Fisher & Quijano

8/12/2019 Fisher & Quijano

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G.R. No. 8686, U.S. v. Quinajon and Quitoriano, 31 Phil. 189Republic of the Philippines

SUPREME COURTManila

EN BANC

July 30, 1915

G.R. No. 8686THE UNITED STATES,plaintiff-appellee,

vs.PASCUAL QUINAJON and EUGENIOQUITORIANO,defendants-appellants.Irineo Javier for appellants.

Attorney-General Villamor for appellee.

JOHNSON, J.:The defendants were charged with a violation of the provisionsofAct No. 98. A complaint was presented in the court of the

justice of the peace on the 11th day of November, 1912. Apreliminary examination was had and the defendants were heldfor trial in the Court of First Instance of the province of IlocosNorte.On the 17th day of November, 1912, the prosecuting attorney ofthe Province of Ilocos Norte presented the following complaint:

The undersigned charges Pascual Quinajon and EugenioQuitoriano, residents of the municipality of Paoay, IlocosNorte, P.I., with violatingAct No. 98of the CivilCommission, within the jurisdiction of this court, asfollows:
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That the aforementioned accused are now and have beenengaged for more than four years prior to this date in thetransportation of passengers and merchandise in the port of

Currimao

that is, in the loading and unloading ofpassengers and merchandise by means of virayesfrom theshore the steamers that anchor in the said port, and viceversa.That the said accused have been regularly charging 6centavos for the unloading and loading of each package ofmerchandise of cargo, large or small, heavy or light, off oron the steamers that anchor in the said port of Currimao,

and that the unloading is understood to be from the steamerto the storage warehouses.

That, in the months of June, July, and September, 1912, the saidaccused, by means of their virayesand employees, did unload inthe port of Currimao aforementioned 5,986 sacks of ricebelonging to the provincial government of Ilocos Norte, P.I.,

that had come from Manila, P.I., which sacks were unloadedfrom the steamers in which they had been shipped and werecarried to the storage warehouses in which they were deposited;that the said accused did willfully, unlawfully, and criminallydemand and collect from the provincial treasurer for theunloading of each one of the said sacks of rice 10 centavoswhich, as set forth in the preceding paragraph, they have beenregularly charging for such services in the unloading of the same

kind of merchandise and under virtually the same circumstancesand conditions; that the total sum of the payments so made bythe provincial treasurer amounted to P598.60 for the aforesaid5,986 sacks of rice, the provincial government of Ilocos Norte,P.I., being thereby damaged in the sum of 359.16, inasmuch as it


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should have paid only 239.44, in accordance with the said rateof 6 centavos for each package.

Acts committed in violation of the saidAct No. 98of the

Civil Commission.Upon that complaint the defendants were duly arraigned, tried,found guilty of the crime charged, and sentenced by theHonorable Dionisio Chanco, judge, to pay a fine of $100 (P200)and costs, and to return to the provincial government of theProvince of Ilocos Norte the sum of P359.16.

From that sentence each of the defendants appealed to this court.

In this court they allege that the lower court committed thefollowing errors:

1. The court erred in holding that the accused had beenregularly collecting 6 centavos for the loading or theunloading of each sack rice from steamers in the port ofCurrimao.

2. The court erred in holding that the defendants establishedpreferential privileges and made discriminations in favor ofcertain shippers, against the provincial government ofIlocos Norte, in the loading or unloading of merchandise onto or from the steamers in the port of Currimao.

3. The court erred, further, in sentencing the accused to pay

to the provincial government of Ilocos Norte the sum ofP359.16.

The first assignment of error presents a question of fact only.The appellants allege that the lower court committed an error inits conclusions of fact. They allege that the lower court
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committed an error in deciding that they had regularly charged 6centavos for each sack of rice loaded or unloaded at the port ofCurrimao. The decision of the lower court contains the

following statement of facts:

It is proven that the defendants, acting as representatives ofthe Union Obrera, established at the port of Currimao,Ilocos Norte, and engaged by means of virayesas commoncarriers of passengers and in loading and unloading freightfrom steamers anchoring at said port, to the shore or to thewarehouses, and vice versa, have regularly collected,

during the last four years, 6 centavos for each sack of riceloaded or unloaded by said association.It is likewise proven that the same defendants, representingthe same association, collected from the provincialgovernment of Ilocos Norte 10 centavos for each of the5,986 sacks of rice which they unloaded from the steamersduring the months of June, July, and September, as

property belonging to the said government, a price whichdiffered from the usual, charge of 6 centavos made toothers shippers of said commodity.

The provincial fiscal presented as witnesses in support ofthe information the Chinese merchants Cu Chatco, Cu Joco,Sy Yacco, Lim Anco, and Francisco Castro, who testifiedthat they paid to the defendants for loading and unloading

supplies from the steamers at Currimao 6 centavos for eachpackage of any kind of supplies, large or small, heavy orlight. The two first named, Cu Chatco and Cu Joco,testified, furthermore, that formerly they paid transportationcharges for the loading and discharge of their supplies from


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the steamers according to the weight and size of eachpackage, for which purpose a classification was previouslymade by weighing and measuring said packages or

merchandise. Cu Joco does not remember how much waspaid at that time for each package, but Cu Chatco states that10 centavos was paid for the transportation of each sack ofrice weighing 60 kilos or more. The two above-namedwitnesses, Cu Chatco and Cu Joco, add that as the task ofweighing and measuring was very annoying to the Chinesemerchants at Laoag, Ilocos Norte, they suggested to thedefendants and entered into an agreement with them, to pay

by the lot the transportation charges covering loaded ontoor unloaded from the steamers, at the rate of 6 centavos foreach package, heavy or light, large or small.

We have made a careful examination of the evidence adducedduring the trial of the cause, and conclude that said facts aresubstantially sustained thereby. The evidence clearly shows that

the defendant collected 6 centavos for each package, ofwhatever kind of merchandise, large or small, heavy or light,from those merchants only with whom they had a specialcontract. From other merchants, with whom they had not madesaid special contract, as well as the Province of Ilocos Norte,they collected a different rate. The evidence shows that theycollected from the Province of Ilocos Norte 10 centavos for eachsack of rice which they unloaded from the steamers during the

months of June, July, and September. There seems to be noreason for reversing or modifying the conclusions of the lowercourt based upon said finding of facts. The effect of collecting adifferent amount from different persons for exactly analogous orsimilar service performed by the defendants will be discussed


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when we come to a discussion of the law applicable to theforegoing facts.

The second assignment of error, to wit, that "the lower courtcommitted an error in holding that the defendants establishedpreferential privileges in favor of certain shippers," presents thequestion whether or not the defendants and appellants, in viewof the foregoing facts, have violated the provisions of saidActNo. 98.The facts, as they are disclosed by the record and the findings ofthe lower court, may be stated concretely as follows: (1) The

defendants, as common carriers, charged and collected fromsomeshippersand merchants, a certain price for each package ofmerchandise, loaded or unloaded, according to a certainschedule. (See Exhibit A.) The prices fixed in the scheduledepended upon the size and weight of the package. (2) Thedefendants entered into a special contractwith certainmerchants, under and by virtue of the terms of

which they charged and collected, for loading merchandise insaid port, the sum of 6 centavos for each package, withoutreference to its size or weight.It is contended that it cost any more to load or unload the rice forthe province than it did for the merchants with whom the specialcontract was made. There is no proof that the conditions weredifferent. There is no proof that the services rendered by thedefendants for the different parties were unlike or even not

contemporaneous. The defendants justify their acts by the factthat they handled all the merchandise of some merchants,whether the packages were large or small, at the same price.
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Under these facts, the question is squarely presented whether ornot the defendants are guilty of a violation of the spirit or theletter of saidAct No. 98.SaidAct No. 98was largely borrowed

from the Act of Congress of February 4, 1887. The language ofthe two Acts, so far as they relate to the present case, ispractically the same. Said Act of Congress has been construedby the Federal courts of the United States in several decisions. Inview of the United States to said Act of Congress.The similarity ofAct No. 98and the Act of Congress may beseen in the following quotations:

(Sec. 1,Act No. 98.) (Sec. 2, Act of Congress, Feb. 4,

1887.)No person or corporation engagedas a common carrier of passengers or That if any commoncarrier subjectproperty shall directly or indirectly by to the provisions ofthis Act shall,any special rate, rebate, drawback or directly or indirectly,

by any specialother device, charge, demand, collect rate, rebate,drawback, or other device,or receive from any person or persons, charge, demand,collect, or receive froma greater or less compensation for any any person orpersons a greater orservice rendered, or to be rendered in less compensation forany servicethe transportation of passengers or rendered , or to berendered, in theproperty on land or water between any transportation ofpassengers or
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points in the Philippine Islands than property, subject to theprovisions ofsuch common carrier charges, demands, this Act, than it

charges, demands,collects or receives from any other person collects, orreceives from any otheror persons for doing for him a like or person or persons fordoingcontemporaneous service in the for him or them a like andtransportation of a like kind of traffic contemporaneousservice in the

under substantially similar circumstances transportation ofa like kind ofand conditions, and any such unjust traffic undersubstantially similardiscrimination is hereby prohibited and circumstances andconditions, suchdeclared to be unlawful. common carrier shall be deemed

guiltyof unjust discrimination, which is herebyprohibited and declared to be unlawful.

