Court Opinion

ID: 9808465
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:38:56.144367+00
Date Added: 2024-06-11T12:13:11.094645
License: Public Domain

BROWN, J.,
dissenting: The fact that Congressional legislation on matters relating to interstate commerce may interfere with the exercise of the police power by the State, or • may contravene the public policy of the State, is not sufficient to prevent the operation of such legislation. The Federal statute is supreme. Therefore, if Congress has, by its enactments, covered the subject of rate making and charging in its relation to interstate commerce, the right 'of a State, through either its Legislature or its courts, to regulate or interfere with such rate making and charging 'is destroyed. • This is fundamental, and I do1 not understand it to be controverted by the opinion of the Court. That opinion seems to ’be based upon the view that Congress has not acted upon the subject, and, therefore, the State courts have the right to apply to the situation the law in force in the State. T am forced by the decisions of the Supreme Court of the United States to reach a different conclusion.
It has recently been held by that Court that' Congress has completely taken control of the subject of 'rate making and charging by the'provisions of the act to regulate commerce and the amendments thereto. Southern Railway Co. v. Reid, 222 U. S., 424. Upon the authority of that case inhibitive Congressional legislation is not required to prevent the application of State legislation upon incidental matters relating to inter*239state commerce. It is said to be sufficient if Federal legislation occupies the field. After discussing the power conferred upon the Interstate Commerce Commission by the act to regulate. commerce, Mr. Justice McKenna, says in the Reid case: “It is evident, therefore, that Congress has taken control of the subject of rate making and charging. All of the particular details we cannot set forth without extensive quotations from the act, which it is quite inconvenient to make. The provisions of the act are directed at the abuses most to be feared — unreasonableness in the rates and discriminations, including in the latter discriminations in service, in the acceptance and delivery of freight, and in facilities furnished.” And again referring to the act to regulate commerce, Mr. Justice McKenna uses this sweeping language: “There is scarcely a detail of regulation which is omitted to secure the purpose to which the Interstate Commerce Act is aimed. It is true that words directly inhibitive of the exercise of State authority are not employed, but the subject is taken possession of.”
It is not denied that Congress has so far conferred upon the Interstate Commerce Commission the power to regulate interstate rates as to destroy the jurisdiction of the State courts to pass upon the reasonableness of such rates. The plain language of the United States Supreme Court in the Abilene Cotton Oil Co. case, 204 U. S., 426, placed that matter beyond dispute. But it is asserted that although a State court cannot by its action directly regulate the rate to be charged for an interstate shipment, it can destroy the- relation of the value of shipment to the rate charged, as fixed by the tariffs on file with the Interstate Commerce Commission, without encroaching upon the power vested in the Commission by the act to regulate commerce. I think this is doing indirectly the very thing prohibited by the Abilene case. It is not sufficient, to sustain that position, to- say, in this case, that the action is one for negligence, and that the plaintiff has been damaged $285, and if he cannot recover that sum he is without remedy. He has the remedy which he has contracted to accept and which was made the basis of the rate on which his shipment moved. He agreed for a valuable consideration that his remedy should be restricted *240to tbe recovery of $100, and be did tbis witb knowledge tbat tbe extent of bis remedy was determined by tbe rate of freight, and tbat for every increase of 20 per cent in rate, tbe amount wbicb be would be entitled to recover would be increased 100 p.er cent, as provided by tbe tariff on file witb tbe Interstate Commerce Commission. It is said tbat tbe rates prescribed “are not based upon tbe assumption tbat tbe carrier will not perform its duty.” In wbat other way could tbe carrier be liable for injury to animals in transportation? Negligence is essential to create liability. Tbe contract of shipment in tbis case provided tbat "should damage occur for which the said carrier may be liable, tbe value at tbe place and date of shipment shall govern tbe settlement, in wbicb tbe amount claimed shall not exceed for a horse or mule $100, wbicb amount, it is agreed, is as much as such animals as are herein agreed to be transported are worth.” Tbe rate charged was $170 for tbe car-load of mules, wbicb rate was on file witb tbe Interstate Commerce Commission in a tariff containing tbis provision: “Live stock subject to tbe following rules, viz.: Rates on live stock will apply when tbe declared value does not exceed tbe following: Horses or mules, each, $100. For every increase of 100 per cent or fraction thereof in tbe declared value there shall be an increase of 20 per cent in rate.” Tbe meaning of tbis provision is plain. It is contemplated tbat where tbe shipper accepts a rate based upon tbe value of tbe animals as declared, be is restricted to tbe recovery of such value, regardless of tbe character of his claim. Tbe very purpose of tbis provision of the tariff is to establish a relation between tbe value of tbe thing shipped and tbe rate. Tbis method of rate making not only has tbe sanction of tbe Interstate Commerce Commission, but has tbe approval of tbe Supreme Court of tbe United States. In Hart v. R. R., 112 U. S., 331, a contract of carriage, agreeing on tbe valuation of tbe property carried, was upheld as “a proper and lawful mode of securing a due proportion between tbe amount for wbicb tbe carrier may be responsible and tbe freight be receives.”
