Minneapolis & St. Louis R. Co. v. Minnesota
186 U.S. 257 (1902)

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U.S. Supreme Court

Minneapolis & St. Louis R. Co. v. Minnesota, 186 U.S. 257 (1902)

Minneapolis & St. Louis Railroad Company v. Minnesota

No. 131

Argued January 23-24, 1902

Decided June 2, 1902

186 U.S. 257

Syllabus

The act of the Legislature of Minnesota creating a railroad Commission is not unconstitutional in assuming to establish joint through rates or tariffs over the lines of independent connecting railroads and apportioning and dividing the joint earnings.

Such a Commission has a clear right to pass upon the reasonableness of contracts in which the public is interested, whether such contracts be made directly with the patrons of the road or for a joint action between railroads in the transportation of persons and property in which the public is indirectly concerned.

Without deciding whether or not connecting roads may be compelled to enter into contracts as between themselves and establish joint rates, it is nonetheless true that, where a joint tariff between two or more roads has been agreed upon, such tariff is as much within the control of the legislature as if it related to transportation over a single line.

The presumption is that the rates fixed by the Commission are reasonable, and the burden of proof is upon the railroad company to show the contrary.

A tariff fixed by the Commission for coal in carload lots is not proved to be unreasonable by showing that, if such tariff were applied to all freight, the road would not pay its operating expenses, since it might well be that the existing rates upon other merchandise, which were not disturbed by the Commission, might be sufficient to earn a large profit to the company, though it might earn little or nothing upon coal in carload lots.

This was a petition for a mandamus filed in the District Court of Ramsey County by the state, upon the relation of the Railroad and Warehouse Commission, against the Minneapolis & St. Louis Railroad Company and several other railroad companies (the first of which alone answered and sued out this writ of error), to compel such companies to adopt and publish a joint through rate fixed by the Commission upon shipments of hard coal in carload lots from the City of Duluth to certain points in the southern and western parts of the State of Minnesota, and to enjoin them from demanding or receiving any

Page 186 U. S. 258

greater sum for such through shipments than that fixed by the Commission.

The facts are substantially as follows: the St. Paul and Duluth Railroad Company, a corporation of the State of Minnesota, operates a line of railroad from Duluth upon Lake Superior to the Cities of St. Paul and Minneapolis. Its local rate upon hard coal in carload lots from Duluth to these twin cities was $1.25 per ton, the reasonableness of which local rate is conceded. The Minneapolis and St. Louis Railroad Company, also a corporation of the same state, operates a line of road from St. Paul and Minneapolis southerly through Hopkins, a station nine miles from Minneapolis, to Albert Lea in said state, thence still southerly to Angus in Boone County, Iowa. At Albert Lea and Angus, it connects with other railroads, and by virtue of traffic arrangements has access to all the principal markets. It also owns and operates a branch line extending from a connection with its main line at Hopkins, westerly ninety-two miles to Morton, Minnesota at which point it connects with a railroad owned and operated by the Wisconsin, Minnesota and Pacific Railroad Company, which extends westerly from Morton to Watertown in South Dakota. Winthrop is a station upon the line of the Minneapolis and St. Louis road between Hopkins and Morton, sixty miles west of Hopkins, and at the time the order of the Commission was made the Minneapolis, New Ulm and Southwestern Railroad had constructed and owned a short line of railroad extending south from Winthrop to New Ulm in Brown County. The capital stock of the last-named company was owned by the Minneapolis and St. Louis Railroad Company, but it was nevertheless a separate and independent corporation.

Both the St. Paul and Duluth Railroad Company and the Minneapolis and St. Louis company are fully equipped to conduct the business of common carriers, have complete track connections and transfer facilities at St. Paul and Minneapolis, and for a long time have been engaged in transporting hard coal in carload lots without change of cars from Duluth to the points upon the line of the Minneapolis and St. Louis road for a joint through rate, which had been established by the mutual agreement

Page 186 U. S. 259

of the companies, and which had been divided between them according to that agreement. In dividing earnings under this joint tariff, to which not only the two principal defendants were parties, but the Minneapolis, New Ulm and Southwestern company, and the Wisconsin, Minnesota and Pacific company were also parties, there was first set apart to the St. Paul and Duluth company $1 per ton for transporting the hard coal from Duluth to Minneapolis, the remainder being turned over to one or more of the other three companies participating in the carriage of the coal to its destination.

On September 22, 1898, the Railroad and Warehouse Commission, having resolved to investigate the reasonableness of this joint rate, made an order upon all these railroad companies to answer as to the reasonableness of such rate. The companies duly appeared and took part in the investigation, and on January 19, 1899, the Commission made an order whereby it determined that the joint rate then in force for transporting hard coal from Duluth to the several stations west of the Twin Cities was unreasonable and unjust, and ordered a reduction to another rate found by the Commission, which was published and served upon the companies, as required by the state laws, but was disregarded by the railroads interested. Under the rate so fixed, the St. Paul and Duluth company was allowed $1 per ton from Duluth to Minneapolis, which was the same price previously agreed upon between the parties, the remainder to be paid to the Minneapolis and St. Louis company, which was left to settle with the Minneapolis, New Ulm, and the Southwestern and the Wisconsin, Minnesota & Pacific companies for services rendered by those companies in the transportation of coal to points upon their respective roads. Neither of the companies filed or posted schedules of the new tariffs as required by law, and the plaintiff in error, the Minneapolis and St. Louis Railroad Company, on March 3, 1899, and six weeks after the Commission made its order, withdrew all tariffs on hard coal in carload lots which had been established under agreement with the Duluth road.

Whereupon this proceeding was taken in the District Court of Ramsey County to compel the railroad companies to comply

Page 186 U. S. 260

with the order of the Commission. After trial, judgment was rendered by that court confirming the order of the Commission directing the issue of a writ of mandamus as prayed, and the judgment so rendered was affirmed upon appeal by the Supreme Court of Minnesota in State v. Minneapolis & St. Louis R. Co., 80 Minn.191.

Whereupon the Minneapolis and St. Louis Railroad Company, against which the full amount of the reduction by the Commission was assessed, sued out this writ of error.

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