INTERSTATE COM. COM'N.
v.
ATCltrSON, T. & s. F. B. CO.
295
INTERSTATE COMMERCE CoMMISSION V.ATCHISON,
T. &S. F. R. CO.et al.
(Circuit Court,S. D. CaUjomia. April ,25, 1899.)
1.
INTERSTATE COMMERCE ACT-LONG AND SHORT HAULS-COMMISSION.
To render lawful a greater cbarge for a shorter than'foralonger haul, under section 4 of the interstate commerce act, (24 St. p. 879,) it is not necessary to first obtain autbority from the commission. Such chargeis lawful if the circumstances and conditions are not in fa,ct "SUbstantially similar." and the carrier may determine the question for himself, subject to a liability for violating the act, if,on in· vestigation, the fact be found against him.
S. 'SAME-PROCEEDING TO ENFORCE ORDERS OF COMMISSION. On a proceeding in the circuit court, under section 16, to enforce an order of the commissioners directing certain carriers to desist from charging 8 greater rate for a shorter than for a haul, the facts found by the commission are not con· clusive, but are merely prima facie evidence, SUbject' to be overcome by other evidence Pfoduced befpre the court. 8. SAME-COMPETITIVE POlNTS. Los Angeles, Cal., is a point to which there 'is active competition in certain kinds of freight, between several transcontinental railway lines, direct,or by water, via Va,ncouver and San Francillco. also by ocean freights, via and the straits 'of Magellan, from points east of tbe Missouri river; and a through rate on the same kind of freight, lower than that to San Bernardino, an intermediate nODCjlmpetitivepoint, 60 miles from Los Angeles, on one of the oompeting rail lines, is not prohibited by the aot, since the circumstances and conditions are substantially dissimilar.
In Equity. Petition filed by the Interstate Commerce Commission to enforce an order requiring certain railroad companies to desist from charging a greater rate for a shorter than for a longer haul. Dismissed. M. T. Allen. U. S. Atty., and Harris Gregg, for petitioner. A. BrtIIIl80n and C. No Sterry, for defendants. Ross, District Judge. This proceeding was instituted by virtue of the section of the act of congress entitled"An act to regulate commerce," as amended March 2, 1889, (25 St. at Large, p. 855,) to enforce an order by the Interstate Commerce Commission on the 19th day of July, 1890, directing that, from and after September 1, 1890, the deflmdants, the Atchison, Topeka & Santa Fe Railroad Company, the Atlantic & Pacific Railroad Company, the Burlington & Missouri River Railroad Company, the Califomia Central Railway Company, Kansas &; the Calilornia Southern Railroad Company, the Nebraska Railway Company. the Missouri Pacific Railway Company, and the St. Louis & San Francisco Railway Company, cease and desist from charging or receiving any greater compensation, in the aggregate, for the transportation in car-load lots of certain enumerated commodities over their several lines or the routes formed by them, from Kansas City» St. Louj", Detroit, 'Cincinnati, or New York, or from corresponding points, for the shorter distance to San Bernardino, in the state of Oalifornia. than for the longer distance over the same line. in the same directior., to Los Angeles, in the state of Califomia. The order of the commission here sought to be enforced was made in aproceedinp; instituted before that body by a complaint on the part of the San Bernardino Board of Trade, setting forth that the railroad companies above men-
vol. 50. tioned were charging and receiving higher rates for each car load of reaphay plows, horse rakes, seed drills, corn planters, forks, (hay or manure.) hoes, hand rakes, shovels, spades, bags, burlap and gunny, compressed in, bales, beer in glasses or stone, packed bottles, wine or beer in bulk, coffee in sacks, crockery, common chiQa and white wa,re"packed,cnairs, common wooden seated, cane seated, perforated, worth not more than nine dollars a dozen, school furniture, iron, bar or rod, fruit and jelly glasses, pumps, steam or hydrq.uUc. sewing machines, soap, Castile, imitation Castile, common balls. and laundry, stoves, ranges, registers, radiators, black iron stove furnitl:\f:e and hollow ware, sugar, buggies and carriages, and farm wagons from the Missouri river, St. Louis, Chicago, Cincinnati, Detroit" and New York, over the same line, in the same direction, to Sun Bernardino, than to Los Angeles, San Bernardino being the shorter lind Los Angeles the longer distance; thereby giving Los Angeles an unlawful ,preference over San Bernardi.no. To this complaint a demurrer Wasititerposed by the Burlington & Missouri River Railroad Company, and'answers were filed by the other defendant companies. The comnlissio,il beld that the complaint was sufficient to put the carriers to proof that the services were rendered under such dissimilar circumstances as to justify the greater charge for the shorter haul; and, after hearing evidence, found certain facts, which are set out in its report and opinion. Holding that the greater charge for shorter haul was not justified by the facts tound, the order was entered which this court is now asked to enforce. The petition of the commission for such enforcement sets forth, among other things, that, subsequent to filing of the complaint of the San l3ernardinoBoardof Tra,de belore the ,commission, the California Central RailwuyCompanyand the California Southern Railroad Company )Vere and,. constituted into a new corporation, under and by of California, called the "Southern California Railway Company;' which last-mentiQned c()rporation claims to have some interin the sUbject-matter of this suh, and accordingly it is also made a ;, . onhe defendant companies, except the Chicago, Ran!las & Nebraska Railway Company, filed an answer, admitting the l!-llegations qf ,the petition respecti{l'g the corporate existence of the defendant Com.panies, and the location of their principal places of business; also the consolidation of the California Central Eailway Company and the CalifoJlqi,a; Southern Railroad Company, forming the Southern California RaiJway QompaQy; but alleging that, in addition to the California Central Railway, Company and the California Southern Railroad Company, the Redondo, Beach Railway Company, at. the time being a corporation,duJy incorporated under the laws of California, having its principal place of business in the, city of Los Angeles, was duly consolidated with the aforesaid two companies, under the name of Southern COI;npany; that the Redondo Beach Railway Compliny J,4e ',' of such consolidation, owned and operated a line of
IN'l'ERSTATE COM. COM'N. V. ATCHISON, T. & B. F. R. CO.
