Cargill Company v. Minnesota Railroad Warehouse Commission/Opinion of the Court

The present action was brought in one of the courts of Minnesota, in the name of the state, against the W. W. Cargill Company, a Wisconsin corporation. The relief sought was a decree perpetually enjoining the defendant from operating a certain elevator and warehouse owned by it, situated on the right of way of the Chicago, Milwaukee, & St. Paul Railway Company, in the village of Lanesboro, Minnesota, until it should have obtained a license from the railroad & warehouse commission of that state.

The suit is based on a statute of Minnesota, approved April 16th, 1895, and entitled 'An Act to Regulate the Receipt, Storage, and Shipment of Grain at Elevators and Warehouses on the Right of Way of Railroads, Depot Grounds, and Other Lands used in Connection with Such Line of Railway in the State of Minnesota, at Stations and Sidings, Other than at Terminal Points.' Gen. Laws, Minn. 1895, chap. 148, p. 313.

It seems to be necessary to a clear understanding of the case, and to the disposition of some of the questions presented for consideration, that the entire act be examined. It is therefore given in full in the margin.

We here give only the first and second sections of the act:

'§ 1. All elevators and warehouses in which grain is received, stored, shipped or handled, and which are situated on the right of way of any railroad, depot grounds, or any lands acquired or reserved by any railroad company in this state to be used in connection with its line of railway at any station or siding in this state, other than at terminal points, are hereby declared to be public elevators, and shall be under the supervision and subject to the inspection of the railroad & warehouse commission of the state of Minnesota, and shall, for the purposes of this act, be known and designated as public country elevators or country warehouses. It shall be unlawful to receive, ship, store, or handle any grain in any such elevator or warehouse, unless the owner or owners thereof shall have procured a license therefore from the state railroad & warehouse commission, which license shall he issued for the fee of $1 per year, and only upon written application under oath, specifying the location of such elevator or warehouse and the name of the person, firm, or corporation owning and operating such elevator or warehouse, and the names of all the members of the firm, or the names of all the officers of the corporation, owning and operating such elevator or warehouse, and all moneys received for such licenses shall be turned over to the state grain inspection fund. Such license shall confer upon the licensee full authority to operate such warehouse or elevator in accordance with the laws of this state and the rules and regulations prescribed by said commission, and every person, company, or corporation receiving such license shall be held to have accepted the provisions of this act, and thereby to have agreed to comply with the same. If any elevator or warehouse is operated in violation or in disregard of the laws of this state its license shall, upon due proof of this fact, after proper hearing and notice to the licensee, be revoked by the said railroad & warehouse commission. Every such license shall expire on the 31st day of August of each year.

'§ 2. No person, firm, or corporation shall in any manner operate such public country elevator or country warehouse without having a license as specified in the preceding section, and any attempt to operate such elevator or warehouse without such license shall be deemed a misdemeanor to be punished as hereinafter provided, and any attempt to operate such elevator or warehouse in violation of law and without having the license herein prescribed may, upon complaint of the party aggrieved, and upon complaint of the railroad & warehouse commission, he enjoined and restrained by the district court for the county in which the elevator or warehouse in question is situate, by temporary and permanent injunction, conformably to the procedure in civil actions in the district court.'

The complaint alleged that the elevator was used by the defendant company in connection with the railway for the receiving and shipping of wheat and other grains transported over the lines of the railway company; was essential and necessary to the railway company in order promptly, safely, and properly to handle grains received by it for shipment; and constituted, in that respect, a necessary adjunct of the railroad.

The facts upon which the case was determined are set forth in a finding based upon the stipulation of the parties, and may be summarized as follows:

On April 16th, 1895, and for more than a year prior thereto, the defendant company was engaged in the business of buying, selling, and dealing in grain,-its principal office and place of business being in the city of La Crosse, Wisconsin. It owned and operated large terminal and other grain elevators in that city, in Green Bay, and in other places in Wisconsin.

The village of Lanesboro contained about 1,100 inhabitants, and was situated in the county of Fillmore, Minnesota, upon the railway line of the Southern Minnesota division of the Chicago, Milwaukee, & St. Paul Railway Company, distant about 54 miles west from La Crosse, and having by the railway line referred to direct connection with that city.

