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Mottley v. Louisville & Nashville Railroad Co.

Supreme Court of the United States · Civil Procedure

Civil ProcedureInterstate CommerceContractsinterstate commercefree passespublished tariffdifferent compensationsubsequent illegality

Facts

After a train collision in Kentucky allegedly caused by the railroad's negligence, Mottley and his wife settled their claims in 1871 by releasing the railroad from damages in exchange for the railroad's promise to issue free passes over its railroad and branches for life. The railroad honored that agreement for many years, but later refused further performance on the ground that the Act of Congress of June 29, 1906 made such performance illegal. The Mottleys then sued in Kentucky state court seeking specific performance requiring the railroad to issue passes for 1909 and each year thereafter over all its lines in and out of Kentucky. The railroad defended chiefly on the basis that federal law prohibited interstate free passes and prohibited collecting compensation different from the published tariff.

Issue

Can a railroad be compelled to continue performing a preexisting agreement to provide lifetime interstate passes when a later federal commerce statute forbids issuing interstate free passes and forbids charging, collecting, or receiving compensation different from the carrier's published tariff? More specifically, may a contract valid when made still be enforced after Congress, acting under its commerce power, has made the promised performance unlawful?

Rule

When Congress validly regulates interstate commerce, carriers may charge, collect, or receive only the compensation specified in their published tariffs, payable in money, and may not issue interstate free passes except as the statute expressly allows. A private contract, even if valid when made, cannot be enforced in court once subsequent federal legislation makes the promised interstate transportation illegal; contracts are made subject to the possible future exercise of lawful governmental power.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In 1898, Rowan Transit Rail settled Nadia Flores's injury claim in St. Louis by agreeing to give her one round-trip rail ticket each year for life between Missouri and Illinois. In 1907, after Congress enacted a law barring interstate free passenger transportation except for specified classes and requiring carriers to charge only the compensation in their published tariffs, the railroad refused to issue another ticket.

If Nadia sues in Missouri state court for specific performance of the lifetime-ticket agreement, what is the best result?

Explanation. The majority held that Congress may forbid a carrier from issuing interstate free transportation or accepting compensation different from the money rate in the published tariff, and once that occurs, courts may not enforce an earlier valid contract requiring such transportation. The prior release is still different compensation in kind, not payment of the tariff in money. No special savings clause for preexisting contracts is required. (Derived from Mottley v. Louisville & Nashville Railroad Co. (n.d.).)