text:
    MISCH v. LEHMAN.
    1. Covenants — Building Restrictions — Estoppel.
    Where, in violation of a building restriction against erecting any store, factory, or building other than a dwelling house with usual appurtenances, defendants planned to construct a four-family flat on' a lot included within the restricted district, and it appeared that the complainants had raised no objection to another violation of the covenants on a neighboring lot, but the structure was not so clearly a breach of the restriction as to be unquestionable, nor had the point been adjudicated, and the character of the district or adjacent property had not changed or been seriously affected by the alleged violation, the court properly enjoined defendants from proceeding with the erection of the flat, overruling the contention that complainants were estopped to ask for the injunction.

    2. Same — Contracts- — Equity — Injunction — Waiver or Acquiescence in Breach oe Restrictions.
    Even after one or more breaches, equity will not refuse relief if the restrictive covenants can be shown to be valuable to complainant and successive violations do not appear to have resulted in a subversion of the original scheme of development, so as to alter substantially the character of the neighborhood.
    3. Same — Evidence.

      Held, also, that the character of the residential district had not so changed as to make it inequitable to enforce the restriction.
    4. Same — Injunction—Acts Restrained.
    While the final injunction of the circuit court prohibiting the defendants from erecting any flat, double house, apartment, or any structure but a single dwelling, was not too broad; it is modified so as to authorize defendants to move for dissolution or modification thereof in case the character of the district should materially change in the future.

      Appeal from Wayne; Mandell, J.
    Submitted November 25, 1913.
    (Docket No. 125.)
    Decided December 20, 1913.
    Bill by Otto Misch and others against Fred A. Lehman and others for an injunction to enforce a restrictive covenant in certain conveyances. From a decree for complainants, defendants appeal.
    Modified and affirmed.

      Louis C. Wurzer, for complainants.

      Henry B. Graves, for defendants.

      As to the right to the enforcement of a restrictive covenant as affected by change in neighborhood, see note in 28 L. R. A. (N. S.) 706.

   Brooke, J.

The bill of complaint in this cause is filed for the purpose of permanently enjoining defendants from violating a building restriction contained in the conveyance under which they hold title. From a decree in favor of complainants, defendants appeal.

The restriction involved is the same as that considered in the case of Schadt v. Brill, 173 Mich. 647 (139 N. W. 878) ; defendants’ lot being one of the 77 lots contained in the Whitney subdivision. Of these 77 lots, 21 face the East Grand boulevard, lying upon the west side thereof, comihencing at Mack avenue and running south. Defendants’ property consists of lot 32 and the northerly 10 feet of lot 31, and lies upon the southwest comer of Mack avenue and the East Grand boulevard. It was the expressed intention of defendants to erect a four-family flat thereon, the carrying out of which the decree of the court below perpetually enjoined. The first building south of defendants’ lot, and about 100 feet distant, is the. two-family or duplex house, the existence of which was urged by defendant in Schadt v. Brill, supra, as a reason why he should not be enjoined from consummating a like breach of the restrictive clause. This claim was considered, and dismissed as untenable under the facts in that case. The restrictive clause was likewise construed, and it was held that no structure other than a single residence for one family could be erected thereunder. It is the contention of the defendants that the reasoning of that opinion should not be applied to the facts in this case. It is urged that these complainants, having stood by and permitted one breach of the restriction (that on lot 29 adverted to), are now estopped from insisting that defendants be enjoined from a like breach. It is pointed out that the property of these complainants lies much closer to lot 29 than does that of the complainant in Schadt v. Brill, and therefore that it was immediately affected by the breach, thus imposing upon complainants the duty to seek injunctive relief against the owner of said lot 29. Having failed in this duty, defendants contend that it is now too late for them to act.

Several answers to this claim are suggested. In the first place defendants owned their lot at the time the structure was erected upon lot 29. If any legal duty to act was imposed upon the owners of other lots in the same subdivision, it rested upon defendants, as well as upon complainants.

Again, it must be borne in mind that the exact meaning of the restriction itself was not free from doubt. It was not entirely clear that a dwelling house like that located upon lot 29 could not be legally erected under the restriction until the determination of the case of Schadt v. Brill, supra. It is doubtless true that a continued acquiescence in successive breaches of the restriction would afford ground for the claim of estoppel because of the fact that the contemplated character of the property would thus be destroyed, and, that, stage having been reached, it would be inequitable to grant relief. But we are of opinion that acquiescence in a single breach of the character of that upon lot 29, under the circumstances disclosed by this case, is not such an act or failure to act as should be held to deprive these complainants of equitable relief. The true rule seems to be that, even after one or more breaches, equity will grant relief if the restriction can be shown to be of value to complainant, and such breaches have not resulted in a subversion of the original scheme of development resulting in a substantial, if not entire, change in the neighborhood. Righter v. Winters, 68 N. J. Eq. 252 (59 Atl. 770); Brown v. Huber, 80 Ohio St. 183; Sayles v. Hall, 210 Mass. 281; Brigham v. H. G. Mulock Co., 74 N. J. Eq. 287 (70 Atl. 185); Landell v. Hamilton, 175 Pa. 327 (34 Atl. 663, 34 L. R. A. 227).

The decisions in Trustees of Columbia College v. Thacher, 87 N. Y. 311 (41 Am. Rep. 365); Jackson v. Stevenson, 156 Mass. 496 (31 N. E. 691, 32 Am. St. Rep. 476), and Schefer v. Ball, 104 N. Y. Supp. 1028, 53 Misc. Rep. 448, cited by defendants, are not in conflict with this principle.

Defendants urge that there is such a change in the character of the neighborhood as to make it inequitable to enforce the restriction. We are of opinion that the case upon this point is ruled by the late case of Moore v. Curry, 176 Mich. 456 (142 N. W. 839). Here is a large subdivision upon which there have been erected many beautiful homes, costing up to $20,000 each. The development of that part of the plat fronting upon the boulevard is shown by the record to have been of a particularly high class, with the single exception of the house upon lot 29. There can be no doubt that the erection of the contemplated structure upon the corner of Mack avenue and the boulevard would very seriously affect the values of the complainants’ property, and would thus destroy that negative easement (Allen v. City of Detroit, 167 Mich. 464 [133 N. W. 317, 36 L. R. A. (N. S.) 890]), which complainants, by virtue of the restrictive clause, have acquired in defendants’ lot.

The decree of the lower court perpetually enjoins defendants from proceeding with the construction, erection, or maintenance, or causing to be constructed, erected, or maintained, any flat, double house, apartment, or any other building except a single dwelling house, intended or suitable for the separate occupancy for one family. It further perpetually restrains defendants from doing any act which will in any wise be a violation of the building restrictions on the lot in question.

Defendants claim that this decree is too broad and far-reaching in its terms (citing Frink v. Hughes, 133 Mich. 63 [94 N. W. 601], and Moore v. Curry, supra). They contend that the only question litigated in the present proceeding is the right of defendants to erect a four-family flat at this time; other features of the restriction and the possible development in the future as they might bear upon the restriction were, it is said, not in issue. While it seems doubtful that any future development will so change the situation as to make the enforcement of the restriction inequitable, it is not unreasonable that the decree should be so modified as to protect the defendants in case such a radical change should occur in the future.

The decree will stand affirmed, except that it shall be without prejudice to the right of the defendants to move hereafter for a modification or dissolution of the injunction.

Sthere, C. J., and Moore, McAlvay, Stone, Ostrander, and Bird, JJ., concurred. Kuhn, J., did not sit.


source: Caselaw Access Project

author: McAlvay, J. Ostrander, J.

license: Public Domain

text:
    MICHIGAN RAILROAD COMMISSION v. DETROIT & MACKINAC RAILWAY CO.

