Court Opinion

ID: 9417412
Source: CourtListenerOpinion
Date Created: 2023-08-02 20:14:40.290606+00
Date Added: 2024-06-11T17:20:40.682231
License: Public Domain

Mr. Justice Harlan
dissenting.*
This ease and the case against the Illinois Central Railroad Company, argued with it, are unlike that of Chicago, Burlington & Quincy Railroad Co. v. Iowa, 94 U. S. 155, where the charter of the company was granted expressly subject to such rules and regulations as the legislature might, from time to time, enact and provide; or of Peik v. Chicago & Northwestern Railway Co., 94 U. S. 164, 175, where, at the time the railroad charter was granted, the Stare Constitution provided that all charters of corporations “ may be altered or repealed by the legislature at any time after their passage; ” or of Winona & St. Peter Railroad Co. v. Blake, 94 U. S. 180, where the charter prescribed no limit upon the legislative power to fix rates for transportation, and conferred no'express power upon the company to fix or establish such rates as it might deem proper. Different Questions from any of these are now presented.
The Mobile and Ohio Railroad Company was chartered on the 3d of February, 1848, by the State of Alabama, with authority to construct and maintain a railroad from the City of Mobile to the west line of that State; towards the mouth of the Ohio River, and'to transport and carry property and persons, under such regulations, as to time and manner, as its board of directors might establish. It was also invested by its charter .with power, “from time to time, to fix, regulate, and receive the toll and charges by them to be received for the transportation of persons and property over the line of railroad hereby authorized to be constructed and completed, or any part thereof.” § 12. The legislature of Mississippi, in the same month, appoved of the Alabama charter — except in certain particulars not important to be here mentioned — and consented to the *338extension of the road through that State to the Tennessee line; conferring upon the company, when .organized, “the same .rights, powers, and privileges ” that were granted to it within the State of Alabama. Like consent was given, and similar action was taken, by the States of Tennessee arid Kentucky, with reference to the proposed road within their respective limits.
The Illinois Central Railroad Company is the lessee of the Chicago, St. Louis and New Orleans Railroad Company.' By an act of the legislature of Mississippi, of April 18, 1873, the New Orleans, Jackson and Great Northern Railroad Company, owning a line of railroad from New Orleans, Louisiana, to Canton, Mississippi, and the Mississippi Central Railroad Company, owning a line running from the latter place northward to Jackson, Tennessee, were authorized to consolidate into one corporation; the latter to have all the rights, powers, privileges, immunities, and franchises in perpetuity, then conferred upon the constituent companies, or upon either of them. Such consolidation took place under the name of the Chicago, St. Louis and New Orleans Railroad Company, and by an act of February 28, 1878, was ratified. But the same act provided that .it should be of no. force or effect until the debt due the State from the Mississippi Central Railroad-Company was adjusted by the Chicago, St. Louis and New Orleans Railroad Company. Subsequently, by an act approved March 1, 1882, the payment of this debt by the latter company to the State was acknowledged, and the Chicago, St. Louis and New Orleans Railroad Company was declared to be a corporation of Mississippi, “ with perpetual succession, and, as such, is invested with all the rights, powers, privileges, liberties, and franchises conferred by the act to which this is a supplement, and especially the rights and powers .. . . of section 10 of an act entitled ‘ An Act to incorporate the Mississippi Railroad Company,’ approved March 10, 1852.”
The 10th section of the act last named, to the rights and powers conferred by which particular reference was made, is in these words : “ That the president and directors be and they are hereby authorized to adopt and establish such a tariff of *339charges for the transportation of persons and property as they may think proper, and the same, to alter and change at pleasure.”
The amount paid to the State by the Chicago, St. Louis and New Orleans Railroad Company, on account of the debt due from the Mississippi Central Railroad Company was $158,-978.82.
It is thus seen that the Mobile and Ohio Railroad Company, and the Chicago, St. Louis and New Orleans Railroad Company, were given by their charters the power to fix and regulate rates for transportation of persons and property upon their respective roads. This power was, of course, not without limit; for the general grant of the franchises, rights, and privileges enumerated in these charters was attended by the condition, which the law always implies in such cases, that the charges for transportation established by the companies shall be reasonable.
The Mississippi statute of 1881 provides for the appointment of three commissioners, and invests them with the power of establishing — upon the basis of “ just compensation,” and the protection of persons, localities, or corporations against “ unjust discrimination” — a tariff of charged for the transportation of persons and property on any railroad owned or operated in that State. • The commissioners, so appointed, are required, in ascertaining such compensation, “to take into consideration the character and nature of the our vice to be performed, and the entire business of such railroad, together with its earnings from the passenger and other traffic; ” to so revise these tariffs “ as to allow a fair and just return on the value of such railroad, its appurtenances and equipments ; ” and to increase or reduce the rates so established “ as justice to the public and each of said railroad companies may require,” and “ as experience and business operations may show to be just.” Any person, company or corporation, operating a railroad in Mississippi, who fails to conform to the tariff of charges established by the commission, is made liable to a penalty of $500 for each violation, recoverable in the name of the State.
