*1 through Accordingly judgment of the Court a normal room. affirmed. Appeals reversed and that of trial court Civil
Opinion January 11, 1956. delivered
Rehearing February overruled 1956. Company Al Railroad Et & New Orleans Al. of Texas Et A-4463. 1955.
No. Decided November Rehearing overruled February (286 112) S.W. 2d Series *3 Baker, Boots, Andrews Shepperd, Bell, and Edwin N. Hutche- son, Hutcheson, and Aenold, Thomas O. all of Hous- Taliaferro ton, Wigley, McLeod, Ballinger Shirley, Mills, Jr., Mills and Galveston, G. H. Penland, Reeves, Suggs, Mart W. J. Y. William R. McDowell, Thpmdon, Brooks, Bert and Frank C. all of Dal- las, Barwise, Magoffin Seth W. T. Thompson, Walker, D. Smith Shannon, Allen, Gambill, Dyer Gambill and Stroud and Dyer, Adair Avery, Jr., Worth, all McKay Avery, of Fort & Charles N. McKay, O’Quinn
John Hollers, J. Crenshaw, & Siddons, Everett Hutchinson, Austin, all of P. Lowe of Colo- Springs, rado Colo., Schwartz, La., Orleans, Louis A. of New appellants. for The Railroad jurisdiction has no Texas
power determining enter growing orders out inter issues rates, holding power the trial court erred in that such Commission, vested and in its conclusion that as reasonably supported matter of law the orders suit are substantial evidence. Railroad Commission of Texas v. Texas Co., App., 137, denied, Steel Texas Civ. 43 2d S.W. Certiorari 562, Sup. 644, 1295; Gulf, 286 L. U.S. 52 Ct. 76 Ed. W.T.&P. Ry. Co., Barry, 814; Co. Thomas O. v. 45 S.W. v. Stanolind & G. 270, 420; Co., 145 Texas 198 2d Hawkins v. Texas 146 S.W. 511, 2d 338. S.W. '326 Shepperd, Attorney ,Phillip John Ben Robinson General Commission, Gen., Starnes, Atty.
'Mert for Railroad Assistants Austin, Steakley Steakley, & all for Corn Smith and Zollie C. Fender, Refining Co., Fender and Joe G. Products Houston, Minter & Sugar Co., appellees. Imperial Gulf, reply appellants propositions & S. have cited C. Ry. Commission, 338, 113 F. 102 Texas S.W. Co. v. 27, 741; Eubank, 184 U.S. Louisville & Nashville R.R. Co. M., Chicago, Sup. 416; 46 L. Ed. States v. United Ct. Co., Sup. Ed. 1023. L. Ry P. Ct. St. & P. 294 U.S. opinion Mr. on Justice the Court Wilson delivered rehearing. original rehearing 27, 1955) opinion (July
On our is with- following drawn and the substituted: 6453, V.A.C.S., by This suit was filed number under" Art. plaintiffs against of railroads as the Texas Railroad Commis- attacking body sion as of certain defendant a reduction sugar sugar. intrastate companies rates on out-of-state Several being discriminatory attack it between also as alleged .shippers. Imperial Sugar Company Plaintiffs a com- had theretofore filed Railroad Commission before the against plaint seeking in- the railroads reduction of rates existing grounds shipments of trastate on the *4 high (not transportation justified by costs) and rates too were discriminatory shippers. After a were hearing of out-of-state favor order complaint, the
on this entered the Commission amending reducing existing in- and the attacked at bar tariffs sugar. freight rates on This suit resulted. trastate court, sitting upheld jury, The The trial without order. the sugar appellants. carriers and out-of-state refineries are our n Sugar Louisiana, California, and refineries located Colorado alleging already an refineries have have that Texas intervened advantage competitive and that a further reduction of undue discriminatory will this and be both increase cane There is a on interstate commerce. but one and burden products refinery refinery corn located (Imperial) and one appellees. of which are within Texas both discriminatory complaint is based the fact The any sugar place at. one at the same competitively to sell seems transportation is of included. This called price the cost with ¿rrived taking pricing. price by destination at the This is base price adding a adequate supply at to it the nearest and base of freight price prepay. deter- the is. told how base We freight prepay computation from the mined. refinery costs is of place delivery, plus for tax and an allowance certain other factors. sugar illustration, price
As an in Dallas to be seems by price Sugarland, determined the base at the site which is sugar Sugar- refinery, plus prepay nearest fixed from sugar land to Dallas. If beet located would refineries in Colorado Dallas, they pay sell in price do at and themselves must so freight the additional costs from to Dallas. Because Colorado greater freight shipping rate, at distance an interstate charges prepay from Colorado to Dallas will be than more Sugarland sugar from to Dallas. difference known in This freight absorption. language, every-day trade as the In sugar companies this means that beet must themselves ab- part doing charge as a sorb of the costs of the extra business freight greater shipping caused from distance freight Colorado to Texas at the interstate rate. On the other hand, Imperial’s plant Sugarland at located does not have to any transportation shipping absorb cept points cost ex- Paso, Imperial to El shipping Paso Beaumont. In to El must freight absorb amount which its costs exceed the Crockett, California, shipping costs El Paso. Beaumont, Imperial to freight must amount its absorb the which Orleans, Louisiana,
costs exceed that from Beau- New mont.
