Sam Rowland v. Sidney Boyle 24 25, 1916

• Decision Date: 12 June 1916
• Docket Number: No. 252,252
• Citation: 37 S.Ct. 577,61 L.Ed. 1022,244 U.S. 106
• Parties: J. SAM ROWLAND, William F. McKnight, and Thomas E. Wood, Railroad Commissioners of the State of Arkansas, Appts., v. SIDNEY E. BOYLE, as Executrix of the Will of Wilbur F. Boyle, Deceased, and the St. Louis & San Francisco Railroad Company. Argued February 24 and 25, 1916. Restored to docket for reargument
• Court: U.S. Supreme Court

244 U.S. 106

37 S.Ct. 577

61 L.Ed. 1022

J. SAM ROWLAND, William F. McKnight, and Thomas E. Wood, Railroad Commissioners of the State of Arkansas, Appts.,

v SIDNEY E. BOYLE, as Executrix of the Will of Wilbur F. Boyle, Deceased, and the St. Louis & San Francisco Railroad Company.

No. 252.

Argued February 24 and 25, 1916.

Restored to docket for reargument June 12, 1916.

Reargued May 1 and 2, 1917.

Decided May 21, 1917.

Messrs. Joseph M. Hill and S. P. Freeling for appellants.

Messrs. S. T. Bledsoe, John M. Moore, and W. F. Evans for appellees.

Mr. Justice Holmes delivered the opinion of the court:

This is a bill in equity, originally brought by Wilbur Boyle as a stockholder in the railroad company, now one of the appellees, to prevent it from paying, and the Railroad Commission of Arkansas from enforcing, freight rates established by the latter, and a 2-cent passenger rate fixed by a statute of 1907, on the ground that both were confiscatory. A temporary injunction was issued, freight rates were adopted higher than those established by the State Commission, and the 3-cent passenger rate previously in force was restored, a bond being given for keeping accounts and refunding the difference if the final decision should uphold the action of the state. Later by agreement the experiment of a 2 1/2-cent passenger rate was tried for eighteen months, and the final hearing of the cause was postponed to await the decision of Allen v. St. Louis, I. M. & S. R. Co. 230 U. S. 553, 57 L. ed. 1625, 33 Sup. Ct. Rep. 1030, in which the same rates were before the court. That decision was rendered on June 16, 1913, and forthwith after that and the others reported in 230 U. S., there was a conference of railroad managers and officials, engineers and others competent to aid, for the purpose of devising formulas for the division of expenses, etc., between local and interstate business in accord with the views of this court, as a step toward determining the constitutionality of this and other rates sought to be imposed by the states. The railroad company then made a laborious attempt to apply the formulas thus reached, and, as a result, the injunction was made perpetual, subject to a change of circumstances, after a careful discussion by the district court. P.U.R. 1916A, 49, 222 Fed. 539.

The value of the railroad property for the years 1910-1913 was admitted. The question in dispute is the usual one of the division of expense and income between state and interstate business. The decision below explains in greater detail than it is necessary to repeat the method of investigation adopted by the railroad. For the months of November and December, 1913, it caused the most minute and specific reports to be made of all the facts that, by the formulas prepared, would throw light upon the problem to be solved. Such an investigation is too expensive to be kept up for more than a limited time, but evidence was offered to show that the figures for the two months reflected the previous years as to the material proportions, so far as was possible to judge from the returns previously required by the state.

In establishing local rates a state must be assumed to intend to confine its action within the limits set by the Constitution, and not to seek an unjust advantage from the difficulties of dividing income and expense to which we have referred, but in this case the appellants have contented themselves with a purely negative attitude. There is made even a preliminary objection that the evidence is hearsay. We have not observed that the objection was taken when the evidence was introduced, and if not, it would be too late. Diaz v. United States, 223 U. S. 442, 450, 56 L. ed. 500, 503, 32 Sup. Ct. Rep. 250, Ann. Cas. 1913C, 1138. But it is enough to say that the railroad adopted the only practicable mode of presenting its results, that it exhibited its work sheets and data to the...