A state statute providing that a railroad company may receive
for transporting, carrying, and telegraphing such tolls and charges
as might from time to time be established, fixed, and regulated by
the directors, and that the act should be construed liberally so as
to favor its purposes and objects, provided that nothing in it
should be construed as preventing the legislature from regulating
the rates of transportation for passengers and freight over the
road, and provided further that there should be no discrimination
in favor of any road, does not deprive the state of its power,
within the limits of its general authority, as controlled by the
Constitution of the United States, to act upon the reasonableness
of the tolls and charges so established, fixed, and regulated.
Subsequent legislation by the state fixing the maximum rate for
other railroads does not apply to this road by virtue of the
proviso as to discrimination.
Page 116 U. S. 354
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
This is a suit brought by the New Orleans and Northeastern
Railroad Company to enjoin the railroad commission from enforcing
the Railroad Supervision Law of Mississippi against that company.
It differs from the cases of Stone v. Farmers' Loan and Trust
Co., ante, 116 U. S. 307
Stone v. Illinois Central Railroad Company, ante,
116 U. S. 347
already decided, only in the charter provisions on which the claim
of a contract exemption from legislative control as to fares and
freights is made. These are as follows:
"SEC. 4. Be it further enacted that said company is hereby
authorized and empowered to transport, carry, and convey persons
and property on said railroad, to build and maintain a line of
magnetic telegraph, and to operate the same along the line of said
railroad, and to receive for such transportation, carrying,
conveying, and telegraphing such tolls and charges as shall be from
time to time established, fixed, and regulated by the directors of
said railroad company."
"SEC. 18. Be it further enacted that whenever any number of
stockholders, representing three-fourths of the stock now
subscribed to said railroad company, shall accept the powers,
privileges, and franchises contained in the preceding sections of
this act, the said company shall avail themselves of the benefit
thereof, and that this act shall be liberally and favorably
construed so as to favor all the purposes and objects of the same
and the operation of the provisions thereof, provided
nothing contained in the charter shall be so construed as to
prevent the legislature from regulating the rate of transportation
for passage and freight over the same in this state; provided
that there shall be no discrimination in favor of any
On their face and under the rulings in other cases, these
sections show no such contract. It is averred in the bill, however,
and admitted by the demurrer, that in 1882, the state granted
charters to six other railroad companies, each of which a maximum
of rates was fixed. After setting forth the special provisions of
the charters in this particular, the bill proceeds as follows:
Page 116 U. S. 355
"And your orator is therefore advised, believes, and charges
that as the said legislature, by the proviso to the 18th section of
the said Act of March 30, 1871, reserved to itself the right 'to
regulate the rate of transportation for passage and freight' on
your orator's road in said State of Mississippi, but only upon
condition and with the limitation that in and by such act of
regulation there should be no discrimination in favor of any road
in said state and against your orator, the charter clause above
referred to becomes and is integrated into and forms part of your
orator's said charter, and the legislature, having thus exercised
and exhausted its power of regulating tariffs in respect to the
several railroad companies above set out, is by the terms of your
orator's charter precluded from making any other or different
system for regulating your orator's tariff in said state or
devising any other tariff of charges for it, else your orator would
be discriminated against contrary to the true intent and meaning of
the last proviso to section 18 of said Act of March 30, 1871."
To this we cannot agree. The provision in the charter of the New
Orleans and Northeastern Company that in fixing rates there shall
be no discrimination in favor of any other road does not bring into
that charter the rate clauses in the charters of the new companies.
It will undoubtedly be the duty of the commissioners, when fixing
the tariff for this company, to see that there is no such
discrimination as is provided against. Whether in doing so it will
be necessary to have regard to the rates allowed by the later
charters is not a question in this case.
The decree of the circuit court is reversed on the authority
of Stone v. Farmers' Loan and Trust Co., and the cause remanded
with instructions to dismiss the bill.
MR. JUSTICE HARLAN, with whom concurred MR. JUSTICE FIELD,
It seems clear that the power reserved to the legislature of
regulating rates of transportation for passengers and freight over
the road of the complainant is subject to the condition that there
shall be no discrimination against it in favor of any
Page 116 U. S. 356
other company. In other words, the complainant has a contract
with the state that protects it against such discrimination in the
matter of rates. If this were not so, it could not well be the duty
of the railroad commission, as the Court declares, to see that the
discrimination provided against by the company did not exist.
Adhering to the general views expressed by me in the preceding
cases, I dissent from the opinion and judgment in this case.
MR. JUSTICE BLATCHFORD did not sit in this case or take any part
in its decision.