    1. Mandamus — Irrelevant Matter in Answer or Return — Motions — Practice—Pleading.
    Allegations of irrelevant matter, included in an answer in mandamus proceedings, will not be struck out on motion, but tbe proper practice is to bring tbe objectionable allegations to the attention of tbe court at tbe bearing or in tbe briefs of counsel.
    2. Same — Framing Issues — Answer of Respondent.
    On mandamus proceedings by tbe Michigan railroad commission against a railway corporation, wbicb declined to obey tbe order of sucb commission requiring the company to continue to carry products of a corporation engaged in lumbering over a spur track wbicb tbe railway company bad commenced to tear up, it was not necessary to frame issues as to pleadings and evidence involved or included in a chancery cause that respondent bad instituted to test tbe correctness of tbe order made upon pleadings and proofs by relator; and tbe merits of tbe controversy pending before tbe court of equity were not in issue, but merely tbe question whether sucb order should remain in force until tbe determination of the equity proceedings.
    3. Railroads — Michigan Railroad Commission — Carriers — Freight — Logs and Logging — Discriminatory Acts.
    Findings of the Michigan railroad commission as to rates or acts of a carrier railroad which are charged to amount to discrimination, prima facie are correct and stand until modified or set aside by tbe courts; if attacked, tbe complaining party has tbe burden of showing by clear and satisfactory evidence that tbe order is unlawful or unreasonable..
    4. Same — Regulation.
    In equity proceedings to test tbe validity of an order of tbe Michigan railroad commission whereby tbe complainant was required to continue freight service over a spur track that it was purposed to tear up, where defendant had offered before the. commission and later offered in mandamus before this court to furnish a bond indemnifying the railroad company for all cost and expenses that it might incur in relaying track already removed, the bond also securing the company for interest thereon and payment of all rates that might be fixed by the railroad company and approved by such commission, a writ of mandamus is allowed to enforce the order of the railroad commission pending a final adjudication as to the legality of its findings and judgment.
    Ostrander and Stone, JJ., dissenting as to tne extent of relief to be granted.
    Mandamus by the Michigan railroad commission against the Detroit & Mackinac Railway Company to require respondent to obey an order of the relator.
    Submitted January 14, 1913.
    (Calendar No. 25,373.)
    Writ granted December 20, 1913.

      Gillett & Clark, for relator.

      James McNamara and Fred A. Baker, for respondent.

       Removed to tbe United States Supreme Court by writ of error January 3, 1914.

   McAlvay, J.

This is an application by the Michigan railroad commission for a writ of mandamus to enforce an order made by it in the matter of the Fletcher Paper Company v. Detroit & Mackinac R. Co. to remain in force until the hearing and final determination of a cause now pending in the circuit court for Wayne county in chancery.

The order was granted on the petition of the Fletcher Paper Company of Alpena, the owner of logs and timber located along the line of what is known as the “Tubbs Branch” or “Martindale Spur,” and also the owner of the right of way, roadbed, and ties of this spur, upon which the rails of the company are laid, which is a logging branch of the respondent railroad company, and which leaves the main line of road at a station called Case, and extends about five miles in a southerly direction from that point.

The Fletcher Paper Company was engaged in delivering its logs along this branch road and shipping them to Alpena or other points on the railroad company’s main line, and had a large amount of logs on the skidways along the track about one mile south from the main line ready for shipment, when the railroad company, without notice, took up about half a mile of its rails between the point where these logs were placed for loading and the main line, making it impossible to make any further shipment. The railroad company had operated its cars over this branch road for several years, transporting forest products of those having such along the branch for shipment, and had established schedules of rates for the same, which were duly filed with the Michigan railroad commission and published, and it operated this branch in the same manner as it operated many other branches of like character in that territory. It had notice of the Fletcher Paper Company’s purchase of the right of way, roadbed, and ties of this branch from the Churchill Lumber Company, and afterward for some time accepted and transported its logs from this branch according to schedule rates without question. The Fletcher Paper Company, as soon as these rails were removed, filed its bill of complaint in the circuit court for the county of Alpena in chancery, for the purpose of restraining the railroad company from taking up its rails on this branch, and enjoining it to continue to operate this spur and haul out the Fletcher Paper Company’s logs to and on its main line and deliver them at its mills in Alpena county. The hearing of the issue joined in that case resulted in a decree dismissing the bill of complaint, but without prejudice to complainant to file its petition for relief with the Michigan railroad commission. Thereupon the Fletcher Paper Company filed such a petition with the commission, which proceedings resulted in the granting of the order the enforcement of which is sought in these mandamus proceedings.

For the purpose of a clear understanding of the facts in this case, as found by the Michigan railroad commission, from the evidence before it, in making the order in question granting the relief asked for by the Fletcher Paper Company, we embody herein the opinion and order of the railroad commission:

