Missouri Pacific Ry. Co. v. Nebraska, 217 U.S. 196 (1910)

U.S. Supreme Court

Missouri Pacific Ry. Co. v. Nebraska, 217 U.S. 196 (1910) Missouri Pacific Railway Company v. Nebraska

Nos. 127, 128

Argued March 7, 1910

Decided April 4, 1910

217 U.S. 196

ERROR TO THE SUPREME COURT

OF THE STATE OF NEBRASKA

Syllabus

There are constitutional limits to what can be required of the owners of railroads under the police power.

Requiring the expenditure of money takes property whatever may be the ultimate return for the outlay.

It is beyond the police power of a state to compel a railroad company to put in switches at its own expense on the application of the owners of any elevator erected within a specified limit. It amounts to deprivation of property without due process of law, and so held as to the applications for such switches made by elevator companies in these cases under the statute of Nebraska requiring such switch connections.

Quaere whether, even if a statute requiring railroad companies to make such switch connections at their own expense be construed as confined to such demands as are reasonable, it does not deprive the railroad company of its property without due process of law if it does not allow the company a hearing as to the reasonableness of the demand prior to compliance therewith where, as in this case, failure to comply involves heavy and continuing penalties.

81 Neb. 15 reversed.

The facts, which involve the constitutionality of a statute of the State of Nebraska requiring railroad companies to make switch connections with grain elevators under certain conditions, are stated in the opinion.

Page 217 U. S. 204

MR. JUSTICE HOLMES delivered the opinion of the Court.

These are two suits arising under a Nebraska statute. The first is brought by the state to recover a fine of $500 imposed by the law for failure to obey its command; the second is brought at the relation of the party concerned to compel obedience to the same command by mandamus. The statute in question provides that

"every railroad company or corporation 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 location or site for the building or construction of an elevator or elevators 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 respect whatever. Provided, however, that any elevator hereafter constructed, in order to receive the benefits of this act, must have a capacity

Page 217 U. S. 205

of not less than 15,000 bushels."

Then follows a section making railroads liable for damages in case of willful violation of the act (which contains other provisions beside the above), and imposes the above-mentioned fine for each offense. Session Laws of 1905, c. 105, §§ 1, 6; 2 Cobbey's Supp. § 10,007, p. 410.

Under this act, the Manley Cooperative Grain Association, a corporation, applied in writing for a site for an elevator on the right of way of the plaintiff in error in Manley, Nebraska, but the application was refused. Then notice was sent that the corporation intended to build near the end of a side track at the railroad station at Manley, and would expect an extension of the side track. The railroad company replied that it would give no trackage privilege. The elevator was built, and a demand was made for a side track, repeating a previous offer to bear a fair share of the expense of the extension. This also was refused, and thereupon the first-mentioned suit was brought for the penalty imposed by the act. The other suit is a petition for mandamus at the relation of the Farmers' Elevator Company of Strausville, Nebraska, another elevator corporation, and the facts are so like the foregoing that they do not need special statement. In both cases, the railroad company set up that the statute was an attempt to regulate commerce among the states, and also was void under the Fourteenth Amendment. After trials, the fine was imposed and the peremptory writ of mandamus was ordered, and both judgments were affirmed by the supreme court of the state. 81 Neb. 15, 174.

It will have been noticed that there is no provision in the statute for compensation to the railroad for its outlay in building and maintaining the side tracks required. In the present cases, the initial cost is said to be $450 in one and $1,732 in the other, and to require the company to incur this expense unquestionably does take its property, whatever may be the speculations as to the ultimate return for the outlay. Woodward v. Central Vermont Railway Co., 180 Mass. 599,

Page 217 U. S. 206

602, 603. Moreover, a part of the company's roadbed is appropriated mainly to a special use, even if it be supposed that the side track would be available incidentally for other things than to run cars to and from the elevator. Now it is true that railroads can be required to fulfill the purposes for which they are chartered and to do what is reasonably necessary to serve the public in the way in which they undertake to serve it, without compensation for the performance of some part of their duties that does not pay. Missouri Pacific Railway Co. v. Kansas, 216 U. S. 262. It also is true that the states have power to modify and cut down property rights to a certain limited extent without compensation, for public purposes, as a necessary incident of government -- the power commonly called the police power. But railroads, after all, are property protected by the Constitution, and there are constitutional limits to what can be required of their owners under either the police power or any other ostensible justification for taking such property away.

