RAILROAD COMM'N V. E. TEXAS R. CO., 264 U. S. 79 (1924)

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U.S. Supreme Court

Railroad Comm'n v. E. Texas R. Co., 264 U.S. 79 (1924)

Railroad Commission of Texas v.

Eastern Texas Railroad Company

Nos. 145 and 146

Argued March 8, 1923

Decided February 18, 1924

264 U.S. 79


1. The usual permissive charter of a railroad company does not oblige the company to operate its railroad at a loss, nor is such obligation to be implied from acceptance of the charter and operation under it. P. 264 U. S. 85.

2. In the presence of a reasonable certainty that future operation will be at a loss, a railroad company, in the absence of a contract, may cease operation, dismantle its road, and realize its salvage value. Id.

3. Were the railroad to be compelled by the state in such circumstances to continue operation at a loss, it would be deprived of its property without due process of law. Id.

Page 264 U. S. 80

4. The principle allowing a railroad company to withdraw its property from public use that can be kept up only at a loss is consistent with the state's power to regulate while the company continues to exercise the privileges of its charter. P. 264 U. S. 85.

5. The mere presence of a particular provision in the statutes of a state relating to railroads, or even in a special act incorporating a railroad company, does not suffice to show that the provision is a part of the charter contract. P. 264 U. S. 86.

6. When it becomes necessary to consider whether a state is attempting to deprive a litigant of property without due process, and the question turns on the existence and terms of an asserted contract, this Court determines for itself whether there is a contract and what are its terms. Id.

7. Article 6676, Rev.Civ.Stats. 1911, of Texas, requiring all railroads "carrying passengers for hire" to run certain passenger trains and make certain stops, etc., is a mere regulation of passenger service on roads in operation, and does not subject a railroad company, through charter contract or otherwise, to an absolute duty to operate for its full charter period in face of a reasonable certainty of pronounced loss. P. 264 U. S. 87.

8. Article 6625, Rev.Civ.Stats. 1911, of Texas (Act of March 29, 1889, c. 24) relates to the organization, rights, and duties of corporations formed to take over, maintain, and operate railroads sold under judicial decree, etc., and the clause, in its proviso "nor shall the main track of any railroad once constructed and operated be abandoned or removed" applies only to railroads so sold. P. 264 U. S. 88.

283 F.5d 4 affirmed.

Appeals from two decrees of the district court, the first awarding a permanent injunction in the Railroad Company's suit, brought in that court, to restrain the Railroad Commission of Texas and others from interfering with its right to abandon operation and dismantle and salvage its property; the second, dismissing a bill to restrain such abandonment, etc., brought by the state in a court of the state and removed to the district court. See also 258 U. S. 258 U.S. 204, where the same cases were passed upon by this Court in another aspect.

Page 264 U. S. 82

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