297
road running from Los Angeles city, and there connecting with the California Central Railway Company, westerly to Redondo Beach, a point immediately upon the shore of the Pacific ocean, which road is now a part of the line owned and operated by the Southern California Railway Company. The defendants, answering, also admit that all of the aforesaid corporations, except the Southern California Railway Company, and its component corporations, were at the times mentioned in the petition, and still are, common carriers, engaged in the transportation of persons and property by their rajIi-oads extending through several of the United States, under a common control, management, or arrangement for a continuous carriage, and were then engaged in such business from the Missouri river, St. Louis, Chicago, Cincinnati, Detroit, and New York to Barstow, in the county of San Bernardino, state of California. But the defendants, answering, deny that they are interstate common carriers between Burstow and Los Angeles or San Bernardino, and allege that the defendant companies, other than the Southern California Hailway Company, carry only from the eastern points named to Barstow, where all goods and merchandise shipped and hauled by them as common riers are turned over and delivered to the Southern California Railway pany; that said Southern California Railway Company is a corporation organized and existing under the laws of California, having its, principal place of business in the city of Los Angeles, and neither owns nor operates any line of railroad outside of the state of California, and is n"t subject to the provisions of the interstate commerce act. The answer mits the proceedings before the Interstate Commerce Commission as stated in the petition, but alleges that neither the Redondo Beach way Company nor the Southern California Railway Company was a party thereto, and that neither of them had a hearing before the commission upon any of the matters in question. The defendants, ing further, allege, among other things, as reasons why the order of the commission should not be enforced, that the true and existing .state of facts as to ocean competition existing at the time of the filing of the petition by the San Bernardino Board of Trade, and of the answers of the respective defendants therein, were not fully proven and established' before the commission; but that when the petition was filed, and when those answers were made, and when the hearing thereon was had, there did actually exist such water competition as to take the rates upon freight to Los Angeles out of the operation of the interstate commerce act, and that the carrying and transportation of the freight in question to Los Angeles and San Bernardino was not under substantially similar circumstances and conditions, but was made wholly dissimilar by reason of water competition actually existing; and, further, that, since the making of the order here sought to be enforced, there has grown up and now exists a new, substantial, and continuous competition, by ocean carriers, between all of the points east of the Missouri river named in the pleadings herein and the Pacific ports, including the ports of San Francisco, Redondo Beach, and San Pedro, and that there is now being carried by such ocean transportation large quantities of merchandise and
FEDERAL REl.'ORTER,
vol. 50.
including the commodities mentioned in the petition by ,the ,San Bemardino Board of Trade the Interstate Comthe ports Moresaid, in rivalry with and in comm'theoverland carrying, by the defendant companies, and that q?wpetition is actual and. present and is increasing; and that the by reason orench competition, have been com· peIledJo 'rnakl'l specill,1 rates to terminal points upon the Pacific coast, t:lumher the city of Los that the Redondo including Beach Railway Company, now forming part of the Southern California ltaihvayCom pany, by ,reason of aforesaid consolidation, creates a continuous line through to the ocean at Redondo Beach, through which point, 'directly froID the east and from the shipping points named in the petition of the San Bernardino Board of Trade, large quantities of freight consigned andehipped directly to Los Angeles, and to aren.ow the port of San Francisco, by steam and sailing vessels, and from Redond9 Beach and SnuPedro for Los Angeles. The defendants, answeringJurther, allege that there are now.fourtranscontinental lines of railrOlld from tp.e east to the Pacific, ocean, other than that formed by the defend,ant companies,. Dllmely: The Southern Pacific Railroad Company, ()perating its' line of road from the city of San Francisco to Galveston, Tex., and. other . points east, running through the city of Los Angeles, ilOd passing (three miles) south of San Bernardino; the transcontirientll.lline compc;>sed of the Central Pacific and Union Pacific RailSan Francisco to Omaha, and road Companies, operating a line therecopnecting with other roads to the eastern markets; the Northern Pacific, .Railroad Company, operating a line of road between Portland, Or., and Duluth, Minn., and other eastern points; the Canadian Pacific a line of road through the British possesRailroad Company, sions from ocean to OCean. That all of these roads, other than that of the defendant companies, are engaged as common earriers in the transportation of freight from all of the eastern points named in the petition hel'eintot4e Pacific ocean, and thence down the Pacific coast, both by water and fll.il, to Los..<\.pgeles, from which point distribution is made to other pointl:! inland,;.tOat over all 9fsaid lines, other than that of the Angeles,. though an intermediate, is recogdefendant, nizedl!S 'termil1al, poiri..t; that neither of said ,companies, other than in, complaint filed by the San Ber· the defendants, was nardino Board of Trade' before the Interstate Commerce Commission, and that neither of them ill bound by its order, the enforcement of which against the defendant companies would be to subject them toan undue and unreasonable disndvalltage in 'the carrying of freight, by. reason of the other transcontinental lines not being subject to the same order, and for trans'portation to like common points. the same Much time was consumed in the taking of testimony on behalf of the case haS been but recently submitted. For respectiye the commissiop:, it is contended, in tQe first place, that under no circumof the interstate comstan.ces can anx <;larrier, subject to or receive for tranl1portation of freight a greater commerce act;
ATCHISON, T.
&: s.