Thus, it is at least open to question whether a railroad company could be required to deliver cattle at another than its own stockyard at the end of the transit, or cars elsewhere than at its own terminus, without extra charge, if it furnished reasonable accommodations. Louisville & Nashville R. Co. v. Central Stock Yards Co., 212 U. S. 132, 212 U. S. 144; Central Stock Yards Co. v. Louisville & Nashville R. Co., 192 U. S. 568, 192 U. S. 570; Covington Stock Yards Co. v. Keith, 139 U. S. 128. So far as we see, a grain elevator stands in no stronger position than a stockyard. If, as intimated, the elevators with which the Missouri Pacific connects charge too much and wrong the farmers, there may be other remedies, but manifestly the apprehension expressed by the Supreme Court of Nebraska that the company, unless checked, will have power to establish a monopoly is not to be met merely by building another elevator -- the physical limits of that kind of competition are too easily reached. But if we assume that circumstances might make it reasonable to compel a railroad to deliver and receive

Page 217 U. S. 207

grain elsewhere than at its own elevators, or those that it had made its own by contract, the circumstances must be exceptional when it would be constitutional to throw the extra charge of reduplicating already physically adequate accommodations upon the road.

This statute has no reference to special circumstances. It is universal in terms. If we were to take it literally, it makes the demand of the elevator company conclusive, without regard to special needs, and possibly without regard to place. It is true that, in the first of the present cases, the Supreme Court of Nebraska discussed the circumstances and expressed the opinion that the demand was reasonable, and that building the side track would not cast an undue burden upon the road, and in the second, it somewhat less definitely indicated a similar opinion. So it may be, although it hardly seems possible, that the sweeping words of the statute would be construed as by implication confining their requirements to reasonable demands. On the face of it, the statute seems to require the railroad to pay for side tracks whether reasonable or not -- or if another form of expression be preferred, to declare that a demand for a side track to an elevator anywhere is reasonable, and that the railroads must pay. Clearly no such obligation is incident to their public duty, and to impose it goes beyond the limit of the police power.

But if the statute is to be stretched, or rather shrunk, to such demands as ultimately may be held reasonable by the state court, still it requires too much. Why should the railroads pay for what, after all, are private connections? We see no reason. And moreover, even on this strained construction, they refrain from paying at the peril of a fine if they turn out wrong in their guess that, in the particular case, the court will hold the demand not authorized by the act. If the statute makes the mere demand conclusive, it plainly cannot be upheld. If it requires a side track only when the demand is reasonable, then the railroad ought at least to be allowed a hearing in advance to decide whether the demand is within the

Page 217 U. S. 208

act. Sometimes when summary action is necessary, the property owner's rights are preserved by leaving all questions open in a subsequent suit. North American Cold Storage Co. v. Chicago, 211 U. S. 306. But in such cases, the risk is thrown on the destroyer of property. In this case, there is no emergency, yet, at the best, the owner of the property, if it has any remedy at all, acts at its risk not merely of being compelled to pay both the expense of building and the costs of suit, but also of incurring a fine of at least $500 for its offense in awaiting the result of a hearing. See Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418. An earlier statute authorizing the state board of transportation, after hearing, to require the railroad to permit the erection of an elevator upon its roadbed already has been held bad. Missouri Pacific Ry. Co. v. Nebraska, 164 U. S. 403. See also Hartford Fire Ins. Co. v. Chicago, Milwaukee & St. Paul Ry. Co., 175 U. S. 91, 175 U. S. 99. We are of opinion that this statute is unconstitutional in its application to the present cases because it does not provide indemnity for what it requires. We leave other questions on one side, and do not intend by anything that we have said to prejudice a later amendment providing for a preliminary hearing and compensation, which is said to have been passed in 1907. See Laws of 1907, c. 89, p. 309.

Judgments reversed.

MR. JUSTICE HARLAN and MR. JUSTICE McKENNA dissent.