Source: https://supreme.justia.com/cases/federal/us/220/235/
Timestamp: 2019-04-20 12:19:44+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 220 › ICC v. Delaware, Lackawanna & Western R. Co.
The conclusions of the Interstate Commerce Commission on questions of fact are not reviewable by the courts. Balt. & Ohio R. Co. v. Pitcairn, 215 U. S. 481.
A carrier cannot make mere ownership of goods tendered for transportation the test of the duty to carry, nor may a carrier discriminate in fixing charges for carriage upon such ownership.
Under the Act to Regulate Commerce, a carrier cannot refuse to transport carload lots at carload rates because the goods do not actually belong to one shipper or are shipped by a forwarding agency for account of others.
The provisions of § 2 of the Act to Regulate Commerce were substantially taken from § 90, the equality clause of the English Railway Clauses Consolidated Act of 1845, and had been construed by the courts prior to the enactment of § 2 as forbidding a higher charge to forwarding agents than to others.
The right of the carrier to fix rates does not give it the right to discriminate as to those who can avail of them.
The conclusion by the Interstate Commerce Commission that the enforcement of a rule by a carrier creates a discrimination is one of fact and not open to review by the courts.
In the absence of statutory authority to exclude forwarding agents from availing of published rates, the courts cannot overrule a conclusion of the Interstate Commerce Commission that such exclusion would create a preference, and this although the business of forwarding agents be competitive with the carrier itself.
"A recent careful and authoritative examination of the several classifications shows that, in the Southern Classification, there are 3,503 less-than-carload and only 773 carload ratings, the carload ratings being 22.1 percent of the less-than-carload; in the Western Classification, there are 5,729 less-than-carload and only 1,690 carload ratings, the carload ratings being 29.8 percent of the less-than-carload."
In the same opinion it is also stated that in both the Western and Southern Classification territory, the small percentage accorded a carload rate was confined to goods embraced within lower grades of classification, taking therefor the lowest rates. In the Official Classification territory, however, a widely different allowance of carload ratings prevailed, since, in that territory, the carload rating was permitted on a very large number of articles. In that territory, as likewise remarked by Chairman Knapp, "there are 5,852 less-than-carload ratings and 4,235 carload ratings, the carload ratings being 72.4 percent of the less-than-carload" against, as we have said, 29.8 percent and 22.1 percent in the other territories. This large difference was besides in effect made much greater not only by the higher grades of traffic to which the carload rate was extended, but also because of the enlarged right to ship in one car articles embraced in various classes of traffic to which the carload rating was extended.
may be, receives the carload and distributes its contents to the parties for whom they are intended. The forwarding agent finds his compensation and profit in the difference between the carload and less-than-carload rates."
"The saving effected by securing application of the carload, rather than the less-than-carload, rates may be divided between the forwarding agent and his customer in any agreed proportion. To the extent that the customer secures the carriage of his property at a lower rate than the less-than-carload rate which would otherwise be applied, he saves money, and the division of the difference between the carload and the less-than-carload rates is a matter of private bargain between him and the agent."
"Few practices have become more firmly established in the transportation world than that of combining small quantities of freight of various owners and shipping at the relatively lower rates applicable to large consignments, and under this practice has developed an immense volume of traffic which otherwise could never have been brought into being. It is not an exaggeration to say that the enforcement of such a rule by the carriers of the United States would bring disaster upon thousands of the smaller industries, and more surely establish the dominance of the greater industrial and commercial institutions."
And the alertness with which those engaged in commerce utilized every means afforded of shipping at lower cost is shown in the following testament made by Mr.
"The individual shippers are not necessarily located at the same point, nor are the individual consignees. For instance, if a reduction in rates could be effected, a furniture dealer at Grand Rapids, Michigan, having a shipment for a point in Maine, and a furniture dealer in Rockford, Illinois, having a shipment for a point in Massachusetts, might forward their separate shipments at less-than-carload rates to Chicago; there, the two shipments would be consolidated and forwarded at carload rates to Boston, and thence shipped again at less-than-carload rates from Boston to their respective destinations."
"Rule 5-B. In order to entitle a shipment to the carload rate, the quantity of freight requisite under the rules to secure such carload rate must be delivered at one forwarding station, in one working day, by one consignor, consigned to one consignee and destination, except that, when freight is loaded in cars by consignor, it will be subject to the car service rules and charges of the forwarding railroad. (See Note.)"