I am of opinion that this statute impairs the obligation of the contract which the State made with these companies, in *340this: That it takes from each of thein the power conferred by its charter of fixing and regulating rates for transportation within the limit of reasonableness, and confers upon a commission authority to establish, from time to time, such rates as will give “ a fair and just return on the value of such railroad, its appurtenances and equipments,” and “as experience and business operations may show to be just.” In short, the companies a,re placed by the statute in the same condition they would occupy if their charter had not conferred upon them the power to fix and regulate rates for transportation. The whole subject of transportation rates is thus remitted to the judgment of commissioners who have no pecuniary interest whatever in the management of these vast properties, and who, if they had any such interest, would be disqualified under the statute from serving; and who are required to fix rates, according to the value of the property, without any reference to what it originally cost, or what it had cost to maintain it in fit condition for public use.
It is hardly necessary to discuss the proposition that the right to fix and regulate rates for transportation within the limit of reasonableness was and is one of great practical value to these companies; for, the rates so fixed would have governed the conduct of parties interested in them, unless it was made to appear, affirmatively, and in some legal mode, that they were 'unreasonable. The object of the construction of the roads operated by these companies was, as the bill avers and the opinion of the court admits, to establish a continuous line of interstate communication between the Gulf of Mexico and the Great Lakes of the North. In the accomplishment of that object the entire country took-a deep interest; for Congress, by grants of land and otherwise, gave those enterprises every possible encouragement. Does any one believe that private capitalists would have supplied the money, necessary to establish and maintain these lines of inter-state communication had they supposed that the States through which .the roads were extended reserved the right, by commissioners, to take charge of the whole matter of rates, and abrogate, at ’their pleasure, such tariffs of charges as might be established by the companies *341under the power, expressly conferred, of fixing and regulating rates ? Would they have risked the immense sums invested in these enterprises had the charters of the companies contained a provision making rates to depend, not on the capabilities, wants, and interests of the territory to be supplied with railroad service, or on the amount expended in constructing and maintaining these roads, but on their “ value ” as estimated by commissrnners, and on such basis as the latter, from time to time, might deem to be justified by “ experience and business operations ? ” Their value, upon what basis, or at what period of their existence ? When they were constructed ? Or what they would bring at a sale under a decree of court ? In the place of charter provisions, under which rates fixed by the companies would be deemed legal until the contrary was made to appear, the statute substitutes a system under which rates established by, a commission, and by it increased or.diminished from time to time, must be observed by the companies, unless it is made to appear, affirmatively, that such rates are “ unjust,” — officers and agents of the companies, acting in conformity with express provisions of their charters, being made liable to heavy penalties, unless they prove that the commission have established an “ unjust ” tariff of charges.
The court concedes that the power which the State asserts, by the statute of 1884, of limiting and regulating rates, does involve the power to destroy or. to confiscate the property of these companies; and, consequently, it is said, the State cannot compel them to carry persons or property without reward, nor do that which in law would amount to a taking of private property for public use without just compensation. And reference is made to that clause of the statute which 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.” JBut if I do -not misapprehend the effect of the opinion, it means to.declare that where the tariff of charges fixed by the commissioners does- nofc-certainly work the destruction or confiscation of these properties, or amount in law to taking them for public use without just compensation, the charges so established must be accepted bv *342the courts, as well as by the companies, as reasonable, and, therefore, not be held or treated as “ unjust ” in any prosecution under the act for disregarding such tariff. I cannot otherwise interpret the observation that the legislature may establish a maximum, any. charge in excess of which must be deemed by the courts and the parties to be unreasonable.
In expressing the foregoing views I would not be understood as denying the power of the State to establish a railroad commission, or to enforce regulations — not inconsistent with the essential charter rights of the companies — in reference to the general conduct of their merely local business. My only purpose is to express the conviction that each of these companies has a contract with the State whereby it is exempted from absolute legislative control as to rates, and under which it may, through its directors, from time to time, within the limit of reasonableness, establish such rates of toll for the transportation of persons and property as it deems proper— such rates to be respected by the courts and by the public, unless they are shown affirmatively to be unreasonable.
The bill, in my judgment, makes a case that justifies a court of equity in interfering to prevent the commissioners from imposing upon the defendants any such tariff of charges as the statute in question authorizes them to establish in reference to their business exclusively within the State of Mississippi. As the court withholds any expression of opinion as to the validity of the statute when applied to inter-state commerce, that is, to the transportation of persons and property taken up out of the State and put down in the State, or taken up in the State and put down out of the State, I have no occasion to discuss that question. For the reasons stated, I dissent from the opinion and judgment of the court in' these cases.

 This dissent applies also to the judgment and opinion of the court in Stone v. Illinois Central Railroad Co., post, 347.