Lead Opinion
dеlivered the opinion of the court. After stating the facts in the language above reported, he continued:
The argument in support of the decree below is :
1. That the statute under which the commissioners are to act impairs the obligation of the charter contract of the Mobile and Ohio Railroad Company;
2. That it is, so far as that company is concerned, a regulation of commerce- among the States;
3. That it denies the company the equal protection of the laws; and deprives it of its property without due process of law;
4. That it confers both legislative and judicial powers on the commission, and is thus repugnant to the Constitution of Mississippi; and
5. That it is void on its face by reason of its inconsistencies and uncertainties.
These several positions will be considered in their order.
1. The provisions of the Charter on which the claim of contract. rests are found in §§ 1,-7, and 12, as follows:
“ Sec. 1. And the said company is hereby authorized and empowered ... to transport, take, and carry property*325 and persons upon said railroad or way by the power and force of steam, of animals, or of any other mechаnical or other power, or any combination of them which the company may choose to apply.”
“ Sec. 7. That the directors shall have full power to make and prescribe such by-laws, rules, and regulations as they shall deem needful and proper touching the disposition and management of the stock, property, estate, and effects of said company, not contrary to this charter or the laws of this State or of the United States; the transfer of shares, the duties and conduct of their officers and servants, touching the election of, and meeting of the directors; and all matters whatsoever which may appertain to the concerns of said company.”
“ Sec. 12. That it shall be lawful for the company hereby incorporated from time to time to fix, regulate, and receive the toll and charges by them to be received for transportation of'' persons or property on their railroad, or way aforesaid, hereby authorized to be constructed, erected,.built, or used, or upon any part thereof.”
From this it is claimed that the State granted to the company, for the full term of its corporate existence, that is to say, forever, the right of managing its own affairs and regulating its charges for the transportation of persons and property, free of all legislative control.
It is now settled in this court that a State has power to limit the amount of charges by railroad companies for the transportation of persons and property within its own jurisdiction, unless restrained by some contract in the charter, or unless what is done amounts to a reg k iion of foreign or inter-state commerce. Railroad Co. v. Maryland,
The cases in which it has been held that a contract was entered into are'equally instructive. Thus in Gordon v. The Appeal Tax Court,
Such being the rule, and such its practical operation, we return to the special provisions of the charter on which this case
Next follows the power of the directors tó make by-laws, rules, and regulations for the management of the affairs of the company, but it is expressly provided that such by-laws, rules, and regulations shall not be contrary to the laws of the State. This we held in Ruggles v. Illinois included laws in force when the charter was granted, and those which came into operation afterwards as well. It is true that the clause which thus limits the power of the directors is found in the middle of the sentence which confers the power, but it clearly was intended to refer to everything that might be done in this way “ touching . . . all matters whatsoever that may appertain to the concerns of said company.” There is nothing here, therefore, which in any manner implies a contract on the part of the State to exempt the company from the operation of laws enacted within the scope of legislative power for the regulation of the business in which it is authorized to engage.
The case turns consequently on § 12, which is, “ that it shall be lawful for the company . . . from time to time to fix, regulate, and receive the toll and charges by them to be received for transportation,” &c. This would have been implied from the rest of the charter if there had been no such provision, and it is argued that, unless it had been intended to surrender the' power of control over fares and freights, this section would not have been inserted. The argument concedes that the power of
This is not in conflict with the judgment of the Supreme Court of Mississippi in Railroad Commission v. Yazoo & Mississippi Railroad Co., in which it was decided that the power had been surrendered in favor of that company because in that charter a maximum of rates-was fixed. In the opinion, a copy of which has been furnished us in advance of its publication in the regular series of reports, the court says distinctly that “ a grant in general terms of authority to fix rates is not a renunciation of the right of legislative control so as to secure reasonable rates. Such a grant évinces merely a purpose to confer
From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretence ’of regulating fares and freights, the State cannot require a railroad corporation to carry persons or property without reward ; neither can it do that which in law amounts tо a taking of private property for public use without just compensation, or without due .'process of law. What would have this effect" we need not now say, because no tariff has yet' been fixed by the commission, and the statute of Mississippi expressly provides “ that in all trials of cases brought for a violation of any tariff of charges, as fixed by the commission, it may be shown, in defence that such tariff so fixed is unjust.”