(Sec. 2,Act No. 98.) (Sec. 3, Act of Congress, Feb. 4,1887.)It shall be unlawful for anycommon carrier engaged in the That it shall be unlawful for

any commontransportation of passengers or carrier subject to theprovisions of this Actproperty as above set forth to make to make or give anyundue or unreasonable


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or give any unnecessary or unreasonable preference oradvantage to any particularpreference or advantage to any particular person, company,

firm, corporation, orperson, company, firm, corporation or locality, or anyparticular description oflocality, or any particular kind of traffic traffic, in anyrespect whatsoever, or toin any respect whatsoever, or to subject subject anyparticular person, company,any particular person, company, firm, firm, corporation, or

locality, or anycorporation or locality, or any particular particulardescription of traffic, to anykind of traffic, to any undue or undue or unreasonableprejudice orunreasonable prejudice or discrimination disadvantage inany respect whatsoever.

whatsoever, and such unjust preferenceor discrimination is also hereby prohibitedand declared to be unlawful.

SaidAct No. 98is "An Act to regulate commerce in thePhilippine Islands." Its purpose, so far as it is possible, is tocompel common carriers to render to all persons exactly thesame or analogous service for exactly the same price, to the end

that there may be no unjust advantage or unreasonablediscrimination. It applies to persons or corporation engagedas common carriers of passengers or property. A commoncarrier is a person or corporation whose regular business is tocarry passengers or property for all persons who may choose to


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employ and renumerate him. A common carrier is a person orcorporation who undertakes to carry goods or persons for hire.The appellants admit that they are common carriers. The only

question presented is whether or not, under the facts, they haveviolated the Act regulating commerce in the Philippine Islands.The law provides that no common carrier shall directly orindirectly, by any special rate, rebate, drawback, or other device,charge, demand collect, or receive from any person or persons, agreater or less compensation for any service rendered in thetransportation of passengers or property, between points in thePhilippine Islands, than he charges, demands, collects, or

receives from any other person or persons, for doing a like orcontemporaneous service, under substantially similar conditionsor circumstances.

The law prohibits any common carrier from making or givingany unnecessary or unreasonable preference or advantage to anyparticular person, company, firm, corporation or locality, or any

particular kind of traffic, or to subject any particular person,company, firm, corporation, or locality, or any particular kind oftraffic, to any undue or unreasonable prejudice or discriminationwhatsoever.

It will be noted that the law requires common carriers to carryfor all persons, either passengers or property, for exactly thesame charge for a like or contemporaneous service in the

transportation of like kind of traffic under substantially similarcircumstances or conditions. The law prohibits common carriersfrom subjecting any person, etc., or locality, or any particularkind of traffic, to any undue or unreasonable prejudice ordiscrimination whatsoever. The law does not require that the


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same charge shall be made for the carrying of passengers orproperty, unless all the conditions are alike andcontemporaneous. It is not believed that the law prohibits the

charging of a different rate for the carrying of passengers orproperty when the actual cost of handling and transporting thesame is different. it is not believed that the law intended torequire common carriers to carry thesame kindof merchandise,even at the same price, under different and unlike conditions andwhere the actual cost is different. The actual cost of handlingand transporting the same quantity of rice, for example, might bedifferent, depending upon the form of package or other

conditions. It would cost more to handle and transport ricepacked in open boxes or baskets, for example, than it would tohandle and transport the same quantity of rice neatly packed insacks. It would cost more to handle and transport hemp, when itis unbaled and loose, than it would when it is baled. It mightcost more to handle and transport household goods uncratedthan when they are crated. It is not believed that the law

prohibits the charging of a different price for handling andshipping merchandise when the shipper exercises greater care inpreparing the same for shipment, thereby reducing the actualcost of handling and transporting. If the shipper puts hismerchandise in a condition which costs less to handle andtransport, he is certainly entitled to a better rate. The differencein the charge to different merchants or shippers must be basedupon the actual cost of handling and transporting. The law doesnot require common carriers to perform different services for thesame price, unless the actual cost is the same. It is when theprice charged is for the purpose of favoring persons or localitiesor particular kinds of merchandise, that the law intervenes andprohibits. It is favoritism and discrimination which the law


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prohibits. The difference in charge must not be made to favorone merchant, or shipper, or locality, to the disadvantage ofanother merchant, or shipper, or locality. If the services are alike

and contemporaneous, discrimination in the price charged isprohibited. For the purposes of the law, it is not sufficientalways to say that merchandise is alike, simply because it is of alike kind or quantity. The quantity, kind, and quality may beexactly the same, and yet not be alike, so far as the cost oftransportation is concerned. Examples have been given above.Many others might be given. A and B are each shippers ofbananas between the same points. A delivers his bananas to the

carrier in separate bundles or bunches, without a wrapper or anykind of protection, while B delivers exactly the same number ofbunches of bananas, but they are neatly packed in a few boxes orbaskets. It does not require much argument to convince menconversant with the shipping of merchandise, in such a case, thatthe actual cost of handling and shipping would be different andwould, therefore, not be "alike," although contemporaneous,

perhaps. Neither is it believed that shipments may be renderedunlike by the fact that the total shipment is composed ofdifferent kinds or classes of merchandise. For example, A is ashipper of rice and hemp and B is a shipper of rice alone. BothA and B prepare their rice for shipment in exactly the same formof package. It is not believed that the carrier is permitted, underthe law, to carry A's rice for a less price than he carries B's rice,simply because A is also a shipper of hemp. A difference in thecharge for handling and transporting may only be made whenthe difference is based upon actual cost. The actual cost maydepend upon quantity. A man who ships freight by the car-load,by reason of the actual cost of handling and shipping, may beentitled, under certain conditions, to a better rate than the man


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who ships a single article or package of the same class or kind ofmerchandise. A train-load of cattle might be shipped fromDagupan to Manila, for example, at less cost per head than it

would cost to ship just a few head, less than a car-load. Theactual cost of each shipment must necessarily depend upon andbe settled by its own proof. This rule, however, does not prohibitthe making of general schedules, providing they are madeapplicable to all. The difference in the charge made by thecommon carrier cannot be made for the purpose of favoring anyperson or locality, to the prejudice or disadvantage of anotherperson or locality. A common carrier may discriminate between

shippers when the amount of goods shipped by one actuallycosts less to handle and transport, but he cannot discriminateupon the ground simply that he carries all of the goods of oneshipper, while he does not carry all of the goods of another. Thedifference in the charge must be the difference in the cost.It is competent for a common carrier under the law, we believe,to enter into special agreements for handling and transporting

merchandise, whereby advantage may accrue to individuals,when it is made clearly to appear that by such agreements thecommon carrier has only its interests and the legitimate increaseof its profits in view, and when the consideration given to theindividual is for the interest of the common carrier alone, andwhen the common carrier gives all shippers exactly the samerate, under the same conditions.

The appellants justify the different charge upon the ground thatthey carried pianos and matches, for the merchants with whomthey had the special contracts, at the same price. It is notbelieved that a merchant who happens to be a shipper of bothpianos and matches, should have any advantage over the


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merchant who ships pianos alone, unless there is some otheractual additional cost in the one case, which does not exist in theother. A common carrier can not discriminate upon the ground

that he carries all of the goods of one shipper, while he does notof another.

In the present case there is no pretense that it actually cost moreto handle the rice for the province than it did for the merchantswith whom the special contracts were made. From the evidenceit would seem that there was a clear discrimination made againstthe province. Discrimination is the thing which is specifically

prohibited and punished under the law.

