Railroad Commission of Georgia v. Louisville & N. R. Co.

• Decision Date: 18 November 1913
• Citation: 80 S.E. 327,140 Ga. 817
• Parties: RAILROAD COMMISSION OF GEORGIA ET AL. v. LOUISVILLE & N. R. CO.
• Court: Georgia Supreme Court

80 S.E. 327

140 Ga. 817

RAILROAD COMMISSION OF GEORGIA ET AL. v. LOUISVILLE & N. R. CO.

Supreme Court of Georgia

November 18, 1913

Syllabus by the Court.

Under the provisions of the Code of this state, the Railroad Commission had statutory authority to pass an order providing that "all railroads selling mileage or penny scrip books are hereby required, on and after February 1, 1913, to pull the same on the train of the company selling the same, when presented by the holders for transportation between points wholly within the state of Georgia, except where passengers board trains in cities of 10,000 population or more according to the United States census of 1910, in which places mileage or penny scrip shall be exchanged for tickets."

The statute and the order of the Railroad Commission passed thereunder were not in violation of the fourteenth amendment of the Constitution of the United States, as being an unlawful interference with the liberty of contract, or the taking of property without due process of law.

(a) It does not violate the due process clause of the state Constitution.

(b) That a state, through its Legislature or its Railroad Commission, cannot fix a reasonable maximum rate for the carriage of passengers by railroads, and then compel them to issue certain tickets to certain persons at a less rate, does not negative the power to regulate carriers of passengers who voluntarily adopt such practice.

(c) As to mileage and penny scrip books issued or which may be issued since the date of the order, that is clear.

In regard to such mileage and penny scrip books as were issued before the passage of the rule or order of the Railroad Commission, they were issued subject to the statutory power of the Railroad Commission to make regulations in regard to such railroads as carriers of passengers; and such regulatory order as to operation was not violative of the provision of the Constitution of the United States which declares that no state shall pass any law impairing the obligation of contracts.

The fact that railroads, like common carriers at common law could make reasonable rules and regulations in regard to their own operation, in the absence of any statute or valid rule of a Railroad Commission, does not negative the power of the state, directly by legislative act, or through a Railroad Commission duly authorized, to regulate such carriers.

Where under statutory authority, the Railroad Commission of a state, after full hearing as to the facts, passes a regulatory order of the character of that stated in the first headnote, it will not be declared void by the courts merely because, in the absence thereof, a different regulation or agreement made by the railroad companies might have been held valid.

Where such a regulatory order has been made by the state Railroad Commission, within its statutory authority, after a full hearing from the parties concerned, including the carriers the courts will not regard as of no effect the determination of the Commission as to the reasonableness and propriety of such order, or deal with those questions as if the body charged with the duty of considering them had not acted upon them.

(a) The public power to regulate railroads and the private right of ownership of such property coexist, and the one does not destroy the other. Where the power to regulate is so arbitrarily exercised as to infringe the rights of ownership, the exertion is void as being repugnant to the fourteenth amendment of the Constitution of the United States, and also to the due process clause of the state Constitution.

The evidence in this case was conflicting, but it did not show that the Railroad Commission acted so unreasonably or arbitrarily as to authorize an injunction to be granted.

Where an order is promulgated by the Railroad Commission, although a minority of the members thereof may dissent, the order passed by the majority stands as the official action of the body, and is to be dealt with as such.

The order above mentioned is not invalid on the ground that it directly affects and trammels interstate commerce.

Nor is it invalid on the ground that it is discriminatory.

Syllabus by Beck, J., dissenting.

The order of the Railroad Commission under attack in this case was invalid and void: Because it is an unauthorized interference with the reasonable regulation of the railroad selling the mileage and penny scrip books in regard to the manner of using such books; because it violates the due process clause of the state and federal Constitution, in that it violates the constitutional guaranty of freedom in the exercise of the right to make contracts.

Petition for an injunction by the Louisville & Nashville Railroad Company against the Railroad Commission of Georgia and others. From a judgment granting an injunction, defendants bring error. Reversed.

On November 8, 1912, the Railroad Commission of Georgia passed the following order: "Resolved, by the Commission, that all railroads selling mileage or penny scrip books are hereby required, on and after February 1, 1913, to pull the same on the trains of the company selling the same, when presented by the holders for transportation between points wholly within the state of Georgia, except where passengers board trains in cities of 10,000 population or more according to the United States census of 1910, in which places mileage or penny scrip shall be exchanged for tickets."

The Louisville & Nashville Railroad Company filed its petition to enjoin the order on the following grounds, among others: The issuance and sale of mileage scrip books below the maximum rates of passenger fare could not be compelled by the Legislature, or by the Railroad Commission under the powers delegated to it, but the issuance and sale of the same was voluntary; that petitioner and other interested carriers have the right to attach to them the condition requiring the exchange of coupons for tickets, as an incident to the checking of baggage and travel thereon, and have the right to make with the purchasers of said books contracts embodying such conditions; that the Railroad Commission of Georgia has no jurisdiction and authority over the subject which would justify it in passing said order; and that in passing said order the Commission exceeded its powers and functions. The order invades the right of petitioner to attach any condition which it sees fit to a privilege which it voluntarily gives, and which it could not be compelled to give, and unwarrantably interferes with its right to make a contract with the purchaser of such books embodying the conditions upon which the same shall be used. Said order is an unlawful invasion and denial by the Railroad Commission of Georgia of the property right of petitioner of proper and reasonable management and conduct of its affairs, in that it deprives petitioner of the opportunity of protecting its revenue by proper and reasonable checks, and of the reasonable opportunity to safeguard the proper checking of baggage. Petitioner avers that the right of such reasonable management is a property right which cannot be denied it by the state or the Commission, and that said order is in conflict with the due process clause of the state Constitution. Because said order deprives petitioner of the right of making a legal contract with the purchasers of said books, which right of contract is a property right, and in this respect violates said provision of the state Constitution. Because said order deprives petitioner of the right to make a contract with other carriers as to the terms and conditions under which interchangeable mileage or penny scrip shall be issued and used, and therefore violates said provision of the state Constitution. Because the order of the Railroad Commission is violative of the clause of the Constitution of the United States which prohibits a state from passing any law impairing the obligations of contracts. Because said order operates as a regulation of interstate commerce, and will result in unduly and illegally burdening and interfering with the same. Because said order is unreasonable; and because it is discriminatory, as excepting cities of 10,000 or more population.

The defendants demurred to the petition on various grounds, which were urged as reasons why the injunction should not be granted. After hearing evidence and argument, the trial judge granted the injunction as prayed, and the defendants excepted.

Jas. K. Hines, Walter McElreath, and Mayson & Johnson, all of Atlanta, for plaintiffs in error.

Tye, Peeples & Jordan and McDaniel & Black, all of Atlanta, for defendant in error.

FISH C.J.

The controlling questions involved may be considered under three general heads: (1) Did the State Railroad Commission have statutory power to make the regulation under consideration? (2) If so, did such statute conflict with the fourteenth amendment of the federal Constitution, or the clause of the state Constitution forbidding the depriving of any person of life, liberty, or property without due process of law? (3) If the Commission had power to make regulations of this character, has it exercised the power so arbitrarily and unreasonably in the particular case before us as to authorize the courts to declare such action illegal?

Did the State Railroad Commission have statutory authority to make a regulation of this character? By section 2638 of the Code of 1910 it is declared that "all contracts and agreements between railroad companies doing business in this state, as to rates of freight and passenger tariffs, shall be submitted to said commissioners for inspection and correction, that it may be seen whether or not they are a violation of the law or of the provisions of the Constitution or of this...