Congress has conferred upon tbe Interstate Commerce Commission tbe power to regulate rate making in its application to *241interstate commerce; the declared value of the article shipped is a proper basis for fixing freight rates; the carrier in the present case has fixed its rates upon such basis and has filed its tariff containing such rates with the Interstate Commerce Commission in strict accordance with the provisions of the act to regulate commerce. The question arises: Has a State power to enforce a greater responsibility than that fixed by the tariff on file with the Commission and made the basis of the rate paid by the shipper ? If the State court has no power to pass upon the reasonableness of an interstate rate in the absence of action by the Interstate Commerce Commission, as was declared in the Abilene Cotton Oil Co. case, it seems to me that it follows as an unavoidable conclusion that such courts are denied the power to change an interstate rate by altering the relation of the value of the article shipped to such rate.
We must assume that the rates and regulations on file with the Interstate Commerce Commission are reasonable until determined to be unreasonable by the Commission (Erie Railroad Co. v. Lumber Co., 75 N. J. Law, 878), and it is the duty of the State court to enforce such rates and regulations. Abilene Cotton Oil Co. case, supra. It was, therefore, the duty of the Court to restrict the plaintiff’s recovery in this action to the valuation which was made the basis of the rate filed with the Commission.
In Poor Grain Co. v. C. B. and Q. Ry. Co., 12 I. C. C. Rep., 418, Commissioner Harlan says: “When once lawfully published, a rate so long as it remains uncaneeled is as fixed and unalterable, either by the shipper or the carrier, as if the particular rate had been established by a special act of Congress. When regularly published, it is no longer the rate imposed by the carrier, but the rate imposed by the law.”
In the present case the carrier charged the shipper $170 to transport a car-load of twenty-six mules from East St. Louis, Mo., to Baleigh, N. C. The rate was based upon the declared valuation of $100 as provided by the tariff. If the shipper had declared a valuation of $285, the valuation of the mule as fixed by the jury, the rate' according to the tariff would have been $238 for the car-load. If the judgment is sustained, the plain*242tiff has secured tbe transportation of bis car-load of mules for $170, wben tbe published tariff rate is $238. Tbe act to regulate commerce, sec. 6 (as amended in 1906 and 1910), provides that no carrier shall “charge or demand or collect or receive a greater or less or different compensation for such transportation of passengers or property, or for any service in connection therewith, between tbe points named in such tariffs than tbe rates, fares, and charges which are specified in the tariff filed and in effect at the time, nor shall any carrier refund or remit in any manner or by any device any portion of the rates, fares, and charges so specified, nor extend to any shipper or person any jDrivileges or facilities in the transportation of passengers or property, except such as are specified in such tariffs.” The judgment in this case forces the defendant to violate the provisions of this section.
In the Abilene Cotton Oil Co. case the purposes of the act to regulate commerce are set forth, and Chief Justice White says: “It is apparent that the means by which these great purposes are to be accomplished was by placing upon all carriers the positive duty to establish schedules of reasonable rates which should have a reasonable application to all, and which should not be departed from so long as the established schedule remained unaltered in the manner provided by law.” After citing-cases, the learned Chief Justice continues: “When the general scope of the act is enlightened by the considerations just stated, it becomes manifest that there is not only a relation, but an indissoluble unity, between the provision for the establishment and maintenance of rates until corrected in accordance with the statute and prohibitions against preference and discrimination.” One of the important purposes of the act is to insure uniformity and prevent discrimination in freight rates, and certainly any action by the State through its courts which results in destroying such uniformity and creating a discrimination is violative of the act. Uniformity in the application of the established rate will be destroyed if the State courts shall have the power to disturb the relation between the declared value of the article and the rate. A shipper can declare a value of $100 and secure the low rate based upon that value. When the shipment reaches its *243destination tbe amount wbiob be will be entitled to recover in case of loss or damage will be submitted to' a jury for determination and tbe declared value will be ignored. A dozen shippers may declare tbe same value, secure tbe same rate, and recover a different amount. Uniformity in tbe application of tbe rate is clearly destroyed.