It is not believed that the law prohibits common carriers frommaking special rates for the handling and transporting ofmerchandise, when the same are made for the purpose ofincreasing their business, and to manage their important interestsupon the same principles which are regarded as sound, andadopted in other trades and pursuits. It is not believed that thelaw requires absolute equality in all cases. Circumstances andconditions may make it injurious to the carrier. Absoluteequality, under certain circumstances and conditions, may giveshippers an advantage over others. It is only unjust, undue, andunreasonable discrimination which the law forbids. The law ofequality is in force only where the services performed in thedifferent cases are substantially the same, and the circumstances

and conditions are similar. Many considerations may properlyenter into the agreement for the carriage or shipment rate, suchas the quantity carried, its nature, its risks, the expense ofcarriage at different periods of time, and the like. Numerouscircumstances may intervene, which bear upon the cost and


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expense of transportation, and it is but just to the carrier that hebe permitted to take these circumstances into consideration, indetermining the rate or amount of his compensation. A question

of fact is raised in each case for the courts to decide.

The foregoing conclusions are based upon literally hundreds ofdecisions of the courts of different states, and the Supreme Courtof the United States, as well as those of England, which haveinterpreted statutes analogous to the one under consideration.

In the third assignment of error the appellants allege that the

lower court committed an error in condemning them to pay orreturn to the provincial government the sum of P359.16. It is notexactly clear from the decision of the lower court just how hearrived at that conclusion. Section 5 ofAct No. 98provides thatany person or corporation, who may be damaged by reason ofthe doing by a common carrier of any matters and thingsprohibited, shall be entitled to sue for and recover all damagesso incurred, etc. It would seem that the defendants andappellants had a right to charge the provincial government 6centavos for each sack of rice unloaded. They unloaded for theprovince 5,986 sacks, for which they charged the sum ofP598.60. They had a right to collect 6 centavos, or the sum ofP359.16. The appellants therefore collected from the provincemore than they had a right to collect, the difference betweenP598.60 and 359.16, or P239.44. They should be required,

therefore, to return to the province the excess which theycollected, or the sum of P239.44. The judgment of the lowercourt, therefore, should be modified in this respect. Thedefendants are hereby ordered to return to the Province of IlocosNorte the sum P239.44, for which sum a judgment is hereby


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ordered to be entered against them, for which execution mayissue when this judgment becomes final, in case the same is notpaid.

After a careful analysis of the facts, and the law applicablethereto, the judgment of the lower court, as herein modified,should be and is hereby affirmed with costs. So ordered.

Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.Trent, J., dissents.

G.R. No. L-8095 March 31, 1915

F.C. FISHER,plaintiff,vs.

YANGCO STEAMSHIP COMPANY, J.S. STANLEY, as

Acting Collector of Customs of the Philippine Islands,

IGNACIO VILLAMOR, as Attorney-General of the

Philippine Islands, and W.H. BISHOP, as prosecuting

attorney of the city of Manila,respondents.

Haussermann, Cohn and Fisher for plaintiff.

Office of the Solicitor-General Harvey for respondents.

CARSON, J.:

The real question involved in these proceedings is whether therefusal of the owners and officers of a steam vessel, duly

licensed to engage in the coastwise trade of the PhilippineIslands and engaged in that trade as a common carrier, to acceptfor carriage "dynamite, powder or other explosives" from anyand all shippers who may offer such explosives for carriage canbe held to be a lawful act without regard to any question as tothe conditions under which such explosives are offered to


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carriage, or as to the suitableness of the vessel for thetransportation of such explosives, or as to the possibility that therefusal to accept such articles of commerce in a particular case

may have the effect of subjecting any person or locality or thetraffic in such explosives to an undue, unreasonable orunnecessary prejudice or discrimination.

Summarized briefly, the complaint alleges that plaintiff is astockholder in the Yangco Steamship Company, the owner of alarge number of steam vessels, duly licensed to engage in thecoastwise trade of the Philippine Islands; that on or about June

10, 1912, the directors of the company adopted a resolutionwhich was thereafter ratified and affirmed by the shareholders ofthe company, "expressly declaring and providing that the classesof merchandise to be carried by the company in its business as acommon carrier do not include dynamite, powder or otherexplosives, and expressly prohibiting the officers, agents andservants of the company from offering to carry, accepting forcarriage said dynamite, powder or other explosives;" thatthereafter the respondent Acting Collector of Customsdemanded and required of the company the acceptance andcarriage of such explosives; that he has refused and suspendedthe issuance of the necessary clearance documents of the vesselsof the company unless and until the company consents to acceptsuch explosives for carriage; that plaintiff is advised andbelieves that should the company decline to accept such

explosives for carriage, the respondent Attorney-General of thePhilippine Islands and the respondent prosecuting attorney of thecity of Manila intend to institute proceedings under the penalprovisions of sections 4, 5, and 6 of Act No. 98 of the PhilippineCommission against the company, its managers, agents and


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servants, to enforce the requirements of the Acting Collector ofCustoms as to the acceptance of such explosives for carriage;that notwithstanding the demands of the plaintiff stockholder,

the manager, agents and servants of the company decline andrefuse to cease the carriage of such explosives, on the groundthat by reason of the severity of the penalties with which theyare threatened upon failure to carry such explosives, they cannotsubject themselves to "the ruinous consequences which wouldinevitably result" from failure on their part to obey the demandsand requirements of the Acting Collector of Customs as to theacceptance for carriage of explosives; that plaintiff believes that

the Acting Collector of Customs erroneously construes theprovisions of Act No. 98 in holding that they require thecompany to accept such explosives for carriage notwithstandingthe above mentioned resolution of the directors and stockholdersof the company, and that if the Act does in fact require thecompany to carry such explosives it is to that extentunconstitutional and void; that notwithstanding this belief of

complainant as to the true meaning of the Act, the questionsinvolved cannot be raised by the refusal of the company or itsagents to comply with the demands of the Acting Collector ofCustoms, without the risk of irreparable loss and damageresulting from his refusal to facilitate the documentation of thecompany's vessels, and without assuming the company to testthe questions involved by refusing to accept such explosives forcarriage.

The prayer of the complaint is as follows:

Wherefore your petitioner prays to this honorable court asfollows:


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First. That to the due hearing of the above entitled action beissued a writ of prohibition perpetually restraining therespondent Yangco Steamship Company, its appraisers,

agents, servants or other representatives from accepting tocarry and from carrying, in steamers of said companydynamite, powder or other explosive substance, inaccordance with the resolution of the board of directors andof the shareholders of said company.

Second. That a writ of prohibition be issued perpetuallyenjoining the respondent J.S. Stanley as Acting Collector of

Customs of the Philippine Islands, his successors, deputies,servants or other representatives, from obligating the saidYangco Steamship Company, by any means whatever, tocarry dynamite, powder or other explosive substance.

Third. That a writ of prohibition be issued perpetuallyenjoining the respondent Ignacio Villamor as Attorney-General of the Philippine Islands, and W.H. Bishop as

prosecuting attorney of the city of Manila, their deputiesrepresentatives or employees, from accusing the saidYangco Steamship Company, its officers, agents orservants, of the violation of Act No. 98 by reason of thefailure or omission of the said company to accept forcarriage out to carry dynamite powder or other explosive.

Fourth. That the petitioner be granted such other remedy asmay be meet and proper.

To this complaint the respondents demurred, and we are ofopinion that the demurrer must be sustained, on the ground that


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the complaint does not set forth facts sufficient to constitute acause of action.

It will readily be seen that plaintiff seeks in these proceedings to

enjoin the steamship company from accepting for carriage onany of its vessels, dynamite, powder or other explosives, underany conditions whatsoever; to prohibit the Collector of Customsand the prosecuting officers of the government from all attemptsto compel the company to accept such explosives for carriage onany of its vessels under any conditions whatsoever; and toprohibit these officials from any attempt to invoke the penal

provisions of Act No. 98, in any case of a refusal by thecompany or its officers so to do; and this without regard to theconditions as to safety and so forth under which such explosivesare offered for carriage, and without regard also to any questionas to the suitableness for the transportation of such explosives ofthe particular vessel upon which the shipper offers them forcarriage; and further without regard to any question as towhether such conduct on the part of the steamship company andits officers involves in any instance an undue, unnecessary orunreasonable discrimination to the prejudice of any person,locality or particular kind of traffic.

