Citation Numbers: 20 F. 270
Judges: Hill
Filed Date: 4/24/1884
Status: Precedential
Modified Date: 9/9/2022
This bill is filed against the defendants, John M. Stone, W. B. Augustus, and William McWillie, as railroad commissioners of this state, to enjoin and restrain them from in any way interfering with the Mobile & Ohio Railroad Company, its officers, agents, or employes, in the management of the business of said railroad, or the property and business of said corporation, and to prevent the officers of said railroad from obeying any orders issued or made by the railroad commission, etc. The questions presented have been most forcibly and exhaustively argued by the distinguished and learned counsel on both sides, and are questions of grave importance to the people and the commercial interests of the country generally, as well as to the complainant and all whose interest it represents or to be affected by the result hereof. The questions now to he decided arise upon complainant’s motion for the issuance of the writ of injunction prayed for in the bill above stated.
The facts stated in the bill, not being disputed, will be considered as true in considering tiiis motion, and of which the following is a brief statement, so far as it relates to the present motion: In the year 1848 the legislatures of the states of Alabama, Mississippi, Tennessee, and Kentucky, acting separately, but with a common purpose," by their several acts of incorporation incorporated the Mobile & Ohio Railroad Company, the purpose of which was to construct, equip, and operate a railroad to extend from Mobile, in Alabama, to a point opposite Cairo, in the state of Illinois, at the junction of the Mississippi and Ohio rivers, so as to connect with the channels of commerce at each end of this line with all those at intermediate points, thus creating a great national highway for the transportation of persons and property, not only from the one point to the other and intermediate 'pomts, but with other states and the markets of the world, one channel of commerce being connected with another as links in chains of commercial transportation to an unlimited extent. To promote this grand scheme, the United States granted to the corporation many thousands of acres of its lands situate in the states of Alabama and Mississippi, owning no lands in the other states through which this railroad was located. The corporation was further aided by the states and counties and citizens along the line of the road by contributions of money, labor, and otherwise, by which means the railroad has been completed, equipped; and has been operated for many years without any interruption by any state legislation until within a short time. That, as a consideration upon which said land was granted by the United States, certain rights wore reserved by the government in relation to the transportation of the mails, property, and men belonging to or employed by the United States. The corporation being in need of money, has given a trust deed to complainant, as trustee therein, to secure certain bonds, upon which it has raised the needed funds for the purpose of discharging its other indebtedness, and for the better equipping and operating said railroad.
■ The provisions contained in the sixth section of the act complained of are mainly relied upon as impairing the contract so made and violating the rights so secured. This section is as follows:
“That it shall be the duty of all persons or corporations who shall own or operate a railroad in this state, within-thirty days after the passage of this act, to furnish the commissioner with its tariff of charges for transportation of every kind; and it shall be the duty of said commission to revise said tariff of charges so furnished and to determine whether or not, and in what particular, if any, said charges are more than just compensation for the services to be rendered, and whether or not unjust discrimination is being made in such tariff of charges against any person, locality, or corporation; and when said charges are corrected as approved by said commission, the commission shall then append a certificate of its approval to sa'd tariff of charges, but in revising or establishing any and every tariff of charges, it shall be the duty of said commission to take into consideration the character and nature of the service to be performed and the entire business of such railroad, together with its earnings from the passenger and other traffic, and shall so revise such tariffs as to allow a fair and just return on the value of such railroad, its appurtenances, and equipments; and it shall be the duty of said commission to exercise a watchful and careful supervision over every such tariff of charges, and continue such tariff of charges from time to time, as justice to the public and each of said railroad companies may require, and to increase or reduce any of said rates according as experience and business operations may show to be just;'and said commission shall accordingly fix tariffs of charges for those railroads failing to furnish tariffs as above required; and it shall be the*273 duty of said railroad companies or persons operating any railroad in this state to post at each of its depots all rates, schedules, and tariffs for tiie transportation of passengers and freights, made or approved by said railroad commission, with said certificate of approval, within ten days after said approval, in some conspicuous place at such depot; and it shall be unlawful for any such person or corporation to make any rebate or reduction from such tariff in favor of any person, locality, or corporation which shall not be made in favor of all other persons, localities, or corporations by a change in such published rates, except as may be allowed by the commission; and when any change is contemplated to be made in the schedule of passenger or freight rates of any railroad by the commission, said commission shall give the person or corporation operating or managing said railroad notice in writing, at least ten days before such change, of the time and place at which such change will be considered.”
These and other sections in the act imposing other duties upon said commission in relation to the control of said railroads, and imposing upon the persons and corporations managing them penalties for violating the provisions of said act of the legislature, and which it is alleged violates and impairs the contract so made between the legislature and corporation by the charter aforesaid,'as well as in violation and in conflict with other provisions of the constitution of the United States and of the constitution of this state; hut the section above quoted is sufficient to present the question to be decided upon this motion. It is not necessary to refer to adjudicated cases by the supreme court of the United States to maintain the well-settled rule that courts will not declare legislative enactments void by reason of their repugnance to the constitutions, state or federal, except when the judicial mind is clearly convinced of such repugnancy; hut it is equally well settled that when the judicial mind is so convinced it is the duty of the court to declare the legislation void. The court has no jurisdiction to determine the wisdom or unwisdom of the act in question; if unwise, the legislature alone can grant relief. The only question which the court can decide is, did the legislature have the power to pass the act? or, in other words, did any inhibition against such power exist under any provision of the federal or state constitution ? If none such existed the act must be maintained; but if such did exist it must he declared void so far as it relates to the Mobile & Ohio-Railroad Company and the property and interest of all persons connected therewith.
