Source: https://supreme.justia.com/cases/federal/us/210/187/
Timestamp: 2019-04-22 04:18:21+00:00

Document:
The creation of a board of Railroad Commissioners and the extent of its powers, what the route of railroad companies created by the state may be, and whether parallel and competing lines may consolidate, are all matters which a state may regulate by its statutes, and the state courts are the absolute interpreters of such statutes.
Where the contention of plaintiff in error that a charter right has been impaired by subsequent state action was disposed of by the state court on the nonfederal ground that, if any such right ever existed, plaintiff in error was estopped by its own conduct from asserting it, this Court cannot review the judgment on the alleged federal ground of impairment of the contract.
A decree of a state court requiring a railroad company which does an interstate business to construct its lines within the state in accordance with the provisions of its charter and the directions of the state Railroad Commission is not an interference with interstate commerce because compliance therewith entails expense or requires the exercise of eminent domain.
This is a bill in equity, brought by the State of Mississippi and the Railroad Commission of that state to require the railroad companies to construct their railroad through the county seat of Pontotoc County, State of Mississippi, and to restrain them from abandoning a portion of the narrow gauge railroad formerly operated by the Gulf & Chicago Railroad Company, which ran to the town of Pontotoc.
to Middleton, and including its entire proposed line from Decatur to Jackson, and since the execution of the lease, the Mobile Company has been in control and operation of the narrow gauge road. The Gulf & Chicago Railway Company, in violation of the terms and in disregard of the representations contained in its petition to the Commission, has broadened and standardized the narrow gauge road to a point one mile and a half from the end of the line in Pontotoc County, and is operating the same. The remaining part, which is the most important part of the road, extending through a thickly populated district in the principal portion of Pontotoc, has been abandoned. It was a material consideration, in passing on the petition for consolidation, and the consolidation would not have been approved but for the representation that the company would standardize and broaden the line extending into the town.
and maintaining a depot therein unless prevented by natural obstacles, provided such town or city shall grant the right of way through its limits and sufficient ground for ordinary depot purposes."
The Gulf & Chicago Railway Company is constructing its new line within three miles of Pontotoc without passing through the same. There are no natural obstacles in the way. The citizens stand ready to grant the right of way through the limits of the town and sufficient grounds for depot purposes. In fact, the company owns a right of way through a large part of the town and sufficient grounds for depot purposes. The conduct of the company is in violation of the constitution and in willful disregard of the law and of the order of the Commission and the rights of the public.
The injunction prayed was against the construction of the line of road proposed, and to command the defendant to broaden and standardize the line of road extending through the Town of Pontotoc, and to compel its operation into the said county seat as a part of the line built and to be built from Decatur, Mississippi, to Jackson, Tennessee, and to extend the said line on through to the said county seat, as required by said § 187 of the Constitution of the State of Mississippi, and as required by law and by the order of the complainant, the Mississippi Railroad Commission. General relief was also prayed.
people of the town, prior to the application for consolidation, in a meeting called for that purpose, and, by an overwhelming majority, the position taken by the officers of the companies was acquiesced in and approved. Before the filing of the bill, the companies had located and constructed their line as proposed at such public meeting, had purchased a depot site and erected a handsome and commodious depot on the site, into which it is now operating a standard gauge road. And all of this done before the filing of the bill.
The Railroad Commission made an order in the month of June, 1904, requiring the companies to build a depot on that part of the line of the narrow gauge road since abandoned, and upon the old site of the depot used by that road, and outside of the original Town of Pontotoc, the enforcement of which was enjoined by the United States Circuit Court for the Southern District of Mississippi, which suit is now pending. The Commission is still insisting upon the order and resisting the efforts of the companies to enjoin its enforcement. Such order, it is alleged, is inconsistent with the bill in this case.
The line of road now being constructed by the Gulf & Chicago Railway Company from Decatur to Jackson is being constructed upon a different scheme of grades from that upon which the narrow gauge line was constructed, and necessarily adopted to enable the company to transact its business with the least expense, and with the view of enabling it to successfully meet the competition of other lines. If the grades of the narrow gauge road had been adopted, it would have been practically impossible for the railway company to operate successfully, because of the heavy grades, and would have caused an additional cost of construction of $90,000; would have lengthened the road, increased the fixed charges of maintaining the property, increased the cost of operation, and the cost to the company of transacting all interstate commerce business from Mobile, Alabama, to Tennessee.
"will impose unnecessary and unreasonable burdens upon the interstate commerce, and will violate in letter and spirit § 8, Article I, of the Constitution of the United States. And it is alleged that the southern end of the old narrow gauge road line runs into deep hollows and ends in a cluster of big hills which to cut through would cause great expense and entail long delay; that the line would thereby be lengthened, and it would he hampered and prevented from doing an interstate business in successful competition with other lines."
