There are constitutional limits to what can be required of the
owners of railroads under the police power.
Requiring the expenditure of money takes property whatever may
be the ultimate return for the outlay.
It is beyond the police power of a state to compel a railroad
company to put in switches at its own expense on the application of
the owners of any elevator erected within a specified limit. It
amounts to deprivation of property without due process of law, and
so
held as to the applications for such switches made by
elevator companies in these cases under the statute of Nebraska
requiring such switch connections.
Quaere whether, even if a statute requiring railroad
companies to make such switch connections at their own expense be
construed as confined to such demands as are reasonable, it does
not deprive the railroad company of its property without due
process of law if it does not allow the company a hearing as to the
reasonableness of the demand prior to compliance therewith where,
as in this case, failure to comply involves heavy and continuing
penalties.
81 Neb. 15 reversed.
The facts, which involve the constitutionality of a statute of
the State of Nebraska requiring railroad companies to make switch
connections with grain elevators under certain conditions, are
stated in the opinion.
Page 217 U. S. 204
MR. JUSTICE HOLMES delivered the opinion of the Court.
These are two suits arising under a Nebraska statute. The first
is brought by the state to recover a fine of $500 imposed by the
law for failure to obey its command; the second is brought at the
relation of the party concerned to compel obedience to the same
command by mandamus. The statute in question provides that
"every railroad company or corporation operating a railroad in
the State of Nebraska shall afford equal facilities to all persons
or associations who desire to erect or operate, or who are engaged
in operating, grain elevators, or in handling or shipping grain at
or contiguous to any station of its road, and where an application
has been made in writing for a location or site for the building or
construction of an elevator or elevators on the railroad right of
way, and the same not having been granted within a limit of sixty
days, the said railroad company to whom application has been made
shall erect, equip, and maintain a side track or switch of suitable
length to approach as near as four feet of the outer edge of their
right of way when necessary, and in all cases to approach as near
as necessary to approach an elevator that may be erected by the
applicant or applicants, adjacent to their right of way, for the
purpose of loading grain into cars from said elevator, and for
handling and shipping grain to all persons or associations so
erecting or operating such elevators, or handling and shipping
grain, without favoritism or discrimination in any respect
whatever. Provided, however, that any elevator hereafter
constructed, in order to receive the benefits of this act, must
have a capacity
Page 217 U. S. 205
of not less than 15,000 bushels."
Then follows a section making railroads liable for damages in
case of willful violation of the act (which contains other
provisions beside the above), and imposes the above-mentioned fine
for each offense. Session Laws of 1905, c. 105, §§ 1, 6; 2 Cobbey's
Supp. § 10,007, p. 410.
Under this act, the Manley Cooperative Grain Association, a
corporation, applied in writing for a site for an elevator on the
right of way of the plaintiff in error in Manley, Nebraska, but the
application was refused. Then notice was sent that the corporation
intended to build near the end of a side track at the railroad
station at Manley, and would expect an extension of the side track.
The railroad company replied that it would give no trackage
privilege. The elevator was built, and a demand was made for a side
track, repeating a previous offer to bear a fair share of the
expense of the extension. This also was refused, and thereupon the
first-mentioned suit was brought for the penalty imposed by the
act. The other suit is a petition for mandamus at the relation of
the Farmers' Elevator Company of Strausville, Nebraska, another
elevator corporation, and the facts are so like the foregoing that
they do not need special statement. In both cases, the railroad
company set up that the statute was an attempt to regulate commerce
among the states, and also was void under the Fourteenth Amendment.
After trials, the fine was imposed and the peremptory writ of
mandamus was ordered, and both judgments were affirmed by the
supreme court of the state. 81 Neb. 15, 174.
It will have been noticed that there is no provision in the
statute for compensation to the railroad for its outlay in building
and maintaining the side tracks required. In the present cases, the
initial cost is said to be $450 in one and $1,732 in the other, and
to require the company to incur this expense unquestionably does
take its property, whatever may be the speculations as to the
ultimate return for the outlay.
Woodward v. Central Vermont
Railway Co., 180 Mass. 599,
Page 217 U. S. 206
602, 603. Moreover, a part of the company's roadbed is
appropriated mainly to a special use, even if it be supposed that
the side track would be available incidentally for other things
than to run cars to and from the elevator. Now it is true that
railroads can be required to fulfill the purposes for which they
are chartered and to do what is reasonably necessary to serve the
public in the way in which they undertake to serve it, without
compensation for the performance of some part of their duties that
does not pay.
