INi'ERSTATE COMMERCE COMMISSION V. LOUISVILLE & N. R. CO.
409
been, made in the bonds issued by them, and held by a bona fide purchaser, is conclusive of the fact, and binding upon the municipality; for the recital is itself a decision of the fact by the appointed tribunal."
In Chaffee Co. v. Potter, 142 U. S. 355, 12 Sup. Ct. 216, it was held: "When there is an express recital upon the face of a municipal bond that the limit of issue prescribed by the state constitution has not belm passed, and the bonds themselves do not show that it had, the holder is not bound to look further."
tn City of Cadillac v. Woonsocket Inst., 58 Fed. 935,7 C. C. A. 574, it 'sas held by the court of appeals of the Sixth circuit that: ",{ecitals in bonds issued by a city council under statutory authority, that are 'refunding' bonds, issued to take up 'old bonds falling due,' estop the city from showing, as against bona fide holders, that the old bonds were invalid, and therefore insutIicient to support the issuance of the new ones."
Again, in Ashley v. Supervisors, 8 C. C. A. 455, 60 Fed. 55, it was held: "Refunding bonds, payable to bearer, recited that they were issued by the board of supervisors in conformity with the provision of an act authorizing the county to issue such bonds, and provide for the retirement of outstanding bonds. Held, that the purchaser was not bound, in the face of the recitals borne by the bonds, to investigate the nature of the refunded indebtedness."
Many other cases might be cited, but, as the circuit court of appeals for this circuit has passed upon this very statute, it is not deemed necessary to pursue the inquiry further. In West Plains Tp. v. Sage, 16 C. C. A. 553, 69 Fed. bonds were issued under this act containing recitals similar to those contained in the bonds now before the court; but in<;tead of being issued in exchange for warrants, as alleged, they were issued to secure the location of a sugar factory; and it was held that the township was estopped by the recitals to set up the fraud as against a bona fide purchaser. Eyen were I inclined to the contrary view (which is not the case), I should be bound by that decision. When we contemplate the calamitous consequences which have resulted from it, we may regret that the supreme court should llave established the doctrine of estoppel by recitals in municipal bonds; but it is now too deeply imbedded in the law to be shaken, and is conclusive of this case. The demurrer to the answer is therefore sustained.
IXTERSTATE COMMERCE COMMISSION v. LOUISVILLE & N. R. CO. (Circuit Court, M. D. 'l'ennessee. April 17, 1896.) 1. Jl:RISDICTION OF TIlE UNITED STATES CIRCUIT COUR'l' OVER ORDERS :MADE BY THE I;';TERSTATE COMMEHCE COi\HnSsION.
The jurisdiction of the United States circuit court is limited to an approval or disapproval, and to an enforcement or refusal to enforce an order of the commission. The court has no authority to modify the order of the commission. The court may go fully into the proof to determine whether it will approve an orde'r made by the commission, and may hear any additional proof.
2.
SAME.
410 -8. S4'!d:'&' , . ' i. '.
73 FEDERAL REP0BcTER. . ' , ,
made by the commisinon is essentially an administrative order, and is not final Or conclusive in the sense of a court judgment or decree. And an order of the United States circuit court, enforeing an order of the commission, does not change its. character or make it a fina I judgment.
4.
THE JURISDICTION OF THE COM)nSsIOK.
The function of the commission is both quasi judicial and administratiye in its nature. The commission is required to make reports in writing in respect to complaints made to it. Such r<eports must include the findings' of fact' upon which the conclusions of the commission are based, and snch findings so made are to be deemed prima facie evidence as to each and every fact so found in any jUdicial proceeding thereafter had.
5.
It: was the intention of congress that the procednre before the com· mission should substantially conform to that before a court charged with the duty of finding the facts an.d giving judgment thereon, or to the investigation and report of a referee or special master in chancery, passing on both facts and law.
6.
The fact that the commission is composed of men of ability and experience, selected with reference to their particular qualifications there, for, and whose entire time i8 devoted to questions arising under the act, gives to its findings and opinion great weight. But, in order that tlH' findiIig and opinion of the commission shall have the value intended, it should conform to the purpose of congress in requiring such proceedings. Its opinion or report should show what the issues in the case are, and what facts it finds in regard to such issues.
7. SAME.
It: ,is not sufficient for the report of thE) commission to be made up of . mere conclu8ions with respect either to law or fact. It should make suitable reference to the evidence where there is a conflict in the proof, and show how the commission set:t:les the disputed fact; or, if the eyidence in regard to any fact is undisputed, it should be so stated by the commission.
8.
Where, in a given case, it is the duty of the commission to receive and take into account evidence of certain facts, its failure to do so is error of law. And so, where an issue of fact is raised before the commission, its failure to dispose of it is an error of law. The commission has no power to make rates, and especially has the commission no power to order that rates from a given point to Olle city shall bear a certain relation to the rates frOm tlJe same point to another' city. }{EASOKABLE RATES.
9.
Si\.ME.
10.
Under the first section of the act to regulate commerce, the question may be made as to whether a given rate is, in and of itself, unreasonable and unjust. In the consideration of such a question rates to other places or points of shipment "are unimportant, except as evidentiary circuIllstances; but where the conditions are similar, proof of rates charged by other roads is of' great , Under the second section of the act the question of unjust discrimination rItay arise, and under the third section the q\lestion of undue preference may. arise. And In determiiling a question under either or both of those sections it may often, if not always, become necessary to con· trast the rates to other places and persons, because those sections involve the question of relative rates, with all their elements. The bUl'den. of proving undue preference or undue prejudice rests upon the complaining party.' SAME. , .
11.
UK.JUST DISCHIMINATION- UNDUE PltEFEREKCE.
12.
INTERSTATE COMMERCE COMMISSION V. LOUISVILLE & N. R. CO.
411
13.
The carrier's business of transporting goods involves the rights of, and the necessity of doing justice to, three parties. The interest of the seller at the point of departure, the interest of the carrier, and the interest of the trader or consumer at the point of delivery are all concerned in a given transaction, and must be duly cOllsidered by a tribunal or court in the decision of any case involving the carrier's freight tariff. SAME.
14.
Questions of unjust discrimination or undue preference must be treated bro'adly and practically. The carrier's business is one which invol ves so many considerations, and the necessity of taking into account so many conditions, that questions of this kind do not admit of any theoretical I'ules in their solution. SAME.
15.
It is impossible to exercise a jurisdiction, such as is conferred by the act to regulate .commerce, by any process of mere mathematical or arithmetical calculation. iVhen you have a variety of, circumstances differing in the two cases, you cannot say that such a ditl'erence of drcumstances represents or is equivalent to such a fraction Of a penny of charge in the one case as compared with the other. A much broader view must be taken, and it would be hopeless to seek to decide a case by any attempted calculation.
16.
In passing upon the question of undue or unreasonable preference or disadvantage, it is not only legitimate, but propel', to take into consideration, besides the mere difference in charges, various elements, such as the convenience of the public, the fail' interests of the carrier', tile relative quantities or volume of the traffic tile relative cost of tile services and profit to the company, and the situation and circumstances of the respective customers, with reference to each other, as competitive or otherwise. SAME:.
