72 Fla. 379 | Fla. | 1916
—Upon the petition of the Railroad Commissioners an alternative writ of mandamus was issued by this court against the Florida East Coast Railway Company, requiring it to observe as its maximum, rates the rates prescribed in a certain order of the Railroad Commissioners numbered 431, and to put into- effect the rates prescribed in that order or rates not in excess thereof, and in all thing's to observe and comply with the order, or to- appear before the Justices of this court at Tallahassee on a day named and show cause why it refuses to do so.
Order Numbered 431 as made by the Railroad Commissioners is an order prescribing rates to be charged by all railroads doing business wholly or in part within the State of Florida for the transportation between points in this State of freight classified as “Class P.” Freight of this class embraces carload lots of certain commodities and weighing per car not m;ore than a certain number of pounds as follows: “Bark, tan, 20,000 lbs; Barrel material, 24,000 lbs; Barrels, except Ale and Beer, 10,000 lbs; Baskets, fruit and berry, 15,000 lbs; Baskets, vegetable, 20,000 lbs; Box and Crate material, 24,000 lbs; Boxes, berry, fruit and vegetable, 15,000 lbs; Brick, common, 30,000 lbs;-Vitrified brick, 24,000 lbs; Cross-ties, 24,000 lbs; Shells for paving, 30,000 lb-s; Stone, building and building blocks, 30,000 lbs; Mouldings, -common wooden, 24,000 lbs; Cups, turpentine, earthen, 24,000 lbs; Gravel, 30,000 lbs; Limestone, 30,000 lbs; Lumber, 24,000 lbs; Melons, water, 24,000 lbs; Moss,
The order prescribed amounts to be charged on “Class P” freight hauled for a distance of five miles and under, and, for that distance and greater to four hundred miles, a different amount being prescribed for each five or ten miles that the freig'ht may be hauled.
The alternative writ alleg'ed that the respondent railroad company was violating, disregarding and refusing to obey the order in that the company had not published and put into effect the rates prescribed in the order, but had continued to publish, charge and collect rates on articles embraced within Class P which are higher than those rates fixed by the order, and that the respondent company has declared its intention not to1 obey the order.
In the return to the alternative writ the respondent railroad company averred that “Order No. 431 was made by the Relators without the Relators having an}' evidence before them affecting or concerning the Florida' East Coast Railway Company upon which to base said Order No. 431.” The return also contained the averment that the “said Order No. 431 is unjust, unreasonable and' oppressive; that if carried into effect it confiscates the property of the Respondent and compels it to transport freight of Class T’ without just and reasonable compensation for the service.”
The return contains many averments of fact in support of the conclusion averred as to the unjustness and unreasonableness of the order, and concludes with the averment that to enforce the order would be to inflict irreparable injury upon the Respondent and tend to deprive
The averments of fact in support of these conclusions are many. Among other things • it is averred that the rates fixed by Order No. 431 are the lowest rates fixed in the United States on Class “P” freight, and if the order is enforced it will cause a large annual loss of revenue on intrastate business and an additional loss nearly six times greater on all interstate business embraced in Class “P” now done by the respondent. That Order No. 431 makes an approximate reduction of thirty per cent in the rates-on the Class “P” freight from the rates now charged and collected by the respondent; that for the fiscal year ending June 30, 1914, the total earnings of respondent from Class “P” freight amounted to $379,157.06, of which $239,018.27 were derived from interstate freight of Class “P,” and $40,138.79 from intrastate business. That based upon the earnings for the year ending June 30, 1914, Order No. 431 would have resulted in a loss of revenue to the respondent on interstate business in Class “P” of $71,705.48, and, on intrastate business of $12,-041.64 in that class, or a total of $83,747.12. That the rate imposed by the order is the same as that imposed upon the railroads of South Carolina and is considered by those roads to be unjust although the conditions in that State are more favorable for the maintenance of such rate than the conditions existing in the territory in Florida through which the respondent’s road runs. Comparisons were made with the rates on such freight in North Carolina, Alabama and Georgia which were alleged to be higher than the rate fixed by the order. Also with the rates in the Central Freight Association territory North of the Ohio and East of the Mississippi Rivers where
The return nowhere averred specifically that the receipts derived by the respondent from its Class “P” traffic were less than the expense or cost to the respondent of handling such traffic; nor that such expense was equal to such receipts; nor were any figures given in the return to show the cost to respondent of handling its Class “P” traffic on the one hand and the revenue derived from such traffic on the other. It is therefore impossible to ascertain from the return whether the enforcement of Order No. 431 would compel the respondent to transport the commodities thus segregated and classed as “Class P” freight for less than the proper cost of transportation or virtually at cost. Order No. 431 dealing only with the rate to be charged on a particular class of freight, the question whether the total earnings afford a reasonable return is not material and therefore not involved, because if the total income of the carrier enabled it to declare a dividend, that would not justify
The demurrer of relators to the return and their motion to quash were overruled and denied because if the above averment was true, the rate sought to be enforced by the order would compel the respondent to carry Class “P” freight at a confiscatory rate; that is to say it would compel the respondent to perform a service for nothing, or for less than a reasonable rate. This averment was regarded as an averment of an ultimate fact.
