Case ID: ohio-st_82/html/0025-01.html
Source: Caselaw Access Project
Author: {"author": "Davis, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Railroad Commission of Ohio v. The Hocking Valley Railway Co.
    
      Powers of railroad commission — Act of April 2, 1906 — Prevention of unjust discrimination in rates — Question of meeting competition — Railroad may lower rates to meet traction line, when — ■ Railroad statute does not apply to proceedings in error.
    
    1. In proceedings under, “An act to regulate railroads and other common carriers in this state, create a .board of railroad commissioners, prevent the imposition of unreasonable rates, prevent unjust discrimination and insure an adequate railway service,” passed April 2, 1906 (98 O. L., 342), competition is an element to be considered in determining whether rates are reasonable and just; and the fact that a competitive rate is less than th'e rate of the other competing carrier, does not of itself constitute undue and unreasonable discrimination. Such discrimination must be ascertained from a consideration of all the facts and circumstances of each case.
    2. Section 16, par. e of the said statute does not apply to proceedings in error.
    (No. 11402
    Decided March 15, 1910.)
    Error to the Circuit Court of Franklin county.
    Aaron E. Price, a citizen oi the village of Athens, which is situated on the blocking Valley railway, complained to the railroad commission of Ohio, in substance, that the village of Athens is situated on the Hocking Valley railway at a distance of 76.3 miles from the city of Columbus, measured along the right of way of said Hocking Valley railway company; that the village of Logan is located on the line of said railway' at a distance of 49.6 miles from the city of Columbus; that the city of Lancaster is situated on the line of the defendant railway at a distance of 31.5 miles from the city of Columbus; and further complained that the Hocking Valley railway company charges and collects from passengers buying tickets from the village of Athens to the city of Columbus, or reverse, the sum of $1.55, and that the said company charges for a round-trip ticket between Athens and Columbus the sum of $3.10. The complainant further charges that the said railway company makes a practice of selling to any person applying for the same at Logan or Lancaster what is known as a twin ticket which twin ticket entitles the holder to one round trip on any of the passenger trains of the defendant from the station where said ticket is purchased to the other and returh, or entitles two passengers to travel on. any of the company’s passenger trains from either of the stations where the twin ticket is purchased to the other locality; that the said twin tickets are sold at greatly reduced rates and at a much less rate per mile than is charged for tickets between Columbus and Athens and beyond Athens, thereby subjecting the complainant and other citizens of Athens to an undue and unreasonable disadvantage as compared to travelers between Logan and Columbus or Lancaster and Columbus.
    The railway company admitted the allegations of the complainant in regard to the use of the twin ticket system, but denied that it was an unjust or undue and unreasonable preference and advantage, and denied that the company is violating the laws of the state 6f Ohio. The railway company, for further answer, alleged that in order to preserve its local passenger business between such points, and by reason of competition created by interurban electric traction railways, it had reduced its rates for a radius of about fifty miles north and south of Columbus, and in order to accommodate its business between said points had put on additional trains, which since- May 13, 1905, have run and are running between Marion and Logan; and thereby it has increased the train service between those points and intermediate points. Upon hearing of the said complaint before the railroad commission of Ohio, said commission found against the railway company and ordered that the defendant cease from the unjust and unreasonable discrimination, as alleged in the petition of the complainant, ánd as found to exist by the said commission. The Hocking Valley railway company thereupon filed its petition in the court of common pleas of Franklin count)r, as authorized by the statute, averring that the order made by the railroad commission was unlawful and unreasonable and asking that the same be vacated and set aside. The railroad commission filed its answer in said court, and after trial, the court vacated and set aside the said order, and thereupon the railroad commission appealed the case to the circuit court of Franklin county, which court held that the order of the railroad commission was unlawful and unreasonable and rendered the same judgment as had been rendered .in the court of common pleas. The railroad commission prosecutes error to this court seeking to reverse the judgment of the circuit court of Franklin county and also that of the court of common pleas of Franklin county.
    
      
      Mr. W. H. Miller, assistant attorney general, and Messrs. Daugherty & Todd, for plaintiff in error.
    We do not contend, and the commission did not find, that the defendant was forbidden to sell commutation tickets or party tickets. In fact, the authority for such tickets is clearly contained in Section 8 of the Ohio railroad commission act. The point we contend for is, and the finding made by the commission was, that the so-called “twin” ticket is not a commutation or party ticket.
    A commutation ticket has been defined by the interstate commerce commission. Railway Co. v. Railroad Co., 3 I. C. C. R., 469.
    In the party-rate ticket case, Commission v. Railroad Co., 145 U. S., 263, it was held that a party ticket for ten or more was legal, but at the conclusion of the opinion the court say it is possible to conceive that the party rate tickets by reduction of the number for whom they may be issued, may be made the pretext for evading the law.
    The basis of the duty of the railroad company towards its patrons and the public generally is well stated in Messenger v. Railroad Co., 36 N. J. L., 407.
    
