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otyor or any police officer of the municipality.

Vories & Vories and Ben J. Woodson, for the appellant

Huston & Parrish, for the respondent

**• BURGESS, J. The defendant was charged, in the police
wwtof the city of St. Joseph, with violating sections 76 and 77 of
eeneral ordinance number 361 of said city, by failing and refus-
'n?to submit for the inspection of one T. J. AUie, a duly commis-
sioned police officer of said city, the book required to be kept by
Wm as a pawnbroker, for the purpose of registering and entering
» minute description of any and all personal property, bonds,
ttotes, or other securities received by him on deposit or purchase
M such pawnbroker, aa provided by section 76 of aaid general

An. St Bar., you XLIX. -17



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578 8t. Joseph v. Levin. [Miasoari,

ozdinance, he, the said Iteyin, being licensed as a pawnbroker in
said city.

The trial resulted in his conviction by the police conrt and the
imposition of a fine of. fifty dollars. He then appealed to the
criminal court of Buchanan county^ and he was again tried and
convicted and the same fine imposed. The case is now in this
court on his appeal.

The sections of the ordinance refen-ed to in thecomplaintacd
which were read in evidence at the trial over the objections of de-
fendant are as follows:

"Sec. 76. Pawnbrokers to keep books, etc, — ^Every person so
licensed as aforesaid shall keep at his place of business a sub-
stantial and well-bound book, in which he shall enter in writings
minute description of all personal property, bonds, notes, or
other securities received on deposit or purchase as aforesaid, the
time when they were so received, and particularly mentioning;
any prominent or description marks that may be on such prop-
erty, bonds, notes, or other securities, together with the name,
residence of the person or persons by whom they were left, the
amount of purchase money, *®^ the amount loaned, the interest
charged, and the time when the loan falls due; which said book
shall be kept clean and legible, and no entry therein shaD be de-
faced, erased, or obliterated, and all the entries therein shall be
made with ink. He shall give to the person leaving the prop-
erty in the pawn a plainly written or printed ticket or receipt,
showing the transaction. Every such licensed person failing to
comply with any of the provisions of this section shall forfeit to
said city the sum of twenty dollars.

"Sec. 77. Every person so licensed as a pawnbroker shall, dur-
ing the ordinary hours of business, when requested by the mayor
or any police officer of the city, submit and exhibit sach book in
the next preceding section provided for, to the inspection of the
said mayor or any police officer, and shall also exhibit any goods,
personal property, bonds, notes or other securities that may be so
left with the licensed person, to the inspection of the mayor or
police officer. Any and every such person who shall refuse to
submit such book, goods, personal property, bonds, notes, or other
securities as aforesaid, shall be deemed guilty of a misdemeanor
and, on conviction, shall be fined not less than fifty dollan."

The evidence showed that defendant was a pawnbroker; that
he refused to submit his book kept in connection with his busi-
ness as such to one of the regular police officers of said city for



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May, 16^5.] St. Joseph v. Levin. 679

examination on demand, and tliat he was guilty as charged in the
complaint. The only questions, therefore, worthy of considera-
tion are with respect to the sufficiency of the complaint and the
yaiidity of the ordinance.

Defendant contends that the complaint is had, in that it fails
to state that he kept a hook such as the officer requested to see,
or that the officer was on duty, or an acting officer, at the time,
or that defendant was ^^^ a pawnbroker. While it is conceded
that a complaint for the violation of a city ordinance need not
state the facts upon which it is founded with the same strictness
required in an indictment, it is claimed that it should state all nec-
essary facts to show defendant's liability.

While the complaint does not directly allege that defendant
kept the book required by the ordinance to be kept by him as a
pawnbroker, the only inference to be drawn therefrom is that he
did. In other words, such is the logical effect of the allega-
tion, and when the complaint is accorded the same liberal con-
struction to which similar papers in courts of inferior jurisdic-
tion, such as justices of the peace and police courts, are accorded,
we are inclined to hold it to be sufficient. There is no merit
in the other objections to the complaint, which are exceedingly
technical.

