10 9/ fi 7 [pyttdP'^" -^ H. ^ :r^ OJorn^U ICam ^rljool IGibraty Cornell University Library KF 1091.A7B95 Cases on the law of i public service / 3 1924 018 926 778 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018926778 CASES ON THE LAW OF PUBLIC SERVICE CASES ON THE LAW OF PUBLIC SERVICE BY . yo "-^ \ CHARLES K. BURDICK Professor of the Law of Public Service in Cornell University, College or Law BOSTON LITTLE, BROWN, AND COMPANY 1916 ^'/6S'^<)- Copyright, 1916, By Little, Brown, and Company. All rights reserred j^nntns S. J. PAKrHiLL & Co., Boston, n.S.A. CONTENTS CHAPTBE I PAGES THE BASES OF THE DUTIES OF PUBLIC SERVICE ... 1-86 § 1. The Common Callings 1-10 § 2. Exercise of Fbanchises 10- 30 § 3. Legislation 31- 65 § 4. Economic Monopoly 66- 8C CHAPTBE II THE SERVICE TO BE RENDERED 87-167 § 1. What Service Must Be Rendered 87-135 § 2. Who Must Be Served and Excuses for Failure to Serve 135-100 § 3. The Right of Public Service Companies to Serve Them- selves 160-167 CHAPTEE III THE EIGHT TO MAKE RULES FOR THE SERVICE . . . 168-211 CHAPTBE IV RATES 212-334 § 1. Rates Fixed by the One Engaged in Public Service . 212-220 § 2. The Power of the State to Fix Rates 220-237 § 3. Limitations on the Power of the State in Rate Regula- tion 237-265 § 4. Operating Exjpenses and Maintenance 265-288 § 5. The Capital Upon Which a Return Should Be Earned 288-326 § 6. What Rate of Return Should Be Allovted .... 326-334 CHAPTEE V DISCRIMINATION 335-392 CHAPTEE VI DUTY TO FURNISH ADEQUATE FACILITIES 393-444 CONTENTS. CHAPTEE VII • PAGES WITHDRAWAL FROM PUBLIC SERVICE 445-479 APPENDIX THE ACT TO REGULATE COMMERCE AS AMENDED . . 481-528 ELKINS ACT 528-533 INDEX 535-544 TABLE OF CASES. PAGE Abbott V. Johnson G. & K. H. R. R. Co. n. 471 Adams Exp. Co. v. State n. 375 Albany Tel. Co. v. Terry 129 Allen V. Cape Fear & Y. V. R. R. Co. n. 375 V. St. L., I. M. & S. R. Co. n. 257 AUnutt V. Inglis 24, n. 34 American R. Tel. Co. v. Conn. Tel. Co. n. 134 American W. W. Co. v. State n. 20 Ames V. Union Pac. Ry. Co. 288 Ammons v. Railroad 193 Anonymous 1, n. 3, 445 Ansell V. Waterhouse n. 6 Arkansas Rate Case, In re 269, n. 271 Atchison, T. & S. F. R. Co. v. Denver &. N. O. R. Co. n. 103, 107 Attorney-General v. Haver- hill G. L. Co. n. 471 V. Simpson n. 30 Atwater v. Delaware, L. & W. R. R. Co. n. 139 Ayres v. Chicago & N. W. Ry. Co. 362 Bailey v. Fayette G. & E. Co. n. 384 Baldwin v. Chicago, Ru I. & P. Ry. Co. n. 103 Baltimore Ry. Co. v. Wilkin- son «. 176 Baltimore & O. R. R. Co. v. Adams Exp. Co. n. 375 Barker v. Midland Ry. Co. n. 128 V. Railroad Co. n. 200 Barney v. Oyster Bay S. B. Co. n. 128 Beadell, In re n. 128 Bell Telephone Co. v. Com- monwealth n. 10 Bennett v. Dutton n. 149 Billings Mut. T. Co. v. Rocky Mountain T. Co. n. 130 Birney ■;;. N. Y. & W. T. Co. n. 190 Blackstone v. Railroad Co. n. 141 Boerth v. Detroit City Gas Co. 383 PAGE Bogard's Adm'r. v. Illinois Cent. R. R. Co. 146 Boston & Albany R,. R. Co. v. Brown n. 128 Boston & Maine R. R. Co. v. Sullivan n. 128 Bright V. Western Un. T. Co. n. 206 Bradshaw v. South Boston R. R. Co. n. 198 Brass v. North Dakota 49 Brown v. Brandt 136, n. 394 Brunswick & T. W. Dist. v. Maine W. Co. 217 Brymer v. Butler W. Co. 219, 271, 323 Budd V. New York n. 4:7 Buffalo Gas Co. v. City of Buffalo n. 301 BuUard v. American Exp. Co. 104, n. 205 Bullock V. Del., L. & W. R. R. Co. n. 195 Burge V. Ga. Ry. & El. Co. 198 Butchers & D. S. Y. Co. v. Louisville & N. R. R. Co. n. 436 California v. Pacific R. Ru Co. n. 11 California P. Wks. v. Atl. & Pac. R. R. Co. n. 101 Calye's Case n. 136 Camblos v. Phil. & R. R. R. Co. n. 380 Campbell -;;. Western Un. T. Co. n. 205 Canada So. Ry. Co. v. Inter- national Bridge Co. n. 214 Carr v. Northern Pac. Ry. Co. n. 355 Carter v. Commonwealth n. 466 Cedar Rapids G. L. Co. v. Cedar Rapids n. 257, 274, n. 307 Cedar Rapids W. Co. v. Cedar Rapids n. 276, 326 Central of Georgia Ry. Co. v. Motes 191 V. Railroad Com. of Ala. 222 Central Un. Tel. Co. v. State 405 Charleston N. G. Co. v. Lowe n. 20 Chase v. N. Y. C. R. R. Co. n. 195 VIH TABLE OF OASES. PAGE Cheney v. Boston & M. R. R. Ck). 175 Chesapeake & O. Ry. Co. v. Hall n. 101 Chesapeake & P. T. Co. v. Bait. & O. T. Co. n. 134 Chicago & A. R. R. Co. v. Erickson n. 101 V. People n. 423 V. Suffern n. 433 Chicago, B. & Q. E,. R. Co. v. Curtis n. 103 V. Iowa 220 Chicago & G. T. R. Co. v. Wellman n. 257, 268, n. 331 Chicago, M. & St. P. Ry. Co. V. Minnesota n. 331 V. Smith n. 273 V. Tompkins n. 257, 265, 324 V. Wallace n. 102 Chicago c& N. W. Ry. Co. v. Dey 272, n. 328 Chicago, R. I. & P. Ry. Co. v. Nebraska Ry. Com. n. 423 Cincinnati, H. & D. R. R. Co. V. Bowling Green n. 20, n. 76 Citizens Bank v. Nantucket S. S. Co. 89 City of Appleton v. Appleton W. W. Co. n. 316 City of Cleveland v. Cleve- land C. Ry. Co. n. 260 City of Erie v. Erie G. & M. Co. n. 278 City of Gainesville v. Gaines- ville G. & E. P. Co. 464 City of Jackson v. Ander- son . n. 399 City of Minneapolis v. Min- neapolis St. Ry. Co. 259 City of Potwin Place v. To- peka R.y. Co. n. 456, n. 461 City of Riponv. Ripon L. & W. Co. n. 306, n. 307 Cleveland C. C. & St. L. Ry. Co. V. Henry 102 V. Perishow «. 139 Coal & Coke Ry. Co. v. Con- ley & Avis 277 Coburn v. Railway Co. n. 176 Collier v. Langan T. S. & M. Co. n. 94 Commercial V. T. Co. v. New England T. & T. Co. n. 10, n. 134 Commonwealth v. Carey n. 128 V. Fitehburg R. R. Co. n. 461 V. Louisville & N. R. R. Co. n. 384 V. Power w. 128 PAGE Connell v. Louisville Tob. W. Co. n. 57 Connors v. Cunard S. S. Co. n. 147 Consolidated Gas Co. v. City of New York n. 308 Cook & Wheeler v. Chicago, R. I. & P. Ry. Co. 341 Ooppin V. Braithwaite n. 149 Corporation Com. v. Rail- road n. 440 Cotting V. Kansas City S. Y. Co. n. 57, w. 222, n. 259, 331 Covington & L. T. R. Co. v. Sandford n. 257, n. 331 Cowden -v. Pacific Coast S. S. Co. n. 341 Coy V. Indianapolis Gas Co. n. 20 Crescent Coal Co. v. L. & N. R. R. Co. n. 101 Crumley v. Watauga W. Co. n. 19 Cullen, Matter of v. New York Tel. Co. 150 Cumberland T- & T. Co. v. City of Evansville 466 V. Hobart n. 152 V. Kelly n. 402 V. Memphis n. 274 V. Morgan's L. & T. R. R. Co. n. 338 Curtis V. Murphy n. 136 Darnell v. State n. 479 Day V. Owen n. 338 DeBoard v. Camden Int. Ry. Co. 173 Delaware, L. & W. R. R. v. Central S. Y. & T. Co. n. 72 V. United States n. 167 Denton v. Great N. Ry. Co. «. 176 Derby v. Lowry 141 Des Moines W. Co. v. City of Des Moines 329 Detroit Gas Co. v. Moreton T. & S. Co. 154 DeWolf V. Ford 394 Dietrich v. Pennsylvania R. R. Co. n. 176 Donovan v. Pennsylvania Co. 125 Dow V. Beidelman n. 257 Dunn V. Western Un. T. Co. 441 Eagle V. White n. 103 East Kentucky Ry. Co. v. Holdbrook 139 East Ohio Gas Co. v. City of Akron 461 East Tennessee V. & G. Ry. Co. V. Int. Com. Com. n. 362 Evans v. Fitehburg R. Co. n. 101 TABLE OF CASES. IX PAGE Express Cases 115 Farmers L. & T. Co. v. Hen- ning 452 Farwell F. W. Assn. v. Min- neapolis, St. P. & S. Ste. M. Ry. Co. n. 433 Fay V. Pacific Imp. Co. n. 8 Fisli V. Chapman 87 V. Newton n. 103 Fitch V. Newberry n. 138 Florida E. C. Ry. Co. v. Carter n. 176 Fluker v. Georgia R. R. Co. n. 128 Ford V. East St. Louis Ru R. Co. 143 Forrester Co. v. Southern Ry. Co. n. 415 Fuhrman v. Buffalo G. E. Co. n. 297, 301 Galena & Ch. Un. R. R. Co. V. Rae n. 139, 409 Gamble-Robinson Com. Co. V. Chicago & N. W. Ry. Co. 371 Gas Light Co. v. CoUiday n. 156 Geer v. Railroad Co. n. 178 German Alliance Ins. Co. v. Lewis 57 Germania Ref. Co. v. Alum Rock G. Co. n. 466 Gibson v. Culver n. 103 Gisbourne v. Hurst n. 8 Gist V. Telegraph Co. n. 152 Godbout V. St. Paul Union Depot n. 128 Goodenow v. Travis n. 137 Gordon v. Winchester n. 30 Godwin v. Carolina T. & T. Co. n. 152 Gray v. Western Un. T. Co. n. 152 Great W. Ry. Co. v. Sutton n. 341 Greenfield v. Detroit & M. Ry. Co. n. 176 Griflin v. Goldsboro W. Co. n. 19 Griswold v. Webb n. 128 Gulf C. & S. F. Ry. Co v. Moody n. 176 Hannah v. People 160 Harp V. Choctaw, O. & G. R. R. Co. 168 Hatch V. Consumers Co. 210 Haugen v. Albina L. & P. Co. 14 Hedding v. Gallagher n. 128 Hervy v. Hart 396 Hewlett V. Western Un. T. Co. 206 PAGE Hibbard v. N. Y. & Erie R. R. Co. n. 195 Hill V. Antigo W. Co. 313 Home T. & T. Co. v. City of Los Angeles 260 Honeyman v. Oregon & C. R. R. Co. n. 101 Hoover v. Pennsylvania R. R. Co. n. 382 Houck V. Southern P. Ry. Co. n. 338 Hudson V. Ry. Co. v. Boston & U. R. R. n. 103 Hurley v. Eddington n. 8 Huston V. Peters, Hardin & Co. n. 104 Hyde v. Trent & Mersey Nav. Co. 103 Illinois Cent. R. R. Co. v. Interstate Com. Com. 281 V. River & Rail C. & C. Co. 410 V. Smith n. 147 Industrial Siding Case n. 440 Intermountain Rate Cases n. 362 International Bridge Co. v. Canada So. Ry. Co. 212 Inter-Oeean Publishing Co. V. Associated Press 72 Interstate Com. Com. v. Ala- bama M. Ry. Co. 357 V. Baltimore & O. R. R. Co. 347 V. Chicago, R. I. & P. Ry. Co. n. 237 V. Cincinnati, N. O. & T. P. Ry. Co. 231 V. Delaware, L. & W. R. R. Co. 375 V. Humboldt S. S. Co. n. 237 V. Illinois C. R. R. Co. 364 Jackson v. Anderson n. 399 V. Rogers 3 V. Virginia H. S. Co. 393 Jarrett v. Great N. Ry. Co. n. 104 Jencks v. Coleman n. 128, n. 149 Johnson v. Concord R. B.- Corp. n. 176, ». 178 V. Dominion Exp. Co. n. 380 V. Midland Ry. n. 136 V. Pensacola & P. R. R. Co. 338 Jones V. North Ga. El. Co. n. 20 Kansas Pac. Ry. Co. v. Nichols, Kennedy & Co. 96 Kates V. Cab Co. n. 128 TABLE OF CASES. PAGE Kiley v. Chicago City Ey. Co. n. 198 King V. Luellin n. 136 V. Severn & Wye Ry. Co. 450 Kisten v. Hildebrand n. 95, 135 Knight V. Providence & W. R. R. Co. n. 139 Knoxville v. Knoxville W. Co. n. 257, n. 301 Knoxville Tr. Co. v. Wilker- son n. 176, n. 200 Korn V. Railvray Co. n. 146 Kuter V. Michigan C. R. R. Co. n. 101 Ladd V. Southern C. P. & M. Co. 66 Laighton v. City of Car- thage n. 463 Lake Shore & M. S. R. R. Co. V. Greenwood 176 V. Perkins n. 101 Lamond v. Richard n. 137 Lane v. Cotton n. 8 V. Railroad Co. n. 178 Lawrence v. Richards 402 Leavell v. Western Un. T. Co. 400 Lemon v. Pullman Palace- Car Co. M. 9 Little Rock & M. R. Co. v. St. Louis S. W. R. Co. n. 103 Live Stock Com. Co. v. Live Stock Exch. n. 74 Lloyd V. Washington G. L. Co. n. 156 Long Branch Com. ■;;. Tintern M. W. Co. 273, 316 Lough V. Outerbridge n. 382 Louisville v. Cumberland T. & T. Co. n. 257 Louisville & N. R. R. Co. v. Behlmer n. 362 V. Boland n. 103 V. Interstate Com. Com. 234 V. Logan n. 146 V. E.. R. Com. of Ala. 297 V. Turner 179 Louisville W. Co. v. Wiemer n. 154 Lowell V. Boston n. 30 Lumbard v. Stearns 10 Lusby V. Kansas City, M. & B. R. R. Co. 472 McCarter v. Vineland L. & P. Co. n. 471 McConnell v. Southern Ry. Co. n. 415 McGuinn v. Forbes n. 338 PAGE McHugh V. Schlosser n. 137 McMillan v. Michigan S. & N. I. R. R. Co. n. 141 McNees v. Missouri P. Ry. Co. n. 341 M'Neill V. Durham & C. R. R. Co. 384 McRea ■;;. Railroad Co. n. 176, n. 184 McEeynolds, In re v. Brook- lyn U. R. R. Co. n. 322 Mackin v. Boston & A. R. Co. n. 103 Macon & W. R. R. Co. v. Johnson n. 176 Madison v. Madison G. & E. Co. n. 220 Madisonville Tr. Co. v. St. Bernard M. Co. n. 11 Mann Boudoir Car Co. v. Dupre n. 397 Markham v. Brown n. 137 Maroney v. Old Colony & Newport R. R. Co. 183 Marriott, In re n. 128 Martin, The D. R. n. 128 Mayhew v. Kings Co. L. Co. n. 308, n. 318 Maynard v. Syracuse, B. & N. Y. R. Co. n. 101 Memphis News Pub. Co. v. Southern Ry. Co. n. 338 Merchants Dispatch Co. v. Cornforth 414 Metropolitan T. Co. v. Hous- ton T. & C. Ru E. Co. n. 281 Michigan C. R. Co. v. Smith- son n. 103 Miller v. Wilkes Barre Gas Co. n. 156 Mills V. M. K. & T. Ry. Co. n. 195 Minneapolis & St. L. R. R. Co. V. Minnesota m. 273, 427 Minnesota C. & P. Co. v. Pratt 20 Minnesota Rate Cases n. 248, n. 257, 284, n. 301, 318, n. 326 Missouri, K. & T. Ry. Co. v. Harrison n. 419 V. Herring n. 176 V. State n. 430 Missouri Pac. Ry. Co. v. Ne- braska n. 11 V. Smith n. 253 Missouri Rate Cases n. 257 Mockin v. Portland Gas Co. n. 156 Moore v. Brooklyn City R. R. Co. n. 461 TABLE OF CASES. XI PAGE Morey v. Metropolitan Gas L. Co. n. 156 Morris v. Atlantic Ave. R.. R. Co. n. 195 Munn V. Illinois 31, n. 78, 237, n. 331, n. 446 V. People n. 40 Murphy Hardware Co. v. Southern Ry. Co. 139 Nairin v. Kentucky Heating Co. n. 20, 134 Nash V. Page n. 67, n. 76 Nashville, C. & St. L. Ry. Co. V. State n. 427 Nelson v. Boldt «. 136 Nevin v. Pullman Palace- Car Co. n. 9 Nev7 Orleans G. L. Co. v. Paulding n. 30 News Publishing Co. v. Asso- ciated Press n. 76 New York, N. H. & H. R. R. Co. V. Bork n. 128 V. Interstate Com. Com. n. 167 V. Scovill n. 128 New York P. & N. R. R. Co. V. Cromwell n. 415 Nichols v. Oregon S. L. Co. n. 338 Nicholson V. Great W. R. R. Co. n. 355 Norfolk & W. R. Co. v. Con- ley n. 259 V. Old Dom. B. Co. n. 128 Northern Pacific Ry. Co. v. North Dakota 253 V. R. R. Com. of Wash. 436 Northern Ry. Co. v. Wash- ington n. 456 Nota 2 Nye V. Western TJn. T. Co. n. 152 Ocean S. S. Co. of Savannah V. Savannah L. W. & S. Co. 397 Oconto City W. S. Co., Re Application of ' n. 316 Ohio & M. Ry. Co. v. People n. 461 Olanta Coal M. Co. v. Beech Creek R. R. Co. ' n. 141, 433 Old Colony R. Co. v. Tripp re. 128 Olmstead v. Proprietors of Morris Aqueduct 13 Oregon v. Portland Gen. El. Co. n. 471 Oregon S. L. & V. N. Ry. Co. V. Northern P. R. Co. n. 103 Owens V. Macon & B. R. Co. n. 147 Owensburg G. L. Co. v. Hildebrand n. 20, n. 76 PAGE Paige V. Schenectady Ry. Co. n. 455 Pannell v. Louisville Tob. W. Co. n. 270 Patterson v. Wollman n. 30 Pearsall v. Western Un. Tel. Co. n. 190 Pearson v. Duane 147 Peik V. Chicago & N. W. Ry. Co. n. 238 Pennsylvania R. R. Co. v. Philadelphia County n. 259, n. 292 People V. Babcock n. 94 V. Budd 40 V. Chicago & A. R. R. Co. n. 423 V. Chicago & N. W. Ry. Co. 431 V. Delaware & H. C. Co. n. 426 V. Hudson Biv. T. Co. n. 134 V. Los Angeles I. G. Co. n. 135 V. Manhattan G. L. Co. n. 156 V. Murphy n. 96 V. O'Brien n. 463 V. Railway n. 456 V. Rome, W. & O. Ru R. Co. 458 Perth Gen. Station Com. v. Ross n. 128 Phelps V. Illinois Cent. R. R. Co. n. 141 Pickford v. Grand Junction Ry. Co. n. 139, n. 176 Pioneer T. & T. Co. v. Wes- tenhaver 304 Pipe Line Oases 62 Pittsburgh C. C. & St. L. Ry. Co. V. Chicago n. 103 V. Hollowell n. 141 V. Vandyne n. 146 Plummer v. Chesapeake & O. Ry. Co. n. 471 Portland Nat. Gas & Oil Co. V. State n. 20 Prendergast v. Compton n. 149 Price V. Crocker to. 30 V. Riverside L. & I. Co. n. 20 V. St. L., I. M. & S. R. R. Co. 146 Public Serv. Corp. v. Ameri- can L. Co. TO. 20 Puget Sound El. Ry. v. R. R. Com. of Washington 283 Pullman Palace-Car Co. v. Booth TO. 9 V. Cain to. 338 V. Krauss to. 147 V. Lawrence 9, 106 xu TABLE OF CASES. PAGE V. Taylor n. 397 Queens Borough G. & El. Co., In re Rates of 322 Railroad Commission Case n. 381 Railroad Discrimination Case 380 Ratcliff V. Wichita Un. S. Y. Co. n. 57 Reagan v. Farmers L. & T. Co. 238, m. 245, n. 257, n. 297, n. 331 Reasor v. Paducah & 111. F. Co. 145 Regina v. Rymer n. 137 V. Sprague n. 137, n. 338 Renaud v. N. Y., N. H. & H. R. R. Co. n. 176 Rex V. Ivens ' 4, 137 Rich V. Kneeland 1 Robinson v. Chicago & A. R. R. Co. 416 Rockingham Co. L. & P. Co. V. Hobbs n. 19 St. Louis Drayage Co. v. Louisville, etc., R. R. Co. n. 128 St. Louis & S. F. Ry. Co. v. Gill n. 331 St. Louis & S. W. Ry. Co. v. Campbell n. 419 Sammons v. Kearney n. 20 San Antonia St. Ry. Co. v. State 455 San Diego L. & T. Co. v. Jasper . n. 257, n. 318 V. National City n. 257, n. 273, 293, n. 331 San Diego W. Co. v. San Diego n. 297 Sargent v. Boston & L. R. R. Corp. 112 Satterlee v. Groat 445 Savannah & O. Canal Co. v. Shuman n. 461 Schroeder v. Hudson Riv. B. R. Co. n. 106 Scofleld V. Railway Co. n. 347, 352 Sears ■;;. Railroad Co. n. 178 Searles v. Mann Boudoir Car Co. «■ 9 Selectmen of Amesbury v. Citizens E. St. Ry. Co. n. 463 Shea V. Chicago, R. I. & P. Ry. Co. n. 415 Shepard v. Milwaukee G. L. Co. M- 30, 201 V. N. Pac. Ry. Co. n. 807 PAGE Shiras v. Ewing 200 Silkman v. Yonkers W. Com. n. 855 Simpson v. Attorney-Gen- eral n. 30 Sinking Fund Cases n. 39 Smyth V. Ames 248, n. 257, 297, n. 331 Southern P. Co. v. Board of R. R. Com. of Calif. 278 V. Campbell n. 257, 268 Southern Ry. Co. v. Atlanta Stove Wks. 250 SpofCord V. Boston & M. R. Co. n. 341 Spring Valley W. Co. v. San Francisco n. 816 Spring Valley W. W. Co. v. Schottler n. 331 Stanislaus County v. San J. & K. B. C. & I. Co. n. 257 Starr v. Crowley n. 103 State V. Associated Press 77 V. Bell Telephone Co. 10, 181 V. Bridgeton & M. T. Co. n. 454 V. Butte W. Co. 11. 20 V. Citizens T. Co. n. 152 V. Consumers Gas Co. n. 20, 156 V. Delaware, L. & W. R. R. Co. 844 V. Dodge City, M. & T. Ry. Co. n. 461 > V. Goss 187 V. Hartford & N. H. R. R. Co. n. 454, n. 456 V. Helena P. & L. Co. n. 458 V. Hillyard W. Co. n. 211 V. Kansas C. S. & G. Ry. Co. 428 V. Klnlock T. Co. n. 152 V. Missouri P. Ry. Co. n. 483 V. Nebraska Tel. Co. n. 10, n. 76, n. 152 V. Portland Nat. G. & O. Co. 476 V. Railway n. 456 V. Real Est. Bk. n. 479 V. Reed 123 V. Republican V. R. R. Co. 419 V. Seattle L. Co. n. 211 V. Sedalia G. L. Co. n. 355 V. Sioux City & P. R. R. Co. n. 454 V. Southern Minn. R. R^ Co. n. 450 V. Spokane St. Ry. Co. n. 454 V. Steele n. 136, n. 137 V. Thompson n. 195 TABLE OF CASES. Xlll PAGE n. 128 n. 387 n. 436 n. 306 n. 297 n. 257 335 n. 128 n. 101 V. Union Depot Co. V. Union P. R. R. Co. V. ^Vhite Oak Ry. Co. State Journal P. Co. v. Madi- son G. & El. Co. Steenerson v. Great N. Ry, Co. Stone V. Farmers L. & T, Co. n. 238, Sue, The Summltt V. State Sutcliffe V. Great W. Ry. Co. Talcott V. Township of Pine Grove n. 454 Texas & P. Ry. Co. v. R. R. Com. of La. n. 297 Thomas v. Missouri P. Ru Co. n. 103 Thompson v. Lacy 94 V. Schenectady Ry. Co. n. 455 Thurston v. Union P. R. R. Co. 144 Tidewater Co. v. Coster n. 14 Tift V. Southern Ry. Co. 215 Townsend v. New York C. & H. R. R. R. Co. 195 Tunnell v. Pettijohn n. 94 Turner v. North Car. R. R. Co. n. 145 Turnpike Co. v. Illinois n. 463 Union Pac. R. R^ Co. v. Hall n. 455 United States v. Baltimore & O. R. R. Co. 387 V. Chicago I. & L. R. Co. n. 387 V. Lehigh V. R. R. Co. 164 United States- Tel. Co. v. Gildersleeve n. 190 Van Camp v. Michigan Cent. R. R. Co. n. 178 Van Santvoord v. St. John 106 PAGE Vicksburg v. Vicksburg W. W. Co. n. 260 Village of Saratoga Springs V. Saratoga G., E. L. & P. Co. 227 Vincent v. Chicago & W. R. R. Co. n. 433 Wabash, etc., Ry. Co. v. Illinois n. 76 Watauga W. Co. ■;;. Wolfe n. 201 Webbe v. Western Un. T. Co. 186 West V. London & N. W. Ry. Co. n. 433 Western Un. T. Co. v. Cain n. 206 V. Cashman n. 152 V. McMillan n. 176 V. Neel n. 176 V. Simmons 129 V. Trotter 204 Weymouth v. Penobscot L. D. Co. n. 30 Wheeler, Matter of n. 466 Wheeler v. Northern C. I. Co. n. 76 Whitehouse v. Staten Island W. Co. 398 Wiemer v. Louisville W. Co. 152 Wiggens Ferry Co. v. East St. L. Ry. Co. n. 101 Wight V. United States 355 Wilcox V. Consolidated Gas Co. M. 257, 328 Williams v. Mutual Gas Co. n. 20, n. 76 Winters M. P. Co. v. Chi- cago, M. & St. P. Ry. Co. 440 Woods V. Vandalia R. R. Co. n. 288 Xancy v. Batesville T. Co. n. 375 Yazoo & M. V. R. R. Co. v. Blum n. 410 York & N. M. Ry. Co. v. Queen 447, n. 456 CASES ON THE LAW OF PUBLIC SERVICE. CHAPTER I. 3?HE BASES OF THE DUTIES OF PUBLIC SERVICE. Section 1. The Common Callings. ANONYMOUS. Y. B. 19 H. VI 49, pi. 5. 1441.^ Newton", C. J. My horse is ill, and I come to a horse-doctor for advice, and he tells me that one of his horses had a similar trouble, that he applied a certain medicine, and that he will do the same for my horse, and does so, and the horse dies; shall the plaintiff haie an action? I say. No. Paston, J. You have not shown that he is a common surgeon to cure such horses, and so, although he killed your horse by his medi- cines, you shall have no action against him without an assumpsit. Newton, C. J. If I have a sore on my hand, and he applies a jnedicine to my heel, by which negligence my hand is maimed, still I ^hall not have an action unless he undertook to cure me.^ RICH V. KNEELAND. Croke Jac. 330. 1613. Action on the case. Whereas the defendant ^was a common bargeman, and used to carry for hire from London to Milton, and 1 The case as here given is taken from Professor J. B. Ames' article op The History of Assumpsit, in 2 Harvard Law Review, 1, 3. — Ed. 2 " If . . . one saw fit to authorize another to come into contact with his person or property, and damage ensued, there was, without more, no torj. The person injured took the risk of all injurious consequences, unless the 2 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I, other places in Kent ; that he delivered to him a portmanteau and thirty pounds therein to carry, and gave to him twopence for the carriage ; and that the defendant tarn negligenter custodivit, that it was taken f roni him by persons unknown, and so he lost it. The defendant pleads, confessing the receipt, that he was a common bargeman; but that he, fearing to carry it, delivered it to J. D. to carry, and that he gave notice thereof to the plaintifE, and he agreed thereto, and discharged him of the carriage. The plaintifE traverses that he did not discharge him. It was thereupon demurred : and adjudged for the plaintiff ; for the delivery by his assent is not material: but the only matter traversable is the discharge, which is issuable; and found for the plaintifE. A writ of error being brought, it was assigned. First, Because this action lies not against a common bargeman without special promise. But all the justices and barons held that it well lies as against a common carrier upon the land. Secondly, They held . that the traverse was good. Wherefore the judgment was affirmed.'- NOTA. Keilwey, 50. 1450. Note, that it was agreed by all the court, that where a smith declines to shoe my horse, or an innkeeper declines to give me entertainment at his inn, I shall have an action on the case, not- withstanding no act is done; for it does not sound in covenant. But where a carpenter makes a bargain to build me a house and does nothing, no action on the case, because that does sound in covenant. But if he builds the house badly, the action on the case is good. Note, that in this case a man shall have no action against the innkeeper, but shall make complaint to the ruler, by 5 Ed. 4. fol. 2. Contra, 14 H. 7. fol. 23.= other expressly assumed the risk himself, or unless the peculiar nature of one's calling . . . imposed a customary duty to act with reasonable skill." J. B. Ames, The History of Assumpsit, 2 Harvard Law Review, 1, 3. 1 " An express assumpsit was originally an essential part of the plain- tiff's case in another class of actions, namely, actions on the case against bailees for negligence in the custody of the things entrusted to them. . . . This act of taking possession of the goods, his assumpsit to keep them safely, and their subsequent loss by his default, together made up the tort. . . . Bailees whose calling was of a quasi-public nature were chargeable by the custom of the realm, without any express undertaking." J. B. Ames, The History of Assumpsit, 2 Harvard Law Review, 1, 4 to 6. 2 After some vacillation it was established that mere breach of a special assumpsit was not actionable, J. B. Ames, The History of Assumpsit, 2 Harvard Law Review, 1, 10 and 11, but it appears supra that the breach SEC. I.] THE COMMON CALLINGS. 3 JACKSON V. ROGEES. 2 Shower, 327. 1683. AoTiON on the case, for that whereas the defendant is a common carrier from London to Lymmington et abinde retrorsum, and setting it forth as the custom of England, that he is bound to carry goods, and that the plaintiff brought him such a pack, he refused to carry them, though offered his hire. And held by Jefpekies, Chief Judge, that the action is main- tainable, as well as it is against an innkeeper for refusing guests, or a smith on the road who refuses to shoe my horse, being tendered satisfaction for the same. Note, that it was alleged and proved that he had convenience to carry the same ; and the plaintiff had a verdict.^ 3 BLACKSTONE'S COMMENTAEIES 165. " There is also in law always an implied contract with a common innkeeper, to secure his guest's goods in his inn; with a common carrier or bargemaster, to be answerable for the goods he carries; with a common farrier, that he shoes a horse well, without laming him; with a common taylor, or other workman, that he performs his business in a workmanlike manner; in which if they fail, an action on the case lies to recover damages for such breach of their general undertaking. But Jf_ Lemploy a person to transac t_aa,y_nf these concerns, whos e common profession and business it is r ^ni +1it» law impl ies no sucETge neral undertaking ; but, in order to charge him with damages, a sp ecial agreement is required . Also, if an innJieeper, or other victualler, hangs out a sign and offers his house for travellers, it is an implied engagement to entertain all persons who travel that way; and upon this universal assumpsit an action on the ease will lie against him for damages, if he without good rea- son refuses to admit a traveller." of an assumpsit formed an essential element in several rights of action, and it further appears that very little in the nature of active misconduct was necessary in addition to the breach of an assumpsit to constitute a cause of action. In 1488 Bkian, C. J., said : " If there be an accord between you and me that you shall make me an estate of certain land, and you enfeoff another, shall I not have an action on my case? Quasi diceret sic. Et curia cum illo. For when he undertook to make the feoffment, and conveyed to another, this is a great misfeasance." Y. B. 3 H. VII, 14, pi. 20. 1 " An action upon the case lyeth against an innkeeper who denies lodging to a travailer for his money, if he hath spare lodging; because he hath sul? jected himself to keep a common inn." Anonymous, Godbolt 335, pi. 440. BASES OP PUBLIC SERVICE DUTIES. [CHAP. li EEX V. IVENS. 7 C. & p. 213. 1835.^ Indictment against the defendant, as an innkeeper, for not re- ceiving Mr. Samuel Probyn Williams as a guest at his inn, and also for refusing to take his horse. The first count of the indictment averred that the prosecutor had offered to pay a reasonable sum for his lodgings ; and the first and second counts both stated that there was room in the inn. The third count omitted these allegations, and also omitted all mention of the horse. The fourth count was similar to the third, but in a more general form. Plea — Not guilty. It was opened by Whitmore, for the prosecution, that the de- fendant kept the Bell Inn, at Chepstow, and that the prosecutor Mr. Williams had gone there on horseback, on the night of Sunday the 14th of April ; and that the defendant and his wife both refused him admittance into the inn. Godson, for the defendant. Does your lordship think that an indictment lies against an innkeeper for refusing to receive a guest ? I know that an action may be brought against him if he does so'; and such an action was brought against an innkeeper at Lancaster a few years ago. This is only, at most, a private injury to Mr. Wil- liams, and not an offence against the public. Coleridge, J. There can be no doubt that this indictment is sustainable in point of law. Mr. Serjeant Hawkins distinctly lays it down that an indictment lies for this offence. Godson. My friend Mr. Whitmore, has said nothing about any offer of the price of the entertainment, which Mr. Serjt. Hawkins states to be necessary to sustain an indictment. Coleridge, J. There may be facts in this case which may make the tender of reward unnecessary. ' Mr. Samuel Probyn Williams was called. He said, " I am the clerk of Mr. Charles Holden Walker, the solicitor of Newport. On Sunday night the 14th of April, at a few minutes before ^Z^ o'clock, I applied for admission at the Bell Inn, which is kept by the defendant. I had applied at the George, but that was shut up. At the Bell there was a light up stairs, in the room over the parlour. I asked to be admitted, and the defendant's wife said the house and stables were both full. I assumed that the state- ment was correct, and went away to the Beaufort Arms, and I rode 1 The form of the indictment, which is given in a footnote in the report, is here omitted. — Ed. SEC. I.] THE COMMON CALLINGS. 5 also to two or three inns. The Beaufort Arms was shut up, and some of the other inns had no stables. I returned to the Bell, and I told the defendant's wife that I knew the house was not full, and that I was entitled to shelter for the night, and I insisted on it. I could not see if she was dressed, but I believe she and her husband were in bed. S he asked my name, and I said that that could be-J OO difference toiler! She said if I would tell my name, she would ring a bell for one of the servants. I told her my name was Williams. She asked where I lived, and I said it was no dif- ference to her. I afterwards told her I came from Newport. She shut down the window, and said she did not know me, and should not open the door. I knocked my stick against the window shut- ters, and the defendant looked out at the up-stairs window. I told him if the house was full, I could take a chair, and he might put my horse in a shed which I knew they had; and I also knew that they had twelve stalls of stabling. I again urged my right to, shelter, and he said he would not come down for any one." In his cross-examination he said, " It was near one o'clock when I went to the__def endant's house the.j£eQ nd time . Two writs were to be ex- ecuted at Chepstow on the Monday, one a writ of trial, and another a writ of inquiry, and I was to be there on Sunday evening. I went by way of Eedwick, and the road was bad, and that it was that made me so late. I had not been drinking. I at first objected to give my name ; and when I did give it, and my address, I might have added, ' and now you are as wise as you were before ; ' but I did not add the words, ^and be damned to vou .' I did not offer any payment; but they must know that a person who had a horse could pay. I was not angry. I got shelter two miles off, and I was near two hours in Chepstow." In answer to a question put by the learned Judge, he said, " There was no objection made that I did not tender any money." Godson, for the defendant. It appears to me to be rather too much to say that an innkeeper is bound to keep his house open till 12 o'clock at night to allow attorneys' clerks to travel about on Sun- days. I should submit that the law never can require an innkeeper to keep open his house till midnight, more especially on a Sunday. It is admitted that the prosecutor did not tender any money or make any offer of payment. And further it will be proved, that the prosecutor conducted himself so as to be unfit for admission into any respectable house. I submit, that even in the day-time an innkeeper is not bound to receive a guest who ii drunk or insolent, or who swears at either him or his wife. And if in this case it is shown that Mr. Williams did so, that will be an answer to the case. In addition to all these facts, it appears that the prosecutor t^ 6 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. refused to tell his name. This was a further reason why the de- fendant should not admit him into his house; for if inn-keepers were compellable to admit all sorts of suspicious characters into their houses at unseasonable hours of the night, there would be a great probability that they would find, when they got up in the morning, that their houses had been robbed. For the defendant, Thomas Price was called. He said, "I re- side at Chepstow, opposite to the Bell. In April last, I was dis- turbed in the night ; I was asleep, and I heard a loud noise of tap- ping at a door. I thought it at my house, and went to my win- dow. I heard Mrs. Ivens ask a person his name. The answer was, ' What is that to you about my name.' Mrs. Ivens said, ' At such a late hour I want to know your name, and where you come from.' The person replied, ' If you must know my name, it is Williams, and I come from Newport; and now you are as wise as you were before, and be damned to y ou.' Mrs. Ivens then shut the window. I thought the person was either drunk or mad." In his cross-examination this witness said, " I believe Mrs. Ivens said the person was no gentleman. It quite turned my spirits to hear such a bad expression as he used." CoLEEiDGE, J. (in summing up). The facts in this case do not appear to be much in dispute; and though I do not recollect to have ever heard of such an indictment having been tried before, the law applicable to this case is this: — that an indictment lies against an innkeeper, who refuses to receive a guest, he having at the time room in his house; and either the price of the guest's entertainment being tendered to him, or such circumstances occur- ring as will dispense with that tender. This law is founded in good sense. The innkeeper is not to select his guests. He has no right to say to one, you shall come into my inn, and to another you shall not, as every one coming and conducting himself in a proper manner has a right to be received ; and for this purpose innkeepers are a sort of public servants,^ they having in return a kind of privi- lege of entertaining travellers, and supplying them with what they want. It is said in the present case, that Mr. Williams, the prose- cutor, conducted himself improperly, and therefore ought not to have been admitted into the house of the defendant. (If a person came to an inn drunk, or behaved in an indecent or improper man- ner, I am of opinion that the innkeeper is not bound to receive 2 In Ansell v. Waterhouse (1817), 2 Chit. 1, Holrotd, J., said: "This is an action against a person fa common carrier], who, by ancient law, held as it were a public office, and was bound to the public." In Jeremy on Carriers, p. 59, it is said of a common carrier that he is " to be considered in the light of a public servant, and as such liable to an action for refusing to take charge of the goods." SEC. I.] THE COMMON CALLINGS. 7 Mm. You will consider whether Mr. Williams did so behave here. It is next said that he came to the inn at a late hour of the night, ■when probably the family were gone to bed. Have we not all knocked at inn doors at late hours of the night, and after the fam- ily have retired to rest, not for the purpose of annoyance, but to get the people up? In this case it further appears, that the wife of the defenda,nt has a conversation with the prosecutor, in which she insists on knowing his name and abode. I think that an innkeeper has no right to insist on knowing those particulars ; and certainly you and I would think an innkeeper very mpertinent, who asked either the one or the other of any of us. However, the prosecutor gives his name and residence; and supposing that he did add the wor fls"*^"and be damned to you ,"^is that a suihcient reason for keep- mg a man out of an inn who has travelled till midnight ? Ijhillk ihat the prosecutor was not guilty o f such misconduct as would entitle the defendant to shut him out of his house. It has been strongly objected against the prosecutor by Mr. Godson, that he had been travelling on a Sunday. To make that argument of any avail, it must be contended- that travelling on a Sunday is illegal. It is not so, although it is what ought to be avoided whenever it can he. Indeed there is one thing which shows that travelling on a Sunday is not illegal, which is, that in many places you pay addi- tional toll at the turnpikes if you pass through them on a Sunday, by which the legislature plainly contemplates travelling on a Sun- day as a thing not illegal. I do not encourage travelling on Sun- days, but still it is not illegal. "With respect to the non-tender of money by the prosecutor, it is now a custom so universal with inn- keepers to trust that a person will pay before he leaves an inn, that it cannot be necessary for a guest to tender money before he goes into an inn; indeed, in the present case, no objection was made that Mr. Williams did not make a tender; and they did not even insinuate that they had any suspicion that he could not pay for whatever entertainment might be furnished to him. I think, there- fore, that that cannot be set up as a defence. It however remains for me next to consider the case with respect to the hour of the night at which Mr. Williams applied for admission; and the opin- ion which I have formed is, that the lateness of the hour is no ex - ■cu se to the defendant for refusing to receive the prosecutor into his inn. Why are inns established? For the reception of travel- lers, who are often very far distant from their own homes. Kow, at what time is it most essential that travellers should not be denied admission into the inns? I should say when they are benighted, and when, from any casualty, or from the badness of the roads, they arrive at an inn at a very late hour. Indeed, in former times. 8 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. when the roads were much worse, and were much infested with' robbers, a late hour of the night was the time, of all others, at which the traveller most required to be received into an inn. I think^ therefore, that if the traveller conducts himself properly, the inn-' keeper is bound to admit him, at whatever hour of the night he may arrive. The only other question in this case is, whether the defendant's inn was full. There is no distinct evidence on the part of the prosecution that it was not. But I think the conduct of the parties shews that the inn was not full ; because, if it had been, there could have been no use in the landlady asking the prosecutor his name, saying, that if he would tell it, she would ring for one of the servants. Verdict — Guilty.^ Park, J., sentenced the defendant to pay a fine of 20*. sin Lane v. Cotton (1701), 12 Mod. 472, Holt, C. J., in sneaking of those engaged in common callings, said : " Wherever any Subject takes upon himself a Publick Trust for the Benefit of the rest of his fellow Sub- jects, he is eo ipso bound to serve the Subject in all the Things that are within the Reach and Comprehension of such an Office, under Pain of an Action against him ; and for that see Kelway 50. If on the Road a Shoe fall off my Horse, and I come to a Smith to have one put on, and the Smith refuse to do it, an Action will lie against him, because he has made Profession of a Trade which is for the Publick Good, and has thereby ex- posed and vested an interest of himself in all the King's Subjects that will employ him in the Way of his Trade. If an Inn-keeper refuse to entertain a Guest, when his House is not full, an Action will lie against him ; and so against a Carrier, if his Horses be not loaded, and he refuse to take a Packet proper to be sent by a Carrier ; and I have known such Actions maintained, tho' the Cases are not reported. ... If the Inn be full, or the Carrier's Horses loaded, the Action would not lie for such Refusal ; but one that has made Profession of a public Employment, is bound to the utmost Extent of that Employment to serve the Publick." Mr. Justice Holme^ in his work on The Common Law, p. 203, after quoting from Lane v. Cotton, supra, to the effect that " If a man takes upon himself a public employment, he is bound to serve the public as far as the employment extends, and for refusal an action lies," says : " An attempt to apply this doctrine at the present day would be thought monstrous. But it formed part of a consistent scheme for holding those who followed useful callings up to the mark. . . . The scheme has given way to more liberal notions ; but the disjecta memhra still move." See a valuable article entitled Business Jurisprudence, by Edward A. Adler, in 28 Harvard Law Review, 135. The survivors of the ancient common callings are the common carrier by land and water, and the innkeeper. See an article on The Origin of the Peculiar Duties of Public Service Companies, 11 Columbia Law Review, 514, 523 to 525. And see Hurley v. Eddington (1901), 156 Ind. 415. In Gisbourne v. Hurst (1710), 1 Salk. 249, it was resolved "that any man undertaking for hire to carry the goods of all persons indifferently,, as in this case, is as to this privelege a common carrier." In Fay v. Pacific Improvement Co. (1892), 93 Cal. 253, the court said: " The fact that the house is open for the public, that those who patronise it come to it upon the invitation which is extended to the general public, and without any previous agreement for accommodation or agreement as to the duration of their stay, marks the important distinction between a hotel or inn, and a boarding-house." SEC. I.] THE COMMON CALLINGS. 9 PULLMAN; PALACE CAR CO. v. LAWEENCE. 74 Miss. 782. 1897.'- Woods, C. J. We now proceed to consider the law of the liabil- ity of the appellant in the present case. We need hardly say that the law of the state of Illinois is that to which we must look to ascertain whether a cause of action is shown, and to determine the extent and measure of the recovery sought, if appellee was entitled to recover at all. ... It must be conceded, further, that the Pullman Palace Car Company is not technically a common carrier in the state of Illinois. Our constitution has wisely declared all sleeping car companies common carriers, but such is not the law in Illinois. In Illinois, as in many other states, sleeping car com- panies are regarded as nondescript corporations — mi generis. By these authorities they are said to be neither common carriers nor innkeepers. And yet they bear some marked resemblance to both. They are under the duty of not only furnishing seats in their cars to all proper persons applying therefor, but they are also under the obligation in all proper cases, and to the extent of their ability and capacity, to furnish sleeping accommodations and food to the travelling public, for proper compensation. They therefore seem to possess some of the characteristics of innkeepers. And they seem to be quasi common carriers. They own and use railway cars affording many comforts, conveniences and luxuries unknown to first-class ordinary cars of railroad companies, and these cars are to be used in the transportation of passengers from point to point, and the general travelling public is invited to become patrons of the company owning and using these luxurious coaches. The company is, in some sense, engaged in transportation, and its busi- ness is with the general public. It is unlike the private carrier, who may select his own customers, for it must take all who are proper persons, and who pay the demanded fare. So, though not technically a common carrier in Illinois, it bears marked resem- blance to the common carrier, and must be held to the perform- ance of its appropriate duties in its business intercourse with the travelling public.^ 1 Only an extract from the opinion is here reprinted. — Ed. 2 See also Nevin v. Pullman Palace Car Co. (1883), 106 111. 222; Pullman Palace Car Co. v. Booth (Tex., 1894), 28 S. W. 719; Searles v. Mann Boudoir Car Co. (1891), 45 Fed. 330^ Lemon v. Pullman Palace Car Co. (1887), 52 Fed. 262. And see Interstate Commerce Act, § 1, Appendix, p. 482, as to Sleeping Car Companies. 10 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. STATE V. BELL TELEPHONE CO. 23 Fed. 539. 1885.^ This was an application on the part of the Baltimore & Ohio Telegraph Company to compel the defendant to give the petitioner telephone service. The defendant answered that it operated under a license obtained from the American Bell Telephone Company, by the terms of which defendant could only give service to telegraph companies with the consent of the licenser, and that the licenser permitted service to be given to the Western Union Telegraph Com- pany, but would not allow service to be given to the petitioner. Bkewer, J. So, notwithstanding this licenser has given to the licensee the right to establish a telephonic system in the city of St. Louis, with telephonic communication with only certain prescribed telegraph systems, the moment it permitted the establishment of a telephonic system here, that moment it put such telephonic system within the control of the state of Missouri, and the control of the courts, enforcing the obligations of a common carrier. A telephonic system is simply a system for the transmission of intelligence and news. It is, perhaps, in a limited sense, and yet in a strict sense, a common carrier. It must be equal in its dealings with all. It may not say to the lawyers of St. Louis, " my license is to establish a telephonic system open to the doctors and mer- chants, but shutting out you gentlemen of the bar." The moment it establishes a telephonic system here it is bound to deal equally with all citizens in every department of business.^ Section 2. Exercise of Franchises.^ LUMBAED V. STEAEKS. 4 Gush. 60. 1849. The facts of this case, which was a bill in equity for an injunc- tion, are stated in the opinion of the court. 1 The statement of facts is condensed, only part of the opinion of Beewee, J., is reprinted, and the dissenting opinion of Trent, J., is omitted. — Ed. 2 In Commercial Union Tel. Co. v. New England T. & T. Co. (1889), 61 Vt. 241, a telephone company is spoken of as " a common carrier of speech for hire." See also State v. Nebraska Telephone Co. (Neb.,. 1885), 22 N. W. 237, and Bell Telephone Co. v. Commonwealth (Pa., 1886), 3 Atl. 825. 1 " What is a franchise? Under the English law Blackstone defines it as ' a royal privilege, or branch of the king's prerogative, subsisting in the SEC. II.] EXERCISE OF FEANCHISES. 11 Shaw, C. J. This bill was originally brought by the plaintiff as an owner of mills on the lower part of Town brook, in Spring- field, against the defendant Stearns, alleging that by means of an aqueduct, on his own land, he had diverted some portion of the. water of two springs, being some of the sources of said brook, and thereby diminished the plaintiff's water power. Whilst this bill was pending and before answer filed, an act was passed by the legislature on the 10th of May, 1848 (St. 1848, c. 303), entitled "An act to incorporate the Springfield Aqueduct Company." This act authorized the talcing of the springs before mentioned of Stearns, by purchase, and with certain other springs, the laying of an aqueduct for the purpose, expressed in the act, of supplying the village of Springfield with pure water. The act contains the provisions usual in such acts, for forming a company and raising a capital; for taking springs and lands, paying all damages; for digging up roads and ways; providing hydrants; for a gratuitous supply of water, in case of fire ; a penalty for corrupting the water ; and vesting certain superintending powers in the board of health of Springfield, and the county commissioners of Hampden, re- spectively. After the passage of this act, a supplemental bill was filed, making the aqueduct company a party, and insisting on the same grounds against them, as stated in the original bill. It is contended, that this act is unconstitutional and void, because it in effect authorizes the corporation to take private rights of prop- erty for a use which is not a public one, and, therefore, not within the authority of the legislature, even though provision is therein made for a compensation for any such damage.'- It may be very hands of a subjeat.' 2 Bl. Com. 37. Generalized and divested of the spe- cial form which it assumes under a monarchial government based on feudal traditions, a franchise is a right, privilege or power of public concern, which ought not to be exercised by private individuals at their mere will and pleasure, but should be reserved for public control and administration, either by the government directly, or by public agents, acting under such conditions and regulations as the government may impose in the public interest, and for the public security. Such rights and powers must exist under every form of society. They are always educed by the laws and customs of the community. Under our system, their existence and disposal are under the control of the legislative department of the government, and they cannot be assumed or exercised without legislative authority. ... No private person can take another's property, even for a public use, without such authority ; which is the same as to say that the right of eminent do- main can only be exercised by virtue of a legislative grant. This is a fran- chise. No persons can make themselves a body corporate and politic without legislative authority. Corporate capacity is a franchise." California v. Pacific Railroad (Jo. (1888), 127 U. S. 1, 40. 1 By force of the Fifth and Fourteenth Amendments to the Federal Con- stitution private property cannot be taken under the power of eminent domain except for public use. Missouri Pacific Ry. Co. v. Nebraska (1896), 164 U. S. 403; Madison ville Traction Co. v. St. Bernard Mining Co. (1905), 196 U. S. 239. We do not here take up exhaustively the question of what constitutes such public use as to justify the grant of the power of emi- nent domain. Such Inquiry belongs properly in a course on Constitutional Law. — Ed. 12 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. questionable, whether the plaintiff, taking the use of the brook for a mill power, does not take it subject to the reasonable use of all proprietors above, in or near whose premises it passes, for domestic purposes, for such ordinary trades as require the use of water, such as tanning, bleaching, dyeing, and the like, and also for the ex- tinguishment of fires. If such be the right of the inhabitants to the use of the water, it may be a question, whether it is a greater en- croachment on the plaintiff's rights, to take water by conduits and hydrants, than by buckets and engines. But as this right may in- volve a question of fact, which this case has not reached, in its pres- ent stage, we lay no stress on this consideration, but merely suggest it in passing. But we can perceive no ground, on which to sustain the argu- ment, that this act does not declare a public use. It is so expressed in its title, and in the first enacting clause, and the entire act is conformable to this view. The supply of a large number of in- habitants with pure water is a public purpose. But it is urged, as an objection to the constitutionality of the act, that there is no ex- press provision therein requiring the corporation to supply all fami- lies and persons who should apply for water, on reasonable terms; that they may act capriciously and oppressively; and that by fur- nishing some houses and lots, and refusing a supply to others, they may thus give a value to some lots, and deny it to others. This would be a plain abuse of their franchise. By accepting the act of incorporation, they undertake to do all the public duties required by it. When an individual or a corporation is guilty of a breach of public duty, by misfeasance or nonfeasance, and the law has pro- vided no other specific punishment for the breach, an indictment will lie. Perhaps also, in a suitable case, a process to revoke and annul the franchise might be maintained. But it is the less im- portant to determine this question, because this charter is subject to the provision in the Eev. Sts. c. 44, § 23 ; by which it is com- petent for the legislature to make such alterations and amendments, as more effectually to carry into effect all the purposes of the act. The court are of opinion that this act is not open to the objec- tions made to it, and that it is not unconstitutional. Bill dismissed. SEC. II.] EXEKCISE OF FRANCHISES. 13 OLMSTEAD v. PEOPEIETORS OF THE MORRIS AQUEDUCT. 4? N. J. L. 311. 1885.^ The questions involved in this case arose under an application made by the Proprietors of the Morris Aqueduct for the appoint- ment of commissioners to condemn for their uses all the waters of a certain spring called Sandy Spring, and a certain specified portion of the waters of Mills Bailey Brook. The fourth reason assigned by the plaintiffs in error for asking that the appointment of com- missioners be set aside was that the law under which the Proprietors had proceeded was not constitutional. Van Syckel, J. The presumption is always in favor of the va- lidity of legislative acts. If no obligation rested upon the water company to supply on reasonable terms all who apply for water, the use would be strictly private. The duty of furnishing the public with water must be present, to make it of a public character. Although the legislative act may contain no express provision imposing such duty, the presumption is that the legislature intended to act within constitutional limits by creating a public franchise, and that the grant to the company was for the purpose of providing for the public necessity and convenience. The powers granted to the water company are unquestionably capable of being employed as a means of great public usefulness, and hence their creation was a legitimate act of legislation. An in- tention that they shall be used otherwise will not be imputed to th^ law-making power, nor will the grantee be permitted to pervert them to uses for which they could not lawfully be bestowed. In accepting such a charter the company impliedly engages on its part to use it in such manner as will accomplish the object for which the legislature designed it. It cannot refuse to perform the public duties thus cast upon it, without surrendering the franchise. When an individual or a corporation is guilty of a breach of public duty by misfeasance or nonfeasance, the law provides a remedy. The true criterion by which to judge of the character of the use is, whether the public may enjoy it of right, or by permission only. Bonaparte v. Camden and Amboy R. R. Co., Baldwin C. C. 305. Assuming, as we must, that the legislature intended to exercise its lawful l%af, Pyjika't the«a&mpapy, in invokiM the benefit of the corpor|S|abfiOF|6'0#affl!lff(^'^TOW^^^^ iThe statement of facts issomewhai eondensea/ithe arguments of counsel are omitted, and only part Wijl^Hw4(S'F0N^D'.%. 14 BASES OF PUBLIC SEHVICE DUTIES. [CHAP. I. to serve the public, it necessarily follows that the use is a public one. I agree with Mr. Justice Parker, who delivered the opinion in the court below, that if the supplying of a city or town with water is not a public purpose, it is difficult to conceive of any enterprise entrusted to a private corporation that could be classed under that head. The supplement of 1880 to the act concerning telegraph com- panies contains no express words imposing the duty to send mes- sages for all who apply. In Turnpike Company v. News Company, 14 Vroom 381, the Supreme Court maintained the constitutionality of the law as constituting a public use, on the ground that there must be an implication that in granting the franchise, the legislature intended to charge the companies with a duty to the public, and that in accepting the benefits of the law, the recipient of them as- sumes the performance of such public duty. The case of Paterson Gas Light Company v. Brady, 3 Dutcher 245, is cited in support of the contrary contention. In that case Mr. Justice Elmer declared that the company was under no legal obligation to supply gas to all persons having buildings on the lines of their pipes, upon tender of reasonable compensation. He rested this view upon the absence of any express provision in the charter imposing such duty upon the company. This decision fails, how- ever, to give due effect to the purpose of the legislature in creating the company, and to the implied obligation assumed by the company in accepting the grant. If it were a grant for mere, private uses, em- powering the corporate body to withhold service at pleasure from all persons, the company would be without the right to occupy the public streets for the laying of its pipes, and, of course, the grant of eminent domain for such private purposes would be void. In this respect, in my judgment, the conclusion in the Paterson case was erroneous, and in conflict with the views expressed in the Tide-water case,^ and in National Docks v. Central Eailroad Com- pany.* In my opinion the judgment below should be aflSrmed. HAUGEN V. ALBINA LIGHT & POWEE CO. 21 Ore. 411. 1891.^ This is an action for a writ of mandamus to require the defendant 2 Tidewater Co. v. Coster (1866), 3 C. E. Green 518. 3 (1880) 5 Stew. Eq. 755. 1 The statement of facts is condensed, and part of the opinion is omit- ted. — Ed. BEO. II.] ESEECISE OP FRANCHISES, 15 to supply the plaintiff with water by tapping a certain water main on Tillamook street, and allowing him to connect therewith a serv- ice-pipe. The plaintiff is a resident of the city of Albina, and owns a lot on Tillamook street, on which he is constructing a residence. The defendant is a corporation supplying water to the inhabitants of the city of Albina and is operating under a franchise granted to said company by the council of the city of Albina by virtue of an ordinance, as follows : " An ordinance granting the right of way through the streets for laying pipes for the purpose of conveying water through the city. The city of Albina does ordain as fol- lows: Section 1. That the Albina "Water Works Company, its successors and assigns, be and are hereby granted the right and privilege of laying pipes through the streets of Albina, for the purposes of conducting water through the city. Section 2. That the ditches for laying pipes shall be sunk two feet, and the pipes for conducting the water shall be under the surface or level of the established grade eighteen or twenty inches on all improved streets, and no pipe shall be laid so as to interfere with the construction of sewers; provided, that nothing in this ordinance shall be construed so as to grant any exclusive right or privilege of conducting water into the city; provided further, that said water company shall in no case charge more than one dollar per month for the first faucet and fifty cents for each additional faucet in the same building, for family use or at a private dwelling house," etc. Under this ordi- nance the defendant company laid down a four inch pipe through Tillamook street, but refused to supply water from said pipe to plaintiff's residence though requested to do so, and though tendered by the plaintiff the regular fee for tapping a water main with a service pipe. A demurrer was sustained to the answer, and a judg- ment rendered making the writ peremptory, from which defendant appeals. LoED, J. From this statement of the case, as presented by the pleadings, the court below held that when the defendant entered upon, and laid down its water-mains in the street, in pursuance of the privilege granted by the ordinance, it became bound to sup- ply every abutter upon the street with water. The contention for the defendant is, that the ordinance does not impose the duty upon it to furnish water, but only if it shall furnish water, that the charge therefor shall not exceed a certain sum therein specified ; that the grant is to lay pipes through the streets, for the purpose of conducting water through the city in the mode pre- scribed, and so as not to interfere with the construction of sewers, but that it contains no provision requiring it to supply the city or 16 BASES OF PUBLIC SEKVICE DUTIES. [OHAP. I, its inhabitants with water, hence the ordinance imposes no duty upon the company to furnish water to any one. In whatever form the argument is presented, it rests essentially upon this contention. While admitting that it is a corporation organized to supply the city and its inhabitants with water, and that the city by its ordinance granted it the right to lay water-r mains through its streets for the purposes of carrying into effect the objects of its incorporation, it insists that the ordinance is the measure of the rights conferred and the obligation imposed, whiehj by its terms, only grants " the right and privilege of laying pipes through the streets of the city of Albina for the purpose of conr ducting water through the city," under the conditions imposed, with-i out " a word in the language of the grant from which it could be iur ferred that the company is placed under any obligation whatever to supply any inhabitant of the city with water." \ Counsel say : " If the ordinance had imposed upon the company the duty of supplying the inhabitants with water as a part of the conditions of the grant, such a conclusion might be supported; but where no such duty is imposed, and nothing is said except that when the company furnishes water, it shall charge no more than a certain rate per month, they fail to see the soundness of the reason- ing which makes it the duty of the company to furnish water." It is thus seen that it is the absence of any express provision in the ordinance, imposing the duty upon the defendant to supply water, upon which the argument and the case for the defendant is predicated. The effect to be given to the fact that the defendant company was incorporated under the law to furnish water to the' city and its inhabitants, and the implied obligation which the de-* fendant assumed by accepting the grant or franchise under thef ordinance, is entirely overlooked. The defendant is treated as a private corporation, the business of which is private and not of a public nature, and to meet a public necessity, and as a consequence, that it should not be subjected to duties or obligations that are not binding upon other private corporations. In support of thisi view, the only authority cited and relied upon by the defendant is Paterson Gas Light Co. v. Brady, 27 N. J. L. 245; 73 Am. Dec,. 360. . In that case the court was urged to assert the doctrine that gas companies, like common carriers and innkeepers, were bound to accommodate the public, but refused on the ground that the lack of precedents upon the subject could only be based upon the strong presumption that there was no principle of law upon which such a view could be supported. The court says: "The company may organize, may make and sell gas or not at their pleasure; and I se^ SEC. II.] EXERCISE OF EEANCHISES. 17 no more reason to hold that the duty of doing so is meant to be imperative than to hold that other companies incorporated to carry- on manufactories, or to do any other business, are bound to serve the public any further than they find it to be their interest to do so. It was earnestly insisted on the argument that the community has a great interest in the use of gas, and that companies set up to fur- nish it ought to be treated like innkeepers and common carriers, and that if no precedent can be found for such a decision, this court ought to make one. But that there is no authority for so holding in England or America, where companies have been so long incorporated for supplying water and gas to the inhabitants of numerous towns and cities, affords a strong presumption that there is no principle of law upon which it can be supported." But this case and its reasoning was directly disapproved and overruled in the subsequent case of Olmstead v. Proprietors of Mor- ris Aqueduct, 47 F. J. L. 333, in which the court says : " In that case, — Paterson Gas Light Co. v. Brady, — Mr. Justice Elmee de- clared that the company was under no legal obligation to supply ga.s to all persons having buildings on the line of their pipes, upon, tender of reasonable compensation. He rested this view on the absence of any express provision in the charter imposing such duty upon the company. This decision fails, however, to give due effect to the purpose of the legislature, in creating the company and to the implied obligation assumed by the company in accepting the grant. If it were a grant for mere private uses empowering the corporate body to withhold service at pleasure from all persons, the company would be without the right to occupy the public streets for the laying of its pipes, and of course the grant of eminent domain for such private purposes would be void. In this respect, in my judgment, the conclusion in the Paterson case was erroneous, and in conflict with the views expressed in Tide Water Co. v. Coster, 3 C. E. Green, 518; 90 Am. Dec. 634, and in Nat. Docks Ey. Co. v. Cent. E. Co. 5 Stew. Eq. 755." This view is certainly more in accord with recent decisions estab- lishing the doctrine that it is mandatory upon corporations of this sort to supply one and all without distinction. The defendant by incorporating, under the statute for the purpose of supplying water to the city and its inhabitants, undertook a business which it could not have carried on without the grant of eminent domain over the streets in which to lay its pipes. It was by incorporating for this purpose, and in accepting the grant, it became invested with a fran- chise, belonging to the public and not enjoyed of common right, for the accomplishment of public objects and the promotion of the public convenience and comfort. Its business was not of a private. 18 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. but of a public nature, and designed under the conditions of the grant as well for the benefit of the public as the company. " Such a business," says Mr. Justice Haelan, " is not like that of an ordinary corporation engaged in the manufacture of articles that may be quite as indispensable to some persons as are gas lights. The former articles may be supplied by individual effort, and with their supply the government has no such concern that it can grant an ezelusive right to engage in their manufacture and sale, but as the distribution of gas in thickly populated districts is, for the reason stated in other cases, a matter of which the public may assume control, services rendered in supplying it for public and private use, constitute, in our opinion, such public services as, under the constitution of Kentucky, authorized the legislature to grant to the defendant the exclusive privileges in question." (Louisville Gas Co. v. Citizens Gas Co. 115 U. S. 683.) And, in another case, the same eminent judge said : " The manufacture of gas and its distribution for public and private use, by means of pipes laid down, under legislative authority, in the streets and ways of a city, is not an ordinary business in which every one may engage, but is a franchise belonging to the government to be granted for the accomplishment of public objects, to whomsoever, and upon what terms, it pleases. It is a business of a public nature, and meets a public necessity, for which the state may make provision." (New Orleans Gas Co. v. Louisiana Light Co. 115 TJ. S. 650.) It must then be conceded that the defendant is engaged in a business of a public and not of a private nature, like that of ordinary corporations engaged in the manufacture of articles for sale, and that the right to dig up the streets, and place therein pipes or mains for the purpose of conducting water for the supply of the city and its inhabitants, according to the express purpose of its in- corporation, and the business in which it is engaged, is a franchise, the exercise of which could only be granted by the state, or the municipality acting under legislative authority. In such case, how can the defendant, upon the tender of the proper compensation, refuse to supply water without distinction to one and all whose prop- erty abuts upon the street in which its pipes are laid? The de- fendant company was organized to supply water to the city and its inhabitants, and the franchise granted by the city authorities was the means necessary to enable it to effect that purpose. Without the franchise, the object for which the company was incorporated would fail and come to naught. It could not carry on the busi- ness of supplying the city and its inhabitants with water without authority from the city to dig its streets and lay pipes therein for conducting or distributing water for public and private use. It SEC. II.] EXERCISE OF FRANCHISES. 19 was not organized to lay pipes but to supply water, and the grant was to enable it to do so and thereby effect the public purpose con- templated. When the defendant incorporated to carry on such a business, we may reasonably assume that it was with the expectation of receiv- ing a franchise from the city, which, when conferred, it would undertake to carry on according to the purposes for which it was organized. By its acceptance of the grant, under the terms of its incorporation, it assumed the obligation of supplying the city and its inhabitants with water along the line of its mains. It could not dig up the streets and lay pipes therein for conduetpg water, except to furnish the city and its inhabitants with water. That was the purpose for which it became a corporation, and the grant of the city was to enable it to carry it into effect. And "if the supplying of a city or town with water," as Van Syckbl, J., said, " is not a public purpose, it is difficult to conceive of any enterprise entrusted to a private corporation that could be classed under that head." (Olmstead v. Morris Aqueduct, supra.) As the defendant could not carry on the business of supplying water without the franchise, the city must have intended, in grant- ing such franchise, to charge it with the performance of the duty it undertook for the public by the terms of its incorporation, and the defendant, in accepting the benefits of the grant, must have as- sumed the performance of such duty. In a word, the acceptance of a franchise, under such conditions, carries with it the correspond- ing duty of supplying the public without discrimination with the particular commodity which the corporation was organized to sup- ply. " It may be laid down as a general rule," says Mr. Morawetz, " that whenever the aid of the government is granted to a private company, in the form of a monopoly, or a donation of public prop- erty or funds, or a delegation of the power of eminent domain, the grant is subject to an implied condition that the company shall as- sume an obligation to fulfill the public purpose on account of which the grant was made. . . . The same rule applies to com- panies invested with special privileges at the expense of the public for the purpose of supplying cities with water." (2 Morawetz on Corp. § 1139.) The books are replete with illustrations of this principle as ap- plied to water companies, gas companies, telephone companies, and others in the performance of public duties.^ 2 See also Griffin v. Goldsboro Water Co. (1898), 122 N. C. 206; McCrary V Beaudry (1885), 67 Gal. 120; Rockingham County L. & P. Co. v. Hobbs (1904), 72 N. H. 531; Crumley v. Watauga Water Co. (1897), 99 Tenn. 420; American Water Works Co. v. State (1895), 46 Neb. 194; State v. Butte Water Co. (1896), 18 Mont. 199. A V 20 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. MINNESOTA CANAL & POWEE CO. v. PRATT. 101 Min. 197. 1907.^ Elliot, J. In this proceeding the Minnesota Canal & Power Company seeks to condemn certain lands necessary for the con- struction of works designed and intended for the generation of electric power for distribution to the public for the purposes of light, heat, and power. The respondents moved to dismiss the peti- tion on the ground that it did not state facts sufficient to constitute a cause of action. . The motions were treated as in the nature of demurrers, and for the purposes of the hearing the allegations of the petition must be treated as true. The trial court granted the motions to dismiss, and the petitioner appealed from a judgment entered on the order of dismissal. According to this petition the work of internal improvement which the petitioner now proposes to undertake involves the con- struction and maintenance of a continuous navigable watercourse from and within the territory hereinafter described and designated as the Birch lake drainage basin, in St. Louis and Lake counties, Minnesota, to a point ... in "West Duluth, which shall include Irrigation cases: Price v. Riverside L. & I. Co. (1880), 56 Cal. 431; Sammons v. Kearney P. & I. Go. (1906), 77 Neb. 580. " The appellee is a corporation authorized by the legislature to exercise the right of eminent domain (Acts 1889, p. 22) and licensed by the city of Indianapoiis to lay pipes through its streets and alleys for the transporta- tion and distribution of natural gas to its customers. Tliese rights, which involve an element of sovereignty, and which can exist only by grant from the public, are rooted in the principle that their exercise will bestow a benefit upon that part of the public, in whose behalf the grant is made, and the benefit reserved by the citizens is the adequate consideration for the right and convenience surrendered by them. The grant thus resting hpon a public and reciprocal relation, imposes upon the appellee the legal obligation to serve all members of the public contributing to its asserted right, impar- tially. . . ." State ex rel. Wood v. Consumers' Gas Co. (1901), 157 Ind. 345, 351. Other instructive cases on this subject of the duty of gas companies aris- ing out of their exercise of the power of eminent domain, or the power to use streets and highways, are the following : Williams v. Mutual Gas Co. (1884), 52 Mich. 499; Portland Nat. Gas & Oil Co. v. State (1893), 135 Ind. 54; Coy v. Indianapolis Gas Co. (1897), 146 Ind. 655; Public Service Corporation v. American Lighting Co. (1904), 67 N. J. Eq. 122; Owensboro Gaslight Co. v. Hildebrand (Ky., 1897), 42 S. W. 351; Nairin v. Kentucky Heating Co. (Ky., 1900), 86 S. W. 676; Charleston Natural Gas Co. V Lowe (1901), 52 W. Va. 662, 671. Electric light cases: Jones v. North Georgia El. Co. (1906), 125 Ga. 618; Cincinnati H. & D. R. R. Co. v. Village of Bowling Green (1879), 57 Oh. St. 366. 1 The statement of facts, arguments of counsel, and parts of the opinion of Elliot, J., are omitted, as well as all of the dissenting opinion of Lewis, J., concurred in by Start, C. J. The dissent of Start, C, J,, and Lewis, J., does not involve the points discussed In that part of the majority opinion here reprinted. — Ed. SEC. II.] EXEKOISE OP EEANCHISES. 21 the construction and maintenance of a navigable canal connecting said Birch lake drainage basin with the Embarrass river, thence along said Embarrass river to a point in the northerly end of Sabin lake, . . . and the improvement of the Embarrass river and the lakes along the course thereof, and the St. Louis river below the outlet of the Embarrass river, down to [a designated point] in St. Louis county, Minnesota, the construction and maintenance of a navigable canal from said last-mentioned point on the St. Louis river easterly to said point in the city of Duluth, . . . and the construction and maintenance in connection therewith of a suitable device or chute for delivering logs, lumber, timber, forest and other products from the east end of said canal at the point last described to and into the said bay of St. Louis, which canal shall be of such size, dimensions, and capacity as to allow the floating of canal boats and barges and other water craft thereon for the transporta- tion of merchandise, and to allow the floating of logs, lumber, timber and forest products thereon, which watercourse shall be capable of delivering the logs, lumber, timber, forest, and other products from said Birch lake drainage basin and from said St. Louis river and its tributaries to and into the bay of St. Louis at the said city of Duluth and the water tributary to the St. Louis river canal hereinafter described. This work involves and will require the diversion into said ■watercourse of such portions of the waters of the said Birch lake drainage basin as may be required to carry out the purposes of this corporation, and the diversion of which will not interfere with the navigation, navigable capacity, or public use of the waters of the said Birch lake drainage basin and the various lakes and streams to which they are tributary and the diversion into said St. Louis river canal of the waters tributary thereto. The object and purpose of the enterprise is described as the fur- nishing and distribution, by means of such watercourse and said work, of water to municipalities, persons, and corporations for public use; the generation of electricity by means of the water power hereinafter described, and the supplying of such electricity for public use to all municipalities, persons, and corporations desir- ing the same for light, heat, and power purposes, which water power shall be created by conducting in pipes and conduits the waters so diverted from the east end of said St. Louis river canal to the power plant of your petitioner, which will be located at or near the level of the bay of St. Louis, at said city of Duluth, under a head of six hundred feet or thereabouts. 1. The petitioner is met at the threshold with the assertion that it is not a public service corporation, and cannot, therefore, under 22 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I. any circumstances at present exercise the power of eminent domain. This contention seems to be the result of an inversion of ideas. It would be more nearly correct to say that the appellant is a public service corporation, because it has been granted the power of emi- nent domain in aid of the purposes for which it was incorporated. The power of eminent domain is not given to public service cor- porations eo nomine. Certain corporations organized to serve the public are given the right to exercise this sovereign power as the agent of the state. What have become known as "public service corporations" are organized and exist under the authority of the state to serve the public, by supplying the people on equal terms and for a reasonable compensation with services or commodities and articles which, because of their nature, location, or manner of production and distribution, can be best produced and distributed by some organized form of enterprise operating under state con- trol. The statutes do not define public service corporations, although the Eevised Laws of 1905 carry the name as the heading of section 3841, which authorizes the organization of corporations for the specific purposes therein enumerated. The power of eminent domain is specifically granted to the corporations which may be organized under this section of the statute, and in that statute the state reserves a power of control which it would unquestionably have by the common law, because of the nature of the business in which such corporations are authorized to engage. That business is such that the property of all corporations organized thereunder becomes affected with a public use, and is therefore subject to public regulation and control. The corporations which may be authorized under section 2841, E. L. 1905, are such as fall within the ordinary conception of a public service corporation. The " busi- ness " of such a corporation is determined by its charter statement of purposes, which must be within the scope and limits of the statutory authorization. Every such corporation is by the same statute (E. L. 1905, § 2843) expressly authorized to condemn "such private property as may be necessary or convenient for the transaction of the public business for which it was formed." This " public business " includes the construction of works for supply- ing the public, by whatever means, with water, light, heat, and power. In this connection the state expressly reserves the right at all times " to supervise and regulate the business methods and management of any such corporation and from time to time to fix the compensation which. it may charge or receive for its services." In addition thereto it is provided that " every such corporation ob- taining a franchise from a city or village shall be subject to such SEC. II.] EXERCISE OE FRANCHISES. 23 restrictions and conditions as from time to time may be imposed upon it by such municipality." The appellant was organized under these statutes, and the nature of its business, as stated in its articles of incorporation, is " to gen- erate electricity in the state of Minnesota by steam or water power for public use, and to distribute and supply such electricity to the public for light, heat and power purposes." The generation of electrical power for distribution and sale to the general public on equal terms is a public enterprise, and property used for such pur- pose is devoted to a public use. Minnesota Canal & Power Co. v. Koochiching Co., 97 Minn. 429, 107 N. W. 405. The articles re- cite that this is to be done for the public on equal terms and for a reasonable compensation, subject, as required by the statute, to the supervision and control of the state of Minnesota. The petition in this proceeding alleges that for the purpose of accomplishing the purpose for which the corporation was organized it has undertaken the work of internal improvement therein described in detail, and that " all of said works are to be constructed and maintained for public use on equal terms by all municipalities, persons and corpora- tions for a reasonable compensation subject to the state of Minne- sota." The incorporation of the appellant is for a specific purpose, and the law of its corporate being requires it to exercise its powers sub- ject to the supervision and control of the state. It must serve the public on equal terms and for a reasonable compensation. By ac- cepting the franchise it has consented to exercise its powers, subject to this supervision and control, in the interest of the public. Stewart v. Great Northern Ey. Co., 65 Minn. 515, 68 N. W. 208, 33 L. E. A. 427; Charleston v. Lowe, 52 W. Va., 662, 671, 44 S. E. 410; Olmstead v. Proprietors, 47 N. J. L. 311; Haugen v. Albina, 31 Ore. 411, 28 Pae. 244, 14 L. E. A. 434; Cincinnati v. Village, 57 Oh. St. 336, 345, 49 N. B. 121, 41 L. E. A. 422 ; American v. State, 46 Neb. 194, 64 N. W. 711, 30 L. E. A. 447, 50 Am. St. 610; Crumley v. Watauga, 99 Tenn. 420, 41 S. W. 1058 ; GriiBn v. Golds- boro, 122 N. C. 206, 30 S. E. 319, 41 L. E. A. 240 ; Eockingham Co. V. Hobbs, 73 N. H. 531, 58 Atl. 46, 66 L. E. A. 581. In grant- ing this charter the state reserved the right to regulate the business of the corporation. By accepting the franchise the, corporation en- gaged to use it in such a manner as will accomplish the objects for which the legislature granted the charter. 24 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. ALLNUTT V. INGLIS 12 East, 527. 1810.^ The plaintiffs' declaration stated in part that they imported into- "the port of London 40 pipes of wine, being goods which might by the statute be secured in defendant's warehouse without the duties due being first paid, and did all things necessary to legalize the lodging of said goods in defendant's warehouse, and demanded that the defendant receive them for reasonable hire and reward^ and tendered the goods to the defendant, and were at all times ready and willing to pay such reasonable hire and reward, but that de- fendant refused to receive such goods into said warehouse, though there was, sufficient vacant room for such goods, whereby the plain- tiffs were injured by being required to advance the duties on such goods to the amount of £500. The plea of the defendant was to the effect that a table of charges for warehousing had been published, and that the plain- tiffs refused to pay the amount set forth in such table, which was the reason for the refusal to accept the plaintiffs' goods. To this plea there was a general demurrer. Richardson for the plaintiff. The reasonableness of the hire and reward offered by the plaintiffs to the company for the privilege of warehousing their goods in its warehouses, without the imme- diate payment of the import duties, is admitted: and the question is whether the company were bound to receive the goods upon those terms. It is a general rule of law, that where a person has monopoly granted to him for public purposes, he is bound to render the service or use of the thing to which his privilege is annexed for a reasonable compensation. . . . Then under the warehousing act, the intent of the legislature was not merely to confer a benefit upon the London dock company, but to make them the instruments of a public benefit to the trade of London : and the company having accepted the monopoly cum onere, and knowing such to have been the intent of the legislature, they cannot now convert it into an engine to extort unreasonable rates. ... If then the company did not mean to dedicate their warehouses to the public use in this manner, they ought to have made their stand in the first instance, and shoulH have declined taking the certificate of the lords of the treasury, conferring the exclusive privilege, which issued with their own consent. And if this were otherwise, and the company could 1 Only the substance of the pleadings is here given, and parts of the argu- ments of counsel are omitted. — Ed. SEC. II.] EXERCISE OF FRANCHISES. 35 refuse to receive the goods of the merchants except upon their own terms, the act would be for the benefit of the company, and not of trade in general, which it would rather encumber. Bosanquet, contra. Every person is entitled to make the best use of his own property, and the only exception to the rule is in cases where the owner has so entirely dedicated the use of it to the public, that he cannot resume the exclusive possession of it again; as in the instance of a highway, or ferry. So if one accept a grant from the crown of land on the sea shore or on the bank of a navigable river, in a public port, for the purpose of erecting a public wharf or quay, he cannot disuse it, but is bound to preserve it for its destined purpose. If a man open a public house, he cannot refuse to entertain travellers; if he set up as a public carrier he cannot refuse to carry: but he may limit his engagement with the public, and then he is not bound to admit travellers in the one case, or to carry goods in the other, upon any other terms than those upon which he engaged. [Ld. Ellenborough, C. J. It must be recollected that in those cases there is a power in the public of increasing the number of public houses or of carriers in- definitely.] The London Assurance Company, it is well known, contract at a premium rather higher than the ordinary rate of in- surance. If this company had built counting houses instead of warehouses, might they not have let them for as much as they could get ? [Lord Ellenborough, C. J. The business of insurance and of counting houses may be carried on elsewhere, and therefore such instances do not apply. The only question arises on the bond- ing act: shew us that wines may be bonded elsewhere.] There are in fact now other warehouses licensed for bonding wines be- sides those within the docks. [Lord Ellenborough, C. J. asked whether the London dock company were not themselves the occu- piers of those other warehouses ?] And it was admitted that they were : but it was insisted that as the crown is not restrained from licensing other warehouses, it cannot be considered as a monopoly in the company, so as to make the rule of law attach upon them. [Lord Ellenborough, C. J. If the privilege should be extended to other warehouses, it will only be a more extended monopoly in the company and in the owners of the other privileged places.] Richardson in reply was desired by the Court to consider how far the company was pledged to continue to apply its warehouses to this purpose; and also how far the crown was restrained from licensing other warehouses in other hands in the port of London for the same purpose. He denied that the company, having ac- cepted of this privilege to their warehouses for the benefit of the public as well as of themselves, could throw them up at their own 26 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I. pleasure, without reasonable notice to the crown; for if so, the public might be deserted just at the moment of need, and after the merchants have committed themselves and incurred expence and risk upon the faith of the engagement between the crown and the company. It must be understood that when the company accepted the certificate conferring the exclusive privilege, they took it with all its burthens, and cannot withdraw from it: and while their term is running, the legislature declares that it shall be lawful for the importers, &c. of goods to warehouse them in the company's warehouses, without payment of the duties at the time, provided they are certified by the treasury; which has been done. But at any rate, supposing the company could withdraw their warehouses from this use, with or without notice, it is sufficient in this case that they have not done so; and while they in fact enjoy the monopoly, they must take it cum onere. Then supposing other out- lying warehouses have been licensed, the argument is not varied against the company under whose control they are. And supposing others were also licensed, that would not destroy but only extend the monopoly. Lord Ellenboeough, C. J. The question on this record is whether the London Dock Company have a right to insist upon re- ceiving wines into their warehouses for a hire and reward arbitrary and at their will and pleasure, or whether they were bound to re- ceive them there for a reasonable reward only. There is no doubt that the general principle is favored both in law and justice, that every man may fix what price he pleases upon his own property or the use of it: but if, for a particular purpose, the public have a right to resort to his premises and make use of them, and he have a monopoly in them for that purpose, if he will take the benefit of that monopoly, he must as an equivalent perform the duty attached to it on reasonable terms. The question then is, whether circum- stanced as this company is by the combination of the warehousing act with the act by which they were originally constituted, and with the actually existing state of things in the port of London, whereby they alone have the warehousing of these wines, they be not, according to the doctrine of Lord Hale, obliged to limit themselves to a reasonable compensation for such warehousing? And according to him, wherever the accident of time casts upon a party the benefit of having a legal monopoly of landing goods in a public port, as where he is the owner of the only wharf authorized to receive goods which happens to be built in a port newly erected, he is confined to take reasonable compensation only for the use of the wharf. Lord Hale puts the case either way; where the king or a subject have a public wharf to which all persons must come SEC. II.] EXERCISE OP FRANCHISES. 37 who come to that port to unlade their goods, either " because they "are the wharfs only licensed by the queen, or because there is "no other wharf in that port, as it may fall out: in that case, (he " says) there cannot be taken arbitrary and excessive duties for " cranage, wharfage, &c. : neither can they be enhanced to an immo- " derate rate; but the duties must be reasonable and moderate, " though settled by the king's license or charter." And then he as- signs this reason, "for now the wharf and crane and other con- " veniences are affected with a public interest, and they cease to be "juris privati only." Then were the company's warehouses juris privati only at this time ? The legislature had said that these goods should only be warehoused there; and the act was passed not merely for the benefit of the company but for the good of trade. The first clause ^ says that it would greatly tend to the encourage- ment of the trade and commerce of 6. B., and to the accommoda- tion of m,erchants and others if certain goods were permitted to be entered and landed and secured in the port of London without pay- ment of duties at the time of the first entry: and then it says that it shall he lawful for the importer of certain goods enumerated in table A. to secure the same in the West India dock warehouses : and then by s. 2. other goods enumerated in table B. may in like man- ner be secured in the London dock warehouses. And there are no other places at present lawfully authorized for the warehousing of wines (such as were imported in this case) except these warehouses within the London dock premises, or such others as are in the hands of this company. But if those other warehouses were licensed in other hands, it would not cease to be a monopoly of the privilege of bonding there, if the right of the public were still narrowed and restricted to bond their goods in those particular warehouses, though they might be in the hands of one or two others besides the com- pany's. Here then the company's warehouses were invested with the monopoly of a public privilege, and therefore they must by law confine themselves to take reasonable rates for the use of them for that purpose. If the crown should hereafter think it adviseable to extend the privilege more generally to other persons and places, so far as that the public will not be restrained from exercising a choice of warehouses for the purpose, the company may be enfranchised from the restriction which attaches upon a monopoly : but at present while the public are so restricted to warehouse their goods with them for the purpose of bonding, they must submit to that re- striction: and it is enough that there exists in the place and for the commodity in question a virtual monopoly of the warehousing for this purpose, on which the principle of law attaches, as laid 2 43 G. 3, c. 132, the general warehousing act. 28 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. down by Lord Hale in the passage referred to, which includes the good sense as well as the law of the subject. Whether the company be bound to continue to apply their warehouses to this purpose may be a nice question, and I will not say to what extent it may go ; but as long as their warehouses are the only places which can be re- sorted to for this purpose, they are bound to let the trade have the use of them for a reasonable hire and reward. Grose, J. The company contend that they may take what ware- house rent they please : but if they have a monopoly of the ware- housing for this purpose, we cannot say that the legislature in- tended that they should take any price they chose to impose upon the importer; for if they could, it would violate the general in- tention of the act which was to promote and assist trade, and not to prejudice it, which the company would be enabled to do if they could enhance their demand for warehouse rent to any extent they pleased. And if we attend to the principle of law by which monop- olies are regulated, and apply to this ease what is laid down by Lord Hale upon that subject, it is impossible to say that this com- pany do not come within that principle. Le Blanc J. We can only look to the situation of the parties as they appear upon this record, and with reference to the acts of parliament. The company are proprietors of warehouses in the port of London, which they were not under any obligation to erect by the original act constituting them a company : they stood there- fore before the passing of the general warehousing act in the same situation as other proprietors of warehouses. Then the warehous- ing act was passed, which is expressed to be for the encouragement of trade and the accommodation of the merchants and others : and by the 2d section it is made lawful for the importer to secure these goods in the London dock warehouses without paying the duties upon entry; and it does not appear at present that that privilege is extended either by act of parliament or by any other competent authority to any other than the warehouses belonging to the com- pany. Then admitting these warehouses to be private property, and that the company might discontinue this application of them, or that they might have made what terms they pleased in the first instance ; yet having, as they now have, this monopoly, the question is whether the warehouses be not private property clothed with ai public right; and if so, the principle of law attaches upon them. '[ The privileges then of bonding these wines being at present confined by the act of parliament to the company's warehouses, is it not the privilege of the public, and shall not that which is for the good of the public attach on the monopoly, that they shall not be bound to pay an arbitrary but only a reasonable rent? But upon this SEC. II.] EXERCISE OF FRANCHISES. 29 record the company resist having their demand for warehouse rent confined within any limit; and though it does not follow that the rent in fact fixed by them is unreasonable, they do not chuse to insist on its being reasonable, for the purpose of raising the ques- tion. For this purpose therefore the question may be taken to be, whether they may claim an unreasonable rent? But though this be private property, yet the principle laid down by Lord Hale at- taches upon it, that where private property is affected with a public interest, it ceases to be juris privati only ; and in case of its dedica- tion to such a purpose as this, the owners cannot take arbitrary and excessive duties, but the duties must be reasonable. That prin- ciple was followed up in the case of Bolt v. Stennett : for there the quay being one of the public quays licensed under the statute of Elizabeth, it was held that the owner was bound to permit the use of the crane upon it, and could not insist either that the public should not use the crane at all, or should use it only upon his own terms, but that he was bound to permit the use of it upon reason- able terms. Whether the company be bound to continue the use of their warehouses for this purpose may hereafter be material to be decided, but no question arises upon that at present : the warehouses are still applied to the purpose, and there was room sufficient to have received these goods at the time; and the only question was whether they were bound to receive them for a reasonable rent : this they refused to do, and in that refusal they were wrong. Batlet J. The question is whether the company have a right to impose their own terms, whether reasonable or not, upon the im- porters of these goods who offered to deposit them in their ware- houses upon the terms of the warehousing act? For if so, they might exclude particular individuals from the benefit of the act. Or the question may be stated to be whether the public have not a right under that act to deposit and secure certain goods in the company's warehouses upon reasonable terms, and whether the com- pany be not bound to receive such goods from all the public ? Now the act is declared to be passed for the benefit of the trade in gen- eral and for the accommodation of the merchants : and it proceeds afterwards to say that it shall be lawful for the importers, &c. (meaning all importers, and not particular individuals of them) to secure their goods of a certain description in the company's ware- houses. But according to the argument now urged for the com- pany, the act was not passed for the benefit of all importers, but of such only as chuse to pay the company what they are pleased to de- mand for warehouse rent; for to this length the argument neces- sarily goes. It is said however that the company have not a monop- oly of this privilege; but I am not aware of any act of parliament 30 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I, which gave the commissioners of the treasury any power to license particular places for the bonding of wines before this act; though I know they had such a power with respect to sugar and coffee. But whether they had it or not, it is sufficient to say that these were the only warehouses where the importer had a right to insist that his goods should be warehoused and bonded ; for he certainly could not have obliged the commissioners to license any other place for that purpose. As to the question whether the company may re- nounce the application of their warehouses to this use, I cannot add to what the Court have already said: but at least they cannot re- nounce it partially; and I think it would be deluding the public if the company were able to renounce at a moment's warning the ware- housing of the goods for this purpose after they had agreed to ac- cept the licence and monopoly. Judgment for the plaintiff.* 3 See the interpretation and application of this case in Attorney-General v. Simpson [1901], 2 Ch. 671, 719, and in Simpson v. Attorney-General [1904], A. C. 476, 483. " In this case the charter conferred the privilege of driving, not a part, not such portion as the company may choose, but ' all ' the logs to be driven. This right having been accepted by the company, it became a vested and klso an exclusive right. . . .yBy its acceptance and exclusion of the owner from the privilege, in justice and in law it assumed an obligation cor- responding to, and commensurate with its privilege. It accepted the right to drive all the logs, and that acceptance was an undertaking to drive them all, or to use reasonable skill and diligence to accomplish that object. This duty is not one imposed by the charter, certainly not by that alone, but is the result of the defendant's own act ; it is its own undertaking ; virtually a contract on its part, to accomplish that which it was authorized to do." Weymouth v. Penobscot Log Driving Co. (1880), 71 Me. 29, 39. See also Gordon v. Winchester (Ky., 1826), 12 Bush, 110; New Orleans Gas Light Co. v. Paulding (La., 1845), 12 Rob. 378, 380; Shepard v. Mil- waukee Gas Light Co. (1858), 6 Wis. 526, 534; Patterson v. Wolhnan (1896), 5 N. D. 608, 615. AIDING PRIVATE ENTERPRISES THROUGH TAXATION. " The power of government ... to affect the individual in his private rights of property, whether by exacting contributions to the general means, or by sequestration of specific property, is confined, by obvious implication as well as by express terms, to purposes and objects alone which the govern- ment was established to promote, to wit, public uses and the public service. This power, when exercised in one form is taxation; in the other, is desig- nated as the right of eminent domain. The two are diverse in respect of the occasion and mode of exercise, but identical in their source, to wit, the necessities of organized society ; and in the end by which alone the exer- cise of either can be justified, to wit, some public service or use." Lowell v. Boston (1873), 111 Mass. 454, 462. " But railroads are always held to be built for public use, whether the right to take land, or the right to grant pecuniary aid to them, is consid- ered. . . . The building of the subway for the carriage of such passengers as pay the regular fare is therefore for a public use ; and it is within the constitutional power of the Legislature to order or sanction taxation for it." Price V. Crocker (1896), 166 Mass. 347, 361. SEC. III.] LEGISLATION. 31 Section 3. Legislation. MUNN V. ILLINOIS 94 U. S. 113. 1876.^ The Constitution of Illinois, adopted in 1870, contains the fol- lowing in reference to the inspection of grain, and the storage thereof in public warehouses: AETICLB XIIL— WAEEHOUSBS. " Section 1. All elevators or storehouses where grain or other property is stored for a compensation, whether the property stored be kept separate or not, are declared to be public warehouses." " Section 7. The general assembly shall pass laws for the inspec- tion of grain, for the protection of producers, shippers and re- ceivers of grain and produce." An act of the general assembly of Illinois, entitled " An Act to regulate public warehouses and the warehousing and inspection of grain, and to give effect to art. 13 of the Constitution of this State," approved April 35, 1871, provides in the second paragraph of sec- tion 15, as follows : " The maximum charge of storage and handling of grain, in- cluding the cost of receiving and delivering, shall be for the first thirty days or part thereof two cents per bushel, and for each fifteen days or part thereof, after the first thirty days, one-half of one cent per bushel; provided, however, that grain damp or liable to early damage, as indicated by its inspection when received, may be subject to two cents per bushel storage for the first ten days, and for each additional five days or part thereof, not exceeding one-half of one cent per bushel." Mk. Chief Justice Waite delivered the opinion of the court. The question to be determined in this case is whether the general assembly of Illinois can, under the limitations upon the legislative power of the States imposed by the Constitution of the United States, fix by law the maximum of charges for the storage of grain in warehouses at Chicago and other places in the State having not less than one hundred thousand inhabitants, "in which grain is stored in bulk, and in which the grain of different owners is mixed 1 The statement of facts has been abridged, parts of Mk. Chief Justice Waitb's opinion are omitted, and only one paragraph of Mk. Justice Field's quite lengthy dissenting opinion is reprinted. — Ed. 33 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I: together, or in which grain is stored in such a manner that the identity of different lots or parcels cannot be accurately preserved." It is claimed that such a law is repugnant — 1. To that part of sect. 8, art. 1, of the Constitution of the United States which confers upon Congress the power " to regulate commerce with foreign nations and among the several States ; " 2. To that part of sect. 9 of the same article which provides that ''no preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another ; " and 3. To that part of amendment 14 which ordains that no State shall " deprive any person of life, liberty, or property, without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws." We will consider the last of these objections first. Every statute is presumed to be constitutional. The courts ought not to declare one to be unconstitutional, unless it is clearly so. If there is doubt, the expressed will of the legislature should be sus- tained. The Constitution contains ho definition of the word "deprive," as used in the Fourteenth Amendment. To determine its significa- tion, therefore, it is necessary to ascertain the effect which usage has given it, when employed in the same or a like connection. While this provision of the amendment is new in the Constitution of the United States, as a limitation upon the powers of the States, it is old as a principle of civilized government. It is found in Magna Charta, and, in substance if not in form, in nearly or quite all the constitutions that have been from time to time adopted by the several States of the Union. By the Fifth Amendment, it was introduced into the Constitution of the United States as a limitation upon the powers of the national government, and by the Fourteenth, as a guaranty against any encroachment upon an acknowledged right of citizenship by the legislatures of the States. When the people of the United Colonies separated from Great Britain, they changed the form, but not the substance, of their government. They retained for the purposes of government all the powers of the ]3ritish Parliament, and through their State con- stitutions, or other forms of social compact, undertook to give prac- tical effect to such as they deemed necessary for the common good and the security of life and property. All the powers wliich they retained they committed to their respective States, unless in ex- press terms or by implication reserved to themselves. Subsequently, when it was found necessary to establish a national government for national purposes, a part of the powers of the States and of th'^ SEC. III.] LEGISLATION. 33 people of the States was granted to the United States and the people of the United States. This grant operated as a further limitation upon the powers of the States, so that now the governments of the States possess all the powers of the Parliament of England, except such as have been delegated to the United States or reserved by the people. The reservations by the people are shown in the prohi- bitions of the constitutions. When one becomes a member of society, he necessarily parts with some rights or privileges which, as an individual not affected by his relations to others, he might retain. " A body politic," as aptly defined in the preamble of the Constitution of Massachusetts, " is a social compact by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be gov- erned by certain laws for the common good." This does not con- fer power upon the whole people to control rights which are purely and exclusively private, Thorpe v. E. & B. Kailroad Co., 37 Vt. 143 ; but it does authorize the establishment of laws requiring each citizen to so conduct himself, and so use his own property, as not nnnecessarily to injure another. This is the very essence of goy- ernment, and has found expression in the maxim sic utere tuo ut alienum non Icedas. Prom this source come the police powers, which, as was said by Mr. Chief Justice Taney in the License Cases, 5 How. 583, " are nothing more or less than the powers of goverur ment inherent in every sovereignty, . . . that is to say, . . . the power to govern men and things." Under these powers the govern- ment regulates the conduct of its citizens one towards another, and the manner in which each shall use his own property, when such regulation becomes necessary for the public good. In their exercise it has been customary in England from time immemorial, and in this country from its first colonization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, innkeepers, &c,, and in so doing to fix a maximum of charge to be made for services rendered, accommodations furnished, and articles sold. To this day, statutes are to be found in many of the States upon some or all these subjects; and we think it has never yet been successfully contended that such legislation came within any of the constitutional prohibitions against interference with private property. With the Fifth Amendment in force. Congress, in 1820, conferred power upon the city of Washington " to regulate . . . the rates of wharf- age at private wharves, . . . the sweeping of chimneys, and to fix the rates of fees therefor, . . . and the weight and quality of bread," 3 Stat. 587, sect. 7; and, in 1848, "to make all necessary regulations respecting hackney carriages and the rates of fare of the same, and the rates of hauling by cartmen, wagoners, carmen, 34 BASES OF PUBLIC SEKVICE DUTIES. [CHAP. I. and draymen, and the rates of commission of auctioners/' 9 id. 224, sect. 2. From this it is apparent that, down to the time of the adoption of the Fourteenth Amendment, it was not supposed that statutes regulating the use, or even the price of the use, of private property necessarily deprived an owner of his property without due process of law. Under some circumstances they may, but not under all. The amendment does not change the law in this particular: it simply prevents the States from doing that which will operate as such a deprivation. This brings us to inquire as to the principles upon which this power of regulation rests, in order that we may determine what is within and what without its operative effect. Looking, then, to the common law, from whence came the right which the Consti- tution protects, we find that when private property is " affected with a public interest, it ceases to be juris privati only." This was said by Lord Chief Justice Hale more than two hundred years ago, in his treatise De Portibus Maris , 1 Harg. Law Tracts, 78, and has been accepted without objection as an essential element in the law of property ever since. Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has thus created. He may withdraw his grant by discontinuing the use; but, so long as he maintains the use, he must submit to the control.^ In later times, the same principle came under consideration in the Supreme Court of Alabama. That court was called upon, in 1841, to decide whether the power granted to the city of Mobile to regulate the weight and price of bread was unconstitutional, and it was contended that "it would interfere with the right of the citizen to pursue his lawful trade or calling in the mode his judgment might dictate ; " but the court said, " there is no motive . . . for this interference on the part of the legislature with the lawful actions of individuals, or the mode in which private property shall be enjoyed, unless such calling affects the public interest, or private property is employed in a manner which directly affects the body of the people. Upon this principle, in this State, tavern- keepers are licensed; . . . and the County Court is required, at z Quotations from Lord Hale's De Jure Maris with regard to ferries, and from the same author's De Portibus Maris with regard to public wharves, and from the opinions in Allnutt v. Inglis, supra, are omitted. — Ed. SEC. III.] LEGISLATION. 35 least once a year, to settle the rates of innkeepers. TJpon the same principle is founded the control which the legislature has always exercised in the establishment and regulation of mills, ferries, bridges, turnpike roads, and other kindred subjects." Mobile v. Yuille, 3 Ala. n. s. 140. Prom the same source comes the power to regulate the charges of common carriers, which was done in England as long ago as the third year of the reign of William and Mary, and continued until within a comparatively recent period. And, in the first statute we find the following suggestive preamble, to wit : — " And whereas divers wagoners and other carriers, by combina- tion amongst themselves, have raised the prices of carriage of goods in many places to excessive rates, to the great injury of the trade : Be it, therefore, enacted," &c. 3 W. & M. c. 12, § 24; 3 Stat, at Large (Great Britain), 481. Common carriers exercise a sort of public office, and have duties to perform in which the public is interested. New Jersey Kav. Co. V. Merchants' Bank, 6 How. 382. Their business is, therefore, " affected with a public interest," within the meaning of the doc- trine which Lord Hale has so forcibly stated. But we need not go further. Enough has already been said to show that, when private property is devoted to a public use, it is subject to public regulation. It remains only to ascertain whether the warehouses of these plaintifEs in error, and the business which is carried on there, come within the operation of this principle. Eor this purpose we accept as true the statements of fact con- tained in the elaborate brief of one of the counsel of the plaintifEs in error. Prom these it appears that " the great producing region of the West and JSTorthwest sends its grain by water and rail to Chicago, . where the greater part of it is shipped by vessel for transportation to the seaboard by the Great Lakes, and some of it is forwarded by railway to the Eastern ports. . . . Vessels, to some extent, are loaded in the Chicago harbor, and sailed through the St. Lawrence directly to Europe. . . . The quantity [of grain] received in Chicago has made it the greatest grain market in the world. This business has created a demand for means by which the immense quantity of grain can be handled or stored, and these have been found in grain warehouses, • which are commonly called elevators, because the grain is elevated from the boat or car, by machinery operated by steam, into the bins prepared for its reception, and elevated from the bins, by a like process, into the vessel or car which is to carry it on. . . . In this way the largest traffic between the citizens of the country north and west of Chicago and the citizens of the country lying on the Atlantic coast north 36 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. of Washington is in grain which passes through the elevators Of Chicago. In this way the trade in grain is carried on by the in- habitants of seven or eight of the great States of the West with four or iive of the States lying on the sea-shore, and forms the largest part of inter-state commerce in these States. The grain warehouses or elevators in Chicago are immense structures, holding from 300,000 to 1,000,000 bushels at one time, according to size. They are divided into bins of large capacity and great strength. . . . They are located with the river harbor on one side and the railway tracks on the other; and the grain is run through them from car to vessel, or boat to car, as may be demanded in the course of business. It has been found impossible to preserve each owner's grain separate, and this has given rise to a system of inspection and grading, by which the grain of different owners is mixed, and receipts issued for the number of bushels which are negotiable, and redeemable in like kind, upon demand. This mode of conducting the business was inaugurated more than twenty years ago, and has grown to immense proportions. The railways have found it impracticable to own such elevators, and public policy forbids the transaction of such business by the carrier; the owner- ship has, therefore, been by private individuals, who have embarked their capital and devoted their industry to such business as a private pursuit." In this connection it must also be borne in mind that, although in 1874 there were in Chicago fourteen warehouses adapted to this particular business, and owned by about thirty persons, nine business firms controlled them, and that the prices charged and received for storage were such " as have been from year to year agreed upon and established by the different elevators or warehouses in the city of Chicago, and which rates have been annually published in one or more newspapers printed in said city, in the month of January in each year, as the established rates for the year then next ensuing such publication." Thus it is apparent that all the elevat- ing facilities through which these vast productions " of seven or eight great States of the West" must pass on the way "to four or five of the States on the seashore " may be a " virtual " monopoly. Under such circumstances it is difiicult to see why, if the com- mon carrier, or the miller, or the ferryman, or the innkeeper, or the wharfinger, or the baker, or the cartman, or the hackney- coachman, pursues a public employment and exercises "a sort of public office," these plaintiffs in error do not. They stand, to use again the language of their counsel, in the very "gateway of commerce," and take toll from all who pass. Their business most certainly " tends to a common charge, and is become a thing SEC. III.] ~ LEGISLATION. 37 of public interest and use." Every bushel of grain for its passage " pays a toll, which is a common charge," and, therefore, according to Lord Hale, every such warehouseman " ought to be under public regulation, viz., that he . . . take but reasonable toll." Certainly, if any business can be clothed "with a public interest, and cease to he juris privati only," this has been. It may not be made so by the operation of the Constitution of Illinois or this statute, but it is by the facts. ■ Neither is it a matter of any moment that no precedent can be found for a statute precisely like this. It is conceded that the business is one of recent origin, that its growth has been rapid, and that it is already of great importance. And it must also be conceded that it is a business in which the whole public has a direct and positive interest. It presents, therefore, a case for the application of a long-known and well-established principle in social science, and this statute simply extends the law so as to meet this new development of commercial progress. There is no attempt to compel these owners to grant the public an interest in their property, but to declare iheir obligations, if they use it in this particular manner. '"- , "^ ■- It matters not in this case that these planitiffs in error had built their warehouses and established; their btisiness be|ore the regula- tions complained of were adopted."'' W,liat they did was .from the beginning subject tq^the powe/of ,the body politic to require them to conform to such regulations asimight be established by the proper authorities for the common good. They entered lipon their busi- ness and provided themselves withfthe meahs to carry it on subject to this condition. If they djd ,;not wish to subinit tjiemselves to such interference, they should not have clothed the ptibl^c with an interest in their concerns. The sajhW j>jincipfe applies to them that does to the proprietor of a hackney-cai*^ige, and asj-to him it has never been supposed that he was exempt from regulating statutes or ordinances because he had purchased his horses and carriage and established his business before the statute or the ordinance was adopted. It is insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed with a public interest, and that what is reasonable is a judicial and not a legislative question' As has already been shown, the practice has been otherwise. In countries where the common law prevails, it has been customary from time immemorial for the legislature to declare what shall be a reasonable compensation under such circumstances, or, perhaps more properly speaking, to fix a maximum beyond which any charge made 38 BASES OF PUBLIC SEEVICE DUTIES. [pHAP. I. would be unreasonable. Undoubtedly, in mere private contracts, relating to matters in which the public has no interest, what is reasonable must be ascertained judicially. But this is because the legislature has no control over such a contract. So, too, in matters which do affect the public interest, and as to which legislative control may be exercised, if there are no statutory regulations upon the subject, the courts must determine what is reasonable. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge, as one of the means of regulation, is implied. In fact, the common-law rule, which requires the charge to be reasonable, is itself a regulation as to price. Without it the owner could make his rates at will, and compel the public to yield to his terms, or forego the use. But a mere common-law regulation of trade or business may be changed by statute. A person has no property, no vested interest, in any rule of the common law. That is only one of the forms of municipal law, and is no more sacred than any other. Eights of property which have been created by the common law cannot be taken away without due process; but the law itself, as a rule of conduct, may be changed at the will, or even at the whim, of the legislature, unless prevented by constitutional limitations. Indeed, the great office of statutes is to remedy defects in the common law as they are developed, and to adapt it to the changes of time and circumstances. To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one. We know that this is a power which may be abused; but that is no argument against its existence. For protection against abuses by legislatures the people must resort to the polls, not to the courts.^ Judgment affirmed* Mr. Justice Field and Me. Justice Strong dissented. ' Mr. Justice Field. It is true that the legislation which secures to all protection in their rights, and the equal use and enjoyment 3 The rest of this opinion is devoted to defendant's contention that the statute in question is repugnant to section 8, article 1, and to section 9 of the Constitution of the United States. These contentions were held not to be valid. — Ed. * Mr. Justice Bradley, who concurred with the Chief Justice, said later of Munn v. Illinois : " The inquiry there was as to the extent of the police power in cases where the public interest is affected ; and we held that when an employment or business becomes a matter of such public interest and importance as to create a common charge or burden upon the citizens ; in other words, when it becomes a practical monopoly, to which the citizen SEC. III.] LEGISLATION. 39 of their property, embraces an almost infinite variety of subjects. Whatever affects the peace, good order, morals, and health of the community, comes within its scope; and every one must use and enjoy his property subject to the restrictions which such legislation imposes. What is termed the police power of the state, which, from the language often used respecting it, one would suppose to be an undefined and irresponsible element in government, can only interfere with the conduct of individuals in their intercourse with €ach other, and in the use of their property, so far as may be re- quired to secure these objects. The compensation which the owners of property, not having any special rights or privileges from the government in connection with it, may demand for its use, or for their own services in union with it, forms no element of consideration in prescribing regulations for that purpose. If one construct a building in a city, the State, or the municipality exercising a dele- gated power from the State, may require its walls to be of sufficient thickness for the uses intended; it may forbid the employment of inflammable materials in its construction, so as not to endanger the safety of his neighbors; if designed as a theatre, church, or public hall, it may prescribe ample means of egress, so as to afford facility for escape in case of accident; it may forbid the storage in it of powder, nitro-glycerine, or other explosive material; it may require its occupants daily to remove decayed vegetable and animal matter, which would otherwise accumulate and engender disease; it may exclude from it all occupations and business calculated to disturb the neighborhood or infect the air. Indeed, there is no end of regulations with respect to the use of property which may not be legitimately prescribed, having for their object the peace, good order, safety, and health of the community, thus securing to all the equal enjoyment of their property; but in establishing these regu- lations it is evident that compensation to the owner for the use of his property, or for his services in union with it, is not a matter of any importance: whether it be one sum or another does not affect the regulation, either in respect to its utility or mode of enforcement. One may go, in like manner, through the whole round of regulations authorized by legislation. State or municipal, under what is termed the police power, and in no instance will he find that the compensation of the owner for the use of his property has any influence in establishing them. It is only where some right or privilege is conferred by the government or municipality upon the owner, which he can use in connection with his property, or by is compelled to resort, and by means of which a tribute can be exacted from the; community, it is subject to regulation by the legislative power." Sink- ing Fund Cases (1878), 99 U. S. 700, 745. 40 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. means of which the use of his property is rendered more Taluable to him, or he thereby enjoys an advantage over others, that the com- pensation to be received by him becomes a legitimate matter of regulation. Submission to the regulation of compensation in such cases is an implied condition of the grant, and the State, in exer- cising its power of prescribing the compensation only determines - the conditions upon which its concession shall be enjoyed. When the privilege ends, the power of regulation ceases. Mr. Justice Strong. When the judgment in this case was an- nounced by direction of a majority of the court, it was well known by all my brethren that I did not concur in it. It had been my intention to prepare a dissenting opinion, but I found no time for the preparation, and I was reluctant to dissent in such a case without stating my reasons. Mr. Justice Field has now stated, them as fully as I can, and I concur in what he has said.^ Kj PEOPLE V. BUDD. K^ 117 N. Y. 1. 1889.^ Andrews, J. The main question upon this record is, whether the legislation fixing the maximum charge for elevating grain, contained in the act, chapter 581 of the Laws of 1888, is valid and constitutional. The act, in its first section, fixes the maximum charge for receiving, weighing and discharging grain by means of floating and stationary elevators and warehouses iii this state, at five-eighths of one cent a bushel, and for trimming and shoveling to the leg of the elevator in the process of handling grain by means of elevators, " lake vessels or propellers, the ocean vessels or steam- ships, and canal boats," shall, the section declares, only be required to pay the actual cost. The second section makes a violation of the act a misdemeanor, punishable by a fine of not less than $250. The third section gives a civil remedy to a party injured by a violation of the act. The fourth section excludes from the operation of the act any village, town, or city having less than one hundred and thirty thousand population. The defendant, the manager of a stationary elevator in the city of Buffalo, on the 19th day of Sep- tember, 1888, exacted from the Lehigh Valley Transportation Company for elevating, raising and discharging a cargo of corn from a lake propeller at his elevator, the sum of one cent a bushel, and 5 Two judges also dissented when this case was before the Supreme Court of Illinois. Munn v. People (1873), 69 111. 80. 1 The arguments of counsel, and parts of the opinion of Andrews, J., are omitted, as well as the dissenting opinions of Geay and Peckham, JJ. SEC. III.] LEGISLATION. 41 for shoveling to the leg of the elevator, the carrier was charged and compelled to pay four dollars for each thousand bushels. The shoveling of grain to the leg of an elevator at the port of Buffalo is now performed pursuant to an arrangement made since the passage of the act of 1888, by a body of men known as the Shovelers' Union, who pay the elevator one dollar and seventy-five cents a thousand bushels, for the use of the steam shovel, a part of the machinery connected with the elevator, operated by steam, and who for their services and the expense of the steam-shovel charge the carrier for each thousand bushels of grain shoveled the sum of four dollars. The defendant was indicted for a violation of the act of 1888. The indictment contains a single count charging a violation of the first section in two particulars, viz. : In exacting more than the legal rate for elevating the cargo, and exacting more than the actual cost for shovelling the grain to the leg of the elevator. Before reaching the main question there is a subordinate question to be considered. Passing this point, we come to the main question, whether legis- lative power under the State Constitution exists in the legislature to prescribe a maximum charge for elevating grain by stationary elevators owned by individuals or corporations, who have appropri- ated their property to this use and are engaged in this business. The ascertainment of the exact boundaries of legislative power under the rigid constitutional system of the American states is in many cases attended with great perplexity and difficulty. The People have placed in the Constitution a variety of restrictions on legislative power, and chief among them is that which ordains that no person shall be deprived of life, liberty or property without due process of law. The protection of private property is one of the main purposes of government, but no one holds his property by such an absolute tenure as to be freed from the power of the legislature to impose restraints and burdens required by the public good, or proper and necessary to secure the equal rights of all. This power of government, the power as expressed by Taney, C. J. (5 How. 583), "inherent in every sovereignty, the power to govern men and things," is not, however, an uncontrollable or despotic authority, subject to no limitation, exercisable with or without reason in the discretion or at the whim or caprice of the legislative body. But within its legitimate domain the power is original, absolute and indefeasible. It vested in the legislative department of the government at its creation, without affirmative grant or definition, as an essential political power and attribute of government, and personal rights and rights of property are sub- 43 BASES OF PUBLIC SERVICE DUTIES. [OHAP. I. ordinate to this supreme power acting within its appropriate sphere. It may be exercised so as to impair the value of property or limit or restrict the uses of property, yet in this there is no infringement of the constitutional guaranty, because that guaranty is not to be construed as liberating persons or property from the just control of the laws. It was designed for the protection of personal and private rights against incroachments by the legislative body not sanctioned by the principles of civil liberty as held and understood when the Constitution was adopted. The boundary of legislative power in the enactment of laws in the assumed exercise of this power of sovereignty, which injuriously affects per- sons or property, is indistinct, and no rule or definition can be formulated under which, in all cases, it can be readily determined whether a statute does or does not transgress the fundamental law. The power of the British parliament is not the test of legislative power under the written Constitution of the American States. But the great landmarks of civil liberty, embodied in our State Constitutions, were established by our English ancestors, and upon questions such as the one now before us we may study with profit the principles and practice of the; law of England. When a statute is challenged as overstepping the boundaries of legislative power, the object sought to be obtained by the legislature, the nature and functions of government, the principles of the common law, the practice of legislation and legal adjudications are pertinent and important considerations and elements in the determination of the controversy. The act in question regulates the price of elevating grain, and the regulation affects the compensation which may be lawfully de- manded for labor and personal services, as well as for the use of property. It fixes a maximum charge for labor and the use of property when combined, as they of necessity are, in the business of elevating grain. The operation of the statute is by its terms limited to the business carried on in cities and towns having a population of not less than one hundred and thirty thousand, practically to the cities of Buffalo, New York and Brooklyn. The circumstances, also, substantially restrict the application of the act to grain brought to Buffalo from the upper lakes by water, and there, by means of elevators, transshipped into canal boats and trans- ported through the Erie canal and Hudson river to the harbor of New York and there discharged by elevators into warehouses or ocean vessels. The business of transporting grain by the lakes, and thence by the Erie canal to New York, is one of great magni- tude. The case shows that about one hundred and twenty mil- lions of bushels of grain annually come to Buffalo from the west. SEC. III.] LEGISLATION. 43 The business of elevating grain at that point is mainly con- nected with lake and canal transportation. It is shown by official records that the receipts of grain at New York in the year 1887, by way of the Erie canal and Hudson river, during the season of canal navigation, exceeded forty-six million bushels, an amount very largely in excess of the amount received during the same period by rail and by river and coastwise vessels. The elevation of this grain from lake vessels to canal boats takes place at Buffalo, where the case shows there are thirty or forty elevators, stationary and floating. How many of these elevators are actually employed in the business does not appear. The record is silent as to many facts which might tend to explain the relation of this business as actually conducted, to the public interests. It is asserted that a combination exists, and has for several years existed, between the elevator owners to maintain excessive charges, by fixing a uniform tariff and pooling the earnings, and dividing them ratably among all of the elevator owners, although but a part of the elevators are actually operated. (See report of the committee on foreign commerce of the Chamber of Commerce of New York, made in April, 1885.) There is no evidence in the record as to the locations in the port of Buffalo suitable and available for stationary elevators. It is evident that they must be placed where they can be reached by both lake vessels and canal boats, and it may reasonably be assumed that but a limited area (not devoted to other purposes of commerce) is available for the erection of stationary elevators. In determining whether the legislature can lawfully regulate and fix the charge for elevating grain by private elevators, it must be conceded that the uses to which a man may devote his property, the price which he may charge for such use, how much he shall demand or receive for his labor, and the methods of conducting his business are, as a general rule, not the subject of legislative regulation. These are a part of our liberty, of which, under the constitutional guaranty, we cannot be deprived. We have no hesi- tation in declaring that unless there are special conditions and circumstances which bring the business of elevating grain within principles which, by the common law and the practice of free governments, justify legislative control and regulation in the par- ticular case, the statute of 1888 cannot be sustained. That no general power resides in the legislature to regulate private business, prescribe the conditions under which it shall be conducted, fix the price of commodities or services, or interfere with freedom of contract, we cannot doubt. The merchant and manufacturer, the artisan and laborer, under our system of government, are left to 44 BASES OF PUBLIC SEKVICE DUTIES. [CHAP. I. pursue and provide for their own interests in their own way, un- trammeled by burdensome and restrictive regulations which, how- ever common in rude and irregular times, are inconsistent with constitutional liberty. The justification of the statute of Illinois regulating the charge for elevating and storing grain in the elevators of that state was placed in the Munn Case upon that principle of the common law stated by Lord Hale in his treatise De Portihus Maris (1 Harg. Law Tracts, 78), that when private property is " affected by a pub- lie interest it ceases to be juris privati only." The principle of the decision is stated with great perspicuity by Bradley, J., in his opinion in the Sinking Fund Cases (supra). He says: "The inquiry there was as to the extent of the police power where the public interest is afEected; and we held that where an employment becomes a matter of such public interest and importance as to create a common charge or burden upon the citizen, in other words, when it becomes a practical monopoly, to which the citizen is com- pelled to resort and by means of which a tribute can be exacted from the community, it is subject to regulation by the legislative power." The elevators in Chicago had no legal monopoly in the business of elevating grain. The business was open to all comers, but the location of the elevators, their connection with the railroads, on which most of the grain from the grain-producing states and territories of the west and northwest was brought to Chicago, the necessity of using them in the transfer, storing and transhipment of grain, created, as was held by the court, a virtual and practical monopoly which afEected the business and property with a public interest and subjected them to regulation by law. The application of the language of Lord Hale and of the principle that private property may, by its uses, cease to be juris privati strictly, and become afEected by a public interest, to the business of elevating grain in Chicago, was combated and denied by Field, J., in his very able and forcible dissenting opinion. " It is," he declared, " only where- some privilege in the bestowment of the government is enjoyed in connection with (private) property, that it is affected by a public interest in any proper sense of the terms. It is the public privilege connected with the use of the property which creates the public interest in it." There can be no doubt that where the government confers a special privilege upon a citizen, not of common right, it may annex such conditions upon its enjoyment as it sees fit. Nor can there be any question that where an individual has a legal monopoly to use his property for a public purpose, and the public have an interest in the use, he is subject to an obligation, cast upon him by the common law to SEC. III.] LEGISLATION-. 45 demand only a reasonable compensation for the use. This is stated with great clearness by Lord Ellenborough in Allnutt v. Inglis ( 12 East 527). " There is," he said, " no doubt that the general prin- ciple is favored both in law and justice, that every man may fix what price he pleases upon his own property or the use of it: but if, for a particular purpose, the public have a right to resort to his premises and make use of them, and he have a monopoly in them for that purpose, if he will take the benefit of that mo- nopoly, he must as an equivalent perform the duty attached to it on reasonable terms." But the question is whether the power of the legislature to regulate charges for the use of property and the rendition of services connected with it, depends in every case upon the circumstance that the owner of the property has a legal monopoly or privilege to use the property for the particular purpose, or has some special protection from the government, or some peculiar benefit in the prosecution of his business. It is said that the control which the legislature is permitted to exercise over the business of common carriers is a survival of that class of legislation which in former times extended to the details of personal conduct and assumed to regulate the private affairs and business of men in the minutest particulars. This is true. But it has survived because it was entitled to survive. By reason of the changed conditions of society and a truer appreciation of the proper functions of government, many things have fallen out of the range of the police power as formerly recognized, the regulation of which, by legislation, would now be regarded as invading personal liberty. But society could not safely surrender the power to regulate by law the business of common carriers. Its value has been infinitely increased by the conditions of modern commerce, under which the carrying trade of the country is, to a great extent, absorbed by corporations, and, as a check upon the greed of these consolidated interests, the legislative power of regulation is demanded by imperative public interests. The same principle upon which the control of common carriers rests has enabled the state to regulate in the public interest the charges of telephone and telegraph companies, and to make the telephone and telegraph, those important agencies of commerce, subservient to the wants and necessities of society. These regulations in no way interfere with a rational liberty — liberty regulated by law. There are elements of publicity in the business of elevating grain which peculiarly affect it with a public interest. They are found in the nature and extent of the business, its relation to the com- merce of the state and country, and the practical monopoly enjoyed by those engaged in it. The extent of the business is shown by 46 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. the facts to which we have referred. A large proportion of the surplus cereals of the country passes through the elevators at Buffalo and finds its way through the Erie canal and Hudson river to the seaboard at New York, from whence they are distributed to , the markets of the world. The business of elevating grain is an incident to the business of transportation. The elevators are in- dispensable instrumentalities in the business of the common carrier. It is scarcely too much to say that, in a broad sense, the elevators perform the work of carriers. They are located upon or adjacent to the waters of the state, and transfer from the lake vessels to the canal boats, or from the canal boats to the ocean vessels, the cargoes of grain, and thereby perform an essential service in transportation. It is by means of the elevators that transportation of grain by water from the upper lakes to the seaboard is rendered possible. It needs no argument to show that the business of elevat- ing grain has a vital relation to commerce in one of its most impor- tant aspects. Every excessive charge made in the course of transpor- tation of grain is a tax on commerce, and the public have a deep interest that no exorbitant charges shall be exacted at any point upon the business of transportation. The third element of publicity which tends to distinguish the business of elevating grain from general commercial pursuits, is the practical monopoly which is or may be connected with its prosecution. In the city of Buffalo the elevators are located at the junction of the canal with Lake Erie. The owners of grain are compelled to use them in transporting cargoes. The area upon which it is practicable to erect them is limited. The struc- tures are expensive, and the circumstances afford great facility for combination among the owners of elevators to fix and maintain an exorbitant tariff of charges and to bring into the combination any new elevator which may be erected and employ it or leave it unemployed, but in either case permit it to share in the aggregate earnings. It is evident that if such a combination, in fact, exists, the principle of free competition in trade is excluded. The precise object of the combination would be to prevent competition. The result of such a combination would necessarily be to subject the lake vessels and canal boats to any exaction which the elevator owners might see fit to impose for the service of the elevator, and the elevator owners would be able to levy a tribute on the com- munity, the extent of which would be limited only by their discretion. It is upon these various circumstances that the court is called upon to determine whether the legislature may interfere and regu- late the charges of elevators. It is purely a question of legislative power. If the power to legislate exists, the court has nothing to SEC. III.] LEGISLATION. 47 do with the policy or wisdom of the interference in the particular case, or with the question of the adequacy or inadequacy of the com- pensation authorized. "This court," said Chase, Ch. J., in the License Tax Cases (5 Wall. 469), "can know nothing of public policy, except from the Constitution and the laws, and the course of administration and decision. It has no legislative powers. It cannot amend or modify any legislative act. It cannot examine questions as expedient or inexpedient, as politic or impolitic. Con- siderations of that sort must be addressed to the legislature. Ques- tions of pohcy there are concluded here." Can it be said, in view of the exceptional circumstances, that the business of elevating grain is not " affected with a public in- terest," within the language of Lord Hale, or that the ease does not fall within the principle which permits the legislature to regu- late the business of common carriers, ferrymen, innkeepers, hack- men and interest on the use of money? It seems to us that speculative, if not fanciful, reasons have been assigned to account for the right of legislative regulation in these and other cases. The underlying principle is that business of certain kinds holds such a peculiar relation to the public interests that there is super- induced upon it the right of public regulation. We rest the power of the legislature to control and regulate elevator charges on the nature and extent of the business, the existence of a virtual mo- nopoly, the benefit derived from the canal, creating the business and making it possible, the interest to trade and commerce, the rela- tion of the business to the prosperity and welfare of the state, and the practice of legislation in analogous cases. These circum- stances, collectively, create an exceptional case and Justify legis- lative regulation. The judgment should be affirmed.^ 2 This decision was affirmed by the Supreme Court of the United States. Budd V. New York (1891), 143 U. S. 517. Mr. Justice Blatchford, in delivering the opinion of the court, said at the outset that " the main ques- tion involved in this case is whether this court will adhere to its decision in Munn v. Illinois." After reviewing the opinion of Andrews, J., in Peo- ple V. Budd, he said : " We regard these views which we have referred to as announced by the Court of Appeals of New York, so far as they support the validity of the statute in question, as sound and just." Me. Justice BiATCHFOBD Concluded by reviewing the opinion of Mr. Chief Justice Waite in Munn v. Illinois, and the cases in which that opinion had been followed or approved. — Ed. Mr. Justice Brewer wrote the following dissenting opinion, which was concurred in by Mr. Justice Field and Mk. Justice Brown : " I dissent from the opinion and judgment in these cases. The main proposition upon which they rest is, in my judgment, radically unsound. It is the doctrine of Munn v. Illinois, 94 U. S. 113, reaffirmed. That is, as declared in the syllabus and stated in the opinion in that case : ' When, therefore, one devotes his property to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent, of the interest he has thus created.' The elaborate discussions of the- ques- tion in the dissenting opinions in that case, and the present cases when 48' BASES OF PUBLIC SERVICE DUTIES. [CHAP. 1. under consideration in the Court of Appeals of the State of New York, seem to forbid anything more than a general declaration of dissent. The vice of the doctrine is, that it places a public interest in the use of property upori the same basis as a public use of property. Property is devoted to a public use when, and only when, the use is one which the public in its organized capacity, to wit, the State, has a right to create and maintain, and, there- fore, one which all the public have a right to demand and share in. The use is public, because the public may create it, and the individual creating it is doing thereby and pro tanto the work of the State. The creation of all highways is a public duty. Railroads are highways. The State may build them. If an individual does that work, he is pro tanto doing the work of the State. He devotes his property to a public use. The State doing the work fixes the price for the use. It does not lose the right to fix the price, because an individual voluntarily undertakes to do the work. But this public use is very different from a public interest in the use. There is scarcely any property in whose use the public has no interest. No man liveth unto himself alone, and no man's property is beyond the touch of another's welfare. Everything, the manner and extent of whose use affects the well-being of others, is property in whose use the public has an interest. Take, for instance, the only store in a little village. All the public of that village are interested in it; interested in the quantity and quality of the goods on its shelves, and their prices, in the time at which it opens and closes, and, generally, in the way in which it is managed ; in short, interested in the use. Does it follow that that village nublic has a right to control these matters? That which is true of the single smalt store in the village, is also true of the largest mercantile establishment in the great city. The magnitude of the business does not change the prin- ciple. There may be more individuals interested, a larger public, but still the public. The country merchant who has a small warehouse in which the neighboring farmers are wont to store their potatoes and grain prepara- tory to shipment occupies the same position as the proprietor of the largest elevator in New York. The public has in each case an interest in the use, and the same interest, no more and no less. I cannot bring myself to be- lieve that when the owner of property has by his industry, skill and money made a certain piece of his property of large value to many, he has thereby deprived himself of the full dominion over it which he had when it was of comparatively little value ; nor can I believe that the control of the public over one's property or business is at all dependent upon the extent to which the public is benefited by it. " Surely the matters in which the public has the most interest, are the supplies of food and clothing ; yet can it be that by reason of this interest the State may fix the price at which the butcher must sell his meat, or the vendor of boots and shoes his goods? Men are endowed by their Creator with certain unalienable rights, ' life, liberty and the pursuit of happiness ' ; and to ' secure,' not grant or create, these rights governments are instituted. That property which a man has honestly acquired he retains full control of, subject to these limitations : First, that he shall not use it to his neighbor's injury, and that does not mean that he must use it for his neighbor's benefit ; second, that if he devotes it to a public use, he gives to the public a right to control that use ; and, third, that whenever the public needs require, the public may take it upon payment of due compen- sation. " It is suggested that there is a monopoly, and that that justifies legisla- tive interference. There are two kinds of monopoly ; one of law, the other of fact. The one exists when exclusive privileges are granted. Such a monopoly, the law which creates alone can break ; and being the creation of law justifies legislative control. A monopoly of fact any one can break, and there is no necessity for legislative interference. It exists where any one by his money and labor furnishes facilities for business which no one else has. A man puts up in a city the only building suitable for oflices. He has therefore a monopoly of that business; but it is a monopoly of fact, which any one can break who, with like business courage puts his means into a similar building. Because of the monopoly feature, subject thus easily to be broken, may the legislature regulate the price at which he will lease his oflBces? So, here, there are no exclusive privileges given to these elevators. They are not upon public ground. If the business is profitable, any one can build another; the field is open for all the elevators, and all the competition that may be desired. If there be a monopoly, it is one of fact and not of law, and one which any individual can break. SEC. III.] LEGISLATION. 49 BEASS f. ISrOETH DAKOTA. 153 U. S. 391. 1894.1 Me. Justice Shiras delivered the opinion of the court. The legislature of the State of North Dakota, by an act ap- proved March 7, 1891, c. 126, Laws of 1891, p. 331, and entitled " An act to regulate grain warehouses and the weighing and handling of grain, and defining the duties of the railroad commissioners in relation thereto," enacted, in the fourth section thereof, that " all buildings, elevators, or warehouses in this State, erected and oper- ated, or which may hereafter be erected and operated by any per- son or persons, association, copartnership, corporation, or trust, for the purpose of buying, selling, storing, shipping, or handling grain for profit, are hereby declared public warehouses, and the per- son or persons, association, copartnership, or trust owning or operat- ing said building or buildings, elevator or elevators, warehouse or warehouses, which are now or may hereafter be located or doing business within this State, as above described, whether said owners or operators reside within this State or not, are public warehouse- men within the meaning of this act, and none of the provisions of this act shall be construed so as to permit discrimination with reference to the buying, receiving, and handling of grain of standard grades, or in regard to parties offering such grain for sale, storage, or handling at such public warehouses, while the same are in operation ; " and in the fifth section, " that the proprietor, lessee, or manager of any public warehouse or elevator in this State shall " The paternal theory of government is to me odious. The utmost pos- sible liberty to the individual, and the fullest possible protection to him and his property, is both the limitation and duty of government. If it may regu- late the price of one service, which is not a public service, or the compen- sation for the use of one kind of property which is not devoted to a public use, why may it not with equal reason regulate the price of all service, and the compensation to be paid for the use of all property? And if so, ' Looking Backward ' is nearer than a dream." " But, as I said, I do not care to enter into any extended discussion of the matter. I believe the time is not distant when the evils resulting from this assumption of a power on the part of government to determine the compensation a man may receive for the use of his property, or the per- formance of his personal services, will become so apparent tliat the courts will hasten to declare that government can prescribe compensation only when it grants a special privilege, as in the creation of a corporation, or when the service which is rendered is a public service, or the property is in fact devoted to a public use. " Me. Justice Field and Me. Justice Beown concur with me in this dissent." 1 The statement of facts, as given in the report, is not here reprinted, and parts of the opinions of Me. Justice Shieas and Me. Justice Beewek are omitted. — Ed. 50 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. file with the railroad commissioners of the State a bond to the State of North Dakota, with good and sufficient sureties, to be approved by said commissioners of railroads, in the penal sum of not less than $5000 nor more than $75,000, in the discretion of said commissioners, conditioned for the faithful performance of duty as public warehousemen, and a compliance with all the laws of the State in relation thereto ; " and in the eleventh section thereof, " the charges for storing and handling of grain shall not be greater than the following schedule: Por receiving, elevating, insuring, delivering, and twenty days' storage, two cents per bushel. Storage rates, after the first twenty days, one-half cent for each fifteen days or fraction thereof, and shall not exceed five cents for six months. The grain shall be kept insured at the_expense of the warehousemen for the benefit of the owner;" and by the twelfth section it is provided that " any person, firm, or association, or any representative thereof, who shall fail to do and keep the require- ments as herein provided, shall be deemed guilty of a misdemeanor, and shall, on conviction thereof, be subject to a fine of not less than two hundred dollars nor more than one thousand dollars, and be liable in addition thereto to imprisonment for not more than one year in the state penitentiary, at the discretion of the court." In October, 1891, in the District Court of the Second Judicial District of the State of North Dakota, in proceedings the nature of which sufficiently appears in the previous statement of facts,^ 2 Brass owned and operated a grain elevator in the village of Grand Harbor, North Dakota, and Stoeser owned a farm adjoining the village. / on which in the year 1891 he raised about 4,000 bushels of wheat. On September 30, 1891, Stoeser applied to store a part of his wheat-crop for the compensation fixed by the statute, which Brass refused to accept for storage unless paid therefor at a rate in excess of that fixed by the statute. Upon this refusal Stoesser filed in the District Court of Ramsay County, North Dakota, a petition for an alternative writ of mandamus. This was granted. To this writ Brass made return by answer, admitting the truth of the facts pleaded, but setting forth that in North Dakota there are about six hundred grain elevators operated by about one hundred and twenty-five independent owners; that there are from two to ten such elevators at every station in the State from which grain is shipped, and that property suit- able for such elevators is unlimited and easily procurable; that at Grand Harbor there are three grain elevators independently owned and operated ; that defendant's elevator is small, having a capacity of about 30,000 bushels ; that defendant's main business is that of buying and selling grain, to which storing is a mere incident ; that in some seasons there is space in defend- ant's elevator in excess of that used for defendant's grain, but that at other times defendant's elevator is not large enough to hold all of his own grain ; that to compel defendant to store grain for all applicants would ruin his own business ; that defendant refused to comply with the statute of North Dakota because it deprived him of his liberty and property with- out due process of law, and denies to him the equal protection of the laws, and amounts to a regulation of commerce among the States. To this return Stoeser interposed a general demurrer, which was sustained, and Brass electing in open court to stand on his return, a peremptory writ of mandamus was allowed. From this judgment an appeal was taken to the Supreme Court of North Dakota, which court affirmed the order and judgment of the District Court. — Ed. SEC. III.] LEGISLATION. 51 the validity of this statute was sustained, and the judgment of that court was, on error, duly affirmed by the Supreme Court of the State. Brass v. North Dakota, 52 N. W. Eep. 408. In the cases thus brought to this court from the States of Illinois and New York, we were asked to declare void statutes regulating the affairs of grain warehouses and elevators within those States, and held valid by their highest courts, because it was claimed that such legislation was repugnant to that clause of the eighth section of article 1 of the Constitution of the United States, which confers upon Congress power to regulate commerce with foreign nations and among the several States, and to the Fourteenth Amendment, which ordains that no State shall deprive any person of life, liberty, or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. In the ease now before us the same contentions are made, but we are not asked to review our decisions made in the previous cases. Indeed, their soundness is tacitly admitted in the briefs and argument of the counsel of the plaintiff in error. But it is said that those cases arose out of facts so peculiar and exceptional, and so different from those of the present case, as to render the reason- ing there used, and the conclusions reached, now inapplicable. The concession, then, is that, upon the facts found to exist by the legislatures of Illinois and New York, their enactments were by the courts properly declared valid, and the contention is that the facts upon which the legislature of North Dakota pro- ceeded, and of which we can take notice in the present case, are so different as to call for the application of other principles, and to render an opposite conclusion necessary. The differences in the facts of the respective cases, to which we are pointed, are mainly as follows: In the first place, what may be called a geographical difference is suggested, in that the operation of the Illinois and New York statutes is said to be restricted to the city of Chicago in the one case, and to the cities of Buffalo, New York, and Brooklyn in the other, while the North Dakota statute is applicable to the territory of the entire State. It is, indeed, true that while the terms of the Illinois and New York statutes embrace in both cases the entire State, yet their behests are restricted to cities having not less than a prescribed number of inhabitants, and that there is no such restriction in the North Dakota law. Upon this it is argued that the statutes of Illinois and New York are intended to operate in great trade centres, where, on account of the business being localized in the hands of a few persons in close proximity to each other, great opportunities for combina- 53 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. tions to raise and control elevating and storage charges are afforded, while the wide extent of the State of North Dakota and the small population of its country towns and villages are said to present no such opportunities. The considerations mentioned are obviously addressed to the legislative discretion. It can scarcely be meant to contend that the statutes of Illinois and New York, valid in their present form, would become illegal if the law makers thought fit to repeal the clauses limiting their operation to cities of a certain size, or that the statute of North Dakota would at once be validated if one or more of her towns were to reach a population of one hundred thousand, and her legislature were to restrict the operation of the statute to such cities. Again, it is said that the modes of carrying on the business of elevating and storing grain in North Dakota are not similar to those pursued in the Eastern cities; that the great elevators used in transshipping grain from the Lakes to the railroads are essential ; and that those who own them, if uncontrolled by law, could extort such charges as they pleased; and great stress is laid upon ex- pressions used in our previous opinions, in which this business, as carried on at Chicago and Buffalo, is spoken of as a practical monopoly, to which shippers and owners of grain are compelled to resort. The surroundings in an agricultural State, where land is cheap in price and limitless in quantity, are thought to be widely different, and to demand different regulations. These arguments are disposed of, as we think, by the simple observation, already made, that the facts rehearsed are matters for those who make, not for those who interpret, the laws. When it is once admitted, as it is admitted here, that it is competent for the legislative power to control the business of elevating and storing grain, whether carried on by individuals or associations, in cities of one size and in some circumstances, it follows that such power may be legally exerted over the same business when carried on in smaller cities and in other circumstances. It may be con- ceded that that would not be wise legislation which provided the same regulations in every case, and overlooked differences in the facts that called for regulations. But, as we have no right to revise the wisdom or expediency of the law in question, so we would not be justified in imputing an improper exercise of discretion to the legislature of North Dakota. It may be true that, in the cases cited, the judges who expressed the conclusions of the court entered, at some length, into a defence of the propriety of the laws which they were considering, and that some of the reasons given for sustaining them went rather to their expediency than to their SEC. III.] LEGISLATIOlSr. 