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ing public should not be lessened; that the connection furnished passengers from the Washington branch, the Norfolk & Carolina branch, the 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 former
part of the state, irrespective of the con- "The commission is of the opinion that nection formerly existing at Selma by the facilities given heretofore by the Attrain No. 39, were analyzed, and as a mat-lantic Coast Line Company to the travelter of fact the service afforded by these trains was held to be wholly inadequate. Thus, for example, whilst it was found that the first train relied upon-the one from Rocky Mount to Goldsboro, arriving there at 6:50 in the morning-made a connection with a Southern Railway train moving from Selma via Raleigh to Greensboro, it was pointed out that it was inadequate because the train had no connection at its point of departure, Rocky Mount, with any incom-ly, on account of this train being heavier, ing train over the large area covered by containing usually one or more extra exthe branch roads, which area, it was stated, press cars, and in all usually ten or more embraced a population of four hundred cars, and on account of increase in business thousand people. Hence it was found that, between Richmond and Selma, which necesto use that train, any person in the ter- sitates longer stops, then other facilities ritory covered by the branch roads would should be furnished by the Atlantic Coast be obliged to leave home the day before Line Company; that this connection, which and pass the night at Rocky Mount. The was the principal outlet for passengers from fourth train relied upon, that is, a connec- eastern Carolina to Selma and other Southtion made by Coast Line No. 39 at Selma ern Railway points for the last ten years, under the new schedule with a later train instead of being abandoned should be made over the Southern road for Raleigh, was permanent and certain; and that this refound to be but a connection with a South-sult be accomplished by carrying out the ern freight train, having no passenger car, order heretofore made in this court. It but only a caboose. The trains under the is ordered, therefore, that the exceptions second, third, and sixth headings, connect- be, and they are hereby, overruled." ing at Goldsboro or Selma in the afternoon and night, were found to make a connection only with a slow train over the Southern road, doing a mixed passenger and freight business, and which made no adequate connection beyond Raleigh to the west. The objection to suggested route No. 8, that is, via Weldon, and thence by the Seaboard "1. Is it practicable for train No. 39 of Air Line to Raleigh and points further west, the Atlantic Coast Line Railroad, due to was decided to be that it was a longer arrive at Selma at 2:50 P. M., to make conroute, more costly, and uncertain as to connection at Selma with train No. 135, westnections. The remaining suggested routes were in effect disposed of upon similar considerations to those above adverted to.
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 found 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 Coast Line, as authorized by statute, appealed to the superior court of Wake county, city of Raleigh, and the case was there tried de novo before a court and jury. The jury, under the instructions of the court, considered and responded to the eight questions, which follow:
bound, of the Southern Railway, due to
"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?
ber of trains and number of stops, on de-, treating the order of the commission so as fendant's main line from Rocky Mount to Selma ? "Answer.
"6. What would be the daily cost of operating such train from Rocky Mount to Selma and return?
to render it unnecessary to pass upon the particular methods for making the connection at Selma referred to in the findings, the court yet reviewed the means of performance therein stated. In doing so it was decided that although to execute the order of the commission it might be im
"7. What would be the probable daily perative for the Coast Line to operate at a receipts from such train?
pecuniary loss a new train from Rocky Mount to Selma, or the extension, with like result, of the movement of one or the other of the branch trains from Rocky Mount to Selma, no violation of any right of the Coast Line protected by the Constitution of the United States or of the state would arise. This was based upon the finding by the court that the average net earning of the railroad from its business in North Carolina was of such a character that an adequate remuneration would remain after allowing for any possible loss which might arise from operating either of the trains in question. 137 N. C. 14, 49 S. E. 191.
