Majority — Hughes J.
Syllabus
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF OREGON.delivered the opinion of the Court.
This is an appeal from a decree of the Circuit Court entered July 18, 1911, dismissing the bill, on demurrer, for want of equity. 189 Fed. Rep. 182 .
The bill' was filed by the complainants, the Southern Pacific Company and the Oregon & California Railroad Company, to set aside an order made by the Railroad Commission of Oregon under date of. September 21, 1910, and to enjoin the defendants, the members of the commission and the Attorney-General of the State, from enforcing it. By this order, the commission found, after hearing, that certain freight rates maintained bj’ the Southern Pacific Company between Portland and other places on its lines in Oregon were unreasonable; excessive and discriminatory, and the commission required. the company, in lieu of the rates thus disapproved, to put into effect the “just and reasonable and non-discriminatory charges'” set forth in the order.
The first, and principal, contention of the appellants, is that this requirement was invalid as constituting a regulation of interstate commerce. The order, however, related solely to intrastate traffic, and the question raised by the bill, so far as its allegations bear upon the conditions of interstate transportation, does not differ in its essential features from that which was passed upon in the Minnesota rate cases. Minnesota Rate Cases, ante, p. 352. This objection to the order cannot be sustained.
It is further insisted that the order was confiscatory.
It was alleged that after payment of operating expenses, taxes, interest, and other reasonable and legitimate expenses, a deficit had accumulated representing an indebtedness to the Southern Pacific Company and amounting mí June 30, 1906, to the sum of $6,222,037; but it also appeared that this deficit- was reduced in the following, years so that on June 30, 1909, it amounted to $3,207,008.37.
The capital stock consisted of preferred stock of the par value of $12,000,000, and common stock of the par value of $7,000,000, and the bonded indebtedness amounted to $17,745,000, making in the aggregate $36,745,000. In one part of the bill' it was alleged; Avithout particulars showing the constituent items, that the total value of the property in Oregon, held under' the lease, consisting of approximately 670 miles' of road with rolling stock, stations, terminals and appurtenances, amounted to $43,594,886.73. But a later averment, in connection with the allegations as to outlays and return, was that "the properties oPthe Oregon & California Railroad Company are of the reasonable value of. a sum representing the out
The receipts from the entire, property and the disbursements for several years were stated. • It was averred that-for the fiscal'year ending June 30, 1909, the total receipts were $7,104,081 and the disbursements, $5,839,698. As the court below pointed out, the bill was silent as to what was embraced in the aggregate expenditures, and the court thought it fair to assume that the total disbursements, as alleged, included not only the expenses of operation, but also interest on bonds and on open accounts and thus, that the averment showed, for the fiscal year ending-June 30, 1909, a net balance of $1,264,383 as a return on the investment represented by $19,000,000 in par value of capital stock. It was alleged that the “annual loss of interstate and intrastate business combined,” which would result if the order in question were enforced, would amount to $156,072.48. The court below concluded thaJ on this showing it could not be said in advance of actual experience, that the rates fixed by the commission would not afford a fair return upon the value of the property.
The order, as already noted, was made in September, 1910, and the bill was brought in October, 1910, but the receipts and disbursements- for the fiscal year ending June 30, 1910, were not given. In addition to this omission, the bill was destitute of any allegation showing the expenses incurred in the conduct of the intrastate business as distinguished from the interstate business, or the share of the value of the property which was assignable to the former. In short, the allegations of the bill were wholly insufficient to show that the complainants would be deprived of just compensation in their business of intrastate transportation by virtue-of the operation of- the order.