The replication filed by the relators denied that there was any agreement between them and the respondent that there should be no further reductions of rates on its line for a number of years as was averred in the return, and denied every material allegation contained therein.
A great deal of evidence was taken upon the issues made comprising seven large volumes of typewritten matter and one large volume of exhibits consisting of tabulated figures, plats and blue prints of respondent’s railroad and terminals.
Much of this evidence throws little if any light upon the issue and the briefs of counsel which exhibit considerable industry in analyzing the testimony of certain witnesses and the citation of decisions have not dealt clearly with the question which the court has been compelled to consider and the evidence affecting which it has been required to exhume from the overwhelming mass of irrelevant matter
Section 30 of Article XVI of the State Constitution ordains that “The legislature is invested with full power to pass laws for the correction of abuses and to prevent unjust discrimination and excessive charges by persons and corporations engaged as common carriers in transporting persons and property, or performing other services of a public nature.”
Sections 2888 and 2889 of the General Statutes of Florida, 1906, Florida Compiled Laws 1914, forbids any railroad, railroad company or common carrier to “charge, collect, demand or receive more than a fair reasonable rate of toll or compensation for the transportation of passengers or freight of any description or for the use and transportation of any railroad car upon its tracks
Section 2893 the General Statutes of Florida, 1906, as amended by Chapter 6527 Laws of Florida, 1913, Florida Compiled Laws, 1914, provides, among other things, that it shall be the duty of the Railroad Commissioners: “1. To make reasonable and just rates of freight and passenger tariffs to be observed by all railroads, railroad companies and common carriers doing business in this State over their respective lines.” “3. To make reasonable and just rates of charges for the use and transportation of all.kinds of railroad cars conveying all kinds of freight to and from all points in this State;” “4. To make reasonable and just rules and regulations for the prevention of any unjust discrimination against persons or localities in charges or in fur-, nishing facilities;” and “13. To prescribe all rules and regulations appropriate for the execution of any of the powers conferred upon them by law either in express terms or by implication. All rules and regulations made and prescribed by the Commissioners shall be made prima facie evidence in the manner that the schedules are made prima facie evidence. Every rule, regulation, schedule or order heretofore or hereafter made by the Commissioners shall be deemed and held to be within their jurisdiction and their powers, and to be reasonable and just and such as ought to have been made in the premises and to have been properly made and ar
In the case of State ex rel. Railroad Commissioners v. Florida East Coast R. Co., 64 Fla. 112, 59 South. Rep. 385, this court speaking through Mr. Chief Justice Whitfield, said: “That until the contrary appears, it will be presumed that in making an order or regulation the Railroad Commissioners acted not arbitrarily, but upon full hearing, or after giving all interested parties a reasonable opportunity to be heard and upon appropriate evidence duly considered and properly applied.” I11 the case of State ex rel. Railroad Commissioners v. Florida East Coast R. Co., 69 Fla. 473, 68 South. Rep. 727, this court said: “It is incumbent upon the carrier to show by convincing evidence that the service required in the entire traffic to which the order applies would under the order be rendered without just compensation, by showing the cost of respondent’s entire intrastate passenger service, the receipts therefrom, the value of the property properly apportioned to and devoted to in
It was therefore incumbent upon the respondent in this case to make it appear by clear and satisfactory evi
As to the averment in the return that Order No. 431 was made without any evidence before the Railroad Commissioners affecting or concerning the Florida East Coast Railway Company, we think it has not been sustained. Aside from the presumption of law that the order was properly made and arrived at in due form of procedure and was reasonable and just and, such as ought to have been made, the return admits that the respondent was represented at the hearing at which the propriety of the order was considered and that all the “matters and things” set forth in the return, “as to the condition of the road, its earnings, the value of its property and the small earnings made by it (except those which have arisen since) were presented to the Railroad Commissioners.” The testimony of Mr. R. Hudson Burr, called as a witness for respondent, shows that the relators had before them the reports of the railroad companies, including that made by respondent, required by law to be made, for the years 1910, 1911, 1912 and 1913. That examination showed the “percentage of total freight tonnage for the year 1910” of the respondent’s
