Wadley v. Southern Ry. Co. v. Georgia, 235 U.S. 651 (1915)
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Wadley v. Southern Railway Company v. Georgia
No. 27
Argued January 30, 1914
Decided January 11, 1915
235 U.S. 651
ERROR TO THE SUPREME COURT
OF THE STATE OF GEORGIA
Syllabus
The general common law rule that a carrier has the option of demanding freight in advance or on delivery applies not only to the shipper, but also to the connecting carrier, but quaere how far this rule may be or has been modified by statutes prohibiting discrimination.
This Court, being bound by the construction given by the highest state court to a statute of the state, holds that the statute of Georgia involved in this case gives power to the State Railroad Commission to require a railroad to treat all connecting carriers alike in regard to payment of freight in advance or on delivery, and the only question here is whether an order requiring a railroad company to cease demanding payment in advance from one carrier and not from another violates the due process provisions of the Fourteenth Amendment.
Although the particular section which authorizes an order of a state railroad commission may not provide for a hearing, if the state court has construed that section as part of the law establishing the commission and which does require hearings, that section is not unconstitutional under the Fourteenth Amendment as denying an opportunity to be heard, and so held as to the Georgia Railroad Commission Law.
An order of the Georgia State Railroad Commission requiring a railroad to desist from demanding freight in advance on merchandise received from one carrier while it accepts merchandise of the same character at the same point from another carrier without such prepayment, being otherwise legal, is not so arbitrary and unreasonable as to be violative of the due process clause of the Fourteenth Amendment.
A state has power to impose penalties sufficiently heavy to secure obedience to orders of public utility commissions after they have been found lawful or after the parties affected have had ample opportunity to test the validity of administrative orders and failed so to do.
A party affected by a statute passed without his having an opportunity to be heard is entitled to a safe and adequate judicial review of the legality thereof. It is a denial of due process of law if such review can be effected by appeal to the courts only at the risk of having to pay penalties so great that it is better to yield to orders of uncertain legality than to ask the protection of the law. Ex Parte Young, 209 U.S. 123.
Where, after reasonable notice of the making of an administrative order, a carrier fails to resort to the safe, adequate and available remedy of testing its validity in the courts and makes an unsuccessful defense by attacking such validity when sued for the penalty, it is subject to the penalty.
137 Ga. 497 affirmed.
Adrian, Georgia, a station on the Wadley Southern Railway, is 10 miles from Rockledge, where the road connects with the Macon & Dublin R. Co., and 27 miles from Wadley, where it connects with the Central of Georgia Railway. In consequence of this connection with both roads, goods could be shipped from Macon to Adrian over either route. It was, however, to the interest of the Wadley Southern to have such freight routed via the Central, because it thereby secured the haul of 27 miles from Wadley to Adrian instead of the 10-mile haul when goods were routed via Rockledge. In addition to this, the Central owned all of the stock in the Wadley Southern, and allowed it more than a mileage proportion in the division of the through rate. For these reasons, the Wadley made the Central its preferred connection, and received from it goods for Adrian without requiring the prepayment of freight, while refusing at Rockledge to receive goods shipped from Macon over the Macon & Dublin R. Co. unless the charges to Adrian were prepaid. Merchants shipping via Rockledge contended that this was an unjust discrimination, and made complaint to the Railroad Commission, which, after "hearing evidence and argument of counsel," passed an order, dated March 12, 1910, requiring
the Wadley Southern to desist from such discrimination, and on and after the receipt of the order, to afford shippers via Rockledge the same facilities for the interchange of freight that was afforded shippers over the line of the Central, via Wadley.
On March 14, 1910, a copy of this order was received by the Wadley Southern, which, however, did not institute any proceeding to test its validity in the courts of Fulton County having jurisdiction of "suits against the Commission or its orders" (Ga.Code, § 2625). Instead, the company, on April 4, 1910, notified the Commission that it would decline to comply with the order on the ground that it was void. Accordingly, on May 26, 1910, more than two months after the order was served, a penalty suit was brought against the carrier by the state in which it was alleged that, on divers days, the Wadley Southern had violated the order of the Commission, and asking that a single penalty "not to exceed $5,000," should be imposed under the terms of the Act of August 26, 1907. That statute provides that all corporations and persons subject to the public utility law "shall comply with every order made by the Commission under authority of law," and any corporation or person which neglects to comply with such order shall
forfeit to the State of Georgia not more than $5,000 for each and every offense, the amount to be fixed by the presiding judge. . . . Every violation . . . of any such order shall be a separate and distinct offense,
and, "in case of the continued violation, every day the violation thereof takes place shall be deemed a separate and distinct offense."
In its answer to this penalty suit, the Wadley Southern denied that it had been guilty of any unjust discrimination, and contended that the order of the Commission, and the statute on which it was based, in violation of the provisions of the Fourteenth Amendment, took property without due process of law, and also that the penalty statute operated to deny the carrier the equal protection of the law. In the trial before a jury, there was testimony on the question as to whether there had been any discrimination and whether any difference in treatment was not justified by the difference in conditions. There was also evidence tending to show that the business of some shippers, through Rockledge, had suffered in consequence of the delay and expense incident to the requirement that freight on goods consigned to Adrian should be prepaid at Wadley. The jury returned a verdict in favor of the state, and the judge imposed a fine of $1,000 on the defendant. The case was then taken to the Supreme Court of Georgia, where the judgment was affirmed (137 Ga. 497), and the case is here on a writ of error which raises the question as to whether the order and the statute under which it was made violate the provisions of the Fourteenth Amendment.