author: WILLIAMSON, J. GRAVES, J. GrOODE, J.,

text:
    THE STATE ex rel. MARQUETTE HOTEL INVESTMENT COMPANY v. STATE TAX COMMISSION.
    In Banc,
    April 18, 1920.
    1. FRANCHISE TAX: Surplus. The word “surplus” as used in the Franchise Act of 1917, Laws 1917, p. 237. requiring a corporation to pay an annual franchise tax “equal to three-fortieths of one per cent of the par value of its outstanding capital stock and surplus,” does not mean the excess of assets over liabilities other than stock liability, but means the excess of the gross assets over the total outstanding capital stock, and therefore the amount of the corporation’s indebtedness is not to be considered in ascertaining the amount of the tax due. So that where the corporation’s gross assets amount to $708,770.90, and its outstanding capital stock amounts to $350,000 and its indebtedness to $350,000, the corporation is taxable upon the total sum of $708,770.90, and not simply upon $358,770.90.

      Held, by GRAVES, J., concurring, that Section 19 of said act, while apparently conflicting with Sections 1 and 2, is meaningless, and should therefore b'e ignored in an attempt to reach the meaning of the word “surplus” used in Section 1.

      Held, by GOODE, J„ dissenting, that the word “surplus” as used in said act, does not denote the entire assets of a corporation in excess of its capital stock, but denotes the excess of assets over liabilities; that the act is ambiguous, conflicting and difficult of interpretation, and is made so especially by Section 10, which seems to relieve from the duty to report the value of property, within or without this State, “all corporations which employ all their property and all their outstanding capital stock in this State;” hut Paragraph 10 of Section 2 requires a corporation to report “the amount of surplus and undivided profits” and Paragraph 14 of Section 2 requires it to report “the clear market value of its total capital stock, surplus, property and assets,” and those words afford a strong reason for a conclusion that the word “surplus” used in Section 1 does not mean assets, hut was used to mean what it is employed to mean in commercial circles, namely, the excess of assets over liabilities.
    2. -: -: Legislative Intention. The cardinal rule of statutory construction is to ascertain the intention of the law-making body, and as far as possible to give effect to the intention expressed; and when that rule is observed, it is clear that the fundamental intention of the Legislature in requiring a corporation to pay a franchise tax equal to three-fortieths of one per cent “of the par value of its outstanding capital stock and surplus” was to levy the tax, first, upon the amount of its capital stock, and. second, upon any surplus property employed in its business in this State; in other words, the amount of property taxable is the amount used in its business, whether that be capital stock paid in or money borrowed. The tax is levied upon the corporation’s right to do business, and the tax is imposed upon all the money or assets it employs in its business. By “surplus” the Legislature meant the difference between the outstanding capital stock of a domestic corporation and the amount of its assets, excluding liabilities of all kinds.

      Held, by GOODE, J., dissenting, that the word “surplus” as used in the act means the 'excess of assets over liabilities.
    3. -: —-: Taxation Policy. No individual is allowed to deduct his indebtedness from the value of the property upon which he is required by the law to pay general taxes, and the same taxation policy inheres in the levying of a franchise tax, and is made compulsory by the constitutional provisions declaring that taxes shall be uniform and in proportion to the value of the property taxed (not in proportion to the value of the owner’s interest therein). And the law does not extend to corporations a favor it denies to natural persons.
    4. -: -: -' — : Applies to Franchises. The constitutional provision requiring all property to “be taxed in proportion to its value” applies to franchises as well as to any other species "of property; and it is not beyond the power of the Legislature to take the extent of the use of a franchise as a basis for computing a franchise tax. And that was the standard employed in the Franchise Tax Act of 1917, which requires a corporation to pay an annual franchise tax equal to three-fortieths of one per cent “of the par value of its outstanding capital stock and surplus; ” it imposes a tax on the amount of money used by a corporation in its business in this State.

      Held, by GOODE, J.; dissenting, that the word “surplus” used in the act means the same thing it is employed in commercial circles to mean, namely, the excess of assets over indebtedness.

      Certiorari.

    Writ quashed.

      Taylor, Chasnoff & Willson, E. T. Miller and Lyon & Swarts for relator.
    (1) The tax levied by the act is a franchise tax, and not a tax upon property. Laws Mo. 1917, pp. 237-242; Mo. Constitution, art. 10, secs. 3 and 4; State v. Stonewall Ins. Co., 89 Ala. 338; Southern G-unl Co: v. Laylin, 64 N. E. 564; State v. Railroad, 45 Md. 361; Phoenix Carpet Co. v. State, 118 Ala. 143; People v. Home Ins. Co., 82 N. Y. 328; State ex rel. v. Schramm, 271 Mo. 223; People ex rel. v. Knight, 174 N. Y. 475. (2) By “par value of the outstanding* capital stock” is meant the result obtained by multiplying* the par value of a single share by the number of shares outstanding. By “surplus” is meant the excess of assets over all liabili- ' ties. People ex rel. v. Roberts, 39 N Y. Supp. 448; First Nat. Bank v. Moon, 102 Kan. 334, L. R. A. 1818-C, 986; Fidelity Trust Co. v. Board of Equalization, 77 N. J. L. 128; Leather Mfgs. Natl. B'ank v. Treat, 116 Fed. 774; People ex rel. v. Purdy, 146 N. Y. Supp. 646; Houston & T. C. Railroad v. McDonald, 148 S. W. 287; State v. Morristown Fire Assn., 2;3 N. J. L. 195; Anderson v. Trust Co., 241 Fed. 342; State ex rel. v. Utter, 34 N. J. L. 487; Lapsley v. Merchants Bank, 105 Mo. App. 98; Decker v. Diemer, 229 Mo. 296; So. Ins. Co. v. Milligan, 154 Ky. 216; G-reeff v. Ins. Co., 160 N, Y, 19; State v, Yard, 42 N. J. L. 357; State v. Parker, 35 N. J. L. 575; Bank v. Tennessee, 161 U. S. 147; Cole, “Assets, Their Construction and Interpretation, ’ ’ pp. 70, 95 and 200; Century Dictionary. (3) The terms “par value of the outstanding capital stock” and “surplus” are to he taken as used in their ordinary and customary meaning, nothing appearing- in the act to evidence a legislative intent to the contrary. State ex rel. v. Gorden, 66 Mo. 394; Kirby & Castle’s Digest of the Statutes of Arkansas of 1916, sec. 8480; People ex rel. v. Roberts, 168 N. Y. 14; People ex rel. v. Roberts, 72 N. Y. Supp. 9501. As friends of the court, Ball & Ryland and James Eu Goodrich also filed briefs for relator; Judson, Green & Henry, filed briefs for St. Louis Chamber of Commerce; Barker, Botts, Parker & Garwood, W. R. Thurmond and Jesse Andrews filed brifefs for Long-Bell Telephone Company; Samuel Mitchell filed briefs for Mercantile Trust Company of St. Louis; F'ordyce, Holliday & White and Bennett Clark filed briefs for Liberty Bank of St. Louis; Jeffries & Corum filed briefs for Baden Bank, Chippewa Bank, Grand Avenue Bank and Union Station Trust Company, of St. Louis.

      Frank W. McAllister, Attorney-General, John T. Gose, Assistant Attorney-General, and Lewis H. Cook, Special Assistant, for respondents.
    (1) The spirit and purpose of a statute are paramount. “For as it has often been said that which is not within the spirit, though within the letter, of the statute, is not within the statute.” State v. Railroad, 32 Fed. 724, 725, quoted in State ex inf. v. Railroad, 238 Mo. 1. c. 613. See also Riddick v. Walsh, 15 Mo. 519; State ex rel. v. County Court, 41 Mo. 254; State ex rel. Ins. Co. v. King, 44 Mo. 283; State ex rel. v. Angert, 127 Mo.-462; Schawacker v. McLaughlin, 1391 Mo. 342, 343; Kane v. Railroad, 112 Mo. 39:; Keeney v. McVoy, 206 Mo. 68; St. Louis v. Christian Bros. College, 257 Mo. 552. It is elementary that statutes should be so reasonably construed as to give them their intended force and effect. State ex rel. Yemero v. McQuillin, -246 Mo. 517; Curtis v. Sexton, 252 Mo. 221; State ex rel. St. Louis v. Railroad, 262 Mo. 720; State ex inf. v. Duncan, 265 Mo. 26; Johnston v. Ragan, 265, Mo. 420; State ex rel. v. Gtordon, 266 Mo. 394; State ex rel. v. Drainage Dist., 271 Mo. 436. (2) All asets devoted to the corporate business constitute the measure of the tax upon the privilege. The term surplus, as used in connection with the oustanding capital stock, means the surplus, excess or overplus of assets devoted to the corporate business which' is in excess of, and not represented by the par value of the oustanding capital stock. North American Petroleum Co; v. Hopkins, 181 P'ao. 627. (3) The Legislature is not to be credited with an, absurdity, nor with the intention of permitting a large class of corporations to bear an unjust share of the burden imposed by the franchise tax. “The effects and consequences of a proposed interpretation of a law should be considered in trying to ascertain the intention of the Legislature.” State ex rel. Macklin v. Rombauer, 104 Mo. 619; Kane v. Railroad, 112 Mo. 34; 'Glaser v. Rothschild, 221 Mo. 210; Endlich on Interp. of Statutes, sec. 295; Cole v. Skrainka, 105 Mo. 310. The Legislature knew when it enacted the Franchise- Tai, that there were a number of very large' corporations which were licensed to do business in this Slate, but a part of whose capital stock had no par value. The Legislature knéw that the term “surplus” as applied to such corporations was meaningless; that they could have no surplus in the sense of excess of assets over liabilities used in connection with capital stock. . The Legislature is not to be charged with using, a term-which had no meaning as applied to a large number of corporations, nor with the intention to favor such corporations by using ■as a measure of the tax only that part of their assets which was represented by outstanding capital stock which had a par value.
   WILLIAMSON, J.