“Opinion.
“By Commissioner Hemans:
“The facts disclosed by the complaint, answer, and proofs in the above-entitled matter are as follows:
“In the year 1905 the Churchill Lumber Company, of Alpena, was the owner of a tract of timber lands, located in Presque Isle county, extending some five miles south of Case, a station on the main line of the Detroit & Mackinac Railway, the defendant herein. The owner, desiring to cut the timber, _ effected an arrangement with the defendant for railroad facilities, whereby the logs could be transported to Alpena. The contract which the parties made was a verbal one, providing in substance that the Churchill Lumber Company was to procure a right of way from the main line of defendant company to and through the timber lands. It was to grade the right of way, and place the ties, and the defendant railway was to place its rails thereon, and haul the forest products to the lumber company’s place of manufacture. The agreement was fully consummated, and the road placed in operation during the year 1905. It has since been known as the ‘Tubbs Branch’ or ‘Martin-dale Spur.’
“It is important to note that the contract, or agreement, by which this particular branch road was constructed was not exceptional in character; but that both as to its form and provisions it was in keeping with the custom that was then and is still followed by the defendant and by such other roads as engage in the transportation of forest products from the places of their severance to the places of manufacture. The magnitude of the lumbering operations, the great extent of timber tracts required to keép mills running, and economic operation have necessitated the construction of branches and spurs from the main line of such roads which traverse the timber sections into the adjacent forests. In many instances such roads have been constructed by the lumber companies, are private in character, and are, by the statutes creating this commission, excepted from its supervision or control. In other instances, as in this case, the branches have been both constructed and operated as appendages to main line. In such cases, as the evidence discloses, it is the custom of both the defendant and other railroads, in the sections, to construct such spurs and branches into the timber tracts; the roads requiring the lumbermen to procure the right of way, to make the grade, and place the ties, while it places the rails, and transports the woodmen’s harvest. These agreements between carrier and lumbermen have been quite generally left in parol; but the evidence offered by the defendant suggests nothing in modification of the claimed terms of such construction, except that it was the custom of the defendant before entering into such agreements to ascertain that the shipper had timber contiguous to a proposed branch equal to at least 2,000,000 feet per mile of road to be constructed.
“The construction of the Tubbs Branch,’ so far as the defendant participated in it, and its subsequent operation by it, was therefore not an isolated case, but one of many of like character. The branch was ultimately constructed at a total length of something more than five miles. There were several proprietors owning timber contiguous to the branch. The Churchill Lumber Company, at whose instance the branch was constructed, owned from 12,000,000 to. 14,000,000 feet. There were other extensive holdings by the Lobdell & Churchill Company, of Onaway, Embury-Martin, of Cheboygan, while the complainant was the owner of more than -21,000,000 feet, the transportation of which was to be facilitated by the branch in question.
“Between the establishment of the branch and the 8th of June, 1.910, the Churchill Lumber Company cut and shipped out all of its timber contiguous to the Tubbs Branch, and on the date last mentioned apprised the defendant railway company of this fact, and requested the removal of the rails from the right of way. At this time the complainant and the Lob-dell & Churchill Company had camps actively engaged in lumbering operations on their respective properties, and were shipping considerable quantities of logs over the branch on the published tariffs of the defendant company.
“The records of this department disclose that from the creation Of the department the defendant, through its public tariff files, has recognized this branch as a part of its general transportation system. (See M. R. C. No. 76; M. R. C. No. 250; M. R. C. No. 265; M. R. C. No. 274; M. R: C. No. 277; M. R. C. No. 279; M. R. C. No. 303.) The proofs disclose that under such tariffs, during a period of three years previous to the arising of the difficulty in question, the complainant offered and had transported over the Tubbs Branch to Alpena logs to the extent of 1,300,000 feet, while other extensive shipments were likewise made by the Lobdell & Churchill Company and the EmburyMartin Company.
“During the year 1908 forest fires killed between 5,000,000 and 6,000,000 feet of timber belonging to complainant adjacent to the branch in question, and in the winter of 1909 and 1910 complainant began preparation for the cutting of this and other portions of the tract. Notwithstanding the notice of the Churchill Lumber Company of June 8th, above referred to, the defendant continued to transport the logs of complainant, and on August 3, 1910, the complainant acquired from the Churchill Lumber Company, for a consideration of $4,000, all the right of the latter concern to the right of way and ties of the Tubbs Branch, so that, so far as the physical property of the road was concerned, the complainant thereafter stood in the same relation to it that the Churchill Lumber Company had occupied, and in the same relation that all other companies stand to railroad branches for which they have furnished the right of way and ties, and the railroad companies have furnished rails. The Churchill Lumber Company at once, upon effecting the sale to complainant, by letter apprised defendant of the fact of such sale, and requested that the rails be not removed. The defendant company thereafter continued to accept shipments from complainant over the branch until the 9th day of September following; between August 3d and September 9th more than 100,000 feet of logs being transported. On the latter date the defendant, without notice to complainant, took up about one-half mile of rail from the branch, beginning about one-half mile from the main line, and extending nearly to the skidway upon which the complainant had at the time approximately 145,000 feet of logs, skidded and ready for shipment, while 375,000 feet more were upon the roll ways in the adjacent forest. On the very forenoon of the day the rails were torn up shipments were made for complainant under tariffs that were then and that continued thereafter in force. The complainant thereafter made a formal request that cars be placed and his shipments accepted. With this request the defendant refused to comply, leaving the rails piled by the right of way, and insisting that the tariff applicable to the branch had been canceled by eliminating the same from the station list. As under the law tariffs cannot be canceled except upon notice to this commission, there is no force to this contention.
“Upon being apprised of the action of the defendant in removing the section of rail from the branch, the complainant filed a bill of complaint against defendant in the circuit court for the county of Alpena in chancery. The bill sought to enjoin the defendant from removing further rail from the branch, and to compel it to replace those already removed, and to accept the shipments offered by complainant. While the above cause was pending, complaint was filed with this commission. At the hearing the defendant offered the record of the proceedings in the Alpena circuit court in chancery as a bar to the proceedings herein. The decree in the chancery case had not at that time been entered, and has subsequently been added to this record. The decree dismisses the bill of complaint, and provides in terms that it is ‘without prejudice to complainant to file its petition for relief with the Michigan railroad commission.’ Even as between courts bound by the strict rules of legal procedure, such a decree could not be effectually pleaded in bar of some subsequent action, unless it appeared that the latter case was identical with the former case upon the facts presented, and that the power of the courts to grant relief was the same in both instances. Story, Equity Pleadings, 793; County of Mobile v. Kimball, 102 U. S. 691; Newberry v. Ruffin, 102 Va. 73 [45 S. E. 733].
“Numerous cases could be cited giving far greater scope to the words ‘without prejudice’ than is contended for them here. The court, in the case of O’Keefe v. Irvington Co., 87 Md. 199 [39 Atl. 428], among numerous citations, quoted approvingly from Northern Pacific R. Co. v. Railway Co. [C. C.], 47 Fed. 536, to the effect that, when the qualifying words ‘without prejudice’ are used, the effect is ‘like a nonsuit in a common-law action.’ We are therefore clearly of the opinion that the decree in the chancery court can in no manner be said to be a bar to this proceeding, and, however familiar (similar) the two proceedings may be upon the precise facts involved, there is a marked dissimilarity in the powers of the court and this commission, in the application of a remedy to any wrong which the facts may disclose.
“Prior to action by this commission in the premises, the power of the chancery court was, and still is, limited to the enforcement of those clear legal or equitable rights embraced within the general equity jurisdiction of the' court. Needless to say, this jurisdiction does not comprehend the power to decree regulations that are administrative in character, such as the legislature has delegated through the act creating the Michigan railroad commission. While the courts, through a bill in chancery, have certain jurisdiction over the orders of the commission, they may not, in the first instance, pass upon the reasonableness of maximum rates of charges for the transportation of property, or upon the innumerable questions growing out of the rate-making power, and the preventing of discrimination.
“Section 22 of Act No. 300 of the Public Acts of 1909, being an act which, among other things, defines the powers and duties of the Michigan railroad commission, provides:
“ ‘Upon, complaint in writing of any person, firm, or corporation or association, or of any mercantile, agricultural or manufacturing society, or of any body politic or municipal organization, that any of the rates, fares, charges or classifications, or any joint rate or rates are in any respect unreasonable or unjustly discriminatory, or that any regulation or practice whatsoever affecting the transportation of persons or property or any service in connection therewith, is in any respect unreasonable or unjustly discriminatory, or that any service is inadequate, the commission shall notify the common carrier complained of. * * *'
“After providing for hearing and investigation, the section further provides:
“ ‘If, upon such investigation, the rate or rates, joint rate or rates, fares, charges or classifications, regulation, practice or service complained of shall be found to be unreasonable, inadequate or unjustly discriminatory, the commission shall have power to and it shall determine and by order fix and order substituted therefor, such rate or rates, joint rate or rates, fares and charges, as is or are just and reasonable, and which shall be the maximum to be charged in the future, and such classifications, regulation, practice or service as is or are just, reasonable and adequate, and which shall be imposed and followed or service rendered in future in lieu of that found to be unreasonable, inadequate or unjustly discriminatory, and in either case the commission shall make an order that the common carrier cease and desist from such violation, and shall conform to the regulation and practice so prescribed.’
“None of the foregoing powers are committed to the jurisdiction of the chancery court. That court, in this controversy, exercised its powers in determining the property rights of the parties. This commission exercises its powers in determining the reasonableness or unreasonableness of the discrimination, regulation, and practices complained of.
“In seeking for guidance in determining the extent and limitation of its powers, this commission naturally looks to the decisions of the interstate commerce commission. The act to regulate commerce, under which that body exercises its authority, by its terms limits the commission to the prescribing of just and reasonable rates, but without the broad language of the Michigan statute. The interstate commerce commission has said, speaking of its powers:
- “ ‘We think that the commission has full power to remove unjust discrimination resulting from a rule or a practice as well as that resulting from a rate.’ Ouerbacker Coffee Co. v. Railway Co., 18 Interst. Com. Com’n R. 570.'
“In another case they have very truly said:
“ ‘There is no more insidious or effective way by which a carrier may discriminate between its shippers than through a regulation or practice that denies to them the equal enjoyment of its facilities.’ Rail & River Coal Co. v. Railroad Co., 14 Interst. Com. Com’n R. 86.’
“As a few instances of what the interstate commerce commission has declared to be discrimination, it is of interest to note the following:
“The practice of a railroad allowing ,more free time for the unloading of cars in one city than in another. Lynah & Read v. Railroad Co., 18 Interst. Com. Com’n R. 38.
“For a railroad to build and rent an elevator for a nominal rental to an individual in one city, while it requires the individuals of a neighboring city to provide its own. Brook-Rauch Mill & Elevator Co. v. Railway Co., 17 Interst. Com. Com’n R. 158.
“For a railroad to bear a part or all of a cartage charge upon freight brought to it by distant shippers, while refusing to bear no (any) part of the cartage charge from shippers near at hand. Stone & Carten v. Railway Co., 3 Interst. Com. Com’n R. 60.
“The first chairman of the interstate commerce commission, the distinguished Thomas M. Cooley, speaking for the commission in the case of Crews v. Railroad Co., 1 Interst. Com. Com’n R. 426, said:
‘“Discrimination must consist in the doing for or allowing to one party or place what is denied to another.’
“It will hardly be contended that the action of the defendant in placing its rails upon the ties and right of way of the Churchill Lumber Company, and upon the right of way and ties of other lumber companies, and granting the use of its railway facilities as they have use for them, and then ruthlessly tearing out the rails and refusing the same facilities to complainant, does not come clearly within this definition. In the exercise of its franchise it is the duty of a railway company to so adjust its tariffs and so regulate its practices that unjust discrimination shall not result. The defendant, therefore, may not refuse to one shipper the facilities which it grants freely to another under conditions which are practically identical.
“It is the opinion of the commission that the defendant company should relay the rails removed by it from the so-called ‘Tubbs Branch’ or ‘Martindale Spur,’ and accept for transportation on said branch the shipments tendered by complainant; that said tracks should be relaid on or before 30 days from this date, and an order to this effect will be entered.
“C. L. Glasgow, Chairman.
“G. W. Dickinson, Commissioner.
“Lawton T. Hemans, Commissioner.”
“Order.
“State of Michigan.
“Before the Michigan Railroad Commission.
“Session of the Michigan Railroad Commission held at its offices in the city of Lansing on the 3d day of August, A. D. 1911.
“Fletcher Paper Company, Complainant, v. Detroit & Mackinac Railway Co., Defendant. D—163.
“This matter having come on to be heard upon complaint and answer, and proofs having been taken before the commission, and the said proofs and briefs of the respective parties having been duly considered, it is ordered that the said defendant, the Detroit & Mackinac Railway Company, be and is hereby required, on or before the expiration of thirty days from the date hereof, to relay the rails removed by it from the so-called ‘Tubbs Branch’ or ‘Martindale Spur,’ and to accept the shipments offered to it on said branch by the complainant, the Fletcher Paper Company, and to grant to the said Fletcher Paper Company the same facilities heretofore granted by said Detroit & Mackinac Railway Company to the Churchill Lumber Company, and to such other person, firm, or corporation as have been granted rights of shipment over said ‘Tubbs Branch’ or ‘Martindale Spur.’
“C. L. Glasgow, Chairman.
“G. W. Dickinson, Commissioner.
“Lawton T. Hemans, Commissioner.”