In sustaining the demurrer, the court gave to the com
It is also , urged that the railroad commission act of Oregon (February 18, 1907 Laws of 1907, chap. 53, p. 67), and the order in question, were void as against the Oregon & California Railroad Company, and the lessee of its property, upon the groundthat the act and. order- impaired the obligation of the contract contained in the charter of the first-mentioned company. That company was incorporated in 1870, under the general incorporation act of Oregon, approved October 14, 1862, which, in § 34, provided Every corporation formed under this act for the construction of- a railroad, as to such road shall be deemed common carriefs, and shall have power to collect and receive such tolls or freight for transportation of persons or property thereon as it may prescribe..” Reference is also made to the following provision of the constitution of Oregon pursuant to which this incorporation act was enacted: “Corporations may be formed under general laws, but shall not be created by special laws except for municipal purposes. All laws passed pursuant to this ¡ section may be altered,. amended or repealed but not so as to^.alter or destroy a,ny vested corporate rights.” (Art.-XI, § 2.)' The sole question-presented on this branch of the case, it is said by counsel for the appellants, “is whether the judgment of the carrier in fixing rates for transportation of persons or property shall be supervised,
As to this question, it is sufficient to say that it is well established that a general charter provision such as the one quoted, giving power to charge and collect tolls, necessarily implies that the charges shall be reasonable and loes not detract from the power of the State through its legislature, or the agency lawfully constituted thereby, to prescribe reasonable rates to be observed by the carrier. State v. Southern Pacific Co., 23 Oregon, 424, 432, 433; Stone v. Farmers’ Loan & Trust Co., 116 U. S. 307 , 330; Dow v. Beidelman, 125 U. S. 680 , 688; Georgia R. R. & Banking Co. v. Smith, 128 U. S. 174 , 181; Chicago, M. & Sty. P. Railway Co. v. Minnesota, 134 U. S. 418 , 455; Covington & C. Bridge Co. v. Kentucky, 154 U. S. 204 , 215; Louisville & Nashville Railroad v. Kentucky, 161 U. S. 677 , 696; Owensboro v. Owensboro Waterworks Co., 191 U. S. 358 , 370. In the case of Stone v. Farmers’ Loan_& Trust Co., supra, .where the charter'.empowered the railroad company “from time to time to fix, regulate, and ■receive the toll and charges by.them to be received for transportation of persons or property on their railroad,” and it was insisted that a subsequent .statute creating a railroad commission.with authority to fix maximum rates was an impairment of contract obligation, the court said (p. 330): “The claim now is that by § 12”- (the provision referred to) “the State has surrendered"the power to fix a maximum for this company, and has declared that the courts shall be loft to determine what, is reasonable, free of all legislative control. TYe see no evidence of any such intention. Power is granted tp fix reasonable charges,
The remaining questions may be briefly disposed of. The complainants were not entitled to have the court below substitute its judgment for that of the commission or determine the matters which properly fell within the province of that body. The conditions of traffic, the adjustment of rates with respect to the different commodities transported, and the appropriate basis for classification, were subjects for the consideration of the commission, and there was nothing shown which would have warranted the court in overriding the decision of the commission upon the ground that its action was- of such an arbitrary character as to constitute an abuse of power.
The criticism made in the bill that the railroad commission act violated the state constitution in conferring upon the commission authority to exercise legislative, executive and judicial powers, has been answered by the decision of the state court, sustaining the statute. State v. Corvallis & Eastern R. R. Co., 59 Oregon, 450; 117 Pac. Rep. 980 . The provision of the statute that suit might be brought in the state court to set aside orders of the commission upon the ground that the rates fixed were unlawful, or that the regulation or practice prescribed-was unreasonable, did not infringe the rights of the complainants. The procedure permitted by the statute is consistent with the Fourteenth .Amendment. • Portland
0.ur conclusion is that the demurrer was properly sustained.
Decree affirmed.
Cases cited
- 16 U. S. 202 16 U. S. 202 p. 538
- Jack v. Kansas 199 U. S. 372 p. 538
- 190 U. S. 447 190 U. S. 447 p. 538
- Merchants' & Manufacturers' Bank v. Pennsylvania 167 U. S. 461 p. 538
- 168 U. S. 705 168 U. S. 705 p. 538
- Chicago & Grand Trunk Railway Co. v. Wellman 143 U. S. 339 p. 538, p. 539, p. 544
