Court Opinion

ID: 9417411
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:14:40.285588+00
Date Added: 2024-06-11T17:20:40.625180
License: Public Domain

Mr. Chief Justice Waite
delivered the opinion of the court. After stating the facts in the language above reported, he continued:
The argument in support of the decree below is :
1. That the statute under which the commissioners are to act impairs the obligation of the charter contract of the Mobile and Ohio Railroad Company;
2. That it is, so far as that company is concerned, a regulation of commerce- among the States;
3. That it denies the company the equal protection of the laws; and deprives it of its property without due process of law;
4. That it confers both legislative and judicial powers on the commission, and is thus repugnant to the Constitution of Mississippi; and
5. That it is void on its face by reason of its inconsistencies and uncertainties.
These several positions will be considered in their order.
1. The provisions of the Charter on which the claim of contract. rests are found in §§ 1,-7, and 12, as follows:
“ Sec. 1. And the said company is hereby authorized and empowered ... to transport, take, and carry property *325and persons upon said railroad or way by the power and force of steam, of animals, or of any other mechanical or other power, or any combination of them which the company may choose to apply.”
“ Sec. 7. That the directors shall have full power to make and prescribe such by-laws, rules, and regulations as they shall deem needful and proper touching the disposition and management of the stock, property, estate, and effects of said company, not contrary to this charter or the laws of this State or of the United States; the transfer of shares, the duties and conduct of their officers and servants, touching the election of, and meeting of the directors; and all matters whatsoever which may appertain to the concerns of said company.”
“ Sec. 12. That it shall be lawful for the company hereby incorporated from time to time to fix, regulate, and receive the toll and charges by them to be received for transportation of'' persons or property on their railroad, or way aforesaid, hereby authorized to be constructed, erected,.built, or used, or upon any part thereof.”
From this it is claimed that the State granted to the company, for the full term of its corporate existence, that is to say, forever, the right of managing its own affairs and regulating its charges for the transportation of persons and property, free of all legislative control.
It is now settled in this court that a State has power to limit the amount of charges by railroad companies for the transportation of persons and property within its own jurisdiction, unless restrained by some contract in the charter, or unless what is done amounts to a reg k iion of foreign or inter-state commerce. Railroad Co. v. Maryland, 21 Wall. 456; Chicago, Burlington & Quincy Railroad Co. v. Iowa, 94 U. S. 155; Peik v. Chicago and Northwestern Railway Co., 94 U. S. 164; Winona and St. Peter Railroad Co. v. Blake, 94 U. S. 180; Ruggles v. Illinois, 108 U. S. 526, 531. This power of regulation is a power of government, continuing in its nature, and if it can be bargained .away at all it can only be by words of positive grant, or something which is in law equivalent. If there is reasonable doubt, it must be resolved in favor of the *326existence of the power. In the words of Chief Justice Marshall, in Providence Bank v. Billings, 4 Pet. 514, 561, “ its abandonment ought not to be presumed in a case in which the deliberate purpose of the State to abandon it does not appear.” This rule is elementary, and the cases in our reports where it has been considered and applied are numerous. Thus, in Providence Bank v. Billings, it was held that the incorporation of a bank without any special provision for taxation did not imply a contract on the part of a State not to tax at all. ’ In Charles River Bridge v. Warren Bridge, 11 Pet. 419, 548, the court said this rule of construction was not confined to the taxing power, and accordingly it held that the charter of a toll-bridge company did not imply a contract not to allow the building of another bridge in the immediate vicinity which would materially interfere with its revenues. In delivering the opinion of the court, Chief Justice Taney used this language: “ This act of incorporation is in the usual form, and the privileges such as are comfnonly given to corporations of that kind. It confers on them the ordinary faculties of a corporation for the purpose of building the bridge; and establishes certain rates of toll which the company are authorized to take ; that is the whole grant. There is no exclusive privilege given to them over the waters of Charles River above or below their bridge; •no right to erect another bridge themselves nor to prevent other persons from erecting one; no engagemént from the State that another shall not be ’ erected;. and no undertak- • ing not to sanction competition, nor to make improvements that' may diminish the amount of its income.” In Minot v. Philadelphia, Wilmington & Baltimore Railroad Co., known as the Delaware Railroad Tax Case, 18 Wall. 206, 226, it was held that a provision in the charter tha.t the railroad company “ should pay annually into the treasury of the State a tax of one-quarter of one per cent, on its capital stock of four hundred thousand dollars,” without any words “ indicating the intent of the legislature that no further or different tax should be subsequently levied,” was not