It is contended policy of the Interstate Commerce competitive relationships, Commission is to stabilize and for adopted the Interstate Commerce Commission re- has existing lationship June The carriers contend Railroad Commission must de- powers applicable (Arts. rive all its from the Texas statutes 6445, 6448, 6457, 6460, 6473, 6474, V.A.C.S., alleged consideration discrimination favor of interstate shippers against interestate intrastate rates and *5 shippers by is not authorized the Texas statutes. urged Imperial prevails here,
It is if the out-of-state upon refineries could further insist reduction of the interstate by 30, 1946, rates the transcontinental to lines restore the June relationship, competitive which the interstate Commerce Com- Hawaiian mission wishes to maintain. Both California and Inc., Sugars, Sugar Refining Ltd., Corporation, and Godchaux granted, Im- already application. If be have perial made such might go then Texas Railroal back to the n fear rates, railroads in and the another reduction course, process. limitation no to one will end Of there whether upon any question of reduction of intrastate rates is the compensatory or the railroad. not the rate be to culminating in question proceeding There is no that the but (Sugar Imperial by the order attack bar was initiated under at growing alleged Land) discrimination to relief from an obtain approved out of a certain interstate rates reduction of attacked at order bar Interstate Commission. The Commerce recites: made, effective which been “The further reductions have sugar refining,
generally January, 1953, in from the interstate Texas, distributing points effect of producing have to nullifying, part, made revisions which were in whole in order, related in under were our former the rates which origins to Texas effect rates from reduced time; reduc- portion to which no at that to that Sugarland, which made the rates from but to tions were reduced, situation from have been further California Texas, Sugarland part as to rates from California has been worsened.”
[*****] * “* * showing complainant, that while further sugar previously to sell was 10c more attractive to California it Chicago Dallas, for Cali- is now 3c more attractive than in it Chicago market.” fornia to sell at Dallas than [*] [*] [*] [*] *, widespread chaos, however, apparently not feared “The Texas, being the rates were reduced from California to when restoring apparently and if so could now be avoided serious Texas, from December 1952 rates California Louisiana, January 14, and the Colorado beet brought Texas, having reductions that area been these complaint about the herein.”
[*****] the two series of reductions have “As a result of which *6 especially Texas, sugar rates to in the interstate been' made intrastate January, Texas made in the reductions greater propor- relatively to bear traffic is called subjected increases, rates or the Texas intrastate tion of the traffic or greater interstate relatively increases than territory.” certain intermediate Texas and rates to j|s % sj: íJí íJí that found from the record herein “We have heretofore producing as rates to Texas from the several interstate areas January, 1953, average made effective in the rates 138.9% using base, 30, 1946, in as a were effect on June that 60,000 weight pound prescribed herein will minimum rates to be approximately rates as of be of the intrastate 138.9% variations, over June under, there are some both While great preponderance 80,000 pound of the minimum weight interstate that from the rates have been established origins 60,000 Texas, pound than minimum are 8c less weight 80,000 points. pound minimum rates to the same weight generally prescribed, limited rates to be and at this time territory 80,000 weight pound to the same to which the minimum order, will, therefore, prescribed rates were in our former be prescribed 60,000 pound constructed on of 8c under basis weight minimum rates.” further find
“We from the evidence action before us defendants, individually or in connection with their inter- connecting lines, involuntarily reducing rates origins Texas, necessary makes the revisions * * of the Texas intrastate rates to be made herein *.”
í¡í :j; :ji >): :£ prescribed “The Column in our former order to the territory canceled, socalled 28502 will also be as the reductions connecting which have made defendants and been their lines again January, 1953, in the interstate rates to points wipe Texas and some Oklahoma have served to out all adjudgment.” Docket of the semblance voluntarily reasoned The Commission re- carriers compar- duced certain interstate rates which it beliéved question; new to the rate intrastate able rates would greater earnings comparable than return areas; getting the carriers were' not all bulk- other sugar-hauling being business available since moved some -by private truck, an' indication that intrastate may rates were *7 high; too and'that in a reduction mean additional business for the carriers. regulatory power State’s to fix rates is not
automatically by rate, limited the a related interstate for court Simpson Sup. Shepard, (1913), said in 747, 230 U.S. 33 352 Ct. L. Ed. 1511: say exists, power may “To that this but it exercised be higher prescribing only equal in rates that are on an or basis by trans- than those portation, are fixed carrier for interstate denying power it is to maintain in name while legislative judgment is to in fact. It assert that the exercise of n in determining charge for what should intra- be carrier’s subject is itself to will. But this state- state service the carrier’s carrier, it; by authority and controlled wide controls power the idea that the fix reasonable rates and to limited the car- internal traffic is the mere action of for its places laying an rate to the state’s in across rier foreign jurisprudence.” our to border'is authority power 6445 confers the Commission and Art. charges duty adopt necessary rates, all and made its and it is regulate govern railroads, regulations and1 to correct rates, unjust prevent discrimination and and abuses prevent any conduct general and all other abuses in the business. railroads’ provides that “The Commission shall: Art. rates, charges Adopt necessary regulations, all and
“1. regulate freight passenger traffic, govern and to correct and unjust prevent discrimination and extortion in rates and abuses freight passenger traffic on different railroads and this State. classify freight Fairly justly all and
“2. subdivide transported may character property of whatsoever be over special of tins State into such classes railroads necessary expedient. may found as or subdivisions to each class subdivision of “3. Fix reasonable transportation subject to this title each railroad .'rate for of each said classes and subdivisions. [*] [*] n [*] time, change, any alter, amend or abolish “6. From time to necessary. deemed it when classification or rate established amended, or rates shall be' altered or new classification Such originals.” put into effect in the manner same provides: Art. 6457 alter, any may any abolish,
“The Commission at or in time regulations; any manner amend such and in that event certi- schedules, regulations, showing fied copies of the rules or changes therein, shall be delivered to road affected as here- each specified. In all cases where the rates shall not have been changes Commission, made, except fixed no after shall be days’ ten notice to with the consent of the Commission.” prohibits
Art.
