83 F. 898 | 4th Cir. | 1897
Lead Opinion
On the 27th day of June, 1894, the interstate commerce commission entered an order requiring the appellees to cease and desist on or before the 15th day of July, 1894, and thenceforth abstain, from charging, demanding, collecting, or receiving any greater compensation in the aggregate for the transportation of hay or other commodities carried, by and under the circumstances and conditions similar to those appearing in this case, from Memphis, in the state of Tennessee, to Summerville, in
The notice issued, and the defendants duly appeared and filed their answers. The joint answer of the receivers of the East Tennessee, Virginia & Georgia Railway Company and of the Memphis & Charleston Railroad Company admits that such companies are subject to the act to regulate commerce, and, in effect, that the shipment of hay took place as set forth in the petition; but it was not admitted1 therein that the rates specified constituted a violation of the law, and proof of the same was demanded. The answer of the lessees of the Georgia Railroad, as also the answer of the receivers of the South Carolina Railway Company, are, in substance, the same. Concerning the petitioner’s allegations of a violation of the fourth section of the interstate commerce act, the answers make the following averments, in substance: That the Georgia Railroad Company and the other carriers complained against have no joint through tariff from Memphis to Summerville, and that, therefore, they have no “line,” in the sense of said section, from Memphis to Summerville, on which that section can operate; that the transportation of the two car loads of hay from Memphis to Summerville was not done under substantially similar circumstances and conditions as the transportation of like property from Memphis to Charleston, for the reason that Summerville is a local station on the South Carolina Railway, not on any water route, and that enterprise and capital has not constructed more than one railroad to it; that consequently it has not the advantage of competition of carriers, as the said railroad on which it is located is not compelled by competition to choose between a reasonable rate and a rate which is much below what is reasonable; and that at Charleston there exists competition with numerous other all-rail routes between Memphis and that city, eight of which are mentioned by name, and the lines composing the same set forth in detail. The claim was made by the defendants in their answers that
The case being at issue upon the complaint and answers (the testimony having been duly taken), the same was, after argument by counsel, duly submitted to the commission, which directed the order to the appellees hereinbefore referred to; and, as required by law, it caused a properly authenticated copv of its report, and of its findings of fact and conclusions thereon, together with a copy of said order, to be delivered.to each and all of the parties to said cause, their receivers and successors in operation. The defendants to said proceeding before the interstate commerce commission having failed and refused to obey such order, the said Henry W, Behliner filed his petition, as he was authorized by the interstate commerce law to do, in the circuit court of the United States for the district: of South Carolina, in which the action had before the commission was fully set out, and the refusal of the defendants therein to comply with what he charged to be the lawful order of the commission was alleged; and the prayer was made that an or
At the time of the institution of the proceedings before the interstate commerce commission, the South Carolina Railway Company was represented by Daniel H. Chamberlain, its receiver, who was made a defendant, and who filed his answer to the petition. The proceedings were instituted in December, 1892, and the order of the commission issued on the 27th dav of June, 1894; but prior thereto, on April 12, 1894, the South Carolina Railway Company was sold by virtue of a decree of the circuit court of the United States for the district of South Carolina, entered in the cause of Bound v. South Carolina Railway Co. et al., in which said cause the said Daniel H. Chamberlain had been appointed such receiver. On the 12th day of May, 1894, the purchaser of said property under said foreclosure sale conveyed the same to the South Carolina & Georgia Railroad Company, a defendant herein. That company moved the court below to dismiss these proceedings, so far as it was concerned, for the reason that there was no evidence before the court of any notice to, or service of the same upon, said company, of the institution of this action before the interstate commerce commission, nor any evidence of any refusal or neglect by it to obey the order of the commission. The court below was of opinion that there was no evidence of the sendee of the cornmis