Considerable quantities of grain had been annually raised in Fillmore county, and marketed, sold, and delivered into local grain elevators and warehouses in Lanesboro, and thence shipped in cars over the above-mentioned line of railway, which was the only means for such shipment.

The defendant company owned, occupied, and operated a grain warehouse situated on the right of way of the railway company and along its tracks in Lanesboro.

No machinery or mechanical appliances whatever had been used or were contained in its warehouse at Lanesboro; and all grain of every kind received into it during the period in question had been hauled to the warehouse in bags or farm wagons and there unloaded. The bags of grain were placed upon small hand trucks at the entrance of the building, and conveyed first to the weighing scale and thence to the grain bins of the warehouse into which the grain was poured from the bags.

The grain shipped from the warehouse was 'spouted' by force of gravity into box cars standing on the railway tracks, and thence carried by the railroad company over its line for the defendant company to such points as the latter might direct.

Each parcel or lot of grain received into or deposited or handled in or shipped from the warehouse had been purchased by the defendant, and was its sole and absolute property.

The defendant company during the period mentioned never received into, or shipped from, or handled or deposited or in any was stored in the warehouse any grain in which any other person or persons had any property, title, right, or interest; nor issued or offered to issue any warehouse receipt or storage ticket for grain received there; nor carried on or offered or attempted to carry on in the warehouse the business of receiving, handling, storing, or shipping grain of or for any other person or persons. But the warehouse was used, occupied, and operated by the defendant solely for the purpose of receiving, handling, and shipping its own grain in its private capacity as grain owner and merchant.

During all the time the warehouse was owned, occupied, and operated by the defendant, all grain of every kind and description received into, or deposited or handled in, or shipped from, the warehouse was purchased by it for the express purpose of acquiring, shipping, and transporting it as its property solely to its terminal elevators in the cities of La Crosse and Green Bay, or to Milwaukee, Wisconsin, or to Chicago, Illinois, and thence to other points in states east of Lake Michigan and upon the Atlantic seaboard.

All the grain so received into, or deposited or handled in, the warehouse had been actually shipped as its property from the warehouse in carload lots over the railway line, and directly and continuously transported by the railway company beyond Minnesota to its terminal elevators, cities, or points in Wisconsin, Illinois, and states other than Minnesota, and to no other points or places.

As fast as received into the warehouse from wagons all the grain was 'spouted' into the box cars of the railway company for shipment, or was loaded into such cars severally containing different kinds of grades of grain separated from each other within the car by partitions, as sufficient grain for such a carload was accumulated in the warehouse, or was loaded out and so shipped as a full carload of grain of any one kind and grade was received into the warehouse; and no grain received or deposited in, or shipped from, the warehouse was handled or shipped in any manner other or different from one of the modes indicated, or kept in the warehouse longer or for any other purpose than as stated.

No grain received into, or deposited or handled in, or shipped from, the warehouse had been bargained or sold or delivered to any person or firm or corporation doing business or resident in, or a citizen of, Minnesota, or shipped or transported to, or delivered at, any city, village, town, point, or place within the boundaries of that state.

During the time mentioned all grain of every kind and description received into or deposited or handled in, or shipped from, the warehouse was grown in Minnesota, and was sold and delivered to the defendant by, and received into the warehouse from, citizens and residents of, or other persons doing business in, Minnesota, the weights, grades, dockage, and inspection of all such grain having been fixed by mutual agreement between such persons and the company without controversy in respect thereto, and in no other manner and by no other persons; and no weighing, grading, docking, or inspection of, or supervision or regulation of, any grain was performed or attempted or offered to be done or performed in or about the warehouse on the receipt or shipment of grain or at any other place or time by any person delegated or furnished by, or acting under the authority of, the state of Minnesota, or of any law thereof or of the railroad & warehouse commission of Minnesota, or any rule, regulation, officer, agent, or representative thereof, or by any person in any capacity whatsoever.

The defendant company never applied to the railroad & warehouse commission for license to receive, ship, store, or handle any grain in its elevator, and never procured a license therefor from the commission.