with power to that end, is not and could not be successfully questioned, in view of the long line of authorities sustaining that docrine.† Accepting this general rule, the
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 All the assignments of error challenge the railway companies to regulate for them- correctness of the decision below the selves the time and manner in which pas- ground of its repugnancy to the due process sengers and property should be transport- or equal protection clauses of the 14th ed," provided only such companies com- Amendment. Amendment. The elementary proposition plied with the existing statutory direction that railroads, from the public nature of "to run one passenger train at least each way the business by them carried on and the over its line every week day." On appeal interest which the public have in their the supreme court of North Carolina re-operation, are subject, as to their state versed the judgment. The facts found by business, to state regulation, which may be the corporation commission were reiterated exerted either directly by the legislative auand it was held that error had been com-thority or by administrative bodies endowed mitted 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 view,
cago, B. & Q. R. Co. v. Cutts) 94 U. S. 155, +Chicago, B. & Q. R. Co. v. Iowa (Chi24 L. ed. 94; Peik v Chicago & N. W. R. Co. 94 U. S. 164, 24 L. ed. 97; Chicago, M. & St. P. R. Co. v. Ackley, 94 U. S. 179, 24 L. ed. 99; Winona & St. P. R. Co. v. Blake, 94 U. S. 180, 24 L. ed. 99; Stone v. Wisconsin, 94 U. S. 181, 24 L. ed. 102; Ruggles v. Illinois, 108 U. S. 536, 27 L. ed. 816, 2 Sup. 108 U. S. 541, 27 L. ed. 818, 2 Sup. Ct. Rep. Ct. Rep. 832; Illinois C. R. Co. v. Illinois, 839; Stone v. Farmers' Loan & T. Co. 116 U. S. 307, 29 L. ed. 636, 6 Sup. Ct. Rep. 334, 388, 1191; Stone v. Illinois C. R. Co. 116 U. S. 347, 29 L. ed. 650, 6 Sup. Ct. Rep. 348; Stone v. New Orleans & N. E. R. Co. 116 U. S. 352, 29 L. ed. 651, 6 Sup. Ct. Rep. 31 L. ed. 841, 1 Inters. Com. Rep. 56, 8 Sup. 349, 391; Dow v. Beidelman, 125 U. S. 680, Ct. Rep. 1028; Charlotte, C. & A. R. Co. v. Gibbes, 142 U. S. 386, 35 L. ed. 1051, 12 Sup. Ct. Rep. 255; Chicago & G. T. R. Co. v. Wellman, 143 U. S. 339, 36 L. ed. 176, 12 Sup. Ct. Rep. 400; Pearsall v. Great North
assignments of error rest upon the hypoth- | although numbered separately, but reiteresis that the order which the court be- ates grounds of error to be found in the low enforced was so arbitrary and un- others. In other words, the various grounds reasonable in its character as to transcend of error are so interblended in the several the limits of regulation, and to be in effect propositions as to render it impossible to a denial of due process of law, or a depriva- treat one as distinct from the other. All tion of the equal protection of the laws. the grounds, however, which the propositions assert as establishing the arbitrary and unreasonable character of the order complained of may be embraced under four general headings, which we proceed to dispose of.
As the public power to regulate railways and the private right of ownership of such property coexist and do not the one destroy the other, it has been settled that the right of ownership of railway property, like other property rights, finds protection in constitutional guaranties, and, therefore, wherever the power of regulation is exerted in such an arbitrary and unreasonable way as to cause it to be in effect not a regulation, but an infringement upon the right of ownership, such an exertion of power is void because repugnant to the due process and equal protection clauses of the 14th Amendment. The result, therefore, is that the proposition relied upon is well founded if it be that the order which the court below enforced was of the arbitrary and arbitrary and un
reasonable character asserted.
