Bartels Northern Oil Co. v. Jackman

SpaldiNg, Ch. J.

(after stating the facts as above). The attorney general, for the purposes of this decision only, admits the unconstitutionality of the law, and contends that the court has no jurisdiction of the subject of this action. The first ground for this contention is that it is an attempt to enjoin the execution of a public statute by officers of the law for the public benefit.

1. Assuming that the respondent has no adequate remedy at law, a suit for an injunction will lie to test the validity of a statute or the lawfulness of the exercise of the powers conferred upon the officer charged with executing it; and we are of the opinion that subdiv. 4, § 7214, Comp. Laws 1913, which provides that injunction will not be granted to prevent the execution of a public statute by officers of the law for the public benefit, cannot be made to apply in any event to this statute. It will be noted that it is “officers of the law” who under that section cannot be enjoined. There are authorities defining “officer *246of tbe law,” and there seems to be a clear distinction between an officer of the law and a public officer, an officer of the law being defined as synonymous with peace officer, referring only to judges, justices, sheriffs, and constables. See authorities cited in 6 Words & Phrases, 4951. This conclusion is supported by an inspection of Field’s Civil Code, which furnishes the basis of our Code. In Field’s Code the term used is, “nor to prevent the execution of any statute in this state, nor the exercise of any public office.” We are disposed to hold that a change in the phrase was made in recognition of a distinction between a public officer and an officer of the law, and to enlarge the function of the remedy by injunction. This court, however, without having this distinction called to its attention, has passed upon the principle involved in this objection, in State ex rel. Ladd v. District Ct. 17 N. D. 285, 15 L.R.A.(N.S.) 331, 115 N. W. 675, where it was held that the legality of the acts of the pure food commissioner might be tested in an action to enjoin him, and not to preclude an inquiry by the courts into the legality of official acts of such officer in such suit. There is, however, another, and if possible a stronger reason why this prohibition is not applicable in the instant case. It is contended that this law is in violation of the commerce provisions of the Federal Constitution. A Federal question is therefore involved. In the determination of such question, which we shall later examine, decisions of the Supreme Court of the United States are controlling where that court has expressly passed upon the same question, and this court has no alternative, but must follow the decisions of the highest court of the land. In General Oil Co. v. Crain, 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475, this same argument was advanced. The statute of Tennessee, construed in that case, provided that “no court in the state of Tennessee has, nor shall [it] hereafter have, any power, jurisdiction, or authority to entertain any suit against the state or any officer acting by the authority of the state, with a view to reach the state, its treasury, funds, or property. . . .” And it was held that provisions of the Federal Constitution and Amendments could not be nullified by the state prohibiting suits in its own courts against state officers to prevent their enforcing unconstitutional statutes. See also Pennoyer v. McConnaughy, 140 U. S. 1, 35 L. ed. 363, 11 Sup. Ct. Rep. 701; Board of Liquidation v. McComb, 92 U. S. 531, 23 L. ed. *247623; Osborn v. Bank of United States, 9 Wheat. 859, 6 L. ed. 233; Minneapolis Brewing Co. v. McGillivray, 104 Fed. 272.

Beferring to actions in onr own courts again, and without citing specific cases, it is well known to the profession tnat the courts have entertained and sustained from the very beginning suits to enjoin the execution of state laws, not only because claimed to be unconstitutional, but for many other reasons. On of the most important cáses of this character was State ex rel. Rusk v. Budge, 14 N. D. 582, 105 N. W. 724, wherein it was sought to enjoin the defendants, as members of the Board of State Capitol Commissioners, from building a new state capitol, on the ground that the law establishing such commission and authorizing the construction of a new capitol was unconstitutional. Dismissing this point with this brief discussion, we hold it not well taken, and that a suit for injunction may be entertained when in other respects the complaint states a cause of action, having for its purpose the enjoining of officers of the law from executing an unconstitutional act of the legislature, or to determine whether an act is valid.

2. It is next urged that the complaint is insufficient to give the court jurisdiction, because the plaintiff has a plain, speedy, and adequate remedy at law, and that irreparable injury to the respondent is not shown.

