Source: https://supreme.justia.com/cases/federal/us/269/217/
Timestamp: 2019-04-19 21:06:31+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 269 › Louisville & Nashville R. Co. v. Sloss-Sheffield Co.
1. The case is properly here on writ of error; therefore, certiorari is denied. P. 269 U. S. 223.
being disregarded as not affecting the substantial rights of the parties. P. 269 U. S. 223.
3. A prayer for reparation, though lacking in details of specific claims, will invoke the jurisdiction of the Commission and stop the running of the two-year statute of limitations if such that, under ordinary legal procedure the details could be supplied by amendment or bill of particulars. P. 269 U. S. 226.
4. Where a claim for reparation, incidental to a proceeding to reduce rates, was first denied by the Commission, but later granted on a petition for rehearing, held that neither the delay of a year and upwards in filing such petition nor the subsequent delay in deciding it deprived the Commission of jurisdiction of the claim and let in the two-year statute of limitations, there being then no rule limiting the time for filing the petition, and its entertainment under the circumstances being in accordance with the practice of the Commission. P. 228.
5. A prayer for reparation in a proceeding to reduce future rates should not be limited by a narrow construction to losses suffered by the complaining shipper before the proceeding was begun, thus excluding those to be suffered while it is pending. P. 269 U. S. 229.
6. A complaint for reparation which is sufficiently broad to cover relief as to rates over connecting lines will stop the two-year statute of limitations from running for the initial carrier proceeded against, though not for the connecting carriers, until they are made parties. P. 269 U. S. 230.
7. The carriers participating in forming an excessive joint through rate are jointly and severally liable for resulting damages to shippers, without regard to the division of the rate among the carriers. P. 269 U. S. 231.
awarded (Interstate Commerce Act § 16) to the consignor. As a seller in a competitive market, the consignor was directly affected by the rate; the burden of the published rate rested on the consignor under the bill of lading; the consignee, in paying the freight, acted solely a the consignor's agent, and the equities between them were no concern of the carrier. So. Pacific Co. v. Darnell-Taenzer Co., 245 U. S. 531, distinguished. P. 269 U. S. 234.
9. In an order of reparation for payment of excessive freight charge, interest may be allowed by the Commission from time of such payment. P. 269 U. S. 238.
10. A judgment enforcing a reparation order may include interest on the amount of the order from its date, even though that amount be itself in part made up of interest. P. 269 U. S. 240.
Error to a judgment of the circuit court of appeals which affirmed, with a modification, a judgment of the district court on an order of reparation made by the Interstate Commerce Commission. Certiorari was applied for and denied.
what is known as the Seventh Supplemental Report. See Sloss-Sheffield Steel & Iron Co. v. Louisville & Nashville R. Co., 30 I.C.C. 597; 35 I.C.C. 460; 40 I.C.C. 738; 46 I.C.C. 558; 51 I.C.C. 635; 52 I.C.C. 576.
The district court, which heard the case without a jury, entered judgment in accordance with the Commission's order, except that it disallowed damages for the period between April 16, 1912, and July 22, 1913. Writs of error from the circuit court of appeals were sued out by both the plaintiff and the defendant. That court entered judgment for $103,367.47, being the full amount awarded by the Commission, with interest, and thus affirmed, as modified, the judgment of the district court. 295 F. 53. The carrier then sued out a writ of error from this Court. It also filed a petition for a writ of certiorari, consideration of which was postponed to the hearing on the writ of error. Compare Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 245 U. S. 535. As the case is properly here on writ of error, the petition for certiorari is denied. Seventy-seven errors are formally assigned. Only 7 distinct contentions require separate consideration. Some of these relate to matters of procedure, others to substantive rights. Some assert that complete defenses to the suit were erroneously overruled, others, that the amount of the recovery should have been reduced. Those which deal with matters of procedure will be considered first.