There are no allegations in the complaint that for some specialand sufficient reasons all or indeed any of the company's vesselsare unsuitable for the business of transporting explosives; or that

shippers have declined or will in future decline to comply withsuch reasonable regulations and to take such reasonableprecautions as may be necessary and proper to secure the safetyof the vessels of the company in transporting such explosives.Indeed the contention of petitioner is that a common carrier in


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the Philippine Islands may decline to accept for carriage anyshipment of merchandise of a class which it expressly orimpliedly declines to accept from all shippers alike, because as

he contends "the duty of a common carrier to carry for all whooffer arises from the public profession he has made, and limitedby it."

In support of this contention counsel cites for a number ofEnglish and American authorities, discussing and applying thedoctrine of the common law with reference to common carriers.But it is unnecessary now to decide whether, in the absence of

statute, the principles on which the American and English caseswere decided would be applicable in this jurisdiction. The dutiesand liabilities of common carriers in this jurisdiction are definedand fully set forth in Act No. 98 of the Philippine Commission,and until and unless that statute be declared invalid orunconstitutional, we are bound by its provisions.

Sections 2, 3 and 4 of the Act are as follows:

SEC. 2. It shall be unlawful for any common carrierengaged in the transportation of passengers or property asabove set forth to make or give any unnecessary orunreasonable preference or advantage to any particularperson, company, firm, corporation or locality, or anyparticular kind of traffic in any respect whatsoever, or tosubject any particular person, company, firm, corporationor locality, or any particular kind of traffic, to undue orunreasonable prejudice or discrimination whatsoever, andsuch unjust preference or discrimination is also herebyprohibited and declared to be unlawful.


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SEC. 3. No common carrier engaged in the carriage ofpassengers or property as aforesaid shall, under anypretense whatsoever, fail or refuse to receive for carriage,

and as promptly as it is able to do so withoutdiscrimination, to carry any person or property offering forcarriage, and in the order in which such persons or propertyare offered for carriage, nor shall any such common carrierenter into any arrangement, contract or agreement with anyother person or corporation whereby the latter is given anexclusive or preferential or monopolize the carriage anyclass or kind of property to the exclusion or partial

exclusion of any other person or persons, and the enteringinto any such arrangement, contract or agreement, underany form or pretense whatsoever, is hereby prohibited anddeclared to be unlawful.

SEC. 4. Any willful violation of the provisions of this Actby any common carrier engaged in the transportation ofpassengers or property as hereinbefore set forth is herebydeclared to be punishable by a fine not exceeding fivethousand dollars money of the United States, or byimprisonment not exceeding two years, or both, within thediscretion of the court.

The validity of this Act has been questioned on various grounds,and it is vigorously contended that in so far as it imposes any

obligation on a common carrier to accept for carriagemerchandise of a class which he makes no public profession tocarry, or which he has expressly or impliedly announced hisintention to decline to accept for carriage from all shippers alike,it is ultra vires, unconstitutional and void.


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We may dismiss without extended discussion any argument orcontention as to the invalidity of the statute based on allegedabsurdities inherent in its provisions or on alleged unreasonable

or impossible requirements which may be read into it by astrained construction of its terms.

We agree with counsel for petitioner that the provision of theAct which prescribes that, "No common carrier ... shall, underany pretense whatsoever, fail or refuse to receive for carriage ...to carry any person or property offering for carriage," is not tobe construed in its literal sense and without regard to the

context, so as to impose an imperative duty on all commoncarriers to accept for carriage, and to carry all and any kind offreight which may be offered for carriage without regard to thefacilities which they may have at their disposal. The legislatorcould not have intended and did not intend to prescribe that acommon carrier running passenger automobiles for hire musttransport coal in his machines; nor that the owner of a tanksteamer, expressly constructed in small watertight compartmentsfor the carriage of crude oil must accept common carrier mustaccept and carry contraband articles, such as opium, morphine,cocaine, or the like, the mere possession of which is declared tobe a criminal offense; nor that common carriers must accepteggs offered for transportation in paper parcels or anymerchandise whatever do defectively packed as to entail uponthe company unreasonable and unnecessary care or risks.

Read in connection with its context this, as well as all the othermandatory and prohibitory provisions of the statute, was clearlyintended merely to forbid failures or refusals to receive personsor property for carriage involving any "unnecessary or


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unreasonable preference or advantage to any particular person,company, firm, corporation, or locality, or any particular kind oftraffic in any respect whatsoever," or which would "subject any

particular person, company, firm, corporation or locality, or anyparticular kind of traffic to any undue or unreasonable prejudiceor discrimination whatsoever."

The question, then, of construing and applying the statute, incases of alleged violations of its provisions, always involves aconsideration as to whether the acts complained of had the effectof making or giving an "unreasonable or unnecessary preference

or advantage" to any person, locality or particular kind of traffic,or of subjecting any person, locality, or particular kind of trafficto any undue or unreasonable prejudice or discrimination. It isvery clear therefore that the language of the statute itself refutesany contention as to its invalidity based on the allegedunreasonableness of its mandatory or prohibitory provisions.

So also we may dismiss without much discussion the

contentions as to the invalidity of the statute, which are based onthe alleged excessive severity of the penalties prescribed forviolation of its provisions. Upon general principles it ispeculiarly and exclusively within the province of the legislatorto prescribe the pains and penalties which may be imposed uponpersons convicted of violations of the laws in force within histerritorial jurisdiction. With the exercise of his discretion in this

regard where it is alleged that excessive fines or cruel andunusual punishments have been prescribed, and even in suchcases the courts will not presume to interfere in the absence ofthe clearest and most convincing argument and proof in supportof such contentions. (Weems vs.United States, 217 U.S., 349;


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U.S. vs.Pico, 18 Phil. Rep., 386.) We need hardly add that thereis no ground upon which to rest a contention that the penaltiesprescribed in the statute under consideration are either excessive

or cruel and unusual, in the sense in which these terms are usedin the organic legislation in force in the Philippine Islands.

But it is contended that on account of the penalties prescribedthe statute should be held invalid upon the principles announcedinEx parteYoung (209 U.S., 123, 147, 148);Cotting vs.Goddard (183 U.S., 79, 102); Mercantile TrustCo. vs.Texas Co. (51 Fed., 529); Louisville Ry. vs. McCord

(103 Fed., 216); Cons. Gas Co. vs.Mayer (416 Fed., 150). Weare satisfied however that the reasoning of those cases is notapplicable to the statute under consideration. The principlesannounced in those decisions are fairly indicated in thefollowing citations found in petitioner's brief:

But when the legislature, in an effort to prevent any inquiry ofthe validity of a particular statute, so burdens any challenge

thereof in the courts that the party affected is necessarilyconstrained to submit rather than take the chances of thepenalties imposed, then it becomes a serious question whetherthe party is not deprived of the equal protection of the laws.(Cotting vs.Goddard, 183 U. S., 79, 102.)

It may therefore be said that when the penalties fordisobedience are by fines so enormous and imprisonmentso severe as to intimidate the company and its officers fromresorting to the courts to test the validity of the legislation,the result is the same as if the law in terms prohibited thecompany from seeking judicial construction of laws whichdeeply affect its rights.


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It is urged that there is no principle upon which to base theclaim that a person is entitled to disobey a statute at leastonce, for the purpose of testing its validity, without

subjecting himself to the penalties for disobedienceprovided by the statute in case it is valid. This is not anaccurate statement of the case. Ordinarily a law creatingoffenses in the nature of misdemeanors or felonies relatesto a subject over which the jurisdiction of the legislature iscomplete in any event. In the case, however, of theestablishment of certain rates without any hearing, thevalidity of such rates necessarily depends upon whether

they are high enough to permit at least some return uponthe investment (how much it is not now necessary to state),and an inquiry as to that fact is a proper subject of judicialinvestigation. If it turns out that the rates are too low forthat purpose, then they are illegal. Now, to impose upon aparty interested the burden of obtaining a judicial decisionof such a question (no prior hearing having been given)

only upon the condition that, if unsuccessful, he must sufferimprisonment and pay fines, as provided in these acts, is, ineffect, to close up all approaches to the courts, and thusprevent any hearing upon the question whether the rates asprovided by the acts are not too low, and therefore invalid.The distinction is obvious between a case where thevalidity of the act depends upon the existence of a factwhich can be determined only after investigation of a verycomplicated and technical character, and the ordinary caseof a statute upon a subject requiring no such investigation,and over which the jurisdiction of the legislature iscomplete in any event.


