Source: https://supreme.justia.com/cases/federal/us/235/314/
Timestamp: 2019-04-20 10:16:53+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 235 › United States v. Louisville & Nashville R. Co.
The very purpose for which the Interstate Commerce Commission was created was to bring into existence a body which, from its peculiar character, would be most fitted to primarily decide whether, from facts, disputed or undisputed, in a given case preference or discrimination existed.
Where the evidence is undisputed and shows a discrimination between localities, a finding by the Interstate Commerce Commission that such discrimination is undue is a finding of fact which is not subject to review by the Commerce Court.
Quaere, and not now decided, whether the method adopted by the Interstate Commerce Commission of considering, and basing its opinion upon, matter gathered in its general investigations regarding the subject matter in controversy, but not produced upon the particular proceeding against particular carriers in which an order is made requiring them to desist from practices complained of in that proceeding, amounts to a denial of a hearing and results in want of due process of law.
After the amendment to § 4 of the Interstate Commerce Act by the Act of June 18, 1910, the authority of the carriers to primarily determine for themselves the propriety of charging a higher rate for a shorter than for a longer distance ceased to exist and was taken from them and primarily vested in the Commission.
In this case, the rates and allowances involved and the grain reshipping privilege at Nashville are governed by § 4 of the act. Intermountain Rate Cases, 234 U. S. 476.
The application of the principle of public policy embodied in § 4 of the Interstate Commerce Act is to be determined by the substance of things, and not by names; otherwise, the statute would be wholly inefficacious.
The facts, which involve the jurisdiction of the Commerce Court to review orders of the Interstate Commerce Commission, are stated in the opinion.
"On grain, grain products, and hay shipped to Nashville by rail from or through Ohio or Mississippi River crossing points such as Louisville, Evansville, Hickman, Paducah, Cairo, etc., the L. & N. and N.C. & St.L. charge the full local freight rate from said crossing points to Nashville. These shipments may then be stopped at Nashville for a period not exceeding six months, during which time they may be rebilled or reshipped to destination in southeastern and Carolina territory, and on such reshipments so rebilled the freight charges into and out of Nashville are readjusted so that the total transportation charge on any one shipment from any given Ohio or Mississippi River crossing via Nashville to any given destination in said territory shall exactly correspond with the transportation charge legally assessable on that shipment had it been billed and moved through from its point of origin at the said Ohio or Mississippi River crossing points to its final destination without having been stopped in transit at Nashville. "
We adopt the history of the litigation insofar as it relates to the privilege in question contained in the brief on the part of the United States.
"1. In 1908, certain Georgia grain dealers complained to the Interstate Commerce Commission of various traffic practices at Nashville; after taking voluminous proof, the Commission, on June 24, 1909, held the reshipping privilege illegal and ordered it stopped (16 I.C.C. 590, 595)."
"2. The Commission, on its own motion, postponed the effective date of the order so that it might institute a countrywide investigation of the practices involved, and on May 3, 1910, the Commission, after a hearing at which about 150 shippers and carriers were represented by counsel, reported that its former order abolishing the reshipping privilege in toto was too strict, and remitted the matter to the carriers and shippers to frame regulations that would prevent any rebating under the privilege (18 I.C.C. 280), and, pursuant thereto, new and satisfactory regulations were adopted to safeguard the reshipping privilege (21 I.C.C. 183, 188)."
The previous order of June 24, 1909, which had abolished the reshipping privilege at Nashville, was vacated, and the Commission thereafter again considered the controversy between the grain dealers of Georgia and the Nashville dealers and carriers.
"3. . . . On June 9, 1911, the Commission delivered a supplemental report, holding that the action of the carriers in granting the reshipping privilege to Nashville, while refusing it to Atlanta, etc., was an undue and unreasonable preference to Nashville, in violation of § 3 of the Interstate Commerce Act (21 I.C.C. 186). The Commission entered an order in accordance therewith."
"4. The Nashville Board of Trade, the L. & N. R. Co., and the N.C. & St.L. R. Co. thereupon sued in the Commerce Court to enjoin the enforcement of the order; the two suits were consolidated."
before the Commission was introduced, and some additional testimony was taken.
