Source: https://supreme.justia.com/cases/federal/us/161/677/
Timestamp: 2019-04-20 08:24:24+00:00

Document:
A power given in a charter of a railroad to connect or unite with other roads refers merely to a physical connection of the tracks, and does not authorize the purchase, or even the lease of such roads or road, or any union of franchises.
The several statutes of Kentucky and of Tennessee relating to the Louisville and Nashville Railroad Company, which are quoted from or referred to in the opinion of the court, confer upon that company no general right to purchase other roads, or to consolidate with them.
The union referred to in those statutes is limited to a union with a road already connected with the Louisville and Nashville by running into the same town, and has and could have no possible relation to the acquirement of a parallel or competing line.
The third section of the Kentucky act of 1856 reenacting the Tennessee act of 1855, and providing that the Louisville and Nashville Company may "from time to time extend any branch road and may purchase and hold any road constructed by another company" did not confer a general power to purchase roads constructed by other companies regardless of their relations or connections with the Louisville and Nashville road.
A contemporaneous construction of its charter which ratified the purchase of a few short local lines does not justify the company in consolidating with a parallel and competing line between its two termini with a view of destroying the competition which had previously existed between the two lines.
The Chesapeake, Ohio, and Southwestern Railroad Company was never vested with the power to consolidate its capital stock, franchises, or property with that of any other company owning a parallel or competing line. If, from reasons of public policy, a legislature declares that a railway company shall not become the purchaser of a parallel or competing line, the purchase is not the less unlawful because the parties choose to let it take the form of a judicial sale.
Whatever is contrary to public policy or inimical to the public interests is subject to the police power of the state, and is within legislative control, and, in the exertion of such power, the legislature is vested with a large discretion which, if exercised bona fide for the protection of the public, is beyond the reach of judicial inquiry.
"no railroad, telegraph, telephone, bridge or common carrier company shall consolidate its capital stock, franchises or property, or pool its earnings, in whole or in part, with any other railroad, telegraph, telephone, bridge or common carrier company owning a parallel or competing line or structure, or acquire by purchase, lease or otherwise, any parallel or competing line or structure, or operate the same, nor shall any railroad company or other common carrier combine or make any contract with the owners of any vessel that leaves or makes port in this state, or with any common carrier, by which combination or contract the earnings of the one doing the carrying are to be shared by the other not doing the carrying,"
is a legitimate exercise of the police power of the state, and forbids the consolidation between the Louisville and Nashville Company and the Chesapeake, Ohio and Southwestern Company, which is the subject of controversy in this suit, at least so far as the power to make it remains unexecuted.
This was a bill in equity, styled a "petition," originally filed by the Commonwealth of Kentucky against the Louisville & Nashville Railroad Company (hereinafter called the L. & N. Co.), the Chesapeake, Ohio & Southwestern Railroad Company (hereinafter called the Chesapeake Co.), and several subordinate corporations tributary to the latter, to enjoin the L. & N. Co. (1) from acquiring the control of, or operating, the parallel and competing lines of railroad known as the Chesapeake, Ohio & Southwestern System, (2) from acquiring or operating the Short Route Railway Transfer Company, a belt line in Louisville, and the Union Depot in Louisville, connected therewith, and also (3) to enjoin the Chesapeake, Ohio & Southwestern System from selling out to, or permitting its roads to be operated by, its competitor, the L. & N. Co.
"SEC. 201. No railroad, telegraph, telephone, bridge or common carrier company shall consolidate its capital stock, franchises or property, or pool its earnings, in whole or in part, with any other railroad, telegraph, telephone, bridge or common carrier company owning a parallel or competing line or structure; or acquire, by purchase, lease or otherwise, any parallel or competing line or structure, or operate the same, nor shall any railroad company or other common carrier combine or make any contract with the owners of any vessel that leaves or makes port in this state, or with any common carrier, by which combination or contract the earnings of the one doing the carrying are to be shared by the other not doing the carrying."
L. & N. Co. was endeavoring to acquire the capital stock, interest in real property and mortgage securities of the other defendant companies, in order to obtain control, and ultimately purchase at judicial sale, and become the owner of, their franchises and property.
The answer denied the allegation in the form as made, but contained an affirmative statement that the purchase of the stock and securities referred to had already been consummated, and in effect admitted that the L. & N. Co. intended to purchase the franchises and properties at judicial sale.