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We hold, therefore, that the provisions of the acts relatingto the enforcement of the rates, either for freight orpassengers, by imposing such enormous fines and possible

imprisonment as a result of an unsuccessful effort to testthe validity of the laws themselves, are unconstitutional ontheir face, without regard to the question of theinsufficiency of those rates. (Ex parteYoung, 209 U.S.,123 147, 148.)

An examination of the general provisions of our statute, of thecircumstances under which it was enacted, the mischief which it

sought to remedy and of the nature of the penalties prescribedfor violations of its terms convinces us that, unlike the statutesunder consideration in the above cited cases, its enactmentinvolved no attempt to prevent common carriers "from resortingto the courts to test the validity of the legislation;" no "effort toprevent any inquiry" as to its validity. It imposes no arbitraryobligation upon the company to do or to refrain from doinganything. It makes no attempt to compel such carriers to dobusiness at a fixed or arbitrarily designated rate, at the risk ofseparate criminal prosecutions for every demand of a higher or adifferent rate. Its penalties can be imposed only upon proof of"unreasonable," "unnecessary" and "unjust" discriminations, andrange from a maximum which is certainly not excessive forwillful, deliberate and contumacious violations of its provisionsby a great and powerful corporation, to a minimum which may

be a merely nominal fine. With so wide a range of discretion fora contention on the part of any common carrier that it or itsofficers are "intimidated from resorting to the courts to test thevalidity" of the provisions of the statute prohibiting such"unreasonable," "unnecessary" and "unjust" discriminations, or


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to test in any particular case whether a given course of conductdoes in fact involve such discrimination. We will presume, forthe purpose of declaring the statute invalid, that there is so real a

danger that the Courts of First Instance and this court on appealwill abuse the discretion thus conferred upon us, as to intimidateany common carrier, acting in good faith, from resorting to thecourts to test the validity of the statute. Legislative enactments,penalizing unreasonable discriminations, unreasonable restraintsof trade, and unreasonable conduct in various forms of humanactivity are so familiar and have been so frequently sustained inthe courts, as to render extended discussion unnecessary to

refute any contention as to the invalidity of the statute underconsideration, merely it imposes upon the carrier the obligationof adopting one of various courses of conduct open to it, at therisk of incurring a prescribed penalty in the event that the courseof conduct actually adopted by it should be held to haveinvolved an unreasonable, unnecessary or unjust discrimination.Applying the test announced inEx parteYoung,supra, it will be

seen that the validity of the Act does not depend upon "theexistence of a fact which can be determined only afterinvestigation of a very complicated and technical character," andthat "the jurisdiction of the legislature" over the subject withwhich the statute deals "is complete in any event." There can beno real question as to the plenary power of the legislature toprohibit and to penalize the making of undue, unreasonable andunjust discriminations by common carriers to the prejudice ofany person, locality or particular kind of traffic.(SeeMunn vs.Illinois, 94 U.S., 113, and other cases hereinaftercited in support of this proposition.)


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Counsel for petitioner contends also that the statute, if construedso as to deny the right of the steamship company to elect at willwhether or not it will engage in a particular business, such as

that of carrying explosives, is unconstitutional "because it is aconfiscation of property, a taking of the carrier's propertywithout due process of law," and because it deprives him of hisliberty by compelling him to engage in business against his will.The argument continues as follows:

To require of a carrier, as a condition to his continuing insaid business, that he must carry anything and every thing

is to render useless the facilities he may have for thecarriage of certain lines of freight. It would be almost ascomplete a confiscation of such facilities as if the samewere destroyed. Their value as a means of livelihood wouldbe utterly taken away. The law is a prohibition to him tocontinue in business; the alternative is to get out or to gointo some other business the same alternative as wasoffered in the case of the Chicago & N.W. Ry. vs.Dey (35Fed. Rep., 866, 880), and which was there commented onas follows:

"Whatever of force there may be in such arguments, asapplied to mere personal property capable of removaland use elsewhere, or in other business, it is whollywithout force as against railroad corporations, so large

a proportion of whose investment is in the soil andfixtures appertaining thereto, which cannot beremoved. For a government, whether that governmentbe a single sovereign or one of the majority, to say toan individual who has invested his means in so


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laudable an enterprise as the construction of a railroad,one which tends so much to the wealth and prosperityof the community, that, if he finds that the rates

imposed will cause him to do business at a loss, hemay quit business, and abandon that road, is the veryirony of despotism. Apples of Sodom were fruit of joyin comparison. Reading, as I do, in the preamble of theFederal Constitution, that it was ordained to "establishjustice," I can never believe that it is within theproperty of an individual invested in and used for apurpose in which even the Argus eyes of the police

power can see nothing injurious to public morals,public health, or the general welfare. I read also in thefirst section of the bill of rights of this state that "allmen are by nature free and equal, and have certaininalienable rights, among which are those of enjoyingand defending life and liberty, acquiring, possessing,and protecting property, and pursuing and obtaining

safety and happiness;" and I know that, while thatremains as the supreme law of the state, no legislaturecan directly or indirectly lay its withering ordestroying hand on a single dollar invested in thelegitimate business of transportation." (Chicago &N.W. Ry. vs.Dey, 35 Fed. Rep., 866, 880.)

It is manifest, however, that this contention is directed against a

construction of the statute, which, as we have said, is notwarranted by its terms. As we have already indicated, the statutedoes not "require of a carrier, as a condition to his continuing insaid business, that he must carry anything and everything," andthereby "render useless the facilities he may have for the


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carriage of certain lines of freight." It merely forbids failures orrefusals to receive persons or property for carriage which havethe effect of giving an "unreasonable or unnecessary preference

or advantage" to any person, locality or particular kind of traffic,or of subjecting any person, locality or particular kind of trafficto any undue or unreasonable prejudice or discrimination.

Counsel expressly admits that the statute, "as a prohibitionagainst discrimination is a fair, reasonable and valid exercise ofgovernment," and that "it is necessary and proper that suchdiscrimination be prohibited and prevented," but he contends

that "on the other hand there is no reasonable warrant nor validexcuse for depriving a person of his liberty by requiring him toengage in business against his will. If he has a rolling boat,unsuitable and unprofitable for passenger trade, he may devote itto lumber carrying. To prohibit him from using it unless it isfitted out with doctors and stewards and staterooms to carrypassengers would be an invalid confiscation of this property. Acarrier may limit his business to the branches thereof that suithis convenience. If his wagon be old, or the route dangerous, hemay avoid liability for loss of passengers' lives and limbs bycarrying freight only. If his vehicles require expensivepneumatic tires, unsuitable for freight transportation, ha maynevertheless carry passengers. The only limitation upon hisaction that it is competent for the governing authority to imposeis to require him to treat all alike. His limitations must apply to

all, and they must be established limitations. He cannot refuse tocarry a case of redjusion the ground that he has carried forothers onlyjusithat he was green, or blue, or black. But he canrefuse to carry redjusi, if he has publicly professed such a


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limitation upon his business and held himself out as unwilling tocarry the same for anyone."

To this it is sufficient answer to say that there is nothing in the

statute which would deprive any person of his liberty "byrequiring him to engage in business against his will." Theprohibitions of the statute against undue, unnecessary orunreasonable regulations which the legislator has seen fit toprescribe for the conduct of the business in which the carrier isengaged of his own free will and accord. In so far as the self-imposed limitations by the carrier upon the business conducted

by him, in the various examples given by counsel, do notinvolve an unreasonable or unnecessary discrimination thestatute would not control his action in any wise whatever. Itoperates only in cases involving such unreasonable orunnecessary preferences or discriminations. Thus in thehypothetical case suggested by the petitioner, a carrier engagedin the carriage of green, blue or blackjusi, and duly equippedtherefor would manifestly be guilty of "giving an unnecessaryand unreasonable preference to a particular kind of traffic" andof subjecting to "an undue and reasonable prejudice a particularkind of traffic," should he decline to carry redjusi, to theprejudice of a particular shipper or of those engaged in themanufacture of that kind ofjusi, basing his refusal on the groundof "mere whim or caprice" or of mere personal convenience. Soa public carrier of passengers would not be permitted under this

statute to absolve himself from liability for a refusal to carry aChinaman, a Spaniard, an American, a Filipino, or amestizobyproof that from "mere whim or caprice or personal scruple," orto suit his own convenience, or in the hope of increasing hisbusiness and thus making larger profits, he had publicly


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announced his intention not to carry one or other of these classesof passengers.

