of the courts to declare an act of a state or federal Legislature unconstitutional when it is shown that it is repugnant to the Constitution; and it is well to remember that a North Carolina court was the first to announce the doctrine that the courts possessed such power, and soon thereafter the Supreme Court of the United States, in the case of Marbury v. Madison, supra, declared it to be the settled doctrine of this country. In the North Carolina case the Court of Conference (which was the highest court at that time), in Bayard v. Singleton, 1 N. C. Rep. 5 (Nov. Term, 1787), in discussing the power of the court to declare an act of the Legislature unconstitutional, said:

“Another mode was proposed for putting the matter in controversy on a more constitutional footing for a decision than that of the motion under the aforesaid act. The court then, after every reasonable endeavor had been used in vain for avoiding a disagreeable difference between the Legislature and the judicial powers of the State, at length with much apparent reluctance, but with great deliberation and firmness, gave their opinion separately, but unanimously for overruling the afore-mentioned motion for the dismission of the said suits, in the course of which the judges observed that the obligation of their oaths and the duty of their office required them in that situation to give their opinion on that important and momentous subject, and that notwithstanding the great reluctance they might feel against involving themselves in a dispute with the Legislature of the state, yet no object of concern or respect could come in competition or authorize them to dispense with the duty they owed the public, in consequence of the trust they were invested with under the solemnity of their oaths; that they, therefore, were bound to declare that they considered that whatever disabilities the persons under whom the plaintiffs were said to derive their title might justly have incurred against their maintaining or prosecuting any suits in the courts of this state, yet that such disabilities in their nature were merely personal, and not by any means capable of being transferred to the present plaintiffs, either by descent or purchase, and that these plaintiffs being citizens of one of the United States, or citizens of this state, by the confederation of all the states, which is to be taken as a part of the law of the land, unrepealable by any act of the General Assembly ; that by the Constitution every citizen had undoubtedly a right to a decision of his property by a trial by jury, for that if the Legislature could take away this right, and require him to stand condemned in his property without a trial, it might with as much authority require his life to be taken away without a trial by jury, and that he should stand condemned to die without the formality of any trial at all; that, if the members of the General Assembly could do this, they might with equal authority not only render themselves the legislators of the state for life, without any further election of the people, from thence transmit the dignity and authority of legislation down to their heirs male forever; but that it was clear that no act they could pass could by any means repeal or alter the Constitution, because, if they could do this, they would at the same instant of time destroy their own existence as a Legislature, and dissolve the government thereby established. Consequently the Constitution (which the judicial power was bound to take notice of as much as of any other law whatever), standing in full force as the fundamental law of the land, notwithstanding the act on which the present motion was grounded, the same act must, of course, in that instance, stand as abrogated and without any effect.”

That the Legislature has the power within the limitations fixed by the Constitution of the United States to prescribe maximum rates for railroads cannot be denied. While this is so, it is equally true as was said by Judge Catron (afterwards a justice of the Supreme Court of the United States), in the case of Vanzant v. Waddell, 2 Yerger (Tenn.) 262–70:

"Every partial or private law which directly proposes to destroy or affect individual rights, or does the same thing by affording remedies leading to similar consequences, is unconstitutional and void. Were this otherwise, odious individuals and corporate bodies would be governed by one rule, and the mass of the community, who made the law, by another."

In the case of Smyth v. Ames, supra, in referring to this phase of the question, it is said:

* * * But, despite the difficulties that confessedly attend the proper solution of such questions, the court cannot shrink from the duty to determine whether it be true, as alleged, that the Nebraska statute invades or destroys rights secured by the supreme law of the land. No one, we take it, will contend that a state enactment is in harmony with that law simply because the Legislature of the State has declared such to be the case; for that would make the state Legislature the final judge of the validity of its enactments, although the Constitution of the United States and the laws made in pursuance thereof are the supreme law of the land, anything in the Constitution or laws of any state to the contrary notwithstanding. Article 6. The idea that any Legislature, state or federal, can conclusively determine for the people and for the court that which it enacts into the form of law, or what it authorizes its agents to do, is consistent with the fundamental law, is in opposition to the theory of our institutions. The duty rests upon all courts, federal and state, when their jurisdiction is properly invoked, to see to it that no right secured by the supreme law of the land is impaired or destroyed by legislation. This function and duty of the judiciary distinguishes the American system from all other systems of government. The perpetuity of our institutions and the liberty which is enjoyed under them depend, in no small degree, upon the power given the judiciary to declare null and void all legislation that is clearly repugnant to the supreme law of the land.”