In coming to consider the question just stated it must be borne in mind that a court may not, under the guise of protect ing private property, extend its authority to a subject of regulation not within its competency, but is confined to ascertaining whether the particular assertion of the legislative power to regulate has been exercised to so unwarranted a degree as, in substance and effect, to exceed regulation, and to be equivalent to a taking of property without due process of law, or a denial of the equal protection of the laws. We shall not, in analyzing the case, undertake to review in their order the ten propositions of error found in the record and reproduced in the briefs of counsel, as each proposition, ern R. Co. 161 U. S. 646, 665, 40 L. ed. 838,, 844, 16 Sup. Ct. Rep. 705; Louisville & N. R. Co. v. Kentucky, 161 U. S. 677, 695, 40 L. ed. 849, 857, 16 Sup. Ct. Rep. 714; Wiscousin, M. & P. R. Co. v. Jacobson, 179 U. S. 287, 45 L. ed. 194, 21 Sup. Ct. Rep. 115; Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 46 L. ed. 1151, 22 Sup. Ct. Rep. 900; Minneapolis & St. L. R. Co. v. Minnesota, 193 U. S. 53, 48 L. ed. 614, 24 Sup. Ct. Rep. 396; Chicago, B. & Q. R. Co. v. Illinois, 200 U. S. 561, 584, 50 L. ed. 596, 605, 26 Sup. Ct. Rep. 341; Atlantic Coast Line R. Co. v. Florida, 203 U. S. 256, 51 L. ed. 174, 27 Sup. Ct. Rep. 108; Seaboard Air Line R. Co. v. Florida, 203 U. S. 261, 51 L. ed. 175, 27 Sup. Ct. Rep. 109.
Stone v. Farmers' Loan & T. Co. 116 U. S. 307, 331, 29 L. ed. 636, 644, 6 Sup. Ct. Rep. 334, 388, 1191; Chicago, M. & St. P. R. Co. v. Minnesota, 134 U. S. 418, 455,
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, when 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 the 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 fail33 L. ed. 970, 979, 3 Inters. Com. Rep. 209, 10 Sup. Ct. Rep. 462, 702: Chicago & G. T. R. Co. v. Wellman, 143 U. S. 339, 344, 36 L. ed. 176, 179, 12 Sup. Ct. Rep. 400; Reagan v. Farmers' Loan & T. Co. 154 U. S. 362, 399, 38 L. ed. 1014, 1024, 4 Inters. Com. Rep. 560, 14 Sup. Ct. Rep. 1047; St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649, 657, 39 L. ed. 567, 570, 15 Sup. Ct. Rep. 484; Chicago, B. & Q. R. Co. v. Chicago, 166 U. S. 226, 241, 41 L. ed. 979, 986, 17 Sup. Ct. Rep. 581; Smyth v. Ames, 169 U. S. 466, 512, 42 L. ed. 819, 838, 18 Sup. Ct. Rep. 418; Chicago, M. & St. P. R. Co. v. Tompkins, 176 U. S. 167, 172, 44 L. ed. 417, 420, 20 Sup. Ct. Rep. 336; Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 46 L. ed. 1151, 22 Sup. Ct. Rep. 900; Chicago, B. & Q. R. Co. v. Illinois, 200 U. S. 561, 592, 50 L. ed. 596, 609, 26 Sup. Ct. Rep. 341.
here relied on to be without merit. Its error arises from assuming that adequate facilities were afforded at Selma or via Weldon and the Seaboard without reference to the order complained of. In view of the facts as to the connections at Selma and the Weldon route, found by the commission and reiterated by the court, which we have previously stated, and which we accept, we cannot escape drawing for ourselves the conclusion deduced both by the commission and the court below that the connections relied on were wholly inade quate for the public convenience, and, therefore, a state of things existed justifying the order.
ure to furnish facilities to those traveling | ditional facilities, we think the proposition 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 of the Coast Line. This reduces itself to the contention that, although the governmental power to regulate exists in the interest of the public, yet it does not extend to securing to the public reasonable facilities for making connection between different carriers. But the proposition destroys itself, since at one and the same time it admits the plenary power to regulate, and yet virtually denies the efficiency of that authority. That power, as we have seen, takes its origin from the quasi public nature of the business in which the carrier is engaged, and embraces that business in its entirety; which, of course, includes the duty to require carriers to make reasonable connections with other roads, so as to promote the convenience of the traveling public. In considering the facts found below as to the connection in question, that is, the population contained in the large territory whose convenience was subserved by the connection, and the admission of the railroad as to the importance of the connection, we conclude that the order in question, considered from the point of view of the requirements of the public interest, was one coming clearly within the scope of the power to enforce just and reasonable regulations.