sufficient to show a contract binding the State not to make such a levy, the court remarking that “ the surrender, when claimed, must be shown by clear, unam*327biguous language, which will admit of no reasonable construction consistent with the reservation of the power.” So, in Bailey v. Magwire, 22 Wall. 215, 228, it was held that a clause in a charter which subjected a corporation “ to taxation at the rate assessed by the State on other real or personal property of. like value,” did not relieve the company from taxation for other than State purposes. And here the court said: “Silence on such a subject,”' that is to say, taxation for other purposes, “ cannot be construed as a waiver of the right of the State in this regard. There must be something said which is broad enough to show clearly that the legislature intended to relieve the corporation from a part of the burdens borne by other real and personal property.”' In Fertilizing Co. v. Hyde Park, 97 U. S. 659, it appeared that a company had been incorporated with authority to establish and maintain, for fifty years, “ chemical and other works at the place designated . . . for the purpose of manufacturing and converting dead animals and other animal matter into an agricultural fertilizer, or into other chemical products, by means of chemical or other processes; ” but this court held that the State was not thereby prevented from causing the works to be abated in case they should, within the time of the charter, become a public nuisance because of the growth of population in the neighborhood, and among the reasons assigned was the absence from the charter of any express exemption of the company from the operation of the powers of the State applicable to its existing condition for the time being. In Newton v. Commissioners, 100 U. S. 548, 562, the seat of justice of a county had been fixed at Can-field, but the statute by which this was done provided “ that before the seat of justice shall be considered permanently established at Canfield,” the citizens should donate a lot and make certain provisions for the' erection of public buildings thereon. The citizens complied with all the requirements of the law, and the seat of justice remained undisturbed at the place where it had been “ permanently established” .until 1874, when a law was passed for its removal to another town. The citizens of Canfield then caused a bill to be filed for an injunction restraining the county commissioners from effecting ,the *328removal, on the ground that the original act, and what was done under .it, constituted an executed contract on the part of the State that the seat of justice should remain forever, at Can-field, and the later act impaired the obligation of that contract; but this court held' otherwise, saying, among other things, “ If the legislature had intended to assume an obligation that it should be kept the?'e in perpetuity, it is to be presumed it would have said so. ¥e cannot — certainly not in this case —interpolate into the. statute a thing so important which it does not contain.”
The cases in which it has been held that a contract was entered into are'equally instructive. Thus in Gordon v. The Appeal Tax Court, 3 How. 133, the statute was: “ That upon any of the banks in this State complying with the conditions of this act, the faith of the State is hereby pledged not to impose any future tax or bonus on the said banks during the continuance of their charters under this act.” In State Bank of Ohio v. Knoop, 16 How. 369, the provision was that each bank organized under the act should semi-annually, on the days designated for declaring dividends, set .off to-the. State six per cent, on the profits deducting therefrom the expenses and ascertained losses for the six months next preceding, which sum or amount so set off shall be in lieu of all taxes to which the company, or the Stockholders therein, would otherwise be subject, and from the .judgment that this was a contract of exemption from any further exercise oN the power of taxation three justices dissented. In Bridge Proprietors v. Hoboken Co., 1 Wall. 116, the 'words of exclusion were, “ that it should not be lawful for .any person or .persons whatsoever to erect, or cause to be erected [within certain specified limits], any other bridge or bridges over or across the said river.” In Home of the Friendless v. Rouse, 8 Wall. 430, the provision was that all property of said corporation shall be exempt from taxation, and that a certain existing, statute to tne effect that every act of incorporation should be subject to alteration and repeal “ shall hot apply to this corporation.”
Such being the rule, and such its practical operation, we return to the special provisions of the charter on which this case *329depends, and find, first, the authority given the corporation to carry persons and property. This of itself implies authority to charge a -reasonable sum for the carriage. In this way the corporation was put in the same position a natural person would occupy if engaged in the same or like business. Its rights and its privileges in its business of transportation are just what those of a natural person would be under like circumstances; no more, no less. The natural person would be subject to legislative control as to the amount of his charges. So must the corporation be. That was decided in Railroad Co. v. Maryland; Chicago, Burlington & Quincy Railroad Co. v. Iowa ; Peik v. Chicago & Northwestern Railway Co.; Winona & St. Peter Railroad Co. v. Blake; and Ruggles v. Illinois; all cited above.