"absolutely refrain from constructing and operating a certain line of railroad from Decatur, Mississippi, to Middleton, Tennessee, or any other line of railroad from any point whatsoever to any other point passing within three miles of the county seat of Pontotoc County, Mississippi, as the said county seat was originally laid out, marked, and established, without passing through the said county seat."
interests of the railroad, will suffer by reason of the continuance of the temporary injunction."
All other questions were reserved until the final hearing.
The supreme court of the state reversed the decree, reinstated the injunction, and remanded the case to the chancery court. 86 Miss. 172.
After a trial upon the merits, the chancery court entered a decree making the injunction perpetual. The decree was affirmed by the supreme court. 89 Miss. 724. Other facts will appear in the opinion.
The defendant railroad companies, in their motion to dissolve the temporary injunction, urged as grounds thereof, among others, that the injunction imposed a direct and unnecessary burden upon, and was an interference with, interstate commerce and an interference with the carrying of United States mail. To those grounds the court did not apparently respond, and the supreme court did not refer to them in either of its opinions.
Counter-contentions are urged. Plaintiffs in error contend that the federal questions set up by them were evaded. Defendants in error contend that such questions were not involved, and are not now presented for consideration.
"1. What is the true interpretation to be given § 187 of our Constitution, and has it any application to the facts of this litigation? 2. What are the legal rights of the citizens of the Town of Pontotoc and the duties of the appellees as to the narrow gauge road which was in use and active operation before and at the consolidation hereinbefore referred to and at the date of the leasing of its property by one appellee to the other? "
Under the first branch, the court decided that appellants (defendants in error here) could, under the facts of the record, be "afforded no relief by the language of intendment of § 187 of the Constitution." This branch of the case therefore needs no further consideration.
"an express grant of power by the legislature for the two companies to consolidate . . . would have been void as being in contravention of the general statutory inhibition against consolidation or purchase of competing lines of railroads, which cannot, without violating § 87 of the Constitution [of the state], be suspended 'for the benefit of any individual or private corporation or association.'"
And, to sustain this proposition, Yazoo & M. V. Ry. Co. v. Southern Ry. Co., 83 Miss. 746, was cited. It was deduced from § 3587 of the code of the state of 1892 that the statement in the petition that the roads were "in no way parallel or competing lines" were statements of jurisdictional facts "upon the existence of which depended the power of the corporations to consolidate." And, following Lusby v. Railroad, 73 Miss. 364, the court held that the Gulf & Chicago Railroad Company was without power to abandon or relocate any portion of its line, "except on the score of imperious necessity'" -- an exception, it was said, not suggested by the facts of this record. These restraints and duties, it was further said, came to the consolidated corporation.
"and making it a part of the main line of the proposed railroad, and no such obstacles or necessity exist to prevent the said companies from extending their said line from the southern terminus of the said original line . . . , and that the allegations of the bill have been sustained by the proof, and that the complainants are entitled to the relief prayed for."
"the consolidation was conditioned upon the broadening and standardizing the then-existing narrow gauge railroad, and make it a part of the main line of railroad operated by the consolidated corporation."
And it was alone, it was further said, upon the compliance with those conditions, that the Railroad Commission consented to the consolidation, and without which the Commission would have had no power to authorize the consolidation, and without which the consolidation would not have been effected. So insistent was the condition, the court held, in view of the fact that the roads would otherwise be parallel and competing roads, that the legislature could not relieve from it without violating § 87 of the Constitution of the state.
"that the railroads were 'in no way parallel or competing lines,' and expressly pledged themselves to broaden and standardize the then-existing narrow gauge railroad, and to make it a part of the main line operated by the consolidated corporation. . . . And it is upon this ground, and this ground alone, that we now hold that the decree of the chancellor should be affirmed."
"is the core of this contention, and that, and that precisely, is what we deal with and decide in this case -- to-wit, that these appellants [plaintiffs in error here] are bound by their solemn obligation, deliberately entered into, as stated above, to broaden and standardize the narrow gauge railroad and to make it a part of the main line."
We have made these full quotations from the opinions and decrees of the state courts to clearly show what facts were found and what principles of law laid down, that we might estimate the federal questions which it is contended are involved in the case. We have seen that the federal grounds invoked in the motion to dissolve the temporary injunction were that the injunction imposed a direct and unnecessary burden upon, and was an interference with, interstate commerce, and was an interference with the carrying of the United States mails. In the amended answer the same grounds were repeated with more circumstantiality, and § 8, article 1, of the Constitution of the United States, was invoked.
to change the location of the narrow gauge road, embodied in § 8 of the charter of the Ripley Railroad, and in the articles of organization of the Gulf & Chicago Railroad Company."