(a) It is stated that “the plaintiff has a complete remedy at law, either by an action of conversion or claim and delivery or for damages, and it is argued that, if the law is invalid, the inspector and his deputies are trespassers, and liable as such to the plaintiff for damages it may sustain.” The allegations of the complaint are sufficient to show that it is doing a continuous business; that it is constantly receiving and selling oil or products of petroleum. The statute requires the inspector to hold at the port of entry shipments for nonpayment of fees. It needs no discussion to show that, should an action for conversion be brought against the inspector or deputy on one shipment of the commodity, it would furnish no protection on the next and succeeding shipments. The same would be true if the remedy by claim and delivery were invoked, or actions for damages. The remedy by law must not only be adequate, but it must be plain and speedy. Authorities are cited by defendant to sustain his position, but an inspection discloses that such authorities involve facts materially different from *248those pleaded in the ease at bar. They were where one act only was in question, instead of a succession of acts. It appears reasonably clear that in the case at bar injunction is much more prompt and efficient than either of the legal remedies suggested, that in fact none of those named would be adequate to meet the dangers sought to be guarded against. In Corning v. Troy Iron & Nail Factory, 39 Barb. 311, the court, in passing upon an injunction sought against trespass on a running stream, says: “It is said that equity will not grant an injunction if there is an ample remedy at law. I think the rule, according to the modern decisions, is subject to some qualification; but, assuming its entire correctness, is it true that here .is an ample remedy at law ? It is said an action at law lies to recover the damages. . . . [if so] such actions may be indefinitely repeated, and each successive day may witness the commencement of a new one;” and the court sustained the injunction, and in affirming the decision the court of appeals in 40 N. Y. 206, said: “If equity refuses its aid, the only remedy of the plaintiffs, whose rights have been established, will be to commence suits from day to day, and thus endeavor to make it for the interest of the defendant to do justice by restoring the stream to its channel. If the plaintiffs have no other means of recovering their rights, there is a great defect in jurisprudence. But there is no such defect. The right of the plaintiffs to the equitable relief sought is established by authority as well as principle.” Many authorities are to the same effect, and see Sumner v. Crawford, 91 Tex. 129, 41 S. W. 994; Denny v. Denny, 113 Ind. 22, 14 N. E. 593; Champ v. Kendrick, 130 Ind. 549, 30 N. E. 788. The law is in a measure a progressive science, although not an exact one. When courts of law and equity were separate and distinct courts, there was very strong reason for a close distinction between actions at law and suits in equity. Neither court had jurisdiction over the other subject. But since the abrogation, in most states, of forms of action, and jurisdiction being granted in -both classes of cases to the same court, it is not necessary to as clearly and completely distinguish between the two as formerly, although care must, of course, still be taken not to invade the right to trial by jury. It is universally coming to be • recognized in other subjects that “an ounce of prevention is worth a pound of cure.”' Why should not this apply with equal force to the law ? And, unless required *249by constitutional or statutory provisions to adopt and follow a specified course of action, such proceedings as will prevent the evil should be favored, rather than to permit the damage to be done, and then seek a subsequent remedy by action for damages or some corresponding course. In line with this it is said in 4 Pomeroy’s Equity Jurisprudence, §§ 1356, 1357, that “if the trespass is continuous in its nature,, if repeated acts of wrong are done or threatened, although each of these-acts taken by itself may not be destructive, and the legal remedy may therefore be adequate for each single act if it stood alone, then, also, the entire wrong will be prevented or stopped by injunction on the ground of avoiding a repetition of similar actions. . . . The injunction is granted, not merely because the injury is essentially destructive, but because, being continuous or repeated, the full compensation for the -entire wrong cannot be obtained in one action at law for damages. . . . The ideal remedy in any perfect system of administering justice would be that which absolutely precludes the commission of a wrong, not that which awards punishment or satisfaction for a wrong . . . committed.” See also Watson v. Sutherland, 5 Wall. 74, 18 L. ed. 581. We are satisfied that neither of the forms of law action suggested would furnish an adequate remedy for the wrong committed by the defendant in obeying the law, and holding successive shipments of products of petroleum consigned to the plaintiff, if the law in question is invalid, and that therefore injunction, so far as this objection is concerned, is a proper proceeding to test the question.