This is a proceeding by writ of certiorari issuing out of this court, upon the petition of the Marquette Hotel Investment Company against the State Tax Commission, to determine the amount of tax due from relator under the act commonly known as the Franchise Tax Act. [Laws of Missouri 1917, p. 237.] The relator, as required by the act above mentioned, filed its report with the State Tax Commission, showing, assets of the amount of $708,770.90, and liabilities in the amount of $700,000, consisting of its capital stock, amounting to $350,000, and indebtedness amounting to $350,000, thus showing an excess of assets above capital stock and indebtedness in the sum of $8,770.90. Respondent construed the Act of 1917, supra, to mean that the tax of three-fortieths of one per cent, by that act assessed, .should be caculated upon the basis of $708,770.90, and determined the amount of the tax due from relator to be $5|31.58'. Relator contends that its indebtedness of $350,000 should be deducted from its total assets, leaving, a balance of $358,770.90, and that amount of the tax due from it is, when computed on this balance, $269'.08. This sum it has tendered to the State Treasurer. The foregoing facts are substantially the facts set out in relator’s application for the writ of certiorari, and upon these facts the writ was issued.

The respondent demurred to the writ, on the ground that it did not state facts sufficient to constitute a cause of action against respondent, and because upon its face it showed that relator is not entitled to the relief prayed. The cause is submitted upon the issues thus made up.

FranchisB The statute in question is denominated a franchise tax in tlie title, and in the first section of the act. In relator’s brief, the first point made is that this is a “franchise tax and not a tax upon property:” ReSp0ncient jn its brief states that it “readily agrees with relator that the franchise tax is not a property tax.” Since the lawmaking body and the contending parties are agreed upon this point, we think we may safely assume that this is a franchise tax, and so dispose of relator’s contention number one.

The real difference between the parties here is embraced within a very narrow scope. Section 1 of the act snpra, in so far as it relates to the matter here in issue, is as follows:

Surplus. “Every corporation organized under the laws of this State shall . . , pay an annual franchise tax to the State of Missouri equal to three-fortieths of one per een|. 0£ £ke par vaiue of its outstanding capital stock and surplus ... ”

There is no controversy between the parties to this action concerning the liability of the- relator to pay the tax upon the amount of its outstanding, capital stock, which is $350,000. The whole controversy hinges upon the interpretation to be placed upon the word “surplus” as used in the statute. Surplus ex vi termini implies an excess. Relator’s contention is that, as used in this act, surplus means the excess of assets over liabilities other than stock liability. Respondent, on the other hand, contends that the surplus is the excess of the gross assets over the total outstanding capital stock, and that the amount of relator’s indebtedness is an irrelevant circumstance. By respondent’s reasoning, the tax should be based upon the total sum-of $708,770.90. By relator’s reasoning, the amount upon which the tax should be calculated is $358,770.90.

We are indebted to the diligence of counsel for relator for a large number of citations of cases in which “surplus” is defined. We have read all of these cases with interest, but, it must be confessed, with little profit. In each instance, the word as used in the case cited is obviously, and usually expressly, confined to the particular context in which it is used, and to the subject matter under discussion. No case cited is sufficiently analogous to be of much assistance. The result is that we are forced to turn to a study of this particular act, and to endeavor, as best we may, from its somewhat confused and cloudy phraseology, to ascertain what the real intention of the Legislature was. It goes without saying that the cardinal rule of statutory construction is to ascertain the intention of the law-making, body, and as far as possible to give effect to the intention expressed.

The ordinary meaning of the word “surplus,” as found in the standard lexicons, is “that which remains when use or need is satisfied; excess; overplus.” As defined in various decisions, surplus mean “the amount of the residue of the assets after the liabilities have beer, deducted” (Anderson v. Farmers’ Loan & Trust Co., 141 Fed. 322, l. c. 327), or “the net assets over and above the liabilities” (People ex rel. v. Purdy, 146 N. Y. Supp. 646.). A method of ascertaining; the amount of the surplus is pointed out in Fidelity Trust Co. v. Board of Equalization, 77 N. J. Law, 128, l. c. 130, as follows: “In order to ascertain the capital and surplus, it is necessary to find the true value of the gross assets. From this must be deducted debts and liabilities. The remainder will be the value of the capital and surplus, if any. ’' All of these authorities tend to support relator’s contention.

In each instance above cited, however as well as in all others which have been called to our attention, the definition given or the method pointed out by which the surplus may be ascertained, is confined either in'express terms, or by necessary implication, to the particular case and facts under consideration. "Wfe think it must be so confined in this instance.

It clearly appears, by reference to Sections 1 and 2, that the fundamental idea in the mind of the Legislature was that a corporation doing business wholly in this State should be taxed under the provisions of this act upon two things, first, upon the amount of its outstanding capital stock, regardless of the value of its assets, whether more or less than the amount of the outstanding capital stock, and, second, upon any surplus property employed in its business in this State. The tax is levied not upon the property itself, but upon the right of the corporation to transact business in this State. The references to the amount of the authorized capital stock and to the amount of the surplus are made solely for the purpose of pointing out a method of determining the amount of the tax. It is, of course, obvious that a corporation may be authorized to issue a very limited amount of capital stock, and may, in fact, in the case of a domestic corporation, have outstanding only one-half of the capital stock which it is authorized to issue. But the amount of capital stock outstanding is by no means the measure of the amount of capital which the corporation may use in its business. It commonly happens that upon the organization of a corporation, all or so much of its capital stock as is required by law to be paid up, is paid up, and in addition thereto a sum is contributed by the stockholders as a means of establishing and reenforcing the credit of the corporation. There is no limit to the amount which may be so contributed. A corporation organized and authorized to issue capital stock in an amount not exceeding two thousand dollars may borrow and employ in its business any sum whatever. The result is that a corporation with a minimum stock subscription may actually employ huge sums of capital in its business. It might well happen that no part of this total employed in business, in excess of the amount of the outstanding capital stock, would be surplus in the ordinary acceptation. of that term. If this excess were borrowed money, the amount so borrowed would constitute a liability, but the corporation would nevertheless be employing the amount of that liability in business. The money so borrowed, or the property purchased with, that money, would be assets of the corporation. The corporation would have the right to use and actually would be using, under its franchise, not only the amount of its outstanding capital stock, but all of the money so borrowed. This it has a right to do, and it is that right which the General Assembly intended to tax by the enactment of the statute here in question. If relator’s theory is correct, and all liabilities must first be deducted in order to ascertain what the surplus is, or whether oiynot there is any surplus, it would be an. easy matter for a corporation practically to escape the tax levied by this law, and nevertheless to enjoy all the benefits of a franchise to do business in this State with assets circumscribed only by the limits of its ability to borrow money or to contract debts. It cannot be supposed that the Legislature intended such a condition to exist. Neither can it be supposed that a possibility so obvious escaped the legislative attention. It necessarily follows that, in view of the language of Sections 1 and 2, and of the whole purpose of this act, as disclosed by the act itself, the Legislature must have intended the word surplus to mean the difference between the amount of the outstanding capital stock of a wholly domestic corporation, such as relator is, and the amount of the assets of that corporation, excluding, liabilities of all sorts. Were the rulé otherwise, this peculiar condition might exist: A corporation might accumulate a surplus of $100,000-, which it could either use in its bin-ness or distribute in dividends to its stockholders. If it used this sum in its business, its franchise tax would then be based upon the amount of its outstanding capital stock, plus $100,000. But if it- distributed this same $100,000 as dividends to its stockholders and immediately borrowed it back from them and employed it in its business, the franchise tax, upon relator’s theory, would be based upon the outstanding capital stock alone. In other words, the amount of the franchise tax would depend on the method of book-keeping employed. A statute is not to be so construed as to produce an absurdity.

Poney011 Other considerations tend strongly to support the conclusions we have announced. It may not be amiss to discuss some of them. It will be presumed, in the absence of a declaration to the contrary, that the General Assembly did not mean to- depart from the fixed public policy of the State with reference to the levying Iaxes- II lience becomes pertinent to inquire what that policy is, as tending to shed some light upon the meaning of this act. Turning to our Constitution as the highest evidence of the policy of the State, we find two- pertinent provisions, to-wit:

“Taxes may be levied and collected for public purposes only. They shall be uniform upon the same class of subjects within the territorial limits of the authority levying the tax, and all taxes shall be levied and collected by general laws.” [Sec. 8, Article X, Constitution of Missouri.]

“All property subject to- taxation shall be taxed in proportion to its value. ’ ’ [Sec. 4, Article X, Constitution of Missouri.]

The Constitution thus declares that taxes shall be uniform and in proportion to the value of the property taxed. (Note that it is the value of the 'property, not the value of the owner’s interest therein, that is to be taxed.) These provisions are intended to secure uniformity and equality in taxation, so far as possible, and they apply to all taxpayers both natural and corporate, and to franchise as well as to property taxes.

Corporations' Relator contends that its indebtedness should be deducted from its surplus assets, for assessment purposes. But is any natural person allowed to deduct his indebtedness from his assets, before giving his property in for assessment for taxation? Not. at all. It is well known that this has never been the policy of this State. Now a franchise may be granted to natural persons „ „ .. , , . , as well as to corporations, and may be taxed when owned by the one as well as when owned by the. other. Why should the Legislature be supposed to have -intended to depart from the constitutional rule of equality and uniformity merely because this a franchise tax? It cannot be presumed that the law intends, in matters of taxation, to extend to corporations a favor which it denies to natural persons.

“There is a seeming injustice in taxing corporations which are largely indebted, and whose earnings are insufficient to pay the accruing interest, as is alleged to be the fact in the present case, to the full extent of the value of all their property and privileges, without regard to their indebtedness, yet it has never been the policy of the Legislature to make any discrimination in favor of individuals on this account, and corporations can not claim, an exemption from taxation when, under like circumstances, an individual would not also be exempt to the same extent.” [Porter v. Rockford Railroad Co., 76 Ill. 561, l. c. 588,]

Further, by way of illustration of the idea of uniformity and equality of taxation, even as between corporations, suppose that each of two corporations has $200,000 invested, and each has $100,000 of outstanding capital stock,. and $100y000 in surplus assets, but one owes $100,000 for borrowed money, while the other owes nothing. Construing this statute as respondent has construed it, each would pay the same amount of taxes. If relator’s contention is correct, the first, after deducting its indebtedness, would be taxed upon a basis of $100,000, while the second, having no indebtedness, would be taxed upon a basis of $200,000. Would that be uniformity and equality in taxation, either as to the value of the property owned, in the case of a property tax, or as to the measure of the use of the franchise, in the case of a franchise tax? Obviously not. Yet if relator’s contention should be upheld, that is precisely what would happen in the case supposed. Such' a construction would render the statute unconstitutional. “Unequal taxes may not be imposed upon property of the same kind, in the same condition, and used for the same purposes.” .[Guthrie on Fourteenth Amendment, cited with approval in Russell v. Croy, 164 Mo. 69, l. c. 110.] It might well be argued that such a discrimination would be in violation of the Fourteenth Amendment to the Constitution of the United States, guaranteeing the equal protection of the laws. . Now it is horn-book law that a statute must not be so construed as to make it unconstitutional when it is susceptible of a construction which will harmonize it with the Constitution.