The intention of the statute and-the reason of the law in making the orders of the Railroad Commissioners only' prima facie reasonable and just, was that the judgment of the Railroad Commissioners upon the facts before them could not in practice, in reason and fairness be conclusive of the truth and as in the nature of things the railroad companies are in possession of all the facts relating to the maintenance and operation of their respective railroads and therefore in better position to know the truth concerning the management of the business, they can more readily and with less difficulty and very much less expense show clearly the unreasonableness of any order containing that element of illegality. While it is necessary for the Railroad Commissioners to have some evidence before them germane to the subject under investigation, so that the order made may be said to reflect the judgment of the Commissioners, it by no means follows that the test of legality of such an order is the legal sufficiency in quality or quantity of the evidence on which it rests.
We think that the principle here announced is practical in its application and just in its effect. The Railroad Commissioners recognized it and acted upon it in the making of Order No. 431 and applying it to the respondent road as shown by the testimony of Mr. Burr in the following question and answer: “O. What evidence affecting the Florida East Coast did you have before you at that investigation or hearing upon which you based Order No. 431 requiring the Florida East Coast Railway to put those rates in force that are now issued?”
This court said in State ex rel. Railroad Commissioners v. Florida East Coast R. Co., 69 Fla. 165, 67 South. Rep. 906: “The Railroad Commission Act of the State and the amendments thereto contemplate that the Commissioners shall inquire into the necessities which seemingly demand their attention and base their determination upon the evidence before them. If it is made to appear that these requirements of the statute were not observed, that the order was made without any evidence before the Commissioners in support of the necessity or propriety of it, or clearly contrary to the evidence, the order will be deemed to have been made without authority of law and therefore not possessing the status of prima facie reasonableness.”
According to the evidence in this case the consideration of Order No. 431 extended through many years from 1905 to 1914, during which time officials of the respondent company appeared before the relators and “made statements at the hearings, officials of other roads were heard, analyses of Class P rates were made, witnesses testified and the annual reports of the various roads were on file before the Commissioners. All the
We have considered the testimony of the Railroad Commissioners, Mr. Burr, Mr. Blitch and Mr. Dunn, in this case, and overrule the point made by their attorney that it is contrary to public policy “that a Railroad Commissioner should be called as a witness to impeach their own orders.” This court has said that although the law gives to administrative action the effect of prima facie reasonableness, the courts may enquire into the reasonableness of the action. State ex rel. Railroad Commissioners v. Florida East Coast R. Co., 69 Fla. 165, 67 South. Rep. 906. The courts uniformly hold that the question of the reasonableness of a rate fixed by an order of the Railroad Commissioners cannot be conclusively determined by the legislature of the State or by a Commission acting under its authority so as to preclude the possibility of judicial inquiry. Under the guaranty of due process of law a carrier has a right to judicial investigation as to the reasonableness of an order made by Railroad Commissioners affecting the carrier’s rights. The verdict of a jury, the decision of arbitrators and the judgment of a court are conclusive upon the parties until'set aside or annulled for some reason in law. The parties have had their day in court, have been heard upon the law and evidence before the tribunal possessing the power and authority to determine the questions, but the very authority of the Railroad Commissioners in making such an order as the one involved in this case depends upon the fact that evidence was before them upon which tó base the order. To say that a carrier against whom such an order is made can
The next question presented for our consideration is: Does the evidence clearly and satisfactorily show that the cost to the respondent or expense incurred by it in handling the.Class “P” traffic is equal to or more than the receipts derived from such traffic ?
