Court Opinion

ID: 9417359
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:10:46.5273+00
Date Added: 2024-06-11T17:21:40.208301
License: Public Domain

Mr. Justice Harlan
concurring.
In Munn v. Illinois, 94 U. S. 113, this court held that there was nothing in the Constitution of the United States which prevented the legislature of Illinois from fixing, by statute, the maximum of charges for the storage of grain in warehouses at Chicago and other places in that State, where grain is stored in bulk, and in which the grain of different owners is mixed together, or in which the grain is stored in such a manner that the identity of different lots or parcels cannot be accurately preserved.
Immediately following that case is Chicago, Burlington & Quincy Railroad Company v. Iowa, 94 U. S. 155, which involved the validity of a statute of Iowa establishing “ reasonable maximum rates of charges for the transportation of freights and passengers” on the different railroads of that State. Touching that case it may be observed that the court conceded that a railroad corporation might be protected by its charter against absolute legislative control as to rates of- fare and freight, but that the power of the corporation which there questioned the validity of the law of Iowa was, by its ^charter, made-subject to such legislation as the legislature might, from time to time, establish.
“ They [railroad corporations] are, therefore,” said the court, “ engaged in public employment affecting the public interest, and, under the decision in Munn v. Illinois, subject to legislative control, unless protected by their charters. The Burlington & Missouri River Railroad Company, the benefit of whose charter the Chicago, Burlington & Quincy Railroad Company now claims, was organized under the general corporation law of Iowa, with power to contract, in reference to its business, the same as private individuals, and to 'establish by-laws and make all rules and regulations deemed expedient in relation to its affairs, but her ing subject, nevertheless, at all times fto such rules and regulations as the general assembly of Iowa might, from time to time, enact *536and provide. This is, in substance, its. chanter, and to that extent it is protected as by a contract / for it is now too late to contend that the charter of a corporation is nota contract within the meaning of that clause in the Constitution of the United States which prohibits a State from passing any law impairing the obligation of a contract. Whatever is granted is secured subject only to the limitations and reservations in the charter, or in the laws or constitutions which govern it.”
In Peik v. Chicago & Northwestern Railway Company, 94 U. S. 164, a similar statute of Wisconsin was sustained, as within the power of its legislature to enact. The court said:
“In Munn v. Illinois and Chicago, Burlington & Quincy Railroad Company v. Iowa, we decided' that the State may limit the amount of charges by railroad companies for fares and freight, unless restrained by some contract, even though their im come may have been pledged as security for the payment of obligations incurred upon the faith of the charter ”
It was also said in that case:
“ When property has been clothed with a public interest, the legislature may fix a limit to that which shall, in law, be reasonable for its use. This limit binds the courts as well as the people!”
The language last quoted, it must not be overlooked, was used in reference to a railroad charter granted imder the Constitution of Wisconsin, which expressly provided that all acts for the creation of corporations within the State “may be altered or repealed by the legislature at any time after their passage.”
In Winona & St. Peter Railroad Compamy v. Blake, 94 U. S. 180, it was decided that, as there was nothing in the charter of the railroad company limiting the power of the State to regulate charges for freight and passengers, it was competent-for the legislature to require the company to carry on equal and reasonable terms; this, because, as the court ruled, it was incident to the occupation in which the corporation was engaged, *537and for which it was created á carrier, to collect only a reasonable compensation for carriage. The act was there held as adding nothing to, and taking nothing from the grant as contained in the original charter. ,
These cases establish, among others, these,principles: 1. That the charter of a railroad corporation is. a contract within the meaning of the contract clause of the federal Constitution. 2. That such corporation may be protected by its charter against absolute legislative control in the matter of rates for the carriage of passengers and freight. 3. That when the charter is granted subject to such regulations as the legislature from time to time may provide, or subject to the authority of the legislature to alter or repeal it, in either of such cases the legislature has the same power over rates or tolls that it had when the charter was granted. 4. In the absence of statutory regulations upon the subject, it is necessarily implied from the occupation of a railroad corporation that it shall exact only reasonable compensation for carriage.
How far these principles control the present case I proceed now to inquire.
The general railroad law of 1849 authorized railroad corporations created under it to regulate tolls and Compensation for the transportation of passengers and property, subject to these restrictions: That compensation for a passenger and his ordinary baggage should not exceed three cents a .mile, unless by special act of the legislature; further, that the legislature may, from time to time, alter or reduce the rates of toll, fare, freight, or other profits upon such railroad, provided the same should not, without the consent of the corporation, be so reduced as to produce with said profits less than fifteen per cent, per annum on the capital actually paid in, nor, unless on an examination of the amounts received and expended, to be made by the Secretary of State, 'he shall ascertain that. the net • income derived by the company from all sources for the year then last passed exceeded an annual income of fifteen per cent, upon the capital so actually paid in.