Missouri Pacific Railway Co. v. Kansas,
216 U. S. 262. It
also is true that the states have power to modify and cut down
property rights to a certain limited extent without compensation,
for public purposes, as a necessary incident of government -- the
power commonly called the police power. But railroads, after all,
are property protected by the Constitution, and there are
constitutional limits to what can be required of their owners under
either the police power or any other ostensible justification for
taking such property away.
Thus, it is at least open to question whether a railroad company
could be required to deliver cattle at another than its own
stockyard at the end of the transit, or cars elsewhere than at its
own terminus, without extra charge, if it furnished reasonable
accommodations.
Louisville & Nashville R. Co. v. Central
Stock Yards Co., 212 U. S. 132,
212 U. S. 144;
Central Stock Yards Co. v. Louisville & Nashville R.
Co., 192 U. S. 568,
192 U. S. 570;
Covington Stock Yards Co. v. Keith, 139 U.
S. 128. So far as we see, a grain elevator stands in no
stronger position than a stockyard. If, as intimated, the elevators
with which the Missouri Pacific connects charge too much and wrong
the farmers, there may be other remedies, but manifestly the
apprehension expressed by the Supreme Court of Nebraska that the
company, unless checked, will have power to establish a monopoly is
not to be met merely by building another elevator -- the physical
limits of that kind of competition are too easily reached. But if
we assume that circumstances might make it reasonable to compel a
railroad to deliver and receive
Page 217 U. S. 207
grain elsewhere than at its own elevators, or those that it had
made its own by contract, the circumstances must be exceptional
when it would be constitutional to throw the extra charge of
reduplicating already physically adequate accommodations upon the
road.
This statute has no reference to special circumstances. It is
universal in terms. If we were to take it literally, it makes the
demand of the elevator company conclusive, without regard to
special needs, and possibly without regard to place. It is true
that, in the first of the present cases, the Supreme Court of
Nebraska discussed the circumstances and expressed the opinion that
the demand was reasonable, and that building the side track would
not cast an undue burden upon the road, and in the second, it
somewhat less definitely indicated a similar opinion. So it may be,
although it hardly seems possible, that the sweeping words of the
statute would be construed as by implication confining their
requirements to reasonable demands. On the face of it, the statute
seems to require the railroad to pay for side tracks whether
reasonable or not -- or if another form of expression be preferred,
to declare that a demand for a side track to an elevator anywhere
is reasonable, and that the railroads must pay. Clearly no such
obligation is incident to their public duty, and to impose it goes
beyond the limit of the police power.
But if the statute is to be stretched, or rather shrunk, to such
demands as ultimately may be held reasonable by the state court,
still it requires too much. Why should the railroads pay for what,
after all, are private connections? We see no reason. And moreover,
even on this strained construction, they refrain from paying at the
peril of a fine if they turn out wrong in their guess that, in the
particular case, the court will hold the demand not authorized by
the act. If the statute makes the mere demand conclusive, it
plainly cannot be upheld. If it requires a side track only when the
demand is reasonable, then the railroad ought at least to be
allowed a hearing in advance to decide whether the demand is within
the
Page 217 U. S. 208
act. Sometimes when summary action is necessary, the property
owner's rights are preserved by leaving all questions open in a
subsequent suit.
North American Cold Storage Co. v.
Chicago, 211 U. S. 306. But
in such cases, the risk is thrown on the destroyer of property. In
this case, there is no emergency, yet, at the best, the owner of
the property, if it has any remedy at all, acts at its risk not
merely of being compelled to pay both the expense of building and
the costs of suit, but also of incurring a fine of at least $500
for its offense in awaiting the result of a hearing.
See
Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota,
134 U. S. 418. An
earlier statute authorizing the state board of transportation,
after hearing, to require the railroad to permit the erection of an
elevator upon its roadbed already has been held bad.
Missouri
Pacific Ry. Co. v. Nebraska, 164 U. S. 403.
See also Hartford Fire Ins. Co. v. Chicago, Milwaukee & St.
Paul Ry. Co., 175 U. S. 91,
175 U. S. 99. We
are of opinion that this statute is unconstitutional in its
application to the present cases because it does not provide
indemnity for what it requires. We leave other questions on one
side, and do not intend by anything that we have said to prejudice
a later amendment providing for a preliminary hearing and
compensation, which is said to have been passed in 1907.
See Laws of 1907, c. 89, p. 309.
Judgments reversed.
MR. JUSTICE HARLAN and MR. JUSTICE McKENNA dissent.