doing
railroads from
a number of acts
*8
unjust
which are declared
imposes
to be
discriminations
penalties upon
guilty.
ap
the railroad found
Act
The
does not
ply
commerce,
argue
to interstate
and from this the railroads
fixing
that
the Commission cannot consider interstate
in
rates
charge
intrastate
rates. A
may
of discrimination
be leveled in
an effort to
a
penalty,
have
rate declared void or to collect a
given
in
but
changing
case at bar it is
as one reason for
a
body having
rate
rate-making
function. The statute
imposing penalties upon railroads was not intended to limit the
rate-making
jurisdiction
function.
penalize
scope
and the
rate-making
of facts to
things.
be considered in
are two different
acting
rate-making
hold that
We
when
within its
function the
Railroad Commission can consider the structure of interstate
upon
rates
their effect
intrastate rates. Railroad Commis
Neville,
394,
sion
&Weld
96 Texas
The carriers cite the case of K. & T. R. Co. v. Commission, App. Railroad 1928, Texas Civ. 489, 3 S.W. 2d Refining Missouri, affirmed in Ry. Producers Co. v. Co., K. T.& App., Texas Com. 2d 679 and proposition S.W. for the here, “the Commission then did what it has done and so purpose, declared its fix the Texas rate in relation to the attempt by interstate rate.” That case was an shipper a to col- through reparations lect a Railroad Commission order from a already shipped prescribed a carrier for oil under a intrastate grounds unjust rate on discrimination reason of a re- holding express interstate rate. The prescribed lated was that a changed binding intrastate rate was until set aside charged long reparations carrier was not for as it liable a attempt- prescribed rate. The action of the Commission ing money reparations shipper to award under those cir- to a legislative action completely cumstances is different from its changing existing here in rate. Company D. the case of v. Ft. & C. Texas Steel Worth
Ry. Co., a suit 2d held that was S.W. against pen- cannot for be maintained in a state court railroad growing alties for rates. That out interstate discriminations fixing an does case not hold that the Railroad Commission may intrastate rate not consider the interstate rate structure comparative additionally purpose purposes for the both making rate. with the intrastate rate consistent penalty not two cases are not com- The case at bar is suit. The may although parable the Texas business concerns both cases sought suffering type injury. The relief been the same have the matter at was a Railroad bar before the Commission change collateral attack in on a rate while that was a court case sought penalty. For us to hold which the relief order in in- could consider the the Texas Railroad Commission fixing would be to structure in terstate rate bring many In- body and with the conflicts blindfold Commission. terstate Commerce Company, v. Texas Steel
The case of 137, 143, by Supreme App., error 43 S.W. 2d refused Texas Civ. *9 denied, Texas, 286 U.S. of certiorari S. Ct. Court upon in the courts an order of was an attack state L. Ed. refusing grant against relief to Railroad Commission the Texas fabricating-in-transit against privi- 2-cent intrastate by the lege in a related interstate rate Interstate Com- prescribed court had “found that the Interstate The trial merce Commission. authority prescribe to had no the 2-cent Commission Commerce * * plus as intrastate rates privilege differential transit Appeals first held: of Civil Court presented that the shows Interstate Com- record “The findings sup- or essential made no basic Commission merce order, jurisdiction for its to establish or authorize or port its plus privilege differentials as intrastate rates transit 2-cent
the moving wholly within this articles state as and steel iron business, unjust to end an in order discrimination as intrastate persons either as between and lo- against commerce intrastate upon burden the an undue income the calities, or because excerpts the Interstate only order of However, of the carriers. proceedings in the Consolidated its Commission and Commerce the hearing evidence, remand reverse we Cases regard. If development in this case for a fuller the cause hearing Interstate that the issue after a full found be findings essential failed to make basic Commission Commerce entering field jurisdiction the state support for its order and Hughes case by the rules Chief Justice under stated establishing supra, 2- States, order its Florida United privilege plus intrastate differentials as cent transit carriers from void, may enjoin the wholly court district using privilege in con- collecting same, transit the said ”* ** articles. rates on iron and steel nection with interstate holding rehearing specific final On this reversed. The was raising growing that “suits issues of discrimination out only rates can maintained in federal after such be courts presented to the matter has been Interstate Commerce Commis- sion.” holding is not
This the Railroad Commission cannot acting legislatively interstate rate consider related while study prescribing opinion rates. A of the entire us to inclines being rates” to as belief the “such referred reviewable only in suits in federal courts were interstate rates judgment proof attack. under The first remanded further of the basis of Interstate order Commerce Commission’s changed rehearing prescribing them. to a rendition On this was grounds exclusively question. on the this was a federal In had case refused alter entirely presents question the intrastate rate. This different from the one at bar. short, position ship of the carriers and out-of-state
pers adjusting where an rate seems be that intrastate needs rates, change up or related down reason of a only can be made Interstate Commerce Commission and promulgated cannot made State Commission which place. in the first find jurisdic no such We government. Surely tional restriction the Commis *10 promulgates power sion which intrastate rate has the adjustments rates. in those If its action make should turn out commerce, this can a to be burden be corrected Commission. the Interstate Commerce 334' appellant
A filed maintenance-of- brief one states the competitive-relationship contention as follows:
“Through sugar years primary the Appellees, concern com- panies, Appellants and a dif- has been maintain absorption in ferential or all of their out of state markets on a basis each market. which could afford do business in such granting The Interstate Commerce Commission in its orders (the post in II rate increases World era ex War proceedings) recognized parte relationship has in its this urged competitive orders has the carriers to maintain rela- ”** * tionships. policy binding Is such a determination on the Texas Railroad duty Is it Commission? of the Railroad stabi- competitive relationships lize as of June 1946? time, example, Sugar At competitive Land ad- had
