Source: https://www.legalcrystal.com/case/94094/united-states-vs-abilene-southern-ry-co
Timestamp: 2018-05-22 06:42:40
Document Index: 674047672

Matched Legal Cases: ['§ 16', '§ 16', '§ 15', '§ 418', '§ 17', '§ 16', '§ 17']

United States Vs Abilene and Southern Ry Co - Citation 94094 - Court Judgment | LegalCrystal
United States Vs. Abilene and Southern Ry. Co. - Court Judgment
LegalCrystal Citation legalcrystal.com/94094
Case Number 265 U.S. 274
Respondent Abilene and Southern Ry. Co.
united states v. abilene & southern ry. co. - 265 u.s. 274 (1924) u.s. supreme court united states v. abilene & southern ry. co., 265 u.s. 274 (1924) united states v. abilene & southern railway company no. 456 argued march 4, 1924 decided may 26, 1924 265 u.s. 274 appeal from the district court of the united states for the district of kansas syllabus 1. an order made by a division of the interstate commerce commission being operative, unless stayed by the division or the full commission pending a rehearing by the latter (amended act to regulate commerce, §§ 16a, 17 [4]), a suit to enjoin enforcement of such an order is within the jurisdiction of the district court, and whether relief should be denied until the.....
United States v. Abilene & Southern Ry. Co. - 265 U.S. 274 (1924)
U.S. Supreme Court United States v. Abilene & Southern Ry. Co., 265 U.S. 274 (1924)
1. An order made by a division of the Interstate Commerce Commission being operative, unless stayed by the division or the full Commission pending a rehearing by the latter (amended Act to Regulate Commerce, §§ 16a, 17 [4]), a suit to enjoin enforcement of such an order is within the jurisdiction of the district court, and whether relief should be denied until the plaintiff, through application for rehearing, shall have exhausted the administrative remedy is a matter of judicial discretion. P. 265 U. S. 280 .
the other carriers participating in the joint rates, whose shares were left unchanged, were not necessary parties. P. 265 U. S. 282 .
3. In determining just divisions, the Commission must consider relative cost of service; whether a particular carrier is an originating, intermediate or delivering line; the efficiency of operation of each carrier; the revenue it requires for operation expenses, taxes and a fair return; public importance of the transportation services involved, and any other facts which would ordinarily, without regard to mile haul, entitle one carrier to a greater or less proportion than another. P. 265 U. S. 284 .
5. The mere fact that increased divisions allowed a carrier were measured by percentages of the revenues of the several connecting carriers from the joint traffic does not establish that the division is unjust or guided solely by relative financial ability. P. 265 U. S. 285 .
6. An order increasing the divisions of a carrier is not arbitrary merely because the corresponding decreases are confined to the carriers immediately connecting with it, these having the right to apply for further readjustment as between themselves and remoter carriers. P. 265 U. S. 286 .
7. An order of the Commission is not invalidated by the mere admission as evidence of matter which in judicial proceedings would be incompetent. P. 265 U. S. 288 .
10. Rule XIII of the Commission does not purport to relieve the Commission from introducing, by specific reference, such parts of the reports of carriers, properly on file, as it wishes to treat a evidence. P. 265 U. S. 289 .
filed with the Commission by plaintiff carrier pursuant to law, held tantamount to no notice whatever of evidence used against them. P. 265 U. S. 289 .
13. The divisions of joint rates may be determined on the basis of individual rates and divisions, shown by tariffs and division sheets and found sufficiently typical in character and ample in quantity to justify findings as to each division of each rate of every carrier involved ( New England Divisions Case, 261 U. S. 184 ), but it cannot be inferred, because the joint rates and divisions between particular carriers work injustice in the aggregate, that each particular division of each rate is unjust and in like proportion. P. 265 U. S. 290 .
Court for Kansas which perpetually enjoined the enforcement of an order made by the Commission, on August 9, 1922, under § 15(6) of the Interstate Commerce Act as amended by Transportation Act 1920, c. 91, § 418, 41 Stat. 456, 486. The order relates to the divisions of interstate joint rates on traffic interchanged, within the United States, by the Kansas City, Mexico & Orient system with 13 carriers whose lines make direct connection with it. The order provides that, on all such interchanged traffic, the existing divisions of these carriers shall be reduced by a fixed percent, and that the Orient shall receive the amount so taken from its connections. [ Footnote 1 ] The order also directed the Orient and the connecting carriers to make, at stated intervals, reports of the financial results of the divisions ordered, permitted any carrier to except itself from the order, in whole or in part, by proper showing, and retained jurisdiction in the Commission "to adjust on the basis of such reports the divisions herein prescribed or stated, if such adjustment shall to us seem proper." Kansas City, Mexico & Orient Divisions, 73 I.C.C. 319, 329.