"that the president and board of directors of said company are hereby vested with all powers and rights necessary to the construction of a railroad from the City of Louisville to the Tennessee line in the direction of Nashville, the route to be by them selected and determined, not exceeding sixty-six feet wide, with as many sets of tracks as they may deem necessary, and that they may cause to be made contracts with others for making said railroad or any part of it."
"that it shall be lawful for said Louisville and Nashville Railroad Company to unite their road with any other road connecting therewith upon such terms and conditions as may be agreed upon between the said Louisville and Nashville Railroad Company and such other company as they may desire to unite their said road with."
"An act to charter the Louisville and Nashville Railroad Company, and the several acts amending said act passed by the Legislatures of Kentucky and Tennessee,"
contained shall be construed to prevent the Louisville and Nashville Railroad Company from admitting branch roads to connect with it at any point or points to be agreed upon between said company and those who have or may subscribe stock for the construction of any branch road. The stock subscribed and the means created to construct such separate branch shall be faithfully applied to that purpose, and said company is hereby vested with the power and the right to issue its bonds under the provisions of this act to obtain means to construct and equip any branch road, the bonds to express on their face the purpose for which they were executed, and to secure their payment may execute a deed of trust, or mortgage, for payment of which the rights, credits, profits, property and franchise, procured for said branch by the use of its means, shall alone be made liable. The credit, rights, or profits of the main stem shall not be used to create means to construct, or be made liable for any debt or liability created to construct, branch roads, nor shall the rights, credit, property, and profits of any branch road be used to create means to construct, or made liable for any debt or liability created to build the main stem, and with a view to such liabilities and profits, said company shall keep separate accounts, exhibiting the stock, property and debts of the main road, and each separate branch."
and may purchase and hold any road constructed by another company, or may agree on terms to receive the cars of other roads on their said road, but shall charge for the same the usual freight."
"SEC 1. That all charters and grants of or to corporations, or amendments thereof, and all other statutes shall be subject to amendment or repeal at the will of the legislature unless a contrary intent be therein plainly expressed, provided that whilst privileges and franchises so granted may be changed or repealed, no amendment or appeal shall impair other rights previously vested. . . ."
At this time and up to September, 1856, the L. & N. Co. owned only a short piece of road, thirty-one miles in length, extending from Louisville southwardly to Lebanon Junction. Up to September, 1857, it owned only forty-five miles; to September, 1858, seventy-two miles; in 1859, only one hundred and ten miles, and not till 1860 did it carry its road to Nashville, one hundred and eighty miles. About the same time was constructed a branch road from a point about seven miles south of Bowling Green to the state line, which has since been extended, and is now owned and operated by it, to Memphis, Tennessee. Subsequently it purchased, and now owns, a road known as the Evansville, Henderson & Nashville Railroad, which extends from Edgefield, Tennessee, on its main line, ten miles north of Nashville, by way of Hopkinsville, Kentucky, to Henderson, and thence across the Ohio River to Evansville, Indiana. It also owns and operates various branches in the State of Kentucky that diverge from the main line eastwardly, as well as the Kentucky Central Railroad, extending from Cincinnati southward, and certain branches thereof.
Of the roads constituting the Chesapeake, Ohio & Southwestern System, the first one extended from Paducah to Elizabethtown, and was subsequently extended from Cecilia Junction, six miles from Elizabethtown, to Louisville, whereby a continuous line was formed from Louisville to Paducah, independent of the L. & N. road. But by a subsequent lease, amounting practically to a purchase of a road from Paducah to Memphis, the Chesapeake Company became, about 1881, the owner of a connected, continuous, and independent railroad from Louisville, by way of Cecilia Junction and Paducah, to Memphis. It also has an interest in and control of several other railroads, bearing the name of, and nominally held by, the companies that built them, one of which is termed the "Short Route Railway," extending from Preston Street in Louisville through the depot at Seventh and Water Streets to Twelfth Street, where it connects with the main line.
Upon a hearing of the case upon pleadings and proofs, a decree was entered by the Jefferson Circuit Court in favor of the commonwealth, enjoining the proposed agreement for consolidation, which decree was subsequently affirmed by the Court of Appeals of Kentucky. 31 S.W. 476.