vantage freight sugar costs in sold at Dallas of thirteen cents per pounds Orleans, forty per pounds over New cents advantage attack, over Colorado. under order Rail- freight road Commission has lowered the intrastate Sugar changed Land competitive to Dallas so has this rela- tionship. prepay This reduction of intrastate rates lowers the price sugar this in turn will lower sales in Dallas and give sugar may sugar. cheaper consumers in Dallas The Colo- sugar rado beet refineries claim this to on burden inter- They state commerce. sugar will price have to meet the lower Dallas, and since the interstate rates will re- same, main the this will increase absorption the amount of correspondingly profit. They say their reduce in their briefs they they can doubt absorb this additional amount. will Dallas This make the market less attractive to them and it they mean materially could will cease or reduce their busi- ness Dallas. To the railroads reduction a loss of means revenue on
sugar shipped Texas but change no direct in re- sugar shipped However, venue into Texas. the order could sugar shipped amount reduce the total into Texas and cor- respondingly shipments increase the intrastate within if Texas the out-of-state refineries elect to terminate or reduce their rather than business absorb the reduction selling in the sugar. price of So the of this benefits rate reduction fall.directly indirectly consumer to the Texas to the Texas re- reducing profit margin fineries reason of of their com- *11 reducing directly railroads ;petitors.. hurts The order in- sugar may them hurt hauls and revenue on intrastate their sugar It hauls. can reducing directly by the volume an effect is to throw if its commerce a on interstate be burden upon expense inter- operating their carrier’s undue share of the state revenues. obtain a did not and out-of-state intervenors
The carriers a finding burden new rate would be in the trial court that does not establish this upon record they interstate commerce. This finding a a matter did as of law. Neither obtain shippers. The discriminatory to out-of-state new rate was sugar high duty under to maintain a Railroad Commission is no shippers to com price in Texas in order to allow out-of-state advantage being a market pete. near course there is an Of hauling having than does a and competitor. cost of reason of this less price-fixing Freight a not be used as rates should device. pricing shipping
A an scheme which included allowance sugar from Hawaii to Louisiana in order to allow an Hawaiian sugar company compete in to allow Louisiana would seem pub large expense producers profit the Louisiana a at the of the arrangement If an maintained all over the United such were lic. sugar larger profit much it would allow each refiner a States sugar territory. Any primary in its “home” such concern of the agreement companies way express found its into an would which freight violating dangerously laws. close to the antitrust used as a cloak rate structure should not be behind which Freight possible a antitrust violation. rates should be fair hide and nondiscriminatory shippers similarly situated and between upon geographical They locations. between should be based charge greater operation plus profit. Any carrier’s cost of a fair subsidy purpose a made for would constitute to the carrier favoring protecting industry locality or main some or taining price constitute discrimi artificial level would just of the nation. The intrastate rates must bear their share operation. They part cost carrier’s must not shift of the cost freight hauling for interstate com intrastate into the rates Rail interstate commerce. The merce thus be burden duty prorate no has to divide road Commission shippers. duty competitive It has no to fix business between reasonably compensable a level rates above maintaining price purpose sales to the carriers for the compete enough shipper sugar high at to allow a distant profit. previous say
In their 5 the that a Point carriers increase of under attack court Indus the Texas 6% League its trial Traffic lost the Railroad Commission power changes case structure while that consider the rate *12 Commission, League 255 Texas Industrial Traffic Railroad v. 903, 905, pending. 2d was bar not involve S.W. order at did The case, subsequent the order under issues in was dated to the contingent case, upon attack in that and was not the outcome attempt upon obviously mat to a that case. It was not an act pending litigation ter gave first order since in the the Commission court) (later a
the increase sustained in railroads question was at is the of that increase the reasonableness commodity upon complaint sue there. Here the decrease is in one litigation. shipper party a pendency of a to that deprive its that case could not Railroad the Commission of continuing power supervise make to structure and the rate to changes specific with issues involved there. unconnected the urge
In Point 6 the carriers that this order should be strick- upon en because a burden interstate commerce “direct violation the order of Interstate Com- the Commerce mission” Docket 28502. Number have examined the order in Docket
We entered No. 28502. August 3, There the Interstate Commerce on 1942 Commission Sugar found the interstate rates then effect between Land, Texas, reasonable; points in Southern Oklahoma were points just to intrastate rates in Northern Texas across low; Oklahoma border too were and that intrastate Texas rates constituted a burden on interstate commerce shipped by by private rail to North Texas then truck cheaper Southern Oklahoma than interstate rate for Although cheaper same it found that distance. Texas intra- commerce, burden interstate rate was a on Com- finding order mission issued no because the Texas Railroad advised that it would make a Commission revision. Thereafter, April 5, 1943, on the Texas intrastate were adjusted upward requirements meet of the order in Dock During period April 5, et No. 28502. since 1943 there have changes affecting relationship been a number of dealt with in Docket hold that due No. 28502. We to the interval of time changes April involved and to the which have occurred since 5, 1943, rate under attack the intrastate at bar does not vio late order in Docket No. 28502. If the carriers feel that this shipments intrastate rate creates burden
337 any Oklahoma, they in addition have two remedies Southern granted might Railroad Commission. relief which They in may voluntary adjustment downward seek proceeding they may 13” terstate rates. Or initiate “Section U.S.C.A., 1, 49, 13(3) 13(4) before the Part Title Sections having purpose Interstate Commission for the Commerce territory. adjusted upwards affected Ry. Board of Dakota v. Comm. of the North Great State 936, Sup. Ry. (1930), 412, L. 50 Northern Co. 281 74 Ed. U.S. Chicago Q. 391; B. & Ct. Railroad of Wisconsin Co., Sup. (1922), 563, 66 L. Ed. Ct. U.S. Rep. 232, 1086; 22 A.L.R. Moore v. Beau Lutcher & Lumber Co. mont, Ry. Co., App. S.L. 2d & W. Com. S.W. 726; Atchison, Ry. Topeka & Santa Fe Co. v. Illinois Commerce Comm., (1929), 335 Ill. N.E.
