Atlantic Coast Line Railroad v. North Carolina Corp. Commission

A complaint' having been lodged with- the corporation commission because, of the inconvenience to the public thereby occasioned, both" tjie Southern' and Coast Line were notified that a hearing,'wquM- be had concerning the subject on the 29th. On that day the railways, through their officials, appeared. The Southern represented • that its change in time was because it was absolutely dangerous to operate its train at the speed required by the previous schedule, -and indeed that the lengthened schedule was yet faster than .^desired. The Coast Line reiterated the impossibility of changing the schedule of train No. 39 from Richmond to Selma unless there was a change between New York and Richmond. It stated that there was to be a meeting in Washington on November 6 of the representatives of various roads in the South, and that it hoped, as the result of that meeting, to so arrange that No. 39 would be scheduled for delivery at Richmond at an, earlier hour, thus enabling its time to Selma to be advanced. The commission continued the subject for further consideration. On November 9 the superintendent of the Coast Line advised the corporation commission that at the meeting in Washington it had been impossible to' obtain an earlier departure of the train from New York and Washington, byt that the Pennsyl

“Whereas, the convenience of the traveling public requires that close connection be made between the passenger trains on the Atlantic Coast Line Railroad and the Southern Railway at Selma daily in the afternoon of each day;

“And whereas, it appears that such close connection is practicable:

“It is ordered that the Atlantic Coast Line Railroad arrange its schedule so that the train will arrive at Selma at 2:25 p. m. each day instead of: 2:50 P. m., as the schedule now stands.

“ It is furthér ordered that if the Atlantic Coast Line trains have passengers en route for the Southern Railway, and are delayed, notice shall be given to the Southern Railway, and that the Southern Railway shall wait fifteen minutes for such delayed trains upon receipt of such notice.

“This order shall take effect December 20, 1903.”

The Southern, on receipt of the order, expressed its intention to comply. The Coast Line addressed to the commission a letter protesting against the order and requesting its withdrawal and asking for a furthpr hearing. The letter making this request reviewed the previous correspondence. It pointed, out that the connection at Selma had been a very old one and that its breaking was solely caused by the act of the- Southern in changing the time of its train. It declared that, the Coast Line at once, on hearing of the intention of the Southern to make

“On. October 6th, I further advised the Sopthem Railway that if their train was scheduled to leave Selma at two twenty-five f. m... this would break the connection with our No. 39, and stated to them that the connection was a most important one, being the principal outlet for passengers en route from eastern Carolina to Raleigh and other points on their line, and that we hoped that they, could see their way clear not to disturb the connection, as it was impossible for us to get No. 39 to Selma at an earlier hour than the present schedule, owing to the inability of northern connections to deliver the train to us .at Richmond any sooner.” .

Proceeding to point out the failure of the negotiations with •the Pennsylvania and recapitulating the previous statements concerning the rapidity of the schedule of No. 39 between Richmond and Selma, the exacting nature of its work and connections, the absplute 'impossibility of making it faster was insisted upon. Indeed, there was annexed to the letter a report of the time of No. 39 at’ Selma for a period of nearly five month's, showing that the train had rarely made its connection at Selma.

• The commission, after a hearing afforded officials of the Coast Line, suspended its' prior order and fixed a day for a rehearing of the whole subject, both roads being notified to that effect. Upon the new hearing the matter was taken under advisement. On January 16 the commission stated the facts and its conclusions deduced therefrom. As to the operation of the two trains, their connection at Selma, the importance of this connection to the public and the breaking of the connection by the change of schedule, the facts found were identical with those above previously recited. In addition-it was found that the Coast Line train No. 39 from Richmond to Selma was not only a through train, but also operated as a local train between Richmond, and Selma, making all local stops and daily handling in consequence one or two extra express cars. It was found in accordance with the official time sheets of the running of the

a. That a train was operated from Plymouth to Rocky Mount which left'in the morning at 7:30 and arrived at Rocky Mount at 10:35, whefe it remained until 3:55 in the afternoon, when it returned to Plymouth.