53 validity. Such efEorts, on the part of judges, to justify to citizens the ways of legislatures are not without value, though they are liable to be met by the assertion of opposite views as to the practical wisdom of the law, and thus the real question at issue, namely, the power of the legislature to -act at all, is obscured. Still, in the present instance, the obvious aim of the reasoning that prevailed was to show that the subject-matter of these enactments fell within the legitimate sphere of legislative power, and that, so far as the laws and Constitution of the United States were concerned, the legislation in question deprived no person of his property without due process of law, and did not interfere with Federal jurisdiction over interstate commerce. Another argument advanced is based on the admitted allegation that the principal business of the plaintiff in error, in connection with his warehouse, is in storing his own grain, and that the storage of the grain of other persons is and always has been a mere inci- dent, and it is said that the efEect of this law will be to compel him to renounce his principal business and become a mere warehouse- man for others. "We do not understand this law to require the owner of a warehouse, built and used by him only to store his own grain, to receive and store the grain of others. Such a duty only arises when he chooses to enter upon the business of elevating and storing the grain of other persons for profit. Then he becomes subject to the statutory regulations, and he cannot escape them by asserting that he also elevates and stores his own grain in the same warehouse. As well might a person accused of selling liquor without a license urge that the larger part of his liquors were de- signed for his own consumption, and that he only sold the surplus as a mere incident. Another objection to the law is found in its provision that the warehouseman shall insure the grain of others at his own expense. This may be burdensome, but it affects alike all engaged in the business, and, if it be regarded as contrary to sound public policy, those affected must instruct their representatives in general assembly met to provide a remedy. The plaintiff in error, in his answer to the write of mandamus, based his defence wholly upon grounds arising under the constitu- tion of the State and of the United States. We are limited by this record to the questions whether the legislature of North Dakota, in regulating by a general law the business and charges of public warehousemen engaged in elevating and storing grain for profit, denies to the plaintiff in error the equal protection of the laws or deprives him of his property without due process of law, and whether such statutory regulations amount to a regulation of commerce be- 54 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. tween the States. The allegations and arguments of the plaintiff in error have failed to satisfy us that any solid distinction can be found between the cases in which those questions have been here- tofore determined by this court and the present one. The judg- ment of the court below is accordingly • Affirmed. Mr. Justice Brewer, with whom concurred Mr. Justice Field, Mr. Justice Jackson, and Mr. Justice White, dissenting. I dissent from the opinion and judgment of the court in this case. Eeliance is placed in that opinion on Munn v. Illinois, 94 U. S. 113, and Budd v. New York, 143 U. S. 517. In the dissent- ing opinion I filed in the latter case, I expressed, so far as was necessary, my views in reference to the general propositions laid down in the two cases, and I do not desire to repeat what I there said. It is a significant fact that in Sinking Fund Cases, 99 U. S. 700, 747, and in Wabash, St. Louis & Pacific Railway v. Illinois, 118 U. S. 557, 569, Mr. Justice Bradley and Mr. Justice MiUer, who concurred in the judgment in Munn v. Illinois, each sought to limit and qualify the scope of the language used by the Chief Justice in that case. These are the words of Mr. Justice Bradley : " The inquiry there was as to the extent of the police power in cases where the public interest is affected; and we held that when an employment or business becomes a matter of such public interest and importance as to create a common charge or burden upon the citizen; in other words, when it becomes a practical monopoly, to which the citizen is compelled to resort, and by means of which a tribute can be exacted from the community, it is subject to regulation by the legislative power." ^And this is the language of Mr. Justice Miller, delivering 'the opinion of the court: " And in that case the court was presented with the question, which it decided, whether any one engaged in a public business, in which all the public had a right to require his service, could be regulated by acts of the legislature in the exercise of this public function and public duty, so far as to limit the amount of charges that should be made for such services." It appears from these admissions that the principal business of defendant was that of buying wheat and shipping it to Minneap- olis and Duluth for sale, and that he operated and maintained his elevator for the exclusive purpose of purchasing grain to fill his contracts ; and while at the time the elevator was not full and there was room for the storage of the grain tendered by the petitioner, and the defendant had at times used vacant space in his elevator for SEC. III.] LEGISLATION. 55 the storage of grain of others, yet such use was a mere incident to and subordinate to his principal business of buying and selling grain, for which principal business he exclusively maintained and operated his elevator. Now, my first objection is that by this decision a party is com- pelj.ed by the mandate of the court to engage in a business which lie never intended to engage in, and which he does not desire to en- gage in, to wit, the business of maintaining a public elevator. His business is that of buying and selling grain, and he operates and maintains the elevator, which he owns, for the exclusive purpose of carrying on that business. That he may have sometimes accom- modated his neighbors by the use of his elevator for the storage of their grain, and thus to a limited extent engaged in that business, does not change the fact, as admitted, that his principal business was that of buying and selling, and that he operated and maintained that elevator exclusively for the carrying on of that business, or the other admitted fact that, if he is compelled, as he is compelled by this mandate, to receive grain as tendered so long as he has storage capacity unoccupied in his elevator, his principal business and that for which he built the elevator will be utterly ruined and destroyed. The question is not whether, if he should receive and store in his elevator grain for others, he might not so far bring himself within the scope of the law as to be deemed for that transaction engaged in the business of maintaining a public elevator, and thus bound by the charges fixed by statute ; but whether, when he main- tains an elevator exclusively for his own business, the fact that at times he has used vacant room in it for the storage of the grain of other persons, compels him to receive grain when tendered irre- spective of the injury which it does to his own business. And it is admitted that, at the time of this tender, there was not sufficient storage capacity in his elevator to hold and store the grain pur- chased by him in the conduct of his business. And this is a matter of no trifling moment to one engaged in the business of buying and selling grain. He cannot know in advance when grain will be tendered at a price which will justify his purchase with a view to profit. The fact that to-day there may be storage capacity does not prove that to-morrow he may not need the entire capacity of his elevator. And yet, if, because to-day there is room in his elevator^ he is bound to receive any grain that shall be tendered, he may to-morrow be unable to make purchase of the of- fered grain. It is a matter of common knowledge that grain is not put into and taken out of an elevator in an instant. And if once deposited the owner cannot be compelled to remove it, merely for the accommodation of the warehouseman, but may leave it there 56 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I. indefinitely so long as he pays the legal charges. The petition was for a writ of mandamus commanding the defendant " so long as the capacity of his said elevator is sufficient for the purpose, to store such grain as may be tendered to him by the relator," and the de- cree of the court was that the " writ issue as prayed for," and that is the decision which is affirmed by this court. I dissent in the second place because the facts show, in the words of Mr. Justice Bradley, no " practical monopoly, to which the citizen is compelled to resort, and by means of which a tribute can be exacted from the community." Along the line of this single road within the limits of this State there are -about six hundred of these elevators, owned and operated by over one hundred and twenty-five different persons, varying in cost of construction from $500 to $5000; at every station there is land purchasable by any one at prices varying from $1.35 to $40 per acre, and a granary sufficient to store the average product of an ordinary Dakota farm can be erected at a cost of not exceeding $150. So it is that when any farmer or other individual can at a cost of less than $200 provide himself with all the facilities for storing and shipping the entire product of an ordinary farm, when along the line of a single railroad there are six hundred elevators already constructed, owned, and operated by one hundred and twenty-five different per- sons, when at every station at which grain is marketed there are from two to ten sifch elevators, it is held that there exists a monopoly such as justifies control by the public of the prices at which grain shall be stored in any one of these many elevators. If this be a monop- oly, justifying public control of prices for service, I am at a loss to perceive at what point the fact of monopoly will cease and freedom of business commence. For obviously elevators along the line of that road were as plentiful as other institutions of industry, and as easily and cheaply constructed, and therefore savoring no more of monopoly. I dissent in the third place because by this law the elevator man is bound not merely to receive, store, and discharge the grain which is tendered to him, but also to insure and pay the cost of insurance, it matters not what that cost may be, whether more or less than he receives for the whole service. I do not care to en- large upon this matter. If the legislature can compel a party, though confessedly to the disadvantage, injury, and even destruc- tion of his own special business of buying and selling grain, to re- ceive and store grain for whoever may demand it in an elevator which he is maintaining and operating for the exclusive carrying on of his own business at any price which it sees fit to allow, and at the same time compel hini to advance the money to insure the SEC. III.] LEGISLATION". 57 property thus forced upon him, I can only say that it seems to me that the country is rapidly travelling the road which leads to that point where all freedom of contract and conduct will be lost. For these reasons, thus briefly stated, I am constrained to dissent from this opinion and judgment. I am authorized to say that Mr. Justice Pield, Me. Justice Jackson, and Mr. Justice White concur in this dissent.^ GEEMAN" ALLIANCE INSURANCE CO. v. LEWIS. 233 U. S. 389. 1914.^ Mr. Justice McKenna delivered the opinion of the court. We may put aside, therefore, all merely adventitious considerations and come to the bare and essential one, whether a contract of fire insurance is private and as such has constitutional immunity from regulation. Or, to state it differently and to express an antithetical proposition, is the business of insurance so far affected with a public interest as to justify legislative regulation of its rates? And we mean a broad and definite public interest. In some de- gree the public interest is concerned in every transaction between men, the sum of the transactions constituting the activities of life. But there is something more special than this, something of more definite consequence, which makes the public interest that justifies regulatory legislation. We can best explain by examples. The transportation of property — business of common carriers — is ob- viously of public concern and its regulation is an accepted govern- mental power. The transmission of intelligence is of cognate char- acter. There are other utilities which are denominated public, such as the furnishing of water and light, including in the latter gas and electricity. We do not hesitate at their regulation nor at the fixing of the prices which may be charged for their service. The 3 Statutory regulation of stockyard charges has been held to be consti- tutional. RatclifE V. Wichita Union Stockyard Co. (1906), 74 Kan. 1, where the Court said in part : " The operation of stockyards has more of the characteristics of a public business than the carrying on of an elevator or a warehouse. It possesses the market features, including considerations of sanitation and health, and it also has more of the monopolistic features. . . . The company has ... a practical monopoly of a vast business, affect- ing thousands of people who are almost obliged to deal at that market and at the rates which the company may choose to charge." See also the opin- ion of Mr. Justice Brewer in Getting v. Kansas City Stockyards and the State of Kansas (1901), 183 U. S. 79. Statutory regulation of the charges of tobacco warehouses has also been held to be constitutional. Connell v. Louisville Tobacco Warehouse Co. (1902), 113 Ky. 630. 1 The statement of facts, and parts of Mk. Justice McKenna's opinion are omitted. — Ed. 58 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I. basis of the ready concession of the power of regulation is the public interest. This is not denied, but its application to insur- ance is so far denied as not to extend to the fixing of rates. It is said, the State has no power to fix the rates charged to the public by either corporations or individuals engaged in a private business, and the "test of whether the use is public or not is whether a public trust is imposed upon the property and whether the public has a legal right to the use which cannot be denied ; " or, as we have said, quoting counsel, "Where the right to demand and re- ceive service does not exist in the public, the correlative right of regulation as to rates and charges does not exist." Cases are cited which, it must be admitted, support the contention. The dis- tinction is artificial! It is, indeed, but the assertion that the cited examples embrace all cases of public interest. The complainant explicitly so contends, urging that the test it applies excludes the idea that there can be a public interest which gives the power of regulation as distinct from a public use which, necessarily, it is con- tended, can only apply to property, not to personal contracts. The distinction, we think, has no basis in principle (Foble State Bank V. Haskell, 219 U. S. 104), nor has the other contention that the service which cannot be demanded cannot be regulated. Munn V. Illinois, 94 U. S. 113, is an instructive example of legislative power exerted in the public interest. The constitution of Illinois declared all elevators or storehouses, where grain or other property was stored for a compensation, to be public ware- houses, and a law was subsequently enacted fixing rates of storage. In other words, that which had been private property had from its uses become, it was declared, of public concern and the compensa- tion to be charged for its use prescribed. The law was sustained against the contention that it deprived the owners of the ware- houses of their property without due process of law. We can only cite the case and state its principle, not review it at any length. The principle was expressed to be, quoting Lord Chief Justice Hale, " that when private property is ' affected with a public inter- est it ceases to be juris privati ' only " and it becomes " clothed with a public interest when used in a manner to make it of public conse- 1 quence, and affect the community at large " ; and, so using it, the owner " grants to the public an interest in that use, and must sub- mit to be controlled by the public for the common good." And it was said that the application of the principle could not be denied because no precedent could be found for a statute precisely like the one reviewed. It presented a case, the court further said, " for the application of a long-known and well-established principle in social science, and this statute simply extends the law so as to meet this SEC. III.] LEGISLATION. 59 new development of commercial progress." The principle was ex- pressed as to property, and the instance of its application was to property, but it is manifestly broader than that instance. It is the business that is the fundamental thing; property is but its in- strument, the means of rendering the service which has become of public interest. Munn V. Illinois was approved in many state decisions, but it was brought to the review of this court in Budd v. New York, 143 TJ. S. 517, and its doctrine, after elaborate consideration, re-affirmed, and against the same arguments which are now urged against the Kansas statute. Nowhere have these arguments been, or could be, advanced with greater strength and felicity of expression than in the dissenting opinion of Mr. Justice Brewer. Every consider- ation was adduced, based on the private character of the business regulated and, for that reason, its constitutional immunity from regulation, with all the power of argument and illustration of which that great judge was a master. The considerations urged did not prevail. Against them the court opposed the ever-existing police power in government and its necessary exercise for the public good and declared its entire accommodation to the limitations of the Constitution. The court was not deterred by the charge (repeated in the case at bar) that its decision had the sweeping a,nd dangerous copaprehension of subjecting to legislative regulation all of the businesses and affairs of life and the prices of all commodities. Whether we may apprehend such result by extending the principle of the cases to fire insurance we shall presently consider. In Brass ■;;. Stoeser, 153 U. S. 391, Munn v. Illinois and Budd V. New York were affirmed. A law of the State of North Da- kota was sustained which made all buildings, elevators and ware- houses used for the handling of grain for a profit public ware- houses, and fixed a storage rate. The case is important. It ex- tended the principle of the other two cases and denuded it of the limiting element which was supposed to beset it — that to justify regulation of a business the business must have a monopolistic character. That distinction was pressed and answered. It was argued, the court said (p. 402), "that the statutes of Illinois and New York [passed on in the Munn and Budd Cases] are in- tended to operate in great trade centers, where, on account of the business being localized in the hands of a few persons in close proximity to each other, great opportunities for combinations to raise and control elevating and storage charges are afforded, while the wide extent of the State of North Dakota and the small popu- lation of its country towns and villages are said to present no such opportunities." And it was also urged that the method of 60 BASES OF PUBLIC SEEVICE DUTIES. [CHAP. I. carrying on business in North Dakota and the Eastern' cities was different, that the elevators in the latter were essentially means of transporting grain from the lakes to the railroads and those who owned them could, if uncontrolled by law, extort such charges as they pleased, and stress was laid upon the expression in the other cases which represented the business as a practical monop- oly. A contrast was made between those conditions and those which existed in an agricultural State where land was cheap and limitless in quantity. It was replied that this difference in con- ditions was "for those who make, not for those who interpret, the laws." And considering the expressions in the other cases which, it was said, went rather to the expediency of the laws, than to their validity, yet, it was further said, the expressions had their value because the "obvious aim of the reasoning that prevailed was to show that the subject-matter of these enactments fell within the legitimate sphere of legislative power, and that, so far as the laws and Constitution of the United States were concerned, the legislation in question deprived no person of his property without due process of law " (p. 404) . The restriction upon the legislative power which complainant urges we have discussed, or rather the considerations which take, it is contended, the business of insurance outside of the sphere of the power. To the contention that the business is private we have opposed the conception of the public interest. We have shown that the business of insurance has very definite character- istics, with a reach of influence and consequence beyond and dif- ferent from that of the ordinary businesses of the commercial world, to pursue which a greater liberty may be asserted. The transactions of the latter are independent and individual, termi- nating in their effect with the instances. The contracts of insur- ance may be said to be interdependent. They cannot be regarded singly, or isolatedly, and the effect of their relation is to create a fund of assurance and credit, the companies becoming the de- positories of the money of the insured, possessing great power thereby and charged with great responsibility. How necessary their solvency is, is manifest. On the other hand to the insured, insurance is an asset, a basis of credit. It is practically a neces- sity to business activity and enterprise. It is, therefore, essentially different from ordinary commercial transactions, and, as we have seen, according to the sense of the world from the earliest times — certainly the sense of the modern world — is of the greatest public concern. It is, therefore, within the principle we have an- nounced. ■But it is said that the reasoning of the opinion has the broad SEC, III.] LEGISLATION. 61 reach of subjecting to regulation every act of human endeavor and the price of every article of human use. We might, without much concern, leave our discussion to take care of itself against such misunderstanding or deductions. The principle we apply is definite and old and has, as we have pointed out, illustrating ex- amples. And both by the expression of the principle and the citation of the examples we have tried to confine our decision to the regulation of the business of insurance, it having become " clothed with a public interest," and therefore subject " to be con- trolled by the public for the common good." We may venture to observe that the price of insurance is not fixed over the counters of the companies by what Adam Smith calls the higgling of the market, but formed in the councils of the underwriters, promulgated in schedules of practically con- trolling constancy which the applicant for insurance is powerless to oppose and which, therefore, has led to the assertion that the business of insurance is of monopolistic character and that " it is illusory to speak of a liberty of contract." It is in the alternative presented of accepting the rates of the companies or refraining from insurance, business necessity impelling if not compelling it, that we may discover the inducement of the Kansas statute, and the problem presented is whether the legislature could regard it of as much moment to the public that they who seek insurance should no more be constrained by arbitrary terms t|ian they who seek transportation by railroads, steam or street, or by coaches whose itinerary may be only a few city blocks, or who seek the use of grain elevators, or be secured in a night's accommodation at a wayside inn, or in the weight of a five-cent loaf of bread. We do not say this to belittle such rights or to exaggerate the effect of insurance, but to exhibit the principle which exists in all and brings all under the same governmental power. We have summarized the provisions of the Kansas statute, and it will be observed from them that they attempt to systematize the control of insurance. The statute seeks to secure rates which shall be reasonable both to the insurer and the insured, and as a means to this end it prescribes equality of charges, forbids initial dis- crimination or subsequently by the refund of a portion of the rates, or the extension to the insured of any privilege; to this end it requires publicity in the basic schedules and of all the condi- tions which afEect the rates or the value of the insurance to the insured, and also adherence to the rates as published. Whether the requirements are necessary to the purpose, or — ■ to confine our- selves to that which is under review — whether rate regulation is necessary to the purpose, is a matter for legislative judgment, not 62 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. judicial. Our function is only to determine the existence of power.^ THE PIPE LINE CASES. 234 U. S. 548. 1913. "■ Six appeals from the United States Commerce Court to review- decrees enjoining the enforcement of an order of the Interstate Commerce Commission requiring parties in control of oil pipe lines to file with the Commission schedules of rates and charges for transportation. Mk. Justice Holmes delivered the opinion of the court. By the act of Congress of June 29, 1906, chap. 3591, 34 Stat, at L. 584, the Act to Eegulate Commerce was amended so that the 1st section reads in part as follows : " That the provisions of this Act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity, except water and ex- cept natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water, who shall be considered and held to be common carriers within the meaning and purpose of this Act." Thereafter the Interstate Commerce Commission issued an order requiring the appellees, among others, being parties in control of pipe lineSj to file with the Commission schedules of their rates and charges for the transportation of oil. 24 Inters. Com. Rep. 1. The appellees thereupon brought suit in the Commerce Court to set 2 Me. Justice Lamab wrote a dissenting opinion, concurred in by Me. Chief Justice White and Me. Justice Van Devanteb. The points par- ticularly emphasized in the dissenting opinion are contained in the follow- ing sentences : " The fact that insurance is a strictly private and personal contract of indemnity puts it on the extreme outside limit, and removes it as far as any business can be from those that are in their nature public. So that if the price of a private and personal contract of indemnity can be regulated — if the price of a chose in action can be fixed — then the price of everything within the circle of business transactions can be regulated. Considering, therefore, the nature of the subject treated, and the reasoning upon which the court's opinion is based, it is evident that the decision is not a mere entering wedge, but reaches the end from the beginning, and announces a principle which points inevitably to the conclusion that the price of every article sold and the price of every service offered can be regulated by stat- ute." " Not only does the Munn Case show that the right to fix prices depends upon the concurrence of public interest and the employment of property devoted to a public use, but, with the exception of the Louisiana Bread Case, Guillote v. New Orleans, 12 La. Ann. 432, it is believed that every American rate statute, since the requirement that property should not be taken without due process of law, related to a business which was public in its character and employed visible and tangible property which had been devoted to a public use." 1 The concurring opinion of Me. Chief Justice White, and the dissent- ing opinion of Me. Justice McKenna are omitted. — Ed. SEC. III.] LEGISLATION^. 63 aside and annul the order, and a preliminary injunction was issued by that court, on the broad ground that the statute applies to every pipe line that crosses a state boundary, and that thus con- strued it is unconstitutional. 204 Fed. 798. The United States, the Interstate Commerce Commission, and other intervening re- spondents appealed. The circumstances in which the amendment was passed are known to everyone. The Standard Oil Company, a New Jersey corporation, owned the stock of the New York Transit Company, a pipe line made a common carrier by the laws of New York, and of the National Transit Company, a Pennsylvania corporation of like character, and by these it connected the Appalachian oil field with its refineries in the east. It owned nearly all the stock of the Ohio Oil Company, which connected the Lima-Indiana field with its system; and the National Transit Company, controlled by it, owned nearly all the stock of the Prairie Oil & Gas Company, which ran from the mid-continent field in Oklahoma and Kansas and the Caddo field in Louisiana to Indiana, and connected with the previously mentioned lines. It also was largely interested in the Tide Water Pipe Company, Limited, which connected with the Appalachian and other fields and pursued the methods of the Standard Oil Company about to be described. By the before-men- tioned and subordinate iines the Standard Oil Company had made itself master of the only practicable oil transportation between the oil fields east of California and the Atlantic ocean, and carried much the greater part of the oil between those points. Before the recent dissolution, the New York and Pennsylvania companies had extended their lines into New Jersey and Maryland to the re- fineries, and the laws of those states did not require them to be common carriers. To meet the present amendment the Stand- ard Oil Company took a conveyance of the New Jersey and Mary- land lines, and the common carrier lines now end at insignificant places where there are neither market nor appliances except those of the Standard Oil, by which it would seem that the whole trans- port of the carriers' lines is received. There is what seems to be merely a formal breach of continuity when the carriers' pipes stop. The change is not material to our view of the case. Availing itself of its monopoly of the means of transportation the Standard Oil Company refused, through its subordinates, to carry any oil unless the same was sold to it or to them, and through them to it, on terms more or less dictated by itself. In this way it made itself master of the fields without the necessity of own- ing them, and carried across half the continent a great subject of international commerce coming from many owners, but, by the €4 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. duress of which the Standard Oil Company was master, carrying it all as its own. The main question is whether the act does and con- stitutionally can apply to the several constituents that then had been united into a single line. Taking up first the construction of the statute, we think it plain that it was intended to reach the combination of pipe lines that we have described. The provisions of the act are to apply to any person engaged in the transportation of oil by means of pipe lines. The words "who shall be considered and held to be com- mon carriers within the meaning and purpose of this act" ob- viously are not intended to cut down the generality of the previous declaration to the meaning that only those shall be held common carriers within the act who were common carriers in a technical sense, but an injunction that those in control of pipe lines and engaged in the transportation of oil shall be dealt with as such. If the Standard Oil Company and its co-operating companies were not so engaged no one was. It not only would be a sacrifice of fact to form, but would empty the act if the carriage to the sea- board of nearly all the oil east of California were held not to be transportation within its meaning, because by the exercise of their power the carriers imposed as a condition to the carriage a sale to themselves. As applied to them, while the amendment does not compel them to continue in operation, it does require them not to continue except as common carriers. That is the plain meaning, as has been held with regard to other statutes similarly framed^ Atlantic Coast Line E. E. Co. v. Eiverside Mills, 219 U. S. 186, 195, 203. Its evident purpose was to bring within its scope pipe lines that, although not technically common carriers, yet were carrying all oil offered, if only the offerers would sell at their price. The only matter requiring much consideration is the constitu- tionality of the act. That the transportation is commerce among the states we think clear. That conception cannot be made wholly dependent upon technical questions of title, and the fact that the oils transported belonged to the owner of the pipe line is not con^ elusive against the transportation being such commerce. Eearick v. Pennsylvania, 203 U. S. 507, 513. See Texas & N. 0. E. E. Co. v. Sabine Tram Co. 237 U. S. 111. The situation that we have de- scribed would make it illusory to deny the title of commerce to such transportation, beginning in purchase and ending in sale, for the same reasons that make it transportation within the act. The control of Congress over commerce among the states cannot be made a means of exercising powers not intrusted to it by the Constitution, but it may require those who are common carriers in substance to become so in form. So far as the statute contemplates SEC. III.] LEGISLATION. 65 future pipe lines and prescribes the conditions upon which they may be established there can be no doubt that it is valid. So the objection is narrowed to the fact that it applies to lines already engaged in transportation. But, as we already have intimated, those lines that we are considering are common carriers now in everything but form. They carry everybody's oil to a market, al- though they compel outsiders to sell it before taking it into their pipes. The answer to their objection is not that they may give up the business, but that, as applied to them, the statute practically means no more than they must give up requiring a sale to them- selves before carrying the oil that they now receive. The whole case is that the appellees, if they carry, must do it in a way that they do not like. There is no taking and it does not become neces- sary to consider how far Congress could subject them to pecuniary loss without compensation in order to accomplish the end in view, fioke V. United States, 227 U. S. 308, 333; 188 U. S. 331, 357; Lottery Case, 188 U. S. 331, 357. These considerations seem to us sufficient to dispose of the cases of the Standard Oil Company, the Ohio Oil Company, the Prairie Oil & Gas Company, and the Tide Water Pipe Company, Limited. The Standard Oil Company of Louisiana was incorporated since the passage of the amendment, and before the beginning of this suit, to break up the monopoly of the New Jersey Standard Oil Com- pany. It buys a large part of its oil from the Prairie Oil & Gas Company, which buys it at the wells in the mid-continent field and transfers the title to the Louisiana Company in that state. Its case also is covered by what we have said. There remains to be considered only the Uncle Sam Oil Com- pany. This company has a refinery in Kansas and oil wells in Oklahoma, with a pipe line connecting the two which it has used for the sole purpose of conducting oil from its own wells to its own refinery. It would be a perversion of language, considering the sense in which it is used in the statute, to say that a man was engaged in the transportation of water whenever he pumped a pail of water from his well to his house. So as to oil. When, as in this case, a company is simply drawing oil from its own wells across a state line to its own refinery, for its own use, and that is all, we do not regard it as falling within the description of the act, the transportation being merely an incident to use at the end. In that case the decree will be affirmed. In the others the decree will be reversed. (6© BASES OF PUBLIC SBEVICK DUTIES. [CHAP. I. Section 4. Economic Monopoly. LADD V. SOUTHEEi;r COTTON PEESS AND MANUFACTUEING CO. 53 Tex. 172. 1880.^ MooEE, Chief Justice. This suit was brought in the district court of Galveston county, August 3, 1877, by Alexander H. Ladd, the appellant, against appellee. The Southern Cotton Press and Manufacturing Company, a corporation under the laws of Texas, carrying on the business of receiving, storing and compressing cot- ton for such parties as might employ its services in that behalf, to recover back moneys alleged to have been paid by appellant at various times for charges which were uniformly and notoriously de- manded and collected by appellee on all cotton entrusted to it. The right to recover back the money thus paid, is claimed in the petition on the ground that upon the facts stated therein the property and services of appellee had been submitted to public use and had become affected with a public interest; that the charges de- manded by appellee were unlawful and without consideration, and that the payments had been made involuntarily and under duress. The appellee demurred generally and specially, that the facts stated in the petition showed that the business carried on by ap- pellee was a private enterprise and occupation, and not a public employment; that it appeared from the petition that the alleged pay- ments had not been made involuntarily or under duress; that the matters relied on to show duress were insufficient and too vaguely pleaded, and that it appeared from the petition that a large portion of the demand sued for was barred by the statute of limitations. The demurrer was sustained, and appellant declining to amend, judgment was rendered for appellee. From this judgment an appeal was prosecuted, and appellants assign as error that the court should have overruled, instead of sustaining the demurrer to his petition. In support of this assignment, his counsel make in their brief these propositions, viz. : First. The petition shows that appellee had submitted its prop- erty and services to public use. 1. By becoming incorporated by the legislature for the purpose of carrying on the business designated. 1 The statement of facts, and argument of counsel have been omitted. — Ed. BEG. IV.] ECONOMIC MONOPOLY. 67 2. By virtue of the nature and extent of the business. 3. Because by combination with others in the same line of busi- ness, it became a virtual monopoly, the exercise of which enabled them to exact fictitious charges, and charges without consideration, as a substantial toll on nearly all of the chief commodity of the state, and thereby its services and property became aifected with a public interest. Second. That the charges complained of having been utterly without consideration, and involuntary or enforced payment having been made under protest and without mutuality of assent necessary to a contract, were in fact made under duress of property. Are these propositions, or any one of them, applicable to the facts averred in appellant's petition, and if so, should the judgment be reversed? We will consider them in the order in which they are presented. 1. Did appellee, by becoming incorporated by the legislature for the purpose of carrying on a warehouse and compress business, submit its property and services to public use? We are cited to no authority tending to support this proposition, and we are un- able to perceive any principle or reason upon which it can be maintained. The petition shows that appellee is a mere pr ivate corporation, w ith no p rivilege or franchise beyond that ^ f_carry- ing on in a corpor aia.capacity-i]ie business in^:whid| i it is eng^ ^. It is by reason of the nature and character of the business, and not from the fact that it is carried on by an individual or corpora- tion, that the law holds that the property or services of the owner have been submitted to public use. 2. The business of wareh ousing and compress ing-cott on, is free ^ to every one who wishes to engage in it. No grant or franchise need be obtained from the state to authorize those desiring to do so to embark in this character of business. It is not one of the employments which the common law declares public.^ (Coggs v. Barnard, 2 Ld. Eaym. ; 2 Pars, on Con., 139; Story on Bail., sec. 442.) Nor is it claimed to have been made so by statute. Arid we_k now of n o authority, a nd jifloe-JiaR been shown ns , f nr sfiyi^jg tiia t a busines s_strict lY juris privati w iU benome jijri s public i. me rely bv reasQ ii_Qf-ita_extent, If the magnitude of a particular business is such, and the persons affected by it so numerous, that the interest of society demands that the rules and principles ap- plicable to public employments should be applied to it, this would have to be done by the legislature (if not restrained from doing so by the constitution) before a demand for such an use could be enforced by the courts. 2 See dicta contra in Nash v. Page (1882), 80 Ky. 539. 68 BASES OP PUBLIC SERVICE DUTIES. [CHAP. I. If the right to regulate property and the character of its em- ployment is, by reason of its extent, and the number of persons interested in or afEected by the manner or circumstances of its use, as counsel for appellant forcibly declares, " of the very essence of government," the exercise of this right or power pertains to the legislative and not the judicial department. 3. Evidently appellant does not intend to assert that appellee, by combination with others engaged in like business, acquired a monopoly or " virtual monopoly " of the character declared by the constitution of the state to be "contrary to the genius of a free government," and never to be allowed. (Art. 1, sec. 26.) But the import of his proposition, as we understand it, is that appellee and others engaged in the same business, though this business was a legitimate and lawful one, had, without any exclusive right to ; conduct it, by combination virtually acquired the exclusive control/ of the business in the city and port of Galveston, which enabled! them "to exact fictitious charges and charges without consider- 1 ation," and thereby to collect "toll on nearly all the chief com- 1 modity of the state." And that by reason of this fact the prop- 1 Y erty and service employed in such business became afEected with a I public interest. But conceding the premises, the conclusion sought/ to be deduced seems to us to be a non sequiter. It will readily be admitted that in many instances combinations may be made by parties engaged in a particular trade, or by those who, at the time, have the control of the market for some article of prime necessity, to make most unconceivable exactions for their services or demand a most extortionate price for their com- modities. But certainly this does not chang e the nature of the employmenFin which they are ^ ngaged^ or authorize the court to say, when the business of the parties is strictly private, that it has become public. If the combination is illegal, the parties to it will subject themselves to such penalties as the law imposes; and if the injury to society to be apprehended from such combinations is of a character demanding it, the legislature may, by adequate pro-| vision, regulate or prohibit persons from engaging in them. Norl do we say that there may not be instances where, by combination,) or even without it, some particular business, by reason of its ex-j / tent and magnitude and the great number of persons afEected by/ y/ it, though strictly privati juris under the common law and pre-\ vious statutes, may be declared puhlici juris by the legislature./ This seems in effect what was held by the supreme court of thel United States to have been done by the legislature of lUinoisI (4 Otto, 125). But as this is not the character of this case, we' are not called upon to express an authoritative opinion on the SEC. IV.] ECONOMIC MONOPOLY. 69 point. It is sufficient for us to say that in the absence of legisla- tion to that effect, a party who has not subjected his property and services to public use by the character of the business in which he is engaged, does not do so by reason of combination with others ^ in a like busine ss, though he is enabled thereby to exact from those who may employ him unreasonable and extortionate charges for the services rendered. Whether payments made under such cir- cumstances may not be held to have been paid under duress, is another question to be considered hereafter. Nor can it justly be held that the mere extent and magnitude of the business changes a private charge for services into a toll to be regulated by law. JSTor if so, that the court may, in the absence of legislation upon the subject, substitute its judgment as to the proper amount of such toll for the contract of the parties. But although none of the grounds urged by appellant in support of his proposition, "that appellee had submitted its property and services to public use," taken severally and of themselves warrant his conclusion, a fair consideration of the argument of his counsel requires us to consider the effect, not only of each of the positions, standing alone, upon the business of appellee, but also their effect in the aggregate, in connection with all the facts and circumr stances connected with or relating to the business in which ap- pellee was engaged and the manner in which it was conducted and carried on. In doing this it must be conceded, as alleged in appellant's peti- tion, that appellee and those engaged in the same business at the port of Galveston, with the exception of one small establishment capable of doing but a limited business, had combined and fixed the charges complained of; that the business in which appellee and his confederates were engaged was necessary to the public, in refer- ence to the transit of cotton from the producer to the manufacturer and consumer; that the charges complained of were a common charge against all comers and upon every bale of cotton, and was also a charge demanded and enforced without consideration, a com- pliance with which was, under the circumstances, essential to the business life of, and the only escape from business ruin by all who follow the business of brokerage in cotton in the city of Gal- veston. Now, giving the fullest scope and import to these and other allegations made in the petition, how is it shown that appellee's business is of a character with which the courts of the country have the right to interfere; or from what source, we ask, do they derive their authority to regulate the conditions and terms upon which it shall be conducted? It is not contended by appellant. 70 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. that, as ordinarily conducted, the business of receiving, storing, compressing and delivering cotton is privati \^publici?~\ juris, which those engaged in it have not the right to fix the rates and conditions upon which it will be conducted. IBut the argument seems to be, that, in view of the necessities of trade, its magnitude and effect upon the interest of the people throughout the state, as well as of those engaged in the business of appellant, it has become of like public interest as other occupations and trades which the law pronounces and holds to be juris publici. The conclusion sought to be main- tained rests upon the hypothesis that whenever it is made to appear that any particular business is of so general public interest as that which the law holds to be juris publici, the courts have the power to so declare and hold it. The case of Munn v. Illinois, 4 Otto, 125, seems to be the authority mainly relied on to support this position. We cannot regard this case as authority for such a doctrine. [ It was brought to enforce the statute law of the state. The conclusion to be drawn from it is, as we think, that the legis- lature may declare a particular business publici juris, if the facts and circumstances under which it is conducted justify and the good of society requires it; but not that the court may so treat it in adyaace of legislativg^ec^gnition or declaration. / Whether this may be done, even~Dy the legislature, without infringing upon the constitution, need not now be considered. Neither is it neces- sary for us at present to determine whether the submission of prop- erty and service to public use (as there is high authority for hold- ing) is solely dependent upon the fact that those engaged in such business enjoy some franchise, privilege or immunity from the state, or did so in the early days of the common law when this character was impressed upon their property or service. (Dis- senting opinion of Fields, J., in Munn v. Illinois, supra, and authorities cited.) But if it is admitted that appellee's property and services were affected with a public interest, and the amount demanded of, and paid by appellant, was greater than what was reasonable, as it ap- pears from the petition that the payments were made with full knowledge of all the facts and without fraud or deception, unless made under duress, the amount thus paid cannot be recovered back, although so much as exceeds the reasonable value of the services rendered was paid without consideration. (34 Ala., 405; 7 Gush., 125; 59 N. Y., 603; 50 Ga., 304.) A mere protest against a charge does not entitle the party who voluntarily and without duress or compulsion pays it, to sue for and recover it back. (5 Gush., 115; 29 Md., 415; 25 Ind., 261; 46 Gal., 589; 5 Kan., 412.) V SEC. IV.] ECONOMIC MONOPOLY. 71 Second. It remains to inquire whether the money sued for was paid without consideration, involuntarily and under duress. There is no pretense of duress except by reason of the alleged combination of appellee and its confederates, to charge a larger amount than the services rendered were reasonably worth; and for the delivery of cotton which appellant says was not in fact actually delivered, and the agreement between appellee and its confederates that they would not do business with any parties who should fail or refuse to pay any of their charges, or who should resort to the courts to controvert or dispute them. As t he business in which appellee is engaged is opento alJjghoLwished to engagH ln it, and was notTas •we have seen, affected with a public interest, any one engaging in it may prescribe the terms upon which he will transact it. All parties employing his services, knowing his terms, would be bound by them. If it is lawful for a single individual engaged in other husiness to prescribe the terms upon which he will conduct it, we do not see how it can become unlawful by others in the same em- ployment agreeing with him that they will also transact their busi- ness upon the same terms and conditions. (Kirkman v. Walker, 6 Term, 14.) If appellee may lawfully decline doing business for or with those who refuse to comply with the terms which it prescribes, the fact that a failure to conform to these terms would result in its de- clining in future to transact business with the party thus failing, cannot be held to be duress. On the other hand, if the terms and conditions are illegal and such as a party has no right to pre- scribe for himself or in combination with all parties engaged in like business, thereby securing a virtual monopoly, we can see no better reason for saying in this than in the other case that con- tracts entered into and business conducted for a series of years with one of the parties to such agreement with knowledge of it, can be held to have been under duress. If the combination is illegal and the terms prescribed by it are such as the parties have no right to demand, certainly the courts are not impotent to re- strain the parties to such illegal combinations and give redress to those improperly affected by it. To entitle a party voluntarily paying money to recover it back on the ground of duress, he must, at the time of such payment, be under the necessity of either then making the payment, or of resorting to the courts to get possession of property wrongfully detained, or to recover his liberty, or at least show that there is an apparent necessity for resorting to the courts for one or the other of these purposes. The petition shows that the transactions between the parties to the suit do not come within either of these categories. Appellant 73 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. certainly had ample time and opportunity to have had his day in court, before the business between him and appellee was closed by the last voluntary payment by him. Not having complained until the late date at which this suit was brought, he cannot now be heard to complain. (5 Otto, 112-13; 4 Gill (Md.), 425; 1 Ohio St., 268; 34 Md., 436; 115 Mass., 367. The judgment is affirmed.^ THE INTEE-OCEAN PUBLISHING CO. v. THE ASSOCIATED PEESS. 184 111. 438. 1900.^ The Inter-Ocean Publishing Company, a corporation organized Tinder the laws of the State of Illinois, is engaged in publishing two newspapers in the city of Chicago, known as The Daily Inter- Ocean and The Weekly Inter-Ocean, which have a wide circu- lation in the States and Territories of the United States. The As- sociated Press is a corporation organized under the laws of the State of Illinois in 1892. The object of its creation was, " to buy, gather and accumulate information and news ; to vend, supply, dis- tribute and publish the same; to purchase, erect, lease, operate and sell telegraph and telephone lines and other means of transmitting news; to publish periodicals; to make and deal in periodicals and other goods, wares and merchandise." It has about eighteen by- laws with about seventy-five subdivisions thereof. The stock- holders of the Associated Press are the proprietors of newspapers, and the only business of the corporation is that enunciated in its charter, and is mainly buying, gathering and accumulating news and furnishing the same to persons and corporations who have en- tered into contract therefor. It may furnish news to persons and corporations other than those who are stockholders, and the term "members," used in its by-laws, applies to proprietors of news- papers, other than its stockholders, who have entered into contracts with it for procuring news. It does not appear that it has availed itself of any of the powers conferred by its charter other than that of gathering news and distributing the same to its members. Under the by-laws of appellee the Inter-Ocean Publishing Com- pany became a stockholder. The by-laws of the appellee provide, among other things, as fol- 3 Accord, Delaware, L. & W. R. R. v. Central S. Y. & T. Co. (1889), 45 JSr. J. Eq. 50. 1 The statement of facts is abbreviated, arguments of counsel are not reprinted, and parts of the opinion of Phillips, J., are omitted. — Ed. SEC. IV.] ECONOMIC MONOPOLY. 73 lows : " N"o member shall furnish, or permit any one to furnish, its special or other news to, or shall receive news from, any person, firm or corporation which shall have been declared by the board of directors or the stockholders to be antagonistic to the association ; and no member shall furnish news to any other person, firm or corporation engaged in the business of collecting or transmitting iiews, except with the written consent of the board of directors." The by-laws also provide that the board of directors shall have the power to suspend a member for furnishing, or purchasing news con- trary to the rule just quoted, and the contract between the appellant and the appellee expressly incorporated these rules. The appellant bought news from the Sun Printing and Publish- ing Association of New York, which had been declared antagonistic to the appellee. Certain other newspapers complained to appellee of appellant's conduct in this regard, and appellee notified appellant that a meeting of appellee's board of directors would be held at a time and place mentioned to take action on these complaints. Be- fore the time set for the hearing appellant filed its bill for an in- junction against the appellee from suspending or expelling it from its membership, and from refusing to furnish it news according to the terms of its contract. A decree was rendered dismissing the bill for want of equity. On appeal to the Appellate Court for the First District the decree was affirmed, and this appeal is prose- cuted. Me. Justice Phillips delivered the opinion of the court. The. organization of such a method of gathering information and news from so wide an extent of territory as is done by the appellee corporation, and the dissemination of that news, requires the ex- penditure of vast sums of money. It reaches out to the various parts of the United States, where its agents gather news which is wired to it, and through it such news is received by the various important newspapers of the country. Scarcely any newspaper could organize and conduct the means of gathering the informa- tion that is centered in an association of the character of the ap- pellee because of the enormous expense, and no paper could be re- garded as a newspaper of the day unless it had access to and published the reports from such an association as appellee. For news gathered from all parts of the country the various newspapers are almost solely dependent on such an association, and if they are prohibited from publishing it or its use is refused to them, their character as newspapers is destroyed and they would soon become practically worthless publications. The Associated Press, from the time of its organization and establishment in business, sold its hews reports to various newspapers who became members, and the 74 BASES OF PUBLIC S:gEVICE DUTIES. [CHAF. I. publication of that news became of vast importance to the public, so that public interest is attached to the dissemination of that news. Th£_Di anner in g li ich that corporation has used its franch ise has charged its business with "a" public 7 iiiterest.\ it nas gevoted its property to a public use, and has, in etfect, granted to the public such an interest in its use that it must submit to be controlled by the public for the common good, to the extent of the interest it has thus created in the public in its private property. The sole purpose for which news was gathered was that the same should be sold, and all newspaper publishers desiring to purchase such news for publication are entitled to purchase the same without dis- crimination against them. It was held in JSTew York and Chicago Grain and Stock Exchange V. Board of Trade, 127 111. 153 (on p. 163) : "Assuming these market quotations and reports are property and the private property of the board of trade, yet if they have been so used by the board, and by the telegraph company with the knowledge and consent of the board, as to become affected with a public interest, then they, are subject to such public regulation by the legislature and the courts as is necessary to prevent injury to such public interest. The doctrine in question has application both to the property of individuals and of corporations, and it is therefore immaterial that any such corporation may be a mere private corporation. If the interest is public, then it is necessarily, to all alike, common to all and upon equal terms. The doctrine, as applied to the matter of these market quotations, would forbid that a monopoly should be made of them by furnishing them to some and refusing them to others who are equally willing to pay for them and be governed by all reasonable rules and regulations, and would prevent the board of trade or the telegraph companies from unjustly discrimi- nating in respect to the parties who will be allowed to receive them." This principle is sustained in Friedman v. Telegraph Co. 33 Hun, 4, and Smith v. Telegraph Co. 43 id. 454. The appellee corporation being engaged in a business upon which a public in- terest is engrafted, upon principles of justice it can make no dis- tinction with respect to persons who wish to purchase information and news, for purposes of publication, which it was created to furnish.^ 2 But see Live Stock Commission Co. v. Live Stock Exchange (1892), 143 111. 210, in which the Court said in part: " But we are not prepared to hold that the mere fact that the business of a particular market has become very large, gives to the court any power to declare such markets public and impressed with a public use, or to apply to them any rules of public policy peculiar to that class of markets." " It is not claimed that the keeping or doing business in a market of this character is one of the employments which the common law declares to be SEC. IV.] ECOKOMIC MONOPpLT. 75 It is urged, however, that by the terms of the contract appellant cannot retain its membership and stock in the Associated Press, and have the right to purchase news accumulated by it at contract price, without complying with that part of the contract which re- quires appellant to refrain from receiving news from any person or corporation which has been declared by the board of directors of appellee to be antagonistic to the latter, and without appellant being controlled or governed by the by-law of appellee to the same effect. The character of appellee's business is not to be determined by the contract which it made respecting the liabilities which would attend it, but by the nature of the business, its fixed legal charac- ter, growing out of the manner in which that business is conducted, and the purpose of its creation. The leg al character of the corpora - tion and its dutie s cannot be disreg arded because of any stipulation "iiict3?porated in a contract tiiat it should not b e liable to discharge a public auty. its obligation to serve the public is not one resting on contract, but grows out of the fact that it is in the discharge of a public duty, or a private duty which has been so conducted that a public interest has attached thereto. The clause of the contract in this case which sought to restrict appellant from obtaining news from other sources than from ap- pellee is an attempt at restriction upon th e trade and business a mong the cit izens of a comm on country . Competition can never be held hostile to public interests, and efforts to prevent competition public, nor is it pretended that it has been made so by statute. Ordinarily the adoption of new rules of public policy, or the application of existing rules to new subjects, is for the Legislature and not for the courts. Ac- cordingly it may be held to be a general, though perhaps not an invariable rule, that the question whether a particular business which has hitherto been deemed to be private, is public and impressed with a public use, is for the Legislature. The doctrine on this subject is stated in Ladd ». South- ern Cotton Press Manufacturing Company, 53 Tex. 172, where a question very similar to the one under discussion was before the court, as follows : ' We know of no authority, and none has been shown us, for saying that a business strictly juris privati will become juris publici, merely by reason of its extent. If the magnitude of a business is such, and the persons affected by it are so numerous, that the interests of society demand that the rules and principles applicable to public employment should be applied to it, this would have to be done by the Legislature (if not restrained from doing so by the Constitution), before a demand for such use could be enforced by the courts.' The view thus expressed would seem to be pre- cisely applicable to the present case, and we are inclined to adopt it as a correct statement of the law as it should be applied to the facts before us. We do not say that there may not be exceptions to the rule thus stated, but if there are they are not of such a character as to be material here." " Apart from the consideration that the extension and application of even existing rules of law to subjects not heretofore within their purview is legislative in its nature, the determination by the courts as to the precise point at which a mere private business reaches that stage of growth and expansion which is suflacient to render it juris puhlici, would be surrounded by very great difficulties, and would present questions for which the courts, unaided by legislation, would be able to find no just or satisfactory cri- terion or test. But when the Legislature, acting upon a competent state of facts, has interposed and declared the business to be juris publici, all diffi- culty is removed." 76 BASES OF. PUBLIC SERVICE DUTIES. [gHAP. I. by contract or otherwise can never be looked upon with favor by the courts. In People v. Live Stock Exchange, 170 111. 556, it was said (p. 566) : "Efforts to prevent competition and to re- strict individual efforts and freedom of action in trade and com- merce are restrictions hostile to the public welfare, not consonant with the spirit of our institutions and in violation of law." The provisions of the contract that the appellant should purchase news from no other source, and the restrictive clause of the by- law, are both null and void, and the contract is the same as if these provisions had not been incorporated therein. Eejecting en- tirely these illegal provisions, on which the right to suspend the appellant as a member and to refuse to furnish it news and informa- tion gathered by the Associated Press for publication rests, no reason is presented, under the pleadings and afSdavits in the case, why the appellant is not entitled to an injunction, as prayed for in its bill. We hold that the circuit court of Cook county erred in entering a decree dismissing the bill for want of equity, and the Appellate Court for the First District erred in affirming the same. The judgment of the Appellate Court for the First District and the decree of the circuit court of Cook county are each reversed, and the cause is remanded to the circuit court of Cook county, with directions to enter a decree as prayed for in the bill. Reversed and remanded.^ s Following the principal case, it was determined in News Publishing Co. V. Associated Press (1904), 114 111. App. 241, that the defendant was under a duty to render news service which it had contracted to render to one of its members upon the same terms and conditions upon which it rendered like service to other newspaper publishers. In State v. Nebraska Telephone Co. (1885), 17 Neb. 126, where it was sought by mandamus to compel the company to give relator telephone serv- ice, the Court concluded that the company must serve relator, and said : " The views herein expressed are not new. Similar questions have arisen in, and have been frequently discussed and decided by, the courts, and no statute has been deemed necessary to aid the courts in holding that when a person or company undertakes to supply a demand which is ' affected with a public interest,' it must supply all alike who are alike situated, and not discriminate in favor of, nor against any." The Court cited in support of this proposition the last part of Lord EUenborough's opinion in Allnutt v. Inglis, supra. Although the Court said that " the respondent is not pos- sessed of any special privileges," it is in fact stated in the case that " the wires of respondent pass the office of relator. Its posts are planted in the street in front of his door." In some other cases virtual monopoly has been referred to as though it were a possible ground for public service duties, although the decisions in those cases have really been reached on the ground of grant of franchises, or statutory duty. See for example, Williams v. Mvitual Gas Co. (1884), 152 Mich. 499; Wheeler v. Northern C. I. Co. (1887), 10 Col. 582; Owens- burg G. L. Co. V. Hildebrand (Ky., 1897), 42 S. W. 351; Cincinnati H. & D. R. R. Co. V. Village of Bowling Green (1879), 57 Oh. St. 336. And see Mr. Justice Miixbe's comment on Munn v. Illinois, in Wabash, etc., Ry. Co. V. Illinois (1886), 118 U. S. 557, 569. See also dicta in Nash v. Page (1882), 80 Ky. 539. SEC. IV.] ECONOMIC MONOPOLY. Y? STATE ex rel. STAE PUBLISHING CO. v. THE ASSOCI- ATED PEBSS. 159 Mo. 410. 1901.^ Sheewood, J. The object of this original proceeding is to com- pel respondent, the Associated Press, to furnish to the Star Pub- lishing Company, for publication in its newspaper, The Star, the budget of news collected daily by respondent, and also its Saturday night news reports. The substance of the issues presented by the pleadings of the parties to this litigation has been very well condensed by counsel for respondent, and we adopt such condensation : Eelator asserts : (1) That it has a contract with the Associated Press for the Sun- day morning news. (2) That the gathering of general news for publication in a daily newspaper is a public employment, which must be exercised by those who engage in it for all publishers of dailies who may desire it, upon equal termis, and without discrimina- tion. (3) That the Associated Press has, by its charter, assumed this public employment, and so is bound to exercise it on behalf of the relator, upon tender of compensation equal to that paid by other publishers similarly situated, and receiving a similar service. (4) That the Associated Press has broken down all competitors, and secured a monopoly of the business of newsgathering, in consequence of which it is not practicable to publish a daily news- paper without the aid of its service. (5) That the Associated Press has been granted telegraph and telephone franchises by the states of Illinois and Missouri, and also possesses the power of eminent domain. (6) That the by-law of the Associated Press which makes the consent of existing members a condition of admitting new members in any locality is in violation of the anti-trust laws of Missouri, Illinois, and the United States. The respondent, on the other hand, asserts: (1) That it never made any contract with the relator. {%) That the gathering of news, whether for daily newspapers or for other publications, is a purely private business, requiring for its conduct no public franchises or privileges. (3) That, while the Associated Press is in form a corporation for pecuniary profit, in its substance it is but a voluntary association of publishers of newspapers, who have combined their energies for the sake of greater efficiency and economy in newsgathering. (4) That it has not and cannot possibly monopolize the business 1 Arguments of counsel and considerable parts of the opinion are omitted. — Ed. 78 BASES OF PUBLIC SEEVICE DUTIES. [CHAP. I. of newsgathering, and that in fact there are now other general newsgathering agencies in successful operation in the United States. (5 That it does not own or operate' telegraph or telephone lines, and has no means for the transmission of news except such as are open to everybody on like terms. (6) That it has never exercised, and does not possess, the power of eminent domain. (7) That it is not a trust in any sense, nor is there anything unlawful in its methods or aims, since that which the combination accomplishes among its members has exclusive reference to a matter of internal economy, and leaves the members unaffected and unrestrained in so far as concerns their relations to the general public. (8) That its business is national and international in its scope and character, and so is protected against state interference by various provisions of the federal constitution, which are cited. It has been thought best to consider at large the doctrine announced in the case relied on,^ as well as opposing views, in order to endeavor to discover whether Munn's case, granting it correctly decided, has any application to the case at bar. Follow- ing a familiar rule, the general words employed in that opinion should be restricted to the particular facts of that case, and should not be extended to other cases which could not have been in the mind of the court at the time ; nor has that court so extended them to any case of similar sort to the one before us. The controlling element which gave origin to the opinion relied on seems to have been that of a monopoly. But, of course, that element can have no place in the present instance, because re- spondent has been granted no special or exclusive right or priv- ilege by the state, nor has it received any benefits from that quarter. Nor has the respondent acquired any additional right, by reason of its incorporation, to that it possessed before. Every one is at liberty to gather news, and the fact that one has greater facilities or finances for gathering and transmitting news, or that the business has grown into one of great magnitude, wide- spread in its ramifications, or that mere incorporation has been granted a company organized for the purpose of gathering news, does not and cannot of itself give the state the right to regulate what before incorporation was but a natural right. [Tied. Pol. Pow. p. 234, § 93.] Were the rule otherwise than as just stated, the effect would be to deprive a person of a right to pursue any lawful calling, or to contract where and with whomsoever and at what price he will. The right thus to contract cannot be interfered with. It is part and parcel of personal liberty, and therefore under the 2 Munn V. Illinois, supra. SEC. IV.] ECONOMIC MONOPOLY. 79 protection of section 30, art. 2, of our state constitution, and of the fourteenth amendment of the Constitution of the United States, as heretofore quoted. [Cooley, Const. Lim. 944, 945; lb., Torts, 278; State v. Loomis, 115 Mo. 307, and cases cited; State v. Julow, 129, Mo. 163, and cases cited. To like effect see Allgeyer v, Louisiana, 165 U. S. 589, 591; Williams v. Fears, 21 Sup. Ct. Eep. 128, 129, 130.] If relator's position as to its right to compel respondent to turn over to it the results of its labors and researches after news is cor- rect, then by the same token any citizen could compel any news- paper to admit him as a subscriber; or, as news is a synonym of information, intelligence, and knowledge, then a lawyer profoundly versed in his profession could be compelled to yield his treasures of erudition to some less fortunate member of the bar, of the type described by Swift : " Who knows of law nor text nor margent. Calls Singleton his brother sargent." And, even if the business of respondent can justly be deemed a monopoly, then relator's efforts should be directed towards the destruction of that monopoly, and not towards obtaining the man- date of this court compelling relator's admission into that "real genuine article," as counsel are pleased to designate it. Conceding respondent's business to be in truth a monopoly would furnish an all-sufficient reason and answer for denying the relief relator asks, because the addition of one more monopolist to a monopolistic organization would not lessen its monopolistic features, or abate its vicious tendencies. But there is nothing here on which a monopoly can attach. The business is one of mere personal service; an occupation. Unless there is " property " to be " affected vfith a public interest," there is no basis laid for the fact or the charge of a monopoly. [See, on this point Morris v. Colman, 18 Ves. 437 (per Lord Eldon) ; Mogul S. S. Co. v. McGregor, 23 Law E. Q. B. D. 598, 609 (per Lord Esher) ; Express Cases, 117 U. S. 1, 21, 24; Eailway v. Pullman Car Co., 139 U. S. 79, 89-91.] Nor is there any more property in " news," to wit, "information," " intelligence," " knowledge," than there is in " the viewless winds," until the " guinea stamp " of a copyright is impressed upon its external similitude, thus giving it one of the elements of prop- erty, to wit, governmental protection for a limited period. That there is no monopoly, even in fact, in the business in which respondent is engaged, is shown in the clearest possible manner by this record. Other newsgathering agencies have the same facilities over the wires of the Western Union Telegraph as has 80 BASES OF PUBLIC SEEVICB DUTIES. [CHAP. I. the Associated Press. The terms of the telegraph company are uniform as to all organizations, and such other agencies are at work in their occupation, and, it would seem, with great sue-; cess. Hundreds of daily newspapers in every quarter of the Union, leaders in point of circulation in their respective localities, look for their news supplies to some other agency than that of respon- dent. Some publishers accustomed to receive reports from respon- dent have discontinued their business relations with it, and gone to some rival or competing organization. The New York Sun^ repeatedly urged to join the respondent, has continuously declined. And the relator company, notwithstanding the allegations of its petition that its paper could not be published with a profit without the aid of the Associated Press, Mr. Lowenstein, the Star's busi- ness manager, gives it as his opinion under oath that "the Stan prints a better budget of news than any of its rivals." For the purpose of obtaining its supplies of news the Star is affili- ated with the 'New York Sun or LaflEan JSTews Bureau, and concern- ing the efficiency of that service Mr. LafEan, testifying, says : " It has no equal at all, from our point of view ; " and, answering the question whether, " as a matter of fact, it is better than the Asso~ ciated Press ? " answered, " Of course it is ; everybody knows that.". And Mr. M. E. Stone, general manager of the Associated Press, says, that the Scripps-McEae service is an excellent one. If these statements are to be taken as true, and so they will be regarded for the purpose of this case, relator has no standing in court, because Lord Ellenborough, in the Allnutt-Inglis case, supra, after commenting on the fact that the London Dock Company's warehouses were the only places where wines of importers could be bonded, went on to say : " If the crown should hereafter think it advisable to extend the privilege more generally to other persons and places, so far as that the public will not be restrained from exercising a choice of warehouses for the purpose, the company may be. enfranchised from the restriction which attaches upon a monopoly." [13 Bast, loc. cit. 540.] And because, further, a court in circumstances as above related will not award a discretionary writ as now here prayed for the mere purpose of determining an empty and barren technical right in behalf of a petitioner, it will " let well enough alone." Subsidiary to considerations heretofore mentioned may be sug- gested others tending in the same direction. In Mathews v. Associated Press 15 N". Y. Supp. 887, defendant, a corpora- tion organized under the act " to incorporate the Associated Press of the state of New York" (Laws 1867, c. 754), adopted a by- law prohibiting its members from receiving or publishing "the SEC. IV.] ECONOMIC MONOPOLY. 81 regular news dispatches of any other news association covering a like territory, and organized for a like purpose." A suspen- sion of all the rights and privileges of the association was pro- vided as a penalty for a violation of said provision. In an action to restrain defendant from enforcing this penalty, held that the association had power to enact the by-law; that it was not ob- jectionable either as unreasonable and oppressive or as tending to restrain trade and competition and to create a monopoly. It appeared that, while defendant only appoints and engages agents, in the strict sense of the term, in the state of New York, by virtue of contracts with other associations, it receives from them news collected from the principal portions of the civilized world. Plaintiffs are also members of, and they publish the news received from, another press association, which collects its news, by its own agents, from substantially the same territory. Held further, that this action of plaintiffs came within the prohibition of the by-law, and authorized defendant to enforce the penalty. The court in general term, among other things, said : " The busi- ness of collecting the news of the day and furnishing reports of it to the press for a compensation has become a very well known and important industry. It can scarcely be called a branch of trade. There is no right of property in the news itself. That is neither bought nor sold. Any man who hears it may make such use of it as he can for his own advantage, or may communicate it to others. So he may make a business of collecting news, and furnishing reports of it to the newspapers, or to such of them as will com- pensate him for his trouble. The work is commonly done in the locality of each newspaper by its own reporters, employed and paid for that purpose. ... In this case the agents are employed by the defendant, the Associated Press of the state of New York, acting for all the publishers who are comprised in its member- ship. As to all these the charter and by-laws of the corpora- tion constitute the contract between themselves and between them and the association. Among the provisions of that con- tract is one to the effect that none of the members shall con- tract with any other news association to employ for them agents for the procurement of news within the same territory as that in which agents of the defendant association are employed. This contract between the members of the association is mutual, and is for the common benefit, and so is supported by a suffi- cient consideration. It is for the common benefit, because the efficiency of the association depends upon the number and ac- tivity of its agents, and these largely upon the extent of its revenues, from which salaries are paid, and that in turn upon 83 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. the number of its patrons ; so the building up of competitors, which must draw ofE from its patronage, will necessarily detract from the extent and value of its work- The contract, therefore, of the associates with each other and of those with the association, which is embodied in the by-law in question, seems to us not to exceed the proper bounds of self -protection, and not to be unreasonable nor obnoxious to any principle which has been invoked for its condemna- tion." This ruling of the supreme court was unanimously affirmed by the court of appeals, Mr. Justice Peckham delivering the opinion, who afterwards delivered the opinion of the court in U. S. v. Trans-Missouri Freight Ass'n, 166 U. S. 390. In a prior case, Dunlop's Cable News Co. v. Stone 15 N. Y. Supp. 3, the contention was made that news-gathering was a "public business." The Cable News Company was a corporation engaged in col- lecting news and selling the same to all newspapers applying therefor. The New York Associated Press was an association of newspaper proprietors also engaged in the business of collect- ing news and furnishing it to newspapers. The association had a by-law to the effect that none of its members should take news from any other agencies. For violation of this by-law by a number of publishers the association threatened to discontinue its service to them. The suit was to enjoin the association from such proposed action. The plaintiff alleged that the business engaged in by the parties was " a public business, and that both plaintiff and the said New York Associated Press are, therefore, under an obligation to serve the entire public ; and that it is essential for the proper conduct of a newspaper, and for the interests of its readers, subscribers, and advertisers, and for the interest of the public, that such newspaper should be at liberty to avail itself of all sources of information, and combine, if it think best, the intelligence and information furnished by the various agencies instituted for that purpose." A motion for an injunction pendente lite was denied. On appeal to the general term the ruling below was sustained. The court said: "The plaintiff's application amounted to nothing more nor less than an attempt to restrain the defendants from transacting their lawful business in their own way, lest in doing so plaintiff's rival business should be injured or diminished. The defendants have a perfect right to limit the sale of the news which they collect to those who contract to deal exclusively with them. They are private individuals, dealing, it is true, with a large public, but governed by no corporate duty or statutory obligations. They SEC. IV.] ECONOMIC MONOPOLY. 83 certainly owe no duty to the plaintiff, which is a foreign corporation attempting to compete with them, and with whom they have no privity or relations of any kind." In the latter case the defendant association was not incorporated, in the former it was; but both cases were treated alike in this respect. And it has been determined that : " A voluntary association, whether incorporated or not, has, within certain well-defined limits, power to make and enforce by-laws for the government of its members. Such by-laws are ordinarily matters between the association and its members alone, and with which strangers have no concern." [Live-Stock Commission Co. v. Live-Stock Exch., 143 111. 210.] The charter of respondent, after emendation, is couched in these words : " The object for which it is formed is to buy, gather, and accumulate information and news; to vend, supply, distribute, and publish the same." Under the terms of its charter respondent owes no duty to relator, since it possesses no greater right in regard to the gathering and purchase, etc., of news than its incorporators possessed as individuals before the act of incorporation. (Au- thorities supra.) But on the basis that the charter, by-laws, etc., place respondent on the plane of any other corporation in charge of a "public utility," relator asserts that respondent's business is to be regarded in the same light precisely as a railroad, telegraph, or telephone company; that it involves a public franchise. But in Live-Stock Commission Co. v. Live-Stock Exch., supra, it was ruled that: The mere fact that the business of a particular market owned by a private corporation has become so large as to influence the commerce of a large section of the country will not give the courts any power to declare such market public, and im- pressed with a public use, or to apply to it any rules of public policy peculiar to that class of markets. That power belongs alone to the legislative department of the state. [See Express Cases, supra; Eailroad v. Eailroad, 41 Fed. Eep. 559, 569 (Per Caldwell, J,) ; Interstate Commerce Commission v. Eailway, 167 U. S. 479, 499 ; Eailway v. Central Stock Yards Co., 45 N. Y. Eq. 50.] In making this ruling, not only was Munn's case on the point involved, cited with approval, but, in addition thereto, Ladd v. Southern Cotton Press Co., 53 Tex. 172, was cited, and its lan- guage approvingly quoted : "We know of no authority, and none has been shown us, for saying that a business strictly juris privati will become juris publici merely by reason of its extent. If the magnitude of a particular business is such, and the persons aifected by it are so numerous, that the interests of society demand that the rules and principles 84 BASES OF PUBLIC SERVICE DUTIES. [CHAP. I. applicable to public employments should be applied to it, this would have to be done by the legislature (if not restrained from doing so by the constitution), before a demand for such use could be en- forced by the courts." It is not pretended here that such legislation would make re- spondent corporation's business juris publici has been enacted, grant- ing that such legislation could have any extraterritorial effect (as to which see Vawter v. Eailroad Co., 84 Mo. 679 ; State v. Gritzner, 134 Mo. 513, and cases cited; Harris v. White, 81 N. Y., loc. cit. 644). It is needless to discuss in this connection cases which bring into view the duties of railroad, telegraph, and telephone companies, since, those companies having accepted legislative favors, right of eminent domain, etc., must shoulder the burdens along with the benefits, and their business becomes by such acceptance ipso facto publici juris. ISTot so, however, with respondent, which was granted no privileges, asks none, and cannot, therefore, be burdened with conditions such as pertain to common carriers and the like. As to the case of Minnesota Tribune Co. v. Associated Press, 83 Fed. 350, it seems to recognize the validity of such contracts by the Associated Press as are the subject of complaint here. But, if this is not so, we prefer the ruling and reasoning on this point in Mathews' Case. In regard to New York & Chicago Grain & Stock Exch. v. Board of Trade of City of Chicago, 127 111. 153, much relied on by relator : For many years the board of trade had been accustomed to furnish to all customers the telegraphic reports as to daily and hourly conditions of the grain and other mar- kets. Having done so for such a long time, it undertook sud- denly to disrupt those long-continued business relations, and leave the plaintiff, a corporation engaged in the commission busi- ness, without any means of conducting its ordinary and long- established business; and upon this basis it was very properly held that plaintiff was entitled to injunction to prevent the threat- ened disruption of business. This was the very gist of the de- cision in that case, and we need not say whether we fully indorse much of the language and of the reasoning used in arriving at the conclusion reached; and this reason, among others, occurs why we need not, and that is, respondent has never entered into business relations with relator, and consequently there are no such relations to be severed, and no such injurious results can occur in this case as in the one referred to. Eelative to the recent decision by the supreme court of Illinois in Inter-Ocean Pub. Co. v. Associated Press, to which our atten- SEO. IV.] ECONOMIC MONOPOLY. 85 tion has been called, the Inter-Oeean Company was engaged in publishing two newspapers in Chicago, the Daily and the Weelcly Inter-Ocean. A contract was entered into between the parties as to furnishing news in accordance with the by-laws of the As- sociated Press. This contract the Inter-Ocean Publishing Com- pany violated by procuring and publishing news obtained from other news concerns located in the city of New York. Being notified by the Associated Press to appear to answer such charges of violation of contract, the Inter-Ocean Publishing Company resorted to injunction to prevent expulsion for violation of the by- laws of the Associated Press, which formed part and parcel of the contract between the parties. The Inter-Ocean Publishing Company admitted in its bill for injunction that it had violated its contract, and, seemingly by way of excuse, alleged that it could not obtain all the news from the other contracting party, and so was forced to engage the services of other news-gathering associations. Answer was filed, and, upon hearing had, the bill was dismissed for want of equity, and this decree was affirmed in the appellate court. But when the cause reached the supreme court the decrees of the lower courts were reversed, and the cause remanded, with directions to enter a decree as prayed. The rulings in that case were: (1) The by-law and contract created a monopoly. (3) That it was necessary to publish news from other sources to make a check on the defendant. (3) That the by-law tends to restrict competition, because it prevents members from purchasing news from any other source. (4) That the contract and by-law are void, as being beyond the power of the defendant to make. (5) That the " obligation [of the defendant] to serve the public is one not resting on contract, but grows out of the fact that it is in the discharge of a public duty, or a private duty which has been so conducted that public interest has attached thereto." And (6) that the fact that the defendant possessed the right to use the power of eminent domain as to telegraph and telephone lines, although not exercised, contributed to determine the character of its corporate organization. And on these grounds was based the ruling that the defendant must furnish every one applying with the same service of news. The above decision is evidently at war with the rulings in the Live- stock Commission case, supra, where " the amount of business annually transacted at said stock yards is such as to constitute the market thus established the largest live-stock market in the world." If the facts just related did not impress the business with a public use, it is difficult to conceive what facts could do so; and, in addi- tion to the utterances heretofore quoted in the Live-Stock Commis- sion case, the court there also said : " The views here expressed 86 BASES OF PUBLIC SEEVICE DUTIES. [CHAP. I, do not conflict with what was decided in Munn v. Illinois, 94 tr. S. 113. The question raised and decided in that case was as to the constitutionality of the act of the legislature of this state declaring certain grain elevators to be public warehouses, and prescribing rules for their management, and fixing maximum charges for the storage and handling of grain. There the legislatiTe department had interposed, and declared the public use; and the court, in holding the act constitutional, held merely that the legisla- tive power had been properly exercised. This was the only ques- tion having any relevancy here presented in that case, or which the court undertook to decide; and the discussion of the evidence showing that the business carried on in said grain elevators was of such character that it had in fact become impressed with a public use was only for the purpose of showing that a condition of things existed which justified the legislature in passing the statute then under consideration." [143 111., loc. eit. 339.] That case clearly announces that it is necessary in cases like the present one that the Legislature should declare that the business "had in fact become impressed with a public use"; something which, as there stated, the courts were powerless to declare. But tha,t case was wholly ignored in the case under comment. For these reasons, besides those already given during the course of this investigation, we decline to follow that case or regard its rulings authoritative. Moved by these considerations, we deny the peremptory writ. All concur. CHAPTER 11. THE SERVICE TO BE RENDERED. Section 1. ,What Service Must Be Rendered. FISH V. CHAPMAlSr. 2 Ga. 349. 1847.^ NiSBiT, J., delivered the opinion of the court. The Court below decided that the plaintiff in error under his contract with Chapman & Eoss was a common carrier, to which opinion he excepts. The evidence upon this point is the contract and n othing mor e. It does not appear that carrying was his habitual business; a ll that does appear from the record is, that he under - t ook upoS T^ special contract, and upon this, occasion, to haul on lis own~waguu for a compensation specified, the goods of the defendants from the then terminus of the Central Eail Eoad to the city of Macon. Does such an undertaking make him a com- mon carrier? That is the question, and we are inclined to answer it in the negative. A common carrier is one who undertakes to transport from place to place for hire, the goods of such persons as think fit to employ him. Such is a proprietor of wagons, barges, lighters, merchant ships, or other instruments for the public con- veyance of goods. See Mr. Smith's able commentary on the case of Coggs V. Bernard, 1 Smith Leading Cases, 172; Forward v. Pittard, 1 T. E. 37; Morse v. Slew, 2 Lev. 69; 1 Vent. 190, 338; Eich V. Kneeland, Cro. Jac. 330; Maving v. Todd, 1 Stark, 73; Brook V. Pickwick, 1 Bing. E. 318. Eailway companies are com- mon carriers. Palmer v. Grand Junction Canal Co., 4 M. & W. E. 749. "Common carriers (says Chancellor Kent), undertake generally and for all people indifferently, to convey goods and deliver them at a place appointed, for hire, and with or without a special agreement as to price." 3 Kent, 598. A common carrier is bound to convey the goods of any person offering to pay his hire unless his carriage be already full, or the 1 The statement of facts, arguments of counsel and parts of the opinioa are omitted. — Ed. 88 THE SERVICE TO BE RENDEEED. [CHAP. II. risk sought to be imposed upon him extraordinary, or unless the goods be of a sort which he cannot convey, or is not in the habit of conveying. Jackson v. Eogers, 2 Show. 337 ; Riley v. Home, 5 Bing. E. 217; Lane v. Cotton, 1 Ld. Eay. R. 646; Edwards v. Sheratt, 1 East. R. 604; Batson v. Donovan, 1 B. & A. R. 32; 2 Kent, 598; Elsee V. Gatwood, 5 T. R. 143; 1 Pick. R. 50; 2 Sumner R. 221; Story on Bail. 322, 323 ; Dudley S. C. Law and Eq. R. 159. It is from these definitions and from the two propositions stated, that we are to determine what constitutes a person a common carrier. I infer then that the business of carrying must be habitual and not casual. An occasional undertaking to carry goods will not make a person a common carrier; if it did, then it is hard to determine who, in a planting and commercial community like ours, is not one ; there are few planters in our own State owning a wagon and team, who do not occasionally contract to carry goods. It would fee contrary to reason, and excessively burdensome, nay, enormously oppressive, to subject a man to the responsibilities of a common carrier, who might once a year or oftener at long intervals, con- tract to haul goods from one point in the State to another. Such a rule would be exceedingly inconvenient to the whole community, for if established, it might become difficult in certain districts of our State to procure transportation. The undertaking must be general and for all people indifferently^ The undertaking may be evidenced by the carrier's own notice, or practically by a series of acts, by his known habitual continuance in this line of business. He must thus assume to be the servant of the public, he must undertake for all people. A special undertaking- for one man does not make a wagoner, or anybody else, a common carrier. I am very well aware of the importance of holding wagon- ers in this country to a rigid accountability; they are from neces- sity greatly trusted, valuable interests are committed to them, and they are not always of the most careful, sober and responsible class of our citizens. Still the necessity of an inflexible adherence to gen- eral rules we cannot and wish not to escape from. To guard this point therefore, we say, that he who follows wagoning for a liveli- hood, or he who gives out to the world in any intelligible way that he will take goods or other things for transportation from place to place, whether for a year, a season, or less time, is a common carrier and subject to all his liabilities. One of the obligations of a common carrier, as we have seen, is to carry the goods of any person offering to pay his hire ; with cer- tain specific limitations this is the rule. If he refuse to carry, he is liable to be sued, and to respond in damages to the person ag- grieved, and this is perhaps the safest test of his character. By, SEC. I.] WHAT SERVICE MUST BE RENDERED. 89 this test was Mr. Fish a common carrier ? There is no evidence to make him one but his contract with Chapman & Ross. Suppose that after executing this contract, another application had been made to him to carry goods, which he refused, could he be made liable in damages for such refusal upon this evidence? Clearly not. There is not a case in the books, but one to which I shall presently advert, which would make him liable upon proof of a single carrying operation. Upon these views we predicate the opinion, that the plaintiff in error was not a common carrier. From the way in which the opinion of the court is expressed in the bill of exceptions, I am left somewhat in doubt whether the able judge presiding in this cause, intended to say that the plaintiff in error was a common carrier, or that under his contract he was liable as such. If the former, we think he erred; and if the latter, as we shall more fully show, we think with him. In either event we shall not send the case back; for if he meant to say that the plaintiff upon general principles was a common carrier, thinking as we do that he is liable under this contract as such, he will not be benefited by the case's going back. In conflict with these views, it has been held in Pennsylvania, that " a wagoner who carries goods for hire, is a common carrier, whether transportation be his principal and direct business, or an occasional and incidental employment." Gibson, Chief Justice, in Gordon v. Hutchinson, 1 Watts & Serg. R. 285. This decision no doubt contemplates an undertaking to carry generally without a special contract, and does not deny to the undertaker the right to define his liability. There are cases in Tennessee and New Hamp- shire which favour the Pennsylvania rule, but there can be but little doubt that that case is opposed to the principles of the common law, and its rule wholly inexpedient. ' See Story on Bail. sees. 457, 495 ; Bac. Ab. Carrier A.; 2 Bos. & Pul. 417; 4 Taunt. 787; Jones Bail. 121; 1 Wend. E. 372; 6 Taunt. E. 577; 2 Kent, 597. THE CITIZENS' BANK v. THE NANTUCKET STEAMSHIP CO. 2 Story, 16. 1841.^ Story, J. This cause has come before the Court under circum- stance, involving some points of the first impression here, if not of entire novelty ; and it has been elaborately argued by the counsel 1 The statement of facts and arguments of counsel, as well as a part of the opinion dealing with questions of evidence, are omitted. — Ed. 90 THE SERVICE TO BE EENDEEED. [CHAP. II. on each side on all the matters of law, as well as of fact, involved in the controversy. I have given them all the attention, both at the argument and since, which their importance has demanded, and shall now proceed to deliver my own judgment. The suit is in substance brought to recover from the Steamboat Company a sum of money, in bank bills and accounts, belonging to the Citizens' Bank, which was intrusted by the cashier of the bank to the master of the steamboat, to be carried in the steamboat from the Island of Nantucket to the port of New Bedford, across the intermediate sea, which money has been lost, and never duly delivered by the master. The place where, and the circumstances under which it was lost, do not appear distinctly in the evidence; and are no otherwise ascertained, than by the statement of the master, who has alleged that the money was lost by him after his arrival at New Bedford, or was stolen from him; but exactly how and at what time he does not know. The libel is not in rem, but in personam, against the Steam Boat Company alone; and no question is made (and in my judgment there is no just ground for any such question), that the cause is a case of admiralty and maritime jurisdiction in the sense of the Constitution of the United States, of which the District Court had full jurisdiction; and, therefore, it is properly to be entertained by this Court upon the appeal. There are some preliminary considerations suggested at the argument, which it may be well to dispose of, before we consider those, which constitute the main points of the controversy. In the first place, there is no manner of doubt, that steamboats, like other vessels, may be employed as common carriers, and when so employed their owners are liable for all losses and damages to goods and other property intrusted to them as common ca:criers to the same extent and in the same manner, as any other common carriers by sea. But whether they are so, depends entirely upon the nature and extent of the employment of the steamboat, either express or implied, which is authorized by the owners. A steamboat may be employed, although I presume it is rarely the ease, solely in the transportation of passengers ; and then the liability is incurred .only to the extent of the common rights, duties and obligations of carrier vessels of passengers by sea, and carrier vehicles of passengers on land; or they may be employed solely in the transportation of goods and merchandise, and then, like other carriers of the like character at sea and on land, they are bound to the common duties, obligations and liabilities of common carriers. Or the employ- ment may be limited to the mere carriage of particular kinds of property and goods ; and when this is so, and the fact is known and SEC. I.] WHAT SERVICE MUST BE RENDERED. 91 avowed, the owners will not be liable as common carriers for any other goods or property intrusted to their agents without their consent. The transportation of passengers or of merchandise, or of both, does not necessarily imply, that the owners hold them- selves out as common carriers of money or bank bills. It has never been imagined, I presume, that the owners of a ferry boat, whose ordinary employment is merely to carry passengers and their lug- gage, would be liable for the loss of money intrusted for carriage to the boatmen or other servants of the owners, where the latter had no knowledge thereof, and received no compensation therefor. In like manner the owners of stage-coaches, whose ordinary em- ployment is limited to the transportation of passengers and their luggage, would not be liable for parcels of goods or merchandise intrusted to the boatman employed by them to be carried from one place to another on their route, where the owners receive no compensation therefor, and did not hold themselves out as common carriers of such parcels. A fortiori, they would not be liable for the carriage of parcels of money, or bank bills, under the like cir- cimistances. So, if money should be intrusted to a common wagoner not authorized to receive it by the ordinary business of his employ- ers and owners, at their risk, I apprehend, that they would not be liable for the loss thereof as common carriers, any more than they would be for an injury done by his negligence, to a passenger, whom he had casually taken up on the road. In all these cases, the nature and extent of the employment or business, which is authorized by the owners on their own account and at their own risk, and which either expressly or impliedly they hold themselves out as undertaking, furnishes the true limits of their rights, obligations, duties and liabilities. The question, therefore, ,in all cases of this sort is, what are the true nature and extent of the employment and business, in which the owners hold them- selves out to the public as engaged. They may undertake to be common carriers of passengers, and of goods and merchandise, and of money; or, they may limit their employment and business to the carriage of any one or more of these particular matters. Our steamboats are ordinarily employed, I believe, in the carriage, not merely of passengers, but of goods and merchandise, including specie, on freight; and in such cases the owners will incur the lia- bilities of common carriers as to all such matters within the scope of their employment and business. But in respect to the carriage of bank bills, perhaps very different usages do, or at least may, prevail in different routes, and different ports. But, at all events, I do not see, how the Court can judicially say, that steamboat owners are either necessarily or ordinarily to be deemed, in all cases, com- 93 THE SERVICE TO BE RENDEEED. [CHAP. II. mon carriers, not only of passengers, but of goods and merchandise and money on the usual voyages and routes of their steamboats; but the nature and extent of the employment and business thereof must be established as a matter of fact by suitable proofs in each particular case. Such proofs have, therefore, been very properly re- sorted to upon the present occasion. In the next place, I take it to be exceedingly clear, that no person is a common carrier in the sense of the law, who is not a carrier for hire ; that is, who does not receive, or is not entitled to receive, any recompense for his services. The known definition of a com- mon carrier, in all our books, fully establishes this result. If no hire or recompense is payable ex dehito justitim, but something is bestowed as a mere gratuity or voluntary gift, then, although the party may transport either persons or property, he is not in the sense of the law a common carrier; but he is a mere mandatary, or gratuitous bailee ; and of course his rights, duties and liabilities are of a very different nature and character from those of a common carrier. In the present case, therefore, it is a very important in- quiry, whether in point of fact the respondents were carriers of money and bank notes and checks for hire or recompense, or not. I agree, that it is not necessary, that the compensation should be a fixed sum, or known as freight; for it will be sufficient if a hire or recompense is to be paid for the service, in the nature of a quantum^ mermt, to or for the benefit of the Company. And I farther agree, that it is by no means necessary, that if a hire or freight is to be paid, the goods or merchandise or money or other property should be entered upon any freight list, or the contract be verified by any written memorandum. But the existence or non- existence of such circumstances may nevertheless be very important ingredients in ascertaining, what the true understanding of the parties is, as to the character of the bailment. In the next place, if it should turn out, that the Steamboat Com- pany are not to be deemed common carriers of money and bank bills; still, if the master was authorized to receive money and bank bills as their agent, to be transported from one port of the route of the steamboat to another at their risk, as gratuitous bailees, or mandataries, and he has been guilty of gross negligence in the performance of his duty, whereby the money or bank bills have been lost, the Company are undoubtedly liable therefor, unless such transportation be beyond the scope of their charter; upon the plain ground, that they are responsible for the gross negligence of their agents within the scope of their employment. Having stated these preliminary doctrines, which seem neces- sary to a just understanding of the case, we may now proceed SEC. I.] WHAT SEEVICE MUST BE EENDERED. 93 to a direct consideration of the merits of the present controversy. And in my judgment, although there are several principles of law involved in it, yet it mainly turns upon a matter of fact, liamely, whether the Steamboat Company were, or held them- selves out to the public to be, common carriers of money and bank bills, as well as of passengers and goods and merchandises, in the strict sense of the latter terms; or the employment of the steamboat was, so far as the Company are concerned, limited to the mere transportation of passengers and goods and merchandises on freight or for hire; and money and bank bills, although known to the Company to be carried by the master, were treated by them, as a mere personal trust in the master by the owners of the money and bank bills, as their private agent, and for which the Company never held themselves out to the public as responsible, or as being within the scope of their employment and business as carriers. The question has been made at the bar, upon whom in this case the burthen of proof lies to establish, that the Company were common carriers of money or bank bills, or not. It does not ap- pear to me to be of any great importance in the actual posture of the present case, how that matter is decided. But I have no doubt, that the ornis probandi is upon the libellants to establish the affirma- tive; for until that is done, no liability can attach to the respon- dents; and the libellants are bound to establish a prima facie case; and indeed it is scarcely within the rules of evidence to call upon the respondents to establish the negative. But it seems to me the less necessary to sift this matter, since the evidence on the part of the libellants is in my judgment sufficient to establish such a prima facie case, at least to the extent of a compliance with the ex- igency of the rule. It is abundantly proved, that the masters of the steamboat have been constantly and habitually employed in the transportation of money and bank bills for banks and private persons (as indeed com- mon packet masters were likewise employed long before steamboats existed) upon this very route, and upon the common routes from Nantucket to other ports. This usage, or practice, or employment (call it which we may), was so notorious, that it must be presumed to be known to the Steamboat Company; and indeed, that fact is not contraverted. Under such circumstances the natural inference would be, that the transportation of money and bank bills was within the scope of the usual employment of the master in his official capacity, and on account and at the risk of the owners, unless the inference were repelled by other circumstances. The onus probandi then, of disproving this inference, may be deemed to be fairly shifted upon the respondents. 94 THE SERVICE TO BE RENDERED. [CHAP. II. The groTind of the defence of the Company is, that in point of fact, although the transportation of money and bank bills by the master was well known to them, yet it constituted no part of their own business or employment; that they never were in fact common carriers of money or bank bills; that they never held themselves out to the public as such, and never received any compensation therefor; that the master in receiving and transporting money and bank bills acted as the mere private agent of the particular parties, who intrusted the same to him, and not as the agent of the Com- pany or by their authority; that in truth he acted as a mere gra- tuitous bailee or mandatary on all such occasions; and even if he stipulated for, or received, any hire or compensation for such services, he did so, not as the agent of or on account of the Com- pany, but on his own private account, as a matter of agency for the particular bailors or mandators. Now, certainly, if these mat- ters are substantially made out by the evidence, they constitute a complete defence against the present suit.^ THOMPSON V. LACY. 5 Eng. Com. L. Rep. 285. 1820.^ Trover for goods. Plea, not guilty. At the trial before Abbott, C. J., at the London sittings after last Trinity term, it appeared the defendant kept a house of public entertainment, called the Olohe Tavern and Cojfee House, in Pore Street, Mooregate, where he provided lodging and entertainment for travellers and others. No stage coaches or wagons stopped there, nor were there any stables belonging to the house. The plaintiff, in December, 1818, having lived before that time in furnished lodgings in London, went to the defendant's house and engaged a bed; he continued to reside there for several months, and then left the place. The defendant, in his bill, charged for eighty-three nights' lodgings; and claimed to detain the goods mentioned in the declaration, on account of money due to him for lodging and entertainment pro- vided for the plaintiff. Upon these facts, the Lord Chief Justice 2 After a lengthy review of the evidence the court decided that the decree of the District Court in favor of the Steamboat Company ought to be af- firmed. — Ed. See People v. Babcock (1878), 16 Hun (N. Y.) 313, where an express company was found not to be a common carrier of glass ; Collier v. Langan T. S. & M. Co. (1910), 147 Mo. App. 700, where defendant was found to be a common carrier of household goods only; Tunnell v. Petti John (1836), 2 Harr. (Del.) 48, where defendant's profession as a common carrier was held not to extend to objects too large to be conveniently carried on his cart. 1 Concurring opinions of Abbott, C. J., and Best, J., are omitted. — Ed. SEC. I.] WHAT SERVICE MUST BE EENDEEED. 95 was of opinion, that the defendant had a lien upon the goods, and the plaintiff was nonsuited, with liberty to move to enter a verdict for nominal damages, the defendant undertaking, in that ease, to re-deliver the goods. A rule nisi having accordingly been obtained in the last term for that purpose, Marryat and E. Lawes now showed cause, and referred to Park- hurst V. Foster, 1 Salk. 387. Chirney and F. Pollock, contra, in support of the rule cited Calye's Case, 8 Coke, 683. Batlet, J. I am of opinion that this is substantially an inn. In order to learn its character, we must look to the use to which it is applied, and not merely to the name by wnicn it is designated. Now this house was used for the purpose of giving accommoda- tion to travellers, who, in London, reside either in lodgings or in inns. The defendant did not merelv furnish tea and coffee as fhpTrpPjTPr^ ftf a pnffpp-bnnsp dnps^ nnr a. tab ls as the k f^pppr nf a faverndoes ; but he provided lodgings, and that in the way they are provided at inns; for the charge was at so much per night. In the Six Carpenter's case, 8 Coke, 390, a tavern is so far considered as an inn, that all persons are said to have a right to enter it. And I take the true definition of an inn to be, a house where the traveller is furnished with everything which he has occasion for whilst on his way. It has been said, however, that in London the character of inn belongs only to those houses of public entertain- ment frequented by wagons and stage coaches. Now if the lia- bility of a party as innkeeper depended on such a circumstance, it would follow that a person coming to such a house as this from the country in his own private carriage, or in a post-chaise, could not be entitled to consider the owner as responsible for the safety of his goods. It has also been urged, that to constitute an inn there should be stables annexed to it: if that were so, many inferior houses of entertainment in the country, frequented by foot travellers, would not come within the description; and the poorer travellers would not have the protection which the law gives to a guest against an innkeeper. I think, therefore, that in point of law this is an inn, and that the defendant is under the obligations to which innkeepers are liable, viz., that he is bound to receive all persons who are capable of paying a reasonable compensation for the accommodation provided, and that he is liable for their goods, if lost or stolen ; and, on the other hand, that he has a lien on the goods of his guests for the payment of his bill. This rule must, therefore, be discharged. Eule discharged.^ 2 " But it has been decided that a man may be an innkeeper, and liable as such, though he has no provision for horses." Kisten v. Hildebrand 96 THE SERVICE TO BE KENDEEED. [CHAP. II. KANSAS PACIFIC RY. CO. v. NICHOLS, KENNEDY & CO. 9 Kan. 235. 1872.^ Valentine, J. The main "question in this ease is whether the railway company, when it took the cattle of the plaintiffs below for the purpose of transporting them over its road, assumed the respon- sibilities of a common carrier or not. We think it did. This ques- tion has already been decided in this court in the case of the Kansas Pac. Ry. Co. v. Reynolds, 8 Kan. 623. In the case of KimbaU v. Rutland & B. R. Co. 26 Vt. 247, 254, et seq., the court decided that "a. railway company that transport cattle and live-stock for hire, for such persons as choose to employ them, thereby assume and take upon themselves the relation of common carriers, and, with the relation, the duties and obligations which grow out of it; and they are none the less common carriers from the fact that the trans- portation of cattle is not their principal business or employment." See, also Welsh v. Pittsburg, Et. W. & C. R. Co. 10 Ohio St. 65. In the case of the Great Western Ry. Co. v. Hawkins, 18 Mich. 427, 433, the supreme court of Michigan use the following language: " The company in this case must be regarded as common carriers, and liable as such, except so far as that liability was qualified by the special contract." The special contract just mentioned was a contract to transport nineteen horses from Paris, Canada, to De- troit, Michigan, and there is nothing in the contract or in the report of the case that tends to show that the company held them- selves out as common carriers of live stock, or that they anywhere agreed or admitted that they were such carriers, and they carried these horses under a special contract. See, also, the authorities cited in the brief of defendants in error, and 2 Redf. Rys. (4th Ed.) 144, note 2, and cases there cited; Wilson v. Hamilton, 4 Ohio St. 738 ; Sager v. Portsmouth R. Co. 31 Me. 228 ; Clarke V. Rochester & S. R. Co. 14 N. Y. 570; North Mo. R. Co. v. Akers, 4 Kan. 453; Keeney v. Grand Trunk Ry. Co., 59 Barb. 104; Welsh V. Pittsburg, Ft. W. & C. R. Co. 10 Ohio St. 65. It is claimed (1848), 9 B. Mon. (Ky.) 72, 74. "Edwards says, a hotel 'is only an ele- gant kind of common inn.' (Edwards on Bailments, 401.) The same au- thor remarks, in a note at the bottom of page 402, ' Every hotel is an inn, but not every inn is a hotel.' At common law, any person may keep an inn for the public accommodation, without a license, as the keeping of it is not a franchise, but a lawful trade open to every citizen. (The Overseers, etc., V. Warner, 3 Hill R. 150.) And I am of the opinion any person may keep an inn, tavern or hotel, in this State, without having a license to sell strong or spiritous liquors and wines to be drank in his house." People v- Murphy (1861), 5 Parker's Crim. R. (N. Y.) 130, 132. 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. SEC. I.] WHAT SEKVICB MUST BE EENDEEED. 97 that a different doctrine has recently been held in Michigan. Michi- gan South. & N. I. E. Co. V. McDonough, 21 Mich. 165. This is certainly true with respect to the railroad then under consideration by the court; but whether it is true with regard to all railroads in the state of Michigan is not so certain. See pages 189, 198, and 199 of the opinion, and the comments of the court on the provisions of the charter of the Michigan Southern Eailroad Company, and the act consolidating it with the Northern Indiana Eailroad Company. But if this decision does not apply to all the railroads of Michigan as well as to the Michigan Southern & North- ern Indiana Eailroad Company, under its peculiar charter, does it in any manner indicate what the law is in Kansas ? We think not, or but very little at most. In Michigan, since April,- 1870, railroads have not been public purposes, or public uses, in the sense that they are such in the other states of the Union. In that state they are purely and strictly private purposes or uses. People v: Salem, 20 Mich. 452, 475, 480, 485. The supreme court of that state say that "they (railroad companies) are public agents in the same sense that the proprietors of many other kinds of private business are, and not in any other or different sense." " Our policy in that respect," say the court, " has changed ; railroads are no longer public works, but are private property." Eailroads are private, according to that decision, in the same sense that the difEerent kinds of business of hackmen, draymen, proprietors of stage-coaches, mer- chants, newspaper proprietors, physicians, manufacturers, meChaii- ics, hotel-keepers, millers, etc., are private. Eailroads in Michigan seem from that decision to be such private corporations as are described in the case of Leavenworth Co. v. Miller 7 Kan. *524, *535. If they are such private corporations as there described, 'of course they have a right to be common carriers of just such property as they choose, no more and no less. This is not so in Kansas. The railroads of Kansas are organized upon a difEerent basis. In Kansas they are endowed with a kind of quasi public as well fts private character. In Kansas they are so far public that the sov- ereign power of eminent domain may be exercised for their benefit, and they are so far public, that other public aid may be extended to them. It is believed that no railroad has yet been built iJx Kansas that has not been aided both by the exercise of the poWer of eminent domain, and by other public aid, such as lands and county or municipal bonds. Eailroads are public purposes in no sense except in the sense of being common carriers of freight and passengers. It is true that there are incidental public benefits arising from the creation and operation of railroads, such as the increase in the value of property along their routes, the increaSfe 98 THE SERVICE TO BE EENDEEED. [CHAP. II. of the public revenues, etc., but these are only incidental benefits, and are not at all what make railroads public purposes. And this public character of railroads is stamped upon them by the sovereign power where it authorizes their coming into existence; for other- wise they could receive no public aid until the roads should be constructed and in operation, and until the roads should become public purposes by virtue of becoming common carriers of freight or passengers. And if they were created absolutely private corpora- tions they could become common carriers only by holding themselves out as such, and by actually carrying freight or passengers. We suppose it will not be contended that any kind, of public aid could be extended to a purely private corporation. If a railroad company is created as a private carrier, and not as a public or com- mon carrier, we suppose that no one will contend that the sovereign power of eminent domain could be exercised for its benefit in its construction, or that any public aid of any kind whatever could be extended to it. That railroads are created common carriers of some kind, we believe is the universal doctrine of all the courts. The main question is always whether they are common carriers of the particular thing then under consideration. The question in this case is whether they are common carriers of cattle. So far as our statutes are concerned no distinction is made between the carry- ing of cattle and that of any other kind of property. Under our stf^tutes a railroad may as well be a common carrier of cattle as of goods, wares, and merchandise, or of any other kind of property. Now, as no distinction has been made by statute between the carry- ing of the different kinds of property, we would infer that railroads were created for the purpose of being common carriers of all kinds of property which the wants or need of the public require to be ; carried, and which can be carried by railroads ; and particularly we would infer that railroads were created for the purpose of being common carriers of cattle. As Kansas, and all the surrounding states and territories, with their boundless prairies and nutritious grasses, are destined to be great stock-growing countries, it can scarcely be supposed that the legislature in providing common carriers for the property of the public should have omitted to provide for one of the most important kinds of property, a vast source of unbounded wealth. We have no navigable streams within the boun- daries of Kansas upon which to transport cattle, and hence they must be transported by railroad, if transported by any means except by driving them on foot. It is claimed, however, that " the transportation of cattle and live- stock by common carriers by land was unknown to the common law." Suppose it was ; what does that prove ? The transportation SEC. I.] WHAT SERVICE MUST BE EENDEEED. 99 of thousands of other kinds of property, either by land or water, was unknown to the common law, and yet such kinds of property are now carried by common carriers and by railroads every day. We get our common law from England. It was brought over by our ancestors at the earliest settlement of this country. It dates back to the fourth year of the reign of James I., or 1607, when the first English settlement was founded in this country at Jamestown, Virginia. The body of the laws of England as they then existed now constitute our common law. It is so fixed by statute in this state (Comp. Laws, 678; Gen. St. 1127, § 3), and is generally so fixed by statute or by judicial decisions in the other states. The reason why cattle and live-stock were not transported hy land by common carriers, at common law, was because no common carrier at the time our common law was formed had any convenient means for such transportation. Among the other kinds of property not transported by common carriers, either by land or water, at the time our common law was formed are the following: reapers, mowers, wheat-drills, corn- planters, cultivators, threshing-machines, corn-shellers, gypsum, guano, Indian corn, potatoes, tobacco, stoves, steam-engiues, sew- ing-machines, washing-machines, pianos, reed organs, fire and bur- glar proof safes, etc. ; and yet no one would now contend that rail- roads are not common carriers of these kinds of articles. At com- mon law the character of the carrier was never determined by the kind of property that he carried. He might have been a private or special carrier of goods, wares, and merchandise, or of any other kind of property, or he might have been a public or common carrier of cattle, live-stock, or any other kind of property, just as he chose. All personal property was subject to be carried by a common carrier, and no personal property was exempt. "Whether a person was a common carrier depended wholly upon whether he held himself out to the world as such, and not upon the kind of property that he carried. A common carrier was such as undertook, " generally, and not as a casual occupation, and for all people indifferently, to con- vey goods and deliver them at a place appointed, for hire, as a business, and with or without a special agreement as a price." 3 Kent, Comm. 598. And he could hold himself out as a common carrier by engaging in the business generally, or by announcing or proclaiming it to the world by the issuing of cards, circulars, ad- vertisements, etc., or by any other means that would let the public know that he intended to be a common or general carrier fOr the public. Eailroads hold themselves out as common carriers by an act irrevocable on their part in their very creation and organization. The very nature of their business is such that by engaging in it. 100 THE SERVICE TO BE RENDERED. [CHAP. 11. or offering to engage in it, they hold themselves out as common car- riers. But let us return to the point more especially under consideration. At common law no person was a common carrier of any article unless he chose to be, and unless he held himself out as such; and he was a common carrier of just such articles as he chose to be, and no others. If he held himself out as a common carrier of silks and laces, the common law would not compel him to be a common carrier of agricultural implements, such as plows, harrows, etc. If he held himself out as a common carrier of confectionery and spices, the common law would not compel him to be a common carrier of bacon, lard,' and molasses. Tunnell v. Pettijohn, 2 Harr. (Del.) 48. And it seems to us clear, beyond all doubt, that if any person had, in England, prior to the year 1607, held himself out as a common carrier of cattle and live-stock by land, the common law would have made him such. If so, where is the valid distinction that is attempted to be made between the carrying of live-stock and the carrying of any other kind of personal property? The common law never declared that certain kinds of property only could be carried by common carriers, but it permitted all kinds of personal property to be so carried. At common law any person could be a common carrier of all kinds, or any kind, and of just such kinds, of personal property as he chose; no more, nor less. Of course, it is well known that at the time when our common law had its origin, that is, prior to the year 1607, railroads had no existence. But when they came into existence it must be ad- mitted that they would be governed by the same rules so far as applicable which govern other carriers of property. Therefore it must be admitted that railroads might be created for the purpose of carrying one kind of property only, or for carrying many kinds, or for carrying all kinds of property which can be carried by rail- roads, including cattle, live-stock, etc. In this state it must be presumed that they were created for the purpose of carrying all kinds of personal property. It can hardly be supposed that they were created simply for the purpose of being carriers of such articles only as were carried by common carriers under the common law prior to the year 1607; for, if such were the case, they would be carriers of but very few of the innumerable articles that are now actually carried by railroad companies. And it can hardly be sup- posed that they were created for the mere purpose of taking the place of pack-horses, or clumsy wagons, often drawn by oxen, or such other primitive means of carriage and transportation as were used in England prior to that year. Eailroads are undoubtedly created for the purpose of carrying all kinds of property which SEC. I.] WHAT SERVICE MUST BE RENDERED. the common law would have permitted to be carried by common carriers in any mode, either by land or water, which, probably, includes all kinds of personal property. Our decision, then, upon this question is that whenever a railroad company receive cattle or live-stock to be transported over their road from one place to another, such company assume all the responsibilities of a common carrier, except so far as such responsibilities may be modified by special contract.^ 2 A railroad company is bound to receive and carry cattle, unless it has a reasonable excuse for its refusal. Chicago & A. R. R. Co. v. Ericksoii (1879), 91 111. 613. A railroad carrying livestock is liable as a common carrier. Maynard v. Syr. B. & N. Y. R. Co. (1878), 71 N. Y. 180; Evans V. Fitchburg R. Co. (1872), 111 Mass. 142. A railroad is not a common carrier of cattle transported unless it is proved to have assumed all of the liabilities of a common carrier. Lake Shore & M. S. R. R. Co. v. Perkins ( 1872 ) , 25 Mich. 329. A railroad may refuse to become a common carrier of dogs. Honeyman v. Oregon c& C. R. R. Co. (1886), 13 Oreg. 352. " We might further add that in these days there would be little reason for holding that a railway common carrier should be required to accept money to be shipped as freight, because there is operated in connection with almost every such carrier in the country express companies who make a specialty of carrying money and other valuable and small packages." Chesa- peake & O. Ry. Co. V. Hall (1910), 136 Ky. 379, 389. And see, Kuter v. Michigan C. R. R. Co. (1853), Fed. Cas. No. 7955. As to goods improperly packed, or of dangerous character, as nitro- glycerine, dynamite, gunpowder, aqua fortis, oil of vitriol, matches, etc., see California Powder Works v. Atl. & Pac. R. R. Co. (1896), 113 Calif. 329. See also Sutcliffe v. Gr. W. Ry. [1910], 1 K. B. 478, 494. " A common carrier may, under certain conditions, hold itself out to the public as being a common carrier of certain articles of freight, and if it was only engaged in the carriage of specific articles, it would not be under any obligation to carry any other things." Dictum in Crescent Coal Co. v. L. & N. R. R. Co. (1911), 143 Ky. 73, 79. " The proposed road, when completed, is to be used solely ' for the pur- pose of transferring, in railroad cars, freight between the different depots, warehouses, elevators, manufactories, etc., that are or may be on its line, or may be reached by its lateral tracks,' and the point is made that a com- pany whose line of road is limited to a single street, and whose proposed business is so circumscribed, does not come within the purview of the act authorizing the incorporation of railway companies by general law. The argument is, that the legislature, in providing a general law on the subject, must have intended to include only such companies as would perform the usual functions of common carriers, and as the company in question does not propose to receive shipments of freight generally, or carry passengers at all, it is contended the appellee is not, within the meaning of the act, a railway company, and hence its supposed organization was unauthorized, and all acts done under it are illegal and void. The proposed business of this company is clearly such as is usually, if not uniformly, done by railway companies, and we are aware of no rule of law requiring a railway track to be of any particular length, or that it should extend beyond the limits of a particular town or city, though most railroads certainly do. " Nor do we see anything in the objection that the business of the com- pany is to be limited to the carrying of freight oifered in cars only. Every common carrier has the right to determine what particular line of business he will follow. If he elects to carry freight only, he will be under no obli- gations to carry passengers, and vice versa. So if he holds himself out as a carrier of a particular kind of freight, or of freight generally, prepared for carriage in a particular way, he will only be bound to carry to the extent and in the manner proposed. He will nevertheless be a common carrier." Wiggins Ferry Co. v. E. St. L. Ry. Co. (1883), 107 111. 450, 457. 103 THE SERVICE TO BE EENDEEED. [CHAP. II. CLEVELAND, CIKCIKNATI, CHICAGO & ST. LOUIS RAILWAY CO. V. HENRY. 170 Ind. 94. 1908.^ Hadlet, J. So far as expression has been given, there is unani- mity among the courts of this country that a railroad corporation, as a common carrier, is under no legal duty to haul show cars, that is, cars owned and fitted up by showmen and used exclusively by them to house and transport their employees and show property as a com- plete outfit from place to place over railroads. Coup v. Wabash, etc., R. Co., 56 Mich. Ill, 33 .N. W. 215, 56 Am. Rep. 374; Chi- cago, etc., R. Co. V. Wallace, 66 Fed. 508, 14 C. C. A. 357, 30 L. R. A. 161 ; Robertson v. Old Colony R. R. Co., 156 Mass. 525, 31 N. E. 650, 33 Am. St. Rep. 483; Wilson v. Atlantic, etc, R. Co. ( C. C. 1904) 139 Fed. 774, affirmed 133 Fed. 1033, 66 C. C. A. 486; Hutchinson on Carriers (3d Ed.) § 88, p. 84; Moore on Car- riers, § 38. The rule rests upon the principle that such loaded cars or vehicles are not such goods as railroads hold themselves out to carry, and in respect to which they assume a public duty to serve all alike who apply for carriage, and such cars being a class of property they do not profess to carry, and the drawing of which is inconsistent with their business, they are therefore ex- empt from all public duty to haul them. 1 Hutchinson on Carriers (3d Ed.) § 47, and authorities collated; Moore on Carriers, § 1. A common carrier may, however, become a private carrier, and by special agreement undertake for hire to carry that which he is under no obligation to carry. Louisville, etc., Co. v. Keefer (1896) 146 Ind. 31, 36, 44 N. E. 796, 38 L. R. A. 93, 58 Am. St. Rep. 348, and cases cited; Pittsburgh, etc., Co. v. Mahoney (1897) 148 Ind. 196, 300, 46 N. E. 917, 47 N. E. 464, 40 L. R. A. 101, 63 Am. St. Rep. 503, and cases cited; Hutchinson on Carriers (3d Ed.) § 44. In the latter section the author states: "A common carrier may undoubtedly become a private carrier, or bailee for hire, when as a matter of accommodation or special engagement he undertakes to carry something which it is not his business to carry. The relation in such a case is changed from that of a common carrier to that of a private carrier, and where this is the effect of a special arrangement a carrier is not liable as a common carrier and cannot be proceeded against as such." See, also, Baltimore, etc., R. Co. V. Voigt, 176 U. S. 498, 30 Sup. Ct. 385, 44 L. Ed. 560.^ 1 Only an extract from the opinion is here given. — Ed. 2 See Chicago, M. & St. P. Ry. Co. v. Wallace (1895), 66 Fed. 506, 30 L. R. A. 161, and note. " Appellee is a common carrier for hire, and as such is bound, when SEC. I.] WHAT SEEVICB MUST BE RENDERED. 103 AsHUEST, J., IN HYDE V. TRENT AND MEESEY NAVIGATION CO. 5 Term R. 389. 1793.^ The inclination of my opinion on the general question is that a carrier is bound to deliver the goods to the person to whom they are directed. A contrary decision would be highly inconvenient, and would open a door to fraud; for if the liability of the carrier were to cease when he had brought the goods to any inn where he might choose to put up his coach, and a parcel containing plate or jewels, brought by him, were lost before it was delivered to the owner, the latter would only have a remedy against a common porter. It has been said, however, that it is the practice of many persons to send to the inn for their goods; but that does not prove that the carrier is not bound to deliver them, if they do not send. If the owner choose to send for his goods, that merely discharges the carrier from his liability in that case; it only dis- penses with the general obligation thrown by the law upon the car- rier: but it does not apply to other cases where that obligation is not dispensed with. But on this question I do not mean to give any decided opinion.^ requested, to receive for transportation over its lines cars of other common carriers, and as to such cars it holds the same relation as to ordinary- freight received by it for transportation, and is held to the same measure and character of liability to the owners of the cars, as would attach with respect to any other property received by it for carriage. (Peoria & P. U. Ry. Co. V. Chicago R. I. & P. Ry. Co., 109 111. 135 ; East St. Louis C. Ry. Co. V. Wabash St. L. & P. Ry. Co, 123 id. 594; Peoria & P. U. Ry. Co. v. V. S. R. S. Co., 136 id. 643 ; Schumacher v. Chicago & N. W. Ry. Co., 207 id. 199.)" Pittsburgh C. C. & St. L. Ry. Co. v. City of Chicago (1909), 242 111. 178, 188. Accord: Chicago, B. & Q. R. R. Co. v. Curtis (1897), 51 Neb. 442, 453; Mackin v. Boston & A. R. Co. (1883), 135 Mass. 201; Hudson V. Ry. Co. v. Boston & M. R. R. (1905), 106 App. Div. (N. Y.) 375 (statutory) ; Baldwin v. Chicago R. I. & P. Ry. Co. (1879), 50 la. 680 (statutory) ; Thomas v. Missouri P. R. Co. (1892), 18 S. W. (Mo.) 980 (statutory) ; Michigan C. R. Co. v. Smithson (1881), 45 Mich. 212 (statutory) ; Louisville & N. R. Co. v. Boland (1892), 11 So. (Ala.) 667 (statutory). Contra: Oregon S. L. & V. N. Ry. Co. v. Northern P. R. Co. (1892), 51 Fed. 465. 474; Little Rock & M. R. Co. v. St. Louis S. W. R. Co. (1894), 63 Fed. 775; and see Atchison T. & S. F. R. Co. v. Denver & N. O. R. Co., infra, p. 107. 1 Only an extract from the opinion of Ashhuest, J., is reprinted. — Ed. _ 2 " The offer of the defendant presupposes, what is now conceded, and is indeed extremely well settled, that prima facie the carrier is under an obli- gation to deliver the goods, to the consignee personally." Gibson v. Culver (1837), 17 Wend. 305, 306. And see Starr v. Crowley (1825), 1 McClel. & Young, 129; Fish v. Newton (1845), 1 Denio, 45. " Common carriers are ordinarily bound to carry goods entrusted to their conveyance to the residence or place of business of the consignee ; but whether this rule can be conveniently applied to the business usually trans- acted by canal and railroad may admit of doubt." Eagle v. White (1841), 6 Whart. (Pa.) 505, 517. " Prima facie, there must be actual delivery, or in the case of a carrier 104 THE SERVICE TO BE KENDEEED. [CHAP. II. BULLAED V. AMEEICAN EXPEESS CO. 107 Mich. 695. ISSS.'- MoNTGOMEKT, J. This is an action in case, commenced in justice court. The declaration, in substance, alleges that plaintiff is a large shipper of celery by express from Kalamazoo to places throughout the United States, upon lines of the defendant, a com- mon carrier; that the defendant, to collect celery and other articles for shipment in the city of Kalamazoo, and to deliver packages re- ceived by it, maintains and employs a large number of men, horses, and wagons; that since December 1, 1893, plaintifE's place of busi- ness has been at No. 606 Douglas avenue, in said city; that during the celery season plaintiff makes large daily shipments over de- fendant's lines, and has consigned to him packages of money in payment of celery shipped C. 0. D., and other articles, of all of which defendant had notice; that plaintiff repeatedly requested defendant to call at his place of business for his shipments, and to deliver packages to him, which defendant refused to do; that de- fendant collects for shipment from and delivers to a large number of shippers of celery and other articles, under substantially the same circumstances, conditions, and situation as the plaintiff, and for shippers at a greater distance from its place of business than plaintiff's place, and for shippers in the same locality as the plain- tiff, and has unlawfully discriminated against the plaintiff by such refusal; that plaintiff has been damaged by being compelled to convey his celery to defendant's oflBce for shipment, and procure his packages from its office. The plaintiff had judgment in the justice court. In the circuit court the court directed a verdict for the defendant. The evidence on the trial showed that the defendant's agents, acting in unison with the agents of other express companies, had established limits in the city, beyond which they did not go to receive goods for shipment or to deliver packages. In some in- stances these limits extended a greater distance from the de- fendant's office than plaintiff's place of business. It was also in by water, a landing at the wharf, or usual landing place, with due and reasonable notice to the consignee of the arrival of the goods. But this rule may be varied by contract, or affected by a well-established, reason- able and generally known custom and usage." Huston v. Peters, Hardin & Co. (1858), 1 Mete. (Ky.) 558, 562. "It is not the customary duty of a railroad company to tender the goods to the consignee, but the goods are kept at the depot or warehouse until the consignee calls for them." Jarrett v. Great N. Ry. Co. (1898), 74 Minn. 477, 480. 1 The statement of facts and arguments of counsel are omitted. — Ed.. SEC. I.] WHAT SERVICE MUST BE EENDEEED. 105 evidence that the plaintiff knew of these limits before moving into his present place of business, and before transacting the business with defendant in which the inconvenience arose which, it is alleged, circumstances, conditions, and situation as the plaintiff, and for caused damage to plaintiff. At the common law, a carrier of goods was not bound to accept delivery at any place other than his place of business, or the line of travel, in the absence of the custom of receiving goods at other places. Hutch. Carr. §§ 82, 87; Blanchard v. Isaacs, 3 Barb. 388. But it is insisted that the defendant in this case, having practiced the custom of receiving goods for shipment at other points in the city than its office, was bound to furnish equal facilities to all shippers who occupy a similar position. We are not impressed with the force of this reasoning, as ap- plied to the facts in this case. We are cited to no case in which it has been held that a carrier is bound to go beyond its line to receive goods, and, while it would not be competent for a common carrier to discriminate against shippers within its fixed limits, it is not perceived why, if the company is entitled to limit its receipt of goods to its own office or place of business, it may not enlarge these limits at its discretion, without being bound to go beyond them. The duty to deliver to the consignee is somewhat broader. Carriers on land, receiving packages, were, at the common law, generally bound to deliver to the consignee, at his resi- dence or place of business. This rule has not been applied to carriers by water, or railroad companies, which must, of necessity, be confined to a fixed route. It has been said, however, that ex- press companies owe their origin to this very fact, and that the nature of their business is to furnish a means of transportation and delivery to the consignee. Wood's Browne, Carr. § 230; Hutch. Carr. 379. The question of how far this duty may be escaped by usage is not well settled. It has been held, however, that, when the business of an office is so small that the company cannot or does not keep a messenger to make personal delivery, it is not unrea- sonable to require the consignee to call at the office. Hutch. Carr. § 380. If this may be done, it would seem to follow that the com- pany may, so long as the public have notice of the custom, fix limits beyond which its agents are not required to go for delivery- If it cannot do this, it is diSicult to say where would be the limit. It is clear that a reasonable limit is not in all cases the city limit. Conditions are often varied. If not the city limit, can it be said that a certain number of miles from the office, in either direction, would be a reasonable limit ? We think, where the company, in ap- 106 THE SERVICE TO BE EENDERED. [CHAP. II. parent good faith, has assumed to fix limits, having regard to the public requirements, that, with regard to persons who have dealt with them, having knowledge of this fact, they are not bound to deliver beyond these limits. We do not determine what the right of one not having knowledge of these limits would be. This is not such a case, but in this case we think the court committed no error in directing a verdict for the defendant. Judgment will be af- firmed. McGrath, C. J., did not sit. Long, Grant, and Hooker, J. J., concurred. Walvtorth, C, in van SANTVOOED v. ST. JOHF. 6 Hill, 157. 1843.^ The evidence shows that the plaintiflEs in error were not com- mon carriers between New York and Little Palls, but only common carriers of goods from New York to Albany; and were mere for- warders of such. goods by the canal lines when they were directed to places beyond Albany, on the canal route. And St. John & Tousey had no more right to expect that these carriers between New York and Albany would themselves carry the box of clothing in question to Little Falls, than they had to suppose they would de- liver the other box, forwarded by their towboat at the same time, to Hubbard at Chicago. As to both, they must have understood and expected that the owners of the tow-boat line would transport the boxes to the place where their business as common carriers termi- nated, and send them on in the usual way as forwarders, from that place.^ PULLMAN PALACE CAR CO. v. LAWEENCE. 74 Miss. 782. 1897. Supra, p. 9. 1 Only part of Chancellor Walworth's opinion is reprinted. — Ed. 2 " The question whether a railroad company can make a valid contract for the transportation of freight beyond the limits of its own road, as their limits are fixed by its charter, as we understand the decision of the Court of Appeals, in West v. The Rensselaer and Saratoga R. R. Co. (4 Seldon, 37), must now be regarded as finally settled. It is only on the supposition that such a contract is valid, that the decision in that case can be explained. It is, therefore, needless to refer to the recent decisions in England, or to prior decisions in our own courts, which countenance, if they do not estab- lish, the same doctrine." Schroeder v. Hudson River R. R. Co. (1885), 5 Duer, 55, 61. SEC. I.] WHAT SERVICE MUST BE KENDEEED. 107 r ATCHISON, TOPEKA & SANTA FE R. E. CO. v. DENVER & NEW ORLEANS E. R. CO. 110 U. S. 667. 1884.^ It appeared that when the Atchison, Topeka & Santa Fd Com- pany reached Pueblo with its line it had no connection of its own with Denver. The Denver & Rio Grande road was built and run- ning between Denver and Pueblo, but the gauge of its truck was different from that of the Atchison, Topeka & Santa Fe. Other companies occupying different routes had at the time substantially the control of the transportation of passengers and freight between the Missouri River and Denver. The Atchison, Topeka & Santa Pe Company, being desirous of competing for this business, entered into an arrangement, as early as 1879, with the Denver & Rio Grande Company for the formation of a through line of transporta- tion for that purpose. By this arrangement a third rail was to be put down on the track of the Denver & Rio Grande road, so as to ad- mit of the passage of cars continuously over both roads, and terms were agreed on for doing the business and for the division of rates. In 1882 the Denver & New Orleans Company completed its road between Denver and Pueblo, and connected its track with that of the Atchison, Topeka & Santa Fe, in Pueblo, twelve or fifteen hun- dred feet easterly from the junction of the Denver & Rio Grande, and about three-quarters of a mile from the union depot at which the Atchison, Topeka & Santa Fe and the Denver & Rio Grande interchanged their business, and where each stopped its trains regularly to take on and let off passengers and receive and de- liver freight. The Denver & New Orleans Company erected at its junction with the Atchison, Topeka & Santa Fe platforms and other accommodations for the interchange of business, and before this suit was begun the general superintendent of the Denver & New Orleans Company made a request in writing of the general manager of the Atchison, Topeka & Santa Fe, as follows : "That through bills of lading be given via your line and ours, and that you allow all freight consigned via D. & N. 0. R. R. to be delivered this company at point of junction, and on such terms as exist between your road and any other line or lines; that you allow your cars, or cars of any foreign line, destined for points reached by the D. & N. 0. R. R., to be delivered to this company and hauled to destination in same manner as interchanged with 1 The statement of facts is abridged, and parts of the opinion are omitted. —Ed. 108 THE SBEVICE TO BE RENDERED. [CHAP. II. any other line. That you allow tickets to be placed on sale be- tween points on line of D. & N. 0. E. E. and those on line of A. T. & S. F. E. E., or reached by either line; that a system of through checking of baggage be adopted; that a transfer of U. S. mail be made at point of junction. In matter of settlements between the two companies for earnings and charges due, we will settle daily on delivery of freight to tliis line; for mileage due for car service, and for amounts due for tickets interchanged, we agree to settle monthly, or in any other manner adopted by your line, or as is cus- tomary between railroads in such settlements." This request was refused, and the Atchison, Topeka & Santa Pe Company continued its through business with the Denver & Eio Grande as before, but declined to receive or deliver freight or pas- sengers at the junction of the Denver & New Orleans road, or to give or take through bills of lading, or to sell or receive through tickets, or to check baggage over that line. All passengers or freight coming from or destined for that line were taken or de- livered at the regular depot of the Atchison, Topeka & Santa Fe Company in Pueblo, and the prices charged were according to the regular rates to and from that point, which were more than the Atchison, Topeka, & Santa Fe received on a division of through rates to and from Denver under its arrangement with the Denver & Eio Grande Company. This bill in equity was brought to compel the Atchison, Topeka & Santa Fe Eailroad Company to comply with the terms of the written request served upon it. Me. Chief Justice Waite delivered the opinion of the court. After reciting the facts in the foregoing language he continued : The case has been presented by counsel in two aspects : 1. In view of the requirements of the Constitution of Colo- rado alone; and 3. In view of the constitutional and common-law obligations of railroad companies in Colorado as common carriers. We will first consider the requirements of the Constitution; and here it may be premised that see. 6 of art. 15 imposes no greater obligation upon the company than the common law would have imposed without it. Every common carrier must carry for all to the extent of his capacity, without undue or unreasonable dis- crimination either in charges or facilities. The Constitution has taken from the legislature the power of abolishing this rule as ap- plied to railroad companies. So in sec. 4 there is nothing specially important to the present inquiry except the last sentence : " Every railroad company shall 6E.C. I.] "WHAT SERVICE MUST BE RENDERED. 109 have the right with its road to intersect, connect with, or cross any- other railroad." Eailroad companies are created to serve the public as carriers for hire, and their obhgations to the public are such as the law attaches to that service. The only exclusively constitu- tional question in the case is, therefore, whether the right of one railroad company to connect its road with that of another company, which has been made part of the fundamental law of the State, im- plies more than a mechanical union of the tracks of the roads so as to admit of the convenient passage of cars from one to the other. The claim on the part of the Denver and New Orleans Company is that the right to connect the roads includes the right of business intercourse between the two companies, such as is cus- tomary on roads forming a continuous line; and that if the com- panies fail or refuse to agree upon the terms of their intercourse a court of equity may, in the absence of statutory regulations, de- termine what the terms shall be. Such appears to have been the opinion of the Circuit Court, and accordingly in its decree a com- pulsory business connection was established between the two com- panies, and rules were laid down for the government of their con- duct towards each other in this new relation. In other words, the court has made an arrangement for the business intercourse of these companies such as, in its opinion, they ought in law to have made for themselves. To our minds it is clear that the constitutional right in Colorado to connect railroad with railroad does not itself imply the right of connecting business with business. The railroad companies are not to be connected, but their roads. A connection of roads may make a connection in business convenient and desirable, but the one does not necessarily carry with it the other. The language of the Constitution is that railroads may " intersect, connect with, or cross " each other. This clearly applies to the road as a physical structure, not to the corporation or its business. This brings us to the consideration of the second branch of the case, to wit, the relative rights of the two companies at common law and under the Constitution as owners of connected roads, it being conceded that there are no statutory regulations apphcable to the subject. The Constitution expressly provides : 1. That all shall have equal rights in the transportation of per- sons and property; 2. That there shall not be any undue or unreasonable discrimina- tion in charges or facilities ; and 3. That preferences shall not be given in furnishing cars or motive power. llO THE SERVICE TO BE RENDERED. [CHAP. II. It does not expressly provide: 1. That the trains of one connected road shall stop for the ex- change of business at the junction with the other ; nor 2. That companies owning connected roads shall unite in form- ing a through line for continuous business, or haul each other's cars; nor 3. That local rates on a through line shall be the same to one connected road not in the line as the through rates are to another which is ; nor 4. That if one company refuses to agree with another owning a connected road to form a through line or to do a connecting business a court of chancery may order that such a business be done and fix the terms. The question, then, is whether these rights or any of them are implied either at common law or from the Constitution. At common law, a carrier is not bound to carry except on his own line, and we think it quite clear that if he contracts to go be- yond he may, in the absence of statutory regulations to the con- trary, determine for himself what agencies he will employ. His contract is equivalent to an extension of his line for the purposes of the contract, and if he holds himself out as a carrier beyond the line, so that he may be required to carry in that way for all alike, he may nevertheless confine himself in carrying to the par- ticular route he chooses to use. He puts himself in no worse position, by extending his route with the help of others, than he would occupy if the means of transportation employed were all his own. He certainly may select his own agencies and his own asso- ciates for doing his own work. The Atchison, Topeka & Santa Pe Company, as the lessee of the Pueblo & Arkansas Valley Eailroad, has the statutory right to establish its own stations and to regulate the time and manner in which it will carry persons and property and the price to be paid therefor. As to all these matters, it is undoubtedly subject to the power of legislative regulation, but in the absence of regulation it owes only such duties to the public, or to individuals, associations or corporations, as the common law, or some custom having the force of law, has established for the government of those in its con- dition. As has already been shown, the Constitution of Colorado gave to every railroad company in the State the right to a me- chanical union of its road with that of any other company in the State, but no more. The legislature has not seen fit to extend this right, as it undoubtedly may, and consequently the Denver & New Orleans Company comes to the Atchison, Topeka & Santa Pe Com- pany just as any other customer does, and with no more rights. It SEC. I.] WHAT SEEVICE MUST BE RENDERED. Ill has established its junction and provided itself with the means of transacting its business at that place, but as yet it has no legislative authority to compel the other company to adopt that station or to establish an agency to do business there. So far as statutory regulations are concerned, if it wishes to use the Atchison, Topeka & Santa Pe road for business, it must go to the place where that company takes on and lets ofE passengers or property for others. It has as a railroad company no statutory or constitutional privileges in this particular over other persons, associations, or corporations. It saw fit to establish its junction at a place away from the station which the Atchison, Topeka & Santa Fe Company had, in the exer- cise of its legal discretion, located for its own convenience and that of the public. It does not now ask to enter that station with its tracks or to interchange business at that place, but to compel the Atchison, Topeka & Santa Fe Company to stop at its station and transact a connecting business there. ISTo statute requires that connected roads shall adopt joint stations, or that one railroad com- pany shall stop at or make use of the station of another. Each company in the State has the legal right to locate its own stations, and, so far as statutory. regulations are concerned, is not required touse any other. A railroad company is prohibited, both by the common law and by the Constitution of Colorado, from discriminating unreason- ably in favor of or against another company seeking to do business on its road; but that does not necessarily imply that it must stop at the junction of one and interchange business there, because it has established joint depot accommodations and provided facilities for doing a connecting business with another company at another place. A station may be established for the special accommodation of a particular customer; but we have never heard it claimed that every other customer could, by a suit in equity, in 'the absence of a statutory or contract right, compel the company to establish a like station for his special accommodation at some other place. Such matters are, and always have been, proper subjects for legislative consideration, unless prevented by some charter contract; but, as a general rule, remedies for injustice of that kind can only be obtained from the legislature. A court of chancery is not, any more than is a court of law, clothed with legislative power. It may enforce, in its own appropriate way, the specific performance of an existing legal obligation arising out of contract, law, or tiBuage, but it cannot create the obligation. In the present case, the Atchison, Topeka & Santa Fe and the Denver & Eio Grande Companies formed their business connection and established their junction or joint station long before the Den- 112 THE SERVICE TO BE RENDERED. [CHAP. II. Ter & New Orleans road was built. The Denver & New Orleans Company saw fit to make its junction with the Atchison, Topeka & Santa Fe Company at a different place. Under these cir- cumstances, to hold that, if the Atchison, Topeka & Santa Fe con- tinued to stop at its old station, after the Denver & New Orleans was built, a refusal to stop at the junction of the Denver & New Orleans, was an unreasonable discrimination as to facilities in favor of the Denver & Eio Grande Company, and against the Denver & New Orleans, would be in effect to declare that every railroad com- pany which forces a connection of its road with that of another company has a right, under the Constitution or at the common law, to require the company with which it connects to do a con- necting business at the junction, if it does a similar business with any other company under any other circumstances. Such, we think, is not the law. It may be made so by the legislative department of the government, but it does not follow, as a necessary consequence, from the constitutional right of a mechanical union of tracks, or the constitutional prohibition against undue or unreasonable dis- crimination in facilities. This necessarily disposes of the question of a continuous busi- ness, or a through line for passengers or freight, including through tickets, through bills of lading, through checking of baggage, and the like. Such a business does not necessarily follow from a con- nection of tracks. The connection may enable the companies to do such a business conveniently when it is established, but it does not of itself establish the business. The legislature cannot take away the right to a physical union of two roads, but whether a connecting business shall be done over them after the union is made depend^ on legislative regulation, or contract obligation. An interchange of cars, or the hauling by one company of the cars of the other, im- plies a stop at the junction to make the exchange or to take the cars. If there need be no stop, there need be no exchange or taking on of cars.