This case turns to a certain extent upon the principles just announced in Pearsall v. Great Northern Railway Company, ante, 161 U. S. 646, although it differs from that case in the fact that the charter of the L. & N. Co. contains no reserved power to alter or amend, as well as in several other minor particulars.
was limited in its character, and authorized the company only to construct a railroad from Louisville to the Tennessee line, in the direction of Nashville, with as many tracks as might be deemed necessary but with no power to extend its lines or to purchase, lease, or consolidate with other roads.
By the Act of March 7, 1854, the company was given power to unite their road with any other road connecting therewith upon such conditions as the two companies might agree upon. As we have frequently held that a power to connect or unite with another road refers merely to a physical connection of the tracks, and does not authorize the purchase or even the lease of such road, or any union of their franchises, it is evident that this act is no authority for the proposed consolidation. Atchison, Topeka &c. Railroad v. Denver & New Orleans Railroad, 110 U. S. 667; Pennsylvania Co. v. St. Louis, Alton &c. Railroad, 118 U. S. 290; Oregon Railway v. Oregonian Railway, 130 U. S. 1; St. Louis Railroad v. Terre Haute Railroad, 145 U. S. 393; Commissioners v. Railroad Co., 50 Ind. 85, 110. The important power to purchase or consolidate with another line cannot be inferred from any such indefinite language as "to unite or connect with such road." The union referred to in this act is also limited to a union with a road already connected with the L. & N. Co. by running into the same town, and could have no possible relation to the acquirement of a parallel or competing line. We ordinarily speak of two roads as connecting when they have stations in the same city, in which case authority is given by this act to make a mechanical union between the tracks of the two companies.
The thirteenth section of the Tennessee act, incorporated into the first section of the Kentucky act, also authorized the company to permit branch roads to connect with it at any points to be agreed upon between the company and the stockholders of the branch road. It also authorized the issue of bonds to obtain the means to construct and equip any branch road, and provided that the credits and profits of the main stem should not be used for such purpose, nor the property and profits of any branch road be used to build the main stem. As this section, however, was merely limited to branch roads, the L. & N. Co. is forced to rely for its authority to acquire the control of the Chesapeake Co. upon its power "to purchase and hold any road constructed by another company."
The Court of Appeals of Kentucky held that the whole section, taken together, indicated that the power to purchase and hold any road constructed by another company referred to branch roads, which, by a previous clause of the same section, the L. & N. Co. was authorized to construct, and that this was also further manifested by the power given to "agree on terms to receive the cars of other roads on their said road."
Upon the other hand, the company insists that the power to purchase and hold other roads is not only unlimited and extends to all other roads built or to be built, although parallel and competing lines, but that it constitutes an irrevocable contract which a subsequent legislature is powerless to impair.
Bailey v. Magwire, 22 Wall. 215; Slidell v. Grandjean, 111 U. S. 412; Belmont Bridge v. Wheeling Bridge, 138 U. S. 287.
At this time (January, 1856), the only railroads in the State of Kentucky in operation were from Louisville eastwardly to Lexington, and one from Lexington northwardly by way of Paris to Covington. There was no road running into southern or western Kentucky, or southwardly from Louisville, except the L. & N. Co.'s road, as far as it had gone. While the General Assembly was not only willing but anxious that this company should have liberal and broad powers to aid it, the question of parallel or competing lines had probably not entered into the minds of the legislators as a contingency to be provided against.
(1) The language of the section is that the "company may, under the provisions of the thirteenth section of this act" (referring to the thirteenth section of the Tennessee act, reenacted), "from time to time extend," by its own construction, "any branch road." Now, as before observed, the thirteenth section of the Tennessee act refers only to branch roads, the cost of which was to be a charge or mortgage upon the branch line, and not upon the main stem, and it seems reasonable to infer that the cost of whatever roads were built or purchased under it were intended to be a charge upon the branch only, and not upon the main line. If the limitation "under the thirteenth section" were held to be applicable only to that part of the third section which allows extensions of branch lines, it would result that if the company constructed a branch road, its cost would be a charge on the branch line, and not upon the main line, but if it should purchase an independent line, the cost could be made a charge upon the main line.
by another company. The rule, noscitur a sociis, applied to this case, would undoubtedly limit the power to purchase, under the general clause, to such roads as the company was authorized to build under the preceding and more special clause. There is no reason why a power to build should be limited to branch roads, while the power to purchase should be so unlimited as to authorize the company to absorb parallel or competing lines, either within or without the state. Additional support for this construction is also found in the concluding words of the section empowering the company "to agree on terms to receive the cars of other roads on their said road." This would indicate an intention to permit the company to receive upon its main line the cars of other roads constructed or purchased as feeders to that line, but would scarcely be applicable to the cars of competing or parallel roads, which would seldom be required to be taken upon their line.