"In view of the various interests here involved, we direct the appellant to operate the spur track as soon as completed, connecting the main line on the north of the town of Pontotoc."
the companies. And it besides extended the time for compliance with the decree from sixty days to six months. But, aside from this, all of the contentions of the companies (except that based on the "Stegall bill," which will be presently considered) depend upon the power of the Commission, the petition of the companies, and the order of the Commission upon the petition. And these, we think, were all local questions, the decision of which we have no power to review. There is nothing in the statutes or Constitution of the United States which prevents a state from creating a board of railroad commissioners, and what powers the board shall have will depend upon the law creating them, of which the courts of the state are the absolute interpreters. Whether corporations shall remain separate or be permitted to consolidate is a matter of state regulation and provision. It is competent also for a state to prescribe the route of the railroad it creates, and to provide that parallel and competing lines shall remain so. And this power was exercised by the State of Mississippi. It is not exactly clear whether this is disputed by the companies. It is, however, contended that the Commission is a mere administrative agency, and that its only real power or duty in the matter of consenting to consolidations is to determine that such consolidations are not of parallel or competing roads, and that the Commission has nothing whatever to do with the terms of the consolidation. And it is further contended that there was no agreement or contract of any kind between the companies and the Commission, that the order of the Commission was "merely an official finding that the two roads came within the necessary statutory requirements," and that the attempt of the supreme court to base its decision and decree upon the ground that the petition and order constituted a contract binding upon the plaintiffs in error was a "mere pretext, intended to avoid the determination of the federal questions arising in the case, and to place its decision on a nonfederal ground." We cannot assent to this view. The power of the Commission and the effect of its order were necessarily presented by the case.
They were grounds of suit. They became, therefore, the immediate and primary questions to be decided. The power of the Commission and the effect of its order, depended upon the statutes of the state, and of them, as we have said, the supreme court is the absolute interpreter. The matter is exceedingly simple, and is best explained by the reference to the opinion of the supreme court of the state. The court declared that the roads, but for their consolidation, would have been parallel and competing roads, and, in order to make their consolidation -- in order to give the Commission power to consent to their consolidation -- the companies represented that the roads were not parallel and competing. Of course, they would not be if they were made parts of one line. And it was represented that they would be made parts of one line -- to be made so by the broadening of the narrow gauge road, not by its abandonment in whole or in part. Upon this representation -- upon this condition -- the consent of the Commission was invoked and secured.
Much more discussion is unnecessary. It is enough to add to that which we have said that the decree of the supreme court does not work an interference with, or cast a direct burden upon, interstate commerce. The case of the Illinois Central R. Co. v. Illinois, 163 U. S. 142; Cleveland &c. R. Co. v. Illinois, 177 U. S. 514, and Mississippi Railroad Commission v. Illinois Central R. Co., 203 U. S. 335, cited by the companies to sustain their contentions, are not apposite. In those cases, there was an interference with interstate trains for local purposes, though local needs had been adequately supplied. In the case at bar, there is the insistence of the operation of a particular road, which the companies themselves selected or represented that they had selected. That compliance will entail expense or require the exercise of eminent domain will not make it a burden upon interstate commerce. Wisconsin &c. R. Co. v. Jacobson, 179 U. S. 287. Besides, the comparative expense of roads we must assume was considered when the petition to the Commission was made.
It is further contended by the companies that they had the right, under § 8 of the charter of the Ripley Railroad Company, to change the location of its line through the Town of Pontotoc, and that the charter constitutes a contract which is impaired, it is further urged, by the laws creating the Railroad Commission, as interpreted by the supreme court of the state. Section 8 of the charter provides that, for the purpose of making the railroad provided for in § 2, "or repairing or changing it afterwards," the railroad shall have rights of entering upon adjoining land, etc., upon making compensation to the owners. What power this section confers may be open to dispute. It may be said that the right of "repairing or changing" the railroad does not give the power to abandon it. However, the supreme court did not pass upon the meaning of § 8. The court said if that section gave the companies the power to change the line of the narrow gauge road as they desired, they waived it, and are estopped to revoke it by their obtaining the consent of the state through its Railroad Commission to broaden and standardize that line through its entire length. This was a question for the supreme court to decide. It was fairly presented to the court. We cannot question the motives of its judgment; indeed we cannot say that we dissent from it. At any rate, it is not reviewable. Eustis v. Bolles, 150 U. S. 361; Weyerhaueser v. Minnesota, 176 U. S. 550; Hale v. Lewis, 181 U. S. 473; Schaefer v. Werling, 188 U. S. 516.
"denying the obligation of this contract, is either (a) a law impairing the obligation of a contract; or (b) a denial to the plaintiffs in error of the equal protection of the laws; or (c) the taking of their property without due process of law, in violation of the Fourteenth Amendment to the Constitution of the United States."
"So far as the Stegall bill is concerned, it is perfectly obvious, as already held in the former opinion, that this special act, which was in substance for the benefit of this particular corporation, was, under the general statute laws which we have just referred to with respect to consolidation, palpably and manifestly violative of § 87 of the Constitution, and plainly null and void."
This conclusion is attacked, and our construction is invoked of the constitutional provision against that made by the supreme court of the state.
they assert rights under the "Stegall bill," but in that they present a very common case, within the exclusive jurisdiction of the state court.

References: § 187
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 § 3587
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 § 87