.17.
The public at large is greatly interested in competition, and the more favorable prices which it brings, and for that purpose the public is interested in keeping open the larger markets of the country to all points ot production and supply. iVhere traffie from a distance can compete with traffic nearer the market, the public is interested in having the greater distance traffic carried at rates which will enable it to compete with the traffic which is nearer the market. 18.8.om. The advantageous position of one trader in having his worl,s so placed that he has two competing routes is as much u circumstance to be taken into consideration as the geographical position of another trader, who. though he has not the advantage of competition, is situated at a point on the line geographically nearer the market. 19. The fact that a lower rate is charged from a more distant point by reason ofa competing route, which exists thence, is one of the circumstances which may be taken into account, under the provision of the second and third sections of the act to regulate commerce. 20. SHIE-MILEAGE HATES. Mileage, while a circumstance to be considered with all the other facts and conditions, is by no means controlling, or the most important. 21.
The act to regulate commerce is 'lOt to be construed flO as to abridge or take away the common-law right of the carrier to make contracts, and adopt proper business methods, further than its terms and recognized purposes A railroad company may lawfully charge lower rates <In coal in che summer months in order to keep its coal cars and coal cre,vs employed during that season of the year, provided such rates be <Jffered in good .faith to all persons upon equal terms.!
DISCRIMINATION BETWEEN SUMMEH AND WINTEH
R
ON COAL.
IHeadnotes approved by Judge Clark.
412
;
73!FEDERAL REPORTER·.
413
which directed the defendant company to make the' change above indicated, and what is said in this opinion is to be understood as having reference only to the action of the commission in this particular. It is conceded by counsel for both sides of the case that the court, in its power and jurisdiction over the matter, is limited to an approval or disapproval, and to the enforcement or refusal to enforce the order of the commission as a whole or in part just as made by the commission, and that the court is without power or authority to treat the case as one originally instituted in this court, and make an order or decree of its own, or to modify the order of the commission for the purpose of making it conform to the opinion of the court in case the court should entertain a different opinion from that of the commission; and such would seem to be the proper construction of section 16 of the act. This relieves the case of any issue on that point. The court, of course, may go fully into the proof on its own examination to determine whether it will approve the order, and may hear any additional proof adduced. So much of sections 1-3 of the interstate commerce act as are material to the matter now under consideration will be given, and are as follows: "Section 1. * * * All charges made for any service rendered, or to be rendered, in the transportation of passengers or property as aforesaid, or in connection therewith, or for the receiving, delivering, storage, or handling of sueh property, shall be reasonable and just; and every unjust and unreasonable charge for such service is prohibited and declared to be unlawful. "Sec. 2. 'l'hat if any common carrier subject to the provisions of this act shall, 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 rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this 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 transportation of a like kind of traffic under substantially similar circum· stances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and deelared to be unlawful. "Sec. 3. That it shall 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, 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 ulll'easonable prejudice or disadvantage In any respect whatsoever."
The only complaint that could be made in regard to the rate in question here would be that such rates violated either section 1, 2, or 3, as above set forth. Under section 1 the question might be made that a given rate was in and of itself unreasonable and unjust, and in the consideration of such question as this, rates to other places or points of shipment would be unimportant, except as a circumstance or fact in the proof, and having no other than an evidentiary bearing. Under section 2 the question of undue discrimination, and under section 3 that of undue or unreasonable preference or advantage, would arise. In determining a question under either or both of these sections it would often, if not always, become necessary to contrast the rates
414
73 FEDERAL REPORTER.
to other places and persons, for the objection under those sections would involve the question of relative rates, with all of their elements. A discrimination or unjust advantage might be complained .af as made between persons at the same place and entitled to the same rates,or between traders at different places. The investigation conducted before the commission, and its order thereon, are quasi judicial, although it may be considered as settled that the proceeding is not a judicial one, as that term is used with reference to courts of general jurisdiction, and in the general administt'ation of justice. The function of the commission is really both quasi judicial and administrative in its nature. By section 9 of the act persons claiming to be damaged by a violation of the provisions of the act are given an election to sue in the courts of the United Stjltes for such damage, or to make complaint to the com· mission.. The procedure in a complaint before the commission is prescribed in section 13 of the act, and by section 14 the commission is required to make a report in writing in respect thereto, which shall include the findings of fact upon which the conclusions of the commission are based, and such findings so made are to be deemed prima facie evidence as to each and every fact found in any judicial proceeding thereafter had. The commission is authorized to provide for the publication of its reports and decisions, and for the distribution thereof. Other sections of the act, not necessary to be set out herein, make it evident, in my opinion, that while the in· vestigation and report of the commission and its order thereon, as stated, do not constitute a judicial proceeding, still it was the in· tention of congress that the procedure should substantially conform to that before a court charged with the duty of finding the facts, .and giving judgment thereon, or to the investigation and report of a referee or special master in chancery, passing on both facts and law. Congress having provided for such investigation and report in general terms only, it is not to be doubted that substantial conformity to a judicial proceeding was contemplated. And the importance of the commission's action, taking substantially the form of a judicial proceeding, is apparent when it is recognized that the commission is composed of men of ability and experience, selected for this position with reference to their particular qualifications therefor, and whose entire time is devoted to questions arising under this act. This gives to the commission's finding and opinion great 'weight, and entitles it to great consideration, both by the parties .affected and by the courts, when called upon to enforce obedience to its mandates. For the commission's investigation and {)pinion to have this intended value, however, it should, in fact, conform to the purpose of congress in requiring such proceedings. It is not SUfficient, therefore, in a report of its findings of fact and conclusions, to do so in such general way as not to disclose its views upon particular phases of the evidence, or its conclusions of law upon facts found with reference to the particular issues in the case. Stated in another form, it is not sttfficient for 1he report to be made up of mere conclusions. Its opinion or report should show what the issues in the case are, and what facts it finds
415-