(c) It is next urged that irreparable injury to plaintiff is not disclosed by the complaint. The allegations of the complaint in this regard do not seem to us as complete as they might have been made, but we are satisfied that they state enough to inform the court of the character of the threatened injury which plaintiff seeks -to guard against, and warrant it in holding that it is irreparable in a legal sense. Irreparable injury in the sense that it furnishes a ground for the issuance ofJih~m7umctiGrrdoes not mean that the injury is beyond the possibility of repair or of compensation for damages, but rather .that it must be of sucíTconstant and frequent recurrence* that thejnjured party cannot be adequately compensated for any damages, or when the damages which may 'result therefrom cannot be* measurecT’by any certain pecuniary standard, but only by conjecture. Eau Claire Water Co. v. Eau Claire, *250127 Wis. 154, 106 N. W. 679; Columbia College v. Tunberg, 64 Wash. 19, 116 Pac. 280; Donovan v. Pennsylvania Co. 199 U. S. 279, 50 L. ed. 192, 26 Sup. Ct. Rep. 91; Heine v. Roth, 2 Alaska, 416. Por variations of this definition see 2 Words & Phrases, 1206. The complaint in the case at bar states facts indicating with sufficient minuteness that the business of the plaintiff would suffer irreparable injury if it were required to resort to either of the legal remedies suggested. It .is constantly receiving at its different stations shipments of petroleum products, and as constantly disposing of them to its customers. The consumption of such products in this state is enormous, and it is evident that the stoppage of the receipts of the plaintiff would of necessity cause a discontinuance of its sales, work a loss of customers and business, that its customers would be driven to patronize other dealers immediately on the supply in any one of plaintiff’s stations being exhausted. For this injury an action at law would furnish no adequate remedy, and the injury would be irreparable in the same sense. Injury would occur to the business of the plaintiff, and lessen the value of its franchise. . This character of injury is within the contemplation of the law regarding irreparable injury. See State ex rel. Ladd v. District Ct. 17 N. D. 285, 15 L.R.A.(N.S.) 331, 115 N. W. 675. As a result of the foregoing considerations we conclude that the district court had jurisdiction of the subject of the action in the case at bar.

3. In view of the attitude of the state upon argument we shall not devote much space to a consideration of the validity of the tax. In many cases that question may be determined by an inspection of the statute itself, but in other classes of cases, — and among them falls this case, — it must be determined- by the practical workings of the law. This has been so in several cases decided by this court, and among them the coal rate cases. When those cases first went to the Supreme Court of the United States that court declined -to fully pass upon the question, because the law had not been in operation long enough to demonstrate its validity or invalidity, and it was remanded to this court, with leave to the plaintiffs to have the case reopened and take further testimony when the law had been in operation a sufficient time to demonstrate its effect. See Northern P. R. Co. v. North Dakota, 216 U. S. 579, 54 L. ed. 624, 30 Sup. Ct. Rep. 423. We shall not, however, determine the validity or legality of this fee on the pleadings alone. We think *251that, if tbe allegations of tbe complaint are proved by evidence on trial, tbe fee is invalid, that is, whenever tbe fees are to any considerable extent in excess of tbe expenses of administering tbe law. At such time tbe statute becomes not simply an inspection measure, but also a revenue law, and tbe legislature, as alleged in tbe complaint, intended it to be sncb. Our discussion of tbe constitutional question is on tbe assumption only that tbe allegations of tbe complaint regarding tbe relative amount of expenses and fees are borne out on trial, and is for tbe guidance of tbe trial court in case tbe allegations of tbe complaint are put in issue. Tbe Federal decisions on this question appear to bave been somewhat conflicting, but no longer ago than February 24, 1914, tbe question was settled by tbe Supreme Court of tbe United States in a case in every respect on principle like tbe one before us. Tbe facts were tbe same, except as to tbe subject of tbe inspection.