Commission in April, 1922, pursuant to an application of the receiver of the Kansas City, Mexico & Orient Railroad Co. and an affiliated Texas corporation. It appeared (and was not denied) that the public interest demanded continued operation of the railroad; that the revenues were insufficient to pay operating expenses; that the operation was being efficiently conducted, and that, unless relief were afforded by increasing the Orient's division of joint rates and/or otherwise, operation would have to be suspended and the railroad abandoned. [ Footnote 2 ] The 13 carriers who brought this suit participated in the investigation undertaken by the Commission, and supplied certain statistical information requested of them. But they introduced no evidence before the Commission, and the case was submitted there without argument. None of the connecting carriers made application to be excepted from the order. Nor did any of them apply for a rehearing. Before the effective date of the order, this suit was begun. On application for a temporary injunction, it was heard by three judges, pursuant to the Act of October 22, 1913, c. 32, 38 Stat. 208, 220, and a temporary injunction was granted. Upon final hearing, motions of the defendants to dismiss the bill were denied, the injunction was made permanent, and a rehearing was refused. 288 F. 102.
First. The Commission moved, in the district court, to dismiss the bill on the ground that the suit was premature. The contention is that, under the rule of Prentis v. Atlantic Coast Line, 211 U. S. 210 , orderly procedure required that, before invoking judicial review, the
carriers should have exhausted the administrative remedy afforded by a petition for rehearing before the full Commission. The investigation and order were made not by the whole Commission, but by division 4. [ Footnote 3 ] The order of a division has "the same force and effect . . . as if made . . . by the Commission, subject to rehearing by the Commission." Interstate Commerce Act as amended, § 17(4). Any party may apply for such rehearing of any order or matter determined. § 16a. Meanwhile the order may be suspended either by the division or by the Commission. In this case, the order, by its terms, was not to become effective until 37 days after its entry. There was consequently ample time within which to apply for a rehearing and a stay before the plaintiffs could have been injured by the order.
Division 4 consists of four members. There are eleven members on the full Commission. Under these circumstances, what is here called a rehearing resembles an appeal to another administrative tribunal. An application for a rehearing before the Commission would have been clearly appropriate. [ Footnote 4 ] The objections to the validity of the order now urged are in part procedural. They include
questions of joinder of parties, of the admissibility of evidence, and of failure to introduce formal evidence. Most of the objections do not appear to have been raised before the division. If they had been, alleged errors might have been corrected by action of that body or by the full Commission. The order involved also a far-reaching question of administrative power and policy which, so far as appears, had never been passed upon by the full Commission, and was not discussed by these plaintiffs before the division. In view of these facts, the trial court would have been justified in denying equitable relief until an application had been made to the full Commission, and redress had been denied by it. But, in the absence of a stay, the order of a division is operative, and the filing of an application for a rehearing does not relieve the carrier from the duty of observing an order. [ Footnote 5 ] Despite the failure to apply for a rehearing, the court had jurisdiction to entertain this suit. Prendergast v. New York Telephone Co., 262 U. S. 43 , 262 U. S. 48 -49. Compare Chicago Rys. Co. v. Illinois Commerce Commission, 277 F. 970, 974. Whether it should have denied relief until all possible administrative remedies had been exhausted was a matter which called for the exercise of its judicial discretion. We cannot say that, in denying the motion to dismiss, the discretion was abused.
