Minneapolis St Louis Railroad Company v. State of Minnesota Railroad Warehouse Commission

• Citation: 186 U.S. 257,46 L.Ed. 1151,22 S.Ct. 900
• Decision Date: 02 June 1902
• Docket Number: No. 131,131
• Parties: MINNEAPOLIS & ST. LOUIS RAILROAD COMPANY, Plff. in Err. , v. STATE OF MINNESOTA ex rel. RAILROAD & WAREHOUSE COMMISSION
• Court: United States Supreme Court

186 U.S. 257

22 S.Ct. 900

46 L.Ed. 1151

MINNEAPOLIS & ST. LOUIS RAILROAD COMPANY, Plff. in Err.,

v STATE OF MINNESOTA ex rel. RAILROAD & WAREHOUSE COMMISSION.

No. 131.

Argued January 23, 24, 1902.

Decided June 2, 1902.

This was a petition for a mandamus filed in the district court of Ramsey county by the state, upon the relation of the Railroad and Warehouse Commission, against the Minneapolis & St. Louis Railroad Company and several other railroad companies (the first of which alone answered and sued out this writ of error), to compel such companies to adopt and publish a joint through rate fixed by the commission upon shipments of hard coal in carload lots, from the city of Duluth to certain points in the southern and western parts of the state of Minnesota, and to enjoin them from demanding or receiving any greater sum for such through shipments than that fixed by the commission.

The facts are substantially as follows: The St. Paul & Duluth Railroad Company, a corporation of the state of Minnesota, operates a line of railroad from Duluth upon Lake Superior to the cities of St. Paul and Minneapolis. Its local rate upon hard coal in carload lots from Duluth to these twin cities was $1.25 per ton, the reasonableness of which local rate is conceded. The Minneapolis & St. Louis Railroad Company, also a corporation of the same state, operates a line of road from St. Paul and Minneapolis southerly through Hopkins, a station 9 miles from Minneapolis, to Albert Lea in said state, thence still southerly to Angus in Boone county, Iowa. At Albert Lea and Angus it connects with other railroads, and by virtue of traffic arrangements has access to all the principal markets. It also owns and operates a branch line extending from a connection with its main line at Hopkins, westerly 92 miles to Morton, Minnesota, at which point it connects with a railroad owned and operated by the Wisconsin, Minnesota, & Pacific Railroad Company, which extends westerly from Morton to Watertown in South Dakota. Winthrop is a station upon the line of the Minneapolis & St. Louis road between Hopkins and Morton, 60 miles west of Hopkins, and at the time the order of the commission was made the Minneapolis, New Ulm, & Southwestern Railroad had constructed and owned a short line of railroad extending south from Winthrop to New Ulm in Brown county. The capital stock of the last-named company was owned by the Minneapolis & St. Louis Railroad Company; but it was nevertheless a separate and independent corporation.

Both the St. Paul & Duluth Railroad Company and the Minneapolis & St. Louis company are fully equipped to conduct the business of common carriers, have complete track connections and transfer facilities at St. Paul and Minneapolis, and for a long time have been engaged in transporting hard coal in carload lots without change of cars from Duluth to the points upon the line of the Minneapolis and St. Louis road for a joint through rate, which had been established by the mutual agree- ment of the companies, and which had been divided between them according to that agreement. In dividing earnings under this joint tariff, to which not only the two principal defendants were parties, but the Minneapolis, New Ulm, & Southwestern company, and the Wisconsin, Minnesota, & Pacific company were also parties, there was first set apart to the St. Paul & Duluth company $1 per ton for transporting the hard coal from Duluth to Minneapolis, the remainder being turned over to one or more of the other three companies participating in the carriage of the coal to its destination.