A further contention is that the ordinance is unconstitutional
and in conffict with the fifth amendment to the constitution of
the United States, which provides that no person "shall be com-
pelled, in any criminal case, to be a witness against himself,'^ and
with section 11, article 2, of the constitution of the state of
Missouri, whi6h provides: "That the people shall be secure in
their persons, papers, homes, and effects, from unreasonable
searches and seizures; and no warrant to search any place, or
seize any person or thing, shall issue without describing the
place to be searched, or the person or thing to be seized, as nearly
as may be; nor without probable cause, supported by oath or
affirmation reduced to writing."

That amendment has no application to this case, but was in-
tended to act on the national government only, and was not in-
tended to limit the powers of the states in respect of their own
people. It was so held by the supreme court of the United States
in Spies v. Illinois, 123 U. S. 131; Presser v. Illinois, 116 U. S.
252.

*•• It has been repeatedly held that a person, when testifying
as a witness, could not be required to answer questions incrimi-



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580 &T. JoBEPH V. Levin. [MisBOurit

nating himself, that is, connecting himself with the commissiaii
of any crime for which he might be criminally prosecuted: Boyd
V. United States, 116 U, S. 616; Counselman v. Hitchcock, 142
U. S. 547.

So it was held in State y. Simmons Hardware Co., 109 Mo.
118, which was a quo warranto proceeding, at the relation of the
attorney general, against the defendant, charging it with an un-
lawful exercise of its corporate franchises, that an act of the legis-
lature, *^toT the punishment of pools, trusts, and conspiracies,
requiring some officer of every corporation to inform, under oath,
the secretary of state (under penalty of fine, imprisonment, etc.)
whether such company has violated said act,^' was in conflict
with the constitution.

There is, however, a clear distinction between the cases cited
and the one in hand. The ordinance is a mere police regulation
which the city, by virtue of its charter powers, had the right to
pass, to aid in the prevention and detection of larcenies of per-
sonal property which is frequently sold or pledged to pawn-
brokers by thieves, and not for the purpose of preserving evidence
to be used against any other person. The defendant was not
charged with any crime, nor was there any pretense that he was
guilty of crime, and because of the fact that the book might tend
to show that he was in the possession of property which had been
stolen; that he might possibly be prosecuted at some future time
for receiving it, knowing that it had been stolen, and the in-
formation acqxdred by the police officer from an inspection
thereof used against him, was no reason why he should not have
complied with the ordinance, and submitted the boolcto the inspec-
tion of the police officer. In a criminal proceeding ^^^ against
the defendant, he could not, of course, be required to produce the
book to be used as evidence against him, or to permit an examina-
tion of it for that purpose, because to do so would be an invasion
of his constitutional right. In this case, however, no right guar-
anteed to him by the constitution is violated by the ordinance.

The next question for consideration is as to whether the ordi-
nance is in conflict with, or violative of, the section of the consti-
tution of the state of Missouri quoted. By its charter the city is
given power to 'license, regulate, tax, or suppress ordinaries,
hawkers, peddlers, pawnbrokers.*' The city may not only regu-
late, but suppress, pawnbrokers, or refuse to license such occupa-
tion altogether. No person has the right to follow such occupy
Hon within the limits of said city without first obtaining a license



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Klay, 1S95.] St. Joseph v. Levin. 681

from its authorities for that purpose, which may be granted or
withheld at pleasure. The business is a privilege, not a right,
and he who avails himself of it and derives its benefits must beai
its burdens, and conform to the laws in force regulating the oc-
cupation, if not illegal.

In Launder v. Chicago, 111 111. 291, 53 Am. Eep. 625, in^
passing upon a similar ordinance, it was said: "We do not regard
the ordinance as being 'unjust, unreasonable, tyrannical, and op-
pressive.' The requirements objected to are but reasonable
means to keep the pawnbrokers' business free from great abuse
by thieves disposing of stolen goods in their shops. They are all
made in the interest of the public, and are intended for the detec-
tion and prevention of crime. The ordinance is not tyrannical
and oppressive, as the appellant was not bound to bring himself
within its provisions. Before taking out license, appellant knew
he had to keep a book containing an account and description of
goods pawned, amount of money loaned thereon, the time of
pledge, ^^ rate of interest, and the names of pledgors, and
that such book must be kept open for. the inspection of the
mayor and any member of the police, and no objection seems to
have been urged to these requirements, and it appears that ap-
pellant has always complied with them."

