Source: https://caselaw.findlaw.com/us-supreme-court/175/648.html
Timestamp: 2019-04-25 13:01:17+00:00

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[175 U.S. 648, 649] This controversy was commenced on December 29, 1892, when Henry W. Behlmer, a resident of Summerville, South Carolina, and a wholesale hay and grain dealer therein, began proceedings before the Interstate Commerce Commission, under the Act to Regulate Commerce, passed February 4, 1887, as amended, to restrain the continuance of acts asserted by him to be a violation of the statute referred to. The petition was filed by Behlmer on his own behalf, and that of other merchants, residents of Summerville, and the parties complained of were the Memphis & Charleston Railroad Company, the East Tennessee, Virginia, & Georgia Railroad Company, the Georgia Railroad & Banking Company (the owner of a railroad designated as the Georgia Railroad), the South Carolina Railway Company, and other companies and individuals, who were averred to be lessees or receivers of some of the above-named companies. All the lines of railroad mentioned were asserted to be members of a combination styled the Southern Railway & Steamship Association.
'(Second.) Charleston is a port on the Atlantic coast, accessible and easily reached from the ports of Baltimore, Philadelphia, New York, Boston, and other eastern ports from which hay is shipped by water. If the rail lines from Memphis to Charleston charged rates to Charleston as high as the rate to Summerville, although the latter rate is in itself reasonable, no hay would be brought from Memphis to Charleston, but Charleston would be supplied with hay from north Atlantic ports and the railroads would lose the hay business and Memphis would lose a hay market. [175 U.S. 648, 652] '(Third.) The rates on western produce to Charleston and other coast cities, such as Savannah, Port Rayal, and Brunswick, are made with a view to actual, existing water competition. Western produce, such as grain, hay, etc., distributed from Chicago, can reach Charleston through the ports of New York, Philadelphia, and Baltimore over continuous water routes via the lakes and canal or over combined rail and water routes.
'The all-rail lines seeking to do business between Chicago and Charleston and other coast cities are compelled to make their rates approximate those which are offered by the continuous water route or by the combined rail and water routes. The all-rail routes make their rates as much higher as the difference in the service will permit, and those rates are correspondingly adjusted from all western points, such as Evansville, Cairo, St. Louis, Memphis, etc. At present the all-rail rate from Chicago to Charleston on hay, for instance, is 33c. per 100 lbs.; from St. Louis, 28c.; from Louisville, Evansville, and Cairo, 23c.; and from Memphis, 19c.-the route through Memphis offering facilities for the transportation of hay, grain, and western products generally from the states of Missouri, Kansas, Nebraska, etc.
On the foregoing issues testimony was taken before the Commission, which entered an order requiring the defendants to desist on or before a data named from charging any greater sum in the aggregate for the transportation from Memphis to Summerville of hay, or other commodities carried by them, [175 U.S. 648, 653] under circumstances and conditions similar to those appearing in the case, than was being charged for such transportation for the longer distance to Charleston. This order, however, stated that it was made without prejudice to the right of the defendants to apply to the Commission for relief under the 4th section of the Act to Regulate Commerce. The order not having been obeyed, Behlmer, as authorized by 5 of the act of March 2, 1889 (25 Stat. at L. 855, chap. 382), amending 16 of the original act, filed his complaint in the circuit court of the United States for the fourth circuit, eastern district of South Carolina, against the defendants in the proceedings before the Commission and the purchasers, assignees, and successors of some of them, praying that the court might enforce compliance with the order of the Commission. By stipulation the testimony taken before the Commission was used at the hearing in the circuit court, and by consent certain documentary evidence (consisting of railway agreements, tariffs, reports, etc.) was filed as additional evidence on behalf of the defendants.