- Reagan v. Farmers' Loan & Trust Co. 154 U. S. 362 p. 538, p. 539, p. 540, p. 542, p. 543, p. 553
- City of Knoxville v. Knoxville Water Co. 212 U. S. 1 p. 538, p. 539, p. 544
- Prentis v. Atlantic Coast Line Co. 211 U. S. 210 p. 538
- Honolulu Rapid Transit & Land Co. v. Territory of Hawaii ex rel. Hemenway 211 U. S. 282 p. 538
- Atlantic Coast Line Railroad v. North Carolina Corp. Commission 206 U. S. 1 p. 538, p. 545
- Texas & Pacific Railway Co. v. Abilene Cotton Oil Co. 204 U. S. 426 p. 539
- Texas & Pacific Railway Co. v. Mugg 202 U. S. 242 p. 539
- Texas & Pacific Railway Co. v. Cisco Oil Mill 204 U. S. 449 p. 539
- Smyth v. Ames 169 U. S. 466 at 547 p. 539, p. 540, p. 543, p. 545, p. 546
- Henderson Bridge Co. v. Henderson City 173 U. S. 592 at 615 p. 539
- San Diego Land & Town Co. v. National City 174 U. S. 739 p. 539, p. 544, p. 545
- San Diego Land & Town Co. v. Jasper 189 U. S. 439 p. 539
- Covington & Lexington Turnpike Road Co. v. Sandford 164 U. S. 578 at 597 p. 539, p. 545, p. 551
- Stanislaus County v. San Joaquin & King's River Canal & Irrigation Co. 192 U. S. 201 p. 539
- Wilcox v. Consolidated Gas Co. 212 U. S. 19 at 54 p. 539, p. 544, p. 545, p. 553
- Ex parte Young 209 U. S. 123 at 29 p. 539, p. 540, p. 545
- St. Louis, Iron Mountain & Southern Railway Co. v. Taylor 210 U. S. 281 p. 539
- Interstate Commerce Commission v. Illinois Central Railroad 215 U. S. 452 p. 539, p. 540, p. 542, p. 544, p. 545
- Munn v. Illinois 94 U. S. 113 p. 539
- 108 U. S. 536 108 U. S. 536 p. 539
- Sweet v. Rechel 159 U. S. 380 p. 539
- Chicago, Milwaukee & St. Paul Railway Co. v. Tompkins 176 U. S. 167 p. 539, p. 544
- Louisville & Nashville Railroad v. Kentucky 183 U. S. 503 p. 539, p. 544
- Illinois Central Railroad v. Interstate Commerce Commission 206 U. S. 441 p. 539, p. 540, p. 546
- Texas & Pacific Railway Co. v. Interstate Commerce Commission 162 U. S. 197 p. 539
- Cincinnati, New Orleans & Texas Pacific Railway Co. v. Interstate Commerce Commission 162 U. S. 184 p. 539, p. 540
- Interstate Commerce Commission v. Chicago, Rock Island & Pacific Railway Co. 218 U. S. 88 p. 540, p. 547
- Southern Pacific Co. v. Interstate Commerce Commission 219 U. S. 433 p. 540
- Interstate Commerce Commission v. Delaware, Lackawanna & Western Railroad 220 U. S. 235 p. 540, p. 546
- Baltimore & Ohio Railroad v. United States ex rel. Pitcairn Coal Co. 215 U. S. 481 p. 540, p. 546
- President of the Monongahela Bridge Co. v. United States 216 U. S. 177 p. 540
- Cincinnati, Hamilton & Dayton Railway Co. v. Interstate Commerce Commission 206 U. S. 142 p. 540
- Louisville & Nashville Railroad v. Behlmer 175 U. S. 648 p. 540
- 179 U. S. 287 179 U. S. 287 p. 540, p. 545
- Stone v. Farmers' Loan & Trust Co. 116 U. S. 307 p. 541, p. 542, p. 551
- Missouri Pacific Railway Co. v. Kansas ex rel. Railroad Commissioners 216 U. S. 262 p. 541, p. 543
- Interstate Commerce Commission v. Brimson 154 U. S. 447 p. 541
- Packet Co. v. Catlettsburg 105 U. S. 559 p. 542
- Gulf, Colorado & Santa Fe Railway Co. v. Texas 204 U. S. 403 p. 542, p. 543
- Southern Pacific Terminal Co. v. Interstate Commerce Commission 219 U. S. 498 p. 542
- Coe v. Errol 116 U. S. 517 p. 542
- General Oil Co. v. Crain 209 U. S. 211 at 229 p. 543
- American Steel & Wire Co. v. Speed 192 U. S. 500 p. 543
- Reagan v. Mercantile Trust Co. 154 U. S. 413 p. 543
- Armour Packing Co. v. United States 209 U. S. 56 p. 543
- Wabash, St. Louis & Pacific Railway Co. v. Illinois 118 U. S. 557 p. 543
- Gibbons v. Ogden 6 Wheat. 448 p. 543
- Employers' Liability Cases 207 U. S. 463 p. 543
- Addyston Pipe & Steel Co. v. United States 175 U. S. 211 p. 544
- Northern Pacific Railway Co. v. North Dakota ex rel. McCue 216 U. S. 579 p. 544
- 154 U. S. 401 154 U. S. 401 p. 544
- Minneapolis & St. Louis Railroad v. Minnesota 186 U. S. 257 at 519, at 353 p. 545, p. 546, p. 547
- St. Louis & San Francisco Railway Co. v. Gill 156 U. S. 649 at 666 p. 545, p. 546
- 154 U. S. 412 154 U. S. 412 p. 545
- Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Railway Co. 167 U. S. 479 p. 545
- Atlantic Coast Line Railroad v. Florida ex rel. Ellis 203 U. S. 256 p. 546
- Railroad Commission v. Cumberland Telephone & Telegraph Co. 212 U. S. 414 p. 546
- Taylor v. Secor 92 U. S. 575 p. 546
- Chicago, Burlington & Quincy Railway Co. v. Babcock 204 U. S. 585 p. 546
- Clark v. Kansas City 176 U. S. 114 p. 547
- Smiley v. Kansas 196 U. S. 447 p. 547
- Dow v. Reidelman 125 U. S. 680 p. 551
- Georgia Railroad & Banking Co. v. Smith 128 U. S. 174 p. 551
- Chicago, Milwaukee & St. Paul Railway Co. v. Minnesota 134 U. S. 418 p. 551
- Covington & Cincinnati Bridge Co. v. Kentucky 154 U. S. 204 p. 551
- Louisville & Nashville Railroad v. Kentucky 161 U. S. 677 p. 551
- Owensboro v. Owensboro Waterworks Co. 191 U. S. 358 p. 551
- Portland Railway, Light & Power Co. v. Railroad Commission 229 U. S. 397 p. 553
- Western Union Telegraph Co. v. City of Richmond 224 U. S. 160 p. 553