In conclusion, it is only necessary to say that we do not regard
the ordinance as unconstitutional, unreasonable, or unjust; but
that its adoption was a wise, prudential measure as tending to
prevent and aid in the detection of crime.

The judgment is affirmed.

All of this division concur.

CONSTITUTION OF UNITED STATES.— AMENDMENTS TO,
adopted at the first seBsion of Congrefls, are restrictions upon the powers
of the general government only, and not apon those of toe states: liv-
ingston v. Mayor, 8 Wend. 85; 22 Am. Dec. 622.

M UN rCIPAL CORPORATIONS — ORDINANCE REQUIRING
KEEPING OF BOOKS.— A city ordinance requiring every licensed
pawnbroker to make out and deliver to the superintendent of police
every dav, before noon, a legible and correct copy from a book to be
kept' by fiim, of all things received on deposit or purchased during the
preceding day, together with the hour when received or nurchased, and
a description of the pledgor or seller, is not unreasonable: Launder t.
Chicago, 111 111. 291; 53 Am. Rep. 625.



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OASES

or TBM

SUPREME JUDICIAL COUET

NEW HAMPSHIRE.



Manchester and Lawrenob Eailroad v. Concord

Kailroad,

[66 Nbw Hamtshibb, 100.]

CORPORATIONS— contract ULTRA VIRES AS DHFBNSB
TO ACCOUNTING.— If one railroad company has used the road,
rolling stock, and equipments of another under a contract, it la
estopped to set up that such contract is ultra yires when sued for
an accounting and return of the property.

ULTRA VIRES— ESTOPPEL TO PLEAD,— In equity, neither
party to a contract ultra vires simply will be heard to allege its
invalidity while retaining its fruits.

TRADE, RESTRAINT OP.— A contract between competing rail-
roads to destroy and prevent competition, but not raising the prices
of transportation above a reasonable standard, is not void as against
public policy.

CONTRACTS— ILLEGALITY AS DEFENSE.- If one railway
company has used the roadbed, rolling stock, and equipments of
another under an illegal contract, and has received great benefits
therefrom, it cannot set up the illegality of the contract as a defense
to a bill in equity for an accounting and a return of the property.

CONTRACTS— ILLEGALITY— RBLIEP.-Parties to illegal con-
tracts, whether mala prohibita or mala in se, are not gonerally
entitled to relief in equity, but it may grant relief though both parties
are in delicto, provided they do not stand in pari delicto.

CONTRACTS— ILLEGALITY AS DEFENSE.— If an executed
Agreement is void by reason of some statutory or common-law pro-
hibition, either party thereto who has received anything from the
otlier party thereunder, and has failed to perform the agreement on
his part, must account to the latter for what has been so received,
and cannot set up the illegality of the agreement as a defense, unless it
Involves some positive immorality or is against public policy.

DISCOVERY IP PROSECUTION FOR A PENALTY IS

BARRED by the statute of limitations, a person cannot refuse to
make discovery of matters connected with the transaction out of
which the penalty arises, on the ground that such discoyeiy will
expose him to prosecution.

(682)



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Dec. 1889.] Manchester etc. R. R. v. Concord R. R. 683

W. S. Ladd, C. H. Bums, J- F. Briggs, T. Ladd, and 0. E.
Branch, for the plaintiflfs.

Chase & Streeter, J. H. Benton, Jr., and J, W. Fellows, for the
defendants.

*«« BLODGETT, J. This proceeding is a hill in equity for a
discovery and an accounting of the defendants* dealings with the
plaintiffs' railroad properties from December 1, 1856, to July 1,
1887, under various contracts and leases; for the delivery of cer-
tain books, records, and papers alleged to belong to the plaintiffs;
for the return to them of rolling stock and equipments of the
appraised value of one hundred and forty-seven thousand five
himdred and ninety-two dollars, which went into the defendants*
possession at the time they took the plaintiffs* road, and which
they still retain; and for the determination and adjustment of
the respective rights of the parties in and to certain lands,
depots, and tracks, situate in Manchester.