The complainant has invoked the jurisdiction of this court for the purpose of asserting a right which is guaranteed to it by the organic law of the land. This law is supreme, and should be obeyed until the people of the United States through their Legislatures shall deem it expedient to modify the same. Every official, state or federal, is required before entering upon the discharge of the duties of his office to take an oath to support and maintain the Constitution of the United States and the laws made in pursuance thereof, and the state official who takes this oath, among other things, is required to state that he will support the Constitution and laws of the state not inconsistent with the Constitution and laws of the United States. Under these circumstances, there can, and should be, no conflict between the state and federal courts.

If this were a suit in the state court, and it should appear, as it does in this case, that the complainant was threatened with irreparable injury, the injunction would be continued until the final hearing as a matter of course, upon the theory that it is the duty of the court to preserve the status quo until there could be a final determination of the questions involved in the controversy. This is the well-settled rule of the federal courts, and is the universal practice in the state courts of North Carolina.

Counsel for defendants cite the case of Covington & Co. v. Sanford, 164 U. S. 578, 17 Sup. Ct. 198, 41 L. Ed. 560. The court has carefully considered that case, and is of opinion that it does not apply to the case at bar. Counsel also referred to the San Diego Case, 174 U. S. 739, 19 Sup. Ct. 804, 43 L. Ed. 1154, as showing that the railroad company must show "beyond all doubt" that the rates complained of were confiscatory. This expression in the San Diego Case refers to the rule by which the court should be governed on a final hearing, and has no reference to a hearing on a preliminary motion for an injunction to preserve the status quo. It was also established in that case that the rates complained of would admit of a return of 6 per cent. upon the value of the property. While this court, sitting as a court of equity, possesses ample power to restrain the enforcement of an act of the Legislature in a proceeding of this character, pending a final hearing, it should be borne in mind that the legislation of North Carolina relating to railroads and the fixing of rates for the same contemplates that injunctions should be granted in cases like that under consideration, and the necessary means are provided by which the interests of the patrons of the road may be fully protected in such cases, in so far as freight rates are concerned.

It is provided under subhead B, “Injunctions, When Granted,” ş 1082, as follows:

"No judge shall grant an injunction, restraining order or other process staying or affecting, during the pending of any appeal, the enforcement of any determination of the Corporation Commission fixing rates or fares, without requiring as a condition precedent the executing and filing with the Corporation Commission of a justified undertaking in the sum of not less than twenty-five thousand dollars for any company whose road is of less length than fifty miles, and fifty thousand dollars for any company whose road is over fifty miles in length, conditioned that the company will make and file with the Corporation Commission a sworn statement every three months during the pending of the appeal of the items of freight, with names of shippers, carried over such company's road within the preceding ninety days, showing the freight charged and those fixed by the Corporation Commission; and in the event that the determination of the Corporation Commission appealed from is affirmed in part or in whole such company shall within thirty days pay into the treasury of North Carolina the aggregate difference between the freights collected and those fixed by the final determination of the matter appealed. Pub. Laws 1899, p. 291, c. 164, $ 7."

The foregoing provision clearly indicates that it was the purpose of the Legislature not to interfere with the remedy by injunction in cases where it might appear that the rates fixed were confiscatory in their character, and the only limitation with respect to the same is the provision that in cases where it is sought to restrain an act fixing freight rates, that a bond should be required. (It may be that the state officials have overlooked this provision).

Under these circumstances, the court, in addition to being required by the rules, practice, and procedure in such causes to preserve the status quo pending the hearing, is admonished by the acts of the Legislature that in all such cases where it appears that complainant is about to suffer irreparable injury that it is the policy of the law of North Carolina to restrain the enforcement of such legislation pending the hearing upon giving ample security for the payment of such sums as may be deemed to be necessary to protect the rights of those affected by the rates established. While this provision of the North Carolina law affords ample provision for the protection of shippers of freight pending the final hearing, the statute is silent as to the traveling public; and, while it is contemplated that the enforcement of any act fixing passenger rates may be restrained, nevertheless the Legislature in its wisdom did not deem it necessary to make any provision for protection of those whose rights might be affected in this respect by the granting of a temporary injunction. Thus it is clearly shown that it is not the policy of the Legislature of North Carolina to go to the extent which the federal courts have gone in such causes (notably in the case of Consolidated Gas Co. v. Mayer [C. C.] 146 Fed. 150) in protecting the rights of the traveling public. The allegations of the bill, which are supported by uncontradicted evidence, clearly show that, if the present rates are permitted to be enforced, the complainant will suffer great and irreparable injury in the event that the act in question should ultimately be declared unconstitutional. And in such event the difference between the proposed rate and the present rate would be a clear loss to the complainant, inasmuch as it would be impracticable for it to bring a suit to recover the difference between the proposed rate and the old rate against each individual who might in the meantime purchase a ticket, and the denial at this time of the remedy universally afforded by courts of equity, under such circumstances, would be to deprive complainant of a right guaranteed to it by the Constitution of the United States. While a railroad is not entitled to earn a profit on every mile of its road, nor upon every article carried by it, nevertheless it is entitled to earn a reasonable profit upon the entire intrastate business in the state.

