Court Opinion

ID: 9418130
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:09:45.675694+00
Date Added: 2024-06-11T17:15:55.515734
License: Public Domain

Me. Justice Holmes
delivered the opinion of the court.
These are bills in equity brought in the Circuit Court to. enjoin the members and clerk of the Virginia State Corporation Commission from publishing or taking any other steps to enforce a certain order fixing passenger rates. The bills allege, with some elaboration of the facts, that the rates in question are confiscatory, and other matters not necessary to mention, and set up the Fourteenth Amendment, etc. The defendants appeared specially, and by demurrer and plea respectively put forward that the proceedings before the commission are proceedings in a court of the State, which the courts of the United States are forbidden to epjoiñ, Rev. Stats. § 720, and that the decision of the commission makes the legality of the rates res judicata. On these pleadings final decrees were entered for the plaintiffs, and the defendants appealed to this court. Therefore, as the case is presented, it is to be assumed that the order confiscates the plaintiffs’ property and infringes the Fourteenth Amendment if the matter is open to inquiry. The question principally argued, and the main question to be .discussed, is whether the order is one which, in spite of its constitutional invalidity, the courts of the United States are not at liberty to impugn.
*224The State Corporation Commission is established and its powers are defined at length by the constitution of the State. There is no need to rehearse the provisions that give it'dignity and importance or that add judicial to its other functions, because we shall assume that for some purposes it is a court within the meaning of Rev. Stats. § 720, and in the commonly accepted sense of that word. Among its duties it exercises the authority of the State to supervise, regulate and control public service corporations, and to that end, as is said by the Supreme Court of Virginia and repeated by counsel at the bar, it has been clothed with legislative, judicial .and executive powers. Norfolk & Portsmouth Belt Line R. R. Co. v. Commonwealth, 103 Virginia, 289, 294.
The state constitution provides that the commission, in the performance of the duty just mentioned, shall from time to time prescribe and enforce such rates, charges, classification of traffic, and rules and regulations, for transportation and transmission companies doing business in the State, and shall .require them to establish and maintain all such public service, facilities and conveniences, as may be reasonable and just. Before prescribing or fixing any rate or charge, etc., it is to give notice (in case of a general order not directed against any specific company by name, by four weeks’ publication in a newspaper)'of the substance of the contemplated action and of a time and place when the commission will hear objections and evidence against it. If an order is passed, the order again is to be published as above before it shall go into effect. An appeal to the Supreme Court of Appeals is given of right to any party aggrieved, upon conditions not necessary to be stated, and that court, if it reverses .what has been done, is to substitute such order as in its opinion the commission should have made. The commission is to certify the facts upon which its action was based and such evidence as may be required, but no new evidence is to be received, and how far the findings of the commission can be revised perhaps is not quite plain. No other court of the State can review, reverse, correct or annul *225the action of the commission, and in collateral proceedings the validity of the rates established by it cannot be called in doubt.
When a rate has been fixed, the commission has power to enforce compliance with its order by adjudging and enforcing, by its own appropriate process, against the offending company the fines and penalties established by law. But a hearing is required, and the validity and reasonableness of the order may be attacked again in this proceeding, and all defenses seem to be open to the party charged with a breach.
On July 31, 1906, under the provisions outlined, the commission published in a newspaper notice to the several steam railroad companies doing business in Virginia, and all persons interested, that at a certain time and place it would hear objections to an order prescribing a maximum rate of two cents a mile for the transportation of passengers, with details not needing to be stated. A hearing was had, and the complainants (appellees) severally appeared and urged objections similar to those set up in the bills. On April 27,1907, the commission passed an order prescribing the rates, but in more specific form. For certain railroads named, including all of the complainants except as we shall state, the rate was to be two cents; for certain excepted branches of the Southern Railway Company, two and half; for others, including the Chesapeake Western Railway, three; and for others three and a half cents a mile, with a minimum charge of ten cents. Publication of the order was directed, and at that stage these bills were brought.