The nature of the business of a common carrier as a public

employment is such that it is clearly within the power of thestate to impose such just and reasonable regulations thereon inthe interest of the public as the legislator may deem proper. Ofcourse such regulations must not have the effect of depriving anowner of his property without due process of law, nor ofconfiscating or appropriating private property without justcompensation, nor of limiting or prescribing irrevocably vested

rights or privileges lawfully acquired under a charter orfranchise. But aside from such constitutional limitations, thedetermination of the nature and extent of the regulations whichshould be prescribed rests in the hands of the legislator.

Common carriers exercise a sort of public office, and haveduties to perform in which the public is interested. Theirbusiness is, therefore, affected with a public interest, and is

subject of public regulation. (New Jersey Steam Nav.Co. vs.Merchants Bank, 6 How., 344, 382; Munn vs.Illinois, 94U.S., 113, 130.) Indeed, this right of regulation is so far beyondquestion that it is well settled that the power of the state toexercise legislative control over railroad companies and othercarriers "in all respects necessary to protect the public againstdanger, injustice and oppression" may be exercised through

boards of commissioners. (New York etc. R. Co. vs.Bristol, 151U.S., 556, 571; Connecticut etc. R. Co. vs.Woodruff, 153 U.S.,689.)

Regulations limiting of passengers the number of passengersthat may be carried in a particular vehicle or steam vessel, or


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forbidding the loading of a vessel beyond a certain point, orprescribing the number and qualifications of the personnel in theemploy of a common carrier, or forbidding unjust discrimination

as to rates, all tend to limit and restrict his liberty and to controlto some degree the free exercise of his discretion in the conductof his business. But since the Granger cases were decided by theSupreme Court of the United States no one questions the powerof the legislator to prescribe such reasonable regulations uponproperty clothed with a public interest as he may deemexpedient or necessary to protect the public against danger,injustice or oppression. (Munn vs.Illinois, 94 U.S., 113, 130;

Chicago etc. R. Co. vs.Cutts, 94 U.S., 155; Budd vs.New York,143 U.S., 517; Cottingvs.Goddard, 183 U.S., 79.) The right toenter the public employment as a common carrier and to offerone's services to the public for hire does not carry with it theright to conduct that business as one pleases, without regard tothe interest of the public and free from such reasonable and justregulations as may be prescribed for the protection of the public

from the reckless or careless indifference of the carrier as to thepublic welfare and for the prevention of unjust and unreasonablediscrimination of any kind whatsoever in the performance of thecarrier's duties as a servant of the public.

Business of certain kinds, including the business of a commoncarrier, holds such a peculiar relation to the public interest thatthere is superinduced upon it the right of public regulation.

(Budd vs.New York, 143 U.S., 517, 533.) When privateproperty is "affected with a public interest it ceases to bejurisprivationly." Property becomes clothed with a public interestwhen used in a manner to make it of public consequence andaffect the community at large. "When, therefore, one devotes his


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property to a use in which the public has an interest, he, ineffect, grants to the public an interest in that use, and mustsubmit to be controlled by the public for the common good, to

the extent of the interest he has thus created. He may withdrawhis grant by discontinuing the use, but so long as he maintainsthe use he must submit to control." (Munn vs.Illinois, 94 U.S.,113; Georgia R. & Bkg. Co. vs.Smith, 128 U.S., 174;Budd vs.New York, 143 U.S., 517; Louisville etc. Ry.Co. vs.Kentucky, 161 U.S., 677, 695.)

Of course this power to regulate is not a power to destroy, and

limitation is not the equivalent of confiscation. Under pretenseof regulating fares and freight the state can not require a railroadcorporation to carry persons or property without reward. Nor canit do that which in law amounts to a taking of private propertyfor public use without just compensation, or without due processof law. (Chicago etc. R. Co. vs.Minnesota, 134 U.S., 418;Minneapolis Eastern R. Co. vs.Minnesota, 134 U.S., 467.) Butthe judiciary ought not to interfere with regulations establishedand palpably unreasonable as to make their enforcementequivalent to the taking of property for public use without suchcompensation as under all the circumstances is just both to theowner and to the public, that is, judicial interference shouldnever occur unless the case presents, clearly and beyond alldoubt, such a flagrant attack upon the rights of property underthe guise of regulations as to compel the court to say that the

regulation in question will have the effect to deny justcompensation for private property taken for the public use.(Chicago etc. R. Co. vs. Wellman, 143 U.S., 339;Smyth vs.Ames, 169 U.S., 466, 524; Henderson BridgeCo. vs.Henderson City, 173 U.S., 592, 614.)


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Under the common law of England it was early recognized thatcommon carriers owe to the public the duty of carryingindifferently for all who may employ them, and in the order in

which application is made, and without discrimination as toterms. True, they were allowed to restrict their business so as toexclude particular classes of goods, but as to the kinds ofproperty which the carrier was in the habit of carrying in theprosecution of his business he was bound to serve all customersalike (State vs.Cincinnati etc. R. Co., 47 Ohio St., 130, 134,138; Louisville etc. Ry. Co. vs.Quezon City Coal Co., 13 Ky. L.Rep., 832); and it is to be observed in passing that these

common law rules are themselves regulations controlling,limiting and prescribing the conditions under which commoncarriers were permitted to conduct their business.(Munn vs.Illinois, 94 U. S., 113, 133.)

It was found, in the course of time, that the correction of abuseswhich had grown up with the enormously increasing business ofcommon carriers necessitated the adoption of statutoryregulations controlling the business of common carriers, andimposing severe and drastic penalties for violations of theirterms. In England, the Railway Clauses Consolidation Act wasenacted in 1845, the Railway and Canal Traffic Act in 1854, andsince the passage of those Acts much additional legislation hasbeen adopted tending to limit and control the conduct of theirbusiness by common carriers. In the United States, the business

of common carriers has been subjected to a great variety ofstatutory regulations. Among others Congress enacted "TheInterstate Commerce Act" (1887) and its amendments, and theElkins Act as amended (1906); and most if not all of the Statesof the Union have adopted similar legislation regulating the


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business of common carriers within their respectivejurisdictions. Unending litigation has arisen under these statutesand their amendments, but nowhere has the right of the state to

prescribe just and reasonable regulations controlling andlimiting the conduct of the business of common carriers in thepublic interest and for the general welfare been successfullychallenged, though of course there has been wide divergence ofopinion as to the reasonableness, the validity and legality ofmany of the regulations actually adopted.

The power of the Philippine legislator to prohibit and to penalize

all and any unnecessary or unreasonable discriminations bycommon carriers may be maintained upon the same reasoningwhich justified the enactment by the Parliament of England andthe Congress of the United States of the above mentionedstatutes prohibiting and penalizing the granting of certainpreferences and discriminations in those countries. As we havesaid before, we find nothing confiscatory or unreasonable in theconditions imposed in the Philippine statute upon the business ofcommon carriers. Correctly construed they do not force him toengage in any business his will or to make use of his facilities ina manner or for a purpose for which they are not reasonablyadapted. It is only when he offers his facilities as a commoncarrier to the public for hire, that the statute steps in andprescribes that he must treat all alike, that he may not pick andchoose which customer he will serve, and, specifically, that he

shall not make any undue or unreasonable preferences ordiscriminations whatsoever to the prejudice not only of anyperson or locality but also of any particular kind of traffic.


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The legislator having enacted a regulation prohibiting commoncarriers from giving unnecessary or unreasonable preferences oradvantages to any particular kind of traffic or subjecting any

particular kind of traffic to any undue or unreasonable prejudiceor discrimination whatsoever, it is clear that whatever may havebeen the rule at the common law, common carriers in thisjurisdiction cannot lawfully decline to accept a particular classof goods for carriage, to the prejudice of the traffic in thosegoods, unless it appears that for some sufficient reason thediscrimination against the traffic in such goods is reasonable andnecessary. Mere whim or prejudice will not suffice. The grounds

for the discrimination must be substantial ones, such as willjustify the courts in holding the discrimination to have beenreasonable and necessary under all circumstances of the case.

