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Argument for Plaintiff in Error in Nos. 33, 34.
A reserved right to alter charters does not authorize the confiscation or destruction of property of corporations, or the taking of property without compensation, and it must be construed subject to the restrictions of the state and federal constitutions forbidding the taking of property without due process of law. Delaware, &c. R. R. Co. v. Board of Pub. Util. Commrs., 85 N. J. L. 28; State v. Bancroft, 148 Wisconsin, 124; Berea College v. Kentucky, 211 U. S. 45; Grand Trunk Western Ry. Co. v. South Bend, 227 U. S. 544; Chicago, Milwaukee & St. Paul Ry. Co. v. Wisconsin, 238 U. S. 491.
The statute violates the contract clause and the due process clause, in that it impairs the obligation of the contracts between plaintiff in error and the Street Railway Company by altering their respective rights and duties as fixed by said contracts; in that it fixes a maximum proportion to be paid by the Street Railway Company, without regard to the terms of the contracts and without regard to the proportion of the danger or impediment created by the Street Railway Company.
The statute violates the Fourteenth Amendment in that it is an unreasonable exercise of the police power. Sanitary District v. Chicago & Alton R. R. Co., 267 Illinois, 252; Dobbins v. Los Angeles, 195 U. S. 223; Lawton v. Steele, 152 U. S. 133; Holden v. Hardy, 169 U. S. 366; Connolly v. Union Sewer Pipe Co., 184 U. S. 540; Otis Elevator Co. v. Chicago, 263 Illinois, 419. Distinguishing: New York & New England R. R. Co. v. Bristol, 151 U. S. 556.
The question of whether a statute is a reasonable or an unreasonable exercise of the police power, depends, to a certain extent, upon the course of legislation, as well as upon general public opinion. Muller v. Oregon, 208 U. S. 412; Merrick v. Halsey & Co., 242 U. S. 568; Bosley v. McLaughlin, 236 U. S. 385; People v. Charles Schweinler Press, 214 N. Y. 395 [followed by references to the legis
Argument for Plaintiff in Error in Nos. 33, 34. 254 U. S. lation respecting grade crossings, in New Jersey and in other States].
In determining whether the police power has been exercised in a reasonable manner, attention must be paid to the element of cost and the practical effect of the statute under consideration. Wisconsin &c. R. R. Co. v. Jacobson, 179 U. S. 287; Oregon R. R. & Navigation Co. v. Fairchild, 224 U. S. 510; Houston &c. R. R. Co. v. Dallas, 98 Texas, 396; Northern Central Railway Company's Appeal, 103 Pa. St. 621; Pennsylvania &c. R. R. v. Philadelphia & Reading R. R., 160 Pa. St. 277; Cleveland &c. Ry. Co. v. State Public Utilities Comm., 273 Illinois, 210; Connecticut Co. v. Stamford, 95 Connecticut, 26; Chicago &c. Ry. Co. v. Minneapolis, 238 Fed. Rep. 384; Chicago & Northwestern Ry. Co. v. Ochs, 249 U. S. 416.
If the present statute is sustained, there is no limit to the enormous burden that might thus be imposed upon a railroad company, short of the elimination of every grade crossing on its entire system. If an administrative body is given power to determine as a matter of fact what constitutes danger or impediment, and if its conclusion in that respect is binding on the reviewing court, except in a case where there is no evidence whatever to sustain it, then there is no limit to what might be ordered under such a statute, other than the sound discretion of the administrative body to whom is committed this vast power. [Counsel referring to and explaining the following cases in this court: New York & New England R. R. Co. v. Bristol, 151 U. S. 556; Missouri Pacific Ry. Co. v. Omaha, 235 U. S. 121; Northern Pacific Ry. Co. v. Duluth, 208 U. S. 583; St. Paul &c. Ry. Co. v. Minnesota, 214 U. S. 497; Cincinnati &c. R. R. Co. v. Connersville, 218 U. S. 336; Chicago &c. Ry. v. Minneapolis, 232 U. S. 430; Lake Shore &c. Ry. Co. v. Clough, 242 U. S. 375; Atlantic Coast Line R. R. Co. v. Goldsboro, 232 U. S. 548; Chicago &
Alton R. R. Co. v. Tranbarger, 238 U. S. 67; Great Northern Ry. Co. v. Clara City, 246 U. S. 434. Also cases of railway bridges over navigable waters: Chicago &c. Ry. Co. v. Drainage Commissioners, 200 U. S. 561; West Chicago Street R. R. Co. v. Chicago, 201 U. S. 506; Union Bridge Co. v. United States, 204 U. S. 364; Monongahela Bridge Co. v. United States, 216 U. S. 177; Hannibal Bridge Co. v. United States, 221 U. S. 194.]
