Keystone Lumber Yard v. Yazoo & Mississippi Valley Railroad

1. Equity Jurisdiction. Discovery. Statutory modes of making proof. Effect. Original equity jurisdiction of bills for discovery is not taken away by statutes simply providing other means of proving the facts sought to he discovered. 2. Same. Same. Constitution 1890, sec. 160. Complete relief. Where the chancery court takes jurisdiction for the purpose of discovery, it may grant full relief in the ease, under the power conferred by Constitution 1890, sec. 160, providing that, where the court heretofore exercised jurisdiction auxiliary to courts of common law, it may exercise such jurisdiction to grant the relief sought, although the legal remedy may not have been exhausted, or the legal title established by suit at law. 3. Same. Same. Same. Railroads. Reciprocal demurrage. Penalties. Reciprocal demurrage charges, if penalties at all, are statutory penalties, and not penalties created by contract;' and hence, where the chancery court has taken jurisdiction for the purpose of discovery, sought in a bill to compel the carrier to pay such charges, it will grant full relief by a decree for the amount proved.

From tbe chancery court of Yazoo county. IIoN. G. Garlar® Lyell, Chancellor. . , The Keystone Lumber Yard, .a corporation, appellant, was complainant in the court below; the railroad company, appellee,-was defendant there. From a. decree sustaining defendant’s demurrer to -the bill, and dismissing the suit, the complainant appealed to the supreme court. . The opinion of the court sufficiently states the facts. -The decree of the court below contains the following: — “The court is of the opinion that the defendant company cannot be compelled to discover as prayed for by the bill, because such discovery will subject defendant to the imposition of penalties, hence the demurrer is sustained and the complainant’s bill is dismissed without prejudice to the complainant’s right to proceed at law.” Nor prior litigation relative to the matter here in controversy, see Keystone Lumber Yard v. Yazoo, etc., B. Go., 94 Miss. 192, 47 South. 803. The precise. question involved here is, whether equity will enforce a discovery of the cause of delay in the transportation of car load lots of freight, when such discovery will subject defendant to the reciprocal demurrage charge fixed by the state railroad commission, or, whether such discovery will be denied, on the-theory that “courts of equity * * * under- take to disregard and nullify^ bv refusing their aid in proper cases, the expression of the will of the lawmaking power,” under the pretext that such charges are “fines and penalties.” We submit that no such rule of equity exists, or ever did exist. The contention to the contrary is based upon the expression, “these rules for affixing penalties for undue detention of the cars, were not devised for the benefit of the railroad company alone,” in reference to demurrage charges due the railroad companies, to be found in the opinion of the court in the Searles case, 85 Miss. 543, and the quotation thereof in the Keystone Lumber Yard case, 90 Miss. 406, although the court, in the latter case, on page 407, repudiated the suggestion that they were -“fines and penalties,” and although the word “penalties,” in the first instance, was evidently used in its general sense. The reciprocal demurrage charges are, of course, no- more penalties than are demurrage charges. The one is compensation for undue delay in transit, tbe undue detention of tbe shipper’s property; and tbe other .is compensation for undue delay in unloading, tbe undue detention of the railroad’s, propn erty. If there were no demurrage charges fixed by law, shippers could be made to pay for the damage ensuing from undue delay in unloading; if there were no reciprocal demurrage charges fixed by law, a railroad company could still be made to pay for the damages ensuing from undue delay in transpor-' tation. Both are alike founded in the soundest common sense and highest spirit of equity. Each is equitable compensation, the one no less than the other. There can be no doubt that courts of equity will enforce discovery which falls short of subjecting the defendant to prosecution for a public offense or indictable crime, even though it compel the disclosure of fraud or the basest moral turpitude. Watts v. State, 24 Miss. 11. It never was the law that a discovery would be denied in equity simply because it would enable the complainant to recover, or the defendant to defeat, the debt or demand sued for. It must subject to the loss or forfeiture of something distinct from, or collateral to, that which is sued for, or subject the party defendant to a penalty or indictment. Oonant v. Dolafield, 3 Ed. Ch. 201; Hare on Discovery, part 3, par. 1; Sharp v. Sharp, .3 Johns. Ch. 401. Equity will enforce a contractual forfeiture, whenever the jurisdiction attaches on some ground independent of such relief, as in the case of a clear legal right to the forfeiture), where the legal remedy is inadequate. Vicksburg, etc., B. Go. v. Ragsdale, 54 Miss. 208. The legal remedy here is inadequate, because the discovery is essential to its enforcement. The penalties which equity will not enforce are those fixed by contracts of the parties, and not those fixed by statute. Lafayette Oounty v. Hall, 10 Miss. 678. Nor will it decline to enforce a claim for liquidated damages, although, in a generic sense, such may be termed a penalty. Pomeroy, Eq. Juris. 