On September 22, 1898, the Railroad and Warehouse Commission, having resolved to investigate the reasonableness of this joint rate, made an order upon all these railroad companies to answer as to the reasonableness of such rate. The companies duly appeared and took part in the investigation, and on January 19, 1899, the commission made an order whereby it determined that the joint rate then in force for transporting hard coal from Duluth to the several stations west of the twin cities was unreasonable and unjust, and ordered a reduction to another rate found by the commission, which was published and served upon the companies, as required by the state laws, but was disregarded by the railroads interested. Under the rate so fixed the St. Paul & Duluth company was allowed $1 per ton from Duluth to Minneapolis, which was the same price previously agreed upon between the parties, the remainder to be paid to the Minneapolis & St. Louis company, which was left to settle with the Minneapolis, New Ulm, and the Southwestern and the Wisconsin, Minnesota, & Pacific companies for services rendered by those companies in the transportation of coal to points upon their respective roads. Neither of the companies filed or posted schedules of the new tariffs as required by law, and the plaintiff in error, the Minneapolis & St. Louis Railroad Company, on March 3, 1899, and six weeks after the commission made its order, withdrew all tariffs on hard coal in carload lots which had been established under agreement with the Duluth road.

Whereupon this proceeding was taken in the district court of Ramsey county to compel the railroad companies to com- ply with the order of the commission. After trial, judgment was rendered by that court, confirming the order of the commission, directing the issue of a writ of mandamus as prayed; and the judgment so rendered was affirmed upon appeal by the supreme court of Minnesota in State ex rel. Railroad & Warehouse Commission v. Minneapolis & St. L. R. R. Co. 80 Minn. 191, 83 N. W. 60.

Whereupon the Minneapolis & St. Louis Railroad Company, against which the full amount of the reduction by the commission was assessed, sued out this writ of error.

Mr. Albert E. Clarke for plaintiff in error.

Messrs. Thomas D. O'Brien, W. B. Douglas, and Ira B. Mills for defendant in error.

Mr. Justice Brown delivered the opinion of the court:

This case raises two question: (1) The constitutionality of an act of the legislature of Minnesota passed in 1895, creating a railroad and warehouse commission and defining its duties (the material portions of which are printed in the case of Wisconsin, M. & P. R. Co. v. Jacobson, 179 U. S. 287, 45 L. ed. 194, 21 Sup. Ct. Rep. 115), in so far as it assumes to establish joint through rates or tariffs over the lines of independent connecting railroads, and by virtue of which it assumes to arbitrarily apportion and divide joint earnings; (2) whether the tariff fixed by the commission is wholly inadequate and not compensatory.

1. The constitutionality of the act of 1895 is attacked upon the ground that it authorizes the railway commission of the state to compel two or more railroad companies to enter into a joint tariff, and to make and adopt a joint rate for the transportation of property over the lines of such companies, as well as to make a division and to apportion the joint earnings among the several companies interested. It is insisted that it is beyond the constitutional power of the legislature to compel companies to enter into involuntary, unreasonable, and unprofitable contracts with other companies at the instance of third parties, or to fix terms and conditions upon which such contracts shall be performed. This argument in its various applications is one which has been addressed to and considered by this court in nearly every case in which the power of the state to regulate railway charges has been called in question, and the answer made to it in those cases is equally pertinent here. Indeed, it is impossible for the state to exercise this power of regulation without interfering to some extent with the power of a railway to contract either with its customers or connecting lines. The power is one which was said in Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77, to have been customarily exercised in England from time immemorial, and in this country from its first colonization, for the regulation of ferries, common carriers, hackmen, bakers, millers, wharfingers, and innkeepers; and the whole object of this class of legislation is to curtail the power to contract by limiting the exactions of those engaged in these occupations, and providing that the rendition of such services shall not raise an implied promise to pay more than a certain fixed sum. This legislation may be justified by the fact that these various occupations are necessarily to a certain extent monopolistic in their nature, and that in dealing with customers the parties do not stand upon an equality, the latter being practically compelled to submit to such terms as the former may choose to exact, unless the state shall, acting in the interest of the public, elect to interfere and prescribe a maximum of charges.

The argument for the railroad companies in this case assumes that, while the state may interfere as between the railways and their customers, the shippers of freight, it cannot do so as between the railways themselves, by fixing joint tariffs and apportioning such tariffs among the several railways interested in the transportation. The practical result of that argument is this, that if there were within a certain state five connecting roads of 100 miles each in length, which among themselves had established a joint tariff for the whole 500 miles, the state would be powerless to interfere with such tariff, though its right to do so would be unquestioned if the whole 500 miles were owned and operated by a single company. To state such a proposition is practically to answer it. Granting that a state has no right to interfere with the internal economy of a rail- road farther than to secure the...