More than 170 carriers participated in the joint rates in question. Of these, only 39 carriers, whose roads lie wholly west of the Mississippi river, were made respondents before the Commission. The argument is that all who are parties to the through rates are necessarily interested in the divisions of those rates; that failure to join some is not rendered immaterial by the fact that the order made affects directly only those before the Commission, since it would be open to a carrier whose division is reduced, to seek contribution later by a proceeding to readjust the divisions as between it and other carriers who were not parties to the original case, and that an order under this section is invalid unless it disposes completely of the matter in controversy. This argument is answered by what was said in New England Divisions Case, 261 U. S. 184 , 261 U. S. 201 -202. The order, in terms, affects only the 13 carriers whose lines connect directly with the Orient system. Only their divisions were reduced. The shares of all others who participated in the joint rates were left unchanged. All participating carriers might properly have been made respondents. But that was not essential, for it was not necessary that all controversies which may conceivably arise should be settled in a single proceeding. There was no defect of parties in the proceeding before the Commission. [ Footnote 6 ]
Third. The plaintiffs contend that the order is void because made on a basis which Congress did not and could not authorize. [ Footnote 7 ] The argument is that Transportation Act 1920 requires earnings under joint rates to be divided according to what is fair and reasonable as between the parties; that what is so must be determined by the relative amount and cost of the service performed by each of the several railroads, and that the Commission, ignoring this basis of apportionment and making the determination in the public interest, gave to the needy Orient system larger divisions merely because the connection carriers were more prosperous. Relative cost of service is not the only factor to be considered in determining just divisions. The Commission must consider also whether a particular carrier is an originating, intermediate or delivering line; the efficiency with which the several carriers are operated; the amount of revenue required to pay their respective operating expenses, taxes, and a fair return on their railway property; the importance to the public of the transportation service of such carriers, and other facts, if any, which would, ordinarily, without regard to mileage haul, entitle one carrier to a greater or less proportion than another of the joint rate. [ Footnote 8 ] It is settled that, in determining what the divisions should be, the Commission may, in the public interest, take into consideration the financial needs of a weaker road, and that it may be
given a division larger than justice merely as between the parties would suggest "in order to maintain it in effective operation as part of an adequate transportation system," provided the share left to its connections is "adequate to avoid a confiscatory result." Dayton-Goose Creek Ry. Co. v. United States, 263 U. S. 456 , 263 U. S. 477 ; New England Divisions Case, 261 U. S. 184 , 261 U. S. 194 -195. It was not contended before the Commission that a reduction of the carriers' divisions would reduce their rates below what is compensatory. [ Footnote 9 ] There is in the record no evidence on which it could be determined that any of the divisions ordered will result in confiscatory rates. And there is nothing in the order which prohibits rate increases. Compare United States v. Illinois Central R. Co., 263 U. S. 515 , 263 U. S. 526 .
The assertion is made that the Commission was guided solely by the relative financial ability of the several carriers. In support of this assertion, it is pointed out that the increase ordered of the Orient's share was measured not by a percentage of its own divisions, as in New England Divisions Case, 261 U. S. 184 , but by a percentage of the revenues of the several connecting carriers from the joint traffic. [ Footnote 10 ] It does not follow that such a basis of division would necessarily be unjust to the connecting carriers. The position of the Orient as the originating carrier, or as the delivering carrier, or as an indispensable
Invalidity of the order is urged on the further ground that the Commission made the incidental fact of physical connection with the Orient the sole test for determining which carriers should have their divisions reduced, and that such action is clearly arbitrary. It is true that the order affects, in terms, only the 13 carriers whose lines have direct connection with the Orient; but it does not follow that the action was arbitrary. These connecting carriers have a demonstrable interest in having the operation of the Orient continued. Other carriers doubtless have an interest, but it is less certain. It is open to any of these 13 carriers to institute proceedings before the Commission with a view to securing a partial distribution of their burden among other connecting carriers. Compare United States v. Illinois Central R. Co., 263 U. S. 515 , 263 U. S. 526 . The basis of division adopted by the Commission is not shown to be in any respect inconsistent with the rule declared in New England Divisions Case, 261 U. S. 184 . Nor is it shown that the Commission ignored any factor of which consideration is required by the act.