b. That the road also operated a train-from Spring Hope on the westerly side of the main track to Rocky Mount, leaving Spring Hope at 11:20 in the morning, arriving at Rocky Mount at 12:10 in the afternoon and leaving there at 4, arriving at Spring Hope at 4:45. The commission concluded as follows:

“Assuming that the statements máde by the Atlantic Coast Line Railroad Company are true — that it was for the past five months impossible for them to bring No. 39 to Selma by schedule time, to wit, 2:50 p. m., more than twice, and that this train was more" than ten minutes late every day except twenty-four —we must conclude that it is impracticable to require them to make a faster schedule and place this train at Selma at 2:25 p. m. instead of 2:50 p. m.; and therefore this much of the former order is revoked and annulled; but the commission is of the opinion that it is practicable' and that the convenience of the' traveling public requires that the Atlantic Coast Line Railroad Company furnish transportation for passengers from Rocky Mount to Selma after 12:50 p. m. arid by or before 2:25 p. m. each day; that this can be done by extending the run of the Plymouth train to Selma instead of having it lie over at Rocky Mount as now, or by extending the run of the Spring Hope train to Selma instead of having it lie over at Rocky Mount as now. The distance from Plymouth to Rocky Mount is sixty-nine miles, and from Spring Hope to Rocky Mount is nineteen miles, and from Rocky Mount to' Selma forty-two miles; or by providing a Separate train for the service.

“And it is therefore ordered that the Atlantic Coast Line

Railroad Company furnish transportation for passengers from Rocky Mount to Selma after 12:50 p. m. and by or before 2:25 p. m. each' day.

- "It is further ordered that the Southern Railway hold its train No. 135 at Selma fifteen minutes if for any reason the Atlantic Coast Line train connecting at that point is delayed.

“It is further ordered that this order take effect on and after the 26th day of January, 1904.”

Before the date fixed for the taking effect of this order the Coast Line filed five grounds of exception to its validity and prayed another hearing. The first asserted the impossibility of making the connection from Rocky Mount to Selma between the hours fixed by the commission by an extension of the run of either of the branch trains referred to-in the order which the commission had rendered. The reasons principally relied upon to sustain the first exception were the inadequate character of the motive power of the branch road trains for operation on the main track, the speed at which the train would be obliged to travel and the congested condition of the business on the main track during the hours when the train from either of the branch roads would be obliged tó use the main track for the purpose of making the connection. The second exception denied the possibility of making the connection by a special train from Rocky Mount to Selma within the time indicated, and besides asserted that such a train could not be operated without an actual loss. The power of the commission to compel the performance of “services without compensation to the company” was denied, and it was alleged that a taking of property without due process of law in violation of the state constitution and the Fourteenth Amendment to the Constitution of the United States would result from enforcing the order. The third exception denied the power of the commission under the state law to order -the company to put on an extra train between Rocky Mount and Selma, and the fourth in effect reiterated the same ground. The fifth exception challenged the validity of the order as unreasonable, unjust and arbitrary and

Considering the operation of an extra train from Rocky Mount to-Selma or the extension of the run of one of the branch trains as directed in the previous order, and the objection that a loss would be entailed in the operating expenses for such train or trains, the commission treated that fact as immaterial, because it- fouhd as a matter of fact that the total receipts of the Coast Line in North Carolina, taken from business in that State, were sufficiently remunerative, and therefore that even if the train was operated at a loss, as that loss would not reduce the total earnings below what was an adequate remuneration for the whole business, the order would not take the property of the road without due process of law. Summing up its conclusions, the commission said:'

“The commission is of the opinion that the facilities given heretofore by the Atlantic Coast Line Company to the traveling public should not be lessened- that the connection furnished •passengers from the Washington branch, the Norfolk and Carolina branch, t£ie Plymouth branch and the Nashville branch with No. 135, Southern Railway passenger train at Selma, and also for all points between Rocky Mount and Selma, for nearly ten years, should be restored; that if this cannot be done by the Atlantic Coast Line'train No. 39, as formerly, on account of this train being heavier, containing usually one or more extra' express cars, and in all usually ten or more cars, and on account of increase in business between Richmond and. Selma, which necessitates longer stops, then other facilities should be furnished by the Atlantic Coast Line Company; that this connection, which was the principal outlet for passengers from eastern Carolina to Selma and other Southern Railway points for the last ten years, instead of being abandoned should be made permanent and certain, and that this result be accomplished by carrying out the order, heretofore made in this court. It is ordered, therefore, that the exceptions be, and they are hereby, overruled.”

