St. Louis & San Francisco Railway Co. v. Gill

156 U.S. 649, 15 S. Ct. 484, 39 L. Ed. 567, 1895 U.S. LEXIS 2170
CourtSupreme Court of the United States
DecidedMarch 4, 1895
DocketNos. 173-176
StatusPublished
Cited by143 cases

This text of 156 U.S. 649 (St. Louis & San Francisco Railway Co. v. Gill) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
St. Louis & San Francisco Railway Co. v. Gill, 156 U.S. 649, 15 S. Ct. 484, 39 L. Ed. 567, 1895 U.S. LEXIS 2170 (1895).

Opinion

Mr. Justice Shiras,

after stating the case, delivered the opinion of the court.

*652 By the act of April 4, 1887, the legislature of Arkansas' prescribed a maximum rate of three cents per mile for each passenger carried by the railroads of that State, and a penalty of three hundred dollars for each overcharge, payable to the passenger from whom §uch overcharge had been exacted.

It was found by the trial court, a jury having been waived, that John B. Gill, the plaintiff, had, on several occasions, while, travelling ism the railroad of the St. Louis and San Francisco Railway Company, between points within the territory of the State of Arkansas, been charged a rate in excess of that allowed by the statute. The defendant company set up, by way of defence, that it operated that portion of the railroad on which the plaintiff travelled as a purchaser and assignee of the St. Louis, Arkansas and Texas Railway Company, a corporation organized under the laws of the State of Arkansas; that, under the laws of Arkansas in force at the time of the incorporation of said last-mentioned company, in April, 1880, .it had the right to fix and regulate the rate of charge for carrying-passengers, not to exceed the sum of five cents per mile; that the legislature might from time to time, reduce the rates, but that the same should not be so reduced as to produce, as profits for the railroad company, less than fifteen per cent per annum on the capital actually paid in; and that tmtil such profits did annually accrue to said company, it and its successors and assigns were entitled, without limitation, restriction, or control, to the right to fix such rates of fares as to it should seem proper, not exceeding the rate of five cents per mile; that such provisions of the law constituted a contract between the St. Louis, Arkansas and Texas Railway Company and the State, and that the St. Louis and San Francisco Railway Company having become, in a manner and form provided by the laws of' the State, the assignee of the St. Louis, Arkansas and. Texas Railway Company, and the owner of its road, franchise, and privileges, had succeeded tó its right to charge passenger rates not in excess of ‘ five cents per mile, so long as its profits did not exceed fifteen per cent per annum on the capital actually paid in; that the said railroad, although completed for about five years, had never earned in profits an. *653 amount equal to three per cent on the capital actually paid in; that the net earnings or profits for the next ensuing two years will not exceed three per cent on the capital actually paid in or on the amount actually expended in the construction of said railroad ; that the consolidation of the St! Louis, Arkansas and Texas Kailway Company of Arkansas with the company of the same name, incorporated in Missouri, and the sale by the company so formed of. its railroad to the defendant, each severally became and were compacts made between the States of Missouri and Arkansas with each other, with the consolidated company, and with the defendant company, respectively; that the act of April, 1887, of the legislature of Arkansas, attempting to fix passenger rates at less than five per cent per mile, in so far as it relates to the defendant’s line of railway, never received the assent of the State of Missouri or of thfe defendant company, and that such enactment was an alteration and impairment of a contract, and as such null and void under the provisions of the Constitution of the United States.

To this plea or special answer the plaintiff demurred.

As a further plea or special answer the defendant company alleged, in connection with a history of the formation of the original companies, their consolidation, and the purchase of the consolidated railroad by the defendant, that, by a provision of the constitution of the State of Arkansas, in force at the time of the transactions narrated, it was provided that no charter of any corporation should be altered, annulled, or repealed in such a manner as to do injustice to the corporators; that the owners of the capital stock of the St. Louis, Arkansas and Texas Kailway Company are the same and identical persons who own the capital stock of the defendant company; and'that, if the rates of fare prescribed by the act of April, 1887, are enforced, the defendant company will not be able to earn a reasonable rate of interest on its indebtedness, or to meet the actual cost of transporting passengers and maintaining said division of its road ; and that, therefore, .said act óf April, 1887, as far as it is applicable to the said railroad, is in violation of the constitution of Arkansas, and is unreasonable, and a taking of private .property’ for public use without com *654 pensation, and is therefore in violation of the Fifth and Fourteenth Amendments to the Constitution of the United States.

The plaintiff demurred likewise to this plea, and the demurrers having been sustained, the defendant then offered to show that the St. Louis, Arkansas and Texas Railway Company had, on December 31, 1880, executed bonds to the amount of $600,000 and secured the same by a mortgage of all its property, franchises, and immunities to the United States Trust Company of New York, which bonds were yet wholly due and unpaid, and upon which the defendant was required to annually pay the sum of $36,000 as interest; that the defendant company has never, since the construction of said lines, been able to earn, from all sources, an amount,, which, after paying for the actual expenditures, would yield to the defendant or to the original incorporators a profit equal to one per cent upon the capital stock actually paid in cash and used in the construction of such lines of railroads; that the actual cost of transporting each passenger over that portion of the defendant’s railway in the plaintiff’s petition mentioned exceeded the sum of three cents per mile; that at the times in plaintiff’s petition mentioned the defendant could not actually perform the service of carrying' the plaintiff or any other passenger over its railway for the sum of three cents per mile, but that the sum in cash which it was actually required to expend in the carriage of said plaintiff and. other passengers was equal to three and three-tenths cents for each and every mile such passenger was carried, and that if defendant was required to perform .the service at the rate of three cents per mile, it would be required to expend more money in cash for the performance of such service than it would receive from the passenger, and that the revenue or income which it would receive from all sources of profit other than the passenger traffic wrouid not .be sufficient to enable it to make good the amount which it would lose on its passenger business; that three cents per mile for the service rendered by the defendant in carrying passengers, at the times in plaintiff’s petition mentioned, over the line of railroad therein described, was not reasonable compensation, and *655

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Bluebook (online)
156 U.S. 649, 15 S. Ct. 484, 39 L. Ed. 567, 1895 U.S. LEXIS 2170, Counsel Stack Legal Research, https://law.counselstack.com/opinion/st-louis-san-francisco-railway-co-v-gill-scotus-1895.