$68,728.80 to $63,982.80. It deferred the final date for payment from June 1, 1921, as prescribed by the earlier order, to September 1, 1921, and it declared in terms that the order of "March 8, 1921, be and the same is hereby vacated and set aside." These modifications were made in response to a petition filed by the Sloss-Sheffield Company on June 30, 1921, which recited, among other things, that certain items of excess charges had been inadvertently included in earlier computations, and prayed that the order theretofore entered be modified by making the reduction stated. The Louisville & Nashville had no notice of this application, but it had had notice and opportunity to be heard, and was fully heard on all proceedings leading up to the entry of the Sixth Supplemental Report and accompanying order. Neither of the two reports, and neither of the accompanying orders, recited the items of excess charges of which the sums named therein were the aggregates. The district court found that, by the order of July 12, 1921, the Commission merely corrected its Sixth Supplemental Report and award, through striking out and deducting a certain part of the amount theretofore awarded; that the substituted order did not award the Sloss-Sheffield Company reparation on any shipment that was not included and allowed for in its order of March 8, 1921; that the award of July 12, 1921, was based entirely upon evidence furnished the Commission prior to entering the March 8 order, and that the company did not, in connection with its petition of June 30, 1921, submit to the Commission any new or additional evidence. The Louisville & Nashville did not, after learning of the entry of the substitute order, take any proceedings before the Commission to have it set aside or corrected; nor was other objection made thereto until it raised the point in this suit.
nothing except reduce the amount required to be paid. The contention is that the Commission did more than reduce the amount payable; that the order not only eliminated certain items of excess charges inadvertently included, but added certain items inadvertently omitted; that this fact is established by recitals in the petition of June 30, 1921, by a passage in the Seventh Supplemental Report, and by evidence introduced by the carrier in the district court; that the evidence to the contrary introduced by the shipper, and on which that court relied, was incompetent, was duly objected to, and should have been excluded, and that the finding made thereon is in direct conflict with matter of record in the Commission.
in the pleadings may be deemed to have been made here. The insistence of the Louisville & Nashville that the order of July 12 should be deemed valid and of full force and effect insofar as it sets aside, vacates, and annuls the prior order of March 8, but void insofar as it directs a payment to be made, is without support in reason or authority. Thus, the alleged errors in ruling on the admissibility of evidence do not appear to have affected the substantial rights of the parties. Act of Feb. 26, 1919, c. 48, 40 Stat. 1181.
"That the rates and charges herein complained of be found and declared to have been unjust, unreasonable, and discriminatory for a period of at least two years preceding the filing of this complaint, and that the complainants . . . may have reparation to the extent of the difference between the rates and charges actually paid by them severally and the rates and charges that may herein be found and declared the just and reasonable maximum rates to be charged in the future."
argument, which seeks to reverse a settled practice of the Commission as to the time within which petitions for rehearing could then be filed, is not persuasive. The further contention that the delay of the Commission in disposing of the application for rehearing deprived it of jurisdiction is obviously unfounded.
another objection, the liability for exacting unlawful charges is joint and several. Compare Interstate Commerce Commission v. Louisville & Nashville R. Co., 118 F. 613.
it; that the excess charge for which a carrier should be made liable is only that which results from its own error in judgment; that the court should assume that no carrier had any control over any factor in the joint rate except the proportion attributable to its own line, and that consequently the Louisville & Nashville should be held to have contributed to the injury of this shipper only to the extent of 23 cents a ton. [Footnote 6] The argument is unsound.
"any common carrier . . . shall do, cause to be done, or permit to be done any act, matter, or thing in this Act prohibited or declared to be unlawful . . . , such common carrier shall be liable . . . for the full amount of damages sustained in consequence of any such violation of the provisions of this Act. . . ."
257 U. S. 247, 257 U. S. 259. Each connecting carrier is liable only for its own act. But the establishment of a joint rate by the concurrence of connecting carriers is necessarily the act of each, because the establishment of the rate is done by their joint agreement. The case at bar is not like Insurance Co. v. Railroad Co., 104 U. S. 146, on which the Louisville & Nashville relies.
The fact that the joint rate had been constructed out of existing proportional rates is not of legal significance. The rates complained of were not merely the aggregate of individual local or proportional rates customarily charged by the respective lines for the transportation included in the through routes. The rates in question were strictly joint through rates. Each through rate was complained of as a unit. Compare Parsons v. Chicago & Northwestern Ry. Co., 167 U. S. 447, 167 U. S. 455-456. A single charge was made for the transportation from point of origin to point of destination.
act of these carriers. Every local or individual rate is likewise established pursuant to a duty. Whether a rate be individual or joint, the Commission may enforce performance if the duty to establish it is neglected. The liability in the case at bar arises out of the wrongful exaction from the shipper, not out of the unlawful receipt or unjust enrichment by the carrier. Every carrier who participates in the infliction of this wrong is liable in solido like every other joint tortfeasor. The tariff rate, although unlawful because excessive, was, as between shipper and carrier, the only legal rate. Neither would have been at liberty to avail itself of more favorable rates for any part of the through carriage. Compare Baltimore & Ohio Southwestern R. Co. v. Settle, 260 U. S. 166, 260 U. S. 171. The Louisville & Nashville, the initial carrier, exacted the excessive joint rates on behalf of itself and of all of the connecting carriers who with it were parties to the joint through rates.
