Sunderland Bros. v. Chicago, Burlington & Quincy Railroad

Aldrich, J.

This is an action brought under section 6159-6164, Rev. St. 1913, known as the “Reciprocal Demurrage Act,” to recover demurrage alleged to be due from defendant railroad company for delay in forwarding and delivering carloads of sand and stone. These shipments were all intrastate. The court below rendered judgment for plaintiff, and defendant appeals the case to this court.

Section 6159, Rev. St. 1913, provides, among other things: “In less than carloads, not more than one cent per hundred pounds per day or fraction thereof with minimum five cents as damages, together with all other damages the consignor or consignee may sustain thereby.” Also section 6160 provides, among other things: “Any railroad company failing to give such notices shall forfeit and pay to the consignee or other party whose interest is affected the sum of one dollar per car per day or fraction of a day’s delay on all carload shipments, and one cent per hundred pounds per day or fraction thereof on freight in less than carload lots with minimum charge of five cents per day and not exceeding one dollar per day for any shipment in less than carload, after the expiration of said twenty-four hours, as damages, together with all other damages’sustained thereby.” Section 6162, provides: “The railroad company shall forfeit and pay to the shipper or consignee one dollar pelcar per day for each day or fraction thereof such delivery is delayed as damages and all actual damages sustained thereby.” These quotations show clearly that the legislature intended to provide for a fine or penalty in addition to compensatory or actual damages, if not a fine or penalty, then for double damages. The sections- are clear and unambiguous in their meaning and are subject to no other construction.

An unreasonable regulation which in effect, deprives owners of property used in rendering public service, and operates as a limitation upon the rights of those devoting their property to public use and imposes double damages, a part of which is in the nature of a fine and a part as compensatory damages, constitutes a deprivation of property without due process of law and is a violation of the state Constitution. ,

A statute which takes property from one individual and gives it to another, not in compensation for any injury sustained, is contrary to the provisions of the Constitution securing property rights of private individuals.

An act of the legislature which provides for double damages comes under the rule in Atchison & N. R. Co. v. Baty, 6 Neb. 37, and is unconstitutional.

If this statute under consideration only provided for liquidated damages, we would not hesitate to apply the rules laid down in Graham v. Kibble, 9 Neb. 182. In Clearwater Bank v. Kurkonski, 45 Neb. 1, the statute permitted a mortgagor to recover $50 as liquidated damages for failing to release a chattel mortgage. We validated that statute. In Hier v. Hutchings, 58 Neb. 334, liquidated damages were prescribed by section 361 of the Criminal Code (Rev. St. 1913, sec. 9255), and were held recoverable, and the section held valid.

■ Where a statute seeks to make a railroad company liable for one dollar per day per car, for delay in forwarding, giving notices, or delivery, and in addition thereto imposes liability for actual damages caused by such delay, the same is repugnant to the state Constitution. If the demurrage is treated as a fine or a penalty, the statute is repugnant to section 5, art. VIII of the Constitution, which provides that all fines and penalties arising under the general laws of this state shall go to the school fund. If treated as liquidated damages, the legislature is acting beyond its authority in seeking to appropriate private property to private use. Under section 21, art. I of the Constitution: “The property of no person shall be taken or damaged for public use without just compensation therefor.” In the instant case the railroad company is liable for all actual damages. When the legislature seeks to impose a greater liability in damages than compensatory damages, it is taking private property for private use, which is unconstitutional.

1. Fines: Demurrage Act: Constitutionality. Sections 6159, 6160, 6162, Rev. St. 1913, which imposed on railroad companies, for delay in shipment and delivery of goods carried, a liability in favor of the shipper for a specified sum in addition to all actual damages suffered by reason of such delay, are unconstitutional under section 5, art. VIII of the Constitution, which provides that all fines and penalties arising under the general laws shall go exclusively to the school fund. 2. Case Criticised. The case of Clearwater Banjo v. KurJoonsJoi, 45 Neb. 1, discussed and criticised.

"We are of the opinion that the quotations in the second paragraph of this opinion taken from sections 6159, 6160, 6162, Rev. St. 1913, were inducements for the passage of the particular sections; therefore sections 6159, 6160, 6162, supra, are unconstitutional.

The judgment of the district court is reversed and plaintiff’s action dismissed.

Reversed and dismissed.

Letton and Day, JJ., not sitting.