Lake Shore Railway Company v. Smith

In 1891 the general railroad law of the state of Michigan was amended by the legislature by Act No. 90, a portion of the ninth section of which reads as follows:

'* * * Provided, further, that one thousand-mile tickets shall be kept for sale at the principal ticket offices of all railroad companies in this state or carrying on business partly within and partly without the limits of the state, at a price not exceeding twenty dollars in the Lower Peninsula and twenty-five dollars in the Upper Peninsula. Such one thousand-mile tickets may be made non-trans- erable, but whenever required by the purchaser they shall be issued in the names of the purchaser, his wife and children, designating the name of each on such ticket, and in case such ticket is presented by any other than the person or persons named thereon, the conductor may take it up and collect fare, and thereupon such one thousand-mile ticket shall be forfeited to the railroad company. Each one thousand-mile ticket shall be valid for two years only after date of purchase, and in case it is not wholly used within the time, the company issuing the same shall redeem the unused portion thereof, if presented by the purchaser for redemption within thirty days after the expiration of such time, and shall on such redemption be entitled to charge three cents per mile for the portion thereof used.'

On April 19, 1893, and again on October 17, 1893, the defendant in error demanded of the ticket agent of the plaintiff in error, in the city of Adrian, Mich., a 1,000-mile ticket, pursuant to the provisions of the above section, in the names of himself and his wife, Emma Watts Smith, which demand was refused. The defendant in error then applied for a mandamus to the circuit court to compel the railway company to issue such ticket upon the payment of the amount of $20; and, after a hearing, the motion was granted. Upon certiorari, the supreme court of Michigan affirmed that order, and held that the statute applied only to the railway lines of the plaintiff in error operated within the state of Michigan.

The defense set up by the railway company was that, under the charter from the state to one of the predecessors of the company to whose rights it had succeeded, it had the right to charge three cents a mile for the transportation of all passengers, and that such charter constituted a contract between the state and the company, which the former had no right to impair by any legislative action, and that the statute compelling the company to sell 1000-mile tickets at the rate of two cents a mile was an impairment of the contract, and was therefore void, as in violation of the constitution of the United States. It also alleged that the act was in violation of the fourteenth amendment of the constitution of the United States, in that it deprived the company of its property and liberty of contract, without due process of law, and also deprived it of the equal protection of the laws. The act was also alleged to be in violation of the constitution of the state of Michigan, on several grounds.

The supreme court of the state decided that there was no contract in relation to the rates which the company might charge for the transportation of passengers, and that the statute violated no provision either of the federal or the state constitution, but was a valid enactment of the legislature; and therefore the court affirmed the order for mandamus, the ticket to be good upon and limited to the railway lines of the defendant railroad company within the state of Michigan. 72 N. W. 328. The company sued out a writ of error from this court.

George C. Greene, for plaintiff in error.

Fred. A. Maynard and H. C. Smith, for defendant in error.

Mr. Justice PECKHAM, after stating the facts, delivered the opinion of the court.