F. R. CO.
299
pensation for shorter than for a haul over the same line, in the same direction, unless upon application to the commission such carrier be, in the particula.r case, authorized to charge less, for the longer than for the shorter distance. If this be the true construction of the act in question, the case is, of course, ended here; for not only was no such authority given in this case, but the order which it is sought to enforce expressly directed that the defendant companies should not charge or receive any greater compensation for the shorter haul to San Bernardino than for the longer haul to Los Angeles. In support of the construction thus contended for, it is said that" the law points out but one method of escape from the universal application of the prohibitory features of the fourth section of the act, and that is through an application to the commissioners, who alone are given, in the exercise of a sound discretion, the right to suspend the provision in particular cases, and their findings are not reviewable by any other tribunal, because the law has confided to the commissioners, as a special tribunal, the authority to hear and determine the question.» But the fundamental difficulty in the way of adopting the construction now and thus contended for by the commission is that the act in question does not make it unlawful to charge or recei ve more for the shorter than the longer haul, under all circumstances, but only where the circumstances and conditions are substantially similar. By the first section of the act (24 St. at Large, p. 379) it is declared that all charges made for any servicA rendered or to be rendered, in the transportation of passengers or property by any cari'ier subject to its provisions, shall be reasonable and just; and every unjust and unreasonable charge for such service is. prohibited and declared to be unlawful. By the second section, every unjust discrimination, as between persons for doing a like and contemporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions, is prohibited and declared unlawful. By the third section it is declared to be unlawful" for any common carrier subject to the provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or to subject any particular person, company, firm, corporation, or locality, or any particular description of traffic, to any undue or unreasonable prejudice or disadvantage in any respect whatsoever;" and then follows section 4,-thesections particularly applicable to the present question,-which reads: "That it shall be unl>l.wful 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 samH 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 reCPlve 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, Bucb common carrier may, in speCial cases, after investigation by the
a
?OO
,FEDERAL REPORTER,
authorized to charge less for longer than for shorter distances for the of pllssengers 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." It is obvious authority and power conferred upon the commission by the proviso contained in section 4 is limited to cases that fall within the enacting clause of that section, for its purpose manifestly is toenable the commission to relieve carriers from its operation in cases where. it deems such action proper. Such purpose is also expressly deolared in the concluding clause of the proviso. And the power thus conferreg is' exclusive, and its exercise conclusive,in all cases that fall within tqe prohibition of the enacting clause of the section to which the prqyis9 je appended j that is to say. to every case where the carriaf chargeJSQr receives greater compensation in the aggregate for the transportq,t\on .of passengers, or of like kind of property, under substantially and conditions,Jor a shorter than for a longer disthe same in the same direction, the shorter being inthe longer distance. ,In all such cases, a greater charge tpafjhorter than for the longer haul is absolutely prohibited, unless tlW for good, ea use, sees proper to relieve a particular carits operation. But, if the circumstances and conditions are not S\1bstantially similar, the prohibition Imposed by the statute does HOt' a,pplyat all. This question the court must determine. If it finds that tile <;:ircumstances and conditions under which the greater charge was mad.e for the shorter than for the longer haul in question were subfjt!!ntiallY,similar, the inquiry ends, and the order of the commission for in such case it was the exclusive province of the commission to determine whether or not there existed such other ciras would make it to authorize the defendant compaand receive greater compensation for the shorter than for the longer PIloU!. But, if the case shows that the greater charge for the shorter t4an for the longer haul was made un:1er su bstantially dissimilar and conditions, (there being no claim that the compensa1ji.6n and received for the shorter haul was otherwise unjust or unreasona.ble,}then, and in that event, it is manifest that the case does not with}p prohibition of the interstate commerce act at all. This of the statute is in accord with that adopted by the InterstateCorrimerce Commission itself in Re Southern Ry. & S. S. Ass'n, 1 IilC·st. Com. R. 280, where the commission, speaking through Judge COOLEY, ,!;trter quoting the prohibitory clause of section 4, said: clearly stated what is ,nnlawiul and forbidden, and for doing tPe, forbidden act are then provided. But that which the act doe!!' not declare nnlawful must remain lawful if it was so before, and that which it fajls, to forbid the cllrrier is left at liberty to do withont perfIlilision of anyone. Thecharging or receiving the greater compensation for the, shorter than for thp. longer haul is seen to be forbidden only when botl\ are',!lllder !iubstantially similar circulllstanc,es and conditions; and thereany case the carrier, without fiJ."lltobtainillg an order of relief, shall qepad, fl;Olll th,e general rule, its,so will not alone convict it ofi1legal" '... ... " '
,
"
" " .
.
INTERSTATE COM.COM'N. 'V. ATCHISON,: T. & S. F. R. CO.
301
ity, since, if the circumstartcies arid conditions of the two hauls are dissimilar, the statute is not violated. Should an interested party dispute that the actIOn of the carrier was warranted, an issue would be presented for adjudication, and the risks of that adjudication the carrier would necessarily assume. The later clause in this same section, Which empowers the commission to make orders for relief in its discretion, does not in doing so restrict it to a finding of circumstances and conditions strictly dissimilar, but seems intended to give a discretionary authority for cases that could not well be indicated in advance by general designation, while the cases which upon their facts should be acted upon as clearly exceptional would be left for adjUdication when the action of the carrier was challenged. 'fhe statute becomes, on this construction, practical. and this section may be enforced without serious embarrassment. From the recital of the history of the framing of this section, (which IS given further on.) it appears, among other orders for relief was devised by the senate, things, that the proviso committee which originally drafted the section, and that it was an essential' part of it as first proposed; tbe prohibitory part of the section being then qUite stringent,· but a discretion being conferred upon the commission to relieve against: itsopetation. Aft,erwards the words, 'under SUbstantially and conditions,' were inserted in the first sentence of section. Tile proviso was perfectly intelligible, so long as the leading clause contained a hard and fast rule against charging more for the shorter than for the lOnger haul. It was theh obvious that a discretion was left· to the commission in the matter of relaxing the rule when different circum· stances and conditions rendered such relaxation, in its jUdgment, proper; Had the section passed as it then stood, the exercise of such a discretion might have been entered upon by the commission with a distinct understanding of the task imposed, even though its adequate performance might have been out of the question; but, modified 8S it now stands, the necessity for a relieVing order js greatly narrowed, it being obvious that no order is needed to relieve agaiNst the operation of the statute, when nothing is done or pro· posed which it makes unlawful. "If any serious doubt of the proper construction of the clause of the statute now under review should, after careful consideration of its terms; still remain, it would seem that it must be removed when section 2, in which the same controlling word is made use of, is examined in connection. That section provides ·that jf any common carrier subject to the provisions of this act sh-J1l. directly or indirectly, by any special rate, rebate. drawback, or other device, charge, demand, collect, or receive, from any person or persons, a greater Or less compensation for any service renllered, or to be renderel1, in the transportation of passengers or property.' subject to the provisions of thll! act. than it charges, demands. collects. or receives from any other person or persons for doing for him or them a like and contemporaneous service, in the transportatioD()f a likekiild of traffic, under substantially similar stances and conditions, Buch common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited 3nd declared to be unlawful.'Here it will be observed that the phrase is precisely the llame, and there can be no doubt that the words were carefully cbosen, probably because they were believed to express Dloreaccurately and precisely than would any others the exact thought which was in the legislative mind; and in this section, as well as in section 4, the phrase is employed to mark the limit of the carrier's pri vilege,-itsprivilege. too, in respect to the wry subject-matt"r with which section 4. where it is employed, has to do,-.namely, the charges for transportation service; It is not at all likely that congress woulddelilJerately, in tbe saIUe act and when dea:ling With the same gent-ral subject. make use of a phrase whiQhwlls not only carefully chosen and peculiar, but also controlling,
UPORTEB;, vol.