The parties stipulated and agreed that the plaintiff would make no claim of right to maintain the action except under and by virtue of the law in question.

Such being the case made by the finding of facts, the relief asked was denied, the court of original jurisdiction holding that the statute was not a lawful exercise of the police power, and was repugnant as well to the Constitution of Minnesota as to § 1 of the 14th Amendment in so far as it declared warehouses and elevators in which only the grain of the owner was received, stored, shipped, or handled to be public elevators subject to the supervision of the railroad & warehouse commission.

The case was carried to the supreme court of Minnesota, and the judgment was reversed. That court, speaking by Judge Canty, said: 'If the business carried on at this warehouse consisted of nothing more than storing defendant's own grain, we would concede that such business would warrant but little interference or regulation of it by the state. But that business does consist of something more. It was conceded on the argument, and is fairly to be inferred from the findings and stipulation of facts, that the grain is purchased, weighed, graded, and delivered at the warehouse, and that defendant, with its own scales and appliances, weighs and grades the grain. Under these circumstances the warehouse is a sort of public market place, where the farmers come with their grain for the purpose of selling the same, and where the purchaser, a party in interest, acts as marketmaster, weighmaster, inspector, and grader of the grain. Surely such a business is of a public character, and is sufficiently affected with a public interest to warrant a very considerable amount of regulation of it by the state. The business carried on by defendant at its warehouse is similar to that carried on at a large number of other warehouses and elevators in this state. The grain crops of this state constitute by far the most important part of its commerce and its greatest resource. It is important to see that correct weights are had; that uniform grades are given; that the proper amount of dockage and no more is taken; that no dishonest practices are allowed and no undue advantage is permitted to be taken. Said chapter 148 requires the person operating such an elevator or warehouse to procure a license to be issued by the state railroad & warehouse commission, for which a fee of $1 per year must be paid. The act also provides that such license may be revoked by the commission if the warehouse or elevator is operated in violation or in disregard of the laws of this state. Section 2 provides that any person attempting to run such an elevator or warehouse without a license may be enjoined in a suit for that purpose. Section 3 provides that the commission may make suitable and necessary rules and regulations for the government of public country warehouses and elevators. Then follow other provisions. There are undoubtedly many provisions in the act which apply only to warehouses and elevators in which grain is stored for others or for the public, which provisions do not and cannot apply to such warehouses as the one here in question. There are, perhaps, provisions in the act which it would be unconstitutional to apply to such a warehouse as this. But these matters need not be considered at this time. The provision requiring a license is not one of these. This disposes of the only question argued which it is necessary to consider.' ''State ex rel. Railroad & Warehouse Commission v. W. W. Cargill Co.'' 77 Minn. 223, 79 N. W. 962.

Judge Mitchell delivered a separate opinion, in which he said that in view of the fact, among others, that grain was the principal agricultural product of the state, that in its purchase and sale there was great liability to abuse in the matter or weights and grades, and that these were usually determined by the purchaser with his own instrumentalities, he agreed with the court that, although the owner of a warehouse use it exclusively for the storage of his own grain, yet if he used it for the purpose of buying grain from the public, thus rendering it, in effect, a public market, his business was a proper subject of police regulation by the state to the extent of providing such rules and regulations as were reasonably necessary to secure to the public just and correct weights and grades. He was also of opinion that the requirement of a license might be a reasonable regulation in such cases as a means of enabling state officials to ascertain who were engaged in the business. But he was of opinion that the provisions of the statute constituted a system of rules and regulations the different parts of which were so connected with, and dependent upon, each other that it was in many instances impossible to separate them; that many of them were wholly inapplicable to warehouses not used for the storage of grain for others. Some of them were, in his judgment, clearly not within the police powers of the state as applied to warehouses not used for the storage of grain for others. Considering the case only upon the lines followed by the majority, Judge Mitchell was of opinion that, in view of the connection and interdependence of its various provisions, the whole act should be held invalied as to warehouses not used for the storage of grain for others.

