Wadley Southern Railway Company v. State of Georgia

• Decision Date: 11 January 1915
• Docket Number: No. 27,27
• Citation: 35 S.Ct. 214,59 L.Ed. 405,235 U.S. 651
• Parties: WADLEY SOUTHERN RAILWAY COMPANY v. STATE OF GEORGIA
• Court: U.S. Supreme Court

235 U.S. 651

35 S.Ct. 214

59 L.Ed. 405

WADLEY SOUTHERN RAILWAY COMPANY

v STATE OF GEORGIA.

No. 27.

Argued January 30, 1914.

Decided January 11, 1915.

Adrian, Georgia, a station on the Wadley Southern Railway, is 10 miles from Rockledge, where the road connects with the Macon & Dublin R. R., and 27 miles from Wadley, where it connects with the Central of Georgia Railway. In consequence of this connection with both roads, goods could be shipped from Macon to Adrian, over either route. It was, however, to the interest of the Wadley Southern to have such freight routed via the Central, because it thereby secured the haul of 27 miles from Wadley to Adrian instead of the 10-mile haul when goods were routed via Rockledge. In addition to this, the Central owned all of the stock in the Wadley Southern, and allowed it more than a mileage proportion in the division of the through rate. For these reasons, the Wadley made the Central its preferred connection, and received from it goods for Adrian without requiring the prepayment of freight, while refusing at Rockledge to receive goods shipped from Macon over the Macon & Dublin R. R. unless the charges to Adrian were prepaid. Merchants shipping via Rockledge contended that this was an unjust discrimination, and made complaint to the railroad commission, which, after 'hearing evidence and argument of counsel,' passed an order, dated March 12, 1910, requiring 'the Wadley Southern to desist from such discrimination, and on and after the receipt of the order, to afford shippers via Rockledge the same facilities for the interchange of freight that was afforded shippers over the line of the Central, via Wadley.' On March 14, 1910, a copy of this order was received by the Wadley Southern, which, however, did not institute any proceeding to test its validity in the courts of Fulton county having jurisdiction of 'suits against the commission or its orders' (Ga. Code, § 2625). Instead, the company, on April 4, 1910, notified the commission that it would decline to comply with the order on the ground that it was void. Accordingly, on May 26, 1910,—more than two months after the order was served,—a penalty suit was brought against the carrier by the state, in which it was alleged that, on divers days, the Wadley Southern had violated the order of the commission, and asking that a single penalty 'not to exceed $5,000,' should be imposed under the terms of the act of August 26, 1907. That statute provides that all corporations and persons subject to the public utility law 'shall comply with every order made by the commission under authority of law,' and any corporation or person which neglects to comply with such order shall 'forfeit to the state of Georgia not more than $5,000 for each and every offense, the amount to be fixed by the presiding judge. . . . Every violation . . . of any such order shall be a separate and distinct offense,' and, 'in case of the continued violation, every day the violation thereof takes place shall be deemed a separate and distinct offense.'

In its answer to this penalty suit the Wadley Southern denied that it had been guilty of any unjust discrimination, and contended that the order of the commission, and the statute, on which it was based, in violation of the provisions of the 14th Amendment, took property without due process of law, and also that the penalty statute operated to deny the carrier the equal protection of the law. In the trial before a jury there was testimony on the question as to whether there had been any discrimination and whether any difference in treatment was not justified by the difference in conditions. There was also evidence tending to show that the business of some shippers, through Rockledge, had suffered in consequence of the delay and expense incident to the requirement that freight on goods consigned to Adrian should be prepaid at Wadley. The jury returned a verdict in favor of the state, and the judge imposed a fine of $1,000 on the defendant. The case was then taken to the supreme court of Georgia, where the judgment was affirmed (137 Ga. 497, 73 S. E. 741), and the case is here on a writ of error, which raises the question as to whether the order and the statute under which it was made violate the provisions of the 14th Amendment.

Messrs. T. M. Cunningham, Jr., and A. R. Lawton for plaintiff in error.

[Argument of Counsel from pages 654-656 intentionally omitted] Mr. James K. Hines and Mr. T. S. Felder, Attorney General of Georgia, for defendant in error.