in regard to such issues. The report should make .suitable referenceto the evidence adduced in regard to any particular question, where there is a conflict in the proof, showing how the commission settles the disputed fact; or, if the evidence in regard to any issue is undisputed, state that fact. In other words, the report should give the parties to be affected, as well as the court, in any judicial proceeding afterwards instituted, definite and distinct information as to what was found as facts, and the commission's opinion thereon, such as would be necessary to make a judicial opinion sufficient and satisfactory for the purpose of ordinary litigation. Now, the report of the commission in this case does nothing of this kind. It was not intended to cast upon the COUI'ts the labor of an original and independent examination, as in a case instituted here in the first instance. If so, aetion by the commission would be idle. The report should on all issues make a distinct showing, so that on its face it would be prima facie good as required under the act. The main issue made in the answer to the original complaint, as well as now in the answer to the suit in this COUI't, is and was that the difference in the rates from the Earlington mines to Nashville and those from the same point to Memphis was rendered necessar,r and was justified by competitive freight rates at that point, and particularl,r in regard to the rates on coal, by competition in coal from the Pittsburg mines by means of river transportation to The report of the commission, notwithstanding this was the main issue, makes but a passing allusion to the fact of competition at Memphis. The report shows nothing as to the cost of coal at the Pittsburg mines, the rate per ton at which it was transported to Memphis, or the price at which such coal was sold; and the COlIlmission does not consider nor decide to what extent, if at all, this competition affects the rates which the Louisville & Nashville Hailroad Company can make on coal shipped from the Earlington mines to Memphis, so that the rate, together with the price, will enable that coal to be handled on the Memphis market. If the facts in relation to this question of competition ,,,ere at all important in this case, it is certain that the commission did not so consider it, as that entire subject was summarily dismissed without any finding of facts or the expression of any opinion in regard thereto. Indeed, much of the argument at the bar on both sides has been directed to· the question of what the commission did or did not find or decide in this case. It is contended, for example, by the learned counsel for the commission, that it did investigate, and did decide that the rate from Earlington to Nashville was in and of itself unreasonable and unjustly high, without regard to the Memphis rate at all; while counsel for the defendant earnestly insists (and successfull,r, I think) that the commission decided no such question. It is to be regretted, of course, that a report so important as this, both in its effect on the parties and as a basis of suit in this court, should become the subject of construction in order to ascertain what was really decided. It becomes necessary, therefore, in the outset, for this court to decide for itself between the opposing views of counsel, whether the commission decided that the rate from Earlington to Xashville was un-
416
reasonable and unjust; and a careful examination of the original complaint and the report and order of the commission forces me to the conclusion that no such question was presented or decided. From what has been stated, it is clear that nothing in this respect was presented in the original complaint, and there is but a single paragraph in the report of the commission which furnishes support to the view that it considered any such question. I think it may be gathered from the complaint and report that the commission was only discussing the relative rates between Memphis and Nashville. Next to the last paragraph in the opinion of the commission is exactly the order which it made in the case, and may be safely taken as a condensed statement of its ruling, and this I will give in full, as follows: "T'he rate should be 80 arranged that, while Memphis is getting a rate as low as $1.40, Nashville should have a rate from the same mines of not more than $1.00 on 'run of mines, nut and slack,' and not more than $1.15 'screened coal' at any season. It is therefore ordered that from and after this date, so long as the rate charged by the Louisville & Nashville Railroad Co. for the transportation of coal of any kind or class from the mines on its Henderson & Owensboro divisions in the state of Kentucky to Memphis shall not exceed the amount of $1.40 per ton, the rate charged by the said company for the transportation from said mines to Nashville of coal classed as 'run of mines, nut and slack,' shall not at any time exceed the amount of $1.00 per ton, and the rate charged by said company for the transportation from said mines to Nashville of coal classed as 'screen coal' shall not at any time exceed the amount of $1.15 per ton. And any reduction made by the Louisville & Nashville Railroad Co. in the rate for the transportation of coal of any kind or class from said mines to Memphis shall be accompanied by a proportionate reduction in the rates charged for the transportation of 'run of mines, nut and slack coal,' and of 'screened coal,' respectively, from said mines to Nashville."
It appears from this that the commission fixed only a relative rate as reasonable for Nashville, having regard all the time to the rate at Memphis. The rate put in effect was clearly intended to be based on and in proportion to the Memphis rate, with the provision that, in the event there should be a reduction in the Memphis rate, there should be a proportionate reduction in the rates charged from the mines to Nashville. Upon what basis the proportionate rate was made between the two places the report again leaves undisclosed, except inferentially. As the case is, the rate established for Nashville depends upon the fortunes of the Memphis rate, and goes up or down with that. This order is wholly inconsistent with the proposition that any decision was made respecting the Nashville rate as being too high of itself and independently of the Memphis rate. If the rate to Nashville of itself had been under investigation the rates to Memphis were of little value as evidence compared with rates from Tracy City, from Coal Creek and other mines in East Tennessee, from Bon Air at Sparta, and from Alabama mines. Rates from these points, not only to Nashville, but to Chattanoo' ga, Atlanta, and other cities, were readily obtainable from the Southern and other railways on application; and the conditions throughout are so similar that they would be of great value on that question. .
INTERSTATE COMMERCE COMMISSION V. I,OUISVILLE & N. R. CO.
417
If the commission had conf'tidered the Nashville rate, and ruled that this was unreasonably high, and made an order regular in form, and authorized by law, and upon proof of rates on other roads, where conditions are similar, it might be that defendant would have a serious issue on its hands. It remains then to treat the action of the commission in making the change which it did as based on either section 2 or 3 of the act. I think that the entire proceeding shows that the commission was of opinion that the Memphis rate worked a discrimination in favor of consumers of coal at that place against Nashville, under section 2, or that it effected an undue and unreasonable advantage under section 3 of the act, though the reo port does not distinctly state what view the commission entertained, or that it entertained either. Taking the case as it was, and the rates as put in effect at the time the commission decided the case, Memphis was left with an even or flat rate of $1.40 per ton on all classes of coal the year round; and Nashville, with a rate of $1 per ton on the cheaper class of coal, uniform for all seasons of the year, and with a rate of $1.15 on "screened" coal during the summer, and $1.40 during the winter. This was a difference of 40 cents per ton on the lower grade of coal (which was more largely consumed) in favor of Nashville the year round, and a difference of 25 cents per ton on "screened or grate" coal during the summer, with the same rate as Memphis on that class of coal during the winter. The average for the year on either class was much in favor of Nashville. It would hardly be contended that this absolute advantage in rates to Nashville as against Memphis would work such discrimination as to injuriously affect Nashville in commerce, industrial pursuits, or growth, and there is no proof in the record indicating any such condition of things as this. Under such rates every consumer and every trader at Memphis would pay a higher price for coal of the same quality than would be paid by the trader or consumer at Nash· ville. Just how this could injuriously affect Nashville has not been suggested, and it is certain, I think, that no process of reasoning could show how an injurious result to Nashville is brought about, unless upon the basis of a relative rate which consumers and traders at each place should have, taking into account the relative distance of the two cities from the Earlington mines, and by putting the rates between the two places on a mileage basis only. In this way the consumer at Nashville might plausibly say that, while getting a rate on coal which made it absolutely cheaper to him than the consumer at Memphis, the rate to him was still relatively higher than to Memphis. Stated in another form, the complaint from the Nashville trader would be that he did not obtain in the rates the full advantage to which his shorter distance from the mines entitled him as against the Memphis trader with the longer distance. And it may be concluded inferentially that the commission was controlled in its action by this view of a relative rate, such as would be established practically on a mileage basis. For in the report it is observed: "As between Memphis and Nashville, considering the respective distances of those two cities from the mines in western Kentucky, the rate of $1.00
v.73F.no.3-27
418
per ton to Nashville does not seem to be low compared with the $1.40 rate to Memphis."
