Grand Rapids & Indiana Railway Co. v. Michigan Railroad Commission

Ostrander, J.

(after stating the facts). The Michigan Railroad Commission is a body possessing limited powers, to be ascertained by reference to the statute creating it. It may enforce its orders by application to the courts, and its orders are reviewable by the courts. In proceedings before it, unnecessary formality is, and should be, dispensed with, and complaints such as were made in the matters now before us ought to be considered, as the commission in its opinion says, with reference to “the real substance of the issue presented.”

But the necessity for distinct issues,, discoverable from the record which is made, is apparent, since it is by the record that the court must determine whether the jurisdiction of the commission has been exceeded. These observations are made here because it seems to us that the complaint which set the commission in motion is lacking in certainty; the real issue — the one determined by the commission — not being the one immediately suggested by reading the complaint.

Referring to the complaint, we find it states that “it is the practice and regulation” of the said railroad company, “to require the execution of a certain lease or agreement, a copy of which is hereto attached and marked ‘Exhibit A/ as a condition precedent to the construction and the maintenance of a switch connection with the private side track of any shipper tendering traffic for transportation,” and that the practice or regulation is unreasonable, unjust, discriminatory, and in violation of the act. Referring* to the act, it is found that the legislature has enjoined upon railroads the duty “upon application of any shipper tendering traffic for transportation” to construct, maintain, and operate upon reasonable terms a switch connection *393 with any private side track, when such connection is reasonable, practicable, and can be put in with safety, and will furnish sufficient business to justify the construction and maintenance of the same. Section 6 (a). Reading the statute and that portion of the complaint referred to together, it would appear that the railroad company, instead of obeying the statute^ made it a practice to disobey it, and to refuse switch connections with private side tracks, unless an objectionable contract was first made with the shipper. No such complaint was considered by the commission. The form of agreement attached to the complaint indicates that no such issue was intended to be presented. The agreement relates entirely to the construction and maintenance of a side track by the railroad company to the plant of some person or corporation. When completed and executed, it would embody the terms upon which the railroad company undertook, upon request of the shipper, to construct and maintain a side track connecting with its line of road running to the plant or place of business of the shipper. The order of the commission relates, not at all to establishing switch connections with private side tracks, but wholly to side-track agreements and leases, and, attached to the order, is a form of agreement containing “the maximum provisions that may be required by the railroad as preliminary to the construction or operation of side tracks after the date of this order, where such side tracks are to be constructed or where leases or agreements now in existence may have expired.” The railroad company seems, however, not to have mistaken the question intended to be raised, as is indicated by the answer which was filed, and so we proceed to examine the arguments made for and against the validity of the order of the commission.

The commission found: First, that it was a practice and regulation of the railroad company to exact from those requesting the building and maintenance *394 of side tracks an agreement or contract; second, that “the existing side-track leases and agreements required by said defendants in this State contain unreasonable, unjust, and discriminatory provisions,” and that the regulation and practice of requiring them is unreasonable, unjust, and discriminatory, and it determined that defendants cease and desist from the regulation and practice of requiring such agreements “as described in the said petition in this cause,” and that “side-track agreements and leases executed after the date of this order shall not contain requirements in any way providing” — enumerating provisions found to be unreasonable, unjust, and discriminatory. In effect, the commission decided, not that railroad companies shall construct and maintain side tracks in any case, not that construction and maintenance may not rest upon agreement, but that, if they do decide to agree to construct and maintain them, they — and this, of course, includes the shipper and railroad — may not agree to certain things. And the order is universal, applying to every case, whatever the circumstances of the case may be. In my opinion, the validity of the order must be denied,