^ SAEGENT V. BOSTON AND LOWELL EAILEOAD COEPOEATION. 115 Mass. 416. 1874.^ Wells, J. This action is founded upon the supposed obliga- tion of the defendants, as common carriers, to provide facilities 2 See § 15 of the Interstate Commerce Act, as amended in 1906, Appendix, p. 506. 1 The statement of facts is omitted, and only part of the opinion is rer printed. — Ed. SEC. I.] WHAT SERVICE MUST BE EENDERED. 113 and accommodations to enable the plaintiff to transact his busiaess as expressman over and upon the railroads of the defendants. For this purpose he requires that his merchandise and parcels shall be transported, not as freight under the general charge and control of the managers and servants of the railroads, but in their pas- senger trains and under the exclusive control and supervision of the plaintifE and his agents: who also require special accommoda- tions and facilities in the cars and stations of the defendants, for the receipt and distribution of their packages. It is not alleged that there is any contract for such service. The contract which, once existed, and the course of business in previous years, are re- cited for the purpose of showing the manner in which the business of the plaintiff had grown up and the good will connected there- with had been gained, as bearing upon the damages caused by with- drawing from him the means for its further prosecution. The com- plaint is, that under the guise of a proposal to sell or let the privilege which the plaintiff and his associates had before enjoyed, to be used exclusively by the one party who would pay most for it, the de- fendants had in fact denied it to all, and assumed the conduct of the business of express carriage and parcel delivery by its own agents and servants. The allegation of the second count, that the defendants had re- fused to receive and transport articles of freight for the plaintiff in the usual modes of transportation of freight, is abandoned. We know of no principle or rule of law which imposes upon a Tailroad corporation the obligation to perform service in the trans- portation of freight, otherwise than as a carrier of goods for the owner in accordance with their consignment; or which forbids it from establishing uniform regulations applicable alike to all per- sons composing the public to whom the service is due. We are pointed to no provision in the charters of these defendants, or in the general laws relating to railroads, which subjects the use of their roads to the convenience or requirements of other carriers than the corporations authorized to construct and operate them, and such other railroads as may have been authorized to enter upon or unite with and use them. Gen. Sts. c. 63, § 117. All the provisions of law for the regulation of railroads contem- plate the unlimited exercise by the corporation of the rights and duties of general carriers of goods and passengers; and this in- volves the right to adopt any and all reasonable rules and regu- lations to direct the mode in which their business shall be trans- acted. They cannot be required to convert their passenger trains to the purposes of freight at the discretion of parties not respon- sible for the management of the trains; nor can they be compelled 114 THE SERVICE TO BE EENDEEED. [CHAP. II. to admit others than their own agents and servants upon their trains or to their stations for the custody, care, receipt and de- livery of freight or parcels. Whether the defendants, in establishing and conducting the busi- ness of their own "parcel department" undertake to collect and distribute goods and parcels in a manner which involves acts ultra vires, does not affect the question; nor, if they do so, does it afford the plaintiff any ground of action. His claim is for their re- fusal to furnish to him certain claimed facilities upon the roads. That refusal does not involve any acts or exercise of powers ultra vires. Nor does the fact that for many years the defendants did afford certain facilities to separate and independent carriers, as express companies, confer any right upon them or impose any obligation, either of contract or duty, upon the defendants to continue the same unchanged. Whatever may have been contemplated, when the charters for these roads were granted, as to the parties by whom and the mode in which the tracks would be used for the running of trains or car- riages upon them, and the manner in which tolls would be re- ceived, it cannot be doubted that since the St. of 1845, c. 191, the direction of the use of the roads, and the control of all carriages upon them, are exclusively in the directors of the corporations own- ing them. It is a franchise of a public nature, it is true ; and the directors are bound to conduct its exercise with a view to public convenience. But they, and not the individual members of the public, are intrusted with the discretion, authority and duty, in the first instance, to determine what the public convenience re- quires. They are subject, in this respect, to the oversight and regu- lation of the legislature. It is only when they disregard such regu- lations as are provided by law, or required by a reasonable considera- tion of the public convenience and the purposes of their charter, that individuals are entitled to complain.^ 2 The plaintiff also contended that the refusal to furnish him with the facilities which he desired constituted illegal discrimination. The Court declared that this could not be so when the company was not furnishing any one else with such facilities. The Court concluded that, " All that the plaintiff can demand is that, in each of those branches [of defendant's business], he shall have equal terms with other persons and companies." — Ed. SEC. I.] WHAT SERVICE MUST BE EENDEEED. 115 EXPEESS CASES. 117 U. S. 1. 1886.^ Mr. Chief Justice "Waite delivered the opinion of the court. These suits present substantially the same questions and may properly be considered together. They were each brought by an express company against a railway company to restrain the railway company from interfering with or disturbing in any manner the facilities theretofore afEorded the express company for doing its business on the railway of the railway company. The report also contains a copy of the contract between Harnden and the New Jersey Steam Navigation Company, the owner of the Lexington, dated the 1st of August, 1839, for the facilities to be afforded Harnden for his business, on the steamers of that com- pany. This contract was similar to one made a short time before with the Boston and New York Transportation Company, a com- pany which became merged in the New Jersey Steam Navigation Company August 1, 1839, and it provided that Harnden, in con- sideration of $250 per month, was to have the privilege of trans- porting in the steamers of the company between New York and Providence, via Newport and Stonington, not tp exceed once each day from New York and from Providence, " one wooden crate of the dimensions of five feet by five feet in width and height, and six feet in length (contents unknown)." It was also stipulated and agreed that "the said crate, with its contents, is to be at all times exclusively at the risk of the said William P. Harnden; and the said New Jersey Steam Navigation Company will not, in any event, be responsible either to him or his employers for the loss of any goods, wares, merchandise, notes, bills, evidences of debts, or property of any and every description, to be conveyed or transported by him in said crate, or otherwise, in any manner, in the boats of the said company." It was also further provided that Harnden should attach to all his advertisements for business, and to his bills of lading, notices in the form of that at the foot of his advertise- ment, a copy of which is given above, and that he should not violate any of the provisions of the post ofHce laws, or interfere with the Navigation Company in its transportation of letters or papers, or carry powder, matches, or other combustible materials of any kind calculated to endanger the safety of the boats or the property or persons on board. At the end was this clause: "And that this 1 Parts of the opinions of Me. Chief Justice Waite and of Me. Justice MiLLEB are omitted. — Ed. 116 THE SERVICE TO BE EENDEKED. [CHAP. II. contract may be at any time terminated by the New Jersey Steam Navigation Company, or by the said Harnden, upon one month's notice given in writing." Such was the beginning of the express business which now has grown to an enormous size, and is carried on all over the United States and in Canada, and has been extended to Europe and the West Indies. It has become a public necessity, and ranks in im- portance with the mails and with the telegraph. It employs for the purposes of transportation all the important railroads in the United States, and a new road is rarely opened to the public without being equipped in some form with express facilities. It is used in almost every conceivable way, and for almost every conceivable purpose, by the people and by the government. All have become accustomed to it, and it cannot be taken away without breaking up many of the long settled habits of business, and interfering materially with the conveniences of social life. In this connection it is to be kept in mind that neither of the railroad companies involved in these suits is attempting to deprive the general public of the advantages of an express business over its road. The controversy, in each case is not with the public, but with a single express company. And the real question is not whether the railroad companies are authorized by law to do an express business themselves; nor whether they must carry express matter for the public on their passenger trains, in the immediate charge of some person specially appointed for that purpose; nor whether they shall carry express freights for express companies as they carry like freights for the general public; but whether it is their duty to furnish the Adams Company or the Southern Com- pany facilities for doing an express business upon their roads the same in all respects as those they provide for themselves or afEord to any other express company. When the business began railroads were in their infancy. They were few in number, and for comparatively short distances. There has never been a time, however, since the express business was started that it has not been encouraged by the railroad companies, and it is no doubt true, as alleged in each of the bills filed in these cases, that "no railroad company in the United States . . . has ever refused to transport express matter for the public, upon the application of some express company, of some form of legal con- stitution. Every railway company . . . has recognized the right of the public to demand transportation by the railway facilities which the public has permitted to be created, of that class of matter which is known as express mattter." Express companies have un- doubtedly invested their capital and built up their business in the SEC. I.] WHAT SERVICE MUST BE KENDERED. 117 hope and expectation of securing and keeping for themselves such railway facilities as they needed, and railroad companies have like- wise relied upon the express business as one of their important sources of income. But it is neither averred in the bills, nor shown by the testi- mony, that any railroad company in the United States has ever held itself out as a common carrier of express companies, that is to say, as a common carrier of common carriers. On the contrary it has been shown, and in fact it was conceded upon the argument, that, down to the time of bringing these suits, no railroad company had taken an express company on its road for business except under some special contract, verbal or written, and generally written, in which the rights and the duties of the respective parties were care- fully fixed and defined. These contracts, as is seen by those in these records, vary necessarily in their details, according to the varying circumstances of each particular case, and according to the judgment and discretion of the parties immediately concerned. It also appears that, with very few exceptions, only one express com- pany has been allowed by a railroad company to do business on its road at the same time. In some of the States, statutes have been passed which, either in express terms or by judicial interpretation, require railroad companies to furnish equal facilities to all express companies. Gen. Laws N". H., 1878, ch. 163, § 2 ; Eev. Stat. Maine, 1883, 494, ch. 51, § 134; but these are of comparative recent origin, and thus far seem not to have been generally adopted. The reason is obvious why special contracts in reference to this business are necessary. The transportation required is of a kind which must, if possible, be had for the most part on passenger trains. It requires not only speed, but reasonable certainty as to the quantity that will be carried at any one time. As the things carried are to be kept in the personal custody of the messenger or other employe of the express company, it is important that a cer- tain amount of ear space should be specially set apart for the busi- ness, and that this should, as far as practicable, be put in the ex- clusive possession of the express man in charge. As the business to be done is "express," it implies access to the train for loading at the latest, and for unloading at the earliest, convenient moment. All this is entirely inconsistent with the idea of an express business on passenger trains free to all express carriers. Eailroad com- panies are by law carriers of both persons and property. Passen- ger trains have from the beginning been provided for the trans- portation primarily of passengers and their baggage. This must be done with reasonable promptness and with reasonable comfort to the passenger. The express business on passenger trains is in a de- 118 THE SEKVICB TQ BE EENDEKED. [CHAP. II. gree subordinate to the passenger business, and it is consequently the duty of a railroad company in arranging for the express to see that there is as little interference as possible with the wants of passengers. This implies a special understanding and agreement as to the amount of car space that will be afforded, and the condi- tions on which it is to be occupied, the particular trains that can be used, the places at which they shall stop, the price to be paid, and all the varying details of a business which is to be adjusted be- tween two public servants, so that each can perform in the best manner its own particular duties. All this must necessarily be a matter of bargain, and it by no means follows that, because a rail- Toad company can serve one express company in one way, it can as well serve another company in the same way, and still perform its other obligations to the public in a satisfactory manner. The car space that can be given to the express business on a passenger train is, to a certain extent, limited, and, as has been seen, that ( which is allotted to a particular carrier must be, in a measure, under his exclusive control. No express company can do a success- ful business unless it is at all times reasonably sure of the means it requires for transportation. On important lines one company will at times fill all the space the railroad company can well allow for the business. If this space had to be divided among several Companies, there might be occasions when the public would be put to inconvenience by delays which could otherwise be avoided. So long as the public are served to their reasonable satisfaction, it is a matter of no importance who serves them. The railroad com- pany performs its whole duty to the public at large and to each individual when it affords the public all reasonable express accom- modations. If this is done the railroad company owes no duty to the public as to the particular agencies it shall select for that pur- pose. The public require the carriage, but the company may choose its own appropriate means of carriage, always provided they are such as to insure reasonable promptness and security. The inconvenience that would come from allowing more than one express company on a railroad at the same time was appar- ently so well understood both by the express companies and the railroad companies that the three principal express companies, the Adams, the American, and the United States, almost imme- diately on their organization, now more than thirty years ago, by agreement divided the territory in the United States traversed by railroads among themselves, and since that time each has confined its own operations to the particular roads which, under this division, have been set apart for its special use. No one of these companies ha:8 ever interfered with the other, and each has worked its al- SEC. I.] WHAT SEEVICE MUST BE RENDERED. 119 lotted territory, always extending its lines in the agreed directions as circumstances would permit. The exact question, then, is whether these express companies can now demand as a right what they have heretofore had only as by permission. That depends, as is conceded, on whether all railroad companies are now by law charged with the duty of carrying all express companies in the way that express carriers when taken are usually carried, just as they are with the duty of carrying all pas- sengers and freights when offered in the way that passengers and freight are carried. The contracts which these companies once had are now out of the way, and the companies at this time possess no other rights than such as belong to any other company or person wishing to do an express business upon these roads. If they are entitled to the relief they ask it is because it is the duty of the railroad companies to furnish express facilities to all alike who de- mand them. The constitutions and the laws of the States in which the roads are situated place the companies that own and operate them on the footing of common carriers, but there is nothing which in positive terms requires a railroad company to carry all express companies in the way that under some circumstances they may be able with- out inconvenience to carry one company. In Kansas, the Missouri, Kansas and Texas Company must furnish sufficient accommoda- tions for the transportation of all such express freight as may be offered, and in each of the States of Missouri, Arkansas and Kansas railroad companies are probably prohibited from making unreason- able discriminations in their business as carriers, but this is all. Such being the case, the right of the express companies to a de- cree depends upon their showing the existence of a usage, having the force of law in the express business, which requires railroad companies to carry all express companies on their passenger trains as express carriers are usually carried. It is not enough to es- tablish a usage to carry some express company, or to furnish the public in some way with the advantages of an express business over the road. The question is not whether these railroad com- panies must furnish the general public with reasonable express facilities, but whether they must carry these particular express car- riers for the purpose of enabling them to do an express business . over the lines. In all these voluminous records there is not a syllable of evi- dence to show a usage for the carriage of express companies on' the passenger trains of railroads unless specially contracted for.' While it has uniformly been the habit of railroad companies to arrange, at the earliest practicable moment, to take one express 130 THE SEEVICB TO BE RENDERED. [CHAP. II. company on some or all of their passenger trains, or to provide some other way of doing an express business on their lines, it has never been the practice to grant such a privilege to more than one company at the same time, unless a statute or some special circumstances made it necessary or desirable. The express com- panies that bring these suits are certainly in no situation to claim a usage in their favor on these particular roads, because their entry "was originally under special contracts, and no other companies have ever been admitted except by agreement. By the terms of their contracts they agreed that all their contract rights on the roads should be terminated at the will of the railroad company. They were willing to begin and to expand their business upon this understanding, and with this uncertainty as to the duration of their privileges. The stoppage of their facilities was one of the risks they assumed when they accepted their contracts, and made their investments under them. If the general public were com- plaining because the railroad companies refused to carry express matter themselves on their passenger trains, or to allow it to be carried by others, different questions would be presented. As it is, "we have only to decide whether these particular express companies must be carried notwithstanding the termination of their special contract rights. The difficulty in the cases is apparent from the form of the de- crees. As express companies had always been carried by railroad companies under special contracts, which established the duty of the railroad company upon the one side, and fixed the liability of the express company on the other, the court, in decreeing the car- riage, was substantially compelled to make for the parties such a contract for the business as in its opinion they ought to have made for themselves. Having found that the railroad company should furnish the express company with facilities for business, it had to define what those facilities must be, and it did so by de- claring that they should be furnished to the same extent and upon the same trains that the company accorded to itself or to any other company engaged in conducting an express business on its line. It then prescribed the time and manner of making the payment for the facilities and how the payment should be secured, as well ae how it should be measured. Thus, by the decrees, these railroad companies are compelled to carry these express companies at these rates, and on these terms, so long as they ask to be carried, no mat- ter what other express companies pay for the same facilities or what such facilities may, for the time being, be reasonably worth, unless the court sees fit, under the power reserved for that purpose, on the application of either of the parties, to change the measure SEC. I.] WHAT SERVICE MUST BE KENDEEBD. 121 of compensation. In this way as it seems to us, "the court has made an arrangement for the business intercourse of these com- panies, such as, in its opinion, they ought to have made for them- selves," and that, we said in Atchison, Topeka and Santa Fe Eail- road Co. v. Denver & New Orleans Eailroad Co., 110 U. S. 667, followed at this term in Pullman's Palace Car Co. v. Missouri Pacific Eailway Co., 115 U. S. 587, could not be done. The regulation of matters of this kind is legislative in its character, not judicial. To what extent it must come, if it comes at all, from Congress, and to what extent it may come from the States, are questions we do not now undertake to decide ; but that it must come, when it does come, from some source of legislative power, we do not doubt. The legislature may impose a duty, and when imposed it will, if necessary, be enforced by the courts, but, unless a duty has been created either by usage or by contract, or by statute, the courts can- not be called on to give it effect. The decree in each of the cases is reversed, and the suit is re- manded, with directions to dissolve the injunction, and, after adjusting the accounts between the parties for business done while the injunctions were in force, and decreeing the payment of any amounts that may he found to he due, to dismiss the hills. Me. Justice Millee dissenting. I only desire to add one or two observations in regard to mat- ters found in the opinion of this court. 1. The relief sought in these cases is not sought on the ground of usage in the sense that a long course of dealing with the public has established a custom in the nature of law. Usage is only re- lied on as showing that the business itself has forced its way into general recognition as one of such necessity to the public, and so distinct and marked in its character, that it is entitled to a con- sideration different from other modes of transportation. 2. It is said that the regulation of the duties of carrying by the railroads, and of the compensation they shall receive, is legislative in its character, and not judicial. As to the duties of the railroad company, if they are not, as common carriers, under legal obligation to carry express matter for any one engaged in that business in the manner appropriate and usual in such business, then there is no case for the relief sought in these bills. But if they are so bound to carry, then in the absence of any legislative rule fixing their compensation I maintain that that compensation is a judicial question. It is, then, the ordinary and ever-recurring question on a quantum 123 THE SBEVICE TO BE RENDERED. [CHAP. 11. meruit. The railroad company renders the service which, by the law of its organization, it is bound to render. The express com- pany refuses to pay for this the price which the railroad company demands, because it believes it to be exorbitant. That it is a judicial question to determine what shall be paid for the service rendered, in the absence of an express contract, seems to me beyond doubt. That the legislature may, in proper case, fix the rule or rate of compensation, I do not deny. But until this is done the court must decide it, when it becomes matter of controversy. The opinion of the court, while showing its growth and impor- tance, places the entire express business of the country wholly at the mercy of the railroad companies, and suggests no means by which they can be compelled to do it. According to the principles' there announced, no railroad company is bound to receive or carry an express messenger or his packages. If they choose to reject him or his packages, they can throw all the business of the country back to the crude condition in which it was a half century ago, before Harnden established his local express between the large At- lantic cities; for, let it be remembered, that plaintiffs have never refused to pay the railroad companies reasonable compensation for their services, but those companies refuse to carry for them at any price or under any circumstances. I am very sure such a proposition as this will not long be acquiesced in by the great commercial interests of the country and by the public, whom both railroad companies and the express men are intended to serve. If other courts should follow ours in this' doctrine, the evils to ensue will call for other relief. It is in view of amelioration of these great evils that, in dis-- senting here, I announce the principles which I earnestly believe ought to control the actions and the rights of these two great public services. Mr. Justice Field dissenting. I agree with Mr. Justice Miller in the positions he has stated, although in the cases just decided I think the decrees of the courts below require modification in several particulars; they go too far.- But I am clear that railroad companies are bound, as common car- riers, to accommodate the public in the transportation of goods ac- cording to its necessities, and through the instrumentalities or in the mode best adapted to promote its convenience. Among these instrumentalities express companies, by the mode in which their business is conducted, are the most important and useful. Mr. Justice Matthews took no part in the decision of these cases. SEC. I.] WHAT SERVICE MUST BE RENDERED. 133 STATE V. EEED. 76 Miss. 211. 1898.^ Woods, C. J. Joseph Eeed, the appellee, was arrested upon affi- davit charging him with trespassing upon private premises belong- ing to the Alabama & Vicksburg Railroad Company, and was, be- fore the justice of the peace, tried and convicted. He appealed from that conviction to the circuit court of Warren county, and was there tried upon an agreed statement of facts, and was by the judg- ment of that court acquitted of the charge and discharged. Prom this judgment of the circuit court, the state prosecutes this appeal. The agreed statement of facts distinctly states the question to be decided by us, and to that we must confine ourselves. Says the agreed statement: "It is contended that the said company had the right to make the said contract, and thus exclude the defendant and others than the said Peine from the said inclosure, and to grant to the said Peine the exclusive right to enter the said in- closure for the purpose of there soliciting passengers for his hack line. Defendant controverts this position, in so far as it is claimed that the said company can grant the exclusive right to any par- ticular person to enter the said inclosure with his hack, and there solicit passengers, and contends that the railway company must exclude all or admit all into the said inclosure, so long as they con- duet themselves in an orderly and peaceable manner." The single issue thus sharply defined, viz : Has a railway the right to confer upon one hackman the exclusive privilege of entering with his hacks its inclosed stationhouse grounds, and of soliciting incom- ing passengers, and to exclude all others from the inclosure, such privilege conferring advantages upon the favored hackman, and dis- criminating against all other hackmen by forbidding them to enter the inclosure to solicit passengers, and by placing the hacks of those excluded 150 feet from the depot, and in an open street? The question has never before been presented in our courts, but it is by no means a new one, and has been passed upon in other juris- dictions. Quite independently of constitutional or statutory provisions, it seems to be the prevailing doctrine in the United States that a railroad company may make any necessary and reasonable rules for the government of persons using its depots and grounds, yet it cannot arbitrarily, for its own pleasure or profit, admit to its platforms or depot grounds one carrier of passengers or merchan- 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. 134 THE SERVICE TO BE EENDEEED. [CHAP. II. dise, and at the same time exclude all others. The question is one that affects not only the excluded hackmen; it affects the interests of the public. The upholding of the grant of this exclusive priv- ilege would prevent competition between the rival carriers of passen- gers, create a monopoly in the privileged hackmen, and might pro- duce inconvenience and loss to persons traveling over the railroad, or those having freights transported over it, in cases of exclusion of drays and wagons from its grounds, other than those owned by the person having the exclusive right to enter the railroad's depot grounds. To concede the right claimed by the railway in the pres- ent case would be, in effect, to confer upon the railway company the control of the transportation of passengers beyond its own lines, and in the end to create a monopoly of such business, not granted by its charter, and against the interests of the public. These are the views ably urged in Kalamazoo Hack Co. v. Sootsma, 84. Mich. 194; Montana Union Eailway Co. v. Langlois, 9 Mont. 419; Cravens v. Eodgers, 101 Mo. 347 ; and McConnell v. Pedigo, 92 Ky. 465. These are the views held, too, by the three dissenting judges in the case of Old Colony Eailroad Co. ■;;. Tripp, 147 Mass. 35—41. The majority of the judges in that case held that a railroad might grant to one an exclusive right to solicit the patronage of incoming passengers ; but this is the only American case making that distinct holding, and that opinion was delivered by four judges, the other three members of the court vigorously dissenting, and with better show of reasoning, in our judgment. The cases of Barney v. Oyster Bay and Huntington Steamboat Co., 67 N. Y. 31, Fluker v. Georgia Eailroad & Banking Co., 81 Ga. 461, and Cole v. Eowen, 88 Mich. 319, do not present the precise point involved in the case before us. They are alt decisions of other questions, and can be readily distinguished from the case in hand. Counsel for appellant think that in Cole v. Eowen, 88 Mich. 219, the supreme court of Michigan has swung away from the doctrine announced in the earlier case of Kalamazoo Hack Co. v. Sootsma, 84 Mich. 194. But that very able court did not so think, and was careful to disabuse the mind of counsel, who seems to have the notion which counsel here puts forward, and the court clearly dis- tinguished the two cases. We are of opinion that the railroad had no right to exclude Eeed, tjie appellee, from its depot and inclosed grounds, on the facts appearing in the agreed statement on which the ease is submitted to us, and hence that the action of the court below in discharging Joseph Eeed was correct. SEC. I.] WHAT SEEVICE MUST BE RENDERED. 135 DONOVAN V. PENNSYLVANIA CO. 199 U. S. 279. 1905.^ Mr. Justice Harlan delivered the opinion of the court. Upon the pleadings two principal inquiries arise : First, whether the Pennsylvania Company, having made an arrangement with the Parmelee Transfer Company to furnish, at its passenger station, from time to time, all vehicles necessary for the accommodation of passengers arriving there on its trains or on the trains of other railroad companies, may legally exclude from its depot grounds or passenger station all hackmen or expressmen coming to either for the purpose only of soliciting for themselves the custom or patron- age of passengers. Applying these principles to the case before us, it would seem to be clear that the Pennsylvania Company had the right — if it was not its legal duty — to erect and maintain a passenger station and depot buildings in Chicago for the accommodation of pas- sengers and shippers as well as for its own benefit; and that it was its duty to manage that station so as to subserve, primarily, the convenience, comfort, and safety of passengers and the wants of shippers. It was therefore its duty to see to it that passengers were not annoyed, disturbed, or obstructed in the use either of its station house or of the grounds over which such passengers, whether arriving or departing, would pass. It was to that end — primarily, as we may assume from the record — that the Pennsylvania Com- pany made an arrangement with a single company to supply all vehicles necessary for passengers. We cannot say that that ar- rangement was either unnecessary, unreasonable, or arbitrary; on the contrary, it is easy to see how, in a great city, and in a con- stantly crowded railway station, such an arrangement might pro- mote the comfort and convenience of passengers arriving and de- parting, as well as the efficient conduct of the company's business. The record does not show that the arrangement referred to was inadequate for the accommodation of passengers. But if inade- quate, or if the transfer company was allowed to charge exorbitant prices, it was for passengers to complain of neglect of duty by the railroad company, and for the constituted authorities to take steps to compel the company to perform its public functions with due re- gard to the rights of passengers. The question of any failure of the company to properly care for the convenience of passengers 1 The statement of facts, arguments of counsel and part of the opinion ar^ omitted. — Ed. 126 THE SERVICE TO BE RENDERED. [CHAP. II. was not one that, in any legal aspect, concerned the defendants as licensed hackmen and cabmen. It was not for them to vindicate the rights of passengers. They only sought to use the property of the railroad company to make profit in the prosecution of their particular business. A hackman, in nowise connected with the rail- road company, cannot, of right and against the objections of the' company, go upon its grounds or into its station or cars for the purpose simply of soliciting the custom of passengers ; but, of course, a passenger, upon arriving at the station, in whatever vehicle, is en- titled to have such facilities for his entering the company's depot as may be necessary. Here the defendants press the suggestion that they are entitled to the same rights as were accorded by special arrangement to the Parmelee Transfer Company. They insist, in effect, that, as car- riers of passengers, they are entitled to transact their business at any place which, under the authority of law, is devoted primarily to public uses, — certainly, at any place open to another carrier en- gaged in the same kind of business. But this contention, when ap- plied to the present case, cannot be sustained. The railroad com- pany was not bound to accord this particular privilege to the de- fendants simply because it had accorded a like privilege to the Parmelee Transfer Company; for it had no contractual relations with the defendants, and owed them, as hackmen, no duty to aid them in their special calling. The defendants did not have, or pro- fess to have, any business of their own with the company. In meeting their obligations to the public, whatever the nature of those obligations, the defendants could use any property owned by them, but they could not, of right, use the property of others against their consent. In maintaining a highway, under the author- ity of the state, the first and paramount obligation of the railroad company was, as we have already said, to consult the comfort and convenience of the public who used that highway. To that end it could use all suitable means that were not forbidden by law. In its discretion it could accept the aid or stipulate for the services of others. But, after providing fully for the wants of passengers and shippers, it did not undertake, expressly or by implication, to so use its property as to benefit those who had no business or con- nection with it. It is true that by its arrangement with the rail- road company the Parmelee company was given an opportunity to control, to a great extent, the business of carrying passengers from the Union Passenger Station to other railway stations and to hotels or private houses in Chicago. But in a real, substantial, legal sense, that arrangement cannot be regarded as a monopoly in the odious sense of that word, nor does it involve an improper use by SEC. I.] "WHAT SERVICE MUST BE KBNDEEED. 127 the railroad company of its property. That arrangement is to be deemed, not unreasonably, a means devised for the convenience of passengers and of the railroad company, and as involving such use by the company of its property as is consistent with the proper performance of its public duties and its ownership of the property in question. If the company, by such use of its property, also derived pecuniary profit for itself, that was a matter of no con- cern to the defendants, and gave them no ground of complaint. In the Express Cases, 117 U. S. 1, 24, which involved a general inquiry as to the respective rights of railroad and express companies in respect of the use of railroads for the transportation of express parcels, this court said : " So long as the public are served to their reasonable satisfaction, it is a matter of no importance who serves them. The railroad company performs its whole duty to the public at large and to each individual when it affords the public all reason- able express accommodations. If this is done, the railroad company owes no duty to the public as to the particular agencies it shall select for that purpose. The public require the carriage, but the company may choose its own appropriate means of carriage, always provided they are such as to insure reasonable promptness and security." In Chicago, St. L. & N. 0. E. Co. v. Pullman Southern Car Co. 139 U. S. 79, 89, one of the questions was as to the validity of a contract between a railroad company and the Pullman Com- pany, whereby the latter was given the exclusive right for fif- teen years to furnish drawing-room and sleeping cars to be used by the former, and whereby, also, the railroad company stipulated that during that term it would not contract to give a like priv- ilege to other sleeping car companies. That contract was assailed as one in restraint of trade and as being against public policy. This court said : " The authorities cited in support of this con- tention have no application to such a coritract as the one be- fore us. The defendant was under a duty arising from the public nature of its employment to furnish for the use of pas- sengers on its lines such accommodations as were reasonably re- quired by the existing conditions of passenger traffic. Its duty as a carrier of passengers was to make suitable provisions for their comfort and safety. Instead of furnishing its own draw- ing-room and sleeping cars, as it might have done, it employed the plaintiff, whose special business was to provide cars of that char- acter, to supply as many as were necessary to meet the require- ments of travel. It thus used the instrumentality of another cor- poration in order that it might properly discharge its duty to the public. So long as the defendant's lines were supplied with the requisite number of drawing-room and sleeping cars, it was a matter 128 THE SEKVICE TO BE EENDEKED. [CHAP. II. of indifference to the public who owned them. Express Cases, 117 TJ. S. 1." The views we have expressed find more or less support in numer- ous adjudged cases, some of which are cited in the margin.^ There are cases to the contrary, but, in our opinion, the better view, the one sustained by the clear weight of authority and by sound reason and public policy, is that which we have expressed.^ 2 Jencks v. Coleman, 2 Sumn. 221 ; The D. B. Martin, 11 Blatehf-. 233 Com. V. Power, 7 Met. 596 ; Barney v. Oyster Bay S. B. Co., 67 N. Y. 301 Old Colony R. Co. v. Tripp, 147 Mass. 35; Com. v. Carey, 147 Mass. 40, State ex rel. Sheets v. Union Depot Co., 71 Ohio St. 379 ; Norfolk & W. R, Co. V. Old Dominion Baggage Co., 99 Va. Ill; Pinker v. Georgia Railroad Co., 81 Ga. 461; Griswold v. Webb, 16 R. I. 649; Summitt v. State, 76 . Teun. 413 ; New York &c. R. R. Co. v. Scovill, 71 Conn. 136 ; Kates v. Cab Co., 107 Ga. 636 ; Godbout v. St. Paul Union Depot, 79 Minn. 188 ; Boston & Albany R. R. Co. v. Brown, 177 Mass. 65 ; Boston & Maine R. R. Co. v. Sullivan, 177 Mass. 230; New York &c. R. R. Co. v. Bork, 23 R. I. 218; St. Louis Drayage Co. v. Louisville, &c.. R. R. Co., 65 Fed. Rep. 39; Bed- ding V. Gallagher, 72 N. H. 377. 3 Compare the following cases: Barker v. Midland Ry. Co. (1856), 18 C. B. 46, in which plaintiff brought action for damages for exclusion from defendant's premises, when desiring to enter with his omnibus for the pur- pose of setting down passengers and goods, and for the purpose of taking up passengers who had previously engaged him, other omnibus drivers being allowed to enter for such purposes. One count was based upon the Railway and Canal Traffic Act, 1854, which requires that aU reasonable facilities shall be afforded for receiving and delivering traffic, and forbids any undue preference to any particular person or company, or any par- ticular description of traffic in any respect whatever. Judgment was ren- dered for defendants. Cbowdee, J., said: "This is not an action brought by a person wishing to travel by the defendant's railway or to send goods by it ; but by a person who carries to and from the railway persons who are desirous of using or who have used the railway. He clearly is not a person who can complain of an obstruction. As to the fourth count, the Railway and Canal 'Traffic Act, 1854, is confined to the affording facilities to persons using or desiring to use a railway or canal. If any obstruction be afforded in such a case, the party may avail himself of the remedy pro- vided by the act." The above case was quoted and approved in the House of Lords in Perth General Station Committee v. Ross [1897] A. C. 479, 493. In re Marriott (1857), 1 C. B. (N. S.) 499, in which an injunction was sought under the Railway and Canal Traffic Act, 1854, directing the Lou- don and South Western Ry. Co. to admit Marriott's omnibus into the sta- tion yard for the purpose of delivering and receiving traffic. It appeared that other omnibuses were allowed to enter the yard for such purposes, and that passengers coming and leaving by Marriott's omnibus were greatly in- convenienced. Marriott's omnibus went to certain outlying towns not served! by the omnibuses admitted to the station yard. The injunction was granted. Crowder, J., said : " I also am of the opinion that this rule should be made absolute to the extent stated by the Lord Chief Justice, on the ground that the company, by the course of conduct pursued by them toward the complainant, have subjected him and his passengers to a greater degree of inconvenience than the passengers by Williams's omnibus have been subjected to. For instance, all passengers who come from Teddingtou and Hampton Wick by the complainant's omnibus are subjected to the in- convenience of being set down at the gate of the station yard, whereas Wil- liams's coming from Kensington and Norbiton are allowed to be driven into the yard and up to the door of the booking-office. That is clearly giving the one set of passengers an undue and unreasonable preference and advan- tage over the others, and constitutes one of those cases in which the legis- lature has by the recent statute authorized us to interfere." By In re Beadell (1857), 2 O. B. (N. S.) 509, the authority of In re Marriott, is restricted to cases where the exclusion of the omnibus owner or hackman has been injurious to patrons of the road. Griswold v. Webb (1889), 16 R. I. 649, where a hack driver, having been SEC. I.] WHAT SEEVICE MUST BE RENDERED. 139 WESTERN UmON TBLEGEAPH CO. v. SIMMONS. 93 S. W. (Tex. Civ. App.) 686. 1906.^ This was an action for damages for refusal to receive and trans- mit a message destined for a point on the line of another telegraph company. Fly, J. Telegraph companies are public agencies, chartered for public purposes, and vested with the right of eminent domain in the condemnation of private property for their use. With the grant of these powers and privileges there goes the duty, for a reasonable consideration, to receive and transmit all messages over their lines with promptness, skill and despatch. Joyce, Elec. Law, sec. 14, and authorities noted. The law relating to the receiving and forwarding of telegraphic messages to connecting lines is so nearly analogous to that in regard to common carriers that the es- tablished rules of law that determine the liability of the common carrier apply with equal force to telegraph companies. Bach can restrict its liability to its own line, but each must receive and for- ward with diligence to the connecting line, and each will be held liable for its failure or refusal to perform that duty. Smith v. Tel. Co., 84 Tex. 359, 19 S. W. 441, 31 Am. St. Eep. 59. ALBANY TELEPHONE CO. v. TBREY. 127 S. W. (Tex. Civ. App.) 567. 1910. Speer, J. J. B. Terry, as plaintiff below, filed this suit against the Albany Telephone Company and the Southwestern Telegraph engaged to call for an incoming passenger, went upon a part of the railroad premises reserved for private carriages, although forbidden to do so, arid was sued in trespass. The Court said in part: "The driver is not; en- gaged in his vocation of soliciting patronage, but is waiting to take one with whom a contract has already been made. No question is made that a passenger may have his own carriage enter the premises of the carrier to take him away ; but to say that one who is not so fortunate as to own a carriage shall not be allowed to call the one he wants, because it is a hackney carriage, would be a discrimination intolerable in this country. . . . We think the justification [of defendant] is sufficient. ... It simply secures to a passenger the common privileges of a passenger, and enables the hackney driver to shield himself from an apparent violation of the rules only when he is acting bona fide as a servant of such passenger. This qualification guards the owner from an incursion of unlicensed drivers under a mere pretense of serving passengers, and also confines the right of soliciting business on his premises to those whom he may permit." Judgment for defendant. 1 The statement of facts is abridged, and only an extract from the opinion is reprinted. — Ed. 130 THE SERVICE TO BE RENDERED. [CHAP. II. & Telephone Company, seeking to recover damages for the negligent failure of those companies in respect to three certain telephone calls, tendered to them about August 2, 1907, relative to the serious illness of his brother, Martin Terry, at Clarksville. The trial re- sulted in a verdict and judgment in plaintiffs favor for $500, and the defendants have appealed. ' The undisputed facts, which are decisive of this appeal, show that the first call involved was put in by Mrs. Butler, a sister of appellee, at Clarksville, about 5 o'clock a. m., August 3d, to the Southwestern Telegraph & Telephone Company, whose line extends from Clarksville to Cisco, at which latter place the call was de- livered to the Albany Telephone Company, whose line extends from Cisco to Stamford and Eotan. The Albany Telephone Company received the call and made every effort to find appellee at Stamford, to which place the call was addressed; but he was not to be found there, having departed the day before for Eotan. The Southwes- tern Telegraph & Telephone Company had an arrangement with the Albany Telephone Company whereby the two companies would handle calls for Stamford, but not for Eotan. Appellee in some way learned that he was wanted at Clarksville, and, knowing of his brother's illness, attempted to call up Dr. Dinwiddie at that place from Eotan over the lines of these appellants. The evidence fur- ther shows that on about August 6th one W. H. Le Master, at Clarksville, put in a call for appellee at Eotan; but such call was refused, for the reason already given. Neither of the appellants of- fered to handle calls for the public between the stations of Clarks- ville and Eotan. Appellee at no time after the first call by his sister, Mrs. Butler, was at Stamford. Under these facts, the trial court should have given the requested instructions for the appellants. There is absolutely nothing in the facts to show that any duty was imposed by law or contract on the appellants, or either of them, to afford the means of telephonic communication between appellee at Eotan and any of the other parties at Clarksville. The Judgment is therefore reversed, and here rendered for ap- pellants.^ iln Billings Mut. Tel. Co. v. Rocky Mountain Tel. Co. (1907), 155 Feo. 207, statutory provisions which allowed one telephone company, by means of eminent domain, to compel a connection with, and a user of the lines of another telephone company, were upheld and enforced. SEC. I.] WHAT SERVICE MUST BE EEKDEEED. , 131 STATE ex rel THE AMEEICAN UNION TELEGEAPH CO. V. THE BELL TELEPHONE CO. 36 Ohio State, 296. 1880.^ The Columbus Telephone Company is engaged in doing a gen- eral telephone business in the city of Columbus. The telephone in- struments used by it are the property of the American Bell Tele- phone Company, a Massachusetts corporation, which company owns the letters patent on such instruments. By the contract between the Columbus Telephone Company and the Bell Telephone Com- pany it is provided that no telegraph company, unless given special permission by the Bell Telephone Company, can be a subscriber to the service of the Columbus Telephone Company, or use the sys- tem to collect and deliver messages from and to its customers. The Bell Telephone Company has contracted with the Western Union Telegraph Company to give the latter company the exclu- sive right to use the system of the Columbus Telephone Company for the purpose of collecting and distributing telegraphic mes- sages. The relators demanded similar service, but were refused, and therefore brought this action for a writ of mandamus, direct- ing the Columbus Telephone Company to furnish the service de- sired. McIlvaine, C. J. Whether any such duty, upon the princi- ples of the common law, is owing from respondents or either of them to the relators as members of the general public, as is claimed by them, growing out of the nature of the business in which re- spondents are engaged and their relations to the public generally, we need not stop to inquire, as, in our opinion, the whole question between the parties may be determined by the provisions of the statute in such case made and provided. Title 3, chapter 4 of the revised statutes of Ohio, from section 3454 to section 3470, prescribes the powers and duties of mag- netic telegraph companies, and section 3471 of the same chapter provides, "the provisions of this chapter shall apply also to any company organized to construct any line or lines of telephone, and every such company shall have the same powers and be sub- ject to the same restrictions as are herein prescribed for magnetic telegraph companies." Among the powers conferred upon magnetic telegraph com- panies is the right to occupy public roads and other public grounds, 1 Only a summary of the facts is given, and the arguments of counsel, as well as one paragraph of the opinion, are omitted. — Ed. 133 THE SERVICE TO BE EENDEEED. [CHAP. II. and the power of eminent domain, and among their duties are the following, as prescribed in section 3462, as amended April 15, 1880, namely : " Every company, incorporated or unincorporated, op- erating a telegraph line in this state, shall receive dispatches from and for other telegraph lines, and from and for any individual; and on payment of its usual charges for transmitting dispatches, as established by the rules and regulations of the company, shall transmit the same with impartiality and good faith, under a pen- alty of one hundred dollars for each case of neglect or refusal to do so, to be recovered with costs of suit by civil action, in the usual name, and for the benefit of the person or company sending or forwarding, or desiring to send or forward the dispatch." This section, when construed in connection with section 3471, above quoted, makes it the duty of the Columbus Telephone Com- pany to receive dispatches from and for telegraph lines, by the very words of the statute; but if not, such duty towards the rela- tors and each of them is embraced in the succeeding clause, " and from or for any individual." The word " individual " is here used in the sense of person, and embraces artificial or corporate persons as well as natural. The dispatches so received " from or f 6r," must be transmitted " with impartiality," that is, without discrimination, either in respect to persons or in the time or man- ner of transmission. Such being the nature of the duty imposed upon the Columbus Telephone Company by the statute, it cannot ^shield itself from the performance thereof, by any self-imposed restrictions contained in the stipulations of a contract with the American Bell Telephone Company, by which the right to use the instruments or license of th6 latter company was acquired. The Columbus Telephone Com- pany was bound to acquire from the American Bell Telephone Company, such rights in its instruments and patent (or to pro-i vide itself by other means of all such facilities), as were necessary to discharge its duties to the public, as prescribed in the statute; otherwise, it had no right to engage in the business of operating a system of telephones at all. We do not mean to say, that as between the Columbus Telephone Company and the American Bell Telephone Company, the right to control the receipt and delivery of telegraph messages might, not have been reserved to the latter company ; but we do hold, that no such right could be reserved whereby the relators could be de- prived of the use of the system of telephones organized and man- aged by these telephone companies, either jointly or severally. . And in regard to the American Bell Telephone Company, it is enough to say, after what has already been said in relation to the SEC. I.] "WHAT SERVICE MUST BE RENDERED. 133 Columbus Telephone Company, that it cannot be permitted to op- erate a line or system of telephones, in this state, and in the face of the statute, either directly, or through the agency of licensees, without impartiality, or in other words, with discriminations against any member of the general public who is willing and ready to comply with the conditions imposed upon all other patrons or cus- tomers, who are in like circumstances. And all contracts in con- travention of the public policy of this state, as declared in chapter 4 of the revised statutes, above referred to, must be declared void and of no effect. It is claimed that the statute above referred to cannot control or invalidate the contract in question, because the exclusive right to make, vend, and use these telephone instruments is vested by the assignment of letters patent, under an act of congress, in the American Bell Telephone Company; and that it is not within the power of a state to impair the right so secured. In our opin- ion, this statute is not the subject of constitutional infirmity. While it is true, that letters patent secure a monopoly in the thing patented, so that the right to make, vend, or use the same is vested exclusively in the patentee, his heirs and assigns, for a limited period ; it is not true, that a right to make, vend, or use the same in a manner which would be unlawful except for the let- ters patent, thereby becomes lawful, under the act of congress, and beyond the power of the states to regulate or control. This doctrine is fully discussed and settled in Jordan v. Over- seers of Dayton (4 Ohio, 395), and Patterson v. Kentucky (97 U. S. 501). The doctrine of these cases may be stated thus: the right to enjoy a new and useful invention may be secured to the inventor and protected by national authority against all interfer- ence; but the use of tangible property which comes into existence by the application of the discovery is not beyond the control of state legislation, simply because the patentee acquires a monopoly in his discovery. " The sole operation of the statute is to enable him to prevent others from using the products of his labors without his consent; but his own right of using is not enlarged or af- fected." The property of an inventor in a patented machine, like all other property, remains subject to the paramount claims of society, and the manner of its use may be controlled and regulated by state laws when the public welfare requires it. It appears to us, as a proposition too plain to admit of argu- ment, that where the beneficial use of patented property, or any species of property, requires public patronage and governmental aid, as, for instance, the use of public ways and the exercise of the right of eminent domain, the state may impose such eondi- 134 THE SERVICE TO BE RENDERED. [CHAP. II. tions and regulations as in the judgment of the law-making power are necessary to promote the public good. As respects the Western Union Telegraph Company we are of opinion that no case has been made which will justify a judgment against it; but as to the respondents, the Columbus Telephone Company and the Bell Telephone Company, the writ of mandamus prayed for should be made peremptory. Judgment accordingly.^ NAIEIN V. KENTUCKY HEATING CO. 27 Ky. Law Reporter, 551. 1900.'- Action by Eobert Nairin against the Kentucky Heating Com- pany , for an injunction restraining defendant from turning off plaintiff's supply of gas. On an application for dissolution of the injunction. Application granted. Du Eelle, J. It will be observed that the only grounds urged in the pleadings in this case for relief by injunction are, stated briefly, the facts that the defendant had natural gas which it was furnishing for heating purposes, and that plaintiff desired the gas for lighting purposes ; that defendant had been restrained from furnishing gas for lighting, but that plaintiff was not a party to the proceeding; and that, while de'fendant was forbidden by the ordinance under which it was permitted to do business to sell gas for lighting purposes, the city which passed the ordinance was not complaining. It might be sufficient to stop here and say that here is no ground stated for relief by injunction. No contract is averred, a violation of which is sought to be prevented — no sug- gestion of a contract, except the averment that plaintiff applied for a gas connection and got it. There is not even an averment that he niade application for a gas connection for lighting pur- poses. Obviously, unless the defendant be shown to be exercieing a public franchise in the vending of gas for lighting purposes, there is no more ground for injunction shown here than if he had sought one to restrain Peaslee, Gaulbert & Co. from refusing to vend oil to him. But the petition on its face shows that, as to the sale of gas for lighting purposes, the defendant was not only not exercising a public franchise, but was, by the ordinance which 2 See in accord, Commercial Un. Tel. Co. v. New England T. & T. Co. (1888), 61 Vt. 241; Chesapeake & P. Tel. Co. v. Baltimore & O. Tel. Co. (1887), 66 Md. 399. But see contra, American Rapid Tel. Co. v. Con- necticut Tel. Co. (1881), 49 Conn. 352; People ex rel. Postal T. C. Co. v. Hudson River Tel. Co. (1887), 19 Abbott's New Cases (N. Y.), 466. 1 Only an extract from the opinion is reprinted. — Ed. SEC. II.] WHO MUST BE SERVED. 135 permitted it to do business in Louisville at all, expressly forbidden to sell gas for any other than heating purposes. The plaintiff is therefore in the position of asking an injunction requiring the defendant to violate an ordinance of the city.^ Section 2. Who Must Be Sbbved and Excuses foe Failubb to Sebve. KISTElSr V. HILDEBEAND. 9 B. Monroe, 72. 1848.^ Chief Justice Maeshall delivered the opinion of the court. It was laid down in Colyer's case (8 Coke, 33) that common inns were instituted for passengers and wayfaring men. And we think it will be found that the great liability imposed upon them, is for the benefit of travellers and transient persons, who are often com- pelled to resort to inns for shelter and entertainment, without the means of knowing the character of the host; and without the op- portunity of securing themselves against loss or damage to their goods. A common innkeeper is defined to be " a person who makes it his business to entertain travellers and passengers, and provide lodging and necessaries for them and their horses and attendants : " (Bacon's Ab. Inns and Innkeepers, B. ; Story on Bailments, Sec. 475). But it has been decided that a man may be an innkeeper, and liable as such, though he have no provision for horses. It is not necessary that he should have a sign indicat- ing that he is an innkeeper, but it must be his business to enter- tain travellers and passengers. His duty extends chiefly to the entertaining and harboring of travellers, &c., and therefore, if one who keeps a common inn refuses to receive a traveller, or to find him in victuals, &c., for a reasonable price, (without good excuse, as that his house is full,) he is liable not only to a civil action, but to an indict- ment. For having taken upon himself a public employment, he must serve the public to the extent of that employment : (Bacon's Ab. Inns and Innkeepers, C. 1.)^ 2 See People ex rel. City of Los Angeles v. Los Angeles Indep. Gas Co. (1907), 150 Calif. 557. 1 Only an extract from the opinion is reprinted. — Ed. , 2 " The words [of the writ] are ad hospitandos homines per partes uhi hujismodi hospitia existunt transeuntes, et in eisdem hospitantesj by which 136 THE SERVICE TO BE RENDERED. [CHAP. II. BROWN V. BEANDT. [1902] 1 K. B. 696.^ Darling J. I am of the same opinion. No doubt an inn- keeper is bound to provide accommodation for travellers, but he is not bound to do so at all risks and all costs. He is only bound to provide accommodation so long as his house is not full; when it is full he has no duty in that respect. The question then arises, when an innkeeper's house may properly be said to be full. I do not think that the old cases can help one very much, because in olden times people were in the habit of sleeping many in one room, and several in one bed. People who were absolutely unknown to each other would sleep in the same room, as is done in common lodging-houses at the present time. There- fore, if we got a definition of "full" in one of the old cases, I should not be surprised to find that what was called " fuU " then we should now call " indecent overcrowding." It is the habit now of people to occupy separate bedrooms, and, having regard to the ordinary way of living at the present time, I think an inn may be said to be full for the purpose of affording accommodation for the night if all the bedrooms are occupied. There might have it appears that common inns are instituted for passengers and wayfaring men ; for the Ltatin word for an inn is, diversorium, because he who lodges there is, quasi divertens se a via; and so diversoriolum. And therefore if a neighbor who is no traveller, as a friend, at the request of the innholder lodges there and his goods be stolen, etc., he shall not have an action ; for the writ is, ad hospitandos homines, etc., transeuntes in eisdem hospitantes, etc." Calye's Case (1584), 8 Co. Rep. 32b. "The defendant was master of the Bell Inn, in Bristol. He was indicted for not receiving one talsen ill with the smallpox ; and it was quashed for not saying he was a traveller." King V. Luellin (1703), 12 Mod. 445. See also Curtis v. Murphy (1885), 63 Wis. 4. "A man may keep an inn for those persons only who come in their own carriages." Johnson v. Midland Ry. (1849), 4 Exch. 367, 371. "Guests of a hotel, and travellers and other persons entering it with the bona fide intent of becoming guests, cannot be lawfully prevented from going in, or be put out by force, after entrance, . . . unless they be persons of bad or suspicious character, or of vulgar habits, or so objectionable to the patrons of the house, on account of the race to which they belong, that it would injure the business to admit them to all portions of the house." State v. Steele (1890), 106 N. C. 766, 782. In the following jurisdictions refusal on the part of an innkeeper to serve on account of race or color is for- bidden by statute : California, Colorado, Georgia, Indiana, Iowa, Louisiana. Maine, Massachusetts, Michigan, Minnesota, New York, Ohio, Pennsylvania, Vermont and the United States possessions. In the following States re- fusal to serve " without just cause " is forbidden by statute : Montana, Porto Rico and Utah. In Delaware and Tennessee innkeepers are by stat- ute permitted to serve those whom they please. See the statutory provi- sions collected in the Appendix to Beale on Innkeepers, and also Revised Laws of Louisiana, § 456. — Ed. See also Nelson v. Boldt (1910), 180 Fed. 779. 1 The statement of facts, arguments of counsel and the opinion of Lobd Alvekstone, C. J., are omitted. — Ed. SEC. II.] WHO MUST BE SERVED. 137 been a difficulty here if the plaintiff had said, "I will take your sitting-room. I donot want to go to bed. I will sit up all night." But that difficulty does not arise on the facts of this ease. The county court judge has found that the house was full having regard to modem ways of living. He referred to Chaucer and the Can- terbury pilgrims. One need only look at the Sentimental Jour-; ney to see how people's habits have altered since the time of Laurence Sterne. I am of opinion that the county court judge's decision was right. EEX V. IVENS. 7 Car. & P. 213. 1835. Supra, p. 4.* STATE V GOSS. 59 Vt. 266. 1886.^ EowELL, J. This is a complaint in one count for selling, furn-^ ishing, and giving away intoxicating liquor contrary to law. The facts are these. In the summer of 1883, one Pearson, who lived at East Barnet, ordered some lager beer from Bellows Palls, to be sent to him by express, and it came in a box directed to him and marked C. 0. D. The respondent was station agent, and also agent of the express company, at East Barnet, and as such express agent delivered said box and its contents to Pearson, and received from him the designated price of $1.75 for trans- mission to the consignor. The respondent had no knowledge of what the box contained; but the State claimed that from the form and size of the box, and the price paid, he had reason to suspect that iSee also Goodenow v. Travis (1808), 3 Johns. (N. Y.) 427; Markham V. Brown (1837), 8 N. H. 523; State v. Steele, note 2 to the last case. " The unconventional dress of one desiring entertainment is no justification for refusal, if such dress is not indecent. Regina v. Sprague ( 1899 ) , 63 J. P. (Eng.) 233. One who insists on bringing a large dog with him into the inn may be refused entertainment. Regina v. Rymer (1877), 2 Q. B. D. 136. As to the right of an innkeeper to eject one who has been received as a guest, on the ground that the guest has become intoxicated, or has developed a contagious disease, see McHugh v. Schlosser (1894), 159 Pa. 480. As to the right of an innkeeper to eject a guest who is no longer a traveller, see liamond v. Richard [1897], 1 Q. B. 541. 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. 138 THE SERVICE TO BE RENDERED. . [CHAP; II. it contained lager beer, and that he could have found out by opening the box.^ But do the circumstances shield the respondent? He says they do, because he says it was his duty to deliver the packages as he did, even though he had known their contents, and that he should have been liable had he not delivered them; while, on the other hand, it is said that he was bound to know their contents at his peril, and that his want of knowledge makes no difference. Both of these propositions are untenable. As to the first, al- though express companies are common carriers, and liable as such, yet the law neither requires nor permits them to do illegal acts; and they are not bound to transport and deliver intoxicating liquor nor other commodities if thereby they would commit an ofEense or incur a penalty. They cannot be allowed, any more than other people, knowingly and with impunity, to make them- selves agents for others to break the laws of the State. As to the other proposition, express . carriers are not bound, as a general thing, to know the contents of packages ofEered to them for carriage. If they were, it would follow that they might re- fuse to carry without such knowledge; and as it would be un- reasonable to require them to accept as conclusive the word of the shipper as to contents, they must have a right to inspect for them- selves as a condition of carrying, which would occasion great incon- venience in practice. But no such rights exist as a general rule. This precise question was passed upon by the Supreme Court of the United States in the Nitro-Glycerine Case, 15 Wall, 524, where the rule is laid down thus: " It not, then, being his [the carrier's] duty to know the con- tents of any package offered to him for carriage, when there are no attendant circumstances awakening his suspicion as to their character, there can be no presvmiption of law that he had such knowledge in any particular case of that kind, and he cannot ac- cordingly be charged, as matter of law, with notice of the prop- erties and character of packages thus received." ^ 2 The court first decided that a servant of a carrier who delivers intoxi- cating liquors sold contrary to law may properly be indicted for selling, fur- nishing and giving away such liquor. — Ed. 3 " The obligation of a common carrier to receive and carry all goods offered, is qualified by several conditions, which he has a right to insist upon before receiving them. 1. That the person offering the goods has authority to do so. . . . In an action brought against a carrier for refusing to receive and carry goods, would it not constitute a valid defense that the plaintiff had stolen them, although at the time of offering, the carrier may not have known they had been stolen? ... It is clear that he would be justified in refusing to receive them from one having a wrongful possession, although at the time of such refusal, he might not know the manner in which they had been obtained." Fitch v. Newberry (1843), 1 Doug. (Mich.) 1, 10. SEC. II.] WHO MUST BE SERVED. '130 BAST KENTUCKY EAILWAY CO. v. HOLDBEOOK. 4 Ky. Law Reporter, 730. 1883. Appeal from Greenup Circuit Court. Opinion of the court by Judge Eichards, affirming. 1. Petition upon attachment. — When an officer, in whose hands an attachment is placed, levies upon personal property and places it in charge of a special bailiff, it is a good levy, although his re- turn upon the writ only shows that he " levied " upon the property, describing it, without showing the manner of taking possession. 2. A common carrier of freight has a lien upon each shipment so long as it remains in its possession for the charges thereon, but it cannot refuse to receive freight because back charges for other shipments have not been paid; nor can it by mere notice to the shipper, acquire a lien upon a shipment about to be made, for such back charges.^ MUEPHY HAEDWAEB CO. v. SOUTHEEN" EAILWAY CO. 150 N. C. 703. 1909.'- Bkown, J. The statute which imposes the penalty sued for is section 3631 of the Eevisal of 1905, and reads as follows: " Agents or other officers of railroads and other transportation companies whose duty it is to receive freights shall receive all articles of the na- ture and kind received by such company for transportation whenever tendered at a regular depot, station, wharf or boat landing, and every loaded car tendered at a side track, or any warehouse connected with the railroad by a siding, and shall forward the same by the route selected by the person tendering the freight under existing laws; and the transportation company represented by any person refusing to receive such freight shall forfeit and pay to the party aggrieved the sum of fifty dollars for each day said company refuses to receive said shipment of freight, and all damages actually sus- tained by reason of the refusal to receive freight. If such loaded 1 See Atwater v. Del., L. & W. R. R. Co. (1886), 48 N. J. L. 55. As to the right of a common carrier to demand prepayment, see Galena & Chic. Un. R. R. Co. v. Rae (1857), 18 111. 488; Knight v. Providence & W. R. R. Co. (1882), 13 R. I. 572. In an action against a carrier for refusal to carry, the plaintiff need not plead payment or a tender of pay- ment, but it is sufficient if he pleads a readiness and willingness to pay. Pickford v. Grand Junction Ry. Co. (1841), 8 M. & W. 372; Clev. C. C. & St. L. Ry. Co. V. Perishow (1895), 61 111. App. 179. Slight evidence will raise a presumption of such readiness and willingness. Galena & Chic. Un. R. R. Co. V. Rea, supra. 1 Part of the opinion is omitted. — Ed. 140 THE SERVICE TO BE EENDEKED. [CHAP. II. car be tendered at any siding or warehouse at which there is no agent, notice shall be given to an agent at nearest regular station at which there is an agent that such car is loaded and ready for shipment." In its answer the defendant avers that it was prevented from fur- nishing cattle cars to the plaintiff on account of a strike of the machinists on its road, numbering some 2,000 or 3,000^ which strike it could not control, in consequence of which a large per cent, of defendant's motive power got out of order and could not be used. The decision of the court is put upon the ground that the action is brought to recover a penalty for not receiving the cattle, and not for a failure to transport, and that therefore the defense pleaded cannot avail the defendant, even if true. We are advertent to the general rule that the carrier must at all times be in proper condition both to receive from the shipper and to deliver to the consignee. Covington Stock Yard v. Keith, 139 U. S. 133. But we think that general rules must sometimes give way to particular cases, and that, if the defense set up be true, the defendant could not be compelled to receive cattle and feed them indefinitely when it was impossible to foresee when they could be shipped. Otherwise, at a cattle shipping point like Murphy, the carrier might, in cases of a breakdown or burning of its bridges, or a long-continued strike of its employes, find itself in a short while with hundreds of cattle on hand which it must feed and care for. No reasonable foresight and judgment can provide against such contingencies. But that is not the only reason why this defense should be allowed. The penalty statutes must be taken together so as to ascer- tain the entire burden imposed on the carrier. In case the defend' ant had received these cattle in its then unavoidably crippled con- dition, it would have incurred very shortly thereafter another pen- alty for delay in shipping, for section 3633, immediately follow- ing, imposes a penalty for failure to transport within a reasonable time, and fixes the limit of time within which to start the shipment from the initial point at two days. So it follows that, if de- fendant had received the cattle and penned them, its inability to ship them within two days would have brought upon it another and continuing penalty for 30 days. Bagg v. Wilmington, C. & A. E. Co., 109 N. C. 379. As between these two statutes, and in the crippled condition it could not provide against, the defendant would be placed in a helpless condition. It seems unreasonable to require a carrier to continue to receive such a commodity as live stock, especially when conditions it cannot control or avoid will prevent their shipment within the time required by law. SEC. II.] WHO MUST BE SERVED. 141 For these reasons we think that a statute which imposed siich penalties, and which permitted no defense and no excuse however just, practically takes the property of the carrier without due prO^ cess of law, because, while the carrier may be brought into court, it is denied the right to make defense or excuse, however reason- able ; but we do not so construe the law; We have considered this question at length in the case of Grarri- son V. Railroad, antij 575, at this term, in a well-considered opinioh by Mr. Justice Connor, and have held that these penalty statutes are enacted in aid of the common law and to compel a discharge of those duties only which the conamon law itself imposes upon the carrier, and that, where the carrier has a legal defense or excuse for failure to discharge such duty, it may be pleaded in an action to recover the penalty. Upon the principles laid down in that opinion, we think his honor erred in holding that the statute admitted of no defense. In this view of the case, we deem it unnecessary now to con- sider the other question of interstate commerc presented on the record. ISTew trial.^ DEEBY V. LOWRY. 6 Philadelphia, 30. ISeS."- Allison, J. then charged the jury as follows : The important question involved in this action is the right claimed by conductors of city passenger railways to refuse passage to persons of color, and to eject such persons from the cars of which they have charge, when entrance to the same is obtained without their knowledge or consent. The true principle is that a corporation created for the carriage, of passengers has no right to exclude any class of persons, as a, class, from the benefits of its mode of transportation; it may for cause either by or without a regulation exclude individuals. A corporation of this description might as well undertake to make 2 See note in 22 L. R. A. (N. S.) 1200. Compare Pittsburgh, C. & St. li. Ry. Co. 17. HoUowell (1879), 65 Ind. 188; Blackstone v. Railroad Co. (1859), 20 N. Y. 48. Refusal to serve when the railroad was under military control. Phelps v. Illinois Cent. R. R. Co. (1880), 94 Ind. 548. Refusal to carry plaintiff's coal on the ground that it was of inferior quality, and so would injure the reputation of coal carried by defendant, and injure defendant's coal carrying business. Olanta Coal M. Co. v. Beech Creek R. R. Co. (1906), ,144 Fpd. 150. Refusal to carry unless plaintiff would enter into contract limiting defendant's liability. McMillan v. Michigan S. & N. I. R. R. Co. (1867), 16 Mich. 79. 1 The- statement of facts and part of the opinion are omitted. — Ed. 142 THE SERVICE TO BE RENDERED. [CHAP. II. nationality or religion a ground of exclusion, as color; it would not be difficult to determine in advance the legal force of a by- law excluding all Germans, or Frenchmen, or Irishmen, or Protest- ants or Catholics, Jews or Greeks, as such, from the passenger ears of the city; such an exclusion would not be tolerated by any intelligent tribunal; and yet in this, the day of our comparative enlightenment and freedoni from a prejudice, to which we were so long in bondage, a question can be seriously made before a court and Jury and practically enforced at the bar of public opinion, as to the right of an individual conductor, or a company, to turn persons out of the passenger cars of the city with force and vio- lence because of their complexion. Than this, nothing can be more unreasonable; nothing, in my opinion, is a clearer or grosser violation of the plainest principles of the law and of the rights of individuals. But, it is asked, are these corporations powerless to protect them- selves or the passengers whom they carry? By no means, they have a perfect right to exclude any one not a fit person to ride in their cars. Intoxication, profane or indecent language; the pres- ence of one afiSicted with an offensive or contagious disease, smok- ing in the cars, are but illustrations of the principle, because these are a reasonable offence to the travelling public ; these of themselves constitute a ground for exclusion or removal; but the mere preju- dice of one class against another cannot be allowed to subvert or overthrow the cardinal doctrine of the equality of all before the law, in the maintenance of the sacred rights of person and of citizenship. The argument which is used as a justification for the exclusion of people of color from the cars, would shut them out from and bar against them our courts of justice, forbid to them the use of public ferries, bridges and highways, and rests not upon any principle of legal or moral right, but upon bald, naked prejudice alone. It is our duty, gentlemen, in the discharge of our duties, you in your sphere and I in mine, to cast aside all prejudice, that the law may vindicate its just claim to strict and impartial justice. And if, by the action of courts and juries, wrong has been done to the class of citizens to which the plaintiff belongs, it is time that such errors should be corrected. That the jury, for a wrong like that complained of by the plain- tiff, may go beyond mere compensatory damages, and may give vindictive damages, by way of punishment. Verdict for plaintiff. Fifty dollars damages. SEC. II.] WHO MUST BE SERVED. 143 FORD V. EAST LOUISIANA RAILROAD CO. 110 La. 414. 1903.^ Plaintiff was a porter on a railroad which had through excursion arrangements with defendant, and plaintiff was for several years aJLowed to ride free over defendant's line from the point of con- nection of the two roads to Covington, where plaintiff lived. On one occasion plaintiff was ordered off of one of defendant's trains by defendant's superintendent, on the ground that plaintiff had been engaged from time to time in buying and selling unused parts of excursion tickets over defendant's road. Plaintiff offered to pay his fare but this offer was refused. Blanchaed, J. Here he was neither asked for a ticket, nor for payment of the fare in money. Even if shown that he had been trafficking in the unused por- tions of excursion tickets, the company could not, because of that, have denied him the right to travel as a passenger on its trains, provided he paid the fare. It could, of course, at its pleasure, have withdrawn, with or without cause shown, the permission given him to ride free, and it could have resorted to any of the means provided by the law to prevent the practice of buying and selling tickets and protect its rights from that kind of invasion. But a man who " scalps " railroad tickets cannot, generally, be denied transportation over the lines of the railways in whose tickets he traffics. He is a part of the general public and rail- way companies, as common carriers, must permit all who pay the regular fare to travel on their trains. Here the man was sick; he offered to pay his fare; it was de- nied him. He was angrily ordered off the train; the train was stopped in order to put him off; the manager directed the con- ductor to put him off. This was the equivalent of force, even if actual force was not nsed, though as to that the testimony is conflicting, plaintiff claim- ing the conductor took him by the arm, led him to the steps of the platform and demanded of him to get off. The conductor denies that he put his hands on him, though he admits standing on the steps when Ford got off, and he followed him off, getting back oh the car, himself, at the rear end as it passed on again. There is no denial by either the conductor or the manager that Ford was ordered off the car. 1 Only a summary of the facts is given, and part of the opinion is omitted. — Ed. 144 THE SERVICE TO BE RENDERED. [CHAP. Hi THUESTON" V. UmON PACIFIC EAILEOAD CO. Fed. Gas. No. 14019. 1877. DuNDT, District Judge. The railway company is bound, as a common carrier, when not over-crowded, to take all proper persons who may apply for transportation over its line, on their comply- ing with all reasonable rules of the company. But it is not bound to carry all persons at all times, or it might be utterly unable to protect itself from ruin. It would not be obliged to carry one whose ostensible business might be to injure the line; one fleeing, from justice; one going upon the train to assault a passenger, commit larceny or robbery, or for interfering with the proper regulations of the company, or for gambling in any form, or committing any crime; nor is it bound to carry persons infected with contagious diseases, to the danger of other passengers. The person must be upon lawful and legitimate business. Hence de- fendant is not bound to carry persons who travel for the purpose of gambling. As gambling is a crime under the state laws, it is not even necessary for the company to have a rule against it. It is not bound to furnish facilities for carrying out an unlawful purpose. Necessary force may be used to prevent gamblers from entering trains, and if found on them engaged in gambling, and refusing to desist, they may be forcibly expelled. "Whether the plaintifE was going upon the train for gambling purposes, or whether, from his previous course, the defendant might reasonably infer that such was his purpose, is a question of fact for the jury. If they find such to have been the ease, they cannot give judgment for any more than the actual damage sus- tained. After the ticket is purchased and paid for, the railroad com- pany can only avoid compliance with its part of the contract, by the existence of some legal cause or condition which will excuse it. The company should, in the first case, refuse to sell tickets to persons whom it desires and has the right to exclude from the cars, and should exclude them if they attempt to enter the car without tickets. If the ticket has been inadvertently sold to such person and the company desires to rescind the contract for trans* portation, it should tender the return of the money paid for the' ticket. If it does not do this, plaintifE may, under any circum* stances, recover the amount of his actual damage, viz.: what hS paid for the ticket, and, perhaps, necessary expenses of his de- tention. SEC. II.] WHO MUST BE SERVED. 145 In this case the jury rendered a verdict for actual damages ($1.74) and costs, the company not having tendered the money. Judgment on verdict.^ EEASOE V. PADUCAH & ILLINOIS PEEEY CO. 152 Ky. 220. 1913.^ Lassing, J. A steamboat company, holding itself out to the public as a carrier of passengers and freight, is a common carrier, within the meaning of the statute; and the duties imposed upon common carriers by the laws of the land are applicable to it. The fact that it is running a special excursion does not have the effect of relieving its owners of the duty imposed upon it as a common carrier. 6 Cyc. 535; Indianapolis, etc., E. Co. v. Einard, 46 Ind. 293. One of the duties owing by a common carrier to the public is to carry, without discrimination, as far as practicable, all petsons who apply for passage and tender in payment therefor the established fares, or provide themselves with tickets entitling them to passage. But this duty to serve the public does not deprive the carrier of the right to make reasonable and proper rules for the conduct of its business, among which may be enumerated the right to deny passage to or to exclude from its conveyance one already -a passenger, if such person is in such an intoxicated condition as to be unable to care for himself, or as to make it probable that he will annoy or disturb the other passengers; or it may refuse pas- sage to or exclude from its vehicle a person of notoriously bad character, or one habitually guilty of misconduct, when it is ap- parent that the safety and comfort of the other passengers will be endangered by the presence of such person in the conveyance. The fact that, on a former occasion, a passenger had been guilty of misconduct, drunk, boisterous, and indecent in his behavior to- ward other passengers, will not justify the carrier in refusing to permit him to again travel upon its conveyance, if, when he presents himself for passage, he is sober, and is conducting himself in a decent and orderly manner. There is nothing in the record to show that appellant, on the occasion in question, was drunk, or drinking, or disorderly; on the contrary, the evidence distinctly negatives such an idea. The refusal of appellee to carry him as a passenger on its boat was based solely on the fact that he had not conducted himself in a gentlemanly manner on a former occasion. As stated, this fur- 1 See Turner v. North Car. R. R. Co. (1869), 63 N. C. 522. 1 The statement of facts and part of the opinion are omitted. — Ed. 146 THE SERVICE TO BE EENDEEED. [CHAP. II. nished appellee no excuse for refusing him passage; and the trial court properly held this plea bad on demurrer.^ BOGAED'S ADM'E. v. ILLINOIS CENTEAL EAILEOAD CO. 144 Ky. 649. 1911.^ Settle, J. A common carrier, independently of the contractual relation, is under a general obligation to receive and carry upon its trains all proper persons who apply for transportation and offer to pay the regular fare for such service. By the term " proper per- sons" is meant persons whose status or condition apparently en- titles them to be carried as passengers. On the other hand, the carrier has the right to refuse to receive or carry as passengers, improper persons; that is, persons whose condition or conduct is such, from intoxication, disorderly conduct, contagious diseases, or other things, as to make their presence on the train dangerous to the lives or health of other passengers. Likewise, if the condi- tion or conduct of a person, after being received as a passenger, becomes such as to endanger the lives or health of other passen- gers, or to unreasonably annoy or offend them, it is the right and duty of the carrier's servants in charge of the train, upon receiv- ing notice thereof, to eject such offending person from the train; but in doing so they must also exercise due care to protect his health and person from danger or unnecessary discomfort. In such a case the carrier is bound to exercise a reasonable dis- cretion, according to conditions as they reasonably appear at the time. Thompson on Negligence, vol. 3, § 3235.^ PEICE V. ST. LOUIS, lEON MOUNTAIN AND SOUTHERN EAILWAY CO. 75 Ark. 479. 1905.^ Wood, J. A railway company is not required to accept as a passenger one without an attendant, who, from intoxication, is mentally or physically incapable of taking care of himself. But 2 As to degree of intoxication which will justify refusal, see Pittsburgh, C. & St. L. Ky. Co. V. Vandyne (1877), 57 Ind. 576. 1 Only an extract from the opinion is reprinted. — Ed. 2 As to the exercise of the right to eject a person who has been received as a passenger, but is afterwards found to be ill or intoxicated, see Louis- Tille & N. R. R. Co. v. Logan (1889), 88 Ky. 232; Korn v. Railway Co. (1903), 125 Fed. 897. 1 Only an extract from the opinion is reprinted. — Ed. SEC. II.] WHO MUST BE SERVED. 147 it cannot refuse to receive as a passenger one who is capable of taking care of himself, and whose presence is not dangerous or hurtful or annoying to fellow passengers. If the conductor of a passenger train accepts one as a passenger, unattended, who, from drunkenness, is unable to look after himself, he (the conductor), in so doing, is acting within the scope of his authority. It is one of the duties of the conductor to pass upon the eligibility, so to speak, of those presenting themselves for transportation. If a conductor accepts a person as a passenger whom he knows to be unattended, and knows to be insensible from intoxication, and thereby unable to protect himself from danger and injury, the company owes him the duty to exercise such care as may be rea- sonably necessary for his safety. While the company is not an insurer of the person of one who has been received as a passenger in such condition, being cognizant thereof, it is bound to exercise all the care that a reasonably prudent man would to protect one in such insensible and helpless condition from the dangers incident to his surroundings and mode of travel. The railroad company must bestow upon one in such condition any special care and attention, beyond that given to the ordinary passenger, which reasonable prudence and foresight demand for his safety, considering any manner of conduct or disposition of mind manifested by the passenger and known to the company, or any conduct or disposition that might have been reasonably antici- pated from one in his mental and physical condition, which would tend to increase the danger to be apprehended and avoided. If its servants, knowing the facts, fail to give such care and attention, and injury results, as the natural and probable consequence of such failure, the company will be guilty of negligence, and liable in damages for such injury.^ PEAESON V. DUAKE. 4 Wallace, 605. 1866.^ In the month of June, 1856, the steamship Stevens, a common carrier of passengers, of which Pearson was master, on her regular 2 As to the right to refuse to carry a blind person, see Illinois Cent. R. R. Co. V. Smith (1904), 85 Miss. 349. As to the right to refuse to carry a person who is ill. but who has not an infectious disease, see Connors v. Cunard S. S. Co. (1910), 204 Mass. 310. As to the right to exclude insane persons, see Pullman Car Co. v. Krauss (1906), 145 Ala. 395; Owens v. Macon & B. B. Co. (1903), 119 Ga. 230. 1 Part of the statement of facts, the arguments of counsel, and part of the opinion are omitted. — Ed. 148 THE SERVICE TO BE RENDERED. [CHAP. II. trip from Panama to San Francisco, arrived at the intermediate port of Acapidco, where Duane got on board, with the intention of proceeding to San Francisco. He had, shortly before this, been banished from that city by a revolutionary, yet powerful and or- ganized body of men, called "The Vigilance Committee of San Francisco," upon penalty of death in case of return. This com- mittee had, in the fore part of June, against his will, placed him on the Golden Age, a steamer in the harbor of San Francisco, des- tined for Panama, with directions that he should be conveyed beyond the limits of California ; and he was forcibly carried to the Mexican port of Acapulco. The presence of the Stevens afforded the first opportunity to get back, which he was anxious to embrace, being willing to encounter the risk to which his return might ex- pose him. Duane went openly on the boat, at the public gangway, and talked freely with some of the officers and passengers. It is not certain that the master knew of his being aboard until after the ship got to sea, but no directions had been given for his expul- sion, and though he was without a ticket, or money to buy one, yet a passenger, who had the means, offered to pay the purser his fare, who declined receiving it. It was usual for those persons who wished to secure a passage, to procure a ticket at Acapulco, but there was no imperative rule of the ship requiring it, and the customary fare was often paid to the purser after the boat had left the port. There was no evidence that Duane would have been excluded, had the master been aware that he was on board before he left Acapulco, for it was quite clear that the circumstances of his ban- ishment were unknown at that time. The master, Pearson, was aware that the Vigilance Committee was in control of San Francisco, and ascertained in some way that Duane had been expelled by them from California, and if he re- turned, would be in danger of losing his life. Having learned this, he resolved to put Duane aboard the first down ship he met, and send him bade to Acapulco. The steamer So-nora, commanded by Captain Whiting, and one of the same line of steamers of which Pearson, was master, very soon came in sight, and was stopped. Whiting informed Pearson that he had orders not to carry back any banished person, and that Duane would certainly be executed if he returned, and advised that he should be sent to the Sonora, and he would endeavor to persuade him to go on with him. Thereupon Duane was transferred to. the Sonora, and landed at Acapulco. The transfer was effected without any personal indig- nity to Duane, who at first resisted, but was induced to yield to superior force, by friendly counsels. SEC. II.] WHO MUST BE SERVED. I4i> Me. Justice Davis delivered the opinion of the court. This case is interesting, because of certain novel views which this court is asked to sustain. Two questions arise in it: 1st, was the conduct of Pearson justifiable? 3d, if not, what should be the proper measure of damages? It is contended, as the life of Duane was in immi- nent peril, in case of his return to San Francisco, that Pearson was justified, in order to save it, in excluding him from his boat, notwithstanding Duane was willing to take his chances of being hanged by the Vigilance Committee. Such a motive is certainly commendable for its humanity, and goes very far to excuse the transaction, but does not justify it. Common carriers of passengers, like the steamship Stevens, are obliged to carry all persons who apply for passage, if the accom- modations are sufficient, unless there is a proper excuse for re- fusal.^ If there are reasonable objections to a proposed passenger, the carrier is not required to take him. In this case, Duane could have been well refused a passage when he first came on board the boat, if the circumstances of his banishment would, in the opinion of the master, have tended to promote further difficidty, should he be returned to a city where lawless violence was supreme. But this refusal should have preceded the sailing of the ship. After the ship had got to sea, it was too late to take exceptions to the character of a passenger, or to his peculiar position, pro- vided he violated no inflexible rule of the boat in getting on board. This was not done, and the defence that Duane was a " stowaway," and therefore subject to expulsion at any time, is a mere pre- tence, for the evidence is clear that he made no attenipt to secrete himself until advised of his intended transfer to the Sonora. Although a railroad or steamboat company can properly refuse to transport a drunken or insane man, or one whose character is bad, they cannot expel him, after having admitted him as a passenger, and received his fare, unless he misbehaves during the journey.^ Duane conducted himself properly on the boat until his expulsion was determined, and when his fare was tendered to the purser, he was entitled to the same rights as other passengers. The refusal to carry him was contrary to law, although the reason for it was a humane one. The apprehended danger mitigates the act, but affords no legal justification for it. But, the sum of four thousand dollars awarded as damages, in 2 Jencks v. Coleman, 2 Sumner, 221 ; Bennett v. Button, 10 New Hamp- shire, 486. 3 Coppin V. Braithwaite, 8 Jurist, 875 ; Prendergast v. Compton, 8 Car- riugton and Payne, 462. 150 THE 8EEVICE TO BE RENDERED. [CHAP. 11. this case, is excessive, bearing no proportion to the injury re- ceived. Duane is entitled to compensation for the injury done him by being put on board the Sonora, so far as that injury arose from the act of Pearson in putting him there. But the outrages which he suffered at the hands of the Yigilance Committee, his forcible abduction from California and transportation to Acapulco, the difiSculties experienced in getting to New York, and his in- ability to procure a passage' from either Acapulco or Panama to San Francisco, cannot be compensated in this action. The ob- structions he met with in returning to California were wholly due to the circumstances surrounding him, and were not caused by Pearson. Every one, doubtless, to whom he applied for passage, knew the power of the Vigilance Committee, and were afraid to encounter it, by returning an exile, against whom the sentence of death had been pronounced. Pearson had no malice or ill-will towards Duane; and, as the evidence clearly shows, excluded him from his boat, in the fear that, if returned to San Francisco, he would be put to death. It was sheer madness for Duane to seek to go back there. Common prudence required that he should wait until the violence of the storm blew over, and law and order were restored. MATTEE OP CULLEN v. NEW YORK TELEPHONE CO. 106 N. Y. App. Div. 250. 1905. Appeal from Special Term, Kings County. Application by James R. CuUen for a writ of peremptory man- damns against the New York Telephone Company to compel it to render telephone service to him. From an order denying the ap- plication, the applicant appeals. Affirmed. WiLLAKD Baetlett, J. We are not prepared to say that the discretion of the learned judge at Special Term was improperly exercised in this case in denying the appellant's application for a peremptory writ of mandamus commanding the respondent to in- stall a telephone instrument in the cigar shop of the appellant, and to render him the customary telephone service in connection therewith. The writ of mandamus will not issue in cases of doubt- ful right. People ex rel. NichoU v. N. Y. Infant Asylum, 122 N. Y. 190. Indeed, it may often properly be refused, in the exer- cise of judicial discretion, even where the applicant has a cause of action enforceable in a suit for damages. The papers presented to the court at Special Term in this case set out facts and circum- SEC. II.] WHO MUST BE SERVED. 151 stances warranting a suspicion on the part of the police authorities that the premises of which the appellant's cigar shop form a part were used for pool-selling purposes prior to the beginning of his tenancy, and also indicating his presence in and about the place so frequently as to justify the inference that he may well have been cognizant of the fact that the law had thus been violated there. On one occasion during the period when he was a frequent visitor, several persons were arrested by the police there upon the charge that they were engaged in the business of selling pools on horse races, in violation of section 351 of the Penal Code. A telephone instrument which had been installed by the respondent for the service of an express company had been removed by the police, and the restoration of the service refused without the institution of any legal proceedings to compel its restoration. In behalf of the appel- lant it is insisted that he is not chargeable with knowledge of these transactions antedating his tenancy; but, as I have intimated, his frequent visits, which are stated to have numbered more than three or four a week between the 1st day of March, 1904, and the 12th day of February, 1905, render it somewhat improbable that he did not know what was going on. However this may be, it is to be noted that, according to the appellant's own affidavit, the refusal of the respondent to furnish him with a telephone instrument and service was not absolute in character. His application was made to Mr. W. F. Baker, the contracting agent of the respondent, who, at the close of the interview, told the appellant's counsel that if Mr. Cullen would write a letter to the telephone company stating that he would not, and did not intend to, use the telephone for illegal purposes, and would give the company a reference, " he would take up the matter with the general manager of the company." Under the circumstances, this does not seem to us to have been an unreasonable requirement. The New York Telephone Company had been informed by the police department that the premises had been used as a poolroom. It was also aware that a telephone which it had previously installed therein had, been removed therefrom by the police. The officers of the company might not unreasonably apprehend that they would render themselves liable for aiding and abetting a violation of the law if they furnished further telephone service to the premises in view of this information. It was quite proper, therefore, for them to request the assurance from the ap- pellant which the contracting agent suggested, and for them also to require the appellant to furnish a reference as to his character. The action of the corporation in refusing to comply with the ap- pellant's demand until the assurance and reference thus requested should be supplied was not a final refusal. The statement of the 153 THE SERVICE TO BE RENDERED. [CHAP. II. contracting agent that he would thereupon take up the matter •with the general manager of the company was a promise to act upon the application thereafter with an open mind and a fair con- sideration of the whole case, such as might lead the company to put in the desired instrument and serve the appellant as a tele- phone subscriber. This attitude on the part of the defendant cor- poration, if nothing else, justified the court at Special Term in denying the appellant's application for the discretionary and pre- rogative writ of mandamus. The order appealed from should be affirmed.^ Order affirmed, with $10 costs and disbursements. All concur. WIEMEK V. LOUISVILLE WATEK CO. 130 Fed. 251. 1903.^ Evans, District Judge. Although the court has given this case very attentive consideration, it is too much pressed for time just now to do more than state its conclusions generally without going into details. By his bill and the pending motion the com- plainant, Wiemer, seeks an injunction, mandatory in character, to compel the defendant to supply him with water; hg,-QfEering_iail security for the pajrment of thejrice thereof. The learned counsel for the defendaifrdo not contest the general proposition that the defendant is a corporation which owes certain duties to the public,, and the court is of opinion that those duties are, in general terms, very accurately defined in the following language, found in section 931, 3 Cook, Corp., viz. : " A waterworks company is also a quasi public corporation. It must supply water to all who apply there- for and offer to pay the rates." Indeed, the latest authorities seem very definitely to establish the rule that water supply companies like the defendant are required to supply water impartially to all consumers, and that they cannot act capriciously, nor discrimi- 1 Compare Godwin v. Car. Tel. & Tel. Co. (1904), 136 N. C. 258. See Gray v. Western U. T. Co. (1891), 87 Ga. 350, and Gist v. Tele- graph Co. (1895), 45 S. C. 344, as to messages with regard to the sale of options. See Nye v. Western U. T. Co. (1900), 104 Fed. 628, and Western U. T. Co. V. Cashman (1906), 149 Fed. 367, as to libelous messages. See State ea> rel. Webster v. Nebraska Tel. Co. (1885), 17 Neb. 126, State ex rel. Payne v. Kinlock Tel. Co. (1902), 93 Mo. App. 349, and Cum- berland T. & T. Co. V. Hobart (1906), 89 Miss. 252, as to the right to deny service because of outstanding debt or dispute. See State ex rel. Gwynn v. Citizens' Tel. Co. (1901), 61 S. C. 82, as to the right to deny service because applicant is being served by another tele- phone company. 1 Part of the opinion is omitted. — Ed. SEC. II.] WHO MUST BE SERVED. 153 nate against any one who is able to pay for the water supplied. In short, to phrase it in familiar terms, the law does not allow such companies to unduly advantage any customer by doing for him what it will not do for others under circumstances substan- tially the same. Griffin v. Goldsboro, 123 N. C. 206, 30 S. E. 319, 41 L. E. A. 240 ; Haugen v. Albina, 21 Or. 411, 28 Pac. 244, 14 L. E. A. 424. Whether so intended or not by defendant, the court is of opinion that the effect of what was done in this case, as shown by the testimony, was to unduly_discriminate against the complainant and in favor of the Louisville Tramway Sprinkler Company, a riva l in the business of street sprinkling. Perhaps there can be no two opinions upon this proposition of fact when all the testimony is attentively considered, but it is very earnestly urged for the defendant that the complainant has, in no event, any right to claim a supply of water from the defendant, because he is not an " inhabitant " of Louisville, Ky., and the language of the first section of the charter of the defendant is quoted and relied upon to support the contention. That language is that Thomas E. Wilson and others are hereby made a corporation " with power and authority to construct and establish within the city of Louisville or elsewhere for the purpose of supplying said city and itsjnhabita nts with water." 2 Acts 1853-54, p. 121, c. 507. It appears alilce~from' the bill of complaint and from the testimony heard that the sole purpose for which the water sought to be ob- tained by the complainant is to be used by him is that of sprinkling the streets in front of the houses of "inhabitants" of this city, and the court, in the absence of any authority to the contrary, is clearly of opinion that the construction contended for is very much too narrow. The charter does not demand that the "inhabi- tants " of Louisville, in obtaining water for the useful, and, indeed, necessary, purpose of sprinkling the streets, shall be allowed to get it only through the medium of an "inhabitant" of the city. The beneficial thing — the essential purpose — in this instance is at last to supply water for the use of " inhabitants " of Louisville alone, and that fact seems to bring the case clearly within the in- tention and the equity of the statute creating the defendant. The relations between the complainant and the defendant are much more accurately described by what has just been said than they are by the suggestion that the defendant is simply a wholesale dealer in water and the complainant a mere retailer thereof. The duties of the defendant to the public imply very much more than it is a mere vender of its own property to those to whom it sees fit, to sell it. And so it may be said that the cost to the com- plainant of the water is a very small part of the cost of what is 164 THE SERVICE TO BE RENDERED. [CHAP. II. required to sprinkle the streets for property holders or their tenants.'' DETROIT GAS CO. v. MORETON TRUCK AND STORAGE CO. Ill Mich. 401. 1897.^ Grant, J. Replevin. Property replevied: A gas meter of the value of six or seven dollars. The cause of the suit: The refusal of the defendant to pay a bill for furnishing 60 feet of gas pipe, and labor, to connect defendant's stables with plaintiff's gas-pipe line. The amount of the bill rendered, according to plaintiff's testimony, was $7.45, according to defendant's testimony, $11.50. The suit was instituted in justice's court, and was ap- pealed to the circuit court, and then to this court. The circuit court held that title to the meter was in plaintiff, that the right of possession was in defendant, that plaintiff could not maintain the action, refused to award the return of the property, and directed the jury to assess damages to the defendant, which they did at the sum of $55. As long as the law permits such petty suits to be appealed from one court to another till they reach the court of last resort, imposing expense upon litigants and the public, ? Upon appeal the Circuit Court of Appeals, in Louisville Water Co. v. Wiemer (1904), 130 Fed. 257, without expressly deciding the point passed upon by the court below, reversed the decision, declaring that the regula- tion, under which service was denied to the complainant, was reasonable, namely, that water for sprinkling would only be supplied to the one person in each district who was approved of by the largest number of inhabitants. But the Court added : " Similar, if not the same, questions were involved in the case of Fuhring against the Louisville Water Company (a case decided by the Court of Appeals of Kentucky in 1879, but not reported ) . That was the case of a petition for a mandamus to compel this same company to furnish water to the petitioner wherewith to sprinkle the streets of Louisville. The Court of Appeals, waiving all question of propriety of the remedy sought, and assuming that the company was bound to furnish an adequate supply of water for sprinkling the streets of the city, held that the plaintiff, it not appearing that she resided or did business or owned property on any of the streets which she proposed to sprinkle, had no such special interest as would entitle her to the relief sought ; and, further, that, because of the confusion and waste that would otherwise ensue, the company might law- fully restrict its choice to one person, and that such choice was left to the company, no tribunal being expressly appointed for that purpose. In that case it does not appear that another had been already licensed, and the case goes upon the broad grounds that a person having no special interest by reason of residence or ownership had no right to coerce the choice of the company by compelling the selection of himself. The case goes further than the present, for here the company gave the plaintiff a chance to qualify himself of which he would not avail himself. The court below thought itself not bound by the decision referred to for the reason that the case might have been decided upon the fitness of the remedy. But as we think it sound in respect to the question involved, we accept it as confirmatory of our own views, without deciding whether we should be bound by it or not." 1 One paragraph dealing with questions of damages is omitted. — Ed. Sec. II.] WHO MUST be served. 155 costing many times the amount involved, the courts must determine them upon legal principles, notwithstanding they take time which ought to be devoted to important suits. Two questions are presented: (1) Had plaintiff the right to remove the meter? (2) If it had not that right, what is the measure of damages? 1. In disposing of the first question we shall assume that the defendant is liable for the reasonable cost of putting in the service pipe. It is conceded that the plaintiff owns the meter, and that it may remove the same for nonpayment of gas consumed. It is argued that the company could not remove it for nonpayment of the bill for making the connection and piping the defendant's barn, and the court so instructed the jury. This involves a de- termination of the contract between the parties. The connection was made, the pipe furnished, and the meter put in for the sole purpose of furnishing gas to the defendant. The agreement to do these things and to furnish gas were parts of the same contract. If the company may remove its meter for failure to comply with the one provision of the contract, it is difficult to understand why it may not for failure to comply with the other. The defendant agreed to pay for both. The plaintifE is under no obligation to continue to perform its part of the contract when the defendant has refused compliance. Under the defendant's contention the gas company might pipe a man's building at great expense, for which he agreed to pay, and when it was done, and the meter in place, be compelled to furnish gas so long as he paid for the gas consumed, although he refused to pay the other bill. Suppose that before the meter was put in the man should refuse to pay, would the company be liable for damages for not- putting in the meter? "Would he be entitled to the meter without first paying or tender- ing the reasonable cost of piping? To these questions there can be but one answer. If A. agrees to place a machine, the title to which remains in A., upon B.'s land, and to do further work with it for B. after it is so placed, upon condition that B. pay expenses of moving and placing the machine, and after A. has done this work B. refuses to pay, B. cannot say to A., " I will not pay you for moving and placing the machine, but you must keep it on my land and work it for my benefit so long as I pay you the agreed price for its use." A. has two remedies. He may either remove his machine or he may go on with his contract and sue B. for the labor performed. This practically illustrates the defend- ant's position, — that plaintiff must continue to perform its part of the contract, while defendant violates its part. Its counsel cites no authority to support it. The present case is not one of the 156 THE SERVICE TO BE RENDERED. [CHAP. II. ordinary performance of labor or the furnishing of materials, un- attended with any other conditions. We think the plaintifE was entitled to remove its meter, and to maintain the action of replevin upon refusal to deliver it.^ STATE ex rel WOOD v. CONSUMEES' GAS TEUST CO. 157 Ind. 345. 1901.^ Mandamus by the state, on relation of Ann E. Wood, against the Consumers' Gas Trust Company to compel defendant to permit relatrix to use natural gas from its main. From a judgment for defendant, plaintiff appeals. Hadlet, J. The things requested and commanded of the ap- pellee were to lay a service pipe from its main in Bellefontaine street to the property line in front of the relatrix's house, and to permit her to use the gas. The mandate is not to furnish the relatrix with an adequate or any definite amount of gas, but the obvious force and limitations of the request and order are to re- quire the appellee to furnish her with the necessary means, and permit her to use the gas upon the same terms that other in- habitants of the city are permitted to use it. Is it the legal duty of appellee to do these things? Mandamus is a proper remedy to compel appellee to furnish gas to the relatrix if it is shown that she is entitled to it. Portland Natural Gas & Oil Co. v. State, 135 Ind. 54, 31 L. E. A. 639. The appellee is a corporation authorized by the legislature to exercise the right of eminent domain (Acts 1889, p. 23), and licensed by the city of Indianapolis to lay pipe lines through its streets and alleys for the transportation and distribution of natural gas to its customers. These rights, which involve an element of sovereignty, and which can exist only by grant from the public, are rooted in the principle that their exercise will bestow a benefit upon that part of the public in whose behalf the grant is made, and the benefit received by the citizen is the adequate considera- 2 As to the right to discontinue services because of a patron's failure to pay a bill owed by a former occupant of the premises, see Miller v. Wilkes- Barre Gas Co. (1903), 206 Pa. 254. Under a statute allowing discontinu- ance when a person is in arrears, see Morey v. Metropolitan Gas L. Co. (1874), 38 N. Y. Super. Ct. R. (6 Jones & Sp.) 185. As to the right to refuse or discontinue service because of a patron's fail- ure to pay for gas furnished to him previously at other premises, see Gas Light Co. V. CoUiday (1860), 25 Md. 1; Mockin v. Portland Gas Co. (1900), 38 Or. 120; Lloyd v. Washington G. L. Co. (1881), 15 D. C. (1 Mackey) 331. Under statute, see People v. Manhattan G. L. Co. (1865), 45 Barb. 136. 1 Part of the opinion is omitted. — Ed. SEC. II.] WHO MUST BE SERVED. 157 tion for the right and convenience surrendered by him. The grant thus resting upon a public and reciprocal relation imposes upon the appellee the legal obligation to serve all the members of the public contributing to its asserted right impartially, and to per- mit all such to use gas who have made the necessary arrangements to receive it and apply therefor, and who pay, or offer to pay, the price, and abide the reasonable rules and regulations of the com- pany. Portland Natural Gas & Oil Co. v. State, 135 Ind. 54; Coy V. Indianapolis Gas Co., 146 Ind. 655, 36 L. E. A. 535; Haugen v. Water Co., 21 Or. 411, 28 Pac. 244, 14 Lr. E. A. 424; People V. Manhattan Gaslight Co., 45 Barb. 136; Crumley v. Watauga Water Co., 99 Tenn. 420, 41 S. W. 1058; American Waterworks Co. v. State, 46 Neb. 194, 64 N. W. 711, 30 L. E. A. 447; State v. Butte City Water Co., 18 Mont. 199, 44 Pac. 966, 32 L. E. A. 697, 56 Am. St. Eep. 574. But without controverting the law as declared in the foregoing cases, or claiming exemption from the rule, it is answered, as a justification for denying the relatrix the use of gas, that the cor- poration was organized as a voluntary enterprise, in the general interest of the people of Indianapolis; that its purpose was not the making of money for any one, but to furnish gas to consumers in the city at the lowest possible rate; and that the supply of gas the corporation has on hand, or that it may possibly procure, is in- sufficient to supply what customers it has now connected with its mains, in severely cold weather; and that to permit the relatrix to use gas would be to further reduce the already insufficient sup- ply. Will these facts relieve the appellee of its duty to permit the relatrix to use its gas? If they will, then it must be true that the relatrix is not entitled to share in the gas furnished by appellee to the inhabitants of the city, because her participation will reduce the possible supply below the full requirements of those already being served. It is proper to observe that the present consumers of appellee's gas are not here complaining of the quantity of gas received by them, or protesting against the admission of the relatrix to a share of the supply; and it is difficult to see how the appellee, while continuing to assert and exercise its extraordinary rights, may set up its own default, or probable default, to others as a legal excuse for the nonperformance of its duty to the relatrix. The legal effect of the answer is that the relatrix shall have no gas because her neighbors, in common right, have none to spare. It is admitted, because not denied, that the relatrix is a member of that part of the public which appellee has engaged to serve. As such she has borne her part of the public burdens. She has ren- 158 THE SERVICE TO BE RENDERED. [CHAP. II. dered her share of the consideration. Bellefontaine street, in front of her house, has been dug up, and her property made servient to the use of appellee in laying its pipes and in carrying forward its business, and her right to use the gas, and to share in the public benefit, thus secured, whatever it may amount to, is equal to the right of any other inhabitant of the city. The right to gas is held in common by all those abutting on the street in which appellee has laid its pipes or it is held of right by none. The legislature alone can authorize the doing of the things done by appellee, and this body is prohibited by the fundamental law from granting a sovereign power to be exercised for the benefit of a class, or for the benefit of any part of the public less tlian the whole residing within its range. Cooley, Const. Lim. (6th Ed.) p. 651, and cases cited. Appellee's contract is with the state, and its extraordinary powers are granted in consideration of its engagement to bring to the com- munity of its operations a public benefit; not a benefit to a few, or to favorites, but a benefit equally belonging to every citizen, similarly situated, who may wish to avail himself of his privilege, and prepare to receive it. There can be no such thing as priority or superiority of right among those who possess the right in com- mon. That the beneficial agency shall fall short of expectation can make no difference in the right to participate in it on equal terms. So, if appellee has found it impossible to procure enough gas to fully supply all, this is no sufiicient reason for permitting it to say that it will deliver all it has to one class, to the exclusion of another in like situation. It is immaterial that appellee was organized to make money for no one, but to supply gas to the inhabitants of Indianapolis at the lowest possible rate. It has pointed us to no special charter privilege, and, under the law of its creation, certain it is that its unselfish purpose will not relieve it of its important duty to the public. The principle here an- nounced is not new. It is as old as the common law itself. It has arisen in a multitude of cases affecting railroad, navigation, tele- graph, telephone, water, gas, and other like companies, and has been many times discussed and decided by the courts ; " and no statute has been deemed necessary to aid the courts in holding that, when a person or company has undertaken to supply a demand which is ' affected with a public interest,' it must supply aU alike who are like situated, and not discriminate in favor of nor against any." 45 Cent. Law J. p. 278 ; Haugen v. Water Co., 31 Or. 411 ; Olmsted v. Proprietors, 47 N. J. Law, 311; Stern v. Wilkes Barre Gas Co., 2 Kulp, 499 ; Chicago & N. W. Ey. Co. v. People, 56 111. 365, 8 Am. Eep. 690; Nebraska Tel. Co. v. State, 55 Neb. 627; SEC. II.] "WHO MUST BE SEEVED. 159 Watauga Water Co. v. Wolfe, 99 Tenn. 429, 41 S. W. 1060, 63 Am. St. Eep. 841 ; State ex rel. v. Delaware etc. K. Co., 48 N. J. Law, 55, 2 Atl. 803, 57 Am. Eep. 543. In a further material sense, the discrimination asserted by the answer becomes injurious to the relatrix. It is a matter of com- mon knowledge that natural gas is a cheap and convenient fuel, and for many reasons is eagerly sought by those who may reason- ably- obtain it. It is therefore of like knowledge that, in a com- munity where it is supplied to some premises and denied to others, the effect is to enhance the value of such parcels as have it, by making it more desirable and profitable to occupy them, and to depreciate the value of such parcels as are excluded from its use. It is very clear that appellee may not, under the gmse of adminis- tering a public benefit, exercise a public power to take the prop- erty of one and confer it upon another. The principal argument of appellee's counsel is that not having sufficient gas to supply its present customers, and having exhausted every available means for increasing its supply, it is therefore im- possible for it to perform its public duty, and mandamus will not lie to compel an attempt to perform a duty impossible of per- formance. We concede in the fullest terms that mandamus will not lie to require an attempt to do a thing shown to be impos- sible. But this is not the question we have before us. The rela- trix is not asking, nor the court commanding, that the company attempt to increase its supply of gas. The relatrix is only seeking to be permitted to share in the quantity of gas the company has at its command, whatever that may be, on the same terms that others are permitted to use it. There is in the request of the relatrix nothing unreasonable and nothing impossible of performance. The whole question comes to this: The appellee, under public grant for the dispensation of a public good, has taken possession of certain streets and alleys in Indianapolis for the distribution and sale of natural gas to those abutting on its lines. The relatrix, owning a lot abutting on one of appellee's lines, erected thereon a dwelling house, and, upon the faith of being permitted to use the gas, has piped her house, and constructed her heating apparatus of a form suitable only to the use of natural gas as a fuel, which will be worthless if natural gas is denied her. She has, in common with other abutters, been subjected to the inconvenience of having the street in front of her house dug up and had her property oc- cupied with the company's pipes. She has made all necessary ar- rangements to receive the gas, has tendered appellee its usual charges, has offered to abide by its reasonable rules and regulations, and -we perceive neither legal reason, nor natural justice, in deny- 160 THE SERVICE TO BE RENDERED. [CHAP. II. ing her the rights accorded to those of her neighbors who have con- tributed in the same way to appellee's enterprise. The second paragraph of answer was insufficient, and the demurrer thereto should have been sustained. Judgment reversed, with instructions to sustain the demurrer to the second paragraph of the return to the alternative writ of man- date. Section 3. The Eight of Public Service Companies to Serve Themselves. HANNAH V. THE PEOPLE. 198 HI. 77. 1902.'^ BoGGS, J. This is an appeal by John S. Hannah from a judg- ment of the circuit court of Cook county adjudging him guilty of contempt and imposing a iine of $100 for violating a decree of that court enjoining him and other interested parties from storing in the public warehouse of the Central Elevator Company any grain directly or indirectly owned by or belonging to said elevator company or the firm of Carrington, Hannah & Co., of which appellant was a member, or in which said corporation or firm had any interest other than as public warehousemen. Upon informa- tion in chancery theretofore filed in said circuit court by the at- torney general against said Central Elevator Company and eight other companies, they and each of them, their managers, agents and employes, had by the decree of said court been enjoined from storing and mixing their own grain with the grain of their custom- ers in their own elevators. Appeals were taken from the decrees in those cases to this court, where they were affirmed. Central Elevator Co. v. People, 174 111. 303. While these appeals were under consideration in {his court the legislature passed an act, approved May 26, 1897 (Laws 1897, p. 302), amending section 6 of the warehouse act of April 25, 1871, purporting to make it lawful for owners, lessees, or managers of public ware- houses of class A to store their own grain and mix it with the grain of others of the same grade in their own warehouses, on con- dition hereinafter set forth. After this act was adopted, and after the decree was affirmed by this court, the appellant, as man- 1 The arguments of counsel and part of the opinion are omitted. WiLEiiir and Caktee, JJ., dissented without opinion. — Ed. SEC. III.] EIGHT TO SERVE THEMSELVES. 161 ager of the Central Elevator Company, and who was one of the owners of stock in said company, with full knowledge of said decree and its affirmance, and of the perpetual injunction thereby granted, stored and continued to store the grain of the elevator company, and of the copartnership of which he was a member, in. the warehouse of said company, claiming the right to do so under said amendatory act of 1897, but disclaiming any intent to violate the injunction of the court. In the proceedings instituted against Hannah as for contempt the circuit court held that the act of 1897 'was unconstitutional and void, and entered the judgment and im- posed the fine appealed from. Under the constitution of 1870, and the enactment of 1871, adopted in obedience to the constitutional requirements, public warehouses licensed under the act of 1871 are public agencies, and licensees under that act are to be regarded as pursuing a public employment, and as charged with the performance of duties toward the public. In applying for and accepting their licenses, such warehousemen voluntarily submitted their business and their prop- erty to the control of the law, to the end that the performance by them of their duties to the public might be accomplished and en- forced. The constitution declares such warehouses shall be public warehouses. This constitutional provision impresses the business of keeping a public warehouse with a public use, and those who apply for and accept licenses to keep public warehouses under the act of 1871 voluntarily occupy a relation to those who store grain in their warehouses, or have the right to so store grain, which makes it incumbent upon such warehousemen to discharge certain duties to such owners and producers and shippers of grain. The license authorizes the warehouseman to pursue a public employ- ment. The law implies, as a condition of the acceptance of a license to conduct a public warehouse, that the licensee is not dis- qualified upon any ground of interest adverse to that of those whom, by the acceptance of the license, he undertakes to represent and serve, from discharging the duties of a public warehouseman, and that he will remain so disinterested and qualified while he holds that relation to the public. Speaking upon that subject, we said in Central Elevator Co. v. People, supra, p. 307 : " It is a firmly established rule that, where one person occupies a relation in which he owes a duty to another, he shall not place himself in any position which will expose him to the temptation of acting contrary to that duty or bring his interest in conflict with Ms duty. This rule applies to every person who stands in such a situation that he owes a duty to another, and courts of equity have never fettered themselves by defining particular relations to 163 THE SERVICE TO BE EENDEEED. [CHAP. II. ■which alone it will be applied. They have applied it to agents, partners, guardians, executors, administrators, directors, and man- aging officers of corporations, as well as to trustees, but have never fixed or defined its limits. The rule is founded upon the plain consideration that the one charged with duty shall act with regard to the disc];iarge of that duty, and he will not be permitted to expose himself to temptation or be brought into a situation where his personal interests conflict with his duty. Courts of equity have never allowed a person occupying such a relation to undertake the service of two whose interests are in conflict, and then endeavor to see that he does not violate his duty, but forbid such a course of dealing, irrespective of his good faith or bad faith. If the duty of the defendants as public warehousemen stands in opposition to personal interest as buyers and dealers in grain storing the same in their own warehouses, then the law interposes a preventive check against any temptation to act from personal interest by prohibiting them from occupying any such position. The public warehouses established under the law are public agencies, and the defendants, as licensees, pursue a public employment. They are clothed with a duty toward the public." That the exercise of the right purported to be given to the keep- ers of public warehouses by the said amendatory act of 1897 to store their own grain in their own warehouses, mix it with any grain of others which they may decide is of like grade as their own grain, and issue and buy warehouse receipts representing or purporting to represent their own grain, etc., is incompatible with the fair, faithful, and impartial discharge of the public employment of a keeper of a public warehouse, is well shown by the following ex- tract from the opinion of this court in said Central Elevator Co. v. People, supra, p. 208 : " The evidence shows that defendants, as public warehousemen storing grain in their own warehouses, are enabled to, and do, overbid legitimate grain dealers by ex- acting from them the established rate for storage, while they give up a part of the storage charges when they buy or sell for themselves. By this practice of buying and selling through their own elevators the position of equality between them and the public whom they are bound to serve is destroyed, and by the advantage of their position they are enabled to crush out, and have nearly crushed out, competition in the largest grain market of the world. The result is that the warehousemen own three-fourths of all the grain stored in the public warehouses of Chicago, and upon some of the railroads the only buyers of grain are the warehousemen on that line. The grades established for different qualities of grain are such that the grain is not exactly of the same quality in each SEC. III.] RIGHT TO SERVE THEMSELVES. 163 grade, and the difference in market price in different qualities of the same grade varies from 2 cents per bushel in the better grades to 15 cents in the lower grades. The great bulk of grain is brought by rail and in car loads, and is inspected on the tracks, and the duty of the warehousemen is to mix the car loads of grain as they come. Such indiscriminate mixing gives an average quality of grain to all holders of warehouse receipts. Where the warehouse- man is a buyer, the manipulation of the grain may result in per- sonal advantage to him. Not only is this so, but the warehouse proprietors often overbid other dealers as much as a quarter of a cent a bushel, and immediately resell the same to a private buyer at a quarter of a cent less than they paid, exacting storage which more than balances their loss. In this way they use their business as warehousemen to drive out competition with them as buyers. It would be idle to expect a warehouseman to perform his duty to the public as an impartial holder of the grain of the different proprie- tors, if he is permitted to occupy a position where his self-interest is at variance with his duty. In exercising the public employment for which he is licensed, he cannot be permitted to use the advan- tage of his position to crush out competition and to combine in establishing a monopoly, by which a great accumulation of grain is, in the hands of the warehousemen, liable to be suddenly thrown upon the market whenever they, as speculators, see profit in such course. The defendants are large dealers in futures on the Chi- cago Board of Trade, and together hold an enormous supply of grain ready to aid their opportunities as speculators. The ware- houseman issues his own warehouse receipt to himself. As public warehouseman he gives a receipt to himself as individual, and is enabled to use his own receipts for the purpose of trade and to build up a monopoly and destroy competition. That this course of dealing is inconsistent with the full and impartial performance of his duty to the public seems clear." And further in the same cause we held it was inconsistent with the duties and obligations the said Central Elevator Company owed to the public for it to buy grain and store the same in the public warehouse which it was licensed to conduct, and as public warehouseman to issue receipts or certificates for such grain to itself. Judgment affirmed. 164 THE SERVICE TO BE RENDERED. [CHAP. II. UNITED STATES v. LEHIGH VALLEY EAILEOAD CO, 220 U. S. 257. 1910.^ Mr. Chief Justice White delivered the opinion of the court. This case is one of what were known as the commodity eases, previously decided and reported in United States v. Delaware & Hudson Co., 213 U. S. 366. The controversy now is but a sequel to that disposed of in the previous cases. To understand the question now for consideration it is essential to have in mind the contentions which arose for decision upon the previous appeal and the disposition which was made of them. We therefore refer to those subjects. The United States proceeded, both by suits in equity and man- damus, against certain railroad companies, including the Lehigh Valley, to prohibit them from transporting coal in interstate com- merce in violation of what were deemed to be the prohibitions of the fifth paragraph of the 1st section of the act to regulate com- merce, as amended on June 29, 1906, usually referred to as the commodities clause of the Hepburn act. The clause is as follows: " Prom and after May first, nineteen hundred and eight, it shall be unlawful for any railroad company to transport from any state, territory, or the District of Columbia to any other state, territory, or the District of Columbia, or to any foreign country, any article or commodity, other than timber and the manufactured products thereof, manufactured, mined, or produced by it, or under its au- thority, or which it may own in whole or in part, or in which it may have any interest, direct or indirect, except such articles or commodities as may be necessary or intended for its use in the con- duct of its business as a common carrier." 34 Stat. 584, c. 3591. In effect, the contention of the government was that the clause in question prohibited railroad companies from moving in the chan- nels of interstate commerce articles or commodities other than the articles excepted by the provision, which had been manufactured, mined, or produced by the companies or under their authority, or which were, at the time of the transportation, owned by them, or which had been previously owned by them in whole or in part, or in which the companies then or previously had any interest, direct or indirect. The government, moreover, insisted that these gen- eral propositions embraced the movement by the companies in in- terstate commerce of a commodity which had been manufactured, mined, or produced by a corporation in which the transporting 1 The arguments of counsel and part of the opinion are omitted. — Ed. SEC. III.] RIGHT TO SEBVE THEMSELVES. 165 railroad company was a stockholder, irrespective of the extent of such stock ownership. The railroad companies in efEect defended the suits upon the ground that the statute, as construed by the government, was repugnant to the Constitution. In coming to determine whether the government was correct in its contention that these prohibitions operated to prevent a rail- road company from transporting a product because it was owned by or had been mined, manufactured, or produced by a corpora- tion in which the railroad company was the owner of stock, irre- spective of the amount of such stock ownership, it was expressly decided that the prohibitions of the statute were addressed only to a legal or equitable interest in the commodities to which the pro- hibitions referred; that they therefore did not prohibit a railroad company from transporting commodities mined, manufactured, produced, or owned by a distinct corporation, merely because the railroad company was the owner of some or all of the stock in such corporation. Summing up its review as to the true construction of the com- modities clause, the court held (p. 415) that it prohibited "a rail- road company engaged in interstate commerce from transporting in such commerce articles or commodities under the following cir- cumstances and conditions: (a) When the article or commodity has been manufactured, mined, or produced by a carrier or under its authority, and at the time of transportation the carrier has not in good faith, before the act of transportation, dissociated itself from such article or commodity; (b) when the carrier owns the article or commodity to be transported, in whole or in part; (c) when the carrier, at the time of transportation, has an interest, direct or indirect, in a legal or equitable sense, in the article or com- modity, not including, therefore, articles or commodities manu- factured, mined, or produced or owned, etc., by a bona fide cor- poration in which the railroad company is a stockholder." Thus construed, the clause was held to be within the power of Congress to enact. Accordingly, the mandate of this court provided that the cause "be, and the same is hereby, remanded to the said circuit court for further proceedings in conformity with the opinion of this court." tjpon the filing of the mandate, the court below vacated its de- cree dismissing the bill in this (the equity) cause, and reinstated the case upon the docket. The United States then presented an amended bill and asked leave to file it. The amendment contained copious averments in regard to the actual relations existing be- tween the railroad company and one of the coal companies men- 166 THE SERVICE TO BE EENDERED. [CHAE. II. tioiied in the original bill, viz., the Lehigh Valley Coal Company. In substance it was averred that as to this particular coal company, the railroad company was not only the owner of all the stock issued by the coal company, but that the railroad company so used the power thus resulting from its stock ownership as to deprive the coal company of all real, independent existence, and to make it vir- tually but an agency or dependency or department of the railroad company. In other words, in great detail facts were averred which tended to establish that there was no distinction in practice between the coal company and the railroad company, the latter using the coal company as a mere device to enable the railroad company to violate the provisions of the commodities clause. It was charged that by these abuses the production, shipment, and sale of all the coal within the territory served by the railroad company was brought within the dominion of that company prac- tically to the same extent as if it was the absolute owner of the same. Finally it was alleged as follows : " That by virtue of the facts hereinbefore set out and otherwise, and more particularly by virtue of the control, direction, domina- tion, and supervision exercised by the persons who are the offi- cers of the defendant railroad and by the defendant over all the operations of the said coal company, embracing the mining and production of said coal, the shipment and transportation of the same over the defendant railroad, and the sale thereof at the seaboard, it follows : " First. That the coal company, not being in substance and in good faith a bona fide corporation, separate from the defendant, but a mere adjunct or instrumentality of the defendant, the de- fendant, at the time of transportation, has an interest, direct or , indirect, in a legal or equitable sense, in said coal. " Second. That said coal of said coal company is mined and produced under the authority of defendant, and the defendant, at the time of transportation and before the act of transportation, has not in good faith dissociated itself from all exercise of author- ity over said coal, but continues to exercise authority over said coal at the time of transportation, and over the subsequent sale thereof." On the objection of the railway company, the court denied the request of the United States for leave to file the amended bill. The United States then moved for a decree dismissing its original bill without prejudice, and after argument that motion also was denied. Thereupon counsel for the railroad company moved to dis- miss the bill absolutely, and upon the statement of counsel for the United States that it "would not proceed any further, in view of the fact that the proposed amendment had been disallowed," the SEC. III.] EIGHT TO SERVE THEMSELYES. 167 I court reached the conclusion "that the bill should be dismissed absolutely upon the allegations of the bill and answer." A decree to that effect was entered, and the government prosecutes this ap- peal, relying for reversal upon the error which it is insisted was committed in refusing to allow the proposed amended bill to be filed, and in dismissing the suit. Our duty is to enforce the statute, and not to exclude from its prohibitions things which are properly embraced within them. Com- ing to discharge this duty it follows, in view of the express prohi- bitions of the commodities clause, it must be held that while the right of a railroad company as a stockholder to use its stock owner- ship for the purpose of a bona fide separate administration of the affairs of a corporation in which it has a stock interest may not be denied, the use of such stock ownership in substance for the pur- pose of destroying the entity of a producing, etc., corporation, and of commingling its affairs in administration with the affairs of the railroad company, so as to make the two corporations virtually one, brings the railroad company so voluntarily acting as to such pro- ducing, etc., corporation within the prohibitions of the commodities clause. In other words, that by operation and effect of the com- modities clause there is a duty cast upon a railroad company pro- posing to carry in interstate commerce the product of a producing, etc., corporation in which it has a stock interest, not to abuse such power so as virtually to do by indirection that which the commodi- ties clause prohibits, — a duty which plainly would be violated by the unnecessary commingling of the affairs of the producing com- pany with its own, so as to cause them to be one and inseparable. Deciding, as we do, that error was committed in denying leave to file the proposed amended bill, the decree below is reversed and the cause remanded with directions for further proceedings in conformity with this opinion.^ 2 For a further application of the Commodities Clause, see Delaware, L. & W. R. R. Co. V. United States (1913), 231 U. S. 363. See New York, N. H. & H. R. R. Co. v. Interstate Com. Com. (1905). 200 U. S. 361, decided before the passage of the Commodities Clause. CHAPTER III THE EIGHT TO MAKE EULES FOE THE SEEVICE. HAEP V. CHOCTAW, OKLAHOMA & GULP EAILEOAD CO. 125 Fed. 445. 1903.^ Thayer, Circuit Judge. The facts developed at the trial below, concerning which there was practically no controversy, are these: From Septeniber> 1900, to February 15, 1903, and thereafter, the Choctaw, Oklahoma & Gulf Eailroad Company, the defendant in error, operated a line of railroad extending from El Eeno, in the territory of Oklahoma, thence eastwardly through the territory of Oklahoma, the Indian Territory, and the state of Arkansas, to Memphis, Tennessee. Coal fields existed along this line of road from South McAlister, in the Indian Territory, eastward to a point between Hartford and Mansfield, both of the latter places being in the state of Arkansas, or for a distance altogether of about 100 miles. The defendant company made a practice of hauling coal taken from the mines contiguous to its road, which belonged either to itself or to other persons and corporations, and about 60 or 70 per cent, of its trafiBc was of that character. When a mine owner, other than the defendant company, desired to employ the defendant to haul his coal, he made application to that effect to the company, and if, on an examination of the applicant's mine by the executive officers of the railroad, the quantity of coal therein seemed to be adequate to justify the expense, the general practice was to enter into an agreement with the mine owner whereby the latter under- took to procure the right of way and grade a track leading from the railroad to his mine, and to supply the necessary ties, the rail- road, on its part, agreeing to furnish the necessary iron and to lay the track, and thereafter keep the track and roadbed in good re- pair. It was also the usual practice in such agreemeiits to require the mine owner to develop his mine so that it would supply a cer- tain number of cars of coal per day, and to equip it with tipples and screens so that coal could be conveniently and speedily loaded into cars at the mine. In the month of September, 1900, the de- fendant's road in the vicinity of Hartford, Ark., had been re- 1 Part of the opinion is omitted. — Ed. RIGHT TO MAKE RULES FOR SERVICE. 169 cently constructed, and the volume of traffic at that station was small. The railroad company, before building its road eastwardly into the state of Arkansas, had bought about 1,600 acres of coal land near Hartford, and had located its station at that point on a part of the tract. The coal fields in that vicinity had been only slightly developed in the month of September, 1900, but there was one coal mine called Glenn's Bank that had been opened near the station to supply the local demand for coal, and after the railroad was opened for business, and during the fall of the year 1900 and the winter of 1901, the parties controlling this mine were allowed to haul coal to the station by wagons and load it on cars that were set out upon a side track. The plaintiff at that time was also in possession of a mine near the station, and at his request, and as the traffic at the station was not large, he was accorded the same privilege of loading coal from wagons into cars standing on the house track, which privilege he continued to exercise until the spring of the year 1901, up to which time, during a period of seven or eight months, he had loaded altogether something over 300 cars. During the period in question the railroad company did not per- mit coal to be loaded from wagons into ears standing upon its side- tracks at any of its stations, except at the Hartford station, and at one other station called Eed Oak, in the Indian Territory, at which latter place, as it seems, the practice was pursued temporarily until a spur track could be completed to the mine, which was some distance from the railroad. The defendant gave permission to load coal from wagons at Hartford mainly, if not entirely, for the purpose of aiding in the development of the coal measures at that point, but with no intention on its part of receiving coal perma- nently in that way, or of permitting its station side tracks to be used continuously for the purpose of standing coal cars thereon to be loaded from wagons. Some time in the spring of the year 1901, or the early summer of that year, the plaintiff was advised, by officers of the railroad company, that the practice of setting out cars on the station side tracks to be loaded from wagons would have to be discontinued. Thereafter there were several interviews between the plaintiff and persons representing the railroad com- pany relative to the construction of a spur track to the plaintiff's mine for his benefit and accommodation. The railroad company appears to have been willing at all times to lay such a track and to furnish the iron therefor, provided the plaintiff would secure a right of way and do the grading. The plaintiff on his part appears to have been willing at first to accept this proposition. They dif- fered, however, as to the place where the spur track should con- nect with the main line of the road; the plaintiff insisting that 170 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. the connection should be made at the station house at Hartford, and the defendant objecting to a connection at that point. The negotiations looking to the construction of a spur track accordingly fell through, and on August 15, 1903, the defendant company peremptorily declined to permit cars to be further loaded from wagons at its station or house track, the reason assigned for such action being, in substance, that it was the universal practice of all railroads engaged in hauling coal to require mine owners and coal shippers to have tipples and tracks whereby coal could be speedily loaded direct from the mines, and because of the annoy- ance, inconvenience, and delay necessarily attendant upon the load- ing of coal cars from wagons at stations. The plaintiff thereafter made complaint concerning the defendant's action to the board of railroad commissioners of the state of Arkansas, and in view of threatened action by that body the defendant company on October 7, 1902, again permitted cars to be loaded at the Hartford station from wagons, provided the coal so loaded was consigned to points within the state of Arkansas. At a later date, in January, 1902, for the same reason — that is to say, because of action taken or threatened to be taken by the board of railroad commissioners for the state of Arkansas, and to avoid the possible assessment of heavy penalties — the order against loading from wagons at the Hartford station, as respects coal consigned to any point on the defendant's railroad, either within or without the state of Arkansas, was revoked. The fundamental question which this state of facts presents would seem to be whether the defendant company, by setting out coal cars on its house track at Hartford, and permitting them to be loaded from wagons for a period of several months, under the cir- cumstances above detailed, thereby obligated itself to continue that practice, and was guilty of a legal wrong when it discontinued it in August, 1901. Undoubtedly a common carrier must accept and transport all commodities that are tendered to it for carriage which it holds itself out to the world as engaged in carrying, provided a reasonable compensation for the service is also tendered. Un- like a private carrier, it is not entitled to choose its patrons or cus- tomers, but, being a quasi public servant, must serve everybody who chooses to employ it, and must treat them impartially, charging each the same rate for substantially the same service, and affording to each the same facilities for shipment. A common carrier, how- ever, is not bound by the rules of the common law to receive and carry commodities of any and every kind which may be offered to it, but only such as it makes a practice of transporting. It is ein- titled in the first instance to determine what class of commodities EIGHT TO MAKE RULES FOR SERVICE. 171 it will engage in carrying. Moreover, it is entitled, in the first in- stance, by the common law, to establish reasonable rules and regu- lations governing the manner and form in which it will receive such articles as it professes to carry, and providing how they shall be packed for shipment so that they may be handled and trans- ported conveniently, safely, and expeditiously. Hutchinson on Car- riers, §§ 111-113, and cases there cited. This power to make rea- sonable regulations with respect to the manner in which it will re- ceive commodities for transportation implies the existence of a power on the part of a common carrier to change or modify such regulations from time to time upon reasonable notice to the public, as otherwise it might be compelled to pursue a particular practice' of receiving goods which it had once adopted, and was at the time attended with no inconvenience, after that practice had become ex- ceedingly inconvenient and burdensome both to itself and the pub- lic. It is manifest, we think (indeed, so manifest that we might almost taJie judicial notice of the fact), that no railroad con- structed through extensive coal fields and engaged- in transporting coal to market could for any considerable period follow the practice of setting out cars on its station side tracks, some distance froni the place where coal is mined, and permitting coal to be hauled thence by wagons and loaded into the cars by the slow process of shoveling. The useless consumption of time, and the additional expense incident to the handling of the commodity in question, in large quantities, in that primitive manner, would occasion great public loss and inconvenience, to say nothing of the loss sustained by the carrier, and the serious manner in which that method of handling coal would interfere with the movement of its trains and the transaction of its other business. In the case at bar one of the witnesses testified, in substance, that, if all the coal tributary to the defendant's railroad was loaded by wagon, the mines would not produce 20 per cent, of their present output because of the impos- sibility of handling the output in that way. This is in itself an entirely reasonable statement, and no attempt was made by the plaintifE to disprove it; his contention being apparently that, be- cause the defendant had permitted him to load coal from wagons for a few months, it had deliberately chosen that method of re- ceiving coal and serving the public, and was bound perforce to continue the practice indefinitely. We are of opinion that this contention on the part of plaintiff is untenable, and should be over- ruled. The evidence shows without contradiction, as heretofore stated, that the practice of permitting a shipper of coal to load cars from wagons at stations obtained at no other station along the defendant's road save at Hartford and Eed Oak, where the prac- 173 EIGHT TO MAKE KULES FOE SEEVICE. [CHAP. III. tice was tolerated temporarily, and for special reasons, with no thought of pursuing it permanently. The great bulk of coal that the defendant received and transported oyer its road was loaded by means of tipples into cars standing on spur tracks which had been laid to the mines, and in so far as the defendant had held itself out to the world as a common carrier of coal it can only be said to have so held itself out provided the commodity was so de- livered and loaded. We entertain no doubt that the defendant had the right to abandon the method of receiving coal which it had adopted at Hartford when the conditions that led to the practice at that station had so far changed as to render its further continu- ance inconvenient and burdensome. Especially should this right be conceded to the defendant when we reflect that if it permitted coal to be hauled to that station in wagons, and thence loaded into cars, other mine owners along its line might and probably would assert the same privilege, thereby subjecting it to great loss and expense, besides putting the public to much inconvenience. That conditions had materially changed at the Hartford station between September, 1900, and August, 1901, admits of no controversy. It was proven at the trial, and not denied, that in the meantime the defendant had disposed of its coal land at that point; that several large mines had been opened in the immediate vicinity of that place ; that the station had become a large shipping point for coal ; that the volume of trafi&c at that place, as well as along the road generally, had largely increased during the year; that the demand for cars in August, 1901, to handle coal and other products which required shipment, was far greater than during the previous year; and that the public interest, as well as the interest of the carrier, demanded that there should be as little delay as possible in loading cars. Under these circumstances, we think that the defendant in- curred no liability in refusing to permit its station side track to be further used for loading coal cars from wagons. Nor do we find that when the trial below ended any issue of fact as respects this point remained to be settled or decided by the jury, since all the material facts upon which the defendant's right to terminate the practice of loading cars from wagons depended were practically undisputed, and the existence or nonexistence of that right was a question of law to be determined by the court. EIGHT TO MAKE KULES FOR SERVICE. 173 DE BOARD V. CAMDEN INTERSTATE RAILWAY CO. 62 W. Va. 41. 1907.^ POFFENBARGER, Judge. The railway company operated street car lines on Third avenue and Eourth avenue of the city of Hunt- ington. What connection these two lines had is not clearly shown, but transfers were given by the conductors on the Third Avenue line which were good for passage on the Fourth Avenue line, if presented within one hour from the time of their issuance, shown by punch marks in the margin thereof. The plaintiff, an employe in the American Car & Foundry shops, situated in the eastern end of the city, took passage on a Third Avenue car going west, paid his fare, and took a transfer from the conductor. Having crossed over to Fourth avenue and waited a few minutes, he observed a car standing below Ninth street and started down to it. Before he ar- rived, the ear moved on, and he walked on after it until another car came down, which he boarded, and handed the conductor the transfer. He was informed by the conductor that the transfer was not good for a passage on the car, although presented within an hour after the time at which it had been issued because it was ten- dered below a place known as "Johnson's Lane." He refused tq pay any additional fare, and was ejected from the car. He re- sisted removal, and the conductor rang for the motorman, whq came back with a crank in his hand, with which he struck the plaintiff across the knuckles to make him let loose of the bar to which he was clinging. So much of the transfer as is material reads as follows: Free Transfer. Good only as indicated, if presented within one hour from time and date punched in margin — not transferable — and is accepted by passenger upon condition that the Company is not responsible for any error upon the part of the conductors in punching time and dates. Camden Interstate Railway Co. It does not disclose any such limitation as to the place at which it must be used as was enforced by the conductor. It appears from the testimony of a witness for the defendant that there was a rule forbidding its acceptance below Johnson's Lane, posted, among others, in the defendant company's barn, to which the public were not admitted. 