50.
. 'i
i
.1n, its, in one plapEj, upon th,e conduct of the,parMt/l who were,Wbe ,would be essentially all But, beyond quell,tion, wust judge afe the ·substantially circumconditions precludethespe(Jialrate, r!3bate, or drawback, whiqh III made I$econd/lection, since, ,no tribunal is empowerlld,to <jjldge for it untn. after the ,carrier has acted, and then only for the of determining 'Whether its action constitut,es a violation of law. Tbe,c!'fl'rler judges on peril of the cons6qul1nces; but the special rate, rebate, or which it g,rlmts Is not iJIt'gal it turns out that thEl circumstances&l)d conditions were,not such /\s.toforbid it ;and. as congress clearly this, it mustal$o, ,when llsing the same words in thE! fourth haveintsllded that the carrier whose privilege was in the same way limited by them sholdQ in the 81111)e way act upon its JUdgment of the limiting and
F'or,tPe reasons above assigned, .it seems to me to be clear that the court ,must determine the question whether or not the greater comcharged arid by the defendant companies for' the tra,,DS,9"V,'( or"ta,tion of the 0,000, modities ,in,' question, for the S,horter haul, to . thaJ;iJQttbe longer haul to Los Angeles. was under substaIjltially similar and conditions; and in doing so it must be guided by the powerS conferred and the duties imposed upon it by section of the act, as amended March 2, 1889, which reads as follows: "Sec. 16. Thilt whe,never ,ooy common carrier, 8S deflnedin and subject to th(\ of shall violate, or refuse or neglect to obey or per. ordllr of the commission crt'ated by this act, Mtf""mled ul,onij reqniringa trial by jury, as providt'd by the seventh amendment to tile cOllstitution of tile United States, it shall be law. ful for commission. or for any company or person int,el'E'sted in such order to 8Ppl.y \n a summary way, by pl:'tltion, to the circuit court ofthll U,n,ited sitti,ng in pquity. in the judicial district in which the commoncarrier complained of has its principal ollice. or in whkh the viola· tion pr d.i.sobed\l·nce of SUch ol'dl'r 01' reqnirement shall happen, alleging such the caSEl maybe; and the saidcollrt shall have Violation ,01' deter);l1lne the mattl'r.:on such shortllotice to the common cal'rierq.;>mplainl'd'ofastll!lcourt shall deem reasonable; and such notice may be serve!! oosucll cOmm()l'I",Wlrriet', his ,or its officers, agents, or servants, in such mannel' Hsthll court shall dirllctj and said court slIKII proceed to hl'ar anlldeterminethllmatter speedily, RS'I\ court of eqUity" and without the pr(iClledings applicablll to ordinluysnits in eqUity, but in such, ,mann!3r.as to do. 'in the premises; and to this end such court shall,baYll po",¢,r, jf it :think fit, to diliec.t and pl'osecute in such mode, and by such p!lrsonsft!J may appoint, all SUCh liS the court lOay think need· ful to l'nable itrtp form aj\l!Jt jUdgmpnt in the matter of and on f3uch heal'il,1g"tlle findhlSllof fllCL in the, report of said commission shall be stated; and if it be made to appt>arto or Qn report of any such pel'son or persons, that tlje)awful I'equirementof said dmwn in question,bas been viqlatel)onlfsl;Ibllyed, it lawful for such COUl't to issue il writ of injunllti(m,or mandatory or otherwise, to restnlin such common carril;ll'from.flll'tht'r Cl)lltinuing such violation or disobedience Qf Buchorder, Q,l': of salllcommission, Rnd enjoiningobe-
INTERSTATE COM. ,COM'N. f1. ATCHISON, T.& S. F. R. CO.
