Stone v. New Orleans Northeastern Railroad Company/Opinion of the Court

by Morrison Waite

United States Supreme Court

116 U.S. 352

Stone  v.  New Orleans Northeastern Railroad Company

 Argued: January 4, 1886. ---

This is a suit brought by the New Orleans & Northeastern Railroad Company to enjoin the railroad commission from enforcing the railroad supervision law of Mississippi against that company. It differs from the cases of Stone v. Farmers' Loan & Trust Co., ante, 334, and Stone v. Illinois Cent. R. Co., ante, 348, only in the charter provisions on which the claim of a contract exemption from legislative control as to fares and freights is made. These are as follows:

'Sec. 4. Be it further enacted that said company is hereby authorized and empowered to transport, carry, and convey persons and property on said railroad; to build and maintain a line of magnetic telegraph, and to operate the same along the line of said railroad; and to receive for such transportation, carrying, conveying, and telegraphing such tolls and charges as shall be from time to time established, fixed, and regulated by the directors of said railroad company.'

'Sec. 18. Be it further enacted that whenever any number of stockholders, representing three-fourths of the stock now subscribed to said railroad company, shall accept the powers, privileges, and franchises contained in the preceding sections of this act, the said company shall avail themselves of the benefit thereof, and that this act shall be liberally and favorably construed, so as to favor all the purposes and objects of the same and the operation of the provisions thereof: provided, that nothing contained in the charter shall be so construed as to prevent the legislature from regulating the rate of transportation for passage and freight over the same in this state: provided, further, that there shall be no discrimination in favor of any road.'

On their face, and under the rulings in other cases, these sections show no such contract. It is averred in the bill, however, and admitted by the demurrer, that in 1882 the state granted charters to six other railroad companies, each of which a maximum of rates was fixed. After setting forth the special provisions of the charters in this particular, the bill proceeds as follows: 'And your orator is therefore advised, believes, and charges that, as the said legislature, by the proviso to the eighteenth section of the said act of March 30, 1871, reserved to itself the right 'to regulate the rate of transportation for passage and freight' on your orator's road in said state of Mississippi, but only upon condition and with the limitation that in and by such act of regulation there should be no discrimination in favor of any road in said state, and against your orator, the charter clause above referred to becomes and is integrated into, and forms part of, your orator's said charter, and the legislature, having thus exercised and exhausted its power of regulating tariffs in respect to the several railroad companies above set out, is by the terms of your orator's charter precluded from making any other or different system for regulating your orator's tariff in said state, or devising any other tariff of charges for it, else your orator would be discriminated against contrary to the true intent and meaning of the last proviso to section 18 of said act of March 30, 1871.'

To this we cannot agree. The provision in the charter of the New Orleans & Northeastern Company, that in fixing rates there shall be no discrimination in favor of any other road, does not bring into that charter the rate clauses in the charters of the new companies. It will undoubtedly be the duty of the commissioners, when fixing the tariff for this company, to see that there is no such discrimination as is provided against. Whether in doing so it will be necessary to have regard to the rates allowed by the later charters is not a question in this case.

The decree of the circuit court is reversed on the authority of Stone v. Farmers' Loan & Trust Co., ante, 334, and the cause remanded, with instructions to dismiss the bill.

BLATCHFORD, J., did not sit in this case or take any part in its decision.

Notes