Chicago, M. & St. P. Ry. Co. v. Minnesota - 134 U.S. 418 (1890)


U.S. Supreme Court

Chicago, M. & St. P. Ry. Co. v. Minnesota, 134 U.S. 418 (1890)

Chicago, Milwaukee and St. Paul Railway Company v. Minnesota

No. 762

Argued January 13-14, 1890

Decided March 24, 1890

134 U.S. 418

Syllabus

The Act of the Legislature of Minnesota approved March 7, 1887, General Laws of 1887, c. 10, establishing a railroad and warehouse commission, being interpreted by the supreme court of that state as providing that the rates of charges for the transportation of property recommended and published by the commission shall be final and conclusive as to what are equal and reasonable charges, and that there can be no judicial inquiry as to the reasonableness of such rates, and a railroad company, in answer to an application for a mandamus, contending that such rates, in regard to it, are unreasonable, and not being allowed by the state court to put in testimony on the question of the reasonableness of such rates, held that the act is in conflict with the Constitution of the United States as depriving the company of its property without due process of law, and depriving it of the equal protection of the laws.

The state had made no irrepealable contract with the 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.

This was a writ of error to review a judgment of the Supreme Court of the State of Minnesota awarding a writ of mandamus against the Chicago, Milwaukee & St. Paul Railway Company.

The case arose on proceedings taken by the Railroad and Warehouse Commission of the State of Minnesota under an act of the legislature of that state, approved March 7, 1887, General Laws of 1887, c. 10, entitled "An act to regulate common carriers and creating the Railroad and Warehouse Commission of the State of Minnesota and defining the duties of such commission in relation to common carriers." The act is set forth in full in the margin. *

Page 134 U. S. 419

The ninth section of that act creates a commission, to be known as the "Railroad and Warehouse Commission of the

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State of Minnesota," to consist of three persons, to be appointed by the governor by and with the advice and consent of the senate.

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The first section of the act declares that its provisions shall apply to any common carrier

"engaged in the transportation

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of passengers or property wholly by railroad, or partly by railroad and partly by water, when both are used under a

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common control, management, or arrangement, for a carriage or shipment from one place or station to another, both being within the State of Minnesota. "

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The second section declares

"That all charges made by any common carrier subject to the provisions of this act, for any

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service rendered or to be rendered in the transportation of passengers or property as aforesaid, or in connection

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therewith, or for the receiving, delivering, storage, or handling of such property, shall be equal and reasonable, and every

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unequal and unreasonable charge for such service is prohibited, and declared to be unlawful. "

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The eighth section provides that every common carrier subject to the provisions of the act shall print and keep for

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public inspection schedules of the charges which it has established for the transportation of property; that it shall make

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no change therein except after ten days' public notice, plainly stating the changes proposed to be made, and the time when

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they will go into effect; that it shall be unlawful for it to charge or receive any greater or less compensation than that

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so established and published for transporting property; that it shall file copies of its schedules with the commission, and

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shall notify such commission of all changes proposed to be made; that in case the commission shall find at any time that

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any part of the tariffs of charges so filed and published is in any respect unequal or unreasonable, it shall have the power, and it is authorized and directed, to compel any common carrier to change the same, and adopt such charge as the

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commission "shall declare to be equal and reasonable," to which end the commission shall, in writing, inform such carrier in what respect such tariff of charges is unequal and unreasonable, and shall recommend what tariff shall be substituted therefor; that in case the carrier shall neglect for ten days after such notice to adopt such tariff of charges as the commission recommends, it shall be the duty of the latter to immediately publish such tariff as it has declared to be equal and reasonable and cause it to be posted at all the regular stations on the line of such carrier in Minnesota, and it shall be unlawful thereafter for the carrier to charge a higher or lower rate than that so fixed and published by the commission, and that if any carrier subject to the provisions of the act shall neglect to publish or file its schedules of charges or to carry out such recommendation made and published by the commission, it shall be subject to a writ of mandamus "to be issued by any judge of the supreme court or of any of the district courts" of the state, on application of the commission, to compel compliance with the requirements of section 8, and with the recommendation of the commission, and a failure to comply with the requirements of the mandamus shall be punishable as and for contempt, and the commission may apply also to any such judge for an injunction against the carrier from receiving or transporting property or passengers within the state until it shall have complied with the requirements of section 8 and with the recommendation of the commission, and for any willful violation or failure to comply with such requirements or such recommendation of the commission, the court may award such costs, including counsel fees, by way of penalty, on the return of said writs, and after due deliberation thereon, as may be just.