In the absence of a more definite finding and statement of conclusions by the commission, it must be assumed, as I think the result shows, that the commission contrasted the distance at which the two cities are situated from the mines, and also contrasted the difference in rates, and concluded that the Kashville rate was relatively too high, and that this mode of adjusting the rates gave an undue preference, and was a violation of section 3 of the act; and that the commission rested its decision in part, though not entirely, upon this proposition. The entire omission of any finding or conclusion in respect of competing rates at Memphis, and what effect, if any, this circumstance had on the case, leaves no choice but to infer-as I think may be safely done-that the commission excluded entirely from its consideration any question of competition, so far as it related to the only point actually ruled on by the commissiO!l, as the case was left when it was called upon to pass judgment. If, therefore, the defendant company had the right to put in issue the question whether or not it was controlled by competing rates at Memphis, and if it was the duty of the commission to take into consideration that element or condition in passing on the case, it becomes apparent that the action of the commission was erroneous in two particulars: (1) In its omission to make any finding at all in regard to the fact of competition; and (2) in its refusal or failure to take into account such competition, and to give the same due con· sideration, and without doing which it failed to dispose of the leading issue in the case. It is important, therefore, to determine whether the commission was under a legal duty to accept evidence of competition, and to investigate and decide thereon; for, if such evidence was competent, and was evidence which the commission was required to receive as other evidence, its report and order would be analogous to a court judgment, showing upon its face that the court had exduded from consideration material evidence in the case and had made no response whatever to one of the issues joined. And whether the commission treated the rate which the defendant company had in effect at Memphis as a violation of section 2 or 3 of the interstate commerce act, it seems not now open to doubt that the fact of competing rates was a condition which it must have taken into account, and must have duly considered as evidence in the case, and must have decided whether the company's defense, based upon that circumstance, was made out or not. In Interstate Commerce Commission v. Baltimore & O. R. Co., 43 Fed. 51, it was pointed out by Judge Jackson that sections 2 and 3 of our interstate commerce act substantially embody section 2 of the English railway traffic act of 1854, and section 90 of the act of 1845. It was held, too, that the interstate commerce act having thus substantially adopted these provisions, the construction given to such provisions by the English courts must be received as incorporated in the act, and the supreme court of the United States announced the same proposition in Interstate Commerce Commission v. Baltimore & O. R. Co., 145 U. So 284, 12 Sup. Ct. 844, affirming the judgment below.
INTERSTATE COMMERCE COMMISSTON V. LOUISVILLE & N. R. CO.
419
And, while the question in that case was one growing out of passenger traffic, it involved a construction of these sections of our act, and in the progress of the opinion Judge Jackson said: "The English cases referred to above, and others that might be cited, establish the rule that, in passing upon the question of undue or unreasonable preference or disadvantage. it is not only legitimate, but propel', to take into consideration, besides the mere differences in charges. various elements, such as the convenience of the public, the fail' interest of the carrier, the relative quantities or volume of the traffic involved, the relative cost of the services and profit to the company, and the situation and circumstances of the respective customers with reference to each other', as competitive or otherwise. 'l'he English decisions cited, and the case of Denaby l\lain Colliery Co. v. Manchester, S. & L. n. Co., 11 App. Cas. 97, iJ5 Law .J. Q. B. 181, further establish that the burden Of proving the undue preference or the undue prejudice rests upon the complaining party."
And the supreme court, in the same case just referred to, after reviewing the English decisions, stated the result as follows: "In short, the SUbSk'lnCe of all these decisions is that railway companies are only bound to give the same terms to all persons alike under the same eonditions and circumstanees, and that any fact which produces an inequality of condition and a change of circumstances justifies an inequality of charge."
It is to be borne in mind that when competition enters as an element in the determination of a case, thiro; question-whether or not there is an undue preference or advantage-is a quero;tion not of law, but of fact. 'Whether or not the evidpnce is competent, and must be taken into account, is, of course, a question of law; but, with the evidence once admitted, the issue them becomes one of fact. And so, if the commission ought to have received and taken into account the evidence of competitive rates, its failure to do so was an error of law; as was also its failure to dispose of this issue at all. 'When the evidence was admitted, the question of undue preference, as stated, is one of fact which should have been found. It may therefore be accepted as the result of the cases in this country that the circumstance of competition is an element which must be considered, and the English cases are now full and clear upon the subject. It must be stated, too, that questions of this kind must be treated broadly and practically. The carrier's business is one which involves so many considerations, and the necessity of taking into account so many conditions, that questions of this kind do not admit of any rigidly theoretical rules in their solution. It muro;t be kept in mind, too, that the carrier's business of transporting goods involves the rights of, and the necessity of doing justice to, three parties. The interest of the seller at the point of departure, the rights of the carrier, and the rights or interest of the trader or consumer at the point of delivery are all concerned in a given transaction, and must be duly considered by a tribunal or court in the decision of any case involving the carrier's freight tariff. It is entirely conceivable that by taking into account the interest and advantage of the trader at the point of delivery alone, serious injury might be done to the trader at the point of departure as well as the carrier, without any substantial benefit to the trader at the point of delivery; or a loss might be inflicted on the trader at the point of de-
420
73 FEDERAL. REPORTER.
parture, as well as the carrier, out of all proportion to any benefit conferred on those whose interests are at the point of delivery. And in referring to "trader" in this connection, either at the one point or the other, it is intended to use the word in a representative sense, as including all persons interested in the production and sale of a commodity at the point of departure of the goods, and all persons interested as dealers or consumers at the point of delivery. It was at one time thought doubtful whether the interests of the railway could be taken into account at all, but it is now established that they can be. Interstate Commerce Commission v. Baltimore & O. R. Co., 43 Fed. 52; Ames v. Railway Co., 64 Fed. 176; Reagan v. Trust Co., 154 U. S. 412, 14 Sup. Ot. 1047. There is also, besides the parties named, the interest of the public concerned in a traffic question like this. The public at large are greatly interested in competition,-with the more favorable prices which it brings, and, for that purpose, in keeping open the larger markets of the country to all points of production and supply. It is obvious, therefore, that in judicial action upon the question of rates the effect of the ruling must be closely observed, as it thus falls in different directions, and upon different interests, and no one particular interest can properly be considered to the exclusion of others. As the trader at the point of delivery, and who generally pays the rates charged, is the one actively complaining, it generally happens that his interest and that of the carrier are represented before the court, and thus brought out into prominence, and attention directed too exclusively to the proximate, rather than the more distant, results, and in a given case it may be to interests of relatively small magnitude. I will now refer briefly to two recent English cases involving the construction of the clauses in the English traffic act substantially embodied in ours. In the case of Phipps v. Railway Co. [1892] 2 Q. B. 242, the English court of appeals was considering a case which had been appealed from the decision by the railway commissioners. The statement of the case, so far as is necessary to be now noticed, was as follows: "The case made by the company was that the comparatively lower rates charged to Butlins and Islip were forced upon them by the competition of the Midland Railway Company; that the lower charge was made bona fide, and was, in the terms of section 27 of the act of 1888, 'necessary for the purpose of securing in the interest of the public the traffic in respect of which it was made'; that there was still a difference of 6d. a ton in favor of the plaintiffs, and that the plaintiffs had not been injured by the rates charged to Bmlins and Islip; and they produced evidence to show that the competition in the South Staffordshire market was such that a difference of 6d. a ton, or even less, in the price of iron of the same quality, would often be enough to secure a contract. The railway commissioners (Wills, J., Sir Frederick Peel, and Viscount Cobham) held that the London & Northwestern Railway Company, in fixing the rates in question, were entitled to take into account the circumstance that Butlins and Islip had access to another line of railway which was in competition with their own, and that no sufficient case of undue preference had been made out against them. The plaintiffs appealed."