Moreover, as we have said, we see no reason why the provisions of Section 4 of Article X of our Constitution, providing that all property “shall be taxed in proportion to its value,’’ should, not apply as well to franchises as to any other species of property. It certainly is not heyond the power of the Legislature to take the extent of the use of á franchise as a basis for the computation of the franchise tax. That, we think, is the standard adopted by the Legislature in this instance. Generally speaking, a franchise which is not used is non-pioductive. Its-value depends, usually at least, upon the extent to which it is used. If, therefore, each of two corporations uses in its business the same amount of outstanding capital stock, and the same amount of other assets, each is using its franchise to the same extent, and it. is, therefore, reasonable to assume that these franchises are of equal value. Each should therefore pay an equal amount of taxes. The fact that one corporation may have borrowed fifty per cent of its total capital, diminishes the actual value of its outstanding capital stock to that extent, but does not in the least diminish the extent to which it is using its franchise. On the contrary, the borrowing corporation, by the act of borrowing, is making a greater use of its franchise than is the non-borrowing corporation. It is upon the franchise, we reiterate, that the statute here in question levies a tax. The extent of the use of the franchise is the basis for the computation of the tax.

Furthermore, it is frequently the case that a corporation’s total gross assets do not equal the par value of its outstanding capital stock. In such a case, .its outstanding capital stock is actually below par. It may "also be indebted to such an extent that after paying its debts, the outstanding capital stock would not be worth more than fifty cents on the dollar. Having no surplus, it would have nothing from which it could deduct its indebtness, even if.such deduction were allowed. Yet by the express language of this act, such a corporation would be assessed upon “the par value of its outstanding capital stock.” Why should it be supposed that the General Assembly meant, as relator contends- it did mean, that a corporation whose outstanding capital stock is worth less than par should not be allowed to; deduct its liabilities, while one whose outstanding- capital stock is worth more than par should be allowed that privilege¶ Such a distinction would be unreasonable, discriminatory and in defiance of the uniformity and equality clauses of our Constitution. Yet this conclusion is the inevitable result of relator’s argument.

“It is not denied that the State may classify property for taxation . . . But we do mean to say the classification must rest on some reason other than mere ownership and that different pieces of property of the same kind, held and used for the same or similar purposes, within the same jurisdiction, cannot lawfully be so classified as that one is subject to the tax and the other exempt, merely because one belongs to a . . . large concern and the other to a small one.” [Russell v. Croy, 164 Mo. 69, l. c. 107.]

Under a constitutional provision substantially similar to ours, á Nebraska statute allowing a deduction of indebtedness in assessing- a franchise was held void. “This provision of the Constitution does not allow the indebtedness of individuals or corporations to be deducted from the true value of property or franchises in determining the value of such property and franchises for taxation, and if the ‘manner’ of assessment prescribed by the Legislature, when strictly pursued, would result in so doing, and would not result in levying a tax ‘by valuation, so that every person and corporation shall pay' a tax in proportion to the value of his, her or its property and franchises, ’ it violates the constitution, and is so- far invalid.” [State v. Karr, 64 Neb. 514, l. c. 521.]

That the Franchise Tax Act may cause hardships may be conceded. "What taxing act ever failed to cause hardships? But the wisdom or unwisdom of particular acts of legislation is for the decision of the Ben eral Assembly. So, also, is the correction of legislative mistakes, if any. So long as it keeps within its constitutional bounds, the Legislature is supreme. The constitutionality of this act is not questioned in this proceeding. Clearly, in this case the General Assembly meant by surplus, the excess of assets employed in the business over the par value of outstanding capital stock, without regard to liabilities.

It is in harmony with the principles which we have discussed that respondent has levied upon relator the tax which is here called in question. We think respondent correctly construed the law, and that the writ of certiorari heretofore issued by us should be quashed. It is so ordered.

All concur except Woodson and Goode, JJ., who dissent; Goode, J., in separate opinion. Graves, J., concurs in separate opinion. ' Motion for rehearing overruled in Per Curiam opinion.

GRAVES, J.

■ . ■ Section 10. (concurring). — I. I concur with our learned brother in the disposition that he makes of the term “surplus” as used in the Act of 1917, Law 1917, p. 237. I agree with him that the purpose of the law was merely to fix a basis for a franchise tax, and that the word “surplus” as therein used means the . i . . property used m the business, m excess of the capital stock, without consideration of debts or liabilities. But I have had trouble with Section 10 of the act, in determining whether or not the corporation here involved had toi report sucli “surplus,” 'and thereby subject it to the franchise' tax. This! is the reason for this separate concurrence, and an analysis of the Act itself, which follows. In this analysis, we shall confine ourselves to those portions of the' Act which relates solely to a Missouri corporation, which employes all its capital stock, and other property in this State, for such is the status of the complaining corporation here.

II. The Act of 1917, supra, is composed of 14 sec* tions, including the section which repeals previous conflicting laws. Now taking a Missouri corporation which emplovs all that it has (capital stock and other property) in this State, let us get the applicatory law. With the exception of the sense in which he term “surplus” is used in the act, and the further exception of the conglomerated phrases of Section 10 of the act, the law is reasonably clear. It covers several classes of corporations and refers to fixed fees as to some and. franchise taxes as to others.

Section 1 of the act refers to- six classes of corporation: (1) Missouri corporations, which employ all their stock and other property in Missouri; (2:) Missouri corporations which employ only a part of their stock, and other property in Missouri; (3) foreign corporations; (4) corporations not organized for profit; (5) express companies, and (-6!) a class of insurance companies. As to class one,, supra, this section reads: “Every corporation organized under the laws of this State shall, in addition to all other fees and taxes now required or paid, pay an annual franchise tax to the State of Missouri equal to three-fortieths of- one per cent of the par value of its outstanding stock and surplus.”

The 4th, 5th and 6ith classes, supra, are exempted in the proviso of the section, for .reasons which are clear. Section 2 then thus provides:

“Every corporation liable to the tax prescribed in the foregoing section shall make a report in writing to the Missouri Tax Commission, if it is in existence, and if not, then to the State. Board of Equalization, annually on or before the first day of February, in such form as said Commission or said Board of Equalization may prescribe. Such report shall be signed and sworn to before an officer duly authorized to administer oaths by the president, vice-president, secretary, treasurer or general manager of the corporation and shall contain the following:

“1. Name of corporation.

“2. The location of its principal business office.

“3. The names of its president, vice-president, secretray, treasurer, and members of the board of directors, with the residence and postoffice address of each.

“4. The amount of authorized capital stock.

“5. The amount of capital stock subscribed.

“6. The amount of capital stock issued and outstanding.

“7. The amount of capital stock paid up.

“8. The par value of the stock.

“9. The clear market value of the stock.

“10, The amount of surplus and undivided profits.

“11. The nature and kind of business in -which the corporation is engaged and the location of its place or places of business.

“12. The clear market value of its property and assets without this State.

“13. The clear market value of its property and assets without this State.

“14. The clear market value of its total capital stock, surplus, property and assets.

“15. The change or changes, if any, in the above particulars made since the last annual report.”

Paragraphs 12,' 13 and 14 clearly provide for a corporation of the class here involved to rep'ort the very property found in the report of this corporation, and from which the Tax Commission has found and fixed the tax complained of in this action.

Section 3 of the act' covers the duties, of the Tax Commission, and serves no special purpose in this outline. Sections 4 and 5 deal with corporations (domestic and’foreign) which do business in this State, but which have no capital stock. -The latter provides the form of report for the same. Section 6 provides for certain fees to be collected annually from the corporations covered by Sections 4 and 5, and also for certain annual fixed fees for certain other corporations therein mentioned. Neither of these sections (4, 5 and 6) has any application to the complaining corporation here, but we give this outline for the purpose of trying to get a meaning out of Section 10 of the act.

Section 7 makes the franchise taxes and penalties a lien upon the property, and serves no real purpose for this discussion. Section 8 provides for* a suit to collect the taxes, and Section 9 provides for a forfeiture of charter and license rights for failure to report under the act. The only other material section is Section 10, •which reads:

“All insurance companies, building and loan associations, and other corporations, the fees of which are fixed at lump sums by this act, and all corporations which employ all their property and all their outstanding capital stock in this State shall all report and pay the fees on all its outstanding capital stock, whether employed in this State or not, shall not be required to set out in the report required by this act the value of its property within this State or without the State.”

If there ever was a conglomerated mass in a section of a statute, it is to be found is this Section 10: If you strike out from this section the clause, “and all corporations which employ all their property and all their outstanding capital stock in this State shall all report and pay the fees on all its outstanding capital stock, whether employed in this State or not,” then the remainder would harmonize with all that has gone before in the previous sections. This because the previous sections have dealt with both franchise taxes, and fixed annual fees. With this clause cut out, the section would refer to and thoroughly flit in Section 6, supra, which is the fixed fee section, and not the general .franchise tax sections. With the foregoing clause in Section 10, there is apparently a conflict between Section 10 and Sections 1 and 2, supra. This, upon the theory that you can make 'any sense out of the clause at all. This clause in the first part thereof refers solely to corporations which employ all stock and property in this State. Yet it is followed up by the incomprehensible phrase “shall all report and pay the fees on all its outstanding capital stock, whether employed in this State or not.” Just how a corporation of the class just named in the first clause (a corporation using all its stock and property in this State) could have some of its capital stock in use in some other state is not made plain. But be this as it may, there is one thing which is plain. This clause only refers to “fees on all its outstanding capital stock” and there is no provision for fees upon stock (fori corporations of the class here involved) in the whole act preceding Section 10. There is a specific provision for a franchise tax, hut a franchise tax is not a fee. This, because Section 6, supra, provides for fixed annual fees, thus distinguishing between franchise taxes and fixed fees. The clause is therefore meaningless in this act, and it should be so declared. I therefore concur in the opinion of our learned brother.

