The provisions in c. 40 of the General Statutes of South
Carolina of 1882 requiring the salaries and expenses of the state
railroad commission to be borne by the several corporations owning
or operating railroads within the state are not in conflict with
the provision in the Fourteenth Amendment to the Constitution that
a state shall not
"deprive any person of life, liberty or property without due
process of law; nor deny to any person within its jurisdiction the
equal protection of the laws."
It is again decided that private corporations are persons within
the meaning of that Amendment.
Requiring the burden of a public service by a corporation, in
consequence of its existence and of the exercise of privileges
obtained at its request, to be borne by it is neither denying to it
the equal protection of the laws nor making any unjust
discrimination against it.
The legislative and constitutional provision of the South
Carolina that taxation of property shall be equal and uniform and
in proportion to its value is not violated by exacting a
contribution according to their gross income of the several
railroads in proportion be the number of miles of railroad operated
within the state in order to meet the special service required of
the state railroad commission.
The Court stated the case as follows:
The plaintiff below and in error, the Charlotte, Columbia and
Augusta Railroad Company, is a corporation existing under the laws
of the States of North Carolina, South Carolina, and Georgia. Its
road and other property are situated in the County of Richmond,
Georgia, and in the Counties of Aiken, Edgefield, Lexington,
Richland, Fairfield, Chester, and York, South Carolina, and in the
County of Mecklenberg, North Carolina.
By the legislature of South Carolina a general railroad law was
passed in 1878 prescribing numerous provisions for the regulation
and government of railroads in that state. That law, as amended in
some particulars, was incorporated as
Page 142 U. S. 387
chapter 40 in the general statutes of the state in 1882. It
provides for the appointment by the governor of three railroad
commissioners, charged to see to the enforcement of its various
provisions, each of whom is to receive a salary of $2,000 a year,
to be paid out of the treasury of the state in the manner provided
by law for the salaries of other state officers, and also that
"The entire expenses of the railroad commission, including all
salaries and expenses of every kind, shall be borne by the several
corporations owning or operating railroads within this state
according to their gross income, proportioned to the number of
miles in the state, to be proportioned by the comptroller general
of the state, who on or before the first day of October in each and
every year shall assess upon each and every corporation its just
proportion of such expenses in proportion to its said gross income
for the current year ending on the 30th day of June next preceding
that on which the said assessment is made, and the said assessment
shall be charged up against the said corporations, respectively,
under the order and direction of the comptroller general, and shall
be collected by the several county treasurers in the manner
provided by law for the collection of taxes from such corporations,
and shall be paid by the said county treasurers as collected into
the treasury of the state in like manner as other taxes collected
by them for the state."
For the fiscal year of 1883, the plaintiff was charged on the
books of the County Treasurer of Richland County, in South
Carolina, with the sum of $987.75, being the amount assessed as a
tax against that company as its entire proportion of the salaries
and expenses of the railroad commissioners of the state, and being
its proportion for all the counties.
The plaintiff, deeming the same to be unjust and illegal, paid
the same under protest and instituted the present suit, under a law
of the state, to obtain a judicial determination that it was
wrongfully and illegally collected, and the certificate of the
court that it should be refunded.
In its complaint, it alleges that the tax is illegal because
assessed in proportion to the gross income of the plaintiff,
instead of being in proportion to the value of its property,
Page 142 U. S. 388
and because its imposition is in conflict with the constitution
of the state in several particulars mentioned, and also in
violation of the Fourteenth Amendment of the Constitution of the
United States, by which each state is forbidden to deprive any
person of property without due process of law or to deny to any
person within its jurisdiction the equal protection of the laws, in
this: that the act and amendments authorizing it require railroad
companies of the state, exclusively, to pay the salaries and
expenses of three state officers, no other persons in the state
being required to contribute any portion of the same, and require
them to pay a tax of a nature, character, and amount not required
of other corporations and persons within the jurisdiction of the
state.
The attorney general of the state appeared for the Treasurer of
Richland County, and admitted that that officer, under the order
and direction of the comptroller general of the state, had
collected of the plaintiff the sum claimed, $987.75, as the just
proportion of the entire expenses of the railroad commissioners of
the state, assessed upon that corporation by him, and also the sum
of $24.70, being the amount of costs and penalties charged against
it by his direction, and that the same were paid under protest,
denying, however, that the laws under which the amount was assessed
against the plaintiff and collected were unconstitutional and void
or that the same was illegally and wrongfully collected.
The Constitution of South Carolina declares that "all property
subject to taxation shall be taxed in proportion to its value," and
that its legislature
"shall provide by law for a uniform and equal rate of assessment
and taxation, and shall prescribe such regulations as shall secure
a just valuation for taxation of all property,"
with certain specified exceptions not affecting the questions
presented.
The case was heard by the Court of Common Pleas for Richland
County, and by its decree the validity of the assessment and tax
was sustained, and the complaint dismissed. On appeal to the
supreme court of the state, the judgment was affirmed, and to
review that judgment the case is brought here on writ of error.
