Corporation Commission v. Railroad
Corporation Commission v. Railroad
Concurring Opinion
concurring. I fully concur in the opinion of the Court; b.ut there is a question omitted therefrom which, though perhaps not essential to the present decision of the Court, may become of the greatest importance in view of the Federal question raised, or attempted to be raised, by the defendant. I think there was error in excluding, upon the objection of tire defendant, answers to the following questions asked by the plaintiff, to-wit:
“Q. Mr. Borden, what is the stock of the Atlantic Coast Line worth to-day?” “Q. What was the stock of the Wilmington and Weldon Railroad Company worth twenty years ago ?” “Q. Is not the present value of the original stock of the Wilmington and Weldon Railroad Company, which constituted the balsis of the present stock of the Atlantic Coast Line, today worth $1,900' or $2,000 in the market?” “Q. What dividends are now being received by the holders of the*23 original stock of tlie Wilmington and Weldon Railroad Company?” (Record, p. 294).
The questions sufficiently disclose the scope of the proposed enquiry, but would doubtless have been followed by other questions eliciting in greater detail the desired information. In its second exception to the order of the Commission, the defendant claims the protection of the Constitution of the United States in the following words: “The company, therefore, excepts to the order of the Commission in so' far as it is construed as requiring it to run an additional train from Rocky Mount to Selma between the hours above named, because to do so would be requiring the company to perform services without compensation to it for the same, and thereby taking its property without due process of law, and in violation of the Constitution of this State, and in violation of the Constitution of the United States.” (Record, p. 32). In its brief the defendant also says: “Neither the Commission nor the Legislature has the power to require the defendant to run an additional train a.t a loss. The jury finds that to operate this train will impose a daily loss of fifteen dollars upon the defendant, and to compel the defendant to operate this train at a loss would be taking its property without compensation and in violation of the Constitution of this State and of the Constitution of the United States.”
In this view of the case the excluded testimony might become of the utmost importance. We cannot presume that the Corporation Commission intends “to take the property of the defendant without due process of law” or to require unnecessary services without compensation in^ some form or another; but we cannot admit that the defendant can ignore the just demands of the public by creating for its own profit and convenience a condition of affairs that makes one train unprofitable by throwing all the remunerative business on trains that do not make connection. The order of the Commission does
In this view the profits of the road, both for the present and tire immediate past, would become material. Suppose the witness had answered that no dividend had been paid for years, and that the company was unable to earn anything beyond bare expenses, whereby the stock was almost un
These are hypothetical answers on both sides. Where the truth may be was peculiarly within the knowledge of the defendant upon whose objection it was excluded. It cannot be contended that such an investigation would be an impertinent inquisition into' private affairs, as property taken for a public purpose under the power of eminent domain is indelibly impressed with a public use. This has been too often decided by the Supreme Court of the United States to be any longer an open question. Two cases will be sufficient for my purpose. In Railroad Co. v. Wellman, 143 U. S., 339, the Court says, on page 345 : “A single- suggestion in this direction: It is agreed that the defendant’s operating expenses for 1888 were $2,404,516.54. Of what do these operating expenses consist ? Are they made up partially of extravagant salaries; fifty to one hundred thousand dollars to the president, and in like proportion to subordinate officers? Surely, before the courts are called upon to adjudge an act of the Legislature fixing the maximum passenger rates for railroad companies to be unconstitutional, on the ground that its enforcement would prevent the stockholders from receiving any dividends on their investments, or the bondholders any interest on their loans, they should be fully advised as to what is done with
The Corporation Commission Act (chap. 164, Laws 1899), in section 2 provides as follows: “Provided, that in fixing any maximum rates or charge or tariff of rates or charges for any common carrier, person or corporation subject to the provisions of this act, the said Commission shall take into consideration if proved or may require proof of the fair value of the property of such carrier, person or corporation used for the public in the consideration of such rate or charge or the fair value of the service rendered as in determining the fair value of the property so being used for the convenience of the public. It shall furthermore consider the original cost of the construction thereof and the amount expended in permanent improvements thereon and the present compared with the original cost of construction of all its property within the State of North Carolina; the probable earning capacity of such property under the particular rates proposed and the sum required to meet the operating expenses of such carrier, person or corporation, and all other facts that will enable them to determine what are reasonable and just rates, charges and tariffs.”
