SECTION 2. FURNISHING TRANSPORTATION AND THE MEANS OF TRANSPORTATION IS A PUBLIC FUNCTION

OLCOTT v. SUPERVISORS OF FOND DU LAC (1872)

83 U. S. (16 Wall.) 678, 691; 21 L. Ed. 382.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF WISCONSIN

Railways constructed by private corporations and owned and operated by them as common carriers are public highways. That others may not put their cars or locomotives upon the road does not make it any less a public highway.

Mr. Justice STRONG: * * Prior to 1870 it seems to have been as well settled in Wisconsin as elsewhere that the construction of a railway was a matter of public concern, and not the less so because done by a private corporation. That the State might itself make such an improvement, and impose taxes to defray the cost, or exercise its right of eminent domain therefor, was beyond question. Yet confessedly it could neither take property or tax for such a purpose, unless the use for which the property was taken or the tax collected was a public one. And it was also the undoubted law of the State that building a railroad or a canal by an incorporated company was an act done for a public use, and thus the power of the legislature to delegate to such a company the State right of eminent domain was justified. In Pratt v. Brown, 3 Wis. 612, it was said by the Supreme Court of the State that the incorporation of companies for the purpose of constructing railroads or canals affords the best illustration of the delegation of power to exercise the right of eminent domain, by the condemnation and seizure of private property for public use upon making just compensation therefor. It is admitted that the only principle upon which such delegation of power can be justified is that the property taken by these companies is taken for the public use. Similar language was used and a decision. to the same effect was made in Robbins v. R. Co., 6 Wis. 641. In Hasbrouck v. Milwaukee, 13 Wis. 37, a case where the right to tax for the improvement of a harbor was under consideration the court used this significant language:

"The power of municipal corporations, when authorized by the legislature to engage in works of internal improvement, such as the

building of railroads, canals, harbors, and the like, or to loan their credit in aid thereof, and to defray the expenses of such improvements, make good their pledges by the exercise of the power of taxing the persons and property of their citizens, has always been sustained on the ground that such work, although they are in general operated and controlled by private corporations, are, nevertheless, by reason of the facilities which they afford for trade, commerce, and intercommunication between the different and distant portions of the country, indispensable to the public interests and public functions. It was originally supposed that they would add, and subsequent experience demonstrates that they have added, vastly, and almost immeasurably, to the general business, the commercial prosperity, and the pecuniary resources of the inhabitants of cities, towns, villages, and rural districts through which they pass and with which they are connected. It is, in view of these results, the public good thus produced, and the benefits thus conferred upon the persons and property of all the individuals composing the community, that Courts have been able to pronounce them matters of public concern, for the accomplishment of which the taxing power might lawfully be called into action. It is in this sense that they are said to fall so far within the purposes for which municipal corporations are created, that such corporations may engage in, or pledge their credit for their construction."

That railroads, though constructed by private corporations and owned by them, are public highways, has been the doctrine of nearly all the Courts ever since such conveniences for passage and transportation have had any existence. Very early the question arose whether a State's right of eminent domain could be exercised by a private corporation created for the purpose of constructing a railroad. Clearly it could not, unless taking land for such a purpose by such an agency is taking land for public use. The right of eminent domain nowhere justifies taking property for a private use. Yet it is a doctrine universally accepted that a State legislature may authorize a private corporation to take land for the construction of such a road, making compensation to the owner. What else does this doctrine mean if not that building a railroad, though it be built by a private corporation, is an act done for a public use? And the reason why the use has always been held a public one is that such a road is a highway, whether made by the government itself or by the agency of corporate bodies, or even by individuals when they obtain their power to construct it from legislative grant. It would be useless to cite the numerous decisions to this effect which have

been made in the State Courts. We may, however, refer to two or three which exhibit fully not only the doctrine itself, but the reasons upon which it rests. Beekman v. R. Co., 3 Paige 45; Bloodgood v. R. Co., 18 Wend. 1; Worcester v. R. Co., 4 Metc. 564.

Whether the use of a railroad is a public or a private one depends in no measure upon the question who constructed it or who owns it. It has never been considered a matter of any importance that the road was built by the agency of a private corporation. No matter who is the agent, the function performed is that of the State. Though the ownership is private the use is public. So turnpikes, bridges, ferries, and canals, although made by individuals under public grants, or by companies, are regarded as publici juris. The right to exact tolls or charge freights is granted for a service to the public. The owners may be private companies, but they are compellable to permit the public to use their works in the manner in which such works can be used. Charles River Bridge v. Warren Bridge, 7 Pick. 495. That all persons may not put their own cars upon the road, and use their own motive power, has no bearing upon the question whether the road is a public highway. It bears only upon the mode of use, of which the legislature is the exclusive judge. Cooley's Constitutional Limitations.