The hearing of the petition of the Fletcher Paper Company before the railroad commission was had March 24, 1911. The order in question was made August 3, 1911. It was duly served on respondent railroad company August 8, 1911. On September 2, 1911, the railroad company filed its bill of complaint in the circuit court for the county of Wayne in chancery, to review, vacate, and annul said order, which cause was pending at the time this mandamus proceeding was instituted, and is still pending in said court.

Respondent contends that the instant case ought not to be considered and passed upon by this court, for the reason that it had no opportunity to present its proofs at the hearing before the railroad commission, and claims that on said hearing it relied upon its contention that the decree of the Alpena circuit court in chancery dismissing the bill of complaint of the Fletcher Paper Company against respondent was res adjudicates, and therefore a bar to the proceedings before the railroad commission, and that it was understood at the time, and by correspondence later, between it and the said commission that, if that question was decided adversely to it, opportunity would be given to introduce evidence in this proceeding, should it so desire, and that it received no such notice; that the first knowledge it had of the decision by the commission was the service upon it of a copy of the order of August 3d.

The record indicates that such an understanding was had; but it is denied in the brief of counsel for petitioner that no notice or opportunity was given to respondent to furnish proofs in the case, and no such claim appears to have been made to the commission after the order was promulgated and before the bill to review the order was filed. The respondent at no time has presented any statement of the nature of the testimony it at that time desired to introduce, or any statement of merits which it could show by such proofs, or that in fact it expected and desired to put in further or other proofs and exhibits than are shown by the testimony returned in the record.

Further, the answer of respondent admits all of the material facts charged against it in the petition upon which petitioner relies for the relief asked of the railroad commission. Admitting the truth of its contention, it is apparent that no injury to defendant has been done in the neglect to notify it according to agreement.

The further claim is made by respondent that the several allegations in its answer to this petition in this case must be accepted as true because it is not traversed or denied and no issues of fact are framed. This answer is voluminous, and includes the pleadings and testimony in the proceedings before the railroad commission, the bill of complaint in the Alpena case and the answer thereto, the bill of complaint filed in the Wayne circuit court, and also the opinion of the Alpena circuit judge. It is claimed by petitioner that these matters are irrelevant and immaterial, and that issue need not be joined upon such matters. This court has held that improper and irrelevant allegations contained in an answer of a respondent to an order to show cause will not be stricken out upon motion, and has pointed out the practice to be to call the attention of the court to such matters. Erikson v. Alpena Circuit Judge, 138 Mich. 103 (101 N. W. 63).

In the instant case that practice has been followed, and we are of opinion that the bill of complaint in the Wayne circuit court and the opinion of the Alpena circuit judge are immaterial and require no consideration, and that the transcript of the testimony taken before the railroad commission on the hearing of the petition for the order of August 3, 1911, gives all the information necessary upon this hearing relative to the bill of complaint and answer in the Alpena chancery case, and that it was not necessary to embody those records in the answer of respondent.

The pleadings in the instant case, the pleadings and testimony returned in the matter of the application of the Fletcher Paper Company against respondent for an order to enforce the order of August 3, 1911, pending its review, are all that this court needs to consider. It was therefore not necessary to frame issues upon the respondent’s answer.

We are not called upon to considei and determine the merits of the controversy between the Fletcher Paper Company and respondent railway company upon the order of August 3, 1911. Such questions are involved in the case now pending before the circuit court for the county of Wayne in chancery, wherein the respondent railway company seeks to review, annul, and set aside said order. The sole question before this court in this proceeding is whether the order of the railroad commission shall take effect and become operative pending the hearing and determination of that chancery cause.

The Michigan railroad commission assumed jurisdiction and passed upon the matters in controversy between the parties in the proceedings then before it, and its final determination resulted in the order in question, assuming and claiming to act under and by virtue of the power and authority granted to it under section 22 of the railroad commission law.

It will not be necessary to quote the provisions of that section at length. The commission is authorized to hear all complaints relative to rates, joint rates, charges, or classifications that are charged to be in any respect unreasonable or unjustly discriminatory, or “any regulation or practice whatsoever affecting the transportation of persons or property, or any service in connection therewith which is in any respect unreasonable or unjustly discriminatory,” and, if on investigation such charges are found to be true, it is authorized to determine and by order fix such rates and charges as are just and reasonable and such regulation, practice, or service as is just, reasonable, and adequate, “and which shall be imposed and followed or service rendered in future in lieu of that found to be unreasonable, inadequate or unjustly discriminatory, and in either case the commission shall make an order that the common carrier cease and desist from such violation and shall conform to the regulation and practice so prescribed.”

