Omaha Council Bluffs Street Railway Company v. Interstate Commerce Commission (230 U.S. 324)/Opinion of the Court

The Omaha & Council Bluffs Railway & Bridge Company was chartered as a street railroad company under the laws of Iowa. It owned street car lines in Council Bluffs, and, in 1887, was authorized by Congress to construct a bridge across the Missouri river, and to operate thereon 'steam, cable, and street cars.' 24 Stat. at L. 501, chap. 356. The Omaha & Council Bluffs Railway, chartered as a street railroad under the laws of Nebraska, owned the street car lines in Omaha and its suburbs, South Omaha, Benson, Dundee, and Florence. This street railroad had no right of eminent domain, and was not authorized to haul freight, being limited by its charter to carrying passengers only. By lease it acquired the bridge and car lines in Council Bluffs, which thereafter it operated as part of its system. Complaint having been made that certain interstate fares were unreasonable, a hearing was had before the Commerce Commission, which, on November 27, 1909 (17 Inters. Com. Rep. 239), ordered a reduction in the rate between Council Bluffs, Iowa, and points beyond the Loop, in Omaha, Nebraska. The two companies, lessor and lessee, thereupon filed a bill in the United States circuit court for the district of Nebraska to enjoin the order. The case was heard before three circuit judges, who (179 Fed. 243) granted a temporary injunction.

The case was transferred to the commerce court, which, on October 5, 1911 (191 Fed. 40), dismissed the bill.

On the argument of the appeal in this court, the sole question discussed was whether the provisions of the commerce act as to the railroads applied to street railroads, the appellant relying, among other things, on the fact that during the discussion in the senate, the author of the bill and chairman of the senate committee to which it had been referred, said (17 Cong. Rec. pt. IV., p. 3472) that 'the bill is not intended to affect the stage coach, the street railway, the telegraph lines, the canal boat, or the vessel employed in the inland or coasting trade, even though they may be engaged in interstate commerce, because it is not deemed necessary or practicable to cover such a multitude of subjects.' After quoting § 1 and this statement, and construing it in the light of the broad scope of the act, the commerce court held that the meaning of the statute could not be determined from statements used in debate. We concur in that view. The act must be interpreted by its own terms, and we must look to it as a whole, in order to determine whether it applies to street railroads, carrying passengers between cities divided by a state line.

The statute in terms applies to carriers engaged in the transportation of passengers or property by railroad.

But, in 1887, that word had no fixed and accurate meaning, for there was then, as now, a conflict in the decisions of the state courts as to whether street railroads were embraced within the provisions of a statute giving rights or imposing burdens on railroads. The appellants cite decisions from twelve states holding that in a statute the word 'railroad' does not mean 'street railroad.' The defense cite decisions to the contrary from an equal number of states. The present record discloses a similar disagreement in Federal tribunals. For not only did the commerce court and the circuit court differ, but it appears that the members of the Commission were divided on the subject when this case was decided and also when the question was first raised in Willson v. Rock Creek R. Co. 7 Inters. Com. Rep. 83.

This conflict is not so great as at first blush would appear. For all recognize that while there is similarity between railroads and street railroads, there is also a difference. Some courts, emphasizing the similarity, hold that in statutes the word railroad includes street railroad, unless the contrary is required by the context. Others, emphasizing the dissimilarity, hold that railroad does not include street railroad unless required by the context, since, as tersely put by the court of appeals of Kentucky, 'a street railroad, in a technical and popular sense, is as different from an ordinary railroad as a street is from a road' Louisville & P. R. Co. v. Louisville City R. Co. 2 Duv. (Ky.) 175.

But all the decisions hold that the meaning of the word is to be determined by construing the statute as a whole. If the scope of the act is such as to show that both classes of companies were within the legislative contemplation, then the word 'railroad' will include street railroad. On the other hand, if the act was aimed at railroads proper, then street railroads are excluded from the provisions of the statute. Applying this universally accepted rule of construing this word, it is to be noted that ordinary railroads are constructed on the companies' own property. The tracks extend from town to town, and are usually connected with other railroads, which themselves are further connected with others, so that freight may be shipped, without breaking bulk, across the continent. Such railroads are channels of interstate commerce. Street railroads, on the other hand, are local, are laid in streets as aids to street traffic, and for the use of a single community, even though that community be divided by state lines, or under different municipal control. When these street railroads carry passengers across a state line they are, of course, engaged in interstate commerce, but not the commerce which Congress had in mind when legislating in 1887. Street railroads transport passengers from street to street, from ward to ward, from city to suburbs, but the commerce to which Congress referred was that carried on by railroads engaged in hauling passengers or freight 'between states,' 'between states and territories,' 'between the United States and foreign countries.' The act referred to railroads which were required to post their schedules-not at street corners where passengers board street cars, but in 'every depot, station, or office where passengers or freight are received for transportation.' The railroads referred to in the act were not those having separate, distinct, and local street lines, but those of whom it was required that they should make joint rates and reasonable facilities for interchange of traffic with connecting lines, so that freight might be easily and expeditiously moved in interstate commerce.

