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Argument for Appellee.
only against state action, and is not infringed unless the State is the actor. An injunction against the commission under that amendment is necessarily against the State, because if the commission does not act for the State the amendment is not violated. "To secure the manifest purposes of the constitutional exemption guaranteed by the Eleventh Amendment requires that it should be interpreted, not literally and too narrowly, but fairly, and with such breadth and largeness as effectually to accomplish the substance of its purpose. In this spirit it must be held to cover, not only suits brought against a State by name, but those also against its officers, agents, and representatives, where the State, though not named as such, is, nevertheless, the only real party against which alone in fact the relief is asked, and against which the judgment or decree effectively operates." In re Ayers, 123 U. S. 505, 506.
Mr. John F. Dillon and Mr. E. B. Kruttschnitt, (with whom were Mr. Herbert B. Turner and Mr. John J. McCook on the brief,) for appellee, upon the effect of the Fourteenth Amendment upon the power of the States to regulate and control railway fares and charges, said:
The underlying question in this case is whether at this time, railway companies and the holders of their shares and bonds have any effectual protection against legislative invasion and destruction of the values of their properties. In 1891 the legislature of Texas passed a railroad commission act, which empowers three citizens of Texas who, by the appointment of the governor, constitute the commission, to fix rates for railway transportation, and provides that the rates so fixed shall be in all cases presumptively, and in certain cases conclusively, reasonable and lawful.
It enacts that if any railway company shall charge or receive a greater rate than that fixed and established by the commission, it shall be guilty of extortion and liable to double penalties, one to the State and one to the passenger or shipper, ranging from $100 to $5000 for each offence. Under the authority of this act the commission have, as alleged, both
Argument for Appellee.
generally and circumstantially, in the bill and amended bill of complaint, fixed tariffs of rates which are unreasonable and unjust, and have coerced the companies to put these rates into effect under the menaces contained in the act of a vast multiplicity of suits to enforce the provisions thereof as to damages and penalties.
The shareholders and the bondholders, as well as the railway companies, are remediless unless they can obtain judicial relief. And they can obtain no such relief in this and the like causes unless the act itself, or the orders of the commission establishing such rates, are in conflict with the act or with the provisions of the constitution of the State, or of those provisions of the Constitution of the United States, which protect private property from state legislative spoliation, and which guarantee to every person the equal protection of the laws of the land.
The founders of our democratic, or rather republican institutions were neither visionaries nor socialists. It is among the eternal lessons of history, which they well knew, that the mass of the people were subject to the influence of supposed temporary interests, and of "violent and casual forces" which might be in conflict with their own vital and permanent welfare. Realizing this truth, and the necessity of safe-guarding these vital and permanent interests, the founders of our political and legal institutions devised and the device has been supposed to be the crowning proof of their wisdom — the American polity of constitutional restraints upon all the departments of the governments which the people established. All the original States undertook to secure the inviolability of private property. This they did, either by extracting and adopting, in terms, the famous 39th article of Magna Charta, securing the people from arbitrary imprisonment and arbitrary spoliation, or by claiming for themselves, compendiously, all of the liberties and rights set forth in the Great Charter. We make this statement as to the action of the original States after a careful examination of their charters and constitutions.
When the Federal constitution was formed, there was in
Argument for Appellee.
serted in it the provision, also original and unique, “that no State shall pass any law impairing the obligation of contracts."
Encroachments from the general government were feared, and this fear led to the speedy adoption of the first amendments to the constitution. Justice Miller, in the Slaughterhouse cases says: "The adoption of the first eleven amendments to the Constitution, so soon after the original instrument was accepted, shows prevailing sense of danger at that time from the Federal power."
The Fifth Amendment was borrowed from the Magna arta, where it had stood for more than five centuries as the bulwark of the ancient and inherited rights of Englishmen to be secure in their personal liberty and in their possession. It was a limitation only on the general government; but it showed a settled purpose, from the beginning, in both State and Federal constitutions to protect and secure personal liberty and private property.
With these guarantees the inviolability of contracts and the sacredness of private property — the Republic set out on its untried course. One hundred years and more have vindicated the necessity and the wisdom of these organic limitations.