Right start, from the the trial court faced a dilemma. Should *13 the case pre- be tried under the substantial evidence rule or ponderance of evidence? con- This dilemma arose from a State, flict between the case of Lone Gas Star Co. 137 Texas 681, requiring preponderance 2d S.W. burden and the following applying cases the substantial evidence rule: Consoli- Industries, dated Commission, Chemical Inc. v. Railroad Texas App. 1947, Angelina n.r.e.; Civ. 201 S.W. 2d error ref. & Commission, App., Neches River R. v.Co. Railroad Texas Civ. 928; League 246 S.W. 2d and Texas Industrial Traffic v. Rail- Texas, App. 1953, road Commission Civ. 255 S.W. 2d ref., error n.r.e. response objection In an to the tender of evidence of cer- data, following tain cost ruling: Court made the “THE objection COURT: so far as the is concerned particular subject matter, to the preface my ruling me let with petitioners pleaded, observation: have Ias have viewed pleadings, their they on two I theories. don’t know that have subordinated one the other. is One under the substantial pure evidence rule and the other theory. is on the trial de novo rule, petitioner Under the substantial posi- evidence has a negative burden, you get tive if what I mean. I don’t know not, allegations I whether do or but the over all no evidence nearly which the order could is opens be based one which up court, the matter of evidence the trial if it is tried on the theory, anything evidence on any- substantial almost that has thing operations. or with rates do thing peculiar they “It is a have a burden which in or- English understanding ordinary dinary parlance and Supreme burden, Court has language impossible but is having rule established possible burden ruled it to be negative rule, under positive itself, is a but and so the rule go into objection and let them theory I will overrule regard. in that Honor, then, I understand Your do “MR. Now RICHARDS: conducting under of this case the trial now this Court rule? evidence substantial theory any conducting trial I on
“THE am COURT: peti- on the plaintiffs. another pleaded There is burden establishing theory any any com- ; tioner he has the burden know on. I don’t he can stand that he feels bination of theories and I don’t presents his case after he has to elect he whether develops. I will except probably in so far as it he does think go basis.” allow him to ahead trial, in his included termination of the the Court At the following: conclusion law the being a review of action of the Railroad
“This 4653, V.C.S., judicial under Article review of the Com- precepts herein is under the of the substantial mission’s action recognized rule, jurispru- as it is defined and evidence considered to have dence of this State and evidence otherwise theory was received on the substan- inadmissible been Findings prepon- applies. fact on a tial rule based vidence made, however, con- of the evidence have been and the derance *14 are the same whether or not the substan- clusions of law herein governs rule this case.” tial evidence hold the substantial evidence rule should not have We holding applied and reaffirm our in the Lone Star been Gas according at bar should be resolved case that fact issues preponderance of the evidence. freight legislative. fixing very of
The is its nature Sup. Simpson Shepard, 1913, 352, 729, v. U.S. Ct. 230 33 57 Ry. Co, 1511; L. Ed. Railroad Commission v. Houston & T.C. 340, 750, 756; (1897), 90 Texas S.W. Commission 38 Neville, (1903) 394, 529; 96 Texas & S.W. Gulf 73 Weld Commission, (1909), 338, R. v. Railroad 102 Texas C. & S.F. Co. 741; 795; 116 S.W. Railroad Commission v. Houston 113 S.W. 591; Commerce, Missouri, 375, Texas 124 2d S.W. Chamber Commission, 1928, App. Texas Civ. K. R. v. Railroad & T. Co. 489, App., 2d 679. 2d affirmed Texas S.W. Com. S.W. 10, 2, Constitution, provides: Art. Texas § * “* * regulate railroad, Legislature pass laws to shall freight passenger tariffs, prevent and to correct abuses and freight unjust discrimination and extortion in and the rates state, passenger in this and tariffs on different railroads by adequate penalties; and to the further ac- enforce complishment same objects may provide purposes, of these agencies requisite establish all means and invested with such powers may adequate deemed and advisable.” V.A.C.S., 6448, fixing
Under Arts. 6445 and a func- duty sep- tion and of the Railroad under Commission. But — powers aration and division of doctrine still our basic — guarantee Legislature charged liberty fundamental has 6453, judiciary by V.A.C.S., examining Art. with an order upon complaint of the Railroad Commission of a dissatisfied party and, 6454, V.A.C.S., under Art. proving the burden of complained unjust the rates “unreasonable placed upon complaining it or party. them” is Refining Missouri, Ry. Producers Co. v. T. K. & Co. of Texas, App. 679, 680, Com. 13 S.W. 2d a suit reparations for collected under an order of the Rail- fixing alleged road high a rate to be too and dis- criminatory, we held that pass the Railroad Commission cannot upon judicial-type judgment legislative its own order. This Court said: opinion, “In our contemplated it was never Rail-
road placed Commission should be in the position unenviable determining duly as to whether its rates established are un- just discriminatory. We think the article of the statute quoted express purpose above enacted for the making binding the rates fixed the Railroad Commission and con- parties they all clusive until set proceed- were aside ing provided in the district court as articles 6453 and R.S. 1925.” point
This Court then went on to out the difference in func- tion between the Interstate Commerce Commission and the *15 Commission, saying: Texas Railroad argument plausible
