Court Opinion

ID: 9841772
Source: CourtListenerOpinion
Date Created: 2023-09-22 20:05:26.597737+00
Date Added: 2024-06-11T09:04:43.887850
License: Public Domain

■jMjr. Justice Blatchfoed,
after 'stating the cáse as above1 reported, delivered the opinion of the court.
The .opinion of the Supreme Court pf, Minnesota is reported in 38 Minnesota, 281. In it the court in the first place , construed the statute on . the question as'to whether the court itself-had jurisdiction to entertain tpe proceeding, and held, that it had. Of course, w¿ óannot revie# this decision.
It next proceeded to consider the question as to the nature and extent of the powers granted to the . commission by the statute in the matter of fixing, the rates of charges. On-that subject it said : “ It seems to us that, if language means anything, it is perfectly evident that. the expressed intention of .the legislature is that-the rates recommended and published by the commission (assuming that they have proceeded in the jmanner-pointed out by the act) should be not simply advisory, nor merely jjrima fade' equal and reasonable, but final and conclusive as to what are lawful or equal' and reasonable charges; that, in proceedings to compel compliance with the rates thus published, the law neither contemplates nor allows any issue to be made or inquiry-had as to- their equality and1 reasonableness in fact. Under the provisions of the act, the rates thus published are the only ones that are lawful, and •therefore, in contemplation of law, the only ones that are equal and reasonable;' and, hence, in proceedings like thé present, there' is, as said -before, no fact to traverse, except the-•violation of the law in refusing compliance with the recpm--mendations of the commission. Indeed, the language of the act is so plain on that point that argument can add •'nothing' to its force.”
*453It then proceeded to examine the question of the validity of the- act under the constitution of Minnesota, as to whether the legislature'was authorized to confer upon the commission the powers given to the latter by the statute. It held that,' as the legislature had the power itself to regulate charges by railroads, it could delegate to a commission .the power of fixing such charges, and could make the judgment or determination, of the commission as to what were reasonable charges final and conclusive.
The Chicago, Milwaukee and St. Paul Railway Company is a corporation organized under the laws of Wisconsin. The line of railroad owned and operated by it in the • present case extends-from Calmar, in Iowa,'to LeRoy,"m Minnesota, and from Leroy, through Owatonna and Faribault, to St. Paul and Minneapolis, the line from Calmar to St. Paul and Minneapolis being known as the “Iowa and Minnesota Division,” and being wholly in Minnesota from the point where it crosses the state line between Iowa and Minnesota. It was constructed under a charter granted by' the Territory • of Minnesota to the Minneapolis arid Cedar Valley Railroad.Company, by an act approved March 1, 4856, Laws of 1856, e. 166, p. 325,.to construct á railroad from the Iowa line, at or near the crossing of said line by the Cedar River, through the valley -of Strait River to, Minneapolis. Section 9 of that act provided that the directors of the corporation, should have power to make all needful, rules, regulations and by-laws touching “the rates of. toll and the manner of collecting the same; and section 13, that the company should have power to unite its railroad with any'other, railroad which was. then, -or thereafter might be, constructed in the’Territory of Minnesota, or adjoining States- or Territories, and should have power to consolidate it's, stock with any other company or companies.
• By an .act passed"' March :3, 1857, c. 99, (11 Stat. 195,) the Congress of the United States made a grant of land to the. Territory of Minnesota to aid in constructing certain railroads. By an act of the legislature of' the Territory, approved May ■22, 1857, (Lavds of 1857, extra session, p. 20,) a portion' of such grant was conferred upon the Minneapolis ¡énd Cedar Valley *454Railroad Company. .Subsequently, in 1860, the State of Minnesota, by proper proceedings, became the owner of the rights, franchises and property of that company. By an act approved March .10,1862, c. 17, (Special Laws of 1862, p. 226,) the State incorporated' the Minneapolis, Faribault and Cedar Yalley Railroad Company, and conveyed to it all the franchises and 'property of the Minneapolis and Cedár Yalley Railroad Company which the State had so acquired ; and by an act approved February 1, 1864, (Special Laws of 1864, p. 164,)-the name of the Minneapolis, Faribault and Cedar Yalley Railroad Company was changed to that of the Minnesota Central Railway Company. . That company constructed the rpad from Minneapolis and St. Paul to LeRoy, in Minnesota; and the road from LeRoy to Calmar, in Iowa, and thence to McGregor, in the latter State, was consolidated with it. In August, 1867, the entire road from McGregor, by way of Calmar, LeRoy, Austin, Owa-tonna and Faribault, to St. Paul and Minneapolis, was conveyed to the Chicago, Milwaukee and St. Paul Railway Company, which succeeded to all the franchises so granted to the Minneapolis and Cedar Yalley Railroad Company.