It is also claimed that the charter contains a contract binding the State to allow the company, at all times and in all ways, to manage its own affairs through its own board of directors, and that the obligation of this contract will be impaired if the provisions of the statute are enforced by the commissioners. As has already been seen, the power of the directors is coupled with a condition that their management shall be in accordance with the laws of the State. This undoubtedly means with such laws as may be constitutionally enacted touching the administration of the affairs of the company. The present statute requires the company, 1, to furnish the commissioner's with copies of its tariffs for all kinds of transportation; 2, to post in some conspicuous place at each of its depots the tariff approved by
The second and third of these requirements relate only to the duty of the company to keep its charges within the limit of the tariff approved by the commissioners without discrimination in favor of or against persons or localities. The first, fourth, and sixth are clearly intended as a means of furnishing the commissioners with the information necessary to enable them to act understandingly in fixing the tariff. Whether under these provisions the company can be required to make a report of or give information about its business outside of Mississippi' is a question we do not now undertake to decide. The second, fifth, seventh, and eighth are nothing more than reasonable police regulations for the comfort, convenience, and safety of those travelling upon the road or doing business with the company in the State.
The commissioners have power, 1, to approve, and if need be to fix the tariff -of"charges for transportation, both of persons and property, by which the company must be governed, and to exercise a watchful and careful supervision over such tariff; 2, to notify the company of the times and places when and where
We conclude, therefore, that the chapter of the company contains no contract the obligation of which is in any way. impaired by the - statute under which the commissioners are to act.
2. There can be ho doubt that each of the States through which the Mobile and Ohio Railroad passes incorporated the company. for the purpose of. securing' the construction of a railroad from Mobile; through Alabama, Mississippi, Tennessee, and Kentucky, to some point near the mouth of the Ohio River, where it would connect with another railroad to the lakes, and thus form a continuous line of inter-state communication between the Gulf of Mexico in the south, and the Great Lakes in the north. It is equally certain that Congress aided in the construction of parts of this line of road so as to establish such a route of travel and transportation. But it is none the less true that the corporation created by each State is for
The commission is in-.expfess'termg-prohibited by the act of' March 15, 1884, from interfering-with the charges of the company for the transportation óf persons or property through Mississippi-from one State to another. The statute makes no mention of person^ or property taken up without the State and .delivered within, nor of such as may be taken up within and carried without. As to this, the only limit on the power of the commissioners is the constitutional authority of the State over the subject. Precisely all that may be done, or all that may not be done, it is not easy to say in advance. The line between the exclusive power of Congress, and the general powers of the State in this particular, is not everywhere distinctly marked, and it is always easier to determine when a case arises whether it falls on one side or the other, than to settle in advance the boundary, so that it may be- -in all respеcts strictly accurate. As yet the commissioners have done nothing. There is, certainly, much they may do in regulating charges within the State, which will not be in conflict with the Constitution of the United States. It is to be presumed they will always act within the limits of their constitutional authority. It will be time enough to consider what may be done to prevent it when the}7 attempt to go beyond.,
3. General statutes regulating the use'of railroads in a State, or fixing maximum rates of charges for transportation, when not forbidden by charter contracts, do not necessarily deprive the corporation owning or operating a railroad within the State of its property without due process of law, within the meaning of the Fourteenth Amendment of the Constitution of the United States, nor take away from the corporation the equal protection of the laws. Munn v. Illinois,
4. The Supreme Court of Mississippi has decided in the cases of Railroad Commission v. Yazoo & Mississippi Railroad Company, and Railroad Commission v. Natchez, Jackson & Columbia Railroad Company, not yet officially reported, that the statute is not repugnant to the Constitution of the State “ in that it creates a commission and charges it with the duty of supervising railroads,” To this we agree, and that is all that need be decided in this case. As was said by the Supreme Court of Mississippi, in the case first referred to above : “ Many questions may arise under it not necessary to be disposed of now, and we leave them for consideration when presented.”
5. It is difficult to understand precisely on what ground we are expected to decide that this statute is so inconsistent аnd uncertain as to render it absolutely void on its face. The statute of Tennessee which was under consideration in Louisville & Nashville Railroad Company v. Railroad Commission of Tennessee, 19 Fed. Rep. 679, is materially different from this in many respects. That case was decided before this statute was passed, and it is not at all unlikely that the legislature of Mississippi made use of the decision in framing their bill so as to avoid some, if not all, of the objections which, in the opinion of the court, were fatal to what had been done in Tennessee. The argument on this branch of the controversy contains much that might have been useful if addressed to the legislature while considering the bill before its final enactment, but we find nothing in it to show that the statute as it now stands is altogether void and inoperative. When the commission has- acted and proceedings are had to enforce what it has done, questions may arise as to the validity of some of the vari
The decree of the Circuit Court is reversed and the cause remanded, with instructions to dismiss the bill.
Dissenting Opinion
dissenting.