GrOODE, J.,

(dissenting). — After a more thorough study of the Franchise Tax Act, in considering the motion for a rehearing, I have concluded the word “surplus” is used in it, not to denote the entire assets of a corporation in excess of its capital stock, but to denote the excess of assets over liabilities. The act is ambiguous, conflicting and difficult to interpret.

Section io Two possible meanings' of Section 10 have been propounded in the brief s: One is that as many corporations own property in this State which is not used in the business of the corporate owners, the words “whether em-Pl°yed this State or not” (which appear to contradict the prior words, “which employ all their property ... in this State”), are intended to require such unused property to be taken into account in ascertaining the amount of the surplus assets of such corporations. The other interpretation offered to reconcile the contradictory phrases of the section, is that it was copied from a section in a similar act of Arkansas, but by oversight some words of the Arkansas statute were omitted and thereby confusion was caused in the language of the section in the Missouri Statute. [Kirby & Castle’s Ark. Digest 1918, sec. 8480.] The argument is that the words “and any corporation which” should be inserted in Section 10, so it would read as follows:

“All insurance companies, building and loan associations, and other corporations, the fees of which are' fixed at lump sums by this act, and all corporations which employ all their property and all their outstanding capital stock in this State (and any corporation which) shall report and pay the fees on all its outstanding capital stock, whether employed' in this State or not, shall not be required] to set out in the report required by this act, the value of its property within this State or without the State.”

Neither of those ingenious suggestions can be adopted as the, sense of Section 10. -without adding to the language of it, or giving a meaning to the language that it does not easily bear. The first one would require the words “capital stock” to be interpreted as meaning “property” or “assets” — the total property or assets of a corporation. The second would require words to be interpolated in the section at a place where it is by no means obvious they, or their equivalent, were intended to be inserted, and were omitted by mistake.

The section appears to relieve from the duty to report the value of property, within or without this State, not only insurance- companies, building and loan associations and other corporations taxed in a lump sum, but also “all corporations which employ all their property and all their outstanding capital stock in this State. ’ ’ And if such corporations, which comprise most of those subject to the franchise tax, are not required to report the value of their- assets, the logical and natural conclusion is that the Legislature did not intend that their franchise tax should be measured by their assets.

other aragrap s. Paragraph 12 of Sectioii 2 requires every corporation liable to the tax prescribed in Section 1, to report the clear market value of its property and assets in this State, and Paragraph 13 of Section 2 requires it to report “the clear market value ^ -£g p,r0per£y g^d assets without this State.” I perceive no way to reconcile those two paragraphs of Section 2 with Section 10, except by the construction that Section 10 so far limits said Paragraphs 12 and 13 as to exact a report of total assets only from corporations which, employ part of their assets or capital stock outside of this State; a construction hardly permissible, because it would reduce so largely the number of companies required to report their assets as to render it improbable the Legislature intended such a consequence.

Be that matter as it may, a strong reason is found for concluding “surplus” does not mean total assets, in the circumstance that Paragraph 14 of Section 2 distinguishes “surplus” from “property and assets,” for it requires a corporation to report the “clear market value of its total capital stock, surplus, property and assets.” Besides, in Paragraph 10' of Section 2, the word “surplus” is used along with the words “undivided profits,” in requiring a report of “the amount of surplus and undivided profits.”

The first of those paragraphs shows, in my opinion, that the word “surplus” was not used in the sense of total property and. assets; for if it was the Legislature indulged in a useless repetition.

The tenth paragraph of Section 2, in speaking of “surplus and undivided profits,” indicates that those terms were employed to mean what they do in commercial circles; namely, the amount of assets over liabilities, whether the excess of assets is carried by the company under the name of “surplus” or of “undivided profits. ’ ’

The decisions to which we have been cited relate mainly to the meaning of “surplus” in bankers’ parlance, but in so far as they boar upon the present case they tend to support the view! that the word was used in the Franchise Tax Act to denote thei excess of the assets of a corporation over its liabilities, except itsi liability to shareholders on the shares of stock held by them . [Bank v. Moon, L. R. A. 1918 C. 986; Leather Mfrs. Nat. Bank v. Treat, 116 Fed, 774, 128 Fed. 262; Anderson v. Loan & Trust Co., 241 Fed. 3122.]

Hardships, Much is said about the bad effect that will come from one or the other construction of this act; sometimes a proper matter for consideration in construing statutes. But in the present case, undesirable results have been reasoned out in the briefs of the parties as likely to follow either construction, and it has seemed best to determine the meaning of the act solely from its terms. The majority opinion is not without support in some of the provisions of the law; but for the reasons stated, I think the intention of the Legislature was not to give to the word ‘ ‘ surplus ’ ’ the meaning given to it in that opinion, from which I respectfully dissent. 1

ON MOTION FOR REHEARING.

tS?CMS6 PER CURIAM: — A franchise tax is not one levied upon property, but one placed on the right to do business. It may be graduated according to the extent of the business done. The act before us eon-templates a tax upon the right to do business in- accordance with the property actually used in the business.

Franchise taxes, to be fair, should be measured by the volume of business. The volume can best be measured by the property used in the business. To illustrate, one corporation has $1000’ of its own, and starts a business with it as its capital stock. It keeps ' within its capital stock. The volume of its business necessity is small. On the other hand another corporation has $1000' of its own (in capital stock) and borrows $49,000, and with the $50,000 starts the same kind.of business. It should do many times the business of the other and its tax upon the right to do business should be proportionately greater.

With this idea of a franchise tax, it is hardly fair to the Legislature to sav that in the use of the word “surplus” it means the mere excess of assets over liabilities. To give it such a construction would not proportion the tax to the business done, as illustrated above by the two supposed corporations. With the two supposed corporations, giving the term “surplus” the construction for which counsel contend, we would have both paying the same tax, and yet one doing a business many times larger than the other, because of the money actually used in the business. It would get the profits of an increased business, whilst paying only a nominal franchise tax for the right to do that business. So that, notwithstanding the great list of briefs filed by friends of the court upon the motion for rehearing, we are of the opinion that we properly construed the term “surplus”' in the franchise tax measure.

II. We have also read with pleasure the briefs discussing the construction of Section 10’ of the act given by the separate concurring opinion. It may be that the writer of the Missouri act (generally known not to have been the Legislature, or any member thereof) had in mind to borrow from the Arkansas law, but if he failed to borrow the law, we are left to give the best construction we can of what has been presented to the court for construction. We are fully satisfied with the construction that we there placed upon this Section 10 of the law before us.

deposits, The status of bank deposits is not discussed in the opinions heretofore written, and should not be discussed now. Whether they constitute the working assets of a bank or trust company should be left to a case where such is a live issue. W]e have troubles enough "with the questions in the particular cases, without extending .the inquiry to outside problems. The motion for rehearing should be overruled. It is so ordered.

All concur except Woodson, J., absent, and Goode, J., wbo dissents in opinion filed.


source: Caselaw Access Project

author: "WILLIAMSON, J. GRAVES, J.

license: Public Domain

text:
    CLARENCE W. ALEXANDER, Doing Business as CONSOLIDATED COAL COMPANY, v. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, Appellant.
    In Banc,
    April 30, 1920.
    1. PLEADING: Cause of Action: Refusal to Deliver Cars: Intrastate Shipment. The statute (Sec. 3184, R. S. 1909) affixing a penalty against a railroad company for refusal to deliver freight cars to the consignee, contains no provision limiting its application to intrastate shipments, and where the petition does not allege that the particular shipment was either an interstate or an intrastate shipment, if defendant wishes to raise the point that the shipment did not come within the purview of the State statute, for that the Federal statute exempts interstate shipments from its operation, it must do so by pleading in its answer the exemption as a defense. An exception to the operation of a statute, if contained in a, separate section or in a Federal statute, cannot ba raised by demurrer, but to be available must be pleaded as a de- ' fense.

      Held, by GRAVES, L, dissenting, with whom WOODSON, X, concurs, that Section 3204 in specific terms limits an action brought under Section 3184 to intrastate shipments, for it says that “all th’e provisions of Sections 3179 to 3207 shall be held to apply to shipments made from one point within the State to any point within the State:” and therefore a petition which shows a shipment to have been an interstate one would be demurrable, but if it does not so allege the point that the shipment was interstate must be .pleaded in the answer.
    2. REFUSAL TO DELIVER CARS: Penal Statute: Construction,: Intent. The statute (Sec. 3184, R. S. 1909) declaring that “it shall be unlawful for any common carrier to subject any particular person to undue or unreasonable prejudice or disadvantage with respect to the transportation” of a freight car, and subjecting it . to damages in treble the amount sustained, is penal in its nature, and the rule of strict construction applies; but it is to be construed according to its true meaning and intent and so as not to defeat the plain legislative intent.
    3. -■: Ill-Will. An arbitrary and unreasonable refusal of a railroad company to deliver a shipment of coal to its consignee falls within the true meaning and plain intent of the statute, although said refusal is not the outgrowth of ill-will, disfavor or other malicious intent.
    4. -: Preference. In order for a consignee of a shipment of coal to make out a case of damages for an arbitrary or unreasonable refusal to deliver the car, it is not necessary for him to show that defendant gave undue or unreasonable preference to some other person or shipment. The statute (Sec. 31'84, R. S. 1909) does forbid a common carrier “to give undue or unreasonable preference or advantage to any particular person,’’ but it also forbids the carrier to subject any particular person “to any undue or unreasonable prejudice or disadvantage,’’ and it is not necessary that the carrier be shown to have violated the first prohibition in order to hold it liable for the second offense.
    5. -: Attorney’s Fee: Constitutional Statute. The statute (Sec. 3191, R. S. 1909) which allows a-reasonable attorney’s fee to be taxed as costs in favor of a plaintiff in a suit against a common carrier for damages for an arbitrary or unreasonable refusal to deliver a freight" car to the consignee of the shipment, applying alike to all common cariers, is not violative of Section 1 of the Focrteenth Amendment, prohibiting a state from depriving a citizen of due process of law or denying to any of its citizens the equal protection of the laws, or of Section 30 of Article 2 of the Constitution of Missouri, guaranteeing to all persons due process of law. [Overruling Paddock v. Mo. Pac. Ry. Co., 155 Mo. 524, and Thompson v. Traders Ins. Co., 169 Mo. 12.]