303
dience to thesanie; and i:n case of any disobedience of any such writ 'of injunction or other proper process; mandatory or otherwise, it shall be lawful for sucb court to issue writs of .attachment; or any other process of said court incident or applicable to writs of injunction or other proper proceas, mandatory or otherwise, against such common carrier, and, if a corporation, against one or more of the directors, .officers, or agents .of the same, or against any owner, lessee, trustee, receiver, or other person failing to obey such writ of injunction or other proper process, mandattlry or otherwise; and said court may, if it shall think fit, make an order directing such common carrier or other person, so disobeying such writ of injunction or othe,r proper process, mandatory or to pay sllch sum of money, not exceeding for each carrier or person in'default the sum of five hundred dollars for every day, after a day t<l be named 'In the order, that such carriet or other person shall fail to obey such injunetion or other proper process, mandatory or otherwise; and such moneys shall be payable as the court .shall direct, either to the party complaining or il)to court, to abide the ultimate decision of the court, or into the and pa)'ment thereof may, without prejudice to any other mode of recqvering the be enforced by attachment, or order in the nature of a writ 'of execution, in like ,manner as, if the same had been recovered by a final decree 'in personam in such court.' ,When the subject in dispute shall be of the value of two thousand dollars or more, either party to such proceeding before said court may appeal to the supreme court of the United States, under the same reglllations now provided by law in respect of security for such !\ppeal,; but such appeal slla11 not operate to stay or supersede the order of the court' or the execution of any or process thereon; and such court may, in every such matter, order the payment of such costs and counsel fees as shall be deemed reasonable. Whenever any such petition shall be filed or presented by the commission, it shall be the duty of the district attorney, under thedirectionof the .attorney general of the United States, to prosecute the same; and the costs and expenses of sllch prosecution shall be. paid out of the appropriation for the expenses of the courts of the United States. If the maHers involved in any such order or reqUirement of 8ll>id commission are founded upon a controversy requiring a trial by'jury, as prOVided by the seventh amend. ment to the constitution of the United States, and any such common carrier shall violate: or refuse or neglect to obey or perform the same, after, notice given by said COlD mission as ptovided in the fiftellnth section of this .act, it shall be lawful ,for any company or person interested in such order or requirement to apply ina summary way, by petition, to the circuit court of the United States sitting as a courtoflaw in the judicial district in which the carrier complained of has its primlipal office, or in which the violation or, disobedience of such order or requirement shall happen, alleging such violation or disobedience, as the case niay be; and said court shall by its order then fix a time and place forthe trial of said cause, w!aichshall not be less than twenty nor more than forty days from, the time said order is made ; and it shall. be the duty of the marshal of thedlstdct'lf1.)yhich said proceeding is pending to forthwith serve 11 copy of saId petition, and of said' order, upon each of the defendants; and it shall be the duty of the defendants to file their to said petition within ten days after the service of the same upon them as aforesaid. At the trial of the findirigs of fact of said commission, as Sl"t forth in its report, shall be, prima facie evidellC6 of the matters therein stated; and if either party shall demand a jury, or shall omit to waive a jury, theeourt shall, by its order, direct the marshal forthwith to summon a jury to try the cause; but, if all the parties shall waive a jury in writing, then the court shall try the issueS 'in said cause, and render its judgmerit If the subject hi dispriteshaU be of the' value of two thousand dollars or more, either party may appealt<tthe supreme court of· the United States, under the same
304
FEDERAL REPORTER,
lations now provided bylaw in respect to security for sucb appeal; but sucb appeal must betaken within twenty days from the day of the rendition of the judgment of said circuit court. If the jUdgment of the circuit court shall be in favor of the party complaining. he or they shall be entitled to recover a reasonable counselor attorney's fee, to be fixed by the court, which shall be collected aspaj:tof the costs in the case. For the purposes of this act, excepting its peDal> provisions, the circuit courts of the United States shall be deemed to be:always ins68sion." : On the part oHhe commission it is Jcol'1tended that the facts found by set out in its l'epo:>rt are upon the court. It is impossiconstrue the language of the statute conferring jurisdiction upon ihe.cq)lrt to enforce the lawful orders and requirements of the commission. NotoJlly doesthe provision ofthe statute that the findings offaet contained in the: report of the OOnimission shall be taken as prima facie evidence of the matters therein stated preclude the idea. that such finding shall be conclusive ,eVIdence thereof" but such a construction would, in to convert the court juqicial tribunal into an executive ()fgalil,tocarryout the orders of the commission. Courts are instituted to hear:and determine causes; and to hear is to hear not one only, but both, si,des'to the And so congress, in the·act under consideratidrrn* conferring upon.,the circuit cou.rts, sitting in equity, jurisdiction t4 th.e, enforcement pf the orders and requirements of qoi;nmission, has provided that such courts shall proceed to hear and det<)lnnilile such matters,speedily, as a court of equity, without the formal pleadings and proceedings applicable Ito ordinary suits in equity, but in snch' manner as to do justice in the premises; and to this end "such court power, if fit, to direct and in such mode ana'l:>. perso,nsas it.m,a y appo.in,t, all sncp inquiries as the court tqink needful to ena]:lle it to form a just jqdgrpent in the matter of such petition; and on ,such hearing the findings of fact in the report of,said commission shall be prima facie evidence of the matters therein stated." 'It is, I think, very clear from this language that while congrE)SS, prescribing, as itlawftilly might, a. rule of evidence, made the (act of th l. as set forth in its report, prima facie 9fthe matters therein stated, they are not conclusive evidence of such matters; and that it is the duty of the court to examine the entireev,idence submitted., and base its judgment upon the case as here established. This conclQslon, is in h'lirmony withthlit of the court in 13ridge' Cp. v. '& N. R. 00., 37 Fed. Rep. 567, Commerce Val. R. 00., 49 Fed. Rep. and 177. , The real question, therefore, for the decision of the court, is whether or not the case shows that the circumstances and conditions existing at LOs Angeles ',a.nd San Bernardino, respecting the transportation of the in are substantially dissimilar; and this is a of law and fact. It is said for the defendant companies mixed thl1t tQElfacts in regard to that. question were. not Jully presented to the Interstate Commerce Commission when the matter was there considered;
INTERSTATE COM. COM"N. V. ATCHISON, T ·. & S. F. R. CO.