Tbis judgment forces a discrimination in favor of shippers whose animals are transported to North Carolina, and against tbe shipper whose animals are shipped to those States in which the valuation fixed by the contract of shipment is upheld. If North Carolina is the destination of the shipment, the shipper can declare a value of $100, secure the low rate, and recover ten times that amount if he can prove such damage. The shipper who selects one of the States referred to as the destination of his shipment will be forced to accept $100 for loss or damage to each animal regardless of the extent of his loss. The same result is brought about if the validity of the contract is to be determined by the law of the place of shipment. The amount of damages will be determined by the rules in force in the various States. Elliot’t on Railroads, sec. 1510; 6 Cyc., 398. If this condition is permitted to exist uniformity will be destroyed and discrimination will take its place.
In Armour Packing Co. v. United States, 209 U. S., 57, Mr. Justice Day, dealing with a violation of the act by carrying out a contract for a rate after the rate had been changed by publication of a higher rate, said: “The Elkins act proceeded upon broad lines and was evidently intended to effectuate the purpose of Congress to require that all shippers should be treated alike, and that the only rate charged to any shipper for the same service under the samé conditions should be the one established, published, and posted as required by law. It is not so much the particular form by which, or the motive for which, this purpose was accomplished, but the intention was to prohibit any and all means that might be resorted to to obtain or receive concessions and rebates from the fixed rates, duly posted and published.”
The language of Mr. Justice Van Devanter in the case of Robertson v. B. and O. R. R. Co., 222 U. S., 506, leaves no *244doubt of the purpose of Congress to confer upon the Interstate Commerce Commission the sole power and duty to regulate all matters relating to the subject of interstate freight fates. It is held in that case that an inquiry into the reasonableness of a rate shall be made by the Commission before resort to the courts. Justice Van Devamter says: “When the purpose of the act and the means for the accomplishment of that purpose are understood, it is altogether plain that the act contemplated that such an investigation and order by the designated tribunal, the Interstate Commerce Commission, should be a prerequisite to the right to seek reparation in the courts because of exactions uhder an established schedule alleged to be violative of prescribed standards; and this is so because the existence and exercise of a right to maintain an action of that character, in the absence of such an investigation and order, would be repugnant to the declared rule that a rate established in the mode prescribed should be deemed the legal rate, and obligatory alike upon carrier and shipper until changed in the manner provided, would be in derogation of the power expressly delegated to the Commission, and would be destructive of the uniformity and equality which the act was designed to effect.”
In addition to the authorities already cited, the following cases support the statement that Congress has conferred upon the Interstate Commerce Commission authority to regulate commerce, including the right to fix and approve rates and regulations governing such rates: T. and P. Ry. v. Mugg, 202 U. S., 242; McNeill v. Southern Ry., 202 U. S., 543; B. and O. R. R. v. Pitcairn Coal Co., 215 U. S., 481; Robinson v. B. and O. R. R., 222 U. S., 506; Chicago and A. R. Co. v. Kirby, U. S. S. C. Advance Sheets, 15 July, 1912.
In T. and P. Ry. v. Mugg, 98 Tex., 353, it was attempted to base a right of recovery upon the misrepresentation of an agent in quoting an interstate rate. The Texas court upheld the right to recover damages, notwithstanding the fact that the rate quoted was the rate published and on file with the Interstate Commerce Commission. The decision was put upon the ground that the question of rates was not involved, and that the action was based upon the misstatement of the agent, which induced *245the shippers to make contracts which resulted, in loss. Upon appeal to the Supreme Court of the United States, the judgment of the Texas court was reversed. T. and P. Ry. Co. v. Mugg, supra.
The Hughes case, 191 U. S., 411, is said to be an authority in support of the position that Congress has not legislated on the subject-matter of this action. That decision was rendered in 1902. I have examined the act to regulate commerce as it was in force at’that time, and find that it has since been extensively amended, and the power of the Interstate Commerce Oom- . mission has been enlarged. This was accomplished -by amendments in 1906 and in 1910. The enlargement of the scope of the act and the recent decisions of the Supreme Court of the United States, considered in connection with the facts of this case, lead me to conclude that the Hughes case is not to be regarded as authority against the position that Congress has now taken control of the subject of rate making and charging, and conferred upon the Interstate Commerce Commission the power to pass upon questions relating' to that subject. Each amendment of the act was made with the view of extending the jurisdiction of the Commission over interstate commerce, and the language of the entire act leaves no doubt of the purpose of Congress to have one tribunal to pass upon the intricate problems of rate making. In this way alone can uniformity be secured and discrimination prevented.