1. If the duty to build, maintain, and operate so-called private spur or side tracks was an absolute duty of the railroad company, no universal rule governing the conditions and circumstances under which the duty should be performed could be made. The reasonableness of an order requiring the performance of such a duty would be always open to question, and, manifestly, in each case, the peculiar circumstances would determine the question of the reasonableness of the order. Oregon Railroad & Navigation Co. v. Fairchild, 224 U. S. 510, 528 , et seq. (32 Sup. Ct. 535, 540). It is true, and has been already stated, that the order in question does not require the railroad company to build or maintain or operate any track. The order was made, however, in contemplation of the fact that *395 shippers desire side tracks to be constructed, and that railroad companies accede to the desire and build side tracks. The right to build at all is denied, unless the order be complied with. This is a practical denial of a hearing in each case, if one is desired, and a prejudgment of rights. *

“Since the decision in Wisconsin, etc., Railroad v. Jacobson, 179 U. S. 287 [21 Sup. Ct. 115], there can be no doubt of the power of a State, acting through an administrative body, to require railroad companies to make track connection. But manifestly that does not mean that a commission may compel them to build branch lines, so as to connect roads lying at a distance from each other; nor does it mean that they may be required to make connections at every point where their tracks come close together in city, town, and country, regardless of the amount of business to be done, or the number of persons who may utilize the connection, if built. The question in each case must be determined in the light of all the facts, and with a just regard to the advantage to be derived by the public and the expense to be incurred by the carrier. For while the question of expense must always be considered (Chicago, etc., Railroad v. Tompkins, 176 U. S. 167, 174 [20 Sup. Ct. 336]), the weight to be given that fact depends somewhat on the character of the facilities sought. If the order involves the use of property needed in the discharge of those duties which the carrier is bound to perform, then, upon proof of the necessity, the order will be granted, even though ‘the furnishing of such necessary facilities may occasion an incidental, pecuniary loss/ But even then the matter of expense is ‘an important criteria to be taken into view in determining the reasonableness of the order,' Atlantic Coast Line Railroad v. North Carolina Commission, 206 U. S. 1, 27 [27 Sup. Ct. 585, 11 Am. & Eng. Ann. Cas. 398]; Missouri Pacific Ry. v. Kansas, 216 U. S. 262 [30 Sup. Ct. 330]. Where, however, the proceeding is brought to compel a carrier to furnish a facility not included within its absolute duties, the question of expense is of more controlling importance. In determining the reasonableness of such an order, the court must consider all the *396 facts — the places and persons interested, the volume of business to be affected, the saving in time and expense to the shipper, as against the cost and loss to the carrier. On a consideration of such and similar facts the question of public necessity and the reasonableness of the order must be determined. This was done in Wisconsin, etc., Railroad v. Jacobson , in which, for the first time, it was decided that a State commission might compel two competing interstate roads to connect their tracks.

“It appeared on an examination of the facts in that case that on one of the lines there was an immense supply of wood, for which there was a great demand at points on the other, where there was none, and that if the connecting track was installed, there would be a saving-in time and freight on this large volume of business. It also appeared that many cattle were raised on one line, for which there were important markets on the other, and that without the track connections these cattle would have to be hauled over a much longer route, with a resulting loss in weight and value. The advantage to the public was so great that the order requiring the track connection was sustained, in spite of the fact that one of the roads was thereby deprived of the revenue which it would otherwise have received for the longer haul. But the court said ( 179 U. S. 301 [21 Sup. Ct. 1115]), that:

“ ‘In so deciding we do not at all mean to bold that under no circumstances could a judgment enforcing track connection between two railroad corporations be a violation of the constitutional rights of one or the other, or possibly of both such corporations. It would depend upon the facts surrounding the cases in regard to which the judgment was given. The reasonableness of the judgment with reference to the facts concerning each case must be a material, if not a controlling, factor upon the question of its validity. A statute, or a regulation provided for therein, is frequently valid, or the reverse, according as the fact may be, whether it is a reasonable or an unreasonable exercise of legislative power over the subject-matter involved. And in many eases questions of degree are the controlling ones by which to determine the validity, or the reverse, of legislative action.’ ”

Oregon Railroad & Navigation Co. v. Fairchild, supra.

*397 The language quoted relates to a requirement that a track connection be established between railroads, but the reasoning is pertinent here.