The division of the joint rate among the participating carriers is a matter which in no way concerns the shipper. The shipper's only interest is that the joint rate be reasonable as a whole. It may be unreasonable although each of the factors of which it is constructed was reasonable. It may be reasonable although some of the factors, or of the divisions of the participants, were unreasonable. Moreover, there is no finding that the excess received by the Louisville & Nashville was only 23 cents a ton. The Commission did not fix or determine the rights of the several carriers as against each other in respect to the reparation awarded; nor had it, so far as appears, fixed the divisions of the joint rate theretofore existing. Awarding reparation for excessive charges in the past and regulating rates for the future involve the determination of matters essentially different. Baer Bros. Mercantile Co. v. Denver & Rio Grande R. Co., 233 U. S. 479.
freight charges. The Commission and the district court found that the Sloss-Sheffield Company bore the transportation charges and was damaged to the extent of the difference between the charges paid and those that would have accrued at the rates found reasonable. Both tribunals found further that all the iron was sold f.o.b. destination; that it was shipped to purchasers named as consignees on straight bills of lading; that it was invoiced and charged on the seller's books at the full delivered price; that, pursuant to arrangement between seller and purchaser, the consignee physically paid the freight upon acceptance of the delivery, and that he was credited with this at the rate specified in the sales contract as a part payment of the purchase price, and remitted only the balance of the purchase price.
contention is that facts specifically found differentiate the case at bar and overcome the prima facie effect of the Commission's finding as to damages; that, because of these specific facts, it was not the Sloss-Sheffield Company, but the purchasers of the iron from it, who paid and bore these freight charges, and that it was these purchasers alone who were entitled to reparation.
"Price. Fourteen dollars and eighty-five cents ($14.85) per ton of 2,240 pounds delivered at Chicago, Illinois."
"This price is based on present tariff freight rate of $4.35 per ton. In case the tariff rate declines, the buyer is to have the benefit of such decline. In case the tariff freight rate advances, the buyer is to pay the advance."
"Freight, cash; balance, cash 30 days from average date of monthly deliveries (invoice date). . . . The seller will not be liable for any overcharge in freight when correct rate is expressed in bill of lading."
overcharges was carefully considered by the Commission in 1911 in Baker Mfg. Co. v. Chicago & Northwestern Ry. Co., 21 I.C.C. 605. It was then held that the consignor must sue if goods were sold f.o.b. destination. This case has been consistently followed by the Commission since, [Footnote 9] and it was cited in Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 245 U. S. 534. In the case at bar, both the consignor and the consignees claimed reparation, and the Commission's decision denying relief to the consignees seems to have been acquiesced in before that tribunal by all parties.
The Louisville & Nashville argues now that a sale at the delivered price of $14,85 is, by reason of this provision, the legal equivalent of a sale at $10.50 plus freight; that, under a contract of sale at a fixed price plus freight, the purchaser would be entitled "in case the tariff rate declines" to the benefit of "the decline;" that a decision that a published rate exacted was excessive is the legal equivalent of a decline in rates; that, under the provision quoted, the purchaser would be entitled, as against the seller, to any damages payable by the carrier for having established and collected the higher tariff rate thereafter found to be unlawful because excessive, and that, since the refund to be made by the carrier would ultimately inure to the purchaser's benefit, no damage was suffered by the seller by reason of the excessive freight charge.
enters a competitive market with a standard article, he must meet offerings from other sources. On goods sold f.o.b. destination, the published freight charge from the point of origin becomes, in essence, a part of the seller's cost of production. An excessive freight charge for delivery of the finished article affects him as directly as does a like charge upon his raw materials. Moreover, the burden of the published freight rate rested upon the consignor under the bill of lading, Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U. S. 59, 265 U. S. 67, as well as under the contract of sale. The purchaser who paid the freight did so solely as agent for the seller. The carrier did not know of the provision in the sales contracts. With the rights or equities as between seller and purchaser it had and has no concern, nor need we concern ourselves with them.