It is shown by the evidence that the gross revenue from intrastate business in North Carolina in 1906 was $3,324,625. It is also shown that the minimum expense of earning this amount should be on the basis of 86.35 cents on $1 earned, and the aggregate expense thus incurred would be $2,870,814.33; that the maximum net earnings from intrastate business in North Carolina, not making any allowance for taxes, is $453,811.41; that the taxes chargeable to North Carolina for the fiscal year ending June 30, 1906, was $269,651.18; that the proportion of intrastate gross earnings to total gross earnings were 27.60 per cent; that 27.60 per cent. of the total taxes which should be charged to intrastate traffic shows that the intrastate taxes should have been for that year $74,423.73. Improvements and betterments not capitalized chargeable to North Carolina for the same year for the purpose of keeping the property up to modern standard and without additions to it amounted to $197,056.77. Twenty-seven and sixty one-hundredths per cent. of this last item which is assignable to intrastate traffic is $54,633.04, thus making a total of taxes, improvements, and betterments not capitalized, chargeable against intrastate traffic for said year, $129,056.ry. The evidence shows that the complainant will sustain a loss of revenue by the proposed passenger rates of $275,055.53, a net loss from freight of $21,691.64, making a total loss of $296,747.17. So it will be seen from the foregoing that the net earnings from intrastate operations under the proposed rates and classifications would only be $28,007.47. That part of the complainant's property in North Carolina devoted to intrastate business was assessed for taxation in that state during the year ended June 30, 1906, at $7,213,222.74. In this connection it should be remembered that no class of property in North Carolina is assessed at its true value for taxation. Nevertheless, if we assume the tax valuation of the property of complainant to be a proper method of ascertaining the value of its property chargeable to intrastate business, we find that the net earnings of complainant, under the proposed rates and charges for intrastate business, taking the year 1906 as a basis, would only amount to 39/100 of 1 per cent. upon such valuation, before allowing anything for the payment of dividends upon the stock and interest on the bonds of complainant.

The complainant in this cause occupies a fiduciary relation to the holders of its mortgages, stocks, and bonds. The holders of these investments and securities are as much entitled to the protection of the law as any private citizen who may have invested his money in the mercantile business or any other private enterprise. To hold otherwise would be to discourage investments in those public enterprises which are indispensable to the development, progress, and growth of the country. If it is to be held by the courts that those who invest their capital in public enterprises of this kind are to be denied the equal protection of the laws, then the construction of railroads and other public utilities by private capital would at once cease, and the government would be required to embark in the untried, if not hazardous, undertaking of owning and controlling, not only the railroads of the country, but any other utilities which might be deemed necessary for the convenience and advantage of the public.

North Carolina has had a sad experience in attempting to operate railroads within her borders, and her efforts in that respect have proven disastrous in the extreme, and to-day the only railroad property owned by the state is being operated under leases which are deemed to be much more advantageous to the state than any plan of operation which it could adopt under its own management and control. The state of North Carolina undertook to construct and operate the Western Carolina Railroad, but its efforts proved to be a dismal failure, and, had it not been for the purchase of the same by the complainant, in all probability it would never have been completed, and to-day western Carolina would be inaccessible to the outside world.

The court does not deem it proper at this time to pass upon the validity of section 1 of the act relating to passenger rates, feeling, as it does, that the cause should be referred to a master in order that all the facts bearing upon that question should be ascertained and reported by him before a final determination as to the reasonableness of the rates imposed can be had.

Much has been said by counsel as to the power of the court in this cause to grant a temporary restraining order, as well as the expediency of the same. There can be no doubt as to the true rule by which the court is to be governed, when it appears that the complainant is about to suffer irreparable injury. In this instance, the act in question is challenged as being unconstitutional, and, as the court has said, the evidence now before it is sufficient to justify it in continuing the order heretofore granted until the final hearing. However, the court is not bound by this strict rule of construction in dealing with this question. In the case of Cotting v. Kansas Stockyards Company, 183 U.