Next follows the power of the directors tó make by-laws, rules, and regulations for the management of the affairs of the company, but it is expressly provided that such by-laws, rules, and regulations shall not be contrary to the laws of the State. This we held in Ruggles v. Illinois included laws in force when the charter was granted, and those which came into operation afterwards as well. It is true that the clause which thus limits the power of the directors is found in the middle of the sentence which confers the power, but it clearly was intended to refer to everything that might be done in this way “ touching . . . all matters whatsoever that may appertain to the concerns of said company.” There is nothing here, therefore, which in any manner implies a contract on the part of the State to exempt the company from the operation of laws enacted within the scope of legislative power for the regulation of the business in which it is authorized to engage.
The case turns consequently on § 12, which is, “ that it shall be lawful for the company . . . from time to time to fix, regulate, and receive the toll and charges by them to be received for transportation,” &c. This would have been implied from the rest of the charter if there had been no such provision, and it is argued that, unless it had been intended to surrender the' power of control over fares and freights, this section would not have been inserted. The argument concedes that the power of *330the company under this section is limited by the rule of the common law which requires all charges to be reasonable. In Munn v. Illinois, 94 U. S. 113, and Chicago, Burlington & Quincy Railroad Co. v. Iowa, above cited, this court decided that, as to natural persons and corporations subject to legislative control, the State could, in cases like this, fix a maximum beyond which any charge would be unreasonable, and that such maximum when fixed would be binding on the courts in their adjudications, as well as on the parties in their dealings. The claim now is that by § 12 the State has surrendered the power to fix a maximum for this company, and has declared that the courts shall be left to determine what is reasonable, free of all legislative control. "We see no evidence of. any such intention. Power is granted to fix reasonable charges, but what shall be deemed reasonable in law is nowhere indicated. There is no rate specified, nor any limit set. Nothing whatever is said of the way in which the question of reasonableness is to be settled. All that is left as it was. Consequently, all the power which the State had in the matter before the charter it retained after-wards. The power to charge being coupled with the condition that the charge shall be reasonable, the State is left free to act on the subject of reasonableness within the limits of its general authority as circumstances may require. The right to fix reasonable' charges has been granted, but the power of declaring what shall be deemed reasonable has not been surrendered. If there had been an intention of surrendering this power, it would have been easy to say so. Not .having said so, the conclusive presumption is there was no such intention.
This is not in conflict with the judgment of the Supreme Court of Mississippi in Railroad Commission v. Yazoo & Mississippi Railroad Co., in which it was decided that the power had been surrendered in favor of that company because in that charter a maximum of rates-was fixed. In the opinion, a copy of which has been furnished us in advance of its publication in the regular series of reports, the court says distinctly that “ a grant in general terms of authority to fix rates is not a renunciation of the right of legislative control so as to secure reasonable rates. Such a grant évinces merely a purpose to confer *331power to exact compensation, which shall be just and reasonable. It is only where there is an unmistakable manifestation of a purpose to place the unrestricted right in the corporation to determine rates of compensation that the power of the legislature afterwards to interfere can be denied.” In Railroad Commission v. Natchez, Jackson & Columbia Railroad Co. it was held by the same court that the charter authority for the company “from time to time to fix, regulate, and receive.tolls and charges by them to be received for transportation of persons and property,” did not amount to a contract of exemption, and the commission was allowed to proceed under the law.
From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretence ’of regulating fares and freights, the State cannot require a railroad corporation to carry persons or property without reward ; neither can it do that which in law amounts to a taking of private property for public use without just compensation, or without due .'process of law. What would have this effect" we need not now say, because no tariff has yet' been fixed by the commission, and the statute of Mississippi expressly provides “ that in all trials of cases brought for a violation of any tariff of charges, as fixed by the commission, it may be shown, in defence that such tariff so fixed is unjust.”