violation of the Elkins Act, 32 Stat. 847; 34 Stat. 584; that repayment by the carrier could therefore not have been made legally until after the final award, Pennsylvania R. Co. v. International Coal Mining Co., 230 U. S. 184, 230 U. S. 197; that, for this reason, there could be no culpable delay in failing to repay the excess earlier, and that consequently there was lacking the only legal basis for allowing interest.
the general rules governing the allowance of interest. The wrong for which the statute renders the carrier liable is the exacting of payment pursuant to an unlawful rate, not the withholding of the excess unlawfully exacted. The mere fact that the validity of the claim is disputed and that the amount recoverable is uncertain obviously does not bar the recovery of interest. The Commission properly determined not only whether interest should be included, but also the date from which it shall be included. Compare Arkadelphia Co. v. St. Louis, S.W. Ry. Co., 249 U. S. 134, 249 U. S. 147; Eddy v. Lafayette, 163 U. S. 456, 163 U. S. 467; The Scotland, 118 U. S. 507, 118 U. S. 519. On the findings made, we cannot say that the conclusion of the Commission that interest should be paid from the date of the illegal exaction was unwarranted.
The further contention is that, by allowing interest from September 12, 1921, the effective date of the Commission's order, on the whole amount then payable, compound interest to the extent of $1,363.93 was allowed. It is true that the judgment entered involves such payment, but it does not follow that this was error. Payment of some compound interest often results when a judgment of affirmance is entered by an appellate court. It results likewise whenever a trial court enters judgment in an action upon a judgment or upon an award. An order of reparation may be likened to an award in this respect.
Reparation was awarded also to other furnace companies similarly situated. They joined as plaintiffs in this suit pursuant to § 16 of the Act, but, by reason of stipulations between the parties, these claims do not require consideration here. The stipulations cover also like claims against other carriers.
The proceedings had were these. After the Commission ordered that, for the future, the rates complained of be reduced because unreasonable, it found that, throughout the period beginning two years prior to the filing of the complaint, the existing rates had also been unreasonable and excessive to the extent of 35 cents a ton, Sloss-Sheffield Steel & Iron Co. v. Louisville & Nashville R. Co., 52 I.C.C. 576; held that the Sloss-Sheffield Company was entitled to reparation on account of shipments made during that period; directed that the parties prepare statements showing the details of shipments in accordance with Rule V of its Rules of Practice; ordered, upon the filing of the Sixth Supplemental Report, Sloss-Sheffield Steel & Iron Co. v. Louisville & Nashville R. Co., 60 I.C.C. 595, the payment therein specified, and ultimately substituted the order of July 12, 1921, for that of March 8, 62 I.C.C. 646.
See Mountain Ice Co. v. Delaware, L. & W. R. Co., 21 I.C.C. 45; Michigan Hardwood Mfrs.' Assn. v. Transcontinental Freight Bureau, 27 I.C.C. 32, 34, 36; Marian Coal Co. v. Delaware, L. & W. R. Co., 27 I.C.C. 441, 442; Commercial Club of Omaha v. Anderson & S. R. Ry. Co., 41 I.C.C. 480, 482; Buffalo Union Furnace Co. v. Lake Shore & M. S. Ry. Co., 44 I.C.C. 267, 269; National Petroleum Assn. v. Missouri, K. & T. Ry. Co., 58 I.C.C. 415, 418; Coakley v. Director General, 59 I.C.C. 141, 144; National Preservers, etc., Assn. v. Southern Ry. Co., 74 I.C.C. 179, 183.
The original order of June 1, 1914, which reduced rates from the future, did not grant any reparation. The Commission did not then decide whether the rates had been unreasonable at any time prior to the entry of the order, and the report stated merely: "Reparation is prayed for, but under the circumstances of this case we do not believe that it may fairly be awarded." The Sloss-Sheffield Company petitioned for a rehearing in respect to reparation for the period prior to the filing of the original complaint, but it did not do so until July 22, 1915. The application so made was not acted upon until December 9, 1918. The Commission then decided that the Sloss-Sheffield Company was entitled to a finding as to the reasonableness of the rates during the two years immediately preceding the filing of the original complaint, and authorized the parties to introduce additional evidence on this issue. Sloss-Sheffields Steel & Iron Co. v. Louisville & Nashville R. Co., 51 I.C.C. 635. On April 7, 1919, the Commission decided that the rates had been unreasonable during the 2-year period; that reparation should be made, 52 I.C.C. 576, but that, upon the then record, it was unable to fix the amount.