305
and attention is called to the fact that the commission itself has since held, in the case of Rice v. Railroad 00., 3 Int. St. Com. R. 261, that Los Angeles is a terminal and competitive point in respect to petroleum and its products,-the traffic there involved,-and that the Atchison, Topeka & Santa Fe Railroad Company was justified, by the existence of substantially' dissimilar circumstances and conditions, in makinglower rates on that traffic to Los Angeles than to intermediate points. Referring to the difference in situation between Los Angeles and San Francisco, Sacramento, Stockton, Marysville, Oakland, and 8an Diego, the commission there say: "With reference to this traffic. the city of Los Angl'Ies occupies a different position to that of the water terminals named. It appears that this city receives petroleum and its products. important in amount, by the water lines to San Francisco or San Diego, as the case may be, and which is afterwards br()ught down the coast by the rail lines of the Southern Pacific Company or the Atchison, Topeka & Santa Fe Railroad Company, as the case may be. to Los Angeles. It does not appear whetller it is brought to Los Angeles on throughbills of lading. or only on bills of lading from San Francisco or San Diego, as the case may he. and afterwards, on a separate bill, to Ang-ples; but thi'sis not important. as; in either event. the practical result would be the same. It may be brought to Los Angeles each way If it isa separate Francisco or San Diego. and no further, then calTiage by,a water line to tbe rate that is thus made for its carriage is one that is not subject to the regulation provided by tbeact to regulate commerce. and if from San Francisco or San. Diego, as the case may. it is a separate carriage by a rail carrier to Los Angeles, then it is a service beginning and ending in the state of California, and, as such, not 8ubject to the regulation provided by the act to regUlate commerce. The dealer in these products at Los Angeles has a right to demand that the rail carrier shall take these articles brought by the water lines to San Francisco or San Diego. as the case may be, and bring them to him at Los Angeles at reasonable rates; and these rates might be reasonable and be less in amount than the difference, for example. between the amount of the water rate to San Francisco or San Diego and the amount of the all-rail rates to thpse points. Such a state of facts creates a substantial dissimilarity of circumstances and conditiolls in reference to the transportation of this traffic to Los Angeles that prevents the lower all-rail rate to that city lipon these products from being a violation of section 4 of the act to regUlate commerce. These circumstances and conditions are strongly competitive, and on one side they are subject to the regulation provided by the act to regulate commerce, while on the other they are not. They fairly warrant the all-rail carriers, who are subject to the act to regulate commerce, in making such just and reasonable rates on this traffic as will enable them to meet at Los AngelI'S the rates of carriers not subject to the act to regulate commerce, even though in doing so they charge lower rates than at intermediate stations, where no such circumstances and conditions exist. On the other hand. if this traffic is brought from New York. for example, by water lines to San Francisco or San Diego, and from the one or the other of these two lastnamed sea ports. as the case may be, to Los Angeles. under a through bill of lading. then it is manifest, upon the evidence in this proceeding, that it would be so brought from New York to Los Angeles at as low, if not a lower, rate than the all..rail rate from points east of the ninety-seventh meridian of longitude to Los Angeles: and being, as we have already seen, important in amount, woulll also be in actual competition with the all-rail rate, so that the rail carriers would be justified in meeting it by the alhrail
V".50F.no.4-20
J'EDERAL ·REPoRTER,
voL 60.
"dr!'eigit'eamed to or fromo.!cOtn'petitive point,said DEADY in Ex pa'rtii.:KlJehler, 1 Int. St. Com. R. 319" .' "Is always'oorrledunder ·substautially dissimilar circumstances·' and conditiona,l .from: that carried to orfrOOl noncompetitive points. In the latter makes its own"rate3,and there is no good reason why it should apowed to chargele,s'fcQr;alopg haul than a short one. When each hR. U,I .is m .. ..,Rdr or to. ,3 n.l>Il.C()m.P,et..iU.ve. pOint., the etl'ec. o.f s,. U.Ch discrimi. .,·. nation is' to l:lUild up one place at expenst} of the other. Such action is and hllS no or, excuse in the exigencies or conditionsot itMibusiness of tile corporation. In the former case the circumstances are altogether different. The power of the corporation to make a rate is limited by the necessitiE's of ,the situation. Competition controls the as was said in,EilJ parte Koehler, charge. ·.. It must take · aband()i:rthe field, and its road go to rust,.' Competition may not be the onlycirc:u,mstance that un'der which a long and a short h.aUI., ar.e 1>.ei'f.o.r me. d.,... sllbstantiaIlY. . .. . . i:.·. But certainly.it is t.he most obvious one, and must have been in the contemplation of congress in the " .
Judge
or
The oomm<;Jn .ca.rrier cannot be required to ignore or overcome existing the transportation facilities of localities, crehyjts; own arbitrary, action" but by or by enterprises jtsiCQntr:ol. San Bernardino is situated in one of the most fertile andproduotive valleysiin the world, and is a thriving and ous city, but it has not the transport:.afJion facilities that Los Angeles has.' IHS"aMUi.60 miles distant, andftirther inland. '. By reason of its iti'eceives the benefit of the competitive rates to jn proportion to its proximity thereto. :nut, not being a competitive point, it dQ6S not, get terminal rates. The proof shows, what is also a matter of common knowledge, that railroad companies do not make terminalra.tes, unless compelled to do so by competition. WhereveratId' whenever Mtual competition exists, the question the carrier isriot'S6 much what is a fair ratefor the service, or wpat bear,but what rate can be goC{or the service as rate offered by the competitor. Especially is this true when the co.mpetitol'isa carrier by water, because that is the cheapest known kind of transpOrtation, and is unrestricted by law. ,If, therefore, Los to the Angelesc,lmbe justly regarded as i!.<lonl,eetitivepoint in trttPsportati.<;>hof ,the commodities in question, there is such dissilUilaritY'lpf,1 C?ihmmstaI;l,c.6s tmdClQnditions between it and the intermediatepointof,8an Bernardino as to make the long and short haul clause of the interstate COMmerce act· inapplicable. The factS! in respect to this question,as shown by the, evidence submitted t6 the.cotirt, ditferent.from, those. set 6ut in the report and upon which its order here$()ught to be enforced of was based.,. "Injts report and opinion the ,commission say: "BetweeD'iSa'nFJr-anciScdaIld the southern border of California, a distance of six hundred Itliles; &nJose, LosA:n'geles, and San 'Diego are the onlS points designute(l Pacillc coast terminals by said transcont.inental association. and to, which tate8froiD tbe Missouri l'i'ver and more eastern points are the same as to San Francisco. 8anJose is an interior cIty; within'fiftymiltis of i< '
INTERSTATE CQM. COM'N. 'D. ATCHISON, T. &
e.
