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U.S. Supreme Court

McNeill v. Southern Railway Co., 202 U.S. 543 (1906)

McNeill v. Southern Railway Company

No. 370, 594. Argued April 2, 3, 1906

Decided May 28, 1906

202 U.S. 543


Although the dispute which was the origin of the controversy involved less than $2,000, where the controversy presented by the bill involves the right of enforcement of statutory penalties against complainant of over $2,000, and also its right to carry on interstate business within the state, which is worth more than $2,000, the circuit court has jurisdiction so far as the amount in controversy is concerned.

A suit brought by a railway company against the members of a state railway commission to restrain them from interfering with complainant's property and interstate business under a state statute alleged in the bill to be unconstitutional as imposing burdens on interstate commerce is not a suit against the state within the meaning of the Eleventh Amendment.

The interstate transportation of cars from another state which have not been delivered to the consignee, but remain on the track of the railway company in the condition in which they were originally brought into the state, is not completed, and they are still within the protection of the commerce clause of the Constitution.

While a state in the exercise of its police power may confer power on ar administrative agency to make reasonable regulations as to the place, time, and manner of delivery of merchandise moving in channels of interstate commerce, any regulation which directly burdens interstate commerce is a regulation thereof, and repugnant to the federal Constitution, and so held that an order of the North Carolina Corporation Commission requiring a railway company to deliver cars from another state to the consignee on a private siding beyond its own right of way was a burden on interstate commerce, and void.

Quaere whether such an order applicable solely to state business would be repugnant to the due process clause of the Constitution.

An injunction granted by the final decree should not be broader than the necessities of the case require, and if broader than that, it will be modified, as in this case, by this Court. chanrobles.com-red

Page 202 U. S. 544

The Southern Railway Company, a corporation organized under the laws of the State of Virginia, operates, among others, a line of railway passing through Greensboro, North Carolina. At that place, the Greensboro Ice & Coal Company, during the times hereafter mentioned, had a coal and wood yard, located some distance from the main track and right of way of the railroad. From this main track, however, there was a private siding or spur track extending across the land of private persons to the establishment of the ice and coal company. In consequence of the views expressed in the opinion, it is unnecessary to review the facts as to the construction of this spur track or to detail the course of dealing between the parties concerning it prior to the origin of this controversy. Certain it is that, at one time, the railroad delivered cars consigned to the ice and coal company from its main track onto the spur track in question. A dispute arose between the railway company and the ice and coal company concerning demurrage on thirteen cars containing coal and wood consigned to the latter company. In consequence of the refusal of the ice and coal company to pay these charges, the railway, on October 12, 1903, notified the ice and coal company that, after October 17, 1903, it would only deliver cars consigned to the ice and coal company on the public tracks of the railway company at a place known as the team track, set aside for the delivery to the public generally of merchandise of that character. After receiving this notice, the ice and coal company ordered four cars of coal from points in the States of Pennsylvania, West Virginia, and Tennessee. These cars reached Greensboro between October 18, 1903, and October 22, 1903, were placed upon the team track, and delivery was tendered to the ice and coal company. That company, however, declined to receive or unload the cars elsewhere than on the siding above referred to. An informal complaint on the subject was made by letter on October 20, 1903, to the North Carolina Corporation Commission, composed of the appellants Franklin McNeill, Samuel L. Rogers, and Eugene C. Beddingfield. After conversations had with chanrobles.com-red

Page 202 U. S. 545

officers of the railway company, the commission, on October 31, 1903, made an order requiring the railway company, upon payment of freight charges, to make delivery of the cars beyond its right of way and on the siding referred to. Hearing was had on exceptions filed on behalf of the railway company, and on December 10, 1903, the commission made an order overruling the exceptions. The railway company appealed to the Circuit Court of Guilford County.

In the meantime, on November 2, 1903, after demurrage or car service charges had attached in respect to the four cars of coal, and to prevent unnecessary interference with its other business, the railway company removed the cars in question from the team track and placed them on a distant siding.

By chapter 164 of the Public Laws of North Carolina for 1899, creating the corporation commission, and by the acts amendatory thereof, as contained in chapter 20, revisal of 1905, as amended in 1905, it was provided as follows:

"1086. For Violating Rules. -- If any railroad company doing business in this state, by its agents or employees, shall be guilty of a violation of the rules and regulations provided and prescribed by the commission, and if, after due notice of such violation, given to the principal officers thereof, if residing in the state, or, if not, to the manager or superintendent or secretary or treasurer, if residing in the state, or, if not, then to any local agent thereof, ample and full recompense for the wrong or injury done thereby to any person or corporation, as may be directed by the commission, shall not be made within thirty days from the time of such notice, such company shall incur a penalty for each offense of $500. (1899, c. 164, § 15.)"

"1087. Refusing to Obey Orders of Commission. -- Any railroad or other corporation which violates any of the provisions of this chapter or refuses to conform to or obey any rule, order, or regulation of the corporation commission shall, in addition to the other penalties prescribed in this chapter, forfeit and

Page 202 U. S. 546

pay the sum of $500 for each offense, to be recovered in an action to be instituted in the Superior Court of Wake County, in the name of the State of North Carolina on the relation of the corporation commission, and each day such company continues to violate any provision of this chapter, or continues to refuse to obey or perform any rule, order, or regulation prescribed by the corporation commission shall be a separate offense. (1899, c. 164, § 23.)"

"* * * *"

"1091. Violation of Rules, Causing Injury; Damages; Limitation. -- If any railroad company doing business in this state shall, in violation of any rule or regulation provided by the commission, inflict any wrong or injury on any person, such person shall have the right of action and recovery for such wrong or injury in any court having jurisdiction thereof, and the damages to be recovered shall be the same as in an action between individuals, except that, in case of willful violation of law, such railroad company shall be liable to exemplary damages; Provided, that all suits under this chapter shall be brought within one year after the commission of the alleged wrong or injury. (1899, c. 164, § 16.)"

On January 5, 1904, the bill in this case was filed in the Circuit Court of the United States for the Eastern District of North Carolina to perpetually enjoin the bringing of actions by the ice and coal company and by the commission to recover penalties or damages under the authority of the aforesaid statutory provisions because of the noncompliance of the railway company with the order of the commission. As grounds for the relief prayed, it was averred that the railway company had a common defense based upon the commerce clause of the Constitution of the United States, the provisions of the act of Congress to regulate commerce, and the due process clause of the Constitution, and also because the corporation commission was an illegal body, as it was empowered to exercise judicial, executive, and legislative functions, contrary to the Constitutions of the state and of the United States. After the filing chanrobles.com-red

Page 202 U. S. 547

of answers, the cause was referred to a master to report the testimony and findings of fact to the court. The court, concluding that the order of the corporation commission was repugnant to the commerce clause of the Constitution, entered a decree in favor of the railway company, and perpetually enjoined the enforcement of the order of the corporation commission and the bringing of actions to recover penalties or damages for a violation of that order. 134 F. 82. The corporation commission and the ice and coal company appealed, and the railway company prosecuted a cross-appeal upon the ground that the court below erred in not deciding that the corporation commission was an unconstitutional body because of the alleged mixed and peculiar character of the functions conferred upon it by the state statutes. chanrobles.com-red

Page 202 U. S. 558


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