Relative to an order made by this commission this court has said:

“Its findings are not conclusive, but have the effect of establishing prima facie that the rates considered are reasonable and just and therefore lawful, or are unreasonable and unjust and unlawful. Its orders stand until modified or set aside by it or by the courts. * * * Presumptively, the findings and orders of the commission are right. If attacked, the complainant has the burden of showing ‘by clear and satisfactory evidence that the order of the commission complained of is unlawful or unreasonable, as the case may be.’ ” Detroit, etc., R. Co. v. Railroad Commission, 171 Mich. 335, 346 (137 N. W. 329, 333).

The commission, in its opinion, said: “This commission exercises its powers in determining the reasonableness or unreasonableness of the discrimination, regulation, and practices complained of” —and found and determined that the practices of the respondent were unjust and discriminatory in refusing to the Fletcher Paper Company the facilities which it granted freely to others under conditions practically identical.

The contention of respondent, reduced'to its lowest terms, is that the order in question is confiscatory. This is often, if not in fact generally, one of the objections of the common carrier railroad company in contesting the rate fixed in ordinary rate cases, as was contended in Detroit, etc., R. Co. v. Railroad Commission, supra.

The petitioner in the instant case before the railroad commission offered, and upon this hearing before this court keeps such offer good, to indemnify respondent for all costs and expenses incurred in relaying the track taken up by it, with interest, and to pay all rates that may be fixed or charged by the railway company and approved by the commission, in case this order is vacated and set aside by the Wayne circuit court in chancery, or by this court, if an appeal is taken. This indemnity would save respondent harmless from any possible loss in complying with the order, and save petitioner from claimed irreparable damage to 21,000,000 feet of forest products during the probable term of years occupied in this litigation.

It has been held by this court that an order of the railroad commission is enforceable by mandamus, although a proceeding in equity to review it is pending. Michigan Railroad Commission v. Railroad Co., 159 Mich. 580 (124 N. W. 564).

This order is prima facie not unreasonable. There is no question but that the legislative intent clearly expressed in this statute was that the orders of the commission should be and continue in force during all subsequent proceedings until modified or set aside by the commission or by the courts.

The statute provides a remedy by mandamus to enforce the orders of the commission, and this court has granted such writs. Upon the facts presented, the writ should be granted in this case.

Upon furnishing bond by the petitioner before the railroad commission, the Fletcher Paper Company, in the penal sum of $10,000 to indemnify respondent in manner and form as herein stated, with two sureties to be agreed upon between the parties, or approved by the clerk of this court, a writ of mandamus will issue as prayed.

Steere, C. J., and Moore and Brooke, JJ., concurred with McAlvay, J.

Ostrander, J.

(dissenting in part). It is provided in section 22 (a) of Act No. 300, Public Acts of 1909, that an order of the railroad commission shall of its own force take effect and become operative 20 days after the service thereof. In section 47 of the act it is provided that the commission may compel compliance “with the orders of the commission by proceedings in mandamus, injunction or by other appropriate civil remedies.”

Notwithstanding these provisions of the statute, whether a writ of mandamus shall be granted in a particular case is a judicial question, and the fact that the railroad commission has made an order is not alone sufficient to require the court to issue the writ. The court may still inquire whether the writ ought to issue. The order of the commission which it is sought to compel the respondent to obey requires respondent to relay a portion of a spur line, to operate it, and accept shipments over it offered by the Fletcher Paper Company, granting to said company the same facilities heretofore granted by it to the Churchill Lumber Company and such other persons as have been granted rights of shipment over said spur.

It is provided in the statute, section 22 (a):

“Upon complaint in writing of any person, firm or corporation or association, or of any mercantile, agricultural or manufacturing society, or of any body politic or municipal organization, that any of the rates, fares, charges or classifications, or any joint rate or rates, are in any respect unreasonable or unjustly discriminatory, or that any regulation or practice whatsoever affecting the transportation of persons or property or any service in connection therewith, is in any respect unreasonable or unjustly discriminatory, or that any service is inadequate, the commission shall notify the common carrier complained of that complaint has been made and shall furnish a copy of the said complaint with said ntítice, and twenty days after such notice has been given the commission may proceed to investigate the same as hereinafter provided. Before proceeding to make the-investigation, the commission shall give the said common carrier and the complainants at least ten days’ notice of the time and place when and where such matters will be considered and determined, and said parties shall be entitled to be heard and shall have process to enforce the attendance of witnesses. Such hearings may be continued from time to time in the discretion of the commission. If, upon such investigation, the rate or rates, joint rate or rates, fares, charges or classifications, regulation, practice or service complained of shall be found to be unreasonable, inadequate or unjustly discriminatory, the commission shall have power to and it shall determine and by order fix and order substituted therefor, such rate or rates, joint rate or rates, fares and charges, as is or are-just and reasonable, and which shall be the maximum to be charged in the future, and such classifications, regulation, practice or service as is or are just, reasonable and adequate, and which shall be imposed and followed or service rendered in future in lieu of that found to be unreasonable, inadequate or unjustly discriminatory, and in either case the commission shall make an order that the common carrier cease and desist from such violation, and shall conform to the regulation and practice so prescribed.”

We have not before us the complaint made to the railroad commission by the Fletcher Paper Company; but, from the opinion delivered by the commission, which is set out in the opinion of my Brother Mc-Alvay, the facts involved may be understood. It is made evident by that opinion that the railroad commission considered that its powers under the act extend so far as to correct a rule or practice of the railroad company resulting in unjust discrimination, and that it determined that the conduct of respondent in discontinuing business over the particular spur was a practice resulting in unjust discrimination. It is further made evident that, in determining that the Fletcher Paper Company was denied facilities afforded other shippers, comparison was made, not between facilities afforded that company and other shippers situated on the particular spur, but between facilities afforded that company and those afforded shippers on other spur tracks which the respondent continued to operate. As the opinion is understood, it denies to respondent the right, under the circumstances disclosed, to discontinue operations over and to abandon the spur, or branch. And this right is denied, apparently, because, having constructed the spur, under the circumstances stated, and having in times past accepted freight thereon for transportation from persons other than the one with whom the original agreement to construct and operate the line was made, and because it operates other spurs, or branches, it may not withdraw from the enterprise so long as its services are desired by any person, or so long, at least, as some person offers a fair amount of freight for shipment. So long as the respondent was operating the spur, accepting thereon and transporting over it freight for those who offered it, and so long as it published tariffs affecting such service, it was undoubtedly, as to such operations, within the scope of the act in question, and this we held in Detroit, etc., R. Co. v. Railroad Commission, 171 Mich. 335 (137 N. W. 329). But whether the Michigan railroad commission has power under the statute to require respondent to continue to operate such a spur, or branch, against its will, and in face of its efforts to abandon it, is quite a different question. It is a question which we assume is presented in the pending chancery proceeding to set aside the order which in this proceeding is sought to be enforced. It need not be answered now. But, if it is very doubtful, as I think it is, whether the order, in its entirety, is one which the railroad commission had the authority to make, the doubt may be and should be taken into account in determining whether the writ of mandamus should be granted to enforce the order.

