State v. Seaboard Air Line Ry.

• Decision Date: 21 July 1904
• Citation: 48 Fla. 129,37 So. 314
• Court: Florida Supreme Court
• Parties: STATE ex rel. RAILROAD COM'RS et al. v. SEABOARD AIR LINE RY.

37 So. 314

48 Fla. 129

STATE ex rel. RAILROAD COM'RS et al. v. SEABOARD AIR LINE RY.

Florida Supreme Court

July 21, 1904

In Banc. Application by the state, on the relation of the Railroad Commissioners and others, for a writ of mandamus to the Seaboard Air Line Railway. Motion to quash returns. Granted.

Syllabus by the Court

SYLLABUS

1. The contracts set forth in the statement and opinion under which the Seaboard Air Line Railway controls and operates the Florida West Shore Railway give the former the 'right license, or permission to operate' the latter, and the latter is 'in use' by the former and 'operated by' it under a such a 'contract or agreement' as brings it within the meaning of the railroad commission law (Acts 1899, p. 76, c. 4700), so that the Railroad Commissioners have power under section 6 (page 80) of that law to make reasonable and just rates of freight and passenger tariffs to be observed by the former in the operation of the latter, although under the terms of the contracts the former is not entitled in its own right to the income or profits of the business.

2. In determining whether rates of freight and passenger tariffs established by the Railroad Commissioners for railroad transportation in this state are reasonable, the cost of construction should not be deducted from the estimated earnings under the proposed rates; but the reasonable cost of construction may and should be considered in determining the fair value of the property engaged in transportation.

3. In determining whether rates of freight and passenger tariffs established by the Railroad Commissioners for railroad transportation in this state are reasonable, no part of the earnings or losses from interstate and foreign commerce can be charged to or against the income account of the transportation company; but its interstate and foreign business may and should be considered in determining the proportion of the value of the property of the company assignable to local business and for other purposes.

4. The return to an alternative writ of mandamus seeking to compel a railroad company to put into effect and operation a schedule of tariffs prescribed for it by the Railroad Commissioners which alleges positively and unequivocally that the passenger and freight tariffs prescribed for it by the Railroad Commissioners are unreasonable, and that they do not give to the company fair and reasonable compensation for the services required to be performed by it, is sufficient to tender an issue as to the reasonableness of the rates, without setting up all the facts bearing upon the question of reasonableness and under such an issue any and every fact pertinent to the question of reasonableness is properly admissible.

COUNSEL

W. H. Ellis, Atty. Gen., and J. M. Barrs, for plaintiffs.

Geo. P. Raney and John C. Cooper, for defendant. On February 2, 1904, an alternative writ of mandamus issued from this court alleging:

'(1) That the Florida West Shore Railway is a railroad company a corporation of the state of Florida, and has constructed its line of railway from a point about four miles southwest of Turkey Creek, a station on the main line of the Florida Central & Peninsular Railroad, which railroad is now known as the Seaboard Air Line Railway, at which point the said line of railway of the Florida West Shore Railway connects with a branch of the said Florida Central & Peninsular Railroad, known as the 'Turkey Creek Branch,' and runs in a southwesterly direction to the town of Sarasota, in Manatee county, Florida, with branch lines to Terra Ceia, Lemon, and Palmetto, and that all of the said main line and branch lines of said Florida West Shore Railway are within the state of Florida.

'(2) That the Seaboard Air Line Railway is a corporation of the states of Virginia and North Carolina, and now controls and operates, and since the 1st day of June, 1903, has controlled and operated, the said Florida Central & Peninsular Railroad, known as the Seaboard Air Line Railway, and owns, controls, and operates, or controls and operates, divers other lines of railroad in the state of Florida.

