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Statement of the Case.

upon, pursuant to the provisions of section eight of an act entitled 'An act to regulate common carriers, and creating the Railroad and Warehouse Commission of the State of Minne sota, and defining the duties of such commission in relation to common carriers,' approved March 7, 1887, examined the cause and reasonableness of said complaint, and finding, pursuant to subdivision (e) of said section, that your said tariff of rates, so far as appertains to the transportation of milk to the cities of St. Paul and Minneapolis from the other places above named, and insomuch as said tariff provides for or requires the charging or collection of a greater compensation than two and one-half cents per gallon, is unreasonable and excessive. Therefore said commission recommends and directs that you, the said Chicago, Milwaukee & St. Paul Railway Company, shall alter and change your said schedule by the adoption and substitution of a rate not to exceed two and one-half cents per gallon for the services aforesaid from the cities of Owatonna and Faribault, or either of them, to said St. Paul and Minneapolis. The commission, as at present advised, approves of the custom and arrangement which, it is informed, has been adopted and is now in use by the Minnesota & Northwestern R. R. Co., of collecting two and one-half cents per gallon on all milk transported by it, regardless of distance; but this expression of opinion is no part of the decision, notice, or order in this case.”

This report was entered of record, and a copy furnished to the Boards-of-Trade Union, and a copy was also delivered, on the 4th of August, 1887, to the company, with a notice to it to desist from charging or receiving such unequal and unreasonable rates for such services. The commission thus informed the comparty in writing in what respect such tariff of rates and charges was unequal and unreasonable, and recommended to it in writing what tariff should be substituted therefor, to wit, the tariff so found equal and reasonable by the commission.

The company neglected and refused, for more than ten days after such notice, to substitute or adopt such tariff of charges as was recommended by the commission. The latter

Statement of the Case.

thereupon published the tariff of charges which it had de clared to be equal and reasonable, and caused it to be posted at the station of the company in Faribault on the 14th of October, 1887, and at all the regular stations on the line of the company in Minnesota prior to November 12, 1887, and in all things complied with the statute.

The tariff so made, published and posted, was dated October 13, 1887, and was headed : “Chicago, Milwaukee and St. Paul Railway Company. (Iowa and Minnesota division.) Freight Tariff on Milk from Owatonna and Faribault to St. Paul and Minneapolis, taking effect October 15, 1887 ;” and prescribed a charge of 27 cents per gallon in ten-gallon cans from either the Owatonna station or the Faribault station to either St. Paul or Minneapolis, to be the legal, equal and reasonable maximum charge and compensation for such service, and declared that the same was in force and effect in lieu and place of the charges and compensation theretofore demanded and received therefor by the company.

On the 6th of December, 1887, the commission, by the attorney general of the State, made an application to the Supreme Court of the State for a writ of mandamus to compel the company to comply with the recommendation made to it by the commission, to change its tariff of rates on milk from Owatonna and Faribault .to St. Paul and Minneapolis, and to adopt the rates declared by the commission to be equal and reasonable. The application set forth the pro ceedings herein before detailed; that the company had refused to carry out the recommendation so made, published and posted by the commission; that it continued to charge three cents per gallon for the transportation of milk in ten-gallon' cans from Owatonna and Faribault to St. Paul and Minneapolis; that said charge was unequal, unreasonable and excessive; that 2} cents per gallon for the transportation by it of milk in ten-gallon cans from Owatonna and Faribault to St. Paul and Minneapolis was the maximum reasonable charge for the service; that any rate therefor in excess of 27 cents per gallon in ten-gallon cans was unequal, unreasonable and excessive; that three cents per gallon in ten-gallon cans was a higher rate

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Statement of the Case.

than was charged for the same distances on passenger trains by any express company or by any other railroad company in Minnesota, engaged in transporting milk to St. Paul or Minneapolis; that 24 cents per gallon in ten-gallon cans was the highest rate charged for like distances on passenger trains by any such company; that the milk transported by the company to St. Paul and Minneapolis, over its Iowa and Minnesota division, (extending from Calmar, in Iowa, to Le Roy, in Minnesota, and from LeRoy, through Owatonna and Faribault, to St. Paul and Minneapolis,) large quantities of which milk were shipped from Faribault, was so transported by the company on a passenger train which ran daily from Owatonna to St. Paul and Minneapolis; and that the company, by means of such excessive charges, subjected the traffic in milk at Faribault and Owatonna to undue and unreasonable prejudice and disadvantage.

