# Railroad Commission Cases

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The Railroad Commission Cases, 116 U.S. 307 (1886), is a United States Supreme Court case concerning the power of states to set transportation charges of railroad companies. The Court held that the fixing of freight and passenger rates in railroad tansportation was a permissible exercise of state police power. Warning: template has been deprecated.
United States Supreme Court
116 U.S. 307
Railroad Commission Cases
Argued: January 4, 1886. ---
This is a suit brought by the Farmers' Loan & Trust Company, a New York corporation, to enjoin the railroad commission of Mississippi from enforcing against the Mobile & Ohio Railroad Company the provisions of the statute of Mississippi passed March 11, 1884, entitled 'An act to provide for the regulation of freight and passenger rates on railroads in this state, and to create a commission to supervise the same, and for other purposes.' That act is as follows:
'Section 1. Be it enacted by the legislature of the state of Mississippi, that the track of every railroad in this state is a public highway, over which all persons have equal rights of transportation for passengers and freights on the payment of just compensation to the owner of the railroad for such transportation; and any person or corporation engaged in transporting passengers or freights over any railroad in this state, who shall exact, receive, or demand more than the rate specified in any bill of lading issued by such person or corporation, or who, for his or its advantage, or for the advantage of any connecting line, or for any person or locality, shall make any discrimination, in transportation, against any individual, locality, or corporation, shall be guilty of extortion.'
Sections 2 and 3 relate to the punishment of those so guilty, and their liability in double damages to parties injured. Sections 4 and 5 provide for the appointment of three commissioners, to be known as the 'Railroad Commission of the State of Mississippi,' prescribe their qualifications and tenure of office, fix their salaries, and subject them to penalties and punishment for violation of duty. Section 6 is as follows:
'Sec. 6. Be it further enacted, that it shall be the duty of all persons or corporations who shall own or operate a railroad in this state, within thirty days after the passage of this act, to furnish the commission with its tariff of charges for transportation of every kind; and it shall be the duty of said commission to revise said tariff of charges so furnished, and determine whether or not, and in what particular, if any, said charges are more than just compensation for the services to be rendered, and whether or not unjust discrimination is made in such tariff of charges against any person, locality, or corporation; and when said charges are corrected, as approved by said commission, the commission shall then append a certificate of its approval to said tariff of charges; but in revising or establishing any and every tariff of charges it shall be the duty of said commission to take into consideration the character and nature of the service to be performed, and the entire business of such railroad, together with its earnings from the passenger and other traffic, and shall so revise such tariffs as to allow a fair and just return on the value of such railroad, its appurtenances and equipments, and it shall be the duty of said commission to exercise a watchful and careful supervision over every such tariff of charges, and continue such tariff of charges from time to time as justice to the public and each of said railroad companies may require, and to increase or reduce any of said rates according as experience and business operations may show to be just; and said commission shall accordingly fix tariffs of charges for those railroads failing to furnish tariffs as above required. And it shall be the duty of said railroad companies, or persons operating any railroad in this state, to post at each of its depots all rates, schedules, and tariffs for the transportation of passengers and freights made or approved by said railroad commission, with said certificate of approval, within ten days after said approval, in some conspicuous place at such depot; and it shall be unlawful for any such person or corporation to make any rebate or reduction from such tariff in favor of any person, locality, or corporation which shall not be made in favor of all other persons, localities, or corporations by a change in such published rates, except as may be allowed by the commission; and when any change is contemplated to be made in the schedule of passenger or freight rates of any railroad by the commission, said commission shall give the person or corporation operating or managing said railroad notice in writing at least ten days before such change of the time and place at which such change will be considered.'