'(3) That the said Seaboard Air Line Railway and the Florida West Shore Railway entered into a contract with each other on the 1st day of June, A. D. 1903, in which it was agreed by them as follows, to wit:

"This agreement, made and executed on this the first day of June, A. D. nineteen hundred and three (1903), between the Seaboard Air Line Railway, a corporation of the states of Virginia and North Carolina, hereinafter called the 'Seaboard,' party of the first part, and the Florida West Shore Railway, a corporation of the state of Florida, hereinafter called the 'West Shore,' party of the second part:

"Whereas, the West Shore has constructed its line of railway from a point about four (4) miles southwest of Turkey Creek, a station on the main line of the Florida Central & Peninsular Railroad (which latter railroad is controlled and operated by the Seaboard Air Line Railway), at which point the said line of railway of the West Shore connects with the Turkey Creek Branch of the said Florida Central & Peninsular Railroad, and runs in a southwesterly direction to the town of Sarasota, in Manatee county, Florida, with the branch lines to Terra Ceia, Lemon, and Palmetto; and

"Whereas, the West Shore contemplates the extension of its said line of railway from Sarasota southwardly to a point at or near Charlotte Harbor in De Soto county, Florida; and

"Whereas, the West Shore has no equipment, rolling stock, or motive power, and is unable to operate its said line of railway without the acquisition of the same; and

"Whereas, the Seaboard desires to derive the benefit from the opening up and development of the territory through which the railway of the West Shore runs; and

"Whereas, it is deemed to be to the mutual interest and advantage of the stockholders of the Seaboard and of the West Shore that the railway of the West Shore should be operated in connection with the Seaboard:

"Now, then, in consideration of the premises, and of the advantages and benefits to be derived by each of the said parties from the contracts of the other, it is hereby mutually covenanted and contracted as follows:

"First. The Seaboard agrees to furnish the West Shore Railway with the necessary equipment for the operation of its line of railway, and agrees to cause the same to be operated by its officers and agents for the benefit of the stockholders of the West Shore.

"Second. The term 'equipment' shall embrace engines and coaches, freight and passenger, switch engines, or construction trains, and rolling stock of every kind and description necessary in the operation of the railroad, together with all tools, implements, and other accessories incident thereto.

"Third. The West Shore shall pay for the use of said equipment the same rentals which the Seaboard now charges its ancillary lines for the use of similar equipment, it being understood that, if at any time either party shall become dissatisfied with the rate of rental so charged, such party shall have the right to call for a readjustment of said rates, and, if such readjustment cannot be had by agreement, then the question of rentals shall be submitted to arbitrators to be selected as hereinafter provided, who, after investigation of the matter, shall decide whether or not in equity and justice there ought to be any change in the rate of rental, and, if so, fix a rate which, in their judgment, would be fair and equitable to all concerned, and the decision of the arbitrators in the premises shall be conclusive upon both parties hereto.

"Fourth. The West Shore agrees that it will bear such proportion of the salaries of the officers of the operating and traffic departments of the fifth division of the Seaboard as the mileage of the West Shore bears to the mileage of the said division, which said proportion is hereby fixed at the sum of three hundred and fifty dollars ($350) per annum.

"Fifth. It is understood and agreed that the compensation for the use of equipment hereinbefore provided, and the proportion of salaries to be paid by the West Shore, shall be considered as part of the operating expenses of the railway of the West Shore.

"Sixth. It is understood and agreed that the taxes, assessments, insurance, damages to persons or property incurred by reason of the running of cars or through the operation of the railroad, and all other items of expense of every class and description customarily included in the operating expenses of a railroad, shall be considered as part of the operating expenses of the railway of the West Shore.

"Seventh. It is understood and agreed that the sum of one hundred and twenty-five dollars ($125) per month shall be allowed and paid to the West Shore out of the earnings of the railway, to be used by it in paying the salaries of such of its officers as are not engaged in the direct operation of the company, and in otherwise keeping up the corporate organization of the company, and the said allowance to be considered as a part of the operating expenses of the West Shore.

"Elghth. The Seaboard agrees to guaranty the payment, as the same matures, of both the principal and interest of a series of bonds of the West Shore, known as first mortgage, four per cent. (4%), thirty-year gold bonds, issued and to be issued at the rate of fourteen thousand dollars ($14,000) per mile of which eleven thousand five hundred dollars ($11,500) per mile shall be used in payment for the construction of the railway of the West Shore, and the remainder of said bonds, to wit, twenty-five hundred dollars ($2,500) per mile, to remain in the treasury of the company and only to be used for its...