upon data [ Footnote 11 ] taken from the annual reports filed with the Commission by the plaintiff carriers pursuant to law; that these reports were not formally put in evidence; that the parts containing the data relied upon were not put in evidence through excerpts; that attention was not otherwise specifically called to them, and that objection to the use of the reports under these circumstances was seasonably made by the carriers, and was insisted upon. The parts of the annual reports in question were used as evidence of facts which it was deemed necessary to prove, not as a means of verifying facts of which the Commission, like a court, takes judicial notice. The contention of the Commission is that, because its able examiner gave notice that "no doubt it will be necessary to refer to the annual reports of all these carriers," its Rules of Practice [ Footnote 12 ] permitted matter in the reports to
The mere admission by an administrative tribunal of matter which, under the rules of evidence applicable to judicial proceedings, would be deemed incompetent does not invalidate its order. Interstate Commerce Commission v. Baird, 194 U. S. 25 , 194 U. S. 44 ; Spiller v. Atchison, Topeka & Santa Fe Ry. Co., 253 U. S. 117 , 253 U. S. 131 . Compare Bilokumsky v. Tod, 263 U. S. 149 , 263 U. S. 157 . But a finding without evidence is beyond the power of the Commission. Papers in the Commission's files are not always evidence in a case. New England Divisions Case, 261 U. S. 184 , 261 U. S. 198 , note 19. Nothing can be treated as evidence which is not introduced as such. Interstate Commerce Commission v. Louisville & Nashville R. Co., 227 U. S. 88 , 227 U. S. 91 -93; Chicago Junction Case, 264 U. S. 258 . If the proceeding had been, in form, an adversary one commenced by the Orient system, that carrier could not, under rule XIII, have introduced the annual reports as a whole. For they contain much that is not relevant to the matter in issue. By the terms of the rule, it would have been obliged to submit copies of such portions as it deemed material, or to make specific reference to the exact portion to be used. The fact that the proceeding was technically an investigation instituted by the Commission
It is sought to justify the procedure followed by the clause in rule XIII which declares that the "Commission will take notice of items in tariffs and annual or other periodical reports of carriers properly on file." But this clause does not mean that the Commission will take judicial notice of all the facts contained in such documents. Nor does it purport to relieve the Commission from introducing, by specific reference, such parts of the reports as it wishes to treat as evidence. It means that, as to these items, there is no occasion for the parties to serve copies. The objection to the use of the data contained in the annual reports is not lack of authenticity or untrustworthiness. It is that the carriers were left without notice of the evidence with which they were in fact confronted, as later disclosed by the finding made. The requirement that, in an adversary proceeding, specific reference be made is essential to the preservation of the substantial rights of the parties. [ Footnote 13 ]
Fifth. A further objection of the carriers should be considered. They point out that the record does not contain any tariffs showing the individual joint rates, or any division sheets showing how these individual joint rates are divided, nor any information concerning the amount of service performed by the Orient and its several connections under such individual joint rates. As justification for this omission, it is argued that there are in the record exhibits, furnished by the several carriers, containing data from which the Commission could reach a conclusion as to whether or not the divisions, taken as a whole, were equitable as between the Orient and its several connections; [ Footnote 14 ] that, in a general rate case, evidence
"deemed typical of the whole rate structure" will support a finding as to each rate in the structure by raising a rebuttable presumption concerning each rate; that typical "evidence" in this sense means not evidence directly representative of every individual rate, but evidence tending to show the general situation; that a like presumption arises in a division case; that the data dealing with the traffic in the aggregate, which was furnished by the exhibits constituted such typical evidence; that, in this proceeding, information concerning individual rates and divisions was not essential, and that the course pursued by the examiner is in substance that upheld in the New England Divisions Case, 261 U. S. 184 , 261 U. S. 196 -199.
The percentage of the reduction prescribed in respect to the several carriers ranges from 10 to 30 percent. Thus, the Missouri Pacific's division was shrunk 20 percent. It was estimated that the resulting reduction of its revenues would be $115,789.22. That amount, added to the existing share of the Orient on this traffic, would increase its division, on weighted average, over 14 percent. The Texas & Pacific's division was also shrunk 20 percent. The estimated resulting reduction of its revenues would be $121,140.81. But that amount, added to the existing share of the Orient on this traffic, would increase its division about 25 percent. The order differs from that upheld in New England Divisions Case, 261 U. S. 184 , which prescribed a percentage increase of the division of the New England roads and directed that the amount of the increase be taken from the existing shares of the several connecting carriers.
See Interstate Commerce Act as amended, § 17; Annual Report of the Commission (1920) pp. 3-6; The Chicago Junction Case, 264 U. S. 258 , note 3.
Compare Southern Pacific Co. v. Interstate Commerce Commission, 219 U. S. 433 , 219 U. S. 443 ; New England Divisions Case, 261 U. S. 184 , 261 U. S. 189 ; United States v. Illinois Central R. Co., 263 U. S. 515 , 263 U. S. 525 .
Compare New England Divisions Case, 261 U. S. 184 , 261 U. S. 193 -195; Wichita Northwestern Ry. Co. v. Chicago, Rock Island & Pacific Ry. Co., 81 I.C.C. 513, 517.