St Louis Ry Co v. Gill Same v. Stevenson Same v. Trimble Same v. Carter
| Decision Date | 04 March 1895 |
| Docket Number | Nos. 173-176,s. 173-176 |
| Citation | 156 U.S. 667,39 L.Ed. 573,15 S.Ct. 484,156 U.S. 649,39 L.Ed. 567 |
| Parties | ST. LOUIS & S. F. RY. CO. v. GILL. SAME v. STEVENSON. SAME v. TRIMBLE. SAME v. CARTER |
| Court | U.S. Supreme Court |
On the 16th day of August, 1880, under the general laws of the state of Arkansas, a company was incorporated under the name and style of the St. Louis, Arkansas & Texas Railway Company, and authorized to construct a railway from the northern boundary of the state of Arkansas to Fayetteville, in that state. This railroad was connected at its northern terminus with the railroad of the St. Louis, Arkansas & Texas Railway Company, a corporation of the state of Missouri, and at its southern terminus with the railroad of the Missouri, Arkansas & Southern Railway Company, a corporation of the state of Arkansas.
Under provisions of the laws of the states of Arkansas and Missouri, on the 10th day of June, 1881, the three companies mentioned were consolidated into a single corporation, under the style of the St. Louis, Arkansas & Texas Railway Company, Consolidated.
On and previous to the 21st day of February, 1882, it was provided by the laws of the states of Arkansas and Missouri that any railroad company incorporated under the laws of the state of Missouri might lease or purchase any part of a railroad, with all its rights, privileges, immunities, real estate, and other property, the whole or a part of which was in the state of Missouri, and constructed, owned, or leased by any other company, if the lines of the roads of said companies were connected and continuous, and that any railroad company incorporated under the laws of the state of Arkansas whose road was wholly or in part constructed and in operation was authorized to sell, lease, or otherwise dispose of the whole or any part of its railroad, with all the rights, privileges, franchises, and immunities thereunto belonging, to any connecting railroad or any railroad corporation then or thereafter organized under the laws of the state of Missouri, or of the United States, or of both.
In the manner provided by those laws, the St. Louis, Arkansas & Texas Railway Company, Consolidated, on the 21st day of February, 1882, sold and conveyed all of its railway in the states of Arkansas and Missouri, together with all its rights, privileges, franchises, and immunities, to the St. Louis & San Francisco Railway Company, a corporation organized under the general laws of the state of Missouri and under several acts of the congress of the United States.
By an act of the legislature of Arkansas, approved April 14, 1887, the maximum rate of passenger fares to be charged in that state was fixed at three cents per mile, and a penalty of $300 was given the passenger for each overcharge. At the fall term of 1887 of the Washington county circuit court, John B. Gill brought an action against the St. Louis & San Francisco Railway Company, alleging that said company, operating a railroad within the state of Arkansas more than 75 miles in length, had on five distinct occasions charged and received from the plaintiff more than three cents per mile, and demanding judgment for the penalties prescribed in the said statute.
The St. Louis & San Francisco Railway Company filed several pleas or special answers to the complaint, two of which are alleged to raise federal questions. To these special pleas the plaintiff demurred, and the demurrers were sustained. The defendant then made several offers tending to show that the rate of three cents per mile for each passenger carried was unreasonable, and did not enable the defendant to pay its interest or to earn anything on its capital st ck. These offers were ruled out, on plaintiff's objection, as incompetent and irrelevant. Due exceptions were taken by the defendant to the action of the court in sustaining the demurrers, and in excluding plaintiff's evidence. Judgment went for the plaintiff, which was on appeal affirmed by the supreme court of Arkansas, to whose judgment a writ of error was sued out to this court.
Geo. R. Peck, E. D. Kenna, A. T. Britton, and A. B. Browne, for plaintiff in error.
A. H. Garland and D. W. Jones, for defendants in error.
Mr. Justice SHIRAS, after stating the facts in the foregoing language, delivered the opinion of the court.
By the act of April 14, 1887, the legislature of Arkansas prescribed a maximum rate of three cents per mile for each passenger carried by the railroads of that state, and a penalty of $300 for each overcharge, payable to the passenger from whom such overcharge had been exacted.
