MURRAY, MCSWEEN, AND PATTON, AS THE STATE DISPENSARY COMMISSION, v. STATE OF SOUTH CAROLINA ex rel. RAY, TRUSTEE.

ERROR TO THE SUPREME COURT OF THE STATE OF SOUTH
CAROLINA.

No. 605. Argued February 26, March 1, 1909.-Decided April 5, 1909.

Murray v. Wilson Distilling Co., ante, p. 151, followed as to the Federal questions involved in this proceeding.

THE facts are stated in the opinion.

Mr. W. F. Stevenson, with whom Mr. D. S. Matheson was on the brief, for plaintiffs in error.

Mr. D. C. Ray, for defendants in error, submitted.

MR. JUSTICE WHITE delivered the opinion of the court.

This is a proceeding in mandamus commenced in the Supreme Court of the State of South Carolina to compel the commission appointed under the authority of the act of the general assembly, of that State, approved February 16, 1907, providing for the winding up of the affairs of the state dispensary, to comply with an act of the general assembly, approved February 24, 1908, requiring the payment of a certain judgment out of the funds in the hands of the commission. It was set up in justification of the refusal to obey the command of the statute that the commission was restrained and enjoined from paying out the fund by orders of the Circuit Court of the United States, made in the suits of the Wilson Distilling Company and the Fleischmann Company, the validity of which orders was the subject of consideration in the case of Murray v. Wilson Distilling Company, No. 625, this term, just decided. Upon the authority of the decision in State ex rel.

J. F. Lyon v. W. J. Murray and others, 79 S. Car. 316, the Supreme Court of South Carolina held that the return of the commission was insufficient, and ordered a peremptory mandamus to issue. A writ of error was thereupon prosecuted from this court, upon the theory that the court below had declined to give full faith and credit to the orders and decrees of the Circuit Court of the United States in the cases mentioned.

The determination of the questions of a Federal nature, arising in this case, is controlled by the decision made in Murray v. Wilson Distilling Company, No. 625, this term, ante, p. 151, heretofore referred to, and, upon the authority of that decision, the judgment of the Supreme Court of South Carolina is

Affirmed. THE CHIEF JUSTICE took no part in the consideration or disposition of this case.

SILER et. al., CONSTITUTING THE RAILROAD COMMISSION OF KENTUCKY, v. LOUISVILLE AND NASHVILLE RAILROAD COMPANY.

APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF KENTUCKY.

No. 521. Argued February 24, 25, 26, 1909.—Decided April 5, 1909.

Where the Federal questions raised by the bill are not merely colorable but are raised in good faith and not in a fraudulent attempt to give jurisdiction to the Circuit Court, that court has jurisdiction, and can decide the case on local or state questions only, and it will not lose its jurisdiction of the case by omitting to decide the Federal questions or deciding them adversely to the party claiming their benefit. Where the bill not only alleges that the statute creating the commission, but also the order of the commission sought to be enjoined, deprives complainant of its property without due process of law, and also violates other provisions of the Constitution, the Circuit Court obtains

jurisdiction without reference to the particular violation of the Fourteenth Amendment. Barney v. City of New York, 190 U. S. 430, distinguished. The rule of this court is not to decide constitutional questions if the case can be decided without doing so; and when, as in this case, it can dispose of the case by construction of the statute and on the lack of authority given by such statute to make the order complained of, it will do so rather than on the constitutional questions involved. Jurisdiction so extensive as to place in the hands of a commission power to make general maximum rates for all commodities between all points in the State is not to be implied, but must be given in language admitting no other reasonable construction, and this power cannot be found in the Kentucky Railroad Commission Act.

Notwithstanding the highest court of the State has not yet construed the statute involved, this court must, in a case of which it has jurisdiction, construe it.

The fact that the legislature of a State gives to a railroad commission no power to raise rates, but only power to reduce rates found to be exorbitant after hearing on specific complaint, is an argument against construing the statute so as to give the commission power to fix maximum rates on all commodities.