It is also claimed that the charter contains a contract binding the State to allow the company, at all times and in all ways, to manage its own affairs through its own board of directors, and that the obligation of this contract will be impaired if the provisions of the statute are enforced by the commissioners. As has already been seen, the power of the directors is coupled with a condition that their management shall be in accordance with the laws of the State. This undoubtedly means with such laws as may be constitutionally enacted touching the administration of the affairs of the company. The present statute requires the company, 1, to furnish the commissioner's with copies of its tariffs for all kinds of transportation; 2, to post in some conspicuous place at each of its depots the tariff approved by *332the commissioners, .with the certificate of approval attached; 3, to conform to the tariff as approved without discrimination in favor of or against persons or localities; 4, to furnish the commissioners with all the information they require relative to the management of its line, and particularly with copies of all leases, contracts, and agreements for transportation with express, sleeping-car, or other companies to which they are parties ; 5, to report all accidents within the limits of the State attended with any serious personal injury; 6, to make quarterly returns of its business to the commissioners, which returns shall embrace all the receipts and expenditures of its railroad; Y, to provide at least one comfortable and suitable reception room at each depot for the use and accommodation of persons desiring or awaiting transportation over its road; and 8, to keep at all times in such reception rooms a bulletin board which shall show the time of the arrival and departure of trains, and when any passenger or other train transporting passengers is delayed, notice of the extent of the delay and the probable time of arrival as near as it can be ascertained.
The second and third of these requirements relate only to the duty of the company to keep its charges within the limit of the tariff approved by the commissioners without discrimination in favor of or against persons or localities. The first, fourth, and sixth are clearly intended as a means of furnishing the commissioners with the information necessary to enable them to act understandingly in fixing the tariff. Whether under these provisions the company can be required to make a report of or give information about its business outside of Mississippi' is a question we do not now undertake to decide. The second, fifth, seventh, and eighth are nothing more than reasonable police regulations for the comfort, convenience, and safety of those travelling upon the road or doing business with the company in the State.
The commissioners have power, 1, to approve, and if need be to fix the tariff -of"charges for transportation, both of persons and property, by which the company must be governed, and to exercise a watchful and careful supervision over such tariff; 2, to notify the company of the times and places when and where *333the propriety of a change in- existing tariffs will be considered; 3, to entertain complaints made by any person against a tariff which has. been approved, on the ground that the same is in any respect for more.than a just compensation, or that,the charges amount to or operate so as to effect unjust discrimination, and, after due notice to the company and proper inquiry had, to make any changes that may be deemed proper; 4, to repair to the scene of an accident within the State attended with serious personal injury, and inquire into the facts and circumstances thereof, to be recorded in the minutes of their proceedings and embraced in the annual report they are required to make to the governor for transmission to the legislature; 5, to inspect the depots of all railroads operated in the State and to see that comfortable and suitable reception rooms are provided ; and 6, to institute all necessary suits for the recovery of the penalties prescribed by the statute for a violation of its provisions. The first three of these relate entirely to proceedings for fixing charges and supervising the tariff, and the rest, like the correlative requirements of the company, are mere police regulations -which the commissioners are to enforce. All this comes clearly within the supervising power of the State in the administration of the affairs of its domestic corporations.
We conclude, therefore, that the chapter of the company contains no contract the obligation of which is in any way. impaired by the - statute under which the commissioners are to act.
2. There can be ho doubt that each of the States through which the Mobile and Ohio Railroad passes incorporated the company. for the purpose of. securing' the construction of a railroad from Mobile; through Alabama, Mississippi, Tennessee, and Kentucky, to some point near the mouth of the Ohio River, where it would connect with another railroad to the lakes, and thus form a continuous line of inter-state communication between the Gulf of Mexico in the south, and the Great Lakes in the north. It is equally certain that Congress aided in the construction of parts of this line of road so as to establish such a route of travel and transportation. But it is none the less true that the corporation created by each State is for *334all the purposes of local government a domestic corporation, and that its railroad within the State is a matter of domestic concern. Every person, every corporation, everything within the territorial limits of a State is while there subject tt> the constitutional authority of the State government. Clearly under-this rule Mississippi may govern this corporation, as it does all domestic corporations, in respect to every act and everything within the State which is the lawful subject of State government.' It may, beyond-' all question, by the settled rule of decision in this court, regulate freights and fares for business done exclusively within the State, and it would seem to be a matter of domestic concern to prevent the company from discriminating against persons and planes in Mississippi. So it may make all needful regulations of a police character for the government of the company while operating its road in that jurisdiction. In this way it may certainly require the company to fence so much of its road as lies within the State; to stop its trains at railroad crossings; to slacken speed while running in a crowded thoroughfare; to post its tariffs and time-tables at proper places, and other things of a kindred character affecting the comfort, the convenience, or the safety of those-who are entitled to look to the State for protection against the wrongful or negligent conduct of others. This company is not. relieved entirely from State regulation or State control in Mississippi simply, because it. has been incorporated by,--and is carrying on business in, the other States- through which its road runs. "While in Mississippi it can be governed by Mississippi in respect to all things which' have not-- been placed by the Constitution of the United States’within the-exclusive jurisdiction of Congress, that is to say, using the language of this court in Cardwell v. Bridge Co., 113 U. S. 205, 210, “when the subjects on which it is-exerted are national in their character, and admit and require uniformity of regulations affecting alike all the States;” Under this rule nothing can. be done by the government of. Mississippi which will operate as a burden on the inter-state business of the company or impair the usefulness of its facilities for inter-state traffic. It is not enough to prevent the-. State from acting that the road in Mississippi is *335used .in aid of inter-state commerce. Legislation of this kind to be unconstitutional must be suck as will necessarily amount to or operate as a regulation of, business without the State as well as within.