“The is made the system federal of permitting reparations by Interstate Com- to be awarded the analogous right in this case. the claimed merce Commission is to however, federal difference, the There is a fundamental between sys- rate-making system of the federal and the our state. Under - the rates tem, not fix the Interstate Commerce Commission does Act, charged Transportation the car- by carrier. the the Under reasonable, just, and rier is commanded to fix rates are light admonition, they fix nondiscriminatory. their the of filing by Interstate Com- thereof with the own rates schedules by the only complaint a is made merce Commission. It is when shipper carrier or a the Interstate Commerce Commission fair, just, and to whether a rate is is authorized reasonable, ascertain Under just a and fair rate. determine what is carrier, system is fixed our is determined the but rate establishing very purpose of rea- tribunal created for the a nondiscriminatory Interstate rates. The Commerce sonable and only reparations a it finds that rate when awards discriminatory. unjust course fixed itself or Of the carrier is system the car- contemplated federal it was not under the binding upon rier could fix rate that would be conclusive railway shipper. company do the This would enable the -— thing policy prevent very law to which it was charging discriminatory rates. A different of extortionate however, rule, applies are rates in the first instance where the public upon imposed duty by a fixed fixing freight whom is tribunal ship- just fair and carrier per.” Commerce,
In Railroad Commission v. Houston Chamber supra, this Court said:
“*
*
[*]
making
of rates is a
legislative
function,
but the
any
is
as to whether
unreasonable or for
determination
* *
illegal
judicial
is
function
*.
reason
* *
“*
proof required by
question
theOn
of burden of
sta-
Railroad Commission is attacked di-
tute when an order
1925)
rectly,
(article
Rev.
reads:
Stat.
now
statute
proof
plaintiff
shall rest
to show
‘The burden of
charges
rates, regulations, orders, classifications,
or
com-
acts
unjust
plained them.’
unreasonable
unchanged
left
“The codifiers of the
revision
article
(which in turn
6658 of the Rev. Stat. 1911
was article 4566
subject, except
1895) on the
the omission after
the Rev. Stat.
‘by
satisfactory
clear and
‘show’ of the words
evi-
word
*16
dence’;
controversy
under
must
the statute now in force the
determined,
proof’
con-
therefore be
so far as the ‘burden of
is
cerned, by
governing
ordinary civil cases.”
the same rules
in
(
the Commission made old no rate unjust, unreasonable, discriminatory, prejudicial or otherwise illegal, finding just, without the new reasonable * * citing fair Thompson Commission, v. Railroad spe 2d S.W. 759. That case involved an attack cialized permit motor carrier issued under Art. 911-b. Section (d) 5a provides Art. 911-b that the Commission’s order shall “* * * be void full unless the Commission set forth in its order * * complete findings provision of fact There is no such governing in making the statutes the rate function for railroads and we by judicial cannot insert it into the fiat. statutes
By their Point 7 the carriers contend that the new rate is unjust unreasonable and as to them in that the order will sub stantially noncompensable reduce their annual revenue and is in give Although it will appellees them a fair return. claim plead that the carriers did not that the was not com rate pensatory, given we believe if construction liberal their pleading support will this Point. Having findings failed to obtain favorable of fact in the court, trial appeal showing carriers have the burden on (cid:127) the order of the Commission is as a matter of law either confiscatory unjust. or unreasonable and The evidence offered issue, railroads as sum- application
marized them in their error, for writ of comes February to this: general granted 1952 the Railroad Commission freight. increase on intrastate The railroads’ 6% operating grater expense August Unit items were 1953 than they February Although were in 1952. their total investment $863,197,002 February had increased from $872,- 1952 to 642,806 July 1953, operating their net income had decreased $3,998,668 $3,533,303, and their rate of return from period. operating in the same An ratio of cost 5.56% 4.86% exceeding necessary to income not try in the railroad indus- 70% condition, to a sound financial and while that ratio was February July 72.49 in it was 77.44 in 1953. Under the proposed lose, annually, reduced rates oh the carriers will Charges Sugar $284,000. under thé in excess of new rates from many points they Land in Texas will lower were be even than why so.. 1928. One witness knew of no reason this should be The railroads offered no show that the new evidence to sugar, noncompensatory. alone, Their rates on if considered *17 position phase intra- on this of the is that if their entire case investment, operations do not show a return reasonable on they operating or if ratio to in- show unreasonable of cost come, single powerless a the Commission is to reduce rates on citing
commodity, v. Nevil- Railroad Commission Weld & le, 394, Ames, 466, 529; Smyth 96 Texas 73 S.W. v. 169 U.S. 819, (Minnesota Simpson Shepard, 42 L. Ed. Rate v. Cases), Sup. 230 33 L. 1511. These U.S. Ct. Ed. controlling. authorities against
In the Weld & Neville case suit was the Railroad compel grant Commission to it to a rate on lower round-bale shipped cotton than sought fixed for was cotton in relief flat bales. The refusing was desired. fix The court said that in a lower right rate for round-bale cotton the a con- Commission had operations sider the entire of business the railroads transported some commodities would have to be at a loss. That holding is not a a that the Commission cannot lower a on rate particular commodity of because virtue the reduction the railroads would lose revenue. Smyth In enjoined v. Ames state were en- authorities
forcing against general statutory in railroads Nebraska a re- freight duction of in rates. The evidence showed if 29%% during any the reduced rates had in preced- been effect of the ing years operated three most of the would roads have at a loss operating profit and the income of the few aat would have compel they so small as to been conclusion that were forced. property just compensation. their without to use Simpson Shepard Supreme v. Court of the United against injunction affirmed an States two> of orders the Rail- road & Commission of Warehouse the State of Minnesota and legislature general two acts of the of that state which fixed charges passenger schedules of maximum for trans- granted portation. injunction showing The a prescribed very a would have made serious reduction in a already inadequate. return appears Smyth Simpson