'There is no showing in this proceeding of competition by lines not subject to the Act to Regulate Commerce for the carriage of hay from Memphis to Charleston, and the fact that there may be competition for such traffic by lines which are subject to the act, or that hay may be carried to Charleston by various rail and water, or part rail and part water, routes [175 U.S. 648, 656] from points other than Memphis, does not justify the defendant carriers in departing from the general rule of the 4th section upon their own motion. Such considerations may constitute reasons for applying to the Commission for relief under the proviso clause of that section, but for reasons stated in our decisions of the cases above cited they do not justify carriers in departing from the rule of the 4th section without such a relieving order. Water competition, to justify lower long-haul rates, must exist between the point of shipment and the longer-distance point of destination. James & M. Buggy Co. v. Cincinnati, N. O. %& t. p. r. c/o. 3 Inters. Com. Rep. 682, 4 I. C. C. Rep. 744. One transportation line cannot be said to meet the competition of another transportation line for the carrying trade of any particular locality, unless the latter line could and would perform the service alone if the former did not undertake it. Chattanooga Bd. of Trade v. East Tennessee, V. & G. R. Co. 4 Inters. Com. Rep. 213, 5 I. C. C. Rep. 546. The competition of markets, or the competition of carrying lines, subject to regulation under the Act to Regulate Commerce, does not justify carriers in making greater short-haul or lower long-haul charges over the same line without an order issued by the Commission on application therefor and after investigation. Trammell v. Clyde S. S. Co. 4 Inters. Com. Rep. 120, 5 I. C. C. Rep. 324; and Gerke Brewing Co. v. Louisville & N. R. Co. 4 Inters. Com. Rep. 267, 5 I. C. C. Rep. 596.' 4 Inters. Com. Rep. 523.
The first two of the foregoing questions in effect solely involve propositions of law, for, although the essential predicate upon which they rest takes into consideration certain facts, they were not disputed below, and their existence was [175 U.S. 648, 662] not denied in the argument at bar. They may be assumed, therefore, as being unchallenged for the purpose of the legal questions presented. We come, then, to the immediate consideration of the propositions above referred to in the order stated.
1st. The conceded facts from which it was deduced as a matter of law that the carriers were operating 'under a common control, management, or arrangement for a continuous carriage or shipment' were as follows: The several carriers transported hay from Memphis under through bills of lading, by continuous carriage, to Summerville and Charleston. The several roads shared in an agreed rate on traffic to Charleston and in a precisely equal in amount rate on traffic to Summerville. On shipments to Summerville, however, there was added to the Charleston rate the amount of the local rate from Charleston to Summerville, the benefit of which additional exaction was solely received by the local road on which Summerville was situated. The contention that under this state of facts the carriers did not constitute a continuous line, bringing them within the control of the Act to Regulate Commerce, is no longer open to controversy in this court. In Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U.S. 184 , 40 L. ed. 935, 5 Inters. Com. Rep. 391, 16 Sup. Ct. Rep. 700, decided since the case in hand was before the Commission and the circuit court, it was held under a state of fact substantially similar to that here found that the carriers were thereby subject to the Act to Regulate Commerce.
2d. It is, as we have said, uncontroverted that all the competition relied on by the carriers to establish that there was a dissimilarity of circumstance and condition arose solely from two sources: either that originating at Memphis, the initial point of the traffic, from the presence there of carriers who were subject to the provisions of the commerce act, or competition based on the fact that Charleston was connected with or accessible to lines of rail and water communication which brought it in relation with many other places and markets other than Memphis, thereby creating competition between Memphis and Charleston, the claim being that Memphis would have been deprived of the benefits of the Charleston traffic, and Charles- [175 U.S. 648, 663] ton would be also cut off from the Memphis supply, if the rates from Memphis to Charleston had not been made lower to meet the competition at Charleston.
'The Commission justified its action wholly upon the construction put by it on the Act to Regulate Commerce, as forbidding the Commission to consider the 'circumstances and conditions' attendant upon the foreign traffic as such 'circu- [175 U.S. 648, 665] mstances and conditions' as they are directed in the act to consider. The Commission thought it was constrained by the act to regard foreign and domestic traffic as like kinds of traffic under substantially similar circumstances and conditions, and that the action of the defendant company in procuring through traffic that would, except for the through rates, not reach the port of New Orleans, and in taking its pro rata share of such rates, was an act of 'unjust discrimination,' within the meaning of the act.
It is then settled that the construction given in this cause by the Interstate Commerce Commission and the circuit court of appeals to the 4th section of the Act to Regulate ulate Commerce was erroneous, and hence that both the Interstate Commerce Commission and the circuit court of appeals mistakenly considered, as a matter of law, that competition, however material, arising from carriers who were subject to the Act to Regulate Commerce could not be taken into consideration, and likewise that all competition, however substantial, not originating at the initial point of the traffic, was equally, as a matter of law, excluded from view. It follows that the decree of the circuit court must be reversed unless it be the duty of this court to examine the evidence, which was not passed on by the Commission or the circuit court of appeals, for the purpose of ascertaining whether the competition relied on was so substantial and so controlling on traffic and rates as to cause it to produce a dissimilarity of circumstance and condition within the meaning of the 4th section of the act. A consideration of this subject leads to a solution of the third question which we have previously stated was involved in the cause. In passing, however, it is well to say that both the opinions of this court, just referred to, were announced subsequently to the decision in this case by the Interstate Commerce Commission and of the circuit court, and moreover that the opinion of this court in the last cause (the Midland Case) was announced after the decision of the circuit court of appeals of the case now here. Indeed, since the decision last referred to, it is not denied that the Interstate Commerce Commission have recognized that the interpretation previously given by it to the 4th section had been decided to be unsound, hence in the practical application of the law, since [175 U.S. 648, 670] the decision by this court in the Midland Case, the construction of the statute which was announced by the Commission in previous cases as well as in this has no longer been applied. 11 Ann. Rep. I. C. C. (1897), pp. 38, 43, 91; Savannah Bureau of Freight & Transportation v. Charleston & S. R. Co. 7 Inters. Com. Rep. 479, 480.