This question is one of considerable perplexity and has engaged our sedulous attention. The difficulty arises not on account of the principle of law which we conceive to apply to the question, but because of the form in which the evidence is presented to us. Much of the testimony that was taken appears to be of little or no value so far as its relevancy to the vital question is concerned, and some of the witnesses called by both relator
We are concerned in this matter with the following questions: ist. Taking the accounts for the year ending June 30, 1914, as the basis upon which to make the comparison between revenue and expense in Class P traffic. What revenue did respondent derive from that class of traffic? 2nd. What expense was properly incurred by respondent in handling that class of traffic? 3rd. In apportioning respondent’s entire railroad expenses between the different classes of railroad traffic, does the evidence clearly and satisfactorily show that-respondent's method is correct? 4th. Applying to the accounts of that year and the year ending June 30th, 1915, the rates proposed by Order No. 431, does the evidence clearly and satisfactorily show that the respondent’s revenue from that class of traffic would be reduced to such an extent that the expense would be legally disproportionate to the revenue that would be derived? 5th. Should the interest upon the bonded indebtedness of the road and taxes be considered as - a proper item of expense to be apportioned between the different classes of railroad traffic? 6th. Should Rule 19 prescribed by the Railroad Commissioners which makes a reduction of ten per cent in the rates where the freight passes over two roads in intrastate commerce and a reduction of twenty
Taking the figures of Mr. W. J. Buchanan, a witness for respondent and whose occupation is that of assistant traffic director of the Minneapolis Traffic Association and who was employed by the respondent to investigate the cost of Class P rates to its road, it appears that for the two years ending June 30, 1914 and 19x5. the total revenues increased in the last year over the former by $165,658.94, while the expenses for the same period decreased about $330,059.78, or a difference in favor of the road due perhaps to increased business and increased efficiency in management of approximately a half million dollars. And the freight revenue of the road shows a steady increase from 19x0 to 1915 inclusive, of more than 43%. The net revenue from railway operations for the year ending June 30th, 1915, appears from the figures of this witness to have been $2,094,-946.81.
It appears from the testimony of Mr. C. W. Hill-man, a witness called by the relator and whose occupation is an accountant and President of the Mutual Audit Company of Louisville, Kentucky, and who was employed by relator to investigate the books and papers of the Florida East Coast Railway Company in order to determine the expense on Class “P” freight; also from the testimony of Mr. J. P. Beckwith, Vice President of the respondent corporation, that the books of the company show the actual cost of the respondent company’s property on August 31, 1915, to amount to $49,147,-469-35- That of that sum the portion of the road from
Now the revenue derived by respondent from Class P traffic for the year ending June 30, 1914, according to the witness Buchanan was $207,289.84 exclusive of interstate busniess, and according to the witness Hillman $221,798.12, and for the )rear ending June 30, 1915, according to Buchanan, it was $225,061.84. The effect of the application of the rates prescribed by Rule 19 is not considered in these figures because that rule 'has never been in force on respondent’s road, the judgment of this court having been superseded on writ of error taken to the Supreme Court of the United States.
The second and third questions, viz, The expense incurred by respondent in handling Class P traffic and the correctness of the method in arriving at that expense, we will undertake to consider together. The figures of Mr. Buchanan show the expense chargeable to Class “P” intrastate traffic for the year ending June 30, 1914, to be $187,960.85, or a net profit of $19,328.99, and
If it is true that the passenger traffic of a common carrier of freight and passengers shows a loss to the carrier it seems that fairness would require that in case of doubt as to the proper assignment of general expenses it should be resolved in favor of the passenger traffic; but where these differences arise we do not find the evidence of respondent to be conclusive of the accuracy of its method nor of the fallacy of relator’s method.