"where companies such as these are, being parallel and competing, claim that authority to consolidate has been granted to them, they must be able to point to words in the statute which admit of no other reasonable construction, for it will not be assumed that the lawmaking power has authorized the creation of a monopoly so detrimental to the public interest."
"the purchase of a rival railroad is (not to speak of public policy) foreign to the objects for which the defendant was incorporated. Nor can the purchase be regarded as within the authority given by the defendant's charter to build lateral or branch roads. . . . As a purchase with a view to extinguishing competition, the transaction is clearly ultra vires."
Defendant, however, further urges in support of its assumed rights under the third section of the charter of 1856 a contemporaneous construction by the parties in interest under which several lines were purchased which ran parallel to some of its own branches, and one of which, known as the "Cecilia Branch," about fifty miles in length, running substantially parallel to its main line, which it purchased and held for a short time and then sold to the Chesapeake Co. These, however, were local lines which either ran parallel to the branches of the L. & N., such as the Owensburg & Nashville and the Bardstown Branch, or an extension of its main line, such as the Louisville, Cincinnati & Lexington, running from Louisville to Cincinnati, or a short line like the Cecilia Branch, running parallel to the main line; yet, as the terminus at one end or the other was in most cases different, it can hardly be said that any of these were competing lines or that their purchase showed such an acquiescence on the part of the state as to estop it from opposing the purchase of a through line from Louisville to Memphis by the way of Paducah -- a line which connects the principal termini of the L. & N. Co. by a road substantially parallel, and no part of which is more than fifty miles from the corresponding part of the L. & N. Putting the broadest construction upon what was actually done, it amounts to no more than that the company made several purchases of local lines in which the state acquiesced. That the state may have seen fit in particular cases to ratify the acquisition of local lines parallel to certain branch lines of the main road does not argue that it intended to approve the purchase of parallel and competing through lines, especially in view of the Act of June 22, 1858, which limited the power to consolidate or lease to roads so connected as to form a continuous line.
Indeed, these acquisitions appear to have been deemed so little in contravention of the public policy of the state that the General Assembly did not hesitate to confirm them by special acts, and to receive taxes upon them as part of the L. & N. system.
"A power is frequently yielded to merely because it is claimed, and it may be exercised for a long time in violation of the constitutional prohibition without the mischief which the Constitution was designed to guard against appearing, or without anyone's being sufficiently interested in the subject to raise the question. But these circumstances certainly cannot be allowed to sanction a clear infraction of the Constitution."
it purchased the road from Louisville to Cecilia Junction, which was held only a short time, and then sold to the Chesapeake, Ohio & Southwestern Company."
That the lines proposed to be consolidated are parallel and competing is evident from an inspection of the map, since both connect the two important cities, Louisville and Memphis, which constitute their termini, and are natural competitors for the traffic from the Southwestern to the Northeastern states by way of Cincinnati, as well as that in the opposite direction. The object of the consolidation is obviously to enable the L. & N. to obtain a complete monopoly of all the traffic through the western half of the state. Conceding that that part of the Chesapeake line which ran from Elizabethtown to Paducah was originally a branch line of the L. & N., and might have been acquired as such under section 3 of the act of 1856, it ceased to be such after the Cecilia Branch was acquired and the line was extended from Paducah to Memphis. It then became a parallel and competing line within the meaning of the Constitution.
In reply to the argument that millions of dollars have been invested in the securities of the company upon the faith of what was supposed to be its admitted powers, and that its capital stock of $1,500,000 in 1856 has expanded to $51,000,000, it is sufficient to say that in making such investments, capitalists were bound to know the authority of the company under its charter, and to put the proper interpretation upon it, and that we are not at liberty to presume that investments were made upon the faith of powers that do not exist, and, if they were, the commonwealth is not bound to respect investments made under a misapprehension of the law. Indeed, the argument proves too much, and would justify the inference that capitalists put their money into the road upon the assumption that it had been given irrevocable right to absorb to itself every road which might thereafter be constructed within the limits of the commonwealth.
"It is unnecessary, however, to express a definitive opinion upon the question whether a contract between these parties was beyond the corporate powers of the plaintiff, because, as held by the decisions of this Court already cited, a contract beyond the corporate power of either party is as invalid as if beyond the corporate powers of both, and the contract in question was clearly beyond the corporate powers of the defendant."