In D. E. Foote & Co. v. Stanley, 232 U. S. 494, 58 L. ed. 698, 34 Sup. Ct. Rep. 377, tbe Supreme Court of the United States reversed tbe supreme court of Maryland, and held tbe fee provided by an oyster inspection law void, — in conflict with tbe provisions of tbe Federal Constitution. Tbe facts, so far as material to tbe case before this court, were as follows: Plaintiffs were engaged in packing oysters, which were taken from tbe waters of Virginia and New Jersey, as well as from Maryland, and shipped to Baltimore. Tbe oysters were unloaded from vessels in Baltimore, where they were inspected and then distributed to customers of tbe plaintiff. A fee of 1 cent per bushel was imposed for inspection. Tbe facts were stipulated, and showed that tbe salaries of tbe inspectors amounted to about $14,000 per an-num, and that tbe total receipts from tbe fees were something over $43,000 per annum, leaving a surplus or excess of between $28,000 and $29,000. Under the law tbe surplus was used for keeping and maintaining sufficient police regulation for tbe protection of fish and oysters in Maryland waters, and tbe payment of tbe officers and men, and keeping in repair and supplying tbe necessary means of sailing tbe boats and vessels of tbe state fishery force. This law was enacted in 1910, and prior to its enactment a similar law bad been in force on tbe subject, providing tbe same fee for inspection, and tbe court bad before it, as in the case at bar, tbe knowledge of tbe receipts and expenditures under tbe preceding law. Tbe Supreme Court held that *252there was a difference between policing and inspection, that while the two duties might sometimes overlap, if the state imposed upon one set. of officers the performance of the two duties, and paid the whole or a part of the joint expenses out of inspection fees, it must be made tO' appear that the tax did not materially exceed the cost of inspection,, and that the burden in such was on those seeking to collect the combined charge, because if the cost of inspection was so intermingled with other charges as to make it impossible to separate the two, interstate commerce might be burdened by fees collected both for inspection and revenue, — for a lawful and for an unlawful purpose. In the case at bar the excess over the cost of inspection goes into the general fund of the state treasury, and is appropriated by the legislature to pay the general expenses of government, the same as are funds derived from general taxation. The only difference in this respect between our statute and the Maryland statute is that under the latter the excess was applied to a definite purpose more nearly related to the oyster industry than the excess in our own case is to the oil industry. The court also held that, if the fees exceeded the cost by a sum not unreasonable, no question could arise as to the validity of the tax, so far as the amount of the charge was concerned; that, even if this appeared, courts would not immediately interfere, because the presumption was that the legislature would reduce the fees to a proper sum. It then says, — and this is literally applicable to the case before this court, because of the former law in the case having provided the same fee, — “But when the facts show that- what was known to be an unnecessary amount has been levied, or what has proved to be an unreasonable charge is continued, then we are obliged to act in the light of those facts, and to give effect to the provisions of the Constitution prohibiting the collection by a state of more than is necessary for executing its inspection laws;’ and the courts will not enter into any nice calculation as to the difference between cost and collection, nor will they declare the fees to be excessive unless made clearly to appear that they are obviously and largely beyond what is needed for the inspection services rendered, but, on the contrary, it was held that if it was shown that the fees were disproportionate to the service rendered, or that they included the cost of something beyond legitimate inspection to determine quality and condition, the tax must be declared void, because such costs, by neees-*253sary operation, obstruct tbe freedom of commerce among the states; and it was beld that tbe act included tbe cost of something beyond legitimate inspection; it beld also that “tbe question of reasonableness' of tbe fee may be considered in tbe light of tbe practical operation of tbe law, with a view to determining with reasonable certainty tbe permanent relation between tbe amount collected and tbe cost of inspection;” and that tbe tax was void as a burden on interstate commerce, when levied upon oysters coming from other states. As we have before said, we have no discretion on this phase of tbe case. Tbe foregoing authority is tbe last word by tbe Supreme Court of tbe United States on tbe subject, and is absolutely controlling on the question before us. We must therefore bold that, if tbe facts alleged in tbe complaint, and which were only admitted as true for tbe purpose of determining the demurrer interposed by tbe state, are shown to be substantially true, or that tbe amount collected in fees is largely in excess of tbe necessary expenses of making inspections, tbe tax is invalid.

Tbe state cites and relies upon General Oil Co. v. Crain, decided by the Supreme Court of the United States in 1908, and found in 209 U. S. 211, 52 L. ed. 754, 28 Sup. Ct. Rep. 475. On first inspection tbe facts in that case seem to make it an authority, but on close reading it appears that tbe inspection fee there beld valid only related to tbe inspection of oil shipped into tbe state and afterward commingled with tbe general property of tbe state: that is, it was shipped in, unloaded, and placed at rest, perhaps to be thereafter shipped out of tbe state, but it was beld that, in view of its being placed at rest in the state and tbe inspection being thereafter made, it bad ceased to be an interstate commodity, and that tbe provisions of tbe Federal Constitution were not applicable.

