Railroad Commission v. Weld & Neville

• Decision Date: 13 April 1903
• Parties: RAILROAD COMMISSION OF TEXAS v. WELD & NEVILLE et al.
• Court: Texas Supreme Court

73 S.W. 529

RAILROAD COMMISSION OF TEXAS v. WELD & NEVILLE et al.

Supreme Court of Texas.

April 13, 1903.

Error from Court of Civil Appeals of Third Supreme Judicial District.

Action by Weld & Neville and others against the Railroad Commission of Texas. Judgment for plaintiffs was affirmed by the Court of Civil Appeals (68 S. W. 1117), and defendant brings error. Reversed.

C. K. Bell, Atty. Gen., and T. S. Reese, Asst. Atty. Gen., for plaintiff in error. Gregory & Batts, Hutcheson, Campbell & Hutcheson, and Crane, Greer & Wharton, for defendants in error.

BROWN, J.

Under article 4565, Rev. St. 1895, the defendants in error instituted this suit in the district court of the Twenty-Sixth Judicial District, Travis county, against the Railroad Commission of Texas, and alleged, in substance, that the said Railroad Commission had established rules and regulations for the transportation of cotton from various points in Texas to Houston and Galveston as follows: For the territory extending not more than 100 miles from Houston the rate allowed to be charged upon cotton was based upon the length of the haul, but from all points more than 100 miles from Houston the same rate was allowed based upon 100 pounds of weight, whether in car load or less lots, with reduction of rate upon cotton compressed to a density of 22½ pounds to the cubic foot. It is alleged that the regulations of the commission require the railroad companies to cause the cotton to be compressed either at the initial point of shipment or at the first compress in the line of transportation; charges for compressing to be paid by the railroad company, except for cotton shipped from points between 70 and 100 miles from Houston, the charges of compressing are apportioned between the shipper and the railroad company, but cotton shipped from stations less than 70 miles from Houston is not required to be compressed.

The petition alleges that the regulations of the Railroad Commission governing the shipping of cotton and fixing the rates thereon were made with reference to the old system of handling cotton, which involves its compression at the gins in bales of 54 to 58 inches long, 28 to 36 inches wide, and from 24 to 28 inches thick, which must be hauled to the railroad station, thence by the carrier to the nearest compress; 25 bales being all that a car will carry in an uncompressed condition, but, after being compressed to a density of 22½ pounds to the cubic foot, 50 bales can be carried to the car. Plaintiffs allege that they are interested in one of a number of improved economic methods of handling cotton in successful operation in Texas and minutely describe the method by which a bale of cotton is produced by the Lowry system which weighs 250 pounds, with a density of more than 40 pounds to the cubic foot, being convenient in size and weight for handling, impervious to water, and not combustible. With bales thus compressed the carrier can load cars to the limit of their capacity and the allowed excess, and can use flat cars in the transportation of the cotton without danger of injury from water or fire.

Plaintiffs allege that the cotton crop of Texas amounts annually to 3,000,000 bales, the greater part of which is gathered and shipped during the last four months of each year, and all of it must be transported by the railroads of the state within that time, necessitating the ownership and use of a large number of cars at a heavy cost, which cars cannot be used at other seasons of the year; that the demand for cars to carry cotton is so great as to often create car famine and great delay in the transportation of the cotton, which causes the railroad companies to resort to the use of flat cars that are unfit for that use, and expose the cotton to damage by water and fire, whereby the railroad companies are subjected to heavy damages. The petitioners state minutely the supposed advantages that accrue to the railroad companies in shipping the Lowry bales of cotton over other freight or cotton otherwise compressed. Briefly stated, the allegations are that the Lowry bales are not breakable; that they are not combustible, nor liable to injury by water; save the expenses incident to short hauls and concentrating the cotton, and the difference between the cost of carrying two packages of the same weight, one compressed to the density of 22½ pounds to the cubic foot and one to the density of 40 pounds to the cubic foot.