The universality of the rule established by the order of the commission condemns it.

2. Assuming, what is doubtful, that the complainant railroad company in every case, no matter what the circumstances surrounding it, would refuse to make agreements other than the one found to be objectionable, a practice or regulation within the meaning of the act is not thereby made out. This sufficiently appears from a reading of the act and the particular context wherever these terms are used. For example, in section 22 (a) it is provided that:

“Upon complaint of any person, firm or corporation * * * that any regulation or practice whatsoever affecting the transportation of persons or property, or any service in connection therewith, are in any respect unreasonable or unjust, * * * the commission may notify the railroad complained of that complaint has been made, and * * * may proceed to investigate the same. * * * ”

If a side track is constructed, and cars are moved over it, the transportation of persons and property may be affected. Whether a side track shall be built, and, if built, the relations which shall be established by agreement between the railroad constructing it and the private shipper, are not usually, if ever, in the absence of legislation, matters of public concern. By section 14 of the act the commission is given control over private side tracks in so far as the same are used by common carriers, and innumerable cases may be conceived in which it might be called upon, within its powers, to exercise such control. But a practice of the railroads to build and maintain side tracks only by an arrangement of its own and the shippers’ private rights is not, in the absence of legislation, a practice to be controlled by the commission.

*398 3. What the commission did was, not to administer, but enact, a law. The legislature alone can impose upon railroads the duty to construct private side tracks. When the complaint was made, it had imposed no such duty. Having the right to construct or refuse to construct or maintain a particular track, the complainant had the right to impose the terms upon which it would construct and maintain it. This is settled beyond doubt by our own decisions and those rendered in other jurisdictions. Mann v. Railroad Co., 135 Mich. 210 ( 97 N. W. 721 ). This right the order of the commission would take away.

Without entering upon an examination of many interesting phases of the subject-matter discussed in the briefs, we are content to rest decision upon the points above stated; the more so because the legislature, after the complaint was made to the commission, and before the decision of the commission was handed down, imposed upon railroads, in terms, the duty to build spur tracks to and to and upon the grounds of shippers upon certain terms and subject to certain contingencies. The enactment (Act No. 300, Pub. Acts 1909, § 6, subd. “5”) reads:

“Every railroad shall provide a reasonable, adequate and suitable spur track to and to and upon the grounds of any mill, elevator, storehouse, warehouse, dock, wharf, pier, manufacturing establishment, lumber yard, coal dock or other industry or enterprise, wherever such spur track does not necessarily exceed two miles in length and is practically indispensable to the successful operation of any such industry or enterprise, and shall connect such spur track with its main track and operate the same in connection therewith: Provided, that such railroad may require the person or persons, firm, corporation or association primarily to be served thereby, to pay the legitimate cost and expense of acquiring by condemnation or purchase where necessary the rights of way for such spur track, and of constructing the same, in Which case the total estimated cost thereof shall be deposited with the rail *399 road before the railroad shall be required to incur any expense whatever therefor. No railroad shall, however, be required to provide a spur track where it is unusually unsafe and dangerous: Provided, that in the event of the failure of said shipper and the said railroad to agree, the necessity for, reasonableness of, and practical safety of such spur track and connection and the operation thereof shall be decided by the said Michigan Railroad Commission upon complaint and hearing as provided in section twenty-two of this act.”

This act was called to the attention of the commission by the answer of the railroad* We need not now inquire whether this legislation may be sustained. Assuming it to be valid, the duties of the commission are pointed out with, respect to disagreements between the railroad and a shipper in a particular case. If the legislation shall be held to be invalid, it is nevertheless an expression of legislative opinion that the commission had theretofore no such powers as were assumed in the matter at bar.

The decree of the circuit court is reversed, and a decree will be entered in this court in accordance with the prayer of the bill.

McAlvay, C. J., and Stone, Moore, and Steere, JJ., concurred. Brooke, Kuhn, and Bird, JJ., did not sit.