1 Part of the opinion is omitted. — Ed. 174 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. The plain and undisputed state of facts, shown by the evidence, renders it unnecessary to consider many of the principles of law applicable to the rights of passengers and common carriers, re- spectively, growing out of contracts for carriage. On the face of the transfer but one limitation appeared, namely, that it should be used within one hour after the issuance thereof. If presented within that time, on the face' thereof, it entitled the holder to a westward passage on any car of the company running on Fourth avenue. There is no evidence tending in the slightest degree to show that the plaintifE had any knowledge of any limitation upon that right. According to all the authorities, a paper so handed him, without any explanation, or any knowledge on his part of any limitation, constituted the contract between him and the company. Unlike steam railroads, street railways do not have a certain fare for passage between given points. The nature of their business is such as to compel them, for the most part, to charge a certain fare for a passage without reference to the distance; this, at least, was the method of the defendant company. The paper, on its face, therefore, entitled the plaintiff to carriage, and knowledge of a secret limitation embodied in some rule which he had never seen could not be imputed to him. That rule, therefore, constituted no part of the contract. "Eailway passengers are not required to know the rules and regulations made by the directors of a company for the control of the actions of its agents and the manage- ment of its affairs." Hufford v. Eailroad Co., 64 Mich. 631, 8 Am. St. Eep. 859. In that case, this principle was applied in favor of a passenger who had relied upon the representa- tions of an agent as to the extent to which a ticket purchased by him was good for passage. It seems that the ticket on its face was a little uncertain. It was not controverted that the purchaser had read the ticket. Being uncertain as to what its lan- guage meant, he applied to the agent for an explanation, and was informed that it was good for a passage to the point to which the purchaser desired to go, and to which he had paid the fare. The conductor refused to carry him to that point, and required him to pay an additional fare for a portion of the distance. The authori- ties agree that the purchaser of a ticket, or a contractor for carriage, in order to be bound by a limitation, must have knowledge of it, but there is a disagreement among them as to what amounts to notice, and as to the extent of the duty of a person contracting for carriage to carefully examine all of the stipulations written or printed in the contract.^ 2 A verdict for the plaintifE having been set aside by the court below, that order was reversed and set aside, and the case remanded for the rendition of judgment on the verdict. — Ed. EIGHT TO MAKE RULES FOR SERVICE. 175 CHENEY V. BOSTON & MAINE EAILEOAD CO. 11 Met. 12.1. 1846.^ Dewet, J. This case involves no question of the general duty of railroad companies to carry passengers who offer themselves and are ready to pay the usual rate of fare. It is only a question whether one who purchases a ticket, entitling him, by the rules of the company regulating the tariff of fares to a continuous passage through, and avails himself of the reduction in price allowed to such passengers, can insist upon being taken up as a way passen- ger, at such stations as he may elect to stop at, he having volun- tarily abandoned the train that went through. The question really is, what was the contract between the plaintifE and defendants. Now the case stated by the parties expressly finds that the price of tickets entitling the party to a passage in the cars from Durham to Boston, in one continuous passage, was $1.87% for each, and for a passage from Durham to Exeter, and from Exeter to Boston, as separate trips, $3. Such was the regu- lar and ordinary charge. It is true that the tickets themselves do not describe the passage to be one by the same train. Nor do they purport to entitle the holder to a conveyance by two separate trips, first by taking the cars to Exeter, and thence by a subsequent train passing from Exeter to Boston. They are silent as to the mode. It therefore was a contract to carry in the usual manner in which passengers are carried who have tickets of that kind. It is said that the rules of the company were unknown to the plaintiff when he purchased the tickets, and therefore he ought not to be affected by them. This might very properly be insisted upon in his behalf, if it were attempted to charge him with any liability created by such rules; especially if it were attempted to enforce any claim for damages by reason of them. The question, as to the right of the plaintiff to be transported as a passenger, does not depend upon' his knowledge, at the time of the purchase of his ticket, of the difference of the price to be paid for a passage through the whole distance by one train, or that of a passage by different trains. The plaintiff might have inquired and informed himself as to that. If he did not, he took the mode of conveyance, the price of the ticket, and the superscription thereon, secure to him under the rules and regulations of the com- pany. It appears, however, that before reaching Exeter, the plain- 1 The statement of facts is omitted, the facts sufficiently appearing in the opinion. — Ed. 176 EIGHT TO MAKE RULES FOE SEKVIOB. [CHAP. III. tiff was fully apprised of the different rates of fare, and the rules applicable to way passengers, and that the agent of the defendants, the conductor of the train, offered to refund to him the money that he had paid for his tickets, deducting the usual fare from Durham to Exeter, which the plaintiff refused to accept. In the opinion of the court, this was all that the defendants were required to do; and as the plaintiff declined this offer, and thereupon left the train, stopping at Exeter, he voluntarily relinquished his passage through by a continuous train, for which he held a ticket, and whatever loss he has sustained was occasioned by his own act, and occurred under such circumstances as preclude him from all claim for dam- ages for any default in the company in the matter. Nor can he sustain any legal claim to recover back the sum paid for his first ticket, or any part thereof. The offer to that effect was refused by him. Judgment for the defendants.^ LAKE SHOEE AND MICHIGAN SOUTHEEN EAILWAY CO. V. GEEENWOOD. 79 Pa. St. 373. 1875.^ October 20th, 1875. Before Agnew, C. J., Shaeswood, "W1L7 LiAMS, Meecue, Goedon, Paxson and Woodward, JJ. Error to the Court of Common Pleas of Erie county: Of Octo- ber and November Term 1875, No. 135. • This action was in case and was brought November 23d, 1873, by J. L. Greenwood and Sarah E., his wife, in her right, against The Lake Shore and Michigan Southern Eailway Company. The cause of action was removing Mrs. Greenwood from one of the way freight train cars of the plaintiff at a distance from a station, be- 2 See Johnson v. Concord R. R. Corp. (1865), 46 N. H. 213; Western U. T. Co. V. Neel (1894), 86 Tex. 368; Western U. T. Co. v. MeMillan (1895), 30 S. W. (Tex.) 298; Gulf, C. & S. F. Ry. Co. v. Moody (1895). 30 S. W. (Tex.) 574; Knoxville Traction Co. v. Wilkerson (1906), 117 Tenn. 482; Florida E. C. Ry. Co. v. Carter (1914), 65 So. (Fla.) 254; McRea v. Railroad Co. (1883), 88 N. C. 526; Dietrich v. Pa. R. R. Co. (1872), 71 Pa. St. 432. As to waiver of regulation, see Pickford v. Grand Junction Ry. Co. (1884), 12 M. & W. 765; Greenfield v. Detroit & M. Ry. Co. (1903), 133 Mich. 557; Missouri K. & T. Ry. Co. ■». Herring (1910), 130 S. W. (Tex.) 1039. With regard to breaches of regulations as affecting right of recovery for injury, see Macon & W. R. R. Co. v. Johnson (1868), 38 Ga. 409; Balti- more Ry. Co. V. Wilkinson (1868), 30 Md. 224; Renaud v. N. T., N. H. & H. R. R. Co. (1912), 210 Mass. 553; Coburn v. Ry. Co. (1910), 243 111. 448. As to liability in deceit for publishing false time-tables, see Denton v. Great N. Ry. Co. (1856), 5 El. & Bl. 860. 1 The arguments of counsel are omitted. — Ed. EIGHT TO MAKE RULES FOR SERVICE. 177 cause she had no ticket, although she offered to pay the conductor the proper fare. She was removed under the following ride of the company : — " Notice. — ■ On and after February 1st, 1873, passengers will not be carried under any circumstances upon any freight trains, except such as are designated as way freights upon the time tables, and they will not be carried upon way trains unless they are pro- vided with tickets. Way freights will not stop at the stations where tickets are not sold to receive nor to let off passengers." On the trial before Vincent, P. J., April 16th, 1875, Mrs. Green- wood testified that in August, 1873, she started from Brie to go to Harborcreek Station, seven miles east of Erie, on the defend- ants' road; she had missed the early passenger train and got on the way freight train; no one came around till she had got about two miles; the conductor then came; she offered him money, he declined to take it and asked for her ticket ; she said she had none ; he said he must put her off, he could not help it; he was obliged io put her off if she had no ticket; she had been accustomed to ride on that train back and forward, and always had paid her fare on the train ; had ridden on it frequently after February 1st, 1873. She did not see the notice that passengers should not be carried on a freight train without a ticket. Mr. Greenwood testified that he went with his wife to the depot, the ticket agent said the passenger train had gone, but the way freight was just going, starting from the upper end of the depot; he put his wife aboard there; the ticket agent did not say he needed a ticket ; he had often ridden on the train without a ticket, did not know a ticket was required; he had not seen the notice in the depot that passengers would not be carried on freight trains without a ticket. Plaintiff gave in evidence the following order from the company to their employees : — " Conductors of way freight trains must visit their cabooses im- mediately before starting from each station, and not permit any passengers to ride upon their trains escept such as are provided with tickets. . . . Ticket agents will take pains to inform passen- gers of this order, so that the public may experience no inconven- ience." Defendants gave evidence that the notice was hung in conspicu- ous places in the ladies' and gentlemen's rooms in the passenger station at Erie, and had been put up a week or ten days before the order took effect; the notice was in the caboose when Mrs. Greenwood got on the train ; the notice was in each of the waiting- rooms at Harborcreek Station. 178 RIGHT TO MAKE EDLES SOB SERVICE. [CHAP. III. The court charged : — ... "It has not been contended that the order, requiring all passengeTS on this train to procure tickets before getting upon the train, was not a reasonable and proper one, and within the power of the defendants to make. But she contends that the company had, before this, for a long time, been in the habit of carrying her, back and forth, between Erie and Harborcreek, and allowing her to pay her fare on the cars, and she had never seen a notice or been informed of the new rule; and her husband testifies that, although the ticket agent at Erie told him he could take this way freight, he did not inform him that he must procure a ticket for his wife or himself before getting into the car, and that he was, therefore, justified in getting on the car without a ticket, and that the con- ductor should have received her fare, and carried her to her destina- tion. We are of the opinion that, if the company had been in the habit of carrying the plaintiff on this train without a ticket, its agents had no right to eject her from the car, unless she had notice of the change of the rule. It matters not how she had that notice, if she did have it before she went upon the train, the conductor hadJa right to put her off, using as much force as was necessary for that purpose, and putting her off in a reasonably proper place." . . . Both parties submitted points. The foregoing portion of the charge sufficiently states the principles involved in them and the question decided by the Supreme Court. The verdict was for the plaintiffs $125. The defendants took a writ of error, and assigned for error the instruction of the court. Judgment was entered in the Supreme Court, E'ovember 1st, 1875. Per Curiam. — The rule as to the purchase of tickets before en- tering into the car of the way freight train was entirely reason- able. But the plaintiff having used this car often before the adop- tion of the rule, and indeed afterwards, without objection for the want of a ticket, the company could not turn her out of the car and land her off a mile or so from the station without proof of express no- tice, or her actual knowledge of the existence of the rule forbidding any one to enter the car without a ticket. The putting up such notices in the station house is not sufficient under these circum- etances to visit her with notice. Judgment affirmed.^ 2 Compare Johnson v. Concord R. R. Corp. (1865), 46 N. H. 213; Sears v. K. R. Co. (1867), 14 Allen, 433; Lane v. R. R. Co. (1880), 5 Lea (Tenn.), 124; Van Camp v. Mich. Cent. R. R. Co. (1904), 137 Mich. 467; Geer v. R. R. Ck). (1905), 142 Mich. 511. EIGHT TO MAKE RULES FOR SERVICE. 179 LOUISVILLE AND NASHVILLE RAILEOAD v. TUENEE. 100 Tenn. 213. 1897.* "Wilkes, J. This is an action for damages for unlawfully eject- ing the plaintiff. Turner, from one of the passenger ears of the Louisville & Nashville Eailroad Company. It was commenced be- fore a justice of the peace, and on appeal was tried before the court and a jury, and judgment rendered for the plaintiff for $300 and costs; and the railroad company has appealed and assigned errors. The facts are that plaintiff bought what is called a "local ticket " at Guthrie, Ky., for Clarksville, Tenn. Upon its face was stamped or printed the words, " Good for one continuous passage, beginning on date of sale, only." And the date of sale, "June 14/97," was stamped on its back. Plaintiff did not use or attempt to use the ticket upon the day of sale, being unexpectedly detained at Guthrie on business. On the next day he tendered the ticket for passage to Clarksville. The conductor took the ticket in his hand and punched it, and handed it back to plaintiff, with the re- mark that he could not ride upon it, that the rule of the company was that such ticket .was good only on the day of sale, and that he would have to pay fare or get off the train. Plaintiff replied that he had bought the ticket and paid full price for it, and was entitled to ride upon it, and had no notice of such rule; that he had no money to pay his fare, and would not willingly leave the train, but would have to be put off. At the next station the conductor took him by the arm and led him through the car, and put him off, with- out any actual force or rudeness. He walked down the railroad three or four miles, and, finding a conveyance going to Clarksville, went in it, reaching that city without further cost about 4 o'clock p. M., when by the train he would have reached there at 11 A. M. of the same day. Plaintiff states that he had no knowledge of the regulation of the road that a ticket must be used on the date of its sale, and had previously ridden upon tickets on days subsequent to the day of sale. It appears that about January 1, 1897, the rail- road company had put this rule in force, and had posted notices of it in its various waiting rooms, and among others one was posted near the ticket window at Guthrie. This notice was as follows: " Louisville & Nashville E. E. Co. Notice. On and after Jan. 1, 1897, local tickets sold by this company, except commutation and 1 A small part of the opinion dealing with the measure of damages is omitted. — Ed. 180 EIGHT TO MAKE RULES FOE SERVICE. [CHAP. III. mileage tickets, will be void if not used for continuous passage through to destination, beginning on date of sale. Any ticket which cannot be thus used will be redeemed from the original pur- chaser, if sent to the general passenger agent, at Louisville, Ky., with satisfactory explanation of the cause which prevented its use." Signed by the traffic manager and general passenger agent. This notice was thus posted continuously from the date it went into effect, about January 1, 1897, up to the date of trial; and all local tickets sold after January 1, 1897, had stamped or printed on their face the provision above stated, — " Good for one continuous pas- sage, beginning on date of sale, only." It is not shown that any special damage was done the plaintiff, beyond the indignity of ejecting him from the train, and the inconvenience to which he was put on his journey. Many errors are assigned, but we will not treat them seriatim. The court charged the jury, in substance, that such a regulation and limitation in regard to tickets as the one in controversy would not be binding on a purchaser, imless the contents and conditions were made known to him when he bought the ticket, or it be shown otherwise that he knew of them, and purchased the ticket with that knowledge; that, in order to charge him with notice, it must be shown that he actually knew of them and consented to them, and the railroad company would be liable, if he bought a ticket without such actual knowledge, and attempted to use it, and was ejected from the train; that the fact that the notice was posted up in the waiting room, near the ticket window, and that the limiting words were stamped or printed on the face of the ticket, would not af- fect a purchaser with notice, if he bought the ticket in the usual way, and paid the usual price for it, and, if ejected for the refusal to pay fare while tendering such ticket, the road would be liable. This holding and ruling of the court is assigned as error, and it is also assigned as error that there is no evidence to support the ver- dict, and that the damages are excessive. It is held by this court that a railroad company may make, and by its agents enforce, rea- sonable rules and regulations for the carriage of freight and pas- sengers, and the transaction of its business generally. Summit v. State, 8 Lea, 413 ; Lane v. Eailroad Co., 5 Lea, 126 ; Eailroad Co. v. Garrett, 8 Lea, 438; Bailroad Co. v. Fleming, 14 Lea, 129; Eailroad Co. v. Benson, 1 Pickle 627. As to whether a rule is reasonable or not is a question for the court. Eailroad Co. v. Fleming, 14 Lea, 128. But such rules and regulations must be reasonable in their requirements, and must be executed in a reasonable and proper manner, so as not to be unnecessarily burdensome to the public. Such rules must not contravene RIGHT TO MAKE RULES FOR SERVICE. 181 any law or principle of sound public policy, and they must accord with the proper service and conduct of a railroad in its business and duty as a common carrier. The liability of the road cannot be restricted by such rules and regulations, nor can they be so shaped or enforced as unnecessarily to annoy and restrict the traveling public in its rights. 5 Am. & Eng. Enc. Law (2d Ed.) p. 482, and notes. Thus, in Lane v. Eailroad Co., 5 Lea, 124, it was held that a railroad company has the right to make regula- tions requiring passengers to purchase tickets before entering upon a freight train, and authorizing conductors to expel persons not having tickets, though they offer money in payment of fare. In Summit v. State it is held that a railroad may make all necessary reasonable rules for the proper and orderly management of its de- pots and other places open to the public, but not in such way as to infringe upon the rights of the public. A railroad may also make a rule that coupons from tickets shall be detached only by the conductor, and not by the passenger, and enforce such rule in a reasonable manner. Eailroad Co. v. Harris, 9 Lea, 180. So a railroad may by regulation establish a higher rate of fare if paid on the cars than in the ease of a ticket purchased before going on the train. Eailroad Co. v. Guinan, 11 Lea, 98. It may also regu- late the running of its trains, and the stopping of through trains at principal points only, and require passengers who are destined to way stations to ride upon such trains only as under the schedules stop at such stations. Trotlinger v. The E. T. & Ga. E. E., 11 Lea, 533. It may also require a person, on entering a train for pur- poses of travel, to exhibit his ticket, and afterwards to surrender it when called upon by the conductor. Eailroad Co. v. Fleming, 14 Lea, 129. It may also prescribe in what cars passengers may ride, provided equal and proper accommodations are furnished alike to all passengers holding first-class tickets, as that cars may be set apart for ladies when alone or accompanied by gentlemen traveling with them, and different cars for colored and white people shall be furnished, under the statute. Eailroad Co. v. Benson, 1 Pickle, 627 ; Eailroad Co. v. Wells, 1 Pickle, 613. Such rules and regula- tions, in order to be effective, must be made known to the public in such way and by such means as in the special ease may be neces- sary and best adapted to serve the convenience and purpose of the passenger as well as of the railroad. As to what notice or publication of rules is required or sufficient, in order to reach and affect the public, the authorities are by no means agreed. From the very nature of the ease, much must de- pend upon the provisions of the rule, and Whether it is one intended to affect the entire public and the usual and general business of 18* EIGHT TO MAKE RULES EOE SERVICE. [CHAP. III. passenger traffic or one intended for certain trains and certain cir- cumstances and individuals only. To illustrate, a person desir- ing to ride upon a freight train, or a through train when his des- tination is a way station, would reasonably expect regulations dif- ferent from those affecting travel generally, and would be put on his guard to ascertain the rules by which his passage must be gov- erned, when he would have no occasion to suspect such rules to apply to his passage upon the trains of the road generally. A rule relating to the former might be reasonable, which would not in the latter case, and notice might be sufficient in the former which would not be in the latter. So, in Lane v. Railroad, 5 Lea, 124, it was held that when a rail- road company has been in the habit of permitting persons to ride upon its freight trains without the purchase of tickets, it must in- form persons personally that its rule has been changed so as to require tickets, if such is the case, until such time as will suffice to acquaint the public with the existence of such rule. So, in Trotlinger v. Eailroad, 11 Lea, 533, it was held that a passenger holding a ticket to a way station had no right to ride upon a through train which did not stop at such station, provided he had notice of such schedule regulations, and it was suggested that if such publicity had been given in the ticket office and on the cars by posters that a party of ordinary intelligence, by the use of ordinary care and caution, could or might obtain all requisite information as to the matters involved, then the passenger would be bound by such regulations. Citing 2 Wait's Actions and De- fenses, 67, and cases there collated, for authority for the latter proposition as to publication and notice. These regulations in regard to riding on freight trains, and on trains only that stop at certain stations and do not stop at others, have been held to be reasonable regulations, but they apply to only exceptional cases, and not to the general traveling public in passing over the road from one station to another. Such special cases may be regulated by rules, and such rules may very properly be brought to the knowledge of the traveling public by notices of publication, but a rule and notice which is intended to apply to all passengers, and to affect all travel and every individual who applies for pas- sage, stands upon a different basis and requires more direct notice. A notice which is intended to apply to the entire public should be such as to leave no doubt but that it reaches all who are to be af- fected by it. While there is a conflict in the cases, the weight of authority is that time limitations, or conditions stamped or printed upon the back or face of a general ticket, are not binding upon a passenger RIGHT TO MAKE RULES FOE SERVICE. 183 unless his attention is called to them when he purchases the ticket and he assents thereto. Potter v. The Majestic, 33 L. E. A., 746, a,nd note; Eay's Negligence of Imposed Duties of Passenger Car- riers, 514, 518; 4 Elliott on Eailroads, See. 1593, note; Cole v. Goodwin, 33 Am. Dec, 505, and notes ; Eawson v. Penn. Eailroad Co., 8 Am. Dec, 545. While there may be some uncertainty, and even conflict, in the authorities, we are of the opinion that the correct rule is that a person who purchases a general ticket, and pays the usual price therefor, is entitled to one passage, unlimited as to time, upon any train which, under the proper and usual schedules of the road, stops at the point of the passenger's destination. If a ticket, lim- ited or conditional, is sold to a passenger, it can only be done upon an express agreement with him, either oral or in writing, and either based upon a consideration, or with the alternative presented to the passenger of a full and unlimited ticket. A similar rule ob- tains in regard to contracts for carriage of freight, and it has been held by this Court that a carrier must hold itself in readiness to ship with common Ikw liability, and must offer to shippers a rea- sonable and bona fide alternative between that mode of shipment and one with restricted or limited liability. Eailroad v. Gilbert, Parkes & Co., 4 Pickle, 430. So, in Michigan Central Eailroad v. Mineral Springs Mfg. Co., 16 Wall., 330 (Book 21, L. Co-op. Ed., 302), it is said: " Nothing short of an express stipulation, by parol or in writing, will be per- mitted to discharge a carrier from the duties which the law has annexed to his employment, . . . and such agreement is not to be implied or inferred from a general notice to the public limiting the obligation of the carrier, which may, or may not, be assented to." See, also, Nav. Co. v. Black, 6 How., 344. We are also of opinion that the mere stamping or printing of a limitation or condition upon the back or face of a ticket, and the acceptance of such ticket by a passenger, without more, is not suf- ficient to bind him to such condition or limitation, in the absence of actual notice to him of such condition or limitation and his as- sent thereto when he purchases his ticket. It cannot be presumed that every person buying a railroad ticket, for ordinary and gen- eral use, will, in the hurry and bustle of travel, stop to read and critically inspect his ticket. As a matter of fact, but little oppor- tunity is afforded him to do so. He generally takes his place in the crowd at the ticket window, produces and hands over his money with a request for a ticket to destination. His money is received. The ticket is produced, and, after being stamped, is handed to him through the ticket window. He has had no opportunity to see what 184 EIGHT TO MAKE EULBS FOE SEEVICE. [CHAP. III. is upon it, and has no time, in the rush, to stop and read and con- sider what may be printed or stamped on its face or back, and when he has paid full fare there is no occasion for his doing so, inasmuch as he can safely rely upon the contract which the law makes for him. Ordinary local tickets do not generally contain any terms of contract, and are not intended to do so. They are mere tokens to the passenger and vouchers for the conductor, adopted for con- venience to show that the passenger has paid his fare from one place to another, very much in the nature of baggage checks. The contract is in fact made when the ticket is purchased, and if it is different from what the law would imply, it must be so stated and assented to when the ticket is delivered. Nor will the posting of notices in the waiting rooms, ticket offices, and on the cars affect purchasers with notice in such cases. Passengers have but little time or opportunity to read such placards, and it would impose quite a serious burden upon travel to hold that the public must read all these notices thus posted, before taking passage on a train upon which they are willing to, and do, pay full fare. Eawson v. Penn. E. E. Co., 8 Am. Eep., 545; Cole v. Goodwin, 32 Am. Dec, 505, and note; Eay Passenger Carriers, Sec. 145; Hutchinson on Carriers, Sees. 246, 580, 581 ; 4 Elliott on Eailways, Sec. 1593. This rule, which we consider to be settled by the weight of au- thority and by reason, by no means prevents a railroad company from selling special tickets for special trains with limitations and conditions, such as excursion, round-trip, commutation, and mileage tickets, when the conditions and limitations are known to the pur- chaser and assented to by him orally or in writing, and he has paid for such ticket less than the usual fare. When tickets are sold at reduced rates, it has been very wisely said that the purchaser should, in consideration of such reduced fare or greater privileges, expect and look for some conditions, limitations, and terms different from those attaching to tickets generally, and be on his guard to become informed of them. But there is no such obligation upon the ordi- nary passenger, who pays the usual or full fare and asks for no reduced rates or special privileges, and he has a right to expect an unlimited ticket.^ 2 Compare McRea v. Wilmington & W. R. R. Co. (1883), 88 N. C. 526. EIGHT TO MAKE RULES FOR SERVICE. 185 MAEONY V. OLD COLONY & NEWPOET EAILEOAD CO. 106 Mass. 153. 1870.^ The plaintiff bought a ticket for passage from Sandwich, Massa- chusetts, to Kew York. It was also in evidence, that he took the morning train on the Cape Cod Eailroad, giving the conductor for his passage the first part of the ticket, and arrived at Middlebor- ough, the point of junction with the old line of the Old Colony & Newport Eailroad, about nine o'clock, and there entered a train of the defendants' cars, and was carried to Fall Eiver, the con- ductor of this train, to whom he presented this ticket, punching the same, and allowing him to pass thereon; that at Fall Eiver, after a short delay, he entered another train of the defendants' cars, being the morning train from Boston to Newport, which came to Fall Eiver by way of Taunton, and not by way of Middleborough ; and that between Fall Eiver and Tiverton, being called upon for his fare by the conductor of tTie last named train, he presented the ticket, and was informed by the conductor that by the rules of the defendants it was good only on the steamboat trains, or trains connecting with the steamboats, of which two were run in the afternoon, and that he must pay the difference in fare (about sixty cents) or leave the train at Tiverton, the next station, and wait for the steamboat train, which passed in the afternoon; that the plaintiff refused to make any further payment, claiming that on said ticket he was entitled to ride to Newport on said train, pass a part of the day in Newport, and then take the steamboat in the evening for New York; that at Tiverton he was removed, or re- quired to leave the train, by the conductor; and that he subse- quently jumped upon the train, rode to the next station, Bristol Ferry, there left the train, and some six or seven hours later took the steamboat train at Bristol Ferry, and reached Newport before the departure of the steamboat for New York ; that the fare at this time, by reason of competition with other lines, was less from Sand- wich to New York than the fare from Sandwich to Newport, of which the plaintiff was informed ; that the tickets in the form above described were prepared and issued by the Cape Cod Eailroad Com- pany, and had been sold for some months prior to July 11, 1868, by said company, with the assent of the defendants, but the Cape Cod Eailroad Company claimed no other right to malce contracts for conveyance of passengers over the defendants' railroad; and that of the amount received for such tickets the Cape Cod Eailroad 1 Part of the statement of facts, the arguments of counsel and a para- graph of the opinion dealing with a point of evidence are omitted. — Ed. 186 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. Company retained the local fare on its own road, and paid the de- fendants the amount of the fare from Middleborough to New York, and the ticket-seller at Sandwich was appointed by, accounted to, and received all instructions from said Cape Cod Eailroad Com- pany. The defendants offered evidence, which was uncontradicted, that by their rules passengers holding tickets to New York were re- stricted to the steamboat trains ; that two steamboat trains were run each afternoon, to one of which cars passing through Middlebor- ough were attached, and stopped at Tiverton ; and that the morning train from Boston to Newport was not one of said steamboat trains. Wells, J. The plaintiff's ticket entitled him to a passage upon any regular train for passengers upon the road of the defendants. It contained no notice of any restriction or limitation of the right which it purported to give. It was issued by the ticket agent of the Cape Cod Eailroad Company, whose authority for that purpose was sufficiently shown by the fact that such tickets had been so issued by said company "for some months prior" thereto, "with the assent of the defendants." The defendants could not, by any rule or regulation not previously made known, restrict the plaintiff from taking the passage to which his ticket entitled him, in any regular train for the accommodation of passengers. Under the in- structions, the jury must have found that there was no such in- formation to the plaintiff personally; and the case shows no such publication of the rule as would affect him with notice thereof. We think that the defendants show no good ground of exception to the ruling or the instructions to the jury in the court below. Exceptions overruled. WEBBE V. WESTEEN UNION TELEGEAPH CO. 169 111. 610. 1897.^ Me. Justice Magrudee delivered the opinion of the court. Upon the blank form containing the telegraphic message de- livered by Haas to appellee's operator at Montgomery, Ala., there were printed in small type certain conditions, among which was the following: "The company will not hold itself liable ... in any case where the claim is not presented in writing within sixty days after the message is filed with the company for transmission." Upon the back of the blank form upon which the dispatch as de- 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. EIGHT TO MAKE RULES FOR SERVICE. 187 livered to appellant in Chicago was written, certain stipulations and conditions were printed, the last of which was as follows: "The company wiU not be liable for damages or statutory penalties in any case where the claim is not presented in writing within sixty days after the message is filed with the company for transmission." It is contended by appellee that the claim here sued upon was not pre- sented in writing within the 60 days named in the printed conditions. It is not altogether clear, under the evidence in this case, that the claim was not presented in writing within 60 days, as required by the condition. On February 7, 1893, one of the attorneys of the appel- lant wrote a letter to an ofBeer of the appellee company. Although this letter stated that the claim for damages was made against ap- pellee on behalf of I. H. & J. C. Haas, yet the letter explained fully the nature of the alteration which was made in the dispatch, and the nature of the claim based upon the loss incurred by reason of that alteration. But, whether the claim was presented in writing within the 60 days or not, it seems to be conceded that the action of the court in instructing the jury to find for the defendant was based upon the conclusion that the claim was not presented in writing within the time named. The question in the case is whether the court erred in taking the case away from the Jury. The further question involved is whether the failure to present the claim in writing within the 60 days, if there was such failure, constitutes a defense against the present action. It is not denied that the company was guilty of negligence in delivering the dispatch as altered, instead of delivering it as originally sent. At any rate, no contest is made upon the ques- tion as to whether there was such negligence or not. Counsel for appellee confine themselves in their brief to the proposition that, for want of a claim in writing within 60 days after the dispatch in question was sent, appellant's right of recovery is barred. It is to be noted that this suit is not brought by Haas, the sender of the dispatch, but by Webbe, the receiver of the dispatch as changed. The dispatch, as sent, is signed by the sender; but the dispatch, as received, is not signed by the receiver. The question, then, arises whether any difference exists between the right of recovery by the sender of the dispatch and the right of recovery by the receiver of the dispatch, so far as these printed conditions upon the blank forms are concerned. We have held that the rela- tion of contract exists between the sender of the dispatch and the telegraph company, but that no relation of contract exists between the receiver of the dispatch and the telegraph company, and that the proper remedy of the receiver of the dispatch for damages on account of its alteration is an action in tort. Telegraph Co. v. 188 EIGHT TO MAKE EULES FOE SEEVICE. [CHAP. III. Dubois, 128, 111. 348. Ordinarily, where a shipper of goods or the sender of a telegraphic dispatch is held to be bound by stipu- lations or conditions printed upon the blank form of a receipt or bill of lading or dispatch, it is upon the ground that the person so bound signs the document containing the conditions, and makes a contract with the company which is to carry his goods or transmit his message. It would seem to be clear, however, that such con- ditions and stipulations would not have the same binding effect where, as here, no contract relation exists. In a case where a suit in assumpsit for damages was brought by the sender of a dispatch against the telegraph company, we held that the telegraph company is a servant of the public, and bound to act whenever called upon, its charges being paid or tendered; that such companies are, in this respect, like common carriers, and though not regarded, like common carriers, as insurers of the safe delivery of every message intrusted to them, yet their duty is to transmit correctly the message as delivered; that they are bound to the use of due and reasonable care, and liable for the conse- quences of carelessness or negligence, in the conduct of their busi- ness; that where a party desiring to send a telegraphic dispatch is 'required by the company to write his message upon a paper con- taining a condition exonerating the company from liability for an incorrect transmission of the message unless it shall be repeated, and at an additional cost therefor to the sender, such a restriction, even if regarded as a contract, is unjust, without consideration, and void; that it is against public policy to permit telegraph com- panies to secure exemption from the consequences of their own gross negligence by contract ; that notwithstanding any special con- dition which may be contained in a contract between a company and the sender of a message, respecting the liability of the former in case of an inaccurate transmission of the message, the company will still be liable for mistakes happening by its own fault; that it will depend on circumstances whether a paper furnished by the company on which the message is written, and signed by the sender, is a contract or not ; that it is a question for the jury to determine, as a question of fact, upon evidence aliunde, and from aU the cir- cumstances attending the signing of the paper, whether or not the sender of the dispatch has knowledge of its terms and assents to its restrictions. Tyler, Ullman & Co. v. Western Union Tel. Co., 60 111. 431. The Tyler case distinctly held that assent by the sender of the dispatch to the printed terms and conditions upon the blank form must be shown in order to make such terms and conditions binding as a contract upon the sender. The doctrine of the Tyler case has been subsequently indorsed and approved by this court. EIGHT TO MAKte RULES FOR SEETICE. 189 Western Union Tel. Co. v. Tyler, 74 111. 168 ; Western Union Tel. Co. V. Dubois, supra. If assent to such terms and conditions is nec- essary to bind the sender of the dispatch, surely assent to such terms and conditions, as printed upon a dispatch delivered, will be necessary to bind the receiver thereof. The receiver of the dispatch will certainly not be bound by a provision thereon requiring a claim to be presented within 60 days, in the absence of proof that he as- sented to such a provision. Western Union Tel. Co. v. Fairbanks, 15 111. App. 600; Western Union Tel. Co. v. Be Golyer, 27 id. 489 ; Western Union Tel. Co. v. Lycan, 60 id. 134. It is said, how- ever, that the requirement that the claim should be presented within 60 days is a reasonable requirement, and that a party suing for dam- ages will be bound to show that he has complied with such require- ment, if he had notice or knowledge of the same, or if there were any circumstances of such a character as to aifect him with such notice or knowledge. Upon an examination of the authorities, it will be found that in most cases where the provision in regard to the limit of 60 days has been held to be reasonable, and notice or knowledge of the same has been held to be binding upon the plaintiff in the suit, the controversy has been between the sender of the dispatch and the telegraph company. Such doctrine, however, has no ap- plication as between the receiver of the dispatch, whose suit is in tort against the company for negligence in the performance of a public duty, and the telegraph company. From the rule that assent is necessary to make such a condition as the 60-day limit binding, it necessarily follows that mere notice or knowledge of such con- dition will not affect the receiver of the dispatch. It is against public policy that a telegraph company may adopt rules, regulat- ing its relations with its patrons, which, if they are reasonable, shall be binding upon such patrons without their assent, if they only have knowledge. Counsel for appellee refer to the case of Oppenheimer v. United States Express Co., 69 111. 62, as support- ing the doctrine contended for by them ; but " there is in that case [Oppenheimer Case] no departure from the uniform decisions of this court that a carrier cannot be released from the duties and lia- bilities annexed to its employment unless the shipper assents to the attempted restrictions." Boscowitz v. Adams Express Co., 93 111. 523. Some of the cases seem to hold that the printed conditions upon blank forms of telegraphic dispatches, including the one in refer- ence to the limit of 60 days, are mere regulations, and not con- tracts between the sender of the message and the telegraph com- pany. The force of the distinction thus sought to be made lies in the fact that, if the conditions or stipulations are considered 190 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. as mere regulations, the assent of the sender to them is not nec- essary, but that he will be bound if they are brought home to his knowledge, whereas, if they are held to be parts of a contract, the assent of the sender must be shown in order to bind him. Croswell on Law of Electricity, § 493. But, whatever may be the correct view of these conditions as being regulations or contracts where the controversy is between the sender of the dispatch and the telegraph company, we are of the opinion that such distinction has no application where the controversy is between the company and the receiver of the dispatch. Id. § 540. There is no proof of con- tract between the telegraph company and the person to whom the message is addressed, and therefore he could not be held bound by these conditions or stipulations. Id. § 504, and cases cited in note 3. Counsel for appellee rely mainly upon the case of Manier & Co. V. Western Union Tel. Co., 94 Tenn. 443, as authority for the position that such conditions and stipulations including the limit of 60 days, are binding upon the receiver, as well as the sender, of the dispatch. But we are not inclined to assent to the doc- trine of the Tennessee case. The author of the opinion in that case refers to cases holding that the addressee of the message is not bound by the stipulation as to the 60-day limit, because he did not make the contract, and also to eases holding to the con- trary, and says that it is not necessary to determine in the case there under consideration where the weight of authority lies. The conclusion announced in that case rests mainly upon two consid- erations, namely: First, that, where the receiver of the message is a patron of the company, he will be presumed to have knowl- edge of the form of the contract embodied in the blanks used; second, that the receiver's right to recover rests entirely upon the contract of sending, and upon the principle that, where two parties contract for the benefit of a third', such third party may maintain an action for the breach of the agreement in his own right. We are unable to see that these considerations can have any influence where the action brought by the receiver of the dispatch is an action in tort for damages for the careless and negligent performance of a public duty. The opposite view from that contended for by counsel for ap- pellee is supported by respectable authority, and is in harmony with the decisions heretofore rendered by this court, and is a natural corollary from such decisions.^ 2 Compare Birney v. N. Y. & W. T. Co. (1862), 18 Md. 341; U. S. Tel. Co. V. Gildersleeve (1868), 29 Md. 232; Pearsall v. Western U. T. Go. (1891), 124 N. y. 256. EIGHT TO MAKE RULES EOE SERVICE. 191 CENTRAL OF GEOEGIA RAILWAY CO. v. MOTES. 117 Ga. 923. 1903> Simmons, C. C. . . . 2. "We shall not at this time undertake to do more than determine whether or not, as regards a waiting room in a city such as Macon, where weary travelers may, if they wish, procure suitable accommodations for rest and comfort, regu- lations forbidding the use by passengers of benches as beds, or any other attempted transformation of a railroad waiting room into a lodging house, tend to deprive passengers of inalienable rights, or are for any other reason to be regarded as despotic and unrea- sonable. It is pertinent here to remark that there was no evidence introduced on the trial touching any rule promulgated by the rail- road commission of this state with respect to the duty of a com- mon carrier to furnish lodgings to such of its patrons as find it con- venient to present themselves at the carrier's depot during the night, there to remain until the scheduled departure several hours later of a morning train. Kor have we been cited to any common- law or statutory rule which imposes upon a railway company any such duty towards such patrons, or to one holding a ticket, who, through his own fault or misfortune, has missed an evening train. Accordingly, we shall endeavor to decide on principle whether such a duty does or does not, as a general thing, exist. It seems reason- able to assert that a railway company could not be considered unrea- sonable if it adopted a regulation whereby a passenger was not ad- mitted to its waiting room until an hour or so before the departure, on schedule time, of a train the passenger desired to take. Nor would it appear more unreasonable for the carrier to actually keep its waiting room open all night for the accommodation of its patrons, permitting them to enter it at any time they chose, on condition that they would not abuse the privilege thus accorded them by undertaking to wrest from the carrier a night's sleep to which they were not entitled. Many good reasons might be sug- gested why the carrier would be unwilling to extend an unqualified invitation to enter at will and stay as long as desirable. For in- stance, passengers expecting to take a particular train might, if permitted to indulge in inopportune sleep, miss the train, and be left complaining on the carrier's hands, instead of making a timely and orderly departure and giving place to other passengers entitled to enter its waiting room and partake of the accommoda- tions it afforded. Again, the carrier could have a laudable ambi- 1 Only one point in the opinion is reprinted. — Ed. 192 EIGHT TO MAKE RULES FOE SEEVICE. [CHAP. III. tion to SO conduct its waiting room that passengers of culture and refinement might be spared the disgust of witnessing the uncouth and unseemly behavior of a different class of travelers^ whose sense of decency fails to suggest to them the impropriety of sprawling over or upon benches or seats designed for a purpose other than that of affording an opportunity to retire for the night in a grotesque, if not offensive, attitude of repose. The reasonable- ness of a regulation adopted by a carrier of passengers with respect to the use to be made of its premises is not to be ar- bitrarily determined by applying the test whether or not such regulation would be reasonable if adopted by a carrier of live stock. The circumstances of time and place are to be given due consideration. On the Western frontier, years ago, the rea- sonableness of attempting to regulate the " shooting out " of station lights by waiting passengers might have been seriously questioned by at least some members of the traveling public. To-day there is doubtless a growing sentiment in all parts of the country against converting into a smoking apartment a general waiting room pro- vided for the accommodation of both sexes, as well as against treat- ing with contempt the invitation held out by the station house " sand box " or cuspidor, and other minor infractions of the laws of etiquette which obtain in polite society. The evolution which has taken place along this line cannot properly be ignored by the courts, for carriers of passengers are to be encouraged, rather than disheartened, when they manifest a disposition to improve condi- tions which have become almost intolerable. To furnish adequate and comfortable accommodations to the traveling public is an exacting and serious business, not mere vain and expensive trilling. A prospective traveler who purchases a railroad ticket with a view to going on a journey does not thereby acquire a right to demand of the carrier that he be allowed to enter its waiting room eight hours or so before the train he expects to take is due, and there go to sleep as a matter of course. To miss his train will not change his status from a waiting passenger into a guest en- titled to demand a place wherein to sleep until the next train bound for his destination arrives, or transform the carrier into an innkeeper or proprietor of a lodging house. Indeed, he would stand upon no better footing than would a patron of a public eating house who, after missing his supper through his own tardi- ness, might, simply because he was the holder of a meal ticket, unreasonably claim the privilege of occupying a chair at table in the room where meals were served, and there passing his time in sleep until the arrival of the breakfast hour. Accordingly, we hold, without hesitation, that a railway company may with pro- EIGHT TO MAKE RULES FOB SERVICE. 193 priety insist that such of its patrons as contemplate taking a morning train shall, if they desire to refresh themselves by slumber during the intervening night, find quarters other than its waiting rooms. AMMONS V. EAILEOAD. 138 N. C. 555. 1905.^ Action by W. E. Ammons against the Southern Eailway Com- pany, heard by Judge B. F. Long and a jury, at the August Term, 1904, of the Superior Court of Swain County. Prom a judgment of nonsuit, the plaintiff appealed. The plaintifE alleges that he was unlawfully ejected from one of the defendant's trains, and sues to recover damages for the wrong thus committed. At the close of the testimony, and after the plaintiff had requested certain instructions to be given to the jury, the court held that he could not recover in the action. The plaintiff thereupon submitted to a nonsuit, and appealed. It is necessary to state only the substance of his testimony, which is as follows : On June 30th the plaintiff went to Almond, a station on defendant's line, to buy a ticket to Noland, which is nine miles away. The defendant's agent told him he was out of tickets, but to get on the train, and he would tell the conductor not to charge extra fare. The agent said the ticket rate was 41 cents. The extra or train rate was 65 cents. The agent said the plaintiff would have to pay only 41 cents. He boarded the train, and the con- ductor asked him for his ticket. The plaintiff told him what the agent had said to him, and the conductor demanded 75 cents, and said that the agent did have tickets. He then told the plaintiff to pay 75 cents or get off. He pulled the bell cord, when the plaintiff said, " If you put me off, I will sue the company," and the conductor replied, " It would not make a durn bit of difference to me if you did." When the conductor called for the fare, the plaintiff offered him 50 cents, and added that he did not mind a rebate, but did not want to pay 75 cents. The conductor refused to take the 50 cents, and put the plaintiff off the train 400 yards from the station. It is a rule of the company to require the pay- ment of 35 cents extra when a passenger has no ticket. There was evidence as to the damages, not necessary to be stated. Walker, J. (after stating the case). Assuming the plaintiff's testimony to be true, and giving him the benefit of all reasonable 1 One paragraph of the opinion is omitted. — Ed. 194 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. inferences therefrom, and this is the way it should be consid- dered, we think the judge erred in his intimation of opinion against the plaintiff's right to recover. The law of the case, at least in the present development of the latter, and in the aspect of it now presented, seems to be well settled, and is thus stated by a learned and accurate text-writer : " It is undoubtedly competent ior a railroad company, as a means of protection against imposi- tion, and to facilitate the transaction of its business, to require passengers to procure tickets before entering the car; and where this requirement is duly made known, and reasonable opportunities are afforded for complying with it, it may be enforced either by expulsion from the train, regardless of a tender of the fare in money, or by requiring the payment of a larger fare upon the train than that for which the ticket might have been procured. A regu- lation or by-law of the carrier is not unreasonable which provides that when such tickets are not procured before the commencement of the journey, and the carrier is therefore put to the incon- venience of collecting from the passenger his fare during its prog- ress, the price of the carriage shall be more than would have been charged for the ticket, and that upon the refusal of the passenger io pay the higher fare, not extortionate in amount, he shall be ejected. And if adopted in good faith, and with a view to facili- tate the business of the carrier, there can be certainly nothing un- reasonable or unjust in such rule, especially in the case of railway carriers. But, as a condition precedent to the existence of this right of expulsion for the refusal to procure a ticket or to pay the higher fare, an opportunity, at least reasonable, and such as the statute requires where a statute exists, must have been afforded by the carrier to the passenger, not himself in fault, to provide himself ■with the required ticket. If, therefore, no ofiBce be kept or opened at the proper time, nor adequate facilities be provided for the purpose of supplying passengers with them, or if the office provided for the purpose be closed before the time iixed by law or by a rule of the carrier, and for either reason the passenger has been unable to obtain a ticket, the higher rate cannot be lawfully demanded. And if, without having afforded such proper facilities to the pas- senger, the carrier should exact from him the additional charge for carriage without a ticket, the former may sue for and recover the amount so paid above the established rate when a ticket is purchased; and if, upon his refusal to pay it, he be ejected, when he is ready and offers to pay his fare at such established rate, his expulsion will be illegal, and he may recover damages for the tres- pass." Hutchinson on Carriers (2d Ed.) § 570 et seq.j 5 Am. & Eng. Enc. of Law (3d Ed.) p. 695, and note 4. These principles EIGHT TO MAKE KULES FOE SEEVICE. 195 are well sustained by the authorities cited in their support, and are in themselves most just and reasonable. They apply with peculiar force to the facts of this case. The plaintiff's right of recovery cannot be made to depend upon the conductor's knowledge or ignorance of the fact that the agent had no tickets for sale to intended passengers. If he did not know it, and refused to accept and act upon the plaintiff's state- ment, no fault can be imputed to the plaintiff, and the defendant cannot escape liability, as the cause of action rests upon the fact that there was no opportunity afforded to purchase a ticket, and the plaintiff is not responsible, and cannot be made to suffer, for the conductor's ignorance of existing conditions. The defendant's station agent could easily have informed the conductor that his tickets had been exhausted, and actually promised the plaintiff to do so, so that in this case there was no excuse for a want of knowl- edge of the facts. It is suiScient to declare, in the light of the authorities and with the plaintiff's testimony before us, that he was entitled to have the case submitted to the jury under proper instructions from the court. Having so decided, we need not dis- cuss the question of damages. The subject, though, has recently been considered by this court in the following case: Holmes v. Eailroad, 94 N. C. 318 ; Eose v. Eailroad, 106 N". C. 168 ; Tomlin- son V. Eailroad, 107 N. C. 337; Allen v. Eailroad, 119 N. C. 710; Eemington v. Kirby, 120 N. C. 330. There was error in the ruling of the court that the plaintiff upon his own showing was not en- titled to recover. New trial.^ TOWNSEND V. NEW YOEK CEISTTEAL AND HUDSON EIVEE EAILEOAD CO. 56 N. Y. 295. 1874.^ Grovee, J. This action was brought by the plaintiff to recover damages for an assault upon and forcibly ejecting him from its ear, at Staatsburg, a station on defendant's road between Pough- keepsie and Ehinebeck. 2 See Chase v. N. Y. Cent. E. R. Co. (1863), 26 N. Y. 523 ; Mills v. M. K. & T. Ry. Co. (1900), 94 Tex. 242. As to exhibition of ticket on train, see Hibbard v. N. Y. & Erie R. R. Co. (1857), 15 N. Y. 455. As to refusal to surrender ticket without receiving a check, see State v. Thompson (1850), 20 N. H. 250. As to regulations with regard to carrying of parcels by passengers, see Morris v. Atlantic Ave. R. R. Co. (1889), 116 N. Y. 552; Bullock v. Del., 1,. & W. R. R. Co. (1897), 60 N. J. L. 24. 1 The arguments of counsel and part of the opinion are omitted. — Ed. 196 EIGHT TO MAKE RULES FOB SERVICE. [CHAP. III. The jury by their verdict have found that the plaintiff purchased a ticket at the station at Sing Sing, for Ehinebeck; that with this ticket he went on board a train from New York, going no farther north than Poughkeepsie ; that after this train passed Peekskill the conductor called for tickets and the plaintiff handed his to him, which he took and retained, giving to the plaintiff no cheek or other evidence showing any right to a passage upon any train of the defendant; nor did the plaintiff ask for a return of his ticket or for any such evidence. Upon the arrival of the train at Pough- keepsie, where it stopped, the plaintiff got out and waited at the station until another train arrived from New York, which was going to Albany, stopping at Ehinebeck. The plaintiff got into and seated himself in a car in this train; and after it started the conductor called upon hini for his ticket; in reply to which the plaintiff told him that he had purchased a ticket from Sing Sing to Ehinebeck, which the conductor of the other train had taken and had not given back to him; some of the passengers told the conductor that the plaintiff had had such a ticket. The conductor told the plaintiff that it was his duty in case he had no ticket to collect the fare, and that the other conductor would make it right with him. The plaintiff refused to pay fare, and the conductor told him he must leave the train. This the plaintiff refused to do, insisting upon his right to a passage to Ehinebeck upon the ticket which the conductor of the other train had taken. Upon the arrival of the train at Staatsburg, a regular station, the plaintiff still refusing to pay fare or to leave the train upon request, was taken hold of and such force used as was necessary to overcome his resistance, and ejected from the car. This was the injury for which the recovery was had. In Hibbard v. The New York and Erie Eailroad Co. (15 N. Y., 456) it was held by this court that a railroad company had the right to establish reasonable regulations for the government of passengers upon its trains, and forcibly eject therefrom those who refused to comply with such regulations. Surely, a regulation re- quiring passengers either to present evidence to the conductor of a right to a seat, when reasonably required so to do, or to pay fare, is reasonable; and for non-compliance therewith such passenger may be excluded from the car. The question in this case is whether a wrongful taking of a ticket from a passenger by the conductor of one train, exonerates him from compliance with the regula- tion in another train, on which he wishes to proceed upon his journey. I am unable to see how the wrongful act of the previous conductor can at all justify the passenger in violating the lawful regulations upon another train. For the wrongful act in taking EIGHT TO MAKE RULES EOE SERVICE. 197 his ticket he has a complete remedy against the company. The conductor of the train upon which he was was not bound to take his word that he had had a ticket showing his right to a passage to Ehinebeck, which had been taken up by the conductor of the other train. His statement to that effect was wholly immaterial, and it was the duty of the conductor to the company to enforce the regulation, as was rightly held by the trial judge, by putting the plaintiff off, in case he persistently refused to pay fare. The question is, whether under the facts found by the jury, resistance in the performance of this duty was lawful on the part of the plaintiff. If so, the singular case is presented, where the regula- tion of the company was lawful, where the conductor owed a duty to the company to execute it, and at the same time the plaintiff had the right to repel force by force and use all that was necessary to retain his seat in the car. Thus, a desperate struggle might ensue, attended by very serious consequences, when both sides were entirely in the right, so far as either could ascertain. All this is claimed to result from the wrongful act of the conductor of an- other train, in taking a ticket from the plaintiff, for which wrong the plaintiff had a perfect remedy, without inviting the commission of an assault and battery by persisting in retaining a seat upon another train in violation of the lawful regulations by which those in charge were bound to govern themselves. It was conceded by the counsel, upon the argument, that one buying a ticket, say from Albany for Buffalo, which was wrongfully taken from him by a servant of the company, and who had once been put off for a refusal to pay fare, would not have the right to go upon other trains going to Buffalo, and if forcibly ejected therefrom maintain actions against the company for the injuries so inflicted. The reason why he could not, given by the counsel, was, that being once ejected was notice that he could not have a seat upon the ticket which he claimed had been taken from him. But when the conductor in charge of the train explicitly tells him that he can- not retain his seat upon that ticket, that he must pay fare or leave the car, does it not amount to the same thing? He then knows that he cannot proceed upon the ticket taken, but must resort to his remedy the same as though he had been ejected. If, after this no- tice, he waits for the application of force to remove him, he does so in his own wrong; he invites the use of the force necessary to remove him; and if no more is applied than is necessary to effect the object, he can neither recover against the conductor or com- pany therefor. This is the rule deducible from the analogies of the law. 'No one has a right to resort to force to compel the per- formance of a contract made with him by another. He must avail 198 EIGHT TO MAKE RULES FOE SEEVICE. [CHAP. III. himself of the remedies the law provides in such case. This rule will prevent breaches of the peace instead of producing them; it will leave the company responsible for the wrong done by its serv- ant without aggravating it by a liability to pay thousands of dol-; lars for injuries received by an assault and battery, caused by the faithful efforts of its servants to enforce its lawful regulations.^ BUEGE V. GEOEGIA EAILWAY AND ELECTEIC CO. 133 Ga. 423. 1909.^ HoLDEN, J. The plaintiff brought suit against the defendant, a corporation operating a system of street railways in the city of At- lanta, for damages, alleging that on the 22nd day of September, 1906, he, in company with his brother and another party, boarded one of the defendant's cars in the city for the purpose of riding thereon to the center of the city. He tendered to the conductor a $5 gold piece and asked him to take out three fares. The con- ductor replied that he could not change the money, and that the petitioner and his two companions must leave the car. The con- ductor forcibly ejected the plaintiff from the car. The defendant proved that there was in operation a rule of the defendant com- pany, requiring its conductors to make change where the amount tendered was not above $3, but not to furnish change for a greater amount for passengers. 2. The only other point referred to or insisted upon by counsel for the plaintiff is that the plaintiff had the right to have the jury pass upon the question as to whether or not the conductor should have accepted a $5 gold piece and made change thereof in order to pay three fares. It would not be right to require conductors to carry such an amount of small change as would be necessary to change any denomination of money, nor would it be proper to require passengers to tender the exact amount of fare; hence, the law requires that the conductor go prepared to change an amount that is reasonable. Street railways have the right to enact a rea- sonable rule in regard to such matters, so as to fix an amount which conductors are required to carry and which the public may expect them to carry for the purpose of supplying change to passengers. In this connection, see Southern Ey. Co. v. Watson, 110 Ga. 681 2 See Bradshaw v. South Boston R. R. Co. (1883), 135 Mass. 407; Kiley V. Chic. City Ry. Co. (1901), 189 111. 384. , 1 Part of the opinion is omitted. — Ed. EIGHT TO MAKE RULES EOE SEKVICE. 199 (36 S. B. 209) ; 6 Cyc. 546. The rule in the present case was ■one requiring conductors to carry change to the amount of $2 and no more. Whether or not such a rule is a reasonable one is a matter of law to be determined by the court. Southern Ey. Co. V. Watson, 110 Ga. 681, 683 (36 S. E. 209) ; Central of Ga. Ey. Co. V. Motes, 117 Ga. 923 (43 S. B. 990, 62 L. E. A. 507, 97 Am. St. E. 223). The public, as well as the corporation, are interested that some fixed rule should exist, and it is proper that it should be a question of law whether the rule is a reasonable one. What might appear reasonable to one jury might not so appear to another; and if it were a question of fact to be determined by a jury, no fixed rule by which the corporation and the public should be gov- erned could exist. To require conductors to carry an amount suffi- cient to change $5 for all passengers who might tender that amount to pay the fare charged for transportation within the city would require all conductors, at all times, to carry a considerable amount of change. To require conductors to obtain, count out, and de- liver change for $5 for every passenger who might tender that amount would make slow the collection of fares, with the probable result of delaying the progress of Cars and subjecting the traveling public to the inconvenience of frequent waits and delays made necessary by the changing of such a denomination of currency. Such a requirement might not only result in great inconvenience to the public, but impose a heavy and unnecessary burden on the railway company. Every street-railway company should discharge its duties to the public in a proper manner; and in order to do so, it has a right to make and enforce reasonable rules. To require) conductors to change $5 for every passenger tendering that amount ^ would prevent the company from performing its public duty with, proper caution and with proper expedition. The rule requiring conductors to change no amount greater than $3 works no great hardship on the passenger, though a rule requiring the changing of larger amounts might prove very burdensome to the company. The fact that the plaintiff asked that the fares of his two companions be also taken out of the $5 coin tendered does not place him in any better position than if only one fare was to be taken out, since the amount of change which the conductor would be required to fur- nish in order to collect the three fares or the fare of the plaintiff alone would still be greater than $2. The rule of the street-rail- way company, requiring conductors to make change to the ex- tent of $2 and no more, is a reasonable rule, and the court com- mitted no error in so holding. Wynn v. Ga. Ey. & Elect. Co., 6 Ga. App. 77 (64 S. E. 278) ; Barker v. Central Park, K. & E. Eiver Co., 151 N". Y. 237 (45 N". E. 550, 35 L. E. A. 489, 56 Am. St. E. 300 EIGHT TO MAKE RULES FOE SEEVICE. [CHAP. III. 626) ; Muldowney v. P. B. Traction Co., 8 Pa. Sup. Ct. 335. The court below was right in directing a verdict, and its judgment is Affkmed. ATI the Justices concur." o SHIEAS V. EWING. 48 Kan. 170. 1892.^ Opinion by Steang, C. : Action for damages. The plaintiff, •who was also plaintiff below, a resident of the city of Ottawa, in this state, contracted with the Cherryvale Water & Manufacturing Company for a supply of water for the purpose of sprinkling his lawn, the use of the water to be regulated by the rules and regula- tions of the water company. The defendant, C. T. Ewing, the as- signee and successor of the water company, by his agent, the man- ager of said water company, for the alleged violation of the rules and regulations of said company by the plaintiff, Mr. Shiras, in the use of the water supplied him by said company, shut off his supply of water for the period of about two months from August 10, 1887- The plaintiff alleged that the defendant unlawfully shut off his supply of water, and that because of the withdrawal thereof a number of his shade-trees died, and the grass on his lawn also died out. For these he claimed damages. The case was tried by the court and a jury, resulting in a verdict and judgment for the defendant. Motion for new trial was heard and overruled. The company in this case made rules for the regulation of the use of the water supplied by it to its patrons. The contract of the plaintiff with the company was made subject thereto, and the plaintiff was furnished with a copy of such rules before the vio- lation thereof complained of, and for which his water was shut off, occurred. The evidence tends to prove that the plaintiff vio- lated them. The jury found against him, and in so finding de- termined that he did violate them. The court found that the rules of the company were reasonable. We do not desire to say whether as a whole they are reasonable or not. The evidence strongly tends to show that the plaintiff's washer, whence he got his supply of water, was left open all night, and the water was left to run to waste. We think the jury found that it was left to run to waste. The company presented the plaintiff a bill for the water so wasted. He refused to pay it. The bill, which was first $3,, was afterwards reduced to $1.50, and still he refused to pay it- 2 See Barker v. R. R. Co. (1896), 151 N. Y. 237; Knoxville Traction Co. «. Wilkerson (1906), 117 Tenn. 482. 1 Part of the opinion is omitted. — Ed. EIGHT TO MAKE EULES FOE SBEVICE. 301 His refusal was not based upon the idea that the bill was too high, because he said he would not pay anything for the water so wasted. It is true he claimed it had not been let to run to waste by him- self, nor by his permission. But, under the evidence as to the negli- gent and careless use of the water by the plaintiff, it was not diffi- cult for the jury to believe that the washer was left open by the negligence of himself or his family. Under the instructions of the court upon that question, and a general verdict for the defend- ant, it is undoubtedly true that the jury so found. A rule of the company against the unnecessary and useless waste of the water supply is certainly reasonable. This is all we hold in this case. This requires this court to affirm the judgment of the district court herein, and we therefore so recommend. By the Court: It is so ordered. All the Justices concurring.^ SHEPAED V. THE MILWAUKEE GAS LIGHT CO. 6 Wis. 539. 1859.^ Smith, J. The only reason urged for refusing to furnish the gas to the plaintiff was, that he refused to sign the regulations adopted by the company. This leads us to examine those regula- tions, and to determine whether or not they were such as the com- pany could rightfully require the plaintiff to subscribe to, as a condition precedent to his right to demand the gas. We shall not attempt to discuss all of these regulations, sepa- rately, though we are requested so to do; but shall only point out some of them which we think are unreasonable, and which the company had no right to impose. But before doing so, we wish to be distinctly understood, that in our opinion, they have a right to make all such needful rules and regulations for their own and the convenience and security of the public, as are reasonable and just, and to exact a promise of conformity thereto. But these rules and regulations must be reasonable, just, lawful, not capricious, arbitrary, oppressive or unreasonable. Were it not so, the whole net work of pipes and machinery would be at the mercy of the careless, the fraudulent or the malignant. Prom the nature of the article produced and used, as well as from the manner of ifs use, great care is requisite in its management, and there is a 2 See Watauga Water Co. v. Wolfe (1897), 99 Tenn. 429. iThe statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. 203 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. kind of implied duty or obligation resting upon those who use the gas, to use it in such a manner as not to injure or endanger others who use it. Hence we see no objection to a rule or regulation of the company requiring application for gas to be made in writing, and requiring the applicant to sign reasonable regulations. The 3rd rule of the company, allowing the company to demand security for the gas consumed, or ai deposit of money to secure pay- ment thereof, appears to be just and necessary to guard against loss. As the delivery of the gas is necessarily its consumption, and as the amount delivered is ascertained by the amount consumed, it would seem to be just and right that the company should not be com- pelled to furnish it without reasonable security for payment, in convenient amounts and at proper periods. The 9th rule is also objected to as illegal. This authorizes the company, by their inspector, to have free access at all times to buildings and dwellings, to examine the whole apparatus and for the removal of the meter and service pipe. The gas apparatus in the buildings, stores and dwellings, is the property of the individual, put up at his own expense, in which the company have no interest. It may be proper for the company to have the right of inspecting the gas apparatus to determine its sufficiency and safety and, at stated periods, to inspect the same, or perhaps oftener, upon reasonable notice therefor. But certainly it cannot be necessary that the dwellings of gas consumers should be subject to instantaneous visitation at all times without notice. Nor is it to be conceded that the company should have the right, at all times, to enter the premises and remove the service and meter at their pleasure. This regulation is too general and cannot be upheld, or at least a party cannot be required to subscribe to it to entitle him to be furnished with gas. Another regulation (14) reserves to the company the right at any time to cut off communication of the service pipe, if they shall find it necessary so to do, to protect the works against abuse or fraud. Here the company assume the whole power to decide upon the question of abuse or fraud, either in fact or in anticipation, without notice, without trial, of their own mere motion. This sum- mary jurisdiction would not be given to any of the judicial courts in any case, but upon the most urgent emergency. Much less could it have been the intention to confer such power upon one of the parties to a contract of such vital importance. It is no hard- ship for the company to resort to the same tribunals, upon like pro- cess, for protection against fraud, as the law provides for individ- uals. Eule 16 provides, that after the admission of gas into the fittings. EIGHT TO MAKE RULES FOE SEKVICE. 203 they must not be disconnected or opened, either for alteration or re- pairs, or extensions; without a permit from the company, which may be obtained at their office, free of expense ; and any gas fitter or other person, who may violate this regulation, will be held liable to pay treble the amount of damages occasioned thereby. It is not to be allowed that the gas company can impose pen- alties in this way, or make the submission to such penalties a condi- tion precedent to the right of the citizen to be furnished with gas. It is singular, if the legislature has given to the gas com- pany the right to inhibit the citizen from altering the arrange- ment of his gas apparatus in his dwelling without their assent first had and obtained, or from extending the same ; -and still more singular that the company should claim the sovereign right to in- flict penalties upon him for doing so, and not him only, but upon any other person who should act in the matter without their con- sent. The statement of this proposition is its answer. Eule 17 provides, that the company shall have the right to sub- stitute alcohol for water in the meters, and charge therefor. All that is necessary to observe upon this regulation, is, that the com- pany are entitled to charge for the gas consumed, and that some accurate mode of measurement must be used, whether of alcohol or water. The consumer must pay the legal rates for the quantity consumed; and the mode of measurement, whatever it is, must be correct. Eule 21 assumes for the company the power to make any other rules or regulations, from time to time, under which the gas company will furnish private consumers, as experience shall sug- gest, &c. What we have said before as to the power of the company to prescribe reasonable rules and regulations, is a sufficient answer to the question raised, or which may be raised thereon. It is not necessary to go farther. Indeed we might have stopped much earlier, and would have done so, but for what we under- stood to be the desire of the parties for a full examination of all the questions involved in this action. "Without recapitulation, we have no doubt that the judgment of the county court was right, and that the judgment ought to be, and it is affirmed, with costs. 204 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. WBSTEEN' UNIOISr TELEGEAPH CO. v. TEOTTER. 55 111. App. 659. 1894. Mr. Presiding Justice Wall delivered the opinion of the Court. Appellee recovered a judgment against appellant for $134.09 for failing to deliver a telegram addressed to him by a commission firm in Chicago. Appellee was a farmer, residing a mile and a quarter from the village of Kansas. Having some marketable cattle which he wished to sell he wrote to the commission firm for information and they sent him the telegram in question. They did not know whether he lived in the village or what arrangements he might have made for having a telegram delivered to him and paid merely for its transmission to Kansas. The operator did not know the appellee but made effort to find him within the vil- lage and failed to do so. He learned, however, where he lived, and it being beyond the free delivery limits, did nothing further. The appellant having heard in some indirect way that there was a telegram for him, called at the office and received it. In the mean- time, not having heard from this commission firm, he had sent his cattle to another firm. The claim is that if he had received the telegram promptly he would have sent the cattle in response thereto by the first train and would have realized a higher price than that received. The verdict represents the alleged difference. The telegram was re- ceived at Kansas at 1 :10 p. M., July 5, 1893. It did not reach the hands of appellee until the 9th. It appears that by a rule of the company the free delivery limit for a town of less than 5,000 inhabitants was one-half mile from the office. It is urged on the one side that this is a reasonable rule and that it should be enforced, and on the other that whether reasonable or not it does not appear that the sender or the appellee knew of it, and so it is not binding on either. The rule is reasonable, and not only so, but it is a matter of common knowledge among business men that. there is always a limit for the free delivery of messages. The trouble here was that the appellee did not expect a reply by wire. He went to the post office daily, but as he had not in- structed the commission men to telegraph him it did not occur to him that they would, and they not knowing that he lived be- yond the limit, made no arrangement with the company for delivery of the message. Hence it was bound to do no more than it was EIGHT TO MAKE RULES FOK SERVICE. 205 paid for, that is, transmit the message to the designated office and there make reasonable effort to deliver it within the free limit. It is argued that the agent should have known from its terms, that it was a message of importance, but this did not require him to go beyond the limits of free delivery. If he inferred that the message was of unusual importance, he must also have inferred that the appellee was expecting it, and not living within the limits, would call for it. At any rate, such a conclusion on his part would have been reasonable. We are of the opinion that the case shown by the proof did not justify the judgment, which will therefore be reversed and the cause remanded.^ CAMPBELL V. WESTERN UKION" TELEGEAPH CO. 74 S. C. 300. 1906.* Me. Justice Cart. This is an action for damages for failure to deliver a telegram within a reasonable time. The next question for consideration is, whether the Circuit Judge was in error, in ruling that when a person to whom a mes- sage is addressed, resides within a reasonable distance from the company's office, though not within the free delivery limits, it can- not refuse to deliver the telegram, unless it demands additional compensation from the sender, and he declines to pay it. In other words, that it is the duty of the defendant to notify the sender, it would not deliver the message, unless he made additional com- pensation for the service beyond the free delivery limits. The de- fendant is a common carrier in its line of business (sec. 3, art. IX., of the Constitution), and the law imposes upon it the duty of delivering all messages, when the persons to whom they are addressed reside within a reasonable distance from the terminal office. The company, however, has the right to make reasonable regulations as to free delivery limits, and as to additional charges for services rendered beyond such limits. In the case of Hood v. Tel. Co., 47 S. E. E. (N. C), 607, the Court ruled that a telegraph company failiiig to make any attempt to deliver a message, because the person to whom it was addressed resided beyond the free delivery limits, and, also, failing to notify the sender, or of its refusal to deliver, is liable in damages result- ing from its negligence in not making the delivery. 1 Compare BuUard v. American Exp. Co., supra, p. 104. I Part of the opinion is omitted. — Ed. 206 EIGHT TO MAKE RULES FOE SERVICE. [CHAP. III. , In the case of Gainey v. Tel. Co., 48 S. E. E. (IST. C), 653, the Court says : " It is undoubtedly true, as argued by the learned counsel for the plaintiff, that the company is not exempt from liability, merely because the person addressed may chance to live outside its free delivery limits; because it undertakes expressly, and by the very terms of its contract, to make a delivery within those limits, free of any charge, and, impliedly at least, to deliver beyond the fixed limits; for which latter service an extra charge is made, not exceeding in amount the actual cost of such special delivery. The language of the contract in this respect is as follows : 'messages will be delivered free within the established free deliv- ery limits of the terminal ofBce. For delivery at a greater dis- tance a special charge will be made to cover the cost of such de- livery.' We have held that when a message is received at a termi- nal office, to which it has been transmitted for delivery, to the person addressed, it is the duty of the company to make diligent search to find him, and if he cannot be found, to wire back to the office from which the message came for a better address; and, likewise, it is the duty of the company, when it has discovered that the person for whom the message is intended lives beyond its free delivery limits, either to deliver it by a special messenger, or to wire back and demand payment, or a guaranty of payment, as it may choose to do, of the charge for the special delivery; and if it fails to deliver without demanding and being refused payment of charge, it will be liable for its default." We do not regard this language as conflicting with our inter- pretation of said clause of the contract, which is, that the com- pany must undertake to deliver a message to one outside the free delivery limits if upon notice the sender pays for such delivery, provided such person lives within a reasonable distance from the oflBce of delivery. The language of the foregoing case as con- strued by us is a correct interpretation of the contract.^ HEWLETT V. WESTEEIST UNION TELEGEAPH CO. 28 Fed. 181. 1886.^ Hammond, J. The plaintiff, being transiently in the city of Memphis, sent from his hotel to the defendant company's office, with sufficient money to pay for it, the following message, to be transmitted by telegraph : 2 See Western U. T. Co. v. Cain (1&97), 40 S. W. (Tex.) 624; Bright v. Western U. T. Co. (1903), 132 N. C. 317. 1 One paragraph of the opinion is omitted. — Ed. EIGHT TO MAKE EDLBS FOE SEEVICE. 207 " 1 P. M., Gaston's, Memphis, December 16, 1881. " To R. 0. Bean, Leighton, Ala.: Will leave to-night. Will you ■wait for me ? T. G. Hewlett." The errand boy was told by the company's clerk that it would not be received without an additional sum of money to pay for the aaiBwer, and, not having that, he returned to the hotel, and the message was never sent, the plaintiff not having heen informed of defendant's refusal to take it until it was too late to take the train. He sues for damages, and proves that he and one Bean were engaged in a joint enterprise to capture a fugitive from Jus- tice, for whose arrest there was a reward to be had of $1,600, which Bean received, and refused to share with plaintiff because he did not come to help. His failure to go he attributed to his failure to receive an answer to his message, and he claims com- pensation, to the extent of his share of the reward, from the de- fendant, for its refusal to transmit it. The company justifies under its regulations on that subject, which it insists are reasonable. They are as follows : " (11) All messages, except answers, or covered by franks, must be prepaid, unless guarantied by responsible parties. Messages on the business of the party sending, and answers to collect messages, must invariably be prepaid. Messages addressed to hotels, or to parties absent from home, must be prepaid in all cases, unless they are answers to messages marked ' answer prepaid.' " (13) Transient persons sending messages which require an- swers must deposit in advance an amount sufficient to pay for a reply of 10 words. In such cases the signal ' 33 ' will be sent with pne message, signifying that the answer is prepaid." The only case cited by counsel, and they say that it is the only one directly in point as to the reasonableness of these rules in their relation to the deposit of money to pay for the expected answer by transient persons, is that of W. U. Tel. Co. v. McGuire, 104 Ind. 130, S. C. 2 N. E. Eep. 201, where it was held to be rea- sonable, and I am of the same opinion. I am not entirely satisfied with the grounds of that judgment ; for it seems to me to place the ruling too entirely upon a mere question of etiquette between the parties to the correspondence. The court says : "A person who sends another a message, and asks an answer, promises, by fair and just implication, to pay for transmitting the answer. It is fairly inferable that the sender who asks an answer to his message will not impose upon the person from whom he re- quests the answer the burden of paying the expense of its trans- mission. The telegraph company has a right to proceed upon this 208 EIGHT TO MAKE RULES FOR SERVICE. [CHAP. III. natural inference, and to take reasonable measures for securing legal compensation for its services." This may be true, if we assume that the subject-matter of the message concerns the business of the sender, and that only, and not at all the business of the addressee. Then it would be the rule of social etiquette, of course, as it is if one writes a letter strictly on his own business to inclose a postage stamp for the reply. But there is great force in the argument of plaintiff's coun- sel that it is none of the telegraph company's business to enforce rules of social courtesy like that; and since it cannot know whether there will be any reply, or whether, if there be, the circumstances may not be such that the sender of the answer should himself pay for it, and be anxious and willing to do so, the company should not refuse to send the original message, if it be paid for. He likened it to a regulation of a carrier of passengers refusing to transport a passenger at regular rates, unless he should buy a return ticket. And I take it that in an equal number of cases the relation of the parties may be such that the sender might rea- sonably expect and demand, notwithstanding the social rule of courtesy above referred to, that his correspondent should pay for the answer, and that in an equal number of cases he does do so^ In many other cases, when the original message is solely about his own business, the sender may reasonably hope and expect the an- swer to be paid for by the other party. Again, often a transient person in distress, and with redduced funds, might wish to rely on the other party to pay for the answer; and since the company may protect itself by refusing to take the answer without prepay- ment by its sender, it would seem an unreasonable hardship, under those circumstances, to demand that he pay for both messages in advance. Or he might wish to go away to receive the answer, or to receive it over another line, or at another place, etc.; and so, under many imaginable circumstances, be reasonably exempt from the burden of depositing money in advance for a message he may never receive, and find it inconvenient and expensive to get back his deposit. Hence, take it altogether, I should not support the reasonableness of this regulation wholly on the ground of the sender's obligation to pay for the answer. He may very often be not so obliged, and that is an answer to it. But I think this regulation is a reasonable one, notwithstanding the force of the plaintiff's attack on this Indiana case. It should not be segregated from the other regulations of the company on the subject of collecting the tolls, and tested by itself alone, on the reasoning of plaintiff's argument, as above set forth. This is only one regulation of a carefully devised system for securing payment EIGHT TO MAKE KULES POE SEEVICE. 209 of tolls, consistently with enlarged accommodation of the public in allowing the customers of defendant to regulate among them- selves this very matter of adjusting the burden of these tolls. I have quoted in the statement of facts the entire regulations on the subject, as I find them printed, italics and all, and an analysis of them shows that the company is endeavoring to accommodate the public as much as possible in this matter. It might reasonably, as the railroads do as to passenger fares, demand prepayment by the sender of all messages, whether they be originals or answers. But it does not do this. It allows answers to be sent at the ex- pense of the person whose message is answered, and this is a priv- ilege and a benefit it seeks to confer on the original sender by undertaking to collect of him that toll instead of requiring his correspondent to pay it, thereby lessening the chances of his an- swering at all. It requires all original messages to be prepaid or guarantied. If guarantied, the company will allow the sender, if he choose, to place the burden of the toll on the addressee, — by itself undertaking to collect the toll of him in the first instance, but of the sender at last, if the other refuses to pay. It seeks, as to answers, to accommodate the public in the same way, by under- taking to collect of the person addressed; and, as I understand the regulations, the sender of the answer is not expected to pay at all, certainly not to prepay, unless it be an answer to a message which has been sent to be collected from himself, or is sent to parties away from home, or addressed to hotels; and in these last- mentioned cases he need not prepay if it be an answer to a message marked "answer prepaid." In order to give them, their cor- respondents, and all persons who are interested in the use of the telegraph, the benefit of this system of collecting and adjusting tolls, the requirement is made that transient persons shall pay for the expected answers in advance, and it is not unreasonable, as a part of that system. It may be that a more liberal rule might be devised for transient persons, and that this one operates sometimes harshly and inconveniently; but that is not the question. In view of the whole system, a court cannot say that the power and discre- tion of the company to determine for itself what is best for all concerned has been unreasonably exercised. It has a choice of its own regulations, and the test of reasonableness is not whether some other would answer its purposes as well or better, but whether this is fairly and generally beneficial to the company, and all its cus- tomers. Now, I have said elsewhere that reasonable regulations of public corporations like these must be reasonably applied, and that a rtde which is generally fair may, under especial circumstances, become 310 EIGHT TO MAKE EDLES FOE SEEVICE. [CHAP. Ill, oppressive and unreasonable, as applied in the particular case ; and so these corporations must exercise ordinarily prudent discretion in relaxing their regulations in such cases. If, to use an illustra- tion of the argument, a tramp, with just money enough to pay for his message, should so inform the company, and ask to have it transmitted, and take pay for the answer from its own sender, and this should be refused, it may be that the company would be liable; but I should think that, under these regulations, there ■would be in such case no refusal, and that almost any intelligent operator, when so informed, would take the message. No such a case is shown here. The plaintiff was neglectful in not looking after his message sooner than he did, and he was not a tramp, or destitute of funds to deposit for the answer. Judgment for defendant. HATCH V. CONSUMEES CO. 17 Idaho, 204. 1909.^ AiLSHiE, J. This is an original action commenced in this court, praying for the issuance of a writ of mandate against the defendant corporation, requiring and commanding that it connect plaintiff's ■water pipes with defendant's water system. We have heretofore held in Bothwell v. Consumers Company, 13 Idaho, 568, 92 Pac. 533, and Pocatello Water Co. v. Standley, 7 Idaho, 155, 61 Pac. 518, that the mains and laterals laid within the streets and alleys are the property of the water company, and that the franchise granted such company authorizes it to dig in the streets and alleys and use and occupy them for the purpose of laying and maintaining their pipe-lines and delivering water to consumers. We discover no reason for departing from the rule announced in those cases. (See, also, section 2840, Eev. Codes.) On the other hand, the consumer has no right or franchise to ex- cavate the streets or to lay or maintain pipes therein. When he undertakes to pass beyond his property line with pipes, he is met by the public authorities and the franchise held by the water company. He is in no position to acquire a property right in the streets and alleys by laying pipes therein. The water company, on the con- trary, is clothed with this power and right and all the necessary authority for creating and establishing property rights therein and the protection of such property. There is no reason in saying that the company has no interest in laterals it may lay in the streets from its main to the line of abutting property owners. These later- 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. EIGHT TO MAKE RULES FOR SERVICE. 211 als are of just as much use and as valuable to the compaiiy as its mains in proportion to the amount of water to be delivered through such laterals as compared with that delivered through the main. The only difference whatever is in the extent of the service. The capacity of a main is ordinarily such that it will supply a large number of consumers along the street from the one main. The capacity of a lateral is ordinarily such that it will only supply one or two consumers. The relative value to the company of the main and laterals is measured by the extent of the service from the two. The necessity, however, for one is just as great as for the other. Without a main none of the residents along a street can be sup- plied. Without a lateral the individual consumer cannot be sup- plied. The law of ownership is the same in the one case as the other, and the right of property and control is the same in each instance. Water companies maintain waterworks for the purpose of collecting rates and tolls. They operate them for gain. In order to collect tolls, they must deliver water. The consumer, on the other hand, pays his money for service. Unless he is served, there is nothing for which he may be called upon to pay. We are aware that some courts have held that the consumer may be required to pay the expenses of " service connections," as it is sometimes called, or, rather, for laterals extending from the curb line to the main. So far as we have been able to examine, however, these decisions are based upon express statutes. There is a line of decisions to that effect in Wisconsin. The case of Gleason v. Waukesha County, 103 Wis. 235, 79 N. W. 249, is a leading authority on this point, and holds that the expense of lay- ing water pipes from the curb line to connect with the main may be properly assessed against the property of the abutting owner, but this is based upon the express provision of the Wisconsin statute authorizing the levying of assessnients against abutting property owners for such purposes "whenever the council shall order the paving or re-paving of any street in which water, gas mains and sewer or either of them shall have been previously laid or con- structed." In that case it was claimed that the statute was un- constitutional, in that it authorized a taking of property without due process of law. The court upheld the statute on the ground that the laying of the gas and water pipes was an improvement to the property of the abutting owners, and that it conferred a benefit. We know of no case, however, that has held to such a rule in the absence of a statute or ordinance authorizing and pro- viding for levying an assessment for such purposes.^ 2 Compare State v. Hillyard Water Co. (1908), 49 Wash. 232. See State v. Seattle Lighting Co. (1910), 60 Wash. 81. CHAPTER IV. EATES. Section 1. Eates Fixed by the One Engaged in Public Seevice. INTBENATIONAL BRIDGE CO. v. CANADA SOUTHERN RAILWAY CO. 7 Ontario App. 226. 1882.^ Speagge, C. J. The suit of the bridge company is for the re- covery of tolls between the 31st of October, 1877, and the 31st of December, 1878 ; and the decree declares that the railway company is liable to pay to the bridge company tolls for the use of the bridge at the rate settled by the directors of the bridge company, namely : — And the decree then sets out the rates, which it declares the rail- way company liable to pay; and refers it to the Master to take an account of the amount due in respect of such user of the bridge from the earlier to the later of the above dates, having regard to the declaration contained in the decree, with interest; and orders payment of the amount to be found due by the Master. The de- cree contains no declaration or order in respect of tolls accruing due after the later of the above dates. It is no res judicata as to anything subsequent to 31st December, 1878; and is not in any shape binding upon the railway company as to anything subse- quent to that date. In the suit in which the railway company are plaintiffs and the bridge company defendants, the same points are raised as in this suit, and the two were argued together. Mr. Crooks conceded that it was incident to the corporate pow- ers of the bridge company to require payment of tolls from rail- way companies for the user of the bridge, and to fix the amount of tolls to be paid for such user. I But Mr. Crooks, while conce4ing to the bridge company the possession of power to fix tolls, ^ontends that this power is quali- 1 Part of the opinion is omitted. — j SEC. I.] EATES FIXED BY tUBLIC SERVICE COMPANY. 213 fied by the implied condition, that the tolls fixed must be reason- able ; and the ground upon which he bases this contention, is that the franchise of the company, and the structure built and used under and in pursuance of thfeir franchise, are publici juris; and Mr. Crooks cites high authority for his position. He refers among other authorities to Lord Hale's treatise De Jure Maris; and the treatise of the same learned writer De Portihus Maris, to Mr. Jus- tice Stroiig's observations upon the nature of a franchise and struc- ture of a similar character in The Attorney-General v. The Niagara Palls Suspension Bridge Company, 20 Gr. 34, 490; to Allnut v. Inglis, 12 East 527, the London Docks wine case, and which is referred to in the learned and elaborate judgment of C. J. Waite in the case of Munn v. Illinois, 4 Otto 113. We are also referred to the language of Mr. Justice Blackburn in the case in the Lords of the Great Western Eailway Co. v. Sutton, L. E. 4 H. L. 236. The earlier portion of the learned Judge's answer to the question propounded by the House is apposite to this point.^ The question is a very interesting one; but our decision in his favour would not help Mr. Crooks in this case, unless he is able to show not only that the tolls fixed by the company must be reason- able, but that they are in fact otherwise than reasonable. The parties differ widely as to the dividend yielded by the tariff of charges. Mr. Crooks makes it (reducing the capital by the items he objects to) about 17 per cent. Mr. Cassels, on the other hand, taking the capital at two millions, makes the dividend not to exceed 8 per cent, if spread over the whole period since the comple- tion of the bridge, or, taking the year 1878 by itself, not to exceed 10 per cent. . Beading the evidence of Mr. Gzowski, and the very interesting narrative that it contains of the obstacles and difficulties en- countered in the construction of the bridge, and the skill and perse- verance with which he met and surmounted them, the evidence of Mr. Brydges, who was president of the company during its con- struction, and until the summer of 1874, and the evidence of Mr. Hannaford, the company's engineer then and ever since, one cannot fail to see that it is impossible to predicate of this bridge an im- munity from disaster. So far as skilful and conscientious work 2 In this case Me. Justice Blackbukn says in part : " The obligation which the common law imposed upon him [a common carrier] was to accept and carry all goods delivered to him for carriage according to his profession (unless he has some reasonable excuse for not doing so) on being paid a reasonable compensation for so doing ; and if the carrier refused to accept such goods, an action lay against him for so refusing ; and if the customer in order to induce the carrier to perform his duty, paid, under protest, a larger sum than was reasonable, he might recover back the surplus beyond what the carrier was entitled to receive, in an action for money had and received as being money extorted from him." 214: KATES, [chap. IV. could give it permanence, no one can doubt that it has it; but Mr. Brydges says that no other bridge that he had seen, compared with this one in point of danger and risk. One of my learned brothers referred to the Tay bridge, which, since Mr. Brydges gave his evidence, has been swept away. It was regarded as a monument of engineering skill, but its destruction has shewn that the elements are more powerful than any work of man, and the International bridge is certainly exposed to not less danger than was the bridge across the Tay. To speak of six per cent, upon capital laid out in such an en- terprise, is most unreasonable. It is not necessary to say what we should think reasonable. But assuming it to be competent to the Courts to say when the point of unreasonableness has been reached, and to relieve against overcharge ; we are unable to say that in this case that point was reached during the period with which we have to deal in this case. In my opinion, the decree is right. It may be that the railway company failing in the principal object of their bill, may not care to take the reference which the decree gives them.^ 3 When the case was affirmed in the House of Lords, sub nom. Canada Southern Railway Co. v. International Bridge Co. (1883), 8 App. Cas. 723, The Lobd Chancelloe (Earl op Selbornb) said with regard to the rates: " It certain ly annpt^rfi tr. thojT- Tiprrla ^pg that tjLe principle must he. whe n reasoUa.bleuess comes in question, not what ptoBt ft may be reasonable for a company to make, but what it is reasonable to charge to the pprsnn wl^^i ip charge d. That is tne only thing he is concerned with. They do not say that the case may not be imagined of the results to a company being so enormously disproportionate to the money laid out upon the undertaking as to make that of itself possibly some evidence that the charge is unreason- able, with reference to the person against whom it is charged. But that is merely imaginary. Here we have got a perfectly reasonable scale of charges in everything which is to be regarded as material to the person against whom' the charge is made. One of their Lordships asked Counsel at the bar to point out which of these charges were unreasonable. It was not found possible to do so. In point of fact, every one of them seems to be, when examined with reference to the service rendered and the benefit to the person receiving that service, perfectly unexceptionable, according to any standard of reasonableness which can be suggested. That being so, it seems to their Lordships that it would be a very extraordinary thing indeed, unless the Legislature had expressly said so, to hold that the persons using the bridge could claim a right to take the whole accounts of the company, to dissect ■ their capital account, and to dissect their income account, to allow this item and disallow that, and, after manipulating the accounts in their own way, to ask a Court to say that the persons who have projected such an under- taking as this, who have encountered all the original risks of executing it, who are still subject to the risks which from natural and other causes every such undertaking is subject to, and who may possibly, as in the case alluded to by the learned Judge in the Court below, the case of the Tay Bridge, have the whole thing swept away in a moment, are to be regarded as mak- ing unreasonable charges, not because it is otherwise than fair for the rail- way company using the bridge to pay those charges, but because the bridge company gets a dividend which is alleged to amount, at the utmost, to 15 per cent. Their Lordships can hardily characterise that argument as any- thing less than preposterous." SEC. I.] KATES FIXED BY PUBLIC SEEVICE COMPANY. 215 TIFT et al. v. SOUTHEEN EAILWAY CO. et al. 10 I. 0. C. R. 548. lOOS.'^ On June 33, 1903, the defendant railroads put into effect an advance of 3 cents per 100 pounds on lumber. The plaintiffs prayed that the defendants be ordered to cease from enforcing the advance in rates, and for other relief. Clements, Commissioner. The defendants do not attempt to justify the advance on the ground that the previous rate was un- remunerative. The justifications set up are consistent with re- munerativeness of that rate. In their answer they allege, among other things, that, if the advance is not allowed, "the result will be to prevent the respondents and other railroads in the South from sharing to any extent whatever in the phenomenal prosperity of the business in the regular grades of lumber." The lumber business, it is true, has grown from its inception, but the proof does not show that for the two or three years preced- ing the advance the prices of the mill products had materially in- creased or that the profits realized on the business were phenomenally large. (Finding 8.) However that may be, it is clear that, if a rate on an article of traffic is already remunerative, the increased prosperity of the business of manufacturing that article is no ground for an advance of the rate. The claim to the contrary on the part of the carriers is based upon the erroneous assumption, so preva- lent among trafiic managers that a rate may be made high as "the traffic will bear." On this point we quote what was said by us in the ease of The Central Yellow Pine Association v. Illinois Central Eailroad Company, et al. (ante, 561). " The_te st of the reason ab leness of a rate is not the amount of the profi t in the business of a shipper or manufactu rer, but whether {Eef ate yields a reasonab le compensation for the services rendered . IfTEe^ prosperity of the manufacturer is to have a controlling in- fluence, this would justify a higher rate on the traffic of the pros- perous manufacturer than on that of one less prosperous. The right to participate in the prosperity of a shipper by raising rates is simply a license to the carrier to appropriate that prosperity, or in other words, to transfer the shipper's legitimate profit in his business from the shipper to the carrier." The carriers necessarily and justly participate in the increased prosperity of their patrons in the resultant enlargement of their own business. This appears to be the case with these defendants 1 The statement of facts is omitted, and a short statement of the point in controversy is substituted. Part of the opinion is also omitted. — Ed. 316 RATES. [chap. IV. as the tonnage of lumber shipped over their lines and their revenue therefrom have steadily grown in amount. Take the two years, 1901 and 1903, immediately preceding the present advanced rate, and 1903 the year of the advance; the lumber tonnage of de- fendants has grown in those years from 6,566,407 tons in 1901, to 9,808,463 tons in 1903, an increase of 3,243,056 tons. (Finding 9.) The business of the defendants, not only in lumber, but in traffic in general, has grown and is growing largely, and in view of the fact, that they derive their franchises, or "right to exist" from the public, the lumber shippers, as part of the public, might plausibly, to say the least, claim that they have a right to partici- pate in the prosperity of the defendants by having their rate re- duced rather than advanced. The general rule is, the greater the tonnage of an article transported, the lower should be the rate. 'No rule is more firmly grounded in reason or more universally Tecognized by carriers. It is because of the greater density of traffic north of the Ohio Eiver in Central Freight Association Territory and in the Eastern Territory that rates in general are made- materially lower in those territories than in Southern Terri- tory. As before stated, the advance in the rate is not sought to be justified on the ground that the rate in force was un jgmunera- > tive or not a reasonable return for the service rendered . The prin- cipal ground urged is that additional revenue was needed to meet increased expenses and that, in the language of one of the princi-| pal witnesses for the defendant, they " looked around to see where | they could best get that additional revenue and one of the com- | modities which they thought would bear the advance was lumber." Carriers have no right to advance a rate which is already rea- sonably high and which yields an adequate return for the service rendered, solely because additional revenue is needed. In Smyth ?;. Ames (169 TJ. S. 547, 43 L. ed. 849, 18 Sup. Ct. Eep. 418), the Supreme Court held that " the public is entitled^ to demand that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth." ..." It cannot therefore be admitted that a railroad corporation maintaining a highway under the authority of a state may fix its rates with a view solely to its own interests and ignore the rights of the public." In Covington & Lexington Turnpike Eoad Co. v. Sandford (164 TJ. S. 596, 597, 41 L. ed. 566, 17 Sup. Ct. Eep. 198), it is said: A corporation "is not entitled, as of right and without reference to the interests of the public, to realize a given per cent, upon its capital stock. . . . Stoclcholders are not the only persons whose rights or interests are to be considered. The rights of the public / SEO. I.] BATES FIXED BY PUBLIC SBKVICE COMPANY. 217 are not to be ignored. . . . The public cannot properly be sub- jected to unreasonable rates in order simply that stockholders may earn dividends." It is clear, therefore, that the mere fact of the need of additional revenue to meet increased expense does not justify the advance in the rate on lumber.^ BEUNSWICK AND TOPSHAM WATEE DISTEICT v. MAINE WATEE CO. „/ 99 Me. 371. 1904.^ C-^'""' Savage, J. We turn to the other question involved in this re- quest. That relates to the assumed existence of a nearer and cheaper source of supply than the one now in use by the company, which is a part of its present entire plant, and which in part repre- sents its actual investment. We do not doubt that, when the worth of a public service of this kind to the public or the customers is spoken of, necessarily one of the elements to be considered is the expense at which the public or customers, as a community, might serve themselves were they free to do so, and were it not for the existence of the practically exclusive franchises of the supplying company. When the worth of the water to a consumer is esti- mated, we are not limited to the value of water itself, for it is an absolute necessity. Its value has no limit. Water, speaking ab- stractly, is priceless; it is inestimable. To sustain life it must be had at any price. And in this respect a public water service differs from all other kinds of public service. In estimating what it is reasonable to charge for a water service, that is, not exceed- ing its worth to the consumers, water is to be regarded as a product, and the cost at which it can be produced or distributed is an important element of its worth. It is not the only element, however. The individuals of a community may with reason prefer to pay rates which yield a return to the money of other people higher than the event shows they could serve themselves for, rather than make the venture themselves, and risk their own money to lose in an uncertain enterprise. It was said by us in the Waterville case that the investor is entitled to something for the risk he takes, and it is not unreasonable for the consumer to be charged with something on that account. That is one of the things which make up the worth of the water to the customer. The same element enters 2 For a full history of this case see, also, 123 Fed. 789, 138 Fed. 758, 148 Fed. 1021, and 206 U. S. 428. 1 Only one point is reprinted from the opinion. — Ed. 218 RATES. [chap. IV. always into the relations between producer and eonsTimer. But such a consideration as this last one must always be treated with caution. The company is only entitled to fair returns, in any event, and " fair " to the customer as well as to itself. In the aspect now being considered, the worth of a water service to its customers does not mean what it would cost some one indi- vidual, or some few individuals, to supply themselves, for one may be blessed with a spring, and another may have a good well. It means the worth to the individuals in a community taken as a whole. It is the worth to the customers as individuals, but as individuals making up a community of water takers. In the very nature of things, a water system is usually intended to supply a somewhat compactly settled community, or a community whose geographical limits are somewhat restricted. As a matter of fact, in this state such systems usually supply villages, or the more compact portions of cities. The necessity does not exist for extending such systems beyond these limits, and the expense would be practically prohibi- tive. Such a community must, in general, stand as a whole. The rates for such a system are generally and properly uniform, although the expense of supplying some, as those nearer the source of sup- ply, is actually less than that of supplying those at the outermost limits. Still the benefits are uniform, and uniform rates are rea- sonable. Now, such a community is, we think, entitled to the bene- fit of such natural and sufiicient facilities for procuring pure water as exist in its vicinity. Communities are in every respect entitled to the benefit of existing natural advantages. It therefore seems to be reasonable that a public water service company undertaking to supply a community with water is bound to do so wisely and economically. It is bound to take advantage of practicable natural facilities. If there is more than one source of supply, other things being equal, the community is entitled to have the least expensive one used. So long as the company enjoys practically exclusive franchises, so long it must afford the com- munity the benefit of the conditions which nature has provided for them. For instance, if water can profitably be served from a nearer source of supply at a certain rate, the company ought not to be per- mitted to charge a higher rate based upon the expense of bringing it from a farther and more expensive source. And this even if in attempting to serve this and other communiti9S together it might be more profitable to the company to do so. SEC. I.] KATES FIXED BY PUBLIC SERVICE COMPANY. 319 BEYMEN V. BUTLEE WATEE CO. 179 Pa. St. 231. ISST.'- Mr. Justice Williams. A provision in the third section of the act of June 2, 1887, relating to the jurisdiction of the courts over gas and water companies, is supplemental to the act of 1874, and defines somewhat more distinctly the duty of such companies to furnish the public with pure gas and water, but it con tains _ no al^ lusio n to t he subjectjif4udce. The power of the court to interfere betwien tKe"TeIIer and the buyer of water is conferred only by the provisions already quoted from the act of 1874, and that act au- thorizes the court to entertain the compkint of the buyer, to iiives- tigate the reasonableness of the price charged, and to " dismiss the complaint," or to order that the charges complained of, if found to be unreasonable and unjust, " shall be decreased." The water com- pany prepares its schedule of prices in the first instance, and makes its own terms with its customers; but if these afe oppressive, so that, in the exercise of the visitorial powe i_-Qf-the_state, the just protection of the citizen requires that they be reduceS, then the court is authorized to say : " This charge is oppressive. You must decrease it. You are entitled to charge a price that will yield a fair compensation to you, but you must not be extortionate." This is not an authority to manage the ajBEairs of the company, but to restrain illegal and oppressive conduct on its part in its dealings with the public. It may be that the power to order that any par- ticular item of charge shall " be decreased " includes the power to fix the extent of the reduction that must be made, or to name the maximum charge for the particular service in controversy, which the court will approve; but the decree is that the item shall "be decreased" either generally or to a sum named. The schedule of charges must be revised accordingly by the company defendant, and such revision may be compelled in the same manner that the decree of the same court may be enforced in other cases. We do not think this supervisory power would justify the court in\ preparing a tariff of water rents, and commanding a corporation to I furnish water to the public at the rates so fixed. This would in-j volve a transfer of the management of the property and the business! of a solvent corporation from its owners to a court of equity, for nol other reason than that the court regarded some one or more of the> charges made by the company as too high. The act of 1874 con- templates no such radical departure from established rules as this, ' I Only an extract from the opinion Is here reprinted. — Bd. 230 KATES. [chap. IV. but provides simply for the protection of the citizen from extor- tionate charges, specifically pointed out and complained of by pe- tition.^ Section 2. The Power of the State to Fix Rates. ^ CHICAGO, BUELIJSTGTOlSr AISTD QUINCY EAILEOAD CO. v. IOWA. 94 U. S. 155. 1876.^ Appeal from the Circuit Court of the United States for the Dis- trict of Iowa. This bill was filed by the Chicago, Burlington, and Quincy Eail- road Company, a corporation created by the laws of Illinois, for an injunction restraining the Attorney-General of the State of Iowa from prosecutinjfsuits against it or its officers, under the provi- sions of an act passed by the legislature of Iowa, entitled " An Act to establish reasonable maximum rates of charges for the trans- portation of freight and passengers on the different railroads of this State," approved March 23, 1874. Mr. Chief Justice Waite delivered the opinion of the court. Eailroad companies are carriers for hire. They are incorporated as such, and given extraordinary powers, in order that they may ■the better serve the public in that capacity. They are, therefore, engaged in a public employment affecting the public interest, and, under the decision in Munn v. Illinois, supra, p. 113, subject to leg- 2 In Madison v. Madison G. & E. Go. (1906), 129 Wis. 49, the Court said, at page 268 : " But it is insisted by respondents that, since the gas company is obli- gated to furnish gas to the city and its inhabitants at a reasonable price, the court has jurisdiction to determine what, under the existing facts and circumstances, is a reasonable charge, and to enforce it as the measure of future service under like conditions. No doubt the court can ascertain, within its judicial function and whenever the question is necessarily in- volved in any controversy to which the gas company is a party, what is a reasonable charge for gas furnished. This, however, as already shown, is the extent to which the court can go. Whatever might be determined to be a reasonable charge, under the facts and circumstances adduced in such an inquiry, cajinot be enforced as a fixed charge for the service for any purpose other than to determine the particular controversy between the parties and their privies. If it were attempted to enforce it as a prescribed future charge, it would, in an indirect way, usurp the legislative prerogative of prescribing by rule the compensation for a future public service. This, as we have seen, the courts cannot do." 1 In this connection notice again the cases in Chapter I, Section 3, supra. — Ed. 2 Part of the statement of facts, the arguments of counsel and part of the opinion are omitted. — Ed. SEC. II.] POWER OP STATE TO FIX KATES. 321 islaftive control as to their rates of fare and freight, unless pro- tected by their charters. The Burlington and Missouri Eiver Eailroad Company, the bene- fit of whose charter the Chicago, Burlington, and Quincy Eailroad Company now claims, was organized under the general corporation law of Iowa, with power to contract, in reference to its business, the same as private individuals, and to establish by-laws and make all rules and regulations deemed expedient in relation to its affairs, but being subject, ne vertheless, at all times to such r ules and regu - lations as the generaFassembly of Iowa might _from time to~tim"e enact and provide. This is, in substance, its charter, and to that extent it is protected as by a contract ; for it is now too late to con- tend that the charter of a corporation is not a contract within the meaning of that clause in the Constitution of the. United States which prohibits a State from passing any law impairing the obliga- tion of a contract. Whatever is granted is secured subject only to the limitations and reservations in the charter or in the law or con- stitutions which govern it. This company, in the transactions of its business, has the same rights, and is subject to the same control, as private individuals under the same circumstances. It must carry when called upon to do so, and can charge only a reasonable sum for the carriage. In the absence of any legislative regulation upon the subject, the courts must decide for it, as they do for private persons, when con- troversies arise, what is reasonable. But when the legislature steps in and prescribes a maximum of charge, it operates upon this cor- poration the same as it does upon individuals engaged in a similar business. It was w ithinthe_power of the company tocall upon the legi glature to j iy per m anently this limit, and ma k elFa^art oi the charter; and, if it was refused, to abstain from building the road and establishing the contemplated business. Ifjhatjiaibeen done, the charter mi ght have presented a contract against future legisla tive in terferencg^ But it was not ; and the company in- vested its capital, relying upon the good faith of the people and the wisdom and impartiality of legislators for protection against wrong under the form of legislative regulation. It is a matter of no importance that the power of regulation now under consideration was not exercised for more than twenty years after this compag y was organized. A power of government which actually exists is no t lost by non ^user. A good government never puEs~fortints extraordinary powers, except under circumstances which require it. That government is the best which, while per- forming all its duties, interferes the least with the lawful pursuits of its people. 222 RATES. [chap. IV. In 1691, during the third year of the reign of William and Mary, Parliament provided for the regulation of the rates of charges by common carriers. This statute remained in force, with some amendment, until 1827, when it was repealed, and it has never been re-enacted. No one supposes that the power to restore its pro- visions has been lost. A change of circumstances seemed to render such a regulation no longer necessary, and it was abandoned for the time. The power was not surrendered. That remains for fu- ture exercise, when required. So here, the power of regulation ex- isted from the beginning, but it was not exercised imtil in the judgment of the body politic the condition of things was such as to render it necessary for the common good. Neither does it affect the case that before the power was exer- cised the company had pledged its income as security for the pay- ment of debts incurred, and had leased its road to a tenant that re- lied upon the earnings for the means of paying the agreed rent. The company could not grant or pledge more than it had to give. After the pledge and after the lease the property remained within the jurisdiction of the State, and continued subject to the same governmental powers that existed before.^ CENTRAL OP GEOEGIA RAILWAY CO. v. RAILROAD COM- MISSION OP ALABAMA. K 161 Fed. 925. 1908.^ ,i. ' Jones, District Judge. / XV. Has the Legislature attempted to delegate legislative power to the Commission in the authority conferred upon it to make and unmake rates and classifications established by statutes? The act of August 9, 1907, provides in the first section : " That in all cases where any classification of railroads or of any 3 In Cotting v. Kansas City Stock Yards Co. (1901), 183 U. S. 79, Mr. Justice Bkewer, after stating the doctrine of Munn v. Illinois, and re- ferring to cases which had followed it, said, at page 85 : " These decisions go beyond but are in line with those in which was recog- nized the power of the State to regulate charges for services connected with any strictly public employment, as, for instance, in the matter of common carriage, supply of water, gas, etc. Spring Valley Water Works v. Schottler, 110 U. S. 347; Railroad Commission Cases, 116 U. S. 307; Wabash, St. Louis & Pacific Railway v. Illinois, 118 U. S. 557; Dow v. Beidelman, 125 U. S. 680; Chicago, Milwaukee, etc., Railway v. Minnesota, 134 U. S. 418; Chicago & Grand Trunk Railway v. Wellman, 143 U. S. 339; Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362 ; St. Louis & San Francisco Rail- way V. Gill, 156 U. S. 649; Covington, etc.. Turnpike Co. ». Sandford, 164 U. g. 578; Smyth v. Ames, 169 U. S. 466; San Diego Land Co. v. National City, 174 U. S. 789 ; Chicago^ Milwaukee & St. Paul Railway v. Tompkins, 176 U. S. 167." 1 The statement of facts is omitted, and only an extract from the opinion is reprinted. — Ed. SBC. II.] POWEE OF STATE TO FIX RATES. 233 articles of freight or any maximum rates or charges for the trans- portation of passengers or freight over any railroad in this state, have been, or may hereafter be prescribed by statute, or any pre- vailing rates or charges for such transportation have been, or may hereafter be, by statute made the maximum rates or charges, the Kailroad Commission of Alabama shall have the power and is hereby authorized to change such classifications and such rates or charges, or any of them, from time to time as conditions may, in its judg- ment render expedient or proper so to do, whether the effect of such changes be to increase or reduce any of the rates or charges, and to establish and order to be put in force in lieu thereof any new classification or rate or charge which it may deem reasonable and proper; and the classifications, rates or charges so established by it shall be the lawful classifications, rates or charges until fur- ther changed by said Eailroad Commission." Like power is given as to the rates and classifications in the acts known as the " Eight Group Acts." Legislative Power has been Attempted to be Delegated to the Com- mission as to Change of Statutory Eates and Classifications. XVI. The will of legislators never becomes the law, unless ex- pressed in the mode and form the Constitution demands. The Leg- islature, in framing a statute, may provide for its unchanged op- eration until it is repealed, or it may provide for contingencies aris- ing after it goes into effect, which in its wisdom may require change in the law, and provide for the change, in view of the happening of these contingencies, upon the occurrence of which the lawmaker himself declares in the Statute what the change shall be. But, whatever the intent of the lawmaker, a statute, in order to ripen into a law, must always be a perfect expression of the legislative will, upon every contingency with which the statute deals, as it leaves the hands of the lawmaking power. When the Legislature declares its will as to contingencies, it may lawfully make the tak- ing effect of the statute in the first instance, or its suspension or abrogation afterwards, and the substitution of some other law, de- pend upon the ascertainment of some particular state of facts by an executive officer. But, to be a perfect expression of the legis- lative will as to these matters, the statute itself must ascertain or prescribe a state of facts which constitute the condition or con- tingency upon which the change may be made, and what change shall be effected in the prior law, when that contingency is ascer- tained. Under a statute so framed, the Legislature has delegated no legislative authority to the executive officer. It has simply made use of his services to ascertain a state of facts, upon the ascertain- ment of which the Legislature itself declares, in advance, its own 234 RATES. [chap. IV. judgment as to " what the law shall be " under the changed condi- tions. The contingency upon which the change shall take place in the operation of a law must be a state of facts which the Legis- lature either ascertains in so many words, or defines or prescribes by general definition, and upon the finding of which state of facts the Legislature, and not some other body, forms the opinion, and declares that it is expedient and proper to change the operation of the law. The propriety and expediency of changing a law is the very question which the Constitution commits exclusively to the wisdom of the Legislature, and it must express its own judgment and will in the statute as to these questions. If the opinion or judgment of some other department as to the happening of some undefined event, and the effect such event should have upon the legislative policy, is to determine whether there shall be a change in the law, it is the judgment and will of the officer as to the ex- pediency of a change, and not the opinion and will of the lawmak- ing power, which effects the changes. The statute here makes the expediency and propriety of a change, which shall be made when the officer so determines, depend solely upon the discretion and will of an executive officer, and not upon the happening of any state of facts upon which the Legislature itself has passed its judgment and uttered its commands. The statutes in that posture are neither more nor less than a legislative declaration that there shall be a change in the legislative will because an executive officer deems it expedient, and that because the executive officer so wills there- after the legislative will shall be only what an executive officer prescribes. This is nothing more nor less than the entire abdica- tion of the duty of the Legislature to determine the expediency and propriety of legislation, and the surrender of legislative power to an executive officer, to use as he pleases in the future. The court has struggled hard to find some way, consistent with obedience to the Constitution, to avoid the consequences and in- conveniences, both public and private, which must follow from striking down the powers here attempted to be conferred upon the Commission. Finding no escape on principle, the duty of the court is plain. It must enforce the Constitution. The Legisla- ture doubtless intended in the passage of these statutes to leave the whole matter of rates and classifications in the keeping of the Commission, and thought it had done so. It could have done so by an absolute repeal of the schedules and classifications fixed by it, leaving the Commission, as an administrative body, to work out under rules and principles fixed by the Constitution, the stat- utes, and the common law, what are reasonable classifications and rates, in view of the facts in the particular cases with which the SEC. II.] POWEK OF STATE TO EIX RATES. 225 Commission deals. The Legislature could also have retained the " Group Acts " as a general guide for the Commission, and yet given the Commission power to change them, by providing in those statutes that upon the happening of a certain state of facts therein declared or defined, not upon the mere opinion or judgment of the Commission on undefined conditions of which the Commission is the sole judge, and upon which the Legislature itself made no dec- laration " what the law shall be," the Commission might thereupon change the classifications and rates, within certain limitations, which the statutes themselves would state or define. But nothing of that kind was provided for in any of the statutes. The Legis- lature has not repealed or changed them. The constitutional trouble with the statute is that the legislative power has specifically declared its will upon the wisdom and expediency of the particu- lar classifications and rates, and put them upon the statute books as the law of the land. It takes the lawmaking power to repeal or change a law, as well as to make a law ; and the power of repeal- ing or changing a law, or substituting another law in its stead, cannot be delegated to any other department, much less to a statu- tory board. Turn the proposition over as we may, and scan it from every constitutional point of view, we are always confronted with the fact that, in order to change the laws now in existence as to rates and classifications, they must be repealed or altered by the legislative power which made them. The legislative power which made them has not repealed or altered them. It has merely attempted to let another body undo what the Legislature has done. It has not declared in any pf those statutes its own will as to ''what the law shall be" on any changed state of facts which the lawmakers have defined or prescribed, nor, when that state of facts is ascertained, what shall be either the nature or extent of the changes which the lawmakers will shall result therefrom, except that the wisdom and judgment of the Commission shall be the legislative will as to the change. On these questions, upon which the Legislature must speak if the Constitution be obeyed, it has declared no will of its own as to "what the law shall be." It has simply declared to the Commission that it is authorized, for any reasons it may think of sufficient importance, to unmake what the Legislature has declared to be the law of the land, and set up other standards of its own, which shall stand as the law until again changed by order of the Commission. In short, it has referred the whole matter of " what the law shall be " to the Eailroad Commis- sion as a "committee with power to act," and declared that the legislative will as to the future shall be whatever the Commission may will and declare. 226 KATES. [chap. IV. Of the wisdom of the Legislature's determining for itself what are just and reasonable rates and classifications, and imbedding those rates and classifications in statutes, whereby they become the law of the land and cannot be altered except by an act of the law- making power itself, the Legislature must determine for itself; but, when the Legislature does so determine, the Constitution fastens upon their act, and provides the only mode in which the requirements of such enactments can be undone or changed. While some inconvenience, both public and private, must result from fol- lowing the Constitution in this case, the evil is of small consequence as compared with the greater evils which would result in allowing such depd,rtures from the fundamental law. It is vital to the wel- fare and happiness of the people that the law shall not be made and unmade, or changed, save by the lawmaking power itself. To- day it is the carrier and those who deal with him who are attempted to be subjected to the doctrine that administrative ofl&cers may change the law as enacted by the Legislature, and prescribe differ- ent rules of conduct from those made by the supreme lawmaking power, varying the law according to their own notions whenever, "in their judgment," it is "expedient and proper so to do." If such power can lawfully be conferred upon administrative officers in these cases, it cannot be denied to executive officers in other cases. It is an alarming doctrine to proclaim in a free country that the laws for the control of the rights and business of citizens. Tinder the complex conditions of modern life, can be made to give place to different obligations and rules made by executive officers, "whenever conditions may, in their judgment, render it expedient or proper so to do." The whole matter is exhaustively discussed in Field v. Clark, 143 U. S. 694, 12 Sup. Ct. 505, 36 L. Ed. 294, wherein is quoted with approval the words of the Supreme Court of Ohio (Eailroad Co. v. Clinton County Com'rs., 1 Ohio St. 88) that: " The true distinction is between the delegation of power to make a law, which necessarily involves a discretion as to what it shall be, and the conferring of authority and discretion as to its execution, to be exercised under and in pursuance of law. The first cannot be done; to the latter, no valid objection can be made." In the one case the official overrides the law and substitutes his own judgment for it; in the other, he does not change the law, but merely conforms to it. A late instructive case is State v. Great Northern Eailway Company, 100 Minn. 445, 111 N. W. 289, 10 L. E. A. (N. S.) 250. Our own cases of Mitchell, Judge, etc., v. State ex rel, etc., 134 Ala. 392, 32 South. 687, and Harlan v. State ex rel., 136 Ala. 155, 33 South. 858, are conclusive on this point. SBC. II.] POWEK OF STATE TO FIX RATES. 237 iWhether the legislative department of a state, under its Constitu- tion, can delegate legislative power, involves no federal question. The decisions of the highest court of the state are binding upon the federal courts on such a question. Few cases can be found where a Legislature has ever attempted to authorize any other depart- ment of the government to strike down an explicit legislative com- mand, and substitute, in its unshackled discretion, some other com- mand; and no case can be found where such an attempt ever suc- ceeded. See State v. Morris County, 36 N". J. Law, 73, 13 Am. Eep. 423. [VILLAGE OP SAEATOGA SPEINGS v. SAEATOGA GAS, ELECTEIC LIGHT AND POWEE CO. 191 N. Y. 123. 1908.^ . . CuLLEK, C. J. This appeal presents the question of the consti- tutionality of the statute passed by the Legislature in 1905 (Chap. 737), providing for the appointment by the Governor of a com- mission, which was authorized to determine, upon the complaint of municipal authorities or consimiers, the maximum price to be charged for service by gas and electric light companies. This statute confers many other powers upon the commission. This ap- peal, TinwpvpTyprpBPTitR nTily- th n gn n gfinn n f tha validity of the stat- Tite r Ergo~far~as it confers upon the commission the power to fix maximum rates. The provisions of tiie statute in this respect are easily separable from the remainder of the act, and, therefore, it is the validity of such provisions alone that we shaU. consider on this appeal. The argument by the learned counsel for the appellant in their attack upon the statute has taken a very broad range. While they concede that the fixing of maximum rates of carriers and public service corporations as a proper exercise of the police power of the state, provided, of course, that the rates so fixed are not confiscatory and in violation of property rights, it is contended that the power is strictly legislative, and that the act before us is unconstitutional, in that it assumes to delegate to the commission, an administrative body, legislative powers. The argument against the constitutionality of the underlying' feature of the statute proceeds on two propositions — orTelKatTe^ islative power can not be del e gated , and the other that rate-mak- ing is a legislative power. Each proposition is true, if not con- strued^totrhroadly, but each is liable to such misconstruction. To be strictly accurate, the first requires the qualification pointed out 1 The arguments of counsel and part of the opinion are omitted. — Ed. 228 RATES. [chap. IV. by Chief Justice Marshall in Wayman v. Southard (10 Wheat. 1, 42) : " It will not be contended that Congress can delegate to the courts, or to any other tribunals, powers which are strictly and ex- clusively legislative. But Congress may certainly delegate to others powers which the Legislature may rightfully exercise itself." If by the second proposition it is intended to assert that the rate-mak- ing power being part of the police power is vested in the Legisla- ture, it is true. But if it is intended to go further and deny the power of the Legislature to confer by general laws upon other branches of the government, the duty not only of executing the law, but of determining its application to particular cases and the formu- lating rules for its exercise, then in my judgment it is not true. A priori reasoning as to the nature and proper distribution of the powers of government is not conclusive on the question of what powers are so inherently legislative as to preclude their delegation in any degree to the other branches of the government. We are now brought to the consideration whether, not the power to enact general laws for the regulation of rates, but the power to prescribe particular rates to be charged by particular carriers, pub- lic service corporations, or other persons engaged in occupations or business affected with the public interest, and so constitutionally subject to regulation as to their charges, is so inherently and ex- clusively a legislative power that it is impossible of delegation to other branches of the government. There is first presented to us the argument resting on history, and it is said : " It cannot be gainsaid that until very recently the duty (that of imposing rates) was at all times a legislative one. For many centuries Parliament has directly legislated as to the price of products, regulating the selling value of the great staples like wool and food, and even the employment of labor. . . . The earliest known regulation of rates of carriage was by an act of Parliament in 1692." If by this it is intended to assert that specific rates for commodities, services, or labor were prescribed by Parliament alone, my research (which is necessarily limited) leads me to the belief that the statement is incorrect. Legislation fixing the wages of laborers commenced at a very early period in England, and it may be that at the tijne the act of Parliament in terms fixed the special wage. The matter was the subject of different, and possibly conflicting, legislation until the time of Elizabeth, when many of the old laws were re- pealed and a comprehensive statute enacted embracing servants, laborers, artificers, and substantially all of what we would term the wage-earning class. St. 5 Eliz. (1562) c. 4. The statute (section 15) made it the duty of the justices of the peace in every shire to meet with the sheriff of the county, if it was convenient, SEC. II.] POWEE OB STATE TO FIX RATES. 229 and with the mayor of any city or incorporated town, if there were such in the shire, after Easter in each year, and limit, rate, and appoint the wages for all artificers, handicraftsmen, husbandmen, or other laborer, servant, or workman. As far as I can discover from the time of the enactment of this statute until the regulation of wages ceased to be regarded as a proper subject for state con- trol, wages were fixed, not by act of Parliament, but by the justices of the peace. This must have been the most extensive, if not also the most important, field of rate making upon which the govern- ment ever entered. The power thus devolved upon the justices of the peace was not conferred on any principle of local self-govern- ment which obtains with us, for no such idea prevailed in England, except possibly .in the cases of chartered cities or towns to which special privileges were granted by their charters. The justices of the peace were appointed and removed by the Crown at pleasure, and, like our own, were more administrative than judicial in their functions. (People ex rel. Lawrence v. Mann, 97 K. Y. 530.) The power was conferred on the justices simply for convenience, or, possibly, of necessity, because at the time of the enactment of the statute the condition of the country, almost devoid of proper highways for the transportation of goods, and with comparatively little communication between the inhabitants of its different parts, must have occasioned great difference in the price of commodities and rates of wages in different localities. The only act I find passed in 1692 on the subject of carriers is St. 3 W. & M. c. 12. By section 24 it is enacted "that the Justices of the Peace of every County and other Place within the Eealm of England or Do- minion of Wales shall have Power and Authority, and are hereby injoined and required, at their next respective Quarter or General Session after Easter Day, yearly, to assess and rate the Prices of all Land-carriage of Goods whatsoever to be brought into any Place, or Places within their respective Limits and Jurisdictions, by any common Carrier or Wagoner." Here again the power to fix rates was conferred on administrative officers. These statutes must have remained extant till the close of the eighteenth century, for in an edition of Burns' Justice, published in 1800, much space is devoted to the duty of the justices under them, and an edition of Bacon's Abridgment, published in 1807, mentions them as then in force. Indeed, Sir James Stephen states that the act of Eliza- beth was not formally repealed until 1875, though it practically became a dead letter many years before. Legislation in England prior to the revolution would, therefore, seem rather to support than to, disapprove the proposition that details of rate making could properly be delegated to administrative officers. 230 RATES. [chap. IV. The enormous pecuniary interest involved, and the inherent dif- ficulties of the problem, would doubtless dictate great caution and mature deliberation in enacting any legislation on the subject; but it seems to me that it should equally dictate that the legislation enacted should provide the most practical, just, and efficient solu- tion of the problem. These considerations also apply to the case before us. There are in this state approximately 450 gas light and electric light companies. They are located in nearly every portion of the state, which contains within its bounds, not only cities varying in population from 10,000 to 4,000,000, but villages, agricultural or rural communities, and the wild forests of the Adi- rondacks. It is plain that no uniform rate of charges could be established that would be just or reasonable. Besides, the difference in the output of the several companies, varying with the size of the communities they respectively supply, as well as the difference in the cost of material to the various companies, dependent on their location with reference to the cost of transportation of coal, oil, and the like, would make a rate that was fair in one place unreasonable in another. Therefore, any close approximation to a reasonable tariff would require special rates to be prescribed for many different localities. To do this properly would involve an investigation into the particular facts in each case. There was a time in the history of this country when carriers and public service corporations were so few that the Legislature itself might have performed that labor ; but by reason of the rapid growth of population and the great in- crease in the number of such corporations it has become impracti- cable for the Legislature to discharge that duty. Moreover, many rates might require alteration from time to time. That the most appropriate method (speaking from a practical, not necessarily constitutional, point of view) is the creation of a commission or body of experts to determine particular rates, has been said several times in the opinions rendered by the Supreme Court of the United States in the various railroad commission cases and in those of state courts. Of course, these remarks are obiter, and they are quoted only to show the very general recognition by the courts that convenience, if not necessity, requires such a course. While no consideration of convenience or of supposed necessity would jus- tify us in ignoring any constitutional mandate or limitation, it must be remembered that we have no express constitutional provi- sion on the subject, and that it is sought to condemn the legisla- tion before us solely by extending the principle that the. Legisla- ture cannot delegate legislative powers (a principle which, though unquestionably true, is, as we have seen, true only within limits) to a point that would render efficient legislation on the subject im- SEC. II.] POWER OF STATE TO FIX KATES. 231 practicable. It cannot be said, to use the language of Justice Har- lan, that in any real sense the Legislature has delegated its power to the commission. The statute is complete. The Legislature, not the commission, has enacted that there shall be maximum rates for the charges of the gas and electric light companies, and that light shall be furnished to consumers at those rates, and has pro- vided the penalty for extorting greater charges for service. What is intrusted to the commission is the duty of investigating the facts, and, after a public hearing, of ascertaining and determining what is a reasonable maximum rate. It is now necessary to consider the objections to some special features of the particular act before us. It is contended that, even conceding that the Legislature may commit to an administrative board the power to determine a tariff of rates, the statute must prescribe some standard by which the action of the board is to be governed, and that otherwise the whole plenary power of the Leg- islature is intrusted to the board, whose action may be arbitrary; and it is urged the statute before us provides no such standard. We think otherwise. The statute provides that the commission shall fix the rate within the limits prescribed by law. This includes both statute law and common law. There may have been com- panies which had franchises immune from invasion by which they were authorized to charge specific rates. The common law pre- scribes the rule that the rate shall be reasonable, and I think, even without special mention, the statute would necessarily imply the same limitation. But it is said that, granting this, " reasonable " is really no standard, but a mere generality. Again, we are of a different opinion. Indeed, if the statute assumed to fix any other standard for rates than that they should be reasonable, we think it would be much more open to attack than in its present form. A lawmaker may exhaust reflection and ingenuity in the attempt to state all the elements which affect the reasonableness of a rate only to find that in a particular case he had omitted the factor -which controlled the disposition of that case. INTEESTATE COMMEECE COMMISSIOlSr v. CINCINNATI, NEW OELEANS AND TEXAS PACIFIC EAILWAY CO. \ 167 U. S. 479. 1896.^ l,."^" Mr. Justice Brewer, after stating the case, delivered the opin- ion of the court. 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — ^Ed. 232 RATES. [chap. IV. A similar question was before us at the last term, in Cincinniati, 1^. 0. & T. P. Ey. Co. V. Interstate Commerce Commission, 162 TJ. S. 184, and in the opinion, on pages 196 and 197, we said : "Whether congress intended to confer upon the interstate com- merce commission the power to itself fix rates was mooted in the courts below, and is discussed in the briefs of counsel. " We do not find any provision in the act that expressly, or by necessary implication, confers such a power. " It is argued on behalf of the commission that the power to pass upon the reasonableness of existing rates implies a right to prescribe rates. That is not necessarily so. The reasonableness of the rate in a given case depends on the facts, and the function of the commission is to consider these facts and give them their proper weight. If the commission, instead of withholding judg- ment in such a matter until an issue shall be made and the facts found, itself fixes a rate, that rate is prejudged by the commission to be reasonable. " We prefer to adopt the view expressed by the late Justice Jack- son, when circuit judge, in the case of Interstate Commerce Com- mission V. Baltimore & 0. E. Co., 43 Fed. 37, and whose judgment was afBrmed by this court. 145 TJ. S. 363. " ' Subject to the two leading prohibitions, that their charges shall not be unjust or unreasonable, and that they shall not un- justly discriminate, so as to give undue preference or disadvantage to persons or traffic similarly circumstanced, the act to regulate commerce leaves common carriers as they were at the common law, free to make special contracts looking to the increase of their busi- ness, to classify their trafiic, to adjust and apportion their rates so as to meet the necessities of commerce, and generally to manage their important interests upon the same principles which are re- garded as sound, and adopted, in other trades and pursuits.' " The views thus expressed have been vigorously and earnestly chal- lenged in this and in other cases argued at the present term. In view of its importance, and the full arguments that have been pre- sented, we have deemed it our duty to re-examine the question in its entirety, and to determine what powers congress has given to this commission in respect to the matter of rates. The importance of the question cannot be overestimated. Billions of dollars are in- vested in railroad properties. Millions of passengers, as well as millions of tons of freight, are moved each year by the railroad conipani|es, and this transportation is carried on by a multitude of corporations working in different parts of the country, and sub- jected to varying and diverse conditions. It will be perceived that in this case the Interstate Commerce SBC. II.] POWEE OF STATE TO FIX RATES. 333 Commission assumed the right to prescribe rates which should con- trol in the future, and their application to the court was for a mandamus to compel the companies to comply with their decision ; that is, to abide by their legislative determination as to the maxi- mum rates to be observed in the future. "We have therefore these considerations presented: First. The power to prescribe a tariff of rates for carriage by a common car- rier is a legislative, and not an administrative or judicial, func- tion, and, having respect to the large amount of property invested in railroads, the various companies engaged therein, the thousands of miles of road, azid the millions of tons of freight carried, the varying and diverse conditions attaching to such carriage, is a power of supreme delicacy and importance. Second. That Con- gress has transferred such a power to any administrative body is not to be presumed or implied from any doubtful and uncertain language. The words and phrases efficacious to make such a dele- gation of power are well understood, and have been frequently used, and, if Congress had intended to grant such a power to the Inter- state Commerce Commission, it cannot be doubted that it would have used language open to no misconstruction, but clear and direct. Third. Incorporating into a statute the common-law obligation rest- ing upon the carrier to make all its charges reasonable and just, and directing the commission to execute and enforce the provisions of the act, does not by implication carry to the commission, or in- vest it with the power to exercise, the legislative function of pre- scribing rates which shall control in the future. Fourth. Beyond the inference which irresistibly foUows from the omission to grant in express terms to the commission this power of fixing rates is the clear language of section 6, recognizing the right of the carrier to establish rates, to increase or reduce them, and prescribing the con- ditions upon which such increase or reduction may be made, and requiring, as the only conditions of its action, first, publication; and, second, the filing of the tariff with the commission. The grant to the commission of the power to prescribe the form of the schedules, and to direct the place and manner of publication of joint rates, thus specifying the scope and limit of its functions in this respect, strengthens the conclusion that the power to prescribe rates or fix any tariff for the future is not among the powers granted to the commission. These considerations convince us that under the interstate com- merce act the commission has no power to prescribe the tariff of rates which shall control in the future, and therefore cannot in- voke a judgment in mandamus from the courts to enforce any such tariff by it prescribed. 234 RATES. [chap. IY. But has the eommission no functions to perform in respect to the matter of rates, no power to make any inquiry in respect thereto ? Unquestionably it has, and most important duties in re- spect to this matter. It is charged with the general duty of in- quiring as to the management of the business of railroad com- panies, and to keep itself informed as to the manner in which the same is conducted, and has the right to compel complete and full information as to the manner in which such carriers are transacting their business. And, with this knowledge, it is charged with the duty of seeing that there is no violation of the long and short haul clause ; that there is no discrimination between individual shippers, and that nothing is done, by rebate or any other device, to give preference to one as against another; that no undue preferences are given to one place or places or individual or class of individu- als, but that in all things that equality of right, which is the great purpose of the interstate commerce act, shall be secured to all ship- pers. It must also see that that publicity which is required by section 6 is observed by the railroad companies. Holding the rail- road companies to strict compliance with all these statutory pro- visions, and enforcing obedience to all these provisions, tends, as observed by Commissioner Cooley in In re Chicago, St. P. & K. C. Ey. Co., 3 Interst. Commerce Com. E. 331, 361, to both reason- ableness and equality of rate, as contemplated by the interstate com- merce act. LOUISVILLE AND If ASHVILLE EAILEOAD CO. v. INTEE- STATB COMMEECE COMMISSION. > 184 Fed. 118. 1910.* ijf ' Severens, Circuit Judge. Three several complaints were made to the eommission concerning certain freight rates charged by this complainant upon traffic between Kew Orleans, La., and Mobile, Ala., between Kew Orleans and Pensacola, Ela., and between New Orleans and Montgomery, Selma, and Prattville; each of which last three mentioned places being in Alabama and within the same zone of official classification. The complaint in each ease was that the rates were unreasonable and unjust per se, and were unduly prejudicial to the commercial interests of New Orleans. The com- plaints were made by the board of trade of the last-named city. The commission gave notice thereof to the complainant and fixed a time and place for hearing. The complainant appeared and an- 1 Part of the opinion is omitted. — Ed. SEC. II.] POWEE OF STATE TO FIX RATES. 235 swered. Proofs were submitted by the respective parties and con- sidered by the commission. Whereupon the commission, being of opinion that the rates which were charged were too high, reduced them in respect to several classes of freight, and fixed them at speci- fied new rates, which it ordered the complainant to observe. By its order the date upon which it should become effective was stated. jSTo further statement in detail of these proceedings is necessary, as their regularity is not contested. A brief history of the matter of rates on the routes above men- tioned is necessary to a full understanding of the action of the com- mission and the effect of its order. A schedule of rates on these routes was fixed by the railroad company in 1887, and adhered to until 1907, when, upon complaint made by shippers at 'New Or- leans that the through rates were unreasonably high, and amounted to more than the sum of the local rates, and asking for a reduction of through rates to rates not greater than the sum of the local rates between the termini of the through routes and intermediate points, the railroad company changed its schedule by raising the local rates so that their sum should equal the through rates which it had been charging. The through rates were left undisturbed. These conditions continued until the autumn of 1909, when the New Orleans Board of Trade made complaints of the existing rates to the Interstate Commerce Commission, urging that they were unreasonable and asking for an order requiring the reduction of the local rates to the old schedule, and the reduction of the through rates to the sum of the locals so reduced. The commission was of opinion that the known circumstances and the proofs supported the complaints, and on November 26, 1909, made the order in ques- tion. It is to be understood that what is here said relates to cer- tain classes of freights and not to entire schedules. The object of this bill is to obtain a decree enjoining the commission from enforcing its order. The complaint made against it is that it is in excess of the authority conferred by the acts of Congress creating the commission and defining its powers, and that the order is in violation of the constitutional rights of the complainant. And it is further urged that the order is based upon manifest errors of law and fact, that the rates prescribed by it are unreasonably low and in violation of section 1 of the act (Act Feb. 4, 1887, c. 104, 24 Stat. 379 [U. S. Comp. St. 1901, p. 3154]), and that it violates section 3, in that it, creates undue and unreasonable preferences. Prom these premises it is seen that the subject of the controversy is an order prescribing the maximum rates on interstate traffic. That the order concerns a subject within the scope of the powers of the commission cannot be doubted; and the first question is 236 BATES. [chap. IV. whether the order transcends the due limitation of the powers which are undoubtedly possessed by the commission. In pursuing this inquiry it is of prime importance that we ap- prehend clearly the nature of the power on which the order rests; and for greater clearness it is well to emphasize the fact that the particular power in question is one which relates to the prescrip- tion of rules and regulations for future conduct, and it is not a power for aflEording remedies for past misconduct or other violations of legal rights. As has been pointed out in the opinions of the Su- preme Court, the power thus defined is legislative in its nature ; and it is well settled upon a long series of decisions by that court in the development of this subject that, when this legislative power ■ concerns the administrative afEairs of the government, it may be delegated to an officer, or a board already existing or created for the purpose, and, when so delegated, the power may be as fully ex- ercised as the Legislature might have exercised it, subject to any limitations imposed by the Legislature itself. When a subject re- quires legislation for the regulation of future conduct, but the ob- jects of it are so diffuse and variable that they cannot be distinctly apprehended and comprised in the ordinary terms of legislative classification, it is not unusual to prescribe general rules, if such do not already exist, and delegate the power to apply those rules to the varying circumstances which may arise and give occasion for control. The necessity of legislation in such form justifies its adoption; and it is not obnoxious to the Constitution, in that it delegates legislative power. "Wayman v. Southard, 10 Wheat. 