Every provision of the statute is applicable to railroads. Only a few of its requirements are applicable to street railroads, which did not do the business Congress had in contemplation, and had not engaged in the pooling, rebating, and discrimination which the statute was intended to prohibit. This was recognized in Willson v. Rock Creek R. Co. 7 Inters. Com. Rep. 83, where, although it was held that the statute applied to a street railroad between Washington, D. C., and a point in Maryland, the Commission nevertheless said (7 Inters. Com. Rep. 83): 'It may be conceded that this class of railroads was not specifically within the contemplation of the framers of that law, for the evils which it was intended to remedy would, in the nature of the case, but rarely arise in the management of such roads and their dealings with the public.'

Street railroads not being guilty of the mischief sought to be corrected, the remedial provisions of the statute not being applicable to them, commands upon every railroad 'subject to the act' being such that they could not be obeyed by street railroads because of the nature of their business and character and location of their tracks, it is evident that the case is within that large line of authorities which hold that under such a statute the word 'railroad' cannot be construed to include street railroad.

But it is said that since 1887, when the act was passed, a new type of interurban railroad has been developed which, with electricity as a motive power, uses larger cars, and runs through the country from town to town, enabling the carrier to haul passengers, freight, express, and the mail for long distances at high speed. We are not dealing with such a case, but with a company chartered as a street railroad, doing a street railroad business and hauling no freight. The case was heard on demurrer, with the opinion of the Commission treated as a part of the record. It indicates that at some points the line is on private property, but where this is and to how great an extent does not appear. Indeed, the record does not show that electricity was used as a motive pawer, though, in the light of modern methods, that may possibly be assumed. But it affirmatively appears that the company was chartered as a street railroad, and hauls no freight, and is doing only a business appropriate to a street railroad. So that whatever the motive power, or the size or speed of the cars, is immaterial. In any event, there were 'street cars' referred to in the act of Congress authorizing the construction of the bridge from Council Bluffs to Omaha (24 Stat. at L. 501, chap. 356). The company used such cars and did a street passenger business only. It laid its tracks in crowded thoroughfares of those cities and their suburbs, and it is manifest that Congress did not intend that these tracks should be connected with railroads for hauling freight cars and long trains through and along the streets of Omaha and Council Bluffs.

It is contended, however, that the amendment of June 18, 1910 (36 Stat. at L. 552, chap. 309), shows that Congress considered that street railroads were under the jurisdiction of the Commission, inasmuch as it then provided that 'the Commission shall not, however, establish any through route, classification, or rate between street electric passenger railways not engaged in. . . transporting freight. . . and railroads of a different character.' It is contended, on the other hand, that in that statute Congress distinctly recognized that a street electric road was 'a different character of railroad,' and apprehending that the broad language of the amendment of 1910 might be construed to take in street railroads, this provision was inserted out of abundant caution to prevent that result, as in the case of establishing routes wholly by water, which certainly were not within the terms of the original act.

This section of the act of 1910, however, having been passed after the order was made by the Commission, November 27, 1909, is not before us for construction, and, manifestly, cannot be given a retrospective OPERATION, THOUGH THE GOVERNMENT INSISTS that it should be given a prospective operation, and in its brief contends that 'even if the Commission's order was without lawful authority at the time it was made November 27, 1909), the amendment of 1910 either ratified it altogether, or, at least, validated it for the future,' and, therefore, it was contended 'that the judgment should be affirmed; or, if not affirmed as rendered, should be modified to set aside the order only in its operation prior to June 18, 1910,' on which day the amendment as to electric street passenger cars became effective. Mattingly v. District of Columbia, 97 U.S. 687, 24 L. ed. 1098; Lowrey v. Hawaii, 206 U.S. 206, 51 L. ed. 1026, 27 Sup. Ct. Rep. 622; Baltimore & O. R. Co. v. Interstate Commerce Commission, 221 U.S. 612, 55 L. ed. 878, 31 Sup. Ct. Rep. 621, are cited to show that Congress might ratify what had not been originally commanded. The first two decisions relate to transactions of a nature entirely different from that here involved; and, in the Baltimore Case, which was more like this on its facts, the parties, pending the suit, stipulated that the order should apply only to the future; and it was said that the 'question of the here, and there being nothing to show that the order was made has become a moot one' (621). There was no such stipulaion here, and there being nothifng to show that Congress attempted an express ratification, and it being open whether the amendment was intended to confer a jurisdiction not previously given, the motion of the government to make the order of November 27, 1909, effective from June 18, 1910, cannot prevail.

The decree of the Commerce Court is reversed, and that of the three Circuit Judges made permanent.

Reversed.

Mr. Justice Pitney did not hear the argument and took no part in the decision of this case.