In order to decide the cases it is not necessary to discuss all the questions that were raised or touched xipon in argument, and some we shall lay on one side. We shall assume that when, as here, a state constitution sees’fit to unite legislative and judicial powers 'in a single hand, there is nothing to hinder so far as the Constitution of the United States is concerned. Dreyer v. Illinois, 187 U. S. 71, 83, 84; Winchester & Strasburg R. R. Co. v. Commonwealth, 106 Virginia, 264, 268. We shall assume, as we have said, that some of the powers of the> com*226mission are judicial, and we shall assume, without.deciding, that, if it was proceeding against the appellees to enforce this order and to punish them for a breach, it then would be sitting as a court and would be protected from interference on the part of courts of the United States.
But we think it equally plain that the proceedings drawn in question here are legislative in their nature, and none the less so that they have taken place with a body which at another moment, or. in its principal or dominant aspect, is a court such as is meant by § 720. A judicial inquiry investigates, declares and enforces liabilities as they stand on present or past facts and under , laws supposed already to exist, That is its purpose and end. Legislation on the other'hand looks' to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. The establishment of a rate is the making of a rule for the future, and therefore is an act legislative not judicial in kind, as seems to be fully recognized by the Supreme Court of Appeals, Commonwealth v. Atlantic Coast Line Ry. Co., 106 Virginia, 61, 64, and especially by its learned President in his pointed remarks in Winchester and Strasburg R. R. Co. and others v. Commonwealth, 106 Virginia, 264, 281. See further Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Ry. Co., 167 U. S. 479, 499, 500, 505; San Diego Land & Town Co. v. Jasper, 189 U. S. 439, 440.
Proceedings legislative in nature are not proceedings in a court within the meaning of Rev. Stats. § 720, no matter what may be the general or dominant character of the body in which they may take place. Southern Ry. Co. v. Greensboro Ice & Coal Co., 134 Fed. Rep. 82, 94, affirmed sub nom. McNeill v. Southern Ry. Co., 202 U. S. 543. That question depends not upon the character of the body but upon the character of the proceedings. Ex parte Virginia, 100 U. S. 339, 348. They are not a suit in which a writ of error would lie under Rev. Stats. § 709, and Act of February 18, 1875, c. 80, 18 Stat. 318. See Upshur County v. Rich, 135 U. S. 467; Wallace v. Adams, 204 *227U. S. 415, 423. The decision upon them cannot be res judicata when a suit is brought. See Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362. And it does not matter what inquiries may have been made as a preliminary to the legislative act. Most legislation is preceded by hearings and investigations. But the effect of the inquiry, and of the decision upon it, is determined by the nature of the act to which the inquiry and decision lead up. A judge sitting with a jury is not competent to decide issues of fact; but matters of fact that are merely premises to a rule of law be may decide. He may find out for himself, in whatever way seems best, whether a supposed statute ever really was passed. In Pickering v. Barkley, Style, 132, merchants .were asked by the court to state their understanding as an aid to-the decision of a demurrer. The nature of the final act determines the nature of the previous inquiry. As the judge is bound to declare the law he must know or discover the facts that establish the law. So when the final act is legislative the decision which induces it cannot be judicial in the practical sense, although the questions considered might be the same that would arise in the trial of a case. If a state constitution should provide for a hearing before any law should be passed, and should declare that it should be a judicial proceeding in rem and the decision binding upon all the world, it hardly is to be supposed that the simple device could make the constitutionality of the law res judicata, if it subsequently should be drawn in question before a court of the United States. And all that we have said would be equally true if an appeal had been taken to the Supreme Court of Appeals and it had confirmed the rate. Its action in doing so would not have been judicial, although the questions debated by it might have been the same that might come before it as a court, and would have been discussed and passed upon by it in the same way that it would deal with them if they arose afterwards in a case properly so called. We gather that these are the views of the Supreme Court of Appeals itself. Atlantic Coast Lina Ry. Co. v. Commonwealth, 102 Virginia, 599, 621. They are irn-*228plied in many cases in this and other United States-courts in which the enforcement of rates has been enjoined, notwithstanding notice and hearing, and what counsel in this case call litigation in advance. Legislation cannot bolster itself up in that way. Litigation cannot arise until the moment of legislation is past. See Southern Ry. Co. v. Commonwealth, 107 Virginia, 771, 772.