The court of appeals, in giving its opinion and referring to a previous case, said: "Is not it a question of fact, and not of law, whether such a preference is due or undue? Unless you could point to some other law which defines what
INTERSTA'fE
COMMISSION
v.
LOUISVILLE & N. R. CO.
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shall be held to be reasonable or unreasonable, it must be and is a mere question, not of law, but of fact. The lord chancellor there points out that the mere eircumstance that there is an advantage does not of itself show that it is an undue preference within the meaning- of the act, and, further, that whether there be such an undue preference or advantage is a question of fact, and of fact alone. No rule is given to guide the court or the tribunal in the determination of cases or applications made under the second section of the act of 18;34. The conclusion is one of fact, to be arrived at looking at the matter broadly and applying common sense to the facts that arE' proved. I qUite agree with 'ViIls, .J., that it is impossible to exercise a jurisdiction, such as is conferred by this section, by any process of mere mathematical or arithmetical calculation. 'Vhen you have a variety of circumstances differing in the two cases, you cannot say that such a difference of circumstances represents or is equivalent to such a fraction of a penny difference of charge in the one case as compared with the other. A much broader view must be taken, and it would be bopeless to seek to decide a case by any attempted calculation."
And, referring to the matter of mileage as a method of determining what a rate should be, the court said: "Therefore, what they call attention to as their ground for alleging that there was no undue preference is this: that mileage rate is not, and cannot alone be, the test. That where a train is started or taken from one point to another, there are certain initial chargps and certain charges at the other end. I will not call them 'terminal' charges, because that is a word used to describe different things, and the use of it often gives rise to misunderstanding and dispute, but certain initial charges, and certain terminating charges, which are constant whatever distance the train has traveled; and that, before comparing the mileage rate, you must in each case deduct those initial and terminating charges, and then, and then only, will the comparison be a fall' one. Now, dealing with the matter in relation to Butlins alone for the moment, can it be said that the railway commissioners were not entitled to take that circumstance into consideration, and, looking at the distance, and looking at the difference of charge, to say that it was not established to their satisfaction that there was undue preference, inasmuch as the railway company had pointed to circumstances which led them to the conclusion that there was no reason for saying otherwise than that the Gd. fairly represented the difference of charge which might be made without constituting any undue preference or any undue disadvantage? It was on that ground distinctly, on that part of the case so far as the mere difference of charge to Butlins was concerned. that 'WiIls, .1., proceeded in his judgment. 'What he said may be shortly put thus: 'It is true that, if you try it merely as a matter of mileage. it is about a half penny as compared with one penny for the distance traveled, but when you eliminate from the charge those constant charges at both ends, which must always exist whatever the distance, when you consider the longer lead there is in the one case tllan the other, and when you consider the necessities of the case which are brought about by the active competition of the Midland, putting all those things t<>gether, the diffen'nce is not nearly large enough to render It either necessary or desirable that this court should interfere.' "
And, continuing, the court further said: "Now, there is no doubt that in coming to that determination the court below did have regard to the competition between the Midland and the London and Northwestern. and the situation of these two furnaces which rendered such competition inevitable. If the appellants can make out that In point of law that is a consideration which cannot be permitted to have any influence at all, that those circumstances must be rig'idly excluded from consideration, that they are not circumstances legitimately to be considered, no doubt they establish that the court below has erred In point of law. But it is necessary for them to go as far as that in order to make any way with this appeal, because, once admit that to any extent, for any purpose, the question of competition can be allowed to enter in, whetber the court has
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73 F1EpERAL REPORTER.
given too much weight to it or too little, becomes a question of fact, and not of law."
And, discussing thE! question of the trader's proximity to the market, the court observed: "Can we say that the local situation of one trader, as compared with another, which enables him, by' competing routes, to enforce upon the carrier by either of those routes a certain amount of· compliance with his demands, whiCh,would be impossible if he did not enjoy tbat advantage, is not among the circumstances which may be taken into consideration? I am looking at the question noW as between trader and trader. It is said that it Is unfair to the trader who is nearer the market that he should not enjoy the full benefit of the advantage to be derived from his geographical situation at a point on the railway nearer the market than his fellow trader who trades at a point more distant; but I cannot see, looking at the matter as between the two traders, Why the advantageous position of the one trader in having his works so placed that he has two competing routes is not so much a circumstance to be taken into consideration as the geographical position of the other trader, who, though he has not the advantage of competition, is situated at a point on the line geographically nearer the market. 'Why the local situation, in regard to its proximity to the market, is to b'" the only consideration to be taken into account in dealing with the question as a matter of what is reasonable and right as between the two tmders, I cannot understand. Of course, if you are to exclude this from consideration altogether, the result must inevitably be to deprive the trader who has the two competing routes of a certain amount of the advantage which he derives from that favorable position of his works. All that I have to say is that I cannot find anything in the act whleh indic'ates that When you are left at large (for J'ou are left at large) as to whether, as between two traders, the company is showing an undue and unreasonable preference to the one as compared with the other, you are to leave that circumstance out of consideration any more than any other circumstance which would affec't men's minds. I should have said so, and I do say so, upon the act of 1834, and 1 find nothing in the aet of 1888 to exclude any such consideration, if it is not excluded by the act of 1854."
And, treating of the railway's right and motive in the attempt to secure traffic, the court said: "Of course, a railway company endeavors to seeure the traffic for its own advantage. That is the motive ",-hich operates upon the railway company. Naturally enough they want to secure all the traffic they ean in order to do the best trade they can. But I think that the leg'islature has here pointed out that in considering a question of this sort you are not only to consider the legitimate desire of the railway company to seeure traffic, but that you are to consider whether it is in the interest of the public that they should secure that traffic, rather than abandon it, or 110t attempt to secure it. Ot course, many cases might be put where, although the object of the railway company is to seeure the traffic for their own purposes upon their own line, yet, nevertheless, the very fact that they seek by the charges they make to secure it operates in the interest of the public. One class of cases unquestionably intended to be covered by the section is that in which traffic from a disof a character which competes with the traffic nearer the market i>l charged low rates, because, unless such low rates were charged, it would not come into the market at all. It is certain that, unless some such principle as that were adopted, a large town would necessarily have its food supplies greatly raised in priees. So that, although the object of the company is simply to get the trame, the puhlic have an interest in their getting the traffic, llnd allowing the carriage at a rate which wiII render that traffic possible, and so bring the goods at a cheaper rate, and one which makes it possIble for those at a greater distance from the market to compete with those situated nearer to it. * * * I cannot but think that a lower rate which is charged from a more distant point by reason of a competing route which exists thence is one of the circumstances which may be taken into account
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423
nnder those proYisions, and which would fall within the terms of the cnaetment quite as much as the case to which I haye called attention. Suppose that to insist UVOll absolutely equal rates would practically exclude one of the two railwaJ's from the traffic, it is obvious that those members of the public who are in the neighborhood where tlley can have the benefit of this competition would be prejudiced by any such proceedings. And, further. inasmuch as competition undoubtedly tends to diminution of charge, and the charge of cilniage is one which ultimately falls upon the consumer, it is ollYious that the public have an interest in the proceedings under this act of varliament not being so used as to destroy a traffic which can never be secured but by SOllle such reduction of charge. and the destruction of which would be vrejudicial to the public by tending to increase prices."