1, 6 L. Ed. 253 ; Field v. Clark, 143 U. S. 649, 12 Sup. Ct. 495, 36 L. Ed. 294; Buttfield v. Stranahan, 192 U. S. 476, 24 Sup. Ct. 349, 48 L. Ed. 425 ; Union Bridge Co. v. United States, 204 U. S. 364, 27 Sup. Ct. 367, 51 L. Ed. 523. And it would be difiieult to instance an occasion in the history of federal legislation so plainly subject to the application of this exceptional rule as the enactment of the interstate commerce law and the carrying forward of its scheme by subsequent amendments. It is manifest that some such scheme as this must have been adopted or the purpose to control carriers engaged in interstate commerce must fail. It would have been impossible for Congress to have foreseen the multitude of questions depending upon the special facts presented sometimes in one complication and sometimes in another, and declare a single rule applicable to each. The most that it could do would be to declare the general r^iles to indicate its purpose and to serve as guides in the determination of ques- tions which would arise, and delegate the power of applying them to some competent public agency always in th,djfield and ready to SBC. III.] LIMITATIONS ON STATE REGULATION. 237 entertain and dispose of controversies. And it is indispensable to this power that the commission should have the right to exercise its judgment and to form conclusions upon the facts. To enable it to do this, the statute provides that notice shall be given to in- terested parties, that a hearing shall be had and proofs taken. We think there is no valid constitutional objection to the law, in that legislative powers are improperly delegated.^ Section 3. Limitations on the Power of the State in Rate Eegulation. MIJNN V. ILLINOIS. 94 U. S. 113. 1876.^ Me. Chief Justice Waite delivered the opinion of the court. It is insisted, however, that the owner of property is entitled to a reasonable compensation for its use, even though it be clothed with a public interest, and that what is reasonable is a judicial and not a legislative question. As has already been shown, the practice has been otherwise. In countries where the common law prevails, it has been customary from time immemorial for the legislature to declare what shall be a reasonable compensation under such circumstances, or, perhaps more properly speaking, to fix a maximum beyond which any charge made would be unreasonable. Undoubtedly, in mere pri- vate contracts, relating to matters in which the public has no in- terest, what is reasonable must be ascertained judicially. But this is because the legislature has no control over such a contract. So, too, in matters which do aifect the public interest, and as to which legislative control may be exercised, if there are no statutory regu- lations upon the subject, the courtsmiust determine what is reason- able. The controlling fact is the power to regulate at all. If that exists, the right to establish the maximum of charge, as one of the means of regulation, is implied. In fact, the common-law rule, which requires the charge to be reasonable, is itself a regulation as 2 See Interstate Commerce Act, § 15, as amended June 29, 1906, Appendix, p. 504. See Interstate Com. Com. v. Chicago, R. I. & P. Ry. Co. (1910), 218 U. S. 88; Interstate Com. Com. v. Humboldt S. S. Co. (1912), 224 U. S. 474. 1 Only an extract from the opinion is here reprinted. — Ed. 238 BATES. [chap. IV. to price. Without it the owner could make his rates at will, and compel the public to yield to his terms, or forego the use. But a mere common-law regulation of trade or business may be changed by statute. A person has no property, no vested interest, in any rule of the common law. That is only one of the forms of municipal law, and is no more sacred than any other. Eights of property which have been created by the common law cannot be taken away without due process ; but the law itself, as a rule of con- duct, may be changed at the will, or even at the whim, of the leg- islature, unless prevented by constitutional limitations. Indeed, the great office of statutes is to remedy defects in the common law as they are developed, and to adapt it to the changes of time and circumstances. To limit the rate of charge for services rendered in a public employment, or for the use of property in which the public has an interest, is only changing a regulation which existed before. It establishes no new principle in the law, but only gives a new effect to an old one. We know that this is a power which may be abused; but that is no argument against its existence. For protection against abuses by legislatures the people must resort to .the polls, not to the courts.^ EEAGAN V. PAEMEES' LOAN AND TEUST CO. 154 U. S. 362. 1894.^ Me. Justice Beewee delivered the opinion of the court. It appears from the bill that, in pursuance of the powers given to it by this act, the state commission has made a body of rates for 2 See Peik v. Chicago & N. W. Ry. Co. (1876), 94 U. S. 164. 178. In Stone v. Farmers' L. & T. Co. (1885), 116 U. S. 307, the following language is found on pages 330 and 331 : " In Munn v. Illinois, 94 U. S. 113, and Chicago, Burlington & Quincy Railroad Co. v. Iowa [94 U. S. 155], above cited, this court decided that, as to natural persons and corporations subject to legislative control, the State could, in cases like this, fix a maximum beyond which any charge would' be unreasonable, and that such maximum when fixed would be binding on the courts in their adjudications, as well as on the parties in their dealings. " From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself %ithout limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confisca- tion. Under pretence of regulating fares and freights, the State cannot re- quire a railroad' corporation to carry persons or property without reward ; neither can it do that which in law amounts to a taking of private prop- erty for public use without just compensation, or without due process of law. What would have this effect we need not now say, because no tariff has yet been fixed by the commission, and the statute of Mississippi ex- pressly provides ' that in all trials of cases brought for a violation of any tariff of charges, as fixed by the commission, it may be shown in defence that such tariff so fixed is unjust' " 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. SEC. III.] LIMITATIONS ON STATE REGULATION. 239 fares and freights. This body of rates, as a whole, is challenged by the plaintiff as unreasonable, unjust, and working a destruc- tion of its rights of property. The defendant denies the power of the court to entertain an inquiry into that matter; insistingjthat the fixing of rates for carriage by a public carrier is a matter wholly within the p ower ofthe_legislative department of th e government , and beyond_examin^ion _by the courtsT It is doubtless tru e, as a^generaljpro position , that the j ormation of a tariff of charges for the Transpo rtation by a co mmon carrier of persons or pTppertyTs a legislati veor administrative, rather than a jud icialTfuncti onT YeOtli^ ^waYS be en recognized that, if a carrier a ttempted to charge^^_shipper an unre asonable sum, the courts~had juriscliction toinquire into that matter, and to award to the shipper any amount exacted from him in excess of a rea- sonable rate, and also, in a reverse case, to render judgment in favor of the carrier for the amount found to be a reasonable charge. The provin ce of the courts ig_noi_jehanged^ no r the limit of judicial inquiry altered, beca use the legislature, instead of the ca rrier,_pxe- scribes the ratea. The courts are not authorized to revise or change the body ofTates imposed by a legislature or a commission. They do not determine whether one rate is preferable to another, or what, under all circumstances, would be fair and reasonable, as between the carriers and the shippers. They do not engage in any mere administrative work. But s till there can be no doubt of their power , and duty to inquire whether a body of rates'prescribed by a legis- lature or a co mmission is unjust and unreasonable, and s uc h aa to ^^ work a practi ca l destruction to rights of property, and, if found so to be, to restrain^ts operation. In Chicago, Burlington & Quincy 5ailroadl^Towa, 94 U. STTFS, and Peik v. Chicago & Northwest- ern Railway, 94 U. S. 164, the question of legislative control over railroads was presented ; and it was held that the fixing of rates was not a matter within the absolute discretion of the carriers, but was subject to legislative control. As stated by Mr. Justice Miller in Wabash, St. L. & P. Ey. Co. v. Illinois, 118 U. S. 557, 569, in re- spect to those cases : " The great question to be decided, and which was decided, and which was argued in all those cases, was the right of the State within which a railroad company did business to regulate or limit the amount of any of these traffic charges." There was in those cases no decision as to the extent of control, but only as to the right of control. This question came again before this court in Eailroad Commission Cases, 116 U. S. 307, 331; and, while the right control was reaffirmed, a limitation on that right was plainly intimated in the following words of the chief justice : 340 RATES. [chap. IV. " From what has thus been said, it is not to be inferred that this power of limitation or regulation is itself without limit. This power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense of regulating _fares andfreightSj_the state canno t require a railrq ad^co rporation to carry persons or property without, reward . ISTeithe rcan it do tbpt which in law amount s to a taking of private property f ar p^^li^ i^s" wit)i_- out just compensation, or wjfliout d ue process of law. " This language was quoted in the subsequent case of Dow v. Beidel- man, 125 TJ. S. 680, 689. Again, in Chicago, M. & St. P. Ey Co. V. Minnesota, 134 U. S. 418, 458, it was said by Mr. Justice Blatch- ford, speaking for the majority of the court : " The question of the reasonableness of a rate of charge for transportation by a railroad company, involving, as it does, the ele- ment of reasonableness, both as regards the company and as re- gards the public, is eminently a question for judicial investiga- tion, requiring the process of law for its determination." And in Chicago & Grand Trunk Eailway v. Wellman, 143 U. S. 339, 344, is this declaration of the law: " The legislature has power to fix rates, and the extent of judicial interference is protection against unreasonable rates." Budd V. New York, 143 U. S. 517, announces nothing to the contrary. The question there was not whether the rates were rea- sonable, but whether the business, that of elevating grain, was within legislative control as to the matter of rates. It was said in the opinion : " In the cases before us the records do not show that the charges fixed by the statute are unreasonable." Hence, there was no occasion for saying anything as to the power or duty of the courts in case the rates, as established, had been found to be un- reasonable. It was enough that, upon examination, it appeared that there was no evidence upon which it could be adjudged that the rates were in fact open to objection on that ground." These cases al l support _tiie_piQpQ sition tha Ljwhile it is not the province of the courts toenter^u pon the mere l y~admini ajiajiie ^uty of framing a tarifl ""ofrates for carriage,_it^is within the scoge of judicial power, and a part of judiciaL duty, to restraSS^Emg which, in the form^f a regulation of rates, operates to den y to the, owners of property invested in the business of transportation that equal protection which is the constitutional right of all owners of other property. There is nothing new or strange in this. It has always been a part of the judicial function to determine whether the act of one party (whether that party be a single individual, ^n organized body, or the public as a whole) operates to divest the other party of any rights of person or property. In every con- SEC. III.] LIMITATIONS ON STATE EEGULATION. 241 stitution is the guaranty against the taking of private property fdir public purposes without just compensation. The equal protectiou of the laws, which, by the Fourteenth Amendment, no State can deny to the individual, forbids legislation, in whatever form it may be enacted, by which the property of one individual is, without compensation, wrested from him for the benefit of another, or of the public. This, as has been often observed, is a government of law, and not a government of men; and it must never be forgotten that under such a government, with its constitutional limitations and guaranties, the forms of law and the machinery of government, with all their reach and power, must, in their actual workings, stop on the hither side of the unnecessary and uncompensated taking or destruction of any private property, legally acquired and legally held. It was therefore within the competency of the Circuit Court of the United States for the Western District of Texas, at the in- stance of the plaintiff, a citizen of another State, to enter upon an inquiry as to the reasonableness and justice of the rates prescribed by the railroad commission. Indeed, it was, in so doing, only ex- ercising a power expressly named in the act creating the commission. A classification was made by the commission, and different rates established for diilerent kinds of goods. These rates were pre- scribed by successive circulars. Classification of rates is based on several considerations, such as bulk, value, facility of handling, etc. It is recognized in the management of all railroads, and no com- plaint is here made of the fact of classification, or the way in which it was made by the commission. By these circulars, rates all along the line of classification were reduced from those thereto- fore charged on the road. The challenge in this case is of the tariff as a whole, and not of any particular rate upon any single class of goods. As we have seen, it is not the function of the courts to establish a schedule of rates. It is not, therefore, within our power to prepare a new schedule, or rearrange this. Our inquiry is limited to the effect of the tariff as a whole, including therein the rates prescribed for all the several classes of goods, and the de- cree must either condemn or sustain this act of quasi legislation. If a law be adjudged invalid, the court may not, in the decree, at- tempt to enact a law upon the same subject which shall be obnoxious to no legal objections. It stops with simply passing its judgment on the validity of the act before it. The same rule obtains in a case like this. And now what deductions are fairly to be drawn from all the facts before us? Is there anything which detracts from the force of the general allegation that these rates are unjust and unreason- able? This clearly appears. The cost of this railroad property 243 KATES. [chap. IV. was $40,000,000. It cannot be replaced to-day for less than $25,- 000,000. There are $15,000,000 of mortgage bonds outstanding against it, and nearly $10,000,000 of stock. These bonds and stock represent money invested in the construction of this road. The owners of the stock have never received a dollar's worth of divi- dends in return for their investment. The road was thrown into the hands of a receiver for default in payment of the interest on the bonds. The earnings for the last three years prior to the es- tablishment of these rates was insufficient to pay the operating expenses and the interest on the bonds. In order to make good the deficiency in interest, the stockholders have put their hands in their pockets, and advanced over a million of dollars. The sup- plies for the road have been purchased at as cheap a rate as pos- sible. The ofiBcers and employes have been paid no more than is necessa,ry to secure men of the skill and knowledge requisite to suitable operation of the road. By the voluntary action of the com- pany the rate, ih cents, per ton, per mile, has decreased in 10 years from 3.03 to 1.30. The actual reduction by virtue of this tariff in the receipts during the six or eight months that it has been en- forced amounts to over $150,000. Can it be that a tariff which, under these circumstances, has worked such results to the parties whose money built this road, is other than unjust and unreason- able? Would any investment ever be made of private capital in railroad enterprises with such as the proffered results ? It is unnecessary to decide, and we do not wish to be understood as laying down as an absolute rule, that in every case a failure to produce some profit to those who have invested their money in the building of a road is conclusive that the tariff is unjust and un- |reasonable. And yet justice demands that every one should re- jiceive some compensation for the use of his money or property, if it be possible without prejudice to the rights of others. There may be circumstances which would justify such a tariff. There may have been extravagance, and a needless expenditure of money. There may be waste in the management of the road, enormous sal- aries, unjust discrimination as between individual shippers, result- ing in general loss. The construction may have been at a time when material and labor were at the highest price, so that the actual cost far exceeds the present value. The road may have been un- wisely built, in localities where there is no sufficient business to sustain a road. Doubtless, too, there are many other matters af- fecting the rights of the community in which the road is built, as well as the rights of those who have built the road. But we do hold that a general averment in a bill that a tariff, as established, is unjust and unreasonable, is supported by the ad- . SEC. III.] LIMITATIONS ON STATE REGULATION. 343 mitted facts that the road cost far more than the amount of the stock and bonds outstanding; that such stock and bonds represent money invested in its construction; that there has been no waste or mismanagement in the construction or operation; that supplies and labor have been purchased at the lowest possible price con- sistent with the successful operation of the road; that the rates voluntarily fixed by the company have been for 10 years steadily decreasing, until the aggregate decrease has been more than 50 per cent.; that, under the rates thus voluntarily established, the stock, which represents two-fifths of the value, has never received anything in the way of dividends, and that for the last three' years the earnings above operating expenses have been insufficient' to pay the interest on the bonded debt, and that the proposed tariff, as enforced, will so diminish the earnings that they will not be able to pay one-half the interest on the bonded debt above the op- erating expenses; and that such an averment, so supported, will, in the absence of any satisfactory showing to the contrary, sustain a finding that the proposed tariff is unjust and unreasonable, and a decree restraining it being put in force. It follows from these considerations that the decree, as entered, must ie reversed^ in so far as it restrains the railroad commission from discharging the duties imposed by this act, and from proceeding to establish reasonable rates and regula- tions, but must be affirmed so far only as it restrains the de- fendants from enforcing the rates already established. The costs in this court will be divided. SMYTH V. AMES. 169 U. S. 466. 1898.^ Each of these suits was brought July 28, 1893, and involves the constitutionality of an act of the legislature of Nebraska ap- proved by the governor April 13, 1893, and which took effect Au- gust 1, 1893. It was an act "to regulate railroads, to classify freights, to fix reasonable maximum rates to be charged for the transportation of freights upon each of the railroads iri the state of Nebraska, and to provide penalties for the violation of this act." Acts Neb. 1893, c. 34; Comp. St. Neb. 1893, c. 73, art. 13. The acf is referred to in the record as " House Roll 33." Mk. Justice Haelan delivered the opinion of the court. 1 Most of the statement of facts, all of the arguments of counsel and part of the opinion are omitted. — Ed. 8.44 RATES. [chap. IV. We are now to inquire whether the Nebraska statute is repugnant to the constitution of the United States. By the fourteenth amendment it is provided that no state shall deprive any person of property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. That corporations are persons within the meaning of this Amendment is now settled. Santa Clara Co. v. Southern Pacific Eailroad, 118 U. S. 394, 396; Charlotte, Columbia & Augusta Rail- road V. Gibbes, 143 U. S. 386, 391; Gulf, Colorado & Santa Fe Eailway v. Ellis, 165 U. S. 150, 154. "V^hat amounts to deprivation of property without due process of law, or what is a denial of the equal protection of the laws, is often difficult to determine, espe- cially where the question relates to the property of a quasi public corporation, and the extent to which it may be subjected to public control. But this court, speaking by Chief Justice Waite, has said that, while the State has power to fix the charges by railroad com- panies for the transportation of persons and property within its own jurisdiction, unless restrained by valid contract, or unless what is done amounts to a regulation of foreign or interstate commerce, such power is not without limit ; and that, " under pretense of regulating fares and freights, the State cannot require a railroad corporation to carry persons or property without reward, neither can it do that which in law amounts to the taking of private prop- erty for public use without just compensation, or without due proc- ess of law." Eailroad Commission Cases, 116 U. S. 307, 325, 331. This principle was recognized in Dow v. Beidelman, 125 U. S. 680, 689, and has been reaffirmed in other cases. In Georgia Eailroad & Banking Co. v. Smith, 128 U. S. 174, 179, it was said that the power of the State to prescribe the charges of a railroad company for the carriage of persons and merchandise within its limits — in the absence of any provision in the charter of the company consti- tuting a contract vesting it with authority over those matters — was " subject to the limitation that the carriage is not required with- out reward, or upon conditions amounting to the taking of prop- erty for public use without just compensation; and that what is done does not amount to a regulation of foreign or interstate com- merce." In Chicago, Milwaukee & St. Paul Eailway v. Minnesota, 134 U. S., 418, 458, it was said : " If the company is deprived of the power of charging reasonable rates for the use of its prop- erty, and such deprivation takes place in the absence of an investi- gation by judicial machinery, it is deprived of the lawful use of its property, and thus, in substance and effect, of the property itself, without due process of law, and in violation of the Constitution of the United States ; and, in so far as it is thus deprived, while other SEC. III.] LIMITATIONS ON STATE REGULATION. 245 persons are permitted to receive reasonable profits upon their in- vested capital, the company is deprived of the equal protection of the laws." In Chicago & Grand Trunk Eailway v. Wellman, 143 U. S. 339, 344, the court, in answer to the suggestion that the legis- lature had no authority to prescribe maximum rates for railroad transportation, said that "the legislature has power to fix rates, and the extent of judicial interference is protection against unrea- sonable rates." In Budd v. New York, 143 TJ. S. 517, 547, the court, while sustaining the power of New York by statute to regu- late charges to be exacted at grain elevators and warehouses, in that State, took care to state, as a result of former decisions, that such power was not one " to destroy or a power to compel the doing of the services without reward, or to take private property for pub- lic use without just compensation or without due process of law." ^ So, in St. Louis & San Francisco Eailway v. Gill, 156 TJ. S. 649, 657, it was said that "there is a remedy in the courts for relief against legislation establishing a tariff of rates which is so unreason- able as to practically destroy the value of property of companies en- gaged in the carrying business, and that especially may the courts of the United States treat such a question as a judicial one, and hold such acts of legislation to be in conflict with the Constitution of the United States, as depriving the companies of their property without due process of law, and as depriving them of the equal pro- tection of the laws." In Covington & Lexington Turnpike Eoad Co. V. Sandford, 164 U. S. 578, 584, 59^595, 597, which involved the validity of a state enactment prescribing rates of toll on a turn- pike road, the court said : " A statute which, by its necessary op- eration, compels a turnpike company, when charging only such tolls as are just to the public, to submit to such further reduction of rates as will prevent it from keeping its road in proper repair, and from earning any dividends whatever for stockholders, is as obnoxious to the Constitution of the United States as would be a similar statute relating to the business of a railroad corporation having authority, under its charter, to collect and receive tolls for passengers and freight." And in Chicago, Burlington & Quiney Eailroad v. City of Chicago, 166 U. S. 226, 341, it was held that "a judgment of a state court, even if it be authorized by statute, whereby private property is taken for the State or under its direction for public use, without compensation made or secured to the owner, is upon prin- ciple and authority wanting in the due process of law required by the Fourteenth Amendment of the Constitution of the United States, and the afiirmance of such judgment by the highest court of 2 A paragraph dealing with Reagan v. Farmers' L. & T. Co., supra, is here omitted. — Ed. 246 RATES. [chap. IV. •the State is a denial by that State of a right secured to the owner by that instrument." In view of the adjudications these principles must be regarded as settled: 1. A railroad corporation is a person within the meaning of the Fourteenth Amendment declaring that no State shall deprive any person of property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws. 2. 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 Fourteenth Amendment of the Constitution of the United States. 3. While rates for the transportation of persons and property • within the limits of a State are primarily for its determination, the ■question whether they are so unreasonably low as to deprive the carrier of its property without such compensation as the Constitu- 'tion secures, and therefore without due process of law, cannot be so conclusively determined by the legislature of the State, or by • regulations adopted under its authority, that the matter may not become the subject of judicial inquiry. The cases before us directly present the important question last stated. It is said by the appellants that the local rates established by the .N'ebraska statute are much higher than in the State of Iowa, and that fact shows that the Nebraska rates are reasonable. This con- tention was thus met by the Circuit Court : " It is, however, urged • by the defendants that in the general tariffs of these companies, there is an inequality; that the rates in Nebraska are higher than those in adjoining States ; and that the reduction by House Eoll 33 simply establishes an equality between Nebraska and the other States through which the roads run. The question is asked. Are not the people of Nebraska entitled to as cheap rates as the people of Iowa? Of course, relatively they are. That is, the roads may not discriminate against the people of any one State, but they are not necessarily bound to give absolutely the same rates to the people of all the States, for the kind and amount of business and the cost thereof are factors which determine largely the question of rates, and these vary in the several States. The volume of business in one State may be greater per mile, while the cost of construction and of maintenance is less; hence, to enforce the same rates in both SEC. III.] LIMITATIONS ON STATE REGULATION. 347 States might result in great injustice in one, while it would only be reasonable and fair in another. Comparisons, therefore, between the rates of two States, are of little value, unless all the elements that enter into the problem are presented. It may be true, as tes- tified by some of the witnesses, that the existing local rates in Ne- braska are 40 per cent, higher than similar rates in the State of Iowa. But it is also true that the mileage earnings in Iowa are greater than in Nebraska. In Iowa there are 330 people to each mile of railroad, while in Nebraska there are but 190; and, as a general rule, the more people there are the more business there is. Hence a mere difference between the rates in two States is of com- paratively little significance." 64 Ped. 165. In these views we concur, and it is unnecessary to add anything to what was said by the Circuit Court on this point. It is further said, in behalf of the appellants, that the reason- ableness of the rates established by the Nebraska statute is not to be determined by the inquiry whether such rates would leave a reasonable net profit from the local business affected thereby, but that the court should take into consideration, among other things, the whole business of the company ; that is, all its business, passen- ger and freight, interstate and domestic. If it be found upon in- yestigation that the profits derived by a railroad company from its interstate business alone are sufficient to cover operating expenses on its entire line, and also to meet interest, and justify a liberal dividend upon its stock, may the legislature prescribe rates for do- mestic business that would bring no reward, and be less than tho services rendered are reasonably worth? Or must the rates for such transportation as begins and ends in the State be established with reference solely to the amount of business done by the carrier wholly within such State, to the cost of doing such local business and to the fair value of the property used in conducting it, with- out taking into consideration the amount and cost of its interstate business, and the value of the property employed in it? If we do not misapprehend counsel, their argument leads to the conclusion that the State of Nebraska could legally require local freight busi- ness to be conducted even at an actual loss, if the company earned on its interstate business enough to give it just compensation in respect of its entire line and all its business, interstate and domes- tic. We cannot concur in this view. In our judgment, it must be held that the reasonableness or unreasonableness of rates pre- scribed by a State for the transportation of persons and property wholly within its limits must be determined without reference to the interstate business done by the carrier, or to the profits de- rived from it. The State cannot justify unreasonably low rates 248 RATES. [chap. IV. for domestic transportation, considered alone, upon the ground that the carrier is earning large profits on its interstate business, over which, so far as rates are concerned, the State has no control. Not can the carrier justify unreasonably high rates on domestic business upon the ground that it will be able only in that way to meet losses on its interstate business. So far as rates of trans- portation are conperned, domestic business should not be made to bear the losses on interstate business, nor the latter the losses on domestic business. It is only rates for the transportation of per- sons and property between points within the State that the State can prescribe; and when it undertakes to prescribe rates not to be exceeded by the carrier it must do so with reference exclusively to what is just and reasonable, as between the carrier and the pub- lic, in respect of domestic business. The argument that a railroad line is an entirety; that its income goes into, and its expenses are provided for, out of a common fund ; and that its capitalization is on its entire line, within and without the State, can have no ap- plication where the State is without authority over rates on the entire line, and can only deal with local rates, and make such regu- lations as are necessary to give just compensation on local busi- ness.* It appears, from what has been said, that if the rates prescribed by the act of 1893 had been in force during the years ending Jime 30, 1891, 1893, and 1893, the Fremont Company, in the years end- ing June 30, 1891, and June 30, 1893, and the Union Pacific Company, in the years ending June 30, 1893, and June 30, 1893, would each have received more than enough to pay operating ex- penses. Do those facts affect the general conclusion as to the probable effect of the act of 1893? In the discussion of this question the plaintiffs contended that a railroad company is en- titled to exact such charges for transportation as will enable it at all times not only to pay operating expenses, but also to meet the interest regularly accruing upon all its outstanding obligations, and justify a dividend upon all its stock; and that to prohibit it from maintaining rates or charges for transportation adequate to all those ends will deprive it of its property without due process of law, and deny to it the equal protection of the laws. This con- tention was the subject of elaborate discussion, and, as it bears upon each case in its important aspects, it should not be passed without examination. 3 For a discussion of what regulation is entirely without the power of the States, what regulation is entirely subject to their control, and what regula- tion may be indulged in by them until such time as Congress shall legis- late on the subject, see Minnesota Rate Cases (1913), 230 U. S. 852, 398 et seq. SBC. III.] LIMITATIONS ON STATE REGULATION. 349 In our opinion, the broad proposition advanced by counsel in- volves some misconception of the relations between the public and a railroad corporation. It is unsound, in that it practically ex- cludes from consideration the fair value of the property used, omits altogether any consideration of 'the right of the public to be ex- empt from unreasonable exactions, and makes the interests of the corporation maintaining a public highway the sole test in deter- mining whether the rates established by or for it are such as may be rightfully prescribed as between it and the public. A railroad is a public highway, and none the less so because constructed and maintained through the agency of a corporation deriving its exist- ence and powers from the State. Such a corporation was created for public purposes. It performs a function of the State. Its authority to exercise the right of eminent domain and to charge tolls was given primarily for the benefit of the public. It is under governmental control, though such control must be exercised with due regard to the constitutional guaranties for the protection of its property. Olcott v. The Supervisors, 16 Wall. 678, 694; Sinking Fund Cases, 99 U. S. 700, 719 ; Cherokee Nation v. Southern Kan. Ey. Co., 135 U. S. 641, 657. It cannot, therefore, be admitted that a railroad corporation maintaining a highway under the author- ity of the State may fix its rates with a view solely to its own in- terests, and ignore the rights of the public. But the rights of the public would be ignored if rates for the transportation of persons or property on a railroad are exacted without reference to the fair value of the property used for the public, or the fair value of the services rendered, but, in order simply that the corporation may meet operating expenses, pay the interest on its obligations, and declare a dividend to stockholders. If a railroad corporation has bonded its property for an amount that exceeds its fair value, or if its capitalization is largely ficti- tious, it may not impose upon the public the burden of such in- creased rates as may be required for the purpose of realizing profits upon such excessive valuation or fictitious capitalization; and the apparent value of the property and franchises used by the corpora- tion, as represented by its stocks, bonds, and obligations, is not alone to be considered when determining the rates that may be rea- sonably charged. We hold, however, that the basis of all calculations as to the reasonableness of rates to be charged by a corporation maintaining a highway under legislative sanction must be the fair value of the property being used by it for the convenience of the public. And, in order to ascertain that value, the original cost of construction, the amount expended in permanent improvements, the amount 250 BATES. [chap. IV. and market Talue of its bonds and stock, the present as compared with the original cost of construction, the probable earning capac- ity of the property under particular rates prescribed by statute, and the sum required to meet operating expenses, are all matters for consideration, and are to be given such weight as may be just and right in each case. We do not say that there may not be I, 'other inatters to be regarded in estimating the value of the prop- ■ erty. What the company is entitled to ask is a fair return upon the I value of that which it employs for the public convenience. On the ' other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth. But even upon this basis, and determining the probable effect of the act of 1893 by ascer- taining what could have been its effect if it had been in operation during the three years immediately preceding its passage, we per- ceive no ground on the record for reversing the decree of the Cir- cuit Court. On the contrary, we are of opinion that as to most of the companies in question there would have been, under such rates as were established by the act of 1893, an actual loss in each of the years ending June 30, 1891, 1893, and 1893 ; and that, in the exceptional cases above stated, when two of the companies would have earned something above operating expenses in particular years, the receipts or gains, above operating expenses, would have been too small to affect the general conclusion that the act, if enforced, would have deprived each of the railroad companies involved in these suits of the just compensation secured to them by the Con- stitution. Under the evidence, there is no ground for saying that the operating expenses of any of the companies were greater thaM. necessary. SOUTHEEN EAILWAY CO. v. ATLANTA STOVE WOEKS. 128 Ga. 207. 1907.^ The Eailroad Commission of Georgia, after making a general schedule of intra-state rates for the railroads of the State, ma^ a supplementary order contained in Circular 309, establishing rates for the carriage of stoves and fixtures between certain named points. The Southern Eailway Company refused to carry for the Atlanta Stove Works according to the rates fixed by such circular, and the latter brought this action for mandamus. Eyans, J. Many adjudications of courts of last resort have 1 The statement of facts has been condensed and part of the opinion is omitted. — Ed. SEC. III.] LIMITATIONS ON STATE REGULATION. 251 established the proposition that the presumption is that the rates fixed by the Commission are reasonable, and the burden of proof is upon the railroad companies to show the contrary. Dow v. Beidelman, 125 U. S. 680; Chicago, etc., Ey. Co. v. Tompkins, 176 U. S. 167; Minn. & St. L. E. Co. v. Minnesota, 186 U. S. 257. The plaintiff in error contends that circular 309 bears in- ternal evidence of the unreasonableness of the rates. No factor appears in this circular which may not properly enter into the problem of rate making. The circular does not fix an isolated and independent rate apart from the whole body of rates, but amends the general schedule to the extent of its provisions. It is a matter of common knowledge in the traffic world that ap- parently insignificant causes sometimes influence the moving of traffic. Freight heretofore passing over the road of one carrier is perceptibly diverted in another direction or transported by a different carrier. The carrier's traffic agent is ever alert to dis- cover the cause of the diversion of profitable business, and, when such cause is supposed to be discovered, to arrange or readjust his tariff schedules in such a inanner as to secure what may have been lost, as well as to increase the public patronage of his road. Bate fixing is impossible of being resolved into an exact science, because of the inharmony of basing criteria in different localities, and even in the same territory. Many factors must be considered in one in- stance which are wholly lacking in another case. Out of the dis- similarity of potential criteria in establishing rates grew the prin- ciple of classification. Classification has been extended to the character of the railroad, localities, commodities, amount of traffic, and many other conditions which directly affect the moving of traffic. In the recent treatise of Beale and Wyman on Eailroad Eate Eegulation, in chapter 18, the authors have grouped under topical heads some general bases of commodity classification, such as comparison of commodities, convenience in handling, value of the goods, car load rates, and difference in rate between classes. Classification of commodities into classes is there said to be allow- able so long as it is not disproportionate. After discussing several decisions rendered by the Interstate Commerce Commission, at sec tion 607, it is said that "the principle to be deduced from the cases which have Just been discussed is that the differences in rates between the classes in a classification should not be dispropor- tionate." From the necessity of the case, where so many elements are obliged to be considered in fixing a coinmodity rate as part of the general schedule of rates, it is impracticable to fix a single commodity rate without reference to rates of other commodities, as well as other factors that properly may enter into the estimate. 352 RATES. [chap. IV. Chicago, etc., Ey. Co. v. Tompkins, 176 U. S. 167. In the case of Minneapolis & St. Louis E. E. Co. v. Minnesota, 186 U. S. 257, the reasonableness of the rate on coal between two intrastate points was Tinder review. The railroad company contended that this par- ticular rate on a tonnage basis would render freight transporta- tion receipts less than actual operating expenses. Testimony was submitted to sustain this contention. The court, speaking through Mr. Justice Brown, said : " The principal testimony, however, was intended to show that, if the rate fixed by the Commission for coal in car load lots were applied to all freight, the road would not pay its operating expenses, although in making this showing the interest upon the bonded debt and the dividends were included as part of the operating expenses. But it so appears that, if the old rate upon hard coal in car load lots agreed upon by the roads were adopted as an average rate for all freights, the freight earnings of the road would have been largely increased. This would indicate that the rate fixed for coal must have been above the average rate, although coal is classified as far below the average. It is quite evident that this testimony has but a slight, if any, tendency to show that even at the rates fixed by the Commission there would not still be a reasonable profit upon coal so carried." And further on in the same opinion it was said: "We do not think it beyond the power of the State Commission to reduce the freight upon a particular article, provided the companies are able to earn a fair profit upon their entire business, and that the burden is upon them to impeach the action of the Commission in this par- ticular." As epigrammatically put in Smyth v. Ames, 169 U. S. 547 : " What the company is entitled to ask is a fair return upon the value of that which it employs for the public convenience. On the other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth." We do not see how this result can be obtained except from an application of the whole body of rates to the railroad's entire business within this State. Again, if the railroad company be permitted to contest the rea- sonableness of an individual commodity rate apart from the whole body of rates, the courts would be called on to fix and establish independent rates for different commodities. The courts would be at the beck and call of every carrier in the State to revise, change, or modify some particular rate. The courts have no such power. "The courts are not authorized to revise or change the body of rates imposed by a legislature or a commission. They do not determine whether one rate is preferable to another, or what un- der all the circumstances would be fair and reasonable as be- SEC. III.] LIMITATIONS ON STATE REGULATION. 253 tween the carriers and the shippers. They do not engage in any mere administrative work, but still there can be no doubt of their power and duty to inquire whether a body of rates pre- scribed by a legislature or a commission is unjust and unrea- sonable, and such as to work a practical destruction of rights of property, and, if found so to be, to restrain its operation." Eeagan V. Farmers' Loan & Trust Co., 154 U. S. 363. The commission fixes a schedule of rates. Some commodity rates are higher than others, and necessarily so. The entire body of rates are prescribed with respect to their inter-relation. The low rate is presumably fixed with reference to the higher rate, and conversely ; and a partic- ular rate cannot be said to be unreasonable without showing it to be such when taken in connection with the whole body of rates. We therefore reach the conclusion that the averment of the fifteenth paragraph of the amended answer, "that the rates prescribed by circular 309 are unreasonable, in that the amount earned by your petitioner in the transportation of the articles covered by 309 be- tween the points therein prescribed would be less than the cost of service," fails to raise an issue of fact. Since conceding the truth of the averment, for the reasons given above, the rate therein pre- scribed is not alleged to be unreasonable as a part of the whole body of rates prescribed by the Commission.^ NOETHEElSr PACIFIC EAILWAY CO. ■!;. NOETH DAKOTA. 35 Sup. St. Rep. 429. 1915.^ Me. Justice Hughes delivered the opinion of the court. By chapter 51 of the Laws of 1907, the legislature of North Dakota fixed maximum intrastate rates, graduated according to distance, for the transportation of coal in carload lots. It was further provided that in case the transportation was over two or more lines of railroad it should be considered as one haul, the com- pensation for which should be divided among the carriers accord- ing to their agreement, or, if they could not agree, as the railroad commissioners should decide, subject to appeal to the courts. While the statutory rates governed all coal shipments, their practical ap- plication was almost solely to lignite coal. As to the law, the state court held : " (a) The statutory freight rate is presumed to be reasonable, 2 See Missouri Pac. E. R. Co. v. Smith (1895), 60 Ark. 221. 1 Part of the opinion is omitted. — Ed. 354; KATES. [chap. IV. "which presumption continues until the contrary appears and the rate is shown beyond a reasonable doubt to be confiscatory. "(b) Proof that a rate is noncompensatory — that is, while producing more revenue than sufficient to pay the actual expenses occasioned by the transportation of the commodity, but insufficient to also reimburse for that proportion of the railroad's fixed or over- head costs properly apportionable to such commodity carried — is not sufficient to establish that the rate is confiscatory in law. "(c) In order to establish such a noncompensatory rate to be confiscatory, it must further appear that any deficit under the rate affects the net intrastate freight earnings materially, and reduces them to a point where they are insufficient to amount to a rea- sonable rate of profit on the amount of the value of the railroad property within the state contributing to produce such net earn- ings." The general principles to be applied are not open to contro- versy. The railroad property is private property devoted to a pub- lic use. As a corporation, the owner is subject to the obligations of its charter. As the holder of special franchises, it is subject to the conditions upon which they were granted. Aside from specific requirements of this sort, the common carrier must discharge the obligations which inhere in the nature of its business. It must supply facilities that are reasonably adequate; it must carry upon reasonable terms,; and it must serve without unjust discrimination. These duties are properly called public duties, and the state, within the limits of its jurisdiction, may enforce them. The state may prescribe rules to insure fair remuneration and to prevent ex- tortion, to secure substantial equality of treatment in like cases, and to promote safety, good order, and convenience. But, broad as is the power of regulation, the state does not en- joy the freedom of an owner. The fact that the property is de- voted to a public use on certain terms does not justify the re- quirement that it shall be devoted to other public purposes, or to the same use on other terms, or the imposition of re- strictions that are not reasonably concerned with the proper conduct of the business according to the undertaking which the carrier has expressly or impliedly assumed. If it has held itself out as a carrier of passengers only, it cannot be compelled to carry freight. As a carrier for hire, it cannot be required to carry persons or goods gratuitously. The case would not be altered by the assertion that the public interest demanded such carriage. The public interest cannot be invoked as a justifi- cation for demands which pass the limits of reasonable protection, and seek to impose upon the carrier and its property burdens that SEC. III.] LIMITATIONS ON STATE EEGDLATION. 255 are not incident to its engagement. In such a case, it would be no answer to say that the carrier obtains from its entire intrastate business a return as to the sufficiency of which in the aggregate it is not entitled to complain. We have, then, to apply these familiar principles to a case where the state has attempted to fix a rate for the transportation of a commodity under which, taking the results of the business to which the rate is applied, the carrier is compelled to transport the com- modity for less than cost, or without substantial compensation in addition to cost. We say this, for we entertain no doubt that, in determining the cost of the transportation of a particular com- modity, all the outlays which pertain to it must be considered. We find no basis for distinguishing in this respect between so-called " out-of-pocket cos|^" or " actual " expenses, and other outlays which are none tM^Je^s j,^tually made because they are applicable to all traffic, insteaa&'f being .exclusively incurred in the traffic in question. Illustrations arq fouiid in outlays for maintenance of way and structures, general e^pehseS?|ind taxes. It is not a suffi- cient reason for excluding, such, o^\|t(;her, expenses to say that they would still haveieen in&r^;^d had th^ particular conunodity not been transported^^TAa;^ ,eom'nio,<^ity ha&' bo^ li^ransported ; the common carrier ^| ^nder'ljajfdli^ l^o cJi-r^^ ^and the es^^nses of its business at a particnla]te,time 'Sre .^dbutabl'6,''to.whai/ 1|;, ao;es^car^ The state cannot estim^/±he cost of"'c^:^ryirig'.cp^l by throwing the expense incidenr?^ theV.maintenari(?^' ,^f the- roadbed,'' aiid the general expenses, upoh jfehe carriage of %he6it> or the cost "of carrying wheat by throwing tn# biardeiiJof ,^the upkeep of the prop- erty upon coal and other commod'itfe^ 't'ms,.,flf cdurse, does not mean that all commodities are to be' treated "'^as carried at the same rate of expense. The outlays that exclusively pertain to a given class of traffic must be assigned to that class, and the other expenses must be fairly apportioned. It may be difficult to make such an apportionment, but when conclusions are based on cost, the entire cost must be taken into account. It should be said, further, that we find nothing in the record before us, and nothing in the facts which have been set forth with the most careful elaboration by the state court, that can be taken to indicate the existence of any standard whatever by reference to which the rate in question may be considered to be reasonable. It does not appear that there has been any practice of the carriers in North Dakota which affords any semblance of support to a rate so low. Whatever inference may be deduced from coal rates in other states, as disclosed by the record, is decidedly against the reasonableness of the rate. And it may be added that, while the 256 RATES. [chap. IV. rate was found to be compensatory in the case of the Great North- ern Eailway Company, this was distinctly shown to be due to the , peculiar conditions of the traffic over that road, the differences with respect to which were fully detailed by the state court. 26 N. D. pp. 439, 472-480, 145 N. W. 135. Nearly 90 per cent, of the total intrastate traffic in lignite coal upon the three roads was over the lines of the plaintiff's in error. It is urged by the state that the commodity in question is one of the lowest classes of freight. This may be assumed, and it may be a good reason for a lower rate than that charged for carrying articles of a different sort, but the mere grade of the commodity cannot be regarded as furnishing a sufficient ground for compelling the carrier to trans- port it for less than cost, or without substantial reward. The state insists that the enactment of the statute may be justi- fied as " a declaration of public policy." In substance, the argu- ment is that the rate was imposed to aid in the development of a local industry, and thus to confer a benefit upon the people of the state. The importance to the community of its deposits of lignite coal, the infancy of the industry, and the advantages to be gained by increasing the consumption of this coal and making the com- munity less dependent upon fuel supplies imported into the state, are emphasized. But, while local interests serve as a motive for enforcing reasonable rates, it would be a very different matter to say that the state may compel the carrier to maintain a rate upon a particular commodity that is less than reasonable, or — as might equally well be asserted — to carry gratuitously, in order to build up a local enterprise. That would be to go outside the carrier's undertaking, and outside the field of reasonable super- vision of the conduct of its business, and would be equivalent to an appropriation of the property to public uses upon terms to which the carrier had in no way agreed. It does not aid the argument to urge that the state may permit the carrier to make good its loss by charges for other transportation. If other rates are exorbitant, they may be reduced. Certainly, it could not be said that the carrier may be required to charge excessive rates to some in order that others might be served at a rate unreasonably low. That would be but arbitrary action. We cannot reach the conclusion that the rate in question is to be supported upon the ground of public policy if, upon the facts found, it should be deemed to be less than reasonable. The legislature undoubtedly has a wide range of discretion in the exercise of the power to prescribe reasonable charges, and it is not bound to fix uniform rates for all commodities, or to secure the same percentage of profit on every sort of business. There SEC. III.] LIMITATIONS ON STATE REGULATION. 357 are many factors to be considered, — differences in the articles trans- ported, the care required, the risk assumed, the value of the service, and it is obviously important that there should be reasonable ad- justments and classifications. Nor is its authority hampered by the necessity of establishing such minute distinctions that the ef- fective exercise of the rate-making power becomes impossible. It is not bound to prescribe separate rates for every individual service performed, but it may group services by fixing rates for classes of traffic. As repeatedly observed, we do not sit as a revisory board to substitute our judgment for that of the legislature, or its administrative agent, as to matters within its province. San Diego Land & Town Co. v. Jasper, 189 U. S. 439; Louisville & N. E. Co. V. Garrett, 231 TJ. S. 298, 313. The court, therefore, is not called upon to concern itself with mere details of a schedule; or ■to review a particular tariff or schedule which yields substantial compensation for the services it embraces, when the profitableness of the intrastate business as a whole is not involved. But a different question arises when the state has segregated a commodity, or a class of traffic, and has attempted to compel the carriers to transport it at a loss or without substantial compensa- tion, even though the entire traffic to which the rate is applied is taken into account. On that fact being satisfactorily estab- lished, the presumption of reasonableness is rebutted. If in such a case there exists any practice, or what may be taken to be (broadly speaking) a standard of rates with respect to that traffic, in the light of which it is insisted that the rate should still be regarded as reasonable, that should be made to appear. As has been said, it does not appear here. Frequently, attacks upon state rates have raised the question as to the profitableness of the entire intrastate business under the state's requirements. But the decisions in this class of cases (which we have cited in the margin^) furnish no iground for saying that the state may set apart a commodity or a special class of traffic and impose upon it any rate it pleases, pro- vided only that the return from the entire intrastate business is 2 stone V. Farmers' lioan & T. Co., 116 U. S. 307; Dow v. Beidelman, 125 U. S. 680, 690; Chicago & G. T. R. Co. v. Wellman, 143 U. S. 339, 341; Reagan v. Fairmers' Loan & T. Co^ 154 U. S. 362; Covington & L. Turnp. Road Co. V. Sandford, 164 U. S. 578; Smyth v. Ames, 169 U. S. 466; San Diego Land & Town Co. v. National City, 174 TJ. S. 739; Chicago, M. & Sf. P. R. Co. V. Tompkins, 176 U. S. 167; San Diego Land & Town Co. v. Jasper, supra; Stanislaus County v. San Joaquin & K. River Canal & Irrig. Co., 192 U. S. 201; Knoxville v. Knoxville Water Co., 212 U. S. 1; Wilcos v. Consolidated Gas Co., 212 U. S. 19; Cedar Rapids Gaslight Co. v. Cedar Rapids, 223 U. S. 665; Louisville v. Cumberland Teleph. & Teleg. Co., 225 U. S. 430; Minnesota Rate Cases (Simpson v. Shepard), 230 TJ. S.i352, 433; Missouri Rate Cases (Knott v. Chicago, B. & Q. R. Co.), 230 TJ. S. 474, 497; Southern P. Co. v. Campbell, 230 TJ. S. 537; Allen v. St. Lb'iiis, I M. & S. R. Co., 230 U. S. 553. 556. 258 RATES. [chap. IV. adequate. In St. Louis & S. F. E. Co. v. Gill, 156 U. S. 649, a statute fixing a maximum rate for passengers in the state of Arkansas was challenged, but the allegation and offer of proof that the rate would compel the carriage of passengers at a loss related only to a portion, or division, of the railroad, and not to the result of all the traflSc to which the rate in question applied. The holding that this was insufficient was in entire accord with the above-stated principle, — that the rate-making power may be exercised in a practical way, and that the legislature is not bound to assure a net profit from " every mile, section, or other part into ■which the road might be divided." Id. p. 665. A passenger rate may apply generally throughout the state, and the effect of the rate must be considered with respect to the whole business governed by the rate. In Smyth v. Ames, 169 U. S. 466, a schedule of freight rates was involved, and, while the entire schedule was under consid- eration, it was recognized that in order to determine its adequacy the intrastate freight business might be segregated. Id. pp. 535, 550. The case of Minneapolis & St. L. E. Co. v. Minnesota, 186 TJ. S. 257, involved a rate fixed by the Eailroad and Warehouse Commission of the State of Minnesota for the intrastate transporta- tion of hard coal in carload lots. There was no proof that the car- rier was compelled to transport the coal at a loss or without substan- tial compensation. The principal testimony, as the court observed, was intended to show that "if the rate fixed by the commission for coal in carload lots were applied to all freight, the road would not pay its operating expenses, although in making this showing the interest upon the bonded debt and the dividends were included as part of the operating expenses." It was said that it was " quite evident" that this testimony had "but a slight, if any, tendency to show that even at the rates fixed by the commission there would not still be a reasonable profit upon coal so carried " (id. p. 266) ; and this conclusion effectually distinguishes the case from the one at bar. To repeat and conclude : It is presumed — but the presumption is a rebuttable one — that the rates which the state fixes for in- trastate traffic are reasonable and just. When the question is as to the profitableness of the intrastate business as a whole under a general scheme of rates, the caiTier must satisfactorily prove the fair value of the property employed in its intrastate business, and show that it has been denied a fair return upon that value. With respect to particular rates, it is recognized that there is a wide field of legislative discretion, permitting variety and classification, and hence the mere details of what appears to be a reasonable scheme of rates, or a tariff or schedule affording substantial com- SEC. III.] LIMITATIONS ON STATE REGULATION. 259 pensation, are not subject to judicial review. But this legislative power cannot be regarded as being without limit. The consti- tutional guaranty protects the carrier from arbitrary action and from the appropriation of its property to public purposes outside the undertaking assumed; and where it is established that a com- modity, or a class of traffic, has been segregated and a rate im- posed which would compel the carrier to transport it for less than the proper cost of transportation, or virtually at cost, and thus the carrier would be denied a reasonable reward for its service after taking into account the entire traffic to which the rate applies, it must be concluded that the state has exceeded its authority. The judgments, respectively, are reversed, and the cases are re- manded for further proceedings not inconsistent with this opinion. It is so ordered.^ Mr. Justice Pitney dissents. CITY OF MINNEAPOLIS v. MINNEAPOLIS STEEET EAILWAY CO. 215 U. S. 417. 1910.^ Mr. Justice Day delivered the opinion of the court. This is an appeal from a decree of the circuit court of the United States for the district of Minnesota, enjoining the city of Minneapolis from enforcing, as against the Minneapolis Street Eailway Company, appellee, a certain ordinance of the city of Minneapolis, passed February 9, 1907, prescribing the rate of fare for the transportation of passengers over any street railway line, or lines, of the company in the city of Minneapolis. The case was tried upon amended bill and answer. The ground alleged for injunction in the amended bill was in substance that the ordinance of February 9, 1907, violated the terms of a previous and subsisting contract, prescribing the rates of fare to be charged by the company in the city of Minneapolis. It appears in the record that the railway company was organized on July 1, 1873, and that its alleged contract arises from an ordinance of the city of Minneapolis passed July 9, 1875, ratified by an act of the leg- islature of the state of Minnesota passed March 4, 1879. We 3 See Norfolk & W. Ry. Co. v. Conley (1915), 35 Sup. Ct. R. 437; Penn- sylvania R. R. Co. V. Philadelphia County (1908), 220 Pa. St. 100. Compare the opinion of Mb. Justice Bkbwee in Cotting v. Kansas City S. Y. Co. (1901), 183 U. S. 79. 1 The arguments of counsel and part of the opinion are omitted. — Ed. 360 RATES. [chap. it. shall have occasion later on to deal more specifically with this or- dinance and ratifying act. It is sufEcient for the present purpose to say that it is the con- tention of the company, that, by the ordinance of July 9, 1875, •and the ratifying act, it became the owner of an irrepealable con- tract for the term of fifty years from the date of its organization, by the terms of which it had the right to charge a fare not ex- ceeding 5 cents for each person carried on any continuous line which might be designated by the city council of the city, such continuous line, however, not to exceed 3 miles in length. The contract, it is alleged, is violated by the ordinance of February 9, 1907, re- quiring the sale of six tickets for 25 cents. We therefore reach the conclusion that when the ordinance com- plained of, that of February 9, 1907, was enacted by the city council, the company was the owner of a valuable contract right secured to it by the ordinance of July, 1875, ratified by the enact- ment of the legislature of the state of Minnesota on March 4, 1879, which secured to the company for fifty years from July 1, 1873, the contract right to charge 5 cents per passenger for one con- tinuous trip. We think that the requirement of the ordinance, that the company should operate its roads by the sale of tickets six for a quarter, as required by the ordinance of February 9, 1907, was an enactment by legislative authority which impaired the obliga- tion of the contract thus held and owned by the complainant com- pany. We therefore reach the conclusion that the decree of the Circuit Court enjoining the execution of the ordinance, for the rea- sons stated, should be affirmed.^ HOME TELEPHONE AND TELEGEAPH CO. v. CITY OF LOS ANGELES. 211 U. S. 265. 1908.^ Mk. Justice Moody delivered the opinion of the court. This is a suit in equity brought in the Circuit Court of the United States by the appellant, a telephone company, against the city of Los Angeles and its ofiicers. The object of the suit is to restrain the enforcement of certain ordinances which fixed the rates to be charged for telephone service; required every person, firm, or corporation supplying telephone service to furnish annually 2 See City of Cleveland v. Cleveland O. Ry. Co. (1904), 194 U. S. 517; Vicksburg v. Vicksburg W. W. Co. (1907), 206 U. S. 496. 1 The arguments of counsel and part of the opinion are omitted. — Ed. SEC. III.] LIMITATIONS ON STATE REGULATION. 361 to the city council a statement of the revenue from, and expendi- tures in, the business, and an itemized inventory of the property used in the business, with its cost and value; and provided a penalty for charges in excess of the rates fixed and for failure to furnish the required statements. The defendants demurred to the bill, the demurrer was sustained, and an appeal was taken directly to this court on the constitutional questions, which will be stated. The ordinances complained of were enacted by virtue of the powers contained in § 31 of the city charter, which is as follows: " (Sec. 31.) The council shall have power, by ordinance, to regulate and provide for lighting of streets, laying down gas pipes, and erection of lamp-posts, electric towers, and other apparatus, and to regulate the sale and use of gas and electric light, and fix and determine the price of gas and electric light, and the rent of gas meters within the city and regulate the inspection thereof, and to regulate telephone service, and the use of telephones within the city, and to fix and determine the charges for telephones and telephone service and connections; and to prohibit or regulate the erection of poles for telegraph, telephone, or electric wire in the public grounds, streets, or alleys, and the placing of wire thereon; and to require the removal from the public grounds, streets, or alleys of any or all such poles, and the removal and placing under ground of any or all telegraph, telephone, or electric wires." It was decided by the judge of the court below, and is agreed by the parties, that this section of the charter conferred upon the city council, in conformity with the Constitution and laws of the state of California, the power to prescribe charges for telephone service. Not doubting the correctness of this view, we accept it without extended discussion. The power to fix, subject to constir tutional limits, the charges of such a business as the furnishing to the public of telephone service, is among the powers of govern- ment, is legislative in its character, continuing in its nature, and capable of being vested in a municipal corporation. The company, however, insists that the city, having the authority so to do, has contracted with it that it may maintain the charges for service at a specified standard, and that, as the rates pre- scribed in the ordinances complained of are less than that standard, the ordinances therefore impair the obligation of the contract, in violation of the Constitution of the United States. This is the first question to be considered, and the facts out of which the contention arises are alleged in the bill and admitted by the de- murrer. The company obtained its franchise under the provisions of a 263 RATES. [chap. it. statute of the state enacted March 11, 1901 (Stat. 1901, p. 265), which was later than the adoption of § 31 of the city charter. By proceedings conforming to this statute a franchise to construct and operate a telephone system for iifty years was sold to M. Adrian King, which, by assignment, assented to by the city, came into the hands of the plaintiff company, which constructed the works and has since operated them. The franchise was granted by an ordinance. In the view we take oi the case we need do no more than state very briefly the main features of the ordinance. It grants a franchise for fifty years, which is to be enjoyed in ac- cordance with terms and conditions named, stipulates for certain free service for the city, and the payment to it, after five years, of 2 per cent of the gross receipts, and provides that the charges for service shall not exceed specified amounts. This ordinance, enacted by the city council, which exercises the legislative and business powers of the city, and, as has been shown, the charter power of regulating telephone service and of fixing the charges, contains, it is contended, the contract whose obligation the subsequent ordinances fixing lower rates impaired. Two ques- tions obviously arise here. Did the city council have the power to enter into a contract fixing, unalterably, during the term of the franchise, charges for telephone service, and disabling itself from exercising the charter power of regulation? If so, was such a con- tract in fact made? The first of these two questions calls for earlier consideration, for it is needless to consider whether a contract in fact was made until it is determined whether the authority to make the contract was vested in the city. It has been settled by this court that the state may authorize one of its municipal corporations to establish, by an inviolable con- tract, the rates to be charged by a public service corporation (or natural person) for a definite term, not grossly unreasonable in point of time, and that the effect of such a contract is to suspend, during the life of the contract, the governmental power of fixing and regulating the rates. Detroit v. Detroit Citizens' Street K. Co., 184 U. S. 368, 382 ; Vidcsburg v. Vicksburg Waterworks Co., 206 U. S. 496, 508. But for the very reason that such a contract has the effect of extinguishing pro tanto an undoubted power of government, both its existence and the authority to make it must clearly and unmistakably appear, and all doubts must be resolved in favor of the continuance of the power. Providence Bank v. Billings, 4 Pet. 514, 561; Eailroad Commission Cases, 116 U. S. 307, 325; Vicksburg, S. & P. R. Co. v. Dennis, 116 U. S. 665; Preeport Water Co. v. Preeport, 180 U. S. 587, 599, 611; Stanis- laus County V. San Joaquin & K. Eiver Canal & Irrig. Co., 192 SEC. III.] LIMITATIONS ON STATE REGULATION. 263 U. S. 201, 211 ; Metropolitan Street E. Co. v. Few York State Tax Comrs., 199 U. S. 1. And see Water, Light, & Gas Co. v. Hutchin- son, 207 TJ. S. 385. The facts in this case which seem to us material upon the ques- tions of the authority of the city to contract for rates to be main- tained during the term of the franchise are as follows: The charter gave to the council the power " by ordinance ... to regu- late telephone service and the use of telephones within the city, . . . and to fix and determine the charges for telephones and tele- phone service and connection." This is an ample authority to ex- ercise the governmental power of regulating charges, but it is no authority to enter into a contract to abandon the governmental power itself. It speaks in words appropriate to describe the author- ity to exercise the governmental power, but entirely unfitted to describe the authority to contract. It authorizes command, but not agreement. Doubtless, an agreement as to rates might be authorized by the legislature to be made by ordinance. But the ordinance here described was not an ordinance to agree upon the charges, but an ordinance " to fix and determine the charges." It authorizes the exercise of the governmental power and nothing else. We find no other provision in the charter which, by any pos- sibility, can be held to authorize a contract upon this important and vital subject. The appellant has failed to show that the city had legislative authority to make a contract of exemption from the exercise of the power of regulation conferred in the charter. It therefore becomes unnecessary to consider whether such a contract in fact was made. The appellant's contention, that there was a violation of the obligation of its contract, must therefore be denied. SOUTHEEN PACIFIC CO. ■;;. CAMPBELL. 230 U. S. 537. 1913.^ Mr. Justice Hughes delivered the opinion of the court. It is also urged that the railroad commission act of Oregon (Laws of 1907, chap. 53 J, and the order in question, were void as against the Oregon & California Eailroad Company, and the lessee of its property, upon the ground that 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 1 The arguments of counsel and part of the opinion are omitted. — Ed. 264 KATES. [chap. IV. 14, 1863, which, in § 34 provided: "Every corporation formed under this act for the construction of a railroad, as to such road shall be deemed common carriers, and shall have power to collect and receive such tolls or freight for transportation of persons or property thereon as it may prescribe." Eeference 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 any vested corporate rights." (Art. 11, § 3.) 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, regulated, and supplanted by the judgment of the state exercised through a Eailroad Commission, or shall it re- main as it was at common law, within the exclusive power and jurisdiction of the carrier to fix these rates, subject only to the power of the courts, upon judicial inquiry, to denounce and decline to enforce rates that are excessive and unreasonable?" 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 does not detract from the power of the state through its legislature, or the agency lawfully con- stituted thereby, to prescribe reasonable rates to be observed by the carrier. State v. Southern P. Co., 23 Or. 424, 432, 433 ; Stone v. Farmers' Loan & T. Co., 116 U. S. 307, 330; Dow v. Beidelman, 135 U. S. 680, 688 ; Georgia, E. & Bkg. Co. v. Smith, 128 U. S.- 174, 181 ; Chicago, M. & St. P. E. Co. v. Minnesota, 134 U. S. 418, 455 ; Covington & C. Bridge Co. v. Kentucky, 154 U. S. 204, 215 ; Louisville & N. E. Co. v. Kentucky, 161 U. S. 677, 696; Owens- boro V. Owensboro Waterworks Co., 191 U. S. 358, 370. In the ease of Stone v. Farmers' Loan & T. Co., supra, where the charter empowered the railroad company " from time to time to fix, regu- late, 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 commis- sion with authority to fix maximum rates was an impairment of contract obligation, the court said : " 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 left to determine what is reasonable, free of all legis- lative control. We see no evidence of such intention. Power is SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 365 granted to fix reasonable charges, but what shall be deemed reason- able in law is nowhere indicated. . . . Consequently, all the power which the state had in the matter before the charter it retained after- wards. The power to charge being coupled with the condition that the charge shall be reasonable, the state is left free to act on the subject of reasonableness, within the limits of its general authority, as circumstances may require. The right to fix reasonable charged has been granted, but the power of declaring what shall be deemed reasonable has not been surrendered." V - Section 4. Opeeating Expenses and Maintenance. CHICAGO, MILWAUKEE AND ST. PAUL EAILWAY CO. V. TOMPKINS. 176 U. S. 167. 1900.^ Mr. Justice Brewer delivered the opinion of the court. Pew cases are more difficult or perplexing than those which involve an inquiry whether the rates prescribed by a state legisla- ture for the carriage of passengers and freight are unreasonable. And yet this difficulty affords no excuse for a failure to examine and solve the question involved. It has often been said that this is a government of laws, and not of men; and by this court, in Tick Wo V. Hopkins, 118 U. S. 356, 369 : " When we consider the nature and the theory of our institutions of government, the principles upon which they are supposed to rest, and review the history of their development, we are constrained to conclude thai they do not mean to leave room for the play and action of purely personal and arbitrary power." When we recall that, as estimated, over ten thousand millions of dollars are invested in railroad property, the proposition that such a vast amount of property is beyond the protecting clauses of the Constitution, that the owners may be deprived of it by the ar- bitrary enactment of any legislature, state, or nation, without any right of appeal to the courts, is one which cannot for a moment be tolerated. Difficult as are the questions involved in these cases, burdensome as the labor is which they cast upon the courts, no tribunal can hesitate to respond to the duty of inquiry and pro- tection cast upon it by the Constitution. Eailroad Commission 1 The statement of facts and part of the opinion are omitted. — Ed. . -J-'' 266 ' BATES. [chap. IV. Cases, 116 TJ. S. 307; Dow v. Beidelman, 125 U. S. 680; Georgia E. & Bkg. Co. V. Smith, 128 U. S. 174; Chicago, M. & St. P. R. Co. V. Minnesota, 134 U. S. 418; Chicago & G. T. E. Co. v. Wellman, 143 U. S. 339 ; Eeagaii v. Farmers' Loan & T. Co., 154 U. S. 362 ; St. Louis & S. F. R. Co. v. Gill, 156 U. S. 649 ; Covington & L. Turnp. Eoad Co. v. Sandford, 164 U. S. 578 ; Smyth v. Ames, 169 U. S- 466. It is often said that the legislature is presumed to act with full knowledge of the facts upon which its legislation is based. This is undoubtedly true, but when it is assumed from that, that its judgment upon those facts is not subject to investigation, the in- ference is carried too far. Doubtless upon mere questions of policy its conclusions are beyond judicial consideration. Courts may not inquire whether any given act is wise or unwise, and only when such act trespasses upon vested rights may the courts intervene. A single illustration will make this clear: It is within the com- petency of the legislature to determine when and what property shall be taken for public uses. That question is one of policy over which the courts have no supervision ; but if after determining that certain property shall be taken for public uses the legislature pro- ceeds further, and declares that only a certain price shall be paid for it, then the owner may challenge the validity of that part of the act, may contend that his property is taken without due com- pensation; and the legislative determination of value does not preclude an investigation in the proper judicial tribunals. The same principle applies when vested rights of property are disturbed by a .legislative enactment in respect to rates. In approaching the consideration of a case of this kind we start with the presumption that the act of the legislature is valid, and upon any company seeking to challenge its validity rests the bur- den of proving that it infringes the constitutional guaranty of pro- tection to property. The case must be a clear one in behalf of the railroad company or the legislation of the state must be upheld. Such being unquestionably the law, it is obviously of the utmost importance that the facts shall be clearly and accurately found and distinctly stated by the trial court, and that those facts shall sus- tain the conclusion reached. We are of opinion that neither the findings made by the court, nor such facts as are stated in its opinion, are sufficient to war- rant a conclusion upon the question whether the rates prescribed by the defendants were unreasonable or not, and we are also of opin- ion that the process by which the court came to its conclusion is not one which can be relied upon. The court proceeded upon the theory that a comparison of the actual gross receipts of the com- SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 267 pany from its South Dakota local business with those which it would have received if the rates prescribed by the defendants had been in force was sufficient to determine the question of the rea- sonableness of these latter rates, and instituted such comparison with respect to the four years preceding the commencement of this suit. 'Now, it is obvious that the amount of gross receipts from any business does not of itself determine whether such business is profitable or not. The question of expenses incurred in producing those receipts must be always taken into account, and only by striking the balance between the two can it be determined that the business is profitable. The gross receipts may be large, but if the expenses are larger surely the business is not profitable. It can- not be said that the rates which a legislature prescribes are rea- sonable if the railroad company charging only those rates finds the necessary expenses of carrying on its business greater than its re- ceipts. But here we are confronted by the ninth statement in the find- ings of fact, to wit, " that the court is unable to find from the tes- timony what the actual cost of earning the local earnings for the fiscal years ending June 30, 1894, 1895, 1896, and 1897 was." If the court meant by that to say that there was no testimony tending to show what was the cost of doing local business, we are constrained to say that the statement is erroneous, because there was abundance of testimony bearing upon that question. If it meant simply that it could not determine that fact with mathemati- cal accuracy, basing it upon testimony of the exapt amount of money paid out for doing such work, it is undoubtedly true, but there are majiy things that have to be determined by court and jury in respect to which mathematical accuracy is not possible. Take the ordinary case of condemnation of real estate, the value is to be determined by the trial tribunal, whether jury or court, and yet no one is able to state the exact value. In this very case the court fixed the value of the company's property in South Dakota at $10,000,000, and yet it is impossible from the testimony to say that this conclusion was absolutely accurate, that there was testi- mony tending to show to a dollar such value. Beyond the figures given from the books of the company of the actual cost of doing the total business of the company there was the testimony of sev- eral experts as to the relative cost of doing local and through busi- ness. Such testimony is not to be disregarded simply because it cannot demonstrate by figures the exact amount or per cent of the extra cost. It is obvious on a little reflection that the cost of moving local freight is greater than that of moving through freight, and equally obvious that it is almost if not quite impossible to de- 268 KATES. [chap. IV. termine the difference with mathematical accuracy. Take a single line of 100 miles, with ten stations. One train starts from one terminus with through freight and goes to the other without stop. A second train starts with freight for each intermediate station. The mileage is the same. The amount of freight hauled per mile may be the same, but the time taken by the one is greater than that taken by the other. Additional fuel is consumed at each station where there is a stop. The wear and tear of the locomo- tive and cars from the increased stops and in shifting cars from main to side trades is greater ; there are the wages of the employees at the intermediate stations, the cost of insurance, and these ele- ments are so varying and uncertain that it would seem quite out of reach to make any accurate comparison of the relative cost. And if this is true when there are two separate trains, it is more so when the same train carries both local and through freight. It is impossible to distribute between the two the relative cost of carriage. Yet that there is a difference is manifest, and upon such difference the opinions of experts familiar with railroad business is competent testimony, and cannot be disregarded. We think, therefore, there was error in the failure to iind the cost of doing the local business, and that only by a comparison between the gross receipts and the cost of doing the business, ascer- taining thus the net earnings, can the true effect of the reduction of rates be determined. / CHICAGO AISTD GRAND TEUNK EAILWAY CO. v. -^ WELLMAN. 143 U. S..339. 1892.^ In 1889 the legislature of the state of Michigan passed an act, No. 202 of the Public Acts of that year, pages 282 and 283, by which, among other things, section 3323 of Howell's Statutes, be- ing a part of the railroad law of that state, was amended, reducing the rate for passenger service on defendant's line. Plaintiff tendered fare according to the statute, and being refused carriage brought this action, which was tried on an agreed statement of facts. Defendant contended that the statute was unconstitutional. Judgment was rendered for plaintiff, and affirmed upon appeal by the Supreme Court of the State. Me. Justice Brewer delivered the opinion of the court. On the very day the act went into force the application for a 1 The statement of facts is condensed, and part of the opinion is omitted. — Ed. SEC. IV.] OPERATING EXPENSES AJSTD MAINTENANCE. 269 ticket is made, a suit commenced, and within two months a judg- ment obtained in the trial court; a judgment rendered, not upon the presentation of all the facts from the lips of witnesses, and a full inquiry into them, but upon an agreed statement which pre- cludes inquiry into many things which necessarily largely enter into the determination of the matter in controversy. A single suggestion in this direction: It is agreed that the defendant's operating expenses for 1888 were $2,404,516.54. Of what do these operating expenses consist? Are they made up partially of ex- travagant salaries, — fifty to one hundred thousand dollars to the president, and in like proportions to subordinate officers? Surely, before the courts are called upon to adjudge an act of the legisla- ture fixing the maximum passenger rates for railroad companies to be unconstitutional, on the ground that its enforcement would prevent the stockholders from receiving any dividends on their in- vestments, or the bondholders any interest on their loans, they should be fully advised as to what is done with the receipts and earnings of the coijapany; for, if so advised, it might clearly ap- pear that a prudent and honest management would, within the rates prescribed, secure to the bondholders their interest, and to the stockholders reasonable dividends. While the protection of vested rights of property is a supreme duty of the courts, it has not come to this, that the legislative power rests subservient to the discre- tion of any railroad corporation which may, by exorbitant and un- reasonable salaries, or in some other improper way, transfer its earnings into what it is pleased to call " operating expenses." We do not mean to insinuate aught against the actuaL manage- ment of the affairs of this company. The silence of the record gives us no information, and we have no knowledge outside thereof, and no suspicion of wrong. Our suggestion is only to indicalte how easily courts may be misled into doing grievous wrong to the public, and how careful they should be to not declare legislative acts unconstitutional upon agreed and general statements, and without the fullest disclosure of all material facts. Judgment affirmed. In re AEKANSAS EATE CASES. 187 Fed. 290. 1911.^ Teiebee, District Judge. Personal Injuries. It is also claimed that complainants are not entitled to "charge in the expense of operation the sums they paid for injuries to persons." This claim 1 Only an extract from the voluminous opinion is here reprinted. — Ed. 270 BATES. [chap. IV. cannot be treated seriously. It is true^ as claimed by counsel, " that the people of Arkansas are not insurers of the risks of the railroad business ; " but, on the other hand, such accidents cannot be wholly avoided, and, as there is no pretense that they were willful or in- tentional on the part of the oflBcials of the company, they must be considered as unavoidable risks of operation of the business. Many persons and corporations engaged in industrial pursuits of a char- acter dangerous to employes or others insure themselves against such loss, and the premiums paid therefor are charged to expense of operation. Eailroads, or rather these roads, for reasons which are not explained by the evidence in these cases, but probably economic, carry their own insurance against such losses, and charge them as expense of operation, as they would otherwise charge the premiums paid for the insurance, if they obtained it from insur- ance companies. As these indemnity insurance companies make the charge high enough to cover the expense of the management of their business and a profit on their investment, the policy of the railroad companies is probably most economical. PANNBLL V. LOUISVILLE TOBACCO WAEEHOUSE CO. 113 Ky. 630. 1902.^ HoBSON, J. In the year 1900 the appellants instituted a number of suits at law to recover penalties for the violation of sections 4799, 4801, 4803, Ky. St. Section 4799 provides that a ware- houseman, in settling with a shipper, shall account to him for the net weight of the tobacco sold, including the sample; section 4801, that the warehouseman, in selling leaf tobacco at public auction, shall receive as compensation therefor $2 a hogshead from the owner or his agent; section 4803, that it shall be unlaw- ful for the warehouseman directly or indirectly to charge the seller or owner anything by way of commission or otherwise for paying to him the money for which his tobacco is sold. Section 4807 makes the warehouseman liable to the party aggrieved in the sum of not less than $35 nor more than $100 for a violation of these provisions. Appellees are warehousemen in Louisville, Ky., and appellants are sellers of tobacco. The actions instituted by ap- pellants sought to recover penalties for violation of the foregoing sections by the warehousemen in not accounting to the shipper for the full weight of his tobacco, and in charging him commission on the price in addition to the $3 a hogshead for selling it. 1 Part of the statement of facts is omitted, and only one point is reprinted from the opinion. — Ed. SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 271 About 175,000 hogsheads are sold annually by appellees. But a short time is taken to sell a hogshead, and it is hard to escape the conviction, from the proof, that there is a very bitter rivalry between them to secure trade, and that this rivalry is somewhat promoted by the scale of fees that are charged under the rules. In other words, the rules allow a liberal compensation, and it is a matter of importance to the warehouse to secure the trade of a customer, and in order to secure trade the houses expend large amoiints in the country. If the business was not so remunerative, they could not afford to expend as much as is shown by the proof in securing it, and we do not think it can be maintained that a scale of fees which is so large as to justify the warehouseman in expending large amounts to secure trade might not be properly reduced. For we know that the larger the fee, the more the ware- housemen can afford to pay out to get the trade; and it is not the policy of the law that the warehouseman should be allowed to charge a large fee against the shipper, in order that he may be able to spend a portion of it in securing the trade. To illustrate : If the fees were so large that the warehousemen could give half of them to get the business, it is manifest that this would lead to practices that ought not to be encouraged, and would be a hardship on the tobacco raiser, which the statute was designed to prevent. Of course, the proof before us does not show such an extreme case as this. But the facts shown by the evidence do not present a case showing clearly and beyond all doubt such a flagrant attack upon the rights of property as to compel the court to gay that the rate prescribed will necessarily have the effect to deny just com- pensation for private property taken for public use.^ BEYMEE V. BUTLEE WATEE CO. 179 Pa. St. 231. 1897.^ Me. Justice Williams. This leads us to the second question raised, viz. : By what rule is the court to determine what is rea- sonable, and what is oppressive? Ordinarily, that is a reasonable charge or system of charges which yields a fair return upon the investment. Fixed charges and the costs of maintenance and operation must first be provided for. Then the interests of the owners of the property are to be considered. They are entitled to a rate of return, if their property will earn it, not less than the 2 Compare on this point In re Arkansas Rate Cases (1911), 187 Fed. 290, at p. 316. 1 Only an extract from the opinion is here reprinted. — Ed. 272 BATES, [chap. IV. legal rate of interest ; and a system of charges that yields no more income than is fairly required to maintain the plant, pay fixed charges and operating expenses, provide a suitable sinking fund for the payment of debts, and pay a fair profit to the owners of the property, cannot be said to be unreasonable. This whole sub- ject was brought to the attention of the learned judge by a request that he should find, as matter of law, that the reasonableness of the charges must be determined with reference to the expenditure in obtaining the supply, and providing for a fund to maintain the plant in good order, and pay a fair profit upon the money in- vested by the owners, and that a rate which did no more than this was neither excessive nor unjust. This the learned judge re- fused to find, saying, in reply to the request: "We have no authority for such a ruling, and it would be unjust to the consumer, who would have to pay full cost of the water, provide a sinking fund, secure a reasonable profit upon the investment, and have no voice in the management of the business of the company. The act of assembly in this regard can bear no such construction." This ruling cannot be sustained. The cost of the water to the company includes a fair return to the persons who furnished the capital for the construction of the plant, in addition to an allow- ance annually of a sum sufficient to keep the plant in good repair, and to pay any fixed charges and operating expenses. A rate of water rents that enables the company to realize no more than this is reasonable and just. CHICAGO AND NORTHWBSTEEN EAILWAY CO. v. DEY. 35 Fed. 866. 1888.^ Brewer, J. The fixed charges are the interest on the bonds. This must be paid, for otherwise foreclosure would follow, and the interest of the mortgagor swept out of existence. The property of the stockholders cannot be destroyed any more than the property of the bondholders. Each has a fixed and vested interest, which cannot be taken away. I know that often the stockholder and the bondholder are regarded and spoken of as having but a single in- terest; but the law recognizes a clear distinction. A mortgage -on a railroad creates the same rights in mortgagor and mortgagee as a mortgage on my homestead. The legislature cannot destroy my property in my homestead simply because it is mortgaged, neither can it destroy the stockholders' property because the railroad is 1 Only an extract from the opinion is liere reprinted. — Ed. SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 273 mortgaged. It cannot interfere with a contract between the com- pany mortgagor and the mortgagee, or reduce the stipulated rate of interest ; and so, unless that stipulated interest is paid, fore- closure of course follows, and the mortgagors' rights, the property of the stockholders, are swept away. Whatever individuals may do by private contract to modify existing rates of interest, the legislature has no compulsory power in the matter. While, by re- ducing the rates, the value of the stockholders' property may be reduced, in that less dividends are possible, — and that power of the legislature over property is conceded,— jet, if the rates are so re- duced that no dividends are possible, and especially if they are such that the interest on the mortgage debt is not earned, then the en- forcement of the rates means either confiscation, or compelling, in. the language of the supreme court, the corporation to carry persons or property without reward.^ LONG BBANCH COMMISSIOJST v. TINTBEN MANOK WATER CO. 70 N. J. Eq. 71. 1905.^ PiTNET, V. C. I have intimated that the defendant ought not to expect, at the start, a compensatory income such as that stated by Judge Williams in the Supreme Court of Pennsylvania, and by the Supreme Court of Maine, above cited, but I do think they ought to get at the start a moderate rate of interest, say 5 per cent, on their investment after paying all expenses of operation and main- tenance and a moderate allowance for depreciation in value. This latter item as applied to the water mains is slight. If originally laid of iron of proper quality and properly coated on the interior, they are practically immortal. They are, however, liable to diminution in carrying capacity, due to the growth on the interior of tubercles of rust. This is an unascertainable quantity, which varies materially with the quality of the iron, the character of the coating, and the characteristics of the water. The fire hydrants, steam pumps, boilers and filters, and buildings certainly do depreciate in value each year to an appreciable extent over and above the amount which may be expended upon them for reasonable and ordinary repairs. Mr. La Monte put this deprecia- . tion at 5 per cent, on all the mains and hydrants. I think that too 2 See Chicago, M. & St. P. Ry. Co. v. Smith (1901), 110 Fed. 473. Compare Minneapolis & St. L. R. R. Co. v. Minnesota (1902), 186 U. S. 257, 266; San Diego L. & T. Co. v. National City (1896), 74 Fed. 79, 87. 1 Only an extract from the opinion is here reprinted. — Ed. 274 BATES. [chap. IV. great, and fix it at 1 per cent, on so miich of the $847,000 as is represented by the material so subject to depreciation. Just what proportion of the whole that represents must be a mere estimate; with insufficient data I put it at $600,000. It follows that the net income which the defendant ought to re- ceive at the start from Long Branch should be 5 per cent, on $847,- 000, which amounts to $43,350, and 1 per cent, on $600,000, mak- ing $6,000, and a total of $48,350. To this must be added the costs of maintenance and administra- tion including ordinary repairs and taxes. Mr. La Monte had made up and submitted and been cross-examined upon a very careful estimate of those items showing the amount to be $30,000. I have carefully scrutinized it and believe it to be a fair and just estimate. Allotting two-thirds of this to Long Branch, we have it charged with $30,000 a year. This seems a large sum, but it must be borne in mind that the works must in their size and operation be gauged to the highest population in the crowded season, and to the extravagant use in which Long Branch indulges for street sprinkling. Taking those matters into consideration, I do not find it oppressive.^ CEDAE EAPIDS GAS LIGHT CO. v. THE CITY OF CEDAE EAPIDS'. 144 Iowa, 426. 1909.^ Ladd, J. It appears that the company had charged off its books as depreciation in the value of its property due to use the following sums: $10,000 in 1903, $30,000 in 1903, $13,000 in 1904, $10,- 000 in 1905, $13,000 in 1906. In computing the expense of dis- tribution, the plaintiff's accountant, as said, included these items, while the defendant's accountant allowed for depreciation of prop- erty $.05 per 1,000 cubic feet of gas manufactured. This would make a difference in manufacturing and distributing gas sold in 1905 of $.0714 per 1,000 cubic feet, and in 1906 of $.0816. There can be no doubt as to the justice of some allowance for deprecia- tion. A public service corporation is under no obligation to sac- 2 " The conditions in no two cities may be alike, and it seems reasonable to say that questions as to telephone rates may in large measure be local questions to be determined upon factors, among which the most important may be (1) the cost of the plant; (2) the cost of operation and mainte- nance; (3) the amount of taxes and other dues exacted by the local gov- ernment; and (4) the rapidity of deterioration due to climatic or other causes." Cumberland T. & T. Co. v. Memphis (1908), 183 Fed. 875, 877. 1 Only one point from the opinion is here reprinted.^ — Ed. SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 275 rifice its property for the public good. Nor is it bound to see its property gradually wasted by wear and decay without making pro- vision for its replacement. It is entitled to earn enough not only to meet the expenses of current repairs, but also to provide means for replacing the parts of the plant when these can no longer be used. " It is entitled to see that from its earnings the value of the property is kept unimpaired, so that at the end of any given term of years the original investment shall remain as it was at the be- ginning. It is not only the right of the company to make such provision, but it is its duty to its bond and stock holders and, in the case of a public service corporation at least, its plain duty to the public. If a different course were pursued, the only method of providing for displacement of property which has ceased to be useful would be the investment of new capital and the issue of new bonds or stock. This course would lead to a constantly increasing variance between present value and bond and stock capitalization — a tendency which would inevitably lead to disaster either to the stockholders or to the public, or both." This situation ought not to be brought about either by the payment of excessive dividends or the omission to exact proper prices for the output. Mayor, etc., of Knoxville v. Knoxville Water Co., 39 Sup. Ct. 148. There is a wide divergence of opinion as to the amount that should be set aside for depreciation, but all the witnesses concede that their estimates are without data as a foundation, though the elements to be taken into account are enumerated. As contended, scarcely two parts of the plant will cease to be useful at the same time. Some will last but a brief period, while others may be serv- ing their purposes for more than a century to come. Some stress is put on the possibility of enlargement and of the necessity of re- placing parts with others adequate to meet increased demands, but there is no reason to think that the income will not keep pace with the extensions or enlargements. In other words, profits on the ad- ditional sales of gas will in all probability yield an adequate in- come on the amounts expended for the expansion of the plant. Should replacement of some of the machinery now in use prove necessary because of new inventions, this in all probability will be owing to the economy which may be effected thereby in produc- tion, and again the saving may be expected to yield a fair return for the new investment. Moreover, the rate fixed by this ordinance is not necessarily perpetual, but subject to such changes by the gov- erning board of the city as shall be essential to meet the contingen- cies of the future. The expert accountant who testified in behalf of defendant allowed 5 cents per 1,000 cubic feet of gas manu- factured for depreciation, and another, who had made a study of 276 KATES. [chap. IV. the durability of different material, testified that if 1.7 per cent, of the value of the plant were put into a sinking fund drawing annual interest at 4 per cent, per annum, this would produce enough to replace the plant in 30 years. The amount allowed by the ac- countant approximates this percentage of the value, and we are of opinion that in view of the evidence adduced it will prove adequate for replacement of the different portions of the plant when this shall become necessary. Appellee insists that the average cost dur- ing the past five years should be adopted. This, including depreci- ation, would be $.6404 per 1,000 feet. Another item is not to be overlooked, and that is the probability that in the future the com- pany, in view of this investigation, will be required to pay its just portion of the burdens of taxation. What the increase shall be cannot be told in advance, but it is likely to be enough to offset any decrease in the cost of fittings. The cost of gas production during the years 1905 and 1906 was much higher than for the years previ- ous. This was not owing to the increased cost of fuel. The ac- countant of defendants testified that the cost of manufacturing and distribution, including allowance for depreciation, was $.57 per 1,000 cubic feet in 1902, $.5935 in 1903, $.6375 in 1904. This in- crease in cost was due in large part to the inorease in the fittings account, such as installing stoves, meters, and the like. In 1903 there was a profit in this account of $283.99, in 1903, an expense of $972.80, in 1904 an expense of $39.60, in 1905 of $6,758.89, and in 1906 of $5,943.83. This increase of expense of fittings, etc., over profits on the sale of stoves, etc., is not satisfactorily explained. There is no reason for thinking so large an outlay as in the last two years will be required in the future, and the probable increase therein may safely be allowed to offset probable increase in taxes. Upon an examination of the entire record, we are satisfied that the cost of manufacturing, distribution, and of making collections should not exceed $.6813 per 1,000 cubic feet at the time the ordi- nance was enacted.^ 2 In Cedar Rapids W. Co. v. Cedar Rapids (1902), 118 Iowa, 234, 263, the same Court said : " So, also, we may say we see no reason wtiy plaintitE, in addition to operating expenses, repairs, and other ordinary charges, should be allowed to reduce the apparent profits by deductions for a restoration or rebuilding fund. The setting aside of such a fund may be good business policy, and, if the company sees fit to devote a portion of its profits to that purpose (though, as we understand the record, no such fund has yet been created), no one can complain ; but it is in no just sense a charge affecting the net earnings of the works. To hold 'otherwise is to say that the public must not only pay the reasonable and fair value of the services rendered, but must, in addition, pay the company the full value of its works every forty years — the average period estimated by plaintiff — for all time to come." SEC. IV.] OPEKATING EXPENSES AND MAINTENANCE. 277 COAL AND COKE EAILWAY CO. v. CONLEY AND AVIS. 67 W. Va. 129. 1910.* PoPFENBAEGEE, J. There are only two items in the statement of expenses that might possibly include money that ought not to be deducted from the income for the purposes of the biU. They are the items designated "Maintenance of Way," amounting to $137,059.01, and " Maintenance of Equipment," amounting to $166,307.64. Under these two headings, there might be included the cost of improvements upon the roadbed and track and of new or additional rolling stock. It is easy to see how a railroad com- pany, if permitted to include such costs in what are designated as expenses of Maintenance of Way and Maintenance of Equipment, and other improvements, could absorb all, or a large portion, of its earnings in the cost of betterments of its property and be in a position in almost any year to say it is not earning a fair return on its investment. The cost of betterments is obviously capital invested, and, if taken out of the earnings of the road, ought to be regarded, for the purposes of a case of this kind, as a part of the net earnings. Railroad Co. v. United States, 99 U. S. 403, 430. It is not properly chargeable to operating expenses. On the con- trary, it is net profit earned. Of course the railway company may do what it pleases with its profits, but if it sees fit to devote them to the improvement of its road, or the building of branch lines, instead of declaring dividends or paying interest on its indebted- ness, it cannot be heard to say it has not earned them. Some criti- cism of these two items in the statement is found in the discussion of both the bill and the evidence, but we do not think the Court could say, upon the demurrer to the bill, in view of the amount in- vested, that they are out of proportion. The magnitude of the cost of maintaining a new railroad in a mountainous section of the country, as well as that of maintaining the efiiciency of rolling stock, is obvious to all. This railroad is 183 miles long and, ex- clusive of rolling stock, cost something over $5,000,000.00, while its rolling stock, owned and leased, cost something over $1,500,- 000.00. Eor ten months the cost of Maintenance of Way amounted to only about two per cent, of the amount invested in the railroad, and of Maintenance of Equipment to only about eleven per cent, of the value of the rolling stock. The charge for general expenses is comparatively light, being only $33,390.11 for that time.- It is impossible that extravagant and disproportionate sums could have 1 Only an extract from the opinion is here reprinted. — Ed. 278 , RATES. [chap. IV. been paid out of this amount to general officers as salaries and in discharge of other general expenses.^ SOUTHEEN PACIFIC CO. v. BOAED OP EAILEOAD COM- MISSIOKEES OP CALIPOENIA. 78 Fed'. 236. 1896.'' The Attorney General objected to complainants' figures as to operating expenses, because they included the sum of $654,836.81 for improvements and betterments. McKenna, Circuit Judge. The abstract legality of such charge is established by the Eeagan Case. The same contention was made there, and a deduction of the sum of $303,085.77 was claimed to have been charged to operating expenses, whereas it was expended for " Cost of road, equipment, and permanent improvements." Mr. Justice Brewer, commenting on the claim, said: " Again, the sum of $303,085.77 appears in that table, under the description ' Cost of road, equipment, and permanent improvements, admitted to have been included in operating expenses,' and is added to the income as though it had been improperly included in operat- ing expenses. But, before this change can be held to be proper, it is well to see what further light is thrown on the matter by other portions of the report. That states that there were no extensions of the road during that year, so that all of this sum was expended upon the road as it was. Among the items going to make up this sum of $303,085.77 is one of $113,313.09 for rails, and it appears from the same report that there was not a dollar expended for rails except as included within this amount. Kow, it goes without say- ing that, in the operation of every road, there is a constant wearing out of the rails, and a constant necessity for replacing old with new. The purchase of these rails may be called ' permanent improve- ments,' or by any other name; but they are what is necessary for keeping the road in serviceable condition. Indeed, in another part of the report, under the head of 'Eenewals of rails and ties,' is stated the number of tons of 'New rails laid' on the main line. Other items therein are for fencing, grading, bridging, and culvert masonry, bridges and trestles, buildings, furniture, fixtures, etc. It being shown affirmatively that there were no extensions, it is obvious that these expenditures were those necessary for a proper carrying on of the business required of the company." 2 See City of Erie v. Erie G. & M. Co. (1908), 78 Kan. 348, 354. 1 Only one point from the opinion is liere reprinted, togetlier witli a brief statement of the point in controversy. — Ed. SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 379 Substantially to the same effect is Union Pac. Ry. Co. v. U. S., 99 U. S. 403. In the latter case the court was called upon to in- terpret that clause of the act of 1862 in aid of the construction of the Union Pacific Eailroad, which provided that " after said road is completed, and until said bond and interest are paid, at least 5 per cent, of the net earnings of said roads shall also be applied to the payment thereof." It may be said that there were several ele- ments in that case which are not in the case at bar, but, neverthe- less, the remarks Mr. Justice Bradley made are substantially ap- plicable. Speaking of when a railroad is completed, he said: " In one sense, a railroad is never completed. There is never, or hardly ever, a time when something more cannot be done, and is not done, to render the most perfect road more complete than' it was before. This fact is well exemplified by the history of the early railroads of the country. At first, many of them were con- structed with a flat rail or iron bar, laid on wooden stringpieces, resulting in what was known in former times as 'snake heads'; the bars becoming loose, and curving up in such a manner as to be caught by the cars, and forced through the floors amongst the passengers. Then came the T rail, and, finally, the H rail, which itself passed through many successive improvements. Finally, steel rails, in the place of iron rails, have been adopted as the most perfect, durable, safe, and economical rails on extensive lines of road. Bridges were first made of wood, then of stone, then of stone and iron. Grades originally crossed, and, in most cases, do still cross, highways and other roads on the same level. The most im- proved plan is to have them, by means of bridges, pass over or under intersecting roads. A single track is all that is deemed nec- essary to begin with ; but now no railroad of any pretensions is con- sidered perfect until it has, at least, a double track. Depots and station houses are, at first, mere sheds, which are deemed sufficient to answer the purpose of business. These are succeeded, as the means of the company admit, by commodious station and freight houses, of permanent and ornamental structure. And so the proc- ess of improvement goes onj so that it is often a nice question to determine what is meant by a complete, first-class railroad." And, declaring what are proper expenditures, he further said : "Having considered the question of receipts or earnings, the next thing in order is the expenditures which are properly charge- able against the gross earnings in order to arrive at the ' net earn- ings,' as this expression is to be understood within the meaning of the act. As a general proposition, net earnings are the excess of the gross earnings over the expenditures defrayed in producing them, aside from and exclusive of the expenditure of capital laid 280 KATES. [chap. IV. out in constructing and equipping the works themselves. It may often be difficult to draw a precise line between expenditures for construction and the ordinary expenses incident to operating and maintaining the road and works of a railroad company. The- oretically, the expenses chargeable to earnings include the general expenses of keeping up the organization of the company, and all expenses incurred in operating the works and keeping them in good condition and repair; while expenses chargeable to capital include those which are incurred in the original construction of the works, and in the subsequent enlargement and improvement thereof. "With regard to the last-mentioned class of expenditures, however, namely, those which are incurred in enlarging and improving the works, a difference of practice prevails amongst railroad companies. Some charge to construction account every item of expense, and every part and portion of every item, which goes to make the road, or any of its appurtenances or equipments, better than they were before; whilst others charge to ordinary expense account, and against earnings, whatever is taken for these purposes from the earnings, and is not raised upon bonds or issues of stock. The lat- ter method is deemed the most conservative and beneficial for the company, and operates as a restraint against injudicious dividends and the accumulation of a heavy indebtedness. The temptation is to make expenses appear as small as possible, so as to have a large apparent surplus to divide. But it is not regarded as the wisest and most prudent method. The question is one of policy, which is usually left to the discretion of the directors. There is but little danger that any board will cause a very large or undue portion of their earnings to be absorbed in permanent improvements. The practice will only extend to those which may be required from time to time by the gradual increase of the company's traffic, the dis- patch of business, the public accommodation, and the general per- manency and completeness of the works. When any important im- provement is needed, such as an additional track, or any other mat- ter which involves a large outlay of money, the owners of the road will hardly forego the entire suspension of dividends in order to raise the requisite funds for those purposes, but will rather take the ordinary course of issuing bonds or additional stock. But for making all ordinary improvements, as well as repairs, it is better for the stockholders, and all those who are interested in the pros- perity of the enterprise, that a portion of the earnings should be employed. . . . "We are disposed to agree, therefore, with the judge who delivered the concurring opinion in the court below, that the twenty-seventh item of expenditure, as state'd in the table of ex- penses in the eighteenth finding, entitled ' Expenditures for sta- SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 381 tion buildings, shops/ etc., is a charge that may properly be made against earnings; since, as the fact is, such expenditures were actually paid therefrom, and were not carried to capital account." The same idea is variously illustrated in the following cases: TJ. S. V. Kansas Pac. E. Co., 99 U. S. 455; St. John v. Eailway Co., 33 Wall. 136; Eailroad Co. v. Nickals, 119 U. S. 396, 7 Sup. Ct. 209 ; Warren v. King, 108 U. S. 389, 3 Sup. Ct. 789 ; Mobile & 0, E. Co. V. State of Tennessee, 153 U. S. 495, 14 Sup. Ct. 968 ; Barnard v. Eailroad Co., 7 Allen, 513; Minot v. Paine, 99 Mass., 106, 107 ; Eailway Co. v. Elkins, 37 N. J. Bq. 373 ; Dent v. London Tramways Co. 16 Ch. Div. 344.^ ILLmOIS CENTEAL EAILEOAD CO. v. INTEESTATE COMMEECE COMMISSIOlSr. 206 U. S. 441. 1907.^ Mb. Justice McKenna delivered the opinion of the court. The Commission finds that the net and gross earnings of the ap- pellants have grown from year to year, and also that what they have reported as operating expenses have also grown. But in these operating expenses there were included "expenditures for real es- tate, right of way, tunnels, bridges, and other strictly permanent improvements, and also for equipment, such as locomotives and cars." The Commission expressed the opinion that such expendi- tures should not be charged to a single year, but " should be, so far as practicable and so far as rates exacted from the public are con- cerned, 'projected proportionately over the future.'" And it was said : " If these large amounts are deducted from the annual op- erating expenses reported by the defendants (appellants), it will be found that the percentage of operating expenses to earnings has in some instances diminished and in others increased to no mate- rial extent." The exact effect of the difference of view between appellants and the Commission as to operating expenses there is no test; but it cannot be said, even if the commission was wrong as to such expenses, that error in its ultimate conclusion is demon-' strated or that the correctness of the conclusion is made so doubt- ful as to justify a reversal. The findings show that the old rates were profitable and that dividends were declared even when per- manent improvements and equipment were charged to operating 2 See Metropolitan T. Co. v. Houston T. C. R. R. Co. (1898), 90 Fed. 683, 690, 1 Only an extract from the opinion is here reprinted. — Ed. 283 RATES. [chap. IV. expenses. But may they be so charged? Appellants contend that the answer should be so obviously in the affirmative that it should be made an axiom in transportation. On principle it would seem as if the answer should be otherwise. It would seem as if expendi- tures for additions to construction and equipment, as expenditures for original construction and equipment, should be reimbursed by all of the traffic they accommodate during the period of their dura- tion, and that improvements that will last many years should not be charged wholly against the revenue of a single year. But it is insisted that Union P. E. Co. v. United States, 99 U. S. 402, establishes the contrary. That case was not concerned with rates of transportation or the rule which should determine them against shippers. It was concerned with the construction of the words "net earnings" in an act of Congress, 5 per cent, of which earnings were provided to be applied annually to a loan by the government to the railroad. Considering the provision of the act and its purpose, it was concluded "that the true interest of the government " was " the same as that of stockholders, and would be subserved by encouraging a liberal application of the earnings to the improvement of the works." "It is better," it was said, "for the ultimate security of the government in reference to the payment of its loan, as well as for the service which it may require in the transportation of its property and mails, that $100 should be spent in improving the works, than that it should receive $5 towards the payment of its subsidy. If the 5 per cent, of net earnings, demandable from the company, amounted to a new in- debtedness, not due before, like a rent accruing upon a lease, a more rigid rule might be insisted on. But it is not so ; the amount of the indebtedness is fixed and unchangeable. The amount of the 5 per cent, and its receipt at one time or another is simply a ques- tion of earlier or later payment of a debt already fixed in amount. If the employment of any earnings of the road in making improve- ments lessens the amount of net earnings, the government loses nothing thereby. The only result is, that a less amount is presently paid on its debt, while the general security for the whole debt is largely increased." The interest of the government in the improve- ment of the road was even greater than that of a stockholder. This was manifest from its munificent gift of lands, in addition to its generous loan of credit. As benefactor of the road and as creditor of it, as a government concerned with the development of the coun- try, as a money lender concerned with the extent of security, " the true interest " of the United States might be that revenue should be applied to improvements. Payment of the debt was only post- poned, not denied, and this and the other considerations might well SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 283 determine the construction of words in the statute which were capable of different meanings. But such is not the relation or con- cern of a shipper of lumber. His right is immediate. He may demand a service. He must pay a toll, but a toll measured by the reasonable value of the service. The elements of that value' may be many and complex, not always determinable, as we have seen, with mathematical accuracy, but, we think it is clear that instrumentali- ties which are to be used for years should not be paid for by the revenues of a day or year ; and this is the principle of returns upon capital which exists in durable shape. PUGET SOUND ELECTEIC EAILWAY v. RAILROAD COM- MISSION OP WASHINGTON. 65 Wash. 75. 1911.^ Morris, J. It is unquestionably true that the railway company is not bound to see its property gradually deteriorate in value and earning power without making provision out of its earnings to keep its usefulness unimpaired; and that it can properly charge an annual sum to care for necessary depreciation and waste, and have such sum allowed in any determination of what is a proper return upon its investment to be approximated in fixing its rates of car- riage. But we cannot concede that in so doing it can make the traffic of any future year or years bear all the burdens of the de- terioration of past years. Each year should carry the burden of its own wear and tear, and thus, when renewals become necessary, the burden is equally borne by all contributing features. As we read it, the Supreme Court of the United States has so held in Knoxville v. Knoxville Water Co., 213 U. S.- 1, 14, where, in treating a like question, it is said : " If, however, a com- pany fails to perform this plain duty and to exact suf- ficient returns to keep the investment unimpaired, whether this is the result of unwarranted dividends upon overissues of se- curities, or of omission to exact proper prices for the output, the fault is its own. When therefore, a public regulation of its prices comes under question, the true value of the property then employed for the purpose of earning a return cannot be enhanced by a consideration of the errors in management which have been committed in the past." Accepting, therefore, the contention of appellant, that it is shown that from $140,000 to $160,000 will be required annually for the next three to five years for renewals and 1 Only an extract from the opinion is here reprinted. — Ed. 284 RATES. [chap. IV. replacement, such an expenditure will not be made necessary by the deterioration and waste of these years alone ; but the conditions necessitating renewals and replacement are the result of the years of wear and tear that have gradually taken place since the operation of the road first began, and each year contributing to such a con- dition should be charged with its proportionate share of the burden. That 35 per cent, of the earnings is a sufficient sum to be set aside each year as a depreciation and renewal fund is clearly established by the testimony; and, had this sum been so set apart each year, there can be little doubt but that the company would now have on hand a sufficient amount to care for all its present and future needs properly chargeable to such fund. "While the question is more of an economic than a legal one, and hence difEcult of determination in a judicial inquiry, we are satisfied that no injustice has been done appellant in this finding. THE MINNESOTA EATE CASES. ^ 230 U. S. 352. 1913.^ Me. Justice Hughes delivered the opinion of the court. Apportionment of expenses. — As already stated, it was held in dividing the freight operating expenses, that the cost of doing the intrastate freight business was two and one-half times that of doing the interstate freight business. That is to say, the division of ex- penses was made according to ton-miles, interstate and intrastate, after the intrastate ton-miles had been increased two and one-half times. The substantial question is whether the proof established this extra cost with that degree of certainty which is requisite to sup- port a decree invalidating the state rates. It appeared that the cost of intrastate business was not kept separately or set up in the accounts or statistics of the company. The president of the company testified as to his judgment in the matter, which was based, in the absence of such accounts, upon the general facts of operation. His testimony was supported by that of other eminent railroad men, who testified in the Great Northern and Minneapolis and St. Louis cases. The elements en- tering into the greater expense of doing intrastate business were defined to be: That the average haul was shorter, being (in the ease of the Northern Pacific) 104.52 miles for intrastate transporta- tion as against 485.3 miles for interstate transportation; that the state business had to be handled twice at terminals; that the local 1 Only one point from this voluminous opinion is here reprinted. — Ed. SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 285 short-haul business used most valuable terminal facilities in order to obtain its proper handling from the larger distributing centers, and used those facilities to a greater extent for the tons handled than did the longer through business; that the amount of clerical and warehouse labor in connection with the local business was much greater than in the case of the long-haul through business; that the chances of damage were greater in the short-haul business be- cause of the greater number of individual transactions ; that in the short-haul business there was an excess of equipment for loading and unloading; that local or way freight trains were "loaded lighter " ; that the wear and tear on the local trains was greater be- cause of frequent stopping and starting; that there was increased switching, resulting in greater damage to equipment and tracks; that the local train was generally on the road more hours than a through train, and therefore consumed more coal; that in the smaller stations the amount of shifting was large; that many of the local trains carried passengers, involving two stops at each sta- tion, one for passengers and the other for the local freight work; that the manner of operation of local trains increased the chances of injury to employees; that the short-haul business moved irregu- larly' and spasmodically, and that its facilities were worked at their full capacity only for limited periods. From these considerations, which were elaborated in the testi- mony, the witness reached the conclusion that the " so-called local short-haul intrastate business costs anywhere from three to six or seven times as much as the so-called long-haul through interstate business." In the Great Northern Case, the witnesses expressed the opinion that the extra cost of intrastate freight was three or four times greater than that of the interstate freight. One wit- ness said that it would be from four to six times. These estimates, it is understood, had relation to the cost per ton mile. The appellants do not dispute that business carried for short distances on local trains is more expensive than the handling of other business, but it is insisted that this is due solely to the dif- ferent train service that it receives. It is said that all through trains start from divisional points and run from one end of the division to the other without stop; that the local trains are made up of cars carrying business destined for points intermediate the termini of the division, and take up all traffic originating at the intermediate stations; that the word "local," as applied to these trains, is not synonymous with intrastate, but that the local trains carry a large part of the interstate traffic, both in receiving and distributing it; and that by far the greater part of the extra cost of the local train service is properly chargeable to interstate busi- 386 RATES. [chap. IV. ness. It is also insisted that so far as this extra expense can be charged to intrastate business, it is adequately met by the addi- tional revenue of that business, which per ton mile, as compared with the interstate business, is as 1.4387 to 1.0000. To establish these propositions, and to meet the testimony of the complainants' witnesses, the appellants introduced an elaborate series of calculations, made by a professional accountant, which were deduced from the results of an extended examination of the records of the companies. The witness made computations as to the character of the freight on each road, dividing it between through and local freight upon each operating division, and then subdividing it between intrastate and interstate freight. It is con- tended by the appellants that these calculations are sufficient to show that in the case of the Northern Pacific, about 91 per cent, of the freight on through trains was interstate and about 9 per cent, intrastate, and that on the local trains the interstate freight amounted to 68.67 per cent., and the intrastate, 31.33 per cent. Calculations of this witness were also introduced, showing his di- vision of the total expenses between the passenger and freight busi- ness, and then in each department between the interstate and in- trastate business; and by means of these, it was estimated that, under the rates in question (assuming them to have been applied to the business of the fiscal year ending June 30, 1907, to which the calculations were directed), the net profits on the intrastate business as a whole would have been slightly more than 6 per cent, upon an amount equal to the share of property value attributed to that business by the master's estimate and apportionment of total value. These computations are assailed by the appellees as inaccurate and as based upon erroneous estimates. "We shall not go into the details, and, for the present purpose, we may assume that the ap- pellees are right in their criticism. Our conclusions may be briefly stated. The statements of the complainants' witnesses as to the extra cost of intrastate business, while entitled to respect as expressions of opinion, manifestly in- volve wide and difficult generalizations. They embrace, without the aid of statistical information derived from appropriate tests and submitted to careful analysis, a general estimate of all the con- ditions of transportation, and an effort to express in the terms of a definite relation, or ratio, what clearly could be accurately ar- rived at only by prolonged and minute investigation of particular facts with respect to the actual traffic as it was being carried over the line. The extra cost, as estimated by these witnesses, is predi- < cated not simply of haulage charges, but of all the outlays of the ' SEC. IV.] OPERATING EXPENSES AND MAINTENANCE. 387 freight service, including the share of the expenses for main- tenance of way and equipment assigned to the freight department. And the ratio, to be accurately stated, must also express the re- sults of a suitable discrimination between the interstate and intra- state traffic on through and local trains respectively, and of an at- tribution of the proper share of the extra cost of local train service to the interstate traffic that uses it. The wide range of the esti- mates of extra cost, from three to six or seven times that of the interstate business per ton mile, shows both the difficulty and the lack of certainty in passing judgment. We are of opinion that, on an issue of this character, involving the constitutional validity of state action, general estimates of the sort here submitted, with respect to a subject so intricate and im- portant, should not be accepted as adequate proof to sustain a find- ing of confiscation. While accounts have not been kept so as to show the relative cost of interstate and intrastate business, giving particulars of the traffic handled on through and local trains, and presenting data from which such extra cost as there may be, of intrastate business, may be suitably determined, it would appear to have been not impracticable to have had such accounts kept or statistics prepared, at least during test periods, properly selected. It may be said that this would have been a very difficult matter, but the company, having assailed the constitutionality of the state acts and orders, was bound to establish its case, and it was not en- titled to rest on expressions of judgment when it had it in its power to present accurate data which would permit the court to draw the right conclusion. We need not separately review the findings with respect to the division of passenger expenses, as the same considerations are in- volved, with the distinction, however, that the extra cost attributed to the intrastate business is relatively small as compared with that charged to intrastate freight. And, in view of the conclusions reached on the controlling questions we have considered, we ex- press no opinion with respect to the method adopted in dividing expenses between the passenger and freight departments. For the purpose of determining whether the rates permit a fair return, the results of the entire intrastate business must be taken into account. During the test year the entire revenue, as found, from the intrastate business, passenger and freight, amounted to $3,897,913.26. All the rates in question were in force save the commodity rates, and it is further found that the loss that would have accrued in intrastate commodity business, by the application of the commodity rates which were under injunction, would have amounted to $31,493.67. 288 KATES. [chap. IV. As neither the share of the expenses properly attributable to the intrastate business, nor the value of the property employed in it, was satisfactorily shown, and hence it did not appear upon the facts proved that a fair return had been denied to the company, we are of the opinion that the complainant failed to sustain his bill.'' Section 5. The Capital -upon "Which a Eetuen Should Be Eaened. AMES V. UNION PACIFIC EAILWAY CO. 64 Fed. 165. 1894.'- Brewer, Circuit Justice. In each of these three cases, respec- tively, the plaintiffs are stockholders in the corporation first named therein as party defendant. In the first the defendants are the Union Pacific Eailway Company, a corporation created under the laws of congress, and owning and operating a railroad partly within the limits of the state of Nebraska ; the St. Joseph & Grand Island Eailroad Company, the Omaha & Eepublican Valley Eailroad Com- pany, and the Kansas City & Omaha Eailroad Company, corpora- tions organized under the laws of the states of Kansas and Nebraska, whose stock is substantially owned and whose lines are controlled and operated by the Union Pacific Eailway Company and certain officers of the state of Nebraska, constituting its board of trans- portation, together with the secretaries thereof. In the second the defendants are the Chicago & Northwestern Eailroad Company, a corporation organized and existing under the laws of the states of Illinois, Wisconsin, and Iowa; the Fremont, Elkhorn & Missouri Valley Eailroad Company, a corporation organized under the laws of the state of Nebraska; and the Chicago, St. Paul, Minneapolis & Omaha Eailroad Company, a corporation organized under the laws of the states of Minnesota and Nebraska, — both of which companies are owned and their roads operated by the Chicago & Northwestern Eailroad Company; and, in addition, the board of transportation of the state of Nebraska, and its secretaries. In the third case the defendants are the Chicago, Burlington & Quincy Eailroad Company, a corporation organized and existing under the laws of the states of Illinois and Iowa, which owns, controls, and 2 See Woods v. Vandalia R. R. Co. (1913), 231 U. S. 1. 1 Part of the opinion is omitted. — Ed. SEC. v.] THE CAPITAL. 389 operates, in the name of the Burlington & Missouri Eiver Eailroad Company in Nebraska, certain lines within that state; and in ad- dition the state board of transportation, and its secretaries. What is the test by which the reasonableness of rates is deter- mined? This is not yet fully settled. Indeed, it is doubtful whether any single rule can be laid down, applicable to all cases. If it be said that the rates must be such as to secure to the owners a reasonable per cent, on the money invested, it will be remembered that many things have happened to make the investment far in excess of the actual value of the property, — injudicious contracts, poor engineering, unusually high cost of material, rascality on the part of those engaged in the construction or management of the property. These and many other things, as is well known, are factors which have largely entered into the investments with which many railroad properties stand charged. Now, if the public was seeking to take title to the railroad by condemnation, the present value of the property, and not the cost, is that which would have to pay. In like manner, it may be argued that, when the legisla- ture assumes the right to reduce, the rates so reduced cannot be adjudged unreasonable if, under them, there is earned by the rail- road company a fair interest on the actual value of the property. It is not easy to always determine the value of railroad property, and if there is no other testimony in respect thereto than the amount of stock and bonds outstanding, or the construction ac- count, it may be fairly assumed that one or other of these repre- sents it, and computation as to the compensatory quality of rates may be based upon such amounts. In the cases before us, how- ever, there is abundant testimony that the cost of reproducing these roads is less than the amount of the stock and bond account, or the cost of construction, and that the present value of the prop- erty is not accurately represented by either the stocks and bonds, or the original construction account. Nevertheless, the amount of money that has gone into the railroad property — the actual in- vestment, as expressed, theoretically, at least, by the amount of stock and bonds — is not to be ignored, even though such sum is far in excess of the present value. It was said in the case of Eeagan v. Trust Co., 154 U. S. 413, 14 Sup. Ct. 1059 : " It is unnecessary to decide, and we do not wish to be under- stood as laying down an absolute rule, that in every case a failure to produce some profit to those who have invested their money in the building of a road is conclusive that the tariff is unjust and unreasonable. And yet justice demands that every one should re- ceive some compensation for the use of his money or property, if it be possible, without prejudice to the rights of others." S90 KATES. [chap. IV. It is not always reasonable to east the entire burden of the de- preciation on those who have invested their money in railroads. Take the Union Pacific Eailway, for illustration. At the time the government created the corporation, to induce the building of this transcontinental road through a largely unoccupied territory, it loaned to the company $16,000 a mile; taking as security there- for a second lien on the property, and granting to the corporation the right to create a prior lien to an equal amount, which was done. There is testimony tending to show that the road in Ne- braska could be built to-day for $20,000 a mile. Would it be full justice to the government, would it satisfy the common sense of right and wrong, would it be reasonable, for the state of Nebraska to so reduce the rates that the earnings of the road would only pay ordinary interest on $20,000 a mile, and so, the holders of the first lien being paid their interest, the government be forced to be content with only interest on one-fourth of its investment? Or, to put the case in a little stronger light, suppose the promoter of this enterprise had been some private citizen, who had advanced his $16,000 a mile as a second lien, and that the road could be con- structed to-day for only $16,000 a mile. Would it be reasonable and just to so reduce rates as to simply pay to the holders of the first lien reasonable interest, and leave him without any recom- pense for his investment ? Is there not an element of equity which puts the reduction of rates in a different attitude from the abso- lute taking of the property by virtue of eminent domain? In the latter case, while only the value is paid, yet that value is actually paid, and the owners may reinvest, and take the chances of gain elsewhere, whereas, if the property is not taken, the owners have no other recourse than to receive the sum which the property they must continue to own will earn under the reduced rates. Consid- erations such as these compel me to say that I think there is no hard and fast test which can be laid down to determine in all cases whether the rates prescribed by the legislature are just and rea- sonable, and that often many factors enter into the determination of the problem. Obviously, however, the effect of the reduction upon the earnings is the first and principal matter to be consid- ered. This is a matter of computation. The power of regulating railroads is often said to be a legislative power vested in the law- making body, to be exercised for the general welfare. Within the term " regulation " are embraced two ideas : One is the mere con- trol of the operation of the roads, prescribing the rules for the management thereof, — matters which affect the convenience of the public in their use. Eegulation, in this sense, may be considered as purely public in its character, and in no manner trespassing SEC. v.] THE CAPITAL. 391 upon the rights of the owners of railroads. But within the scope of the word " regulation," as commonly used, is embraced the idea of fixing the compensation which the owners of railroad property shall receive for the use thereof ; and when regulation, in this sense, is attempted, it necessarily affects the property interests of the railroad owners ; and it is " regulation," in this sense of the term, that we are to consider in the present cases. There are certain matters which embarrass these cases, and ren- der all computations more than ordinarily difficult. One is this: The various companies are doing an interstate as well as a local business. If these roads were wholly within the state, and only local business done by them, the computation would be much sim- plified, and the effect of the reduction in rates upon the property more easily disclosed. But all of these roads are interstate roads, and a large portion of their business is interstate business. Some of it is local business in other states than Nebraska. Now, it will not do to look simply at the gross earnings, and, because the reduc- tion therein made by the enforcement of this statute still leaves enough to pay reasonable compensation to the owners of the prop- erty, uphold the act, because, if the legislature of Nebraska can put in force this tariff for local business, the legislatures of other states through which these roads run, and the congress of the United States, may make corresponding reductions in the rates on all other business, local and interstate, and the aggregate of such reductions might entirely destroy all earning capacity from the property. Another matter to be noticed is this: There is in this act no interference with the passenger tariff, but only a maximum for freight rates. So we cannot place all the local expenses over against all the local receipts, and draw our conclusions therefrom. We have an attempt by the legislature to prescribe a maximum tariff for only the transportation of freight within the limits of Nebraska, and are called upon to determine whether the rates so fixed are unreasonable, and afford no fair compensation to those who have invested their means in these railroad properties. In order to determine this, we must ascertain what it costs to carry this local freight, what the receipts have been therefrom, and what reduction will be made in such receipts by the application of this act, and then we must take such proportion of the gross investment in the roads as the present earnings from local freights bear to the total earnings of the road. From these computations, we may see whether the reduction made by this act in the local freights, if applied to all the company's business, would leave any compensa- tion to the owners, and, if so, how much. Obviously, the problem 393 RATES. [chap. IV. thus presented is one of exceeding difficulty. Fortunately, we have in Mr. Dilworth, the secretary of the state board of transporta- tion, one of the defendants' witnesses, a gentleman whose compe- tency and credibility are unchallenged. In the computations which I have made, I have relied mainly on his figures. The conclusion to which I have come is that, having regard to the present condition of affairs in the state, the present volume of business done over these roads, and any probabilities of an early change in that volume, a reduction of 39% per cent, in the rates for local freight is unjust and unreasonable to those who have in- vested their money in these railroad properties. I appreciate fully the embarrassments and difficulties attending an investigation of this kind. I am reluctant, as every judge should be, to interfere with the deliberate judgment of the legislature. I have taken much time to study this case in all its relations, and have come, though reluctantly, to the conclusion I have stated, and am there- fore constrained to order decrees in behalf of the plaintifEs, stay- ing the enforcement of this tariff upon the companies named in the bills. It may be said that, even if furnishing no reasonable remuneration to-day, the result might be different under an in- crease of business. That, of course, is possible; and it may be that, as the volume of business increases, the time will come when the rates fixed by this house roll 33 will be reasonable and just. So there should be entered, as a proviso to the decrees, that leave is reserved to the defendants, at any time that they are so advised, to move the court for a reinvestigation of the question of the rea- sonableness of these rates. ^ 2 In Pennsylvania R. R. Co. v. Philadelphia County (1908), 220 Pa. St. 100, the Court said, at page 115 : " What is a fair profit is a complicated and difficult question,, but there are certain elements that are plainly to be regarded to avoid injustice, such as the original investment, the risks as- sumed at that time, the returns as compared with other enterprises as nearly similar as may be, the cost of maintenance and improvement, the prospects of increase and the present value in view of the preceding elements. In- justice is done by anything that fails to consider these, and to deal equi- tably with the private as well as the publi|C interests involved. It is not necessarily regulated by what others would now make the venture for, under the present circumstances and with present knowledge. The public having long reaped the incidental profits from the development of the coun- try by the enterprise and venture of capital, in the increased value of land, the opening of new and wider markets for crops and manufactures and the facility of intercourse and exchange for persons and property, the courts should not now ignore this aspect of the subject in considering the ques- tion of injustice to the corporators." SEC. v.] THE CAPITAL. 293 SAN DIEGO LAND AND TOWN CO. v. CITY OP NATIONAL CITY. 74 Fed. 79. 1896.^ Ross, Circuit Judge. The municipality known as " The City of National City" having, through its board of trustees, established by ordinance the rates at which the complainant corporation should furnish the city and its inhabitants with water for domestic pur- poses and purposes of irrigation, for the year commencing July 1, 1895, and ending July 1, 1896, the complainant commenced this suit for the purpose of obtaining a decree of this court adjudging that the provisions of the constitution and laws of the state of California pursuant to which the proceedings by the board of trustees of the defendant corporation fixing the rates were had, be declared to be in violation of the fourteenth amendment to the constitution of the United States, and that the rates so established be, on that ground, annulled, or, in the event the court shall determine that the provi- sions of the constitution and laws of the state of California do not contravene the constitution of the United States, then that the rates fixed by the board of trustees of the defendant corporation be de- creed to be arbitrary, unreasonable, and unjust, and for that reason void, and their enforcement enjoined, and that the board of trustees be ordered and required to adopt a new and reasonable rate of charge, and that it be decreed that the complainant corporation is entitled to charge and collect for "water rights," at reasonable rates, as a condition upon which it will furnish water to the in- habitants of the municipality for the purposes of irrigation, inde- pendent of the rates fixed by the board of trustees for water sold and furnished by the company. To compel the complainant to supply the people of the munici- pality with water acquired by it without just compensation would manifestly be nothing short of confiscation. To what extent munic- ipal authorities may go in that direction, without reaching the pro- hibited point, has never yet been definitely fixed by judicial decision, but that the power has a limit has been decided. Thus, in Eeagan V. Trust Co., 154 U. S. 362-399, 14 Sup. Ct. 1047, the supreme court said : " It is within the scope of judicial power, and a part of judicial duty, to restrain anything which, in the form of a regulation of rates, operates to deny to the owners of property invested in the business of transportation that 'equal protection which is the con- 1 Part of the opinion is omitted. — Ed. 294 RATES. [chap. IV. stitutional right of all owners of other property. There is nothing new or strange in this. It has always been a part of the judicial function to determine whether the act of one party (whether that party be a single individual, an organized body, or the public as a whole) operates to divest the other party of any rights of person or property. In every constitution is the guaranty against the taking of private property for public use without just compensation. The equal protection of the laws which, by the fourteenth amendment, no state can deny to the individual, forbids legislation, in whatever form it may be enacted, by which the property of one individual is, without compensation, wrested from him for the benefit of another or of the public. This, as has been often observed, is a government of law, and not a government of men ; and it must never be forgotten that under such a government, with its constitutional limitations and guaranties, the forms of law and the machinery of govern- ment, with all their reach and power, must, in their actual workings, stop on the hither side of the unnecessary and uncompensated taking or destruction of any private property, legally acquired and legally held." In the same case the court said that: " It is unnecessary to decide, and we do not wish to be understood as laying down as an absolute rule, that in every case a failure to produce some profit to those who have invested their money in the building of a road is conclusive that the tariff is unjust and un- reasonable. And yet justice demands that every one should receive some compensation for the use of his money or property, if it be possible without prejudice to the rights of others." In the subsequent case of Ames v. Railway Co., 64 Fed. 165, 177, Mr. Justice Brewer, sitting in the circuit court, and having under consideration an act of the legislature of Nebraska prescribing the maximum rates for transportation of freight by railroads within that state, said: " What is the test by which the reasonableness of rates is deter- mined? This is not yet fully settled. Indeed, it is doubtful whether any single rule can be laid down, applicable to all cases. If it be said that the rates must be such as to secure to the owners a reasonable per cent, on the money invested, it will be remembered that many things have happened to make the investment far in excess of the actual value of the property, — injudicious contracts, poor engineering, unusually high cost of material, rascality on the part of those engaged in the construction or management of the property. These and many other things, as is well known, are factors which have largely entered into the investments with which many railroad properties stand charged. Now, if the public was SEC. v.] THE CAPITAL. 395 seeking to take title to the railroad by condemnation, tbe present value of the property, and not the cost, is that which [it] would have to pay. In like manner, it may be argued that, when the legislature assumes the right to reduce, the rates so reduced cannot be adjudged unreasonable if under them there is earned by the railroad company a fair interest on the actual value of the property." In Spring Valley "Waterworks v. City of San Prancisco, supra, the supreme court of California, in speaking of the provision of the con- stitution of that state here in question, held that, in order to justify the court in setting aside the rates fixed by a municipal corporation, " there must be actual fraud in fixing the rates, or they must be so palpably and grossly unreasonable and unjust as to amount to the same thing." 82 Cal. 306, 23 Pac. 910, 1046. To the latter rule, — that is to say, that there must be actual fraud, or its equivalent, on the part of the municipal authorities, in order to justify a court in adjudging the rates established by them unreasonable, — I cannot yield assent. The same court, in the same case, in construing the constitutional provision, said: " When the constitution provides for the fixing of rates or com- pensation, it means reasonable rates and just compensation. To fix such rates and compensation is the duty, and within the jurisdiction, of the board. To fix rates not reasonable, or compensation not just, is a plain violation of its duty." In the case of Spring Valley Waterworks v. Schottler, 110 U. S. 347, 4 Sup. Ct. 48, Chief Justice Waite, in speaking of the same constitutional provision, said : " By the constitution, and thfe legislation under it, the municipal authorities have been created a special tribunal to determine what, as between the public and the company, shall be deemed a reason- able price during a certain limited period. Like every other tri- bunal established by the legislature for such a purpose, their duties are judicial in their nature, and they are bound, in morals and in law, to exercise an honest judgment as to all matters submitted for their official determination." The court further observed that it was not necessary, in that case, to determine "what may be done if the municipal authorities do not exercise an honest judgment, or if they fix upon a price which is manifestly unreasonable." It is obvious, I think, that it must be held, either that the right of judicial interference exists only when the schedule of rates estab- lished will fail to secure the owners of the property some compensa- tion or income from their investment (however small), or else that the court must adjudicate, when properly called upon to do so, whether the rates established by the municipal authorities are so 396 RATES. [chap. IV. manifestly unreasonable as to amount to the taking of property for public use without just compensation. Undoubtedly, every in- tendment is in favor of the rates as established by the municipal authorities. But as it is firmly established that it is within the scope of judicial power, and a part of judicial duty, to inquire whether rates so established operate to deprive the owner of his property without just compensation, it seems to me that it logically follows that, if the court finds from the evidence produced that they are manifestly unreasonable, it is its duty so to adjudge, and to annul them; for it is plain that if they are manifestly unrea- sonable they cannot be just. In the solution of that problem many considerations may enter; among them, the amount of money actually invested. But that is by no means, of itself, controlling, even where the property was at the time fairly worth what it cost. If it has since enhanced in value, those who invested their money in it, like others who invest their money in any other kind of property, are justly entitled to the benefit of the increased value. If, on the other hand, the property has decreased in value, it is but right that those who invested their money in it, and took the chances of an increase in value, should bear the burden of the de- crease. In my judgment, it is the actual value of the property at the time the rates are to be fixed that should form the basis upon which to compute just rates ; having, at the same time, due regard to the rights of the public, and to the cost of maintenance of the plant, and its depreciation by reason of wear and tear. If one has property to sell, it is its present value that is looked to, one element of which may very properly be its cost ; but one element only. So, too, if one has property to lease, it is its present value, rather than its cost, upon which the amount of rent is based. And if, as said by Mr. Justice Brewer in Ames v. Eailway Co., supra, the public were seeking to condemn the property in question for a greater public use, if that be possible, its present value, and not its cost, is that which the public would have to pay. It follows, I think, that, where the public undertakes to reduce the rates to be charged for the use of such property, it is its present value, and not its cost, that must be taken as a basis upon which to fix reasonable and just rates; having due regard to the cost of its maintenance, to its depreciation by reason of wear and tear, and also to the rights of the public. If, upon such a basis, a fair interest is allowed, no just cause of complaint can exist. ^ 2 " If the State were to seek to acquire the title to these roads, under its power of eminent domain, is there any doubt that constitutional provisions ■would require the payment to the corporation of just compensation, that compensation being the value of the property as it stood in the markets of the world, and not as prescribed by an act of the legislature? Is it any less a departure from the obligations of justice to seek to take not the title but SEC. v.] THE CAPITAL. 291/ SMYTH V. AMES. 169 U. S. 466. 1898. Supra, p. 243.^ LOUISVILLE AND NASHVILLE RAILEOAD CO. v. EAIL- EOAD COMMISSION OE ALABAMA. 196 Fed. 800. 1912.^ Jones, District Judge. In reference to the question of value with the view of rate regulation, the most reliable test ordinarily is the cost of the reproduction of the road as it exists. I say " ordinarily " because there may be instances, which is not the case here, where by reason of paralleling the road by a new road, and diverting its business or from other causes, its value may be far less than what it will cost to reproduce it as it is at the time of the inquiry. The original cost of a road may in some cases reflect light on, or even determine, the present value, as when it is of very recent construction. But ordinarily it is of little assistance in that regard, since many items of value may be dona- tions by the government or by individuals, as is the case of the south and north, or the road may have been built long before the the use for the public benefit at less than its market value? " Mk. Justice Brewee, in Reagan v. Farmers' L. & T. Co. (1894), 154 U. S. 362, 410. "The judicial test of market value depends upon the fact that sales of similar property have been and are being made at ascertainable prices. But such property as this is not so sold, at least, not often enough to furnish a fair criterion ; and the very fact of governmental regulation would neces- sarily control the price. Until the rates are fixed no one can say how much the property would sell for, and therefore that price cannot be ascertained as a basis for fixing those rates." Van Fleet, J., in San Diego Water Co. v. San Diego (1897), 118 Calif. 556, 568. 