The prayer of the petition in the case at bar cannot be grantedunless we hold that the refusal of the defendant steamshipcompany to accept for carriage on any of its vessels "dynamite,gunpowder or other explosives" would in no instance involve aviolation of the provisions of this statute. There can be littledoubt, however, that cases may and will arise wherein therefusal of a vessel "engaged in the coastwise trade of thePhilippine Islands as a common carrier" to accept suchexplosives for carriage would subject some person, company,firm or corporation, or locality, or particular kind of traffic to acertain prejudice or discrimination. Indeed it cannot be doubted

that the refusal of a "steamship company, the owner of a largenumber of vessels" engaged in that trade to receive for carriageany such explosives on any of its vessels would subject thetraffic in such explosives to a manifest prejudice anddiscrimination. The only question to be determined therefore is


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whether such prejudice or discrimination might in any caseprove to be undue, unnecessary or unreasonable.

This of course is, in each case, a question of fact, and we are of

the opinion that the facts alleged in the complaint are notsufficient to sustain a finding in favor of the contentions of thepetitioner. It is not alleged in the complaint that "dynamite,gunpowder and other explosives" can in no event be transportedwith reasonable safety on board steam vessels engaged in thebusiness of common carriers. It is not alleged that all, or indeedany of the defendant steamship company's vessels are unsuited

for the carriage of such explosives. It is not alleged that thenature of the business in which the steamship company isengaged is such as to preclude a finding that a refusal to acceptsuch explosives on any of its vessels would subject the traffic insuch explosives to an undue and unreasonable prejudice anddiscrimination.

Plaintiff's contention in this regard is as follows:

In the present case, the respondent company has expresslyand publicly renounced the carriage of explosives, andexpressly excluded the same terms from the business itconducts. This in itself were sufficient, even though suchexclusion of explosives were based on no other ground thanthe mere whim, caprice or personal scruple of the carrier. Itis unnecessary, however, to indulge in academic discussionof a moot question, for the decision not a carry explosivesrests on substantial grounds which are self-evident.

We think however that the answer to the question whether sucha refusal to carry explosives involves an unnecessary or


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unreasonable preference or advantage to any person, locality orparticular kind of traffic or subjects any person, locality orparticular to traffic to an undue or unreasonable prejudice and

discrimination is by no means "self-evident," and that it is aquestion of fact to be determined by the particular circumstancesof each case.

The words "dynamite, powder or other explosives" are broadenough to include matches, and other articles of like nature, andmay fairly be held to include also kerosene oil, gasoline andsimilar products of a highly inflammable and explosive

character. Many of these articles of merchandise are in thenature of necessities in any country open to modern progress andadvancement. We are not fully advised as to the methods oftransportation by which they are made commercially availablethroughout the world, but certain it is that dynamite, gunpowder,matches, kerosene oil and gasoline are transported on manyvessels sailing the high seas. Indeed it is a matter of commonknowledge that common carriers throughout the world transportenormous quantities of these explosives, on both land and sea,and there can be little doubt that a general refusal of thecommon carriers in any country to accept such explosives forcarriage would involve many persons, firms and enterprises inutter ruin, and would disastrously affect the interests of thepublic and the general welfare of the community.

It would be going to far to say that a refusal by a steam vesselengaged in the business of transporting general merchandise as acommon carrier to accept for carriage a shipment of matches,solely on the ground of the dangers incident to the explosivequality of this class of merchandise, would not subject the traffic


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in matches to an unnecessary, undue or unreasonable prejudiceand discrimination without proof that for some special reasonthe particular vessel is not fitted to carry articles of that nature.

There may be and doubtless are some vessels engaged inbusiness as common carriers of merchandise, which for lack ofsuitable deck space or storage rooms might be justified indeclining to carry kerosene oil, gasoline, and similar products,even when offered for carriage securely packed in cases; andfew vessels are equipped to transport those products in bulk. Butin any case of a refusal to carry such products which wouldsubject any person, locality or the traffic in such products would

be necessary to hear evidence before making an affirmativefinding that such prejudice or discrimination was or was notunnecessary, undue or unreasonable. The making of such afinding would involve a consideration of the suitability of thevessel for the transportation of such products ; the reasonablepossibility of danger or disaster resulting from theirtransportation in the form and under the conditions in which

they are offered for carriage; the general nature of the businessdone by the carrier and, in a word, all the attendantcircumstances which might affect the question of the reasonablenecessity for the refusal by the carrier to undertake thetransportation of this class of merchandise.

But it is contended that whatever the rule may be as to otherexplosives, the exceptional power and violence of dynamite and

gunpowder in explosion will always furnish the owner of avessel with a reasonable excuse for his failure or refusal toaccept them for carriage or to carry them on board his boat. Wethink however that even as to dynamite and gunpowder wewould not be justified in making such a holding unaided by


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evidence sustaining the proposition that these articles can neverbe carried with reasonable safety on any vessel engaged in thebusiness of a common carrier. It is said that dynamite is so

erratic an uncontrollable in its action that it is impossible toassert that it can be handled with safety in any given case. Onthe other hand it is contended that while this may be true ofsome kinds of dynamite, it is a fact that dynamite can be and ismanufactured so as to eliminate any real danger from explosionduring transportation. These are of course questions of fact uponwhich we are not qualified to pass judgment without theassistance of expert witnesses who have made special studies as

to the chemical composition and reactions of the different kindsof dynamite, or attained a thorough knowledge of its propertiesas a result of wide experience in its manufacture andtransportation.

As we construe the Philippine statute, the mere fact that violentand destructive explosions can be obtained by the use ofdynamite under certain conditions would not be sufficient initself to justify the refusal of a vessel, duly licensed as acommon carrier of merchandise, to accept it for carriage, if itcan be proven that in the condition in which it is offered forcarriage there is no real danger to the carrier, nor reasonableground to fear that his vessel or those on board his vessel will beexposed to unnecessary and unreasonable risk in transporting it,having in mind the nature of his business as a common carrier

engaged in the coastwise trade in the Philippine Islands, and hisduty as a servant of the public engaged in a public employment.So also, if by the exercise of due diligence and the taking ofunreasonable precautions the danger of explosions can bepractically eliminated, the carrier would not be justified in


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subjecting the traffic in this commodity to prejudice ordiscrimination by proof that there would be a possibility ofdanger from explosion when no such precautions are taken.

The traffic in dynamite, gunpowder and other explosives isvitally essential to the material and general welfare of the peopleof these Islands. If dynamite, gunpowder and other explosivesare to continue in general use throughout the Philippines, theymust be transported by water from port to port in the variousislands which make up the Archipelago. We are satisfiedtherefore that the refusal by a particular vessel, engaged as a

common carrier of merchandise in the coastwise trade of thePhilippine Islands, to accept any or all of these explosives forcarriage would constitute a violation of the prohibitions againstdiscriminations penalized under the statute, unless it can beshown by affirmative evidence that there is so real andsubstantial a danger of disaster necessarily involved in thecarriage of any or all of these articles of merchandise as torender such refusal a due or a necessary or a reasonable exerciseof prudence and discretion on the part of the shipowner.

The complaint in the case at bar lacking the necessaryallegations under this ruling, the demurrer must be sustained onthe ground that the facts alleged do not constitute a cause ofaction.

A number of interesting questions of procedure are raised anddiscussed in the briefs of counsel. As to all of these questions weexpressly reserve our opinion, believing as we do that insustaining the demurrer on the grounds indicated in this opinionwe are able to dispose of the real issue involved in theproceedings without entering upon the discussion of the nice


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questions which it might have been necessary to pass upon hadit appeared that the facts alleged in the complaint constitute acause of action.

We think, however, that we should not finally dispose of thecase without indicating that since the institution of theseproceedings the enactment of Acts No. 2307 and No. 2362(creating a Board of Public Utility Commissioners and for otherpurposes) may have materially modified the right to institute andmaintain such proceedings in this jurisdiction. But the demurrerhaving been formallly submitted for judgment before the

enactment of these statutes, counsel have not been heard in thisconnection. We therefore refrain from any comment upon anyquestions which might be raised as to whether or not there maybe another adequate and appropriate remedy for the allegedwrong set forth in the complaint. Our disposition of the questionraised by the demurrer renders that unnecessary at this time,though it may not be improper to observe that a carefulexamination of those acts confirms us in the holding upon whichwe base our ruling on this demurrer, that is to say "Thatwhatever may have been the rule at the common law, commoncarriers in this jurisdiction cannot lawfully decline to accept aparticular class of goods for carriage, to the prejudice of thetraffic in those goods, unless it appears that for some sufficientreason the discrimination against the traffic in such goods isreasonable and necessary. Mere prejudice or whim will not

suffice. The grounds of the discrimination must be substantialones, such as will justify the courts in holding the discriminationto have been reasonable and necessary under all thecircumstances of the case."