It sufficiently appears that the attempted abandonment of the spur and its operation was without notice to the Fletcher Paper Company, and that company had delivered, in the usual manner and in the only manner that forest products of like nature could be delivered for shipment, a considerable quantity of logs for transportation by respondent. If other goods of like value had been delivered and received by the respondent for shipment, it would be the duty of the respondent, I think, to transport them before abandoning the spur. As to such goods and the shippers, the relation of the respondent would be that of a common carrier of goods. While this relation continued, it would be subject to the provisions of the act. The rule ought to be the same with respect to such logs as had been delivered on the line of the road in the customary manner. They had not been received and receipted for by respondent as ordinarily freight tendered for shipment is received and receipted for by a railroad company; but according to usage they had been delivered along the line of the road for transportation, and had been theretofore, upon such delivery, transported. Whether it had or did not have greater power in the premises, I am satisfied that the Michigan railroad commission- had power to order respondent to continue and complete the transportation of such logs, and to that extent compliance with the order which was made should be compelled by the writ of mandamus. The order of this court should be so limited.

With respect to other points presented for decision, I concur in what has been said by Mr. Justice Mc-Alvay.

Stone, J., concurred with Ostrander, J.” Kuhn and Bird, JJ., did not sit.

       3 How. Stat. [2d Ed.] § 6524 et seq.

       3 How. Stat. [2d Ed.] § 6524 et seq.


author: Ostrander, J.

text:
    DETROIT & MACKINAC RAILWAY CO. v. MICHIGAN RAILROAD COMMISSION.
    1. Railroads — Courts—Michigan Railroad Commission — Regulation of Rates.
    The power to review orders of the Michigan railroad commission, lodged in the courts, is solely to determine whether the rates established .are confiscatory, not to establish rates: and if they are so found, the court must refer the matter back to the commission to fix other rates.
    2. Same — Equity—Enforcement of Order — Michigan Railroad Commission.
    In proper cases, the court has authority to compel a railroad company, applying to it for relief against the orders of the commission, to perform orders which are found not to be unreasonable or confiscatory. Act No. 300, Pub. Acts 1909 (3 How. Stat. [2d Ed.] § 6524). It is not necessary to resort to mandamus proceedings in such cases.

      3. Constitutional Law — Railroads—Carriers—Due Process.
    The act creating the Michigan railroad commission, and empowering it to fix rates, is valid, and since aggrieved parties are authorized to apply to the courts for relief against confiscatory orders, the statute (Act No. 300, Pub. Acts 1909) cannot be said to deprive a railroad corporation of its property without due process of law.
    4. Appeal and Error — Equity Pleading — Answer—Railroads— State — Regulation.
    Relief not prayed for in the answer of a defendant in chancery will not usually be awarded on appeal: accordingly the decree of this court affirming an order of the decree of the lower court, which dismissed complainant’s bill without requiring it to perform the order of the railroad commission, cannot be amended at the request of defendant commission, which did not appeal or request such relief in its answer; the remedy is by mandamus proceedings, pursuant to section 47 of the act.
    Bill by the Detroit & Mackinac Railway Company against the Michigan railroad commission to review the action of defendant in certain cases; in which the Onaway Shingle & Tie Company and others intervened as complainants; the Fletcher Paper Company and others as defendants. On motion to amend the final decree in Detroit & Mackinac Railway Co. v. Michigan Railroad Commission, 171 Mich. 335 (137 N. W. 329).
    Submitted November 11, 1913.
    (Calendar No. 24,650.)
    Denied December 20, 1913.

      Gilleti & Clark, for the motion.

      James McNamara and Fred A. Baker, contra.

   Ostrander, J.

The Michigan railroad commission made and entered certain orders respectively on October 19,1909, October 22, 1909, and November 3, 1909. Pursuant to the statute, Act No. 300, Public Acts of 1909, § 26a, the railway company began an action in the circuit court in chancery for the county of Wayne against the Michigan railroad commission to vacate and set aside said orders. Such proceedings were had that afterwards the said circuit court in chancery entered a decree in said action dismissing the bill of complaint. Upon appeal, and on July 29, 1912, the decree was affirmed. It is made to appear that thereafter applications were made both to this court and to one of the justices of the Supreme Court of the United States for the allowance of a writ of error to the Supreme Court of the United States, and that the said writ was not allowed. Thereafter a bill was filed by the railway company in the district court of the United States for the eastern district of Michigan, in equity, setting up in substance and effect the same matters presented by the bill in the State court, and praying for substantially the same relief, and for a temporary injunction restraining the Michigan railroad commission and other defendants, pending the hearing in the Federal court, from putting into effect the said orders of the Michigan railroad commission. A motion for a preliminary injunction was heard by the district judge and by two circuit judges, and the injunction was refused for reasons sufficiently indicated by the following excerpt from the opinion which was filed:

“The sum of the whole matter was that the bill was dismissed because the complainant did not, with sufficient certainty and clearness, prove the existence of that confiscation, the presence of which was necessary to enable courts to give relief. We are satisfied that the opinion, upon the whole, confirms our view that the Michigan courts could consider only this question, and had no legislative or administrative discretion in determining what was reasonable, and that, therefore, when complainant resorted to the Michigan courts, it invoked the protection of the judicial power.
“It follows that the right of the railway company to such a review as any court could give became fixed when the order of the commission was promulgated; that, to prevent an invasion of its legal right, the railway company could resort to any court of competent jurisdiction; and that, having selected the Wayne circuit court in chancery, and having submitted its controversy to that court, and judgment having been rendered against complainant by that court and by the Supreme Court of Michigan, the railway company cannot now try the same controversy over again in this court.” 203 Fed. 864.

See, also, Puget Sound Electric Railway v. Lee (D. C.), 207 Fed. 860.

From the order denying the motion for a preliminary injunction an appeal has been taken to the Supreme Court of the United States, and is pending.

The Michigan railroad commission, by the attorney general, moves this court to amend its decree in the cause by inserting therein these words:

“And it is further ordered, adjudged and decreed that the said Detroit & Mackinac Railway Company forthwith put in full force and effect the several orders of the Michigan railroad commission heretofore made, in the premises, namely, the order made on October 22, 1909, in a proceeding in which Frank W. Gilchrist, Churchill Lumber Company and Island Mill Lumber Company are complainants, and the Detroit & Mackinac Railway Company is defendant, and the order made October 19, 1909, in a proceeding in which the Fletcher Paper Company is complainant, and the Detroit & Mackinac Railway Company is defendant, and the supplemental order made by said commission in a proceeding between said parties, dated November 3, 1909,”—

Or that, in lieu thereof, the Wayne circuit court in chancery be directed to put the said orders into effect. In opposing the granting of the motion it is urged by the railway company (1) that neither in the answer of the Michigan railroad commission nor in those of intervening defendants in the original action was there a prayer for affirmative relief; (2) that in said action the Wayne circuit court and this court acted in the place of the commission to review and correct, revise or affirm, the orders of the commission; that the result merely left the orders of the commission in effect and as if no appeal had been taken; (3) the Michigan railroad commission can apply to this court for a writ of mandamus to compel the Detroit & Mackinac Railway Company to comply with the orders of the commission, and, in such a proceeding (mandamus), the railway company will have the right to open the whole case upon the facts, frame issues, and have them sent down for trial, “and on the verdict or findings reported, this court in the exercise of its judicial power can review, modify, reverse, or affirm the order of the commission" as affirmed on the direct appeal;” (4) an application for mandamus would not be entertained by the court while the appeal is pending in the Supreme Court of the United States.

These contentions, except the first and the last one, rest upon the proposition asserted in argument that the power exercised by the court in the proceeding to review the action of the Michigan railroad commission is not judicial in character, and is exercised merely for the purpose of reviewing and of correcting the results of a similar exercise of power by the Michigan railroad commission. In short, that the action in court was a mere continuation of the proceedings before the commission, the court exercising no other or different powers from those exercised by the commission, and addressing itself to the decision of no questions other than those decided by the commission. We are told that in filing its bill of complaint in the circuit court in chancery, and in appealing to this court, the railway company was but pursuing a practice approved by the Supreme Court of the United States in Prentis v. Atlantic Coast Line Co., 211 U. S. 210 (29 Sup. Ct. 67), preparatory to thereafter invoking the judicial authority, to determine the lawfulness of the orders made by the railroad commission.

