increase in the rates for freights and fares, because the increase in rates for freight was more than overbalanced by a decrease in rates for passenger transportation, so that the total amount charged the public for railroad service was less, instead of more, in proportion to the service rendered. While the case was again pending here upon exception to certain orders in the superior court, upon an agreed statement of facts a case was presented to this court to determine upon what roads the restriction of the statutes applied. Upon the facts stated, it *Page 238 appeared that some of the roads leased under the Public Statutes were not in existence July 24, 1889, and it was thought that if the restriction related to a schedule of rates in force upon that date the statute could not apply, because there was no schedule to which to apply it; while if the restriction related to the general charge for transportation service, as the defendants' answer indicated might be claimed, the restriction might have some application. The question had not been argued; but as there was occasion for immediate decision of the main question, and upon the understanding that the state claimed that the restriction was specific and particular, in opposition to the claim put forward in the defendants' answer, the decision was then tentatively made against the state as to the new roads, upon this claim or concession of the state. Neither party asked for further consideration of the question, and the whole case was subsequently dismissed without prejudice by agreement, leaving the entire controversy unadjudicated. It may be remarked that in no instance has the controversy over railroad rates been submitted for judicial decision. Certain questions presented by what both parties have agreed, or what one party has alleged to be the facts, have been presented and decided; but a settlement of the law upon a judicial determination of the facts has not been and is not yet invoked by either party. An attempt to apply a decision based upon supposed or agreed facts to the actual facts may sometimes produce a wrong impression as to what was decided. There is a wide difference between the question whether the state may properly insist upon the terms of the agreement as to interstate rates so long as the other party to the contract claims the benefit and does not show that a failure to comply is caused by the command of superior authority (State v. Railroad, 75 N.H. 327, 331-335) and the question whether individual shippers can obtain relief as to interstate rates in violation of the controlling federal law.

The question whether the restriction of the act of 1889 and of chapter 156 of the Public Statutes is specific, applying to rates then in force for particular subjects and routes, or general, applying to transportation as a whole, is in this case first presented for decision. Why the defendants did not earlier take this position, as perhaps they might have done, is not material. It may be that, conscious of raises made in certain rates in 1903, they were unaware, until the thorough examination before the public service commission, that they were insufficient to bring the general charge for freight service up to the level of 1889. But for whatever reason the claim was not *Page 239 earlier made, there is nothing which now estops them from making it. As the case is presented, the decision is merely that the evidence offered is competent and that the motion to reject the brief statement should, as to this contention, be denied.

If as a result of the trial it should appear that the defendants have collected of the plaintiffs any sums in excess of the amounts allowed by the statute as hereinbefore construed, the plaintiffs are not prevented from recovering the same because the sums paid were paid without protest. The reasons for this conclusion are fully stated in the opinion filed by Judge Peaslee, in which, upon this point, all the justices concur.

Case discharged.

YOUNG, J., concurred.