On the 22d of June, 1887, the Boards of Trade Union of Farmington, Northfield, Faribault, and Owatonna, in Minnesota, filed with the commission a petition in writing complaining that the Chicago, Milwaukee & St. Paul Railway Company, being a common carrier engaged in the transportation of property wholly by railroad, for carriage or shipment from Owatonna, Faribault, Dundas, Northfield, and Farmington

Page 134 U. S. 436

to the Cities of St. Paul and Minneapolis, all of those places being within the State of Minnesota, made charges for its services in the transportation of milk from said Owatonna, Faribault, Dundas, Northfield, and Farmington to St. Paul and Minneapolis which were unequal and unreasonable in that it charged four cents per gallon for the transportation of milk from Owatonna to St. Paul and Minneapolis, and three cents per gallon from Faribault, Dundas, Northfield, and Farmington to the said cities, and that such charges were unreasonably high, and subjected the traffic in milk between said points to unreasonable prejudice and disadvantage. The prayer of the petition was that such rates be declared unreasonable and the carrier be compelled to change the same and adopt such rates and charges as the commission should declare to be equal and reasonable. A statement of the complaint thus made was forwarded by the commission on the 29th of June, 1887, to the railway company, and it was called upon by the commission, on the 6th of July, 1887, to satisfy the complaint or answer it in writing at the office of the commission in St. Paul on the 13th of July, 1887. On the 30th of June, 1887, Mr. J. F. Tucker, the assistant general manager of the railway company, addressed a letter from Milwaukee to the secretary of the commission saying:

"I have your favor of the 29th, with complaint as to milk rates being unreasonable and unequal. They may be unequal, if unreasonable. They are unreasonably low for the service performed -- by passenger train -- and are 25 percent less than the same commodity is charged into New York, with longer distances and hundred times larger volume in favor of New York. I am frank to say it is hard to appreciate complaints from boards of trade that one-tenth of a cent per gallon on milk handled on passenger train one mile is unreasonable. With what is the comparison made that enables such a conclusion? It's not first-class rates by freight train, and was made low to encourage the trade under the hope and promise that when the trade were fostered, it would be advanced. This, as usual, has been forgotten."

On the 13th of July, 1887 at the office of the commission

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in St. Paul, the company appeared by J. A. Chandler, its duly authorized attorney, and the Boards of Trade Union by its attorney, and the commission proceeded to investigate the complaint. An investigation of the rates charged by the company for its services in transporting milk from Owatonna, Faribault, Dundas, Northfield, and Farmington, to St. Paul and Minneapolis was made by the commission, and it found that the charges of the company for transporting milk from Owatonna and Faribault to St. Paul and Minneapolis were three cents per gallon on ten-gallon cans; that such charges were unequal and unreasonable, and that the company's tariff of rates for transporting milk from Owatonna and Faribault to those cities, filed and published by it as provided by chapter 10 of the Laws of 1887, was unequal and unreasonable, and the commission declared that a rate of two and one-half cents per gallon in ten-gallon cans was an equal and reasonable rate for such services.

On the 4th of August, 1887, the commission made a report in writing which included the findings of fact upon which its conclusions were based, its recommendation as to the tariff which should be substituted for the tariff so found to be unequal and unreasonable, and also a specification of the rates and charges which it declared to be equal and reasonable. This paper was in the shape of a communication dated at St. Paul, August 4, 1887, signed by the secretary of the commission and addressed to the company. It said:

"It appearing, from your schedule of rates and charges for the transportation of milk over and upon the Iowa and Minnesota division of your road that you charge, collect, and receive for the transportation of milk over and upon said line from Owatonna and Faribault to the Cities of St. Paul and Minneapolis three cents per gallon, in ten-gallon cans, and from Dundas, Northfield, and Farmington to said cities of St. Paul and Minneapolis two and one-half cents per gallon in cans of like capacity, and complaint having been made that such rates and charges are unequal and unreasonable, and that the services performed by you in such transportation are not reasonably worth the said sums charged therefor, and this commission having

Page 134 U. S. 438

thereupon, pursuant to the provisions of section eight of an act entitled"

"An act to regulate common carriers, and creating the railroad and warehouse commission of the State of Minnesota, and defining the duties of such commission in relation to common carriers,"

"approved March 7, 1887, examined the cause and reasonableness of said complaint, and finding, pursuant to subdivision e of said section, that your said tariff of rates, so far as appertains to the transportation of milk to the cities of St. Paul and Minneapolis from the other places above named, and inasmuch as said tariff provides for, or requires the charging or collection of, a greater compensation than two and one-half cents per gallon, is unreasonable and excessive. Therefore said commission recommends and directs that you, the said Chicago, Milwaukee & St. Paul Railway Company, shall alter and change your said schedule by the adoption and substitution of a rate not to exceed two and one-half cents per gallon for the services aforesaid from the cities of Owatonna and Faribault, or either of them, to said St. Paul and Minneapolis. The commission as at present advised, approves of the custom and arrangement which, it is informed, has been adopted and is now in use by the Minnesota & North western R. Co. of collecting two and one-half cents per gallon on all milk transported by it, regardless of distance; but this expression of opinion is no part of the decision, notice, or order in this case."

This report was entered of record, and a copy furnished to the Boards of Trade Union, and a copy was also delivered, on the 4th of August, 1887, to the company, with a notice to it to desist from charging or receiving such unequal and unreasonable rates for such services. The commission thus informed the company in writing in what respect such tariff or rates and charges was unequal and unreasonable, and recommended to it in writing what tariff should be substituted therefor, to-wit, the tariff so found equal and reasonable by the commission.

