Court Opinion

ID: 9304646
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:15:43.581333+00
Date Added: 2024-06-11T17:13:50.984600
License: Public Domain

ARCHBARD, Judge
(dissenting). There can be no serious question as to the conclusion which would have been reached by the Commission had thby confined themselves to the determination of wdiat was a just and reasonable rate .from Cincinnati to Chattanooga by the Cincinnati Southern, without regard to the effect upon other roads. This was gone into at length in 1894, and the 60-cent schedule, which is now contended for, sustained. Freight Bureau v. Cin., N. O. & T. P. R. R., 6 Interst. Com. R. 195. But as the law then stood there was no authority in the Commission to fix future rates, and its action was therefore held of no effect. Inter. Com. Com. v. Cin., N. O. & T. P. R. R., 167 U. S. 479, 17 Sup. Ct. 896, 42 L. Ed. 243. But even with the lapse of time and the change of conditions, the issue as is recognized by the Commission is the same, and the same conclusion would confessedly have been reached except as they were influenced by a regard for the necessities of other roads. “If it is our duty,’’ says Commissioner Prouty in the report, “to take this railroad *254by itself, and to determine the reasonableness of these rates, by reference to cost of construction, cost of maintenance, and profit upon the investment, we think the complainants have established their case, and that these rates ought fairly to be reduced by as great an amount as was formerly found reasonable by this Commission.” Unfortunately, however, for the complainants, this view did not prevail. It was contended by the railroad company that the rates should be fixed not only with reference to the final results to itself and its own financial necessities, but also with reference to other companies whose rates were necessarily affected thereby; or, in other words, that the Commission should establish rates which .would be just and reasonable for the whole section of territory in issue, and that if a particular carrier was so situated that it could make a handsome profit it was to be recognized as a piece of good fortune with which the Commission was not to interfere. Adopting this view, which had also been followed in other cases (In re Proposed Advance in Freight Rates, 9 Interst. Com. R. 382; Spokane v. North Pac. R. R., 15 Interst. Com. R. 376; Kindel v. New York, New Haven & Hartford R. R., 15 Interst. Com. R. 555), it was accordingly held that the reasonableness of the rate between points served by two or more lines could not be determined by reference to that line alone which was shortest 'and most favorably situated with respect to operation and earnings, and the rate limited thereby; but that the entire situation was to be considered, and a rate fixed which would be reasonable with respect to all the lines directly serving the points involved. That rates for similar distances on other lines similarly conditioned may be referred to, to assist in determining what is fair and reasonable in any case, is.clear. And it is no doubt proper, also, to take into account the effect on rates upon freight moving to and from other points beyond those immediately in view. But that, in my judgment, is as far as it is permissible to go. There is no right, as I look at it, to consider the effect of the rate or rates to be established on those of other roads, between the same points, or to maintain such rates at a figure which is necessary to meet the needs of those roads. And so far as the order óf the Commission was induced by any such idea, it cannot be sustained.
If the Cincinnati Southern was the only line from Cincinnati to Chattanooga the rate, of course, so far as it was not a joint rate, would be fixed with reference to that road’ alone. And if it was a line that was costly to build, or that could not be economically run, this would operate to increase the rates, and the shipper would have to pay, to correspond. But, on the other hand, if the reverse of this was true, and the road was neither an expensive one to construct, maintain, or run, the shipper would clearly be entitled to the benefit of these conditions and to the lower rates necessarily to ensue. So, also, if this favored road was the first in the field, and other roads had come in after it was built, it certainly would not be contended that with the introduction of new and additional facilities the lower rates prevailing on the more favored line could be raised to meet the necessities of others not so well placed. It is not to be thought of that the construction of a second or third road should be made the basis for higher *255rates. The standard would be that of the original and most favored line. But what difference does it make whether the road which can afford the best rate is the first or the last to be built? It is the condition at the time the rate is fixed that controls. The shipper is entitled to the benefit of any advance in transportation facilities that may be made, and is not to be tied down to the unprogressive and outdistanced past. The supposed advantage in competing lines between the same points becomes a detriment if rates are to be kept up to help the weakest road.
The Cincinnati Southern extends in a short and direct route due south from Cincinnati to Chattanooga without branches 336 miles. It was expensive to build, and the cost of operation and maintenance is high. But its net earnings are nevertheless large; amounting to some 44 per cent, on the capital stock. The route between the same points by way of the Rouisville & Nashville and the Nashville, Chattanooga & St. Louis roads is a third longer, or 450 miles, and both of these roads have more or less unremunerative branch lines. And yet the Commission have not only put the two routes on an equality, but have even considered the influence of unprofitable branches, which have to be taken care of, fixing a rate which shall be fair for the whole system, and not simply for the immediate section of road which is involved. This, in my judgment, they had no right to do. The shipper is entitled to a just and reasonable rate, having regard to the service which is to be rendered by the carrier that is to perform. And this service is largely to be measured by the facilities for economically rendering it, which are possessed by that particular road. It is not to be augmented or kept up, beyond what is fair and just, by the consideration of what some other road, not so favorably situated, may need.
The order of the Commission, being based upon mistaken and erroneous grounds, is therefore invalid and should be so declared., Southern Railway v. St. Louis Hay & Grain Co., 214 U. S. 297, 29 Sup. Ct. 678, 53 L. Ed. 1004; Inter. Com. Com. v. Stickney, 215 U. S. 98, 30 Sup. Ct. 66, 54 L. Ed. 112; Southern Pacific Railway v. Inter. Com. Com., 219 U. S. 498, 31 Sup. Ct. 279, 55 L. Ed. -. And the case should be remanded in consequence to the Commission in order that a rate may be fixed which shall be just and reasonable as respects the respondent carrier, by whom the services are to bte performed. This does not take from the Commission the right to say what that rate shall be. Much less does it involve the determination of the rate by the court. It merely disposes of the rate which has been mistakenly made, as preliminary to a new consideration of it by the Commission upon correct and proper grounds. Cin., N. O. & T. P. R. R. v. Inter. Com. Com., 162 U. S. 184, 238, 239, 16 Sup. Ct. 700, 40 L. Ed. 935; Southern Railway v. St. Louis Hay & Grain Co., 214 U. S. 297, 29 Sup. Ct. 678, 53 L. Ed. 1004.
I therefore dissent from the judgment of the court sustaining the demurrer and dismissing the bill.
MACK, Judge, concurs in the above dissent.