In bar of the plaintiffs* right to a recovery, the defendants file
three special pleas, and, as to the matters in the bill not covered
by the pleas, they demur. The plaintiffs demur to the pleas.

The first plea avers that the 'contracts between the parties,
under which the defendants went into and retained the posses-
fiion and management of the plaintiffs* road for more than thirty
years, "were wholly beyond the corporate power** of either party
to make or to ratify, and that therefore the defendants should be
hence dismissed with their costs and charges. In other words,
not denying that they have received the full benefit of the per-
formance of the contract by the plaintiffs, the defendants say that
they should be permitted to retain the benefit and property so
acquired, and be dismissed with costs, because they were not em-
powered by ^^ their charter to perform what they promised the
plaintiffs in return.

The demurrer to this plea is sustained. The defense set up
IB BO repugnant to the natural sense of justice, so contrary to good
faith and fair dealing, and so opposed to the weight of modem
authority, that it need only be said that, in equity at least, neither
party to a transaction ultra vires simply is heard to allege its in-
validity while retaining its fruits. However the contractual
power of the defendants may be limited under their charter,
there is no limitation of their power to make restitution to the
other party whose money or property they have obtained through
an unauthorized contract; nor, as a corporation, are they exempted



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684 Manch£8tbb etc. R. R. v. Concord R. R. [N. H^

from the common obligation to do justice which bindB indi-
Tidualsy for this duty rests upon all persons alike, whether natural
or artificial.

The second plea ayers, and the demurrer admits, that at the
time of the making of the contracts between the parties, and of
the dealings thereunder, their respective roads "were rival and
competing railroads, by the competition of which the prices of
transportation thereon were, and but for said supposed contracts,
dealings, transactions, operations, and business would have con-
tinued to be, materially reduced, and said alleged contracts, deal-
ings, transactions, and business were made and had for the pur-
pose of destroying and preventing such competition, and did
destroy and prevent it.'*

It will be noticed that there is no averment in the plea that the
purpose of the contracts was to raise the prices of transportation
above a reasonable standard, or that they did have this effect, or
that the public were prejudiced by their operation in any man-
ner; and the naked question presented then is, whether all con- -
tracts between rival railway corporations which prevent com-
petition are necessarily contrary to public policy, and therefore
mala prohibita and illegal in themselves.

To state this question is to answer it in the negative, because it
is obvious that the answer depends upon circumstances. While,
without doubt, contracts which have a direct tendency to prevent
a healthy competition are detrimental to the public, and conse-
quently against public policy, it is equally free from doubt that
when such contracts prevent an unhealthy competition, and yet
furnish the public with adequate facilities at fixed and reasonable
rates, they are beneficial and in accord with sound principles of
public policy. For the lessons of experience, as well aa the de-
ductions of reason, amply demonstrate that the public interest is
not subserved by competition which reduces the rate of trans-
portation below the standard of fair compensation; and the
theory which formerly obtained, that the public is benefited by
unrestricted competition between railroads, has been so em-
phatically disproved by the results which have generally followed
its adoption in practice, that the hope of any permanent relief
from excessive rates through *^^ the competition of a parallel
or rival road may, as a rule, be justly characterized as illusory
and fallacious.

Upon authority, also, arrangements and contracts between
competing railroads, by which unrestrained competition is pre-



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Dec. 1889.] Mamghsbtsb btc. B. B. v. Concord B. B. 685