It appears to us that the most plausible objection to these bills is not the one most dwelt upon in argument, but that they were brought- too sooh. Our doubt is a narrow one and its limits should be understood. It seems to us clear that the appellees were not bound to wait for proceedings brought to enforce the rate and to punish them for departing from it. Those, we have assumed in favor of the appellants would be proceedings in court and could not be enjoined; while to confine the railroads to them for the assertion of their rights would be to deprive them of a part of those rights. If the railroads were required to take no active steps until they could bring a writ of error from this court to the Supreme Court of Appeals after a final judgment, they would come here with the facts already found against them. But the determination as to their rights turns almost wholly upon the facts to be found. Whether their property was taken unconstitutionally depends upon the valuation of the property, the income to be derived from the proposed rate and the proportion between the two — • pure matters of fact. When those are settled- the law is tolerably- plain. All their constitutional rights, we repeat, depend upon what the- facts are found to be. They are not to be. forbidden to try those facts before a court of their own choosing if otherwise competent. "A State cannot tie up a citizen of another State, having property within its territory invaded by unauthorized -acts' of its own officers, to suits for redress in its own.courts.’’ Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 391; Smyth v. Ames, 169 U. S. 466, 517. See McNeill v. Southern Railway Co., 202 U. S. 543; Ex parte Young, 209 U. S. 123, 165. Other cases further illustrating *229this point are Chicago & N. W. Ry. Co. v. Dey, 35 Fed. Rep. 866; Northern Pacific Ry. Co. v. Keyes, 91 Fed. Rep. 47; Western Union Telegraph Co. v. Myatt, 98 Fed. Rep. 335.
Our hesitation has been on the narrower question whether the railroads, before they resorted to the Circuit Court, should not have taken the appeal allowed to them by the Virginia constitution at the legislative stage, so as to make it absolutely certain that the officials of the State would try to establish and enforce an unconstitutional rule. Considerations of comity and convenience have led this court ordinarily to decline to interfere by habeas corpus where the petitioner had open to him a writ of error to a higher court of a State, in cases where there was no merely logical reason for refusing the writ. The question is whether somewhat similar considerations ought not to have some weight here.
We admit at once that they have not the same weight in this case. The question to be decided, we repeat, is legislative, whether a certain rule shall be made. Although the appeal is given as a right, it is not a remedy, properly so called. At that time no case exists. We should hesitate to say, as a general rule, that a right to resort to the courts could be made always to depend upon keeping a previous watch upon the bodies that make laws, and using every effort and all the machinery available to prevent unconstitutional laws from being passed. It might be said that a citizen has a right to assume that the constitution will be respected, and that the very meaning of our system in giving the last word upon constitutional questions to the courts is that he may rest upon that assumption and is not bound to be continually on the alert against covert or open attacks upon his rights in bodies that cannot finally take them away. It is a novel ground for denying a man a resort to the courts that he has not used due diligence to prevent a law from being passed.
. But this case hardly can be disposed of on purely general principles. The question that we are considering may be termed a question of equitable fitness or propriety, and must *230be answered on the particular facts. The establishment of railroad rates is not like a law that affects private persons who may never have heard of it till it was passed. It is a matter of great interest, both to the railroads and to the public, and is watched by both with scrutinizing care. The railro'ads went into evidence before the commission. They very well might have taken the matter before the Supreme Court of Appeals. No new evidence and no great additional expense would have been involved.