It was found by the trial court, adjury having been waived, that John B. Gill, the plaintiff, had on several occasions, while traveling on the railroad of the St. Louis & San Francisco Railway Company, between points within the territory of the state of Arkansas, been charged a rate in excess of that allowed by the statute. The defendant company set up, by way of defense, that it operated that portion of the railroad on which the plaintiff traveled as a purchaser and assignee of the St. Louis, Arkansas & Texas Railway Company, a corporation organized under the laws of the state of Arkansas; that, under the laws of Arkansas in force at the time of the incorporation of said last-mentioned company, in April, 1880, it had the right to fix and regulate the rate of charge for carrying passengers, not to exceed the sum of five cents per mile; that the legislature might, from time to time, reduce the rates, but that the same should not be so reduced as to produce, as profits for the railroad company, less than 15 per cent. per annum on the capital actually paid in; and that, until such profits did annually accrue to said company, it and its successors and assigns were entitled, without limitation, restriction, or control, to the right to fix such rates of fares as to it should seem proper, not exceeding the rate of five cents per mile; that such provisions of the law constituted a contract between the St. Louis, Arkansas & Texas Railway Company and the state, and that the St. Louis & San Francisco Railway Company, having become, in a manner and form provided by the laws of the state, the assign of the St. Louis, Arkansas & Texas Railway Company, and the owner of its road, franchise, and privileges, had succeeded to its right to charge passenger rates not in excess of five cents per mile, so long as its profits did not exceed 15 per cent. per annum on the capital actually paid in; that the said railroad, although completed for about five years, had never earned in profits an amount equal to 3 per cent. on the capital actually paid in; that the net earnings or profits for the next ensuing two years will not exceed 3 per cent. on the capital actually paid in, or on the amount actually expended in the construction of said railroad; that the consolidation of the St. Louis, Arkansas & Texas Railway Company of Arkansas with the company of the same name, incorporated in Missouri, and the sale by the company so formed of its railroad to the defendant, each severally became and were compacts made between the states of Missouri and Arkansas with each other, with the consolidated company, and with the defendant company, respectively; that the act of April, 1887, of the legislature of Arkansas, attempting to fix passenger rates at less than five cents per mile, in so far as it relates to the defendant's line of railway, never received the assent of the state of Missouri or of the defendant company; and that such enactment was an alteration and impairment of a contract, and as such null and void, under the provisions of the constitution of the United States.
To this plea or special answer, the plaintiff demurred.
As a further plea or special answer, the defendant company alleged, in connection with a history of the formation of the original companies, their consolidation, and the purchase of the consolidated railroad by the defendant, that by a provision of the constitution of the state of Arkansas, in force at the time of the transactions narrated, it was provided that no charter of any corporation should be altered, annulled, or repealed in such a manner as to do injustice to the corporators; that the owners of the capital stock of the St. Louis, Arkansas & Texas Railway Company are the same and identical persons who own the capital stock of the defendant company; and that if the rates of fare prescribed by the act of April, 1887, are enforced, the defendant company will not be able to earn a reasonable rate of interest on its indebtedness, or to meet the actual cost of transporting passengers and maintaining said division of its road; and that, therefore, said act of April, 1887, as far as it is applicable to the said railroad, is in violation of the constitution of Arkansas, and is unreasonable, and a taking of private property for public use without compensation, and is therfore in violation of the fifth and fourteenth amendments to the constitution of the United States.
The plaintiff demurred likewise to this plea, and, the demurrers having been sustained, the defendant then offered to show that the St. Louis, Arkansas & Texas Railway Company had on December 31, 1880, executed bonds to the amount of $600,000, and secured the same by a mortgage of all its property, franchises, and immunities to the United States Trust Company of New York, which bonds were yet wholly due and unpaid, and upon which the defendant was required to annually pay the sum of $36,000 as interest; that the defendant company has never since the construction of said lines been able to earn, from all sources, an amount which, after paying for the actual expenditures, would yield to the defendant or to the original incorporators a profit equal to 1 per cent. upon the capital stock actually paid in cash, and used in the construction of such lines of railroads; that the actual cost of transporting each passenger over that portion of the defendant's railway in the...
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