Dow v. Beidelman

• Citation: 8 S.Ct. 1028,125 U.S. 680,31 L.Ed. 841
• Parties: DOW et al. v. BEIDELMAN. 1
• Decision Date: 16 April 1888
• Court: United States Supreme Court

125 U.S. 680

8 S.Ct. 1028

31 L.Ed. 841

DOW et al. v. BEIDELMAN.¹

April 16, 1888.

[Statement of Case from pages 680-685 intentionally omitted] [N.M. Rose, for plaintiffs in error. [686]

John H. Rogers, for defendant in error.

GRAY, J.

The general rule of law that governs this case has been clearly stated and developed in opinions of this court, delivered by the late chief justice. In Munn v. Illinois, 94 U. S. 113, decided at October term, 1876, after affirming the doctrine that, by the common law, carriers or other persons exercising a public employment could not charge more than a reasonable compensation for their services, and that it is within the power of the legislature 'to declare what shall be a reasonable compensation for such services, or, perhaps more properly speaking, to fix a maximum beyond which any charge made would be unreasonable,' the chief justice said: 'To limit the rate of charges for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one.' Id. 133, 134. In Railroad Co. v. Iowa, Id 155, decided at the same time, a corporation having a perpetual lease of the railroad of another organized under the general corporation law of Iowa of 1851, c. 43, with the same powers as private individuals to make contracts, as well as the power to establish by-laws and make all rules and regulations deemed expedient for the management of its affairs, in accordance with law, was held to be bound by the subsequent statute of Iowa of 1874, c. 68, entitled 'An act to establish reasonable maximum rates of charges for transportation of freight and passengers on the different railroads of this state,' by which those railroads were classified according to the gross amount of their earnings per mile for the preceding year; and the compensation per mile, which those of each class might receive for the transportation of a passenger with ordinary baggage, was limited to three cents, three cents and a half, and four cents, respectively. Laws Iowa, 1874, p. 61. The chief justice said: 'Railroad companies are carriers for hire. They are incorporated as such, and given extraordinary powers, in order that they may better serve the public in that capacity. They are, therefore, engaged in a public employment, affecting the public interest, and, under the decision in Munn v. Illinois, 94 U. S. 113, subject to legislative control as to their rates of fare and freight, unless protected by their charters.' 'This company, in the transactions of its business, has the same rights, and is subject to the same control, as private individuals under the same circumstances. It must carry when called upon to do so, and can charge only a reasonable sum for the carriage. In the absence of any legislative regulation upon the subject, the courts must decide for it, as they do for private persons, when controversies arise, what is reasonable. But when the legislature steps in, and prescribes a maximum of charge, it operates upon this corporation the same as it does upon individuals engaged in a similar business.' Id. 161, 162. The same rule was affirmed and acted on in several other cases decided at the same time, in the first of which the chief justice, in answering 'the claim that the courts must decide what is reasonable, and not the legislatr e,' said: 'Where property has been clothed with a public interest, the legislature may fix a limit to that which in law shall be reasonable for its use. This limits the courts, as well as the people. If it has been improperly fixed, the legislature, not the courts, must be appealed to for the change.' Peik v. Railway Co., Id. 164, 178; Railroad Co. v. Ackley, Id. 179; Railroad Co. v. Blake, Id. 180; Stone v. Wisconsin, Id. 181. Upon like grounds in Ruggles, v. Illinois, 108 U. S. 526, 2 Sup. Ct. Rep. 832, and Railroad Co. v. Illinois, 108 U. S. 541, 2 Sup. Ct. Rep. 839, (decided at October term, 1882,) the statute of Illinois of April 15, 1871, (Laws Ill. 1871, p. 640,) which classified the railroads in the state according to their gross annual earnings per mile, and put different limits on the compensation of the different classes per mile for carrying a passenger and his baggage, was adjudged, in opinions delivered by the chief justice, to be constitutional and valid, in restricting to the limit of three cents a mile existing corporations, whose charters gave them power to make all by-laws, rules, and regulations not repugnant to law, and gave their directors power to establish such rates of toll as they should by their by-laws determine. And two justices who did not assent to those opinions concurred in the judgments, because it was not shown that the rate prescribed by the legislature was unreasonable. In Stone v. Trust Co., 116 U. S. 307, 6 Sup. Ct. Rep. 334, 388, 1191, decided at October term, 1885, the obligation of a contract, created by a charter granting similar powers to a railroad corporation and its directors, was held not to be impaired by a statute of Mississippi establishing a board of railroad commissioners charged with the duty of preventing the exaction of unreasonable or discriminating rates upon transportation done within the limits of the state; and the chief justice said: 'It is now settled in this court that a state has power to limit the amount of charges, by railroad companies for the transportation of persons and property within its own jurisdiction, unless restrained by some contract in the charter, or unless what is done amounts to a regulation of foreign or interstate commerce.' 116 U. S. 325, 6 Sup. Ct. Rep. 342. He added, however: 'From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy; and limitation is not the equivalent of confiscation. Under pretense of regulating fares and freights, the state cannot require a railroad company to carry persons and property without reward; neither can it do that which in law amounts to a taking of...