If, however, tbe Crain Case would otherwise be an authority, it must be considered as superseded by tbe Eoote Case, from which we have quoted, which stands as tbe law applicable until overruled by tbe same court. Many authorities are cited from state courts, some apparently sustaining tbe state’s contention, although most of those appearing to •be directly in point contain very brief discussions of tbe subject, and tbe fee was much smaller. And all were decided prior to tbe decision of D. E. Foote & Co. v. Stanley, supra, hence in so far as they are in conflict with that authority, are of no force or weight.

*2544. It is also contended by respondent that the provisions fixing the amount of the fee are in conflict with various sections of the state Constitution, and particularly with § 116, which provides that laws shall be passed taxing by uniform rule all property according to its true value in money. We need not dwell upon this point, because if the evidence adduced on trial sustains the allegations of the complaint as to the relative amount of fees and expenses, it is a revenue measure, and comes within the terms of the decision recently made by this court in Malin v. Lamoure County, 27 N. D. 140, 50 L.R.A.(N.S.) 997, 145 N. W. 582, where this subject was fully considered.

5. With reference to the preliminary injunction granted at the beginning of this litigation without notice to the state, we find that no question is before us on that order prior to the hearing of a motion to dissolve such restraining order. This motion was made and heard shortly after the initiation of this litigation, on the complaint, and on the same objections which we have considered above. The state submitted no affidavits, but stood upon the naked legal propositions which we have decided. The application for the temporary restraining order was supported by the affidavit of Charles Bartels, manager of the plaintiff, wherein he restated most of the allegations contained in the complaint, and also that it was necessary to have delivered to plaintiff the oils and gasolenes shipped, from time to time, from points without the state, and that there was then in transit, billed to it, a number of cars of such oils and gasolenes, which were being held by the defendant in his official capacity as state oil inspector, under the provisions of the inspection law of 1913; that its business was continuous ; that it was absolutely necessary for the protection of its interests that no interference be made by defendant with its receipts of such oils and gasolenes shipped to it from time to time; that he had been notified as manager of the plaintiff that it was the intention of the inspector to hold any and all such oils then or thereafter shipped to it, and not deliver the same to plaintiff, or permit them to be delivered, without the payment of all delinquent fees for inspection; that if such course were permitted, its business would be interrupted, its proceeds depleted, and that it would suffer irreparable injury. Plaintiff tendered to the oil inspector an undertaking in due form to protect the state and insure the payment of any and all fees, together with costs *255and disbursements for which the court might find plaintiff liable. It is well established that the granting or refusing of a temporary restraining order in such cases lies within the sound legal discretion of the court to which application is made. The statute provides for such order. See § 1529, Comp. Laws 1913, and from the date of the order entered on the motion to dissolve the temporary injunction, which is the order appealed from, that injunction stands on the same basis as though there had been a hearing on the original application. The court exacted and the plaintiff furnished adequate protection to the state, and under the circumstances the same reasons sustain this order that are applicable to the main contention.

The members of this court fully appreciate the gravity of the situation occasioned by our conclusions, and also that all doubts should be resolved in favor of the validity of the tax. We have carefully considered and analyzed the authorities cited by the state, claimed to sustain its position, but they furnish no justification for sustaining the tax in the light of the Federal authority to which we have made reference, and which is absolutely controlling on the Federal question involved. It is possible that we might have gone further, and held the tax invalid on the face of the law, considering the disproportion between the salaries of the deputy inspectors and the income derived from the number of barrels which form the basis of such salaries at the different ports of entry, but there are indefinite and undisclosed expenditures authorized by the law, so we feel that we should not determine this with reference to the salaries alone. For this reason, and that the state may have the benefit of every doubt on the subject, we deem it proper to remit the case to the trial court for further proceedings, if the state desires to take them. To that end it is given thirty days from the filing of the remittitur in the trial court in which to answer, for the purpose of showing, if possible, that the amount received in fees is not sufficiently in excess of the expenses necessarily incurred in executing the law and making inspections to constitute it a revenue measure. The orders of the District Court are affirmed.