The petition filed in the court: below avers that the findings and conclusions of the commission in the matter of the petition filed before it by the appellant, together with a copy of the order and notice, were delivered to each and all of the parties to the cause, their receivers and. successors in operation. We think the evidence sufficiently sustains these allegations. The South Carolina Railway Company had due notice of the proceedings before the commission, and filed its answer, through its receiver; and it plainly appears that a registered letter was sent from the office of the secretary of the commission in July, 1894, and duly delivered at Charleston to the successor of said South Carolina Railway Company (the South Carolina & Georgia Railroad Company), which contained a copy of the opinion and order of the interstate commerce commission made and filed in the matter of said petition. That such copy was received by the South Carolina & Georgia Railroad Company is not doubted, and the point relied upon by (hat company in its motion to dismiss made in the court below was that the name of the South Carolina & Georgia Railroad Company is not mentioned in said order and opinion, and the further fact that said company was organized after the date when such order and opinion were made and filed. In our judgment, this position of the South Carolina & Georgia. Railroad Company is without merit. So far as the questions involved in this controversy are concerned, we think it had sufficient notice, and in fact that it was bound by the notice' served upon, and the answer filed by, the receiver of the South Carolina Railway Company. The petitioner, in his complaint lilt'd with the commission, charged the South Carolina Railway Company and its receiver with unlawfully charging an unreasonable rate of freight on certain articles transported over its line, and other lines with which it had traffic arrangements; and 1he commission, after full investigation, found that the petitioner’s allegation was true, and ordered that said road and the others connected with it cease, on or before July 15, 1894, to make such unlawful charges. We are utterly unable to agree with the contention that such order of the commission was rendered absolutely nugatory, within a few days after it was issued, by the mere fact that the name of one of the railroads mentioned therein had in the meantime been changed, while the traffic arrangements theretofore in existence were still in force. To so hold would render it: impossible for any petitioner to obtain relief in cases similar to Ibis, and would in fact prevent the commission from enforcing its lawful orders. The supreme court: of the United States, in the case of U. S. v. Trans-Missouri Freight Ass’n, 166 U. S. 290, 309, 17 Sup. Ct. 540, in effect decides this point: in the manner we have indicated, when it says, in substance, that if, by the mere dissolution of the association originally proceeded against, the suit abates, then de
We do not think it essential to the decision of this case to further consider the argument of counsel relating to the pecuniary liability of the purchaser of property sold under foreclosure decree, nor of the responsibility of such purchaser for contracts made by the receiver prior to such sale, as in our judgment the propositions of law therein involved are not applicable to the facts and circumstances of this case. We conclude that the court below had jurisdiction of the parties and of the subject-matter involved, and, such being the case, it was its duty, as a court of equity, to make both its jurisdiction and its remedy effectual for perfect relief, if it found the allegations of the petition to be true.
This brings us to tbe real question in this case, and that is, have these defendants violated the provisions of the fourth section of the act of congress approved February 4-, 1887, entitled “An act to regulate commerce”? 24 Stat. 379. That section reads as follows:
“Sec. 4. That it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier within the terms of this act to charge and receive as great compensation for a shorter as for a longer distance; provided, however, that upon application to the commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation' by the commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property; and the commission may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section of this act.”