And Lindley, L. J., in a concurring opinion, expresses the same view in language as follows: "l\ow, the appeal here is put, as it must be put, upon a question of law, viz. whether tlwre is any rule whicb compels us to say that the commissioners bad no right to take into their consideration the fact that Butlins and Islip had two routes of comnlUnicatioIl westward instead of one. It appears to me that there is no such rule, as I cannot help thinking it would be extremely unreasonable if there were. Upon what principle of good sense can any business man, or anybody else, exelude from his consideration the locality of either plaee? If there is a physical difference in fa VOl' of one or the other, or any artificial difference by reason of the facilities of traffic. whether by sea or by land, why is not everJ'thing which is material to be taken into account, and upon what principle can it be said that rou are to exeIllde from consideration one of the main elements in the case'! The observations which I have made have no reference to the equality clause. The equality clause imposes a rigid rule, and, putting it shurtly, it is to the effect that for the same service the same sum is to be paid. One can understal1{] that, thing turns upon the words 'the same.' The moment the servicf, is not the same. the rule does not apply; and it appears to me that, if the law were to the effect contended for, it would be extremely irrationaL"
80 in the case of Mansion House Ass'n Hailway 'rratnc v. IJondon & S. W. Hy. Co. [1895] 1 Q. B. \)32, before the'railway and canal
commission, the question was one of an unjust advantage or preference as between home and foreign goods, and Collins, .1., giving the opinion, and referring to the argument of counsel, said: "It is obvious that this argunwnt, if accepted, would involve the most momentous consequences; consequences which Mr. Balfour Browne did not dispute. Ifor instance, let us assume that some trader in Southampton madc it his business to collect home merchandise of the same description named in the application, and to deliver it to the railway companJ' there' at fixed dates and in large quantities, just as the respondents now deliver foreign merchandise for deliverJ' to London, and was charged by the company the sanw rate, namely, os. a ton. On a complaint by the present applicants impugning such charges as an undue preference, it would be open to the company to justify it by urging all these topics which have been recognized by many decisions, and are sanctioned by subsection 2, such as difference of COJ1(litinns, reducing the cost, and increasing the profit of the comI1anJ', the existence of competition by land or water from Southampton to London, and so forth; and if they prove their facts they might be entitled to have their COIllplaint dismissed."
And another member of the commission, giving a separate concurring opinion, observed: "The other alternative would be to raise the shipping ['ates to the level of the local rates. Tllese Sllipping rates are charged upon traffic of a highly competitive character. and we may take it that they are fixed at the highest point that is consistent with securing a remunerative share of the traffic. as a I am not introducing competition -,Jjustify the preference, but
424
factor in the result which it seems to me wiII inevitably follow upon the raising of the Southampton dock rates, namely, the loss of the whole shipping traffic to the railway. A slIght increa!je would probably have this effect; any approximation to the level of the local rates most certainly so. It is not denied that the traffic would go to London by sea all the same, and at the same rates as before. The only difference would be that the railway company would be more or less impoverished, not to the advantage of the farmer, who would gain nothing, but solely to the advantage of the shipping interest, which is not, of course, Wholly a British interest. * * * I am of opinion, therefore, that if not by the use of the words 'same or similar serVices,' then. by the general sense of the proviso as interpreted by the learned judge, it i" intended that in cases where undue preference of foreign goods is alleged, that we should take into consideration, as we have always been entitled to do in the case of home goods, the circumstances of the trafllc as regards its quantity, its packing, its regularity, and all other matters affecting its cost to the company, except so far as they may be· matters special to the foreign origin of the goods; that is, the limitation imposed by the proviso, the object of which is, in my opinion, not to give home traffic a preference over foreign traffic, but to place them in a position of strict equality."
It thus appears beyond question, without reference to fnrther authorities, that, in every case where a difference in the rates between two points of shipment is the ground of complaint, a leading and important element in the determination of the question is that of competition or want of competition. It is entirely apparent, too, that other practical conditions are to be taken into account, and that the mileage, while a circumstance to be considered with all the other facts and conditions, is by no pleans controlling or the most important. As e'lrly as 1872 it had been fully demonstrated in England that equal mileage as a basis for settling the difficulty was entirely impracticable. In that year the committee upon the amalgamation of railways reported upon this subject, and the substance of this report h; found in the note to the case of Ransome v. Railway Co., 1 Nev. & :rYIcN. 63, which was one of the Ooal Traflic Cases. In reporting against equal mileage, the committee said: "(a) It would prevent railway companies from lowering their fares and rates so as to compete with traffic by sea, by canal, or by a shorter or otherwise cheaper railway, and would thus deprive the public of the benefit of competition and the company of a legitimate source of profit. "(b) It would prevent railway companies from making perfectly fair ar· rangements for carrying at a lower rate than usual goods brought in large and constant quantities, or for carrying for long distances at a lower rate than for short distances. "(c) It would compel a company to canoy for the same rate over a line which has been very expensive in construction, or which, from gradients or otherwise, is VelOY expensive in working, at the same rate at which it car· ries over less expensive lines. In short, to impose equal mileage on the com· panies would be to deprive the public of the benefit of much of the competition which now exists or has existed, to raise the charges on the public in many cases where the companies now find it to their interest to lower them, and to perpetuate monopolies in carriage, trade, and manufacture in favor of those routes and places which are nearest and least expensive, where the varying charges of the company now create competition. And it will be found that the supporters of equal mileage, when pressed, often really mean, not that the rates they themselves pay are too high, but that the rates which others pay are too low."
As has already been seen in this case, the commission, so far as it rested its decision on the difference in rates to Kashville and Memphis, evidently worked out a result by contrasting the distance of
425
these places respectively from the Earlington mines, or upon a mileage basis. And the commission did not take into account, or make any finding or investigation in respect of, competitive rates at that point; and in this, I think, the commission was clearly in error. The commission based its ruling in part upon the ground that the defendant railway company was without right to make any difference between what mav be called the summer and winter rates. and the commission required the company to reduce its winter rate'so as to conform to the summer rate, and make that uniform the year round; and this brings up the question whether its opinion on that point was sound. 'Xeither the commission in its report, nor its able counsel in the argument, have referred the court to any particular provision of the interstate commerce act with the terms or just implication of which this mode of doing business is in conflict. The commiEsion, in its report, assigns no reason why such mode of business is not lawful, except the statement that it is not customary. Indeed, counsel for the commission took occasion to say expressly that he ]'egarded this mode of adjusting its rates by the defendant so as to furnish a lower rate during the summer, or dull season, than ,vas furnished during the winter, or active season, as a sound, perfectly just, and proper business method in and of itself, and apparently tonceding that it might be well if the act of congress allowed the business to be transacted in this way. It is ditllcuIt to understand how the question of whether such a difference in rates had been customary or not was controlling in the decision of that point. It has not been suggested that there is any particular common-law principle which prohibited what was thus done, and it is certain that methods of business have been followed for almost time out of mind closely anaiogous to this. It is customary in manufacturing and other industrial establishments to lower the price of goods in order to keep business going during the summer, or dull season of the year. And so, too, it is a matter of common knowledge that coal in any market may be bought during the summer or heated season of the year at rates lower than it can be obtained during the winter, when the consumption is large, and the demand for this commodity active. It is well known, as the proof in this case abundantly shows, that it is very difficult for mining and manufacturing establishments to find market during the 8ummer months for the product or output of such establishments. 'fhis is due to the fact that there is c\)mparativC'ly little demand for their products during those months. It lias emile to be well known, therefore, as the "surplus output" or »l·oduet. and the question of a market for such surplus output dmill[!,' the dull season of the year is everywhere recognized as a diffienlt one, and concessions ate made in prices and rates in order that this smplus output may be handled. This is necessary to enable those owning and operating such establishment.. to furnish employment to the common laborers of the country, whose subsistence depends upon continuous emplcyment. It enables those operating sueh concerns to keep their working forces together, in order that a suffieient output may be furnished during the active season of the ;real' to m the increased demands of the trade. It is apparent, f't