The ease of Cotting v. Stockyards Co., 183 U. S., 79, is cited by the defendant; but does not seem to sustain its contentions. In the opinion in that case appears the following dear distinction between those corporations which, like rail
Opinion of the Court
after stating the facts. For more than ten years the people of a large part of the eastern portion of the State, having occasion to> come to tire capital or to the ad] acent central section, have found their most direct and convenient route to- be via Selma, at which point by its schedule the southbound train No. 39 of the defendant Atlantic Coast Line, delivered its passengers at 2:50 P. M. daily in time to connect with the Southern Railway westbound train No. 135 from Goldsboro to Greensboro. On 3 October, 1903, the Southern notified the Corporation Commission that owing to the condition of its track it was dangerous to maintain its speed — thirty-eight miles per hour — on its train No. 135, and proposed to leave Goldsboro thirty minutes sooner, which would cause its arrival a few minutes earlier at Selma. This the Commission found to be nroper and reasonable. It was brought to the attention of the Commission by proper complaint made, that for many months the Atlantic Coast Line had failed to make this afternoon connection regularly at Selma at its schedule time to the great inconvenience of the traveling public, and it was asked to order the afternoon .connection to be resumed and observed. After much correspondence with the officials of both roads the Commission on 8 December, 1903, ordered that the afternoon connection should
Section 1 of the Corporation Cbmmission Act (Acts 1899, chap. 164) in enumerating the qualifications, the duties and powers of the Commission, provides that “they shall have such general control and supervision of all railroad * * * companies or corporations and of all other companies or corporations engaged in the carrying of freight or passengers * * * necessary to carry into effect the provisions of this act.” Section 21 of the act provides that “All common carriers subject to the provisions of this act shall according to their powers afford all reasonable, proper and equal facilities for the interchange of trafile between their respective lines and for the forwarding and delivering of passengers and freight to and from their several lines and those connecting therewith, * * * ¿md connecting lines shall he required to make as close connection as practicable for the convenience of the traveling publicThis provision is positive, clear and mandatory. Common carriers are (1) to afford all reasonable, proper and equal facilities for the interchange of traffic and forwarding freight and passengers. This would include both the place and time of delivery and forwarding of passengers and freight. The terms of the law are general and cannot be interpreted to mean alone the place at which passengers and freight are to be delivered; it does not mean simply facility for delivery which might be confined to the place, but also requires facility for forwarding which includes time as well, and prohibits such management as would produce delay in forwarding passengers. This requires close connection in point of time with connecting lines. (2) In the second place, common carriers are “to make as close connection as practicable for the convenience of the traveling public.” The defendant insists that this last requirement means simply a physical connection, that is, a track connection. It is contended that
It is true that section 1957 (9) of The Code of 1883, originally enacted in 1871-’72, gave to railroad companies themselves the right to “regulate the time and manner in which passengers and property shall be transported,” but by the Act of 1891, chap. 320, creating a Railroad Commission, the State made a radical change in its attitude towards railroads.
In this case the excuse of the defendant for its often missing connection at Selma since 1900 is that train No. 39 was a through train and that its increase in business made it more difficult to get to Selma in time. It may be natural that the officers of the company, looking to profits^ should prefer the through business to the neglect of the convenience of the people of North Carolina, and should be reluctant to avoid the delay caused by heavy through business by putting fifteen dollars per day of its profits into affording the required convenience by an additional train, if necessary. But it is precisely because just and proper regard for public convenience did not always coincide with the largest profit to the corporation that the State had to enact a statute giving to the Corporation Commission the power to regulate their rates, require suitable connections to be made, and a general supervision of their conduct. An act of the Legislature or order of the Commission reducing the defendant’s charges for freight and passengers many hundred of thousands of dollars would be valid if it left enough profit, over running expenses, “with economical salaries and management (of which the Court will judge) to pay interest on its bona fide debt and some profit to stockholders.” Wellman v. Railroad, 143 U. S., 339. It follows that this order, even if it cost the defendant fifteen dollars per day, is in the power of the Commission, if it serves public convenience.
The other point as to the constitutional power of the Legislature to so enact is also well settled. The general power of the Legislature to provide reasonable rules and regulations,
This has been repeated over and over again in all the courts. Citation of authorities would be a work of supererogation. If the public can regulate the charges of a common carrier, so that only it is not deprived of all profits, as is held in Wellman v. Railroad, 143 U. S., 339, and Dow v. Beidelman, 125 U. S., 680, it can certainly require a connection for the accommodation of thousands of our people even if, at the utmost, it requires a loss of fifteen dollars a day out of a railroad company making $2,000,000 net earnings annually out of its operation in this State.
