Mississippi Railroad Commission v. Mobile Ohio Railroad Company

• Citation: 61 L.Ed. 1216,37 S.Ct. 602,244 U.S. 388
• Decision Date: 04 June 1917
• Docket Number: No. 256,256
• Parties: MISSISSIPPI RAILROAD COMMISSION and Ross A. Collins, Attorney General, Appts., v. MOBILE & OHIO RAILROAD COMPANY, Appellee
• Court: United States Supreme Court

244 U.S. 388

37 S.Ct. 602

61 L.Ed. 1216

MISSISSIPPI RAILROAD COMMISSION and Ross A. Collins, Attorney General, Appts.,

v MOBILE & OHIO RAILROAD COMPANY, Appellee.

No. 256.

Submitted May 1, 1917.

Decided June 4, 1917.

Messrs. James N. Flowers and George H. Ethridge for appellants.

Messrs. S. R. Prince and Carl Fox for appellee.

Mr. Justice Clarke delivered the opinion of the court:

This is a direct appeal from an order of the district court for the southern district of Mississippi, three judges sitting, granting an interlocutory injunction restraining the Mississippi Railroad Commission and the attorney general of that state from enforcing six separate orders entered by the Commission on one citation in one case on October 7, 1914, requiring the appellee to restore to service six passenger trains,—two each way daily between Meridian and Waynesboro, a town 52 miles to the south, and one train each way daily between Meridian and Okolona, a town 127 miles to the north,—all in the state of Mississippi. The trains between Meridian and Okolona which were discontinued were interstate trains; the others were local to the state.

The appellee averred several grounds for the injunction prayed for, but the conclusion which we have reached calls upon us to consider only one of them, viz.:

That the depression of business incident to the European war had so reduced the income of the railroad company that, at the time the order was entered, it was less than its current expenses; that a large loss would be incurred in operating each of the six trains; that without these trains there remained reasonably adequate service, having regard to the population of the territory involved, and that the general financial condition of the company was such that the order, if enforced, would deprive the company of its property without due process of law and of the equal protection of the laws, in violation of the 14th Amendment to the Constitution of the United States.

The principles of law applicable to the decision of such a case as this record presents are few, and they have become so settled and so familiar by repeated decisions of this court that extended discussion of them would be superfluous. They are these:

A state may regulate the conduct of railways within its borders, either directly or through a body charged with the duty and invested with powers requisite to accomplish such regulations. Mississippi R. Commission v. Illinois C. R. Co. 203 U. S. 335, 51 L. ed. 209, 27 Sup. Ct. Rep. 90; Prentis v. Atlantic Coast Line R. Co. 211 U. S. 210, 53 L. ed. 150, 29 Sup. Ct. Rep. 67; Louisville & N. R. Co. v. Garrett, 231 U. S. 298, 58 L. ed. 229, 34 Sup. Ct. Rep. 48.

Under this power of regulation a state may require carriers to provide reasonable and adequate facilities to serve not only the local necessities, but the local convenience, of the communities to which they are directly tributary. Lake Shore & M. S. R. Co. v. Ohio, 173 U. S. 285, 43 L. ed. 702, 19 Sup. Ct. Rep. 465; Clevelant, C. C. & St. L. R. Co. v. Illinois, 177 U. S. 514, 44 L. ed. 868, 20 Sup. Ct. Rep. 722; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. Rep. 585; Missouri P. R. Co. v. Kansas, 216 U. S. 262, 54 L. ed. 472, 30 Sup. Ct. Rep. 330; Chicago, B. & Q. R. Co. v. Railroad Commission, 237 U. S. 220, 59 L. ed. 926, P.U.R.1915C, 309, 35 Sup. Ct. Rep. 560; and such regulation may extend in a proper case to requiring the running of trains in addition to those provided by the carrier, even where this may involve some pecuniary loss. Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, 206 U. S. 1, 51 L. ed. 933, 27 Sup. Ct. Rep. 585; and Missouri P. R. Co. v. Kansas, 216 U. S. 262, 54 L. ed. 472, 30 Sup. Ct. Rep. 330.

But, while the scope of this power of regulation over carriers is very great and comprehensive, the property which is invested in the railways of the country is nevertheless under the protection of the fundamental guaranties of the Constitution and is entitled to as full protection of the law as any other private property devoted to a public use, and it cannot be taken from its owners without just compensation, or without due process of law. Wisconsin, M. & P. R. Co. v. Jacobson, 179 U. S. 287, 45 L. ed. 194, 21 Sup. Ct. Rep. 115; Atlantic Coast Line R. Co. v. North Carolina Corp. Commission, supra; Northern P. R. Co. v. North Dakota, 236 U. S. 585, 59 L. ed. 735, L.R.A.——, ——, P.U.R.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1; Chicago, M. & St. P. R. Co. v. Wisconsin, 238 U. S. 491, 59 L. ed. 1423, L.R.A.1916A, 1133, P.U.R.1915D, 706, 35 Sup. Ct. Rep. 869.

This power of regulation, if it is exercised in such an arbitrary or unreasonable manner as to prevent the company from obtaining a fair return upon the property invested in the public service, passes beyond lawful bounds and is void, because repugnant to the due process of law provision of the 14th Amendment to the Constitution of the United States. Atlantic Coast Line R. Co v. North Carolina Corp. Commission, supra; Missouri P. R. Co. v. Nebraska, 217 U. S. 196, 54 L. ed. 727, 30 Sup. Ct. Rep. 461, 18 Ann. Cas. 989; Missouri P. R. Co. v. Tucker, 230 U. S. 340, 57 L. ed. 1507, 35 Sup. Ct. Rep. 961; Northern P. R. Co. v. North Dakota, 236 U. S. 585, 59 L. ed. 735, L.R.A.——, ——, P.U.R.1915C, 277, 35 Sup. Ct. Rep. 429, Ann. Cas. 1916A, 1.

Whether a statute enacted by the legislature of a state, or an order passed by a railroad commission, exceeds the bounds which the law thus sets to such authority, is a question of law arising on the facts of each case (Mississippi R. Commission v. Illinois C. R. Co. 203 U. S. 335, 51 L. ed. 209, 27 Sup. Ct. Rep. 90), and the appropriate remedy for determining that question is a bill in equity such as was filed in this case to enjoin its enforcement (Ibid.; Chicago, M. & St. P. R. Co. v. Wisconsin, 238 U. S. 491, 59 L. ed. 1423, L.R.A.1916A, 1133, P.U.R.1915D, 706, 35 Sup. Ct. Rep. 869).

With these principles in mind we pass to a consideration of the question of law which the facts of this particular case present for our decision.

The case was heard on bill, answer, and testimony which are all before us, and the facts appearing may be summarized as follows:

The Mobile & Ohio Railroad Company is an interstate carrier operating a line of railway from Mobile, Alabama, to St. Louis, Missouri. This evidence is uncontradicted; that the company is not overcapitalized, that it has been wisely and economically managed, and that, nevertheless, its net earnings above the cost of operation, fixed charges, and taxes, and before...