We find this case, so far as the fourth section is involved, to be quite similar to the case of Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U. S. 184, 16 Sup. Ct. 700, commonly known as “The Social Circle Case.” That the appellees, in transporting the hay and other property mentioned in the petition filed in this cause, and in establishing the rates on the same from Memphis to Charleston and from Memphis to Summerville, were engaged in such transportation under a common management for continuous carriage or shipment, within the meaning of that language as used in the act to regulate commerce, is, we think, without doubt; and therefore it follows that it was within the jurisdiction of the interstate commerce commission to ascertain whether, in charging a higher rate for a shorter than for a longer distance over the same line in the same direction (the shorter being included within the longer distance), the appellees were transporting such property under substantially similar circumstances and conditions. The appellees alleged, both before the commission and the court below, such substantial dissimilarity of circumstances and conditions as justified them in making the greater charge for the shorter haul complained of in the petition, and upon them was the burden of showing affirmatively that such circumstances and
The decisions of the interstate commerce commission concerning 1he proper construction of this fourth section of the commerce act have not been uniformly sustained by the decrees of the courts of the United States iu cases instituted for the purpose of enforcing the orders of the commission concerning that section; and therefore», prior to the announcement of the opinion of the supreme court in Hie Social Circle Case, there was much confusion concerning the true meaning of the same. A careful reading of that opinion impels us to the conclusion that the construction given that section by the interstate commerce commission in a number of cases decided by it prior to such decision is the proper one. In this connection may be cited the following: James & Mayer Buggy Co. v. Cincinnati, N. O. & T. P. R. Co., 3 Interst. Commerce Com. R. 682: Georgia R. Co. v. Clyde S. S. Co., 4 Interst. Commerce Com. R. 120; Chattanooga Board of Trade v. East Tennessee, V. & G. R. Co., Id. 213. Such being our conclusions, we have now to determine whether or not the facts found by the commission are supported by the evidence taken in this case, or, in other words, whether or not the circumstances and conditions attending the transportation of hay from Memphis to Charleston and from Memphis to Summerville are so dissimilar as to justify the rates charged respectively. Does the competition set up by the appellees as existing* by -water between Chicago and the North Atlantic ports, and the competition by rail between Memphis and Charleston, as also the competition of market with market, constitute substantial dissimilar circumstances and conditions, within the meaning of the said fourth section of the act to regulate commerce?, Did such competition in fact affect: rates between Chicago, the North Atlantic ports, and Charleston? We are of the opinion that it was not of controlling force; that it was not such effectual competition as would constitute the dissimilar circumstances and conditions which would justify the commission, upon application to it, in authorizing the carrier to charge less for the longer than for the shorter haul. We adopt the conclusion heretofore announced by the interstate commerce commission, which is, in substance, that, in order to justify the greater charge for the shorter distance because of water competition, the transportation as to which 'such competí
The rate from Memphis to Charleston on hay and grain and like products is reasonable, and is shown by the evidence to be remunerative. It is fair to presume that it would not have been made by the railroads unless those controlling them were satisfied that it would be. so;- and consequently, to justify the higher charge for
We do not find it necessary to consider and dispose of the questions raised in the pleadings, and argued by counsel, concerning the Southern Kailway & Steamship Association, nor the matter of the added local charge1 of nine1 cents from Charleston to Summerville, otherwise than it. may be involved in the through rale to Summer-ville.
The decree of the court below dismissing the bill is reversed, and this cause1 is remanded te> saiel cemrt, with instructions to ente;r a decree imrein requiring the appellees, and each of them, to desist from charging, demanding, eolleu-ting, or receiving any greater compensation in the aggregate fe>r the transportation of hay or other e-omtnodiries carried by them, under circumslane-es and conditions similar to those1 set: out in the petition filed in this cause, from Memphis, in the state of Tennessee, to Huimnerville, in the state of South Carolina, than that contemporaneously charged and received for the transportatiem of hay and other commodities, respectively, for the longer distance from Memphis aforesaid, to Charleston, in the state* of Hearth Carolina. Haid cemrt will also sen1 that the requirements of said decree are immediately carried into effect and en
Dissenting Opinion
(dissenting). I am unable to join in the order reversing the decree of the circuit court, which it is proposed to pass in this case, and will very briefly state my reasons:
Behlmer, in his petition to the commission, complained that he was charged as freight on two car loads of hay from Memphis to Summerville at the rate of 28 cents per 100, while the rate over the same roads to Charleston, 22 miles further, was only 19 cents. This, he alleged, was a violation of the fourth section of the interstate commerce act. He further complained that the 9 cents, additional per 100 charged to Summerville was based on the local rate for 22 miles from Charleston back to Summerville over the South Carolina Railroad, which itself, he alleged, was excessive and unreasonable; and he further alleged that the combined rate of 28 cents from Memphis to Charleston was excessive and unreasonable, and in violation of the first section of the act. The defendants answered, alleging that there were eight all-rail routes which were competitors for the business from Memphis to Charleston; that there was, besides, existing water competition from ports on the Atlantic Coast to Charleston; and that the rate from Memphis to Charleston of 19 cents per 100 was forced upon the defendant lines by this rail and water competition which they had to meet at Charleston, but which the South Carolina Railroad did not have to meet at Summerville; and that rates which were just and reasonable to Summerville would result in the loss of the business, if charged to Charleston. The commission considered only the allegation that the defendants violated the long and short haul clause, and, in view of their decision on that point, deemed it unnecessary to consider whether any other provision of the law had been violated. In the decision of the commission appears the following:
“There is no showing in this proceeding of competition by lines not subject to the act to regulate commerce for the carriage of hay from Memphis td Charleston, and the fact that there may be competition for such traffic by lines which are subject to the act, or that hay may be carried to Charleston by various rail and water, or part-rail and part-water, routes, from points other than Memphis, does not justify the defendant carriers in departing from the general rule of the fourth section upon their own motion. Such considerations may constitute reasons for applying to the commission for relief under the proviso clause of that section, but, for the reasons stated in our decisions of the cases above cited, they do not justify carriers in departing from the rule of the fourth section without such relieving order. Water competition, to justify lower long-haul rates, must exist between the point of shipment and the longer-distance destination. One transportation line cannot be said to meet the competition of another transportation line for the carrying trade of any .particular locality unless the latter line could and would perform the service alone if the' former did 'not undertake it. The competition of markets or the competition of carrying lines subject to regulation under the act to regulate commerce does not justify carriers in making greater short-haul or lower long-haul charges over the same line without an order issued by the commission on application therefor after investigation.”
“Because Charleston is an important seaport and railroad center, and liay may be and is carried tliere from various points, is not a sufficient reason for a departure from tliis rule. The just interests of the carrier are fully protected by the proviso clause of the fourth section. The defendants are under no obligation to compete at low rates for the carriage of hay from Memphis to Charleston. They ought not to engage in such competition if.the rates obtainable are not remunerative. If they are remunerative, the defendants cannot, in the face of the prohibition of the fourth section, and the provision in that section for the issuance of relieving orders, assume to say that such rates, though profitable on Charleston traffic, are insufficient for the transportation of car-load quantities to a shorter point on the same line, and in the same direction.”
There was no finding of fact by the commission other than is contained in the foregoing extract from its decision, and it is obvious that the commission did not jiass upon the question of the dissimilarity of the circumstances and conditions, nor upon the question whether (he rate for the shorter haul was of itself reasonable and just. They took the law to be that, by charging a greater rate for the shorter haul over the same line, the carriers were prima facie without justification, and that they could only be permitted lawfully to make the charge after they had been authorized upon application to the commission under the proviso of the fourth section. One of the cases cited by the commission in support of this proposition of law is the decision of the circuit court of appeals in Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Ry. Co., 9 C. C. A. 689, now known as the “Social Circle Case.” Tlie supreme court, in reviewing that case (162 U. S. 184-194, 16 Sup. Ct. 700), did not approve such a hard and fast rule, but held in that case that as the commission had found as a fact that the circumstances and conditions were not so dissimilar as to justify the rates charged, and as the circuit court of appeals had approved that finding, the supreme court would not disturb it." But in the case known as the “Import Case,” 162 U. S. 197, 16 Sup. Ct. 666, the supreme court held, in deciding a similar question, that it was error for the commission not to consider an existing competition which affected rates, and tlie fact that rates had to be reduced in order to secure freight, which otherwise would go by other routes, was one of the circumstances and conditions which must be considered before substantial similarity could be determined. It may be fairly said, therefore, that tlie commission failed to consider one of the circumstances without which it could not arrive at a just finding. Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S. 197-238, 16 Sup. Ct. 666; Interstate Commerce Commission v. Alabama Midland Ry. Co., 21 C. C. A. 51, 74 Fed. 715; Interstate Commerce Commission v. Louisville & N. R. Co., 73 Fed. 409. It was error, I think, for the commission to hold that the carriers could not justify themselves because they had not first made application for relief under the proviso of the fourth section. It has been held (hat, if the carrier can show that the circumstances and conditions of the two hauls are dissimilar, the statute