It is not necessary that the particular service required shall be profitable if the total earnings in this State show a profit. It is precisely because some particular service, which the public comfort or convenience may require, is not profitable that the company declines to render it. It prefers to work the soft spots, the best paying ore only, and it is precisely for that reason that the Commission is vested with the power to require those things to be don© if reasonable and just (not nec
In Railroad v. Gill, 156 U. S., 664, the Court, affirming the Supreme Court of Arkansas in same ease (54 Ark., 112), says that the common carrier cannot “attack as unjust a regulation which fixes a rate at which some part would be unremunerative. * * * To the extent that the question of injustice is to be determined by the effects of the act upon the earnings of the company, the earnings of the entire line must be estimated.” In Railroad v. Minnesota, 186 U. S., 261, the Court says that if upon the whole operations in hauling coal the road makes a profit, the requirement as to a fair profit upon investment is satisfied notwithstanding under the order of the Commission there would be a loss in hauling at the rate fixed in car-load lots. In Railroad v. Minn., supra, the Court say: “We do not think it beyond the power of the State Commission to reduce the freight upon a particular article, provided the companies are able to earn a fair profit upon their entire business, and the burden is upon them to impeach the action of the Commission in this particular.” In Cantwell v. railroad, 176 Ill., 512, tire Supreme Court of Illinois laid down the same doctrine thus: “The sufficiency of the earnings of a railroad to justify the expense of running a separate passenger train over a certain branch line constituting part of the entire system is not to be determined by considering the profits of that branch alone, but of the whole business of the various parts of the roads operated with the branch as one continual line.” In Railroad v. Commission of La., 33 So., 214, the Supreme Court of that State, through Nichols, C. J., in defining the powers possessed by the Railroad Commission, says: “They extend to matters concerning public comfort and convenience, and in the consideration of matters of comfort and convenience the number of persons who may be concerned or interested in some particular matter at some
In U. S. v. Freight Asso., 166 U. S., 322, the Court says: “It must also be remembered that railways are corporations organized for public purposes, have been granted valuable franchises and privileges (and among such the right to take private property of citizens is not the least), and that they all primarily owe duties to the public of a higher nature even than that of earning large dividends for their shareholders.” In Gladson v. Minn., 166 U. S., 430, the Court says: “The State which created the corporation may make all needful regulations of a police character for the government of the company while operating its road within the jurisdiction; it may prescribe the location and the plan of construction of the- road and the rate of speed at which the trains shall run- and the places at which they shall stop, and may make any other reasonable regulations for their management in order to
It is needless to multiply authorities. As the United States Supreme Court says in the last-cited case, the defendant was granted incorporation by the State “to subserve primarily the public good and convenience.” If all those things required for the public convenience or comfort were profitable per se to the company, a Corporation Commission would not be necessary to compel the adoption and operation of such betterments. In Water-works v. Schottler, 110 U. S., 347, it was held that the Legislature may regulate gas and water and other like companies, and requires them to furnish their customers at prices to be fixed by the municipal authorities of the locality, and in Railroad v. Bristol, 151 U. S., 556, that the Legislature could require, even as to railroads already built, the removal of grade crossings at railroad expense. Certainly, then, the police power extends to authorizing the State Corporation Commission to require two railroad companies to malee connection. The Corporation Commission, after three several investigations, has found that this connection would subserve that
While we must reverse the decision below and affirm the judgment of the Corporation Commission, in view of the novelty and importance of this class of litigation, it is well to take notice of some of the- exceptions taken by the Commission.
It was error to direct a verdict upon the first four issues. Upon tire first issue, whether it was practicable to make connection by train No. 39, and the second issue, whether it was practicable to make connection by extending the run of the Plymouth train to Selma, there was a conflict of evidence, and the issues were of fact, and (if material) should have been submitted to the jury. More especially was this time since the order of the Commission was presumed to be valid and the burden was on the defendant to show otherwise.
The first seven issues were irrelevant and immaterial. The motion of tire plaintiff for judgment upon the verdict should have been granted. The eighth issue, “Is it reasonable and proper that for the convenience of the traveling public the defendant company should be required to make such connection?” was answered “Yes.” This was the only material issue, and upon that finding alone the judgment should be entered here. This view is strengthened by the “inspection of tire whole! record,” which shows that the findings' upon the sixth and seventh issues are that if the connection were made by the most expensive of the four methods named, the loss was only fifteen dollars per day, and the report of the defendant to the Corporation Commission, which, is in tire record, that its annual net earnings in this State were nearly two millions of dollars. This shows the correctness of the finding upon the eighth issue as to the reasonableness of the order, even in the most adverse view.
The Court has the power to enter final judgment here,
In this matter there has already been a year’s delay. The inconvenience to the public continues each day. The act of the Legislature for that reason expedites the hearing of these causes by giving them precedence of all other civil eases. Judgment will therefore be entered here reversing the judg
Reversed.
Reference
- Full Case Name
- CORPORATION COMMISSION v. RAILROAD—\RAILROAD CONNECTION CASE.\""
- Cited By
- 28 cases
- Status
- Published