Texas Ry Co v. Gulf Ry Co

Decision Date01 March 1926
Docket NumberNo. 417,417
Citation70 L.Ed. 578,46 S.Ct. 263,270 U.S. 266
PartiesTEXAS & P. RY. CO. v. GULF, C. & S. F. RY. CO
CourtU.S. Supreme Court

[Argument of Counsel from pages 266-268 intentionally omitted] Messrs. T. D. Gresham, of Dallas, Tex., and Thomas J. Freeman, of New Orleans, La., for appellant.

Messrs. J. W. Terry, of Galveston, Tex., Gardner Lathrop, Thomas J. Norton, and Homer W. Davis, all of Chicago, Ill., for appellee.

[Argument of Counsel from pages 268-270 intentionally omitted] Mr. Justice BRANDEIS delivered the opinion of the Court.

Transportation Act 1950, c. 91, § 402, 41 Stat. 456, 477-478 (Comp. St. Ann. Supp. 1923, § 8563) provides:

Paragraph 18: '* * * No carrier by railroad subject to this act shall undertake the extension of its line of railroad * * * unless and until there shall first have been obtained from the Commission a certificate that the present or future public convenience and necessity require or will require the construction * * * of such * * * extended line. * * *'

Paragraph 22: 'The authority of the Commission (so) conferred * * * shall not extend to the construction * * * of spur, industrial, team, switching or side tracks, * * * to be located wholly within one state. * * *'

Paragraph 20: 'Any construction * * * contrary to the provisions * * * of paragraph 18 * * * may be enjoined by any court of competent jurisdiction at the suit of * * * any party in interest.'

This suit was brought by the Texas & Pacific Railway Company1 in the federal District Court for Southern Texas to enjoin the Gulf, Colorado & Santa Fe Railway Company from constructing wholly within that state projected trackage, sometimes called the 'Hale-Cement Line.' The bill alleges that the line is, within the meaning of the above provision, an extension of the defendant's railroad; that the prescribed certificate from the Interstate Commerce Commission has not been secured; and that operation of the line will result in irreparable injury to the plaintiff, because it will divert to the Santa Fe traffic which would otherwise be enjoyed by the Texas & Pacific. By answer the defendant challenged the jurisdiction of the court, insisted that the line is merely an industrial track, and asserted that the plaintiff is barred by laches. After a full hearing, the District Court entered a final decree enjoining the construction or operation of the line unless and until the prescribed certificate should have been obtained. Lancaster v. Gulf, C. & S. F. R. Co., 298 F. 488. The case was first brought to this court by the Santa Fe on constitutional grounds, by direct appeal under section 238 of the Judicial Code (Comp. St. § 1215). Because no substantial constitutional question was presented, this court transferred it to the Circuit Court of Appeals for the Fifth Circuit. Gulf, C. & S. F. R. Co. v. Texas & P. R. Co., 46 S. Ct. 128, 266 U. S. 588, 69 L. Ed. 455. There the decree of the District Court was reversed. Gulf, C. & S. F. R. Co. v. Texas & P. R. Co. (C. C. A.) 4 F. (2d) 904. The second appeal to this court was then taken by the Texas & Pacific under section 241 of the Judicial Code (Comp. St. § 1218), and the case was decketed here on May 5, 1925. The three objections to granting relief which had been set up in the answer were renewed here.

First. The Santa Fe contends that the decree of the District Court was properly reversed, because the Texas & Pacific had not secured a determination by the Interstate Commerce Commission that the projected line constitutes an extension. It is admitted that, where projected tracks would confessedly constitute an extension and no certificate has been obtained, a court may enjoin construction, although such prior determination by the Commission was not made or sought. The claim is that, where the defendant asserts that the proposed tracks do not constitute an extension, the court must, under the doctrine of Texas & Pacific Ry. Co. v. American Tie & Timber Co., 34 S. Ct. 885, 234 U. S. 138, 58 L. Ed. 1255, and Northern Pacific Ry. Co. v. Solum, 38 S. Ct. 550, 247 U. S. 477, 483, 62 L. Ed. 1221, either dismiss the bill because it is without jurisdiction, or postpone action because it is without power to proceed, unless and until a determination by the Commission of the controverted question shall have been made. It is argued that the issue whether tracks constitute an extension presents an administrative question; that the Commission has power to decide it, because Congress, by conferring authority to determine whether an extension is compatible with the public interest, has by implication conferred authority to determine also the subordinate question whether a proposed track constitutes an extension; that if the Commission finds the track to be an extension, it may under its general powers make an order requiring the carrier to cease and desist from construction and operation unless and until the prescribed certificate is obtained; and that, as the Commission has such primary jurisdiction, its aid must have been invoked before a court can grant relief.