It is unnecessary, however, to pursue this branch of the inquiry further, for it is not seriously denied that a railroad, though constructed and owned by a private corporation, is a matter of public concern, and that its uses are so far public that the right of eminent domain of the State may be exerted to facilitate its construction. But it is contended that, though the purpose and the use may be public, sufficiently to justify taking private property they are not public when the right to impose taxes is asserted. It is argued that there are differences between the power of taxation and the power of taking private property for a public use, and that because of these differences it does not follow that wherever the one power may be exerted the other can. We do not care to inquire whether this is so or not. The question now is: whether if a railroad, built and owned by a private corporation, is for a public use, because it is a highway, taxes may not be imposed in furtherance of that use. If there be any purpose for which taxation would seem to be legitimate it is the making and maintenance of highways. They have always been governmental affairs, and it has ever been recognized as one of the most important duties of the State to provide and care for them. Taxation for such uses has been immemorially imposed. When, therefore, it is settled that a railroad is a highway for public uses,

there can be no substantial reason why the power of the State to tax may not be exerted in its behalf. It is said that railroads are not public highways per se; that they are only declared such by the decisions of the Courts, and that they have been declared public only with respect to the power of eminent domain. This is a mistake. In their very nature they are public highways. It needed no decision of Courts to make them such. True they must be used in a peculiar manner, and under certain restrictions, but they are facilities for passage and transportation afforded to the public, of which the public has a right to avail itself. As well might it be said a turnpike is a highway, only because declared such by judicial decision. *

CALIFORNIA v. CENTRAL PACIFIC R. CO. (1888)
127 U. S. 1, 35; 32 L. Ed. 150.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR
THE NORTHERN DISTRICT OF CALIFORNIA

Congress has authority to construct, or authorize private corporations to construct, railroads across States and Territories.

Mr. Justice BRADLEY: * In No. 660, the Central Pacific Railroad Company, in its answer, after reciting the various acts of Congress conferring franchises and privileges and imposing duties upon the company, avers that it is a federal corporation, and holds its corporate powers and franchises under the government of the United States, and that the said government has never given to the State of California the right to lay any tax upon the franchise, existence or corporations of the company. Similar averments are made in the other cases, 664, 1157 and 661. The Court finds in each of these cases that the assessment made by the State board of equalization included the full value of all franchises and corporate powers held and exercised by the defendant. The first question, then, is whether the defendants in these cases held any franchises granted to them by the Government of the United States. Of this there can hardly be a doubt.

The Central Pacific Railroad Company was constituted by the consolidation of two State corporations of California, but derived many of its franchises and privileges from the Government of the United States. The findings of the Court below on this subject are as follows, to wit:

"That on the 28th day of June, 1861, a corporation was formed and organized, under the laws of the State of California, under the corporate name of The Central Pacific Railroad Company of California. Said corporation was formed for the purpose of constructing, owning and operating a line of railroad and telegraph, commencing at the City of Sacramento in said State and running thence through the Counties of Sacramento, Placer, Sierra and Nevada to the eastern boundary of said State, in the expectation that its proposed railroad would when constructed constitute part of a line of railroad extending from the Missouri River to the Pacific Ocean, which line it was then supposed was about to be constructed under the legislative supervision and authority of the Government of the United States, and which line of railroad was afterwards so constructed.

"That on or about the 1st day of July, 1862, the Government of the United States undertook to construct, or to cause to be constructed, a line of railroad from the Missouri River to the Pacific Ocean, and to that end Congress passed an act entitled 'An act to Aid in the Construction of a Railroad from the Missouri River to the Pacific Ocean, and to secure to the Government the Use of the Same for Postal, Military, and Other Purposes." 12 Stat. 489, c. 120.

"That to facilitate the construction of said road the Government of the United States, by said act of Congress, conferred upon the said Central Pacific Railroad Company of California the same powers and clothed it with the same privileges and immunities which it conferred upon and clothed the said Union Pacific Railroad Company, except that the said Central Pacific Railroad Company of California was to commence the construction of said railroad at the Pacific Ocean and build east until it met the said Union Pacific railroad, building west.

"That on or about the 2d day of July, 1864, Congress passed an act entitled 'An act to amend an act entitled An act to aid in the construction of a railroad and telegraph line from the Missouri River to the Pacific Ocean, and to secure to the Government of the United States the use of the same for postal, military and other purposes,' approved July 1, 1862. 13 Stat. 356, c. 216.

"That said Central Pacific Railroad Company of California filed in the Department of the Interior its acceptance of the terms and conditions of said act of Congress of July 1, 1862, within the time therein designated.