See also Thomas v. Railroad Co., 101 U. S. 71; Oregon Railway v. Oregonian Railway Co., 130 U. S. 1; Pennsylvania Railroad v. St. Louis, Alton &c. Railroad, 118 U. S. 290; Central Transportation Co. v. Pullman's Car Co., 139 U. S. 24.
The Chesapeake Co. was incorporated under an act of the General Assembly of Kentucky, passed in 1881 (Acts 1881, p. 258), the ninth section of which declares that the corporation should be "governed by any general law enacted by the Legislature of this state in regard to consolidation with parallel or competing lines." So that although organized prior to the adoption of the Constitution of 1891, it became subject at once, and as soon as said constitution was adopted, to its provision declaring that no railroad should consolidate its capital stock, franchise, or property with that of any other owing a parallel or competing line or structure.
application to judicial or involuntary sales, where the property is seized upon to satisfy a debt of the corporation.
We do not understand, however, that the fact that a purchase is made at a judicial sale confers upon the purchaser any right he is forbidden to acquire if the purchase had been made at private sale. If, from reasons of public policy, the legislature declares that a railway shall not become the purchaser of a parallel or competing line, the purchase is not the less unlawful because the parties choose to let it take the form of a judicial sale. A person who, by reason of any statutory disability such as infancy, lunacy, marriage, or otherwise, is incompetent to buy at private sale is not less incompetent from becoming the purchaser at a judicial sale. The prohibition is not upon the power of the court foreclosing the mortgage to order a judicial sale of the property, but upon its power to confirm a sale made to a parallel or competing road. The allegation of the bill in this connection is that suits have been filed upon claims against the several companies interested, with the object of having a judicial sale of their property, so that the L. & N. Co. may purchase the property in its own name, or in the name of some new company or companies organized by it, or in which it shall have a controlling interest. It is true, as was observed in Pearsall v. The Great Northern, that the stockholders of the L. & N. Co. may individually become the purchasers of the Chesapeake Co. at a judicial sale, and may organize a new corporation; but it would still be a corporation separate and distinct from that of the L. & N. Co. The inhibition of the constitution is not against the sale to individuals, though they may chance to be stockholders in a competing line, but against the acquisition by a railway, in any form, of a parallel or competing line. If this could be evaded by going through the form of a judicial sale, the constitutional provision would be of no value.
"all charters and grants of or to corporations, or amendments thereof, and all other statutes, shall be subject to amendment or appeal at the will of the legislature, unless a contrary intent be therein plainly expressed."
The third section of this act provided that the act should apply only to "charters and acts of incorporation to be granted hereafter, and that this act shall take effect from its passage." The argument is that, as this act was given immediate effect, while the former act, under a general law of the state, did not take effect until two months from the time it was approved by the governor, the Act of February 14th was in reality the prior act, and the charter of January 17th was in fact granted thereafter within the meaning of the third section of the Act of February 14th.
The answer of the defendant to this was that the thirteenth section of the Tennessee act of 1855, which was reenacted in the first section of the Kentucky Act of January 17, provided "that this act shall take effect from and after its passage." If the adoption verbatim of this Tennessee act by the Kentucky Legislature was sufficient to give the Kentucky act immediate effect, then, undoubtedly, the Act of February 14 was a subsequent act, and did not apply to the charter of January 17. Upon the other hand, if the reenactment of the thirteenth section of the Tennessee act was not intended to give the Kentucky charter immediate effect, then this charter did not become operative until March 17, and thereby became subject to the reservation statute of February 14, which did take immediate effect. This question was elaborately argued at the bar, but, for the reasons hereafter stated, we do not consider it necessary to express a decided opinion upon the point.
consolidation of the stock, franchises, or property, as well as the purchase and lease of parallel and competing lines. Unless this section impairs the obligation of the contract contained in the charter, it operates as a repeal of any power that may possibly be deduced from such charter to purchase, lease, or consolidate with any parallel or competing line. In this particular, the case differs from that of Pearsall v. Great Northern Railway, just decided, only in the fact that the charter of the Great Northern, while conferring a power to consolidate with other roads in much clearer and more explicit language than was used in the L. & N. charter, also contained in section 17 the reservation of a power to amend in any manner not destroying or impairing the vested rights of the corporation. The opinion in that case dealt largely with the question whether a subsequent act of the legislature taking away this power so long as it was unexecuted, and so far as it applied to parallel or competing lines, impaired a vested right. Our conclusion was that it did not.