This ease and the case against the Illinois Central Railroad Company, argued with it, are unlike that of Chicago, Burlington & Quincy Railroad Co. v. Iowa,
The Mobile and Ohio Railroad Company was chartered on the 3d of February, 1848, by the State of Alabama, with authority to construct and maintain a railroad from the City of Mobile to the west line of that State; towards the mouth of the Ohio River, and'to transport and carry property and persons, under such regulations, as to time and manner, as its board of directors might establish. It was also invested by its charter .with power, “from time to time, to fix, regulate, and receive the toll and charges by them to be received for the transportation of persons and property over the line of railroad hereby authorized to be constructed and completed, or any part thereof.” § 12. The legislature of Mississippi, in the same month, appoved of the Alabama charter — except in certain particulars not important to be here mentioned — and consented to the
The Illinois Central Railroad Company is the lessee of the Chicago, St. Louis and New Orleans Railroad Company.' By an act of the legislature оf Mississippi, of April 18, 1873, the New Orleans, Jackson and Great Northern Railroad Company, owning a line of railroad from New Orleans, Louisiana, to Canton, Mississippi, and the Mississippi Central Railroad Company, owning a line running from the latter place northward to Jackson, Tennessee, were authorized to consolidate into one corporation; the latter to have all the rights, powers, privileges, immunities, and franchises in perpetuity, then conferred upon the constituent companies, or upon either of them. Such consolidation took place under the name of the Chicago, St. Louis and New Orleans Railroad Company, and by an act of February 28, 1878, was ratified. But the same act provided that .it should be of no. force or effect until the debt due the State from the Mississippi Central Railroad-Company was adjusted by the Chicago, St. Louis and New Orleans Railroad Company. Subsequently, by an act approved March 1, 1882, the payment of this debt by the latter company to the State was acknowledged, and the Chicago, St. Louis and Nеw Orleans Railroad Company was declared to be a corporation of Mississippi, “ with perpetual succession, and, as such, is invested with all the rights, powers, privileges, liberties, and franchises conferred by the act to which this is a supplement, and especially the rights and powers .. . . of section 10 of an act entitled ‘ An Act to incorporate the Mississippi Railroad Company,’ approved March 10, 1852.”
The 10th section of the act last named, to the rights and powers conferred by which particular reference was made, is in these words : “ That the president and directors be and they are hereby authorized to adopt and establish such a tariff of
The amount paid to the State by the Chicago, St. Louis and New Orleans Railroad Company, on account of the debt due from the Mississippi Central Railroad Company was $158,-978.82.
It is thus seen that the Mobile and Ohio Railroad Company, and the Chicago, St. Louis and New Orleans Railroad Company, were given by their charters the power tо fix and regulate rates for transportation of persons and property upon their respective roads. This power was, of course, not without limit; for the general grant of the franchises, rights, and privileges enumerated in these charters was attended by the condition, which the law always implies in such cases, that the charges for transportation established by the companies shall be reasonable.
The Mississippi statute of 1881 provides for the appointment of three commissioners, and invests them with the power of establishing — upon the basis of “ just compensation,” and the protection of persons, localities, or corporations against “ unjust discrimination” — a tariff of charged for the transportation of persons and property on any railroad owned or operated in that State. • The commissioners, so appointed, are required, in ascertaining such compensation, “to take into consideration the character and nature of the our vice to be performed, and the entire business of such railroad, together with its earnings from the passenger and other traffic; ” to so revise these tariffs “ as to allow a fair and just return on the value of such railroad, its appurtenances and equipments ; ” and to increase or reduce the rates so established “ as justice to the public and each of said railroad companies may require,” and “ as experience and business operations may show to be just.” Any person, company or corporation, operating a railroad in Mississippi, who fails to conform to the tariff of charges established by the commission, is made liable to a penalty of $500 for each violation, recoverable in the name of the State.