Indeed, in the cases by which the controversy here before [175 U.S. 648, 672] us is controlled, attention was pointedly called to the fact that in considering the power of the carrier, of his own motion, to charge a lesser sum for the longer haul, not only was the interest of the carrier to be taken into account, but also the interest of the public,-especially at the place from which the traffic moved and the place to which it was to be delivered, and to these principles we shall before concluding again advert.
This failure to consider the evidence points to the distinction between this cause and that of Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U.S. 184 , 40 L. ed. 935, 5 Inters. Com. Rep. 391, 16 Sup. Ct. Rep. 700, upon which reliance is placed. In that case the court, from an examination of the whole record, considered that the result of the action of the Commission and the circuit court of appeals had been substantially to decide, not that the character of competition relied on could not be taken [175 U.S. 648, 673] into view, but that, fully weighing and considering it, sufficient proof did not result to show that it was so substantial and so material as to justify deciding that there were dissimilar circumstances and conditions. The judgment below was, because of this view as to such question, affirmed. The court said (p. 194, L. ed. p. 938, Inters. Com. Rep. p. 401, Sup. Ct. Rep. p. 704): 'But the question was one of fact peculiarly within the province of the Commission whose conclusions have been accepted and approved by the circuit court of appeals, and we find nothing in the record to make it our duty to draw a different conclusion.' If it be again, arguendo, conceded the state of the record in that case was such that an analysis of the action taken below might have well led the court to a different opinion; in other words, might have justified it in holding that both the Commission and the circuit court of appeals had rested their conclusions, not on the want of proof as to the claimed competition, but solely on the absence of legal power to assert competition of the character relied on, such concession could have no influence upon the decision of this cause. This follows because the only deduction possible from the proposition would be that the particular case had been decided on a question of fact, when it should have been controlled by a question of law, which would afford no reason for the failure to apply sound principles of law to the facts of this record. It involves a complete non sequitur to assert that because legal principles may not have been applied to a given case, on the assumption that the facts did not render their application necessary, therefore, in future cases, where it was found that the facts brought the controversy within the principles, they should not be applied.
It follows that whilst the carrier may take into consideration the existence of competition as the producing cause of dissimilar circumstances and conditions, his right to do so is governed by the following principles: First. The absolute command of the statute that all rates shall be just and reasonable, and that no undue discrimination be brought about, though, in the nature of things, this latter consideration may [175 U.S. 648, 675] in many cases be involved in the determination of whether competition was such as created a substantial dissimilarity of condition. Second. That the competition relied upon be, not artificial or merely conjectural, but material and substantial, thereby operating on the question of traffic and rate making, the right in every event to be only enjoyed with a due regard to the interest of the public, after giving full weight to the benefits to be conferred on the place from whence the traffic moved as well as those to be derived by the locality to which it is to be delivered. If, then, we were to undertake the duty of weighing the evidence in this record, we would be called upon, as a matter of original action, to investigate all these serious considerations which were shut out from view by the Commission, and were not weighed by the circuit court of appeals, because both the Commission and the court erroneously construed the statute. But the law attributes prima facie effect to the findings of fact made by the Commission, and that body, from the nature of its organization and the duties imposed upon it by the statute, is peculiarly competent to pass upon questions of fact of the character here arising. In Texas & P. R. Co. v. Interstate Commerce Commission, 162 U.S. 197 , 40 L. ed. 940, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666, the court found the fact to be that the Commission had failed to consider and give weight to the proof in the record, affecting the question before it, on a mistaken view taken by it of the law, and that on review of the action of the Commission the circuit court of appeals, whilst considering that the legal conclusion of the Commission was wrong, nevertheless proceeded as a matter of original investigation to weigh the testimony and determine the facts flowing from it. The court said (p. 238, L. ed. p. 954, Inters. Com. Rep. p. 441, Sup. Ct. Rep. p. 682).

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