The State of Virginia has endeavored to impose the highest safeguards possible upon the exercise of the great power given to the State Corporation Commission, not only by the character of the members of that commission, but by making its decisions dependent upon the assent of the same historic body that is entrusted with the preservation of the most valued constitutional rights\ if the railroads see fit to appeal. It seems to us only a just recognition of the solicitude with which their rights have been guarded, that they should make sure that the State in its final legislative action would not respect what they think their rights to be, before resorting to the courts of the United States.
If the rate should be affirmed by the Supreme Court of Appeals and the railroads still should regard it as confiscatory, it will be understood from what we have said that they will be at liberty then to renew their application to the Circuit Court, without fear of being met by a plea of res judicata.. It will not be necessary to wait for a prosecution by the commission. We may add that when the rate is fixed a bill against the commission ‘ to restrain the members from enforcing it will not be bad as an attempt to enjoin legislation or as a suit against a State, and will be the proper form of remedy. Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362; Smyth v. Ames, 169 U. S. 466; Chicago, Milwaukee & St. Paul Ry. Co. v. Tompkins, 176 U. S. 167; Hanley v. Kansas City Southern Ry. Co., 187 U. S. 617; McNeill v. Southern Ry. Co., 202 U. S. 543; Mississippi Railroad Commission v. Illinois *231Central Ry. Co., 203 U. S. 335; Ex parte Young, 209 U. S. 123.
It is proper before closing to mention one decision that was relied upon by the appellees, and one or two other matters peculiar to the cases before the court. In McNeill v. Southern Ry. Co., 202 U. S. 543, the same moment was selected for bringing suit as in these cases, while an examination of the laws of North Carolina discloses that there were statutory provisions for appeal somewhat similar to those in the Virginia constitution, to which we now are referring. But, apart from other differences, in that case the ground of the decree was that the state commission was dealing with a subject-matter beyond its power; no regulation would have been valid, 202 U. S. 561, and the considerations to which we now are giving weight naturally were not urged. But this decision, suggests that in three of the present cases an equally potent constitutional bar is alleged against the proceedings of the commission. The Chesapeake and Ohio, the Norfolk and Western and the Southern Railway Companies all set .up general laws, alleged to be incorporated in their charters and to constitute contracts, providing that their tolls should not be diminished except under'-conditions of fact alleged not to exist.
If the State has bound itself by contract not to cut down .the rates as contemplated, there would seem to.be no reason why the suit should not be entertained now. See Reagan v. Farmers’ Loan & Trust Co., 154 U. S. 362, 393. But it would be premature and is unnecessary to decide whether the State has done so or not. No rate is irrevocably fixed by the State until the matter has been laid before the body having the last word. It’may be that that body will adhere to the old rate or will-establish one that will riot be open to the charge of violating the contracts alleged. The contracts alleged do not prohibit a certain reduction if the profits heretofore realized have exceeded a certain amount. On the question of contract as on that of confiscation it is reasonable, and proper *232that the evidence should be laid, in the first instance, before the body having the last legislative word.
• There is yet another difficulty in applying to these cases the comity which it is desirable if possible to apply. The Virginia statute of April 15, 1903, enacted to carry into effect the provision of the constitution, requires, by § 34, certain, if not all, appeals to be taken and perfected within six months from the date of the order. 1 Pollard’s Code of Virginia, c. 56a, 714. It may be that when an appeal is taken' to the Supreme Court of Appeals-this section will be held to apply and the appeal be declared too la,te. . We express no opinion upon the matter, which is for the state tribunals to decide, but-simply notice a possibility.. If the present bills should -be. dismissed, and thten tliat possible conclusion reached, injustice might'be done. 'As ouy decision does not go upon a denial of power to entertain the bills at the present stage but upon ouy views as to what is the most proper and orderly course in cases, of this sort when practicable, it seems to us that the bills should be retained for the present to await' the result of the appeals if the companies see fit to take them. If the appeals are dismissed as brought too late the companies will be entitled to decrees. If they are entertained and the orders of thé commission affirmed, the bills may be dismissed without prejudice,, and filed again.

Decrees reversed.

Me. Justice Brewer is of the opinion that the decrees should be affirmed.