Buffalo Union Furnace Co. v. Lake Shore & M. S. Ry. Co., 44 I.C.C. 267, 269; Plymouth Coal Co. v. Pennsylvania R. Co., 56 I.C.C. 699, 706-707; G. B. Markle Co. v. Lehigh Valley R. Co., 57 I.C.C. 375, 376; National Petroleum Assn. v. Missouri, K. & T. Ry. Co., 58 I.C.C. 415, 417, 418. See also Freight Bureau v. New York, N.H. & H.R. Co., 63 I.C.C. 327, 334; Indian Packing Corp. v. Director General, 64 I.C.C. 205, 210; American Fork & Hoe Co. v. St. Louis & S. F. R. Co., 69 I.C.C. 173; Globe Elevator Co. v. Director General, 74 I.C.C. 591; Bradford Rig & Reel Co. v. Director General, 80 I.C.C. 335, 338; Lissberger & Co. v. Pennsylvania R. Co., 81 I.C.C. 645, 648; Boren-Stewart Co. v. Baltimore & O. R. Co., 83 I.C.C. 215, 216, 217; Beaumont Chamber of Commerce v. Director General, 85 I.C.C. 139, 145; Utah Gilsonite Co. v. Atchison, T. & S.F. Ry. Co., 85 I.C.C. 557, 570; Cohen v. Atchison, T. & S.F. Ry. Co., 88 I.C.C. 143, 146.
Compare Lehigh Valley R. Co. v. American Hay Co., 219 F. 539; Lehigh Valley R. Co. v. Markle Co., 279 F. 261.
For the characteristics of through routes, of joint rates, of proportional rates, of combinations of locals, and of divisions of joint rates, see Kansas City Southern Ry. Co. v. C. H. Albers Commission Co., 223 U. S. 573, 223 U. S. 586-588; St. Louis Southwestern Ry. Co. v. United States, 245 U. S. 136; Central R. Co. v. United States, 257 U. S. 247, 257 U. S. 255; Baltimore & Ohio Southwestern R. Co. v. Settle, 260 U. S. 166; New England Divisions Case, 261 U. S. 184; United States v. Illinois Central R. Co., 263 U. S. 515; United States v. Abilene & Southern Ry. Co., 265 U. S. 274; United States v. American Ry. Express Co., 265 U. S. 425.
Independent Refiners' Assn. v. Western N.Y. & P. R. Co., 6 I.C.C. 378, 383-385; Morti v. Chicago, M. & St. P. Ry. Co., 13 I.C.C. 513, 515; Nicola, Stone & Myers Co. v. Louisville & Nashville R. Co., 14 I.C.C.199, 209; Black Horse Tobacco Co. v. Illinois Central R. Co., 17 I.C.C. 588, 590, 593; Sondheimer Co. v. Illinois Central R. Co., 20 I.C.C. 606, 610; Webster Grocer Co. v. Chicago & Northwestern Ry. Co., 21 I.C.C. 20; International Agricultural Corp. v. Louisville & Nashville R. Co., 29 I.C.C. 391; Best Co. v. Great Northern Ry. Co., 33 I.C.C. 3; Orgill Bros. Co. v. Nashville, Chattanooga & St. Louis Ry. Co., 39 I.C.C. 513, 514; Heinz v. Pere Marquette R. Co., 39 I.C.C. 622, 624; Riverside Mills v. A. & S. Steamboat Co., 40 I.C.C. 501, 502; Squire & Co. v. A. S. R. Co., 44 I.C.C. 509; Swift & Co. v. Missouri P. Ry. Co., 49 I.C.C. 336, 337; International Nickel Co. v. Director General, 66 I.C.C. 627, 628; United States Graphite Co. v. Director General, 88 I.C.C. 157, 160. This course of action was not affected by the decision in Western New York & Pennsylvania R. Co. v. Penn Refining Co., 137 F. 343, 357, 358, aff'd in 208 U. S. 208 U.S. 208. Compare Texas & Pacific Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 162 U. S. 205.