Tented, do not contravene public policy. Hare v. London etc.
By. Co., 2 Johns. & H. 80, ia directly in point. In that case a bill
in chancery had been brought by a stockholder in the defendant
company to annul an agreement between two railway companies
to divide the profits of the traffic in fixed proportions; and it was
admitted there, as it is here, that the purpose of the agreement
was to prevent competition. In dismissing the bill, Vice-Chan-
cellor Wood said (page 103): 'TVith regard to the argument
against the validity of the agreement, I may dear the ground of
one objection by saying that I see nothing in the alleged injury
to the public arising from the prevention of competition* ....
It is a mistaken notion that the public is benefited by pitting two
railway companies against each other till one is ruined, the result
being at last to raise the fares to the highest possible standard.'^
So, also, in 1 Bedfield on Railways, section 146, subdivision 2, it
is said: ^'There is no principle of public policy which renders
void a traffic arrangement between two lines of railway for the
purpose of avoiding competition." And Mr. Morawetz says, in
his admirable treatise on Corporations: "Public policy clearly
does not demand that railroad companies operating competing
lines shall engage in strife causing their financial ruin; and, bo
far as agreements among the companies are designed to afi!ect this
result, their purpose is not injurious to the public, or illegal.
Moreover, such agreements are positively benelicial to the pubhc,
80 far as they prevent the fluctuation of rates and unjust dis-
criminations among shippers, which invariably attend the unre-
stricted competition of rival companies. It is therefore impos-
sible to support the proposition that all agreements among
railroad companies which restrict competition are condenmed
by law. Some such agreements may be contrary to pub-
lic policy, and unlawful; but if an agreement of this character is
a reasonable business arrangement to protect the shareholders
and creditors of the companies from loss, and does not cause un-
reasonably high charges or violate any duty which the com-
panies owe to the public, it should be sustained and enforced by
the courts*': Slorawetz on Private Corporations, 2d ed., sec.
1131. In the same section, in speaking of contracts in restraint
of trade (to which many of the authorities and much of the argu-
ment for the defendants relate), he says: "Even if there were such
a rule as has been claimed applicable to competition in trade, the
principle and policy of the rule would not be applicable to
traffic arrangements designed merely to prevent ruinous competi-



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586 Manchester etc. R. R. v. Concord R. R, [N. H.

Hon and Srais' among railroad companies. The main objection
which has been urged against combinations restraimng competi-
tion in trade, namely^ that such combinations tend to produce
monopolies and cause extortion, has no application to combina-
tions among railroad *^® companies, for railroad companies are
prohibited by law to charge more than reasonable rates. It
should be obserred, also, that competition among railroad com-
panies has not the same safeguards as competition in trade.
Persons will ordinarily do business only when they think they see
a fair chance of profit; and, if press of competition renders a
particular trade unprofitable, those engaged in that trade will
suspend or reduce their operations, and apply their capital and
labor to other uses, until a reasonable margin of profit has been
reached. But the capital invested in the construction of a
railroad cannot be withdrawn when competition renders the
operation of the road unprofitable. A railroad is of no use
except for railroad purposes, and, if the operation of the road
were stopped, the capital invested in its construction would be
wholly lost. Hence, it is for the interest of a rail-
road company to operate its road, though the earnings are
barely sufficient to pay the operating expenses. The ownership
of the road may pass from the shareholders to the bondholders,
and be of no benefit to the latter; but the struggle for traffic will
continue so long as the means of paying operating expenses can
be raised. Unrestricted competition will thus render the com-
petitive traffic wholly unremunerative, and will cause the ulti-
mate bankruptcy of the companies, unless the portion of their
traffic which is not the subject of competition can be made to
bear the entire burden of the interest and fixed charges."

The application of these principles to the plea under considera-
tion is patent and decisive. The geographical location and rela-
tive resources of the two roads were such as to render it obvioni
that the plaintiffs could not reasonably hope successfully to com-
pete with their more powerful rival. The alternatives presented,
it may be safely assumed, were combination or ruinous competi-
tion. They accepted the former; and as the combination did
not, so far as appears by the pleadings, raise the rate of trans-
portation above the standard of fair compensation, or violate any
duty that is owing to the public from roads which are noncom-
peting, there is nothing averred in the plea which bars the right
of the plaintiflFs to an accounting with the defendants.

Numerous cases have been cited in behalf of the defendants in



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Dec. 1889.] If anchsstbb na R. B. v. Concord R. B. 637

•npport of their proposition that the combination between the
parties must be regarded as void at common law because against
pablic policy. It is quite impossible, without extending this
opinion beyond all reasonable limits^ to go through and comment
upon these cases in detail, as has been done in the last brief for
the plaintiffs; but it is suflicient to say, in general terms, as is
there said, that they are cases of contracts in restraint of mer-
cantile bnsiness; or cases of contracts which attempt to derogate
from the right of eminent domain inherent in the state; or cases
where contracts between railroad compauics were held contrary



Online LibraryAbraham Clark FreemanThe American state reports: containing the cases of general value and ... → online text (page 67 of 121)