The commission is in-.expfess'termg-prohibited by the act of' March 15, 1884, from interfering-with the charges of the company for the transportation óf persons or property through Mississippi-from one State to another. The statute makes no mention of person^ or property taken up without the State and .delivered within, nor of such as may be taken up within and carried without. As to this, the only limit on the power of the commissioners is the constitutional authority of the State over the subject. Precisely all that may be done, or all that may not be done, it is not easy to say in advance. The line between the exclusive power of Congress, and the general powers of the State in this particular, is not everywhere distinctly marked, and it is always easier to determine when a case arises whether it falls on one side or the other, than to settle in advance the boundary, so that it may be- -in all respects strictly accurate. As yet the commissioners have done nothing. There is, certainly, much they may do in regulating charges within the State, which will not be in conflict with the Constitution of the United States. It is to be presumed they will always act within the limits of their constitutional authority. It will be time enough to consider what may be done to prevent it when the}7 attempt to go beyond.,
3. General statutes regulating the use'of railroads in a State, or fixing maximum rates of charges for transportation, when not forbidden by charter contracts, do not necessarily deprive the corporation owning or operating a railroad within the State of its property without due process of law, within the meaning of the Fourteenth Amendment of the Constitution of the United States, nor take away from the corporation the equal protection of the laws. Munn v. Illinois, 94 U. S. 113, 134, 135; Railroad Co. v. Richmond, 96 U. S. 521, 529; Spring Valley Water Works v. Schottler, 110 U. S. 347, 354. The great purpose of the statute now under consideration is to fix a maximum of charges, and to regulate in some matters of a police *336nature the use of railroads in the State. In its general scope it is constitutional, and' it applies equally to all persons or corporations owning or operating railroads in the State. No preference is given to one over another, but all are treated ¿dike. Whether.in some of its details the statute may be defective or invalid we do not deem it necessary to inqr.he, for this suit is brought to prevent the commissioners from giving it any effect whatever as against this company.
4. The Supreme Court of Mississippi has decided in the cases of Railroad Commission v. Yazoo & Mississippi Railroad Company, and Railroad Commission v. Natchez, Jackson & Columbia Railroad Company, not yet officially reported, that the statute is not repugnant to the Constitution of the State “ in that it creates a commission and charges it with the duty of supervising railroads,” To this we agree, and that is all that need be decided in this case. As was said by the Supreme Court of Mississippi, in the case first referred to above : “ Many questions may arise under it not necessary to be disposed of now, and we leave them for consideration when presented.”
5. It is difficult to understand precisely on what ground we are expected to decide that this statute is so inconsistent and uncertain as to render it absolutely void on its face. The statute of Tennessee which was under consideration in Louisville & Nashville Railroad Company v. Railroad Commission of Tennessee, 19 Fed. Rep. 679, is materially different from this in many respects. That case was decided before this statute was passed, and it is not at all unlikely that the legislature of Mississippi made use of the decision in framing their bill so as to avoid some, if not all, of the objections which, in the opinion of the court, were fatal to what had been done in Tennessee. The argument on this branch of the controversy contains much that might have been useful if addressed to the legislature while considering the bill before its final enactment, but we find nothing in it to show that the statute as it now stands is altogether void and inoperative. When the commission has- acted and proceedings are had to enforce what it has done, questions may arise as to the validity of some of the vari*337ous provisions which will be worthy of consideration, but we are unable to say that, as a whole, the statute is invalid.
The decree of the Circuit Court is reversed and the cause remanded, with instructions to dismiss the bill.