If, as is contended, the court acted as an appellate railroad commission, it may be said that, sitting as such a tribunal, it had no power to order the railway company to put the orders of the commission into effect, and no process to compel such action, because the commission has no such power and can issue no process in that behalf; that, therefore, it has now no power, by amendment of its decree, to require obedience by the railway company to the said orders of the commission.

But if the proposition asserted upon the part of the railway company is unsound, if the court has determined — judicially determined — that the orders of the commission are not unreasonable or unlawful, that their enforcement will not result in confiscation or in unlawfully depriving the company of property, it would seem to follow that the orders of the commission should be immediately enforced, unless there is some arbitrary rule which prevents an amendment of the decree. To insist that the commission shall in all such cases institute mandamus proceedings in this court, in which proceedings the questions of the lawfulness and reasonableness of the orders would necessarily be regarded as having been settled by the decree, would seem to be to prefer form to substance.

This court has not had occasion to examine, generally, and to construe the various provisions of the act of 1909. Many of its provisions were taken from Act No. 312 of the Public Acts of 1907. In Michigan Central R. Co. v. Wayne Circuit Judge, 156 Mich. 459 (120 N. W. 1073), and in Michigan Central R. Co. v. Railroad Commission, 160 Mich. 355 (125 N. W. 549), certain orders of the commission were considered; in the first case the question being whether, the circuit court should have granted a preliminary injunction restraining the enforcement of the orders of the commission, and in the other (the same case on appeal) whether the act of 1907 was void because it conferred upon the commission executive and legislative powers. In the Michigan Constitution of 1909, as in the Constitution of 1850, the powers of government are divided, and it is expressly declared that no person belonging to one department shall exercise the powers properly belonging to another, “except in the cases expressly provided in this Constitution.” Art. 8, §§ 1, 2. In the Constitution is the further provision:

“The legislature may, from time to time, pass laws establishing reasonable maximum rates of charges for the transportation of passengers and freight on different railroads in this State, and may pass laws establishing reasonable maximum rates of charges for the transportation of property by express companies in this State, and may delegate such power to fix reasonable maximum rates of charges for the transportation of freight by railroad companies and for the transportation of property by express companies to a commission created by law; and shall prohibit running contracts between such railroád companies whereby discrimination is made in favor of either of such companies as against other companies owning connecting or intersecting lines of railroad.” Art. 12, §7.

In neither of the cases referred to nor in Detroit, etc., R. Co. v. Railroad Commission, 171 Mich. 335 (137 N. W. 329), did the court undertake to review, other than judicially, the orders of the commission. In the first case it was said:

“We do not construe the provisions of this act to lodge in the courts the power to establish rates. The power conferred upon the courts is solely to determine whether the rates are confiscatory or unreasonable. If the courts should so find, they are not authorized to determine what are reasonable, but the matter must again be referred to the commission to establish other rates. If they are found to be reasonable, the courts will sustain the action of the commission. If, however, it should be determined that such power was conferred upon the courts and is unconstitutional, the act would still be held valid, because it could stand with that clause eliminated from the statute. Courts declare legislative enactments invalid only when they are able .to determine from the act itself that the legislature would not in all probability have enacted the law with the objectionable features eliminated. This act expressly declares that, so long as the main purpose and object of the act can be sustained, any provision held void shall not affect its validity. We are not now prepared to hold that, if all the provisions which counsel for relators now attack should be held void, it would invalidate the entire law. Similar acts have been sustained by the courts of many of the States, and we prefer to reserve this important question until the final hearing.”

This was said in view of contentions, one of which was that section 26 of the act conferred upon the courts the power to establish rates if those established by the commission were found to be unlawful or unreasonable. When the cause after hearing came to this court upon appeal, the foregoing and some other portions of the earlier opinion were quoted, and it was said:

“We have thus quoted, perhaps at unnecessary length, from the opinion of Justice Grant, because it appeared there, as it did upon this hearing, that the rates fixed by the commission are not confiscatory, but afford some remuneration over and above expenses, and because the law expressly makes the rates fixed by the commission prima facie lawful and reasonable, and casts the burden of showing the contrary upon the railroad companies contesting, who are the complainants here. While the holding of this court in the mandamus proceeding may not be res judicata, yet it shows clearly the view held at that time as to the law of the case.”

Sections 26a. and 26d of the act of 1909 are similar to sections found in the act of 1907, the language of which was the ground for the contention that powers other than judicial had been conferred upon the courts. The sections referred to read:

“Sec. 26. (a) Any common carrier or other party in interest, being dissatisfied with any order of the commission fixing any rate or rates, fares, charges, classifications, joint rate or rates, or any order fixing any regulations, practices or services, 'may within thirty days from the issuance of such order and notice thereof commence an action in the circuit court in chancery against the commission as defendant to vacate and set aside any such order on the ground that the rate or ratesj fares, charges, classifications, joint rate or rates fixed are unlawful or unreasonable, or that any such regulation, practice or service fixed in such order is unreasonable; in which suit the commission shall be served with a subpoena and a copy of the complaint. The commission shall file its answer, and on leave of court any interested party may file an answer to said complaint. Upon the filing of the answer of the commission said action shall be at issue and stand ready for hearing upon ten days’ notice by either party. All suits brought under this section shall have precedence over any civil cause of a different nature pending in such court, and the circuit court shall always be deemed open for the hearing thereof, and the same shall proceed, be tried and determined as other chancery suits. Any party to such suit may introduce original evidence in addition to the transcript of evidence offered to said commission, and the circuit courts in chancery are hereby given jurisdiction of such suits and empowered to affirm, vacate or set aside the order of the commission in whole or in part, and to make such other order or decree as the courts shall decide to be in accordance with the facts and the law. * * *
“(d) Either party to said action, within sixty days after service of a copy of the order or judgment of the court, may appeal to the Supreme Court, which appeal shall be governed by the statutes governing chancery appeals. When the appeal is taken the case shall, on the return of the papers to the Supreme Court, be immediately placed on the calendar of the then pending term, and shall be brought to a hearing in the same manner as other cases on the calendar, or if no term is then pending, shall take precedence of cases of a different nature except criminal cases at the next term of the Supreme Court.”

In the case in which the pending motion is made, the railway company availed itself of the right, given by the statute, to immediately review the orders of the commission in the courts. The commission had established certain rates and practices. Its orders were in effect — were by the statute made effective — until set aside or the enforcement of them enjoined. They became immediately the foundation of private rights. The railway company addressed itself to the circuit court in chancery for the county of Wayne, charging that the rates, etc., were unreasonable and confiscatory. It did not appeal from the commission to the couid;, and the statute does not provide for an appeal. It prayed, apparently, for a judicial determination of its rights in the premises, and introduced such testimony as it cared to introduce. Its bill was dismissed. It appealed to this court, and here the decree of the lower court was affirmed. Neither court undertook to determine anything more than that it was not made out that the orders were unreasonable and confiscatory. On the contrary, it affirmatively appears that in both courts it was recognized that, in determining the reasonableness of charges and practices complained about, the commission may consider facts which courts may not consider, and that the court confined itself to a determination of the judicial questions presented, namely, whether the action of the commission was shown to be unreasonable, or would, if enforced, result in confiscation of property. It is true that in the opinion of this court the question whether the legislature had attempted to confer greater powers upon it was not discussed. In view of the previous decisions herein referred to, it was unnecessary to advert to the subject. The proposition now advanced by the railway company receives no support from either of our decisions. What we have held is, in effect, that the legislation in question affords to parties in interest an immediate judicial review of the orders of the Michigan railroad commission and that the legislation will be held to impose or confer upon the court the power and duty to determine whether the orders of the commission are reasonable, and whether the rates fixed by it are so unreniunerative as to be confiscatory. It is not manifest that the application of the legislation in question as so limited and the practice pursued deny to the railway company any constitutional right. Standard Oil Co. v. Missouri, 224 U. S. 270 (32 Sup. Ct. 406, Ann. Cas. 1913D, 936); State, ex rel. Oregon, etc., Navigation Co. v. Fairchild, 224 U. S. 510 (32 Sup. Ct. 535); Reagan v. Trust Co., 154 U. S. 362 (14 Sup. Ct. 1047).