1 " The master found the value of the entire railroad to be $93,385,341.32. this estimate of the value of the railroad being based, as has been stated, on the amount of outstanding stock and bonds. Clearly this method of reaching the value of the railroad was unsatisfactory, and, does not comply with the rule laid down in Smyth v. Ames, supra. " We think it unnecessary to consider some other questions discussed in the case because the judgment of • the Circuit Court was evidently based upon the matters which have been referred to above ; that is ( 1 ) the manifest error of the master in failing to allow any presumption in favor of the correctness of the commission's action, (2) the failure on the part of the railway company to show the cost of service in handling the particular com- modity involved here, and (3) the action of the master in basing the value of the railway company's property in Louisiana on the amount of stock and bonds outstanding and therein failing to comply with the rule announced by the Supreme Court as to what should be considered in reaching the fair value of railroad property." Newman, J., in Texas & P. Ry. Co. v. R. R. Com. of La. (1911), 192 Fed. 280, 286. See Steenerson v. Great N. Ry. Co. (1897), 69 Minn. 353, 373; Fuhrman v. BufEalo G. E. Co. (1913), 3 P. S. C, 2d D. of N. Y. 739, 767. 1 The statement of facts and a large part of the opinion are omitted. — Ed. 398 RATES. [chap. IV. period of inquiry at greatly less or greatly higher prices than those prevailing at the time of the inquiry. Or its original cost might be involved in obscurity, and may include the cost of abandoned or destroyed portions of the property, which should not figure in the inventory for the present time, or the road may have been bought at a forced sale in times of panic at a nominal price or in inflated times at a corresponding price ; or the road, costing little originally, may have developed from many contributing causes into being property of great value. And in every case, after finding the original cost, when possible to be done, (the question would still have to be solved as to whether such original cost is the same as the present value, which would involve the determination of the present value for such comparison independent of original cost, and in no other or better way than on reproduction values. The market value of bonds and stocks, while shedding in some cases light on the question of present value, cannot except in a very slight measure indicate what that value is as a matter of fact. The market value of stocks and bonds merely shows the public estimate of the value of the whole property contributing to the income, which may, as in the case of the Louisville & Nashville Eailroad, embrace millions of dollars of property not used as a common carrier. And this public opinion is also open to the influences of stock jobbing manipulation and artificial bookkeeping, without the advantages of sworn inventories and the precise testimony of competent and disinterested witnesses on exact inventories of exist- ing property. A road may have a smaU amount of stock com- pared to its property, as in the case of the Louisville & Nashville Eailroad, and it may have no bonds or a large amount of bonds against its property and the two combined may not, with premiums or discounts taken into consideration, indicate with any accuracy the present values of the property invested in the business and used as a common carrier. Therefore, while looking at all collateral matters reflecting light on the subject, the court regards the repro- duction cost as the final test of present. value. Under inquiry 18 in the South & North Case the special master reports at page 72 et seq. the cost of reproducing the railroad and other properties, after deducting $338,419 from complainants' fig- ures, for the years named, as follows: Year ending June 30, 1906 $20,041,714.84 Year ending June 30, 1907 21,077,210.17 Year ending June 30, 1908 22,077,003.12 Year ending June 30, 1909 22,151,800.36 Year ending June 30, 1910 23,372,753.27 SEC. v.] THE CAPITAL. 299 Under the same special inquiry 18 at page 113 et seq., in the Louisville & Nashville Case, the master reports the cost of repro- ducing the railroad and other properties, including equipment used as a common carrier, after making deductions from complainants' estimates of $674,673.92, for the years named, as follows : Year ending June 30, 1906 $41,258,565.60 Year ending June 30, 1907 43,039,940.60 Year ending June 30, 1908 40,800,349.22 Year ending June 30, 1909 41,194,742.68 Year ending June 30, 1910 41,443,462.39 The respondents urged before the master all the objections now set up in the exceptions filed to his reports as to these values, and they were noticed seriatim, discussed, and disposed of by the master as shown in his reports. After considering the exceptions, I ap- prove and confirm the findings of the master on the questions of values and cost of reproduction, and overrule the exceptions in that regard of respondents and complainants, and approve and con- firm the master's reports thereon. One of the objections of the respondents is that the estimates were based on the prices of 1907 when they were made, and that they were then unusually high. This is disposed of by the point that present values are required to be taken and used in determining present and prospective rates. Cotting v. Kansas, 183 U. S. 91, 22 Sup. Ct. 30, 46 L. Ed. 92 ; "Wilcox v. Consolidated Gas Co., 212 U. S. 19-52, 29 Sup. Ct. 192, 53 L. Ed. 382, 15 Ann. Cas. 1034; Stanislaus County v. J. C. & I. Co., 192 U. S. 215, 24 Sup. Ct. 241, 48 L. Ed. 406. And by the fact that the proof satisfac- torily shows that the reconstruction could not have been effected from 1907 to 1910 at less than the estimates used. Eecord, S. & N. A. 116, 118, 368, 417, 430, 432, 497, 501; Eecord, L. & N., 365-367. It is insisted that in reproduction estimates the enhanced value of property between the time of the original location of a railroad through a wilderness or marsh, it may be, is not to be taken into account 40 or 50 years afterwards, when civilization, perhaps largely the result of the expenditures and operations of the road, has increased original values a hundredfold. Suppose a road is located when original cost is fabulously inflated, and the course of events brings things down to their intrinsic worth, upon whom does the loss fall? It is usually understood that the state does not make up such losses to its citizens. And, vice versa, when minerals are discovered, or oil wells developed on lands, does not 300 KATES. [chap. IV. the owner of the land own its product? And how are tax values estimated? Do the officers take the value when land is first en- tered and cleared or when it has been improved and become a town site? The law is perfectly settled, with the obvious view of the matter, that increments and losses alike attach to ownership as to duties and rights pertaining to property. "Willcox v. Con. Gas Co., 212 U. S. 53, 29 Sup. Ct. 192, 63 L. Ed. 382; Stanislaus v. Irri- gation Co., 192 U. S. 215, 24 Sup. Ct. 241, 48 L. Ed. 406; San Diego Land Co. v. National City, 174 U. S. 757, 19 Sup. Ct. 804, 43 L. Ed. 1154. And this just rule has its balances and adjust- ments making it not oppressive to the public in any case. It is to be noticed, too, that the rates in fact usually diminish with the increase in property values, because the increase of business domi- nates values and justifies lower rates; but, be that as it may, the rule of giving to the owner the increments of value and subjecting him to the losses in values has the unequivocal sanction of the law. The respondents except to the value of the franchise in the Louisville & Nashville Case on the ground that there is no evidence of the value in the record. Exception 10, L. & N. Case. And in the South & North Case, on the ground that "the valuations are erroneous and excessive." Exception 4, South & North Case. As to the amount of valuation, the undisputed proof is that it is the tax valuation at 60 per cent, of real value brought up to par or 100 per cent. This could not be excessive if the tax value was 60 percent, of the real value, and the uncontradicted proof is to that effect, and the proof is that it is not excessive. As to the factum of evidence being in the record of the value, it is shown that the law charged the State Tax Commission with the duty of assessing the franchise for taxation, and they did so and fixed the value at 60 per cent, of the real value, and it is shown what these assessments were. Eecord, L. & N. Case, 1927, 1928-1960; Eecord, S. & N. Case, 1389, 1400, 1598, 1599, 2622-2627, 2628, 2629, 2644-2648. The assessments relied on were state valuations by officers spe- cially delegated to make them, and not merely to receive the returns of the taxpayer. They are therefore competent evidence of pro- bative worth. Wigmore on Evid. § 1640; Elliott on Evidence, § 1312; Eonkendorff v. Taylor, 4 Pet. 349, 7 L. Ed. 882. As to the propriety of valuing the franchise on a rate question, the authorities clearly settle the point in the affirmative. I refer to the master's report in the South & North Case, pp. 41-46, where he considers the question in an able manner, and I concur thoroughly in his conclusion. I merely cite here the authorities. Willcox v. Con. Gas Co., 212 U. S. 19-54, 29 Sup. Ct. 192, 53 L. Ed. 382, 15 Ann. SEC. v.] THE CAPITAL. 301 Cas. 1034; Monongahela v. United States, 148 U. S. 331, 13 Sup. Ct. 622, 37 L. Ed. 463 ; People v. O'Brien, 111 N. Y. 1, 18 N. E. 692, 2 L. E. A. 255, 7 Ann. St. Eep. 684; Topsham v. Maine W. Co., 99 Me. 371, 59 Atl. 537; State Eailroad Tax Cases, 92 U. S. 606-607, 23 L. Ed. 663 ; Waterworks Co. v. Kansas City, 62 Fed. 863, 10 C. C. A. 653, 27 L. E. A. 827; Metropolitan T. Co. v. H. & T. Co., etc. (C. C.) 90 Fed. 683-689; Adams Express Com- pany V. Kentucky, 166 U. S. 171, 17 Sup. Ct. 527, 41 L. Ed. 960; Fargo V. Hart, 193 U. S. 490, 24 Sup. Ct. 498, 48 L. Ed. 761; Adams Express Company v. Ohio, 166 U. S. 185-221, 17 Sup. Ct. 604, 41 L. Ed. 965; Beale and Wyman on E. E. Eate Eegulation, §§ 368-370.2 FUHEMANN v. BUFFALO GENEEAL ELECTEIC CO. 3 P. S. C, 2d D. of N. Y. 739. 1913.^ Stevens, Chairman. Value of Franchise It is a fact that the respondent has a perpetual franchise covering all the streets and public ways of the city of Buffalo. This fran- chise was acquired in the purchase from the Brush company and the Thomson-Houston company of the fixed capital and franchises of those companies. It is not quite clear what position the respondent takes concern- ing this franchise, as to whether it should be treated as an item of property having a value upon which the company is entitled to a return, or not. At page 39 of its brief it indicates three possible values, as follows: e Eeproduction value new, with additions, etc $6,166,140 Commercial value • 5,948,600 Net earnings value 5,750,000 In none of these valuations does a valuation appear for franchise, but upon pages 29-33 of its brief it argues that the franchise has value, and concludes as follows: If it has a value, or if that value was validly agreed upon and capitalized under the laws in force when it was done, such value can not by statute be excluded from the total valuation upon which a public service corporation is entitled to a return. 2 See Knoxville v. Knoxville W. Co. (1909) , 212 U. S. 1 ; Minnesota Rate Cases (1913), 230 U. S. 352, 456 to 458; Buffalo Gas Co. v. City of Buffalo (1913), 3 P. S. C, 2d D. of N. Y. 553, 631 to 648. 1 Only one point from the opinion is here reprinted. — Ed. 303 KATES. [chap. IV. In another place in the same brief the following language is used : All three of the bases for the valuation of franchises in that case are present in this case, viz. : (a) The franchises were included in the valuation in strict com- pliance with the then existing laws of the State. (6) The agreement under which the franchises were included in the " aggregate value " of the properties, franchises, and rights con- solidated has always been recognized as valid; otherwise it must be assumed that some attack upon it would have been made by some public authority during the twenty years during which it has continued. (c) The stock has been dealt in for more than twenty years on the basis of its validity; and to declare the basis of it invalid after such a lapse of time would be to do great injury to innocent investors who have relied and had the right to rely upon the validity of an issue of stock made strictly in accordance with the law. It must be assumed from the foregoing language that the re- spondent expects that some franchise value must be allowed it in fixing the rate. It recognizes that the stock and bonds which were issued to the Thomson-Houston and Brush companies amounted to $3,000,000 ; that the physical property had a value of practically $1,100,000, thus leaving $1,900,000 to be accounted for in in- tangibles of some character. The respondent has made no proof whatsoever regarding this al- leged franchise value, but if it claims any return thereon it relies wholly upon the argument presented in its brief. It is true that a great deal has been said about franchise value in rate cases. It is unnecessary at this time to review what has been said. There is one paramount fundamental consideration which, in the judgment of the Commission, is conclusive upon the whole matter, and the facts upon which it is based are as follows : It does not appear that any sum whatever was ever paid by the respondent or by its predecessor companies for this franchise. It was a gift by the City of Buffalo to the predecessor companies, and consists wholly in permission to use the streets of the city for the placing of poles, stringing of wires, and placing of conduits. The company was given this privilege, without which it could not tran- sact its business. It is true that the franchise is of value to the company, and that without the franchise the remainder of its prop- erty would not possess any exchange value as an electric plant, or such as might be given it when coupled with the expectation that a franchise would be given. If it were entirely certain that no BEC. v.] THE CAPITAL, 303 franchise would be given, the property would have no exchange value except for purposes other than the distribution of electric energy. The franchise gives life to the enterprise and makes possible a re- turn upon the capital which has been sunk in it. It makes possible a sale of the concern to other investors if those constructing it desire to part with their interest. It is indispensable to the conduct of the enterprise. All of these considerations, however, entirely fail to show that the public should pay a return upon some amount assumed to be the value of the franchise. The investors did not put the franchise into the enterprise. That was done by the public. The whole truth lies in one sentence : If the franchise, which was a gift from the public to the company, should be made the basis of a money return, the practical result would be that the public would have to pay money to the company because it had given the company the right to occupy the public streets with its plant. This is the whole of the matter, and when thus stated, there is but little more to be said. The City of Buffalo as a municipality has given the company a right to place its poles and string its wires in the streets for the purpose of lighting the streets. The argument that the franchise tbus given has a value for rate making purposes comes ]ust to this : that the City must annually pay to the company, in addition to all just amounts for operating expenses, taxes, amortization, and a proper return upon the investment made by the stockholders, a fur- ther sum because of the right which the City itself had given to occupy its streets. The company desires to make money by lighting the streets. It can not so do without having its plant in the streets. The City consents that the plant may be put in the streets, and the company then desires the City to pay it a large sum because it has consented to such use of the streets. If the fran- chise was of the value of $2,000,000, as seems to have been assumed in the consolidation, and the proper return upon this is 6 per cent. per annum, the public in the City of Buffalo would be required to pay $130,000 each year to the respondent for no reason whatso- ever except that it had given the company the right to occupy the public streets with its plant. We are not prepared to say that either the municipality of Buifalo or the customers of the company residing in Buffalo should pay anything to the respondent on this account.^ 2 Compare Willcox v. Consolidated Gas Co. (1909), 212 U. S. 19. 304 KATES. [chap. IV. PIONBEE TELEPHONE AND TELEGEAPH CO. v. WESTENHAVEE. 29 Okl. 429. 1911.^ Hates, J. No inflexible method for the ascertainment of the value of the property used in the service has been fixed by legislative bodies dealing with rates, or by the courts in determining the validity of rates, and from the nature of the subject no inflexible method can be fixed. Sometimes the present value is arrived at by ascertaining the original cost of construction and all betterments, and deducting therefrom for depreciation; but this method does not always prove to be fair and just. If there was extravagance and unnecessary waste in the construction, or, as is often the case, fictitious stocks and bonds issued, the proceeds of which did not go into the original construction, such method would prove unfair to the public. On the other hand, where the market price of the physical units or of the labor entering into the construction of the plant has advanced since its construction, the original cost may be much lower than the present value, and for that reason be to the owner of the plant an unfair determination of its present value. The method most frequently used is to ascertain what it will cost to reproduce the plant, or the cost of its replacement at the present time, and de- duct therefrom for depreciation in the existing plant. Both meth- ods may be used and considered in ascertaining the present value, and both are often resorted to, as was done in this case. By appellant's evidence, it is established that appellant has not owned the exchange plant at Enid from its construction, but that it acquired the plant, in 1905, from others, and paid therefor the sum of $54,000, which was the amount the plant had cost those who had constructed it. Appellant, immediately after purchasing the plant, began reconstructing it and enlarging its equipment. It expended for these purposes, during the year 1905, the sum of $17,115.78; during the year 1906, $52,177.47; during the year 1907, $13,395.76. None of said expenditures was made for land, build-' ing, rights of way, franchises, or other privileges. The total cost of the plant to appellant at the time of the first hearing in February, 1908, exclusive of lands and buildings, was $135,689.01. The Commission undertook to ascertain the present value by finding the reproductive value new, or cost of replacement. This method is practicable for a telephone exchange plant, and is probably as fair and accurate a method as could have been adopted in the present 1 Part of the opinion is omitted. — Ed. SEC. v.] THE CAPITAL. 305 case. In pursuance of this method, a Mr. Player, a telephone expert for the Commission, was sent with assistants to Enid to take in- ventory of the plant, and appraise its reproductive value or cost of replacement. The summary of his appraisement, corrected in ac- cordance with admissions at the trial, is as follows : 1. Interior equipment local exchange $30,503.39 2. Subscribers' stations 19,984.53 3. Aerial construction 39,634.50 4. Underground construction 11,371.23 5. Eeplacement cost of the physical property after add- ing the cost of jumper wires and transmitters and receivers "..... 81,493.64 6. Engineering and supervision^ 10 per cent 8,149.37 ">;■■'■; ' fcf 7. Total replacement cost of physical property on a con- tract basis .': /: . . ... ...-,. . . . . . . .'* 89,643.01 8. Office fixtures aud fi4niture ......,....."..... 1,473.75 9. Stock on hand ^^4ftaterialv. .'. /. . 3,433.56 10. Stock on hand — toois y.\ ...................... / IS^.SV 11. EoUing stock and liv9 stock; . , . .5. . .'.*., . . .'^ . .> "960.00 . The Commission adopted and found the foregoing appraisement to be the present value of the plant, and that the amount ^pon which appellant is entitled to receive a fair return is $94,663.69'. Appel- lant accepts in this proceeding all the items in the foregoing ap- praisement as correct, but contends that there are certain elements entering into the reproductive value that the Commission has re- fused to allow. The items for which it contends, but which were refused by the Commission, are as follows : 1. Miscellaneous $ 2,050.28 2. Piecemeal construction and working around plant. . 6,000.00 3. Interest during construction 4,000.00 4. Working capital 8,740.06 f $20,790.34 2 2 The court was satisfied from the evidence that the contract prices in the table of reproductive value included all miscellaneous expenses and so dis- allowed the first item contended for by the company. — Ed. 306 KATES. [chap. IV. The evidence upon which the appellant insists item No. 2, refused hy the Commission, should have been allowed is substantially as fol- lows, quoting from one of witnesses : " The necessity of concentrating the large number of wires re- quired of the larger city of Enid makes it advisable to adopt a different distribution or arrangement of pole lines. This involved the moving of some of the old poles in the lines, in order to shorten up spans to get sufficient strength for carrying the larger cables. The moving of the poles is an expensive undertaking, as same must be moved without crossing up or interfering with the wires then being used in the old plant. In a great many instances, new leads crossed old leads in such a way that extra work had to be done to prevent the new work from interfering with the operation of the old plant. The subscribers' instruments had to be rewired and adapted to work temporarily on the new plant until final changes should be made. In fact, there was no part of the new work that did not have to be worked out with some special regard to the pro- tection of the old plant, in order that service might be continued." "We think, however, that the Commission committed no error in refusing to allow this item. The fact that appellant's plant has been constructed piecemeal does not increase its present value, although the cost of construction by such method may have been greater than if it had been constructed at one time. The plant, in our opinion, in arriving at its cost of reproduction new, should not be considered as an existing obstruction upon the streets, which would have to be worked around in constructing a new plant of a similar kind. The fact that other obstructions, such as telegraph systems or other tele- phone plants, exist in the streets at the present time, and would have to be worked around at this time in building a plant like appellant's, might require an allowance in arriving at the cost of reproduction new of appellant's plant; but a determination of that question is not required here, for it is not for such obstruction that this item is claimed.^ Item No. 3 disallowed by the Commission, is for interest on the capital invested during the period of construction. There is no controversy about the amount of this claim. The Commission refused to allow it, because it did not consider it a proper element of reproductive value. Counsel for the Commission, however, at the oral argument before this court, conceded, and we think properly, that there was no ground for refusing its allowance. It is a matter within the observation and knowledge of all that a plant, the cost 8 Compare State Journal Printing Co. v. Madison G. & El. Co. (1910), 4 Wis. H. C. R. 501, 546; City of Ripen v. Ripon L. & W. Co. (1910), 5 Wis. R. C. R. 1, 15. SEC. v.] THE CAPITAL. 307 of whose physical units put together into a completed plant ap- proximates $100,000, cannot be constructed instantly. It requires time to assemble the physical properties, and still a greater length of time to put those units into place, where they may be used to render service. During this period, the capital invested must of necessity be idle, and no income can be derived therefrom. When the construction of the plant is completed, no willing seller, who is not forced to sell, would take for his plant the cost of the physical units and the cost of the labor in the construction, because the plant has cost him in addition thereto the use of the capital, or a certain part thereof, invested in the physical properties during the time of construction. A willing buyer could afford to pay, and would pay, more than the actual cost of labor and material, assum- ing that the plant has been economically constructed, because such cost would not represent the total expenditures the purchaser would have to make, in order to construct the plant himself. In addi- tion to such expenditures, he would have to expend the earnings of his capital during the period of construction. No case has been cited, and in our investigation we have found no case, involving this question, where a reasonable amount has not been considered and allowed for loss of interest during construction as part of the cost of construction.* In addition to the foregoing items disallowed by the Commis- sion, and the items allowed as constituting the fixed capital of the company, appellant contends for an allowance of item No. 4, as working capital, on which, also, it is entitled to receive a fair return. The Commission allowed the sum of $3,433.56 for stock on hand at Enid. Item No. 9 of Mr. Player's appraisal shows that sum to be the amount of stock and supplies on hand at Enid at the time he appraised the plant. Appellant maintains a general office at Oklahoma City, where are kept tools and teams, stock on hand in the general storehouse, a repair shop, cash to meet the current expenses of its plants and system throughout the state, and general office fixtures that are used by the general officers of 4 " Included in plaintiff's estimate of value are : Interest on capital dur- ing construction, $22,415 ; promotion and organization, $14,943.69 ; and en- gineering, $18,679.61. These are mere estimates of what might be expended for these purposes in the construction of a new plant. Of course, all the money required would not necessarily remain idle during construction, and the. witness admitted that the only expense for promotion and organization he could think of would be attorneys' fees in preparing proper papers. The expense for engineering was said to be the percentage taken into consid- eration by those contemplating such enterprises. Manifestly these estimates are largely speculative. Nothing can be allowed for the promotion and organization of the company, for it is immaterial by whom the plant may be owned in estimating its value." Cedar Rapids G. L. Co. v. Cedar Rapids (1909), 144 la. 426, 438. Compare City of Ripon v. Ripon L. & W. Co. (1910), 5 Wis. R. O. R. 1, 13; Shepard v. N. Pac. Ry. Co. (1911), 184 Fed. 765, 809. 308 EATES. [chap. IV. the company, whose time is devoted to the entire properties of the company. Discussing the question of working capital, the Eailroad Commission of Wisconsin, in Cunningham v. Chippewa Falls Water & Light Co., 5 W. E. C. E., 303, said: "Plants of this kind, the same as practically all other business enterprises must have on hand a reasonable cash balance and other current resources, in order to operate economically and effectively. That this is the case is most self-evident. It has been pointed out in other decisions of this Commission, in HiU v. Antigo Water Co., 3 W. E. C. E. 623, 631, and particularly in State Journal et al. V. Madison Gas & Electric Co., 4 W. E. C. E. 501, 550. Just what sum represents a fair amount for working capital is nearly always a matter of judgment, and to this there is no ex- ception in this case." ^ The commission committed error in refusing to allow anything on items Nos. 3 and 4, disallowed, and should have allowed $4,000 on item Ko. 3, and $7,249.24 on item No. 4, or a total of $11,249.24. While the Commission, in disallowing these items in arriving at the present value of appellant's plant, committed error prejudicial to appellant, such error, we think, is offset by an omission of the Com- mission which operates against appellees and the public. In finding the present value of the physical properties of the plant, the Commission treats the reproductive value of such prop- erties new as the present value. But the physical properties of this plant are not new. Some parts of the same have been used for several years. It is true that a large portion of the same had been used only for periods of one and two years at the time of the hearing, but, as established by appellant's evidence, which we shall consider later, every year there is a depreciation in the physical properties of the plant that is not, and cannot be, taken care of by current repair, and, although some of the physical units have been used only for a brief time, such use brings about a depreciation ; and the reproductive value new of such physical units represents the present value only when there is deducted therefrom the amount of annual depreciation. Knoxville v. Knoxville Water Co., 212 U. S. 1, 29 Sup. Ct. 148, 53 L. Ed. 371. All the evidence is to the effect that there is an annual depre- ciation of the properties of a telephone plant of the character of ap- pellant's plant at Enid in the approximate amount of 7 per cent, per year over what can be taken care of by current repairs. Seven per cent, of the construction value of this plant for the years 1906, 1907, and 1908 makes a total depreciation in the sum of $15,410.46. 5 See Consolidated G. Co. v. City of N. Y. (1907), 157 Fed. 849, 859; Mayhew v. Kings County L. Co. (1911), 2 P. S. C, 1st D. of N. Y. 659, 688. SEC. v.] THE CAPITAL. 309 During the year 1908, $1,340.60 was expended in replacing those parts of the plant so depreciated that they could no longer be made serviceable by repair. This amount should be deducted from the total depreciation, which would leave a net depreciation of $14,- 069.86. This amount of depreciation for those three years, based on the estimate of 7 per cent, annual depreciation which the Com- mission failed to consider in determining the reproductive and pres- ent value of the plant, exceeds the amount of said items Nos. 3 and 4, which it refused to allow in finding such value. Owing to the fact that this plant is in large part new, the depreciation for the said three years would probably not reach the annual average. There is no evidence, however, as to what the ratio of depreciation of these three years would be to the average; but, since approxi- mately one-third in value of the physical properties of the plant consists of old property existing in the plant at the time of pur- chase by appellant, there would be considerable depreciation during each of said years ; and, from all the facts in the case, we think it can- not be said that the amount erroneously disallowed by the Commis- sion is greater than the element of depreciation which the Com- mission failed to consider. It does not clearly appear that the finding of the Commission that $94,663.69, exclusive of going con- cern value, is the present value of the plant upon which appellant is entitled to receive a fair return is so erroneous that it should be disturbed, and, exclusive of the element of going concern value, we adopt said sum as the total value of appellant's property on which it is entitled to a fair return. There is no contention that any value on account of un- expired franchise or for good will should be added to the repro- ductive value, in order to ascertain the present value ; but it is con- tended that, by reason of the fact that appellant's plant has an established system of operition, has at present customers sufficient in number to pay the operating expenses and annual depreciation and some profit, it has a value beyond the mere cost of reproducing the plant. This element of value contended for has been generally referred to by the authorities as " the going concern value " or " going value." No case from the Supreme Court of the United States involving the reasonableness of rates or charges, wherein this question has been considered by that court, has been called to our attention. In Knoxville v. Knoxville Water Co., supra, the lower court added to the appraisement of the physical properties the sum of $6,000,000 for going concern value. The Supreme Court as- sumed, without deciding, that this item was properly added. There are many cases wherein the fair market value of public service prop- erty was involved, under franchises reserving to the municipality 310 ■ RATES. [chap. IV. the right to purchase the plant at or after a stipulated time for the fair market value thereof. These cases, so far as we have been able to examine them, uniformly hold that, in the absence of a provi- sion in the franchise to the contrary, the going concern element of value must be considered in ascertaining the fair value of the plant. One of the leading cases so holding is the National Water Works Co. V. Kansas City, 62 Fed. 853, 10 C. C. A. 653, 27 L. E. A. 827. In that case it was said in the opinion by Mr. Justice Brewer: " ISTor would the mere cost of reproducing the waterworks plant be ■a fair test, because that does not take into account the value which flows from the established connections between the pipes and the buildings of the city. It is obvious that the mere cost of pur- chasing the land, constructing the buildings, putting in the ma- chinery, and laying the pipes in the streets — in other words, the •cost of reproduction — does not give the value of the property as it is to-day. A completed system of waterworks, such as the company •has, without a single connection between the pipes in the streets •and the buildings of the city, would be a property of much less ■value than that system connected, as it is, with so many buildings, •and earning, in consequence thereof, the money which it does earn. •The fact that it is a system in operation, not only with a capacity to supply the city, but actually supplying many buildings in the city, not only with a capacity to earn, but actually earning, makes it true that ' the fair and equitable value ' is something in excess of the cost of reproduction. . . . The city, by this purchase, steps into possession of a waterworks plarit, not merely a completed system for •bringing water to the city, and distributing it through pipes placed ■in the streets, but a system already earning a large income by virtue of having secured connections between the pipes in the streets, and a multitude of private buildings. It steps into possession of a property which not only has the ability to earn, but is in fact earning. It should pay therefor, not merely the value of a system which might be made to earn, but that of a system which does earn." Other similar cases supporting this doctrine, some of which cite the foregoing cases, are: City of Omaha v. Omaha Water Co., 218 U. S. 180, 30 Sup. Ct. 615, 54 L. Ed. 991; Spring Valley Water Works v. City of San Francisco (C. C.) 124 Fed. 574; Gloucester Water Supply Co. v. City of Gloucester, 179 Mass. 365, 60 N. E. 977; Kennebec Water Dist. ■;;. City of Waterville, 97 Me. 185, 54 Atl. 6, 60 L. E. A. 856; Kewburyport Water Co. V. City of Newburyport, 168 Mass. 541, 47 N. E. 533 ; Brunswick & T. Water Dist. v. Maine Water Co., 99 Me. 371, 59 Atl. 537. For the purpose of taxation, it is well established that this ele- ment of value must be included in assessing the property. Galves- SEC. v.] THE CAPITAL. 311 ton, Harrisburg & San Antonio Ey. Co. v. State of Texas, 210 TT. S. 217, 28 Sup. Ct. 638, 52 L. Ed. 1031; State ex rel. Foster v. Williams, 123 Wis. 73, 100 N. W. 1052; Chicago & IST. W. E. v. State, 128 Wis. 553, 108 N. W. 557. Whether, however, all matters which are considered in the fore- going two classes of cases as part of the going value, for the pur- poses involved in those cases, should be considered in determining the value as a basis for rate making is not necessary to determine in this case. It is apparent, however, that a complete telephone plant, without a single subscriber, or with but few subscribers, is less valuable, both to the owner of the plant and to the members of the public it serves, than the same plant with a larger patronage. The more people a subscriber can communicate with over a tele- phone exchange, the more service, as a general rule, is such exchange to him; and it is only when such exchange has subscribers that the property of the owner invested therein has an earning power. But subscribers are not obtained without expenditure of money, labor, and time, during which the capital invested in the plant earns nothing, and often fails to pay operating expenses. The customers must be connected with the system of the plant; trained employes must be obtained ; and a system of operation must be established. Few industries, if any, involving an investment of $90,000 or more, can be made self-sustaining from the first day of their operation. The uncontradicted evidence in this ease discloses that appellant's plant, for the years preceding the first, hearing, failed to produce revenue sufiicient for operating expenses, current repair, and lay aside an amount for depreciation. During the time of development, there is a loss of money actually expended and of dividends upon the property invested. How shall this be taken care of? Must it be borne by the owner of the plant ? Or by the initial customers ? Or shall it be treated as part of the investment or value of the plant, constituting the basis upon which charges shall be made to all customers who receive the benefits from the increased service- rendering power of the plant by reason of these expenditures? It seems that the last solution is the logical, just, and correct one. If rates were to be charged from the beginning, so as to cover these expenditures, and earn a dividend from the time a plant is first operated, the rate to the first customers would be in many instances, if not in all, so exorbitant as to be prohibitive, and would be so at the time when the plant could be of least service to them. On the other hand, the public cannot expect as a business proposition, or demand as a legal right, that this loss shall be borne by him who furnishes the service; for investors in public service property make such investments for the return they will yield; and, if the law 313 RATES. [chap. IV. required that a portion of the investments shall never yield any leturn, but shall be a total loss to the investor, capital would unwill- ingly be placed into such class of investments; but the law, in our opinion, does not so require. Private property can no more be taken in this method for public use without compensation, than by any other method. When the use of the property and the expend- itures made during the nonexpense-paying and nondividend-paying period of the plant are treated as an element of the value of the property upon which fair returns shall be allowed, then the burden is distributed among those who receive the benefits of the expendi- tures and the use of the property in its enhanced value. Discussing this question, the Eailroad Commission of Wisconsin, in Geo. W. Hill et dl. v. Antigo Water Co., decided August 3, 1909, said : "With respect to the value of the plant, it was found that for the purposes of this case, and under the conditions that prevail, the investors in the plant and those who carry on its business are equitably entitled to reasonable returns for interest and profits on a valuation that fairly represents the legitimate and necessary costs of constructing the plant and of building up its business. The valuation which is thus made the basis for the earning of the rates should also be a valuation that is subject to the fewest fluc- tuations. Such a valuation as this appears to be equitable to the investors and those who carry on the business, on the one hand, and to the customers of the plant, on the other. It also furnishes a basis upon which rates may be fixed that are reasonable and just to all concerned, and that also have such stability as is required by the best interests of those affected." Although that body is not one of last resort for the determination of questions involving the reasonableness of rat.e, the reasoning with which it supports the doctrine above quoted commends its conclusions to us as being sound. All the evidence of appellant is that the going-concern value of the plant in this case is equivalent to 20 per cent, of the reproductive value. This evidence is not contradicted by the state. The position of counsel for the state and of the Commission being that, whatever its amount is, it is not an element of present value forming a basis for the earning of rates. Twenty per cent, of the reproductive value is $18,932.73, which, added to the reproductive value of the physical properties found by the Commission, makes a total present value, on which appellant is entitled to receive a fair return, in the sum of $113,- i596.42. BBC. v.] THE CAPITAL. 313 HILL V. ANTIGO WATEE CO. C7~> 3 Wis. R. C. R. 623. 1909.^ Cost of Building Up the Business. The facts thus far presented show the cost to the owner of the original construction of the plant, including all extensions; the gross and net earnings of the plant for the entire period; the cost of reproducing the plant new, and the present value of the plant. The cost of construction, and the present value of the plant relate to its physical property only. They show the cost to the owner of obtaining a plant up to the point where it was ready for business or for operation. They also show what it would cost to build a like plant today under the prices which prevailed during a few of the years which immediately preceded 1908. They further show its present value or the balance left when the cost of reproduction new is reduced by the amount of the depreciation that has occurred. The facts thus enumerated are among the more important ele- ments that should be taken into consideration in determining the value of a plant. But while important, they are not the only ones that should be considered in this connection. There are other facts, such as the cost of building up the business of a plant, that are almost, if not equally, as important. This cost bears about the same relation to the business of a plant as that which the cost of construction bears to its physical structure. Besides this, appraisers and engineers, when called upon to value such plants, are often considering the earning value of the business or the number of customers the plants have acquired, as well as the franchises under which they are operating, and these elements are also often taken into account by courts in passing upon such appraisals. A water works plant can, perhaps, be called a going concern. But it cannot be called a going business or a paying concern until it has acquired a sufficient amount of business so that the revenues obtained from the water it furnishes are large enoitgh to meet operating expenses, including a reasonable amount for interest and profit on the investment. A mere physical plant, no matter how perfect or how well it is adapted to the purpose for which it is intended, amounts to but little unless it has or can obtain a paying business. With- out business it is a dead mass instead of a living concern earn- ing profits. To have profits it must have business or customers 1 Only an extract from the opinion is here reprinted. — Ed. 314 RATES. [chap. IV. who avail themselves of the services it renders at rates that yield an adequate income. But new plants are seldom paying at the start. Several years are usually required before they obtain a sufficient amount of business or earnings to cover operating expenses, including de- preciation and a reasonable rate of interest upon the investment. The amount by which the earnings fail to meet these require- ments may thus be regarded as deficits from the operation. These deficits constitute the cost of building up the business of the plant. They are as much a part of the cost of building up the business as loss of interest during the construction of the plant is a part of the cost of its construction. They are taken into account by those who enter upon such undertakings, and if they cannot be recovered in some way, the plant fails by that much to yield reasonable returns upon the sum that has been expended upon it and its business. Such costs or deficits are, generally speaking, unavoidable. 'Few, if any, plants are paying from the start. The only way in which many, if not most of them, can be made paying concerns at the start is apparently by having the city or tax payers foot the deficit. Private customers cannot always be made to foot them, for the rates required to yield reasonable returns at the start or while the business is light, are more than likely to be so high that rather than pay them the consumers would forego the service. Both of these methods of making up the deficits, therefore, would seem to be impracticable. It would seem to follow from this, that early losses will have to be met by the investors. This is as true for plants owned and operated by the municipality as for plants owned and operated by private investors. There is apparently no way in which this can be prevented. But while such losses will have to be met by the investorSj it is not expected that these sacrifices will be anything but temporary. The investors fully expect, and in most cases rightly so, that these losses will be made good as soon as warranted by the business of the plant. They usually regard such deficits as an additional investment upon which, unless the whole amount is refunded to them in some form, they are entitled to the same returns as on the rest of their capital. Unless they are so compensated, it is mani- festly clear that no money from private sources is likely ever to be invested for such purposes, except, perhaps, in a few rare in- stances for philanthropic reasons. If there is not a reasonable assurance of reasonable returns upon the cost of the plant, as well as upon the cost df the business of the said plant, it is manifestly clear that private investors will seek other fields. It is upon this SEC. v.] THE CAPITAL. 315 basis only that such plants will be built at all, at least by private "capital. Communities that are not willing to bear this expense are also likely to have to do without such conveniences as water under pressure, except in cases where the functions of the in- vestors are assumed by the tax payers through the construction of municipal plants. Even in the case of municipal plants it is necessary that the costs in question should be covered if permanent losses to the tax payers are to be avoided. The total investment consists of the cost of the plant, of its business, and of its franchise. The cost of operation consists of the expenses of running the plant, including depreciation and a reasonable return upon the investment. The amount represented by the investment is furnished by the investors; the operating expenses are borne by the consumers. If the earnings are not sufficient to cover these expenses, the service will, in the long run, not be furnished. In other words, in this case, as in life generally, the price must be paid if the service is to be had. As services of this kind are usually worth more than they cost, it is, as a rule, in line with the best policy that they should be provided and that the cost of the same should be paid in full. It thus appears that the cost of building up the business of a plant is in most eases as unavoidable as the cost of the con- struction of the plant itself; that when such costs are incurred, they must be reimbursed in some form by the consumers in order that capital may be secured; that such reimbursement is equitable as between investors and consumers ; and that this is a just method of dealing with such costs for other reasons. If this is sound, it also follows that the cost of the business must also be taken into consideration in determining the value of the plants for rate- fixing purposes. This would seem to apply with special force where by law the rates are limited so as not to yield more than reasonable re- turns upon the investment. While such legislation may not be a guarantee against losses of any kind, it is clear that if the rates fixed under these laws should not include anything for the cost of building up the business, there would be no way in which these costs could be made good to the investors. In that event these costs would become a permanent loss to them; and the consumers, in turn, would be relieved from paying a reasonable return on a part of the investment or on the capital that is devoted to furnishing them with the service in question. This is a situation of which the investors are taking due notice, and which is entitled to due con- sideration. If not taken into account, it will tend to keep new capital from entering this field as well as to prevent exact justice 316 EATES. [chap. IV. to bapital which has already entered the same. The former would result in hardships or inconveniences to the consumers; the latter would apparently be unjust to at least many of the present investors in such utilities.^ LONG BRANCH COMMISSION v. TINTEEN MANOR WATER CO. 70 N. J. Eq. 71. 1905.^ Pitney, V. C. This brings us to the cost of the new plant in producing proof of which a large amount of time and space were occupied. They were commenced by a contracting company under specifications of the work given in detail and were to be paid for in $1,200,000 in first mortgage bonds and divers shares of the capital stock of the par value of $100,000. Difficulties were encountered in carrying out this contract accord- ing to its terms, and the plans were changed. The result of this was that the contractors were not held to their bargain, but were paid in bonds and stock according to the actual amount of their expenditures. In order to ascertain those expenditures an inventory of the work done was taken, and the cost was ascertained by the vouchers and checks furnished by the contractors. The defendant estimates the cost including the Takanassee and Deal works at $1,500,000 and upwards, without counting the shares of stock which were issued and which may be here treated as a mere bonus. Several distinct criticisms and objections are made to the details given of this valuation. First, it is said that the cost of the site for the reservoir, amounting to $76,000, is too great. The land itself, consisting of several hundred acres, cost $40,000 and the cost of clearing, $35,000. In fact, only about one-third or one-half of this land has been so far covered with water, and much more than the amount covered has been cleared. The fact is that the original plan provided for a very large reservoir, including a very high dam, but in carrying it out a lower dam and smaller reservoir were adopted. 2 See City of Appleton e. Appleton W. W. Co. (1910), 5 Wis. R. C. R. 215, 276; Re Application of Oconto City W. S. Co. (1911), 7 Wis. R. C. R. 497, 515. Compare Spring Valley W. Co. v. San Francisco (1908), 165 Fed. 667. 696. 1 Part of the opinion is omitted. — Ed. SEC. v.] THE CAPITAL. 317 It is admitted that the present supply is ample for many years to come. I shall deduct from the total $25,000 on this account. The next item criticised is the cost of the dam itself, the total cost of which was $89,500. The objection to this is that it was laid out and erected to its present height of a width sufficient for a dam two or three times as high, and that such construction cost nearly or quite twice as much as it would have done for a dam of its present height. I think this objection is well taken, but not to the extent claimed by complainants. I shall deduct $30,000 on account of the excessive cost of the dam. The next objection is to the size of the principal main laid, viz., about 42,000 feet of 36-inch main, which was much too large and expensive, and that complainant ought not to be charged with an income on so great an outlay. Defendant admits that its plans were adapted to a future estimated growth of 50 years. Mr. Sherrerd says, and I agree with him, that 50 years is too long for a forecast. He fixed 30 years as the usual limit. Now it is readily perceived that the difference in cost between a 36-inch main and a 24 or 30-inch main is, or may be, so great that if it be saved and invested it will with the accrued interest in a period of 30 years reach a sum sufficient to lay an additional main if the first shall at that time prove to be insufficient. I conclude, then, that a thirty-inch main from the dam to the pumping station (nearly two miles), and from thence to the town (over six miles), is ample, flanked, as it is, by an eighteen-inch main from Little Silver to Seabright, each of these aiding the other in the case of an emergency of fire. Besides, I am entirely satisfied that the estimate for seventy-five gallons per head per day would be reduced below fifty gallons per day by the general introduction of meters, and such reduction of consumption, or rather of waste, will result in the saving of fuel for making steam. This, I think, it is the clear duty of the defend- ant to accomplish as soon as practicable. By the use of the same hydraulic tables showing the relative weight of thirty and thirty-six inch mains and the difference in weight in lead used in joining the same, I conclude that the reduc- tion of cost of the thirty-six inch main laid, if a thirty-inch main had been used, would have been one-quarter. The total cost of the eight miles of the thirty-six inch main, with the appliances, was $300,000. One-fourth of that would be $75,000, which I shall allow on that account. The next objection is to the amount paid ($425,000) for the old works. No reliable statement was made as to what those works 318 EATES. [chap. IV. originally cost the old company. All that was said was that the present proprietors would not sell them for less than $325,000, besides the bonded debt. But, then, we must consider that there was not an actual sale for cash, but a merging into a new corporation. On the other hand, there was some actual loss in the abandonment of the old plant and the amount spent in and about the dam and pumping station at Takanassee. I estimate it at $100,000. I deduct, then, from the $1,500,000, as follows : Whole cost of works $1,500,000; loss on Takanassee, $100,000; overcost of thirty-six inch main, $75,000; overcost of dam, $30,000; overcost on reservoir, $35,000; total loss, $330,000, leaving $1,370,000 as the amount upon which defendant ought to receive dividends.^ , ;, THE MINNESOTA EATE CASES. 230 U. S. 352. 1918.^ Me. Justice Hughes delivered the opinion of the court. These are the results of the endeavor to apply the cost-of-repro- duction method in determining the value of the right of way. It is at once apparent that, so far as the estimate rests upon a supposed compulsory feature of the acquisition, it cannot be sustained. It is said that the company would be compelled to pay more than what is the normal market values of property in transactions between private parties; that it would lack the freedom they enjoy, and, in view of its needs, it would have to give a higher price. It is also said that this price would be in excess of the present market value of contiguous or similiarly situated property. It might well be asked, who shall describe the conditions that would exist, or the exigencies of the hypothetical owners of the property, on the assump- tion that the railroad were removed? But, aside from this, it is impossible to assume, in making a judicial finding of what it would cost to acquire the property, that the company would be compelled to pay more than its fair market value. It is equipped with the governmental power 'of eminent domain. In view of its public purpose, it has been granted this privilege in order to prevent advantage being taken of its necessities. It would be free to stand upon its legal rights, and it cannot be supposed that they would be disregarded. It is urged that, in this view, the company would be bound to pay the " railway value " of the property. But, supposing the rail- 2 Compare Mayhew v. Kings County L. Co. (1911), 2 P. S. C, 1st D. of N. Y. 659, 683; San Diego L. & T. Co. v. Jasper (1903), 189 U. S. 439, 446. 1 Only an extract from the opinion is here reprinted. — Ed. SEC. v.] THE CAPITAL. 319 road to be obliterated and the lands to be held by others, the owner of each parcel would be entitled to receive on its condemnation, its fair market value for all its available uses and purposes. United States V. Chandler-Dunbar Water Power Co. decided May 26, 1913, 339 U. S. 503. If, in the case of any such owner, his property had a peculiar value or special adaptation for railroad purposes, that would be an element to be considered. Mississippi & E. Eiver Boom Co. V. Patterson, 98 U. S. 403 ; Shoemaker v. United States, 147 U. S. 383; United States v. Chandler-Dunbar Water Power Co. supra. But still the inquiry would be as to the fair market value of the property; as to what the owner had lost, and not what the taker had gained. Boston Chamber of Commerce v. Boston, 217 U. S. 189, 195. The owner would not be entitled to demand payment of the amount which the property might be deemed worth to the company ; or of an enhanced value by virtue of the purpose for which it was taken ; or of an increase over its fair market value, by reason of any added value supposed to result from its combination with; tracts acquired from others, so as to make it a part of a continuous railroad right of way held in one ownership. United States v. Chandler-Dunbar Water Power Co., supra and Boston Chamber of Commerce v. Boston, supra. There is no evidence before us from which the amount which would properly be allowable in such con- demnation proceedings can be ascertained. Moreover, it is manifest that an attempt to estimate what would be the actual cost of acquiring the right of way if the railroad were not there is to indulge in mere speculation. The railroad has long been established; to it have been linked the activities of agri- culture, industry, and trade. Communities have long been depend- ent upon its service, and their growth and development have been conditioned upon the facilities it has provided. The uses of prop- erty in the communities which it serves are to a large degree deter-, mined by it. The values of property along its line largely depend upon its existence. It is an integral part of the communal life. The assumption of its nonexistence, and at the same time that the values that rest upon it remain unchanged, is impossible and can- not be entertained. The conditions of ownership of the property and the amounts which would have to be paid in aquiring the right of way, supposing the railroad to be removed, are wholly beyond reach of any process of rational determination. The cost- of -reproduction method is of service in ascertaining the present value of the plant, when it is reasonably applied and when the cost of reproducing the property may be ascertained with a proper degree of certainty. But it does not justify the acceptance of results which depend upon mere conjecture. It is fundamental "that the 320 KATES. [chap. IY. judicial power to declare legislative action invalid upon constitu- tional grounds is to be exercised only in clear cases. The consti- tutional invalidity must be manifest, and if it rests upon disputed questions of fact, the invalidating facts must be proved. And this is true of asserted value as of other facts. The evidence in these cases demonstrates that the appraisements of the St. Paul and Minneapolis properties which were accepted by the master were in substance appraisals of what was considered to be the peculiar value of the railroad right of way. Efforts to express the results in the terms of a theory of cost of reproduction fail, as naturally they must, to alter or obscure the essential char- acter of the work undertaken and performed. Presented with an impossible hypothesis, and endeavoring to conform to it, the ap- praisers — men of ability and experience — were manifestly seek- ing to give their best judgments as to what the railroad right of way was worth. And doubtless it was believed that it might cost even more to acquire the property, if one attempted to buy into the cities as they now exist, and all the difficulties that might be imagined as incident to such a " reproduction " were considered. The railroad right of way was conceived to be a property sui generis, "a large body of land in a continuous ownership," repre- senting one of the "highest uses" of property, and possessing an exceptional value. The estimates before us, as approved by the master, with his increase of 25 per cent in the case of the Duluth property, must be taken to be estimates of the " railway value " of the land; and whether or not this is conceived of as paid to other owners upon a hypothetical reacquisition of the property is not controlling when we come to the substantial question to be decided. That question is whether, in determining the fair present value of the property of the railroad company as a basis of its charges to the public, it is entitled to a valuation of its right of way not only in excess of the amount invested in it, but also in excess of the market value of contiguous and similarly situated property. For the purpose of making rates, is its land devoted to the public use to be treated (irrespective of improvements) not only as increasing in value by reason of the activities and general prosperity of the community, but as constantly outstripping in this increase, all neigh- boring lands of like character, devoted to other uses? If rates laid by competent authority, state or national, are otherwise just and reasonable, are they to be held to be unconstitutional and void because they do not permit a return upon an increment so calculated ? It is clear that in ascertaining the present value we are not limited to the consideration of the amount of the actual investment. SEC. v.] THE CAPITAL. 321 If that has been reckless or improvident, losses may be sustained which the community does not underwrite. As the company may not be protected in its actual investment, if the value of its property be plainly less, so the making of a just return for the use of the property involves the recognition of its fair value if it be more than its cost. The property is held in private ownership, and it is that property, and not the original cost of it, of which the owner may not be deprived without due process of law. But still it is property employed in a pubUe calling, subject to governmental regulation, and while, under the guise of such regulation, it may not be con- fiscated, it is equally true that there is attached to its use the con- dition that charges to the public shall not be unreasonable. And where the inquiry is as to the fair value of the property, in order to determine the reasonableness of the return allowed by the rate- making power, it is not admissible to attribute to the property owned by the carriers a speculative increment of value, over the amount invested in it and beyond the value of similar property owned by others, solely by reason of the fact that it is used in the pubHe service. That would be to disregard the essential conditions of the public use, and to make the public use destructive of the public right. The increase sought for "railway value" in these cases is an increment over all outlays of the carrier and over the values of similar land in the vicinity. It is an increment which cannot be referred to any known criterion, but must rest on a mere expres- sion of judgment which finds no proper test or standard in the transactions of the business world. It is an increment which, in the last analysis, must rest on an estimate of the value of the rail- road use as compared with other business uses ; it involves an appre- ciation of the returns from rates (when rates themselves are in dis- pute) and a sweeping generalization embracing substantially all the activities of the community. For an allowance of this character there is no warrant. Assuming that the company is entitled to a reasonable share in the general prosperity of the communities which it serves, and thus to attribute to its property an increase in value, still the increase so allowed, apart from any improvements it may make, cannot properly extend beyond the fair average of the normal market value of land in the vicinity having a similar character. Otherwise we enter the realm of mere conjecture. We therefore hold that it was error to base the estimates of value of the right of way, yards, and terminals upon the so-called " railway value " of the property. The company would certainly have no ground of complaint if it were allowed a value for these lands equal to the fair average market 322 BATES. [CHAP. IV. value of similar land in the vicinity, without additions by the use of multipliers, or otherwise, to cover hypothetical outlays.^ In re RATES OF QUEENS BOROUGH GAS AND ELECTRIC CO. 2 P. S. C, 1st D. of N. Y. 544. 1911.^ Maltbie, Commissioner. Thus land has been taken at its fair value, and not at its original cost, and the annual appreciation of land has been treated as a profit. By this method, all property is treated absolutely alike, as Judge Hough suggests. No difference is made, except as depreciation represents a decrease in assets, it is placed as a delit against operation, while appreciation is placed as credit because it is an increase in assets. Land has sometimes been treated like other property only to a degree; that is, each class has been appraised at its present worth or value. That has been done in this case. But if property is to be taken at its depreciated value where it has depreciated, an entry must regularly be made in estimating operating expenses equal to the average annual depreciation. Conversely, if land, or any other property which genuinely appreciates in value, is to be taken at its appreciated "value, then an entry must be made in the estimated receipts equal to the annual appreciation. Unless this is done, it is obvious that the consumer will be burdened with all the estimated decreases in assets but not credited with the increases in assets. If the prin- ciple laid down by the courts is to be followed in part, it should be followed in whole. . It is suggested that the annual increase in the value of land which is treated as income is not actually received. Increase in the value of unoccupied land is not realized until sold or put into use, but it is real, nevertheless, although payment may be deferred. Like- wise, payments to the depreciation fund are not actually expended; yet they have been considered legitimate charges in practically every case. Furthermore, the annual increment is no more in- 2 " In the fourth place, contributions by the city should be deducted. The city of New York has paid to the Brooklyn Union Elevated Railroad Com- pany approximately $800,000 [the amount contributed by the city towards the cost of bridges, crossings, etc.]. No company ought to be allowed to capitalize such contributions, or charge a rate which will yield a fair re- turn upon these contributions. With equal propriety the companies could claim the right to earn profits upon the capitalized value of the streets and of the Brooklyn and Williamsburg bridges, which they have been allowed to use practically without charge. The capitalization of franchises, a pro- cedure prohibited by the law, would be more plausible." Dissenting opinion of Maltbie, Commissioner, in In re MacReynolds v. Brooklyn Un. R. B. Co. (1910), 2 P. S. C, 1st D. of N. Y. 246, 265. 1 Only an extract from the opinion is here reprinted. — Ed. SEC. v.] THE CAPITAL. 323 definite than the total increment — the present value. But if the present value caa be determined, it is possible to determine past annual appreciation with positive accuracy, for it is only a simple mathematical calculation. It is also probably as easy to estimate increases in the near future as it is to estimate what obsolescence, which is a form of depreciation, there will be in the future. Indeed, the problem of handling appreciation is much simpler than depreciation. If the property is growing more valuable, the investor need not worry; and if the state recognizes his right to earn a fair return upon the increase, he is fully protected. It is not necessary that the increase be represented by stocks and bonds, for, if the earning power is there, he will receive a return thereon, regardless of the amount of securities. In fact, the exist- ence of an increase which is not represented by securities is an element of safety, a reserve fund of a valuable kind. There is a further similarity. The exact amount of depreciation and the annual rate are not definitely known until the piece of property is actually replaced or has become useless. The total appreciation and the average annual rate are not known until the land is sold, but when it has been disposed of (and plants are con- tinually being removed and the land sold), they become absolute certainties. Why should these matters be considered less definite when applied to land than when applied to the buildings thereon? The depreciation of the building is a charge against operation; why should not appreciation of land be a credit? The entries in the preceding tables representing the increase in land have been carefully computed. It has been possible to ascer- tain the approximate cost of the land and the date of purchase. Having these facts, one may easily compute the average annual rate of increase. The experts called by the company and the Com- mission were also examined upon the present trend of prices. The estimated increases used in the above computations are believed to be conservative. BEYMEE V. BUTLEE WATEE CO. 179 -Pa. St. 231. 1897.^ Mr. Justice Williams. In determining the amount of the investment by the stockholders, it can make no difference that money earned by the corporation, and in a position to be distributed by a dividend among its stockholders, was used to pay for improve- ments and stock issued in lieu of cash to the stockholders. It is 1 Only an extract from the opinion is here reprinted. — Ed. 3B4 RATES. [chap. IV. not necessary that the money should first be paid to the stockholder, and then returned by him in payment for new stock issued to him. The net earnings, in equity, belonged to him, and stock issued to him in lieu of the money so used that belonged to him was issued for value, and represents an actual investment by the holder. If the company makes an increase of stock that is fictitious, and repre- sents no value added to the property of the corporation, such stock is rather in the nature of additional income than of additional investment. \ CHICAGO, MILWAUKEE AND ST. PAUL EAILWAY CO. V. TOMPKINS. 176 U. S. 167. 1900.^ Me. JusTrcE Brewer delivered the opinion of the court. It may be premised that the books of the plaintiff, showing its business for the four years, were examined, and so much as was deemed necessary admitted in evidence. Prom those books was disclosed with mathematical accuracy the gross receipts of the company on all its business in all the States during each of the four years and the actual cost of doing that business during each of those years; also the gross receipts from the business done in South Dakota, and separately the amount which was received in that State from interstate business and that from local. If the schedule of rates prescribed by the defendants had been in force during the four years, and the same amount of business had been done by the company, the reduction in gross receipts from the passenger business would have been fifteen per cent, and from the freight business seventeen per cent. Of course, the cost of doing the business would be substantially the same. The court found the value of the plaintiff's property in South Dakota to be $10,000,000, although, according to the testimony, it was bonded for over $19,- 000,000. It held that it was not fair to consider that sum, $10,000,- 000, the value of the property employed in doing local business, for it was also used in doing interstate business ; and that the true way to determine the value of the property which could be regarded as employed in local business was by dividing the total value of $10,000,000 in the same proportion that existed between the amount of gross receipts from interstate business and that from local busi- ness, each of which amounts was, as we have seen, accurately shown by the testimony. Upon that basis of division it found that the value of the company's property employed in local business was 1 Only an extract from the opinion is here reprinted. — Ed. SEC. V.]' THE CAPITAL. 335 for the first year, $3,300,000; the second year, $3,600,000; the third year, $3,100,000; and the last year, $1,900,000, and also that the gross receipts from local business were for the first year, 18.5 per cent of the valuation; for the second year, 13.7 per cent; for the third year, 15.6 per cent, and for the last year, 16.3 per cent. In other words, for these several years the company received as compensation for doing its local business the per cent named of the real value of the property used in doing that business. Then, proceeding on the supposition that the defendant's schedule had been in force and the rates reduced as therein prescribed during these four years, it divided the valuation of $10,000,000 on the like proportion of the receipts from interstate business to the receipts from local business as thus diminished, and upon such division found that the valuation of the plaintiff's property engaged in local business would have been, for the first year, $1,900,000 ; for the second year, $3,300,000; for the third year, $1,800,000; and the last year, $1,600,000; and upon such basis that the gross receipts from local business would have amounted to 18 per cent of the value of the property for the first year, 13.1 for the second, 15.3 for the third, and 16.3 for the last. Upon this it held that the difference between the per cent of receipts in the two cases was slight, and that there was no change in what may rightfully be called the earning capacity of the property suJBBeient to justify a declaration that the reduced rates prescribed were unreasonable. In other words, it was of the opinion that the earning capacity was so slightly reduced that it could not be afSrmed that the new rates were unreasonable. But that there was some fallacy in this reasoning would seem to be suggested by the fact that although the defendants' schedule would have reduced the actual receipts 15 per cent on the passenger and 17 per cent on the freight business, the earning capacity for the last year was diminished only one tenth of one per cent. Such a result indicates that there is something wrong in the process by which the conclusion is reached. That there was, can be made apparent by further computations, and in them we will take even numbers as more, easy of comprehension. Suppose the total value of the property in South Dakota was $10,000,000, and the total receipts both from interstate and local business were $1,000,000, one half from each. Then, according to the method pursued by the trial court, the value of the property used in earning local receipts would be $5,000,000, and the per cent of receipts to value would be 10 per cent. The interstate receipts being unchanged, let the local receipts by a proposed schedule be reduced to one fifth of what they had been, so that instead of receiving $500,000 the 336 BATES. [chap. IV. company only receives $100,000. The total receipts for interstate and local business being then $600,000, the valuation of $10,000,000, divided between the two, would give to the property engaged in earning interstate receipts in round numbers $8,333,000, and to that engaged in earning local receipts $1,667,000. But if $1,667,000 worth of property earns $100,000 it earns six per cent. In other words, although the actual receipts from local business are only one fifth of what they were, the earning capacity is three fifths of what it was. And turning to the other side of the problem, it appears that if the value of the property engaged in interstate business is to be taken as $8,333,000, and it earned $500,000, its earning capacity was the same as that employed in local business — six per cent. So that although the rates for interstate business be undisturbed, the process by which the trial court reached its conclusion discloses the same reduction in the earning capacity of the property employed in interstate business as in that employed in local business, in which the rates are reduced.^ Section 6. ly/ What Eate of Eetuen Should Be Allowed. CEDAE RAPIDS WATER CO. v. CITY OP CEDAR RAPIDS. 118 la. 234. 1902.^ Weaver, J. We shall not attempt to go into any minute state- ment or analysis of the figures and computations relied upon by 2 In Minnesota Rate CaSes (1913), 230 U. S. 352, 461, after quoting from the last paragraph reprinted above, Mr. Justice Hughes said : " The value of the use, as measured by return, cannot be made the cri- terion when the return itself is in question. If the return, as formerly allowed, be taken as the basis, then the validity of the State's reduction would have to be tested by the very rates which the State denounced as exorbitant. And, if the return as permitted under the new rates be taken, then the State's action itself reduces the amount of value upon which the fairness of the return is to be computed. " When rates are in controversy, it would seem to be necessary to find a basis for a division of the total value of the property independently of revenue, and this must be found in the use that is made of the property. That is, there should be assigned to each business, that proportion of the total value of the proj)erty which will correspond to the extent of its em- ployment in that busmess. It is said that this is extremely difficult; in particular, because of the necessity for making a division between the pas- senger and freight business and the obvious lack of correspondence between ton-miles and passenger-miles. It does not appear, however, that these are the only units available for such a division ; and it would seem that, after assigning to the passenger and freight departments respectively, the prop- erty exclusively used in each, comparable use-units might be found which would afford the basis for a reasonable division with respect to property used in common. It is suggested that other methods of calculation would be equally unfavorable to the State rates, but this we cannot assume." 1 Only an extract from the opinion is here reprinted. — Ed. SEC. VI.] KATE OP EETUKN ALLOWED. 327 counsel. Some of the items by which plaintiff increases the alleged value of the works and reduces the showing of net earnings, as well as other items by which the defendant decreased the former and increased the latter, we think are unwarranted. The testi- mony, when taken as a whole, and considered in the light of all the proved and admitted circumstances, indicates the present fair value of the company's property to be somewhere from $400,000 to $500,000. The total earnings of the works, as charged upon plaintiff's books, for the year preceding the trial in the district court, were, in round numbers, $59,000, subject, however, to some discounts for advance payments. Of this income about one-third is charged to the city, and is not affected by the ordinance in con- troversy. The other two-thirds are collected from private con- sumers, and the charges for such service are reduced by the ordi- nance in varying proportions. Just the extent which this reduction will affect the company's earnings it is impossible to prove or predict with certainty, but we see no reason to believe that the total revenue, after making all due allowance for discounts, will be reduced below $50,000. The operating expenses charged for the year preceding the trial (being largely in excess of the average in its experience) were $23,000, or, including taxes, $28,000. On this basis the net earn- ings are 5% per cent, on a valuation of $400,000, or 4% per cent, on a valuation of $500,000, or 6% per cent, on the total amount of capital stock and bonds. Stated otherwise, this will enable the company to pay its interest charge of $7,500, make a dividend of 5 per cent, on its capital stock (including stock issued as dividends), and leave a margin of over $3,000 for contingencies. This estimate of earnings may be very materially reduced, or the estimate of the value of the plant be very materially increased, before the court will be justified in saying that the plaintiff's property is being ex- posed to destruction or confiscation by an unprofitable schedule of rates. "We have pursued this subject far enough to demonstrate that, even taking the high estimate of value which plaintiff places upon its property, and its own showing of earnings, there is nothing in the ordinance sought to be nullified which calls for judicial inter- ference. The net earnings- upon this showing, if not large, are substantial. The court cannot undertake to guarantee the com- pany any fixed or certain return upon its investment. The exercise of such a power would work an utter destruction of the legislative right to regulate rates of water companies and other corporations operating works of public utility. We think the decisions have already gone to the verge of safety in nullifying legislative acts of this character ; and to go farther, and say that the courts will not 328 KATES. [chap. IV. only preserve property from confiscation and destruction by legis- lative power, but will also assure to its owners a definite and fixed rate of profit upon their investment, would be an act of judicial usurpation.^ WILCOX V. CONSOLIDATED GAS CO. ^ 212 U. S. 19. 1909.^ Me. Justice Peckham delivered the opinion of the court. There is no particular rate of compensation which must, in all cases and in all parts of the country, be regarded as sufficient for capital invested in business enterprises. Such compensation must depend greatly upon circumstances and locality; among other things, the amount of risk in the business is a most important factor, as well as the locality where the business is conducted, and the rate expected and usually realized there upon investments of a some- what similar nature with regard to the risk attending them. There may be other matters which, in some cases, might also be properly taken into account in determining the rate which an investor might properly expect or hope to receive and which he would be entitled to without legislative interference. The less risk, the less right to any unusual returns upon the investments. One who invests his money in a business of a somewhat hazardous character is very properly held to have the right to a larger return, without legislative interference, than can be obtained from an investment in govern- ment bonds or other perfectly safe security. The man that invested in gas stock in 1833 had a right to look for and obtain, if possible, a much greater rate upon his investment than he who invested in such property in the city of New York years after the risk and danger involved had been almost entirely eliminated. In an investment in a gas company, such as complainant's, the lisk is reduced almost to a minimum. It is a corporation which, in fact, as the cou»t below remarks, monopolizes the gas service of the largest city in America, and is secure against competition under the circumstances in which it is placed, because it is a proposition al- most unthinkable that the city of New York would, for purposes of making competition, permit t];ie streets of the city to be again torn up in order to allow the mains of another company to be laid all through them to supply gas which the present company can ade- quately supply. And, so far as it is given us to look into the future, it seems as certain as anything of such a nature can be, that the de- 2 See Chicago & N. W. Ry. Co. v. Dey (1888), 35 Fed. 866, 879. 1 Only an extract from the opinion is here reprinted. — Ed. SEC. VI.] RATE OF RETUIIN ALLOWED. 329 maud for gas will increase, and, at the reduced price, increase to a considerable extent. An interest in such a business is as near a safe and secure investment as can be imagined with regard to any private manufacturing business, although it is recognized at the same time that there is a possible element of risk,, even in such a business. The court below regarded is as the most favorably situated gas business, in America, and added that all gas business is inherently subject to many of the vicissitudes of manufacturing. Under the circum- stances, the court held that a rate which would permit a return of 6 per cent would be enough to avoid a charge of confiscation, and for the reason that a return of such an amount was the return ordinarily sought and obtained on investments of that degree of safety in the city of New York. Taking all facts into consideration, we concur with the court be- low on this question, and think complainant is entitled to 6 per cent on the fair value of its property devoted to the public use. DBS MOINES WATEE CO. v. CITY OP DES MOINES. 192 Fed. 193. 1911.^ Smith McPheeson', District Judge. The waterworks company claims that certain other specific things, by name, should be allowed, either by way of enhancing the value of the property, or that which would be the same thing, by calling them hazards, and allowing euch rates as would produce a reasonable revenue thereon. One of these is the fact that rates are subject, at any time, to change by the city council, subject to local prejudice, and without experience or training with reference thereto ; the hazard that the city, at any time, can force an involuntary sale by proceedings of condemnation ; the fact that the franchise cannot extend beyond 25 years, with no assurance that it will be renewed ; another competing plant may be allowed; the city may establish a competing plant; and other minor hazards. There can be no question but that some of these matters should be given consideration. The greater the hazard, the higher the rate of interest. A farmer who observes his contracts and pays his debts can get a loan at a low rate of interest by a mortgage on his farm. A man whose credit is not good, and who can only tender security of a doubtful character, must pay a high rate of interest. This has always been so, and always will remain so. The fact that the com- pany's charter may be revoked by a forced sale, or that it may expire 1 Part of the opinion is omitted. — Ed. 330 BATES. [chap. IV. at the end of 25 years, and that it will be continuously kept in liti- gation, are all hazards, which in other business enterprises would increase the rate of interest that the borrower must pay, and justly entitles it to a higher rate of earnings than if its earnings were cer- tain and fixed, and were in perpetuity or of long duration. But it is well-nigh impossible to point out just what particular hazard, and to what extent such a particular hazard, will increase the rate of interest, or will entitle it to higher rate of earnings. From the most exhaustive reading and consideration of the voluminous record in this case, a record of many thousands of pages, I not only cannot say that the findings of the master as to the value of this water plant have not been fairly stated by him, when he states that it is worth not less than $1,840,000, in round numbers, and perhaps, that it is worth something like $15,000 in excess of that ; but I think that the master has been conservative in fixing this valuation. It can be well said that, if he is in error, it has been by an undervaluation. Taking into account the expenses of approximately $122,000 per year, the reduction proposed by the new ordinance would make the plant unremunerative to the extent that it is entitled to receive, con- sidering the fair value of money in a state like Iowa. And, con- sidering the hazards and liabilities, some of them certain and others contingent, and some of them destructive, an 8 per cent, return is moderate. But this proposed ordinance would allow nothing like 8 per cent. All fair-minded people should readily agree, and the defendant , city and its ofiicers ought to agree, that reasonable returns should be allowed to not only these investments, but these dangers and hazards; which clearly are to be taken into account, under the authorities. Some of the leading cases which support the foregoing are the fol- lowing : City of Omaha v. Omaha Water Company, 218 U. S. 180, 30 Sup. Ct. 615, 54 L. Ed. 991 ; National Waterworks Company v. Kansas City, 62 Fed. 853, 10 C. C. A. 653, 27 L. E. A. 827 ; Spring Valley Co. v. San Francisco (C. C.) 124 Fed. 574; Kennebec Water District v. City of Waterville, 97 Me. 185, 54 Atl. 6, 60 L. E. A. 856 ; Brunswick, etc., v. Maine Water Co., 99 Me. 371, 59 Atl. 537 ; Glou- cester Water Co. v. City of Gloucester, 179 Mass. 365, 60 N. E. 977; Norwich Gas & Electric Co. v. City of Norwich, 76 Conn. 565, 57 Atl. 746 ; Galena Water Co. v. City of Galena, 74 Kan. 644, 87 Pac. 735; Newburyport Water Co. v. City of Newburyport, 168 Mass. 541, 47 N. B. 533 ; Town of Bristol v. Bristol Water Works, 23 E. I. 274, 49 Atl. 974; Wilcox v. Consolidated Gas Co. 212 U. S. 19, 29 Sup. Ct. 192, 53 L. Ed. 382. The foregoing authorities sustain the foregoing holdings. SEC. VI.] RATE OF RETURN ALLOWED. 331 The exceptions, both of the city and of the waterworks company, are all overruled. The report of the master is confirmed, and there will be a decree enjoining the enforcement of the ordinance in ques- tion. \ V"' 183 U. S. 79. 1901.^ Mr. Justice Brewer delivered the opinion of the court. In the light of these quotations,^ this may be aflBrn],ed to be the present scope of the decisions of this court in respect to the power of the legislature in regulating rates : . As to those individuals and corporations who have devoted their property to a use in which the public has an interest, although not engaged in a work of a confessedly public character, there has been no further ruling than that the State may prescribe and enforce reasonable charges. What shall be the test of reasonableness in those charges is absolutely undisclosed. As to parties engaged in performing a public service, while the power to regulate has been sustained, negatively the court has held that the legislature may not prescribe rates which if enforced would amount to a confiscation of property. But it has not held affirm- atively that the legislature may enforce rates which stop only this side of confiscation, and leave the property in the hands and under the care of the owners without any remuneration for its use. It has declared that the present value of the property is the basis by which the test of reasonableness is to be determined, although the actual cost is to be considered, and that the value of the services rendered to each individual is also to be considered. It has also ruled that the determination of the legislature is to be presumed to be just, and must be upheld unless it clearly appears to result in enforcing unreasonable and unjust rates. If the rates prescribed by the Kansas statute for yarding and feeding stock had been in force during the year 1896 the income of the stock-yards company would have been reduced that year $300,- 651.77, leaving a net income of $389,916.96. This would have 1 Only a part of the opinion is reprinted. — Ed. 2 From Muun v. Illinois, 94 U. S. 113, 125; Spring V. W. W. Co. v. Schottler, 110 U. S. 347, 354; Railroad Commission Cases, 116 U. S, 307, 331; Chicago M. & St. P. Ry. Co. v. Minnesota, 134 TJ. S. 418, 458; Chi- cago & G. T. Ry. V. Wellman, 143 U. S. 339, 344 ; Reagan v. Farmers' L. & T. Co., 154 U. S. 362, 399; St. Louis & S. F. Ry. Co. v. Gill, 156 U. S. 649, 657 ; Covington, etc., T. Co. v. Sandford, 164 U. S. 578, 596 ; Smyth v. Ames, 169 U. S. 466, 546; San Diego L. Co. v. National City, 174 U. S. 739, 757.— Ed. 333 EATES. [chap. IV. yielded a return of 5.3 per cent on the value of property used for stock-yard purposes, as fixed by the master. Or if the capital stock be taken after deducting therefrom such portion thereof which rep- resents property not used for stock-yard purposes, the return would be 4.6 per cent. Now, in the light of these decisions and facts, it is insisted that the same rule as to the limit of judicial interference must apply in cases in which a public service is distinctly intended and rendered and in those in which, without any intent of public service, the owners have placed their property in such a position that the public has an interest in its use. Obviously there is a difference in the conditions of these cases. In the one the owner has intentionally devoted his property to the discharge of a public service. In the other he has placed his property in such a position that, willingly or unwillingly, the public has acquired an interest in its use. In the one he deliberately undertakes to do that which is a proper work for the state. In the other, in pursuit of merely private gain, he has placed his property in such a position that the public has become interested in its use. In the one it may be said that he voluntarily accepts all the conditions of public service which attach to like service performed by the State itself. In the other, that he sub- mits to only those necessary interferences and regulations which the public interests require. In the one he expresses his willingness to do the work of the State, aware that the State in the discharge of its public duties is not guided solely by a question of profit. It may rightfully determine that the particular service is of such im- portance to the public that it may be conducted at a pecuniary loss, having in view a larger general interest. At any rate, it does not perform its services with the single idea of profit. Its thought is the general public welfare. If in such a case an indi- vidual is willing to undertake the work of the State, may it not be urged that he in a measure subjects himself to the same rules of action, and that if the body which expresses the judgment of the State believes that the particular services should be rendered with- out profit he is not at liberty to complain? While we have said again and again that one volunteering to do such services cannot be compelled to expose his property to confiscation, that he cannot be compelled to submit its use to such rates as do not pay the expenses of the work, and therefore create a constantly increasing debt which ultimately works its appropriation, still is there not force in the suggestion that as the State may do the work without profit, if he voluntarily undertakes to act for the State he must submit to a like determination as to the paramount interests of the public ? Again, wherever a purely public use is contemplated, the State SEC. VI.] RATE OF EETUEN ALLOWED. 333 may and generally does bestow upon the party intending such use some of its governmental powers. It grants the right of eminent domain, by which property can be taken, and taken, not at the price fixed by the owner, but at the market value. It thus enables him to exercise the powers of the State, and, exercising those powers and doing the work of the State, is it wholly unfair to rule that he must submit to the same conditions which the State may place upon its own exercise of the same powers and the doing of the same work? It is unnecessary in this case to determine this question. We simply notice the arguments which are claimed to justify a difEerenee in the rule as to property devoted to public uses from that in respect to property used solely for purposes of private gain, and which only by virtue of the conditions of its use becomes such as the public has an interest in. In reference to this latter class of cases, which is alone the subject of present inquiry, it must be noticed that the individual is not doing the work of the state. He is not using his property in the discharge of a purely public service. He acquires from the state none of its governmental powers. His business in all mat- ters of purchase and sale is subject to the ordinary conditions of the market and the freedom of contract. He can force no one to sell to him, he cannot prescribe the price which he shall pay. He must deal in the market as others deal, buying only when he can buy and at the price at which the owner is willing to sell, and selling only when he can find a purchaser and at the price which the latter is willing to pay. If under such circumstances he is bound by all the conditions of ordinary mercantile transactions he may justly claim some of the privileges which attach to those engaged in such transactions. And while by the decisions here- tofore referred to he cannot claim immunity from all state regu- lation he may rightfully say that such regulation shall not operate to deprive him of the ordinary privileges of others engaged in mer- cantile business. Pursuing this thought, we add that the state's regulation of his charges is not to be measured by the aggregate of his profits, de- termined by the volume of business, but by the question whether any particular charge to an individual dealing with him is, con- sidering the service rendered, an unreasonable exaction. In other words, if he has a thousand transactions a day, and his charges in each are but a reasonable compensation for the benefit received by the party dealing with him, such charges do not become un- reasonable because by reason of the multitude the aggregate of his profits is large. The question is not how much he makes out of his volume of business, but whether in each particular transac- 334 BATES. [chap. it. tion the charge is an unreasonable exaction for the services ren- dered. He has a right to do business. He has a right to charge for each separate service that which is reasonable compensation therefor, and the legislature may not deny him such reasonable compensation, and may not interfere simply because out of the multitude of his transactions the amount of his profits is large.^ 3 Me. Justice Hablan, with whom concurred Mb. Justice Gray, Mb. Justice Bbown, Mb. Justice Shibas, Mb. Justice White and Mb. Jus- tice McKenna : " We assent to the judgment of reversal — so far as the merits of the case are concerned — upon the ground that the statute of Kansas in ques- tion is in violation of the Fourteenth Amendment of the Constitution of the United States, in that it applies only to the Kansas City Stock Yards Com- pany and not to other companies or corporations engaged in like business in Kansas, and thereby denies to that company the equal protection of the laws. Upon the question whether the statute is unconstitutional upon the further ground that, by its necessary operation, it will deprive that com- pany of its property without due process of law, we deem it unnecessary to express an opinion." CHAPTER V. DISCEIMINATION. THE SUE. 22 Fed. 843. 1885.^ Morris, C. J. This suit (with, three others of like character by other female libelants) has been instituted to recover damages on the allegation that the libelant, who is a colored woman of unobjection- able character and conduct, and who had purchased a first-class ticket for a passage on the steam-boat Sue, in August, 1884, from Baltimore to a landing in Virginia, on the Potomac river, was refused proper first-class sleeping accommodations on board, and was in consequence compelled to sit up all night in the saloon, and experienced great discomforts. The answer of the claimants of the steam-boat alleges in defense that there was provided on board a sleeping cabin for white female passengers in the after part of the boat, and that a sleeping cabin equally good ia every respect was provided forward, on the same deck, for female colored pas- sengers, and that these libelants were told and well knew before they came on board that the regulations of the boat did not allow either class to intrude into the cabin of the other; that the libelants all refused to sleep in cabin provided for the colored female passengers, and preferred to remain sitting in the saloon all night xather than to go into it, claiming as matter of right to be al- lowed to go into the white women's cabin. There are two issues raised: The first one of law, the libelants denying the legal right of the owners of the steam-boat to separate passengers for any purpose, because of race or color. The second is an issue of fact, the libelants denying that the forward cabin assigned to them was, in fact, equal in comfort and convenience to the after cabin assigned to white women. In determining the question of law, it is to be observed that the steamer Sue is employed on public navigable waters, and plies be- tween the port of Baltimore and ports in the state of Virginia, and that the regulations made by her owners and enforced on board of her, by which colored passengers are assigned to a different sleeping 1 Part of the opinion is omitted. — Ed. 336 DISCRIMINATION. [CHAP. V. cabin from white passengers, is a matter affecting interstate com- merce. It is, therefore, a matter which cannot be regulated by state law, and congress having refrained from legislation on the subject, the owners of the boat are left at liberty to adopt in reference thereto such reasonable regulations as the common law allows. Hall v. De Cuir, 95 U. S. 490. One of the restrictions which the common law imposes is that such regulations must be reasonable, and tend to the comfort and safety of the passengers generally, and that accommodations equal in comfort and safety must be afforded to all alike who pay the same price. The law of carriers of passengers in this respect is well stated in Hutch. Carr. § 543. He states the result of the decisions to be that, if the conveyance employed be adapted to the carriage of passengers separated into different classes according to the fare which may be charged, the character of the accommodations afforded, or of the persons to be carried, the carrier may so divide them, and any regulation confining those of one class to one part of the conveyance will not be regarded as un- reasonable if made in good faith for the better accommodation and convenience of the passengers. The precise question raised in this case, viz., whether a separ-. ation of passengers as to their sleeping cabins on board a steam- boat, made solely on the ground of race or color, shall be held to- be a reasonable regulation, has not to my knowledge been decided in any court. There have been cases arising from separations made in respect to day travel as to which there has been some conflict of views, and one or two cases have been cited in which such separa-. tions have been held unreasonable. U. S. v. Buntin, 10 Fed. Eep. 739, note; Gray v. Cincinnati S. E. Co. 11 Fed. Eep. 683, note. These differences of opinion, I think, may be explained, in part at- least, by differences in the circumstances existing in different com- munities. It is, in my judgment, a mixed question of law and fact, and whenever it appears that facts do not exist which give reason- for the separation, the reasonableness of the regulation cannot be sustained. But the great weight of authority, it seems to me,' supports the doctrine that, to some extent at least, and under some circumsances, such a separation is allowable at common- law. But to say that regulations based on differences of race or color may be lawful is not to say that every such regulation can be up- held. The regulation must not only be reasonable in that it con- duces to the general comfort of passengers, but it must not deny equal conveniences and opportunities to all who pay the same fare. This discrimination on account of race or color is one which it must be conceded goes to the very limit of the right of a carrier DISCRIMINATION. 337 to regulate the privileges of his passengers, and it can only be exercised when the carrier has it in his power to provide for the passenger, who is excluded from a place to which another person, paying the same fare, is admitted, accommodations equally safe, convenient, and pleasant. This proposition of law, I am informed, was applied by my learned predecessor, Judge Giles, in a suit brought by a colored man who had been excluded from a street car. The street car company had arranged that every third or fourth car, and none other, should be exclusively for colored people, but Judge Giles held that this did not afford equal convenience to this class of citizens. And this leads to the important question of fact in the present case. The libelants testify that the forward cabin, which was assigned to their use, was offensively dirty; that the mattresses in the berths were defaced; that sheets were wanting or soiled, and that there were hardly any berths which had pillows ; that there were no blankets and no conveniences for washing. They testify that from their own knowledge the white women's cabin was clean, pleasant, and inviting, and had none of these defects. They declare that on former trips they had found the forward cabin so intolerable that they sat up all night, and, finding it in the same condition this trip, they refused to remain in it, and being refused admission into the after cabin, again sat up all night. In these assertions they are supported by five other per- sons, all colored persons, to be sure, but respectable, and all having had similar opportunities of experience. They claim also that the approach to the stairway to the cabin assigned for their use was obstructed by cattle, and that there was no key with which' their door could be secured, and that its location did not compare in comfort with the women's cabin aft. While allowing a good deal for the inflamed feelings of these libelants and witnesses, who all testify under feelings of resentment, I still am far from thinking that they have, in a reckless spirit of vindictiveness, made up this story from the whole cloth. The separation of the colored from the white passengers, solely on the ground of race or color, goes to the verge of the carrier's legal right, and such a regulation cannot be upheld unless hona ■fide, and diligently the officers of the ship see to it that the separation is free from any actual discrimination in comfort, at- tention, or appearance of inferiority. The right of the first-class colored passenger was to have first-class accommodation according to the standard of the after cabin on the same boat, and this, no matter what might be the difiiculties arising from the greater number of second-class colored passengers. If it is beyond the 338 DISCEIMINATION. [CHAP. V. power of the owners of the boat to afford this, then they have no right to make the separation. On many vehicles for passenger transportation, the separation cannot be lawfully made, and the right of steamboat owners to make it depends on their ability to make it without discrimination as to comfort, convenience, or safety. I pronounce in favor of the libelants, and will sign a decree for $100 in each case.^ JOHNSON V. PENSACOLA AND PBEDIDO EAILEOAD CO. 16 Fla. 623. 1878.^ Me. Justice Westcott. The next question in order in view of this conclusion is, do the facts set forth in this declaration con- stitute in law a cause of action? The facts here alleged are that the defendant, a common carrier, compelled the plaintfE to pay to the defendant, between the first day of July, a. d. 1874, and the first day of March, a. d. 1877, fifty cents per thousand feet on 4,400,000 feet of lumber shipped by plaintifE over said railroad, making an aggregate of $3,200 in excess of what the said defendant charged the Perdido Bay Lumber Company for like transportation over said railroad during the said period, between the first day of July, a. d. 1874, and the first of March, a. d. 1877. Under the charter of this company it has the general power "to levy and collect tolls from all persons, property, merchandise, and all other commodities transported " on its road. There is no statute in this State regulating the matter of freights and charges by railroad companies. It is not denied that this com- pany is a common carrier. We must, therefore, look to the com- mon law for the settlement of the question involved. The question here is, what was and is the extent of the obligation of a common carrier at common law to the public, when viewed in reference to charges for tolls and freights? We have exhausted the material at our hands in the endeavor to ascertain the result of the English cases upon this question. We can find in England or the United States no case involving 2 See MeGulnn v. Farbes (1889), 37 Fed. 639; Houck v. Southern P. Ry. Co. (1888), 38 Fed. 226; Pullman P. C. Co. v. Cain (1897), 15 Tex. Civ. App. 503. Compare Day v. Owen (1858), 5 Mich. 520. See also with regard to discrimination in service : Cumberland T. & T. Co. V. Morgan's L,. & T. R. R. Co. (1900), 52 La. Ann. 1850; Nichols v. Oregon S. L. Co. (1901), 24 Utah, 83; Regina v. Sprague (1899), 63 Jus- tice of the Peace, 233; Memphis News Pub. v. Southern Ry. Co. (1903), 110 Tenn. 684. 1 The statement of facts, arguments of counsel and part of the opinion are emitted. — Ed. DISCRIMINATION. 339 the precise point here involved, which is, whether, at common law, the defendant, a common carrier, is responsible to the plaintiff for the excess charged him lipon the like material and during the same time over a charge for like freights for like material during the same time made of another. In the case of the Pitchburg Eailroad Company v. Gage and others (13 Gray, 393), the Supreme Court of Massachusetts held " that a railroad corporation is not obliged as a common carrier to transport goods and merchandise for all persons at the same rates." In speaking of the common law rule, that court says : " It requires equal justice to all. But the equality which is to be observed in relation to the public and to every individual consists in the restricted right to charge in each particular case of service a reasonable compensation and no more. If the carrier confines himself to this, no wrong can be done and no cause afforded for complaint." The claim made in this case arose out of a difference between the freights upon plaintiff's ice and the price charged oth- ers upon the same class of freights. It was not upon the same material, but the court treated the case as involving the same principle. It based its conclusion upon the ground that the plain- tiff did not set out a ease of excessive or unreasonable charge. In the last edition of Story on Bailments, we find the rule of the common law thus stated: "At common law a common carrier of goods is not under any obligation to treat all customers equally. He is bound to accept and carry for all upon being paid a reason- able compensation. But the fact that he charges less for one than for another is only evidence to show that a particular charge is unreasonable ; nothing more. There is nothing in the common law to hinder a carrier from carrying for favored individuals at an unreasonably low rate or even gratis." In support of this doe- trine the following cases are cited: 13 Gray, 393; 3 P. C, 337; 4 C. B. (K. S.), 78; 13 C. B. (N. S.) 74. Our conclusions are that, as against a common or public carrier, every person has the same right; that in all cases, where his com- mon duty controls, he cannot refuse A. and accommodate B. ; that all, the entire public, have the right to the same carriage for a reasonable price, and at a reasonable charge for the service per- formed; that the commonness of the duty to carry for all, does not involve a commonness or equality of compensation or charge; that all the shipper can ask of a common carrier is, that for the service performed he shall charge no more than a reasonable sum to him; that whether the carrier charges another more or less than the price charged a particular individual, may be a matter of evidence in determining whether a charge is too much or too little 340 DISCRIMINATION. [CHAP. V. for the service performed, and that the difference between the charges cannot be the measure of damages in any case, unless it is established by proof that the smaller charge is the true reasonable charge in view of the transportation furnished, and that the higher charge is excessive to that degree. The obligations in this matter must be reciprocal. Where there is no express contract, the com- mon law action by the carrier against the shipper is for a quantum meruit, and the liability of the shipper is for a reasonable sum in view of the service performed for him. What is charged another person (in this case the amount charged the Perdido Bay Lumber Company), or the usual charge made against many others (the freight tariff) is matter of evidence admissible to ascertain the value of the service performed. In every case the legality of the charge is established and measured hy the value of the service performed, and not by what is charged another, unless what is charged the other is the compensating sum, in which event it is the proper sum, not on account of its equality, but because of the relation it bears to the value of the service performed as an adequate compensation therefor. To sum the whole matter up, the common law is that a common carrier shall not charge excessive freights. It protects the individual from extortion, and limits the carrier to a reasonable rate, and this on account of the fact that he exercises a public employment, enjoys exclusive franchises and privileges, derived, in the case of defendant here, by grant from the State. The rule is not that all shall be charged equally, but reasonably, because the law is for the reasonable charge and not the equal charge. A statement of inequality does not make a legal cause of action, because it is not necessarily unreasonable. It would be a strange rule indeed which would authorize a shipper, after being compelled to pay his freights according to established rates (this appears from the pleas and declarations), to look around and find some smaller charge for the same service during the same time, which may be either as a gratuity, or a sale of service at a noncompensating rate, or less than the reasonable charge, and claim his damages according to this difference, based upon an inequality not general in its char- acter, but existing only by virtue of a charge made for the same service against one other person. If this court sanctions the doc- trine of absolute equality, and then measures the damages by the difference in the charge as to one person named in a declaration, which does not negative a fair inducement or consideration for the difference, it must sustain such a rule as that stated. The declaration, to be good in law, must state a case of ex- cessive charge for the service performed. When it simply states a case of inequality of charge, it states no cause of action, for the DISCRIMINATION. 341 smaller charge may be less than reasonable, and the greater charge may be exactly the value of the service and the reasonable charge for the transportation furnished. Whether a charge made by A. against B. is reasonable cannot be determined by establishing the charge against C. for the same service. It is too plain for argument that the higher charge, where there is a difference, may be what is the compensating sum, and the lower charge may be too small for the service.^ COOK AND WHEELBE v. CHICAGO, ROCK ISLAND AND PACIFIC RAILWAY CO. 81 Iowa, 551. 1890.^ RoTHEOCK, C. J. 1. The action is not founded upon any statute, state or federal. The right to recover is based entirely upon the common law pertaining to the duties and obligations of com- mon carriers. By an amended and substituted petition the plain- tiffs claimed unlawful and unjust overcharges upon the shipment of 316 car-loads. Each shipment was pleaded in a separate count as a separate cause of action. All of the accounts were alike except in dates of shipment, cars and kinds of stock shipped, and stations from which the shipments were made. It is averred, in 2 In Great Western Ry. Co. v. Sutton (1869), L. R. 4, H. L. 226, Mb. Justice Blackburn said, at page 237 : " At common law a person holding himself out as a common carrier of goods was not under any obligation to treat all customers equally. The obligation which the common law imposed upon him was to accept and carry all goods delivered to him for carriage according to his profession (unless he had some reasonable excuse for not doing so) on being paid a reasonable compensation for so doing; and if the carrier refused to accept such goods, an action lay against him for so refusing ; and if the customer, in order to induce the carrier to perform his duty, paid, under protest, a larger sum than was reasonable, he might recover back the surplus beyond what the carrier was entitled to receive, in an action for money had and received as being money extorted from him. " But the fact that the carrier charged others less, though it was evi- dence to show that the charge was unreasonable, was no more than evidence that way. There was nothing in the common law to hinder the carrier from carrying for favoured individuals at an unreasonably low price, or even gratis. All that the law required was, that he should not charge any more than was reasonable : see per Byles, J., in Baxendale v. Eastern Counties Railway Company [4 C. B. (N. S.) 78], and per Willes, J., in Branley v. South Eastern Railway Company [12 C. B. (N. S.) 74]. But when rail- ways came into operation, and it was found that they practically super- seded all other modes of transit, it became a question for the Legislature how far they would, when granting numerous persons power to make a railway and act as carriers on that line, impose on them restrictions beyond what the common law Imposed on ordinary carriers." See Cowden v. Pacific Coast S. S. Co. (1892), 94 Calif. 470; SpofEord v. Boston & M. R. Co. (1880), 128 Mass. 326; McNees v. Missouri Pac. Ry. Co. (1886), 22 Mo. App. 224. * The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. 342 DISCRIMINATION. [CHAP. V. substance, in the amended petition that the public tariff rates for shipment of live-stock, from any point in Jasper county during the time the plaintiffs made such shipments, was $60 for one car-load. That the plaintiffs paid the full amount of said rates, and that certain other shippers (who are named in the petition) also paid the full tariff rates; but that said other shippers were allowed and defendant paid to them a rebate or drawback upon each car-load shipped by them, which rebate or drawback was paid by defendant to said shippers, under a private and secret arrangement between the defendant company and said shippers; and that the knowledge of the payment of such rebates was wrongfully and fraudulently concealed from the plaintiffs by the defendant, and said other favored shippers. The real question in the ease is, do the facts above recited au- thorize a recovery on the part of the plaintiffs? It is well to keep in mind the fact that the defendant is a public common carrier. At common law a public or common carrier is bound to accept and carry for all upon being paid a reasonable com- pensation. The fact that the charge is less for one than another is only evidence to show that a particular charge is unreasonable. In Story on Bailments, § 508, note 3, it is said : " There is nothing in the common law to hinder a carrier from carrying for favored individuals at an unreasonably low rate, or even gratis." And in 1 Wood, Ey. Law, 566, it is said : " A mere dis- crimination in favor of a customer is not unlawful unless it is an unjust discrimination." In volume 2, p. 95, Eedf. E. E., the following language is used: "It has been held in this country, where there is no statutory regulation affecting the question, that common carriers are not absolutely bound to charge all customers the same price for the same service. But as the rule is clearly established at common law that a carrier is bound by law to carry everything which is brought to him, for a reasonable sum to be paid to him for the same carriage, and not to extort what he will, it would seem to follow that he is bound to carry for all at the same price, unless there is some special reason for the dis- tinction. For, unless this were so, the duty to carry for all would not be of much value to the public, since it would be easy for the carrier to select his own customers at will by the arbitrary discrimination in his prices. Hence, it was held at an early day that all that could be required on the part of the owner of the goods, by way of compensation, was that he should be ready and willing to pay a reasonable compensation, and to deposit the money in advance, if required. Carrying for reasonable compensation must imply that the same compensation is accepted always for DISCRIMINATION. 343 the same service, else it could not be reasonable, either absolutely or relatively." In Hutchinson on Carriers^ 243, after a review of the cases, it is said : " Hence we may conclude that in this coun- try, independently of statutory provisions, all common carriers will be held to the strictest impartiality in the conduct of their business, and that all privileges or preferences given to one customer, which are not extended to all, are in violation of public duty." An examination of the authorities cited by these learned authors leaves no doubt that a common carrier has no right to make un- reasonable charges for his services, and that he cannot lawfully make unjust discrimination between his customers. It is strenu- ously contended by counsel for appellant that it is not charged in the petition as a substantial fact that the rate charged the plaintiffs was unreasonable. It is distinctly averred that the rate charged the plaintiffs "was unreasonable, and is and was an unjust dis- crimination." This appears to us to be a sufficient answer to the argument of counsel to the effect that the action is founded solely upon the fact of mere difference in rates. It appears to be conceded that the defendant had no right to exact unreasonable rates or to make unjust discriminations between shippers which in effect compels one shipper to pay an unreasonable rate. The above principles of law may be said to be fundamental, and it is only necessary to apply the facts to reach the conclusion that the rates paid by the plaintiffs were unreasonable and unjust discrimina- tion. It is not claimed that the favored shippers were objects of the charity of the defendant. The payment of the rebates cannot be designated as "alms giving." It does not appear that the con- cessions were made because the favored shippers furnished more shipments than the plaintiffs. The fact is that some of the others shipped less than the plaintiffs. In short there is no reason for the discrimination. It is true that it is claimed that the rebate shippers bought cattle and hogs from territory in which shipments would ordinarily be made upon other railroads, but the evidence shows that the plaintiffs' field of operation was about the same as the other shippers'. It does not appear that the rebates were allowed merely at times when there were cut rates or a war of rates between the defendant and rival railroad lines. The rebates were paid regularly for years, with but short intervals. Is it to be supposed that any court or jury under this state of facts would solemnly find, declare, and adjudge that, after paying the rebate, the defendant did not have a reasonable compensation for the service ? The only finding that can in any fairness be made is that, after deducting the rebate, the rate was reasonable; and that the exaction from the plaintiffs was unreasonable, and the 344 DISCEIMINATION. [CHAP. V. discrimination against them unjust. And the fact that it was secretly done, and that it appeared to be necessary to carry it on by lying and deceit, surely does not tend to commend such a course of dealing to fair-minded men. We have been cited to a number of adjudged cases, by counsel for the respective parties, and we think we may safely say that not one of them is in conflict with the views we have herein expressed upon this question. On the contrary, and in support of our conclusion, see Sharpless v. Mayor, 21 Pa. St. 147; New England Exp. Co. v. Maine Cent. E. Co., 57 Me. 188; McDuffee v. Eailway Co., 53 N. H. 430; Messenger v. Eailway Co., 36 N. J. Law, 407. STATE ex rel. ATWATEE v. DELAWAEE, LACKAWANNA AND WESTEEN EAILEOAD CO. 48 N. J. L. 55. 1886.^ The relator, an attorney and counselor-at-law, practicing his profession in the city of New York, resides at East Orange, in this state. He testified that he is permanently residing at that place, having resided there since August, 1884, occupying a rented house, the present lease of which expires May 1st, 1886. East Orange is on the line of the Delaware, Lackawanna and Western Eailroad, the only railroad between East Orange and New York City. The regular fare between East Orange and New York City is twenty-six cents for a single ticket, and fifty cents for an ex- cursion ticket. Monthly commutation tickets, such as the com- pany is accustomed to sell to persons who apply for them, are sold at the rate of $6.50. Until March, 1885, the relator was a commuter, purchasing monthly tickets at commutation rates. On the 38th of February, 1885, the relator applied to the company's agent, whose business it was to sell tickets of that class, for a commutation ticket for the ensuing month of March, and tendered the price of the ticket. The agent refused to sell relator a ticket, and assigned as his reason therefor that he had received instructions not to sell the relator commutation tickets. The relator, on the 1st of March, applied again for the ticket, and was again refused. The opinion of the court was delivered by Depue, J. The Morris and Essex Eailroad Company was in- corporated in 1835, to construct a railroad for the purpose of carrying passengers and freight. The charter authorized the com- pany to charge for the carriage of passengers and freight, and pre- 1 Part of the statement of facts and part of the opinion are omitted. — Eb. DISCRIMINATION. 345 scribed the limits of the rates to he charged per ton for the trans- portation of freight, and per mile for the carriage of passengers. Pamph. L., 1835, p. 39, § 10. In virtue of its charter rights and privileges the company became a common carrier of passengers and freight. By legislative authority the Delaware, Lackawanna and Western Eailroad Company, as lessee of the company's railroad, was invested with its franchises, rights and privileges (Pamph. L., 1869, p. 38), subject, of course, to all the obligations and duties resting on the lessor. At this day it would be superfluous to enter upon a discussion to support the doctrine, so well settled, that common carriers are public agents, transacting their business under an obligation to observe equality towards every member of the community, to serve all persons alike, without giving any unjust or unreasonable ad- vantages by way of facilities for the carriage or rates for trans- porting them. 1 Wood on Eailways, § 195. The leading case on this subject is Messenger v. Pennsylvania E. E. Co., reported as decided in the Supreme Court in 7 Vroom 407, and in the Court of Errors in 8 Id. 531. In his opinion in the Supreme Court, Chief Justice Beasley says: "It was one of the primary obligations of the common carrier to receive and carry all goods offered for transportation upon receiving a reasonable hire. . . . Thus, in the very foundation and substance of the business there was inherent a rule which excluded a preference of one consignor of goods over another. . . . Eecognizing this as the settled doc- trine, I do not see how it can be admissible for a common carrier to demand a different hire from various persons for an identical kind of service under identical conditions. ... A person having a public duty to discharge is undoubtedly bound to exercise such office for the equal benefit of all, and therefore to permit a common carrier to charge various prices, according to the person with whom he deals, for the same services, is to forget that he owes a duty to the community." On affirmance of this case the Court of Errors was equally emphatic in affirming the doctrine that a com- mon carrier owes an equal duty to all, which is not discharged if unequal preferences are made, and the enjoyment of the common right is thereby prevented or impaired. How uniformly the doc- trine of this case has been adopted and applied, will be seen by the citations and extracts from opinions of the courts of our sister states given by Mr. Justice Atherton, in his opinion in the recent case of Scofield v. Lake Shore and Michigan S. E. E. Co., as re- ported in 1 West. Eep. 831-831. A collection of cases illustrative of the application of the same principle to railroad, express, tele- graph, gas and water companies will be found in a note to B. & 346 DISCRIMINATION'. [CHAP. V. 0. Tel. Co. V. Bell Telephone Co., 24 Am. Law Beg. (N. S.) 578. There is also a considerable line of cases holding that the carrier may discriminate in the rates charged for the transportation of different classes of goods, or in favor of persons shipping large quantities of freight, or in favor of the long distances for which freight is carried as against shorter distances, or upon grounds which would reduce the trouble or cost of carrying for one party as compared with another. Some of these cases were decided on the "equality clauses" in the English statutes, which our courts have held to be merely declaratory of the common law. Others were decided upon common law principles, without any statutory regulation of the subject. An examination of cases of this class will show that the common law obligation of common carriers to deal with all persons on an equality is tacitly if not expressly recognized; for such discriminations have been upheld only where, under the same circumstances and for the same class of goods, the same rates would be charged to all, or the discrimination, if made under special circumstances, appeared to be just and reasonable: Eansome v. E. C. E. E. Co., 1 C. B. (N. S.) 437; 4 Id. 135; In re Caterham Eailway, 1 C. B. .(K. S.) 410; In re Oxlade, M 454; Baxendale v. G. W. E. E. Co., 5 C. B. (N". S.) 309; Same V. Same, 5 Id. 336, 354; Nicholson v. G. W. E. E. Co., Id. 366 J Garton v. G. W. E. E. Co., Id. 669; Garton v. B. & E. E. E. Co., 6 C. B. (N. S.) 639; Baxendale v. E. C. E. E. Co., 4 Id. 63; Ever- shed V. L. & G. W. E. E. Co., L. E., 2 Q. B. Div. 354, 267 ; Crouch V. L. & W. E. E. Co., 2 C. & K. 789, 804; 1 Wood on Eailways, §§ 197, 198; 3 Id. 496; Stewart v. L. V. E. E. Co., 9 Vroom 505, 530. And it is indisputable that where the carrier has a fixed schedule of rates for carriage for the public generally, a demand from one person of a higher rate for the same service would bd unlawful, although the rate demanded was less than its charted allowed; for such an incorporated company has the double duty to keep within the limit of charges prescribed by its charter, and also to conform to that common law obligation to observe equality in charges with respect to all which the law of the land lays upon the business for which it was incorporated. The principle above stated is applicable to the case in hand. Iii virtue of the charter under which the company transacts its business it is a common carrier of passengers as well as of goods, and in that capacity is obliged to carry all passengers who are ready to pay for their transportation, and liable to an action at the suit of any one whom it refuses to carry without lavrful excuse. Story on Bailm., § 591; Bennett v. Button, 10 N. H. 481; Jencks v: Coleman, 2 Sumn. 321 ; Benett v. P. & 0. Steamboat Co., 6 C. B. DISCRIMINATION. 347 775 ; Beekman v. S. & S. E. E. Co., 3 Paige 45. And, as was said by the court in the Messenger case, in virtue of its charter rights and privileges, the company is a public agent, and as such agent is placed under a duty to exercise its calling with perfect impar- tiality towards all persons. Carrying passengers upon commutation tickets at less rates than the charges for single tickets has become a usual mode with railroad companies in prosecuting the carrying business. It is a mode of transacting business of substantial benefit to those who are able to avail themselves of the privilege, and at the same time is greatly conducive to the growth and pros- perity of parts of the state lying adjacent to the large cities. In- deed, a considerable, if not a greater part of the passenger carry- ing business in localities contiguous to the great business centres of the country is transacted under this system, and the rental and market value of lands in such localities is largely determined by the ability to procure transportation at reduced commutation rates. The denial of this privilege to a particular individual is to him a substantial injury. A company is under no obligation to establish commutation rates for a particular locality, but when it has es-^ tablished such rates, and commutation tickefa are sold thereat to the ; public, the refusal of such a ticket to a particular individual, under the same, circumstances, and upon the same conditions as such tickets are sold to the rest of the public, is an unjust discrimina- tion against him, and a violation of the principle of equality which the company is bound to observe in the conduct of its business. There is not a perceptible shade of difference between the denial of a commutation ticket under such circumstances, and the refusal to sell the same individual an ordinary ticket at the customary rate, and demanding of him for transportation the utmost price allowed in the company's charter in excess of the usual price at which such tickets are sold to the public; and such a denial cannot be made to square with the principles laid down and emphasized in the Messenger case.^ INTEESTATE COMMEECB COMMISSION v. BALTIMOEE AND OHIO EAILEOAD CO. 145 U. S. 263. 1892.^ Me. Justice Beovtn, after stating the facts, delivered the opin- ion of the court. 2 See that part of Scofield v. Railway Co. (1885), 43 Oh. St. 571, not re- printed infra, p. 352. 1 The statement of facts, arguments of counsel and part of the opinion are omitted.^ Ed. 348 DISCEIMINATION. [CHAP. V. Prior to the enactment of the act of February 4, 1887 (24 St. p. 379), to regulate commerce, commonly known as the "Inter- state Commerce Act," railway traffic in this country was regulated by the principles of the common law applicable to common car- riers, which demanded little more than that they should carry for all persons who applied, in the order in which the goods were delivered at the particular station, and that their charges for transportation should be reasonable. It was even doubted whether they were bound to make the same charge to all persons for the same service, — Fitchburg Eailroad Co. v. Gage, 13 Gray, 393 ; Bax- endale v. Eailway Co., 4 C. B. (IST. S.) 63; Eailway Co. v. Sutton, L. E. 4 H. L. 226, 237; £'a; parte Benson, 18 S. C. 385; Johnson v. Eailway Co., 16 Fla. 623, — though the weight of authority in this country was in favor of an equality of charge to all persons for similar services. In several of the states acts had been passed with the design of securing the public against unreasonable and unjust discriminations; but the inefficacy of these laws beyond the lines of the state, the impossibility of securing concerted action between the legislatures towards the regulation of traflBc between the several states, and the evils which grew up under a policy of unrestricted competition, suggested the necessity of legislation by congress under its constitutional power to regulate commerce among the several states. These evils ordinarily took the shape of inequality of charges made, or of facilities furnished, and were usually dictated by or tolerated for the promotion of the interests of the officers of the corporation or of the corporation itself, or for the benefit of some favored persons at the expense of others, or of some particular locality or community, or of some local trade or commercial con- nection, or for the destruction or crippling of some rival or hostile line. The principal objects of the Interstate Commerce Act were to secure just and reasonable charges for transportation; to prohibit unjust discriminations in the rendition of like services under similar circumstances and conditions; to prevent undue or un- reasonable preferences to persons, corporations, or localities; to inhibit greater compensation for a shorter than for a longer dis- tance over the same line ; and to abolish combinations for the pool- ing of freights. It was not designed, however, to prevent compe- tition between different roads, or to interfere with the customary arrangements made by railway companies for reduced fares in consideration of increased mileage, where such reduction did not operate as an unjust discrimination against other persons traveling over the road. In other words, it was not intended to ignore the principle that one can sell at wholesale cheaper than at retail. It DISCRIMINATION. 349 is not all discriminations or preferences that fall within the in- hibition of the statute, — only such as are unjust or unreasonable. For instance, it would be obviously unjust to charge A. a greater sum than B. for a single trip from Washington to Pittsburgh; but, if A. agrees not only to go, but to return by the same route, it is no injustice to B. to permit him to do so for a reduced fare, since the services are not alike, nor the circumstances and con- ditions substantially similar, as required by section 2 to make an unjust discrimination. Indeed, the possibility of just discrimina- tions and reasonable preferences is recognized by these sections, in declaring what shall be deemed unjust. We agree, however, with the plaintiff in its contention that a charge may be perfectly rea- sonable under section 1, and yet may create an unjust discrimina- tion or an unreasonable preference under sections 2 and 3. As was said by Mr. Justice Blackburn in Eailway Co. v. Sutton, L. E. 4 H. L. 226, 239: "When it is sought to show that the charge is extortionate, as being contrary to the statutable obliga- tion to charge equally, it is immaterial whether the charge is reasonable or not; it is enough to show that the company carried for some other person or class of persons at a lower charge during the period throughout which the party complaining was charged more under the like circumstances." The question involved in this case is whether the principle above stated, as applicable to two individuals, applies to the purchase of a single ticket covering the transportation of 10 or more persons from one place to another. These are technically known as party rate tickets, and are issued principally to theatrical and operatic companies for the transportation of their troupes. Such ticket is clearly neither a " mileage " nor an " excursion " ticket within the exception of section 22; and upon the testimony in this case it may be doubtful whether it falls within the definition of " com- mutation tickets," as those words are commonly understood among railway officials. The words "commutation ticket" seem to have no definite meaning. They are defined by Webster (edition of 1891) as "a ticket, as for transportation, which is the evidence of a contract for service at a reduced rate." If this definition be applicable here, then it is clear that it would include a party rate ticket. In the language of the railway, however, they are prin- cipally, if not wholly, used to designate tickets for transportation during a limited time between neighboring towns, or cities and suburban towns. The party rate ticket upon the defendant's road is a single ticket, issued to a party of 10 or more, at a fixed rate of 2 cents per mile, or a discount of one third from the regular passenger rate. The reduction is not made by way of a secret 350 DISCRIMINATION. [CHAP. T. rebate or drawback, but the rates are scheduled, posted, and open to the public at large. But, assuming the weight of evidence in this case to be that the party rate ticket is not a " commutation ticket," as that word was commonly understood at the time of the passage of the act, but is a distinct class by itself, it does not necessarily follow that such tickets are unlawful. The unlawfulness defined by sections 2 and 3 consists either in an " unjust discrimination " or an " un- due or unreasonable preference or advantage," and the object of section 22 was to settle beyond all doubt that the discrimination in favor of certain persons therein named should not be deemed un- just. It does not follow, however, that there may not be other classes of persons in whose favor a discrimination may be made without such discrimiiiation being unjust. In other words, this section is rather illustrative than exclusive. Indeed, many, if not all, the excepted classes named in section 22 are those which, in the absence of this section, would not necessarily be held the sub- jects of an unjust discrimination, if more favorable terms were extended to them than to ordinary passengers. Such, for instance, are property of the United States, state, or municipal governments ; destitute and homeless persons transported free of charge by char- itable societies; indigent persons transported at the expense of municipal governments; inmates of soldiers' homes etc., and min- isters of religion, — in favor of whom a reduction of rates had been made for many years before the passage of the act. It may even admit of serious doubt whether, if the mileage, excursion, or com- mutation tickets had not been mentioned at all in this section, they would have fallen within the prohibition of sections 2 and 3 ; in other words, whether the allowance of a reduced rate to persons agreeing to travel 1,000 miles, or to go and return by the same road, is a "like and contemporaneous service under substantially similar conditions and circumstances" as is rendered to a person who travels upon an ordinary single trip ticket. If it be so, then, under state laws forbidding unjust discriminations, every such ticket issued between points within the same state must be illegal. In view of the fact, however, that every railways company issues such tickets; that there is no reported case, state or federal, wherein their legality has been questioned; that there is no such case in England ; and that the practice is universally acquiesced in by the public, — it would seem that the issuing of such tickets should not be held an unjust discrimination or an unreasonable preference to the persons traveling upon them. But, whether these party rate tickets are commutation tickets' proper, as known to railway officials, or not, they are obviously DISCRIMINATION. 351 "within the comnmting principle. As stated in the opinion of Judge Sage in the court below : " The difference between commuta- tion and party rate tickets is that commutation tickets are issued to induce people to travel more frequently, and party rate tickets are issued to induce more people to travel. There is, however, no difference in principle between them, the object in both cases being to increase travel without unjust discrimination, and to secure patronage that would not otherwise be secured." The testimony indicates that for maoay years before the passage of the act it was customary for railroads to issue tickets at re- duced rates to passengers making frequent trips, trips for long distances, and trips in parties of 10 or more, lower than the regular single fare charged between the same points; and such lower rates were universally made at the date of the passage of the act. As stated in the answer to meet the needs of the commercial traveler, the 1,000-mile ticket was issued ; to meet the needs of the suburban resident or frequent traveler, several forms of tickets were issued. For example, monthly or quarterly tickets, good for any number of trips within the specified time; and 10, 25 or 50 trip tickets, good for a specified number of trips by one person, or for one trip by a specified number of persons; to accommodate parties of 10 or more, a single ticket, one way or round trip, for the whole party, was made up by the agent on a skeleton form furnished for that purpose; to accommodate excursionists traveling in parties too large to use a single ticket, special individual tickets were issued to each person. Tickets good for a specified number of trips were also issued between cities where travel was frequent. In short, it was an established principle of the business that whenever the amount of travel more than made up to the carrier for the reduc- tion of the charge per capita, then such reduction was reasonable and just in the interests both of the carrier and of the public. Although the fact that railroads had long been in the habit of issuing these tickets would be by no means conclusive evidence that they were legal, since the main purpose of the act was to put an end to certain abuses which had crept into the management of railroads, yet congress may be presumed to have had those prac- tices in view, and not to have designed to interfere with them, except so far as they were unreasonable in themselves, or unjust to others. These tickets, then, being within the commutation principle of allowing reduced rates in consideration of increased mileage, the real question is whether this operates as an undue or unreasonable preference or advantage to this particular description of traffic, or an unjust discrimination against others. If, for ex- ample, a railway makes to the public generally a certain rate of 353 DISCKIMINATION. [CHAP. V. freight, and to a particular individual residing in the same town a reduced rate for the same class of goods, this may operate as an undue preference, since it enables the favored party to sell his goods at a lower price than his competitors, and may even enable him to obtain a complete monopoly of that business. Even if the same reduced rate be allowed to every one doing the same amount of business, such discrimination may, if carried too far, operate unjustly upon the smaller dealers engaged in the same business, and enable the larger ones to drive them out of the market. The same result, however, does not follow from the sale of a ticket for a number of passengers at a less rate than for a single passenger; it does not operate to the prejudice of the single pas- senger, who cannot be said to be injured by the fact that another is able in a particular instance to travel at a less rate than he. In order to constitute an unjust discrimination under section 2 the carrier must charge or receive directly from one person a greater or less compensation than from another, or must accomplish the same thing indirectly by means of a special rate, rebate, or other device; but, in either case, it must be for a "like and con- temporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions." To bring the present case within the words of this section, we must assume that the transportation of ten persons on a single ticket is substantially identical with the transportation of one, and, in view of the universally accepted fact that a man may buy, contract, or manufacture on a large scale cheaper proportionately than upon a small scale, this is impossible. Upon the whole, we are of the opinion that party rate tickets, as used by the defendant, are not open to the objections found by the Interstate Commerce Commission, and are not in violation of the act to regulate commerce, and the decree of the court below is therefore affirmed. SCOFIELD V. LAKE SHORE AND MICHIGAN SOUTHERN" RAILWAY CO. 43 Oh. St. 571. 1885.^ The plaintiffs, Scofield, Shurmer & Teagle, filed their petition in the court of common pleas, and therein alleged, in substance, that since 1875 they have been manufacturers of and dealers in refined and other products of petroleum at Cleveland. That dur- 1 Only an extract from the statement of facts and an extract from the opinion are here reprinted. — Ed. DISCRIMINATION. 353 ing the same time the Standard Oil Company was largely engaged in the same business. That defendant. The hake Shore and Michigan Southern Kailway Company, was the owner of a line of railroad passing through Cleveland, and extending from Buffalo, New York, to Chicago, Illinois, with branches to Detroit and Grand Eapids, in Michigan. That it was amply supplied with proper equipment to receive and carry the product of plaintiffs. That it made and published tariff rates for the transportation of oil in barrels, which plaintiffs were at all times charged, in com- mon with all other manufacturers in Cleveland except the Stan- dard Oil Company, which plaintiffs say was largely in excess of the rates charged to and paid by the Standard Oil Company to the same points and places. Atheeton, J. The case of Hays v. Pennsylvania Company, 13 Fed. Eep. 309, decided by Baxter, J., in the circuit court of the United States, for the northern district of Ohio, is important in respect to one element in this case. The defendant in the case at bar claims that it was proper to enter into the contract it did with the Standard Oil Company, on account of the very large amount of freightage that company annually furnishes, and that it was lawful to discriminate in their favor on that account. The plaintiffs in that case had been engaged for several years in min- ing and shipping coal from Salineville, and the defendant's railroad furnished them their only means of getting their coal to market. The railroad company discriminated in favor of every shipper who shipped five thousand tons or over, and the discrimination was from thirty to seventy cents per ton, graduated by the amount shipped. Plaintiffs were required to and did under the discrimination pay a higher rate than their more favored competitors. They brought suit to recover for the discrimination, and, under the instructions of the trial judge, the jury returned a verdict for plaintiffs. The judge on a motion for a new trial said : "The defendant is a common carrier by rail. Its road, though owned by the corporation, was nevertheless constructed for public uses, and is, in a qualified sense, a public highway. Hence every- body constituting a part of the public, for whose benefit it was authorized, is entitled to an eqiidl and impartial participation in the use of the facilities it is capable of affording. ... "The discrimination complained of rested exclusively on the amount of freight supplied by the respective shippers during the year. Ought a discrimination resting exclusively on such a basis to be sustained? If so, then the business of the country ig iq. some degree subject to the will of railroad officials ; for if one maft 354 DISCEIMINATION. [CHAP. V. engaged in mining coal, and dependent on the same railroad for transportation to the same market, can obtain transportation thereof at from twenty-five to fifty cents per ton less than another compet- ing with him in business, solely on the ground that he is able to iurnish, and does furnish, the larger quantity for shipment, the small operator will, sooner or later, be forced to abandon the un- equal contest, and surrender to his more opulent rival. If the principle is sound in its application to rival parties engaged in mining coal, it is equally applicable to merchants, manufacturers, millers, dealers in lumber and grain, and to everybody else inter- ested in any business requiring any considerable amount of trans- portation by rail; and it follows that the success of all such enter- prises would depend as much ,on the favor of railroad oSicials as upon the energies and capacities of the parties prosecuting the same. It is not difficult with such a ruling to forecast the consequences. The men who control railroads would be quick to appreciate the power with which such a holding would invest them, and, it may be, not slow to make the most of their opportunities; and, perhaps, tempted to favor their friends to the detriment of their personal or political opponents; or demand a division of the profits realized froni such collateral pursuits as could be favored or depressed by discriminations for or against them; or else, seeing the augmented power of capital, organize into overshadowing combinations, and extinguish all petty competition, monopolize business, and dictate the price of coal and every other commodity to consumers. We say these results might follow the exercise of such a right as is claimed for railroads in this case. But we think no such power exists in them; they have been authorized for the common benefit of every one, and can not be lawfully manipulated for the advantage of any class at the expense of any other. Capital needs no such extraneous aid. It possesses inherent advantages which can not be taken from it. But it has no just claim, by reason of its accumulated strength, to demand the use of the public highways of the country, constructed for the common benefit of all, on more favorable terms than are accorded to the humblest of the land; and a discrimination in favor of parties furnishing the largest quantity of freight, and solely on that ground, is a discrimination in favor of capital, and is contrary to a sound public policy, viola- ti/ve of that equality of right guaranteed to ^very citizen, and a wrong to the disfavored party, for which the courts are competent to give redress." The district court, , in their finding IQi/^, state that shipment by the car-load was the manner in which nearly all the business was done. That on the request of either party to furnish cars, the DISCRIMINATION. 355 defendant had them switched to the refineries, and after being loaded were switched back and placed on defendant's tracks for shipment on its road. The manner of making shipments for plaintiffs and for the Standard Oil Company was precisely the same, and the only thing to distinguish the business of the one from the other was the aggre- gate yearly amounts of freight shipped. We adopt the reasoning of Baxter, J., as the better law, and hold that a discrimination in the rate of freights resting exclusively on such a basis ought not to be sustained. The principle is opposed to a sound public policy. It would build up and foster monopolies, add largely to the accumu- lated power of capital and money and drive out all enterprise not backed by overshadowing wealth. With the doctrine, as contended for by the defendant, recognized and enforced by the courts, what will prevent the great grain interest of the north-west, or the coal and iron interests of Pennsylvania, or any of i^he great commercial interests of the country, bound together by the power and influence of aggregated wealth and in league with the railroads of the land, driving to the wall all private enterprises struggling for existence, and with an iron hand thrusting back aU but themselves ? The defendant can derive no benefit or advantage in this case from its contract with the Standard Oil Company, and its dis- criminations can not be upheld because of the existence of the same.^ WIGHT V. UNITED STATES. ^ 167 U. S. 512. 1897.^ Mk. Justice Brewer delivered the opinion of the court. It will be observed that, in order to induce Mr. Bruening to transfer his transportation from a competing road to its own line, 2 Compare Nichalson v. Great W. R. R. Co. (1858), 5 C. B. (N. S.) 366. In Carr v. Northern Pac. Ry. Co. (1901), 9 I. C. C. R. 1, 14, the Com- mission said : " It is not always enough that open rates are made and strictly observed, even if fair and reasonable for the service rendered ; nor is it sufficient in every case that a relation of rates, just from the carrier's standpoint, is maintained as between shipments of the same article by differ- ent methods and in different quantities. For example, a carload rate lower than the less than carload rate, where the difference is not too great, would ordinarily be lawful ; but a still lower rate for shipments of a hundred or a thousand carloads, though duly published and impartially applied, would be wholly indefensible. If a low rate is granted on conditions with which only a few can comply that rate is presumably unfair and may be extremely prejudicial to all other shippers of like traffic, because they are practically unable to meet the terms upon which it is offered." With regard to difference in rates as justified by difference in the amount of service, see State v. Sedalia G. L. Co. (1889), 34 Mo. App. 501; Silk- man V. Yonkers W. Com. (1897), 152 N. Y. 327. 1 The statement of facts and part of the opinion, are omitted. — Ed. 356 DISCRIMINATION. [CHAP. V. the Baltimore & Ohio Eailroad Company, through the defendant, in the first place, made an arrangement by which, for 15 cents per hundredweight, it would bring the beer from Cincinnati, and deliver it at his warehouse; that afterwards this arrangement was changed, and it delivered the beer to Mr. Bruening at its depot, and allowed him 31^ cents per hundred for carting it to his ware- house. As Mr. Bruening had the benefit of a siding connection with the competing road, and could get the beer delivered over that road at his warehouse for 15 cents, it apparently could not induce him to transfer his business from the other road to its own without extending to him this rebate. During all this time it was carry- ing beer for Mr. Wolf from the same place of shipment (Cincin- nati) to the same depot in Pittsburg, and charging him 15 cents therefor. Mr. Wolf had no siding connection with the rival road, and therefore had to pay for his cartage, by whichever road it was carried. His warehouse was, in a direct line, 140 yards from the depot, while Mr. Bruening's was 172 yards, though the latter gener- ally carted the beer by a longer route, on account of the steepness of the ascent. Now, it is contended by the defendant that it was necessary for the Baltimore & Ohio Company to offer this induce- ment to Mr. Bruening in. order to get his business, and not neces- sary to make the like offer to Mr. Wolf, because he would have to go to the expense of carting, by whichever road he transported; that therefore the traffic was not " under substantially similar cir- cumstances and conditions," within the terms of section 2. We are unable to concur in this view. Whatever the Baltimore & Ohio Company might lawfully do to draw business from a competing line, whatever inducements it might offer to the customers of that competing line to induce them to change their carrier, is not a ques- tion involved in this case. The wrong prohibited by the section is a discrimination between shippers. It was designed to compel every carrier to give equal rights to all shippers over its own road, and to forbid it by any device to enforce higher charges against one than another. Counsel insist that the purpose of the section was not to prohibit a carrier from rendering more service to one shipper than to another for the same charge, but only that for the same service the charge should be equal, and that the effect of this ar- rangement was simply the rendering to Mr. Bruening of a little greater service for the 15 cents than it did to Mr. Wolf. They say that the section contains no prohibition of extra service or extra privileges to one shipper over that rendered to another. They ask whether, if one shipper has a siding connection with the road of a carrier, it cannot run the cars containing such shipper's freight onto that siding, and thus to his warehouse, at the same rate that DISCKIMINATION. 357 it runs cars to its own depot, and there delivers goods to other ship- pers who are not so fortunate in the matter of sidings. But the service performed in transporting from Cincinnati to the depot at Pittsburg was precisely alike for each. The one shipper paid 15 cents a hundred; the other, in fact, hut 11% cents. It is true, he formally paid 15 cents, but he received a rebate of 31^ cents; and regard must always be had to the substance, and not to the form. Indeed, the section itself forbids the carrier, "directly or indirectly by any special rate, rebate, drawback or other device," to charge, demand, collect, or receive from any person or persons a greater or less compensation, etc. And section 6 of the act, as amended in 1889, throws light upon the intent of the statute; for it requires the common carrier, in publishing schedules, to "state separately the terminal charges, and any rules or regulations which in any wise change, afEect, or determine any part or the aggre- gate of such aforesaid rates and fares and charges." It was the purpose of the section to enforce equality between shippers, and it prohibits any rebate or other device by which two shippers, shipping over the same line, the same distance, under the same circumstances of carriage, are compelled to pay different prices therefore. It may be that the phrase, " under substantially similar circum- stances and conditions," found in section 4 of the act, and where the matter of the long and short haul is considered, may have a broader meaning or a wider reach than the same phrase found in section 2. It will be time enough to determine that question when it is presented. For this case it is enough to hold that that phrase, as found in section 2, refers to the matter of carriage, and does not include competition. We see no error in the record, and the judgment of the district court is affirmed. Mk. Justice White concurs in the judgment. mTEESTATE COMMEECE COMMISSION v. ALABAMA MIDLAND EAILWAY CO. 168 U. S. 144. 1897.^ Me. Justice Shieas delivered the opinion of the court. Errors are likewise assigned to the action of the court in having failed and refused to affirm and enforce the report and opinion of the Commission, wherein it was found and decided, among other 1 The statement of facts, arguments of counsel, part of the opinion of Mr. Justice Shiras and the dissenting opinion of Mr. Justice Harlan are omitted. — Ed. 358 DISCRIMINATION. [CHAP. V. things, that the defendant common carriers which participate in the transportation of class goods to Troy from Louisville, St. Louis, Cincinnati, and from New York, Baltimore, and other North- eastern points, and the defendant common carriers which partici- pate in the transportation of phosphate rock from South Carolina and Florida to Troy, and the defendant common carriers which participate in the transportation of cotton from Troy to the ports of New Orleans, Brunswick, Savannah, Charleston, West Point, or Norfolk, as local shipments, or for export, have made greater charges, under substantially similar circumstances and conditions, for the shorter distance to or from Troy than for longer distances over the same lines in the same direction, and have unjustly dis- criminated in rates against Troy, and subjected said place and dealers and shippers therein to undue and unreasonable prejudice and disadvantage in favor of Montgomery, Eufaula, Columbus, and other places and localities, and dealers and shippers therein, in viola- tion of the provisions of the act to regulate commerce. Whether competition between lines of transportation to Mont- gomery, Eufaula, and Columbus justifies the giving to those cities a preference or advantage in rates over Troy, and, if so, whether such a state of facts justifies a departure from equality of rates without authority from the interstate commerce commission, under the proviso to the fourth section of the act, are questions of con- struction of the statute, and are to be determined before we reach the question of fact in this case. It is contended in the briefs filed on behalf of the Interstate Com- mission that the existence of rival lines of transportation, and conse- quently of competition for the traffic, are not facts to be considered by the Commission or by the courts when determining whether prop- erty transported over the same line is carried under " substantially similar circumstances and conditions," as that phrase is found in the fourth section of the act. That competition is one of the most obvious and effective circum- stances that make the conditions under which a long and short haul is performed substantially dissimilar, and as such must have been in the contemplation of Congress in the passage of the act to regu- late commerce, has been held by many of the Circuit Courts. It is sufficient to cite a few of the number : Ex parte Koehler, 31 Eed. 315; Missouri Pac. Ey. Co. t;. Texas & P. E. Co., Id. 862; Inter- state Commerce Commission v. Atchison, T. & S. F. E. Co., 60 Fed. 395; Interstate Commerce Commission v. New Orleans & T. P. E. Co., 56 Fed. 935, 943 ; Behlmer v. Eailroad Co., 71 Fed. 835 ; Interstate Commerce Commission v. Louisville & N. E. Co., 73 Fed. 409. DISCRIMINATION". 359 In construing statutory provisions forbidding railway companies from giving any undue or unreasonable preference or advantage to or in favor of any particular person or company, or any par- ticular description of traffic, in any respect whatever, the English courts have held, after full consideration, that competition between rival lines is a fact to be considered, and that a preference or ad- vantage thence arising is not necessarily undue or unreasonable. Denaby Colliery Co. v. Manchester, S. & L. Ey. Co., 11 App. Cas. 97 ; Phipps v. Eailway [1892] 2 Q. B. Div. 229. In Texas & P. R. Co. v. Interstate Commerce Commission, 163 U. S'. 