State of Texas v. Eastern Texas Co State of Texas v. United States

CourtUnited States Supreme Court
Citation258 U.S. 204,42 S.Ct. 281,66 L.Ed. 566
Docket NumberNos. 298 and 563,s. 298 and 563
Decision Date13 March 1922

258 U.S. 204
42 S.Ct. 281
66 L.Ed. 566



Nos. 298 and 563.
Argued Nov. 15 and 16, 1921.
Decided March 13, 1922.

Page 205

Messrs. Tom L. Beauchamp and C. M. Cureton, both of Austin, Tex., for appellants.

[Argument of Counsel from pages 205-207 intentionally omitted]

Page 207

Mr. E. B. Perkins, of Dallas, Tex., for appellee railroad companies.

Mr. Solicitor General Beck, of Washington, D. C., for the United States.

[Argument of Counsel from pages 207-212 intentionally omitted]

Page 212

Mr. Walter McFarland, of Washington, D. C., for Interstate Commerce Commission.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

By section 402 of the Transportation Act of 1920, c. 91, 41 Stat. 456, 477, several new paragraphs were added to section 1 of the Act to Regulate Commerce (24 Stat. 379) as theretofore amended. Paragraphs 18, 19, and 20 are copied in the margin.1 By

Page 213

them Congress has undertaken to regulate the construction and acquisition of new or additional lines of railroad and the extension and abandonment of old lines, and to invest the Interstate Commerce Commission with important administrative powers in that connection. Like the act of which they are amendatory, these paragraphs are expressly restricted to carriers engaged in transporting persons or property in interstate and foreign commerce.2

Our present concern is with the provisions relating to the abandonment of existing lines. They declare that

Page 214

'no carrier by railroad subject to this act shall abandon all or any portion of a line of railroad, or the operation thereof, unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity permit of such abandonment' (paragraph 18); that when application for such a certificate is received the Cimmission shall cause notice thereof to be given to the Governor of the state wherein the line lies and published in newspapers of general circulation in each county along the line, and shall accord a hearing to the state and all parties in interest (paragraph 19); that the Commission may grant or refuse the certificate in whole or in part and impose such terms and conditions as in its judgment the public convenience and necessity require; and that when the certificate is issued, and not before, the carrier may, 'without securing approval other than such certificate,' comply with the terms and conditions imposed and proceed with the abandonment covered by the certificate (paragraph 20).

The Eastern Texas Railroad Company, a Texas corporation, owns and operates in that state a line of railroad 30.3 miles in length. Approximately three-fourths of the traffic over the road is in interstate and foreign commerce and the rest is in intrastate commerce. The company neither owns nor operates any other line. The road was constructed in 1902 to serve extensive lumber industries, but in subsequent years the adjacent timber was removed and the mills dismantled. The company claims that since 1917 the road has been operated at a loss.

On June 3, 1920, the company filed with the Commission an application for a certificate authorizing it to abandon and cease operating its road, full notice of the application being regularly given. The state declined to appear before the Commission, but others, who were being served by the road, appeared and opposed the application. A full hearing was had and, on December 2, 1920 the

Page 215

Commission made and filed a report concluding as follows:

'Upon consideration of the record we find that the present public convenience and necessity permit the abandonment of the applicant's line, and we further find that permission to abandon the line should be made subject to the right of interested persons in the community served to purchase the property at a figure not in excess of $50,000. A certificate and order to that effect will be issued.'

The certificate and order were issued and the railroad company indicated its assent to the condition imposed, but, so far as appears, no one sought to purchase under the condition.

While the application was pending before the Cimmission and before the certificate was issued, the state brought a suit in one of its courts against the railroad company and some of its officers to enjoin them from ceasing to operate the road in intrastate commerce. The bill was brought on the theory that under the laws of the state the company was obliged to continue the operation of the road in intrastate commerce; that the provisions of the Transportation Act were unconstitutional and void, if and in so far as they authorize the abandonment of such a road as respects intrastate commerce, and that the company in asking the Commission to sanction such an abandonment was proceeding in disregard of its obligations to the state. At the instance of the defendants the suit was removed to the District Court of the United...

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