The petition charges that, notwithstanding cotton properly compressed is the most desirable class of freight for railroad companies, the railroad commission has fixed upon cotton the highest charge for transportation. It is charged that in transporting the same weight of cotton as originally compressed and the Lowry bale the railroad company receives nearly twice as much freight for a car load of the Lowry bale as for a like car load of the other, and particular instances are cited to illustrate this proposition. It is averred in the petition that under the regulations complained of the railroad companies are given an extraordinary and unreasonable revenue and profit for transporting Lowry bales of cotton, that the revenue derived by railroads from handling cotton compressed under the new method is greatly in excess of that derived from cotton handled in the old way, and that the cost under the new method is so much less that to establish the same rate for both classes of cotton is unjust and inequitable, and a discrimination against plaintiffs.

Plaintiffs allege that prior to the institution of this suit they twice called upon the Railroad Commission for proper hearing to establish reasonable rates for the transportation of cotton, which application the Railroad Commission refused, alleging as its reason that to grant the prayer of petitioners would give the owner of the improved bales practically a monopoly of the business of compressing cotton. It is alleged that the refusal to grant a hearing and the refusal to establish the regulations requested were unreasonable and unjust to plaintiffs, that the regulations requested were reasonable and just to defendants, and they prayed that the regulations be established by the court.

The Railroad Commission, by the Attorney General, filed general demurrer and special exceptions, which were by the court overruled, and upon trial before the court judgment was entered declaring the rates and regulations to be unreasonable and unjust as to the defendants in error, which judgment was affirmed by the Court of Civil Appeals. 68 S. W. 1117.

The contention of the Railroad Commission may be considered under the following propositions: (1) Articles 4565 and 4566 of the Revised Statutes of 1895 do not authorize an inquiry by the courts into the reasonableness and justness of the rates, rules, and regulations made by the commission, except to ascertain if they amount to the taking of property without due process of law; in other words, that such rates, rules, and regulations are confiscatory in their effect. (2) It is contended that, if the said articles do authorize an inquiry into the reasonableness of rates, etc., except to ascertain whether or not they are in conflict with the Constitution, then such articles of the statute are in violation of the Constitution of the state, because they thereby confer legislative power upon the courts. (3) That the facts alleged in plaintiffs' petition do not constitute a cause of action under articles 4565 and 4566.

The first question stated above has been decided by this court adversely to the contention of plaintiff in error in the case of Railroad Commission v. H. & T. C. Railway Co., 90 Tex. 340, 38 S. W. 750. In that case the court said: "The language of the law is so antagonistic to the rules established by the decisions, which construction is claimed to have been adopted by the Legislature, that we must conclude that the Legislature intended to change those rules in their application to the subject embraced in the articles quoted; otherwise there was no need for the articles 4565 and 4566. Indeed, the conferring of that jurisdiction upon the courts of itself imposed the duties to try the case by the ordinary rules of procedure, unless otherwise provided." Upon re-examination of the question we are constrained to adhere to our conclusions announced in that case, and to hold that the Legislature intended to confer upon the courts power to determine the question of the reasonableness of rates as they affect the rights of shippers and the railroads by the same rules that would be applied in determining a like question between other parties.

Articles 4565, 4566, do not confer legislative power upon the courts, but, by subjecting the rates to be made by the commission to examination, their reasonableness becomes a judicial question, and there is no conflict between those articles and the provision of the Constitution which provides that "no person or collection of persons being of one of these departments shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted." The making of rates by the commission is the exercise of legislative authority, which the courts cannot exercise; but whether the law under which it acts has been complied with is a question for the courts. It is unnecessary for us to inquire what the rule would be in the absence of our statutory provisions.

Articles 4564-4566, Rev. St. 1895, read as follows:

"Art. 4564.—In all actions between private parties and railway companies brought under this law, the rates, charges, orders, rules, regulations and classifications prescribed by said commission before the institution of such action shall be held conclusive, and deemed and accepted to be reasonable, fair and just, and in such respects shall not be controverted therein until finally found otherwise in a direct action brought for that purpose in the manner prescribed by articles 4565...