197, it was held that, "in passing upon questions aris- ing under the act, the tribunal appointed to enforce its provi- sions, whether the Commission or the courts, is empowered to fully consider all the circumstances and conditions that reasonably apply to the situation, and that, in the exercise of its jurisdiction, the tribunal may and should consider the legitimate interests as well of the carrying companies as of the traders and shippers, and, in considering whether any particular locality is subjected to an undue preference or disadvantage, the welfare of the communi- ties occupying the localities where the goods are delivered is to be considered as well as that of the communities which are in the locality of the place of shipment; that among the circumstances and conditions to be considered, as well in the case of traffic origi- nating in foreign ports as in the case of traffic originating within the limits of the United States, competition that affects rates should be considered, and in deciding whether rates and charges, made at a low rate to secure foreign freights which would otherwise go by other competitive routes, are or are not undue and unjust, the fair interests of the carrier companies and the welfare of the community which is to receive and consume the commodities are to be con- sidered." To prevent misapprehension, it should be stated that the con- clusion to which we are led by these cases, that, in applying the provisions of the third and fourth sections of the act, which make it unlawful for common carriers to make or give any undue or un- reasonable preference or advantage to any particular person or locality, or to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, competition which affects rates is one of the mat- ters to be considered, is not applicable to the second section of the act. As we have shown in the recent case of Wight v. United States 360 DISCRIMINATION. [CHAP. V. 167 TJ. S. 513, the purpose of the second section is to enforce equality between shippers over the same line, and to prohibit any rebate or other device by which two shippers, shipping over the same line, the same distance, under the same circumstances of carriage, are compelled to pay different prices therefor; and we there held that the phra/Be, "under substantially similar circum- stances and conditions," as used in the second section, refers to the matter of carriage, and does not include competition between rival routes. This view is not open to the criticism that different meanings are attributed to the same words when found in different sections of the act; for what we hold is that, as the purposes of the several sections are different, the phrase imder consideration must be read, in the second section, as restricted to the case of shippers over the same road, thus leaving no room for the operation of competition, but that in the other sections, which cover the entire tract of inter- state and foreign commerce, a meaning must be given to the phrase wide enough to include all the facts that have a legitimate bearing on the, situation, among which we find the fact of compe- tition when it affects rates. In order further to guard against any misapprehension of the scope of our decision, it may be well to observe that we do not hold that the mere fact of competition, no matter what its character or extent, necessarily relieves the carrier from the restraints of the third and fourth sections, but only that these sections are not so stringent and imperative as to exclude in all cases the mat- ter of competition from consideration, in determining the questions of "undue or unreasonable preference or advantage," or what are "substantially similar circumstances and conditions." The com- petition may in some cases be such as, having due regard to the in- terests of the public and of the carrier, ought justly to have effect upon the rates, and in such cases there is no absolute rule which prevents the commission or the courts from taking that matter into consideration. It is further contended on behalf of the appellant that the courts below erred in holding, in effect, that competition of carrier with carrier, both subject to the act to regulate commerce, will justify a departure from the rule of the fourth section of the act without authority from the interstate commerce commission, under the proviso to that section. In view of the conclusion hereinbefore reached, the proposition comes to this : - That when circumstances and conditions are sub- stantially dissimilar the railway companies can only avail them- eelves of such a situation by an application to the commission. DISCEIMINATION. 361 The language of the proviso is as follows : " That upon application to the commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the commission, be authorized to charge less for longer than shorter distances for the transportation of persons or property, and the commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section of this act." The claim now made for the commission is that the only body which has the power to relieve railroad companies from the opera- tion of the long and short haul clause on account of the existence of competition, or any other similar element which would make its application unfair, is the commission itself, which is bound to consider the question, upon application by the railroad company, but whose decision is discretionary and unreviewable. The first observation that occurs on this proposition is that there appears to be no allegation in the bill or petition raising such an issue. The gravamen of the complaint is that the defendant com- panies have continued to charge and collect a greater compensa- tion for services rendered in transportation of property than is prescribed in the order of the commission. It was not claimed that the defendants were precluded from showing in the courts that the difference of rates complained of was justified by dissimilarity of circumstances and conditions, by reason of not having applied to the commission to be relieved from the operation of the fourth section. Moreover, this view of the scope of the proviso to the fourth section does not appear to have ever been acted upon or enforced by the commission. On the contrary, in the case of In re Louis- ville & N". E. Co. V. Interstate Commerce Commission, 1 Interst. Commerce Com. E. 57, the commission, through Judge Cooley, said, in speaking of the effect of the introduction into the fourth section of the words, "under substantially similar circumstances and conditions," and of the meaning of the proviso : " That which the act does not declare unlawful must remain lawful, if it was so before; and that which it fails to forbid the carrier is left at liberty to do, without permission of any one. . . . The charging or receiving the greater compensation for the shorter than for the longer haul is seen to be forbidden only when both are under sub- stantially similar circumstances and conditions; and therefore if in any case the carrier, without first obtaining an order of relief, shall depart from the general rule, its doing so will not alone con- vict it of illegality, since, if the circumstances and conditions of the two hauls are dissimilar, the statute is not violated. . . . Be- 363 DISCRIMINATION. [CHAP. V. yond question, the carrier must judge for itself what are the ' sub- stantially similar circumstances and conditions ' which preclude the special rate, rebate, or drawback which is made unlawful by the second section, since no tribunal is empowered to judge for it until after the carrier has acted, and then only for the purpose of determining whether its action constitutes a violation of law. The carrier judges on peril of the consequences, but the special rate, rebate, or drawback which it grants is not illegal when it turns out that the circumstances and conditions were not such as to forbid it ; and, as congress clearly intended this, it must also, when using the same words in the fourth section, have intended that the carrier whose privilege was in the same way limited by them should in the same way act upon its judgment of the limiting circum- stances and conditions." The view thus expressed has been adopted in several of the circuit courts. Interstate Commerce Commission v. Atchison, T. & S. F. R. Co., 50 Fed. 300; Interstate Commerce Commission v. Cincinnati, N. 0. & T. P. Ey. Co., 56 Fed. 942; Behlmer v. Rail- road Co., 71 Fed. 839. And we do not think the courts below erred in following it in the present case. We are unable to sup- pose that congress intended, by the fourth section and the proviso thereto, to forbid common carriers, in cases where the circum- stances and conditions are substantially dissimilar, from making difiEerent rates until and unless the commission shall authorize them so to do. Much less do we think that it was the intention of con- gress that the decision of the commission, if applied to, could not be reviewed by the courts.^ AYRES V. CHICAGO AFD NORTHWESTERN RAIL- WAY CO. 71 Wis. 372. 1888.^ Cassoday, J. This case was here on a question of pleading upon a former appeal. 58 Wis. 537. The amended complaint is to the effect that the defendant, being a common carrier engaged in the transportation of live-stock, and accustomed to furnish cars for all live-stock offered, was notified by the plaintiffs, on or about October 2 See Louisville & N. R. R. Co. v. Behlmer (1900), 175 U. S. 648; East Tenn. V. & G. Ry. Co. v. Int. Com. Com. (J 901), 181 U. S. 1. See Interstate Commerce Act §4, as amended in 1910, Appendix, p. 487, and the interpretation of the amended section in Intermountain Rate Oases (1914), 234 U. S. 476. 1 Part of the statement of facts and part of the opinion are omitted. — Ed. DISCRIMINATION. 363 13, 1883, to have four such cars for the transportation of cattle, hogs, and sheep at its station La Valle, and three at its station Eeedsburg, ready for loading on Tuesday morning, October 17, 1883, for transportation to Chicago; that the defendant neglected and refused to provide such cars at either of said stations for four days, notwithstanding it was able and might reasonably have done so; and also neglected and refused to carry said stock to Chicago with reasonable diligence, so that they arrived there four days later than they otherwise would have done; whereby the plaintiffs suf- fered loss and damage, by decrease in price and otherwise, $1,700. Whether the defendant could with such diligence so furnish upon the notice given, was necessarily a question of fact to be deter- mined. The plaintiffs, as such shippers, had the right to com- mand the defendant to furnish such cars. But they had no right to insist or expect compliance, except upon giving reasonable notice -of the time when they would be required. To be reasonable, such notice must have been sufficient to enable the defendant, with reasonable diligence under the circumstances then existing, to furnish the cars without interfering with previous orders from other shippers at the same station, or jeopardizing its business on other portions of its road. It must be remembered that the de- fendant has many lines of railroad scattered through several differ- ent states. Along each and all of these different lines it has sta- tions of more or less importance. The company owes the same duty to shippers at any one station as it does to the shippers at any other station of the same business importance. The rights of all shippers applying for such cars under the same circumstances are necessarily equal. ISTo one station, much less any one shipper, has the right to command the entire resources of the company to the exclusion or prejudice of other stations and other shippers. Most of such suitable cars must necessarily be scattefed along and upon such different lines of railroad, loaded or unloaded. Many will necessarily be at the larger centers of trade. The conditions of the market are not always the same, but are liable to fluctuations, and may be such as to create a great demand for such cars upon one or more of such lines, and very little upon others. Such cars should be distributed along the different lines of road, and the several stations on each, as near as may be in proportion to the ordinary business requirements at the time, in order that ship- ments may be made with reasonable celerity. The requirement of such fair and general distribution and uniform vigilance is not only mutually beneficial to producers, shippers, carriers, and pur- chasers, but of business and trade generally. It is the extent of such business ordinarily done on a particular line, or at a par- 364 DISCRIMINATION. [CHAP. V. ticular station, which properly measures the carrier's obligation to furnish such transportation. But it is not the duty of such car- rier to discriminate in favor of the business of one station to the prejudice and injury of the business of another station of the same importance. These views are in harmony with the adjudica- tions last cited. INTEESTATE COMMEECE COMMISSION v. ILLINOIS CENTEAL EAILEOAD CO. 215 U. S. 452. 1910.^ Mr. Justice White delivered the opinion of the court. Notwithstanding full performance by railway carriers of the duty to have a legally sufScient supply of coal cars, it is conceded that unforeseen periods arise when a shortage of such ears to meet the demand for the transportation of coal takes place, because, among other things, (a) of the wide fluctuation between the de- mands for the transportation of bituminous coal at different and uncertain periods; (b) the large number of loaded coal cars de- livered by a carrier beyond its own line for transportation over other roads, consequent upon the fact that the coal produced at a particular point is normally distributed for consumption over an extensive area; and (c) because the cars thus parted with are sub- ject to longer detentions than usually obtain in the case of ship- ments of other articles, owing to the fact that bituminous coal is often shipped by mining operators to distant points, to be sold after arrival, and is hence held at the terminal points awaiting sale, or because, owing to the cost of handling coal, and the diflB- culty of storing such coal, the car in which it is shipped is often used by the shipper or purchaser at the terminal points as a con- venient means of storage or as an instrument for delivery, without the expense of breaking bulk, to other and distant points. It is disclosed that the railroads of the United States generally, at various times, put in force regulations for the distribution of ■ coal cars. Generally speaking, these regulations provide for fixing the capacity of coal mines in order to determine the number of cars to which each might normally be entitled to daily move its output of coal. And these regulations also provide for a method of deter- mining the pro rata share of the cars daily allotted for distribution in times of car shortage. Neither the method by which capacity was to be ascertained nor the regulation for daily distribution upon the basis of such capacity in case of shortage were identical 1 The arguments of counsel and part of the opinion are omitted. — Ed. DISCRIMINATION. 365 among the various railroad systems of the United States. The divergence, and even conflict, between those systems, is illustrated by the cases of Logan Coal Co. v. Pennsylvania E. Co., 154 Fed. 497 ; United States ex rel. Piteairn Coal Co. v. Baltimore & 0. E. Co., 91 C. C. A. 147, 165 Fed. 113 ; cases cited at pages 503 and 504 of the report of the Logan Coal Co. Case, and the case of Majestic Coal & Coke Co. v. Illinois C. E. Co., 163 Fed. 810. In a general sense, however, all the regulations of the various railroads, either for ascertaining the capacity of coal mines, or in order to determine the pro rata share for daily distribution of cars to the respective mines in case of shortage, dealt with four classes of ears : 1, system cars, that is, cars owned by the carrier and in use for the transportation of coal; 2, company fuel cars, that is, cars belonging to the company, and used by it when necessary for the movement of coal from the mines on its own line, and which coal had been bought by the carrier, and was used solely for its own fuel purposes; 3, private cars, that is, cars either owned by coal mining companies or shippers or consumers, and used for the benefit of their owners in conveying coal from the mines to desig- nated points of delivery; 4, foreign railway fuel cars, that is, cars owned by other railroad companies, and which were by them de- livered to the carriers on whose lines mines were situated, for the purpose of enabling the cars to be loaded with coal and returned to the company by whom the cars had been furnished, the coal being intended for use as fuel by such foreign railroad companies. The various regulations, irrespective of minor differences between them, fell upon one or the other side of this broad line of division. One system took into account class 2, the fuel ears of the carrier, class 3, the private cars, and class 4, the cars of foreign railroads, and deducted from the rated capacity of the mine the sum of coal delivered by that mine in .such cars, and upon the basis thus re- sulting apportioned ratably, in case of shortage, the system cars; that is, those embraced in class 1. On the other hand, the other class of regulation not only took no account of the cars in classes 2, 3, and 4, as a means of rating the capacity of the mine, but moreover did not charge against any mine, for the purpose of ascertaining the daily pro rata of the cars to which such mine was entitled, any car whatever furnished such mine on such day embraced within classes 2, 3, and 4, that is, any company fuel car, foreign railway fuel car, or private car. By this system, there fore, where a mine was entitled daily to a given pro rata of the cars subject to general distribution, it received its full share of such cars, and in addition on that day also received such of the company fuel cars, foreign railway fuel cars, and private cars as 366 DISCEIMINATION. [CHAP. V. might have been sent to it for loading on that day. This abso- lute disregard in the allotment of the company fuel cars, foreign railway fuel cars, and private cars was not in all respects common to all the systems which took no account of such cars in fixing capacity, since in some of the regulations one or the other of the classes was taken into account in fixing the fro rata for distribu- tion. On October 31, 1907, the Illinois Collieries Company filed with the Interstate Commerce Commission a complaint against the Illi- nois Central Eailroad Company. The regulations of the railroad company as to the distribution of coal cars were assailed as un- justly discriminatory, in violation of the act to regulate commerce, particularly as respected the practice of not taking into considera- tion foreign railway fuel cars and private cars in determining the distribution of coal cars among the various coal operators along the lines of the railroad on interstate shipments of coal. It appears that the complaint just referred to was heard before the Com- mission, with two other complaints against other railroads, involv- ing the same general subject. Although the complaint in the case of the Illinois Central Rail- road Company differed from the complaints in the two other cases which were considered and passed upon by the Commission at the same time, in that it did not assail the failure to take into account the company fuel cars in making distribution in times of car shortage, nevertheless the Commission declared that the Illinois Central Eailroad Company, both in its brief and argument, had conceded the importance of the subject to that company, and had invoked the action of the Commission thereon. The order of the Commission, as heretofore stated, therefore, not only directed the desisting from the practice of failing to take into account the foreign railway fuel cars, private cars, and the com- pany fuel cars, but also required the carriers to establish regula- tions for a period of two years from July 1, 1908, providing for the counting of all such cars. The general scope of the order was, however, qualified by expressly authorizing a railroad company to deliver to a particular mine all the foreign railway fuel cars, the private cars, and the company fuel cars consigned or assigned to said mine, even although the number thereof might exceed the pro rata share of the cars attributable to said mine when ascertained by taking into account all the cars which the order required to be considered. Where, however, the number of such cars was less than the pro rata share of the mine, the order only permitted the carrier to add a sufficient number of system cars to make up the rightful pro rata number. DISCEIMINATION. 367 Being unwilling to comply with the order of the Commission, the Illinois Central Railroad Company commenced the suit which is now before us to enjoin in all respects the enforcement of the order of the Commission. A certificate as to the public importance of the cause was filed by the attorney general, in compliance with § 16 as amended by the act of June 29, 1906 (34 Stat, at L. 584, chap. 3591, U. S. Comp. Stat. Supp. 1909, p. 1149), and the cause was thereafter submitted at the same time with one brought by the Alton Eailroad, involving a similar question, to a circuit court held by Judges Grosscup, Baker, and Kohlsatt. A single opinion was announced in both cases. From the final decree enjoining the Commission from enforcing its order, in so far as it directed the taking into account the com- pany fuel cars in the distribution of coal cars in times of ear shortage, and in so far as it directed the future taking such cars into account, the Interstate Commerce Commission appeals. As the Interstate Commerce Commission alone has appealed, it is patent that those portions of the order of the Commission which concern foreign railway fuel cars and private cars, and which the court below refused to enjoin, are not open to inquiry. '• The suggestion at once presents itself whether, if these subjects are not open, they do not necessarily carry with them the question of company fuel cars, on the ground that the three classes rest upon one and the same consideration, and that to divorce them would bring about conditions of preference and discrimination which the act to regulate commerce expressly prohibits. In view, however, of the great importance of the questions directly arising for decision, and the fact that the court below has treated the com- pany fuel cars as distinct, we shall not be sedulous to pursue the suggestion, and come at once to the propositions of power previously stated. First. That the act to regulate commerce has not delegated to the Commission authority to regulate the distribution of company fuel cars in timss of car shortage as a means of prohibiting unjust preferences or undue discrimination. When coal is received from the tipple of a coal mine into coal cars by a railway company, and the coal is intended for its own use and is transported by it, it is said there is no consignor, no consignee, and no freight to be paid, and therefore, although there may be transportation, there is no shipment, and hence no com- merce. In changed form, these propositions but embody the reason- ing which led the court below to its conclusion that, under the cir- cumstances, commerce ended at the tipple of the mine. The de- duction from the proposition is, as the movement of coal under 368 DISCRIMINATION. [CHAP. V. the conditions stated is not commerce, it is therefore not within the authority delegated to the Commission by the act of Congress, as all such acts have relation to the regulation of commerce, and do not, therefore, embrace that which is not commerce. We think, when the erroneous assumption upon which the proposi- tion must rest is considered, its unsoundness is readily demonstrable. That assumption is this : that commerce, in the constitutional sense, only embraces shipment in a technical sense, and does not, there- fore, extend to carriers engaged in interstate commerce, certainly in so far as so engaged, and the instrumentalities by which such commerce is carried on, — a doctrine the unsoundness of which has been apparent ever since the decision in Gibbons v. Ogden, 9 Wheat. 1, and which has not since been open to question. It may not be doubted that the equipment of a railroad com- pany engaged in interstate commerce, included in which are its coal cars, are instruments of such commerce. Prom this it neces- sarily follows that such cars are embraced within the governmental power of regulation, which extends, in time of car shortage, to compelling a Just and equal distribution, and the prevention of an unjust and discriminatory one. The corporation, as a carrier engaged in interstate commerce, being, then, as to its interstate commerce business, subject to the control exerted by the act to regulate commerce, and the instru- mentalities employed for the purpose of such commerce being like- wise so subject to control, we are brought to consider the remaining proposition, which is : Second. That^ even if power has been delegated to the Com- mission iy the act to regulate commerce, the order whose continued enforcement was enjoined by the court below was beyond the author- ity delegated by the statute. In view of the facts found by the Commission as to preference's and discriminations resulting from the failure to count the com- pany fuel cars in the daily distribution in times of car shortage, and in further view of the far-reaching preferences and discrimina- tions alleged in the answer of the Commission in this case, and which must be taken as true, as the cause was submitted on bill and answer, it is beyond controversy that the subject with which the order dealt was within the sweeping provisions of § 3 of the act to regulate commerce, prohibiting preferences and discrimi- nations. But it is contended that although this be the case, as the order of the Commission not only forbade the preferences and discriminations complained of, but also commanded the establish- ment of a rule excluding such discriminations for a future definite period of not exceeding two years, the order transcended th^' DISCKIMINATIOlf. 369 authority conferred upon the commission. This proceeds upon the assumption that § 15 of the act to regulate commerce, as enacted by the act of June 29, 1906, while conferring upon the Commission the authority, upon complaint duly made, to declare a rate or practice affecting rates illegal, and to establish a new and reason- able rule or practice affecting such rates for a term not exceeding two years, has no relation to complaints concerning preferences or discriminations, unless such practices, when complained of, are of a character to affect rates, which it is insisted is not here the case. The pertinent part of the section in question (15) reads as follows: " That the Commission is authorized and empowered, and it shall be its duty, whenever, after full hearing upon a complaint made as provided in section 13 of this act, or upon complaint of any common carrier, it shall be of the opinion that any of the rates or charges whatsoever, demanded, charged, or collected by any common carrier or carriers, subject to the provisions of this act, for the transportation of persons or property, as defined in the first section of this act, or that any regulations or practices whatsoever of such carrier or carriers affecting such rates, are un- just or unreasonable, or unjustly discriminatory, or unduly pref- erential or prejudicial, or otherwise in violation of any of the pro- visions of this act, to determine and prescribe what will be the just and reasonable rate or rates, charge or charges, to be thereafter observed in such case as the maximum to be charged; and what regulation or practice in respect to such transportation is just, fair, and reasonable to be thereafter followed; and to make an order that the carrier shall cease and desist from such violation, to the extent to which the Commission find the same to exist, and shall not thereafter publish, demand, or collect any rate or charge for such transportation in excess of the maximum rate or charge so prescribed, and shall conform to the regulation or practice so pre- scribed. "All orders of the Commission, except orders for the payment of money, shall take effect within such reasonable time, not less than thirty days, and shall continue in force for such period of time, not exceeding two years, as shall be prescribed in the order of the Commission, unless the same shall be suspended or modi- fied or set aside by the Commission, or be suspended or set aside by a court of competent jurisdiction." The contention gives to the words found in the earlier part of the section, " any regulation or practice whatsoever of such carrier or carriers affecting such rates," a dominant and controlling power, so as to cause them to limit every other provision in the section, however general in its language. We do not stop to critically ex- 370 DISCRIMINATION. [CHAP. V. amine the provision relied upon, for the purpose of pointing out, as a matter of grammatical construction, the error of the con- tention, because we think, when the text of the section is taken into view and all its provisions are given their natural significance, it obviously appears that the construction relied upon is without foundation, and that to sustain it would be to frustrate the very purpose which it is clear, when the entire provision is considered, it was designed to accomplish, and thus would be destructive of the plain intent of Congress in enacting the provision. The ante- cedent construction which the interstate commerce act had necessi- tated, and the remedial character of the amendments adopted in 1906, all serve to establish the want of merit in the contention re- lied upon. In addition, to adopt it would require us to hold that Congress, in enlarging the power of the Commission over rates, had so drafted the amendment as to cripple and paralyze its power in correcting abuses as to preferences and discriminations which, as this court has hitherto pointed out, it was the great and funda- mental purpose of Congress to further. Conceding, for the sake of the argument, the existence of the preferences and discriminations charged, it is insisted, when the findings made by the Commission are taken into view and the pleadings as an entirety are considered, it results that the dis- criminations and preferences arose from the fact that the railroad company chose to purchase its coal for its fuel supply from a par- ticular mine or mines, and that, as it had a right to do so, it is im- possible, without destroying freedom of contract, to predicate illegal preferences or wrongful discriminations from the fact of purchase. But the proposition overlooks the fact that the regula- tion addresses itself, not to the right to purchase, but to the duty to make equal distribution of cars. The right to buy is one thing, and the power to use the equipment of the road for the purpose of moving the articles purchased in such a way as to discriminate or give preference are wholly distinct and different things. The insistence that the necessary effect of an order compelling the counting of company fuel cars in fixing, in case of shortage, the share of cars a mine from which coal has been purchased will be entitled to, will be to bring about a discrimination against the mine from which the company buys its coal, and a preference in favor of other mines, but inveighs against the expediency of the order. And this is true also of a statement in another form of the same proposition; that is, that if, when coal is bought from a mine by a railroad, the road is compelled to count the cars in which the coal is moved in case of car shortage, a preference will result in favor of the mine selling coal and making delivery thereof at the tipple DISCEIMINATION. 371 of the mine to a person who is able to consume it without the neces- sity of transporting it by rail. At best, these arguments but sug- gest the complexity of the subject, and the difficulty involved in making any order which may not be amenable to the criticism that it leads to or may beget some inequality. Indeed, the arguments just stated, and others of a like character which we do not deem it essential to specially refer to, but assail the wisdom of Congress in conferring upon the Commission the power which has been lodged in that body to consider complaints as to violations of the statute, and to correct them if found to exist, or attack as crude or inexpedient the action of the Commission in performance of the administrative functions vested in it, and upon such assumption invoke the exercise of unwarranted judicial power to correct the assumed evils. It follows from what we have said that the court below erred in enjoining the order of the Commission, in so far as it related to company fuel cars, and its decree is therefore reversed, and the case remanded for further proceedings in conformity with this opinion. Mr. Justice Brewer dissents. GAMBLE-KOBINSON" COMMISSION CO. v. CHICAGO AND NORTHWESTEEN RAILWAY CO. 168 Fed. 161. 1909.^ Sanbokn, Circuit Judge. Section 3 of the act of February 4, 1887, commonly called the " Interstate Commerce Act," provides : " That it shall be unlawful for any common carrier subject to the provisions of this act, to make or give any undue or ijnreasonable preference or advantage to any particular person, company, firm, corporation or locality, or any particular description of traffic in any respect whatsoever, or to subject any particular person, com- pany, firm, corporation or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." 34 Stat. 380, c. 104 (3 U. S. Comp. St. 1901, p. 3155). Is it a violation of this section for a common carrier which cus- tomarily delivers to consignees a certain class of freight, holds the freight bills until after any question arising concerning the cor- rectness of any transportation charges upon its line and upon con- necting lines over which the freight has been transported has been 1 The statement of facts, part of the opinion of Sanborn, J., and all of the dissenting opinion of Hook, J., are omitted. — Ed. 372 DISCEIMIKATION. [CHAP. V. adjusted, and tlien collects them, to refuse to grant such a credit to a particular consignee and to require prepayment of freight bills by it while it still continues to extend credit to others similarly situated? In other words, is it a violation of this section for a railroad company to refuse to loan to one consignee without in- terest the moneys owing to it for transportation charges earned by it and for those paid by it to connecting lines until the con- signee's claims that such charges are incorrect have been settled, when it customarily makes such loans to other consignees? This is the question which this case presents, and it is well to perceive clearly the nature of the controversy inherent in it and the amount actually involved before entering upon the discussion of the issue it presents. Prior to the enactment of the act of February 24, 1887, to regu- late commerce among the states, interstate railway traffic was regulated by the principles of the common law, and under those principles com m on carriers had the right to require the prepay- ment of charges for freight of one or more persons or corporations, and to give credit for such charges to other persons or corporations similarly situated. Interstate Commerce Commission v. Baltimore & Ohio E. R. Co., 145 U. S. 263, 375, 12 Sup. Ct. 844, 36 L. Ed. 699; Southern Indiana Express Co. v. United States Express Co. (C. C.) 88 Fed. 659, 662; Eandall v. Eailway Company, 108 N. C. 613, 13 S. E. 137. That act left common carriers free to exercise to their full ex- tent all the rights and privileges they had under the common law, so far as these rights and privileges and their exercise were not rendered unlawful by the provisions of that act. That act did not make all preferences, advantages, prejudices, or disadvantages un- lawful, but those only which are " undue and unreasonable." The question, therefore, is, did the defendant subject the plain- tiff to any undue or unreasonable prejudice or disadvantage by requiring it to prepay the charges on its freight while the carrier customarily transported freight for others similarly situated with- out such prepayment? The defendant had the right under the common law to demand prepayment of its charges of the plain- tiff and to grant credit to others for similar charges. It had the same right in this regard that every merchant, every man, and every corporation has to grant credit to one or to all but one, and to refuse it to others or to him. There was nothing unjust or morally wrong in the exercise of this right, because the plaintiff had no moral right to the extension of credit, and justice did not require that the defendant should grant to the plaintiff the same credit that it extended to others. DISCRIMINATION. 373 The interstate commerce act did not expressly deprive the de- fendant of this right or make its exercise unlawful; so far as its express provisions are concerned, it left the right and its exercise among those which the Supreme Court declared that carriers were free to exercise and to manage upon "the same principles which are regarded as sound, and adopted in other trades and pursuits." The refusal to extend credit to a purchaser of goods, or of trans- portation, of financial responsibility, credit, and reputation equal to those of others to whom such credit is extended does not in the na- ture of things subject him to an undue or unreasonable prejudice or disadvantage, while a requirement that such a vendor shall extend equal credit to all purchasers of equal financial responsibility, credit, and reputation, would subject him to unreasonable and undue disad- vantage. Eeason, sound business principles, and the practice of the business world give the option to extend credit to the seller of his property, or his services, and to the leaner of his money, and not to the purchaser or borrower. There are other considerations besides financial responsibility, credit, and reputation, which con- dition the rational extension of credit, such as the experience of the seller or the leaner, the habits of the purchaser or the borrower, his fairness and promptness. Finally, the question at issue in this case in the presence of a custom and usage not to demand prepayment of transportation charges, in the presence of a motive and purpose by the defendant to harass and oppress the plaintiff by the demand of such pre- payment, and in the presence of the subjection of the plaintiff in that case to very much more aggravated prejudice and disadvan- tage than those alleged in the action under consideration, was pre- sented, decided, and the considered opinion of this court upon it was delivered by Judge Thayer in 1894 in these words : " It will be observed that the sole question in the cases filed against the St. Louis, Iron Mountain & Southern Eailway Com- pany concerns the right of that company to require the prepayment of freight charges on all property tendered to it for transportation at Little Eock by the Little Eock & Memphis Eailroad Company, while it pursues a different practice with respect to freight received from other shippers at that station. At common law a railroad corporation has an undoubted right to require the prepayment of freight charges by all its customers, or some of them, as it may think best. It has the same right as any other individual or cor- poration to exact payment for a service before it is rendered, or to extend credit. Oregon Short Line & U. N. Ey. Co. v. Northern Pacific E. Co. (C. C.) 51 Fed. 465, 472. Usually, no doubt, rail- road companies find it to their interest, and most convenient, to 374 DISCRIMINATION. [CHAP. V. collect charges from the consignee ; but we cannot doubt their right to demand a reasonable compensation in advance for a proposed service, if they see fit to demand it. This common-law right of requiring payment in advance of some customers, and of extending credit to others, has not been taken away by the interstate com- merce law, unless it is taken away indirectly by the inhibition con- tained in the third section of the act, which declares that an in- terstate carrier shall not 'subject any particular person, company, corporation or locality ... to any undue or unreasonable . . . disadvantage in any respect whatever.' This prohibition is very broad, it is true, but it is materially qualified and restricted by the words 'undue or unreasonable.' One person or corporation may be lawfully subjected to some disadvantage in comparison with others, provided it is not an undue or unreasonable disadvantage. In view of the fact that all persons and corporations are entitled at common law to determine for themselves, and on considerations that are satisfactory to themselves, for whom they will render services on credit, we are not prepared to hold that an interstate carrier subjects another carrier to an unreasonable or undue dis- advantage because it exacts of that carrier the prepayment of freight on all property received from it at a given station, while it does not require charges to be paid in advance on freight received from other individuals and corporations at such station. So far as we are aware, no complaint had been made of abuses of this character at the time the interstate commerce law was enacted, and it may be inferred that the particular wrong complained of was not within the special contemplation of Congress. This being so, the gen- eral words of the statute ought not to be given a scope which will deprive the defendant company of an undoubted common-law right, which all other individuals and corporations are still privileged to exercise, and ordinarily do exercise." Little Eock & Memphis E. Co. V. St. Louis S. "W. E. Co., 63 Fed. 777, 11 C. C. A. 419 (36 L. R. A. 192). The question wa's decided in the same way by Mr. Justice Field in the Circuit Court in Oregon Short Line & U. N. Ey. Co. v. Northern Pacific E. E. Co., 51 Fed. 465, 473, 474, affirmed by the Circuit Court of Appeals of the Ninth Circuit in 9 C. C. A. 409, 410, 413, 413, 414, 61 Fed. 158, 159, 161, 163, and by the Circuit Court of Appeals of the Fifth Circuit in Gulf, C. & S. F. Ey. Co. v. Miami S. S. Co., 30 C. C. A. 143, 154, 155, 86 Fed. 407, 419, 420. It is more than 14 years since this court rendered that decision, no contrary opinion of any national court upon this question has been called to our attention, and because the right of a common carrier to require prepayment of charges for transportation from one and DISCKIMINATION. 375 to give credit for them to another similarly situated existed under the common law, because neither this right nor its exercise were made unlawful by the terms of the interstate commerce act, be- cause the exercise of that right is not in itself unreasonably preju- dicial, or disadvantageous, because the former decision of this court rules this case and ought not to be overruled unless it is clearly wrong, and because upon a careful reconsideration of that decision in the light of the subsequent decisions of the courts we are still convinced that it was right, our conclusion in this ease is that the requirement by the plaintiff of the prepayment of charges by the defendant for the transportation of its freight, while no such re- quirement was made of others similarly situated, while there existed a custom or usage for the carrier to advance the charges of con- necting carriers, to deliver the freight to the consignees, to hold bills for freight until claims arising out of errors in transportation charges were adjusted, and then to collect them, did not subject the plaintiff to undue or unreasonable prejudice or disadvantage or give to others similarly situated any undue or unreasonable preference or advantage within the meaning of section 3 of the interstate com- merce law, and the judgment below must be aflBrmed. It is so ordered.^ INTERSTATE COMMERCE COMMISSION v. DELAWARE, LACKAWANNA AND WESTERN RAILROAD CO. 220 U. S. 235. 1911.^ Ik 1899 the railroads in the so-called Official Classification terri- tory adopted the following rules: " Rule 5-B. In order to entitle a shipment to the carload rate, the quantity of freight requisite under the rules to secure such carload rate must be delivered at one forwarding station, in one working day, by one consignor, consigned to one consignee and destination, except that when freight is loaded in cars by consignor, it will be subject to the car-service rules and charges of the for7 warding railroad. (See note.) " Note. Rule 5-B will apply only when the consignor or con- signee is the actual owner of the property. 2 See Allen v. Cape Fear & Y. V. R. R. Co. (1888), 100 N. C. 397; Baltimore & O. R. R. Go. v. Adams Express Co. (1884), 22 Fed. 404; Taney v. BatesvlUe Tel. Co. (1907), 81 Ark. 486; Adams Express Co. v. State (1903), 161 Ind. 328. 1 The statement of facts here given is substituted for that contained in the opinion, and the arguments of counsel, and part of the opinion are omitted. — Ed. 376 DISCRIMINATION. [CHAP. T. " Eule 15-E. Shipments of property combined into packages by forwarding agents claiming to act as consignors will only be ac- cepted when the names of individual consignors and final consignees, as well as the character and contents of each package, are declared to the forwarding railroad agent, and snch property will be way- billed as separate shipments, and freight charged accordingly. (See note.) " Note. The term ' forwarding agents,' referred to in this rule, rshall be construed to mean agents of actual consignors of the prop- erty, or any party interested in the combination of L. C. L. ship- ments of articles from several consignors at point of origin." Certain forwarding agents, against whom the above rules had been enforced, appealed to the Interstate Commerce Commission for relief. The restriction created by the above rules were de- clared void, and reparation was awarded. The railroad companies did not comply with this order, but filed a bill to enjoin the en- forcement of the order and to have it declared void. Mr. Chief Justice White delivered the opinion of the court. As shown by the opinion of the Commission and that of the two members who dissented, there were many and wide differences in the views expressed. On their face, however, when ultimately reduced, they will be found, in so far as they are here susceptible of review, to rest on but a single legal proposition : that is, the right of a common carrier to make the ownership of goods tendered to him for carriage the test of his duty to receive and carry ; or, what is equivalent thereto, the right of a carrier to make the ownership of goods the criterion by which his charge for carriage is to be measured. We say the contentions all reduce themselves to this, because in their final analysis all the other differences, in so far as they do not rest upon the legal proposition just stated, are based upon conclusions of fact as to which the judgment of the Commis- sion is not susceptible of review by the courts. Baltimore & 0. B. Co. V. United States ex rel. Pitcairn, 215 TJ. S. 481. This at once demonstrates the error committed by the lower court in basing its decree annulling the order of the Commission upon its approval and adoption of the reasons stated in the opinion of the dissenting mem- bers of the Commission. This follows, since the reasons given by the dissenting members, except in so far as they rested upon the legal proposition we have just stated, proceeded upon premises of fact, which, however cogent they may have been as a matter of origi- nal consideration, were not open to be so considered by the court, be- cause they were foreclosed by the opinion of the Commission. Doubtless the mistake of the court below in this respect was occa- sioned by overlooking the scope of the Hepburn act, and because the DISCRIMINATION. 377 decision below was made in June, 1909, before the announcenient of the opinion in the Pitcairn Case. The reasons above stated also serve to narrow the contentions pressed at bar, since such con- tentions likewise in their essence but reiterate the conflict of opinion which developed in the Com mission, but which, for the reasons stated, are, for the purpose of our review, substantially reducible to the one legal question which we have stated. We shall therefore conflne ourselves to a consideration of that question and to such brief notice of the other contentions urged as will make clear that they depend ultimately upon conclusions of fact not open in this court for review. - The contention that a carrier, when goods are tendered to him for transportation, can make the mere ownership of the goods the test of the duty to carry, or, what is equivalent, may discriminate in fixing the charge for carriage, not upon any difference inhering in the goods or in the cost of the service rendered in transporting them, but upon the mere circumstance that the shipper is or is not the real owner of the goods, is so in conflict with the obvious and elementary duty resting upon a carrier, and s6 destructive of the rights of shippers, as to demonstrate the unsoundness of the proposition by its mere statement. We say this because it is im- possible to conceive of any rational theory by which such a right could be justifled consistently either with the duty of the carrier to transport or of the right of a shipper to demand transportation. This must be, since nothing in the duties of a common carrier by the remotest implication can be held to imply the power to sit in judgment on the title of the prospective shipper who has tendered goods for transportation. In fact, the want of foundation for the assertion of such a power is so obvious that in the argument at bar its existence is not directly contended for as an original proposition, but is deduced by implication from the supposed effect of some of the provisions of the second section of the act to regulate commerce. In substance, the contention is that, as the section forbids a carrier from charging "a greater or less compensation for any service rendered or to be rendered in the transportation of passengers or property, . . . than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions," authority is to be implied for basing a charge for transportation upon ownership or nonownership of the goods ten- dered for carriage, upon the theory that such ownership or non- ownership is a dissimilar circumstance and condition within the meaning of the section. 378 DISCRIMIKATIOir. [CHAP. V. But this argi^ment, in every conceivable aspect, amounts only to saying that a provision of the statute which was plainly intended to prevent inequality and discrimination has resulted in bringing about such conditions. Moreover, the unsoundness of the conten- tion is demonstrated by authority. It is not open to question that the provisions of § 3 of the act to regulate commerce were sub- stantially taken from § 90 of the English Eailway Clauses Con- solidation Act of 1845, known as the " Equality Clause." Texas & P. E. Co. V. Interstate Commerce Commission, 163 U. S. 197, 333. Certain also is it that, at the time of the passage of the act to regulate commerce, that clause in the English act had been con- strued as only embracing circumstances concerning the carriage of the goods, and not the person of the sender; or, in other words, that the clause did not allow carriers by railroad to make a differ- ence in rates because of differences in circumstances arising either before the service of the carrier began or after it was terminated-. It was therefore settled in England that the clause forbade the charging of a higher rate for the carriage of goods for an inter- cepting or for-s^arding agent than for others. Great Western E; Co. V. Sutton (1869) L. E. 4 H. L. 326; Evershed v. London & N. W. E. Co. (1878) L. E. 3 App. Cas. 1039, 6 Eng. Eul. Cas. 351, and Denaby Main Colliery Co. v. .Manchester, S. & L. E. Co. (1885) L. E. 11 App. Cas. 97. And it may not be doubted that the settled meaning which was affixed to the English equality clause at the time of the adoption of the act to regulate commerce applies in construing the second section of that act; certainly to the extent that its interpretation is involved in the matter before us. Wight V. United States, 167 U. S. 513 ; Interstate Commerce Commission v. Alabama Midland E. Co. 168 U. S. 144, 166. As these considerations are decisive of the only legal question which, as we have already pointed out, the case involves, and also refute a subordinate contention that a forwarding agent is not a person within the meaning of that word as employed in the' second section of the act to regulate commerce, we are brought, as we have hitherto said, to briefly refer to minor considerations pressed in argument, so far as they seem to us to be of sufficient weight to be entitled to particular notice. First. It is urged that, as the wide range of carload rates and the extent of the facility for combining articles for the purpose of obtaining such rates allowed in Official Classification territory are the result of the voluntary act of the railroads, therefore the power existed in the railroads to restrict and limit the enjoyment of such rate, as was done by the assailed rules. In the interest of the public it is urged a limitation should not be now enforced' DISCEIMINATION. 379 which would compel the carrier to withdraw the facilities which shippers enjoy by the voluntary act of the carriers. But the proposition rests upon the fallacious assumption that because a carrier has the authority to fix rates, it has the right to discriminate as to those who shall be entitled to avail of them. Moreover, the contention is not open for review, because the legal question of the right of the carrier to consider ownership under the second section having been disposed of, the finding of the Commission that to permit the enforcement of the rule would give rise to preferences and engender discriminations prohibited by the act to regulate com- merce embodies a conclusion of fact beyond our competency to re- examine. Second. Conceding, for the sake of the argument, the correct- ness of the construction which we have given to the second sec- tion, it is urged that nevertheless, as a forwarding agent is a "dealer in railroad transportation," and depends for his profit in carrying on his business upon the sum which can be made by him out of the difference between the carload and the less than carload rate, and may discriminate between the persons who employ him, therefore the act to regulate commerce should be construed as em- powering a carrier to exclude the forwarding agent as a means of preventing such discriminations. But in the absence of any statu- tory authority to exclude the forwarding agent, and basing the right to exclude merely upon the assumption that the nature and character of his business would produce discrimination, and there- fore justify the exclusion, the contention is not open for our consideration, because, like the previous one, it is foreclosed by the finding of fact of the Commission. Indeed, this is not merely the result of an implication from the finding of the Commission, since it was affirmatively found that to permit the carrier to exclude the forwarding agent would be to produce preference and discrimina- tion. The contention, then, comes to this, — that carriers should be permitted to give preferences and make discriminations as a means of preventing those unlawful conditions from arising. Third. It is said that as the business of the forwarding agent is in a sense competitive with that of a carrier, and may largely, diminish the revenue derived by railroad companies from their less- than-carload rates, and hence cripple their ability to successfully conduct business, therefore the right to exclude the forwarding agent, even if there is no power to exclude the owner or the ordinary agent of owners, should be permitted. This, however, again, in a twofold sense, is directly in conflict with the findings of fact made by the Commission; first, because it disregards the findings as to the operation of the business of a forwarding agent, and. 380 DISCEIMINATION. [CHAP. V. second, because it overlooks the express finding of the Commission that it would be so difficult, if not impossible, for the carrier to determine in practice the nature and character of the title of a person tendering goods for shipment that the necessary result of a rule excluding a forwarding agent would be to embarrass ship- ments by owners or their special agents, and thus beget universal uncertainty and constant discrimination and preference against owners. As it follows, from the reasons just stated, that the court below erred in annulling the order of the Commission and enjoining its enforcement, its decree to that effect is reversed, and the case is re- EAILKOAD DISCEIMINATION CASE. 136 N. C. 479. 1904.^ Claek, C. J. The gist of this action is for discrimination by ' the defendant in charging the plaintiff a higher rate on logs to the plaintiff's mill in Wilmington than was charged others for like service, and to recover the overcharges, which had been paid under protest. The point presented is not that the rate ($3.50 per thousand feet in car-load lots) charged the plaintiff is per se unreasonable, but that the rate charged others for the same service for the same distance was $3.10, and that this is a serious dis- crimination, which, if continued, will result in the crippling or destruction of the plaintiff's mill, and the building up of other mills which are in competition with the plaintiff, for it has in five months amounted to $3,900, for the recovery of which this action is brought. The court charged the jury : " If you find that the rate of $3.10 per thousand feet was charged and collected by the defendant upon logs shipped over any part of its railroad to a mill or mills at which logs were manufactured into lumber, and the lumber itself reshipped over the railroad of the defendant, or any part of it, and that the reduced rate of $3.10 per thousand feet was given to such mill in consideration of such fact that they would ship the lumber manufactured out of the said logs over the line of the defendant's road, which said agreement was open to all mills that wished to accept it, then it would not be an unjust or illegal 2 Compare Camblos «. Phil. & E. R. R. Co. (1873), Fed. Cas. 2,331, and Johnson v. Dominion Exp. Co. (1896), 28 Ontario, 203. 1 Part of the opinion of Clark, C. J., and all of the concurring opinion of Connor, J., are omitted. — Ed. DISCRIMINATION. 381 discrimination to charge $2.50 per thousand feet, which it is not contested is a reasonable rate to mills which did not ship their manufactured lumber over the line of the defendant road." The proposition herein stated is that a common carrier has a right to charge one person a lower rate of freight than another for ship- ping the same quantity the same distance, under the same con- ditions, provided the shipper give the company a consideration (shipping the manufactured lumber subsequently over its line) which its managers think will make good to it the abatement of rate given to such parties. But if this is equality as to the treasury of the company, it is none the less a discrimination against the plaintiff. It is charged $3.50 while others are charged $2.10 for the same service. It is true, if the plaintiff should choose to agree to ship its manufactured lumber out of Wilmington over the defendant's line, it could get the same reduction of rate on its logs into Wilmington. On those conditions it could save itself from being discriminated against. But suppose the plaintiff should wish to sell its lumber in Wilmington, or can ship it at a lower rate by sea, or even by a competing railroad line out of Wilmington, has it not the right to do so? Should it see fit to exercise that right, has the common carrier the power to place a penalty of a 19 per cent, higher rate on the plaintiff, and to charge it $2.50 for bringing its logs to Wilmington, when it charges others $2.10 for exactly the same service? The principle involved is a vital one to the public at large, for upon this Mleged right to discriminate by common carriers, ex- ercised either openly or secretly by rebates, nearly all trusts, and especially the Standard Oil Company, have been built up to their present disquieting and menacing predominance, as has been fully shown by the investigation and report of the Industrial Commis- sion and the Interstate Commerce Commission, both appointed by acts of Congress. Here the railroad company will doubtless make up, out of its forced monopoly of shipping out of Wilmington the lumber to be manufactured out of all the logs hauled in by it, the 40 cents which is deducted in favor of those who will give it that monopoly. But why should it discriminate by charging the plaintiff $2.50 instead of $2.10; i. e., charge 19 per cent, higher rates upon logs which when turned into lumber are sold in Wilmington, or shipped by sea, or shipped by a competing route ? It cost no more to bring in the plaintiff's logs than the logs for whose hauling only $2.10 was charged. The shipment of logs to Wilmington is one transac- tion. The shipment of lumber out is another. The defendant cannot charge the plaintiff higher on the logs because it will not 383 DISCEIMINATION-. [CHAP. V. agree to ship its lumber by the defendant's line. It is no answer to say that, if the plaintiff will come to the defendant's terms, it will get the same discount. The defendant might as well say, " If you will carry your logs to a sawmill in which the railroad company is a large owner, you will get 19 per cent, reduction in freight on your logs, and there is no discrimination, for the same offer is open to you as to others." If the plaintiff, like others, was shipping logs to Wilmington with the voluntary intention of shipping by the defendant's road, say to New York, then certainly there would be no discrimination. But the plaintiff does not wish to ship to 'New York over the defendant's line, and the defendant proposes " to put the screws to the plaintiff," and make it do so, whether it wishes to do so or not; and, if the plaintiff does not do so, the defendant says the plaintiff cannot be treated as well as others as to the rates for haul- ing its logs, but must pay nearly one-fifth (19 per cent.) higher rates on its logs. That is the very point at issue. Hauling its logs to Wilmington is the only service the plaintiff seeks at the defendant's hands. Why should it pay higher for that service than those who agree to carry their logs to the defendant's mill, or to ship out their lumber by the defendant's road? The point here presented has been often decided, and always — certainly at least in recent years — against the power claimed by the defendant. In Baxendale v. Eailroad, 94 E. C. L. 308, after an elaborate argument, it was held by a very strong court as to this very point: "It is not a legitimate ground for giving a preference to one of the customers of a railroad company that he engages to employ other lines of the company for the carriage of traffic distinct from, and unconnected with, the goods in ques- tion; and it is undue and unreasonable to charge more or less for the same service, according as the customer of the railway thinks proper, or not, to bind himself to employ the company in other and totally distinct business." In Menacho v. Ward (C. C.) 27 Fed. 529, where the court was enlightened by the argument of Frederick Coudert and James C. Carter on opposing sides, it was held that " a common carrier cannot charge a higher rate against shippers who refuse to patronize it exclusively." ^ 2 But see Hoover v. Pennsylvania R. R. Co. (1893), 156 Pa. St. 220; Lough V. Outerbridge (1894), 143 N. Y. 271. DISCRIMINATION. 383 BOEETH V. DETEOIT CITY GAS CO. 152 Mich. 654. 1908.^ Caepentee, J. Did the making of a 60 cent rate to those who use gas engines constitute an unjust or unlawful discrimination en- titling complainant to relief? Defendant does discriminate in its charges for gas. It charges those who use gas for illuminating purposes 90 cents per 1,000 cubic feet; those who use it for fuel purposes 80 cents per 1,000 cubic feet; those who use it for power 60 cents per 1,000 cubic feet. The discrimination between the use for illuminating purposes and fuel purposes was authorized by the ordinance of the city of Detroit. The discrimination between the use for fuel purposes and the use for power purposes was not authorized by that ordinance. The ground of that discrimina- tion is this: That those who use gas for power purposes use on an average much more than those who use it for fuel purposes, and that if they could not get it at the reduced rate they would use some other material for the purpose of creating power. Counsel for each party have elaborately briefed the question of the lawful- ness of this discrimination. We shall not, however, undertake to decide that question. It is not necessary to decide it in order to determine this case. The question is not likely to arise again, for since this suit was commenced a new ordinance has been passed by the city of Detroit authorizing that discrimination. We do not undertake to decide the unlawfulness of the discrimina- tion in question, because, in our judgment, it affords no ground upon which complainant is entitled to relief. Complainant is not entitled to relief because the rate of 80 cents per 1,000 cubic feet is too high, for that was the rate which defendant was entitled to charge. His claim for relief must rest upon the ground that the rate charged those who used gas for power purposes is too low. He cannot complain of this unless he is in some way injured. The circimistance that a manager of a public utility is granting unlawful favors to one of several individuals — and we do not decide that that was done in this case — does not give a right of action to every member of the community. That is a grievance to be redressed by the public. On principle it cannot be redressed by an individual unless he is specially aggrieved thereby. As was said in Hays v. Penn. Co. (C. C.) 12 Fed. 309: " It may be said that it is only when the discrimination inures to the undue advantage of one man in consequence of some injustice lOnly an extract from the opinion is here reprinted. — Ed. 384 DISCEIMINATION. [CHAP. T. inflicted on another that the law interferes for the protection of the latter." See, also, Hozier v. Caledonian Ey. Co., 17 Sess. Cases (2d series) 302. The users of gas engines who receive the reduced rates were in no just sense competitors of complainant. The reduced rates gave them no undue advantage over him. They did not injure him. They, therefore, afford no ground upon which he can claim relief. The decree dismissing complainant's bill is affirmed.^ M'NEILL V. DUEHAM AND CHAELOTTE EAILEOAD CO. 132 N. 0. 510. 1903.^ Clark, C. J. This is an action for personal injuries alleged to have been received by the plaintifE April 6, 1900, by negligence of the defendant, while traveling on its road. The defendant, in its answer, among other things, avers that the plaintifE was a " trespasser on its train, having tendered to defendant no ticket, money, or compensation whatever for its fare — only a free pass, which had expired 1st January previously by its own limitation," and which further had on its back a stipulation exempting the company from liability under all circumstances for injury to his person, or loss or damage to his baggage. The plaintiff testified that he was " editor of the Carthage Blade, a newspaper published at Carthage. In 1899 I made a contract with the defendant to publish its time-table in my paper, as the consideration for the pass. I did publish the time-table, and the defendant agreed to continue the contract and renew the pass for 1900." It is true, he said he told the conductor he would pay the fare ; but, upon his making the above statement, the conductor accepted him as a free passenger. . Upon this evidence the motion for judgment as of nonsuit should have been granted. There is no lawful contract of passage, and the only right the plaintiff could claim against the defendant is that the defendant should not willfully and wantonly injure him. Cook v. Eailroad, 128 IST. C. 333, 38 S. E. 925. . The Gen- eral Assembly (Laws 1891, p. 277, c. 320, § 4) provided that " if any common carrier subject to the provisions of this act shall di- rectly or indirectly by any special rate, rebate, drawback or other device, charge, demand, collect or receive from any person or persons a greater or less compensation for any service rendered 2 Compare Bailey v. Fayette G. & F. Co. (1899), 193 Pa. St. 175; Com- monwealth V. Louisville & N. R. R. Co. (1902), 112 Ky. 75. 1 Part of the opinion is omitted. — Ed. DISCKIMINATION". 385 or to be rendered in the transportation of passengers or property subject to the provisions of this act than it charges, demands or receives from any other person or persons for doing for him or them, a like and contemporaneous service in the transportation of a like kind of traflSe under substantial similar circumstances and conditions such common carrier shall be deemed guilty of un- just discrimination." Section 25 of said chapter (page 386) contains the exceptions which permit handling free and at reduced rates property of the United States, state or municipal governments, or for charitable purposes, or to or from fairs, and at exhibits thereat, and permits "the free carriage of destitute and homeless persons transported by charitable societies, and the necessary agents employed in such transportation, or the free transportation of persons traveling in the interest of orphan asylums or any depart- ment thereof, or the issuance of mileage, excursion or commuta- tion passenger tickets. Nothing in this act shall be construed to prohibit any common carrier from giving reduced rates to min- isters of religion, or to municipal governments for the transporta- tion of indignant persons, or to inmates of national homes or state homes for disabled volunteer soldiers and of soldiers' and sailors' orphan homes, including those about to enter and those re- turning home after discharge, under arrangement with the boards of managers of said homes : nothing in this act shall be construed to prevent railroads from giving free carriage to their own officers and employees, or to prevent the principal officers of any railroad company or companies from exchanging passes or tickets with other railroad companies for their officers or employees." These excep- tions are very liberal, but they do not embrace newspaper editors. Subject to the liberal exceptions just recited, the General As- sembly deemed that free transportation or any other discrimina- tion was so much against public policy that a violation of the statute was made punishable with a iine " not exceeding five thou- sand dollars " for each offense. Nothing could be more clearly a discrimination than the ground upon which the plaintiff asked for and received free passage on this occasion, to wit, that for the year previous he had advertised the schedule of the defendant company in his paper, and had received therefor a free pass over its line for the previous year, and this contract had been renewed for the year then current. It does not appear what was the value of the advertising done, charging for the space at the same rates as would be charged others; but, let it be what it may, it could not amount exactly — "neither more nor less" — to the value of a free pass to travel ad libitum an unstipulated number of miles, over the defendant's road. Besides, it was an illegal discrimina- 386 DISCEIMINATION. [CHAP. T. tion to sell the plaintiff transportation on credit, and not payable in money. The plaintiff knew that the defendant had no right to make a contract with him to transport him free an unlimited number of miles for an advertisement which in any aspect would not be the exact rate charged all other passengers. He knew that the statute denounced such attempted contract as unlawful and punishable with a fine " not less than one thousand nor more than five thousand dollars." "While the plaintiff was not himself made indictable, as in some states, he knew that the contract was unlawful, and he cannot now come into a court of justice and ask that the court shall give him compensation for damages sustained by the negli- gent breach of the contract of safe carriage. That presupposes a lawful contract, and he knew that this was an unlawful con- tract. He and the defendant are in pari delicto, and the court will leave the parties to settle their own controversy over damages for a breach of a contract forbidden by law. In Cook 17. Railroad, 138 N. C. 333, 38 S. B. 935, a tramp was stealing a ride. He was on the train unlawfully. In Pierce v. Eailroad, 134 N. C. 83, 33 S. E. 399, 41 L. E. A. 316, a boy had jumped on a switching train, and was riding thereon, contrary to the town ordinance. The court held that the company was liable in such cases only for any willful or wanton injury inflicted by the employees of the company. Here the plaintiff was on the train illegally, and against a prohibition more severe than the vio- lation of a town ordinance against the boy, or the stealing of a ride by a tramp. To same purport, Eichmond & D. E. Co. v. Burnseed (Miss.) 35 Am. St. Eep. 656, and notes; Hardyer v. E. Co., 45 Ean. 379, 25 Pac. 893, and cases cited. The plaintiff is an edu- cated, reputable gentleman — a member of an honorable profession ; but, being on the cars illegally, seeking free transportation, or at least discrimination in rates, contrary to the prohibition of the statute, his rights as against the company are the same as those others who were also riding contrary to law. He neither shows nor avers willful, wanton, or malicious injury, and cannot recover. We were cited to many authorities holding ineffectual stipulations upon the back of free passes exempting the common carrier from liability for injuries sustained by the holder thereof. These au- thorities are conflicting, 4 Elliott, E. E. § 1608, and can only be considered when the pass is issued in one of the cases permitted by our statute. They have no application to a case like this, where the contract of free carriage is illegal, and the parties are in pari delicto. This is the first case in which the illegal discrimination is set DISCKIMIN'ATION'. 387 up by the common carrier, but it so happens that by the lapse of time it is now protected from indictment by the statute of limita- tions. In refusing to grant judgment as of non-suit, there was error. Douglas, J. (dissenting). I am inclined to think that in pari delicto is not a defense to a tort arising from the negligence of the defendant.^ UNITED STATES v. BALTIMOEE AND OHIO EAILEOAD CO. 231 U. S. 274. 1913.^ Mr. Justice Lurton delivered the opinion of the court. This appeal involves the legality of an order made by the Inter- state Commerce Commission, holding that certain allowances made by the appellees to Arbuckle Brothers on sugar shipped by them over one or another of the railroad companies' lines constitute an illegal preference or discrimination in violation of the act to regu- late commerce. The order of the Commission required the rail- road companies to cease and desist from paying such allowances, " while at the same time paying no such allowances to the Federal Sugar Refining Company," on its sugar brought by it on lighters to the carriers at the same rail terminals. 30 Inters. Com. Eep. 200. The carriers affected filed a bill in the Commerce Court, alleging the invalidity and illegality of the order, and sought an in- junction pendente lite and a permanent injunction against its en- forcement. An injunction until the cause could be finally heard was granted by the Commerce Court. This was appealed from by the United States and the injunction sustained as within the sound discretion of the court below. 235 U. S. 306. Thereupon the cause was finally heard upon motion of the appellants to dismiss the bill for want of equity, all answers and pleas theretofore filed having been withdrawn. The Commerce Court denied this motion and sustained the equity of the bill. The appellants declining to further defend, the temporary injunction was made permanent. Erom that decree this appeal is prosecuted. The situation out of which the questions for decision arise, shortly stated, is this: The railroad companies held by the Interstate Commerce Com- mission to have discriminated in favor of Arbuckle Brothers and 2 See United States v. Chicago, I. & L. R. Co. (1908), 163 Fed. 114; State V. Union P. R. R. Co. (1910), 87 Neb. 29. 1 The arguments of counsel and part of the opinion are omitted. — Ed. 388 DISCEIMINATION, [CHAP. V. against the Federal Sugar Eefining Company are interstate trunk lines whose freight rail terminals are at the 'New Jersey shore of the harbor of New York. Transportation of freights into and out of the city of New York is practicable only by means of car floats, barges, and steam lighters, operating between the city and the New Jersey shore. To meet this condition the appellee railroads have long held themselves out as extending transportation of freights bound east to a defined area along the river front of the city, and as beginning such transportation westbound when freight is delivered at desig- nated points within the same area. The necessary lighterage service is performed without additional cost or charge, the flat rate into or out from such points being identical with that applicable at the New Jersey rail terminals. The limits within which such lighter- age service is performed as a part of the transportation assumed have long been defined and published in the several filed rate sheets of the carriers. The district embraces substantially the commer- cial and manufacturing river front of Greater New York, and within it the railroads hold themselves out as undertaking to receive or deliver freight at any public dock, or at any accessible private dock where the shipper shall arrange for the use of the dock. Within this lighterage zone each of the appellees has es- tablished and long maintained public freight terminal stations, at which it will deliver eastbound freights and receive freights bound west. Some of these stations are owned or managed solely by one of the railroads, and some are union stations operated for the joint use of two or all of the railroads. Some of them are operated by third persons, who manage and operate them under contracts as agents for one or more of the railroads. But whether operated under contract or directly by the company or companies using them, they are represented to be public delivery and receiving sta- tions, and are so set out in the filed tariff sheets of the companies interested. The " allowance " to Arbuckle Brothers referred to in the order of the Commission is the consideration paid by the railroad com- panies to them for instrumentalities and facilities furnished and services performed in the maintenance of one of these public sta- tions, known as the Jay Street terminal, and for the lighterage of all freight between that station and the railroad terminals on the New Jersey shore. Arbuclde Brothers, a copartnership, are large refiners of sugar and dealers in coffee. Much of their product of sugar finds a market in the west at points upon the lines of the railroads here involved. Their refinery is upon the water front of Brooklyn. They also own a contiguous property fronting upon DISCEIMINATION. 389 East Eiver some 1,300 feet. Upon this property they have erected a dock, piers, and large warehouses for the receipt of freight in- tended for transportation to the railroad terminals on the New Jersey shore, or received from such terminals for consignees nearby. They also own steam lighters, car floats, barges, etc., constructed for the transfer of cars, loaded or unloaded, between this dock and the New Jersey terminals. The premises were peculiarly adapted for use as a public union freight station, and for the purpose of ex- tending transportation by their several lines to this portion of the commercial and manufacturing water front of Greater New York, the appellee railroad companies, in 1906, entered into separate, but identical, contracts with Arbuckle Brothers, the latter contracting under the business name and style of " The Terminal Company." The contracts are too lengthy to be set out. Their essential points may be thus summarized : 1. The Terminal Company agrees to maintain the premises in good order and condition for the receipt of freight, and to pro- -vide all necessary boats, car floats, docks, and piers, adequate at all times to receive, discharge, transfer, and deliver freights, loaded and unloaded, adequate to accommodate the business contemplated. 2. The Terminal Company will receive at the New Jersey ter- minals all freights, in or out of cars, intended for delivery at the aforesaid freight station, and safely convey the same to the premises, and there make delivery to the consignees. It will also receive and load into cars all freights which may be delivered to it at its said premises for transportation over the lines of any of said railroad companies, and carry and deliver the same to said railroad company's New Jersey rail terminals. 3. For the facilities supplied and the services performed each of the railroad companies agrees to pay on freight in and out of the station, a compensation measured by the tonnage handled for each such railroad at 4% cents per hundred pounds on freight originating at or destined to points west of what is called " trunk line territory," and on freight originating at or destined to points east thereof, 3 cents per hundred pounds. Under these contracts, consignments to or by Arbuckle Brothers are handled in the same manner as the shipments of the general public, and comprise a part of the tonnage in and out of that sta- tion by which the compensation paid to the Terminal Company is measured. This fact was the basis of the complaint made by the Federal Sugar Eefining Company, whose sugar seeks the same market, and who claimed that as it lightered its sugar from its own shipping dock to the terminals at the New Jersey shore, the so-called "allowance" made in respect to the sugar of Arbuckle 390 DISCRIMINATION". [CHAP. V. Brothers, handled under the contracts referred to above, was an unjust and an illegal discrimination unless a like allowance was made to it. The order of the Commission does not forbid the allowance to Arbuckle Brothers as in itself illegal or unreasonable, but forbids it ohly as a discrimination unless a like allowance is made to the Federal Sugar Refining Company. That there is no undue dis- crimination against the Federal Sugar Eefining Company in refus- ing to make a like allowance to it will appear when the conceded circumstances and conditions are considered. This latter company is a competitor of Arbuckle Brothers in the sale and shipment of sugar to the same markets. Its refinery is located at Yonkers on the Hudson river, a point some 10 miles beyond the limits of the free lighterage district. It owns its docks and piers upon the river, but has never enjoyed the free lighterage privilege accorded to all shippers from docks and piers inside the free zone under the tariff sheets of the carriers. It has therefore been compelled to furnish its own means for lightering shipments from its docks to the New Jersey shore. This is an undoubted disadvantage in competing with Arbuckle Brothers, as well as with all other refiners and shippers of sugar within the lighterage district. Assuming, then, that the lighterage service performed by the Federal Sugar Eefining Company was a service by it for its own convenience, for which the railroads were under no obligation to make compensation, we come to the question whether the facilities employed and the service performed by Arbuckle Brothers in re- spect to their own sugar after delivery at the Jay Street terminal are accessorial, or services in aid of railroad transportation, for which they may be paid a reasonable compensation without dis- criminating unduly against the Federal Sugar Refining Company. That the plain purpose of the contracts between the several rail- road companies and the Terminal Company was to constitute the dock and warehouses of that company a public freight station is too clear for extended discussion. That the premises became such a depot through contract with the owners, and not by virtue of a fee-simple title or a lease, is of no legal significance. Railroad Commission v. Louisville & N. R. Co. 10 Inters. Com. Rep. 175; Cattle Raisers' Asso. v. Chicago, B. & Q. R. Co. 11 Inter. Com. Rep. 277. We must now recur to the distinction drawn by the Commission between the compensation paid by the railroad companies to Ar- buckle Brothers for the instrumentalities furnished and the service performed by them in respect of their own westbound shipments of sugar, and the compensation paid to them in respect to the freight DISCEIMINATIOlir. 391 handled by them through their station for the general public. The Commission find no fault with reference to the compensation paid for the latter, but do find that the compensation paid for the former is an undue discrimination unless a like compensation is made to the Federal Sugar Eefining Company for the lighterage of its sugar. We have before noticed that the order of the Commission is in the alternative. The obvious inference is that the Commission found nothing unlawful per se in the compensation paid to Arbuckle Brothers under the contract, although they are compensated upon a gross tonnage which includes their own sugar, for it sanctions its continuance upon condition that a like allowance shall be paid upon the sugar lightered by the Federal Sugar Eefining Company. Penn. Eef. Co. v. Western New York & P. E. Co. 208 U. S. 208, 218. But, as has already been shown, the railroads were under no obligation to lighter the sugar of the Federal Sugar Eefining Com- pany. Upon the other hand, if the lighterage of the Arbuckle sugar was included in the through rate from the Jay Street station, and a part of the transportation which the railroads were under obligation to perform, and that lighterage was done by Arbuckle Brothers at the instance and procurement of the carriers, they, as owners of the freight thus transported, were entitled to demand a compensation reasonably commensurate with the facilities fur- nished and the services performed. Wight v. United States, 167 U. S. 512; General Electric Co. v. New York C. & H. E. E. Co. 14 Inters. Com. Eep. 237; Interstate Commerce Commission v. Diffen- baugh, 222 U. S. 42, 46. In the case last cited, it is said : " The act of Congress in terms contemplates that if the carrier receives services from an owner of property transported, or uses instrumentalities furnished by. the latter, he shall pay for them. That is taken for granted in § 15; the only restriction being, that he shall pay no more than is reasonable, and the only permissive element being that the Commission may determine the maximum in case there is complaint (or now, upon its own motion. Act of June 18, 1910, chap. 309, § 12, 36 Stat, at L. 539, 551, U. S. Comp. Stat. Supp. 1911, p. 1301). As the carrier is required to furnish this part of the transportation upon request, he could not be required to do it at his own expense, and there, is nothing to prevent his hiring the instrumentality instead of owning it." That the compensation of three and four and one-fifth cents per hundred pounds upon the total tonnage in and out of this station is not unreasonable was and is not challenged, and therefore we pass that subject by. 392 DISCEIMINATION. [CHAP. V. Viewing the whole case in a broad light, it is apparent that the disadvantage under which the Federal Sugar Kefining Company labors is one which arises out of its disadvantageous location. That disadvantage would still remain if the title to the Jay Street station was in the railroad companies, and its business in charge of a third person. We fail to find any error in the decree of the Commerce Court holding the order of the Commission void, and its decree is ac- cordingly approved. CHAPTER VI. DUTY TO FUENISH ADEQUATE FACILITIES. JACKSOIT V. VIRGINIA HOT SPEIKGS CO. 209 Fed. 979. 1913.^ McDowell, District Judge. This is an action of trespass on the case against an innkeeper, brought by a proposing guest who was refused accommodation. The original declaration was de- murred to for several reasons, but it has become unnecessary to discuss any of the grounds of demurrer except the failure of the pleader to allege that the defendant at the time in question had room for the plaintiff. The general rule in common-law pleading is that it is not nec- essary to state matter which would come more properly from the other side. Heard's Stephen PL (9th Am. Ed.) p. 349. It is also not necessary and, as a rule, is improper, to anticipate and deny or avoid matter of defense. 31 Cyc. 109. But it is neces- sary to allege at least a prima facie case. Heard's Stephen PL, p. 351 [352]. The duty of the innkeeper to furnish lodging does not exist if his accommodations are exhausted. In 3 Chitty PL (16th Am. Ed.) p. 531, it is said: " An innkeeper is bound by the custom of the realm to receive travelers and guests at all hours and times if they tender and are ready to pay the customary charge, are in a fit and proper con- dition as to conduct and health, and if there is accommodation for them." In Justice Harlan's dissent in the Civil Eights Cases, 109 U. S. 40, 3 Sup. Ct. 43, 27 L. Ed. 835, the following is quoted : "An innkeeper is bound to take in all travelers and wayfaring persons, and to entertain them, if he can accommodate them, for a reasonable compensation. . . ." Story, Bailments, §§ 475, 476. And again: " In Eex V. Ivens, 7 Carr. & P. 213, 32 E. C. L. 495, the court speaking by Mr. Justice Coleridge, said: 'An indictment lies against an innkeeper who refuses to receive a guest, he having at 1 Part of the opinion is omitted. — Ed. 394 ADEQUATE FACILITIES. [CHAP. VI. the time room in his house; and either the price of the guest's entertainment being tendered to him or such circumstances occur- ring as will dispense with that tender.' " In 16 Am. & Bng. Ency. (3d Ed.) p. 525, it is said: " If an innkeeper improperly refuses to receive and entertain any person coming to the inn as a guest, he is liable, in conse- quence of such unlawful act, to an action by the injured party for damages." In 32 Cyc. 1074, it is said: " An innkeeper, as one carrying on a public employment, is obliged to receive all travelers who properly apply to be admitted, provided he has room and they pay his reasonable charges." And quotations of this same purport could be added almost indefinitely. The only forms for pleading in such cases that I know of are found in 2 Wharton's Precedents of Indictments, 911, and in Haw- thorn V. Hammond, 1 Carrington & Kirwan, 404, 47 E. C. L. 403, which is cited by Chitty (2 PI. [16th Am. Ed.] p. 533) as a precedent. In the indictment, as in the declaration in case, it is alleged that there was at the time sufficient room in the inn. As the duty to receive the guest does not exist unless there is room, I do not- see that a prima facie cause of action is alleged unless the declaration contains an allegation that the defendant had room for the plaintiff. It is argued that the facts in this respect lie peculiarly within the knowledge of the innkeeper, and that therefore exhaustion of accommodation should be regarded as a matter of defense. This argument is making use of a mere (occasional) rule of evidence to overcome a rule of pleading. Prof. Thayer says that no one has a right to look to the law of evidence to determine the rules of pleading. Thayer's Prelim. Treatise on Evidence, p. 371. This ground of demurrer must be held good as to this count, and also as to all the remaining counts of the declaration.^ DE WOLF V. FOKD. 193 N. Y. 397. 1908.^ Weenek, J. For centuries it has been settled in all jurisdic- tions where the common law prevails that the business of an 2 " I think a person who comes to the inn has no legal right to demand to pass the night in a public sitting-room if the bedrooms are all full, and I think that the landlord has no obligation to receive him." Brown v. Brand [1902], 1 K. B. 696. 1 Only an extract from the opinion is here reprinted. — Ed. ADEQUATE FACILITIES. 395 innkeeper is of a quasi public character, invested with many privi- leges, and burdened with correspondingly great responsibilities. Except as the general rule of the common law is modified by statutory enactment, an innkeeper has the undoubted right to con- duct his inn as he deems best, so long as he does not violate the law. Although he impliedly invites the public to his establish- ment, he is bound to furnish no particular kind of entertainment or accommodation, except such as may be expressly stipulated for, or such as may be reasonably implied from the prices which he charges, or the grade of the inn which he maintains. And while he is bound to accept as guests all proper persons, so long as he has room for them, he is under no legal obligation to assign a guest to any particular apartment. Pell v. Knight, 8 M. & W. 269. From the very nature of the business it is inevitable that an innkeeper must, at all reasonable times and for all proper pur- poses, have the right of access to and control over every part of his inn, even though separate parts thereof may be occupied by guests for hire. Over against these general rights and privileges there is the well-recognized responsibility of the innkeeper for the guest's goods and chattels brought to the inn. As to these the innkeeper is an insurer unless his common-law duty is modified by statute, and he is liable for all loss except such as is occasioned by the negligence or fraud of the guest, or by the act of God or the public enemy. Hulett V. Swift, 33 N. Y., 571, 88 Am. Dee. 405. Although this liability of the innkeeper for the loss of goods intrusted to him by his guest was clearly defined nearly four centuries ago, it has been reserved for us at this late day, in the development of our juris- prudence, to define, with such accuracy as the nature of this case requires, the relation of the innkeeper to the person of his guest. It is clearly not the conventional relation of landlord and tenant, for there is no contract as to the realty. Taylor's L. & T. § 66. A room in an inn occupied by a guest is not, in the legal sense, his dwelling house, for notwithstanding his occupancy, it is the house of the innkeeper. Eogers v. People, 86 N. Y. 360, 40 Am. Eep. 548. Nor is the relation of innkeeper and guest usually created by express contract, for as a rule it is based wholly upon the mere circumstance that one man happens to have an inn which is patronized by another, and the law implies whatever else is necessary to constitute the relation between them. Anthon's Law Student, p. 57; Willard w. Eeinhardt, 3 E. D. Smith, 148. It is a relation, moreover, which cannot be defined with exactitude in matters of detail, for it may be one thing in a mining camp, or in the remote and sparsely settled portions of a country. It may be another thing in the tavern by the rural wayside, and yet another 396 ADEQUATE FACILITIES, [CHAP. VI. in the modern urban palace called a hotel. Between the extreme of rugged simplicity on the one hand and of palatial magnificence on the other, there are numberless gradations of service, attention, convenience, and luxury which must necessarily give the relation of innkeeper and guest such flexibility as will render it adaptable to varying conditions and circumstances. But underneath all these differing conditions there is, of course, a basic legal principle which governs the general relation of innkeeper and guest. The innkeeper holds himself out as able and willing to entertain guests for hire; and, in the absence of a specific contract, the law implies that he will furnish such entertainment as the character of his inn and reasonable attention to the convenience and comfort of his guests will afford. HEEVEY V. HAET. 149 Ala. 604. 1906.^ Haralson, J. In Doyle v. Walker, 36 U. C. J. B. 503, it was held, as the common law on the subject, that the innkeeper has the right and the sole right to select the apartment for a guest, and, if he finds it expedient, to change the apartment and assign the guest another, without becoming a trespasser in making the change. If, having the necessary convenience, he refuses to afford reasonable accommodation, he is liable to an action for damages. 16 Am. & Eng. Ency. Law (3d Ed.) 534, 535. The plaintiff in this case, the appellee here, sued the defendants, who are appellants, to recover damages for the alleged reason that he was put out of the room to which he had been assigned by defendants in their hotel, and was refused proper accommodations in said hotel. The jury found for defendants, and the court, on motion of the plaintiff, set aside the verdict and granted a new trial. The grounds of the motion were : "1. Because the verdict was not supported by the evidence, as applied to the law as charged by the court. 3. Because the jury in rendition of the verdict, ignored the law as charged by the court. 3. Because the verdict is not supported by the evidence." The well established rule in this court, as to granting new trials is, " that this court will not revise a judgment granting the motion, unless the evidence plainly and palpably supports the verdict." Merrill v. Brantley, 133 Ala. 537, 31 South. 847^; Smith v. Tombig- bee E. E. Co., 141 Ala. 333, 37 South. 389. 1 The statement of facts, arguments of counsel and part of the opinion are omitted. — Ed. ADEQUATE FACILITIES. 397 The theory of the plaintiff relied on for a recovery is clearly stated in the complaint, upon which, issue being taken, the case was tried. The plaintiff's evidence tended to support the complaint, but the evidence of the defendants was not entirely consonant therewith. In some of its more important phases, it conflicted, and different inferences might have been well drawn therefrom. It would be useless to review the evidence on each side, to do which would require time and labor. We have carefully read the evidence in consulta- tion, and conclude that while it might justify, yet it does not "plainly and palpably support the verdict," without which con- dition, we cannot consistently with the rule of the court above announced reverse the judgment granting the motion for a new trial. Under the averments of the complaint, the defendant was not liable, if he offered plaintiff proper accommodations in lieu of the room previously assigned to him. The ruling on the motion for a new trial must be affirmed.^ Affirmed. Tyson, C. J., and Simpson and Denson, J J., concur. OCEAN STEAMSHIP CO. OP SAVANNAH v. SAVANNAH LOCOMOTIVE WOEKS AND SUPPLY CO. 131 Ga. 831. 1909.^ Evans, P. J. At common law a carrier's duty to receive goods was limited to his facilities for transportation. The owner of a single ship may hold himself out to the public to carry certain goods for hire. As to the goods he proposes to carry, he is a public carrier ; but he is under no obligation to provide other ships because his vessel is inadequate to transport all goods jvhich may be offered him. Such a carrier does not owe to the public all the duties imposed by the law on railroad companies and similar public institutions to furnish adequate transportation facilities for all goods which may be tendered. Eailroad companies are public institutions, and are granted certain exclusive franchises and rights which naturally impose correlative duties. They are invested with the power of condemnation, by the exercise of which sovereign right they acquire an exclusive privilege to carry on their business over the highway constructed by them. They are en- dowed with special and unusual powers, with an express view to their 2 Compare Mann Boudoir Car Co. v. Duprg (1893), 54 Fed. 646, and Pullman Palace Car Co. v. Taylor (1879), 65 Ind. 153. 1 Only an extract f i;om the opinion is here reprinted. — Ed. 398 ADEQUATE FACILITIES. [CHAP. VI. rendering to the public adequate service. The conference of these unusual powers raises ah obligation, not only to serve the public impartially, but to serve the public efficiently. Upon them the law- imposes the obligation to furnish sufficient facilities for the reason- ably prompt transportation of goods tendered for carriage ; and they are bound to provide sufficient cars for transporting, without un- reasonable delay, the usual and ordinary quantity of freight offered to them, or which might reasonably and ordinarily be expected. 6 Am. & Eng. Enc. L. (2d Ed.) 167. A navigation company like the defendant, which receives no franchise from the state to use the open sea, and which enjoys no monopoly or right of eminent domain, owes no duty to the public to furnish adequate facilities to transport all of the trafiic of the ports of its termini. It is under no obligation to buy other ships because it does not under- take to carry any more goods than its vessels will safely accom- modate. If there is a demand for more ships, the commercial neces- sities will regulate the deficiency in transportation service, either by voluntary enlargement of the facilities of existing ship lines or the establishment of new ones. A carrier, not a public or quasi public institution, may select the class of goods which he proposes to carry. Whether the right of selection may include the right to limit the quantity of any com- modity he proposes to carry, provided he gives notice of the limitation, is not before us. WHITEHOUSE v. STATEN ISLAND WATEK CO. 101 N. T. App. Dlv. 112. 1905.^ Hooker, J. The principal question presented by the record for the consideration of the court is whether, under the contract existing between the parties to this action, the defendant's failure to supply water to the plaintiff during a considerable portion of the month of January and part of the month of February, 1904, was a breach of that contract, for which the plaintiff is entitled to recover as damages the fair value of services rendered to the plaintiff in pumping water from his cistern for his use. The de- fendant is a quasi public corporation, chartered to supply water to citizens of 'what was formerly New Brighton. When the plain- tiff moved into his present residence, connection had been made between that residence and the defendant's main in St. Mark's Place by means of a service pipe, and, upon the plaintiff's taking up 1 Part of the opinion is omitted. — Ed. ADEQUATE FACILITIES. 399 his residence there, he paid to the defendant the sum of money it asked each year for the supply of water which he proposed to use. The rate was readjusted after he had lived there a short time^ for the reason that he thought he was paying a larger rate than the regulations of the defendant called for. One of the defendant's agents, upon the basis of the established rates, took an inventory of what the plaintiff was using, and readjusted the rate. This rate was paid for many years, and on or about the 1st day of May, 1903, the plaintiff again paid to the defendant, and the latter received, the annual rental. Under these circumstances, a contract is implied between the plaintiff and the defendant corporation, by virtue of which it undertakes to supply him with water. McEntee V. Kingston Water Co., 165 N. Y. 27, 58 N. E. 785. There must necessarily be implied in this contract a provision that the supply by the defendant for which the plaintiff is paying shall be sufficient for the ordinary uses to which the plaintiff has put it. It is un- questioned that there has been a breach of that contract, and the measure of damages adopted by the plaintiff is not, nor could it well be, questioned. The defendant sought to escape liability on the theory that the contract with the plaintiff was simply to supply water at the junction of the service pipe and the water main in St. Mark's Place, and that because the plaintiff's residence was on an eminence, and at an altitude considerably above other premises supplied from the St. Mark's main, it was not liable, provided it could show that water could have been obtained from the junction of the main and the service pipe. Such was not the contract be- tween the parties. Were such provision properly to be incorporated into an implied contract between •wa.ter companies and consumers, it would, at the option of the water company, relieve it from all liability for its failure to force water into the. houses of its con- sumers, by showing that water could have been obtained in the street below ground in the water mains. The implied contract in this case was to supply the plaintiff with water, no matter what the altitude of his house was above the water main, for this had been the custom for many years, and the defendant had been paid the rates demanded for supplying water at the house; and again, in continuance of the contract, on the 1st day of May, 1903, the defendant accepted payment of the full rate for the ensuing year, which implied a contract to continue the service as it had been rendered, and that was that the plaintiff should have water in his house.^ 2 See City of Jackson v. Anderson (1910), 97 Miss. 1. 400 ADEQUATE FACILITIES. 1[0HAP. VI. LEAVBLL V. WESTEEN UNIOISr TBLEGEAPH CO. 116 N. O. 211. 1895.^ This was a complaint, heard before the Railroad Commission, in Ealeigh, on the 13th November, 1894. The complaint was filed August 31, 1894, alleging a violation of the tariff rate prescribed by the Commission for the transmis- sion of telegraphic messages. The plaintiff alleged that on August 17, 1894, he delivered a ten- word message to the defendant, at Wilson, N". C, to be transmitted to Edenton, N. C, and was required by the defendant to pay fifty cents for the transmission of the message, and that this was a violation of the rate prescribed by the Eailroad Commission of North Carolina. The defendant answered the complaint on the 31st of August, 1894, through its General Superintendent, J. B. Tree, alleging that the "telegraphic tolls from Wilson, N. C, to Norfolk, Va., are twenty-five cents for ten words, and the rate from Norfolk, Va., to Edenton, N. C, is twenty-five cents, making a total of fifty cents. The message was sent via Norfolk because it is the only telegraph route by which the business addressed to Edenton can be handled and turned over to the Elizabeth City and Norfolk Telegraph Com- pany, at Norfolk, Va., as the Western Union Telegraph Company has no commercial office at Edenton, N. C." Clark, J. In Express Co. v. Eailroad, 111 N. C, 463, this Court affirmed the constitutionality of the act (Ch. 320, Acts 1891) establishing the Eailroad and Telegraph Commission. In Mayo V. Telegraph Co., 113 N. C, 343, it sustained the power of such Commission under Section 36 of said act, to establish rates for telegraph companies. In Eailroad Commission v. Telegraph Co. (Albea's case), 113 N. C, 313, the Court held that tele- graphic messages transmitted by a company from and to points in this State, although traversing another State in the route, do not constitute interstate commerce and are subject to the tariff regulation of the commission. In this it followed the unanimous opinion of the Supreme Court of the United States, delivered by Puller^ C. J., in Eailroad v. Pennsylvania, 145 U. S., 192. To the same purport, Campbell v. Eailroad, 86 Iowa, 587. In the present case the commission find as a fact that " the de- fendant has a continuous line by which messages may be transmitted from Wilson to Edenton and other adjacent points in North Cslto- 1 Part of the statement of facts and part of the opinion are omitted. — Ed. ADEQUATE FACILITIES. 401 lina, but this line traverses a part of the state of Virginia, passing through the city of Norfolk;" and it properly holds upon the evi- dence " that the telegraph office at Edenton is under the control of the defendant, and the operator, though employed by the railroad company, is the agent and operator of the defendant." It neces- sarily follows from this state of facts that as the defendant could have sent the message the whole distance over its own line, it can- not be heard to say that it did not do what it ought to have done and thus collect 50 cents for the message instead of 35 as allowed by the commission tariff. The defence set up that in fact it only carried the message to Norfolk and then paid another company to forward it to Edenton can not be regarded when it might itself have completed the delivery of the message. The defendant seeks to excuse itself on the plea that it has only one wire to Edenton and that this is fully occupied at that office by the work it does for the railroad company. But it is the duty of the telegraph com- pany to have sufficient facilities to transact all the business offered to it for all points at which it has offices. If the press of business offered is so great that one wire or one operator at a point is not sufficient it is the duty of the company to add another wire or an additional employee. It is not a mere private business but a public duty which the defendants by their franchise are authorized to discharge. It is further to be noted that in giving to the rail- road company the preference in the use of their line to Edenton, while at other points, as Moyock, Centreville and Hertford on the same line, the public is admitted to the use of the wire, the defend- ant is making a forbidden and illegal discrimination in favor of one customer and against the public at large, as was intimated in Albea's case, supra,-113 N. C, on page 326. It is only by virtue of its franchise as a telegraph company that it can operate its line to Edenton at all. It cannot discriminate at that point in favor of or against any customer. It cannot sub- stract itself from obedience to the rates prescribed by the authority of the State, acting through the Commission, by a contract giving one customer, the railroad, preference in business and pleading that such business occupies the only wire it has. The discrimination is itself illegal. Besides, if it were not, the small cost of an additional wire, which it is common knowledge does not exceed ten dollars per mile, furnishes no ground to exempt the defendant from fur- nishing the additional facility to do the business for aU. The charge of a double rate between Edenton and other points in North Carolina is a far heavier imposition upon the public than the cost of the additional wire to defendant, and is just the kind of burden and discrimination which the Commission was established 403 ADEQUATE FACILITIES. [CHAP. VI. to prevent. In Albea's case, supra, no commercial message was tendered, and the point now decided was not presented by the record. The ruling of the Commission is in all respects. Afjvrmed."' LAWEEFCE v. EICHAEDS. Ill Me. 95. 1913.^ Savage, C. J. This is a mandamus proceeding brought against the defendants as trustees of the Gardiner Water District, wherein it is sought to compel the defendants to extend the water mains of the District to the petitioner's residence in South Gardiner, and supply him with water. The cause was brought before a single Justice who denied the peremptory writ, and it comes before us on exceptions to that ruling. The Gardiner Water District is a quasi-municipal corporation, created by chapter 82 of the Private and Special Laws of 1903. It is about six miles long northerly and southerly and about one and five-eighths wide on the average. Territorially it includes only a part of the city of Gardiner, but it does include the village of South Gardiner, in which the petitioner's house is situated. The primary object of the charter was to enable the District to acquire the ownership of the existing water system of the Maine Water Company in Gardiner, Pittston, Eandolph and Farmingdale, by coiidemnation or otherwise. For, although power was granted to it to take and hold water of the Cobbosseecontee river, and to take land for dams, reservoirs and so forth, yet section 13 of the Act provided that this grant of power should be inoperative unless the District should first acquire the plant and franchises of the Maine Water Company. At the time the charter was granted, and at the time the District acquired the plant of the Maine Water Company, its system was extended only through the more congested and thickly settled portions of the city of Gardiner, and not into the outlying parts of the District. The area of service lay mostly within a circle one mile in diameter. It did not then extend to South Gardiner, which is about five miles from the city proper. Nor has it since been extended in the direction of South Gardiner more than a few hundred feet. It is well settled that mandamus does not lie to compel the per- formance of acts necessarily involving the exercise of judgment and discretion on the part of the ofiicer, board or commission at whose 2 See Cumberland T. & T. Co. v. Kelly (1908), 160 Fed. 316. 1 Only part of the opinion is reprinted. — Ed. ADEQUATE FACILITIES. 403 hands performance is desired. The court may under proper cir- ctimstances require an inferior tribunal to exercise its discretion, but not prescribe how it shall exercise it. The domain of discretionary powers conferred upon municipal bodies will in no case be invaded by the court. The court cannot substitute its own judgment for that of the tribunal to which it was committed by law. Bangor v. County Commissioners, 87 Maine, 294; Spelling on Extraordinary Eemedies, sections 687, 1384. This principle is admitted in argu- ment by the petitioner. ■ But the petitioner contends that the trustees have no discre- tion in the matter, and that, by force of the original act of 1903, he has a clear, legal and vested right, even a contract right, to have water supplied at his house, — a right which the Legislature could not impair by the amendment of 1905. He bases his con- tention on the ground that the District is bound to supply every inhabitant of the District with water. If this contention has real merit, the consequence is that the trustees, acting for the District, are legally bound to supply water to all inhabitants, no matter how large the cost of the undertaking, nor how small the revenue, and no matter how ruinous and destructive the result might be to the financial ability of the District to carry on its operations. That this contention is not sound is, we think, easily demonstrable. The area of the District outside of the city proper and South Gardiner is scatteringly settled. The elevation in some places is considerably higher than the system's reservoir. It does not need the testimony of expert engineers to satisfy a reasoning mind that under such conditions the expense necessarily to be incurred in per- forming the duty, as it is claimed to be, of supplying every in- habitant of the District with water would practically be destructive of the purpose of the charter. It would create a burden too heavy to; be borne. Did the Legislature contemplate and intend such a. possible result? Did the Legislature intend, when it empowered the cities of Lewiston and Bangor to own their water systems, with powers and duties with respect to the water supply similar to those of the Gardiner Water District, that those cities were bound to furnish water over the entire extent of their territorial areas ? We do not think so. It is a matter of common knowledge that water systems in towns or cities containing both an urban and a rural population, whether the systems be owned privately or municipally, never have been in fact, and are not now, anywhere, extended beyond the more compact parts of the town into and through the rural parts. It is practicable in the rural parts for inhabitants to sup- ply themselves. In the thickly settled parts it gradually becomes inconvenient, impracticable and sometimes impossible for the in- 404 ADEQUATE EACILITIES; [OHAP. VI. habitants to do so. Sources of supply become exhausted or defiled, and the need for more water, which the inhabitant cannot well furnish for himself, becomes imperative. Organized action, either public or private, becomes necessary, and the individual then pays for a service which he can no longer perform for himself. We think then there was nothing in the situation existing in Gardiner which gives color to the contention that the Legislature intended the district to be bound to supply all the inhabitants within its limits with water, or to operate and extend the system beyond the ordinary limits to which similar systems are operated and ex- tended. The system which the district was authorized to acquire was limited in Gardiner in fact to the urban portion of the city. This system the trustees were empowered to extend and improve, but we do not think that the statute thereby required them to ex- tend to all parts of the district, to the parts which did not need the water as well as to those which did; even, if the petitioner's theory is correct, to extend to the individual who might reside in the remotest rural portion of the town, if he demanded it. To place such a construction upon the statute, which alone imposed duties upon the trustees, seems unreasonable, and there is nothing in the language of the statute which requires such a construction. In fact there is an implication otherwise in the statute. By sec- tion 10 it was provided that the water rates established by the trustees should be such as to provide revenue "... for such ex- tensions and renewals as may become necessary." This clearly does not mean extensions all over the district. We think then that the contention that as a matter of law every individual in the district has the right to have the water brought to him cannot be sustained. But if the district is not in law bound to supply all, who is to determine to what extent the system shall be extended, and who shall thereby be supplied ? The power to do this must necessarily be vested in the trustees. Jt is not given to any other person or body. In making the deter- mination they must use their judgment and exercise their discre- tion, and the exercise of that discretion is not reviewable on man- damus. It is true that the situation of the petitioner in the village of South Gardiner may not be the same as that of the farmer in the rural part of the town with his spring, or well, or brook. But once grant, as we must, that the trustees are vested with a dis- cretion not to extend to every part of the district, it follows that some power must decide the limits of extension. There is no di- viding line in the exercise of the discretion. There is no ground for saying that the trustees have discretion as to part of the dis- ADEQUATE FACILITIES. 405 trict, and have none as to another part. They must have dis- cretion as to all extensions or none. If they abuse their discretion, the remedy does not lie in the power of the court, but in the wis- dom of the Legislature. It follows from what we have said that the petitioner has no vested legal right, whether it be in the nature of contract or other- wise, to have the district's water main extended to his house. His only legal right is that the trustees shall exercise their discretion. That they have done, adversely to the petitioner. It is proper to say that the ease of Eobbias v. Kailway Co., 100 Me. 496, 62 Atl. 136, 1 L. E. A. (N. S.) 963, on which the peti- tioner strongly relies, is easily distinguishable from this case. There the main was already extended by the petitioner's house, and mandamus was granted to compel the defendant to permit water to be conducted from the main to the house. There was no question of extending a main, nor was the defendant in that case vested with any such discretion as we think these defendants are. The court in that case held that a public service corporation was bound to serve all impartially, fairly, and without discrimination, but it did not hold that such a corporation authorized to supply water to the public was bound at all hazards, without regard to expense or revenue, or the exercise of good business judgment, to extend its mains to every individual of the public who might demand it. But what the duties of a public service corporation may be in a particular case are not involved in this case, and we do not need to consider them now. It is unnecessary to consider the other questions raised. Our conclusion is that the Gardiner Water District is a municipal cor- poration created for a special purpose, that its trustees are vested with discretionary powers in the matter of extensions of the system, and that the court cannot interfere with the exercise of their dis- cretion. Exceptions overruled. CENTEAL UmON TELEPHONE CO. v. STATE. 118 Ind. 194. 1888.^ Olds, J. This is an action, brought by the relatrix, to compel the appellant, by mandate, to furnish her, at her place of business in the city of Lafayette, a telephone and telephonic connections and facilities. 1 Part of the opinion is omitted. — Ed. 406 ADEQUATE FACILITIES. [CHAP. VI. This action is brought under the acts of 1885, prescribing the duties of telephone companies, and to regulate the rental to be paid for the use of telephones, and requires a construction of these acts. On April 8th, 1885, the following law was enacted : ' "An Act prescribing certain duties of telegraph and telephone companies, prohibiting discrimination between patrons, pro- viding penalties therefor, and declaring an emergency." Section 1. Eelates exclusively to telegraph companies. " Sec. 2. Every telephone company, with wires wholly or partly within this State, and engaged in a general telephone business, shall within the local limits of such telephone company's busi- .ness, supply all applicants for telephone connections and facilitifes with such connections and facilities without discrimination or par- tiality, provided such applicants comply or ofEer to comply with thb 'reasonable regulations of the company; and no such company shall impose any conditions or restrictions upon any such applicant that ■are hot imposed impartially upon all persons or companies in like situation, nor shall such companies discriminate against any indi- vidual or company engaged in any lawful business, or between indi- viduals or companies engaged in the same business, by requiring as . a condition for furnishing such facilities that they shall not be used ; in the business of the applicant, or otherwise for any lawful pur- pose." •■' On the 13th of April, 1885, another law was enacted, which is as follows: ■■■ " An Act to regulate the rental allowed for the use of telephones, , ' and fixing a penalty for its violation." It is' insisted by appellant that the act of April 8th is simply an act prohibiting discriminations by telephone companies, and pro- viding a penalty for any discrimination by such companies, aUd that the act of April 13th prescribes the price which may be charged for the rental of telephones, when the same are rented, and pre- scribes penalties for asking or taking a greater rental, and that unless they inhibit all other systems or methods of telephony, other than the rental, this case was decided wrongly by the court below; and that the title to the act of April 8th declares it to be an act pro- hibiting discrimination between patrons, and prescribing penalties thefefor.l It is further claimed by appellant that the answers show thdt appellant was not engaged in a general telephone business at La- fayette at the time of appellee's demand, but was engaged only ih a limited business, and that it offered to furnish appellees such ADEQUATE FACILITIES. 407 limited service, and has in all respects offered to treat her in the same manner as it was treating its other patrons, but that she wanted a different service than that in which appellant was en- gaged; in other words, she wanted appellant to discriminate in her favor, and to grant her demand would make appellant amenable to the law against discrimination. In determining this ease it is important to consider the nature of the telephone, how operated, the utility of it, and the rights of the parties in the absence of the statutes enacted by the Legislature. The telephone differs from the telegraph very materially, in this, that the transmission of news, the sending and receiving of mes- sages by telegraph, can only be done by those having a knowledge of the business, and having a knowledge of the art and science of teleg- raphy. To others, who are not telegraphists, the telegraph would be useless. It is, therefore, only beneficial to the general public when operated by persons or companies keeping in their em- ploy telegraphists, to send, receive and transmit messages, and mes- sengers to deliver them to persons to whom addressed. A tele- graphic instrument in the house or place of business of a patron of the company, connected with the wires of the company, with facilities for transmitting and receiving messages by telegraph, would be of no use to a patron, unless he was learned in the art of telegraphy. But the telephone is entirely different; a telephone, with proper connections and facilities for use, can be used, by any person; it requires no experience to operate it. Webster defines it as " An instrument for conveying sound to a great distance." To conduct the business of the telephone by public telephone sta- tions and by sending messengers to notify persons with whom a patron of the company desires to converse in other parts of the city, to compel the person desiring to converse with others to remain, at the public telephone station until the persons with whom they de- sire to converse can be notified and so arrange their business as to 'leave and go to another telephone station and hold the conversa- tion, renders the use of the telephone almost worthless. It is by reason of the fact that business men can have them in their oSiees and residences, and, without leaving their homes or their places of business, call up another at a great distance with whom they have important business, and converse without the loss of valuable 'time on the part of either, that the telephone is particularly valu- able as an instrument of commerce. It being an instrument 6f commerce, and persons or corporations engaged in the general tele- ■phone business being common carriers of news, what are the rights of the public, independent of the statute, as regards discrimina- tion ? , ! ■ ■ 408 ADEQUATE FACILITIES. [CHAP. VI. Any person or corporation engaged in telephone business, opera- ting telephone lines, furnishing telephonic connections, facilities and service to business houses, persons and companies, and dis- criminating against any person or company, can be compelled by mandate, on the petition of such person or company discriminated against, to furnish to the petitioner a like service as furnished to others. This has been held in the cases of State v. Nebraska Tele- phone Co., 17 Neb. 126 ; Vincent v. Chicago, etc., E. E. Co., 49 111. 33; People v. Manhattan Gas Light Co., 45 Barb. 136. And the principle held in these cases is in accordance with the vrell settled rules governing common carriers. It is not controverted in the argument by counsel for the ap- pellant that the Legislature had the right to regulate the price to be charged and collected for the use of telephones and telephonic connections, facilities and service ; and even if it were controverted, it is well settled by authorities that the Legislature has the right to do so, relative to the business conducted within the State. Hoc- kett V. State, 105 Ind. 250, and Central U. Tel. Co. v. Bradbury, supra, and authorities cited in those cases; Johnson v. State, 113 Ind. 143 ; Munn v. Illinois, 94 U. S. 113 ; Ouachita Packet Co. v. Aiken, 121 U. S. 144; Patterson v. Kentucky, 97 U. S. 501. The telephone company being liable for discriminating between persons and companies, and the person or company discriminated against having a remedy without the enactment of section 2 of the act of April 8th, 1885, there was no occasion for the statute on that account alone. Then what was the purpose and object of the two statutes set out? It should be presumed the Legislature had some purpose and ob- ject. If section 2 of the act of April 8th was only to prevent dis- crimination, and section 1 of the act of April 13th only to fix the price for the rental of telephones when the telephone company was operating under a rental system, then all that the companies opera- ting telephone lines would have to do would be to cease to operate their business under a rental system, and charge so much for each conversation; or, as they have done in this case, establish public telephone stations, and then charge for each separate use of the tele- phone, and they might thereby derive a greater income for the use of the telephone, and render to the public much inferior service, and yet avoid liability under the statute. We do not think such was the object or purpose of the statute, or that such construction can be placed upon it. It was the evident intention of the Legislature that where a telephone company was doing a general telephone business in this State, any person within the local limits of its business in a town ADEQUATE FACILITIES. 409 or city should have the right to demand and receive a telephone and telephonic connections, facilities and service, the best in use by such company, and should only be liable to be charged and to pay three dollars per month therefor. "With this construction only are the statutes of any benefit to the citizens of the State. The Legislature fixed what, in the judgment of that body, was the maximum price that should be charged for the service, and placed it in the power of each individual, and gave him the right, to de- mand and receive such service within the limits of the company's business, in any town or city where such company is doing a general telephone business. GALEITA AND CHICAGO UNION EAILEOAD CO. v. EAE. 18 111. 488. 1857.^ Skinjter, J. This was an action on the case against the rail- road company, as common carriers, for refusal to carry, and for delay in carrying, the grain of the plaintiff below from Eockford to Chicago. The cause was tried by jury, who returned a verdict of $4,950 against the company, upon which the court rendered judg- ment, refusing to grant a new trial. The evidence is very voluminous, and, in the opinion of the court, is insuflBcient to sustain a verdict for the amount found. The instructions in the record, and involved in the assignments of error, are seventeen in number, and a critical examination of each in our opinion would embrace almost the entire law relating to common carriers. This court is under no obligation to write a treatise upon this branch of the law, nor was the court below bound to act upon instructions not necessary to enlighten the jury of the law arising upon the evidence properly before them. As the cause will be again for trial, we will state those rules of law in controversy which are material to the case made by the record. The evidence shows that the company had the necessary means and facilities for transporting with dispatch the amount of freight ordinarily for carriage, and that at the period when the wrong is charged to have been committed there was an unusual and extraor- dinary quantity of grain for shipment, owing to the great harvest of that year and want of facilities for storage in the country. In this respect the company was not in default, in regard to that duty it owed the public, of affording reasonable facilities for the trans- 1 Part of the opinion is omitted. — Ed. '410 ADEQUATE FACILITIES. [CHAP. VL portation of freight. Keither the common law nor the statute re- quires anything more than that the company shall furnish reasbte- able and ordinary facilities of transportation — such as are adapted to its mode of conveyance, and will meet the ordinary demands of the public. The company was not bound to provide in advance for or anticipate extraordinary occasions, or an unusual influx of freight to the road. Wibert v. Few York & Erie Railroad Com- pany, 19 Barbour's S. E. 36; Statutes 1856, p. 1070. Corporations for carrying are created for the public good, and powers and privileges are given them in consideration of the benefits they are expected to confer upon the public. Their obligations to the public require the use of their facilities fairly, and in such manner as is best calculated, in the prosecution of their business, to afford the largest public benefit. An honest and fair endeavor, in the course of their legitimate enterprise, to acconi- plish this is all that can be legally required of them. There is no proof in the case that the grain was lost or damaged by being detained at Rockford, and the ]ury, probably, based their verdict upon the hypothesis that the company was bound to ^e ready, at all events, to carry whatever amount of freight was for transportation, and when required. Judgment reversed and cause remanded. Judgment reversed.^ ILLINOIS CENTRAL RAILROAD CO. v. RIVER AND RAIL COAL AND COKE CO. 150 Ky. 489. 1912.'^ ,' ' Carroll, J. The River & Rail Coal & Coke Company is a cori- poration engaged in mining coal in Union county, and its minfe is located on a line of railway controlled and operated by the ap- pellant railroad company. This suit was brought by the coal company to recover damages for the failure of the railroad com>- pany to furnish it cars for the transportation of coal produced at its mine. It was averred in the petition that on several named days in October, 1910, the railroad company failed to furnish it any cars in which to load coal, although the railroad company was given timely and suSicient notice of the number of cars that would be needed on those days. It was further averred that by reason 6i the failure to furnish the cars ordered, or any cars, on the dayS mentioned, operations at the mine had to be suspended, thereby 2 See Yazoo & M. V. R. R. Co. v. Blum (1906), 89 Miss. 242. 1 Part of the opinion is omitted. — Ed. ADEQUATE FACILITIES. 411 incurring considerable expense in the payment of unemployed labor and causing the coal company to suffer loss in other respects that are pointed out more in detail in the instructions that will be later noticed, for all of which it sought to recover damages. The ease for the coal company is not put upon the ground that the railroad company in failing to furnish it cars was discriminating against it or showing a preference to other coal mines or shippers; but the right of recovery is rested upon the ground that the railroad com- pany did not have a legally adequate or sufficient number of coal cars to supply the demands of the trade, and in so failing com- mitted a breach of duty for which it was amenable in damages. In its defense the railroad company did not deny that it failed to furnish the ears, or dispute that reasonable and proper demand for them had been made, but sought to excuse its failure upon the ground that, although it had an adequate supply of coal cars, the demand for this class of cars was so great in October, 1910, that it could not furnish the cars requested without discriminating against other coal mines on its line of road and showing a preference to the appellee coal company. Several issues are raised by the plead-, ings, but the real question in the case is : What is the legal meas- ure of duty that a railroad company owes to the operators of coal mines in respect to furnishing them cars for the transportation of coal ? At common law the carrier was bound to provide reasonable facilities and appliances to transport such goods as it held itself out ready to carry. Newport News Co. v. Mercer, 96 Ky. 475, 29 S. W. 301, 16 Ky. Law Eep. 555 ; L. & N. E. E. Co. v. Queen City Coal Co., 99 Ky. 317, 35 S. W. 626, 18 Ky. Law Eep. 126. And this common-law duty has been incorporated into both the state and federal statutes. Thus section 783 of the Kentucky Statutes, which treats of the duties of railroad companies in furnishing adequate facilities for the transportation of freight, provides that " every com- pany shall furnish sufficient accommodations for the transporta- tion of all such passengers and, property as shall within a reason- able time previous thereto offer or be offered for transportation at places established by the corporation for receiving and discharging passengers and freight." In section 1 of the act of Congress re- lating to interstate commerce it is provided that " The term ' trans- portation' shall include cars and other vehicles and all instru- mentalities and facilities of shipment or carriage. . . . And it shall be the duty of every carrier, subject to the provisions of this act, to provide and furnish such transportation upon reasonable re- quest therefor, and to establish through routes and adjust reasonable rates applicable thereto." 413 ADEQUATE FACILITIES. [CHAP. VI. It will thus be seen that under the common law, as well as the state and federal statutes, which are merely declaratory thereof, a common carrier is under a legal duty, subject to exceptions some of which will be noticed, not only to provide itself with but to furnish to shippers, when seasonably requested, sufficient cars and equipment to carry all of the freight that may be offered to it and that it holds itself out as a carrier of. Or, as admirably stated in Hutchinson on Carriers, § 495 : " The first duty of the com- mon carrier who holds himself out to the public as ready to engage in the carrying business is, of course, to provide himself with reasonable facilities and appliances for the transportation of such goods as he holds himself out as ready to undertake to carry. He must put himself in a situation to be at least able to transport an amount of freight of the kind which he proposes to carry equal to that which may be ordinarily expected to seek transportation upon his route, for, while the law will sometimes excuse him for delay in the transportation and even for a refusal to accept the goods which may be offered for carriage when there occurs an unprecedented and unexpected press of business, it will not do so when his failure or refusal results from his not having provided himself with the means of present transportation for all who may apply in the regu- lar and expected course of business." The demand was not more than the company should reasonably have anticipated and prepared to meet at the season of the year when this controversy arose. In fact, railroad companies have such ample means of ascertaining, in advance, the number of cars that each mine on the road will need during the year or during the busy season, that it would be a very exceptional state of afEairs when they could not anticipate and prepare to meet the demands of the trade. There is, indeed, less probability of an unprecedented and unusual demand for cars arising in the carriage of coal than might occur with respect to other commodities, for with the facili- ties afforded for rating the capacity of mines and the fact that the quantity of coal to be mined, although gradually increasing, is generally fairly well known in advance, the coal carrying busi- ness is perhaps subject to fewer fluctuations than arise, for ex- ample, in the transportation of grain, cattle, and cotton. But in view of the fact that the real defense relied on is that the com- pany had a sufficient supply of cars and equipment to meet the de- mands of the trade, it does not seem necessary that we should notice with further particularity the features of the case relating to the strike or the unusual demand on its equipment. Whether the company had or not such facilities as were legally sufficient de- pends in a large measure on the soundness of its interpretation ADEQUATE FACILITIES. . 413" of the measure of its legal duty in providing itself with equipment and furnishing the same to shippers. The appellant is one of the largest railroad companies in the United States. Its tracks cover thousands of miles and traverse a number of states. On its lines of road in at least three states there are situated many coal mines in active operation, and to handle the coal trade it had, in 1910, supplied itself with some 33,000 coal cars, and it contends that this number of cars was adequate to supply the demand, insisting, however, that the num- ber of cars required to fulfill its duty did not impose upon it the ob- ligation to have on hand the number needed to meet ihe full de- mands of the trade during the fall and winter months when the movement of coal is many times larger than it is in the spring and summer months. In other words, as we understand the position taken by counsel, it is this: That if a railroad company has a sufficient supply of cars to meet the demands of the coal carrying trade during the year, assuming that approximately the same amount of coal will be shipped during each month, it has fulfilled its legal duty, although the car supply may be wholly inadequate to meet the demands of the trade during the winter and fall months. But we do not agree with counsel that this is a fair or reasonable interpretation of the legal duty of a railroad company engaged in the coal carrying trade from mines along its line of road; for, al- though a railroad company might maintain a sufficient number of cars to carry the coal ofiEered, if the same quantity approximately was offered each month in the year, it might fall far short of having a sufficient number to meet the demands of the trade during the fall and winter, because during this season for at least six months many more cars are needed than are required in the other six months. If the slack as well as the busy months of the year are to be taken into consideration in estimating' the equipment needed,' the supply of cars might be wholly inadequate during the busy months, and yet there would be a large surplus during the slack months. This difference between the movement of coal in the fall and winter and the spring and summer is a matter of such common and general knowledge that railroad companies will not be allowed to plead ignorance of this well-known condition, or with knowledge of it, to excuse their lack of car facilities upon the ground that if approximately the same quantity of coal was shipped and used each month in the year their car facilities would be ample to meet the demand. Nor does the well- recognized principle that appellee was only required to have a sufficient supply of cars to meet the normal demands of the trade help its defense because it did not have in our ■ opinion such a 414 ADEQUATE FACILITIES. [CHAP. VI. supply ; for, conceding that a carrier is only required to have a car supply adequate to meet the normal demands of the trade, this normal demand is not to be estimated by the number of cars needed when the normal demand is least, but by the number needed when the normal demand is the heaviest, in respect to a com- modity such as coal, the normal demand for which is practically the same during six or eight months in each year. And while the number needed in each of these busy months may be taken into consideration in estimating the number needed to supply the de- mand during all these months, the number needed to supply the demand during the spring and summer months is entitled to little consideration in determining what number of cars is needed to supply the normal demand. Of course, a railroad company cannot tell with exact certainty the number of cars that may be needed to meet, in the manner indicated, the normal demands of the trade, as unexpected and unforeseen conditions may arise that will make full performance of its duty impracticable and exonerate it from liability for failing to discharge its duty; but it can make a fair estimate of the number needed, based on mine rating and capacity and its experience in handling the traffic, and it must supply itself with and maintain the number needed to meet the average demand of the trade during the months when the trade is heaviest, and no less than this will answer its duty. This being our view of the law, it is quite clear from the evi- dence that the railroad company did not have a sufficient supply of cars to meet the normal demand during the busy months for sev- eral years, including 1910, although it had many more than were necessary during the spring and summer months, and in failing to have a sufficient supply to fill the normal demand during the fall and winter months it committed a breach of the duty that it owed to the coal company, thereby becoming liable to it in damages. MERCHANTS DISPATCH AND TEANSPORTATION CO. V. CORNFORTH. / 3 Colo. 280. 1877.^ Thatcher, C. J. The Merchants' Dispatch and Transportation Company is a common carrier. Birks Cornforth, the defendant in error, who was the plaintiff in the court below, through their agents, Raymond Bros., bought a car load of fruits, consisting of oranges, lemons, and bananas, of Underbill & Stewart, in New York city. 1 Part of the opihion is omitted. — Ed. ADEQUATE FACILITIES. 415 The fruit was delivered to and shipped by the plaintiff in error, from New York to Denver, in the month of February, a. d. 1874. There is some evidence that the fruit was packed in a re- frigerator car in New York city; such a car, as the testimony es- tablishes, is usually employed in the winter for that purpose, it being well adapted to exclude the cold. The evidence conclusively shows that when the fruit reached Denver, it was in an ordinary box car, and badly frozen. There were apertures in the car through which the cold and snow entered. There was snow all around the boxes of fruit. It appears in evidence, that fruit shipped in a common box car will freeze in ordinary winter weather, and if shipped with due care in a refrigerator, or other car adapted to keep out the cold, it will not freeze in severe winter weather. Was the company guilty of negligence ? -When a common carrier accepts for transportation in the winter season, to ship half across the continent, delicate fruits, the char- acter of his employment, independent of any contract, clearly im- plies that he will ship them in such cars and exercise such diligence as may be reasonably necessary for their safe passage to their desti- nation. Having failed to do this he cannot escape liability. In the case of Wing v. The New York and Erie R. E. Co., 1 Hilt. 341, where by the negligence of the carrier a certain lot of potatoes was frozen, the court says : " The fact that they were perishable im- posed upon the defendant more than ordinary care and diligence, as mere bailees, and the obligation to deposit them most securely against cold. That it would take longer to do it does not relieve them of the duty. The intensity of the cold created also the obli- gation of additional vigilance, and what was usual, was not the con- ■ sideration. What was necessary to be done, under all the circum- stances, was the true criterion." : The rule here adopted, that the degree of care and diligence to be exercised by the carrier must be commensurate with the nature of the trust, is salutary and just. The company, as appears from the evidence, was guilty of the most culpable negligence in transporting the fruit in a car wholly unfit for the purpose, in the winter season. It follows from what we have before said, that the company is liable for loss occasioned by such negligence. Let the judgment of the court below be affirmed, with costs. Affirmed.^ 2 See Shea v. Chicago R. I. & P. Ry. Co. (1896), 66 Minn. 102; For- rester Co. V. Southern Ry. Co. (1908), 147 N. C. 553. Compare New York P. & N. R. R. Co. v. Cromwell (1900), 98 Va. 227, and McConnell v. Southern Ry. Co. (1907), 144 N. C. 87. 416 ADEQUATE FACILITIES. ;[CHAP. VI. ROBINSON V. CHICAGO AND ALTON RAILROAD CO. 135 Mich. 254. 1903.^ Erkok to Circuit Court, Kent County; Alfred Wolcott, Judge. Action by Samuel Robinson, Jr., administrator of Samuel Rob- inson, deceased, against the Chicago & Alton Railroad Company and the Pullman Car Company. Judgment for plaintiff against the railroad company, which brings error. Affirmed. Plaintiff recovered verdict and judgment for damages occasioned by the death of Samuel Robinson, Sr., while a passenger npon a train of the defendant railroad company, through the alleged negli- gence of said company. The deceased left his home in Charlotte, Mich., July 2d, to attend the Democratic National Convention at Kansas City, Mo. The delegation to the convention from Michi- gan met in Chicago, having arranged with the defendant railroad company for a special train of sleeping cars to take them from Chicago to Kansas City on the night of July 3d. The train was made up of the engine, baggage car, five sleepers, and a dining car in the rear. The cars for convenience are numbered from the front of the train, 1, 3, 3, 4, and 5. The sleep ers were owned by_ the defendant Pullm an Company, the dining car by the defendaat-- r gjlroad .comp gS7r~'TM.r. Kobmson 'had a railroad ticKei. and also a berth ticket in PtiUman car No. 3. The train left Chicago at 11 o'clock, an hour late. After getting out of the city, it ran at a high rate of speed. Mr. Robinson and some others went to the dining car for refreshments about midnight, where they remained until after the train left Joliet. They then left the dining car for their respective sleepers, and Mr. Robinson and some others stopped for a short time near the forward end of car No. 4, to converse with friends. One of them passed through the vestibule into car No. 3, followed by Mr. Robinson. Another soon afterwards passed from No. 4 into No. 3, and inquired for Mr. Robinson, desiring to speak with him. He could not be found. The last time he was seen alive was w hen he passed out of the front door of ca r No. 4 to c ross the vestiBule into car No. 3. Tn dnin j y sn pe leil ivom the car and wa s""killed. His dead body was found the next morning lying on tKe^ast side of the track near a station named Mazona, lying between the side track and the main track, near a switch which the train had just passed over. The body, after striking the ground, rolled about 30 feet. An investigation showed that the fastenings of the vestibule door, through which Mr. Robinson fell, 1 Part of the statement of facts and part of the opinion" are omitted. — Ed. ADEQUATE FACILITIES. 417 ^ere defective. The evidence on the part of the plaintiff showed tbat the slot which held the bar designed to keep the door closed was old and worn, and would not hold the bar in place, and that the spring and latches, also designed to keep the door closed, were broken and defective. There was evidence that the train swayed considerably in its movements, so that the passengers had to be careful to prevent being thrown down in passing through the cars, or from one car to another. The theory of the plaintiff is that Mr. Eobinson was thrown through the open door of this vestibule. T he Pullm an Car Company was made a party a s a joint tort feasor.. Attii e close ot the evidence tJie court directed a verdict for the Full- man Companv. and leftthe question of negligence of the defendant^ railroad com pany to the jury. Ueant, j. (aiter stating the facts). 1. It is urged that the manner in which Mr. Eobinson met his death is mere conjecture, and that, therefore, there can be no recovery. This position is un- tenable. It is a fair inference from the evidence adduced in be- half of the plaintiff that Mr. Eobinson was thrown through the vestibule door. He was seen to go out of car No. 4 for car No. 3, which he did not enter. The natural conclusion is that he either voluntarily jumped from the car through this door, or was thrown through it by the lurching of the train. There is nothing to indi- cate that he intended to commit suicide by jumping from the car. 2. It is next urged that the court erred in directing a verdict for the Pullman Car Company. This is not a question in which the defendant railroad company is interested. The verdict and judg- ment are not conclusive of the liability of the Pullman Car Com- pany to the railroad company under the contract between them, by which the Pullman Company furnishes its cars to be run over the defendant's road. Private contracts between these two companies do not aff'ect the rights of travelers. Plain tiff has not appealed from the decision against him and in favor" oi the PnllmaTi flnm pany. The sole question left for the jury was, is the railrnaf] mmj. pany liat)le for t he defects in the cars furnished by the Pullman- par Company to, , be used bv the railroad company , in transporting its passe T'typ^g'' Tf tViP rl^fpurlnnt ownd nn duty tn j fe passengers . foj;defects in the cars of the Pullman. Company, then the railroad- is not liaW'S'. and tn e verdictshould be reversed. If, on the con- trary, the railroad coiEpany, under its contract of carriage with its passengers, is liable for such defects, and cannot defend on the ground that under a contract with the Pullman Car Company the latter company furnished the cars, then the verdict must be sus- tained. The question is not whether a judgment could be main- tained by the plaintiff against the Pullman Company, but whether 418 ADEQUATE FACILITIES. [CHAP. VI. it can be sustained against the railroad company. If the court had directed a verdict for the railroad company, and had left the ques- tion of the negligence of the Pullman Company in providing these cars for use of passengers to the jury, the sole question would have been, was the Pullman Company liable to a passenger for these defects in its own cars ? Whether the Pullman Car Company is bound under its contract to indemnify the railroad com- pany is not involved in this litigation. In a suit by the former company against the latter involving the liability of the latter to the former for the injury the decision rendered by the court in this case is not res adjudicata. Upon that question no such issue is raised by the pleadings. Warren v. B. & M. K. Co., 163 Mass. 484, 40 N. E. 895 ; Buffington v. Cook, 35 Ala. 312, 73 Am. Dec. 491. Plaintiff might have brought suit against the railroad com- pany alone, or might at any time have discontinued it against the Pullman Car Company. Moreland v. Durocher, 121 Mich. 398, 80 N. W. 284; Burroughs v. Eastman, 101 Mich. 419, 59 N. W. 817, 24 L. E. A. 859, 45 Am. St. Eep. 419. It is unnecessary to de- termine the question of the liability of the Pullman Company to the plaintiff, and we refrain from discussing it. The deceased's con- tract of carriage was not made with the Pullman Company ; it was made with the railroad company. He knew nothing of the contract relations between the two defendants. It is quite likely that he did not know that the cars were owned, controlled, and managed by a separate company. As to the deceased, therefore, jhe railroad company owed to him the duty to see that the cars wh ich were _ TuS'^er i^'Tord~werF'^rope3y'^eqT]^^ condition , and «^^perIy''ma^^e3r^Tt^ire'9' Tn migduty, and can not evade it by . ^showing tiiat it had a contract with another companY to do it. ^'rom the description of the defects, "they "evidentry existed when these cars were placed by the defendant upon its tracks for the transportation of the deceased and others. Defendant place d its dining car at the rear of fhe train, and invited its pas sengers to go fo^ndTTrom itr~TF wari;h"ere5oren5ound to_£rOTi^^^m_a^_s^^_]^g^_ sagfe !Eom'o5e'car-m;-SBomCTJ ^^ 102 U. S." 451, 26TrEri4rrDwinelle>;. N. Y. C. & H. E. E. Co., 120 N. Y. 117, 24 N. E. 319, 8 L. E. A. 224, 17 Am. St. Eep. 611. See, also, Eobinson v. Benev. Soc, 132 Mich. 695, 94 N". W. 211. It follows from what we have said that there was no error in refusing to submit special questions 4 and 5 to the jury. 3. It is, however, urged that, the accident causing this injury' occurring in the state of Illinois, this case will be ruled by the lex lod. It is urged that the courts of that state have decided that the Pullman Car Company is liable, and cite Nevin v. Pullman Car ADEQUATE FACILITIES. 419 Company, 106 111. 232, 46 Am. Eep. 688; Pullman Company v. Fielding, 62 111. App. 577. In Nevin v. The Pullman Company the plaintiff, a passenger, was refused a berth in a sleeping car of the defendant. In Pullman Company v. Fielding a passenger oc- cupied an upper berth. Becoming ill in the night, he rang the bell for the porter, desiring to be assisted in descending from his berth. The porter did not respond. Plaintiff then attempted to get out of the berth alone, and by a lurching of the car was thrown and injured. It will be observed that in neither of these was there any defect in the cars provided for in the manage- ment. The railroad company had performed its duty towards the traveler in furnishing safe and suitable cars. The negligent acts complained of were solely those of the Pullman Car Company's employes. Whether the railroad companies would have been liable as well if the parties had seen fit to sue them on the ground that the companies had provided sleeping cars for the use of their pas- sengers was not determined in either of those cases. In Pullman Company v. Fielding suit was brought against both the railroad company and the Pullman Company, and a verdict rendered against both. Pending a motion for a new trial, the plaintiff discontinued his suit against the railroad company. Those cases decided simply that under their facts the Pullman Company was liable. They do not decide that the railroad company was not liable. Neither do they decide that the railroad company would not be liable to a pas- senger for defects in cars furnished by the former for the use of the latter in transporting its passengers. This contention, there- fore, cannot be sustained.^ STATE ex rel. MATTOOK v. EEPUBLICAJST VALLEY EAILEOAD CO. 17 Neb. 647. 1885.^ / Cobb, Ch. J. This is an original application to this court for a writ of mandamus requiring the respondent, the EepubHcan Valley Eailroad Company, to build within the corporate limits of the city of Blue Springs a depot, and to lay down the necessary side tracks and switches, and to stop its trains thereat for the proper transaction of business. So far then as the case is presented by the pleadings, it involves these two questions: 2 See St. Louis & S. W. Ry. Co. v. Campbell (1902), 30 Tex. Civ. App. 35; Missouri, K. & T. Ry. Co. v. Harrison (1904), 97 Tex. 611. 1 Arguments of counsel and part of the opinion are omitted. — Ed. 420 ADEQUATE FACILITIES. [CHAP. VI. 1, Is the depot of respondent at Wymore sufficiently near to the business portion of Blue Springs as to afford her inhabitants and merchants, and particularly the relator, all the facilities and ac- commodations which the respondent owes them as a common carrier, one of whose lines runs through the last named city, with- out discrimination against the business and inhabitants thereof? If not, 2, Is it practicable to operate respondent's branch line of railroad between Wymore and Beatrice with depots and regular services thereat, both at Wymore and Blue Springs? The more important and quasi public question of the power of the courts in the absence of legislation to compel the respondent to establish and maintain a depot at Blue Springs, is raised by respondent in its brief, and that question will be first consid- ered. Eelator in his brief contends that the legislature of the state has imposed upon the respondent the duty of furnishing side tracks and depots, and stopping its trains for the receipt and discharge of passengers and freight, and the proper transaction of business at all places upon their road, etc., and he cites section 121, of chapter 16, Comp. Stat., in support of that proposition. The section reads as follows : " Sec. 121. Every such railroad corporation shall start and run their cars for the transportation of passengers and property at regular times to be fixed by public notice, and shall furnish suf- ficient accommodations for the transportation of passengers and freight, and shall take, transport, and discharge all passengers to and from such stations as the trains stop at, from or to all places and stations upon their said road, on the due payment of fare or freight bill." I do not think that this section furnishes authority for the inter- ference of the courts to compel the establishment of a depot or station at any point on the line of respondent's road, but on the contrary, it is quite apparent upon the face of the section that every duty thereby imposed is qualified by the words, " to and from such stations as the trains stop at," and its application limited to established depots. But in the opinion of this court it has authority to grant relief in cases such as that presented in this case, yet for the source of its authority it must look to the principles of the common law rather than to legislative enactments. The respondent is a com- mon carrier of persons and merchandise. At common law it was the duty of a common carrier by land to deliver freight personally to the consignee; but when railways took the place of convey- ances drawn by animals, necessity required the relaxation of this rule so as to allow of the substitution in place of personal delivery ADEQUATE FACILITIES. 431 a delivery at the warehouse or depot provided by the companies for the storage of goods. Vincent et al. v. C. & A. E. E. Co., 49 111., 33. Is it too much to say that this relaxation of the above rule in favor of railway companies as common carriers imposed upon them the duty of providing suitable depots for the purpose of such delivery? This duty is so intimately connected with the business for which railways are built and managed that motives of self- interest almost always secure its observance. But when for any reason it is neglected or refused, may it not be enforced the same as any other public duty ? This question can scarcely be said to be a new one in this court. In the case of The State, ex rel. "Webster, v. Nebraska Telephone Co., ante p. 126, this court issued a peremptory mandamus, com- pelling the respondent to place and maintain in the office of the relator a telephone and transmitter, such as are usually furnished to its subscribers. In the opinion by Judge Eeese, he says: " Similar questions have arisen in, and have been frequently dis- cussed and decided by, the courts, and no statute has been deemed necessary to aid the courts in holding that when a person or com- pany undertake to supply a demand which is ' affected with a public interest,' it must supply all alike who are alike situated, and not discriminate in favor of nor against any." As a question of power, I fail to see any ground for distinguishing between that which compels a telephone company to furnish a separate instru- ment for the accommodation of one customer, and that which would compel a railroad company to make stoppage of its trains and furnish depot accommodations to a whole community. In neither case would any court interfere except where it is made to appear that such interference is necessary to prevent an unjust discrimina- tion, or an abuse of that discretion which must be conceded to re- side in all private corporations in respect to their dealings with the public. The record in this ease does not present the question of the power of the state to impose new duties upon railroad companies, or to take away or limit their powers by appropriate legislation. Nor does it present the question of the power of the courts to enforce the performance of every duty enjoined upon such corporations, either by the acts under which they derive their corporate ex- istence or other legislation. If either of these questions were pre- sented there would be abundant authority for their decision in the works and cases cited by counsel. But upon the precise point of the power of the court to enforce the discharge of a duty by the railroad company not specially enjoined upon it by the terms of its charter, nor any provision of statutory law, which, as above 422 ADEQUATE FACILITIES. [CHAP. VI. stated, I conceive to be the turning point in this case, there is but very little. There are many opinions of courts and dicta in cases cited by counsel wherein the assumed right of railway corporations to dis- criminate between shippers and others is discussed, deprecated, and denied. Such discrimination is in but few cases upheld, and then only when such discrimination is shown not to be unjust to the complaining party. The remarks of Chief Justice Beasley, of the supreme court of New Jersey, in the case of Messenger v. Pennsyl- vania E. E. Co., 36 N. J. L., 407, are so entirely in accord with the views of this court that I deem it not out of place to trans- cribe them here. " A company of this kind is invested with im- portant prerogative franchises, among which are the rights to build and use a railway, and to charge and take tolls and fares. These prerogatives are grants from the government, and public utility is the consideration for them. Although in the hands of a private corporation they are still sovereign franchises, and must be used and treated as such, they must be held in trust for the general good. If they had remained under the control of the state, it could not be pretended that in the exercise of them it would have been legitimate to favor one citizen at the expense of another. If a state should build and operate a railroad, the exclusion of every- thing like favoritism with respect to its use would seem to be an obligation that could not be disregarded, without violating natural equity and fundamental principles. And it seems to me impossible to concede that when such rights as these are handed over on public considerations to a company of individuals, such rights lose their essential characteristics. I think they are unalterably parts of the supreme authority, and in whatsoever hands they may be found they must be considered as such. In the use of such franchises all citizens have an equal interest and equal rights, and all must, under the same circumstances, be treated alike. It cannot be supposed that it was the legislative intention when such privileges were given that they were to be used as private property at the discretion of the recipient, but, to the contrary of this, I think an implied con- dition attaches to such grants that they are to be held as a qiLosi public trust for the benefit, at least to a considerable degree, of the entire community. In their very nature and constitution, as I view this question, these companies become, in certain aspects, public agents, and the consequence is they must in the exercise of their calling observe to all men a perfect impartiality." Wliile I frankly admit that I am able to find no case — cer- tainly none has been cited by counsel — where the above principles ■have been applied to circumstances exactly like those of the case ADEQUATE FACILITIES. 