We have seen that the only relief asked by the state was that the defendant company be restrained and enjoined from the further operation of its elevator in receiving, storing, or handling of wheat or other grains until it was duly licensed therefor by the railroad & warehouse commission. It was, in effect, adjudged that a license from that commission was a condition precedent to the right of the defendant company to use or operate its elevator or warehouse in the manner and for the purposes indicated; also, that although the statute might contain many provisions not applicable to warehouses like the one owned by the defendant, and other provisions that, perhaps, were unconstitutional when applied to business like that in which the company was engaged, the provision requiring a license could stand and be enforced.

The questions just stated are questions of local law, and in determining whether the statute violates any right secured by the Federal Constitution we must, in the particulars named, accept the interpretation put upon it by the state court. In Tullis v. Lake Erie & W. R. Co. 175 U.S. 348, 353, 44 L. ed. 192, 195, 20 Sup. Ct. Rep. 136, 138, the question was as to the constitutionality of a statute of Indiana relating to railroads and other corporations, except municipal corporations. The supreme court of that state held that the statute was capable of severance, and that its provisions as to railroads were not so connected in substance with the provisions relating to other corporations that their validity could not be separately determined. This court followed that view, declaring it to be an elementary rule that it should adopt 'the interpretation of a statute of a state affixed to it by the court of last resort thereof.' See also Missouri P. R. Co. v. Nebraska, 164 U.S. 403, 414, 41 L. ed. 489, 494, 17 Sup. Ct. Rep. 130; Chicago, M. & St. P. R. Co. v. Minnesota, 134 U.S. 418, 456, 33 L. ed. 970, 980, 3 Inters. Com. Rep. 209, 10 Sup. Ct. Rep. 462, 702; St. Louis, I. M. & S. R. Co. v. Paul, 173 U.S. 404, 408, 43 L. ed. 746, 748, 19 Sup. Ct. Rep. 419.

Pursuant to this rule, and without expressing any opinion on the question, we assume that the provision requiring a license from any person, firm, or corporation proposing to engage in the business bescribed in the 1st section embraces the defendant company; that such provision may stand alone; and that its validity may be determined without reference to other provisions of the statute.

Thus considering the statute, we are of opinion that the mere requirement of a license from a person, firm, or corporation engaged in such business as that conducted by the defendant is not forbidden by the 14th Amendment of the Constitution of the United States. 'The liberty mentioned in that Amendment,' we have siad, 'means not only the right of a citizen to be free from the mere physical restraint of his person, as by incarceration, but the term is deemed to embrace the right of the citizen to be free in the enjoyment of all his faculties; to be free to use them in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; to pursue any livelihood or avocation, and for that purpose to enter into all contracts which may be proper, necessary and essential to his carrying out to a successful conclusion the purposes above mentioned.' Allgeyer v. Louisiana, 165 U.S. 578, 589, 41 L. ed. 832, 836, 17 Sup. Ct. Rep. 427, 431. But to require the defendant company to obtain a license is not forbidden by the Amendment. The authority to make such a requirement is to be referred to the general power of the state to adopt such regulations as are appropriate to protect the people in the enjoyment of their Relative rights and privileges, and to guard them against fraud and imposition. Dent v. West Virginia, 129 U.S. 114, 122, 32 L. ed. 623, 626, 9 Sup. Ct. Rep. 231; Plumley v. Massachusetts, 155 U.S. 461, 39 L. ed. 223, 5 Inters. Com. Rep. 590, 15 Sup. Ct. Rep. 162. The state court well said that the defendant's warehouse could be fairly regarded as 'a sort of public market where the farmers come with their grain for the purpose of selling the same, and where the purchaser, a party in interest, acts as marketmaster, weighmaster, inspector, and grader of the grain.' We cannot question the power of the state, so far as the Constitution of the United States is concerned, to require a license for the privilege of carrying on business of that character within its limits,-such a license not being required for the purpose of forbidding a business lawful or harmless in itself, but only for purposes of regulation.

