Missouri Pacific Railway Company v. Nebraska ex rel. Board of Transportation/Opinion of the Court

The arguments in this case have taken a wider range than is required for its decision. The material facts, as assumed by the court below, are as follows:

The Missouri Pacific Railway Company, a corporation of the state of Nebraska, was the owner of the right of way and depot grounds, within which were its main and side tracks, its stations and other shipping facilities, at Elmwood, in that state, and had permitted two elevators to be erected and operated by private firms on the side track at that station.

John W. Hollenbeck and others (apparently not a corporation, but a voluntary association of persons owning farms and leaseholds in the neighborhood of Elmwood, upon which they raised corn, wheat, oats, and other cereals, large quantities of which were ready for market) made an application in writing to the railway company to grant them 'a location on the right of way at Elmwood station aforesaid for the erection of an elevator of sufficient capacity to store from time to time the cereal products of the farms and leaseholds of' the applicants, 'as well as the products of other neighboring farms.' That application was refused by the railway company.

The applicants then made a complaint to the board of transportation of the state of Nebraska, alleging that the two elevators already built on the right of way of the railway company at Elmwood station were, 'during certain seasons of the year, wholly insufficient in affording a market for the cereals of the complainants and others desirous of marketing their grain,' and that the refusal of the railway company to grant to the complainants a location for an elevator was in violation of the Nebraska statute of 1887, c. 60, in that such refusal was an unjust discrimination, and that the railway company, by such refusal, was subjecting the complainants to an undue and unreasonable prejudice and disadvantage in respect to traffic facilities, over other localities, and was giving an undue and unreasonable preference and advantage to the owners and operators of the two elevators already built at the station.

The board of transportation, after notice to the railway company, and hearing evidence and arguments, found that the two existing elevators were insufficient to handle the grain shipped at Elmwood station, and the owners and operators of those elevators had entered into a combination to fix the prices of grain, and to prevent competition in the price thereof, and there were not sufficient facilities for the handling and shipping of grain at that station; that it was necessary for the convenience of the public that another elevator should be erected and operated there; that, by reason of the side track being placed within the right of way and depot grounds, the complainants could not ship grain without building their elevator upon the grounds of the railway company; that there was room upon those grounds for another elevator, without materially interfering with the operation of the railroad, and the building of an elevator thereon by the complainants would not materially affect the railway company in the use of its grounds, or be an unreasonable burden to it; and that the granting by the railway company of the right and privilege to the owners of the two elevators now standing, and refusing to grant the like right and privilege to the complainants, was an unjust and unreasonable discrimination against the complainants, and unlawfully gave a preference and advantage to the owners of the two existing elevators.

The board of transportation thereupon ordered that the railway company, within 10 days, grant to the complainants, on like terms and conditions as granted to the owners of the two existing elevators, the right and privilege of erecting an elevator upon its grounds, and adjacent to its track, at a point specified in the order, or at some other suitable and convenient place, if the parties could agree, and grant to the complainants all and equal facilities for the handling and shipping of grain at that station which it granted to other shippers of grain there, and cease from all discrimination or preference to and of shippers and operators of elevators at that station.

The railway company not having complied with the order, the supreme court of the state, upon a petition in the name of the state, at the relation of the board of transportation, for a mandamus, and an answer thereto and hearing thereon, found the issues in favor of the relators, and adjudged that unless the railway company, within 40 days, complied with the order of the board of transportation, a writ of mandamus should issue to compel compliance with that order according to its terms. In the opinion of the court, it was said, 'The correctness of the findings of the board is not seriously questioned, but its power to make such findings and order is denied.' 29 Neb. 556, 45 N. W. 787.

The statute of Nebraska of 1887, c. 60, §§ 1-3, prohibits, and declares to be unlawful, all unjust and unreasonable charges made by a railroad company for any services rendered in the transportation (which includes all instrumentalities of shipment or carriage) of passengers or property, or in connection therewith, or for the receiving, delivering, storage, or handling of such property. The demanding or collecting, directly or indirectly, by a railroad company, from any person, of a greater compensation for such service than it demands or collects from any other person for a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, is declared to be unjust discrimination. It is also made unlawful to give any preference or advantage to, or to subject to any prejudice or disadvantage, any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever; and railroad companies are required, according to their respective powers, to afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines, and for the receiving, forwarding, and delivering of passengers and property to and from their several lines and those connecting therewith, and not to discriminate in their rates and charges between such contracting lines.

By section 17, upon complaint in writing concerning any lack of facilities or accommodations furnished by a railroad company for the comfort, convenience, and accommodation of individuals and the public, or concerning any unjust discrimination against any person, firm, corporation, or locality, either in rates, facilities furnished, or otherwise, the board of transportation, whenever, in its judgment, any repairs of, or additions to, or changes in, any portion of the road, rolling stock, stations, depots, station houses, or warehouses of a railroad company, are necessary in order to secure the safety, comfort, accommodation, and convenience of the public and individuals, or any change in the mode of conducting its business is reasonable and expedient in order to promote the security and accommodation of the public, or to prevent unjust discrimination against persons or places, is directed to order the railroad company to make such repairs, additions, or changes.

The supreme court of Nebraska has construed this statute as authorizing the board of transportation to make the order questioned in this case, which required the railroad company to grant to the relators the right to erect an elevator upon its right of way at Elmwood station, on the same terms and conditions on which it had already granted to other persons rights to erect two elevators thereon. The construction so given to the statute by the highest court of the state must be accepted by this court, in judging whether the statute conforms to the constitution of the United States. Chicago, etc., Ry. Co. v. Minnesota, 134 U.S. 418, 456, 10 Sup. Ct. 462, 702; Illinois Cent. R. Co. v. Illinois, 163 U.S. 142, 152, 16 Sup. Ct.