Thus both v. Ames and against injunction Shepard ran v. enforcement of orders re general would have which for reductions .and statutes re just a depriving reasonable sulted railroads nothing cases in either on investment. There is turn their rate-making authority to re agency deprives which re simply particular commodity duce rates because on return to railroads whose duction will result in a loss of revenue par already fixed on investment is low. Unless the rate unjust, commodity the railroads ticular unreasonable simply complain it results should not heard of it because They remedy in a under the statutes loss revenue. their have seeking rates. revenue increase in comparable comparison The admission of rates offered comparable proof operating was error without conditions. Neville, supra; Commission Weld & Con Moline Comm., sumers’ Co. v. Ill. Ill. Commerce N.E. comparisons aspects similarity, did some show such loading characteristics, value, damages and the revenue *18 terms of They compar ton-miles car-miles. did not show Although degree cost comparative able factors. the to which truly comparable degree data are they and the differ to which may going weight be a matter testimony, to of the the still a n basis evaluating for comparison the should be established before comparative the data are admitted in evidence. But since this jury trial, was non we do not consider this re to have been versible error.1 question
The has by been raised of members the Court as to whether Art. 1738-a appeal allows a direct from the trial court to this present. opinion Court in case like the majority of question this is foreclosed in favor of direct by appeal Sterling Railroad Co., Commission v. &Oil Ref. 147 547, 415, Texas 218 S.W. 2d and Railroad Commission v. Shell Co., Oil 146 Texas S. W.2d The effect of these was, incidentally, decisions modify to contrary implication (c) 499-a, of Sec. Rule of Texas Rules of Civil Procedure.
By allege their. Points and 9 the 80,000 carriers public solvency 1 Due to the interest both the of the railroads and in not paying (Abilene Ry. Terrell, excessive rates & So. Co. Tex. Civ. App., ref.), prefer 2d S.W. er. the writer would to reverse and remand parties might establishing in order that all focus on their contentions relevant properly supported comparison might evidence so that a true be drawn and com parative truly rates- evaluated. Evidence “otherwise considered to been in have virtually impossible admissible” was received in volume. It would be for the trial thinking court exclude from his total .effect of this evidence. Under these n circumstances, considering length trial, the' testimony I feel this ' judgment. probably did enter into trial court’s discriminatory in Texas. certain cities as between anyone alleged cities nor else affected Neither those aspect Therefore, parties case. on this discrimination are to this adversary proceeding. rate, For new case is not a true of the this adjudicate points and reason do not those do not we decide question. judgment The the trial court is affirmed.
Opinion 16, 1955. delivered November dissenting. Mr. Justice Culver agree
I do decision. I not with the result reached in this appears would me action reverse because reducing sugar Railroad Commission in arbitrary, any of a unreasonable and not based on evidence probative force. caught large railroad carriers are here a vise between out-of-state, contending refineries, domestic and particularly
Texas the Dallas-Fort Worth market (Imperial Texas) applied appellee area. The to the Imperial for a reduction rate. was of the intrastate complaining complaining rate. It of the intrastate relationship rates. It interstate and intrastate between the slight applying claimed that a reduction in the interstate sugar moving gave undue into the out-of-state refiners advantage. advantage Imperial enjoyed far
As back as 1946 the *19 way the Dallas market in the of railroad over out-of-state rates shippers forty per certain cents On account of was hundred. advantage adjustments forty- this had in rates been increased to ap- cents. In 1953 the Interstate Commission two Commerce advantage proved a this back rate structure which reduced to forty prevailed Upon application the by Imperial which in cents only the Railroad Commission not reduced in-
the cents, gave Imperial as the two to trastate rate so to restore but forty-nine advantage ship- total of cents over the California a advantage by held per corresponding adjustment in the example, Imperial For the distance Colorado refiners. over the greater Sugar than from Land Amarillo is 172 miles present the difference is Under the rates Denver Amarillo. shipment. of the Colorado Under cents in favor inter- six by Railroad is rate Commission now established
345 Sugar give favor of differential in as to a six so cents reversed Sugar Denver than it is is miles Land. Dalhart 312 nearer The of Denver. present eleven cents in favor Land. The rate is cents is two rate the Railroad Commission established Sugar Sugar only nearer 36 miles Land. Lubbock is favor advantage Sugar of 10.4 gives present Land Land. cents, rate The Sugar Land’s than proposed more doubles but the rate advantage. Judge
Seemingly appropriate of Circuit are the words here U.S., Corporation Huxman in of Kansas v. State Commission 746, 1954) Supp. (D.C.P. 128 Fel. Kans. : is not
“While relative distances from a common market only determining fair between factor to be considered in major competitors market, they for a share of common are of importance approximately the same where the distances are may they comparable, conditions are likewise controlling determining un- well be the reasonableness competitors in the absence of reasonableness of rates between persuasive other factors.” question, me,