The defendant, however, insists that some of the provisions of the statute are in violation of the Constitution of the United States, and if it obtained the required license, it would be held to have accepted all of its provisions, and (in the same words of the statute) 'thereby to have agreed to comply with the same.' § 1. The answer to this suggestion is that the acceptance of a license, in whatever form, will not impose upon the licensee an obligation to respect or to comply with any provisions of the statute or with any regulations prescribed by the state railroad & warehouse commission that are repugnant to the Constituation of the United States. A license will give the defendant full authority to carry on its business in accordance with the valid laws of the state and the valid rules and regulations prescribed by the commission. If the commission refused to grant a license, or if it sought to revoke one granted, because the applicant in the one case, or the licensee in the other, refused to comply with statutory provisions or with rules or regulations inconsistent with the Constitution of the United States, the rights of the applicant or the licensee could be protected and enforced by appropriate judicial proceedings.

But the further contention of the defendant company is that the requirement of a license from the owners of elevators and warehouses situated on the right of way of a railroad at one of its stations or sidings other than at terminal points, without requiring a license in respect of elevators and warehouses differently situated, is a denial of the equal protection of the laws, and makes the statute obnoxious to the principle that 'no impediment should be interposed to the pursuits of anyone except as applied to the same pursuits by others under like circumstances; that no greater burdens should be laid upon one than are laid upon others in the same calling and condition.' Barbier v. Connolly, 113 U.S. 27, 31, 28 L. ed. 923, 925, 5 Sup. Ct. Rep. 357, 359; ''Pembina Consol. Silver Min. & Mill. Co. v. Pennsylvania'', 125 U.S. 181, 31 L. ed. 650, 2 Inters. Com. Rep. 24, 8 Sup. Ct. Rep. 737.

Assuming that the defendant is entitled, upon this record, to invoke the denefit of the clause of the 14th Amendment forbidding a state from denying to any person within its jurisdiction the equal protection of the laws, we adjudge that as the statute applies to all of the class defined in its 1st section, it is not invalid by reason of its nonapplication to those who own or operate elevators not situated on the right of way of a railroad. The railroad, as this court has often said, is a public highway established primarily for the convenience of the public, and suject always to any right acquired by the railroad company under an inviolable contract with the state-the use of such a highway may be so regulated as to promote the public convenience, provided such a regulation be not arbitrary in its character, and does not materially interfere with the enjoyment by the railroad company of its property. The right of way is so closely connected with the operations of the railroad company that its use may be so regulated by the state as to promote the ends for which the corporation was created, and thus subserve the interests of the general public without interfering unreasonably with the company's management of its property. If in the judgment of the state it was necessary for the public interests, or beneficial to the public, that elevators and warehouses of the kinds described should be operated only under a license and under such regulations as may be rightfully prescribed, it would be going very far to hold that such a classification was so unreasonable as to justify us in adjudging that the requirement of a license was void as denying the equal protection of the laws. No such judgment could be properly rendered unless the classification was merely arbitrary or was devoid of those elements that are inherent in the distinction implied in classification. We cannot perceive that the requirement of a license is not based upon some reasonable ground, some difference that bears a proper relation to the classification made by the statute. Gulf, C. & S. F. R. Co. v. Ellis, 165 U.S. 150, 165, 41 L. ed. 666, 671, 17 Sup. Ct. Rep. 255. It is worthy of observation in this connection that it was neither alleged nor proved that there were in the state any elevators or warehouses that were not situated on the right of way of a railroad company.

It is also contended that the requirement of a license from the defendant company is inconsistent with the power of Congress to regulate commerce among the states. This view cannot be accepted. The statute puts no obstacle in the way of the purchase by the defendant company of grain in the state or the shipment out of the state of such grain as it purchased. The license has reference only to the business of the defendant at its elevator and warehouse. The statute only requires a license in respect of business conducted at an established warehouse in the state between the defendant and the sellers of grain. We do not perceive that in so doing the state has intrenched upon the domain of Federal authority, or regulated or sought to regulate interstate commerce. In no real or substantial sense is such commerce obstructed by the requirement of a license.

Without expressing any opinion as to the extent to which the railroad & warehouse commission may supervise the business of a person, firm, or corproation receiving a license under the statute, and restricting our decision to the only question necessary to be decided, we adjudge that the statute of Minnesota, so far as it requires a license for conducting such business as that in which the defendant is engaged, is not repugnant to the Constitution of the United States.