Oregon R. & Navigation Co. v. Fairchild
224 U.S. 510 (1912)

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U.S. Supreme Court

Oregon R. & Navigation Co. v. Fairchild, 224 U.S. 510 (1912)

Oregon Railroad and Navigation Company v. Fairchild

No. 118

Argued December 18, 1911

Decided April 29, 1912

224 U.S. 510

Syllabus

An order of a railroad commission requiring a railroad company to expend money and use its property in a specified manner is not a mere administrative order, but is a taking of property; to be valid, there must be more than mere notice and opportunity to be heard; the order itself must be justified by public necessity and not unreasonable or arbitrary.

The hearing which must precede an order taking property must not be a mere form, but one which gives the owner the right to secure and present material evidence; but a state statute which gives the privilege of introducing such evidence, affords compulsory process, and gives the right of cross-examination does not deny due process by not affording sufficient opportunity to be heard.

The hearing is sufficient if the person whose property is to be taken is put on notice as to the order to be made and given opportunity to show that it is unjust or unreasonable.

An opportunity given to test, by review in the courts, the lawfulness of an order made by a commission does not deny due process because, on such review, new evidence (other than newly discovered or necessary on account of surprise or mistake) is not allowed, and because the court must act on the evidence already taken, if the court is not bound by the findings, and the party affected had the right on the original hearing to introduce evidence as to all material points.

Where the party whose property has been taken has not been deprived of a right to be heard, the question is whether, as a matter of law, the facts proved a public necessity justifying the taking.

A state, acting through an administrative body, may require railroad companies to make track connections, Wisconsin &c. R. Co. v. Jacobson,179 U. S. 287, but such body cannot compel a company to

Page 224 U. S. 511

build branch lines, connect roads lying at a distance from each other, or make connections at every point regardless of necessity; each case depends on the special circumstances involved.

In a proceeding brought to compel a carrier to furnish facilities not included in its absolute duties, the question of expense is of controlling importance.

In this case, the record does not disclose any public necessity justifying the order of the State Railroad Commission of Washington to require track connections to be made at eight points.

The burden is on a State Railroad Commission to show that public necessity requires track connections, and the Commission is charged with notice that the reasonableness of its order is to be determined at the hearings before it.

While the statute of the Washington authorizing the State Railroad Commission to order additional trackage is not unconstitutional as denying due process of law, the orders in this case were not justified by public necessity, and therefore deprived the railroad company of its property without due process of law.

52 Wash. 17 reversed.

A statute of the State of Washington authorizes the Railroad Commission, upon complaint made, or on inquiry upon its own motion "after a full hearing . . . to order that additional trackage or sidings be constructed . . . and that additional connections be made."

In pursuance of this act, and by direction of the Commission, the Attorney General filed a complaint against the Oregon Railroad & Navigation Company, chartered under the laws of Oregon, the Northern Pacific Railway Company and the Spokane & Inland Railroad, praying for an order requiring them to connect their tracks at Pullman, Colfax, Garfield, Oakesdale, Rosalia, Waverly, Thorton, Farmington, Connell, and Palouse. The complaint averred that four of these towns were important shipping points, and that at all of them there was a demand that cars should be transferred from one line to the

Page 224 U. S. 512

other, and a public necessity that track connection should be made between the roads at all these points. The Oregon Company filed an answer in which it denied that the towns named were important shipping points; denied that there was, or had ever been, any public demand for the interchange of business at any of the places, or that there was any public necessity for the connection.

At the hearing, evidence was introduced showing that the Spokane & Inland was an electric road not yet completed; that all the roads had the same gauge; that in three of the towns they crossed at grade; that in the others the tracks were generally on the same level, and separated by distances varying from a few feet up to 600 feet; that the connecting tracks would generally be on the right of way of the carriers, though in some instances it would be necessary to acquire other property by purchase or condemnation. There was evidence as to the price of switches and the cost per lineal foot of laying a track with two necessary connecting switches.

The principal witness on behalf of the state was an inspector of the Commission, who testified that the three roads were competitors, and ran from Spokane through each of the towns named in the complaint; that wheat was the principal product of the country, and that it was shipped to Spokane or Portland, reached by each of the roads or their connections; that the main business of the towns named in the complaint was with Spokane, and that the business between local stations was small. From his testimony and a map, it appears that, with the exception of Connell, all of the towns named lay in a strip about fifty miles long and fifteen miles wide, one road on each side, with the Spokane running about half way between the other two; that the roads were generally parallel to each other, but by curves and branch lines reached these towns. In answer to specific inquiries, he gave the route a car would take if shipped from named stations on one

Page 224 U. S. 513

line to named stations on another, under present conditions, and said that, if the connections were made and cars took that route, the distance would be shortened, and that, if wheat, cattle, or other property was thus shipped to and from such stations, there would be a saving in time and distance. He testified that he had no knowledge as to the amount of business done at any of the towns named, or that such shipments had been offered or would be made. He and the other witnesses on behalf of the Commission testified that every purpose would be served if there was a connection between the various roads at one of the points named, some of them thinking Garfield the best point and others that it should be at Oakesdale, from which, it was said, the tracks radiated like the spokes of a wheel. It appeared that the Oregon already connected with the Northern Pacific at Garfield. The inspector and other witnesses were not asked specifically as to all points, but, in answer to inquiries, testified, without contradiction, that there was no necessity for connecting the tracks at Farmington, Thornton, Colfax, Waverly, nor at Garfield or Oakesdale except as indicated above.