“1. Is it practicable for train No. 39 of the Atlantic Coast Line Railroad, due to arrive at Selma at 2:50 p. m., to make connection at Selma with train No. 135, westbound, of the Southern Railway, due to leave Selma at 2:25 p. m.?

“Answer. No.

“2. Is it practicable to make said connection by extending the run of the Plymouth train daily from Plymouth to Selma and return, and if so, what would be the additional expense?

“3. Is it practicable to make said connection by the use of the Spring Hope train, and if so, what would be the additional expense?

“4. In order to make such connection would defendant company have to run an additional train on-its main line from Rocky Mount to Selma?

“Answer.' Yes.

“5. Is it practicable for said train to safely run the schedule prescribed in plaintiff’s order, having due regard to the number of trains and number of stops, on defendant’s main line from Rocky Mount to Selma?

“Answei. Yes.

“6. What would’be the daily cost of operating such train from Rocky Mpunt to Selma and return? .

“Ánswerr $40.00.

“7. What would be the probable daily receipts from such train?

“Answer: $25.00.

“8. Is it reasonable and proper that, for convenience of-the traveling public, the defendant company should be required to malee such connection?

“Answer. Yes.”

The answers to the first four questions were the result of peremptory instructions by the court, and the responses to the last four were deduced by the jury from the testimony submitted to its consideration.

The court granted the prayer of the Atlantic Coast Line to that effect and rendered judgment on the verdict in its favor. The corporation commission was held to be without power “to interfere with the right of railway companies to regulate for themselves the time and manner in which passengers and property should be transported,” provided only such companies complied with the existing statutory direction “to run one passenger train at least each way over its line every week day.” On appeal the Supreme Court of North Carolina reversed the judgment. The facts found by the corporation commission were reiterated, and it was held that error had been committed by the court below in instructing the jury to give a negative response to the first three propositions. Indeed it was declared that the only essential proposition submitted to the jury was the eighth, which required it to be determined whether the connection at Selma was necessary for the public convenience. Treating the facts found by the commission as sustaining the conclusion reached by that body, it was decided' that the commission had power to make the order, and that the exercise of the authority was not repugnant either to the Constitution of the United States or of the State. Notwithstanding, the finding of facts' made concerning the means by which the connection at Selma was to be performed, -the court construed the order of the commission as not having 'been solely based upon the-means of performance referred to in ‘the findings and as embracing not only a choice of the methods referred to .therein, but any other, which the Coast Line might choose to adopt, provided only it accomplished the purpose of the order. But whilst thus from one point of Mew, treating the order of the' commission so as to render it unnecessary to-pass upon the'particular methods for mak

1. That the order was arbitrary and unreasonable, because beyond the scope of the authority delegated to the corporation commission by the state law.

As this proposition involves no Federal question and is concluded by the judgment entered below, we put the subject out of view. And, although not cognate to this proposition, to clear the way .for the consideration of the substantial issues we also put aside the suggestion made in argument that as the Southern Railway by its change of schedule originally rendered the connection at Selma impossible, therefore that road should have been compelled to restore the connection by a modification of the schedule or schedules of the trains.by it operated. We put this suggestion aside because it does not seem to have been seriously urged in the court below, and besides is so directly refuted by the findings that we think it requires no further notice.

2. The order was arbitrary and unreasonable, because tohen properly considered it imposed upon the Coast Line a duty foreign to its obligation to- furnish adequate facilities for those traveling upon its road.