"Note.Rule 5-B will apply only when the consignor or consignee is the actual owner of the property."
"Rule 15-E. Shipments of property combined into packages by forwarding agents claiming to act as consignors will only be accepted when the name of individual consignors and final consignees, as well as the character and contents of each package, are declared to the forwarding railroad agent, and such property will be waybilled as separate shipments, and freight charged accordingly. (See note.)"
"Note. The term 'forwarding agents,' referred to in this rule, shall be construed to mean agents of actual consignors of the property, or any party interested in the combination of I.C.L. shipments of articles from several consignors at point of origin."
substantially unchanged. The Buckeye Buggy Co. case, supra. See also statement in the dissenting opinion of Mr. Commissioner Knapp in the present case. 14 I.C.C. p. 442.
in support of and against the contention that the assailed rules were in conflict with the second section of the Act to Regulate Commerce.
The Commission, at the time the complaints were pending, had also before it the complaint of the California Commercial Association against Wells, Fargo & Company involving an analogous question. On June 22, 1908, the report, opinion, and order of the Commission in both cases were filed. 14 I.C.C. pp. 422, 437.
created preferences and engendered discriminations which the act forbade; (e) that this, among other reasons, was the case because the enforcement of the assailed restrictions would not only create preferences in favor of one set of persons against another, but would create discriminations between places, and would be revolutionary in its operation upon interstate traffic; (f) that, irrespective of the abstract right of a carrier to make the ownership of goods offered for shipment a basis for applying its published rates, owing to the practical impossibility of a carrier's being able to adequately enforce such a rule by determining who was the owner of the goods offered, such a rule as a matter of fact would, in and of itself, be an unlawful preference and discrimination forbidden by the act, and (g) that the same principle would control as to the attempt to establish a rule applicable alone to forwarding agents, because of the practical impossibility of distinguishing one class of agents from another. The reasons which led two members of the Commission to dissent were expounded in a careful opinion, stating views which were in substance the direct antithesis of those expressed by the Commission. For example, the dissenting opinion maintained first that to deprive a carrier of the power to exclude a forwarding agent from the benefit of the carload rate would bring about discrimination against places and preferences in favor of persons prohibited by the act; second, that, as the right to the carload rate was the offspring of the voluntary act of the carrier, the right to restrict the privilege thus accorded to particular classes or conditions necessarily obtained; and third that, in any event, a forwarding agent who was but a dealer in railroad transportation, and therefore in a measure a competitor in business of a railroad carrier, was not within the prohibitions of the second section of the Act to Regulate Commerce.
and before the date fixed for compliance commenced the present suit by filing their joint bill to enjoin the enforcement of the order and have it declared void. It suffices to say in substance that, as a basis for the right to relief, the bill challenged the propositions upon which the Commission had based its order, and affirmatively propounded the grounds which led two members of the Commission to dissent from the conclusions of that body. It also suffices to say that the answer of the Commission traversed the affirmative grounds for relief asserted in the bill and averred the correctness of the order by it made upon the grounds stated in the opinion and report of that body. The order of the Commission and its report and opinion in this particular case, as also its opinion in the California Commercial Association case, which, as we have said, was decided on the same day, were made part of the answer, and the opinion in the Buckeye Buggy Company case was also attached.
pro confesso was entered against the Export Shipping Company and its trustee in bankruptcy, the company having become bankrupt.
Adopting a suggestion made by the court in disposing of the motion for a preliminary injunction, it was stipulated between the solicitors for the various parties that the case should be treated as having been submitted for final hearing. Thereupon a final decree was entered by which the order of the Commission was set aside and declared to be void. This appeal was then taken.
considered by the court because they were foreclosed by the opinion of the Commission. Doubtless the mistake of the court below in this respect was occasioned by overlooking the scope of the Hepburn Act and because the decision below was made in June, 1909, before the announcement of the opinion in the Pitcairn case. The reasons above stated also serve to narrow the contentions pressed at bar, since such contentions likewise in their essence but reiterate the conflict of opinion which developed in the Commission, but which, for the reasons stated, are, for the purpose of our review, substantially reducible to the one legal question which we have stated. We shall therefore confine ourselves to a consideration of that question and to such brief notice of the other contentions urged as will make clear that they depend ultimately upon conclusions of fact not open in this Court for review.