The company neglected and refused for more than ten days after such notice to substitute or adopt such tariff of charges as was recommended by the commission. The latter

Page 134 U. S. 439

thereupon published the tariff of charges which it had declared to be equal and reasonable and caused it to be posted at the station of the company in Faribault on the 14th of October, 1887, and at all the regular stations on the line of the company in Minnesota prior to November 12, 1887, and in all things complied with the statute. The tariff so made, published, and posted was dated October 13, 1887, and was headed:

"Chicago, Milwaukee & St. Paul Railway Company (Iowa and Minnesota Division). Freight tariff on Milk from Owatonna and Faribault to St. Paul and Minneapolis, taking effect October 15, 1887,"

and prescribed a charge of two and one-half cents per gallon in ten-gallon cans from either the Owatonna station or the Faribault station to either St. Paul or Minneapolis to be the legal, equal, and reasonable maximum charge and compensation for such service, and declared that the same was in force and effect in lieu and place of the charges and compensation theretofore demanded and received therefor by the company.

On the 6th of December, 1887, the commission, by the attorney general of the state, made an application to the supreme court of the state for a writ of mandamus to compel the company to comply with the recommendation made to it by the commission, to change its tariff of rates on milk from Owatonna and Faribault to St. Paul and Minneapolis, and to adopt the rates declared by the commission to be equal and reasonable. The application set forth the proceedings hereinbefore detailed; that the company had refused to carry out the recommendation so made, published, and posted by the commission; that it continued to charge three cents per gallon for the transportation of milk in ten-gallon cans from Owatonna and Faribault to St. Paul and Minneapolis; that said charge was unequal, unreasonable, and excessive; that two and one-half cents per gallon for the transportation by it of milk in ten-gallon cans from Owatonna and Faribault to St. Paul and Minneapolis was the maximum reasonable charge for the service; that any rate therefor in excess of two and one-half cents per gallon in ten-gallon cans was unequal, unreasonable, and excessive; that three cents per gallon in ten-gallon cans was a higher rate

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than was charged for the same distances on passenger trains by any express company or by any other railroad company in Minnesota engaged in transporting milk to St. Paul or Minneapolis; that two and one-half cents per gallon in ten-gallon cans was the highest rate charged for like distances on passenger trains by any such company; that the milk transported by the company to St. Paul and Minneapolis, over its Iowa and Minnesota division (extending from Calmar, in Iowa, to Le Roy, in Minnesota, and from Le Roy, through Owatonna and Faribault, to St. Paul and Minneapolis), large quantities of which milk were shipped from Faribault, was so transported by the company on a passenger train which ran daily from Owatonna to St. Paul and Minneapolis, and that the company, by means of such excessive charges, subjected the traffic in milk at Faribault and Owatonna to undue and unreasonable prejudice and disadvantage.

Thereupon an alternative writ of mandamus was issued by the court, returnable before it on the 14th of December, 1887.

On the 23d of December, 1887, the company filed its return to the alternative writ in which it set up:

(1) That it was not competent for the Legislature of Minnesota to delegate to a commission a power of fixing rates for transportation, and that the Act of March 7, 1887, so far as it attempted to confer upon the commission power to establish rates for the transportation of freight and passengers, was void under the constitution of the state.

(2) That the company as the owner of its railroad, franchises, equipment, and appurtenances, and entitled to the possession and beneficial use thereof, was authorized to establish rates for the transportation of freight and passengers, subject only to the provision that such rates should be fair and reasonable; that the establishing of such rates by the state against the will of the company was pro tanto a taking of its property and depriving it thereof, without due process of law in violation of section 1 of Article 14 of the Amendments to the Constitution of the United States, and that the making of the order of October 13, 1887, was pro tanto a

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taking and depriving the company of its property without due process of law in violation of said section 1, and therefore void and of no effect.

(3) That the rate of three cents per gallon as a freight for carrying milk in ten-gallon cans on passenger trains from Owatonna and Faribault, respectively, to St. Paul and Minneapolis was a reasonable, fair, and just rate; that the rate of two and one-half cents per gallon in ten-gallon cans so fixed and established by the commission was not a reasonable, fair, or just compensation to the company for the service rendered, and that the establishing of such rate by the commission against the will of the company was pro tanto a taking of its property without due process of law in violation of said section 1.

The case came on for hearing upon the alternative writ and the return, and the company applied for a reference to take testimony on the issue raised by the allegations in the application for the writ and the return thereto as to whether the rate fixed by the commission was reasonable, fair, and just. The court denied the application for a reference and rendered judgment in favor of the relator, and that a peremptory writ of mandamus issue. An application for a reargument was made and denied. The terms of the peremptory writ were directed to be that the company comply with the requirements of the recommendation and order made by the commission on the 4th of August, 1887, and change its tariff of rates and charges for the transportation of milk from Owatonna and Faribault to St. Paul and Minneapolis, and substitute therefor the tariff recommended, published, and posted by the commission, to-wit, the rate of two and one-half cents per gallon of milk in ten-gallon cans from Owatonna and Faribault to St. Paul and Minneapolis, being the rates published by the commission, and declared to be equal and reasonable therefor. Costs were also adjudged against the company. To review this judgment the company has brought a writ of error.

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