CASES ADJUDGED

IN THE

SUPREME COURT OF THE UNITED STATES

AT

OCTOBER TERM, 1913.

WOOD v. VANDALIA RAILROAD COMPANY.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF INDIANA.

No. 11. Argued December 17, 1912.-Decided October 20, 1913.

An order of a state railroad commission prescribing maximum freight rates on specified intrastate traffic will not be declared unconstitutional as confiscatory and depriving a railroad company of its property without due process of law where there is no proof of the value of the company's property within the State or of its receipts from its entire intrastate traffic, or of the value of that portion of the property affected by the order.

It does not necessarily follow from the mere fact that the total operating expenses of a railroad or of a division thereof bear a given relation to the entire receipts of that road or division, that the same ratio of expenses to receipts are maintained in regard to each particular class of traffic, and this court will not declare an order of a state railroad commission unconstitutional as confiscatory without proof as to the actual facts in regard to the particular rates complained of.

THE facts, which involve the constitutionality under the due process clause of the Fourteenth Amendment of an order of the Railroad Commission of Indiana prescribing maximum railroad freight rates for certain intrastate traffic, are stated in the opinion.

VOL. CCXXXI-1

(1)

Mr. Charles W. Smith and Mr. James E. McCullough, with whom Mr. Henry H. Hornbrook, Mr. Albert P. Smith, Mr. Thomas M. Honan, Attorney General of the State of Indiana, Mr. Bernard Korbly and Mr. Willard New were on the brief, for appellants.

Mr. John G. Williams, with whom Mr. Frederic D. McKenney, Mr. D. P. Williams and Mr. S. O. Pickens were on the brief, for appellees.

MR. JUSTICE HUGHES delivered the opinion of the court.

The bill in this suit was filed by the Vandalia Railroad. Company, appellee, to restrain the enforcement of an order made by the Railroad Commission of Indiana, on December 14, 1906, prescribing maximum freight rates for certain intrastate traffic. The ground of attack was that the rates so fixed would not yield sufficient revenue to pay the actual cost of the transportation covered by the order and, hence, that the order violated the Fourteenth Amendment of the Constitution of the United States. The case was referred to a Special Master who made a report, sustaining the contention of the railroad company, which was confirmed by the Circuit Court. Decree was entered accordingly setting aside the order and permanently enjoining proceedings to enforce it. Members of the Commission, and the shippers on whose petition this action was taken (who were made the defendants below), prosecute this appeal.

The assignments of error are addressed to the single point that the evidence failed to warrant the conclusion. that the prescribed rates were so unreasonably low that, if they were maintained, the Company would be deprived of its property without due process of law.

The Vandalia Railroad Company is a consolidated corporation, organized on January 1, 1905, under the

laws of Indiana and Illinois, pursuant to an agreement made by five railroad companies. Of these the Terre Haute and Indianapolis Company owned a railroad extending from Indianapolis westward to the boundary between the States of Indiana and Illinois, and the St. Louis, Vandalia and Terre Haute Company owned a railroad extending from that point to East St. Louis, Illinois. These two lines, forming a continuous route between Indianapolis and East St. Louis, constituted what was called the St. Louis division of the new company. The other lines entering into the consolidation were the Terre Haute and Logansport, from Terre Haute to Logansport and South Bend, Indiana; the Logansport and Toledo, from Logansport to Butler, Indiana; and the Indianapolis and Vincennes, from Indianapolis to Vincennes, Indiana.

The order applied to that portion of the Vandalia Company's road which lay between Indianapolis and the western boundary of Indiana, a distance of about eighty miles, which originally belonged to the Terre Haute and Indianapolis Company. The order was further limited to the freight traffic moving on "class rates," that is, to the traffic, having its origin and destination on this part of the Company's line, which was embraced in the six classes of the "official classification" as theretofore established by the Company. The existing class rates were found by the Commission to be unreasonably high and the maximum rates in question were ordered to be substituted as just and reasonable.

There was no proof of the value of the complainant's property within the State of Indiana or of the return it received from its entire intrastate business. Nor was there proof of the value of that portion of its road which was affected by the order, or of the return from all of its intrastate business upon that part of its lines. No attempt was made to supply proof of that sort. For all that appears,