We regard the issue presented in this case as involving practically the same question. While there is no general reservation clause in the charter of the L. & N. Co., we think, for the reasons stated in the Pearsall case, that, under its police power, the people, in their sovereign capacity, or the legislature, as their representatives, may deal with the charter of a railway corporation so far as is necessary for the protection of the lives, health, and safety of its passengers or the public, or for the security of property, or the conservation of the public interests, provided, of course, that no vested rights are thereby impaired. In other words, the legislature may not destroy vested rights, whether they are expressly prohibited from doing so or not, but otherwise may legislate with respect to corporations, whether expressly permitted to do so or not. While the police power has been most frequently exercised with respect to matters which concern the public health, safety, or morals, we have frequently held that corporations engaged in a public service are subject to legislative control so far as it becomes necessary for the protection of the public interests. In the case of Munn v.
"Property does become clothed with a public interest when used in a manner to make it of public consequence and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he in effect grants to the public an interest in that use, and must submit to be controlled by the public for the common good to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use, but, so long as he maintains the use, he must submit to the control."
the removal of grade crossings; in Commonwealth v. Alger, 7 Cush. 53, to the establishment of harbor lines, beyond which landowners shall not extend their wharves, and in Eagle Insurance Co. v. Ohio, 153 U. S. 446, to a requirement that insurance companies make returns to the proper state officers of their business conditions, etc., notwithstanding the company be organized under a special charter which did not in terms require it to make such return.
"if the legislative department of a government, charged with the duty of enacting such laws as may promote the health, the morals, and the prosperity of the people, might not, when unrestrained by constitutional limitations upon its authority, provide by reasonable regulations against the misuse of special corporate privileges which it has granted and which could not, except by its sanction, express or implied, have been exercised at all."
It was further held that the establishment against such a corporation before a judicial tribunal that it was insolvent, or that its condition was such as to render its continuance in business hazardous to the public or that it had exceeded its corporate powers, or that it had violated the rules, restrictions, or conditions prescribed by law, constituted a sufficient reason for the state which created it to reclaim the franchises and privileges granted to it.
the Northwest, while Cincinnati is the southern outlet of the traffic of the Northeastern states and the lower Lakes. Another familiar instance is that of the three north and south railways through the State of Connecticut -- one from Bridgeport to Pittsfield, in Massachusetts, another from New Haven to Springfield, and another from Norwich to Worcester. These are strictly parallel lines, but in only a limited sense competing, since they are between different termini and each is required for the trade of its own section of the state. Even in the present case, the competition is mostly confined to the through traffic. Considerations of this kind may induce legislatures, in particular instances, to permit the consolidation of parallel roads without intending thereby to relinquish their right to forbid the consolidation of such parallel lines as are in fact competing.
that a wise policy forbids the legislative body to divest itself of the power to enact laws for the preservation of health and the repression of crime."
To the same effect are Boyd v. Alabama, 94 U. S. 645; Beer Co. v. Massachusetts, 97 U. S. 25.
There are doubtless cases where the police power has been invoked to justify acts of the legislature which were dictated to a certain extent by local interests, or with the effect of unduly burdening or interfering with foreign or interstate commerce. Within this category are laws levying taxes upon alien passengers arriving from foreign ports, for the use of hospitals, The Passenger Cases, 7 How. 283; requiring a bond to be given for every such passenger to indemnify the state against expense for the relief of support of the person named in the bond, Henderson v. New York, 92 U. S. 259, even though such bonds be limited to lewd and debauched women, Chy Lung v. Freeman, 92 U. S. 275; prohibiting the driving or conveying of foreign cattle into the state between certain dates, Railroad Co. v. Husen, 95 U. S. 465; taxing persons from other states engaged in selling or soliciting the sale of liquors, to be shipped into the state from places without it, without imposing a tax upon similar agents for manufacturers within the state, Walling v. Michigan, 116 U. S. 446; Welton v. Missouri, 91 U. S. 275; statutes requiring inspection, before slaughtering, of cattle, sheep, and swine designed for slaughter for human food, so far as they apply to foreign meats, Minnesota v. Barber, 136 U. S. 313; a similar statute prohibiting the sale of meat from animals slaughtered 100 miles or more from the place at which it was offered for sale unless previously inspected by local inspectors, Brimmer v. Rebman, 138 U. S. 78; and finally to statutes requiring a license, under onerous conditions, from the agents of foreign express companies, Crutcher v. Kentucky, 141 U. S. 47.
cases, the general rule holds good that whatever is contrary to public policy or inimical to the public interests is subject to the police power of the state, and within legislative control, and in the exertion of such power the legislature is vested with a large discretion, which, if exercised bona fide for the protection of the public, is beyond the reach of judicial inquiry.