I am of opinion that this statute impairs the obligation of the contract which the State made with these companies, in
It is hardly necessary to discuss the proposition that the right to fix and regulate rates for transportation within the limit of reasonableness was and is one of great practical value to these companies; for, the rates so fixed would have governed the conduct of parties interested in them, unless it was made to appear, affirmatively, and in some legal mode, that they were 'unreasonable. The object of the construction of the roads operated by these companies was, as the bill avers and the opinion of the court admits, to establish a continuous line of interstate communication between the Gulf of Mexico and the Great Lakes of the North. In the accomplishment of that object the entire country took-a deep interest; for Congress, by grants of land and otherwise, gave those enterprises every possible encouragement. Does any one believe that private capitalists would have supplied the money, necessary to establish and maintain these lines of inter-state communication had they supposed that the States through which .the roads were extended reserved the right, by commissioners, to take charge of the whole matter of rates, and abrogate, at ’their pleasurе, such tariffs of charges as might be established by the companies
The court concedes that the power which the State asserts, by the statute of 1884, of limiting and regulating rates, does involve the power to destroy or. to confiscate the property of these companies; and, consequently, it is said, the State cannot compel them to carry persons or property without reward, nor do that which in law would amount to a taking of private property for public use without just compensation. And reference is made to that clause of the statute which provides “ that in all trials of cases brought for a violation of any tariff of charges, as fixed by the commission-, it may be shown in - defence that such tariff so fixed is unjust.” JBut if I do -not misapprehend the effect of the opinion, it means to.declare that where the tariff of charges fixed by the commissioners does- nofc-certainly work the destruction or confiscation of these properties, or amount in law to taking them for public use without just compensation, the charges so established must be accepted bv
In expressing the foregoing views I would not be understood as denying the power of the State to establish a railroad commission, or to enforce regulations — not inconsistent with the essential charter rights of the companies — in reference to the general conduct of their merely local business. My only purpose is to express the conviction that each of thеse companies has a contract with the State whereby it is exempted from absolute legislative control as to rates, and under which it may, through its directors, from time to time, within the limit of reasonableness, establish such rates of toll for the transportation of persons and property as it deems proper— such rates to be respected by the courts and by the public, unless they are shown affirmatively to be unreasonable.
The bill, in my judgment, makes a case that justifies a court of equity in interfering to prevent the commissioners from imposing upon the defendants any such tariff of charges as the statute in question authorizes them to establish in reference to their business exclusively within the State of Mississippi. As the court withholds any expression of opinion as to the validity of the statute when applied to inter-state commerce, that is, to the transportation of persons and property taken up out of the State and put down in the State, or taken up in the State and put down out of the State, I have no occasion to discuss thаt question. For the reasons stated, I dissent from the opinion and judgment of the court in' these cases.
Notes
This dissent applies also to the judgment and opinion of the court in Stone v. Illinois Central Railroad Co., post, 347.
Dissenting Opinion
dissenting.
I concur with Mr. Justice Harlan, that the act of Mississippi impairs the obligation of the contract contained in the charter originaily granted to the Mobile and Ohio Railroad Company
Certainly no one will deny that the right to adopt a rate of charges, subject, as such rate always is, to the condition that they shall be reasonable, was of vital importance to the company. Without that concession no one acquainted with the difficulties, expenses, and hazards of the projected enterprise, can believe that it would have been undertaken. It was certainly the expectation of the constructors of the road that
Under the charter the company con Id make such reasonable discriminations in its charges dependent upon the amount of business done, the character of the material transported, the 'existence of competitive lines or points, as its interest, might suggest, and which, to some extent, are indispensable to the successful management of the business of every railway company. Differences in the bulk-of property of the same weight, differences in value and in liability to breakage or decay, exact different degrеes of care and speed in its transportation, and consequently require and justify different charges. And- all 'experience shows that, where competition by water or otherwise exists, variations in charges must be made from time to time to secure any portion of the business. These considerations must have had their influence with the stockholders when they accepted the charter and undertook the' construction of the road. The act of Mississippi, which the court says is the exercise of a lawful right to interfere with the affairs of the company, never relinquished nor qualified by any stipulation, declares that no discrimination shall be made in the charges of the company in any case. Its language is, that “ any person or corporation engaged in transporting passengers or freight over any railroad in this State, . . . who for his or its
I am aware that this court has held that, unless restrained by expressOontract, the legislature of a State has the right to
Again, the right of the company to appoint all necessary officers, agents, or servants would seem to be essential to secure competent and efficient men for the successful management of its business. New individuals or companies would undertake an enterprise requiring skill, experience, and large expenditures, if those who were to conduct it were not to be selected and controlled by them, but by parties appointed, perhaps, under political influences, and possibly without the requisite knowledge and experience. The efficiency and fidelity of employees would be better assured by leaving their appointment to those interеsted in the judicious management of the business of the company. Indeed, their usefulness and fidelity would seldom be secured in any other way. No one, therefore, can believe that the original stockholders would have accepted the charter and undertaken the work, if this right of appointing those who were to carry out and .manage it when completed was to be withdrawn from them. The act of 'Mississippi is'SO plain an impairment of this essential right, that I should not have supposed there could be any question on the point, did I not find that a majority of my associates are of opinion that it is an entirely constitutional proceeding on the part of the legislature, in no wise interfering with the contract of the company.
I have no doubt that commissioners may, for many purposes, be appointed by the legislature; but I am not prepared to say that the direction and control of the business of the company can, unless a cause of forfeiture or repeal of its charter exists, be taken from it and confided to them, and mоre than its business can be changed from transportation to manufacturing or banking. The right to elect officers to direct and control its affairs, and to pursue the same kind of business for n hich it was
This dissent applies also to the opinion and judgment of the court in Stone v. Illinois Central Railroad Co., post, 347.