We affirm the power of the court, in proper cases, to order by its decree the performance by the railway company of orders which it has found to be not unlawful or unreasonable.

There is, however, a rule of chancery practice long adhered to which denies relief not prayed for, and denies to a nonappealing party relief beyond that granted in the decree by the court below. The rule is not one of form merely, but one of substance, and we are not inclined to make cases like the present exceptional.

Nor is the Michigan railroad commission, nor are the interveners, without remedy. It is provided by section 47 of the act that:

“In addition to all the other remedies provided by this act for the prevention and punishment of any and all violations of the provisions hereof and of all orders of the commissions, the commission, and likewise any person, firm or corporation interested, may compel compliance with the provisions of this act and with the orders of the commission by proceedings in mandamus, injunction or by other appropriate civil remedies.”

Whether the pendency of the appeal in the Supreme Court of the United States should prevent the issue of process to put the orders of the commission into effect is a question we are not now called upon to decide.

The motion to amend the decree is denied, but without costs.

Steere, C. J., and Moore, McAlvay, Brooke, and STONE, JJ., concurred. Kuhn and Bird, JJ., did not sit.


author: Kuhn, J.

text:
    PONTIAC SAVINGS BANK v. REINFORCED CONCRETE PIPE CO.
    Partnership — Certificate of Membership — Contracts — Bills and Notes — Holder in Due Course.
    Whether or not the payee in a promissory note was engaged in business lawfully as a copartnership, having filed a certificate showing its membership, pursuant to Act No. 101, Pub. Acts 1907 (2 How. Stat. [2d Ed.] § 2626), defendants, claiming that the certificate had not been properly acknowledged, could not defeat the right of a holder in due course to recover, in the absence pf proof of knowledge or notice of the illegality: the statute was designed to protect, not to punish, innocent persons who deal with partnerships, and hence contracts made in violation of the act are voidable only at the instance of the innocent party.
    Case-made from Jackson; Parkinson, J.
    Submitted November 4, 1913.
    (Docket No. 60.)
    Decided December 20, 1913.
    Assumpsit by the Pontiac Savings Bank against the Reinforced Concrete Pipe Company and others. Judgment for plaintiff on a directed verdict. Defendant brings case-made.
    Affirmed.

      Miner & Reece, for appellants.

      J. A. Tillson (James H. Clancy, of counsel), for appellee.
   Kuhn, J.

Suit was brought to recover the amount due upon a promissory note made by the defendant, the Reinforced Concrete Pipe Company, a corporation, to the Slater Construction Company, a copartnership, on the 8th day of August, 1912, for $3,600, due 30 days after date, with interest at 6 per cent. This note was received by the plaintiff August 10, 1912. It was a renewal of a note for the same amount dated July 9, 1912, due 30 days from date, and the last-mentioned note was a renewal of the original for the same sum, dated January 9, 1912, due in six months. This note was negotiated by the Slater Construction Company to the plaintiff January 10, 1912. Plaintiff gave the Slater Construction Company $3,600 for the original note by crediting such company with that amount on its account in plaintiff’s bank, and before the maturity of the note the Slater Construction Company exhausted the account. The note now in question was indorsed by the defendants Loomis and Lowery and had also indorsed thereon a guaranty of payment by the Slater Construction Company and waiver of demand, notice, and protest of the same when due. The Slater Construction Company was a copartnership consisting of Olney A. Slater, Franklin A. Slater, and Albert M. Slater, all residing in Pontiac, Mich., which had existed from five to seven years, engaged in the business of contractors, builders, dealers in lumber and builders’ supplies. The persons composing this copartnership on the 18th day of September, 1908, filed with the county clerk of the county of Oakland a certificate purporting to be such as was required under the provisions of Act No. 101 of the Public Acts of 1907 (2 How. Stat. [2d Ed.] § 2626), which gave the names and residences of each of the persons associated in said partnership, but the same was acknowledged only by Olney A. Slater and not by all the partners. On the 20th day of September, 1912, another certificate under said act, and properly acknowledged, was filed with the county clerk of Wayne county.

On the trial of the case in the court below, a verdict was directed in favor of the plaintiff for the amount of the note and interest. Counsel for appellants state their claim in this court in their brief as follows:

“Substantially one question is raised for the consideration of the court by the assignments of error. It is this: Could the Slater Construction Company, as payee of the promissory note in question, as against the makers thereof, make a valid assignment of the same set forth in the case-made, while such copartnership was doing business in violation of Act No. 101 of the laws of this State for the year 1907?”

This assumes that at the time of the taking of the note in question the original payee (the Slater Construction Company) had not filed a proper certificate pursuant to said Act No. 101 of the Public Acts of 1907 (2 How. Stat. [2d Ed.] §2626). A certificate containing all the information the law requires was filed, and the only objection made thereto is that it was not acknowledged by all the partners. It is unnecessary for us to pass on the question whether this was not' a sufficient compliance with the law, as we are satisfied that the trial court was correct in holding that, as under the undisputed facts in this case the plaintiff had no knowledge at the time of the taking of the note in question as to whether or not the Slater Construction Company had complied with the statute in regard to filing the certificate, it was a holder of such note in due course and for value, and, having had no notice whatever of such a defense at the time of taking the note, it cannot be said that its rights are affected by the provisions of the act of the legislature above referred to. The object of the legislature in passing this statute was undoubtedly to protect parties who do business with such concerns and not to punish them, and, in order to make it effective, provided punishment for the offending party.

The question here raised has had the consideration of this court in the case of Cashin v. Pliter, 168 Mich. 386, 390 (134 N. W. 482, Ann. Cas. 1913C, 679), in which case Mr. Justice Steere, in speaking for the court, said:

“While, as heretofore stated, the general rule is well settled that a contract made in violation of a statute is void when the statute is otherwise silent, and contains nothing from which the contrary is to be inferred, nevertheless the diversity of legislation gives rise to varying exceptions to. this rule; and before applying it in full the court should carefully scrutinize the particular statute under advisement, for the purpose of ascertaining, from the subject-matter and language used, the object for which it was enacted and the intent of its makers, to the end that such intent may be rendered effectual and the indicated purpose accomplished. As this act involves purely business transactions and affects only money interests, we think it should be construed as rendering contracts made in violation of it unlawful and unenforceable at the instance of the offending party only, but not as designed to take away the rights of innocent parties who may have dealt with the offenders in ignorance of their having violated the statute.”

Our attention is also called to the construction placed on a similar statute by the California courts, sustaining this view. See Trudel v. Butori, 19 Cal. App. 584 (127 Pac. 76); Gray v. Wells, 118 Cal. 11 (50 Pac. 23).

Judgment is affirmed.

Steere, C. J., and Moore, McAlvay, Brooke, Stone, Ostrander, and Bird, JJ., concurred.