Peik v. Chicago & Northwestern Railway Company - 94 U.S. 164 (1876)
U.S. Supreme Court
Peik v. Chicago & Northwestern Railway Company, 94 U.S. 164 (1876)
Peik v. Chicago & Northwestern Railway Company
94 U.S. 164
1. The Chicago & Northwestern Railway Company was, by its charter, and the charters of other companies consolidated with it, authorized
"to demand and receive such sum or sums of money for the transportation of persons and property, and for storage of property, as it shall deem reasonable."
The Constitution of Wisconsin, in force when the charters were granted, provides that all acts for the creation of corporations within the State "may be altered or repealed by the legislature at any time after their passage." Held that the legislature had power to prescribe a maximum of charges to be made by said company for transporting persons or property within the state, or taken up outside the state and brought within it, or taken up inside and carried without.
2. Certain Wisconsin railroad corporations were consolidated with others of Illinois on terms which, in effect, required that the consolidated company should, when operating in Wisconsin, be subject to its laws. Held that Wisconsin can legislate for the company in that state precisely as it could have legislated for its own original companies, if no consolidation had taken place.
3. The Act of Wisconsin approved March 11, 1874, entitled "An Act relating to railroads, express and telegraph companies, in the State of Wisconsin," is confined to state commerce, or such interstate commerce as directly affects the people of Wisconsin. Until Congress shall act in reference to the relations of this consolidated company to interstate commerce, the regulation of its fares, &c., so far as they are of domestic concern, is within the power of that state.
4. The decision of the Supreme Court of the State of Wisconsin, that said Act of March 11, 1874, was not repealed by that entitled "An Act in relation to railroads," approved March 12, 1874, is binding upon this court.
5. Where property has been clothed with a public interest, the legislature may fix a limit to that which shall in law be reasonable for its use.
6. No party to this record can raise the question that the statute of Wisconsin violates the obligation of the consolidated company, under the land grant to the Wisconsin and Superior Railroad Company, to keep the part of its road which formerly belonged to the latter company open as a public highway for the use of the government of the United states, free from toll, &c.
The appellants in the first case, nonresidents of the State of Wisconsin, and owners of first mortgage bonds of the Chicago & Northwestern Railway Company, filed their bill to restrain the company from obeying, and Paul, Osborn, and Hoyt, railroad commissioners, and Sloan, Attorney-General of Wisconsin, from enforcing, c. 273, Laws of 1874, of that state, which limits the rate of charges for transporting passengers and freights on all the railroads in the state.
The bill sets out the various acts incorporating the company and the companies with which it is consolidated, and it alleges that the company was authorized to give its bonds and mortgages to secure the payment of borrowed money; that the complainants are owners of bonds issued or guaranteed by the company, and secured by mortgages upon various portions of its railroad, executed pursuant to law; that the tariff of rates charged by the company before the passage of that chapter did not produce sufficient income to pay interest on its debt, the legal rate of interest allowed by the laws of the state to its stockholders, and expenses; that the enforcement of said chapter will cause the destruction of the securities held by the complainants; that the classes of freight established by sec. 3 of said chapter are different from the classes of freight established
by the laws of Illinois, Iowa, and Minnesota, for the transportation of freight upon the railroads of the company in those states, and that it is practically impossible to carry on the business of transporting freight from Wisconsin to either of those states; that the enforcement of said chapter will impair the obligation of the contract entered into between the company and the complainants; that said chapter is in violation of the thirteenth article of the bill of rights of the Constitution of Wisconsin, which declares that the property of no person shall be taken for public use without just compensation therefor; that the General Assembly of Wisconsin had no constitutional power to pass said chapter; that the eighteenth section is a regulation of interstate commerce; and that the company has never accepted said chapter, but will be obliged to conform to the reduced rates of fare and freight therein specified, or cease operations in Wisconsin unless said chapter shall be held to be unconstitutional.
The bill in the second case was filed by stockholders of the company, and is substantially the same as that in the first case.
Chapter 273 classifies railroads in the state, fixes the limit of fare for the transportation of any person, classifies freights and the maximum rates therefor, and prescribes certain penalties and forfeitures for receiving any greater rate or compensation for carrying freight or passengers than the act provides. It appoints railroad commissioners and prescribes their duties and powers. The eighteenth section is in the following words:
"Nothing contained in this act shall be taken as in any manner abridging or controlling the rates for freight charged by any railroad company in this state for carrying freight which comes from beyond the boundaries of the state, and to be carried across or through the state; but said railroad companies shall possess the same power and right to charge such rates for carrying such freight as they possessed before the passage of this act."
The defendants in each case demurred to the bill of complaint therein filed. The demurrers were sustained, and the defendants brought the cases here.