Such had been the uniform decision of the Commission. Hayden & Westcott Lumber Co. v. Gulf & Ship Island R. Co., 14 I.C.C. 537, 538; Mountain Ice Co. v. Delaware, Lackawanna & Western R. Co., 21 I.C.C. 45, 51; Lamb, McGregor & Co. v. Chicago & Northwestern R. Co., 22 I.C.C. 346; Central Commercial Co. v. Atchison, Topeka & Santa Fe Ry. Co., 26 I.C.C. 373, 376; Michigan Hardwood Mfrs.' Assn. v. Freight Bureau, 27 I.C.C. 32, 38, 40; Ballou & Wright v. New York, New Haven & Hartford R. Co., 34 I.C.C. 120; Bascom-French Co. v. Atchison, Topeka & Santa Fe Ry. Co., 34 I.C.C. 388, 389; Louisiana Central Lumber Co. v. Chicago, Burlington & Quincy R. Co., 35 I.C.C. 38, 39; Traffic Bureau, Sioux City Commercial Club v. A. & S. R. Co., 37 I.C.C. 353; Advance Bedding Co. v. Atchison, Topeka & Santa Fe Ry. Co., 38 I.C.C. 31, 32; Charles Boldt Co. v. Baltimore & Ohio R. Co., 42 I.C.C. 175, 176; Federal Oil & Supply Co. v. Director General, 60 I.C.C. 185, 187; Iola Cement Mills Traffic Assn. v. Director General, 66 I.C.C. 495, 500; Central Wisconsin Supply Co. v. Director General, 68 I.C.C. 409, 411; Wyoming Sugar Co. v. Director General, 77 I.C.C. 470, 471, 472; 88 I.C.C. 213, 216.
Commercial Club of Omaha v. Anderson & S. R. Ry. Co., 27 I.C.C. 302, 322; Rapier Sugar Feed Co. v. Louisville & N. R. Co., 47 I.C.C. 222, 223; Hubinger Bros. Co. v. Director General, 58 I.C.C. 53, 57; Keokuk Electric Co. v. Director General, 68 I.C.C. 517, 520; Davenport Commercial Club v. Director General, 73 I.C.C. 251, 258; Roxana Petroleum Corp. v. Director General, 74 I.C.C. 605, 607. Compare Standard Oil Co. v. Director General, 89 I.C.C. 7, 9, 10; Dolese Bros. Co. v. Atchison, T. & S.F. Ry. Co., 89 I.C.C. 110, 122.
In International, etc., Corp. v. Louisville & Nashville R. Co., 29 I.C.C. 391, 395, it is stated: "The Commission has uniformly allowed interest on claims for reparation." See E. I. Du Pont, etc., Co. v. Director General, 55 I.C.C. 246, 247; National Petroleum Assn. v. Missouri, Kansas & Texas Ry. Co., 58 I.C.C. 415; Shreveport Creosoting Co. v. Louisiana & Pacific Ry. Co., 92 I.C.C. 519. The Commission has said that interest will not be allowed where the record does not show the date of the payment. Morris & Co. v. Director General, 74 I.C.C. 242, 244.
In Louisville & Nashville R. Co. v. Ohio Valley Tie Co., 242 U. S. 288, 242 U. S. 291, the damages recoverable under §§ 8, 9, and 16 of the Act were said to include loss due to "the keeping of the plaintiff out of its money." In Pennsylvania R. Co. v. Minds, 250 U. S. 368, 250 U. S. 370-371, the Court declared that "unless interest is to be allowed, there seems to be no means of making the claimants whole for the wrongs sustained by violations of the statute." Compare Arkadelphia Milling Co. v. St. Louis Southwestern Ry. Co., 249 U. S. 134, 249 U. S. 147.
When this matter was before the Interstate Commerce Commission, July, 1916, Commissioner McChord, member since 1910, wrote a well considered dissenting opinion pointing out that defendant in error had suffered no proximate damage, and therefore ought not to recover. Sloss-Sheffield Steel & Iron Co. v. Louisville & Nashville R. Co., 40 I.C.C. 738. I think he was right.