423 at bar, yet I am unable to distinguish it in principle from those in which it has been often applied, and we are, I think, unani- mously of the opinion that they furnish us suflQcient warrant for the exercise of the authority invoked. As to the two questions presented by the record as above stated — 1, Whether the depot of respondent at Wymore is sufficiently near to the business portion of Blue Springs as to afford the latter named place all the facilities and accommodations which the re- spondent owes to them, as a common carrier, etc.? And if not, then, 3, Is it practicable to operate respondent's branch line of railroad between Wymore and Beatrice with depots and regular service thereat both at Wymore and Blue Springs? — we have, upon thorough examination of the evidence and consideration of the same, together with arguments thereon, as well at the bar as in the exhaustive printed briefs of counsel, found both of these ques- tions for the relator. A peremptory writ will therefore issue, substantially as prayed, with costs, etc. Judgment Accordingly? The other judges concur. STATE ex rel. SMART v. KANSAS CITY, SHEEVE- PORT AND GULP RAILWAY CO. 51 La. Ann. 200. 1899.^ NiCHOLLS, C. J. As matters stand the only question before us is whether, as a matter of law, the plaintiffs have the right, through mandamus, to force the defendant to establish a depot at Leesville. The supreme court of the United States was called upon to con- sider this question in Railroad Co. v. Washington Ter., 142 U. S. 492, 12 Sup. Ct. 283, under a state of facts very similar to those alleged by the plaintiffs in their petition. The facts of that case, as shown by the report of the court's opinion, were that "the Northern Pacific Railroad at one time stopped its trains at Yakima City, but never built a station there, and after completing its road four miles further, to North Yakima, established there a freight and passenger station; that North Yakima was a town laid out by the defendant on its own unimproved land; that, after having es- tablished this depot, defendant ceased to stop its trains at Yakima 2 See People ex rel. Hunt v. Chicago & A. R. R. Co. (1889), 130 III. 175 Compare Chicago & A. R. R. Co. v. People (1894), 152 111. 230, and Chicago, R. I. & P. Ry. Co. v. Nebraska Ry. Com. (1910), 85 Neb. 818. 1 Part of the opinion is omitted. — Ed. 434 ADEQUATE FACILITIES. [CHAP. VI. City. In consequence, apparently, of this, Yakima City, which at the time of the filing of the petition for mandamus was the most important town, in population and business, in the county, rapidly dwindled, and most of its inhabitants removed to North Yakima, which at the time of the verdict had become the largest and most important town in the county. The defendant could build a station at Yakima City, but the cost of building one would be eight thousand dollars, and the expense of maintaining it one hundred and fifty dollars a month, and the earnings of the whole of this division of the defendant's road are insuflBcient to pay the running expenses. " There were other stations for receiving freight and passengers between Yakima and Pasco Junction, which furnished sufficient facilities for the country south of North Yakima, which included Yakima City; and the passenger and freight traffic of the people living in the surrounding country, considering them as a com- munity, would be better accommodated by a station at North Yakima than by one at Yakima City. After the verdict, and before the district court awarded the mandamus, the county seat was removed by the territorial legislature from Yakima City to North Yakima." In discussing the question the supreme court of the United States declared that " a writ of mandamus to compel a railroad cor- poration to do a particular act in constructing its road or buildings, or in running its trains, can be issued only when there is a specific legal duty on its part to do that act, and clear proof of that duty. If, as in Railroad Co. v. Hall, 91 U. S. 343, the charter of a rail- road company expressly requires it to maintain its railroad on a continuous line, it may be compelled to do so by mandamus. "The difficulties in the way of issuing a mandamus to compel the maintenance of a railroad and the running of trains to a terminus fixed by the charter itself are much increased when it is sought to compel the corporation to establish or to maintain a station and to stop its trains at a particular place on the line of its road. The location of stations and warehouses for receiving and delivering passengers and freight involves a comprehensive view of the interests of the public, as well as of the corporation and its stockholders, and a consideration of many circumstances concerning the amount of population and business at or near, or within convenient access to, one point or another, which are more appropriate to be determined by the directors, or, in case of their abuse, by the legislature, or by administrative boards intrusted by the legislature with that duty, than by the ordinary judicial tribunals." ADEQUATE FACILITIES. 425 Eeferring to the case directly before it, the court said : "^ To hold that the directors of this company, in determining the num- ber, place, and size of its stations and other structures, having re- gard to the public convenience as well as its own pecuniary inter- ests, can be controlled by the courts by writ of mandamus, would be inconsistent with many decisions of high authority in analogous cases/' The court quoted approvingly from People v. New York, L. E. & W. K. Co., 104 jSr. Y. 58, 66, 67, 9 N. E. 856, in which the court of appeals refused to grant a mandamus to compel a railroad corporation to construct and maintain a station and warehouse of sufficient capacity to accommodate passengers and freight at a village containing 1,300 inhabitants, and furnishing to the de- fendant at its station therein a large freight and passenger business, although it was admitted that its present building at that place was entirely inadequate; that the absence of a suitable one was a matter of serious damage to large numbers of persons doing busi- ness at that station; that the railroad commissioners of the state, after notice to the defendant, had adjudged and recommended that it should construct a suitable building there within a certain time; and that the defendant had failed to take any steps in that direc- tion, not for want of means or ability, but because its directors had decided that its interests required it to postpone doing so. The court, speaking by Judge Danforth, while recognizing that " a plainer case could hardly be presented of a deliberate and in- tentional disregard of the public interest and the accommodation of the public," yet held that it was powerless to interpose, be- cause the defendant, as a carrier, was under no obligation at com- mon law to provide warehouses for freight offered, or station houses for passengers waiting transportation, and no such duty was im- posed by the statutes authorizing companies to construct and main- tain railroads "for public use in the conveyance of persons and property," and " to erect and maintain all necessary and convenient buildings and stations " for the accommodation and use of their passengers, freight, and business, and because, under the statutes of New York, the proceedings and determinations of the railroad commissioners amounted to nothing more than a request for in- formation, and had no effect beyond advice to the railroad com- pany and suggestion to the legislature, and could not be judicially enforced. The court said: "As the duty sought to be imposed upon the defendant is not a specific duty prescribed by statute, either in terms or by reasonable construction, the court cannot, no matter how apparent the necessity, enforce its performance by mandamus. 436 ADEQUATE FACILITIES. [CHAP. VI. It cannot compel the erection of a station house, nor the enlarge- ment of one. As to that the statute imports an authority only, not a command, to be availed of at the option of the company, in the discretion of its directors, who are empowered by statute to manage ' its affairs,' among which must be classed the expenditure of money for station buildings or other structures for the promotion of the convenience of the public, having regard to its own interest. With the exercise of that discretion the legislature only can interfere. No doubt, as the respondent urges, the court may by mandamus also act in certain cases affecting corporate matters, but only where the duty concerned is specific, and plainly imposed upon the corpora- tion." " Such is not the case before us. The grievance complained of is an obvious one, but the burden of removing it can be imposed upon the defendant only by legislation. The legislature created the cor- poration, upon the theory that its functions should be exercised for the public benefit. It may add other regulations to those now binding it, but the court can interfere only to enforce a duty de- clared by law. The one presented in this case is not of that char- acter. Nor can it by fair or reasonable construction be implied." ^ The mandamus in Eailroad Co. v. Washington Ter. was re- fused, though presented in the name of the territory on the re- lation of its prosecuting attorney. The mandamus in the case at bar was presented in the name of private individuals, whose special interest in the subject-matter, as differing from that of the public at large, and giving them a right to stand in judgment, might be questioned. No issue was made, however, upon that point in the briefs or argument. In Southeastern Ey. v. Eailway Com'rs, 6 Q. B. Div. 586, 593, a railway company was held, by Lord Chancellor Selborne, Lord Chief Justice Coleridge, and Lord Justice Brett, in the English court of appeal, to be under no obligation to establish stations at any particular place or places, unless it thought fit to do so, and was held bound to afford improved facilities for receiving, for- warding, and delivering passengers and freight at a station once established, and used for the purpose of traffic, only so far as it had been ordered to afford them by the railway commissioners, within powers expressly conferred by act of parliament. The decisions in Eailroad Co. v. Washington Ter. and in People V. New York, L. B. & W. E. Co., 104 N. Y. 58, 66, 67, 9 N. E. 856, were, in our opinion, based upon correct principles, which should and must control the present case. For the reasons herein assigned, it is ordered, adjudged, and 2 But see People v. Del. & H. Canal Co. (1901), 165 N. Y. 362. ADEQUATE FACILITIES. 427 decreed that the judgment of the district court be affirmed, with- out prejudice.^ MINNEAPOLIS AND ST. LOUIS EAILEOAD CO. v. STATE OF MINNESOTA. 193 U. S. 53. 1904.^ Me. Justice McKenna delivered the opinion of the court. This is a proceeding in mandamus to compel plaintiff in error to build and maintain a station house on the line of its road at the village of Emmons, in compliance with an order of the Eail- road & Warehouse Commission of the state of Minnesota. The order of the commission was made upon petition and upon hearing after due notice to plaintiff in error. The writ was granted by the district court of Freeborn county, where the proceedings were commenced. The railroad company in its answer attacks the statute under which the commission acted as follows: " This respondent says further, that chapter 370, General Laws 1901, approved April 13, 1901, which was enacted by the legisla- ture of said state at its thirty-second session, which arbitrarily re- quires railroad carriers to provide freight and passenger rooms and depots at all villages and boroughs upon their respective roads, without regard to the necessity therefor and without regard to the location or situation of such village or boroughs, or to existing con- ditions, is unjust, unreasonable, contrary to public policy, and void. " It denies to the respondent the right to reasonably manage or control its own business ; it takes its property without its consent. " It takes the property of this respondent arbitrarily and un- necessarily, for public use, without just compensation, and is, therefore, violative of the 5th Amendment to the Constitution of the United States. " It deprives the respondent of its property without due process of law, and denies it the equal protection of the laws, and thus violates the 14th Amendment to the Constitution of the United States." The Supreme Court of the State affirmed the judgment of the District Court, the members of the court equally dividing on the facts. 91 N. "W. Eep. 465. This is the second attempt of the village of Emmons to secure 3 See Nashville, C. & St. L. Ry. Co. v. State (1902), 137 Ala. 439. 1 Arguments of counsel and part of the opinion are omitted. — Ed. 428 ADEQUATE FACILITIES. [CHAP. VI. a depot. The first was unsuccessful, 76 Minn. 469, 79 N". W. 510, " wherein the facts are stated," the Supreme Court observed ; and it further observed, passing on the case at bar : " Mr. Associate Justice Lovely having been of counsel for the village in the former proceeding, was disqualified from sitting at the hearing of this appeal, and 'the cause was necessarily argued and submitted to the four remaining members of the court. We assume that Laws 1901, chapter 370, which, in express terms, re- quires railway companies to build and maintain depots or station houses in all villages through which their roads may pass, is in itself valid legislation, and not open to the objection that it is not within the legislative power to enact such a law. With this as- sumption no dispute has arisen over a construction of the act, to the effect that all incorporated villages within this state located on railway lines are prima facie entitled to depots. The commis- sioners have the power to order the erection and maintenance of depot buildings unless it is made to appear that such an order would be so unreasonable in its terms as to actually result in de- priving the company proceeded against of its property without due process of law. The change made by the statute of 1901 simply affects or shifts the burden of proof; for, prior to its en- actment, the burden was on the municipality to establish the rea- sonableness and necessity of a depot therein, while now a railway company appearing before the commissioners, or trying its case on appeal to the District Court, bears the burden of showing that such a requirement is not called for, and that the building and maintenance of a depot in the village is unnecessary and unrea- sonable. " But, while agreeing as to this interpretation of the law, we fail to reach the same conclusion in respect to the facts. We do not question the correctness of the conclusion reached when consider- ing the former appeal. But two members of the court, Chief Justice Start and Associate Justice Brown, are of the opinion that, from the evidence, it appears that there has since been a substantial growth in the village, — a growth which makes an alto- gether different showing, — and that the company did not overcome the prima facie case arising by virtue of the statute, and therefore that the judgment appealed from should be affirmed. Associate Justices Collins and Lewis are unable to agree to this. Their con- clusion is that the testimony fails to show that there has been a real or substantial change in the village, its needs or necessities, that the situation is practically as it was when the former pro- ceeding was considered, and that the prima facie case made by the village has been wholly overcome by the defendant company. ADEQUATE FACILITIES. 439 "With this difference of opinion the judgment appealed from must be, and hereby is, affirmed." The act of 1897 provided as follows: " That all railroad corporations or companies operating any rail- road in this state shall . . . provide at all villages and boroughs on their respective roads depots with suitable waiting rooms for the protection and accommodation of all passengers patronizing such roads, and a freight room for the storage and protection of freight. . . . Such railroad corporations or companies shall, at such depots or stations, stop their trains regularly as at other sta- tions, to receive and discharge passengers, and, for at least one half hour before the arrival, and one half hour after the arrival, of any passenger train, cause their respective depots or waiting rooms to be open for the reception of passengers; said depots to be kept well lighted and warmed for the space of time aforesaid." In its first opinion (76 Minn. 469, 79 N. W. 510), the court held that the word " villages," in the act meant incorporated villages, and that Emmons was not incorporated. The court, however, pro- ceeded further, and said : " But there is no doubt of the power of the commissioners, under the general railroad and warehouse commission act, to require a railroad company to provide a suitable depot and passenger wait- ing room at any place, incorporated or unincorporated, where public necessity or convenience reasonably requires it to be done. But this power is neither absolute nor arbitrary. The facts must be such, having regard to the interests, not only of the particular local- ity, but also of the public at large and of the railroad company itself, as to justify the commissioners, in the exercise of a reason- able discretion and judgment, in ordering the railway company to provide a depot and passenger station at the place in question. Counsel for the relators admit this. The only evidence being the report of the commissioners themselves, we must refer to it to ascertain whether the facts therein stated reasonably justified their order requiring the railroad company to provide and maintain a depot and station at Emmons. The statute provides that, ' upon the trial of said cause [before the court, as in this case, to enforce the order of the commissioners], the findings of fact of said com- mission as set forth in its report shall be prima facie evidence of the matters therein stated.' (Gen. Stat. 1894, § 399.) " The court then reviewed the facts, and decided that the order of the commission establishing a station at Emmons was unrea- sonable. The act was amended in 1901, and the court in the case at bar has decided, as we have seen, the amendment has only shifted the burden of proof. In other words, to quote from the 430 ADEQUATE FACILITIES. [CHAP. YI. opinion of the court, "incorporated villages within this state (Minnesota) located on railway lines a.Te prima facie entitled to depots," and at a hearing before the commissioners and in the district court the railroad has the burden of showing that the estab- lishment of a depot is unreasonable and unnecessary. The statute, as thus construed, does not transcend the power of the state. In other words, and meeting exactly the contention of plaintiff in error, the statute does not deny plaintiff in error the right to reasonably manage or control its property or arbitrarily take its property without its consent or without compensation or due process of law. Wisconsin, M. & P. E. Co. v. Jacobson, 179 U. S. 287. To establish stations at proper places is the first duty of a railroad company. The State can certainly provide for the enforcement of that duty. An incorporated village might be said to be such a place without an express declaration of the statute. To make it prima facie so by statute and to impose the burden of meet- ing the presumption thence arising, certainly does not amount to an invasion of the rights of property or an unreasonable control of property. There is no statement of facts by the supreme court, and its decision, though by a divided court, constituted an affirmance of the finding of the district court. The finding was as follows : " That the respondent railroad company has no depot or station house whatever for the accommodation of the public upon its line of railroad at the village of Emmons, and that its line of road is the only railroad reaching such village. " That there is a suitable location for a depot or station house upon respondent's right of way at the point referred to and de- scribed in the order of the board of railroad and warehouse com- missioners herein, which order is hereto attached. That it is nec- essary for the accommodation of the citizens of Emmons and vi- cinity, and the public at large, and public necessity requires that the respondent railroad company build and maintain a suitable station house at the said village of Emmons for the accommodation of the public transacting business with the respondent at that point." The finding, like the verdict of a jury, is conclusive in this court. Dower v. Richards, 151 U. S. 658. It follows that the order of the Warehouse Commission was not an unreasonable requirement, and the judgment is affirmed.^ 2 Compare Missouri, K. & T. Ry. Co. v. State (1910), 107 Pac. (Okl.) 172, and cases there cited, as to the power of legislatures and commissions to order the stopping of particular trains at particular stations. ADEQUATE FACILITIES. 431 PEOPLE ex rel. SPEUANCE v. CHICAGO AND ^ NOETHWESTEEN EAILWAY CO. 57 111. 436. 1870.^ Mr. Justice Walker delivered the opinion of the Court. This was a proceeding by mandamus, on the part of appellants, in the Superior Court of Chicago, against appellees. The bbject of the proceeding was, to compel the railroad company to permit the junction of a railway tract from the grain elevator of appellants, . with the main track of appellees' road, and when thus connected, to compel the company to deliver at the warehouse all grain shipped to it, for storage. The writ averst, that the warehouse was erected by Maher and Newberry in the year 1862, on land then, and now, owned by Maher; that the elevator is a public warehouse for the storage of grain; that the railway company, under an ordinance of the city, laid and constructed their railway tracks from the west- ern limits of the city along Kinzie street, across the north branch of the Chicago river, and thence along North Water street to the lake shore. It is averred, on the belief of the relators, that before the ware- house was erected, an agreement was made between the Galena & Chicago Union Eailroad Company (which was subsequently con- solidated with appellees' company) and Maher, that a switch might be placed in their track, and a road run thence to the warehouse, which was intended to enable freight cars to pass from their main track to the warehouse, and there discharge grain shipped to it for storage; and that Maher and Newberry obtained a license to make such connection, from the city, by an ordinance duly adopted ; and, thereupon, one Hiram Wheeler obtained, by lease of Maher, his interest in this elevator, and he thereupon constructed a rail- road track from the main line of the company to the warehouse, and the company from that time used the same, and ran their cars to the elevator, and there discharged such grain as was consignel to it for storage; that some time during the year 1865, Wheeler ceased to have any interest in this warehouse, and the railroad company thence refused to deliver grain at that warehouse; that about a year afterwards, Wheeler, who had control of a portion of the ground over which this track ran, compelled its removal, and the connection was thus broken with the consent of the company; that appellants became the lessees of the warehouse in August, 1869 ; that they had complied with the ordinance of the city so as to ac- 1 Part of the opinion is omitted. — Ed. 432 ADEQUATE FACILITIES. [OHAP. VI. quire the right to construct a track from the warehouse to the main track of the company, and applied to the company to connect the same with their road, and that they would carry to, and deliver, such grain as might be consigned to it for storage, but the com- pany had refused, and still refuse; that appellees have railroad connections with a number of other warehouses at which they de- liver grain, and that this and other companies running into Chicago do not have the necessary facilities for storing grain, but depend upon private enterprise for the purpose; that it is the custom and usage of all such railroads to use such connecting tracks to deliver grain at various elevators in the city, and that this road unlawfully discriminates against appellants in refusing to deliver grain at their warehouse, or in not permitting them to form such a connec- tion with their road as would render it easy and convenient to thus deliver grain. It is also averred, that such unlawful discrimination is induced by a contract entered into by the company with other warehouse- men, only to deliver grain transported over their roads to the ware- houses of such parties. It is averred, that relators have no adequate remedy at law, and it concludes with a prayer that the railroad company be compelled to permit them to construct a track, connecting their warehouse with the railroad, by a switch, and then to carry and deliver to them all grain that may be consigned to their warehouse for storage. To this writ, appellees demurred, and it was sustained by the court, and a judgment was rendered in favor of the company. To reverse the judgment, relators have brought the record to this court by appeal, and assign for error the sustaining of the demurrer to the writ. In the case of Vincent v. Chicago & Alton Eailroad Co. 49 111. 33, it was held that : " A railway company can, unquestionably, re- fuse to allow the owners of adjacent property to lay down a side- track connecting with its own rails." Appellants admit, that, under the rules of the common law, this company could not be com- pelled to permit appellants to unite their track with that of the company, but they insist, that the railroads entering Chicago, hav- ing established a custom whereby all public warehouses have been permitted to make such a connection, and grain having been, by them, delivered in bulk into such warehouses, it therefore follows that appellees can not make a discrimination between the different warehouses. The averments of the writ do not bear the construction that this company had permitted the owners of all other elevators to thus connect with their road; nor does it appear that all are so con- ADEQUATE FACILITIES. 433 nected. But even had it been averred, that all warehouses in the city, except that of appellants, were so connected, still there is no averment of the terms or conditions upon which the connections had been made. And it certainly fails to appear that it had been, or was the usage, that such warehouses might be thus brought in connection with this or other roads, without the consent of the companies; and in the absence of such an averment, we would not presume such a custom to exist. Even if such an averment had been made, we are not prepared to hold that such a usage, for so short a period, would have acquired the force and effect of a law, re- pealing or abrogating their common law right to refuse. Customs that obtain the force of laws, are not thus readily obtained. We are, therefore, clearly of opinion, that under the rules of the com- mon law, or under the custom averred in the writ, we have no power to compel this connection, without the consent of appellees.^ OLAKTA COAL MINING CO. v. BEECH CEEEK EAILEOAD CO. 144 Fed. 150. 1906. BuFFiNGTON, District Judge. This is a bill in equity brought August 1, 1904, by the Olanta Coal Mining Company, a corpora- tion of the state of Pennsylvania, in the court of common pleas of Clearfield county. Pa., against the Beech Creek Eailroad Company, a corporation of the same state, and its lessee, the Few York Cen- tral & Hudson Eiver Eailroad Company, a corporation of the state of New York. The latter company alleged itself to be the real and only party in interest, and removed the case to this court. Passing by the many irrelevant matters and proofs in the vo- luminous record, we address ourselves to the gist of the bill, which, in substance, is to compel the railroad to permit switch connections with its line to enable complainant to ship its coal to market. The latter is a coal mining corporation, chartered July 9, 1903, and by its charter is authorized to carry on the business " of mining, shipping and selling of coal and the manufacturing, shipping and selling of coke and other products of coal." Its mining property of some 610 acres contains approximately 550 acres of coal, in which are several different veins. The property adjoins the right 2 Compare Farwell F. W. Assn. v. Minneapolis, St. P. c& S. Ste. M. Ry. Co. (1893), 55 Minn. 8. See also Vincent v. Chicago & W. R. R. Co. (1868), 49 111. 33, and also Chicago & A. R. R. Co. v. SufCern (1889), 129 111. 274. Compare State v. Missouri P. Ry. Co. (1890), 29 Neb. 550, and West v. London & N. W. Ry. Co. (1870), L. R. 5 C. P. 622. 434 ADEQUATE FACILITIES. [CHAP. VI. of way of the railroad. It has no other outlet for its coal save said road. The Beech Creek Eailroad Company was chartered under the provisions of the general railroad act of Pennsylvania of April 4, 1868, and its supplements. It leased' its property to the New York Central Eailroad Company by a long term lease. It is conceded that all its duties and obligations rest on its lessee, the New York Company. By virtue of the Constitution of Penn- sylvania (Article 17, § 1), which provides, " All railroads and canals shall be public highways, and all railroads and canal companies shall be common carriers," and the general railroad law of Feb- ruary 19, 1849, which provides, " Upon the completion of any railroad authorized as aforesaid, the same shall be esteemed a pub- lic highway for the convenience of passengers and the transporta- tion of freight," the Beech Creek Eailroad is a public highway and is chargeable with the duties and obligations of a common carrier. Such is the view of the highest courts of that state. In Eailroad Company v. Colwell, 39 Pa. 339, 80 Am. Dec. 536, it is said : " Though the corporation in respect to its capital is private, yet it was created to accomplish objects in which the public have a direct interest, and its authority to hold land was conferred that these objects might be worked out." And this accords with the general federal view. " The ques- tion," says the Supreme Court of the United States, in Cherokee Nation v. Southern Kansas Eailroad Company, 135 U. S. 657, 10 Sup. Ct. 965, 34 L. Ed. 395, "is no longer an open one, as to whether a railroad is a public highway established primarily for the convenience of the people and to subserve public ends." Its road then being a public highway^ and it a common carrier, its duty, generally stated, is to receive fi'om any person for carriage and transportation such freight as the carrier holds itself out as willing to carry and the party sending offers to pay freight upon. New Jersey Steam Navigation Company v. Merchants' Bank, 6 How. 344, 13 L. Ed. 465; Southern Express Company v. St. Louis, 5 Myer's Fed. Decisions, § 1511. Now in raining, coal is carried from the mines in small cars and delivered to and carried by rail- road companies in car load lots. To do this requires sidings on which the railroad's cars may be conveniently handled and filled. Such a connection the complainant asks, and is willing to bear the expense of mailing. Whatever may be the rights of shippers and the obligations of railroads in other Jurisdictions, the general right of the adjoining property holders in Pennsjdvania to such connection with a railroad chartered by that state has been decided by the high- est court of that state in the case of the Pittsburgh & Lake Erie Eailroad Company v. Eobinson, 95 Pa. 428. There Eobinson was ADEQUATE FACILITIES. 435 the owner of a manufacturing site adjoining the railroad, and the question was the value of the land which the railroad was con- demning in part. It was held that the property owner had a right to switch connection with the railroad, and that this right was an element in determining the value of his land and the proposition " that the defendant company is a common carrier, that its railroad is a public highway, that the plaintiffs have a right in law to con- struct on their land, adjoining said railroad, a suitable switch for the uses of their business, and connect the same with the tracks of the defendant company, subject to the general rules of said com- pany regulating such connections, and that the defendant com- pany is bound to receive and deliver to and from such switch or siding, cars and freight for the said plaintiffs to and from such points, on the line of defendant's railroad, as may be designated by plaintiffs, and on equal terms with all other individuals or trans- portation companies," was held a proper definition of his rights in that regard. In considering this proposition, the court said : "We are also of opinion that the plaintiff's third point should have been affirmed. It is conceded that, under our acts of As- sembly, the owner of mills and manufactories may of right con- nect their private sidings with the railroads of their vicinitj', and though, as the counsel for the defendant in error says, it does not follow that such owners may ever avail themselves of such right, nevertheless, the fact that such a right exists in them may largely advance the market, value of their several properties. Certainly privileges which may be used to facilitate transportation to and frOm large factories must have some effect upon their values." Under this construction thus placed upon its own laws by the court of highest resort of Pennsylvania, the right of a mine operator to proper and reasonable switch connections is clear, unless there is something in the facts and circumstances of the particular case warranting a refusal of this right. We find none here. The com- plainant offers to bear the entire expense of the connection and sid- ing. It is willing that the connection be made in the mode and at the point the respondent prefers. We are not impressed with the contention of the respondent that there are engineering difficulties in locating a switch to reach a siding for the complainant. No such question was raised during the many interviews between these parties prior to the refusal of the railroad company to grant a switch connection. The answer to the bill by the New York Cen- tral Eailroad Company avers no such difficulties. On the contrary, the answer admitted " that it is abundantly able to grant the siding and the track connections with its road and has granted unto Irish Bros., miners and shippers of coal, a siding or track connection, and 436 ADEQUATE PACILITIES. [CHAP. VI. has also granted and constructed other sidings and switching con- nections for other lessees of coal and operators along the line of the Pennsylvania Division of the New York Central & Hudson Eiver Eailroad, meaning thereby the Beech Creek Railroad." It was not until a year after the answer was filed that the question of engineer- ing difficulties was raised by an amendment then made. Under the proceedings and proofs, we are of opinion, and so find, that the respondent has failed to show the existence of any engineering difficulties, hazards, or operating difficulties, which make it unrea- sonable, unwise, or inequitable for a chancellor to grant the prayer of this bill. The second contention of the railroad is that the coal carried by the Beech Creek Eoad has gained a high reputation in the market, which has inured to the benefit of the road as a coal carrier and increased its trade; that the complainant's coal is of an inferior character, and its introduction into the market would injuriously affect the reputation of the coal market from that section, and so injure and decrease the carrying business of the road. We have been cited to no power or right vested in a common carrier to thus refuse to transport freight of the general class it is carrying because of the inferiority of the particular lot in question. The all-suffi- cient answer to a claim on the part of a common carrier to exercise such a power is simply that it does not exist, and the proofs in this case do not satisfy us that, if it did, the respondent has shown by the weight of the proof that its contention as to the character of complainant's coal is established, or that any such damage as is here averred to its business as a common carrier would ensue. Let a decree be submitted for approval and signing.^ NOETHEEN PACIFIC EAILWAY CO. v. EAILEOAD COMMISSION OF WASHINGTON. 58 Wash. 360. 1910.^ GosE, J. This appeal is prosecuted from a judgment of the superior court of Pierce county, affirming an order of the Eailroad Commission requiring the appellant to construct and operate a spur track from its main line road to the sawmill of one H. A. Burnham. The appellant owns and operates a line of railroad, extending from Tacoma easterly and southeasterly through the 1 See State v. White Oak Ry. Co. (1909), 65 W. Va. 15. Compare Butchers & D. S. Y. Co. v. Louisville & N. B. R. Co. (1895), 67 Fed. 35. 1 The arguments of counsel and part of the opinion are omitted. — Ed. ADEQUATE FACILITIES. 437 state and southerly through Eainier and Mcintosh to the Columbia river. Eainier and Mcintosh are stations about four miles apart. Mr. Burnham owns and operates a sawmill about midway between the stations and about 300 feet from the appellant's main-line track. He manufactures about 6 car loads per week of lumber and other sawed timbers^ for shipment over appellant's lines of road, and hauls it by means of wagons and teams to Eainier, a distance of about 2% miles by wagon road, at an expense of about $40 a car load for hauling and loading. "With a spur track to his mill, he could put his products aboard the car for about $5 per car load. He has demanded of the appellant that it furnish him with a spur track to the mill, has offered to furnish a right of way for the track, grade the track and furnish and lay the ties under the direction of the appellant; but it has refused to comply with his demand. Upon a complaint alleging these facts, and also alleging that a spur track can be constructed at small expense to the appellant, extending from the main line of its road to the mill, without endangering or rendering difficult the opera- tion of trains, the case was heard before the Eailroad Commission. The commission found the facts stated, and that a necessity exists for the spur track. Thereafter it entered an order requiring Burn- ham to construct the grade and furnish proper and necessary ties, and requiring' appellant to furnish and lay the rails, construct the spur track, provide proper connections with its main line, and fur- nish Burnham with cars and facilities for loading his lumber at his mill for shipment over the appellant's lines. The order makes no provision for a right of way, and the evidence does not disclose who owns the land over which the spur track is to be constructed. A compliance with the order would require switching to the extent of about a mile, and would consume from a quarter to a half hour every time a car was taken to or from the mill. The appellant contends that the order is a taking of its prop- erty without due process of law, and that it contravenes the four- teenth article of amendment to the federal Constitution. We think this view must prevail. The sawmill is a private industry, and the effect of the order is to take the private property of the appellant and devote it to the private use of Burnham. Healy Lumber Co. v. Morris, 33 Wash. 490, 74 Pac. 681, 63 L. E. A. 820, 99 Am. St. Eep. 964. A railroad is a public highway and, as such, is subject to regulation; but the regulation must be promo- tive of the public interest. Notwithstanding the fact that it is a public highway, its property is private. In Missouri Pacific Eail- way Co. V. Humes, 115 tT. S~ 512, 6 Sup. Ct. 110, 29 L. Ed. 463, speaking of the fourteenth amendment, it is said : " It would be 438 ADEQUATE FACILITIES. [CHi-T. VI. difficult and perhaps impossible to give to those words a definition, at once accurate, and broad enough to cover every case. The difficulty, and perhaps impossibility was referred to by Mr. Justice Miller, in Davidson v. New Orleans, 96 TJ. S. 97 [34 L. Ed. 616], where the opinion was expressed that it is wiser to ascertain their, intent and application by the ' gradual process of judicial inclusion and exclusion, as the eases presented for decision shall require, with the reasoning on which such decisions may be founded.' " It is true that railroad companies may be required to fence their tracks, establish proper crossings at points of intersection with public roads, patrol their tracks at thickly populated points, estab- lish depots and stations, provide suitable connection with intersect- ing lines, adopt suitable safety appliances for the coupling of cars, properly light and heat .their cars and depots, and many other things which touch the public business. The sawmill of Mr. Burnham, while an important industry, is no more a public busi- ness than a flouring mill, a dairy, a farm, a livery barn, or a manufacturing plant of any other character or description. In Missouri Pacific Eailway Co. v. Nebraska, 217 U. S. 196, de- cided by the United States Supreme Court since the case at bar was argued, a statute providing that : " Every railroad company or cor- poration operating a railroad in the state of Nebraska shall afford equal facilities to all persons or associations who desire to erect or operate, or who are engaged in operating grain elevators, or in handling or shipping grain at or contiguous to any station of its road, and where an application has been made in writing for a loca- tion or site for the building or construction of an elevator or eleva- tors on the railroad right of way and the same not having been granted within a limit of sixty days, the said railroad company to whom application has been made, shall erect, equip and maintain a side track or switch of suitable length to approach as near as four feet of the outer edge of their right of way when necessary and in all cases to approach as near as necessary to approach an elevator that may be erected by the applicant or applicants adjacent to their right of way for the purpose of loading grain into cars from said elevator, and for handling and shipping grain to all persons or associations so erecting or operating such elevators, or handling -and shipping grain, without favoritism or discrimination in any re- spect whatever. Provided, however, that any elevator hereafter constructed, in order to receive the benefits of this act, must have a capacity of not less than fifteen thousand bushels " — and mak- ing railroads liable for a fine for failure to obey the command of the statute, was held unconstitutional. The case arose out of two suits based upon the statute. The first was brought by the state , ' ADEQUATE FACILITIES. 439 of Nebraska to recover a fine of $500. The second was brought on the relation of the interested party, to compel the extension of a side track and the granting of shipping facilities; the railroad company having refused an application for a site for an elevator on its right of way. State v. Missouri Pacific Eailway Co., 81 Neb. 15, 115 N. W. 614, and Farmers' Elevator Co. v. Same, 81 Neb. 174, 115 N. W. 757, were reversed; the court saying: "We are of the opinion that this statute is unconstitutional in its applica- tion to the present cases, because it does not provide indemnity for what it requires." The same principle is announced in Chicago, B. & Q. E. Co. V. State, 50 Neb. 399, 69 N. W. 955, and State v. Chicago, Milwaukee & St. Paul Ey. Co. 36 Minn. 402, 31 N. W. 365. However desirable it may be for Mr. Burnham and others en- gaged in a like business to have switches and sidings extended to their mills, the fourteenth amendment to the federal Constitution, as construed by the highest federal court and by this court as well, presents an insuperable barrier against compelling such accommo- dations. The contention of the Attorney General that the order is pro- motive of the public convenience, and within the recognized police power of the state, cannot be upheld. We are persuaded, upon both principle and authority, that the Burnham mill is a private busi- ness, and that an order requiring the railroad company to extend a switch or spur track beyond its right of way to afford him bet- ter and cheaper shipping facilities is, in substance and effect, re- quiring the company to devote its property to the private use of another, and is within the protective clause of the federal Consti- tution. The judgment is reserved, with directions to dismiss the petition. EuDKiN, C. J., and Chadwick and Moeeis, JJ., concur. PuLLEETON", J. Since the Supreme Court of the United States holds that a railroad company cannot be compelled without com- pensation to afford facilities to a private shipper other than it offers at its general public stations, I am constrained to concur in the Judgment the majority have directed to be entered in this case. I cannot concur, however, in all that is said in the opinion. I can- not concur in the view that to compel a railway company to stop at points other than its public stations and take on for carriage the property of a private shipper is taking its property for the private use of another in violation of the due process of law clauses in the state and federal Constitutions. As I understand it, the principal purpose for which a railroad is constructed is to carry from one point to another the private property of the individual; 440 ADEQUATE FACILITIES. [OHAP. VI. that it IS for this purpose it has its existence and is given the vast powers and rights it possesses. This function, then, the state may compel it to fulfill. If, therefore, its public stations do not afford an adequate facility for the shipment of the property of a par- ticular individual, I know of no legal reason why the company cannot be compelled, on due compensation, to furnish that par- ticular individual with additional facilities, even to the extent of putting in an additional side track for him. Por this reason I dissent from the holding that to do so is to take private property for a private use.^ WIN"TEKS METALLIC PAINT CO. v. CHICAGO, MILWAUKEE AND ST. PAUL EAILWAY CO. 16 I. C. C. 587. 1909.^ K Clements, Commissioner. In case No. 1601, besides challenging the reasonableness of the rates on ground iron ore from Iron Ridge to various destinations, complainant prays that the Commission order the construction and maintenance of a private side track from the main line of the St. Paul road to its mills, a distance of 435 feet over the property of the Illinois Steel Company and a public highway. At the hearing complainant's witness stated that his company would not under- take to build or to defray any part of the expense incident to the construction of this siding. By section 1 of the amended act to regulate commerce the Com- inission is authorized to order the construction ajid maintenance, upon reasonable terms, of "a switch connection" with any lateral branch line of railroad, or " private side track which may be con- structed to connect with its railroad, where such connection is rea- sonably practicable and can be put in with safety and will furnish sufficient business to justify the construction and maintenance of the same." Prom the language of this section it is clear that the Commission has no authority to order the construction of a private side track by a railroad company, but that its authority is limited to ordering a carrier to make " a switch connection " with a pri- vate side track. Certainly our authority does not embrace the power to order a carrier to construct and maintain a side track off its right of way and without direct contribution by the shipper to the expense incident thereto. 2 Compare Corporation Commission v. Bailroad — " Industrial Siding Case" (1905), 140 N. C. 239. 1 Only one point f*6m the opinion is here reprinted. — Ed. ADEQUATE FACILITIES. 441 DUKlSr V. WBSTEEN UNION" TELEGEAPH CO. 2 Ga. App. 845. 1907.^ Powell, J. The grave question remaining in the case is whether the petition sets forth a cause of action against the telegraph com- pany. The gist of the action is not the failure or refusal of the telegraph company to transmit a message tendered to it, but the alleged disrespectful, humiliating, and insulting treatment by its agent of a member of the general public, lawfully in its office on business with the company. The contention is that the entire damage alleged is such as afEects only the feelings of the plaintiff, and that damages for mental suffering cannot be recovered, unless there is a concomitant injury to person or purse. The further con- tention is made that no breach of duty to the plaintiff is shown. We will dispose of these contentions in inverse order. A telegraph company is a private corporation performing a pub- lic duty; and whether it is a common carrier, a bailee, or a person engaged in business sui generis, is immaterial. It is a public- service company, one engaged in a business of such nature as to clearly distinguish it from those purely private persons and cor- porations who may conduct their own business in their own way. AU such corporations, on account of the interest which the public has in the manner in which their business is conducted, as well as on account of the special franchises enjoyed by them, must ob- serve certain rules of dealing with the public. These rules, and the corresponding duties which are implied from the nature of the call- ing, are not always declared by specific statute, but are frequently enforced by the courts as a part of the general law or of the com- mon law. "Upon each person, in every position he occupies, pe- culiar duties are imposed, each demanding its discharge with an emphasis accentuated or modified by the attendant circumstances." Eay, Negligence of Imposed Duties, Personal, § 1, " One of the great requirements which the government demands of every in- stitution impressed with a public interest, and one which is thrown over every citizen as a great and protective shield, is the duty to act impartially with all. They are under obligations to eztend their facilities to all persons, on equal terms, who are willing to comply with their reasonable regulations, and to make such com- pensation as is exacted from others in like circumstances." Jones, Telegraph and Telephone Companies, § 236. Prom this principle, universaliy'reeognized, springs the corollary 1 Part of the opinion is omitted. — • Ed. 443 ADEQUATE FACILITIES. [CHAP. VI. that all such persons, natural and artificial, shall afford to such members of the public as have occasion to transact with them business of the nature they are holding themselves out as being accustomed to do, safe and decent access to the places opened up for the transaction of the business in question. This safety does not mean mere physical safety, li'or this decency mere absence of obscenity ; but by the employment of the expression " safe and decent access " it is intended to connote also the notion of freedom from abuse, humiliation, insult, and other unbecoming and dis- respectful treatment. A member of the public is not to be deterred from transacting or offering to transact the business which the law compels a telegraph company to accept impartially from' every person by reason of the fact that he cannot enter the public office without being subjected to insult or personal affront. A vio- lation of this duty has occurred whenever a person entering the telegraph office for the purpose of sending a message has been met with disrespectful or insulting treatment at the hands of the com- pany's agents. It is immaterial that the person thus injured had no personal interest in the message, or that he was the mere agent of another; for there is no such requirement as that persons desiring to transact business with public utility corporations shall do so in person. The fact that the right of respectful treatment, while attempting to do business with a public service company, follows as the natural sequence from the right to be served impar- tially and at all reasonable times, seems to render the citation of authority as to the existence of this right of respectful treatment unnecessary. We do, however, call attention to the Georgia cases of Gasway v. Atlanta & West Point E. Go., 58 Ga. 216, 221, and Georgia E. Co. v. Eichmond, 98 Ga. 495, 502, 25 S. E. 565. It will be noted that, while these were actions against carriers, in neither case did the liability depend upon the fact that the plaintiff was a passenger. In Gasway's case he was attempting to check bag- gage as agent for his wife. In Eichmond's case he had called at the passenger station to see about certain trunks, and the court in deciding the case, took pains to call attention to the fact that the relation of carrier and passenger did not exist at that time. We might multiply citation of precedents, but these are sufficient. The telegraph company, therefore, violated its duty towards the plaintiff, in that it did not afford him safe and decent access to its office. The plaintiff suffered the injury of humiliation and wounded feelings. Is it a case of damnum absque injuria, because no injury to purse or person also ensued? That damages for mental suffering are compensatory in character can hardly be open to question. " Wounding a man's feelings is as much actual dam- ADEQUATE FACILITIES. 443 age as breaking his limbs. The difference is that one is internal and the other external ; the one mental, the other physical." Head V. Ga. Pac. E. Co., 79 Ga. 358, 360, 7 S. E. 217, 318, 11 Am. St. Rep. 434; Smith v. Overby, 30 Ga. 241, 248. Such damages may in the very nature of things be just as proximately and naturally the consequence of the defendant's wrong as any other damage; so that there is no legitimate objection to their allowance for any lack of this element. Of course, there may be eases where mental suffering is not a proximate and natural result of an injury; but this is true as to any other form of damage. Nor can it be justly said that an allowance for mental suffering is any more specula- tive or conjectural than damages for physical pain and suffering. Those cases which preclude recovery of damages for mental suffer- ing, when no other injury is shown, cannot fairly rest on any of these grounds, but must be based upon the theory presented by Allen, J., in the case of Spade v. Lynn, etc., E. 168 Mass. 285, 47 N. E. 88, 38 L. E. A. 512, 60 Am. St. Eep. 393, that the rule is purely arbitrary, though actually existent in certain classes of cases. See, also, Homans v. Boston Elevated Ey. Co., 180 Mass. 456, 62 N. E. 737, 57 L. E. A. 291, 91 Am. St. Eep. 324, wherein the court, through Holmes, J., says that the rule, being arbitrary, is not to be extended. This arbitrary rule is generally applied only to those cases where the injury is the result of mere neglect. The leading case of Chap- man V. Western Union Tel. Co., 88 Ga. 763, 15 S. E. 901, 17 L. E. A. 430, 30 Am. St. Eep. 183, as well as the eases which have fol- lowed it, puts this state in line with those that hold that, in actions on account of wrongs merely negligent, mental suffering unac- companied by other injury cannot be the basis of a recovery. Those courts, however, who assert this doctrine even most strenu- ously, do not extend its application to those intentional injuries of which insult, humiliation, and mental suffering are the natural consequences. As Allen, J., in the Spade case, supra, says: "It is hardly necessary to add that this decision does not reach those classes of actions where an intention to cause mental distress or to hurt the feelings is shown or is reasonably to be inferred." By this distinction there can be seen between the case of Chapman v. Telegraph Company, supra, and that of Cole v. Eailway Company, 102 Ga. 474, 31 S. E. 107, a clear, logical discrimination. The holding in the Cole case is undoubtedly the law, and is un- equivocally supported by authority. There a railway conductor intentionally and wantonly insulted a passenger, not by using slan- derous language to him, as the court intimates in the opinion (for the language was not per se slanderous, and there was no allega- 444 ADEQUATE FACILITIES. [CHAP. VI. tions stating it to be so for any special reason), but by using to him insulting and humiliating language. The whole injury was to the plaintiff's feelings. The court says that case is distinguish- able from the Chapman case; and it is, not because the plaintifE in the Cole case was slandered, but because that was an action upon a malicious and intentional tort, the other upon a merely negli- gent, though wrongful, omission. See Watson on Damages, § 399 ; Burdick, Law of Torts, 101; Wilkinson v. Downtown, [1897] 2 Q. B. 57 (wherein a recovery was upheld in favor of a wife for mental shock on account of defendant's falsely and maliciously telling her that her husband had been seriously wounded) ; Eice V. Eice, 104 Mich. 371, 62 K. W. 833 (where a recovery by a wife for mental suffering occasioned by the alienation of her husband's affections was held proper, though no financial loss in the matter of support was shown) . See, also, Barbee v. Eeese, 60 Miss. 906 ; Conklin v. Thompson, 29 Barb. (N. Y.) 318. CHAPTEE VII WITHDEAWAL FEOM PUBLIC SEEVICE. ANONYMOUS. Godbolt, 345. 1623.^ If an Inn-keeper taketh down his Signe, and yet keepeth a hos- terie, an Action upon the Case will lie against him, if he do deny lodging unto a travailer for his money; but if he taketh down his Signe, and giveth over the keeping of an Inn, then he is discharged from giving lodging. SATTEELBB v. GEOAT. 1 Wend. 272. 1828.> By the Court, Sutherland, J. The defendant was a common carrier between Schenectady and Albany, previous to 1819. He then sold out all his teams but one, which he kept for agricultural purposes on his farm. One witness, however, testified, that de- fendant employed his team in the carrying and forwarding busi- ness, as occasions offered, until 1823 or 1833. But subsequent to that period, there is no evidence whatever of his carrying or for- warding a single load, until April, 1824, when one John Dows applied to him, very urgently, to bring some loads for him from Albany to Schenectady, to which the defendant reluctantly con- sented, and despatched one Asia with his team for the purpose, with special instructions to bring nothing for any other person; if Dows' goods were not ready, to come back empty. He brought two loads and returned for a third, under the same instructions, repeated again and again; but Dows' third load not being ready, instead of returning empty as he was directed to do, he applied to the plaintiffs for a load, which they furnished him, to be car- ried to Frankfort, in Herkimer county. He arrived at Schenectady late at night. The next morning it was discovered that one of the boxes had been broken open, and a part of the goods stolen. 1 Only an extract from the case is here reprinted. — Ed. 1 The statement of the case is omitted. — Ed. 446 WITHDRAWAL FEOM PUBLIC SERVICE. [CHAP. VII. The defendant disavowed all responsibility for the goods, before it was discovered that any of them had been taken, and declared that • •Asia had violated his express instructions in bringing them. Asia was subsequently convicted of the theft, and sent to the state prison. The defendant gave immediate notice to the plaintiffs of all the facts, and that he did not hold himself responsible for the gooSs. The judge charged the jury, that if the defendant was respon- sible ,at all, it was either on the general liability of a common car- rier, and that depended upon the fact, whether he was, at the time, a common carrier or not; or upon a special contract for carrying the goods. That it was for the jury to determine, whether the defendant was, at the time, acting in the capacity of a common carrier; and if they believed that the teamster had been specially employed by the defendant, for a particular purpose and object, then he could not bind the defendant by a contract beyond his special employment. The jury found for the defendant. The law was correctly laid down by the judge. The defendant stood upon the same footing, as though he had never been engaged in the forwarding business. He had abandoned it entirely cer- tainly one year, and according to the weight of evidence, four years previous to this transaction. He makes a special contract with Dows to bring goods for him from Albany, and gives his teamster express instructions to bring goods for no one else. He was acting under a special contract, and not in the capacity of a common car- rier. Is he then responsible for the act of his servant, done in violation of his instructions, and not in the ordinary course of the business in which he was employed ? If a farmer send his servant with a load of wheat to market, and he, without any instructions from his master, applies to a merchant for a return load, and ab- sconds with it, is the master responsible? Most clearly not. It was an act beyond the scope of the general authority of the servant, quoad hoc, therefore he acted for himself and on his own responsi- bility, and not for his employer. The verdict is according to the weight of evidence. There is nothing in the ground of surprise; if there was, it should have been the subject of a special motion. Motion for new trial denied.^ 2 " Property does become clothed with a public interest when used in a manner to make it of public consequence, and affect the community at large. When, therefore, one devotes his property .to a use in which the public has an interest, he, in effect, grants to the public an interest in that use, and must submit to be controlled by the public for the common good, to the extent of the interest he has created. He may withdraw his grant by dis- continuing the use; but so long as he maintains the use he must submit to the control." Munn v. Illinois (1876), 94 U. S. 113, 126. WITHDRAWAL FROM PUBLIC SERVICE. 447 THE YOEK AND NOETH MIDLAND EAILWAY CO. v.. customs ° . in duties in case of have been made public, as required by this Act, shall, failure to pub- before it is admitted into the United States from said rates, foreign country, be subject to customs duties as if said freight were of foreign production. Ho change shall be made in the rates, fares, and ™'*y ^A^^^' o ' ' public notice of charges or ioint rates, fares, and charges which have change in rates 1 ^1 ij i.Ti,ji, ■• • must be given. been filed and published by any common carrier m compliance with the requirements of this section, ex- cept after thirty days' notice to the Commission and to the public published as aforesaid, which shall plainly state the changes proposed to be made in the schedule then in force and the time when the changed rates, fares, or charges will go into effect; and the proposed changes shall be shown by printing new schedules, or shall be plainly indicated upon the sched- ules in force at the time and kept open to public in- spection : Provided, That the Commission may, in its 492 APPENDIX. discretion and for good cause shown, allow changes may°'mSdify' ?e° ^P°^ ''^^^ ^^^ *^^ notice herein specified, or modify quirements of the requirements of this section in respect to publish- this section. ... . „, ^ -"^ , mg, posting, and filing of tariffs, either in particular instances or by a general order applicable to special or peculiar circumstances or conditions. m u^i t* speoHy '^^^ uames of the several carriers which are parties names of car- to any loint tariff shall be specified therein, and each r I e r s partici- *^ ^ pating. Evi- of the parties thereto, other than the one filing the currence. Same, shall file with the Commission such evidence of concurrence therein or acceptance thereof, as may be required or approved by the Commission, and where such evidence of concurrence or acceptance is filed it shall not be necessary for the carriers filing the same to also file copies of the tariffs in which they are named as parties. tra^ts"'^^ "agree- Every common carrier subject to this Act shall also ments, or ar- file with Said Commission copies of all contracts, rangements re- , ■,-, n lating to trafBc agreements, or arrangements with other common ear- w i t h Commfs- riers in relation to any trafl&c affected by the provis- ^"'"' ions of this Act to which it may be a party. ^^Commis^s^i^o^n The Commission may determine and prescribe the forms of Bched- form in which the schedules required by this section to be kept open to public inspection shall be prepared and arranged and may change the form from time to time as shall be found expedient, shall" engaV'fn '^^ Carrier, unless otherwise provided by this Act, t r a nsportation shall engage Or participate in the transportation of and publishes passengers or property, as defined in this Act, unless charges thereon, the rates, fares, and charges upon which the same are transported by said carrier have been filed and pub- lished in accordance with the provisions of this Act; nor shall any carrier charge or demand or collect or re- ceive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, between the points named in such tariffs than the rates, fares, and '^t"e's ' t '^ %e charges which are specified in the tariff filed and in strictly oh- effect at the time : nor shall any carrier refund or re- 86TT6U mit in any manner or by any device any portion of the rates, fares, and charges so specified, nor extend to any shipper or person any privileges or facilities in m'e'a*ns''%'om- ^^^ transportation of passengers or property, except mon carrier." guch as are Specified in such tariffs: Provided, That APPENDIX. 493 wherever the word "carrier" occurs in this Act it shall be held to mean " common carrier." That in time of war or threatened war preference and precedence shall, upon the demand of the Presi- dent of the United States, be given, over all other trafiSc, to the transportation of troops and material of war, and carriers shall adopt every means within their control to facilitate and expedite the military traf- fic. The Commission may reject and refuse to file any schedule that is tendered for filing which does not pro- vide and give lawful notice of its effective date, and any schedule so rejected by the Commission shall be void and its use shall be unlawful. In case of failure or refusal on the part of any car- rier, receiver, or trustee to comply with the terms of any regulation adopted and promulgated or any order made by the Commission under the provisions of this section, such carrier, receiver, or trustee shall be liable to a penalty of five hundred dollars for each such of- fense, and twenty-five dollars for each and every day of the continuance of such offense, which shall accrue to the United States and may be recovered in a civil action brought by the United States. If any common carrier subject to the provisions of this Act, after written request made upon the agent of such carrier hereinafter in this section referred to, by any person or company for a written statement of the rate or charge applicable to a described shipment be- tween stated places under the schedules or tariffs to which such carrier is a party, shall refuse or omit to give such written statement within a reasonable time, or shall misstate in writing the applicable rate, and if the person or company making such request suffers damage in consequence of such refusal or omission or in consequence of the misstatement of the rate, either through making the shipment over a line or route for which the proper rate is higher than the rate over an- other available line or route, or through entering into any sale or other contract whereunder such person or company obligates himself or itself to make such ship- ment of freight at his or its cost, then the said car- rier shall be liable to a penalty of two hundred and fifty dollars, which shall accrue to the United States P r e f e rence and expedition of military traffic in time of war. A m e ndment of June 18, 1910. C o m m ission may reject cer- tain Bcbedules. Penalty for failure to com- ply with regu- lation. Carrier t o furnish written statement of rate. Penalty for m i s s t atement of rate. 494 APPENDIX. and may be recovered in a civil action brought by the United States. rie?™\geit°*to ^* ®^^^^ ^® ^^^ ^^^^ °^ every carrier by railroad to be posted. keep at all times conspicuously posted in every station where freight is received for transportation the name of an agent resident in the city, village, or town where such station is located, to whom application may be made for the information by this section required to be furnished on written request ; and in case any car- rier shall fail at any time to have such name so posted in any station, it shall be sufficient to address such re- quest in substantially the following form : " The Station Agent of the Company at Station," together with the name of the proper post office, in- serting the name of the carrier company and of the station in the blanks, and to serve the same by de- positing the request so addressed, with postage thereon prepaid, in any post office, of '*^^*ust'"24* When property may be or is transported from poipt 1912. ' to point in the United States by rail and water through the Panama Canal or otherwise, the trans- portation being by a common carrier or carriers, and not entirely within the limits of a single State, the In- c o m mission terstate Commerce Commission shall have jurisdiction tion over rail of such transportation and of the carriers, both by rail fio in certain and by Water, which may or do engage in the same, in par lou ars. ^j^^ following particulars, in addition to the jurisdic- tion given by the Act to regulate commerce, as amended June eighteenth, nineteen hundred and ten : Physical con- z^) To establish physical connection between the n e c 1 1 n be- ^ ^ jr J tween rail lines lines of the rail carrier and the dock of the water car- water carriers, rier by directing the rail carrier to make suitable con- nection between its line and a track or tracks which have been constructed from the dock to the limits of its right of way, or by directing either or both the rail and water carrier, individually or in connection with one another, to construct and connect with the lines of the rail carrier a spur track or tracks to the dock. This provision shall only apply where such connection is reasonably practicable, can be made with safety to the public, and where the amount of business to be handled is sufficient to justify the outlay. The Commission shall have full authority to deter- mine the terms and conditions upon which these con- APPENDIX. 495 neeting tracks, when constructed, shall be operated, and it may, either in the construction or the opera- tion of such tracks, determine what sum shall be paid to or by either carrier. The provisions of this paragraph shall extend to cases where the dock is owned by other parties than the carrier involved. (b) To establish through routes and maximum joint rates between and over such rail and water lines, and to determine all the terms and conditions under which such lines shall be operated in the handling of the traffic embraced. (c) To establish maximum proportional rates by rail to and from the ports to which the traffic is brought, or from which it is taken by the water car- rier, and to determine to what traffic and in connec- tion with what vessels and upon what terms and con- ditions such rates shall apply. By proportional rates are meant those which differ from the corresponding local rates to and from the port and which apply only to traffic which has been brought to the port or is car- ried from the port by a common carrier by water. (d) If any rail carrier subject to the Act to regu- late commerce enters into arrangements with any water carrier operating from a port in the United States to a foreign country, through the Panama Canal or otherwise, for the handling of through busi- ness between interior points of the United States and such foreign country, the Interstate Commerce Com- mission may require such railway to enter into sim- ilar arrangements with any or all other lines of steamships operating from said port to the same for- eign country. The orders of the Interstate Commerce Commission relating to this section shall only be made upon for- mal complaint or in proceedings instituted by the Commission of its own motion and after fuU hear- ing. The orders provided for in the two amend- ments to the Act to regulate commerce enacted in this section shall be served in the same manner and enforced by the same penalties and proceedings as are the orders of the Commission made under the pro- visions of section fifteen of the Act to regulate com- merce, as amended June eighteenth, nineteen hun- dred and ten, and they may be conditioned for the Com mission may determine terms and con- ditions of con- struction and operation. Through routes and joint rates between rail and water carriers. Pro portional rates to and from ports. Through routes and joint rates between rail and water carriers from a port in the IJnited States to a foreign country via Canal. Pro ceedings before the Com- mission to en- force these amendments. 496 APPENDIX. payment of any sum or the giving of security for the payment of any sum or the discharge of any obliga- tion which may be required by the terms of said order. Sec. 7. That it shall be unlawful for any common carrier subject to the provisions of this Act to enter into any combination, contract, or agreement, ex- pressed or implied, to prevent, by change of time schedule, carriage in different cars, or by other means or devices, the carriage of freights from being con- tinuous' from the place of shipment to the place of destination; and no break of bulk, stoppage, or in- terruption made by such common carrier shall prevent the carriage of freights from being and being treated fre?ghts*muBt be ^^ °^^ continuous Carriage from the place of ship- treated as con- ment to the place of destination, unless such break, tinuous unless / ' . n j -xi j; stoppage is in stoppage, or interruption was made m good laith tor ^°° *' ■ some necessary purpose, and without any intent to avoid or unnecessarily interrupt such continuous car- riage or to evade any of the provisions of this Act. Sec. 8. That in case any common carrier subject to the provisions of this Act shall do, cause to be done, or permit to be done any act, matter, or thing in this Act prohibited or declared to be unlawful, or shall omit to do any act, matter, or thing in this Act re- quired to be done, such common carrier shall be liable Liability of to the pcrson or persons injured thereby for the full riers for dam- amount of damages sustained in consequence of any violation of this such violation of the provisions of this Act, together with a reasonable counsel or attorney's fee, to be fixed by the court in every case of recovery, which attorney's fee shall be taxed and collected as part of the costs in the case. ciaTming^to "be ^^^- ^- '^^^^ ^^J person Or persous claiming to be damaged may damaged by any common carrier subject to the pro- elect whether . ■ ° J, A.- i J. -xi. 1 1 • X J. J.1 to complain to visions ot this Act may either make complaint to the the Commis-y^ .*. -, .pi -ttp i • sion or bring Commissiou as hereinaiter provided lor, or may bring uSited 'states suit in his or their own behalf for the recovery of the damages for which such common carrier may be liable under the provisions of this Act, in any district or circuit court of the United States of competent jurisdiction ; but such person or persons shall not have the right to pursue both of said remedies, and must in each case elect which one of the two methods of procedure herein provided for he or they will adopt. court. APPENDIX. 497 In any such action brought for the recovery of dam- ages the court before which the same shall be pending may compel any director, officer, receiver, trustee, or ^gf^f^^j ^J agent of the corporation or company defendant in be compeiied^to such suit to attend, appear, and testify in such ease, s h a 1 1 receive and may compel the production of the books and ""'"'''" ^' papers of such corporation or company party to any such suit; the claim that any such testimony or evi- dence may tend to criminate the person giving such evidence shall not excuse such witness from testify- ing, but such evidence or testimony shall not be used against such person on the trial of any criminal pro- ceeding. Sec. 10. (As amended March 2, 1889, and June . Penalties for ^ violations o f 18, 1910.) That any common carrier subiect to the Act by carriers, J, , i . . , , , or wlien the provisions ot this Act, or, whenever such common car- carrier is a rier is a corporation, any director or oflBcer thereof, or officer^s?*"ag'ents! any receiver, trustee, lessee, agent, or person acting pj^g ™nd''^^m- f or or employed by such corporation, who, alone or prisonment. with any other corporation, company, person, or party, shall willfully do or cause to be done, or shall will- ingly suffer or permit to be done, any act, matter, or thing in this Act prohibited or declared to be unlaw- ful, or who shall aid or abet therein, or shall willfully omit or fail to do any act, matter, or thing in this Act required to be done, or shall cause or willingly suffer or permit any act, matter, or thing so directed or required by this Act to be done not to be so done, or shall aid or abet any such omission or failure, or shall be guilty of any infraction of this Act for which no penalty is otherwise provided, or who shall aid or abet therein, shall be deemed guilty of a misdemeanor, and shall, upon conviction thereof in any district court of the United States within the jurisdiction of which such offense was committed, be subject to a fine of not to exceed five thousand dollars for each offense: Provided, That if the offense for which any person shall be convicted as aforesaid shall be an un- lawful discrimination in rates, fares, or charges for the transportation of passengers or property, such per- son shall, in addition to the fine hereinbefore provided for, be liable to imprisonment in the penitentiary for a term of not exceeding two years, or both such fine and imprisonment, in the discretion of the court. 498 APPENDIX. fa^Te" billing^ -^^^ common carrier subject to the provisions of etc., by car- this Act, or, whenever such common carrier is a cor- cers'or agents: poration, any officer or agent thereof, or any person Fine and im- !• j. i i i i x' 1,1. prieonment. acting lor or employed by such corporation, virho, by means of false billing, false classification, false weigh- ing, or false report of weight, or by any other device or means, shall knowingly and willfully assist, or shall willingly suffer or permit, any person or persons to ob- tain transportation for property at less than the regu- lar rates then established and in force on the line of transportation of such common carrier, shall be deemed guilty of a misdemeanor, and shall, upon con- viction thereof in any court of the United States of competent jurisdiction within the district in which such offense was committed, be subject to a fine of not exceeding five thousand dollars, or imprisonment in the penitentiary for a term of not exceeding two years, or both, in the discretion of the court, for each offense, f a'^Te" biiiin"'^ ^^^ person, corporation, or company, or any agent etc., by ship- or ofiicer thereof, who shall deliver property for trans- pers and other ' . , . , , n persons: Fine portation to any common carrier subject to the pro- and imprison- . . p 1 1 • a j p 1 ment. visions of this Act, Or tor whom, as consignor or con- signee, any such carrier shall transport property, who shall knowingly and willfully, directly or indirectly, himself or by employee, agent, officer, or otherwise, by false billing, false classification, false weighing, false representation of the contents of the package or the substance of the property, false report of weight, false statement, or by any other device or means, whether with or without the consent or connivance of the carrier, its agent, or officer, obtain or attempt to obtain transportation for such property at less than the regular rates then established and in force on the line of transportation; or who shall knowingly and willfully, directly or indirectly, himself or by em- ployee, agent, officer, or otherwise, by false statement or representation as to cost, value, nature, or extent of injury, or by the use of any false bill, bill of lad- ing, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to be false, fictitious, or fraudulent, or to contain any false, ficti- tious, or fraudulent statement or entry, obtain or at- tempt to obtain any allowance, refund, or payment for damage or otherwise in connection with or grow- APPENDIX. 499 ing out of the transportation of or agreement to trans- port such property, whether with or without the con- sent or connivance of the carrier, whereby the com- pensation of such carrier for such transportation, either before or after payment, shall in fact be made less than the regular rates then established and in force on the line of transportation, shall be deemed guilty of fraud, which is hereby declared to be a mis- demeanor, and shall, upon conviction thereof in any court of the United States of competent jurisdiction within the district in which such offense was wholly or in part committed, be subject for each offense to a fine of not exceeding five thousand dollars or impris- onment in the penitentiary for a term of not exceed- ing two years, or both, in the discretion of the court: Provided, That the penalty of imprisonment shall not apply to artificial persons. If any such person, or any ofiicer or agent of any such corporation or company, shall, by payment of money or other thing of value, solicitation, or other- wise, induce or attempt to induce any common car- rier subject to the provisions of this Act, or any of its ofBcers or agents, to discriminate unjustly in his, its, or their favor as against any other consignor or consignee in the transportation of property, or shall aid or abet any common carrier in any such unjust discrimination, such person or such oSicer or agent of such corporation or company shall be deemed guilty of a misdemeanor, and shall, upon conviction thereof in any court of the United States of competent juris- diction within the district in which such offense was committed, be subject to a fine of not exceeding five thousand dollars, or imprisonment in the. penitentiary for a term of not exceeding two years, or both, in the discretion of the court, for each offense ; and such per- son, corporation, or company shall also, together with said common carrier, be liable, jointly or severally, in an action to be brought by any consignor or consignee discriminated against in any court of the United States of competent jurisdiction for all damages caused by or resulting therefrom. Sec. 11. That a Commission is hereby created and established to be known as the Interstate Commerce Commission, which shall be composed of five Commis- Penalties for inducing com- m o n carriers to discriminate unjustly; Fine and imprison- ment. Joint li- ability with car- rier ior dam- ages. Inters tate Commerce C m m i s sion- ers — method of a p p i n tment and terms. 500 APPENDIX. sioners, who shall be appointed by the President, by and with the advice and consent of the Senate. The Commissioners first appointed under this Act shall continue in office for the term of two, three, four, five, and six years, respectively, from the first day of January, Anno Domini eighteen hundred and eighty- seven, the term of each to be designated by the Presi- dent; but their successors shall, be appointed for terms of six years, except that any person chosen to fill a vacancy shall be appointed only for the unex- pired time of the Commissioner whom he shall suc- ceed. Any Commissioner may be removed by the President for inefficiency, neglect of duty, or malfeas- ance in office. Not more than three of the Commis- sioners shall be appointed from the same political party. No person in the employ of or holding any official relation to any common carrier subject to the provisions of this Act, or owning stock or bonds thereof, or who is in any manner pecuniarily inter- ested therein, shall enter upon the duties of or hold such office. Said Commissioners shall not engage in any other business, vocation, or employment. No vacancy in the Commission shall impair the right of the remaining Commissioners to exercise all the pow- ers of the Commission. (See section Z^, enlarging Commission and increasing salaries.) Commission gEC. 12. (As amended March 2, 1889, and Feb- to inquire into ^ ' ' business o£ car- rimrij 10, 1891.) That the Commission hereby cre- itseu informed ated shall have authority to inquire into the manage- thereto. ^ ment of the business of all common carriers subject to the provisions of this Act, and shall keep itself in- formed as to the manner and method in which the same is conducted, and shall have the right to obtain to^exec™e^and ^^°^ ^^^h commou Carriers full and complete infor- enforee provi- matiou neccssary to enable the Commission to perform Act. the duties and carry out the objects for which it was created ; and the Commission is hereby authorized and required to execute and enforce the provisions of this Act ; and, upon the request of the Commission, it shall be the duty of any district attorney of the District attor- United States to whom the Commission may apply neys to prose- -' r^" .^ cute under di- to institute in the proper court and to prosecute under tomey General, the direction of the Attorney General of the United States all necessary proceedings for the enforcement APPENDIX. 501 of the provisions of this Act and for the punishment of all violations thereof, and the costs and expenses of such prosecution shall be paid out of the appropria- tion for the expenses of the courts of the United States; and for the purposes of this Act the Com- mission shall have power to require, by subpoena, the attendance and testimony of witnesses and the pro- duction of all books, papers, tarifEs, contracts, agree- ments, and documents relating to any matter under investigation. Such attendance of witnesses, and the production of such documentary evidence, may be required from any place in the United States, at any designated place of hearing. And in case of disobedience to a subpoena the Commission, or any party to a proceed- ing before the Commission, may invoke the aid of any court of the United States in requiring the at- tendance and testimony of witnesses and the produc- tion of books, papers, and documents under the pro- visions of this section. And any of the circuit courts of the United States within the jurisdiction of which such inquiry is car- ried on may, in case of contumacy or refusal to obey a subpoena issued to any common carrier subject to the provisions of this Act, or other person, issue an order requiring such common carrier or. other person to appear before said Commission (and produce books and papers if so ordered) and give evidence touching the matter in question; and any failure to obey such order of the court may be punished by such court as a contempt thereof. The claim that any such testimony or evidence may tend to criminate the person giving such evidence shall not excuse such wit- ness from testifying; but such evidence or. testimony shall not be used against such person on the trial of any criminal proceeding. The testimony of any witness may be taken, at the instance of a party, in any proceeding or investiga- tion pending before the Commission, by deposition, at any time after a cause or proceeding is at issue on petition and answer. The Commission may also order testimony to be taken by deposition in any pro- ceeding or investigation pending before it, at any stage of such proceeding or investigation. Such m m ission may require testimony and d o c u m entary evidence. Courts to compel wit- nesses to attend and testify. Claim that testimony o r evidence will tend to crimi- nate will not excuse witness. Depositions. C m m ission may order tes- timony to be taken by depo- sition. 502 APPENDIX. depositions may be taken before any judge of any court of the United States, or any commissioner of a circuit, or any clerk of a district or circuit court, or any chancellor, justice, or judge of a supreme or superior court, mayor or chief magistrate of a city, judge of a county court, or court of common pleas of any of the United States, or any notary public, not being of counsel or attorney to either of the parties, nor interested in the event of the proceeding or in- vestigation. Eeasonable notice must first be given in writing by the party or his attorney proposing to take such deposition to the opposite party or his attorney of record, as either may be nearest, which notice shall state the name of the witness and the time and place of the taking of his deposition. Any person may be compelled to appear and depose, and to produce documentary evidence, in the same manner as witnesses may be compelled to appear and testify and produce documentary evi- dence before the Commission as hereinbefore pro- vided. Every person deposing as herein provided shall be cautioned and sworn (or affirm, if he so request) to testify the whole truth, and shall be carefully ex- amined. His testimony shall be reduced to writing by the magistrate taking the deposition, or under his direction, and shall, after it has been reduced to writ- ing, be subscribed by the deponent. _ When witness jf g, witness whose testimony may be desired to be country. taken by deposition be in a foreign country, the depo- sition may be taken before an officer or person desig- nated by the Commission, or agreed upon by the parties by stipulation in writing to be filed with the Commission. All depositions must be promptly filed with the Commission, nefsts'and mag- Witnesses whose depositions are taken pursuant to istrates. this Act, and the magistrate or other officer taking the same, shall severally be entitled to the same fees as are paid for like services in the courts of the United States. r^T^^^^M° Sec. 13. (As amended June '18, 1910.) That \J O lO. Hi XS o 10x1* / How and by any person, firm, corporation, company, or associa- whom made. ,. , -i ■ ■, , , How served. tion. Or any mercantile, agricultural, or manufactur- ing society or other organization, or any body politic APPENDIX. 503 or municipal organization, or any common carrier, complaining of anything done or omitted to be done by any common carrier subject to the provisions of this Act, in contravention of the provisions thereof, may apply to said Commission by petition, which shall briefly state the facts; whereupon a statement of the complaint thus made shall be forwarded by the Commission to such common carrier, who shall be called upon to satisfy the complaint, or to answer the same in writing, within a reasonable time, to be specified by the Commission. If such common car- rier within the time specified shall make reparation to*^ "h^v™ '^ dfs" for the iniury alleged to have been done, the com- oretion as jto tj ^ ^ ^ manner of m- mon carrier shall be relieved of liability to the com- vestigation. plainant only for the particular violation of law thus complained of. If such carrier or carriers shall not satisfy the complaint within the time specified, or there shall appear to be any reasonable ground for investigating said complaint, it shall be the duty of the Commission to investigate the matters complained of in such manner and by such means as it shall deem proper. Said Commission shall, in like manner and with the same authority and powers, investigate any com- plaint forwarded by the railroad commissioner or rail- road commission of any State or Territory at the re- quest of such commissioner or commission, and the Interstate Commerce Commission shall have full au- c o m m ission may issue or- thority and power at any time to institute an inquiry, ders in investi- .,■' ^ ,. . ■' -, , j_i gations begun on its own motion, m any case and as to any matter on its own mo- or thing concerning which a complaint is authorized to be made, to or before said Commission by any pro- vision of this Act, or concerning which any question may arise under any of the provisions of this Act, or relating to the enforcement of any of the provis- ions of this Act. And the said Commission shall have the same powers and authority to proceed with any inquiry instituted on its own motion as though it had been appealed to by complaint or petition un- der any of the provisions of this Act, including the power to make and enforce any order or orders in the case, or relating to the matter or thing concerning which the inquiry is had excepting orders for the payment of money. ISTo complaint shall at any time 504 APPENDIX. a n t"' ? interMt ^® dismissed because of the absence of direct damage immaterial. to the Complainant. Sec. 14. {Amended March 2, 1889, and June 29, mSsT^ripirt '1^06.) That whenever an investigation shall be stating its ooii^ made by said Commission, it shall be its duty to order. make a report in writing in respect thereto, which shall state the conclusions of the Commission, together with its decision, order, or requirement in the prem- Eeparation. jgggj and in case damages are awarded such report shall include the findings of fact on which the award is made. ibe^Tnt'e*recr"'of ^^ reports of investigations made by the Corn- record, serv- mission shall be entered of record, and a copy thereof parties. shall be furnished to the party who may have com- plained, and to any common carrier that may have been complained of. deSsioiis^to''be "^^^ Commission may provide for the publication published, and of its reports and decisions in such form and man- as evidence. ner as may be best adapted for public information and use, and such authorized publications shall be com- petent evidence of the reports and decisions of the Commission therein contained in all courts of the United States and of the several States without any further proof or authentication thereof. The Com- ^Annua^i re- mission may also cause to be printed for early distri- mission. bution its annual reports. Sec. 15. {As am.ehded June 29, 1906, and June 18, 1910.) That whenever, after full hearing upon a o m m ission complaint made as provided in section thirteen of this may determine ^ n i and prescribe Act, or after fuU hearing under an order for inves- sonabie r a t es tigation and hearing made by the Commission on its tions to*be ob- own initiative (either in extension of any pending m^^chalges!^' Complaint or without any complaint whatever), the Commission shall be of opinion that any individual or joint rates or charges whatsoever demanded, charged, or collected by any common carrier or car- . riers subject to the provisions of this Act for the transportation of persons or property or for the trans- mission of messages by telegraph or telephone as de- fined in the first section of this Act, or that any in- dividual or joint classifications, regulations, or prac- tices whatsoever of such carrier or carriers subject to the provisions of this Act are unjust or unreasonable, or unjustly discriminatory, or unduly preferential or APPENDIX. 505 prejudicial or otherwise in violation of any of the provisions of this Act, the Commission is hereby au- thorized and empowered to determine and prescribe what will be the just and reasonable individual or joint rate or rates, charge or charges, to be thereafter observed in such case as the maximum to be charged, and what individual or joint classification, regulation, or practice is just, fair, and reasonable, to be there- after followed, and to make an order that the carrier or carriers shall cease and desist from such violation to the extent to which the Commission finds the same to exist, and shall not thereafter publish, demand, or collect any rate or charge for such transportation or transmission in excess of the maximum rate or charge so prescribed, and shall adopt the classifica- tion and shall conform to and observe the regulation or practice so prescribed. All orders of the Commis- sion, except orders for the payment of money, shall take effect within such reasonable time, not less than thirty days, and shall continue in force for such pe- riod of time, not exceeding two years, as shall be pre- scribed in the order of the Commission, unless the same shall be suspended or modified or set aside by the Commission, or be suspended or set aside by a court of competent jurisdiction. Whenever the car- rier or carriers, in obedience to such order of the Commission or otherwise, in respect to joint rates, fares, or charges, shall fail to agree among themselves upon the apportionment or division thereof the Com- mission may, after hearing, make a supplemental or- der prescribing the just and reasonable proportion of such joint rate to be received by each carrier party thereto, which order shall take effect as a part of the original order. Whenever there shall be filed with the Commission any schedule stating a new individual or joint rate, fare, or charge, or any new individual or joint classi- fication, or any new individual or joint regulation or practice affecting any rate, fare, or charge, the Com- mission shall have, and it is hereby given, authority, either upon complaint or upon its own initiative with- out complaint, at once, and if it so orders, without answer or other formal pleading by the interested car- rier or carriers, but upon reasonable notice, to enter m m ission may determine and prescribe just and rea- sonable regn- lations or practices. o m m i s sion may order car- riers to cease and desist from violations found. Orders of the Com- mission effect- i V e as p r e - scribed, but in not less than thirty days. Orders in force not ex- c e e d i n g two years, unless suspended o r set aside by Commission or court. When c a r - riers fail to agree on divi- sions of joint rate. Commis- sion may pre- scribe propor- tion of such rate to be re- ceived by each carrier. Investigation of new sched- ules. 506 APPENDIX. upon a hearing concerning the propriety of such rate, fare, charge, classification, regulation, or practice ; and pending such hearing and the decision thereon the m a y " suspend Commission upon filing with such schedule and de- new schedules, livering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspen- sion may suspend the operation of such schedule and defer the use of such rate, fare, charge, classification, regulation, or practice, but not for a longer period than one hundred and twenty days beyond the time when such rate, fare, charge, classification, regula- tion, or practice would otherwise go into effect ; and after full hearing, whether completed before or after the rate, fare, charge, classification, regulation, or practice goes into effect, the Commission may make such order in reference to such rate, fare, charge, classification, regulation, or practice as would be proper in a proceeding initiated after the rate, fare, charge, classification, regulation, or practice had be- Com mission eome effective: Provided, That if any such hearing may extend ■' -^ ° suspension. can Uot be concluded within the period of suspension, as above stated, the Interstate Commerce Commission may, in its discretion, extend the time of suspension for a further period not exceeding sLs months. At Burden of any hearing involving a rate increased after January rier as to rea- first, nineteen hundred and ten, or of a rate sought to increased rates, be increased after the passage of this Act, the burden of proof to show that the increased rate or proposed increased rate is just and reasonable shall be upon the common carrier, and the Commission shall give to the hearing and decision of such questions preference over all other questions pending before it and decide the same as speedily as possible. ^ " ™e?tabfi8h '^^® Commission may also, after hearing, on a com- through routes plaint or upou its own initiative without complaint, an d' ciassiflca- establish through routes and joint classifications, and may establish joint rates as the maximum to be charged and may prescribe the division of such rates as hereinbefore provided and the terms and conditions under which such through routes shall be operated, whenever the carriers themselves shall have refused or neglected to establish voluntarily such through routes or joint classifications or joint rates; and this provision shall apply when one of the connecting car- APPENDIX. 507 riers is a water line. The Commission shall not, how- ever, establish any through route, classification, or rate between street electric passenger railways not en- gaged in the general business of transporting freight in addition to their passenger and express business and railroads of a different character, nor shall the Commission have the right to establish any route, classification, rate, fare, or charge when the trans- portation is wholly by water, and any transportation by water affected by this Act shall be subject to the laws and regulations applicable to transportation by water. And in establishing such through route, the Com- mission shall not require any company, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any in- termediate railroad operated in conjunction and un- der a common management or control therewith which lies between the termini of such proposed through route, unless to do so would make such through route unreasonably long as compared with another prac- ticable through route which could otherwise be es- tablished. In all eases where at the time of delivery of prop- erty to any railroad corporation being a common car- rier, for transportation subject to the provisions of this Act to any point of destination, between which and the point of such delivery for shipment two or more through routes and through rates shall have been established as in this Act provided to which through routes and through rates such carrier is a party, the person, firm, or corporation making such shipment, subject to such reasonable exceptions and regulations as the Interstate Commerce Commission shall from time to time prescribe, shall have the right to designate in writing by which of such through routes such property shall be transported to destina- tion, and it shall thereupon be the duty of the initial carrier to route said property and issue a through bill of lading therefor as so directed, and to transport said property over its own line, or lines and deliver the same to a connecting line or lines according to such through route, and it shall be the duty of each of said connecting carriers to receive said property and trans- L i m i tation on power to prescribe through routes. ' Shippers may designate rout- ing. 508 APPENDIX. relative to sliip ments. port it over the said line or lines and deliver the same to the next succeeding carrier or consignee according to the routing instructions in said bill of lading: Provided, however. That the shipper shall in all in- stances have the right to determine, where competing lines of railroad constitute portions of a through line or route, over which of said competing lines so con- stituting a portion of said through line or route his freight shall be transported. Unlawful to j^ gjiai]^ iiQ unlawful for anv common carrier sub- give or receive •^ i."at.ivJ™\hwf J®*^^ ^° ^^® provisions of this Act, or any officer, agent, or employee of such common carrier, or for any other person or corporation lawfully authorized by such common carrier to receive information therefrom, knowingly to disclose to or permit to be acquired by any person or corporation other than the shipper or consignee, without the consent of such shipper or consignee, any information concerning the nature, kind, quantity, destination, consignee, or routing of any property tendered or delivered to such common carrier for interstate transportation, which informa- tion may be used to the detriment or prejudice of such shipper or consignee, or which may improperly disclose his business transactions to a competitor ; and it shall also be unlawful for any person or corporation to solicit or knowingly receive any such information which may be so used : Provided, That nothing in this Act shall be construed to prevent the giving of such information in response to any legal process issued under the authority of any state or federal court, or to any officer or agent of the Government of the United States, or of any State or Territory, in the exercise of his powers, or to any officer or other duly authorized person seeking such information for the prosecution of persons charged with or sus- pected of crime; or information given by a com- mon carrier to another carrier or its duly author- ized agent, for the purpose of adjusting mutual traf- fic accounts in the ordinary course of business of such carriers. Any person, corporation, or association violating any of the provisions of the next preceding paragraph of this section shall be deemed guilty of a misde- meanor, and for each offense, on conviction, shall pay Sxceptions. Penalty. APPENDIX. 509 to the United States a penalty of not more than one thousand dollars. If the owner of property transported under this Act directly or indirectly renders any service con- nected with such transportation^ or furnishes any in- strumentality used therein^ the charge and allowance therefor shall be no more than is just and reasonable, and the Commission may, after hearing on a com- plaint or on its own initiative, determine what is a reasonable charge as the maximum to be paid by the carrier or carriers for the services so rendered or for the use of the instrumentality so furnished, and fix the same by appropriate order, which order shall have the same force and effect and be enforced in like man- ner as the orders above provided for under this sec- tion. The foregoing enumeration of powers shall not ex- clude any power which the Commission would other- wise have in the making of an order under the pro- visions of this Act. Sec. 16. {Amended March 2, 1889, June 29, 1906, and June 18, 1910.) That if, after hearing on a complaint made as provided in section thirteen of this Act, the Commission shall determine that any party complainant is entitled to an award of damages under the provisions of this Act for a violation thereof, the Commission shall make an order direct- ing the carrier to pay to the complainant the sum to which he is entitled on or before a day named. If a carrier does not comply with an order for the payment of money within the time limit in such or- der, the complainant, or any persons for whose bene- fit such order was made, may file in the circuit court of the United States for the district in which he re- sides or in which is located the principal operating office of the carrier, or through which the road of the carrier runs, or in any state court of general juris- diction having jurisdiction of the parties, a petition setting forth briefiy the causes for which he claims damages, and the order of the Commission in the premises. Such suit in the circuit court of the United States shall proceed in all respects like other civil suits for damages, except that on the trial of such suit the findings and order of the Commission o m m ission may determine reasonable maxi- mum to be paid for service ren- dered or instru- mentality fur- nished by owner of property transported. Enumerati o n of powers in this section not exclusive. Award of damages by Commission. To be forced courts. e n - by Findings of fact of Commis- sion prima facie evidence in rep- aration cases. 510 APPENDIX. shall be prima facie evidence of the facts therein stated, and except that the petitioner shall not be liable for costs in the circuit court nor for costs at any subsequent stage of the proceedings unless they accrue upon his appeal. If the petitioner shall finally attorney'''s°"ee/ Prevail he shall be allowed a reasonable attorney's fee, to be taxed and collected as a part of the costs of the suit. All complaints for the recovery of damages shall be filed with the Commission within two years from the time the cause of action accrues, and not upon 'action**'"" after, and a petition for the enforcement of an order for the payment of money shall be filed in the circuit court or state court within one year from the date of the order, and not after. Joint plain- ' j^ g^Q[-^ gyi|;s ^n parties in whose favor the Commis- tiirs may sue ^ joint defend- sion may have made an award for damages by a sin- on awards of gle Order may be joined as plaintiffs, and all the car- amages. ^^^^^ parties to such order awarding such dam- ages may be Joined as defendants, and such suit may be maintained by such joint plaintiffs and against such joint defendants in any district where any one of such joint plaintiffs could maintain such suit against any one of such joint defendants; and Service o f service of process against any one of such defendants as may not be found in the district where the suit is brought may be made in any district where such de- fendant carrier has its principal operating office. In case of such joint suit the recovery, if any, may be by judgment in favor of any one of such plaintiffs, against the defendant found to be liable to such plain- tiff, der "f'comnas- Every order of the Commission shall be forthwith sion. served upon the designated agent of the carrier in the city of Washington or in such other manner as may be provided by law. Commission -phe Commission shall be authorized to suspend or on a 7 suspend ^ or modify or- modify its Orders upon such notice and in such man- ner as it shall deem proper. t h^ ''ir "^ 'agents ^^ ®^^^^ ^^ *^® ^^^^ °^ cvcry common carrier, its and employees, ageuts and employees, to observe and comply with must comply °, ^ ,,, ii, f. „ with such or- such ordcrs SO long as the same shall remain m ef- ders. „ , lect. Any carrier, any officer, representative, or agent of a carrier, or any receiver, trustee, lessee, or agent of APPENDIX. 511 either of them, who knowingly fails or neglects to obey any order made under the provisions of section fifteen of this Act shall forfeit to the United States the sum of five thousand dollars for each offense. Every distinct violation shall be a separate offense, and in case of a continuing violation each day shall be deemed a separate offense. The forfeiture provided for in this Act shall be payable into the Treasury of the United States, and shall be recoverable in a civil suit in the name of the United States, brought in the district where the car- rier has its principal operating office, or in any district through which the road of the carrier runs. It shall be the duty of the various district attor- neys, under the direction of the Attorney General of the United States, to prosecute for the recovery of forfeitures. The costs and expenses of such prosecu- tion shall be paid out of the appropriation for the ex- penses of the courts of the United States. The Commission may employ such attorneys as it finds necessary for proper legal aid and service of the Commission or its members in the conduct of their work or for proper representation of the public in- terests in investigations made by it or cases or pro- ceedings pending before it, whether at the Commis- sion's own instance or upon complaint, or to appear for and represent the Commission in any case pend- ing in the Commerce Court; and the expenses of such employment shall be paid out of the appropria- tion for the Commission. If any carrier fails or neglects to obey any order of the Commission other than for the payment of money, while the same is in effect, the Interstate Com- merce Commission or any party injured thereby, or the United States, by its Attorney General, may ap- ply to the Commerce Court for the enforcement of such order. If, after hearing, that Court determines that the order was regularly made and duly served, and that the carrier is in disobedience of the same, the Court shall enforce obedience to^such order by a writ of injunction or other proper process, mandatory or otherwise, to restrain such carrier, its officers, agents, or representatives, from further disobedience Punishm e n t b y forfeiture for refusal to obey order of Comm i 8 s i o n under section 15. F o r. f e iture payable into Treasury and recoverable in civil suit. Duty of dis- trict attorneys to prosecute. Costs and expenses to be paid out of ap- propriation for court expenses. Comm ission may employ at- torneys. Comm erce Court to en- force orders other than for payment of money. 513 APPENDIX. of such order, or to enjoin upon it or them obedience to the same. contraitB^ ^"ind '^^^ copies of Schedules and classifications and tar- annuai reports ifpg of rates, fares, and charges, and of all contracts, filedwitli ,' DJ c m m i ssion agreements, and arrangements between common car- ordB.^recelvabie riers filed with the Commission as herein provided, evidence* 'cer^ ^^id the statistics, tables, and figures contained in the eSctT^'ther" annual or other reports of carriers made to the Com- fac^ *evWenoe* ^^1^^!°^ ^s required under the provisions of this Act shall be preserved as public records in the custody of the secretary of the Commission, and shall be received as prima facie evidence of what they purport to be for the purpose of investigations by the Commission and in all judicial proceedings; and copies of and extracts from any of said schedules, classifications, tariffs, contracts, agreements, arrangements, or re- ports, made public record as aforesaid, certified by the secretary, under the Commission's seal, shall be received in evidence with like effect as the originals. ciay''^ant''"r™ ^^°- ^^^- i^^^e^ Juue 29, 1906.) That after hearings. a dccision, order, or requirement has been made by the Commission in any proceeding any party thereto may at any time make application for rehearing of the same, or any matter determined therein, and it shall be lawful for the Commission in its discretion to grant such a rehearing if sufficient reason therefor f o't ^rehearing ^^ made to appear. Applications for rehearing shall shall not oper- be governed by such general rules as the Commission p r e e edings, may establish. No such application shall excuse any unless so or- • j. i ■ -xi i • t • • dered by Com- Carrier irom complying with or obeying any decision, mission. order, or requirement of the Commission, or operate in any manner to stay or postpone the enforcement thereof, without the special order of the Commission. In case a rehearing is granted the proceedings there- upon shall conform as nearly as may be to the pro- ceedings in an original hearing, except as the Com- mission may otherwise direct ; and if, in its judgment, after such rehearing and the consideration of all facts, including those arising since the former hearing, it shall appear that the original decision, order, or re- quirement is in any respect unjust or unwarranted, may °on "ihlw" ^^® Commission may reverse, change, or modify the chan'e ormod- ®^"^® accordingly. Any decision, order, or require- ify order. mcut made after such rehearing, reversing, changing. APPENDIX. 513 Parties may appear in per- son or by at- torney. OfScial seal. or modifying the original determination shall be sub- ject to the same provisions as an original order. Sec. 17. {As amended March 2, 1889.) That Commission the Commission may conduct its proceedings in such its own pro- manner as will best conduce to the proper dispatch of "**""■ business and to the ends of Justice. A majority of the Commission shall constitute a quorum for the transaction of business^ but no Commissioner shall participate in any hearing or proceeding in which he has any pecuniary interest. Said Commission may, from time to time, make or amend such general rules or orders as may be requisite for the order and regu- lation of proceedings before it, including forms of notices and the service thereof, which shall conform, as nearly as may be, to those in use in the courts of the United States. Any party may appear before said Commission and be heard, in person or by attorney. Every vote and ofBcial act of the Commission shall be entered of record, and its proceedings shall be public upon the request of either party interested. Said Commission shall have an official seal, which shall be judicially noticed. Either of the members of the Commission may administer oaths and affirma- tions and sign subpoenas. Sec. 18. (As amended March 2, 1889.) [See section 2Jf, increasing salaries of Commissioners.'] That each Commissioner shall receive an annual sal- ary of seven thousand five hundred dollars, payable in the same manner as the judges of the courts of the United States. The Commission shall appoint a sec- retary, who shall receive an annual salary of three thousand five hundred dollars,^ payable in like man- ner. The Commission shall "have authority to em- ploy and fix the compensation of such other employees as it may find necessary to the proper performance of its duties. Until otherwise provided by law, the Commission may hire suitable offices for its use, and shall have authority to procure all necessary office supplies. Witnesses summoned before the Commis- sion shall be paid the same fees and mileage that are feeJ^^'*"*^^'^ paid witnesses in the courts of the United States. All of the expenses of the Commission, including all necessary expenses for transportation incurred by 1 Increased to $5,000 by sundry civil act of March 4, 1907, 34 Stat. L., 1311. 514 APPENDIX. the Commissioners, or by their employees under their orders, in making any investigation, or upon official business in any other places than in the city of Wash- ington, shall be allowed and paid on the presentation of itemized vouchers therefor approved by the chair- man of the Commission, fief "at'^wash^ S^*^- 1^- That the principal office of the Commis- ington. sion shall be in the city of Washington, where its gen- t h^e ^^''oommis- ^^^^ sessions shall be held ; but whenever the conven- «ion. ience of the public or the parties may be promoted, or delay or expense prevented thereby, the Commis- sion may hold special sessions in any part of the United States. It may, by one or more of the Com- ma^ ° "roseoute niissioners, prosecute any inquiry necessary to its inquiries by one duties, in any part of the United States, into any members in any matter or questiou of fact pertaining to the business United" states.^ of any common carrier subject to the provisions of this Act. /■°'«?^™«'l* Sec. 19a. That the Commission shall, as herein- o f Marcn 1, ' 1913- after prcfvided, investigate, ascertain, and report the value of all the property owned or used by every common carrier subject to the provisions of this Act. b ^"commission ^° enable the Commission to make such investiga- Experts. tiou and report, it is authorized to employ such ex- perts and other assistants as may be necessary. The Commission may appoint examiners who shall have power to administer oaths, examine witnesses, and ancf'hfventor'"" ^^® testimony. The Commission shall make an in- ventory which shall list the property of every com- mon carrier subject to the provisions of this Act in detail, and show the value thereof as hereinafter provided, and shall classify the physical property, as nearly as practicable, in conformity with the clas- sification of expenditures for road and equipment, as prescribed by the Interstate Commerce Commis- sion. ert^'^used^'for I'irst. In such investigation said Commission common - car- shall ascertain and report in detail as to each piece rier purposes. „ , j t i • i ■ of property owned or used by said common carrier for its purposes as a common carrier, the original cost to date, the cost of reproduction new, the cost of re- production less depreciation, and an analysis of the methods by which these several costs are obtained, and the reason for their differences, if any. The APPENDIX. 515 Commission shall in like manner ascertain and re- port separately other values, and elements of 'value, if any, of the property of such common carrier, and an analysis of the methods of valuation employed, and of the reasons for any differences between any such value, and each of the foregoing cost values. Second. Such investigation and report shall state in detail and separately from improvements the orig- inal cost of all lands, rights of way, and terminals owned or used for the purposes of a common carrier, and ascertained as of the time of dedication to pub- lic use, and the present value of the same, and sepa- rately the original and present cost of condemnation and damages or of purchase in excess of such original cost or present value. Third. Such investigation and report shall show separately the property held for purposes other than those of a common carrier, and the original cost and present value of the same, together with an analysis of the methods of valuation employed. Fourth. In ascertaining the original cost to date of the property of such common carrier the Commis- sion, in addition to such other elements as it may deem necessary, shall investigate and report upon the history and organization of the present and of any previous corporation operating such property; upon any increases or decreases of stocks, bonds, or other securities, in any reorganization; upon moneys received by any such corporation by reason of any issues of stocks, bonds, or other securities; upon the syndicating, banking, and other financial arrange- ments under which such issues were made and the expense thereof; and upon the net and gross earn- ings of such corporations; and shall also ascertain and report in such detail as may be determined by the Commission upon the expenditure of all moneys and the purposes for which the same were expended. Fifth. The Commission shall ascertain and re- port the amount and value of any aid, gift, grant of right of way, or donation, made to any such common carrier, or to any previous corporation operating such property, by the Government of the United States or by any State, county, or municipal government, or by individuals, associations, or corporations ; and it other prop- erty. Value of real property. Property held for other than common - car- rier purposes. Corporate or- ganization. Stocks and bonds. Earnings and expenditures. Grants from United States. 516 APPENDIX. r^t'"* °* '*"* shall also ascertain and report the grants of land to any such common carrier, or any previous corpora- tion operating such property, by the Government of the United States, or by any State, county, or munici- pal government, and the amount of money derived from the sale of any portion of such grants and the value of the unsold portion thereof at the time ac- quired and at the present time, also, the amount and Concessi o n s value of any concession and allowance made by such made by car- •' tt -j. j rier. common carrier to the Government of the United States, or to any State, county, or municipal gov- ernment in consideration of such aid, gift, grant, or donation, rooedure °* Except as herein otherwise provided, the Com- mission shall have power to prescribe the method of procedure to be followed in the conduct of the investigation, the form in which the results of the valuation shall be submitted, and the classification of the elements that constitute the ascertained value, and such investigation shall show the value of the property of every common carrier as a whole and separately the value of its property in each of the several States and Territories and the District of Columbia, classified and in detail as herein required. and''re^or?*'o" Such investigation shall be commenced within investigation. sixty days after the approval of this Act and shall be prosecuted with diligence and thoroughness, and the result thereof reported to Congress at the be- ginning of each regular session thereafter until com- pleted. ai • i regulations concerning fares or freights, or agree- ments, arrangements, or contracts affecting the same as the Commission may require ; and the Commission may, in its discretion, for the purpose of enabling it the better to carry out the purposes of this Act, pre- scribe a period of time within which all common car- riers subject to the provisions of this Act shall have, as near as may be, a uniform system of accounts, and the manner in which such accounts shall be kept. ons'to*be flied ^^^^ detailed reports shall contain all the required ■with oomtois- statistics for the period of twelve months ending on tember SO of the thirtieth day of June in each year, or on the year. thirty-first day of December in each year if the Com- APPENDIX. 521 mission by order substitute that period for the year ending June thirtieth, and shall be made out under oath and filed with the Commission at its office in Washington within three months after the close of the year for which the report is made, unless addi- tional time be granted in any case by the Commis- sion ; and if any carrier, person, or corporation sub- ject to the provisions of this Act shall fail to make and file said annual reports within the time above specified, or within the time extended by the Commis- sion, for making and filing the same, or shall fail to make specific answer to any question authorized by the provisions of this section within thirty days from the time it is lawfully required so to do, such party shall forfeit to the United States the sum of one hundred dollars for each and every day it shall con- tinue to be in default with respect thereto. The Com- mission shall also have authority by general or spe- cial orders to require said carriers, or any of them, to file monthly reports of earnings and expenses, and to file periodical or special, or both periodical and special, reports concerning any matters about which the Commission is authorized or required by this or any other law to inquire or to keep itself informed or which it is required to enforce ; and such periodical or special reports shall be under oath whenever the Commission so requires ; and if any such carrier shall fail to make and file any such periodical or special report within the time fixed by the Commission, it shall be subject to the forfeitures last above pro- vided. Said forfeitures shall be recovered in the manner provided for the recovery of forfeitures under the pro- visions of this Act. The oath required by this section may be taken before any person authorized to administer an oath by the laws of the State in which the same is taken. The Commission may, in its discretion, prescribe the forms of any and all accounts, records, and memoranda to be kept by carriers subject to the pro- visions of this Act, including the accounts, records, and memoranda of the movement of traffic as well as the receipts and expenditures of moneys. The Com- mission shall at all times have access to all accounts, Com mission may grant ad- ditional time. Penalty. Monthly or periodical re- ports. Recovery forfeitures. of Oath to an- n 11 a 1 reports, how taken. Com mission may prescribe forms of ac- counts, records, and memo- randa, and haye access thereto. 533 APPENDIX. records, and memoranda kept by carriers subject to keep'^'no' othe? ^^^^ ^^^> ^^^ ^* ^^^^^ ^^ TinlawM for such carriers to accounts than keep any other accounts, records, or memoranda than tnosepre- scribed by Com- those prescribed or approved by the Commission, and it may employ special agents or examiners, who shall m a^'^^empio" -^^^^ authority under the order of the Commission to special exam- inspect and examine any and all accounts, records, spect accounts and memoranda kept by such carriers. This provision shall apply to receivers of carriers and operating trus- tees. Punishment j^ gggg gf failure or refusal on the part of any such of carrier by -^ "^ forfeiture for carrier, receiver, or trustee to keep such accounts, accounts or records, and memoranda on the books and in the man- records as pre- -i t i ji /^ - • j_ i •± t_ scribed by Com- ucT prescribed by the Commission, or to submit such aYfow'' iiTspec" accounts, records, and memoranda as are kept to the tion thereof. inspection of the Commission or any of its authorized agents or examiners, such carrier, receiver, or trustee shall forfeit to the United States the sum of five hundred dollars for each such offense and for each and every day of the continuance of such offense, such forfeitures to be recoverable in the same manner as other forfeitures provided for in this Act. f^"°'rs'n ^f'or -^^^ per SOU who shall willfuUy make any false entry- false entry in in the accounts of any book of accounts or in any accounts or rec- t i i n - i i n ords, or mnti- record or memoranda kept by a earner, or who shall counts or rec- willfully destroy, mutilate, alter, or by any other keeping"^ other means or device falsify the record of any such ac- t h^oTe^ p?™ count, record, or memoranda, or who shall willfully scribed. Pine neglect or fail to make full, true and correct entries or imprisonment ° ' or both. m such accounts, records, or memoranda of all facts and transactions appertaining to the carrier's business, or shall keep any other accounts, records, or memo- randa than those prescribed or approved by the Com- mission, shall be deemed guilty of a misdemeanor, and shall be subject, upon conviction in any court of the United States of competent jurisdiction, to a fine of not less than one thousand dollars nor more than five thousand dollars or imprisonment for a term not less than one year nor more than three years, or both such fine and imprisonment : Provided, ofF^ruM^ls! '^^^^ *^^ Commission may in its discretion issue or- 1909. ' ders specifying such operating, accounting, or finan- may "pOTmit ^ae° cial papers, records, books, blanks, tickets, stubs, or struotion of reo- documeuts of Carriers which may, after a reasonable APPENDIX. 523 time, be destroyed, and prescribing the length of time such books, papers, or documents shall be preserved. Any examiner who divulges any fact or informa- tion which. may come to his knowledge during the course of such examination, except in so far as he may be directed by the Commission or by a court or judge thereof, shall be subject, upon conviction in any court of the United States of competent jurisdiction, to a fine of not more than five thousand dollars or imprisonment for a term not exceeding two years, or both. That the circuit and district courts of the United States shall have jurisdiction, upon the application of the Attorney General of the United States at the request of the Commission, alleging a failure to com- ply with or a violation of any of the provisions of said Act to regulate commerce or of any Act supple- mentary thereto or amendatory thereof by any com- mon carrier, to issue a writ or writs of mandamus commanding such common carrier to comply with the provisions of said Acts, or any of them. And to carry out and give effect to the provisions of said Acts, or any of them, the Commission is hereby authorized to employ special agents or examiners who shall have power to administer oaths, examine wit- nesses, and receive evidence. That any common carrier, railroad, or transporta- tion company subject to the provisions of this Act receiving property for transportation from a point in one State or Territory or the District of Columbia to a point in another State, Territory, District of Colum- bia, or from any point in the United States to a point in an adjacent foreign country shall issue a receipt or bill of lading therefor, and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common car- rier, railroad or transportation company to which such property may be delivered or over whose line or lines such property may pass within the United States or within an adjacent foreign country when transported on a through bill of lading, and no contract, receipt, rule, regulation, or other limitation of any character whatsoever, shall exempt such common carrier, rail- road, or transportation company from the liability Pun isliment of special ex- aminer who di- Tulgea informa- t i o n without authority. Fine or imprisonment or both. United States courts may is- sue mandamus to compel com- pliance with provisions o f Act. C-o m mission may employ special exam- iners to receive evidence. Initial carrier liable for loss or damage on through ship- ments. 524 APPENDIX. hereby imposed; and any such common carrier, rail- road, or transportation company so receiving prop- erty for transportation from a point in one State, Territory, or District of Columbia to a point in an- other State or Territory, or from a point in a State or Territory to a point in the District of Columbia, or from any point in the United States to a point in nabii?ty*for''iosB ^^ adjacent foreign country, or for transportation caused J? "a^- wholly within a Territory shall be liable to the law- ful holder of such receipt or bill of lading or to any party entitled to recover thereon, whether such receipt or bill of lading has been issued or not, for the full actual loss, damage, or injury to such property caused by it or by any siich common carrier, railroad, or transportation company to which such property may be delivered or over whose line or lines such prop- erty may pass within the United States or within an adjacent foreign country when transported on a through bill of lading, notwithstanding any limi- tation of liability or limitation of the amount of re- covery or representation or agreement as to value in any such receipt or bill of lading, or in any contract, rule, regulation, or in any tariff filed with the Inter- state Commerce Commission; and any such limita- tion, without respect to the manner or form in which it is sought to be made is hereby declared to be un- lawful and void: Provided, however. That if the iowed^*w''h e re g^O'^s ^^^ hidden from view by wrapping, boxing, or goods are so other means, and the carrier is not notified as to the they cannot be character of the goods, the carrier may require the ^^®"' shipper to specifically state in writing the value of the goods, and the carrier shall not be liable beyond the amount so specifically stated, in which case the Interstate Commerce Commission may establish and maintain rates for transportation, dependent upon the value of the property shipped as specifically stated in writing by the shipper. Such rates shall be pub- lished as are other rate schedules : Provided, further. That nothing in this section shall deprive any holder of such receipt or bill of lading of any remedy or right of action which he has under the existing law : Provided, further. That it shall be unlawful for any such common carrier to provide by rule, contract, regulation, or otherwise a shorter period for giving APPENDIX. 525 notice of claims than ninety days and for the filing Provisions as of claims for a shorter period than four months, and ing ™ otice ^'o£ for the institution of suits than two years : Provided, a°nd' ''bfinglkg however, That if the loss, damage, or injury com- *°*""'" plained of was due to delay or damage while being loaded or unloaded, or damaged in transit by care- lessness or negligence, then no notice of claim nor filing of claim shall be required as a condition pre- cedent to recovery. That the common carrier, railroad, or transporta- initial carrier I. . . 1 • 11 ™^y nave re- tion company issuing such receipt or bill of lading course upon car- shall be entitled to recover from the common carrier, for^io's^s^orTam^ railroad, or transportation company on whose line the ^^°' loss, damage, or injury shall have been sustained the amoimt of such loss, damage, or injury as it may be required to pay to the owners of such property, as may be evidenced by any receipt, judgment, or tran- script thereof. ISTo suit brought in any State court of competent of'*jSkua"^™20* jurisdiction against a railroad company, or other cor- ^sn. poration, or person, engaged in and carrying on the business of a common carrier, to recover damages for delay, loss of, or injury to property received for trans- portation by such common carrier under section twenty of the Act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, as amended June twenty-ninth, nineteen hundred and six, April thirteenth, nineteen hundred and eight, February twenty-fifth, nineteen hundred and nine, and June eighteenth, nineteen hundred and ten, shall be removed to any court of the United States where the matter in controversy does not exceed, exclusive of interest and costs, the sum or value of $3,000. Sec. 31. (As amended March 2, 1889.) That the po^^"*Jf ^^y^l Commission shall, on or before the first day of Commission to December in each year, make a report, which shall be transmitted to Congress, and copies of which shall be distributed as are the other reports transmitted to Congress. This report shall contain such informa- tion and data collected by the Commission as may be considered of value in the determination of questions connected with the regulation of commerce, together with such recommendations as to additional legisla- tion relating thereto as the Commission may deem 536 APPENDIX. necessary; and the names and compensation of the persons employed by said Commission. propMty°%hSt ®^°- ^^- (^* amended March 2, 1889, and Feb- ull ^l a*"'r^* ruary 8, 1895.) \_See section 1, 5th par.] That duced rates. nothing in this Act shall prevent the carriage, storage, or handling of property free or at reduced rates for the United States, State, or municipal governments, or for charitable purposes, or to or from fairs and expositions for exhibition thereat, or the free car- riage of destitute and homeless persons transported by charitable societies, and the necessary agents em- Miieage, ex- ployed in such transportation, or the issuance of mile- cursion, or com- r^ •/ -l y • i x mutation pas- age, excursion, or commutation passenger tickets ; nothing in this Act shall be construed to prohibit any common carrier from giving reduced rates to ministers of religion, or to municipal governments for the transportation of indigent persons, or to inmates of the National Homes or State Homes for Disabled Volunteer Soldiers, and of Soldiers' and Sailors' Or- phan Homes, including those about to enter and those returning home after discharge, under arrangements Passes and -(pith the boards of managers of said homes; nothing tion to officers in this Act shall be construed to prevent railroads and employees • ■ j. ■ j. j.i • ai j of railroad irom giving tree carriage to their own omcers and companies. employees, or to prevent the principal oflBcers of any railroad company or companies irom exichangitig passes or tickets with other railroad companies for Provisions oi their oiSccrs and employees ; and nothing in this Act dition to reme- contained shall in any way abridge or alter the reme- dies existing at... ... , , ixiiij. common 1 a.w . dies now existing at common law or by statute, but «on*not afEecfed the provisions of this Act are in addition to such ^^ ■*■"*• remedies : Provided, That no pending litigation shall in any way be affected by this Act : Provided fiirther, Joint inter- That nothing in this Act shall prevent the issuance changeable ^ ^ five - thousand- of joint interchangeable five-thousand-mile tickets, Amount of free with Special privileges as to the amount of free bag- baggage. ^^^^ ^^^ ^^^ ^^ Carried under mileage tickets of one thousand or more miles. But before any common carrier, subject to the provisions of this Act, shall issue any such joint interchangeable mileage tickets with special privileges, as aforesaid, it shall file with the Interstate Commerce Commission copies of the joint tariffs of rates, fares, or charges on which such joint interchangeable mileage tickets are to be based, APPENDIX. 527 together with specifications of the amount of free bag- gage permitted to be carried under such tickets, in the same manner as common carriers are required to do with regard to other joint rates by section six of this Act; and all the provisions of said section six relating to joint rates, fares, and charges shall be observed by said common carriers and enforced by the Interstate Commerce Commission as fully with regard to such joint interchangeable mileage tickets as with regard to other joint rates, fares, and charges referred to in said section six. It shall be unlawful for any common carrier that has issued or authorized to be issued any such joint interchangeable mileage tickets to demand, collect, or receive from any person or persons a greater or less compensation for transpor- tation of persons or baggage under such joint inter- changeable mileage tickets than that required by the rate, fare, or charge specified in the copies of the joint tarifE of rates, fares, or charges filed with the Commission in force at the time. The provisions of section ten of this Act shall apply to any violation of the requirements of this proviso. Sec. 23. {Added March 2, 1889.) That the cir- cuit and district courts of the United States shall have jurisdiction upon the relation of any person or persons, firm, or corporation, alleging such violation by a common carrier, of any of the provisions of the Act to which this is a supplement and all Acts amendatory thereof, as prevents the relator from hav- ing interstate trafiic moved by said common carrier at the same rates as are charged, or upon terms or conditions as favorable as those given by said com- mon carrier for like traffic under similar conditions to any other shipper, to issue a writ or writs of man- damus against said common carrier, commanding such common carrier to move and transport the traf- fic, or to furnish cars or other facilities for trans- portation for the party applying for the writ: Pro- vided, That if any question of fact as to the proper compensation to the common carrier for the service to be enforced by the writ is raised by the pleadings, the writ of peremptory mandamus may issue, not- withstanding such question of fact is undetermined, upon such terms as to security, payment of money Bates to be published, filed, and observed. Penalties. United States courts to com- mand movement o f interstate traffic or the furnishing o f cars or other t r a nsportation facilities. 538 APPENDIX. into the court, or otherwise, as the court may think proper, pending the determination of the question of cuSuStfve. '^ ^^^^'- Provided, That the remedy hereby given by writ of mandamus shall be cumulative, and shall not be held to exclude or interfere with other remedies provided by this Act or the Act to which it is a sup- plement, to*' consul'""^ ^^^- ^*- i^ transportation cTimes Within the district in which such violation was committed, or through which the transportation may have been conducted; and whenever the offense is begun in one Jurisdiction and completed in another it may be dealt with, inquired of, tried, determined, and punished in either jurisdiction in the same man- ner as if the offense had been actually and wholly committed therein, liabfe'for'aots^of ^^ construiug and enforcing. the provisions of this agents. scction, the act, omission, or failure of any officer, agent, or other person acting for or employed by any common carrier, or shipper, acting within the scope of his employment, shall in every case be also deemed to be the act, omission, or failure of such carrier or partfcfpafed^ in shipper as Well as that of the person. Whenever any by carrier shall, carrier files with the Interstate Commerce Commis- as against such . • ,• i , n _li carrier, be sion Or publishes a particular rate under the provis- ions of the Act to regulate commerce or Acts amenda- tory thereof, or participates in any rates so filed or published, that rate as against such carrier, its ofii- cers or agents, in any prosecution begun under this Act shall be conclusively deemed to be the legal rate, and any departure from such rate, or any offer to de- part therefrom, shall be deemed to be an offense un- der this section of this Act. Any person, corporation, or company who shall de- liver property for interstate transportation to any common carrier, subject to the provisions of this Act, or for whom as consignor or consignee, any such car- rier shall transport property from one State, Terri- tory, or the District of Columbia to any other State, Territory, or the District of Columbia, or foreign country, who shall knowingly by employee, agent, officer, or otherwise, directly or indirectly, by or through any means or device whatsoever, receive or accept from such common carrier any sum of money or any other valuable consideration as a rebate or deemed legal. APPENDIX. 531 offset against the regular charges for transportation of such property, as fixed by the schedules of rates provided for in this Act, shall in addition to any pen- alty provided by this Act forfeit to the United States a sum of money three times the amount of money so received or accepted and three times the value of any other consideration so received or accepted, to be ascertained by the trial court ; and the Attorney Gen- eral of the United States is authorized and directed, whenever he has reasonable grounds to believe that any such person, corporation, or company has know- ingly received or accepted from any such common carrier any sum of money or other valuable considera- tion as a rebate or offset as aforesaid, to institute in any court of the United States of competent jurisdic- tion a civil action to collect the said sum or sums so forfeited as aforesaid; and in the trial of said action all such rebates or other considerations so received or accepted for a period of six years prior to the com- mencement of the action, may be included therein, and the amount recovered shall be three times the total amount of money, or three times the total value of such consideration, so received or accepted, or both, as the case may be. Sec. 2. That in any proceeding for the enforce- ment of the provisions of the statutes relating to in- terstate commerce, whether such proceedings be insti- tuted before the Interstate Commerce Commission or be begun originally in any circuit court of the United States, it shall be lawful to include as parties, in ad- dition to the carrier, all persons interested in or af- fected by the rate, regulation, or practice under con- sideration, and inquiries, investigations, orders, and decrees may be made with reference to and against such additional parties in the same manner, to the same extent, and subject to the same provisions as are or shall be authorized by law with respect to car- riers. Sec. 3. That whenever the Interstate Commerce Commission shall have reasonable ground for belief that any common carrier is engaged in the carriage of passengers or freight traffic between given points at less than the published rates on file, or is commit- ting any discriminations forbidden by law, a petition F o r f e iture may be enforced against receiv- ers of rebates. Persons inter- ested in matters involved i n cases before In- terstate Com- merce Commis- sion or cir- cuit court may be made parties and shall be subject to or- ders or decrees. Court may re- strain depar- tures from pub- lished rates or any discrimina- tion prohibited by law. 533 APPENDIX. may be presented alleging such facts to tlie circuit court of the United States sitting in equity having jurisdiction; and when the act complained of is al- leged to have been committed or as being committed in part in more than one Judicial district or State, it may be dealt with, inquired of, tried, and determined in either such judicial district or State, whereupon it shall be the duty of the court summarily to inquire into the circumstances, upon such notice and in such manner as the court shall direct and without the formal pleadings and proceedings applicable to ordi- nary suits in equity, and to make such other persons or corporations parties thereto as the court may deem necessary, and upon being satisfied of the truth of the allegations of said petition said court shall enforce an observance of the published tariffs or direct and re- quire a discontinuance of such discrimination by proper orders, writs, and process, which said orders, writs, and process may be enforceable as well against the parties interested in the traffic as against the car- rier, subject to the right of appeal as now provided by law. It shall be the duty of the several district attorneys of the United States, whenever the Attor- ney General shall direct, either of his ovm motion or upon the request of the Interstate Commerce Com- mission, to institute and prosecute such proceedings, and the proceedings provided for by this Act shall not preclude the bringing of suit for the recovery of damages by any party injured, or any other action provided by said Act approved February fourth, eighteen hundred and eighty-seven, entitled " An com°er atteni- ^^^ ^° regulate Commerce " and the Acts amendatory ance and testi- thereof. And in proceedings under this Act and the nesses and pro- Acts to regulate Commerce the said courts shall have and papers. '"' ^ the power to compel the attendance of witnesses, both upon the part of the carrier and the shipper, who shall be required to answer on all subjects relating directly or indirectly to the matter in controversy, and to compel the production- of all books and papers, both of the carrier and the shipper, which relate di- rectly or indirectly to such transaction ; the claim that Immunity. giich testimony or evidence may tend to criminate the person giving such evidence shall not excuse such per- son from testifying or such corporation producing its APPENDIX. 533 books and papers, but no person shall be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concern- ing which he may testify or produce evidence docu- mentary or otherwise in such proceedings: Provided, That the provisions of an Act entitled " An Act to expedite the hearing and determination of suits in equity pending or hereafter brought under the Act of July second, eighteen hundred and ninety, entitled ' An Act to protect trade and commerce against un- lawful restraints and monopolies,' 'An Act to regu- late commerce,' approved February fourth, eighteen hundred and eighty-seven, or any other acts having a like purpose that may be hereafter enacted, ap- proved February eleventhi, nineteen hundred and three," shall apply to any case prosecuted under the direction of the Attorney General in the name of the Interstate Commerce Commission. Sec. 4. That all Acts and parts of Acts in conflict with the provisions of this Act are hereby repealed, but such repeal shall not affect causes now pending nor rights which have already accrued, but such causes shall be prosecuted to a conclusion and such rights enforced in a manner heretofore provided by law and as modified by the provisions of this Act. Sec. 5. That this Act shall take effect from its pas- sage. E X p e diting Act of Feb. 11, 1903, to apply in cases prose- cuted under di- rection of At- torney General in name of In- terstate Com- merce Commis- sion. Conflic ting laws repealed. INDEX. [References are to pages.] ADEQUATE FACILITIES, no duty to serve if inn Is full, 393, 394. what facilities innkeeper must furnish, 394r-396. guest has no right to particular room, 396. carrier receiving no franchise not bound to increase facilities, 397. water company must furnish adequate pressure, 398, 399. telegraph company, not having, must string more wires, 400-i02. duty of water works to extend service to new district, 402-405. toll service does not constitute, in case of telephone company, 405-409. railroads must furnish rolling-stock for ordinary traffic, 409-414. special cars for perishable goods, 414, 415. Pullman and dining service, 416-419. duty of railroads to establish stations, 419-426. under statute, 427-430. duty with regard to switch connections, 431-436. under statute, 436-440. courteous treatment, 441—444. ASSOCIATED PRESS, duty to serve, 72-86. B. BASES OF PUBLIC SERVICE DUTIES, common callings, 1-10. exercise of franchises, 10-30. legislation, 31-65. economic monopoly, 66-86. c. CAPITAL. See Rates. CATTLE, duty of railroad to carry, 100, lOln. COLOR, refusal to serve because of, 141. COMMODITIES CLAUSE, applied, 164-167. COMMON CALLINGS, duty of those engaged in, to use care, 1. duty of those engaged in, to serve, 2-10. 535 536 INDEX. [References are to pages.] COMMON CALLINGS (continued). who were anciently engaged in, 3, 8n. innkeepers, 2, 3, 4, 8n. smiths, 2, 3, 8n. tailors, 3. common carriers, 3, 6n, 8n. criminal liability of, for refusal to serve, 4. survivors of those engaged in, 8n. physicians not now engaged in, 8n. Pullman service as a, 9. telephone service as a, 10. COMMON CARRIERS. See Ratleoads. duty to serve, 3, 6n. who are, 8n, 87. pipe-lines as, 62-65. what service must be rendered by, 87-94, 96-128. who must be served and excuses for refusal to serve, 137-150. Commodities Clause of Interstate Commerce Act, 164^167. rules for the service, 168-186, 191-200. rates fixed by, 212-217. State's power to fix rates and its delegation, 220-227. limitation on State's power to fix rates, 238-259, 263-265. operating expenses and maintenance, 265-270, 272, 276-288. valuation for rate purposes, 288-292, 297-301, 318-321, 324r-326. discrimination, 338-382, 384r-392. adequate facilities, 397, 409-^40. withdrawal from service, 447^61, 472--475. COST OF PRODUCTION LESS DEPRECIATION, as evidence of present value, 297-301, 304, 308, 309. COTTON PRESS COMPANY, duty to serve, 66-71. D. DEPRECIATION, maintenance and, 277-281. S making good past, 283. DISCRIMINATION, in service rendered, illegal at common law, 335-338. distribution of rolling-stock, 362-364. prorating of cars, 364r-371. in rates, legal at common law, 338-341. as evidence of unreasonable rates, 341-344. illegal at common law, 344^347. under Interstate Commerce Act, 348, 349. party rates, 349-352. based upon the amount of shipment, 352-355. competition as justifying, under sec. 2 of the Interstate Com- merce Act, 355-357. Under sees. 3 and 4, 357-362. INDEX. 537 [References are to pages.] DISOEIMINATION (continued,). demanding prepayment of one and giving credit to others, 371-375. between owners and forwarding agents, 375-380. in favor of one shipping finished product, 380-382. in favor of one agreeing to give entire business to carrier, 382. based upon different uses of the commodity, 383. free pass in exchange for advertising, 884-387. payment to shipper for services due from carrier, 388-392. DISTRIBUTION OF ROLLING-STOCK, to avoid illegal discrimination, 362-364. DUTY TO SERVE PUBLIC, common calling as basis of, 1-10. exercise of franchise as basis of, 10-30. legislation as basis of, 31-65. economic monopoly as basis of, 66-86. E. ECONOMIC MONOPOLY, as ground for legislative regulation of rates, 35-37, 46, 52, 56. duty of those exercising, to serve, 66-86. ELECTRIC COMPANIES, duty to serve, 20n, 23. may be granted franchises, 20n, 22. valuation for rate purposes, 301-303. withdrawal of, because unreasonable rates are imposed, 464r466. ELKINS ACT, 528-533. EMINENT DOMAIN, purposes for which, may be granted, lln, 13. water company as recipient of grant of, 11, 13. duty of one exercising, to serve, 12, 13. use of street imder, 17. electric company as recipient of grant of, 20. gas company as recipient of grant of, 20n. railroads as recipients of grants of, 97. EXCUSES FOR REFUSAL TO SERVE, illegality, 138, 150. unpaid charges, 139, 152n, 154, 156n. strike, 139. color, 141. ticket scalping, 143. intoxication, 145, 147. disease, 146. danger to the would-be patron, 148-150. nonresidence, 152-154. limited supply, 156-160. EXPRESS COMPANIES, railroads' duty to furnish" facilities to, 112-122. are common carriers, 117, 138. illegality of shipment as excuse for refusal to serve, 138. 538 INDEX. [References are to pages.] F. FORI'EITURE OF FRANCHISE, proper action for, 476-^79. FRANCHISE, what Is a, lOn. duty of one exercising, to serve, 10-30. who may exercise, 12, 13, 18, 20n, 22. eminent domain is, 17, 18, 20n. use of streets is, 17. legal monopoly Is, 27. receipt of, as affecting service to be rendered by common carrier, 98-100. value of, for rate regulation, 301-303. duration of indefinite, and right to abandon it, 461^63. right to transfer, 466-471. G. GAS COMPANIES, may be granted franchises, 14, 20n. duty to serve, 14, 16, 20n. what service must be rendered, 134. unpaid charges for piping as ground for refusal to serve, 155. unpaid charges for former service as ground for refusal to serve, 156n. limited supply of natural gas as ground for refusal to serve, 156-160. rules for the service, 201-203. legislative delegation of rate fixing power, 227-231. operating expenses and maintenance, 274^-276. valuation for rate purposes, 322, 323. return which should be earned, 328. discrimination, 383. proper action against, for forfeiture of franchises, 476-479. GOING CONCERN, as element of value for rate regulation, 309-315. GRAIN ELEVATORS, legislative regulation of rates of, 31-56. ILLEGALITY, service may not be required to further, 138, 144, 150. IMPROVEMENTS, whether to be distinguished from maintenance, 277-281. projecting cost of, 281. INNKEEPERS, duty to serve, 4. who are, 8n, 95. service to be rendered, 95. who must be served, 6-8, 135-137. adequate facilities, 393-396. withdrawal from public service, 445. INDEX. 539 [References are to pages.] INSUFFICIENT SUPPLY, refusal to supply natural gas because of, 156-160. INSURANCE COMPANIES, legislative regulation of rates, 57-61. INTEREST DURING CONSTRUCTION, as element of value for rate regulation, 306. INTERSTATE COMMERCE ACT. Text of Act, 481-528. pipe-lines are carriers under, 62-65. Commodities Clause of, 164^167. discrimination is illegal under, 348, 349. party rates legal under, 349-352. competition under sec. 2 of, 355-357. under sees. 3 and 4 of, 357-362. INTERSTATE COMMERCE COMMISSION, power to fix rates, 231-237. IRRIGATION COMPANIES, duties to the public, 20n. INVESTMENT, importance of, in rate cases, 290, 296. L. LAND VALUE, in rate regulation, 318-323. LEGAL MONOPOLY, duty of those exercising, to serve, 27-30. LEGISLATION, public service duties imposed by, 31-65. as to rate regulation, 220-334. M. MONOPOLY. See Economic Monopoly, Legal Monopoly. 0. OPERATING EXPENSES. See Rates. P. PIECEMEAL CONSTRUCTION, as affecting value for rate regulation, 306. PIPE-LINES. as common carriers, 62-65. POLICE POWER, regulation of rates under, 31-61. PRORATING CARS, to avoid illegal discrimination, 364-371. PULLMAN CAR COMPANIES, engaged in a common calling, 9. duty to serve, 9. 540 INDEX. [Befereuces are to pages.] Q. QUO WARRAT>lTO, proper action for forfeiture of franchise, 476-479. R. RAILROADS, are common carriers, 98. what goods must be carried, 96-102. duty to carry cattle, 100, lOln. dogs, lOln. explosives, lOln. money as freight, lOln. cars of other railroads, 102n. show cars, 102. where delivery should be made, 103-106. where goods should be received, 105. no duty to carry beyond own line, 106. duty to enter Into through service agreement, 107-112. duty to give facilities to all express companies, 112-122. to cab and transfer men, 123-128. refusal to serve because of unpaid back charges, 139. strike, 139. color, 141. ticket scalping, 143. illegal purpose of patron, 144. intoxication, 145, 147. disease, 146. danger to would-be patron, 148-150. rules may be made for the service, 168-172. right to change rules, 171, 176-178. necessity of notice of rules, 173-186. examples of rules, 169, 173, 175, 177, 179, 186, 191, 193, 196, 198. breach of rules through fault of company's servant, 193-198. basis of rate fixing by company, 212-217. State's power to fix rates, 220-222. delegation of, 222-227, 231-287. courts may review rates under Equal Protection and Due Process Clauses, 238-250. right to review individual rates in a schedule, 250-259. when State by contract is precluded from fixing rates, 259, 263-265. operating expenses and maintenance, 265-270, 272, 276-288. valuation for rate purposes, 288-292, 297-301, 318-321, 324r-326. discrimination, 338-382, 384-392. adequate facilities, 409--440. as to duty of, to finish partly constructed road, 447-450. withdrawal from service, 450-461. right of relocation after construction, 472-475. RATE OF RETURN, in legislative rates, 326-334. INDEX. 541 [Eeferences are to pages.] BATES, fixed by one engaged in public service, 212-220. courts have no right to fix, 219, 220n. power of State to fix rates, 220-222. delegation of, 222-231. under Interstate Commerce Act, 231-237. legislative rates must not be confiscatory, 237-265. courts may review rates under Equal Protection and Due Process Clauses, 238-250. right to review Individual rates in a schedule, 250-259. when State by contract is precluded from fixing, 259-265. operating expenses and maintenance, 265-288. necessity and difliculty of determining, 265-268. must be shown not to be extravagant, 268, 269. injury caused by employee's negligence as, 269. expense of getting business as, 270. sinking fund to pay debts as, 271. interest on bonds as, 272. depreciation, maintenance and administration cost, 273-276. maintenance and improvements, 277-281. projecting cost of improvements over several years, 281. making good past depreciation, 283. apportioning expenses, 284r-288. capital upon which a return should be earned, 288-326. Importance of condemnation cases In fixing, 289. importance of amount invested in fixing, 290, 296. interstate and intrastate, 291. present value as, 293-296. market value as, 296n. elements of evidence in determining, 297, 349. cost of reproduction less depreciation as, 297-301, 304, 308, 309. value of franchise in determining, 301-303. piecemeal construction as affecting, 306. interest during construction as part of, 306. working capital as part of, 307. going concern value as part of, 309-315. when too large an Investment has been made, 316-318. increase in land value as part of, 318-323. invested surplus as part of, 323. apportionment of, to different branches of the business, 324r-326. rate of return which should be allowed, 326-334. RELOCATION, right of, after construction, 472-475. RESIDENT, . only has right to water service, 152-154. RIGHT TO SERVE THEMSELVES, aside from statute, 160-163. under Commodities Clause, 164-167. RULES FOB THE SERVICE, general right to make, 171-172, 201. notice of, 173-190. as to loading coal, 168-172. 542 iiTDEs. [References are to pages.] RULES FOR THE SERVICE (continued). as to place where transfer is good, 173, 174, as to through tickets, 175, 176. that ticket shall be bought before boarding train, 177, 178. as to time when ticket must be used, 179. as to trains upon which ticket may be used, 185, 186. as to time limit for filing claim, 186-190. forbidding sleeping in waiting room, 191-193. breach of, through fault of company's servant, 193-198. requiring payment of extra amount on trains, 193-195. requiring that ticket be shown, 195-198. as to bill which must be changed, 198-200. against waste of water, 20O. requiring a deposit, 202. reserving right of inspection of fixtures, 202. reserving right to cut off service at discretion, 202. as to telegraph free delivery limits, 204-206. requiring prepayment of answer to telegram tendered, 206-210. requiring patron to pay for piping to house, 210, 211. S. SERVICE TO BE RENDERED, what service must be rendered, 87-135. who must be served, 135-160. right of public service companies to serve themselves, 160-167. SHOW CARS, duty of railroad to haul, 102. STEAMSHIP COMPANIES, as common carriers, 90. not bound to increase facilities, 397. STOCKYARDS, legislative regulation of rates of, 57n. duty to serve, 72n. rate of return which should be allowed to, 331-334. STREETS, duty of those using, to serve, 14, 19. use of, as a franchise, 17. STRIKE, as excuse for refusal to serve, 139. SURPLUS, invested, as an element in value, 323. TAXATION, '''• aid through, imposes duty to serve, 30n. TELEGRAPH COMPANIES, duty to serve, 129. message destined for point beyond line of, 129. rule as to time limit for filing claim against, 186-190. rules as to free delivery limits, 2O4r-206. rule of, requiring prepayment of answer to telegram tendered, 206-210. adequate facilities, 400-^2, 441^44. INDEX. 543 [References are to pages.] TELEPHONE COMPANIES, engaged in a common calling, 10. duty to serve, 10. connecting service compelled by eminent domain, 130n. message destined for point beyond line of, 130. rigbt of telegraph company to service of, 131-134. illegality of patron's business as ground for refusal to serve, 150. back charges unpaid as ground for refusal to serve, 152n. right of city to contract avcay power to fix rates of, 260-263. valuation for rate purposes, 304r-312. adequate facilities, 405-409. right to transfer franchise, 466-471. THROUGH SEE,VICE, duty to enter into, 107-112. TOBACCO WAREHOUSES, legislative regulation of rates of, 57n. U. UNPAID CHARGES. carriers refusal to serve based upon, 139. telephone company's refusal to serve based upon, 152n. gas company's refusal to serve based upon, 154, 156n. VALUE, evidence as to, 249. present, 293-296. market, 296n. cost of reproduction less depreciation as measure of, 297-301, 304, 308, 309. franchise, 301-303. land, 318-323. W. WAGON CARRIER, may withdraw from public service at pleasure, 445. WAREHOUSES, exercising legal monopoly must serve, 24^-30. regulation of rates of, 31-57. owners of, cannot serve themselves, 160-163. WATER COMPANIES, ' may be granted franchises, 12, 14, 19. duty to serve, 12, 13, 19. who must be served by, 152-154. rules for the service of, 200, 210. basis of rate fixing by, 217-220. operating expenses and maintenance, 271, 273. valuation for rate purposes, 293-296, 316-318, 323. going value of, 313-315. return which should be earned by, 326-328, 329-331. adequate service, 398, 399, 402-^5. 544 INDE?. [References are to pages.] WITHDRAWAL FROM PUBLIC SERVICE, by innkeeper, 445. by wagon carrier, 445. by one put under public service duties by statute, 446n. no duty to complete partly constructed railway, 447-450. railway's discontinuing service on part of line, 45CM:58. when no injury is caused to the public, 458-461. duration of indefinite franchise and right to abandon, 461-463. unreasonable statutory rates as ground for, 464-466. right to transfer franchise, 466-i71. right of relocation after construction, 472-475. proper action for forfeiture of franchise, 476-479. WORKING CAPITAL, as an element of value for rate regulation, 307. KF 1091 A7 B9? Author Burdick, Charles Kellogg Title Cases on the law of public copy service... ■ Vf.-i'U^oI-^'m-Uivfi'^rtiB^"^^