The basic this court is: Can seems to before lawfully the Railroad fix and relate intrastate rates Commission Certainly has to interstate rates? Railroad Commission right fixing rates, applicable all factors in consider including rates, think the level of but I it does interstate ground solely power to lower on the have intrastate rates approved by reduction interstate rates that has been N. R. Interstate Commerce Commission. Louisville & Co. Eubank, 416; Houston, Sup. 22 46 L. Ed. U.S. Ct. Sup. 833„ 58 L. E. T. R. Ct. & W. Co. v. U.S. U.S. Co., 1341; Philadelphia R. Fed. 858. Ed. & R. Swift & v.Co. power it can said to If the Commission does have that then hamper regulate, somewhat, goods in interstate commerce. movement of relationship proof that factor con- sole entering the rate reduc- sidered tion, language Commission’s order best shown opinion particularly majority follows: set forth in the as action further find from the evidence before us
“We defendants, individually or in connection with their inter- *20 reducing involuntarily connecting lines, from the rates origins Texas, necessary makes the revision the interstate * * made herein. rates to of the Texas intrastate by by Some the stress seems to be laid the Commission and respondents fact, voluntary say, they the was as by reduction voluntary it be the railroads in interstate rate. the Whether not rail- would seem to be immaterial as the pursued appropriate only road the method and the reduction approved by On the Interstate Commerce Commission. point other hand the carriers out that the interstate rate reduc- tion, Imperial’s complaint, comply the basis of was made to by with the criticism the Interstate Commerce Commission that relationship 30, 1946, rate as of June should be restored. The said: Commission
“ petitioners have ‘We the assurance of the intention their proceed by voluntary cooperation discussion and with shippers representatives put markets into to endeavor to competitive effect such will measures as restore former relation- ships completely possible. expect prompt as We full com- pliance representations, spirit proceed- with these in the of the ing. relationships Restoration of rate should not be made increasing bettering excuse for further revenue or com- ” petitive position of the carriers.’
This making must have had the effect of re- by something duction voluntary. railroad less carriers than heavily In appellees, Atchison, a case relied T. & S. Ry. Commission, 1929, F. v. Illinois Commerce 335 Ill. N.E. rule is said be: “It has of course true that no Illinois Commission regulate power change interstate commerce fix or to * *” * relation between interstate and intrastate rates. commerce view this reduction of intrastate rates the Railroad preserve Commission, shippers, out-of-state in order to relationship demanding many years, which had existed for are again Emphasizing only further interstate reductions. fac- tor, namely, which, think, relationship, in- I caused pointedly trastate rate reduction the its said order:
“* * * by interveners, If such further demands made connecting defendants connection With their accede lines reducing Texas, thereto further interstate fates to seem- ingly general investigation the time will have arrived for a into sugar, investigation prop- the rates on carloads. "Such an would n erly the matter of embrace rates on carloads *21 territory Texas to intermediate and the Texas to California Louisiana, the evidence California, to which and from Texas to higher level a much from are on the rates shows including Texas, territory to the west than from California refining group California, to and than from the New Orleans might mileage solu- points A be the in Louisiana. scale of tion.” brought by words, pressure if from the out-of-state
In other any made of the shippers or further reduction is the I.C.C. really will Railroad interstate rates to Texas the Commission in the reduction, implied reduction that further make and it is something about is done intrastate rates will in order unless be the rate from Texas to California.
Bearing under point further this the railroads show the new fixed intrastate rates Commission n charges (Im- Sugar Land, Texas, transporting perial Refinery) many points than the will lower in Texas be to greatly spite increased rates were in and this in of the during twenty-five operation cost of than carrier more these change (cid:127)years and no would war- in economic conditions which rant that situation.
Appellees contend that if did fix and even the Commission rate, relate the intrastate the interstate nevertheless only application relief for the railroad would carriers be 13 of to the Interstate under Section Commerce Commission finding the Interstate Commerce Act for a the intrastate com- (cid:127)rates are too low and constitute a interstate burden carriers, admittedly merce. action is to the While this available statutory au- I not think it is exclusive for the reason that thority em- under which the Railroad acts does not solely upward depending power it to or downward revise rights. upon the level or unreasonableness of appellee, may open
It said the same avenue was Imperial, any correct exerted inter- discrimination applied Imperial rate. first took that course. It Indeed n ground suspend on the the I.C.C. to the interstate reductions Imperial Upon relief did unfair discrimination. a denial of that although further, have had its pursue protest could not (cid:127) application filed accordance domplaint after formal examined practice. rules (cid:127)with the Commission’s measuring wrong think used I the Railroad Commission stick its order stand. therefore should Rehearing February overruled *22 Company
State Products Et Al. Akin January 4, No. A-5391. Decided 1956. Rehearing February 15, overruled (286 110) S.W. 2d Series Shepperd, John Ben Attorney General, Geppert, W. V. W. Lollar, W. attorney general, Guild and L. P. pe- Assistants titioner. Appeals failing
The Court of erred to hold as a mat- Civil against respondents ter law that claim of State vio-