Page 142 U. S. 390
MR. JUSTICE FIELD, after stating the case, delivered the opinion
of the Court.
Notwithstanding the several objections taken in the complaint to
the assessment and tax upon the railroad companies to meet the
expenses and salaries of the railroad commissioners, the argument
of counsel on the hearing was confined to the supposed conflict of
the laws authorizing the tax with the inhibition of the Fourteenth
Amendment of the Constitution of the United States. All other
objections were deemed to be disposed of by the decision of the
supreme court of the state that the laws complained of are not in
conflict with its constitution.
The property of railroad companies in South Carolina is
subjected by the general law to the same tax as similar property of
individuals, in proportion to its value, and like conditions of
uniformity and equality in its assessment are imposed. The further
tax laid upon them to meet the expenses and salaries of the
railroad commissioners is not in proportion to the value of their
property, but according to their gross income, proportioned to the
number of miles of their roads in the state. This tax is stated to
be beyond any which is levied upon other corporations to meet an
expenditure for state officers, and therefore, it is contended,
constitutes an unlawful discrimination against railroad
corporations, imposing an unequal burden upon them in conflict with
the constitutional
Page 142 U. S. 391
amendment which ordains that no state shall deny to any person
the equal protection of the laws. Private corporations are persons
within the meaning of the amendment. It has been so held in several
cases by this Court.
Santa Clara County v. Southern Pacific
Railroad Co., 118 U. S. 394;
Pembina Mining Co. v. Pennsylvania, 125 U.
S. 181,
125 U. S.
1897;
Minneapolis & St. Louis Railroad Co. v.
Beckwith, 129 U. S. 26.
If the tax were levied to pay for services in no way connected
with the railroads -- as, for instance, to pay the salary of the
executive or judicial officers of the state -- while railroad
corporations were at the same time subjected to taxation upon their
property equally with other corporations for such expenses, and
other corporations were not taxed for the salaries mentioned, there
would be just ground of complaint of unlawful discrimination
against the railroad corporations and of their not receiving the
equal protection of the laws. But there is nothing of this nature
in the tax in question. The railroad commissioners are charged with
a variety of duties in connection with railroads the performance of
which is of great importance in the regulation of those instruments
of transportation. They are invested with the general supervision
of all railroads in the state, and are obliged to examine the same
and keep themselves informed as to their condition, and the manner
in which they are operated with reference to the security and
comfort of the public and compliance with the provisions of their
charters and the laws of the state. Whenever it appears to them
that a railroad corporation has violated any law or neglected in
any respect or particular to comply with the terms of its charter,
especially in regard to connections with other railroads, the rates
of toll, and the time schedules, they are obliged to given notice
thereof to such corporation and, if the violation or neglect is
continued after such notice, to apply to the courts for an
injunction to restrain the company complained of from further
continuing to violate the law or the terms of its charter, and
whenever it appears that repairs are necessary to any such road, or
that any addition to the rolling stock or any enlargement or
improvement
Page 142 U. S. 392
in the stations or stationhouses, or any modification of the
rates of fare for transporting freight or passengers, or any change
in the mode of operating the road and conducting its business is
reasonable and expedient in order to promote the security,
convenience, and comfort of the public, they are required to give
information to the corporation of the improvements, and changes
adjudged to be proper, and if the company fail within sixty days to
adopt the suggestions made, to take such legal proceedings as may
be deemed expedient to compel them. It is their duty to listen to
complaints against a railroad company made by the authorities of
any city, town, or county, and to give its officers due opportunity
of explanation, and if the complaint is sustained, to require the
corporation to remove the cause of complaint. They are required to
investigate the cause of any accident on the railroad resulting in
the loss of life, and of any accident not so resulting, which shall
require investigation, and to make annual reports to the
legislature of their official acts, including such statements and
explanations as will disclose the actual working of the system of
railroad transportation in its bearing upon the business and
prosperity of the state, with such suggestions as to the general
railroad policy of the state, or as to any part thereof, or as to
the condition, affairs, or conduct of any of the railroad
corporations, as may seem to them appropriate, with a special
report of all accidents, and the causes thereof, for the preceding
year. All contracts, agreements, or arrangements of any and every
nature made by any railroad company doing business in the state for
the pooling of earnings of any kind with any other railroad company
or companies are to be submitted to the commissioners for their
inspection and approval, so far as they may be affected by any of
the provisions of the act for securing to all persons just, equal,
and reasonable facilities for transportation of freight and
passengers, and if the contracts, agreements, or arrangements
shall, in the opinion of the commissioners, in any way be in
violation of the provisions of the act, the commissioners are to
notify the railroad companies in writing of their objections
thereto, specifying them, and if the railroad companies, after such
notice, fail or neglect
Page 142 U. S. 393
to amend and alter such contract, agreement, or arrangement in a
manner satisfactory to the commissioners, they shall call upon the
Attorney General to institute such legal proceedings as may be
necessary to enforce the penalties prescribed for such
violations.