5. But little need be said in answer to the final contention of the plaintiff in error, that the assumption of a right to forbid the consolidation of parallel and competing lines is an interference with the power of Congress over interstate commerce. The same remark may be made with respect to all police regulations of interstate railways. All such regulations interfere indirectly, more or less, with commerce between the states in the fact that they impose a burden upon the instruments of such commerce and add something to the cost of transportation, by the expense incurred in conforming to such regulations. These are, however, like the taxes imposed upon railways and their rolling stock, which are more or less, according to the policy of the state within which the roads are operated, but are still within the competency of the legislature to impose. It is otherwise, however, with respect to taxes upon their franchises and receipts from interstate commerce, which are treated as a direct burden. There are certain intimations in some of our opinions which might perhaps lead to an inference that the police power cannot be exercised over a subject confined exclusively to Congress by the federal Constitution. But while this is true with respect to the commerce itself, it is not true with respect to the instruments of such commerce.
constituting a regulation of it within the meaning of the Constitution, . . . and it may be said generally that the legislation of a state not directed against commerce or any of its regulations, but relating to the rights, duties, and liabilities of citizens and only indirectly and remotely affecting the operations of commerce, is of obligatory force upon citizens within its territorial jurisdiction, whether on land or water or engaged in commerce foreign or interstate, or in any other pursuit."
It has never been supposed that the dominant power of Congress over interstate commerce took from the states the power of legislation with respect to the instruments of such commerce, so far as the legislation was within its ordinary police powers. Nearly all the railways in the country have been constructed under state authority, and it cannot be supposed that they intended to abandon their power over them as soon as they were finished. The power to construct them involves necessarily the power to impose such regulations upon their operation as a sound regard for the interests of the public may seem to render desirable. In the division of authority with respect to interstate railways, Congress reserves to itself the superior right to control their commerce and forbid interference therewith, while to the states remains the power to create and to regulate the instruments of such commerce so far as necessary to the conservation of the public interests.
to purchase, then, is derivable from the state, the state may accompany it with such limitations as it may choose to impose. It results, then, from the argument of the appellant that if there be any interference with interstate commerce, it is in imposing limitations upon the exercise of a right which did not previously exist, and hence, if the state permits such purchase or consolidation, it is bound to extend the authority to every possible case, or expose itself to the charge of interfering with commerce. This proposition is obviously untenable.
While the constitutional power of the state in this particular has never been formally passed upon by this Court, the power of state legislatures to impose this restriction upon the general authority to consolidate has been recognized in a number of cases. Railroad Co. v. Maryland, 21 Wall. 456, 88 U. S. 470; Shields v. Ohio, 95 U. S. 319; Wallace v. Loomis, 97 U. S. 146, 97 U. S. 154; New Buffalo v. Iron Co., 105 U. S. 73; Leavenworth v. Chicago &c. Railway, 134 U. S. 688, 134 U. S. 699; Livingston County v. Portsmouth Bank, 128 U. S. 102; Keokuk & Western Railroad v. Missouri, 152 U. S. 301; Ashely v. Ryan, 153 U. S. 436. In the last case it was broadly held that a state, in permitting railway companies to consolidate, might impose such conditions as it deemed proper, and that the acceptance of the franchise implied a submission to the conditions without which it could not have been obtained.
&c. Railroad, 49 F. 412; Clarke v. Central Railroad, 50 F. 338; Kimball v. Atchison, Topeka &c. Railroad Co., 46 F. 888.
1. That a general right to purchase or consolidate with other roads was never conferred upon the L. & N. Co.
2. That the Chesapeake Co. was never vested with the power to consolidate its capital stock, franchises, or property with that of any other road owning a parallel or competing line.
3. That, conceding that the requisite power existed in both the above companies, section 201 of the Constitution of 1891 was a legitimate exercise of the police power of the state, and forbade such consolidation at least so far as such power remained unexecuted.

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