F. 4.
co.
807
San ]!'rQncisco. Los is also an interior city, 25 miles from San dro, its nearest harbor. The rates between Los Angeles and San Pedro are from 9 to 12t cents per 100 pounds on goods similar to those named in the complaint. ]:"osAngeles and San Diego are the principal commercial centers of southern California. San Pedro is a seaport through which importations of coal, lumber, and other commodities from the neighboring islands and British America are brought in. aDd vessels come in ballast from 8an Francisco to San Pedro, to be loaded with grain. but its commerce is very small. None of the articles named in the. complaint shipped from the Missouri river, or places further east, have reached I..os Angeles through San Pedro for many years. Seven or eight years ago some agricultural implements were shipped around Cape Horn to San Francisco. The time when shipment of any of the articles named in the complaint was made frOID the east directly through San Pedro or other Pacific coast port to Los Angeles was not within the recoU..ction of any witness testifying. Some goods are shipped from New York bywater to New Orleans: thence by rail to Qalifornia and intermediate places. Practically, there ill no such thing as water competition or a water route from the Missouri and Mississippi rivers and interior cities to the Pacific coast in the carriage of the articles named. Many of them. sllch as stoves, ranges, black hollow ware, when carried over a water route, ate liable to injury from rust. It is possible to ship most of the articles named in the complaint from Atlantic ports and cities around Cape Horn to ports and citIes on the Pacific coast. None are so shipped to or through San Diego or San Pedro, Cal. '1'0 extent they are so shipped to San Francisco, or through it to Los Angeles, if at all, has not been disclosed by the testimony or otherwise ascertained in this investigation." And again: "The agent of one of the defendant roads testified that seven or eight years ago some agricultural machinery was carried around Gape Horn to San Francisco, and on this testimony alone rests the claim of water competition to Los Angeles, nearly fi ve hundred miles from San Francisco. That the merchandise named in the complaint is not carried by sea from New York, or by sea and l"dil from Cincinnati and intel"ior points, to Los Angeles, through San Pedro, appears from the evidence. and is confirmed by the fact that the rail rates are higher to San Pedro than to Los Angeles. If they were so carried through S,m Diego. they would necessarily go at the same rate to t:lan Bernardino, .which is a trille nearer than Los Angeles by rail to San Diego. POBsi hie competition by water is not sufficient to justify a greater charge for the shorter distance. Under the provisions of the fourth section of the act to regulate commerce, the competition must be actual and so counteracting as to take the fre\ght if the lower charge for the longer distance was not maintained. Such competition to Los Angeles ill not established by the fact that Borne of the articles named in the complaint were carried by sea to San Francisco seven or eight years ago." Reference has already been made to the subsequent case of Rice v. Rat1road Co., where the facts were by the commission held to be such as to establish the claim of the defendant that Los Angeles is such competitive point in respect to the transportation of petroleum and its productsas to less charge for the longer haul to that city than for a shorter haul to intermediate points. When the present case was before thecommissiQn, one port. (Redondo,) through which the evidence shows large quantities of frejght of various kinds are almost daily faceiveo at Los Angeles, was not sh9wn to. have existed at all. This port
ZO$
FEbERALREPOR'1'ER; vol.
isdi&tan'ttlbout 18'fuiles'from arid i's connectedtberewith by two. rdiIl'oads,-one formerly known as the "Redondo Beach Railway and the other as the "California Southern Railroad Company.';' Through the port .of San Pedro, also, which is distant from Los Angdes about 22 miles, and connected therewith by rail, large quantities of freight, of almost all kinds and classes, are almost constantly received. All of the freight thus brought to Redondo and San Pedro for Los Angeles is brought by steamer or sailing vessel, much of it in original packages, from New York to San Francisco, and from there transhipped to Los Angeles by way of ,Redondo or San Pedro; some of it by the Canadian Pacific Railroad to Vancouver, and thence by the Pacific Coast Steamship Company's ships to Redondo or San Pedro. Some freight is also brought by water to San Francisco and San Diego, and thence down or up the coast, as the case may be, by rail to Los ,shows that in addition to the five overland roads, to;wit,the CanadianPacffic, the, Northern Pacific, the Central Pacific; the Atchison, Topeka & Santa Fe, and the Southern Pacific, with their various connections, by 'which freight is transported from the eastern an<lmiddle states to California,tpere is what is called the Dearsailing vessels between.Ne\v York and San)J'rancisco, the sailing vessels, and San Francisco and Portland, the Pacific Mail SteamslJ,ip Company's line of vessels from New York to Aspinwall, connecting there with the Panama Railroad running to Panama, and at that place with the corppany's line of steamers to Sail Franyisco, andihat recently there has establisbed a line steamships between 'New York and San Francisco by way of the straits of Magellan, on Some of which, at the time of the taking of the ,ti:)stimony herein, .there was afloat a large amount of freight of various kinds and classes for some of the Los Angeles merchants. Los Angeles is a city orabout 60,000 people, and. because of its location in respect to transportation facilities;'and because it is the most important point in. southetI:!- California, it. was made One of the terminal points of the Pacific coast. by the tranflportation' companies, The evidence shows that a.Qumber of the large mercantile firms of Ban, Francisco, dealing in some or.,all of the oommodities mentioned in the petition,have 'branch houses there, some have agents,atld that some, of the local firII,ls do bdsiness t6the amoun,t of $3,000,000 per ann ll m.. It is not strange, thefEifore, that there should be active competition bet\Veenthecarriers for the transportation of its freight. rfhe witness A. M. Sutton testified, among other thiligs, that he represents in San Frallcisco the line of clipper ships which are and 'have been for years running from New York and Philadelphia around Cape Horn to San Francisco; that they carry almost ever,}' kind and class of freight, including the lioned in . t he petition; that they charter and load fl'om30 to 35 ships a year, have no .fixed rates, but make rates so as to compete with the other water carriers, and with the overland railroads, anll 'iO as to get the'.business; fhatthey solicit businpssas far west as Kansas City; St. Paul, Milwaukee,'Pittsburg, and ChWago; that they,solicit freight for
INTERSTATE cqM; COM'N. v. ATCHISON, T. & S. F. R. CO.