It is contended for the railway company1 that the - State of Minnesota is bound by the contract made by the - Territory in the charter granted to the Minneapolis and Cedar Yalley Railroad Company; that a contract existed' that the company .should have the power of regulating, its rates of toll; that any legislation .by the State infringing upon that right impairs the ■obligation of the contract; that there was no provision in the charter or in any general. statute reserving to the Territory or to the 'State ■ the right to alter or amend the charter; an'd that no. subsequent legislation of the Territory or of the State could deprive the directors of the qómpanyof the power to fix-its rates of. toll,, subject only to the general provision of law. that such rates should be reasonable.
But we áre of opinion that the' general language of, the ninth section of the chartér of the Minneapolis and Cedar Yal-ley Railroad Company cannot be held to constitute an irrepealable contract With that company that it should have the right for all future time to prescribe its rates of toll, free from all control by the legislature.of the State.
*455It was held by this court in Pennsylvania Railroad Co. v. Miller, 132 U. S. 75, in accordance with a long course of decisions both in the state -courts and-in this court, that a railroad corporation takes its charter, containing a kindred provision with that in question, subject to the' general law of the State,- and to such changes as may be made in such general law, and subject to future constitutional provisions and future general legislation, in the absence of any-prior-contract with it exempting it from liability to such future general legislation in respect of the subject matter involved; and that exemption from future general legislation, either by a constitutional provision or by an act of the legislature, cannot-be admitted to exist.unless it is given expressly, or unless it.follows by an implication equally clear with express words.
There is nothing in the mere grant of power, by section-9 of the charter, to the directors of the company, to make needful rules and regulations touching the rates of toll and the manner of collecting the same, which can be properly interpreted as authorizing us to hold that the State parted .with its general authority itself to regulate, at any time in the future when it. might se^ fit to do. so, the rates of toll to be collected by the company.
In Stone v. Farmers' Loan and Trust Co., 116 U. S. 307, 325, the whole subject is fully .considered, the authorities are-cited, and the conclusion is arrived-at, that the right of a. State reasonably to limit the amount of charges.' by a railroad company for the transportation of persons and propertywithin its jurisdiction cannot be granted away by its legislature, unless by words of positive grant or words equivalent in law; and that a statute which grants to a railroad company the right “■ from time to time to fix, regulate and receive the tolls- and charges by them tó be received for transportation,” does not. deprive .the State of its power, within the limits of. its general authority, as controlled by the Constitution-..of- the TTnited States, to act upon the reasonableness of the tolls and charges so fixed'.’and regulated. But, after reaching this'conclusion, the court said (p; 331): “From what has thus been said, it is not to- be inferred that this power of limitation or *456regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the équiyalent 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.”
There being, therefore, no contract or chartered right in the railroad company which can prevent the legislature from regulating in some form the charges of the company for transportation, the question is whether the form adopted in ' the present case is valid.
The construction put upon the statute by the Supreme Court of Minnesota must be accepted by this court, for the purposes of the present case, as conclusive and not to be reexamined here as to its propriety or accuracy. The Supreme Court authoritatively declares that it is the expressed-intention of the legislature of Minnesota, by the statute, that the rates recommended and published by the commission, if it proceeds in the manner pointed out by the act, are not simply advisory, nor merely prima, facie equal and reasonable, but final and conclusive as to what are equal and reasonable charges; that the law neither contemplates nor allows any issue to be made or inquiry to be had as to their equality or reasonableness in fact; that, under the statute, the rates published by the commission are the only ones that are lawful, and, therefore, in contemplation of law the only ones that are equal and reasonable; and that, in a proceeding for a mandamus under the statute, there is no fact to traverse except the violation of law in not complying with the recommendations of the commission. In other words, although the railroad company is forbidden -to establish rates that are not equal and reasonable, there is no power'in the. courts to stay the hands of the commission, if it chooses to establish ■ rates that are unequal and unreasonable.
