Piedmont Northern Ry Co v. Interstate Commerce Commission 22 25, 1932

• Citation: 76 L.Ed. 1115,286 U.S. 299,52 S.Ct. 541
• Decision Date: 16 May 1932
• Docket Number: No. 664,664
• Parties: PIEDMONT & NORTHERN RY. CO. v. INTERSTATE COMMERCE COMMISSION et al. Argued April 22-25, 1932
• Court: U.S. Supreme Court

286 U.S. 299

52 S.Ct. 541

76 L.Ed. 1115

PIEDMONT & NORTHERN RY. CO.

v INTERSTATE COMMERCE COMMISSION et al.

No. 664.

Argued April 22-25, 1932.

Decided May 16, 1932.

Mr. W. S. O'B. Robinson, Jr., of Charlotte, N. C., for petitioner.

Mr. Nelson Thomas, of Washington, D. C., for respondent Interstate Commerce Commission.

[Argument of Counsel from pages 300-301 intentionally omitted] Mr. Sidney S. Alderman, of Washington, D. C., for respondents Southern Ry. Co. et al.

Mr. Justice ROBERTS delivered the opinion of the Court.

In 1910 a charter was granted under the laws of North Carolina for Piedmont Traction Company, as a street railway corporation, authorized to construct street railways in and near Gastonia, with the limited powers of such a company. In the same year the Greenville, Spartanburg & Anderson Railway Company was chartered under the laws of South Carolina, as a street railway corporation, with power to run between fixed termini, Anderson on the south and Spartanburg on the north. A syndicate was then formed which procured a charter for petitioner as a railroad corporation under the law of South Carolina, with full power of eminent domain and author- ity to operate by electricity or otherwise. The Piedmont Traction Company built certain lines in North Carolina, put them into operation, acquired the street railway system of Charlotte and trackage rights over the street railway system of Gastonia. The Greenville, Spartanburg & Anderson Railway Company acquired a line from Belton to Anderson; built one from Greenwood to Greenville, and afterwards on to Spartanburg; secured trackage rights over the street railway systems in Greenville and Anderson, and put all of them into operation in April, 1914. The traction company and the railway company then conveyed their respective properties to the petitioner.

Until the close of 1926, the petitioner owned and operated two separate and disconnected lines of railway, one in South Carolina extending from Greenwood to Spartanburg, about eighty-nine miles, with a branch from Belton to Anderson of eleven miles, and the other in North Carolina extending from Gastonia to Charlotte, about twenty-three miles, with a branch to Belmont, three miles.

In March, 1927, pursuant to corporate action, it proceeded to construct two extensions, one from Spartanburg, the then northern terminus of the South Carolina line, to Gastonia, the southern terminus of the North Carolina line, a distance of fifty-three miles; the other an extension from Charlotte northward to a new terminus at Winston-Salem, N. C., a distance of seventy-five miles. The Interstate Commerce Commission notified the company that appropriate application should be made for a certificate of public convenience and necessity authorizing these extensions, and that this might be filed without prejudice to the petitioner's making a claim of exemption as an interurban electric railway under section 1, par. 22, of the Interstate Commerce Act, as added by Transportation Act § 402, 49 USCA § 1(22). This course was followed. The Commission overruled the claim of exemption, and denied a certificate on the merits. The company brought suit in the United States District Court under the Urgent Deficiencies Act¹ to set aside and annul that portion of the Commission's order which denied it exemption as an interurban electric railway. A statutory court was convened, and after hearing dismissed the suit on the merits.² Upon appeal, this court held that the order of the Commission, being negative in substance as well as in form, infringed no right of the petitioner, was beyond the scope of the remedy afforded by the Urgent Deficiencies Act, and therefore the suit should have been dismissed for want of jurisdiction.³