Section 7 makes it unlawful for a company to grant reductions or rebates prohibited by the act, and fixes a penalty for so doing. Section 8 allows reduced rates for certain kinds of transportation. Section 9 is as follows:
'Sec. 9. Be it further enacted, that it shall be the duty of said commission to hear all complaints made by any person against any such tariff of rates so approved, on the ground that the same in any respect is for more than just compensation, or that such charges, or any of them, amount to or operate so as to effect unjust discrimination. Such complaint must be in writing, and specify the items in the tariff against which complaint is made. And if it appears to the commission that there may be justice in the complaint, or that the matter ought to be investigated, the commission shall forthwith furnish to the person or corporation operating the railroad a copy of the complaint, together with notice, which said notice shall be served as other legal process is now required by law to be served on railroad companies, that at a time and place stated in the notice that tariff, as to said items, will be revised by the commission; and at such time and place it shall be the duty of the commission to hear the parties to the controversy in person or by counsel, or both, and such evidence as may be offered, oral or in writing, and may examine witnesses on oath, conforming to the mode of proceedings, as nearly as may be convenient, to that required of arbitrators, giving such time and latitude to each side, and regulating the opening and conclusion of any argument, as the commission may consider best adapted to arrive at the truth; and when the hearing is concluded, the commission shall give notice of any change deemed proper by them to be made to the person or corporation operating the railroad: provided, in no instance shall any corporation, railroad, or person be criminally or civilly liable for the making of any charge or discrimination whatever, if the same is not in violation of the tariff of charges or rules and regulations prescribed by the commission.'
Sections 10 and 11 are unimportant in this case. The remainder of the statute is as follows:
'Sec. 12. Be it further enacted, that every person or corporation operating a railroad in this state shall furnish the said commission with all the information required relative to the management of their respective lines, and particularly with copies of all leases, contracts, and agreements for transportation with express, sleeping-car, or other companies to which they are parties.
'Sec. 13. Be it further enacted, that every railroad company shall, within twenty-four hours after the occurrence of any accident to a train, attended with serious personal injury on any portion of its line within the limits of this state, give notice of the same to the railroad commissioners, who, upon information of such accident, may repair or dispatch one or more of their number to the scene of said accident, and inquire into the facts and circumstances thereof, which shall be recorded in the minutes of their proceedings, and embraced in their annual report.
'Sec. 14. Be it further enacted, that the commission shall make annual reports to the governor on or before the first day of January in each year, for transmission to the legislature, of their doings for the year ending on the thirtieth day of September next preceding, containing such facts as will disclose the actual workings of the railway system in this state, and such suggestions as to the general railroad policy of the state as may seem to them appropriate.
'Sec. 15. Be it further enacted, that it shall be the duty of every railroad company, or person operating a railroad in this state, to make quarterly returns of the business of said railroad to the railroad commission of Mississippi, which returns shall embrace all the receipts and expenditures of said railroad, and to be made according to forms furnished by the said railroad commissioners for that purpose.
'Sec. 16. Be it further enacted, that the quarterly returns herein provided shall be made as aforesaid within thirty days after the end of each quarter to which they relate, and any railroad company, or persons operating any railroad in this state, which shall fail or refuse to make the quarterly returns as provided for in this act, shall forfeit to the state of Mississippi fifty dollars for every day of such refusal or neglect.
'Sec. 17. Be it further enacted, that the said quarterly returns shall be sworn to by one or more officers of said company, or of the persons operating the said railroad, who has knowledge of their truth, and any person knowingly swearing falsely to any statement in any of said quarterly reports shall be guilty of perjury.
'Sec. 18. Be it further enacted, that it shall be the duty of the commissioners to inspect the depots of the railroads operated in this state, and see that at least one comfortable and suitable reception-room is provided at each depot for the use and accommodation of persons desiring and awaiting transportation over their line, and any railroad company failing or refusing to provide such room, after sixty days' notice from the commissioners to provide the same, shall be liable to a penalty of not less than fifty dollars for each day they so fail or refuse to provide such room, and said railroad company shall keep at all times in such reception-rooms a bulletin board, which shall show the time of the arrival and departure of trains; and when any passenger train or other train for transporting passengers is delayed, notice of same shall be made on said bulletin board for the information of passengers, stating, as nearly as can be ascertained, the extent of the delay and probable time of arrival.
