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U.S. Supreme Court

Grand Trunk Western Ry. Co. v. Railroad Comm'n, 221 U.S. 400 (1911)

Grand Trunk Western Railway Company

v. Railroad Commission of Indiana

No. 138

Submitted April 19, 1911

Decided May 15, 1911

221 U.S. 400




A legislative act by an instrumentality of the state exercising delegated authority is of the same force as if made by the legislature, and is a law of the state within the meaning of the contract clause of the Constitution.

A contract cannot be impaired, within the meaning of the contract clause of the Constitution, by a law which relates to matters beyond

Page 221 U. S. 401

the scope of the contract as construed according to the usual meaning of the words used.

A contract between two railroads for maintaining the physical cost of a crossing and guarding it by good and substantial semiphores or other signals is not impaired by a subsequent act requiring an interlocking system and apportioning the expense in a different manner than provided in the contract. The contract did not embrace such a system.

The facts, which involve the constitutionality of an order of the Railroad Commission of Indiana directing installation and use of interlocking plant at a railroad crossing and apportioning the expense of executing the order, are stated in the opinion.

Page 221 U. S. 402

MR. JUSTICE VAN DEVANTER delivered the opinion of the Court.

This is a suit to secure the annulment or modification of an order of the Railroad Commission of Indiana directing the installation and use of an interlocking plant at the crossing of two railroads in that state, and apportioning between them the expense of executing the order. The suit proceeds upon the theory that a contract between the owners of the roads, entered into before the enactment of the statute upon which the order rests, imposes upon the junior road all the expense of maintaining and guarding the crossing in whatever manner may be essential to make its use safe and convenient, and that the order, by imposing a part of the expense of its execution upon

Page 221 U. S. 403

the other road, impairs the obligation of the contract, and therefore is void.

The appellate court of the state, having regard to the terms of the contract and to the conditions existing when it was made, twenty-five years before, held that it did not provide for or contemplate any such elaborate system of protecting and guarding the crossing as is involved in the use of an interlocking plant, and therefore that the expense entailed by the order was not within the purview of the contract. And that court, after observing that the statute invested the Commission with the authority to make a just, but not an arbitrary, apportionment of the expense, and that the apportionment as made did not appear to be unjust or arbitrary, sustained the order. 40 Ind.App. 168.

Observing first that the order is a legislative act by an instrumentality of the state exercising delegated authority (Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 211 U. S. 226), is of the same force as if made by the legislature, and so is a law of the state within the meaning of the contract clause of the Constitution (New Orleans Water Works Co. v. Louisiana Sugar Refining Co., 125 U. S. 18; St. Paul Gas Light Co. v. St. Paul, 181 U. S. 142, 181 U. S. 148; Northern Pacific Ry. Co. v. Minnesota, 208 U. S. 583, 208 U. S. 590), we come to consider whether it does impair the obligation of the contract. Obviously it does not if the contract creates no obligation respecting the expense which the order entails.

The contract is set forth at length in the state court's opinion, and need not be reproduced here. It declares explicitly that the duty of constructing and properly maintaining the physical crossing of the two roads, and bearing the expense incident thereto, shall rest with the junior road, but its only provision respecting what shall be done in the way of guarding the crossing is that "good and substantial semaphores or other signals, and . . . the requisite watchmen to take charge of and operate the same," shall be provided and maintained by that road at

Page 221 U. S. 404

its "individual expense." There is no reference to an interlocking plant, nor any general language that would include one. The words "semaphores or other signals" do not do so. An interlocking plant is so much more than a signaling device that it is quite beyond their usual meaning. That meaning has been applied to them during twenty-five years of practice under the contract, and another ought not to be substituted now.

We conclude, as did the state court, that the contract does not embrace the expense which the order entails, and therefore that the order does not, by apportioning that expense, impair the obligation of the contract.

But, to avoid any misapprehension that otherwise might arise, we deem it well to observe that we do not, by what is here said, suggest or imply that the contract, if its terms were broad enough to include the expense in question, would be an obstacle to the apportionment of that expense under the state statute. See Chicago, Burlington and Quincy R. Co. v. Nebraska, 170 U. S. 57, 170 U. S. 71-74; New York & New England R. Co. v. Bristol, 151 U. S. 556, 151 U. S. 567.


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