The scope of the power of the Interstate Commerce Commission is illustrated.by section 15 of the act, by the provisions of which the Commission is given authority, among other things, to investigate any “regulations or practices whatsoever of such carrier or carriers subject to the provisions of this act”- as are alleged to be “unjust and unreasonable or unjustly discriminatory, or unduly preferential or prejudicial or otherwise in violation of any of the provisions of this act”; and “the Commission is hereby authorized and empowered to determine and prescribe . . . what individual or joint classification,' regulation, or practice is just, fair, and reasonable, to be thereafter followed, and to make an order that the carrier or carriers shall cease or desist from such violation to the extent to which the Commission finds the same to exist.”
*246Under tbe provisions of tKis last section tbe Interstate Commerce Commission bas assumed jurisdiction to determine tbe validity of a stipulation in a bill of lading fixing tbe basis upon wbieb damages should be determined in case of loss or damage. In Shafer v. R. R., 21 I. C. C. Reports, 8, tbe complainant alleged that a provision in tbe uniform bill of lading used by tbe defendant that fixes tbe amount of damages for wbieb a carrier is liable at tbe invoice value of tbe property at a point of shipment is unjust and unreasonable and prevents tbe defendant from paying to tbe complainant just compensation for tbe loss of a car-load of wheat which tbe defendant misdelivered, to another party; and complainant prayed that an order be entered directing tbe defendant to pay tbe value of tbe property at point of delivery. Tbe Interstate Commerce Commission not only assumed jurisdiction, but held that tbe stipulation of tbe bill of lading was reasonable and valid. Tbe report of tbe Comrnission quotes tbe above parts of section 15, and says: “Under tbe law, therefore, tbe Commission bas authority to consider and determine tbe reasonableness of regulations and practices in respect of issuance, form, and substance of bills of lading, and to determine and prescribe what regulations and practices are reasonable.”
It is said in tbe opinion of tbe Court that the effect of tbe Hepburn Act is to prohibit agreements fixing tbe value of tbe article shipped and restricting liability to such value in case of loss or damage by negligence. Tbe Supreme Courts of Massachusetts, New York, and New Jersey have taken tbe opposite view. Tbe cases are well considered, and I can add nothing to what is said by tbe learned judges of those courts. Bernard v. Express Co., (Mass.) 91 N. E., 325; Greenwald v. Barrett, 199 N. Y., 170; same case, 115 N. Y. Supp., 311; Travis v. Wells-Fargo Co., 79 N. J. Law, 83.
In Travis v. Wells-Fargo Co. it is held: “In an action against a common carrier for goods lost in transit, a’ receipt was put in evidence, in which receipt tbe defendant limited its liability to tbe sum of $50, unless a greater value was stated by tbe shipper. Tbe trial court held that section 20 of tbe Interstate Commerce Act of 1906 (tbe Hepburn Act) prohibited a *247common carrier from so limiting its liability by contract. Held, tbat tbis was error, as tbat section of tbe Federal statute only prohibited any contract wbicb exempted sucb carrier from liability from losses caused by a connecting carrier to wbicb tbe defendant bad delivered tbe goods.” In Greenwald v. Barrett it is held by tbe Supreme Court of Appeals of New York tbat, “Tbe language of tbe act of Oobgress commonly known as tbe Hepburn Act, being an amendment to section 20 of tbe Interstate Commerce* Act, does not abrogate tbe right of common carriers either to regulate their charges for carriage by tbe value of the goods, or to agree with tbe shipper upon a valuation of tbe property carried.”
I conclude from tbe authorities referred to tbat Congress has conferred upon tbe Interstate Commerce Commission tbe power to regulate rates on interstate commerce; tbat a rate established and on file with tbe Commission is presumed to be reasonable until declared by tbe Commission to be otherwise; tbat sucb rate must be strictly adhered to by tbe shipper and carrier as long as it remains in force; and, finally, tbat a State court is without jurisdiction to interfere directly or indirectly with an interstate rate properly established and published and on file with tbe Interstate Commerce Commission as provided by tbe act to regulate commerce.