The present case is illustrated by Chicago &c. Ry. Co. v. Minneapolis, 238 Fed. Rep. 384. The only case in this court in which the question of the validity of a state law providing for the abolition of grade crossings has been directly involved, is the Bristol Case, supra, which is distinguishable both on the facts and on the statute then under consideration.
Mr. Frank Bergen for plaintiff in error in No. 40.
Mr. L. Edward Herrmann and Mr. Frank H. Sommer, with whom Mr. Francis Scott was on the brief, for defendants in error.
MR. JUSTICE HOLMES delivered the opinion of the court.
These are writs of error brought by parties interested in an order of the Board of Public Utility Commissioners of New Jersey, dated April 20, 1915, directing a change in fifteen places in the City of Paterson, where the Erie Railroad now crosses that number of streets at grade. The order was reviewed on writs of certiorari and affirmed by the Supreme Court, and on appeal by the Court of Errors and Appeals. 89 N. J. L. 57, 24. 90 N. J. L. 672, 673, 714, 729, 677, 694, 715. The Erie Railroad Company made two applications to the Supreme Court, the second being based upon a refusal by the Board to grant a rehearing of its order. Accordingly it has two writs of error here.
Opinion of the Court.
But the second adds nothing to the first as we could not say that the Board unreasonably refused further delay. Those of the other parties are to the judgments affirming the original order of the Board. The Erie Railroad was ordered to make the change by carrying fourteen of the crossings under, and one, at Madison Avenue, over the railroad. It will also have to bear the cost, subject to a charge to the Public Service Railway Company of ten per centum of the cost of changing three crossings used by its road. The most important questions arise in the Erie Railroad Company's case and we take that up first.
The order was made under an Act of March 12, 1913, c. 57, P. L. 1913, p. 91, which is construed by the State Courts to authorize it, subject to the constitutional questions to be dealt with here. The Erie Railroad's line in Paterson is over tracks originally belonging to the President and Directors of the Paterson and Hudson River Railroad Company and the Paterson and Ramapo Railroad Company, but now held by the Erie Railroad, by assignment of perpetual leases upon the terms that if in any unforeseen way the leases terminate the value of erections and improvements must be repaid by the lessors. They however are small corporations having no assets except their roads and the rentals received from the Erie Company. The leases were ratified by an Act of March 14, 1853, providing that they should not be held to confer any privilege or right not granted to the lessors by their charters. It is admitted that the statute must be taken to impose the duty of making the changes upon the company operating the road, the plaintiff in error, which is an interstate road. It put in evidence that it did not have assets sufficient to make the changes, at least without interfering with the proper development of its interstate commerce, and also contended that the whole evidence did not justify the finding of the Board that the crossings were dangerous to public safety but at most showed that
Opinion of the Court.
the change would be a public convenience. It is said that the order must be reasonable to be upheld and that it is not reasonable to require an expenditure for such a purpose of over two million dollars from a company that has not more than $100,000 available, and that the order and the statute when construed to justify it not only interfere unwarrantably with interstate commerce and impair the obligation of contracts but take the Erie Company's property without due process of law.
Most of the streets concerned were laid out later than the railroads and this fact is relied upon, so far as it goes, as an additional reason for denying the power of the State to throw the burden of this improvement upon the railroad. That is the fundamental question in the case. It might seem to be answered by the summary of the decisions given in Chicago, Milwaukee & St. Paul Ry. Co. v. Minneapolis, 232 U. S. 430, 438. "It is well settled that railroad corporations may be required, at their own expense, not only to abolish existing grade crossings but also to build and maintain suitable bridges or viaducts to carry highways, newly laid out, over their tracks or to carry their tracks over such highways." Missouri Pacific Ry. Co. v. Omaha, 235 U. S. 121; Northern Pacific Ry. Co. v. Puget Sound & Willapa Harbor Ry. Co., 250 U. S. 332. For although the statement is said to be explained as a matter of state law by the previous decisions in Minnesota, it is made without reference to those decisions or to any local rule, and moreover the intimation of the judgment in the present case is that whatever may have been the earlier rulings the law of New Jersey now adopts the same view.
But it is argued that the order is unreasonable in the circumstances to which we have adverted, the principle applied to the regulation of public service corporations being invoked. Mississippi Railroad Commission v. Mobile & Ohio R. R. Co., 244 U. S. 388, 391; Chicago,