On the question of the assignment of the advertising account No. 55 for instance, while it may be true that resulting from the advertisements of the road and the country through which it passes the country may increase its population eventually by settlers attracted by such ad
Another material point of difference between relator and respondent arises from the contention of relator that the item of switching charges should be estimated and its proper proportion carried to the earnings of Class P traffic. As the expense incurred in switching cars is embraced in the general expense of operating the road and is therefore included in the apportionment to Class “P,” that class is entitled to its just proportion of the revenue derived from that source. The evidence is not at all clear that the calculations of Mr. Hillman are erroneous. .The apportionment of the income from that
The operating percentage as estimated by Mr. Hill-man, however, under the new rate which is less than the estimate under the present rate, when applied to the earnings as shown by him shows a profit on Class “P” traffic of more than $39,000.00, and if that operating rate be applied to the earnings as estimated by Mr. Buchanan under Rule 431 a profit of more than $32,-000.00 would be shown even if the proportion of Class P switching revenue be disallowed. “The proper judicial test however is to apply the proposed rates to the business that has been done and see whether upon that basis such rates will be remunerative or compel the transaction of business at a loss.” Chicago & N. W. Ry. Co. y. Dey, 35 Fed. Rep. 866. Mr. Hillman undertook to do this and found that the cost of conducting Class “P” traffic by respondent was .820515% of the revenue derived. This estimate was based upon an average haul of 118.41 miles of the freight tonnage which was obtained by dividing what is called the ton miles by the tons carried. According to Mr. Buchanan the average haul according to this method of arriving at it was much less. This difference arises from the difference between the figures of the two accountants as to the tons hauled and ton miles of Class “P”, Mr. Hillman making the ton miles greater and the tons less than Mr. Buchanan. The operating expense according to the figures of the latter therefore if expressed in percentage would be greater than that shown by Mr. Hillman. Assuming, however, that the number of cars hauled, tons carried,
Now the question here is does the evidence clearly and satisfactorily show that the relator has attempted to compel the respondent to carry the commodities included in Class “P” traffic at a loss or without substantial compensation the profitableness of the intrastate business as a whole not being involved? Northern Pacific Ry. Co. v. North Dakota, 236 U. S. 585, 59 L. Ed. 735, 35 Sup. Ct. Rep. 429.
We find that the cost apportioned to Class “P” traffic by respondent has not been sufficiently and clearly shown to be accurate, and that the percentage of reduction in the earnings of Class “P” traffic affected by the order as contended for by respondent is erroneous, that the cost of carrying the company material exclusively for use by the passenger service should not be charged
If Rule No. 19 should be considered in this case it is not clearly apparent that this rule will so reduce the earnings as to make the rate under Order No. 431 confiscatory.
Actual experience of the enforcement of these orders may in the future establish a case for respondent upon the question of the confiscatory character of the rates prescribed, in which event it will not be precluded from reopening the question by appropriate proceedings. See State ex rel. Railroad Commissioners v. Louisville & N. R. Co., 63 Fla. 274, 57 South. Rep. 673; Pensacola & A. R. Co. v. State, 25 Fla. 310, 5 South. Rep. 833; Northern Pac. R. Co. v. State of North Dakota ex rel. McCue, 216 U. S. 579, 30 Sup. Ct. Rep. 423; Willcox v. Consolidated Gas Co., 212 U. S. 19, 29 Sup. Ct. Rep. 192; Des Moines Gas Co. v. Des Moines, 238 U. S. 153, 35 Sup. Ct. Rep. 811.
Interest and taxes are matters to be considered in determining whether the rate to be enforced provides a reasonable or fair compensation for the service, but do not enter into the estimates of the cost of the service. After ascertaining the cost to the respondent in hauling the particular traffic and the revenue derived therefrom, the question arises whether after paying the expenses properly chargeable to the particular traffic is there enough left to pay that portion of the taxes and interest on investment which the value of the property employed in the traffic bears to those items. The showing made by the respondent is that a profit resulted in 1914 from Class “P” traffic, and a greater profit in 1915. Now the interest on the funded and unfunded indebtedness and taxes apportioned by respondent to this class of traffic is suffi
Our conclusion is that the respondent’s return is not supported by the evidence and that a peremptory writ of mandamus should issue.
Taylor, C. J., and Shackleford, Cockrell and Whitfield, JJ., concur.