Thereafter the board of directors by resolution reaffirmed the intention to build both extensions and authorized the construction of the connecting link between Spartanburg and Gastonia. The Commission, upon being advised that work had actually started, brought the present suit in the District Court for Western South Carolina, alleging that the construction was illegal, since no certificate had been obtained as required by the Transportation Act, of 1920, § 402, par. (18).⁴ It sought an injunction pursuant to the terms of paragraph (20) of the section. Several interstate railroads were permitted to intervene as parties in interest. See Western Pacific California R. R. Co. v. Southern Pacific Co., 284 U. S. 47, 52 S. Ct. 56, 76 L. Ed. 160. The petitioner defended upon the grounds that the work had been undertaken within ninety days of the adoption of the Transportation Act, and for that reason no certificate for the proposed extensions was required,⁵ and that petitioner was within the exception to the Com- mission's jurisdiction over extensions and new construction, created by paragraph (22) of section 1 of the act, as an interurban electric railway not operated as a part of a general steam railroad system of transportation. After a hearing on pleadings and proofs, the trial court overruled both defenses and entered a decree enjoining the further work of construction until a certificate of convenience and necessity should be obtained. 51 F.(2d) 766. Petitioner appealed to the Circuit Court of Appeals for the Fourth Circuit, and we granted certiorari prior to hearing by that court.⁶

The petitioner has abandoned its first contention and stands only on the claimed exemption.

Section 1, par. 22 of the Interstate Commerce Act, as amended by section 402 of the Transportation Act,⁷ provides:

'The authority of the commission conferred by paragraphs (18) to (21), both inclusive, shall not extend to the construction or abandonment of spur, industrial, team, switching, or side tracks, located or to be located wholly within one State, or of street, suburban, or interurban electric railways, which are not operated as a part of parts of a general steam railroad system of transportation.'

Paragraphs (18) to (21) authorize the Commission to grant a certificate for extensions of line or constructions of new line, or for the abandonment of lines, forbid such action without such certificate, and give the Commission or any party in interest the right to enjoin action in disregard of their provisions.

In support of the claimed exemption, petitioner says its lines are exclusively electric, are not operated as parts of a general steam railroad system of transportation, were constructed, equipped, and are maintained and conducted as interurban electric railways, and that the proposed extensions would be of the same character and operated in the same manner. The concession is made that the company is engaged in the general transportation of freight and passengers in interstate commerce, that the proposed extensions would be so operated in connection with the existing lines, and that petitioner is therefore subject to the Interstate Commerce Act as amended by the Transportation Act, 1920, except those portions from the application of which interurban electric railways not operated as a part or parts of a general steam railroad system of transportation are expressly excluded. In summary, the argument is that paragraph (22) in unambiguous terms excepts petitioner's road from the effect of paragraphs (18) to (21) of section 1, needing neither construction nor interpretation in its application; but that, if there be question regarding this contention, the facts with respect to the railway bring it within the intent of the excepting clause, and, finally, that various governmental agencies have so classified it.

Emphasis is placed upon the aptness of the words used in the paragraph as descriptive of petitioner's railway. Thus it is said the road is 'electric'; is 'interurban,' since it extends between cities; and is 'not a part of any system of steam railroads.' But this literal application is inconclusive, for it ignores the entire phraseology employed, which is, 'street, suburban, or interurban electric railways. * * *' The descriptive adjectives show that Congress had in mind a class of carriers differing essentially from those long recognized as the objects of national concern and regulation. A few illustrations will demonstrate the impossibility of the proposed narrow construction. It would hardly be contended that, if an interstate steam railroad should electrify its entire system, this would place it beyond the reach of paragraphs (18) to (21). Yet the road would become both electric and interurban in the etymological sense of the words, and would not be operated as a part of a general system of steam railroad transportation. Should a new electric transcontinental system be projected without question, application for a certificate under those paragraphs would be required, though here again by mere verbal interpretation it would be exempt from the necessity.

We must therefore seek further to ascertain the distinguishing features which the Legislature had in mind. No difficulty is encountered in defining a street or a suburban electric railway. These are essentially local, are fundamentally passenger carriers, are to an inconsiderable extent engaged in interstate carriage, and transact freight business only incidentally and in a small volume. The record indicates that prior to 1920 such street or suburban railways had grown in many instances so as to link distinct communities, and that, in addition, so-called interurban lines were constructed from time to time, to serve the convenience of two or more cities. But the characteristics of street or suburban railways persisted in these interurban lines. They also were chiefly devoted to passenger traffic and operated single or series self-propelled cars. Many of them carried package freight, some also transported mail, and still fewer carload freight picked up along the line or received for local delivery from connecting steam railroads. It is clear that...