The Commerce Court, finding that there was no conflicting or disputed evidence concerning the origin and character of the reshipping privilege, concluded that whether such privilege was an undue preference was not a matter of fact, but a question of law, upon which it was its duty to reach an independent conclusion. The court therefore, among other considerations, because the privilege was of longstanding and was justified by water competition at Nashville, declared it to be not unlawful and not preferential. A peremptory injunction was allowed, restraining the enforcement of the order of the Commission. And the correctness of this action is the question here for decision.
inevitable conflict which exists between giving that purpose effect and upholding the view of the statute taken by the court below. It cannot be otherwise, since, if the view of the statute upheld below be sustained, the Commission would become but a mere instrument for the purpose of taking testimony to be submitted to the courts for their ultimate action.
of the total transportation charge is made when the reshipment to Atlanta occurs, so that the shipper in the end pays upon the shipment the joint rate instead of the combination of local rates into and out of Nashville."
When the result of this allowance is understood, there seems to be no room for serious controversy that the right to continue the privilege is controlled by the fourth section of the act. The actual shipment from Nashville must either be considered as a movement from Nashville, irrespective of the rate which would have been applicable on a through shipment from an Ohio River point to the same point of destination, or it must be treated by a fiction as one moving from an Ohio River point to the same destination. If the first, then clearly the allowance made of a rate from Nashville to the point of destination was a lesser charge for the longer distance hauled as to such grain than was charged for the shorter distance as to any other grain moving from Nashville to intermediate points, or from such points to places further on, and came clearly within the grasp of the fourth section. If, on the other hand, it be imagined to be a shipment from the Ohio River crossing to the point of destination, upon the theory that the traffic, before stoppage at Nashville, originated at the Ohio River point, then exactly the same conditions would be reproduced, since the charge as the result of the reduction made was the equivalent of a lesser rate for the longer than for the shorter distance, which, as we have stated, was the prevailing system from Ohio River crossings to points of destination in the southeast.
should not be applied so that one section destroyed the others, and consequently that a lesser charge for a longer than for a shorter distance permitted by the fourth section could not, for such reason, be held to be either a preference or discrimination under the second or third sections. Louisville & Nashville R. Co. v. Behlmer, 175 U. S. 648; East Tenn. &c. Ry. v. Interstate Com. Com., 181 U. S. 1. But the rule which requires that a practice which is permitted by one section should not be prohibited upon the theory that it is forbidden by another gives no support to the unwarranted assumption that that may be permitted which is devoid of all sanction, and indeed is in direct conflict with all three of the sections -- a result clearly arising in the case before us in consequence of the amendment of § 4. Indeed, when the evil which it may be assumed conduced to the adoption of the amendment of the fourth section and the remedy which that amendment was intended to make effective are taken into view (see Intermountain Rate cases, supra), it would seem that the case before us cogently demonstrates the applicability of the amendment to the situation. And it needs no argument to demonstrate that the application of the principle of public policy which the statute embodies is to be determined by the substance of things, and not by names, for if that were not the case, the provisions of the statute would be wholly inefficacious, as names would readily be devised to accomplish such a purpose.
It follows from what we have said that the court below was wrong in enjoining the order of the Commission, and, on the contrary, should have dismissed the complaint. The case will therefore be appropriately remanded to enable a decree to that effect to be entered, without prejudice, however, to the right of the carriers to apply to the Commission to be relieved from the operation of the provisions of the fourth section if they are so advised.
"That in said investigation, and in arriving at its decision therein, this respondent, as in duty bound under the law, weighed and considered all the facts and arguments presented by the petitioners herein, by other carriers, and all other parties to said proceeding; that, in forming its opinion and arriving at its conclusion, this respondent, exercising its administrative functions and powers, considered all pertinent facts and matters set forth in many reports and statistics on file with said respondent, together with other facts coming to the knowledge of this respondent in the performance of its duties and functions prescribed and set forth in the acts to regulate commerce and the amendments thereto pertaining to the privileges of rebilling and reshipping; that from said reports and tariffs it appears that said rebilling and reshipping privileges exist at many interior points where no water competition obtains; it is therefore not competent, nor it is relevant, for said petitioners to allege that any particular fact of facts before this respondent in said proceeding are uncontradicted or conclusive in favor of the petitioners' contention, nor can the petitioners by judicial proceeding ascertain each and all the facts, circumstances, and conditions in regard to said transportation that were necessarily and properly considered by, and which aided this respondent in arriving at, its conclusions that said practice of rebilling and reshipping said products from Nashville was unduly and unreasonably discriminatory."
"This respondent denies that there is, or can be, under the law, any complete record of all the evidence, facts, and circumstances before the Commission in determining that this, or any other, practice by carriers is unduly and unjustly discriminatory as between localities or persons, and respondent is advised, and so alleges, that the determination of said question as to whether said admitted discrimination is undue and contrary to the provisions of said Act to Regulate Commerce is one wholly and exclusively within the jurisdiction of this respondent."

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