This being the construction of the statute by which we are bound in considering- the present case, we are of opinion that, so construed, it conflicts with the Constitution of the United *457States in the particulars complained of by the railroad company. It deprives the company of its right to a judicial investigation, by due process of law, under the forms and with the machinery provided by the wisdom of successive ages for the investigation judicially of the truth of a matter in controversy, and substitutes therefor, as au absolute finality,’ the action of a railroad commission which, in view of the powders conceded to it by the state court, cannot be regarded as clothed ;with judicial functions or possessing the 'machinery of a court of justice.
Under section 8 of the statute, which the Supreme Court of Minnesota says is the only' one which relates to the matter' of the fixing by the commission of general schedules of rates, and which section, it says, fully and exclusively provides for that subject, and is complete in itself, all that the commission •is required to do is, dn the filing with it by a railroad.company of copies of its schedules of charges, to “ find ” that any part thereof is in any respect unequal or unreasonable, and-then it is authorized and directed to compel the' company to change the same and adopt such charge’ as the commission “ shall declare to .be equal and reasonable,” .and, to that end, it is required -to inform the company in writing in what respect its charges are unequal and unreasonable. No. hearing is provided for, no summons or notice to the company before the commission has found what it is to find and declared what it is to declare, no opportunity provided for the company to introduce witnesses before the commission, in fact, nothing which; has the semblance of due process of law ; and although, in the present case, it appears that, prior to the decision' of the commission, the company appeared before it by its agent, and the comnj'ssion investigated the rates charged by the company for transporting milk,- yet it does not appear what the character 'of the investigation was or how the result was arrived at.
By the second section of .the statute in .question,' it is provided' that all charges made by a common carrier for the transportation of passengers or property shall be equal and reasonable. Under this provision, the carrier has a right to make equal and reasonable charges for such transportation. *458In the present ease, the return alleged that the rate of charge fixed by the commission was not equal or reasonable, and the Supreme Court held that the statute deprived the company of the right to show that judicially. The question of the reasonableness of a rate of charge for transportation by a railroad ■.company, involving as it. does the element of reasonableness both'as regards the company and as regards the public, is eminently a question for judicial investigation, requiring due process of law for its determination. If the' company is deprived of the power of charging reasonable rates for the use •of its property, and such deprivation takes place in the absence of an investigation by judicial machinery, it is deprived of the lawful use of its property, and thus,' in substance and effect, .of the property itself, without due process of law and in violation of the Constitution of the United States; and in' so far as it is thus deprived, while other persons are permitted to receive.reasonable profits upon their invested capital, the company is deprived of the equal protection of the laws.
It is provided by section 4 of article 10 of the constitution of Minnesota of 1857, that “lands may betaken for public way, for the. purpose of granting to any 'corporation the franchise of way for public use,” and that “ all corporations, being common carriers, enjoying .the-right of way in pursuance to the provisions of this section, shall be bound to carry the mineral, agricultural and other productions and manufactures on equal and reasonable terms.” . It is thus perceived that 'the provision of section 2 of the statute in-question is one enacted in conformity with the constitution of Minnesota.
The issuing of the peremptory writ of mandamus in this case was, therefore, unlawful,- because in violation of. the Constitution of the United States; and it is necessary ttat the relief administered in favor of the plaintiff in error should be a reversal of the judgment of the Supreme Court awarding that-writ, and an instruction for further proceedings by it not-inconsistent with the opinion of this coui't.
• In view Of the opinion delivered by that court, it may be ’impossible' for any further proceedings to be taken other than to dismiss the proceeding - for a mandamus, if the *459court should adhere to .its opinion that, under the statute, it cannot investigate judicially the reasonableness of the rates •fixed by the commission. Still, the question will be ooen for review; and

The judgment of this court is, that the judgment of the /Supreme Qourt of Minnesota, entered May j, 1888, award--ing a peremptory writ of mandamus in this case, be reversed, and the case be remanded to that court, with an ■ instruction for further proceedings not inconsistent with the opinion of this cowrt.