The question to be determined is, did the act of incorporation passed by the legislature of Alabama and adopted by the state of Mississippi, in relation to the point under consideration which is as follows; “And be it further enacted, 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 lo 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,” — create a valid and binding contract between the state and the corporation, and which the legislature is inhibited by the provis
In construing contracts we must ascertain, if we can, the intention of the parties to them, and in doing so we must look to the objects for which they were made, and in the light of the surrounding circumstances. One important, if not the main, object upon the part of the stockholders was to obtain a return by way of dividends for the investment made, and, upon the part of the United States aüd counties, the main purpose was the establishment of a reasonably safe and rapid mode of transportation of persons and property from one end of the line to be constructed to the other, with all its connections. These being the principal objects of the parties to the contract on the one side, it is not probable that the charter would have been accepted, with the understanding that the legislature of any one of the states could at pleasure place any restrictions or limitations upon the rights and powers conferred, and which were not reserved in the act of incorporation.
The right upon the part of the company to charge and receive compensation for services to be rendered, if taken away or impaired, would defeat the purpose of the contract. This right to fix the charges for compensation certainly does not fall within any police power of the states.
The next question is, to whom was it given by the contract in the charter? Most clearly to the company, without any restriction or reservation.
It is contended on the part of the defendants that this power was not given; that the words of the charter are that it shall be lawful for
With the conclusion thus reached, I might dismiss the subject without further comment, but it has been pressed with great force and ability on the one side, and with equal ability resisted on the other, that this act of -the legislature is in conflict with and violates the eighth section of the first article of the constitution of the United States, because, in purpose and effect, it is a regulation of commerce among the states, which right is exclusively vested, by this provision of the federal constitution, in the congress of the United States. This is a pregnant and important question in which all concerned are deeply interested.
As already stated, the right to demand and receive compensation for the expense incurred in building, equipping, and operating this wonderful and immense avenue and mode of transportation of commerce from one place, state, and country to another, is an absolute necessity; it is difficult to see how the right to fix and regulate the charges for the transportation of persons and freight can be considered in any other light than a regulation of commerce, and that when the railroad passes through more states than one, and the transportation passes from one state to another, or through more than one state, it does constitute commerce among the states, and deprives the states of the power to regulate it. As already stated, the Mobile & Ohio railroad was designed to be and was charted by the legislatures of Alabama, Mississippi, Tennessee, and Kentucky, all acting separately, to be sure, but with one common purpose, and that was to-constitute one corporate body for the maintenance of a great commercial highway of communication and transportation from Mobile, Alabama, to Cairo, Illinois, and thence to connect with all the commercial highways converging at those points. It is not, therefore, a mere local highway, -although, as an incident, freight and passengers were intended to be and are transported from one place to another in the same state, as do vessels on the navigable streams; and in that,
The cases of Munn v. Illinois, 94 U. S. 113; Chicago, B. & Q. R. Co. v. Iowa, Id. 155; Peik v. Chicago & N. W. R. Co. Id. 164, are relied upon to sustain the validity of the act as to the latter class of cases. The. first-named case was in relation to warehouses situated in Illinois, and does not, in my opinion, apply to the question under consideration. In the second case the railroad about which the controversy arose was wholly within the state of Iowa. .The last ease at first view would seem to sustain the position assumed by counsel, but when examined will be found only to apply to such commerce as is of domestic concern, and to transportation within the state, and that carried without the state of Wisconsin, but controlled by the laws of that state, the constitution of which reserves to that state the power to alter or repeal the laws in relation to railroad companies. It is admitted in the opinion in that case that congress may pass laws to regulate the last-named transportation, but until congress acts the state of Wisconsin may pass laws regulating commerce over this particular road. In the case under consideration-neither the constitution of the state of Mississippi nor the charter of the Mobile & Ohio Railroad Company reserved any power to legislate in relation to this or any other railroad company. I am therefore of opinion that the .ruling of the supreme court in the last-named case does not apply to the case before the court, and that the question before the court upon this point is an open one so far as it relates to this court.
The question has been passed upon by'Judge McCrary, in the circuit court in Iowa, in the ease of Kaeiser v. Illinois Cent. R. Co. 18 Fed. Rep. 151, in which that distinguished judge held that a statute of Iowa fixing the maximum rate to be charged by railroad companies for carrying freight within the state is invalid in so far as by its terms it applies to through shipments from points within the state •to points without the state, because it is a regulation of commerce beyond the state, and if upheld would enable the state to discriminate against other states.
In the recent case decided at Nashville by Judges Baxter, Hammond, and Key, (Louisville & N. R. Co. v. Railroad Com’rs of Tenn.
Other decisions might be referred to going to sustain the same rule; but being satisfied the role stated is the law, I adopt it, and under the operation of which the act of the legislature complained of in the bill must be held in conflict with the constitution of tiie United States and void.
I am therefore brought to the conclusion that for the reasons stated, if for no other, so far as this act of the legislature authorizes and requires the commission to fix a tariff of charges to be enforced against the Mobile & Ohio Railroad Company, it must be declared nuil and ■void. Tiie commission having no power to fix and regulate tiie tariff of charges for the Mobile & Ohio Railroad Company, the provisions of tiie act in relation to other powers and duties to be performed on the part of the commission, so far as they relate to that corporation, must also be declared void.
The other objections to this act of the legislature raised and argued by counsel, not being necessary to be considered upon the nrosent motion, will be postponed until the hearing of the cause.