      Held, by GRAVES, J., dissenting, with whom WOODSON, J., concurs, that the attorney’s fee and the provision for treble damages are both penalties, and the penalties are unreasonable, and violate the Fourteenth Amendment.
    6. -: Treble Damages. The penalty that may be imposed upon a common carrier for an arbitrary or unreasonable refusal to deliver a car to the consignee of a shipment must not be so severe and oppressive as to be wholly disproportionate to the offense, or obviously unreasonable. But a statute which requires the actual damages recovered to be trebled does not violate the rule.

      Held, by GRAVES,' J., dissenting, with whom WOODSON, J., concurs, that the penalty imposed by the statute, being both an attorney’s fee and twice the amount of th'e adjudicated damages, is unreasonable, and to that extent the statute is void.
    7. -: -: Legislative Discretion. The Legislature is accorded wide discretion and large latitude in fixing the amount of the penalty to be imposed on a common carrier for an arbitrary or unreasonable refusal to deliver a freight shipment to the consignee, and its discretion will not b'e held to have been oppressively exercised unless the penalty affixed is obviously disproportionate to the offense and unreasonable; and a statute which fixes the penalty at twice the damages actually sustained and in addition allows the court to tax an attorney’s fee in favor of the successful plaintiff, is not an unreasonable exercise of legislative discretion. [GRAVES and WOODSON, JJ., dissenting.]
    Appeal from Jackson Circuit Court. — Hon. Thomas J. Seehorn, Judge.
    Affirmed.

      Fred S. Hudson for appellant.
    (1) The verdict is not supported by the evidence; therefore cannot be upheld by this court. McFarland v. Accident Assn., 124 Mo. 204; Cole v. Armour, 154 Mo. 332; Hewitt v. Steel, 136 Mo. 237; Peffer v. Railway, 98 Mo. App. 291; Peck v.- Railway, 31 Mo. App. 128; (2) Plaintiff is suing for penalties; therefore his case must be strictly construed, nothing taken by intendment, and he must bring himself within all the provisions of the statute. Rixke v. Tel. Co., 96 Mo. App. 406; Eddington v. Tel Co., 115 Mo. App. 98; Cornell v. Tel. Co., 108 Mo. 450'. (31) Before plaintiff can recover, he must plead and prove that the shipment complained of was, intrastate. Steel v. Railway, 165 Mo. App. 314. (4) The court had no right to assess an attorney fee as costs in this case. Paddock v. Railway, 155 Mo. 524; Gh C. & S, E. Ry. v. Ellis, 165 U. S. 150. (5) Before plaintiff can recover, he must show that defendant showed undue and unreasonable preference or advantage to another shipper and that ill will, coercion or disfavor was shown the plaintiff. Cohn y. Ry. Co., 151 Mo. App, 688; Wynn v. Railway, 111 Mo. App. 648. (6) Sections 3184 and 3191, on which this suit is brought, are in violation of the Constitution of the State of Missouri ■ and of the United States as they discriminate against one class of litigants and in favor of another and the penalty is unreasonable, unjust and excessive. Polt v. Ry. Co., 232 IT. S. 165; Y. & M. V. Railroad Co. v. Vinegar Co., 226 U. S. 117.

      Strother <fc Campbell for respondent.
    (1) If there is any substantial evidence, the verdict will not be disturbed on appeal. (2) The wrongs complained of (refusal to switch cars to plaintiff, thereby working undue and unreasonable disadvantage) comes clearly within the provisions and manifest spirit and intent of the statute. Cohn v. Railway, 1,81 Mo. 45. Both the petition and. the evidence show the switch track in question and terminals and yards of defendant to be located in Kansas City, Missouri, and that the shipment came from the mines at Macon, Missouri, everything about the car being’ intrastate. Although we do not see what difference it would make if the car had come from Kansas, Iowa, Kentucky, or any of the other states of the Union, as the wrong was a refusal to receive and switch oar's to plaintiff at his place of business in Kansas City, Missouri, after they had been delivered to defendant in its terminal yards in Kansas City, Missouri. (4) The ElKs case has been distinguished in Railroad v. Matthews, 174 U. S. 96, and M. K. & T. Ry. Co. v. Cabe, 233¡ U. S. 648. Section 3191 is leveled at common carriers, and there is a great distinction between the statutes brought in question in the Ellis and Paddock cases and in Section 3191. Cohn v. Railway, 180 Mo. 30; K. O. S'. Ry. Co. v. Anderson, 2,3,3 U. S. 825. (5) Sec. 7068', R. S. 1909, providing for reasonable attorney fees where insurance companies vexatiously refusing to pay a loss has been upheld both by the State appellate courts and the Supreme Court of the United States. Rogers v. Ins. Co., 186 Mo. 248. Martin v. Ins. Co., 190 Mo. App. 703; Williamson v. Ins. Co., 72 C. C. A. 542; Farmers Co. v. Dobney, 189' U. S. 301. We can see no difference in a statute which places the same burden on all common •carriers and a statute which places the same burden on all persons engaged in insurance business. (6) "What has been said above concerning attorney fees, may be included on the question of constitutionality of Sections 3184 and 3191. Railroad v. Vinegar Co., 226 U. S. 217. The opinion in this case upholds this kind of statute, when we keep in mind that this statute is leveled against common carriers as a whole and not merely against railroad companies. Seaboard Air Line v. Seeger, 207 U. S. 73; Yazoo & M. V. R. Co., v. Jackson-Vinegar Co., 226 U. S. 217; Kansas City South. Railroad Co. v. Anderson, 23-3> Ui. S. 325; M. K. & T. Ry. Co. v. Cade, 23S U. S. 651. (7) The theory upon which a statute of this kind is held constitutional is not to enforce the collection of debts, but to compel the performance of duties which the carrier assumes when it enters upon the discharge of its public functions. The Statute is not leveled at corporations alone, but at all carriers. The classification is based solely upon the nature of the business, the nature of this business being that of a public carrier.
   "WILLIAMSON, J.

Clarence W. Alexander, doing business under the name of Consolidated Coal Company, brought this suit against the Chicago, Milwaukee & St. Paul Railway Company, under the provisions of Sections 3184 and 3191, Revised Statutes 1909, to recover damages arising from an alleged violation of said Section 3184 on the part of the defendant, and for treble damages and attorney’s fees as provided by Section 3191.

The petition, in substance, after formal allegations states that the defendant, a common carrier, without just cause or legal excuse refused to deliver shipments of coal consigned to plaintiff, and that under the provisions of Section 3184, Revised Statutes 1909, it is unlawful for a common carrier to subject any one shipper or consignee to any undue or unreasonable prejudice or disadvantage, but that it is the duty of such carrier to afford all equal facilities for traffic; that defendant’s conduct was in violation of this statute, in that it refused to accept cars of coal consigned .to plaintiff, and turned hack and refused to deliver coal shipped to him; and that by reason of these alleged unlawful acts of the defendant, plaintiff had sustained damages in the sum of one thousand dollars. The answer was a general denial. Upon a trial by jury, a verdict was rendered in favor of the plaintiff in the sum of two hundred dollars. Under the authority of Section 3191, supra, this sum was by the court trebled, and judgment rendered in the amount of six hundred dollars, and the court also allowed to plaintiff the sum of seventy-five dollars, as attorney’s fees. It was agreed that the evidence would show that amount to be a reasonable allowance for the services of plaintiff’s attorney. Motions for a new trial and in arrest of judgment were filed and overruled, and by appropriate steps the ease has been' brought to this court. Jurisdiction is vested in this court because the constitutionality of the sections of the statute above mentioned is involved.

The essential facts out of which this controversy arose, are, as shown by the record, as follows: The plaintiff was engaged in the business of selling coal at retail in Kansas City, Missouri, where he maintained a coal yard. The. yard was about fifty feet in width at the rear end, where it abutted upon an alley in which a railroad switch was operated by defendant. From this switch plaintiff’s coal yard was served. At the rear end of plaintiff’s lot there was a board fence about six feet high, extending entirely across the lot. This fence stood about eighteen inches west of the east line of the lot. Outside of the fence and between it and the railroad track above mentioned, there were two or three telephone or electric light poles, which appear to have been about ¡fi'fteenl to eigbteefi inches in diam©ter near the base. The fence was old and had gradually become inclined outward and toward the railroad track. Some time in the early part of 1913., an association of railroad employees known in this record as the “Safety First Committee,” complained to Mr. W. L. Richards, the superintendent of defendant railway company, that the condition of this fence made it dangerous to set cars on the switch in the rear: of plaintiff’s lot. Thereupon, about May 21, 1913, Richards informed plaintiff of that fact by letter, claiming in the letter that the fence leaned to such an extent that it was out over the track, and that a boxcar in passing barely cleared the fence, and requested plaintiff to correct this da-ngérous condition without delay. Several similar letters followed from defendant to plaintiff, including threats on the part of defendant to decline to render switch service to plaintiff unless the fence were repaired and a number of petty bills claimed by defendant to be due it from plaintiff were promptly paid. These bills amounted to less than twenty dollars, and plaintiff disputed some of them. The parties agreed, however, upon an adjustment of these charges, and the balance found to be due to defendant was paid. Plaintiff made some repairs upon the fence in the early part of September, 19'13i, and about September 18,1913, requested defendant to deliver a car of coal upon the switch above mentioned, to be unloaded into plaintiff’s coal yard. Defendant had received from the Burlington Railroad Company a car of coal shipped to plaintiff, but after an examination of the fence as repaired, notified plaintiff that the repairs were not sufficient, and refused to place the car of coal upon the switch. Plaintiff declined to make further repairs and defendant, after holding the car of coal for three days, returned it to the Burlington Railroad Company. Plaintiff had closed down his coal yard during the summer, but in September tried to reopen it for business, with the results above stated. After the car of coal above mentioned had been delivered to defendant in Kansas City, Missouri, for plaintiff, defendant notified plaintiff that it would lift the embargo which it had placed upon his shipping facilities, provided he would put the fence in satisfactory condition and agree to pay “all just car service bills when found to be correct by the Bureau, ’ ’ and further agree to pay all damages which might accrue to defendant’s cars and equipment by reason of plaintiff’s employees handling such cars and equipment. The “Bureau” mentioned seems to have been an organization maintained by defendant alone, or by it and other railroad companies. Thereupon plaintiff brought this suit. ■

There is a sharp conflict in the evidence as to the' extent to which the fence in question leaned toward the railroad track. The evidence in behalf of plaintiff tended to show that the fence was about six feet high; that it set back about eighteen inches west of the property line; that the telephone poles in question stood adjoining the fence and between it and the switch track at intervals along in the rear of plaintiff’s lot; that the fence never at any time inclined to a point beyond the east line of these poles, and that the poles mentioned were set west of the switchtrack far enough to permit the safe operation of cars on that track. The evidence in behalf of the defendant tended to show that the fence inclined so far into the alley as to make the handling of cars upon the switch dangerous; that in places the cars had a clearance of only two to four inches, and that in at least one instance a car was scraped by the fence while being set upon this track. No personal hostility was shown to exist between Richards or any other employee of the defendant company and the plaintiff. There was evidence tending to support plaintiff’s claim for damages in the amount of the verdict found in his behalf by the jury. The evidence tended to show that plaintiff was rarely at the yard during the summer season, and for that reason he did not receive the letters above mentioned which were written prior to August 1st, until some time in August, and that he moved the coal which was piled against the fence and repaired the fence some time from the first to the middle of September, and that defendant at various times during the summer season did in fact set cars upon this track for the use of other consignees.