Statement by Mr. Justice Lamar:

Mr. Justice Lamar, after making the foregoing statement of facts, delivered the opinion of the court:

1. As a general rule, the carrier has the option to demand payment of freight in advance or on delivery. And, as there is a lien on the goods to secure the payment of charges, it is often a matter of indifference whether the freight is collected at the beginning or at the end of the transportation. The law has therefore always recognized that the company could exercise the one option or the other, according to the convenience of the parties, the course of trade, the sufficiency of the goods to pay the accruing charges, and other like considerations.

2. What was true between carrier and shipper was likewise true between carrier and its connections. But there is a conflict in the authorities as to how far this common-law right has been modified by those statutes which, while not requiring absolute uniformity, do prohibit unjust discrimination. On the one hand, it is argaed that the carrier has the right to make connections, establish joint routes and through rates for the purpose of facilitating and increasing its business. As an incident of this right it is said that the carrier may enforce the common-law rule and accept goods with or without the prepayment of freight, its decision being determined by the relation between the two companies, the amount of business interchanged, the solvency of the carrier against which the balance generally exists, the latter's promptness in settlement, and other like matters which, while aiding some of the carriers, do not increase the rates charged to the shipper in whose interest the laws against discrimination have been passed. Among the cases which hold that such difference in treatment is not an unjust discrimination, prohibited by statute, is Gulf, C. & S. F. R. Co. v. Miami S. S. Co. 30 C. C. A. 142, 52 U. S. App. 732, 86 Fed. 407. There the circuit court of appeals for the fifth circuit held that, under the interstate commerce law, a common carrier might demand prepayment from one connection and not from another. Cf. Atchison, T. & S. F. R. Co. v. Denver & N. O. R. Co. 110 U. S. 668, 28 L. ed. 292, 4 Sup. Ct. Rep. 185. A different view of the question has been taken by other courts (Adams Exp. Co. v. State, 161 Ind. 328, 67 N. E. 1033), including the supreme court of Georgia, which, in the present case, held that the statute requiring railroads to furnish customary facilities for the interchange of freight, empowering the commission to prevent unjust discrimination, authorized that body to pass an order directing the Wadley Southern R. R. to discontinue the practice of requiring the Macon & Dublin Railroad to prepay freight to Adrian, while making no such demand from the Central Railway. This construction of the state statute is binding here, and leaves for consideration the question as to whether such an order violated the provisions of the 14th Amendment.

3. On that branch of the case the Wadley Southern has made many assignments of error. It contends, in effect, that without due process of law the order deprives it of the liberty of contract; takes from it a valuable right of property, and deprives it of the profit it could have made in the exercise of the long-recognized common-law right to demand prepayment of freight from one connection without being compelled to make a similar demand from all other connections.

The section of the Code under which the order was made did not expressly provide for notice and an opportunity to be heard; but the supreme court of Georgia held that it must be construed in connection with other parts of the railroad commission law which did contain such provisions. As said in Louisville & N. R. Co. v. Garrett, 231 U. S. 313, 58 L. ed. 242, 34 Sup. Ct. Rep. 48: 'It may be assumed that the statute . . . forbade arbitrary action; it required a hearing, the consideration of the relevant statements, evidence, and arguments submitted, and a determination by the commission' as to whether the discrimination complained of was unjust. 'But on these conditions being fulfilled . . . the appropriate questions for the courts would be whether the commission acted within the authority duly conferred by the legislature . . .; whether the commission went beyond the domain of the state's legislative power and violated the constitutional rights of property by imposing confiscatory requirements.' The Georgia court has likewise held that where the statute gave the commission jurisdiction of the subject, its orders are binding unless shown to have been unreasonable, or to have violated some statutory or constitutional right. Railroad Commission v. Louisville & N. R. Co. 140 Ga. 817 (6a), 836, ——L.R.A.(N.S.) ——, 8 S. E. 327.

In this case the commission dealt with a practice found to be unjustly discriminatory, but the order did not, as claimed, interfere with the carrier's legitimate right of management nor deprive it of any right of contract. It did not require the Wadley road, either at Rockledge or at Wadley, to receive, without prepayment of freight, goods whose value was insufficient to pay charges if the consignee should decline to accept them on arrival. Neither did it deprive the Wadley Southern of the right to solicit and encourage shipments via the Central. The order only prohibited a practice which had proved so preferential to some shippers and communities and...