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 essential to be considered in determining whether an order directing an increase of such facilities is just and reasonable, and that the deficiency of facilities must clearly appear to justify an order directing the furnishing of new and ad27 S. C.-38.
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 unreasonableness of the order, and demonstrates that to give it effect would constitute a taking of property without due process of law, in violation of the 14th Amendment. Conclusive support for this contention, it is insisted, is afforded by the doctrine upheld in Smyth v. Ames, 169 U. S. 466, 42 L. ed 819, 18 Sup. Ct. Rep. 418, and the cases which preceded that decision. The cases relied upon, however, only involved whether a general scheme of maximum rates imposed by state authority prevented the railroads from earning a reasonable compensation, taking into view all proper considerations as to the value of
the property and the cost of operation, and, It is insisted that, although the case be if so, whether the enforcement of rates so unreasonably low would be unjust and unreasonable, and, therefore, be confiscation, that is, a taking of property without due process of law, in violation of the Constitution of the United States. The principle upon which the cases in question proceeded was thus summed up by Mr. Justice Harlan, delivering the opinion of the court in Smyth v. Ames, 169 U. S. 526, 42 L. ed. 842, 18 Sup. Ct. Rep. 426:
"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 14th Amendment of the Constitution of the United States."
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 But this case does not involve the en be reduced below the point of producing a forcement by a state of a general scheme reasonable and adequate return. But these of maximum rates, but only whether an extreme suggestions have no relation to the exercise of state authority to compel a car-case in hand. Let it be conceded that if a rier to perform a particular and specified scheme of maximum rates was imposed by duty is so inherently unjust and unreason-state authority, as a whole adequately reable as to amount to the deprivation of property without due process of law or a denial of the equal protection of the laws. In a 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 demonstrates the unreasonable-class or classes upon whom the burden of ness of the order. Such, however, is not the case when the question is as to the validity of an order to do a particular act, the doing of which does not involve the question of the profitableness of the operation of the railroad as an entirety. The difference between the two cases is illustrated in St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649, 39 L. ed. 567, 15 Sup. Ct. Rep. 484, and Minneapolis & St. L. R. Co. v. Minnesota, 186 U. S. 257, 46 L. ed. 1151, 22 Sup. Ct. Rep. 900. But even if the rule applicable to an entire rate scheme were to be here | applied, as the findings made below as to the net earnings constrain us to conclude that adequate remuneration would result from the general operation of the rates in force, even allowing for any loss occasioned by the running of the extra train in question, it follows that the order would not be unreasonable, even if tested by the doctrine announced in Smyth v. Ames and kindred cases.
munerative, and yet that some of such rates were so unequal as to exceed the flexible limit of judgment which belongs to the power to fix rates, that is, transcended the limits of just classification, and amounted to the creation of favored class or classes whom the carrier was compelled to serve at a loss, to the detriment of other
such loss would fall, that such legislation would be so inherently unreasonable as to constitute a violation of the due process and equal protection clauses of the 14th Amendment. Let it also be conceded that a like repugnancy to the Constitution of the United States would arise from an order made in the exercise of the power to fix a rate when the result of the enforcement of such order would be to compel a carrier to serve, for a wholly inadequate compensation, a class or classes selected for legislative favor, even if, considering rates as a whole, a reasonable return from the operation of its road might be received by the carrier. Neither of these concessions, however, can control the case in hand, since it does not directly involve any question whatever of the power to fix rates and the constitutional limitations controlling the exercise of that power, but is concerned solely with an order directing a carrier to furnish a facility which it is a part of its