The contention that a carrier, when goods are tendered to him for transportation, can make the mere ownership of the goods the test of the duty to carry, or, what is equivalent, may discriminate in fixing the charge for carriage, not upon any difference inhering in the goods or in the cost of the service rendered in transporting them, but upon the mere circumstance that the shipper is or is not the real owner of the goods, is so in conflict with the obvious and elementary duty resting upon a carrier and so destructive of the rights of shippers as to demonstrate the unsoundness of the proposition by its mere statement. We say this because it is impossible to conceive of any rational theory by which such a right could be justified consistently either with the duty of the carrier to transport or of the right of a shipper to demand transportation. This must be, since nothing in the duties of a common carrier by the remotest implication can be held to imply the power to sit in judgment on the title of the prospective shipper who has tendered goods for transportation.
"a greater or less compensation for any service rendered or to be rendered in the transportation of passengers or property . . . 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 circumstances and conditions,"
authority is to be implied for basing a charge for transportation upon ownership or nonownership of the goods tendered for carriage, upon the theory that such ownership or nonownership is a dissimilar circumstance and condition within the meaning of the section.
the service of the carrier began or after it was terminated. It was therefore settled in England that the clause forbade the charging of a higher rate for the carriage of goods for an intercepting or forwarding agent than for others. Great Western R. Co. v. Sutton, 1869, 4 H.L. 226; Evershed v. London & N.W. Ry. Co., 1878, 3 App.Cas. 1029, and Denaby Main Colliery Co. v. Manchester &c. Ry. Co., 1885, 11 App.Cas. 97. And it may not be doubted that the settled meaning which was affixed to the English Equality Clause at the time of the adoption of the Act to Regulate Commerce applies in construing the second section of that act; certainly to the extent that its interpretation is involved in the matter before us. Wight v. United States, 167 U. S. 512; Interstate Commerce Commission v. Alabama M. R. Co., 168 U. S. 144, 168 U. S. 166.
the right to discriminate as to those who shall be entitled to avail of them. Moreover, the contention is not open for review, because the legal question of the right of the carrier to consider ownership under the second section having been disposed of, the finding of the Commission that to permit the enforcement of the rule would give rise to preferences and engender discriminations prohibited by the Act to Regulate Commerce embodies a conclusion of fact beyond our competency to reexamine.
Second. Conceding, for the sake of the argument, the correctness of the construction which we have given to the second section, it is urged that nevertheless, as a forwarding agent is a "dealer in railroad transportation," and depends for his profit in carrying on his business upon the sum which can be made by him out of the difference between the carload and the less-than-carload rate, and may discriminate between the persons who employ him, therefore the Act to Regulate Commerce should be construed as empowering a carrier to exclude the forwarding agent as a means of preventing such discriminations. But, in the absence of any statutory authority to exclude the forwarding agent, and basing the right to exclude merely upon the assumption that the nature and character of his business would produce discrimination, and therefore justify the exclusion, the contention is not open for our consideration, because, like the previous one, it is foreclosed by the finding of fact of the Commission. Indeed, this is not merely the result of an implication from the finding of the Commission, since it was affirmatively found that to permit the carrier to exclude the forwarding agent would be to produce preference and discrimination. The contention, then, comes to this -- that carriers should be permitted to give preferences and make discriminations as a means of preventing those unlawful conditions from arising.
agent is in a sense competitive with that of a carrier, and may largely diminish the revenue derived by railroad companies from their less-than-carload rates, and hence cripple their ability to successfully conduct business, therefore the right to exclude the forwarding agent, even if there is no power to exclude the owner or the ordinary agent of owners, should be permitted. This, however, again, in a two-fold sense, is directly in conflict with the findings of fact made by the Commission -- first because it disregards the findings as to the operation of the business of a forwarding agent, and second because it overlooks the express finding of the Commission that it would be so difficult, if not impossible, for the carrier to determine in practice the nature and character of the title of a person tendering goods for shipment that the necessary result of a rule excluding a forwarding agent would be to embarrass shipments by owners or their special agents, and thus beget universal uncertainty and constant discrimination and preference against owners.
As it follows from the reasons just stated that the court below erred in annulling the order of the Commission and enjoining its enforcement, its decree to that effect is reversed, and the case is remanded, with directions to dismiss the bill.

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