It is evident from these and many other provisions that might be
stated that the duties of the railroad commissioners, when properly
discharged, must be in the highest degree beneficial to the public,
securing faithful service on the part of the railroad companies and
safety, convenience, and comfort in the operation of their roads.
That the state has the power to prescribe the regulations mentioned
there can be no question. Though railroad corporations are private
corporations, as distinguished from those created for municipal and
governmental purposes, their uses are public. They are formed for
the convenience of the public in the transportation of persons and
merchandise, and are invested, for that purpose, with special
privileges. They are allowed to exercise the state's right of
eminent domain, that they may appropriate for their uses the
necessary property of others upon paying just compensation therefor
-- a right which can only be exercised for public purposes. And
they assume, by the acceptance of their charters, the obligations
to transport all persons and merchandise upon like conditions and
at reasonable rates, and they are authorized to charge reasonable
compensation for the services they thus perform. Being the
recipients of special privileges from the state, to be exercised in
the interest of the public, and assuming the obligations thus
mentioned, their business is deemed affected with a public use, and
to the extent of that use is subject to legislative regulation.
Georgia Railroad & Banking Co. v. Smith, 128 U.
S. 174,
124 U. S. 179.
That regulation may extend to all measures deemed essential not
merely to secure the safety of passengers and freight, but to
promote the convenience of the public in the transaction of
business with them and to prevent abuses by extortionate charges
and unjust discrimination. It may embrace a general supervisions of
the operation of their roads, which may be exercised by direct
legislation commanding or forbidding, under severe penalties,
Page 142 U. S. 394
the doing or omission of particular acts, or it may be exercised
through commissioners specially appointed for that purpose. The
mode or manner of regulation is a matter of legislative discretion.
When exercised through commissioners, their services are for the
benefit of the railroad corporations, as well as of the public.
Both are served by the required supervision over the roads and
means of transportation, and there would seem to be no sound reason
why the compensation of the commissioners in such case should not
be met of the corporations the operation of whose roads and the
exercise of whose franchises are supervised. In exacting this,
there is no encroachment upon the Fourteenth Amendment. Requiring
that the burden of a service deemed essential to the public, in
consequence of the existence of the corporations and the exercise
of privileges obtained at their request, should be borne by the
corporations in relation to whom the service is rendered, and to
whom it is useful, is neither denying to the corporations the equal
protection of the laws nor making any unjust discrimination against
them. All railroad corporations in the state are treated alike in
this respect. The necessity of supervision extends to them all, and
for that supervision the like proportional charge is made against
all. There is no occasion for similar regulations for the
government of other than railroad corporations, and therefore no
charge is made against them for the expenses and salaries of the
commissioners. The rule of equality is not invaded where all
corporations of the same kind are subjected to like charges for
similar services, though no charge at all is made against other
corporations. There is no charge where there is no service
rendered. The legislative and constitutional provision of the state
that taxation of property shall be equal and uniform and in
proportion to its value is not violated by exacting a contribution
according to their gross income, in proportion to the number of
miles of railroad operated in the state, to meet the special
service required.
Barbier v. Connolly, 113 U. S.
27;
Soon Hing v. Crowley, 113 U.
S. 703;
Missouri Pacific Railway v. Humes,
115 U. S. 512.
There are many instances where parties are compelled to perform
certain acts and to bear certain expenses when the
Page 142 U. S. 395
public is interested in the acts which are performed as much as
the parties themselves. Thus, in opening, widening, or improving
streets, the owners of adjoining property are often compelled to
bear the expenses, or at least a portion of them, notwithstanding
the work done is chiefly for the benefit of the public. So also, in
the draining of marshlands, the public is directly interested in
removing the causes of malaria, and yet the expense of such labor
is usually thrown upon the owners of the property. Quarantine
regulations are adopted for the protection of the public against
the spread of disease, yet the requirement that the vessel examined
shall pay for the examination is a part of all quarantine systems.
Morgan v. Louisiana, 118 U. S. 455,
118 U. S. 466.
So, the expense of a compulsory examination of a railroad engineer
to ascertain whether he is free from color blindness has been held
to be properly chargeable against the railroad company.
Nashville, Chattanooga & St. Louis Railway v. Alabama,
128 U. S. 96,
128 U. S. 101.
So, where work is done in a particular county for the benefit of
the public, the cost is oftentimes cast upon the county itself,
instead of upon the whole state. Thus, in
County of Mobile v.
Kimball, 102 U. S. 691, it
was held that a provision for the issuing of bonds by a county in
Alabama could not be declared invalid although it imposed upon one
county the expense of an improvement in which the whole state was
interested. In such instances, where the interests of the public
and of individuals are blended in any work or service imposed by
law, whether the cost shall be thrown entirely upon the individuals
or upon the state, or be apportioned between them, is matter of
legislative direction.
We see no error in the ruling of the court below upon the
federal question presented, and the conclusion we have reached
renders it unnecessary to consider how far the obligation of the
corporation was affected by the alleged amendment made to its
charter.
Judgment affirmed.
JUSTICES BRADLEY and GRAY did not sit in this case, nor take
part in its decision.