'Sec. 19. Be it further enacted, that the determination of every matter of said commission shall be in writing, and proof thereof shall be made by a copy of the same, duly certified to by the clerk of said commission; and whenever may matter has been determined by said commission in the course of any proceeding before it relating to the regulation or supervision of any railroad in this state, and coming within the jurisdiction of such commission, proof of the fact of such determination, duly certified as aforesaid, shall be received in all the courts of this state, or before any officers thereof, in all civil cases, as prima facie evidence that such determination was right and proper, and the record of the proceedings of said commission shall be deemed a public record, and shall at all reasonable times be subject to the inspection of the public.
'Sec. 20. Be it further enacted, that said commission, or any one of sai commissioners, may, in the discharge of any of the duties imposed upon them by this act, administer oaths, take affidavits, and summon and examine witnesses under oath, in all matters coming before them; and if any person shall testify or make any false affidavit or oath before said commission, or before any of said commissioners, or before any officers, to any matter coming before said commission, he shall be deemed guilty of perjury, and, upon conviction thereof, shall be punished according to law.
'Sec. 21. Be it further enacted, that all summons for witnesses to appear before said commission, or before any one or more of said commissioners, and notice to persons or corporations, shall be issued by one of said commissioners, and be directed to any sheriff, constable, or marshal, of any city or town, who shall execute the same in his bailiwick, and make due return thereof, as directed therein, under the penalties prescribed by law for a failure to execute and return the process of any court; and if any person, duly summoned to appear and testify before said commission, or before any one or more of said commissioners, shall fail or refuse to appear and testify without a lawful excuse, or shall refuse to answer any proper question propounded to him by said commission, or any of said commissioners, or if any person shall obstruct said commission, or one or more of said commissioners, in the discharge of duty, or shall conduct himself in a rude, disrespectful, or disorderly manner before said commission, or any of them deliberating in the discharge of duty, such person shall be deemed guilty of a misdemeanor, and, upon conviction thereof, shall be fined not less than fifty nor more than one thousand dollars.
'Sec. 22. Be it further enacted, that witnesses summoned to appear before said commission shall be entitled to the same per diem and mileage as witnesses attending circuit court; and witnesses summoned by said commission on its behalf shall be paid out of the state treasury on warrants to be drawn by the auditor, upon the certificate of the commission, showing the amount and items thereof, to which such witness may be entitled; and witnesses summoned for any railroad shall be paid by such railroad.
'Sec. 23. Be it further enacted, that if any railroad company, or person or corporation operating any railroad in this state, shall violate any of the provisions of this act, or the tariff of charges, as fixed by such commission, such company, person, or corporation, shall be liable to a penalty of five hundred dollars for each violation not otherwise provided for; and such penalty may be recovered by an action to be brought in the name of the state of Mississippi in any county where such violation may occur, or injury or wrong be done. The commission shall institute such action through the district attorney of the proper district, and no such suit shall be dismissed without the consent of the court and of said commission; and if any district attorney shall neglect for thirty days after notice to bring any such suit, the commission may direct some attorney at law to bring the same, and his fee therefor shall be fixed by the court, and shall not exceed fifty per cent. of the amount collected; and the district attorney shall not interfere in such suit, and the same shall not be dismissed without consent as aforesaid: provided, 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 defense that such tariff so fixed was unjust.
'Sec. 24. Be it further enacted, that the remedies hereby given shall be regarded as cumulative to the remedies now given by law against railroad corporations, and this act shall not be construed as repealing any statute giving such remedies.
'Sec. 25. Be it further enacted, that the provisions of this act shall apply to and include all persons, firms, and companies, and to all associations of persons, whether incorporated or otherwise, that shall operate a railroad in this state, (street railways excepted.)