The result of the provision ordaining contracts to be inviolable has been, says Mr. Justice Miller, "to make void innumerable acts of state legislatures intended in times of disastrous financial depression and suffering to protect from the hardships of a rigid and prompt enforcement of the law in regard to their contracts, and to prevent the States from repealing, abrogating, or avoiding by legislation, contracts fairly entered into with other parties." Miller on Const. 393.
Hundreds of acts of state legislation have been declared void under this clause by this court, and attempted repudiation, with its consequent dishonor, prevented. Who is not glad. that the States have not the power to destroy or impair contracts?
So, likewise, the provisions in the state and national constitutions protecting private property have, up to this time,
Argument for Appellee.
been effective. These have been, indeed, the great triumphs of our popular system of government, for these were supposed to be its vulnerable spots. Disbelievers in republican institutions had predicted early shipwreck on these rocks, and when it came not they simply postponed the period of fulfilment.
The history and general purpose of the Thirteenth, Fourteenth, and Fifteenth Amendments are set forth in the Slaughter-house cases and in other cases decided by this court. We have no occasion to offer any specific criticism on these decisions; for, sc far as concerns the question of state power over railway rates, a review of all the cases on this subject from Munn v. Illinois and the Granger cases, decided in 1876, to the Michigan Passenger Rate case, decided in 1892, establishes the doctrine that the States have the power to regulate rates, but that such power must be exercised subject to the prohibitions of the Fourteenth Amendment, and, if the regulations thus made are unreasonable, they are void; and the question whether or not they are unreasonable is a judicial question, to be determined by the courts in suits commenced and conducted therein, under and in accordance with the laws of the land.
We contend for nothing more. As thus understood, the doctrine is, as we believe, just and sound.
We must say, however, that it has seemed to us that the principles and purpose of the Fourteenth Amendment have not always been appreciated to the full. We agree that it was not intended to effect structural changes as between the state and Federal governments, but we do not agree that its language or scope are to be limited by the special causes which occasioned its adoption.
It may be that the oppressions of the freedmen by the States in which they had been slaves was the immediate cause of the amendment, but its language is not confined to color or to class. It is general and unlimited. Motley expresses a great truth when he says: "So close is the relationship of the whole human family that it is impossible for a nation, even when struggling for itself, not to acquire something for all mankind." Preface to Dutch Republic. And it is the special glory of those who framed and secured this amendment that
Argument for Appellee.
they purposely made its language and provisions universal and undistinguishing in their application. It is, in fact, a reaffirmation, in the most impressive and solemn form, of the sacredness and stability of private property, as one of the fundamental and indestructible rights of the people of the United States.
Thus it is effectual to protect railway properties against any action or legislation of the States, the effect of which is to deprive the companies of a right to a reasonable compensation for services in the transportation of freight or passengers. In this aspect the question of what is a reasonable compensation is a judicial question to be determined in the courts.
The Texas Railroad Commission Act, in respect of fixing and enforcing rates of charges, is in violation of the Constitution of the United States, for the reason that provisions of the Texas act in that behalf not only limit but effectually deny to railway companies subject to the act, the right to a judicial inquiry into the reasonableness of the rates fixed by the commission, and thereby deny to the companies the equal protection of the laws; and if the Texas act is enforced in the manner provided therein, (and it cannot, of course, be otherwise enforced,) it deprives the companies of their property without due process of law.
We understand and maintain that the decisions of this court on the subject of the power of the States over railway tariffs or charges establish the following principles:
As to railways created by a State, or doing business in a State under state authority, the result of the decisions of this court is that, as to interstate commerce, the several States are without any authority whatever to touch or regulate the same in any degree. As to domestic commerce that is, such as "begins and ends within a State, disconnected from a continuous transportation through or into other States," Wabash &c. Railway v. Illinois, 118 U. S. 557, 564 - the State may establish maximum rates of charges, either immediately by legislative act or mediately through a commission, but this power is not unlimited: like all other legislative powers, it is subject to the prohibitions of the Constitution of the United States, and particularly to those of the Fourteenth Amend