The witnesses for the carrier testified that a connection at Garfield would accommodate all transfers that might be offered; that there had been no demand at any of the towns for such transfers in the past, and that there was no necessity for making them.

Only one shipper was called as a witness. He testified that a connection at Oakesdale would serve all purposes, but gave no information as to the amount of his freight business, nor the saving that would result to him or others if the connection was put in. No merchants or shippers from any of the towns named in the complaint or referred to in the evidence were called. There was no proof as to the volume of business at any of these places, nor as to the amount of freight that would be routed over these track connections if they were constructed. Nor was there any

Page 224 U. S. 514

testimony as to the probable revenue that would be derived from the use of the track connections, or of the saving in freight or otherwise that would result to shippers. The inspector of the Commission testified that these connections would develop very little business.

After the conclusion of the evidence, the Commission dismissed the complaint as to Rosalia and Palouse, where the crossings were not at grade, and made an order in which it found that the roads crossed at grade at two points and ran in close proximity to each other through all the other places; that there was a public necessity for track connection, the cost of which at each point was stated, varying from $316 to $1,460, and aggregating about $7,000. It thereupon ordered that the companies should agree among themselves as to the particular places in said towns where the tracks should be laid and how the expense should be divided, in default of which the Commission would make a supplemental order designating the particular places where the connections should be made and the proportion in which the expense should be borne by each company.

The Oregon Company, being dissatisfied with this order, filed in the Superior Court of Thurston County a petition for review, alleging the unconstitutionality of the statute under which the order had been made and also attacking its reasonableness on the ground that

"there was no evidence showing or tending to show that there was any public demand or public necessity for such track connection, or for the interchange of freight at either of said points in carload lots . . . or that any public convenience would be subserved,"

but, on the contrary, that the only evidence offered tended to show that there was no public necessity, and that it would be obliged to acquire additional property, and to incur large expense to make the connection, without any public necessity, and be thereby deprived of its property without compensation

Page 224 U. S. 515

and without due process of law, in violation of the Constitution of the United States.

This method of attacking the order by petition for review was in compliance with the provisions of the Washington statute which declared that

"the order of the Commission shall, of its own force, take effect and become operative twenty days after notice thereof has been given. . . . And any railroad or express company affected by the order of the Commission, and deeming it to be contrary to the law, may institute proceedings in the superior court . . . and have such order reviewed and its reasonableness and lawfulness inquired into and determined. Pending such review, if the court having jurisdiction shall be of the opinion that the order or requirement of the Commission is unreasonable or unlawful, it may suspend the same . . . pending such litigation. . . . Said action of review shall be taken by the said railroad or express company within twenty days after notice of said order, and if said action of review is not taken within said time, then in all litigation thereafter arising between the State of Washington and said railroad or express company, or private parties and said railroad or express company, the said order shall be deemed final and conclusive. If, however, said action in review is instituted within said time, the said railroad or express company shall have the right of appeal or to prosecute by other appropriate proceedings, from the judgment of the superior court to the Supreme Court of the State of Washington, as in civil actions. . . . The action in review of such order, whether by writ of review or appeal or otherwise, shall be heard by the court without intervention of a jury, and shall be heard and determined upon the evidence and exhibits introduced before the Commission and certified to by it. . . ."

The bill of exceptions recites that, on the hearing in the superior court, the Oregon Company offered competent

Page 224 U. S. 516

and noncumulative testimony in support of its contention on the issues between it and the Commission which, if received, would have tended to show that there was no public necessity for such track connections at either of the places, that no public convenience would be served by making them, and that the cost, instead of aggregating $7,500, would be $21,000 (the amount at each place being specified), besides the expense of acquiring additional land and franchises needed for the construction and operation of the tracks. The court rejected all this evidence on the ground that, under the statute, the petition for review must be determined on the testimony which had been submitted to the Commission. After argument, the petition was dismissed and the Oregon Company excepted. All of the evidence introduced before the Commission, and attached as an exhibit to its answer, was duly incorporated in the bill of exceptions, which also contains a recital that the photographs and maps identified by one of the witnesses had not been forwarded by the Commission, nor were they considered by the court. There was, however, no motion by the defendant for an order requiring such omitted papers to be sent up so as to complete the record. Neither did it appear that any motion was made before the Commission to require a more definite statement of the location of the proposed tracks.

The judgment dismissing the petition was affirmed by the supreme court of the state. 52 Wash. 17. It held that the statute was valid; that it gave the defendant every opportunity to make its defense and granted an adequate judicial review by which to test the validity of the order. In answer to the contention that the evidence showed that the order was unreasonable and amounted to a taking of property without public necessity, the court merely said:

"As to the public necessity for the track connections, we are not prepared to say that the

Page 224 U. S. 517

finding of the Commission in that respect was not justified by the testimony."

The cause was brought here by writ of error, in which it is contended that the Washington statute failed to furnish an adequate hearing or opportunity for judicial review, especially in prohibiting the submission to the court of competent evidence as to the unreasonableness of the order, and further, there was no evidence of a public necessity, and that the order was void as taking property without due process of law.

Page 224 U. S. 523

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