309
all parts of California, Oregon, and Washington; that they carry freight constantly to southern California, chiefly to Los Angeles; that their ships take all California freight to San Francisco, and, if billed to Los Angeles, it is reshipped to San Pedro or Redondo in original packages, and then by rail to Los Angeles. The witness Edwin Goodall testified, among other things, that he represents in San Francisco the Pacific Coast Steamship Company; that their ships go to San Pedro and Redondo, to which ports within the last two years freights from San Francisco have been as low as one dollar a ton by reason of competition with other water carriers and the railroads; that they are engaged in the transportation of all kinds and character of merchandise; that goods shipped in New York by steamers or clippers for Los Angeles and San Bernardino are constantly reshipped at San Francisco in original packages to San Pedro and Redondo, from which they are taken by rail; that they sometimes run two or three freight steamers a week to those ports, and including their passenger steamers, which also carry freight, they would probably average one every other day; that they endeavor to fix their rates so as to successfully compete with whatever opposition they may have, whether from carriers by water or rail. In the report find opinion of the commission, in finding, as it did, from the evidence before it, that practically there was no such thing as water competition or a water route from the Missouri and Mississippi rivers and interior cities to the Pacific coast in the carriage of the artides named, it is said: "Many of them, such as stoves, ranges, black hollow ware, when carried over a water route, are liable to injury from rust." In the case here,A. A. Watkins, a member of the :firm of W. W. Montague & Co .· whose principal place of business is in the city of San Francisco, with a bri.mch house in Los Angeles, testified that his firm deals largely in stoves, ranges, registers, radiators, black iron stove furniture, an.d hollow ware, and that of those commodities they ship what would probably amount to about 75 car loads a year, and that about 75 per cent. of them they ship by water to San Francisco, and from there reship by steamer to Re.elondo or San Pedro what is inthat they ship by water because it tended for Los Angeles and is cheaper to do so than by rail, after deducting their estimate of 8 per ·cent. for loss by rust; and that any increase in the rail tariff would result in their shipping still more largely by water. The testimony in the case is altogether too voluminous to refer to in detail, but I think it is safe to say, generally, that it shows that the water carriers mentioned are now, nndthat some of them· for years past have been, competing with the overland railroads for the carriage of general freight, including the Commodities mentioned in the petition, from the cities and country east of· the Missouri river to the Pacific coast, induding the city of Los Angeles; that they are and have been actively engaged in such transportation, soliciting the freight, and carrying what they can getjund that theyactually do carry an important part of many of the commodities mentioned in the petition. The fact that such means of transportation actually .exists, and is actually and actively seeking the traffic, constitutes campa.·
310
nDEBAL REPORTER,
voL 50.
tition, and was doubtlese'orie of the 'most importantt'actors in making Lolt Angeles a terminal'point!. Not only does, the evidenee show that such W'atel' competition exists; but it shows that the shipments by water ar& ,and a numbel' of the witnesses testify that, in the event the all.raill'ates should be Increased froIn what they are now, it would result in much larger shipments by water, both in quantity and kind. For the;reasons stated'ram of the opinioIithat the circumstances and attending the 'transportation of the commodities in question to Los Angeles and San Bernardino are essentially dissimilar, and therefore that the long and short haul clause of the interstate commerce act does not apply to the case. As has been said, it is not claimed that the rates to San Bernardino are otherwise unjust or unreasonable. If they are, other provisions of the act will afford relief. It results from these views that petitioner is not entitled to the relief it seeks in th'is court. It is accordingly ordered that the petition be dismissed. aUts coat.
WARE tI. WISNER. (CCrcUU D. Iowa. O. D. Februa1'7, 1888.) by the law of tb6
1 Wru.-,-lbu.. I.
The vAlidity, of a ,wlll conveying real estate is to be place whlilre the land Hell. , By:the'laW of Iowa, a will 1rI
EeTATIIl-LBXRlIlliSlT....
B.A.MIIl-RIIlVOOATION-BmTtl: 011 HlIllR. ' B4ME-Pxo)l.A.TB-EnIllOT OP.
by the birth of an heir after itl exeoutlon.
8.
The probate of a will, while it settles the question 01 due exeoution, does not establish Validity, or determine ita force and e1!ect upon titles to real estate claimed un· der it. , Under Revlslov lowa18/lO, S 249lJ, 'an allen nov-resident could not take landal1ing in,tbe state either by descent or devlae. A non-resident alien WOl11aJl, who marries I/o citizen of the United States 1rI capable' of inheriting in 'Iowl!., 'since she thereby becomes a citizen of the United ,,-nder Rev. St.U. B. § 1994, Persons born 1n I/o foreign country, of American parentsJ,.who resided there, bu' who never renounced tbe1l' citizenship; are citizens of the united States. BORN 011. AMERIOANS IN FORIIlIGN CoUNTRY. TO CXTIZ,N. .
4. ALIIilNS-CAP,I,CXTY TO T.A.X1Il BY DESCENT OR DEVlsE.
5.
6.
This is a:bill in equity, brought to quiet title to 1,288 acres of land located in Franklin county, Said land was entered by Asabel Gage,who was a non-resident alien residing in Canada. Patents were issued to him; and he held title until his death,which occurred July 1, 1861. He left him eleven children, two of whom have since died. At the time of his death, it'is conceded that two of his children, JohnM. Gage And.JamesD. Gage, resided in Iowa, and were citizens of the United Stll,tes. ,Itia also conceded thatall the remaining l:bUllren,