426
73 FEDERAlJ REPonTER.
therefore, that no !Sound public polic'Y is affected by such mode of doing business, and counsd admits that it is in itself reasonahle. just, and humane to those who need consideration most. It wcmld be surprising, therefore, if it could be found that a mere business method, wholly without objection within itself, is repugnant to the spirit and purpose of the interstate eommerce aet. The injurious etlect of a suspension of business during a dull season, with idle machinery, and with those on wages thrown out of employment, is certainly entitled to some consideration in following out the possible results of such a rule as the commission here an:nounees. And if those who own and operate mining establishments may propel'ly attempt to keep the same going dming the summer season, it would be singular if the railroad company may not also have the right of keeping such appliances and cars as it devotes to the coal traffic from becoming idle, and also avoid throwing the crews of men who operate such cars out of employment, by joining with the coal miners in a reduction of rates in order to find a market for the surplus output. The interstate commerce act is not to be construed so as to abridge or take away the common-law right of the carTier to make contracts and adopt proper business methods further than its terms and recognized purposes require, ilnd upon this Iwint I f)llote again from the opinion of Judge Jackson in the case refel'red to, in which he refers with approval to the language of Earl(', C. J. Judge Jackson said: "Subject to the two leading prohibitions that their charges shall not be unjust and unreasonable, and that they shall not unjustly discriminate so as to give undue preference or advantage, or subject to uudue preferenC'e or disadvantage persons or traffic similarly circumstanced, the act to regulate eommerce leaves common carriers as they were at common law, free to make special contracts looking to the increase of their business, to classify their traffic, to adjust and apportion their rates so as to meet the necessities or commerce, and generally to manage their important interests upon the samp principles which are recognized as sound, and adopted in other trades and pursuits. Conceding the same terms of contract to all persons equally, may not the carrier adopt both and retail rates for its transportation services? In Nicholson v. Railway Co. (1 Nev. & 1IcN. 147), which ill.Yolved the 'undue preference' clause of the act of 1854, Earle, C. J., said: 'I take the free power of making contracts to be essential for making commercial profit. Railway companies have that power as freely as any merchant, suo., ject only (as to this court) to the duty of acting impartially without of persons; and this duty is performed when the offer of the contrae! is made to all who wish to adopt it. Large contracts may be beyond the means of small capitalists; contracts for long distances Dlay be beyond the needs of those whose traffic is confined to a home district; but the power of the railway company to contract is not restricted by these considerations.' "
It is no objection to this method of doing business to say that certain persons-for example, large dealers and others whose position ('liables them to store away quantities of coal-take advantage of such low rates, and supply themselves during the summer months, while others not so situated, or who are engaged in such business as that they are without motive to do so, will not take advantage of the rates. 'I'his is no undue advantage or discrimination which is made by the company, or which l'esults from its method of doing business at all. If such a difference as that suggested results, it
INTERSTATE COMMERCE: COMMISSION V. LOUISVILLE & N. R. CO.
427
grows out of the difference between financial and business conditions, and results incidentally, and not from anything in the rates themselves. The act was not leveled at any such differences as these, but at arbitrary differences and inequalities in the rates and methods of doing business of the carrier. If the interstate commerce act should undertake to regulate so vast a business as that of the commerce of the country, so as to overcome social, business, and financial inequalities and conditions, the act would at once become nugatory in the difficulties which would attend its execution. All that could be reasonably required of the railroad would be to offer in good faith the reduced or summer rate to all persons on equal terms, so as to extend the advantages thereof to all persons who might choose to avail themselves thereof, and to require more than this would be absurd and unjust. And as bearing upon this point I can again express my view by referring to the opinion of ,Judge Jackson, in which he says: "In Baxendale v. Railway Co. (Heading Case) 5 C. B. (:\". S.) 33G, 28 Law .T. C. P. 81, Cockburn, C. J., after stating that, if it were made to appear that tile disproportion [in rates] was not justified by the circullIstances of the tratlic, the comt would interfere, proceeds as follows: 'So, again, if an arrangement was made by a railway company whereby persons bringing a large amount of traffic to the railway should have their goods carried on more favorable terms than those bringing a less quantity, although the court might uphold such an arangement as an ordinary incident of cOlllmercial economy, provided the same advantages were extended to all persons under the like circumstances, yet it would assuredly insist on the latter condition.' And, while recognizing the duty on the part of the eourt to redress any injustice or inequality prohibited by the law, he makes the further pertinent obsl·rva· tion: 'At the same time we must carefUlly avoid interfering, except where absolutely necessary for the above purpose, with the ordinary right (sub·· ject to the above-named qualifications) which a railway company, in common with every other company or individual, possesses, of regUlating and managing its own affairs, either with regard to charges or accommodation as to the agreements and bargains it may make in its particular business.' As regards the 'undue preference' branch of the :Elnglish acts, the effect of the decision seems to be that a company is bound to give the same treatment to all persons equally under the same circumstances; but that there is nothing to prevent a company. if acting with a view to its own profit, from imposing such condition as may incidentally have the effect of favoring one class of traders, or one town, or one portion of their traffic, provided the conditions are the same to all persons, and are such as lead to the conclusion that they are really imposed for the benefit of the railway company."