Defendant objected to the allowance of an attorney’s fee, on the ground that the court had no jurisdiction to allow it, and that its action deprived defendant of its right to a trial by jury, as provided in Section 28 of Article 2 of the Constitution of the State of Missouri, and for the further reason that the provisions of the statutes in question, permitting the assessment of an attorney’s fee, were unconstitutional and void, and in conflict with Section 1 of Article 14 of the Amendments to the Constitution of the United States, and in violation of Section 30 of Article 2 of the Constitution of Missouri; and defendant also objected to the trebling of the damages for the same reasons. The objection as to the alleged deprivation of a right to a trial by a jury upon the amount of the attorney’s fee allowed by the court is not urged here, and is for that reason treated as waived.

We think that the foregoing, in addition to such other matters of fact as may be noted in the opinion, is a sufficiently full statement of the facts.

pieadin I. Appellant claims that the petition in this cause does not state a cause of action, the gist of the complaint being that it does not charge that the car of coal in question was an intrastate shipment. ' There is no such allegation in the petition, it is true, but appellant made 110 a^a°k TP011 the petition either by demurrer or by motion to make more definite and certain, nor did appellant even question the sufficiency of the petition by an objection to the introduction of evidence. But this objection cannot avail appellant, in any event for the reason that such an allegation was not necessary. Section 3184, Revised Statutes 1909, under which this suit was brought, contains no provision limiting its application to intrastate shipments. This limitation arises by virtue of a Federal statute, covering the field of interstate commerce, and if this shipment was, in fact, an interstate shipment, and for that reason was not within the scope and purview of the Missouri statute, that fact was a matter of defense which should have been set up by respondent in its answer. “So, in an action upon a penal statute, if the proviso be in a separate section or a substantive clause, it is matter of defense, and should be left to the other party.” [Bliss on Code Pleading (3 Ed.), p. 3119, sec. 202 ; 36 Cyc. p. 123¡8; Encyc. Pleading & Practice, Yol. 16, p. 278; United States v. Cook, 17 Wall. 168; Steel v. Smith, 1 Barn. & Ald. 99.] And this was the rule at common law. [Jones v. Axen, 1 Lord Raymond, 120; Stephen’s Pleading (Heard), 443.] “In pleading upon statutes, where there is an exception in the enacting clause, the plaintiff must show that the defendant is not within the exemption, but if there be an exception in <a subsequent clause, that is matter of defense, and the other party must show it to exempt himself from the penalty.” [1 Chitty on Pleading (16 Ed.), p. 318.] A fortiori is this the rule where the exemption, if any, grows, as here, out of a totally different law enacted by a wholly different lawmaking body.

statute II. Appellant calls our attention to the fact that this suit is brought upon a statute penal in its: nature, and insists that the rule of strict construction applies. This is true. But it is also true that a statute is, nevertheless, to be construed according to its ^rue intent and meaning. The court will take care so to construe a penal statute as not to include within its scope any act or person not plainly and fairly intended to be included therein, but it will take equal care so to construe it as not to defeat a plain and proper legislative intent. “But though penal laws are to be construed strictly, yet the intention of the Legislature must govern in the construction of penal as well as other statutes, and they are not to be construed so strictly as to defeat the obvious intention of the Legislature. ” Fuller., C. J., in the United States v. Lacher, 134 U. S. l. c. 628.]

The pertinent portion of the statute upon which this suit is brought is as follows: “It shall be unlawful for any . . . common carrier ... to subject any particular person . '. . to any undue or unreasonable prejudice or disadvantage with respect to such transportation.” [Sec. 3184, R. S. Mo. 1909.] That an arbitrary and unreasonable refusal by any common carrier to deliver shipments to any person would fall within the true intent and meaning of this statute, seems plain. We do not understand that ill will or disfavor on the part of the carrier toward the consignee is a necessary element of any violation of it. The statute is not levelled at such acts only as are done with malicious intent. If there is in fact an unlawful disadvantage imposed by the carrier upon the consignee, the motive with which that injury is inflicted is immaterial. We therefore think that appellant’s contention that respondent failed to malee out a case because no “ill-will or disfavor’’ was shown to exist on the part of appellant toward respondent, is without merit.

Preference III. Neither do we think that appellant’s contention that “before appellant can be held liable it must be shown that it gave undue or unreasonable preference” to some person other than respondent, is well taken. If appellant’s construction of this statute were sustained, a common carrier could refuse to deliver shipment to one consignee, and yet if it gave no special preference to any other consignees, it could not be held to have violated the law. We do not understand the law to mean that a common carrier may, without just reason, ruin a mail’s business by refusing to serve him, and then escape liability therefor merely because the injured one cannot prove that the carrier has shown an undue preference toward another. Section (31184 supra does, it is true, forbid a common carrier ‘ ‘ to give any undue or unreasonable preference or advantage to any particular person,” but with, equal clearness it also forbids a common carrier “to subject any particular person ... to any undue or unreasonable prejudice or disadvantage.”’ Either act is an offense against the law. Both might he committed at the same time, and, conceivably in the same transaction, but the offenses are not necessarily concomitant, nor in any sense interdependent. It is not necessary for the carrier to violate the law twice in order to be held liable once. Cohn v. Railroad, 151 Mo. App. 661, and Wynn v. Railroad, 111 Mo. App. 642, cited by appellant upon this proposition, do not support its contention.

Evidence^1 IY. Appellant somewhat perfunctorily claims, but does not argue, that the evidence fails to support the verdict. It is not for us to pass upon the weight of the evidence, where any substantial evidence is found to exist in favor of the prevailing party. That there was such evidence in this instance admits, we think, of no dispute. In such case, the verdict of the jury is conclusive upon us, particularly when, as in the case at bar, the trial court has overruled' a motion for a new trial based, in part, upon the alleged insufficiency of the evidence.

Pee°rney'S Y. Appellant assigns as error the action of the trial court in assessing an attorney’s fee as costs in this case, and also contends that Sections 3184 and 3191, Revised Statutes 1909, are in violation of the Constitution of this .State and the Constitution of the Jnited States. The specific sections of the respective constitutions thus alleged to be violated are Section 30 of Article 2 of the Constitution of the State of Missouri, and Section 1 of Article 14 of the Amendments to the Constitution of the United States. Section 30 of the Missouri Constitution relates to due process of law, and Section 1 of the Fourteenth Amendment to the Constitution of the United States is the section ref erring to “due process and equal protection of the law.” No question is made in this court concerning the method by which the attorney’s fee was allowed to respondent in the trial court, nor is the amount allowed assailed as unreasonable. The attack is made upon, the fact that a fee was allowed at all, because, as it is claimed, the allowance both of the attorney’s fee and of treble damages was in violation of the sections of the Constitution of Missouri and of the United States securing to appellant due process of law on the one hand, and due process of law and; the equal protection of the law on the other.

■ In discussing this question, it is well to bear in mind that it is the settled law of this State that a statute will not be held to be unconstitutional unless its unconstitutionality is so obvious as to be beyond all reasonable doubt. [Bledsoe v. Stallard, 250 Mo. 154, l. c. 165; Waite, C. J., in Sinking Fund Cases, 99 U. S. 718.] The statutes in question are a part of Chapter 33, Article 2, of the Revised Statutes of Missouri of 1909. By Section 3179 of that article “all individuals, companies, corporations, trustees, receivers and lessees running and operating cars and trains” upon all railways in this State are declared to be common carriers. Section 3191, ’ supra, is as follows:

“In case any such common carrier shall do or cause to be done any act or thing in Sections 3179 to 3207, inclusive, prohibited or declared to be. unlawful, or shall omit to do any act or thing in said sections required to be done, then such common carrier shall be liable to the person or persons injured thereby for three times the amount of damages sustained in consequence of the violation of the provisions of said sections, together with a reasonable attorney’s fee, to be fixed by the court, which fee shall be taxed and collected as part of the costs in the case.”

The specific grounds here urged in support of appellant’s contention are: That Sections 3184 and 3191, supra, “discriminate against one class of litigants, and in favor of another, and the penalty is unreasonable, unjust and excessive. ’ ’ In view of the state of the law involved, a brief discussion of the authorities in point seems necessary.