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Unless an amended complaint be filed in the meantime, letjudgment be entered ten days hereafter sustaining the demurrerand dismissing the complaint with costs against the complainant,

and twenty days thereafter let the record be filed in the archivesof original actions in this court. So ordered.

Arellano, C.J., and Trent, J.,concur.Torres and Johnson, JJ.,concur in the result.

Separate Opinions

MORELAND, J., concurring.

I may briefly say, although the nature of the action is stated atlength in the foregoing opinion, that it is an action by ashareholder of the Yangco Steamship Co. against the companyitself and certain officials of the Insular Government for an

injunction against the company prohibiting it from carryingdynamite on its ships and preventing the defendant officialsfrom compelling the company to do so under Act No. 98.

A demurrer was filed to the complaint raising the question notonly of its sufficiency in general, but putting in issue also theright of the plaintiff to maintain the action under the allegationsof his complaint.

It should be noted that all of the boats of the defendantcompany, under the allegations of the complaint, are boatswhichcarry passengers as well as freight, and that the holding of theopinion which I am discussing compelspassenger ships to carry


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dynamite and all other high explosives when offered forshipment. (See paragraph 3 of the complaint.)

I base my opinion for a dismissal of the complaint on the ground

that the plaintiff has not alleged in his complaint a single one ofthe grounds, apart from that of being a stockholder, necessaryfor him to allege to maintain a shareholder's action.

In the case of Hawes vs.Oakland (104 U.S., 450) it was saidrelative to the right of a stockholder to bring an action whichshould regularly be bought by the company of which he is a

stockholder:We understand that doctrine to be that, to enable astockholder in a corporation to sustain in a court of equityin his own name, a suit founded on a right of actionexisting in the corporation itself, and in which thecorporation itself is the appropriate plaintiff, there mustexist as the foundation of the suit:

Some action or threatened action of the managing board ofdirectors or trustees of the corporation, which is beyond theauthority conferred on them by their character or othersource of organization;

Or such a fraudulent transaction, completed orcontemplated by the acting managers, in connection with

some other party, or among themselves, or with othershareholders as will in serious injury to the corporation, orto the interest of the other shareholders;


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Or where the board of directors, or a majority of them, areacting for their own interest, in a manner destructive of thecorporation itself, or of the rights of the other shareholders;

Or where the majority of shareholders themselves areoppressively and illegally pursuing a course in the name ofthe corporation, which is in violation of the rights of theother shareholders, and which can only be restrained by theaid of a court of equity.

It was also said: "In this country the cases outside of the Federal

Courts are not numerous, and while they admit the right of astockholder to sue in cases where the corporation is the properparty to bring the suit, they limit this right to cases wherethedirectors are guilty of a fraud or a breach of trust, or are

proceeding ultra vires."

Further on in the same case we find: "Conceding appellant'sconstruction of the company's charter to be correct, there is

nothing whichforbidsthe corporation from dealing with the cityin the manner it has done. That city conferred on the companyvaluable rights by special ordinance; namely, the use of thestreets for the laying of its pipes, and the privilege of furnishingwater to the whole population.

It may be the exercise of the highest wisdom, to let the city usethe water in the manner complained of. The directors are better

able to act understandingly on this subject than a stockholderresiding in New York. The great body of the stockholdersresiding in Oakland or other places in California may take thisview of it, and be content to abide by the action of theirdirectors."


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This case is conclusive of the right of the plaintiff in the case atbar to maintain the action. The complaint is devoid ofallegations necessary to sustain a complaint by a shareholder.

The contention of the plaintiff based upon the case ofExparteYoung (209 U.S. 123) is not sustained by that case. Thedecision there requires precisely the same allegations in thecomplaint as does the case of Hawes vs.Oakland. Not one ofthose allegations appears in the complaint in the case at barexcept the allegation that the plaintiff is a stockholder.

Indeed, not only does the complaint lack allegations essential toits sufficiency, but it contains allegations which affirmativelyshow the plaintiff is not entitled to maintain the action. I do notstop to enumerate them all. I call attention to one only, namelythe allegation that the company, by its authorized officials, hasacted in strict conformity with the plaintiff's wishes and hasrefused to accept dynamite for carriage. This allegation showsthat the plaintiff has been able to obtain his remedy and

accomplish his purpose within the corporation itself, and it issufficient, therefore, under the case of Hawes vs.Oakland andthat ofEx parteYoung, to require that the demurrer besustained.

I am opposed to a decision of this case on the merits.

In the first place, there has been no adequate discussion of the

merits by the parties. Substantially all of the brief of thegovernment was devoted to what may be called the technicaldefects of the complaint, such as I have referred to above.Indeed, it is doubtful if any portion of the brief can be said to bedirectly a discussion of the merits.


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In the second place, there is no real pending in this court. It isclear from the complaint that the case is a collusive one (not inany improper sense) between the plaintiff and the defendant

company. There is no reason found in the complaint why thecompany should not have brought the action itself, everymember of the board of directors and every stockholder,according to the allegations of the complaint, being in absoluteaccord with the contentions of the plaintiff on the propositionthat the company should not carry dynamite, and having passedunanimously resolutions to that effect. Moreover, there has beenno violation of Act No. 98. No shipper, or any other person, has

offered dynamite to the defendant company for shipment, and,accordingly, the defendant company has not refused t o acceptdynamite for carriage. Nor have the defendant governmentofficials begun proceedings, or threatened to bring proceedings,against the defendant company in any given case. According tothe allegations of the complaint, the parties are straw parties andthe case a straw case.

In the third place, Act No. 98, under which this proceeding isbrought and under which, it is alleged, the defendant publicofficers are threatening to enforce, has been repealed, in so faras it affects public service corporations, by Act No. 2307, asamended by Act No. 2362. More than that; not only has the lawbeen repealed, but proceedings of this character have beenplaced, in the first instance, under the exclusive jurisdiction of

the Board of Public Utilities. I am unable to see why this courtshould, under the facts of this case, undertake to render adecision on the merits when the Act under which it is broughthas been repealed and the jurisdiction to render a decision on thesubject matter involved has been turned over to another body.


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As I have said before, it was unnecessary to a decision of thiscase to touch the merits in any way; and I am opposed to anattempt to lay down a doctrine on a subject which is within the

exclusive jurisdiction of another body created by law expresslyfor the purpose of removing such cases as this from thejurisdiction of the courts.

I am of the opinion that the complaint should be dismissed, butupon grounds apart from the merits. If the merits of the casewere alone to govern, I should be distinctly in favor of theplaintiff's contention so far as it relates to the carriage of

dynamite on ships carrying passengers; and, while I am opposedto a decision on the merits of this case, nevertheless, the meritshaving been brought into the case by the opinion of some of mybrethren, I desire to refer briefly to the jurisprudence of thesubject.

So far as my researches go, the proposition thatpassengerboatsmust carry dynamite and other high explosives is without

support in the decisions of any English speaking country. I havebeen unable to find a case anywhere which lays down such adoctrine. Indeed, I have been unable to find a case which holdsthatfreightboatsmustcarry dynamite or other high explosives.Every case that I have been able to find states a contrarydoctrine; and neither in courts nor in text books is there even ahint supporting the contention of my brethren. The opinion cites

no authorities to support it; and I am constrained to believe that,in any opinion so elaborately written, cases to support its thesiswould have been cited if any such existed.

On page 372, Vol. 6 of Cyc., will be found the following:"Common carriers owe to the public the duty of carrying


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indifferently for all who may employ them, and in the order inwhich the application is made, and without discrimination as toterms. They may, however, restrict their business so as to

exclude particular classes of goods, and they are not bound toreceive dangerous articles, such as nitro-glycerine, dynamite,gunpowder, oil of vitriol, matches, etc."

In the case of California Powder Works vs.Atlantic and PacificR. R. Co. (113 Cal., 329), it was said: "Nor are the exemptionscontained in the contract of the shipping order void for lack ofconsideration. The defendant was not obliged to received and

transport the powder at all. A common carrier is not bound toreceive ... dangerous articles, as nitro-glycerine, dynamite,gunpowder, aqua fortis, oil of vitriol, matches, etc."

Thi

Fisher & Quijano

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