The act of February 15th, 1851, incorporating the Central Military Tract Railroad Company — one of the constituent cor*538porations which, by consolidation, make the Chicago, Burlington and Quincy Railroad Company, and to the benefit of whose charter the latter is entitled — declares that it is created for the purpose of organizing under the general law of 1849, “ and in all things shall be governed by the provisions thereof, and shall be entitled to have and exercise the powers and privileges and be subject to the liabilities therein enumerated.” The provisions of the act of 1849, enumerating the powers and privileges to be enjoyed by, and the liabilities imposed upon, corporations organized thereunder, thus became a part of the charter of the Central Military Tract Railroad Company. '
If the determination of this case turned solely upon the question whether the act of 1871 establishing maximum charges for all railroads in Illinois, deprived this company of any. contract right declared or given by the law of 1849, there would be no difficulty in affirming the judgment; for, in the first place, the' amount tendered, in this case, to conductor Ruggles, and which he refused to accept as the entire compensation to be paid by Lewis, the passenger, was all that was allowed by the act of 1871, and all that the company, in the absence of a special act, was permitted by the law of 1849 to collect; further, there is no evidence in the record that the passenger rates as established by the act of 1871, will reduce the profits of the company below the aggregate amount which by its charter it was entitled to realize, and within which -the legist lature, by express reservation, could restrict it. But in behalf of appellant it is contended that by the sixth.section of the act of June 19th, 1852, the corporation was invested with absolute control, through its directors, of the whole subject of rates; in other words, that the legislature, in that section, removed the restriction in the act of 1849 of three cents per mile for a passenger and his ordinary baggage, and, by necessary implication, surrendered its power to make even the reduction provided'for in that statute.
In this view, as to the construction of the act of 1852,1 do ■not concur. That act is not absolutely inconsistent, upon the subject of rates, with the'general statute of'< 1849. They may stand together, and since repeals by implication are not favored, *539they should he so construed as, if possible, to make them both operative. The statute of 1849 gave the corporation the general- power, within a certain limit, of regulating tolls and compensation to be paid for the transportation of passengers and property. But it did not prescribe the particular mode by which the public should be informed as to the rates established. I incline to think that the purpose of the act of 1852 was to declare, as a condition precedent to power in the directors to levy and collect tolls, that the rates should not be determined at the mere discretion of the company’s superintendent or agents charged with the management of ’-its business, but — keeping within the limits prescribed by the law of 1849 — should be fixed by the directors in the by-laws of the corporation. ‘It should not be presumed that the legislature intended by the general language of the act of 1852 to abrogate the restrictions in the act of 1849, and to surrender, as to the Central Military Tract Railroad Company, the power, reserved in the general law, of keeping the profits of all railroad corporations created under it, as that one was, within fifteen per cent, upon the capital actually, paid in.
But I do not concur in so much of the opinion of the court as seems to rest upon the ground that, apart from the law of 1849, the question of tolls to be charged by the Central Military Tract Railroad Company was, under the act of 1852, exclusively for legislative determination, and, in no case, of judicial cognizance. The court holds that, testing the right of the company entirely by the latter act — in .other words, assuming that the sixth section of the act of 1852 superseded all in the act of 1849 upon the subject of rates — the judiciary may not' inquire whether the rates established -by the legislature are less than ’ reasonable compensation for the carriage of persons and property; that is, that the legislative determination is conclusive. I concede that the sixth section of the act of' 1852 does not place the subject of rates within the absolute control of the company, so as to authorize it to levy and collect tolls be-' yond what would afford proper remuneration for the services rendered; this, because, as- already shown, the law implies, as incident to its business, that the company shall exact only *540reasonable tolls. But the legislature, by the sixth section of the act of 1852, agreed that the directors might levy and collect such reasonable rates as they should, from time to time, establish by their by-laws. The introduction into that section of the special clause relating to rates, after and in connection with the general clause conferring power to make by-laws, rules and regulations, in reference to the affairs, business and interest of the company, not inconsistent with the laws of the State, was entirely unnecessary, and is meaningless, if not intended to assure those who put their means into the proposed road, that, as to the tolls to be levied and collected, they should be established by the directors within the limit of reasonableness, and not left to the uncontrolled discretion of the legislature. In other words, the company has — putting aside the general law of 1849 — a contract with the State that it may, by its directors, establish, levy, and collect 'reasonable tolls. The court holds, erroneously, as I think, that no contract, in any view of the case, arises out of the act of 1852, and that, consistently with its provisions, the judiciary cannot inquire ' whether the rates established by the board of directors are or are not reasonable. Although the rates fixed by the legislature may be shown to be ruinously low, the judiciary cannot, according to the decision of the court, protect the company in the exercise of the power granted to it of establishing, levying, and collecting, reasonable tolls.
I am of opinion that if the act of 1852 is to be regarded either alone or as' superseding the law of 1849, it constitutes a contract' between the State and the company, whereby the latter acquired an exemption from absolute legislative control as to rates, and secured, beyond the power of the legislature to withdraw, the right, through its directors,' from time to time, within the limit of reasonableness, to establish rates of toll for the transportation of persons and property. If this. be so, it results that all controversies involving rights under this contract must be adjusted, as in all other cases of contract, in the courts according to the established principles of law, and are not determinable by, or wholly dependent upon, the will of one of the parties. The company, or any one acting by its authority, *541has the right to submit to the courts the question whether rates prescribed by any subsequent act of the legislature will give that reasonable compensation which the State agreed, in the act of 1852, might be exacted by the company under by-laws established by its board of directors. • •
The act of 1852 does not, I think, supersede the provisions of the general law of 1849 upon the subject of rates. But since the company (if we look alone to the act of 1852) has failed to show that the rates fixed in the act of 1871 are unreasonable, and since — if the thirty-second section of the act of 1849 is still in force — it does not appear that those rates would reduce the company’s profits below the amount to which, by that section, they could be restricted by subsequent legislation, I concur in affirming the judgment.