      Messrs. Wilson & West; Mr. C. O. Hunter and Mr. Richard Inglis, for defendant in error.
    We contend: That competition between rival lines is a fact to be considered in determining whether a preference or disadvantage thence arising is undue or unreasonable, within the meaning of Section 23 of the railroad commission act. Commission v. Railway Co., 168 U. S., 144; Commission v. Railway Co., 141 Fed. Rep., 1003, 209 U. S., 108; Railway Co. v. Commission, 181 U. S., 1; Railroad Co. v. Behlmer, 175 U. S., 648; Railway Co. v. Commission, 162 U. S., 197; Commission v. Railroad Co., 73 Fed. Rep., 409; Glass Co. v. Railway Co., 13 Interstate Com. Rep., 87.
    That the railway company had the right to reduce its rates to meet the competitive conditions, including the low traction rate and other attractions of interurban travel, even to the extent of going below the competitive rate. In re Canadian Pacific Ry. Co., 8 Interstate Com. Rep., 71.
    That, regardless of the origin or location of the competitive condition, a carrier suffering therefrom has a right to take it into consideration in rate making, wherever and to whatever extent it has a substantial influence.
    And further contend, if the question of profitableness of the reduced rates is material to the determination of their legality, that only the additional cost, if any, of moving the competitive traffic should be considered. The courts have not held that a reduction of competitive rates below the point of profit would render them illegal. The farthest the decisions have gone in that direction is to suggest this as a possible element of illegality. Railway Co. v. Commission, 181 U. S., 1; Commission v. Railroad Co., 93 Fed. Rep., 83.
    Also, real and substantial competition having been proved in this case, that whether an undue or unreasonable prejudice or preference resulted from the reductions made on account thereof, was a question of fact for the trial court.
    The foregoing citations do not exhaust the authorities in support of our propositions; but they are clear cut decisions, on every proposition heretofore advanced by opposing counsel, and adverse to their contention in every particular.
    The}' are pertinent, because Section 23 of the act creating the railroad commission is identical with Section 3 of the interstate commerce act of 1887 (U. S. Compiled Statutes of 1901, Vol. 3, page 3155), and similar in all respects to the English statute on the subject (17 and 18 Victoria, ■c. 31, sec. 2), which were being considered in those cases. There is an exhaustive review of the English cases in the case cited in 73 Fed. Rep., 409.
    Section 4 of the interstate commerce act, also involved in some of the foregoing decisions, is the one forbidding a greater charge for a shorter than for a longer haul, over the same line in the same direction, under substantially similar circumstances and conditions, the shorter being included in the longer. What is said about the consideration of competition under that section is also applicable to the present case; because, as the interstate commerce commission has . said, the practice forbidden by Section 4 “is only a form of unjust discrimination or undue preference, to which, it seems, congress desired to call particular attention, because of its prevalence in certain sections of the country.” Commission v. Railway Co., 105 Fed. Rep., 703. Long and short haul sections. Scofield v. Railroad Co., 43 Ohio St., 571; Commission v. Railway Co., 168 U. S., 144; 
      Colliery Co. v. Railway Co., L. R., 11 A. C., 97; Phipps v. Railway Co., L. R., 2 Q. B. (1892), 229; Railway Co. v. Commission, 181 U. S., 1; Railroad Co. v. Behlmer, 175 U. S., 648.
   Davis, J.

The railroad commission seems to have based its - conclusions upon the proposition that, under the railroad commission act (98 O. L., 342), a railroad is not authorized to lower its schedule of rates solely for- the purpose of meeting competition; and that, even conceding to the railroad such right, a railroad cannot reduce its rate between competing points below the total rates of its competitor for the full distance between such points. In this, we think, the commission was clearly in' error.

A careful reading and analysis of this statute has not disclosed to us any requirement that the rate per mile between any two points on a railroad shall be uniform with the rate per mile between any other two points on the same railroad. The only limitation upon rates is the broad one that they “shall be reasonable and just, and every unjust and unreasonable charge for such service is. prohibited and declared to be unlawful.” Sections 3 and 23. Under this qualification the lawfulness or unlawfulness of the rate must be determined by all the circumstances related to each particular case. By universal consent self-defense is recognized as a natural right of every individual and of every collection of individuals. It follows, therefore, that whatever one does within the limits of protection bf his person, or property, or business is just and reasonable. In other words, when competitive conditions are such as to really threaten one’s property or business, they must necessarily be regarded as justifying retaliatory action, because the same is, by every instinct of man, just and reasonable.

But it is contended on the part of the commission that, conceding that competition is a factor to be reckoned, it should not be permitted to go below the competitive rate. This contention is not sound, because it is seldom that competition consists wholly in the rate. In the case at bar, the competition is between a steam railroad and an electric interurban road. For limited distances the former is at a disadvantage when carrying at the same rate as the latter. The comfort of passengers on the interurban roads is as great as on the steam railroad, if not greater; the frequency of service is in favor of the interurban; the speed on moderate distances is not greatly different; and the ratio of operating expenses to receipts is probably in favor of the interurban. The record seems to show that notwithstanding the competitive rate, the amount of travel has increased on both lines; so that the competition has not been injurious to the traction line. Upon the whole case we see no reason to disturb the findings of the court of common pleas and of the circuit courtj that the rates complained of are not unjust, unreasonable or unduly discriminatory. This is all that we deem it profitable to say upon the merits of the case. These matters were fully considered in the court of common pleas, 5 Nisi Prius Rep. (N. S.), 265.

It is suggested in the brief for the commission that Section 16, Paragraph e of the railroad commission act gives prima facie effect to the findings of the commission; and that such finding should stand, unless clear and unmistakable evidence should require a reversal thereof. That is true so far as concerns the burden of proof, as distinguished from what may be called the burden of the issue. The statute applies to the determination of facts upon evidence; but it does not countervail the well settled rule, that in proceedings in error, the presumption is in favor of the judgment and that the court below applied the .law correctly. The judgment is

Affirmed.

Summers, C. J., Crew, Shauck and Price, JJ., concur.