A railroad corporation doubtless holds its station grounds, tracks and right of way as its private property, but for the public use for which it was incorporated, and may, in its discretion, permit them to be occupied by other parties with structures convenient for the receipt and delivery of freight upon its railroad, so long as a free and safe passage is left for the carriage of freight and passengers. Railroad Co. v. Richardson, 91 U.S. 454. But how far the railroad company can be compelled to do so against its will is a wholly different question.

Upon the admitted facts of the case at bar, the railroad company had granted to two private firms the privilege of erecting elevators upon its right of way at Elmwood station, and had refused an application of other private persons, farmers in the neighborhood, for the privilege of erecting on that right of way a third elevator of sufficient capacity to store from time to time the grain produced upon their farms and upon those of their neighbors, and has been ordered by the board of transportation, and by the supreme court of the state, to grant to the applicants a location upon its right of way for the purpose of erecting thereon such an elevator, upon the like terms and conditions as in its grants to the owners of the two existing elevators.

The only particular alleged in the complaint, and the only one, therefore, presented for our consideration in this case, in which the railroad company is supposed to have made an unjust discrimination against the complainants, or to have subjected them to an undue and unreasonable prejudice and disadvantage, in respect to traffic facilities, over other locations, or to have given an undue and unreasonable preference to other persons, is the refusal of the railroad company to grant to the complainants a location upon its right of way, for the purpose of erecting an elevator thereon, upon the terms and conditions upon which it had previously granted to other persons similar privileges to erect two other elevators.

The record does not show what were the terms and conditions of the contracts between the railroad company and the owners of those elevators, nor present any question as to the validity of those contracts.

Nor does it present any question as to the power of the legislature to compel the railroad company itself to erect and maintain an elevator for the use of the public, or to compel it to permit to all persons equal facilities of access from their own lands to its tracks, and of the use, from time to time, of those tracks for the purpose of shipping or receiving grain or other freight, as in Rhodes v. Railroad Co., 34 Minn. 87, 24 N. W. 347, in Chicago & N. W. Ry. Co. v. People, 56 Ill. 365, and in Hoyt v. Railroad Co., 93 Ill. 601.

Nor does this case show any such exercise of the legislative power to regulate the conduct of the business, or the rate of tolls, fees, of charges, either of railroad corporations or of the proprietors of elevators, as has been upheld by this court in previous cases. Munn v. Illinois, 94 U.S. 113; Chicago, B. & Q. R. Co. v. Iowa, 94 U.S. 155; Dow v. Beidelman, 125 U.S. 680, 8 Sup. Ct. 1028; Budd v. New York, 143 U.S. 517, 12 Sup. Ct. 468; Brass v. State of North Dakota, 153 U.S. 391, 14 Sup. Ct. 857; Covington & C. Bridge Co. v. Kentucky, 154 U.S. 204, 213, 214, 14 Sup. Ct. 1087; Louisville & N. R. v. Kentucky, 161 U.S. 677, 696, 16 Sup. Ct. 714.

The order in question was not limited to temporary use of tracks, nor to the conduct of the business of the railway company. But it required the railway company to grant to the petitioners the right to build and maintain a permanent structure upon its right of way.

The order in question was not, and was not claimed to be, either in the opinion of the court below, or in the argument for the defendant in error in this court, a taking of private property for a public use under the right eminent domain. The petitioners were merely private individuals voluntarily associated together for their own benefit. They do not appear to have been incorporated by the state for any public purpose whatever, or to have themselves intended to establish an elevator for the use of the public. On the contrary, their own application to the railroad company, as recited in thier complaint to the board of transportation, was only 'for a location, on the right of any at Elmwood station aforesaid, for the erection of an elevator of sufficient capacity to store from time to time the cereal products of the farms and leaseholds of complainants aforesaid, as well as the products of other neighboring farms.'

To require the railroad company to grant to the petitioners a location on its right of way for the erection of an elevator for the specified purpose of storing from time to time the grain of the petitioners and of neighboring farmers, is to compel the railroad company, against its will, to transfer an estate in part of the land which it owns and holds, under its charter, as its private property and for a public use, to an association of private individuals, for the purpose of erecting and maintaining a building thereon for storing grain for their own benefit, without reserving any control of the use of such land, or of the building to be erected thereon, to the railroad company, for the accommodation of its own business, or for the convenience of the public.

This court, confining itself to what is necessary for the decision of the case before it, is unanimously of opinion that the order in question, so far as it required the railroad corporation to surrender a part of its land to the petitioners for the purpose of building and maintaining their elevator upon it, was, in essence and effect, a taking of private property of the railroad corporation for the private use of the petitioners. The taking by a state of the private property of one person or corporation, without the owner's consent, for the private use of another, is not due process of law, and is a violation of the fourteenth article of amendment of the constitution of the United States. Wilkinson v. Leland, 2 Pet. 627, 658; Murray v. Hoboken Co., 18 How. 272, 276; Loan Association v. Topeka, 20 Wall. 655; Davidson v. New Orleans, 96 U.S. 97, 102; Cole v. La Grange, 113 U.S. 1, 5 Sup. Ct. 416; Fallbrook Dist. v. Bradley, 164 U.S. 112, 158, 161, 17 Sup. Ct. 56; State v. Chicago, M. & St. P. Ry. Co., 36 Minn. 402, 31 N. W. 365.

Judgment reversed, and case remanded to the supreme court of the state of Nebraska for further proceedings not inconsistent with this opinion.