Where a railroad commission after a hearing on specific complaint as to a rate on a particular commodity makes a general rate tariff for maximum rates on all commodities which is beyond its statutory power, the whole tariff falls, and the rate on the tariff on the particular commodity will not be separately sustained. The Kentucky railroad commission having, after a hearing on complaints that the rates on lumber were too high, attempted to impose a general maximum intrastate tariff schedule, and the statute creating the commission not giving it authority to make such a schedule, this court, without deciding whether either the statute or the order deprives the railroad companies of their property without due process of law, holds that the entire schedule of rates including those on lumber must fall as being beyond the jurisdiction of the commission to establish in that manner.

THE Louisville and Nashville Railroad Company, hereinafter called the company, filed its bill July 25, 1906, in the Circuit Court of the United States for the Eastern District of Kentucky, to enjoin the enforcement of a certain order made by the railroad commission of Kentucky (hereafter called the commission), providing what are termed maximum rates on

the transportation of all commodities upon the railroad of the company to and from all points within the State. In its bill the company contended that the order as to rates of transportation was void, because it was, upon several stated grounds, in violation of certain named provisions of the Constitution of the United States, among them being the claim that the rates were so low as to be confiscatory. It was also contended that the statute was an interference, in its results, with interstate commerce. The company also contended (among other objections not of a Federal nature) that the commission had no power to make the order in question under a correct and proper construction of the state statute of March 10, 1900, under which the commission assumed to exercise the power to fix the rates provided for in its order.

The Circuit Court decided that such act, hereinafter fully set forth and called the "McChord Act," and also the order of the railroad commission of Kentucky complained of, irrespective of any claim that such order was confiscatory, violated the provisions of § 1 of the Fourteenth Amendment to the Constitution of the United States, prohibiting any State from depriving any person of property without due process of law and .from denying to any person within its jurisdiction the equal protection of the laws, and that the order of the commission, so far as it was applicable to the company, was, therefore, null and void, and the special commissioner who had been appointed to take evidence in the case as to the character of the rates, and other matters, was directed to so report. (The court decided the case upon the authority of Louisville &c. R. R. Co. v. McChord, 103 Fed. Rep. 216, reversed on other grounds, 183 U. S. 483.)

A final decree having been made pursuant to the decision of the court, the commission appealed directly to this court from such decree. The proceedings which led up to the decree from which the commission has appealed, without the court passing upon the allegation of the confiscatory nature of the rates, were by means of a stipulation made in order to facilitate matters, VOL. CCXIII-12

Statement of the Case.

213 U.S.

by reason of which the court decided as matter of law the order and act were both invalid, and it perpetually enjoined the enforcement of the order as to rates as well as the procuring of indictments against the officers of the company or the company itself.

The appellants disputed the jurisdiction of the Circuit Court upon the grounds which are particularly stated in the opinion herein, and they took issue on many of the material allegations contained in the bill of complaint.

The facts upon which the questions in this case arise are as follows: The company was duly incorporated under an act of the general assembly of the State of Kentucky, approved March 5, 1850. It has a large mileage, amounting to over 1,200 miles within the State, and it operates its road within the State in connection with other portions of its road in other States, having altogether in Kentucky and such other States a mileage of over 4,000 miles. It claims to have a contract right to fix rates as provided in its charter, and it contends that the order of the commission violates that right as well as other rights protected by the Federal Constitution.

The State adopted a new constitution on the twenty-eighth day of September, 1891, by § 209 of which the present railroad commission of the State was established.

It is asserted by the company, though such assertion is denied, that up to March 10, 1900, the commission or its predecessors had not been empowered by constitutional or statutory provision to regulate or fix the rate of compensation which a railroad company might charge for the service of transporting freight or passengers over its lines in the State. On the abovementioned date the general assembly enacted what is generally called the "McChord Act," which is set forth in full in the margin.1

1 An Act to prevent railroad companies or corporations owning and operating a line or lines of railroad, and its officers, agents and employés, from charging, collecting or receiving extortionate freight or passenger rates in this Commonwealth, and to further increase