'Sec. 26. Be it further enacted, that hereafter the election of railroad commissioners shall be at such time, in such manner, and for such term as may be determined by the legislature.
'Sec. 27. Be it further enacted, that the schedules adopted by the for charges for transportation of persons and freight shall not be enforced against any railroad in this state before the first day of May, A. D. 1884.
'Sec. 28. Be it further enacted, that this act shall take effect and be in force from and after its passage.'
On the fifteenth of March, 1884, the following supplemental act was passed: 'Sec. 1. Be it enacted by the legislature of the state of Mississippi, that the act entitled 'An act to provide for the regulation of freight and passenger rates on railroads in this state, and to create a commission to supervise the same, and for other purposes,' approved March 11, 1884, shall not be so construed as to authorize said commissioners to require bulletin boards to denote the delay of trains noted thereon, or to require the erection of station-houses, in any case where in their judgment the public travel does not make it necessary; nor shall said act be so construed as to require said commission to investigate or call upon any railroad company for rates of charges in transportation or travel from any point outside of this state to points outside of this state, or in any way interfere with such rates of charges.'
On the third of February, 1848, the legislature of Alabama passed an act to incorporate the Mobile & Ohio Railroad Company, with power 'to locate, construct, and finally complete a single, double, or treble railroad or way from some suitable point in the city of Mobile, in a westerly or north-westerly direction, to the west line of this state, towards the mouth of the Ohio river, in such route as shall be deemed most expedient; and to transport, take, and carry property and persons upon said railroad or way by the power and force of steam, of animals, or of any other mechanical or other power, or any combination of them, which said company may choose to apply;' and 'with permission to make any lawful contract with any other railroad corporation in relation to the business of said company, and also to make joint stock with any other railroad corporation.' The immediate government and direction of the affairs of the company was vested in a board of directors, to be chosen by the stockholders, and by section 7 it was provided '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.'
Section 12 is as follows: 'Sec. 12. And be it further enacted, 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.'
On the seventeenth of February, 1848, the legislature of Mississippi passed 'An act to incorporate the Mobile & Ohio Railroad Company.' This act, after reciting the incorporation of the company in Alabama, and setting out that act of incorporation in full, 'the same as printed in Alabama,' and also reciting that Mississipi was 'desirous to aid in accomplishing the object of the said act,' proceeded as follows: 'Section 1. Be it enacted by the legislature of the state of Mississippi, that the railroad described in the above-recited act be extended, in the state of Mississippi, from the Alabama line to the state of Tennessee, in such direction and on such a route as shall be deemed most expedient; and that as to said extension there is granted to the said Mobile & Ohio Railroad Company, when organized, the same rights, powers, and privileges as are granted to it within the state of Alabama by the said act, subject, however, to the same and similar conditions, restriction, modifications, and provisions as are in said act, above recited, contained and set forth, excepting the provision contained in section 15 of said act; and the said act is hereby concurred in and adopted within the state of Mississippi in reference to the said railroad as extended, and in reference to the said Mobile & Ohio Railroad Company, with the exception of that portion contained in section 15, as before stated: provided, that in case of persons absent or unknown, whose lands may be condemned pursuant to sections 7, 8, and 9 of said recited act, the placing of the amount of the damages assessed to the credit of the owner, in the hands of the state treasurer, shall be taken as payment, and on such owner appearing or tendering satisfactory evidence of his claim thereto, such damages shall be paid him by the treasurer on the warrant of the auditor of public accounts.'
The excepted section related to taxation, and as to this a different provision was made in Mississippi from that in the Alabama charter. Power was also given the company to cross the tracks of other railroads in Mississippi, and some slight changes were made in the provision for depositing the amount of damages assessed upon the condemnation of property for the use of the company. Otherwise the charters of the company in these two states were substantially identical.