In Paddock v. Ry. Co., 155 Mo. 524, the right to have an attorney’s fee taxed under a statute involved in that case was challenged, and in an opinion of this court, Marshall., J., said, in substance, that such a fee had been allowed and held valid in Perkins v. Railroad, 103 Mo. 52, but that “since then the constitutionality of such a statute has' undergone examination by the /Supreme Court of the United States .in the case of G. C. & S. E. Ry. v. Ellis, 165 U. S. 150, and'the statute was held to be in conflict with the Fifth Amendment to the Constitution of the United States' and therefore void.” [Paddock v. Mo. Pac. Ry., supra, l. c. 537.] In obedience to the decision in the Ellis case, supra, this court held ithe allowance of the attorney’s fee to be error, and in effect overruled the Perkins case, supra, on that point. The Paddock case was followed, again upon the authority of the Ellis case, in Thompson v. Traders’ Ins. Co., 169 Mo. 12, l. c. 30. But the Paddock case, though discussed, was not followed by this court in Keller v. Home Life Ins. Co., 198 Mo. 440, l. c. 459, where an attorney’s fee was held properly taxable under the provisions of Section 8012, Revised Statutes 1899 (now Sec. 7068, R. S. 1909), notwithstanding the decision of the United States Supreme Court in the Ellis case, which was also discussed, but not followed. It may be noted that the decision in the Ellis case was by a divided court, Justices Grey, Fuller .and White dissenting on the conclusions therein announced. In view of the large number of decisions by the same court in which the .Ellis case has either been distinguished • or ignored, we think it may fairly be said that that decision turned upon the construction of the peculiar statute there under consideration. As construed by the United States Supreme Court, the statute involved in the Ellis case applied to railway corporations only — not to all common carriers. This was held to be an arbitrary classification, and therefore void.

In Seaboard Air Line v. Seegers, 207 U. S. 73, the court had before it a case involving a statute of the State of South Carolina, whereby it was provided, in substance, that every claim for loss or damage to property while' in the possession of a common carrier should be adjusted and paid within forty days after the filing of such claim with an agent of the carrier, and that in the event the carrier failed so to adjust and pay, it should be liable to a penalty of fifty dollars for every such failure. The amount involved in that specific instance was one dollar and seventy-fivé cents. The penalty of fifty dollars had been allowed by the trial court, and the Supreme Court of South Carolina had affirmed the decision. Speaking of this statute, Justice Brewer in the Seegers case, supra, at page 77, said:

“It is not an act leveled against corporations alone, but includes all common carriers. The classification is based solely upon the nature of the business, that being of a public character. . . .

“It may be stated as a general rule that an act which puts in one class all engaged in business of a special and public character, requires of them the performance of a duty which they can do better and more quickly' than others, and imposes a not exorbitant penalty for a failure to perform that duty within a reasonable time, cannot be adjudged unconstitutional as a purely arbitrary classification. . . .

“Further, it must be remembered that the purpose of this legislation is not primarily to enforce the collection of debts, but to compel the performance of duties which the carrier assumes when it enters upon the discharge of its public functions. We know there are limits beyond which penalties may not go — even in cases where classification is legitimate — but we are not prepared to hold that the amount of penalty imposed is so great or the length of time within which the adjustment and payment are to be made is so short that the act imposing the penalty and fixing the time is beyond the power of the State.”

The Ellis ease, supra, is cited in the opinion in this case, hut not followed, although both opinions were written by the same learned justice. In the Ellis case, however, it should be noted that the statute there in question applied to railway corporations only, whereas in the Seegers ease the statute applied to all common carriers. The two cases were distinguished on that point.

In Atchison, Topeka & Santa Fe Ry. Co. v. Matthews, 174 U. S. 96, the United States Supreme Court had under consideration a Kansas statute that allowed a reasonable attorney’s fee to a successful plaintiff in an action for damages against a railroad company. The court there distinguished the Ellis case, and upheld the Kansas statute.

In the same court, in the case of Fidelity Mutual Life Assn. v. Mettler, 185 U. S. 308, the Ellis case was again distingushed, and a statute imposing upon life and health insurance companies a liability to the holders of policies for damages and reasonable attorney’s fees in the event of a failure to pay a loss within a prescribed time after demand, was upheld. This rule was reiterated in Iowa Life Ins. Co. v. Lewis, 187 U. S. 335; Farmers & Merchants Ins. Co. v. Bobney, 189 U. S. 301; K. C. Southern R. R. Co. v. Anderson, 233 U. S. 325 (in which double damages as well as attorney’s fees were allowed); Yazoo & M. V. R. R. Co. v. Jackson Vinegar Co., 226 U. S. 217; M., K. & T. Ry. Co. v. Cade, 233 U. S. 642; M., K. & T. Ry. Co. v. Harris, 234 U. S. 412; Mo. Pac. Ry. Co. v. Larrabee, 234 U. S. 459; St. Louis, I. M. & S. Ry. Co. v. Williams, 40 Sup. Ct. Rep. 71, and many other cases.

In Yazoo & M. V. R. R. Co. v. Jackson Vinegar Co., supra, the constitutionality of a statute of Mississippi, imposing a penalty upon a common carrier for failure to settle claims for damages to goods in shipment, was involved. The amount for which suit was brought in that instance was four dollars and seventy-five cents. A penalty of twenty-five dollars was allowed the plaintiff in the court below. The statute was leveled against “railroad corporations and individuals engaged as common carriers” in that State. In that case the court, speaking through Mr. Justice Van Díevantee?., said:

“As applied to such a case, we think the statute is not repugnant to either the due process of law or the equal protection clause of the Constitution, but, on the contrary, merely provides a reasonable incentive for the prompt, settlement, without suit, of just demands of a class admitting of special legislative treatment. See Seaboard Air Line Ry. v. Seegers, 207 U. S. 73; St. Louis, Iron Mountain & Southern Ry. Co. v. Wynne, 224 U. S. 354.” [Yazoo & M. V. R. R. Co. v. Jackson Vinegar Co., 226 U. S. supra, l. c. 219. ]

In the case of M. K. & T. Ry Co. v. Cade, 233 U. S. l. c. 650, a statute of the State of Texas imposing an attorney’s fee on the defeated defendant in certain classes of cases, was under review, upon the charge that the act was void because in conflict with the same section of the Federal Constitution here cited. The Texas statute was directed against “any person or corporation doing business in this State.” As stated in that opinion, the plaintiff in error relied chiefly upon the Ellis case, supra. After calling attention to the fact that this statute was applicable to all persons both natural and artificial, the court said:

“As has been said before, the Fourteenth Amendment does not require that state laws shall be perfect; and we cannot judicially denounce this act as based upon arbitrary distinctions, in view of the wide discretion that must necessarily reside in a state legislature about resorting to classification when establishing regulations -for the welfare of those for whom they legislate. [Magoun v. Illinois Trust & Savings Bank, 170 U. S. 283, 293; Orient Ins. Co. v. Daggs, 172 U. S. 557, 562; Louisville & Nashville R. R. v. Melton, 218 U. S. 36, 52; Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78.] . . .

“If the classification is otherwise reasonable, the mere fact that attorney’s fees are allowed to successful plaintiffs only, and not to successful defendants, does not render the statute repugnant to the equal protection clause. This is not a discrimination between different citizens or classes of citizens, since members of any and every class may either sue or be sued. Actor and reus differ in their respective attitudes toward a litigation; the former has the burden of seeking, the proper jurisdiction and bringing the proper parties before it, as well as the burden, of proof upon the main issues; and these differences may be made the basis of distinctive treatment respecting, the allowance of an attorney’s fee as a part of the costs. [Atchison, Topeka, etc., Railroad v. Matthews, 174 U. S. 96; Farmers’ etc., Ins. Co. v. Dobney, 189 U. S. 301, 304; McMullin v. Doughty, 68 N. J. Eq. 776, 781.] ”

In the same case it was held that the allowance of an attorney’s fee should not be regarded as a penalty, but that it stood upon the same basis as ordinary court costs, and the court said: “If a reasonable penalty may be imposed for a failure to satisfy a demand found to be just,'it follows a fortiori that costs and an attorney’s fee may be.” [M. K. & T. Ry. v. Cade, supra, l. c. 652.]

In Missouri Pacific Ry. Co. v. Larrabee, 234 U. S. 459, the right of the plaintiff to recover attorney’s fees in a mandamus proceeding was involved. Such a right was conferred by the statutes of Kansas. The attack was made there, as here, that the allowance of an attorney’s fee in such a case was void under the provisions of the Fourteenth Amendment. The allowance was held proper under the authority of the Cade case, supra. In the Larrabee case, however, the liability to pay an attorney’s fee seems to have applied to all persons against whom the mandamus was issued.

In the case of C., M. & St. P. Ry. Co. v. Polt, 232 U. S. 165, a statute which is not set out in the opinion was held to offend against the Fourteenth Amendment, in a very brief utterance by Justice Holmes. It appears from a portion of the statute quoted in the opinion that under a statute of South 'Dakota a railroad company was held absolutely .responsible for property destroyed by a firé communicated from its locomotive, and the damages should be doubled unless paid within sixty days from the date of service of notice of the claim, but if within sixty days after notice of loss it should “offer in writing to ’ pay a fixed sum, being the full amount of the damages sustained, and the owner shall refuse to accept the same, then in any action thereafter brought for such damages when such owner recovers a less sum as damages than the amount so offered, then such owner shall recover its costs.” In the trial court the plaintiff recovered a judgment of seven hundred and eighty dollars. The railway company had offered to pay five hundred dollars. A judgment for double damages was affirmed by the Supreme Court of South Dakota, Justice Holmes said in that case at page 168:

“No doubt the states have a large latitude in the policy that they will pursue and enforce, but the rudiments of fair play required by the Fourteenth Amendment are wanting when a defendant is required to guess rightly what a jury will find, or pay double if that body sees fit to add one cent to the amount that was tendered, although the tender was obviously futile because' of an excessive demand. The case' is covered by St. Louis, Iron Mountain & Southern Ry. Co. v. Wynne, 224 U. S. 354. It is not like those in which ai moderate penalty is imposed for failure to satisfy a demand found to be just. [Yazoo & Mississippi Valley R. R. Co. v. Jackson Vinegar Co., 226 U. S. 217.] ”

The judgment was reversed for the reason set forth in the quotation. The Ellis case was cited in the briefs, but .not noticed in the opinion.

In C., R. I. & Pac. Ry. Co. v. Farmers’ Elevator Co., 226 U. S. 426, the same question was presented to the United States Supreme Court, under a Minnesota statute. and the judgment in favor of the plaintiff below, which had been affirmed in the Supreme Court of Minnesota, was reversed. The decision of the United States Supreme Court, however, turns solely upon the point that by the passage of the Hepburn Act Congress had taken exclusive possession of the field of legislation relating to such commerce, and for that reason the Minnesota statute was void.