This rests upon tlie assumption that as the order was based not upon the neglect of the Coast Line to afford facilities for travel over its own road, but because of the failure to furnish facilities to those traveling on the Coast Line who desired also to connect with and travel on the Southern road, therefore the order was in no just sense a regulation of the business

3. That the facilities afforded the public by the railroad were of such a character as to demonstrate that the extra burden which would result from the compliance with the order was wholly arbitrary and unreasonable.

This rests upon the assumption that as there were several existing daily connections between trains of the Coast Line and those of the Southern at Selma, which might be availed of by those desiring to travel from eastern to western North Carolina and beyond, ,and, as besides, the proof established that another connection operating the same result was afforded by way of Weldon and the Seaboard Air Line to Raleigh and thence further west, therefore it was both arbitrary and unreasonable to superadd an unnecessary connection. Conceding, as must be done, that the nature and extent of the existing facilities furnished by a carrier for the public convenience are

4. That, however otherwise just and reasonable the order may have been, it is inherently unjust and unreasonable because of the nature of the burden which it necessarily imposes.

This proposition is based on the hypothesis that the order, by necessary intendment, directed the Coast Line to operate an additional train, although such train could not be operated without a daily pecuniary loss. The premise upon which this proposition rests would seem to be irrelevant, since the court below in one aspect of its opinion treated the order of the commission as not requiring the operation of an extra train from Rocky Mount to Selma. Yet, as the facts found by the commission and which were affirmed by the court would indicate that it was considered that the. operation of such train was the most direct and efficient means for making the ordered connection, and as the court considered and passed' upon the duty of the railroad to comply with the order, even if to do so it became necessary to operate the extra train at a loss,'we think the proposition relied upon is open and must.. be decided. The contention is that the fact that some loss would result from the requirement that the extra train be operated, in and of itself, conclusively establishes the unrea

“A state enactment or regulations made under the authority of a state enactment, establishing rates for the transportation of persons or property by railroad that will not admit of the carrier earning such compensation, as under all the circumstances is just to it and to the public, would deprive such carrier of its property without due process of law' and deny to it the equal protection of the laws, and would, therefore, be repugnant to -the Foúrteeixth Amendment of the Constitution of the United States:'7

But'this case does not involve the énforcement by a State of a general, scheme of maximum rates, but only whether an exercise of. state authority- to compel' a carrier to perform a particular, and specified duty is so inherently-unjust and unreasonable as to amount to the deprivation- of property without. due process of law, or .a denial of the equal protection- of the laws. In á case involving the validity of an order enforcing a scheme of maximum rates of course - the finding that the enforcement of such scheme will not. produce an adequate return for the. operation of the-railroad, in and of itself dem

It is insisted that, although the case be not controlled by the doctrine of Smyth v. Ames, nevertheless the arbitrary and unreasonable character of the order results from the fact that to execute it would require the operation of a train at a loss, even if the result of the loss so occasioned would not have the effect of reducing the aggregate net earnings below a reasonable profit. The power to fix rates, it is urged, in the nature of things, is restricted to providing for a reasonable and just rate, and not to compelling the performance of a service for such a rate as would mean the sustaining of an actual loss in doing a particular service. To hold to the contrary, it is argued, would be to admit that a regulation might extend to directing the rendering of a service gratuitously or the performance of first one service and then another and still another at a loss, which could be continued in favor of selected interests until the point was reached where by compliance with the last of such multiplied orders the sum total of the revenues of a railroad would be reduced below the point of producing a reasonable and adequate return. But these extreme suggestions have no relation to the case in hand. Let it be conceded that if a. scheme of maximum rates was imposed by state authority,

“Although to carry out the judgment may require the exercise by the plaintiff in error of the power of eminent domain, and will also result in some, comparatively speaking, small expense, yet neither fact-furnishes an answer to the application of defendant in error. Worcester v. Norwich & W. R. Co., 109 Massachusetts, 112; People ex rel. Green v. Dutchess & C. R. Co., 58 N. Y. 152 , 163; People ex rel. Kimball v. Boston & A. R. Co., 70 N. Y. 569 ; People v. New York, L. E. & W. R. Co., 104 N. Y. 58 , 67.”

Affirmed.