Thereupon, an alternative writ of mandamus was issued by the court, returnable before it on the 14th of December, 1887.

On the 23d of December, 1887, the company filed its return to the alternative writ, in which it set up:

(1) That it was not competent for the legislature of Minnesota to delegate to a commission a power of fixing rates for transportation, and that the act of March 7, 1887, so far as it attempted to confer upon the commission power to establish rates for the transportation of freight and passengers, was void under the constitution of the State;

(2) That the company, as the owner of its railroad, franchises, equipment and appurtenances, and entitled to the possession and beneficial use thereof, was authorized to establish rates for the transportation of freight and passengers, subject only to the provision that such rates should be fair and reasonable; that the establishing of such rates by the State against the will of the company was pro tanto a taking of its property, and depriving it thereof, without due process of law, in violation of section 1 of Article 14 of the Amendments to the Constitution of the monited States; and that the making of the order of October 13, 1887, was pro tanto a

Argument for Plaintiff in Error.

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taking, and depriving the company, of its property without due process of law, in violation of said section 1. and therefore void and of no effect;

(3) That the rate of three cents per gallon as a freight for carrying milk in ten-gallon cans on passenger trains from Owatonna and Faribault respectively to St. Paul and Minneapolis was a reasonable, fair and just rate; that the rate of 24 cents per gallon, in ten-gallon cans, so fixed and established by the commission, was not a reasonable, fair or just compensation to the company for the service rendered ; and that the establishing of such rate by the commission, against the will of the company, was pro tanto a taking of its property without due process of law, in violation of said section 1.

The case came on for hearing upon the alternative writ and the return, and the company applied for a reference to take testimony on the issue raised by the allegations in the application for the writ and the return thereto, as to whether the rate fixed by the commission was reasonable, fair and just. The court denied the application for a reference, and rendered judgment in favor of the relator and that a peremptory writ of mandamus issue. An application for a reargument was made and denied. The terms of the peremptory writ were directed to be, that the company comply with the requirements of the recommendation and order made by the commission on the 4th of August, 1887, and change its tariff of rates and charges for the transportation of milk from Owatonna and Faribault to St. Paul and Minneapolis, and substitute therefor the tariff recommended, published and posted by the commission, to wit, the rate of 27 cents per gallon of milk in ten-gallon cans from Owatonna and Faribault to St. Paul and Minneapolis, being the rates published by the commission and declared to be equal and reasonable therefor. Costs were also adjudged against. the company. To review this judgment, the

company brought a writ of error. Mr. John W. Cary for plaintiff in error.

I. The court erred in holding that the legislature of Minnesota, either by positive statute or acting through a railroad

Argument for Plaintiff in Error.

commission, is authorized to make, fix and establish the rates and charges for the transportation of persons and property over lines of railway owned by this company and in denying the right of the company, under the Constitution of the United States, to make, fix and establish its rates and charges over its railway, subject, only, to the provision that such rates and charges shall be fair, just and reasonable:

First. Because the exercise of such a power would impair the obligation of the contract contained in the charter under which said road was constructed.

The charter granted in 1856 was a contract between the Territory of Minnesota and the company organized by said charter; and the State of Minnesota, succeeding to the Territory on its admission to statehood, was subject to its provisions.

The road was constructed in pursuance of the charter. The plaintiff in error has succeeded to the ownership of the property and all the rights, franchises and privileges granted by the charter under the laws of the State of Minnesota. Any legislation of the State impinging upon the rights, franchises and privileges granted thereby, is an impairment of the obligation of the contract so made, which the plaintiff in error may lawfully resist.

There is no provision in the charter or in any general statute reserving to the Territory or State of Minnesota the right to alter, amend or repeal said charter, and it remains in full force according to the terms of the grant.

The language in the Dartmouth College Case, 4 Wheat. 518, conferring upon the board of trustees power to fill vacancies in their own number, is no more explicit than is the language of this charter; yet this court held that it was a contract that could not be violated or impaired by the legislature fifty years subsequently, and held it an affirmative grant of power for all time, that could not be interfered with.

The cases cited by the Chief Justice in Stone v. Farmers' Loan & Trust Co., 116 U. S. 307, on pages 326 and 327, are not authorities to justify the court in holding the language of the charter in this respect not a contract.

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