In the case of Atchison, Topeka & Santa Fe Ry. v. Vosburg, 238 U. S. 56, the court had under consideration a statute of Kansas which required a railway company to furnish cars to shippers, and provided a penalty of five dollars per day for each car not supplied, and for a reasonable attorney’s fee in addition. By a reciprocal provision of this statute, shippers who failed to use cars placed at the disposal were subject to a penalty for their detention, but were not liable for attorney’s fees. Yosburg recovered judgment against the railway company for violation of this statute, including an attorney’s fee, and the case was taken to the United States Supreme Court on the ground that the statute denied the railway company the equal protection of the law guaranteed by the Federal Constitution, because of the fact that under the same statute the railway company might be compelled to pay a fee, but no such liability attached- to the other party. This contention was sustained by the Supreme Court. The case is said to be essentially different from the Matthews, Cade and Anderson lines of cases, because of the distinction made in the statute in question between the parties to such suits.

The whole question seems to be set at rest in the very recent case of St. Louis, Iron Mountain & Southern Ry. Co. v. Williams, 40 Sup. Ct. Rep. 71, decided December 8, 1919. In this case a statute of Arkansas regulating the rates for the transportation of passengers provided that any railroad company which should collect a greater compensation than that prescribed in the statute should, for every such offense, be subjected to a penalty of “not less than fifty dollars nor more than three hundred dollars, and costs of suit, including a reasonable attorney’s fee.” The aggrieved passenger was given the right to recover the penalty and costs, including the attorney’s fee, in a civil action. In that case the railway company had charged each of two passengers sixty-¡six cents more than the prescribed fare. Suit was brought to recover the' penalty and attorney’s fees, and judgment obtained for a penalty of seventy-five dollars and twenty-five dollars attorney’s fee in each case. The constitutionally of the Arkansas statute was attacked upon the same grounds as in the case above mentioned and the case at bar. The judgment of the trial court was, however, affirmed, in an opinion by Mr. Justice Van DevAnter, in which the court points out that it is immaterial that the penalty goes to the aggrieved passenger and not to the state, and holds that this is not contrary to due process of law, nor is it requisite that the amount of the penalty should be confined or proportioned to the passenger’s loss or damages, for the reason that it is imposed as a punishment for the violation of a public law. Although the penalty and the attorney’s fee in that case amounted to one hundred dollars, and the offense of the carrier involved only sixty-six cents, the court nevertheless said: “We think it properly cannot be said to be so severe and oppressive as to be wholly disproportioned to the'offense, or obviously unreasonable.”1 (l. c. 73’.)

The constitutionality of statutes similar to the one here in question has been upheld repeatedly by the Federal courts, and by the courts of last resort of probably a majority of the states of the Union, at least to the extent of allowing a reasonable attorney’s fee to be taxed and reasonable damages, to be awarded against the offender. A careful review of the authorities leads, we think, irresistibly to this conclusion. St. L. S. W. R. R. Co. v. Cone, 111 Ark. 319; Atl. Coast Line Co. v. Perry, 67 So. 639; Peoria, D. & E. Ry. Co. v. Duggan, 109 Ill. 537, Ill. Central Railroad v. Crider, 91 Tenn. 489; M. K. & T. Ry. Co. v. Simonson, 64 Kan. 802; Burlington C. R. & N. Railroad v. Dey, 82 Iowa, 312 Cameron v. C. M. & St. P. Ry. Co., 63 Minn. 384, are a few of the cases which may be cited in support of this statement. It is necessary, however, as said in the Williams case, supra, that the penalty so imposed shall not be “so severe and oppressive as to be wholly disproportioned to the offense, and obviously unreasonable. ’ ’

Is the penalty of treble damages imposed by our statute in this instance so severe as to fall within that rule? In the consideration of this question it is proper to give much weight to the fact that the General Assembly, whose duty it was in the first instance to fix the amount of the penalty, evidently thought treble damages to be justified under the conditions involved and in view of the character of the ills to be remedied. State legislatures are still accorded “wide discretion’’ and “large latitude” in these matters, even under the decisions of the United States Supreme Court. The sections here assailed were first enacted in 1887, and we do not find that the penalty provided has ever before been questioned on the ground of excessiveness, and certainly it has never been adjudged to be so in any appellate court. Practical experience for almost a whole generation has thus apparently justified the wisdom of the law and the amount of the penalty. Furthermore, we think it may safely be assumed that in most claims arising from non-delivery of freight shipments, the amount involved as damages is rarely large, and generally is quite small. In the case in hand, although the amount claimed was one thousand dollars, the amount allowed was only two hundred dollars, and this sum, though trebled, cannot be said to involye a great hardship. A penalty which is not sufficiently severe to prevent frequent infractions of the law, falls short of its purpose. In view of the enormous amount of freight'annually handled by common carriers in this State, and of the infrequency with which the penalty provided in this instance has been a subject of litigation, it would seem to be a fair inference, after a fair test in actual experience, that the section in question has demonstrated the wisdom of the Legislature in enacting it. It is a matter of cornmon knowledge that during the time that this law has stood upon our statute hooks, the common carriers of this State have not lacked either the means or the disposition to appeal to the law-making body and to the courts for redress of their grievances, or for protection of their rights. It cannot be said that they have been accorded an unkindly reception in either forum, and hence the fact that in more than thirty years the validity of this penalty has rarely, if ever, been questioned on the ground that it is excessive, is strongly persuasive that it has not been found to be oppressive. We do not think that we would be justified in holding Section 3191, supra, to be unconstitutional on this ground.

In view of the present attitude of the Supreme Court of the United States upon the questions here involved, as evidenced by the opinions we have cited, we conclude that Sections 3184 and 3191, supra, are not repugnant to the provisions of the Federal Constitution relating to the due process of law or equal protection of the law. By parity of reasoning, they are not in conflict with the due process of law clauses of our State Constitution. Paddock v. Mo. Pac. Ry. Co., 155 Mo. 524, and Thompson v. Traders Ins. Co., 169 Mo. 12, in so far as they may be thought to be authority to the contrary, are hereby overruled.

Few graver duties devolve upon the courts than that of passing upon questions of constitutional law. The power of a court to annul an act of Congress or the Legislature is peculiar to American jurisprudence and was long hotly contested. While the existence of that power has been firmly established both upon reason and authority, it is to be exercised only after solemn deliberation, with the utmost care, and upon conviction beyond a reasonable doubt. The great master of constitutional law, in discussing this question said:

“The question, whether a law be void for its repugnancy to the constitution, is, at all times, a question of much delicacy, which ought seldom, if ever, to be •decided in the affirmative in a doubtful case. The court, when impelled by duty to render sneli a judgment, would be unworthy of its station could it be unmindful of the solemn obligations which that station imposes; but it is not on slight implication and vague conjecture that the Legislature is to be pronounced to have transcended its powers, and its acts to be considered as void. The opposition between the Constitution and the law should be such that the judge feels a clear and strong conviction of théir incompatibility with each other.” [Marshall, C. J., in Fletcher v. Peck, 6 Cranch, 87, l. c. 128.]

For the reasons stated, the judgment should be affirmed. It is so ordered. All concur, except Graves, J., who dissents in separate opinion in which Woodson, J., concurs.

GRAVES, J.

unreason able Penalty, (dissenting). — I. From the facts stated, I agree to most that is written in the majority opinion, except the latter part thereof which deals with the reasonableness of the penalty imposed by our statute, and the statement in the first paragraph thereof, wherein it is said: ‘1 The statute under which this suit is brought contains no provision limiting its application to intra-

s^ate shipments.” I think the penalty fin-posed is so unreasonable as to make the statute in question violative of the provisions

of the Federal Constitution, discussed, and learnedly discussed, by my brother. Many of the cases cited by my brother would so indicate. There mere fact that this statute has not heretofore reached' the Federal court, or this court, may as well be explained upon the theory that the lawyers of the State feared the results, and hence refrained from asking the doubling or trebling of damages, as upon the theory that the corporations reached thereby recognized its reasonableness. The divers and sundry McGrew cases upon our books are illustrative. There were penalty clauses in the statutes covering those cases, but astute counsel for plaintiff never invoked them. Nor are claims for damages under statutes having penalty clauses always or usually trivial in amount. The Me-Grew cases, supra, are illustrative. Others might he cited, but these suffice.

What is the actual penalty fixed by this statute1? In my judgment.it is (1) the attorney’s fee, and (2) the giving to a plaintiff of twice the amount of his adjudicated claim, in addition, as a penalty. In other words the statute not only allows the plaintiff to recover that to which he is entitled as damages, but it goes further and requires the defendant to pay an attorney’s fee, and in addition to the adjudicated actual damages, twice the amount of the adjudged damages, for such is the result of treble damages. It can’t be well said that the allowance of an attorney’s’fee, is other than a penalty. I think the statute violates the provision of the Federal Constitution discussed by my brother, and as the action is under the statute, the judgment should be simply reversed.

II. The action is brought under Sections 3184 an-3191, Revised Statutes 1909. Section 3204 limits in specific terms these statutes to intrastate shipments, and for that reason I dissent from what is said in paragraph one of the majority opinion, quoted, supra. Section 3204, Revised Statutes 1909, reads:

“All the provisions of said Sections 3179 to 3207 shall be held to apply to shipments made from any point within the State to any point within the State, whether the transportation of the same shall be wholly within this State or partly .within this and adjoining State or States.” The italics are ours.

It will be noted that this section covers both sections ■'involved in this action. It is a qualification to the broad language of these sections, and limits their application to intrastate transactions. We have so specifically ruled. [Seawell v. Railway Co., 119 Mo. l. c. 233 et seq.]

So whilst we concur in the ruling that defendant should have pleaded an interstate shipment, if in fact, there was one, yet we do not concur in the view that our statutes cover anything further than intrastate shipments. Had the plaintiff’s petition shown this oar of coal to have been an interstate shipment, it would have been demurrable. Not only has this court held these statutes applicable only to intrastate shipments, but in Steel v. Railroad, 165 Mo. App. l. c. 316, et seq., the St. Louis Court of Appeals has so ruled.

Our statute would seem to make intrastate commerce out of a shipment which started in this State and ended in this State, although the shipment' traversed through another state between the starting and stopping points. That kind of a shipment has been denominated interstate by the United States Supreme Court. [Hanley v. K. C. Southern Ry. Co., 187 U. S. 617.] Clear it' is that our statutes have no reference to interstate matters, and this suffices. For the reasons stated, I dissent.

Woodson, J., consurs.