To this argument the provisions of the act afford a conclusive answer. Paragraph 18 prohibits construction of an extension without obtaining the certificate. Paragraphs 19 and 20 provide that a carrier desiring to construct one may apply for the certificate and prescribe the method of proceeding. Whenever such an application is made, the Commission may pass incidentally upon the question whether what is called an extension is in fact such;2 for if it proves to be only an industrial track, the Commission must decline, on that ground, to issue a certificate.3 A carrier desiring to construct new tracks does not, by making application to the Commission, necessarily admit that they constitute an extension. It may secure a determination of the question, without waiving any right, by asserting in the application that in its opinion a certificate is not required, because the construction involves only an industrial track.4 But a party in interest, who is opposed to the construction, is not authorized by the act to initiate before the Commission any proceeding concerning the project. If application for a certificate has been made, he may appear there in opposition. If no such application has been made, paragraph 20 affords him the only remedy. That remedy is both affirmative and complete.

The function of the court upon an application for an injunction under paragraph 20 is a very different one from that exercised by the Commission when, having taken jurisdiction under paragraphs 19 and 20, it grants or refuses a certificate. The function confided in the Commission is comparable to that involved in a determination of the propriety or application of a rate, rule or practice. It is the exercise of administrative judgment. Where the matter is of that character, no justiciable question arises ordinarily until the Commission has acted. Compare Great Northern Ry. Co. v. Merchants' Elevator Co., 42 S. Ct. 477, 259 U.S. 285, 295, 66 L. Ed. 943. The function of the court upon the application for an injunction is to construe a statutory provision and apply the provision as construed to the facts. The prohibition of paragraph 18 is absolute. If the proposed track is an extension, and no certificate has been obtained, the party in interest opposing construction is entitled as of right to an injunction. The is- sue presented to the court by a denial that the proposed trackage is an extension does not differ in its nature from that raised when the denial is directed to the allegation that the defendant is an interstate carrier. Compare Smyth v. Asphalt Belt Ry. Co., 45 S. Ct. 242, 267 U. S. 326, 328, 329, 69 L. Ed. 629. If the facts are agreed, the question is one of law. If they are not agreed, the court must find them. In the case at bar, the District Court, having jurisdiction generally of the parties and of the subject-matter, was called upon to determine whether an allegation in the bill, essential to the cause of action, was established. This, the court clearly had power to do. Moreover, even if the question presented were, as contended, property one of jurisdiction, the objection urged could not prevail. Every court of general jurisdiction has power to determine whether the conditions essential to its exercise exist.

Second. The facts on which the Santa Fe contends that the proposed line is merely an industrial track are undisputed. Dallas is a large interior city. The Texas & Pacific extends through it and beyond in a general westerly direction; the Santa Fe in a general southwesterly direction. Both lines have been operated for many years. Along the Texas & Pacific, commencing at a point 2 1/2 miles west of the city and extending westward about 2 1/2 miles further, lies territory known as the 'Industrial District.' To its development the facilities and services furnished by the Texas & Pacific have been essential. In it are cement works, oil refineries, and metal works. The traffic moves in carload lots. All the industries are either located on its right of way or connect with it by spurs. To serve the plants that carrier has long switches and assembling tracks. No other railroad has any direct connection with any of these industries. Their traffic from or destined to the Santa Fe or other lines is interchanged by the Texas & Pacific at points on its line distant from these industries from 12 to 30 miles. Thus the Texas & Pacific receives either the whole or a part of the revenue on all the traffic of the district-the richest freight-producing territory in all Texas.

The Santa Fe has no branch line running near to, or in the direction of, any part of the Industrial District. Hale is a station on its road. The proposed line is to begin at Hale, where storage and assembling yards are to be located, and is to end in the Industrial District, near the Texas & Pacific right of way. The air-line distance from Hale to the proposed...

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