Apparently for some years, the Commission has generally accepted the view that the consignee who pays freight charges under a. f.o.b. destination contract of sale acts as agent for the consignor, and the latter may recover when these are found to be excessive. Of course, the decisions deserve attention, but if they support the reparation order here questioned (where the consignee had clear right to demand reasonable rates), they should be disapproved, not followed. Reiteration did not cure the fundamental error. The facts are not in dispute; the function of this Court is to declare the law. Nothing heretofore said by us precludes the defense of no damage.
"This price is based on present tariff freight rate of $4.35 per ton. In case the tariff rate declines, the buyer is to have the benefit of such decline. In case the tariff freight rate advances, the buyer is to pay the advance. Freight, cash; balance, cash 30 days from average date of monthly deliveries. . . . The seller will not be liable for any overcharge in freight when correct rate is expressed in bill of lading."
from the consignee at the end of 30 days $10.50 per ton, and the latter agreed to pay the carrier's lawful charges, whatever they might be. In no event could the consignor receive more than the $10.50; it sold for future delivery at a definite price, payable 30 days thereafter. As intended, the consignee accepted the goods, actually paid the charges, and was thus in relation with the carrier. It was peculiarly interested in the amount so paid, and certainly had the right to demand reasonable rates. The consignor had no immediate interest therein; whether they were more or less could not affect its receipts or profits under the contract.
The provision that "the seller will not be liable for any overcharge in freight when correct rate is expressed in bill of lading" indicates that the parties did not regard the consignee as mere agent of the seller when paying transportation charges. By disavowing its interest in an overcharge, the seller at least recognized the consignee's right to seek redress from the carrier.
Southern Pacific Co. v. Darnell-Taenzer Co., 245 U. S. 531, presents no conflict with Pennsylvania R. Co. v. International Coal Co. There, the shipper paid a published rate which the Commission afterwards found to be unreasonable. This Court held he could recover, as the proximate damage of the unlawful demand, the excess above the rate which the Commission had declared to be reasonable. The opinion went no further.
"The only question before us is that at which we have hinted: whether the fact that the plaintiffs were able to pass on the damage that they sustained in the first instance by paying the unreasonable charge, and to collect that amount from the purchasers, prevents their recovering the overpayment from the carriers. The answer is not difficult. The general tendency of the law, in regard to damages at least, is not to go beyond the first step. As it does not attribute remote consequences to a defendant, so it holds him liable if proximately the plaintiff has suffered a loss. The plaintiffs suffered losses to the amount of the verdict when they paid. Their claim accrued at once in the theory of the law, and it does not inquire into later events. . . . If it be said that the whole transaction is one from a business point of view, it is enough to reply that the unity in this case is not sufficient to entitle the purchaser to recover, any more than the ultimate consumer who in turn paid an increased price. He has no privity with the carrier. . . . The carrier ought not to be allowed to retain his illegal profit, and the only one who can take it from him is the one that alone was in relation with him, and from whom the carrier took the sum. . . . Behind the technical mode of statement is the consideration, well emphasized by the Interstate Commerce Commission, of the endlessness and futility of the effort to follow every transaction to its ultimate result. 13 I.C.C. 680. Probably in the end the public pays the damages in most cases of compensated torts."
It affirmatively appears that defendant in error suffered no appreciable damage. The consignee upon its own account, as agreed and obligated by law, paid freight charges upon receipt of the goods. These were too high; it was unlawfully required to pay too much and suffered proximate loss.
It is vain to speculate whether the seller might have obtained better prices if the freight rate had been lower. It might not have gotten the business at all. Certainly it suffered no more than any competitor who failed to sell because of the exorbitant rate but sustained no proximate loss, and therefore had no right to reparation. Every member of the public may be said to be damnified by excessive freight rates, but unless proximate damage exists, there can be no recovery from the carrier. Here, the consignee paid charges unlawfully demanded of it, and is actually out of pocket more than it should be. The consignor paid nothing, lost nothing; but, under the ruling below, it alone may seek reparation -- reparation for money unlawfully exacted of another.
I dissent from the opinion of the majority of the Court on the ground that the consignees who paid the freight to procure goods, the title to which was in them when shipped, were within the protection of the statute prohibiting unreasonable freight rates, and, upon payment of the illegally exacted freight from their own funds, they were the persons suffering proximate damage, and were therefore entitled to recover the excess freight within the meaning of the statute and the reasoning of the opinion in Southern Pacific Co. v. Darnell-Taenzer Co., 245 U. S. 531.

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