I am, therefore, without further discussion, clearly of opinion that the defendant railroad company had the right to make a difference in its summer and winter rates on the coal traffic. It is to be observed that I am not now called upon to pronounCe any opinion as to whether either the summer or winter rate is in and of itself just and reasonable, being restricted, as before stated, to an approval or disapproval of the action of the commission. 'rhe commission refers to the fact that the defendant road has been buying coal at the Earlington mines and selling on the Memphis market, and states that, as the price of coal is very low at Memphis, it presumes no profit could be made on the sale, and assumes that there must be a profit in the rate of transportation. The presumption that there is no profit in handling coal on the :Memphis market
428
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F,EDERAL REPORTER.
would apply equally to any dealer in that market, and is a presumption contrary to the course of business: It was only necessary, in order to know certainly the facts in the case, to call on the defendant company for a statement of the prices at which coal was bought at the mines and sold on the market at Memphis, and given these with the rate of transportation the truth would be made to appear without recourse to doubtful presumption. I have considered whether or not, if the result of the commission's action might be sustained on ariy ground, I could reopen the case in this court, and allow the plaintiff to introduce proof to show whether or not the rate to Nashville is of itself too high. This could apparently be easily done by procuring the schedule of rates on coal to and from the points suggested herein, where the conditions are similar to the traffic between Earlington and Nashville; Whether I could do so under section 16 of the act is doubtful. As, in any event, I would be without power to substantially change the order made by the commission, and as I do not think that order is a lawful and proper one, I have coneluded that it is best to decide the case upon the record as now made up. An objection is made to the form of the order, in that it is made in terms to operate indefinitely in the future without any reservation of the power of change or modification such as'changes in traffic conditions might make absolutely necessary. It is argued that, if the order of the commission were made the judgment of this court, it would become a bar to any change in the future. I cannot, however, concur in this view. The order of the commission is essentially an administrative one, and is not final or conclusive in the sense of a court judgment or decree, and the order of this court is one merely to give effect to the order made by the commission, and does not change its character or make it a final judgment. There are no private vested rights in the order of the commission, or that of this court, such as exist in a regular judgment or decree of this court. And, if necessity should arise for a change in the tariff of rates, no reason is perceived why the canier might not make this on notice to the commission under the act of congress, just as such carrier is permitted to do in regard to the pUblished filed with the commission. But there exists another objection to the. form of this order which goes deeper. I pass by now the very serious question of the commission's power to make rates at all. It has been seen that the order of the commission does not put in effect a rate at Nashville complete in itself, but only a schedule measured by the Memphis rat(, and depending for its continuance or discontinuance, and for any modification or change, on tbe Memphis rate. If a change should be made in the rate to Memphis, it would be open to the Nashville trader under this order to complain that such change was arbitrary and unreasonable, and this would devolve on the commission, and next on the court, the duty of an examination and decision of the Memphis rate upon its own merits. So, too, if the trader at another point or place in the state should complain that the rates to the trader at Nashville violate the act, or the trader at Nashville should complain of discrimination in rates to the trader at another place in the state, the question in
INTERSTATE CO?tlMERCE
V. LOUISVILLE &. N. R. CO.
429
each case would give rise to an inquiry into the rates at two places instead of one. These and other difficulties which would spring up in an attempt to keep in force the form of order made by the commission in this case are obvious enough without further enumeration. The rate to Nashville sbould stand on its own basis, independently of rates to Memphis or other places, except so far as other rates might be regarded as evidence and for their probative force only. The order is without precedent or analogy in court judgments or decrees. Conceding the doubtful power to fix a rate, it is certainly irregular, and one which I do not think the commission was warranted, under the act of congress, in making. It will be perceived, therefore, that the errors which are thought to exist in the action of the commission are such as relate to the method of investigation and the order made thereon, and to the grounds on which the commission based its There is in the case, in my opinion, no discrimination under section 2, and no undue advantage under section 3, to the Memphis trader' as against the Nashville trader; and the proposition that the railroad was without power to make a difference in the summer and winter rates was, I think, erroneous; and whether or not the Nashville rate, considered upon its own merits, is unjust and unreasonably high, was not inquired about nor decided by the commission. The bill is therefore dismissed, with costs. After the foregoing opinion was written it was withheld until the opinion in Cincinnati, X O. & T. P. Ry. v. Interstate Commerce Commission (known as the "Social Circle Case") Hi Sup. Ct. '700, could be seen, the decision of the case having just been announced. That opinion is now before me, and with it also the opinion in Texas & P. Ry. Co. v. Interstate Commerce Commission, Id. 666. I find nothing in these cases which seems to call for any change or modification of the opinion as already written. On the contrary, so far as the same points were considered, these cases furnish authoritative confirmation of the conclusions reached from a study of the issues in advance of the light thrown upon the subject by these instructive cases. The Social Circle Case denies power in the commission to fix rates, and puts that question at rest. And the opinion in Texas & P. Ry. Co. v. Interstate Commerce Commission fully supports the proposition that in the determination of a question arising under sections 2 or 3 of the interstate commerce act, as between different places, the condition of competitive rates is an element which the commission must take into consideration, and that it is a material issue in the case which the commission is not at liberty to disregard.
430
STROHEIM: et al. v. DEIMEL et at. (Circuit. Court, N. D. Illinois. April 16, 1800.) EXECUTION-IMPRISONMENT FOR DEBT-STATE RESTRICTIONS ON FEDERAL PRO' CESS.
Rev. St. Ill. 1895, c. 72, §§ 30, 31, which provide that creditors who have caused their debtors to be imprisoned upon writs of ca. resp. or ca. sa. must pay their board weekly in advance, or the debtors will be discharged, . is a restriction on imprisonment for debt, within the meaning of Rev. St. U. S. § 990, which declares that "all modifications, conditions and restrictions upon imprisonment for debt. provided by the laws of any ,nate, shall be applicable to the process issuing from the courts of the United States to be executed therein."
At Law. On motion. Action on the case by Julius Stroheil11 and others against Joseph and Rudolph Plaintiffs obtained judgment, and obtained an execution against defendants' bodies, under which the latter were arrested and imprisoned. Defendant Rudolph Deimel now moves to be discharged from imprisonment. Moran, Kraus & Mayer, fvr plaintiffs. Duncan & Gilbert, for petitioner. SHOWALTER, Circuit Judge. This was an action on the case. for alleged false representations for the purpose of obtaining goods on credit. On July 23, 1894, judgment was rendered against defendants for $8,500 and costs. On the 17th of November, 1894, a writ of capias ad satisfaciendum was sued out by the plaintiffs, on said judgment. The two defendants having been thereafter arrested by the marshal, pursuant to said writ, a motion was made on their behalf to quash the same, as having been illegally and improvidently issued. This motion was based on the following enacted in 1893 by the legislature of Illinois: "No person shall be imprisoned for non-payment of a fine or judgment in any civil, criminal, quasi criminal or qui tam action, except upon conviction by a jury: provided, that the defendr',t or defendants in any such action may waive a jury trial by executing a wrmal waiver in writing: and prOVided further, that this provision shall not be construed to apply to fines inflicted for contempt of court; and provided further, that when such waiver of jury is made, imprisonment may follow judgment of the court without conviction by a jury." Laws 1893, p. 96.
There had been filed in the case a stipulation, in writing, waiving a jury. But this paper was subscribed by the counsel for the parties. It contained also a provision for trial before one of the district judges, whereas a trial was afterwards had, and the finding upon which final judgment went was made, by another of the district judges. Before the latter was also heard the motion to quash, as already mentioned. 'What nlanner of stipulation was in fact made, waiving the jury, on the trial actually had, has been a subject of controversy between the parties. Section 914 of the Revised Statutes of the United States is i.n words following: "The practice, pleadings, and forms and modes of proceeding in civil causes, other than equity and admiralty causes, in the circuit and district courts, shall conform, as near as may be, to the practice, pleadings, and forms and