Territory ex rel. McLean & Co. v. Denver & Rio Grande Railroad

POPE, J.

(concurring). — While I do not regard as tenable the position of the appellee, that the hides here involved were at the time and place named in the writ, not articles of interstate commerce and that they were thus not within the protection afforded by the interstate commerce clause of the Constitution, I am of opinion that the fee imposed was a valid requirement in the exercise of the police power of the Territory and thus not within the prohibition against the regulation of interstate commerce by the States. The right of the Territory in the exercise of its police power, to exact a proper fee for inspection in cases such as this, is pointed out very clearly in the opinion of the court. It is contended by the relator, however, that, even assuming this power, the recitals of the writ taken as true upon the motion to quash show the fee imposed to be excessive and also show that the Legislature has diverted a portion of the proceeds to purposes foreign to the ends of the inspection, and that the law thus becomes in effect a revenue measure instead of an inspection charge and is void as an improper burden upon interstate commerce. It is upon this particular contention that I desire by this concurring opinion to record a brief review of the authorities.

The charges which inspection laws impose must be such “as merely defray the -expense of executing the inspection” (In re Rebman, 41 Fed. 875), but to render a law void because of excessiveness of the fee there must be either such excessiveness as “to shock the conscience.” (Patapsco case, 52 Fed. 690) and to demonstrate that the Legislature under the guise of an inspection law was levying a tribute upon interstate commerce, or there must be created by the law imposing the fee some diversion of the funds from the expenses of inspection to other directions, thus evidencing a legislative purpose to misuse the funds. In either case the legislative intent, presumed from the excess in one instance and evidenced by its express language in the second, stamps the law as a mere sham, a creator of revenue under the guise of a statute for inspection. An instance of the first class of law is found in the recent case of Postal Telegraph Co. v. Taylor, 192 U. S. 71, where upon a showing that the fee charged for supervision and inspection was twenty times the amount that would be expended for the purpose, the court held that it was impossible by “the widest stretch of imagination” to regard the fee as reasonable and it was declared void as “a mere subterfuge for the purpose of raising revenue.”

Instances of the second class are found in Amer. Fert. Co. v. Board of Agriculture, 43 Fed. 613 where the Legislature appropriated thousands of dollars derived from so-called inspection fees to purposes entirely foreign to the expense of such inspection and the statute was declared void and also In re Rebman, 41 Fed. 875, where the law was declared void because “half of the moneys paid for- inspection were given to the inspectors and the other half ordered into the treasuryIs this law void under either of these lines of authority? The first which is a question of fact, must be determined by the allegations of the writ, taken as confessed; the second, which is a matter of law, by the wording of the statute. The only allegations of the petition on this subject are found in paragraph “I” of the writ, where it is in effect said that “the pretended fee or charge is largely in excess of the amount of fee or charge which might be absolutely necessary for the making “of the required inspection, and where the relator goes on further to allege that under certain circumstances the inspector could make forty dollars per day when his fees and expenses would amount to only five dollars per day. I cannot consider this allegation of what an inspector under the most favorable circumstances could make upon a given day as the equivalent of an allegation that the proceeds of the system of hide inspection taken in the aggregate and for a stated period, are in excess of the amount necessary to defray the expenses of that system for such period. Relator’s position overlooks the fact that there may be days when the inspector inspects only a few hides instead of 400, and yet with the same expenses and per diem. It overlooks the fact also that the mere expenses and per diem of the inspector is not all that is chargable against the fees collected. The system provides for blanks to be printed, tags to be furnished, data to be forwarded to the office of the cattle sanitary board and an office force there employed to enter such data and preserve the same. It will thus be seen that the fact that one or more inspectors might upon a given day make forty dollars, when their personal expenses and compensation are much less, is not equivalent to an allegation that the fees charged are in excess of the aggregate cost of such inspection from year to year. As was said in Cherter City v. Telegraph Co., 154 Pa. St. 464 (Quoted with approval in Western Union Telegraph Co. v. New Hope, 187 U. S. 425), where it was averred in the affidavit of defense that the rates charged were at least five times the amount of the expense involved in the supervision exercised by the municipality.

“For the purpose of this case, we must treat this averment as true as far as it goes. The difficulty is it does not go far enough. It refers only to the usual ordinary or necessary expenses of municipal officers, of issuing licenses and other expenses thereby imposed upon the municipality. It makes no reference to the liability imposed upon the city by the erection of telegraph poles. It is the duty of the city to see that the poles are safe and properly maintained, and should a citizen be injured in person or property by reason of a neglect of such duty an action might lie against the city for the consequences of such neglect. It is a mistake, therefore, to measure the reasonableness of the charge by the amounts actually expended by the city for a particular year, to the particular purpose specified in the affidavit.”

Coming now to the second point as to whether there is any legislative misappropriation of the funds derived from these inspections the attention of the court has been called by paragraph “J” to Compiled Laws, section 220, which it is alleged diverts the funds arising .from “the inspection of hides” to the payment of notes issued from time to time to aid in the execution of the provisions of the act approved February 14, 1891. It is alleged that this is a diversion of the funds in question and renders the law void. It would seem that the words “Fees arising from inspection of cattle and hides as hereinafter provided” as used in section one of chapter 67 of the Laws of 1893, compiled as section 220 refer only to the fees provided for in section 2 and not to fees provided for by the act of 1901, passed eight years later, and in this view of the matter the fees here in question were not by said statute made subject to the payment of the negotiable paper authorized under the Compiled Laws, section 220. But assuming that such fees were directed to be so used, was this a diversion of such fees from their legitimate purpose? The law of February 14, 1891, referred to in section 220, empowers the cattle sanitary board among other things (section 208) to make “all necessary rules and regulations respecting the inspection of hides and slaughterhouses of this Territory and for the government of all employees of said sanitary board.” It also regulates the duties of inspectors (section 218), and provides for the salary of the secretary and other employees of the board. It thus appears that this act creates fees and expenses which are a legitimate charge against the fees collected under the act of 1901, for, as we have above seen, the inspectors and the secretary of the board constitute an important part of the machinery required for the inspection under that act. Using the money to aid in the execution of the act of 1891, is thus not necessarily a diversion of the funds raised by the act of 1901. As above pointed out there is no sufficient allegation of any excess in the fees chargable under the act of 1901 over the expenses of inspection, so- there is no ground for the assumption that section 220 effects a diversion of the funds. For ought that appears to the contrary, all the funds collected under the law of 1901, are used in paying that portion of the expenses of the board properly chargeable against the inspection provided for by that act. The fact that the funds collected under the act of 1901, are covered into the general funds of the cattle sanitary board does not affect the case. That was true in the Patapsco Case, 52 Fed. 696, and is a mere matter of bookkeeping.

I am of opinion that the judgment should be affirmed.