On the same day, February 28, 1848, the legislature of Tennessee passed 'An act to incorporate the Mobile & Ohio Railroad Company and the Tennessee Central Railroad Company.' This act began as follows:
'Whereas, it appears to this general assembly, from the memorial of Jonathan Emanuel, president, and George N. Stewart, Sidney Smith, Moses Waring, Charles Le Baron, and S. Griffith Fisher, directors, of the Mobile & Ohio Railroad Association, that a company has been organized at Mobile, in the state of Alabama, for the purpose of constructing a railroad from Mobile to the Tennessee river, and from thence to a suitable point near the mouth of the Ohio river, for which purpose said board of president and directors have applied to this general assembly for the passage of such a law as may be necessary to authorize the construction of said road through the state of Tennes see; and whereas, it is deemed a matter of vital importance to this state that a direct communication by railroad to the Gulf of Mexico be established; there fore,
'Section 1. Be it enacted by the general assembly of the state of Tennessee that the said Jonathan Emanuel, president, and the said George N. Stewart Sidney Smith, Moses Waring, Charles Le Baron, and S. Griffith Fisher, directors, and their associates, who shall be the stockholders of said company, and their successors, under the name and style of 'The Mobile & Ohio Railroad Company,' are hereby declared to be a body corporate and politic under the laws of Tennessee, with succession for five hundred years, and a common seal, with capacity to have, receive, and enjoy, to them and their successors, property and estate of whatsoever nature and quality, and the same to alien, transfer, and dispose of, so far as may be necessary to carry into effect the main object of this charter, which is hereby declared to be the construction, use, and maintenance of a railroad from Mobile, in the state of Alabama, to some point on the Mississippi or Ohio river, near the mouth of the Ohio, passing through the state of Tennessee.'
The remainder of the act relates to the powers and privileges of the company in Tennessee.
On the twenty-sixth of February, 1848, the general assembly of Kentucky passed an act 'to authorize the Mobile & Ohio Railroad Company to extend their railroad from the south boundary line of the state of Kentucky to the Mississippi or Ohio rivers,' as follows:
'Section 1. Be it enacted by the general assembly of the common wealth of Kentucky, that the Mobile & Ohio Railroad Company, when formed under the act of the general assembly of the state of Alabama, approved February 3 1848, entitled 'An act to incorporate the Mobile & Ohio Railroad Company, shall be allowed the privilege of making any necessary reconnoissance and survey for the purpose of ascertaining the most eligible route for extending the Mobile & Ohio Railroad to any point upon the Mississippi or Ohio rivers in this state.
'Sec. 2. Be it further enacted, that as soon as said route and point shall be ascertained, the said Mobile & Ohio Railroad Company shall be allowed the right of way for the extension and construction of their said railroad from the Tennessee line to the Mississippi or Ohio rivers, and that they from the Tennessee line to the Mississippi or Ohio rivers, and that they all such restrictions, as are granted, made, and prescribed for the benefit, government, and direction of said Mobile & Ohio Railroad Company within the state of Alabama by the act above described.'
On the twentieth of September, 1850, congress passed 'An act granting the right of way and making a grant of land to the states of Illinois, Mississippi, and Alabama in aid of the construction of a railroad from Chicago to Mobile.' This act provided 'that the said railroad and branches shall be and remain a public highway for the use of the government of the United States, free from toll or other charges,' and 'that the United States mail shall at all times be transported on the said railroad, under the direction of the post-office department, at such price as the congress may by law direct.' These lands were transferred by Alabama and Mississippi to the Mobile & Ohio Railroad Company in 1850 and 1851, and in 1859 congress ratified and confirmed the grants and extended the time for building the road.
The case was heard on demurrer to the bill. The circuit court rendered a decree allowing the injunction, and from that decree this appeal was taken.
John W. C. Watson, for appellants.
E. L. Russell, P. Hamilton, and John A. Campbell, for appellees.
[Argument of Counsel from pages 319-324 intentionally omitted]
WAITE, C. J.

## Notes

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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