440. At first blush, the case of Mississippi Railroad Commission v. Culf, etc., R. Co., 78 Miss. 750, may seem to conflict with Lafayette County v. Hall, supra, but it does not. In the latter case the penalty was in the nature of liquidated damages, as well as statutory, like unto damages for delinquency in the payment of taxes. Burlington v. Burlington R. Co., 41 Iowa, 134. In the former case, the penalty was under Code 1892, § 4329, for the commission of a public offense — a pure penalty, under a penal law, and not simply -in the nature of a penalty. Huntington v. Attrill, 146 IT. S. 657; Wisconsin v. Pelican Insurance Co., 127 IT. S. 265; Creen v. Weaver, 1 Sim. 404. It is patent that the demand sued on is purely legal. This is a suit merely to recover penalties, alleged to be due under the demurrage* rales of the state railroad commission. The bill itself is practically in the form of a declaration at law, and the right, if any, is at law, tire remedy in the law courts* being entirely sufficient and adequate. Section 147 of the present constitution of Mississippi of 1890 was not enacted to* vest in the chancery court any special jurisdiction not possessed by that court under its ancient and original equity jurisdiction, except insofar as jurisdiction of certain other subjects is added to this original jurisdiction of such court by other constitutional provisions, or fly statutes of the legislature not necessary here to consider. - The constitutional section never abolished' the distinction between the chancery and the law courts. Demands at law are no more cognizable in equity, as a general rule, now, than they were prior to the adoption of the constitution of 1890. Section 147 of the state constitution merely deprives this court of the power to reverse on a mistake in jurisdiction made by either the circuit or the chancery court in retaining causes until final judgment or decree in the lower court. According to the interpretation of that section by this court, if the chancery court shall hold jurisdiction of a cause purely legal and. render final decree, sncb a mistake by a chancellor would not warrant the reversal of the decree by this court; and the same is true .where a circuit court, through mistake or misapprehension of the law, holds a case of pure equity nature in the law court until final judgmnet. In the case of Gazenewve v. Gwrell, 70 Miss. 524, this court declares that while the law and equity courts are still distinct jurisdictions, yet the judges and chancellors of the state may, by mistake of law or equity, practically obliterate the demarcation between law and equity courts, merely by failing to observe the distinguishing lines between the jurisdictions of the two courts. And it is further held in the same opinion, which was the first full construction of section 141 of the Mississippi Constitution, that the only inhibition of section 141 is against reversal by the supreme court on account of a mistake as therein specified touching jurisdiction, made by either the chancery or the circuit court. In the case of Illinois, etc., B. Go. v. LeBlanc, 14 Miss. 650, the circuit court, a pure law court, actually entertained and •tried the form of an action of ejectment, a proceeding in the nature of a guia timet proceeding, and yet this court declared that by reason of section 141 of the Mississippi Constitution, the judgment of the circuit court could not be reversed on the sole ground of want of jurisdiction of the law court. See also Adams v. Bank, 74 Miss. 301. In the case at bar, the objection to the jurisdiction of the chancery court was made by demurrer properly and. timely by the defendant, and the chancery court holding the demurrer to be well taken and sufficient, and that the demand was purely a legal one, declined to entertain or to assert jurisdiction over the cause, and dismissed the bill without prejudice to the complainant’s right to a remedy at law. This court in Carbolineum Go. v. Myer, 76 Miss. 568, expressly approved an action of tbis character on the part of a ■chancellor who was persuaded that the chancery court possessed no jurisdiction of the particular right sought to be enforced through its instrumentality. The present case is one, not where the court entertained jurisdiction of the cause and entered a final decree which cannot be reversed by this court on the ground of a mere mistake in jurisdiction, as between common law and equity, but it is one where no mistake has occurred, where the chancellor recognized the lack of jurisdiction in the equity court, and where he refuses to entertain the cause and dismissed the bill without prejudice to complainant’s right to- sue in the proper court at law Nor many years the courts stressed and observed the maxim that a court of chancery abhorred penalties and forfeitures, and a decree for one or the other was rarely entered in the chancery court, except where the equity court, acquiring jurisdiction on an independent and original equity, assumed and exercised jurisdiction over the whole cause and all its details and stood ready to enter a decree if the main equity was .established, that would answer the ends of justice and dispose of the whole case and every issue in it. This has been the rule in Mississippi, and is today the rule of proper chancery practice. In the case of Lafayette Oouniy v. Sail, 70 Miss. 678, this court says that the chancery court having acquired jurisdiction “may give full relief by following the law and enforcing the penalties. Legal remedies are constantly being wiped out in -courts of equity in causes where jurisdiction is acquired on some recognized ground of equitable interference.” It is true that in this opinion the court says that it is not a sound argument that equity will always refuse its aid in the enforcement of penalties, and a distinction is drawn between cases where statutory penalties are demanded and penalties created by contract are sought to be recovered. The court- asserts that while equity will refuse to enforce penalties growing out of contracts between the parties, it will not decline to enforce statutory penalties which are incidental to some other fact or condition, but notwithstanding this clear distinction is drawn, the court does adhere to the proposition that full equity jurisdiction must be in the court on some ground independently of the mere effort to collect penalties. The decree for the penalty must be an incident, an essential one, to full ef-fectuation of the original equity of the case.