Great Northern Ry. Co. v. Loonan Lumber Co.
Great Northern Ry. Co. v. Loonan Lumber Co.
Opinion of the Court
This cause is before us upon an appeal from an order overruling a demurrer to defendant’s answer. The complaint sets forth that both parties are corporations; that defendant caused a car load of coal to be delivered to the Wisconsin Central Railway Company at Chicago for shipment by said company to Minnesota Transfer, to be there delivered to a connecting carrier and forwarded by such connecting carrier to Sioux Falls, S. D.; that said car load was so billed when delivered at Chicago; that the said coal was carried to Minnesota Transfer and de
It is appellant’s contention: (1) The only lawful rate that can be received by the carrier and paid by -the shipper is the tariff rate filed, published and posted in accordance with the federal laws regulating interstate commerce. (2) The courts have no jurisdiction to grant relief to an individual shipper in advance of a change in the filed tariffs for an alleged unreasonableness in rates or violation of the long and short haul clause of the act. (3) An accord and satisfaction on the filed and published rate is unlawful, for it is prohibited and penalized by the act.
We think the last proposition is so well established that it needs no consideration by us, and that therefore the taking of the $79 and giving receipt in full cannot be considered in any manner as a defense unless it is the full amount that could legally be collected. We are also fully satisfied that under the provisions of the interstate commerce act (Act. Feb. 4, 1887, c. 104, 24 Stat. 379 [U. S. Comp. St. 1901, p. 3154]), as interpreted by the United States Supreme Court, no court has any power, in the first instance, to inquire into the reasonableness of any rate that has been regularly established by a railway company and filed with the Interstate Commerce Commission and published by posting; that this question of whether or not a rate is reasonable and just is one to be determined in the first instance in a proper proceeding before the said Interstate Commercé Commission (Texas, etc., R. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 27 Sup. Ct. 350, 51 L. Ed. 553, 9 Am. & Eng. Ann. Cas. 1075) and this is conceded by respondent in its brief. There certainly can be no question at this late date but that the first proposition above stated is true. Gulf C., S. & F. Railroad Co. v. Hefley et al., 158 U. S. 99, 15 Sup. Ct. 812, 39 L. Ed. 910; Texas, etc., v. Mugg, 202 U. S. 242, 26 Sup. Ct. 628, 50 L. Ed. 1011.
It will be seen -that respondent’s position is in direct conflict with that part of appellant’s second proposition above stated, namely, that the court has no jurisdiction to- grant relief to a shipper for a violation of the long and short haul clause of the act, in advance of action thereon by the Interstate Commerce Commission. Appellant places the question 'of relief under the long and short haul clause on exactly the same basis as where relief is sought under section 1 of the same act, which section provides that all charges shall be reasonable and just, and that
We believe that this cause must be considered just the same as if the two railway companies had filed and published a through rate from Chicago to Jasper, without having applied to the Commission, under the last part of section 4, for leave so to do, and this through rate so established was greater than that from Chicago to Sioux Falls. There can be no question, ufider the authorities, but that, in this case, no action could be brought in this court based on the charge that the short haul rate was unreasonable, but that resort would first have to be had to the Commission for it to review the rate filed. It becomes important, then, to see why the courts have held that no such action could be brought, and to see if the same reasons would necessitate a holding that the question of short haul rate being unlawful could not be determined, in the first instance, by a court, but must be referred for such determination to the Commission. The ’ Commission itself, while always jealous of its rights under the law, early held that, under the first part of said section 4^-jt not being made unlawful to' fix a greater rate for short haul than long one, where difference in “circumstances and conditions” authorized it —the carrier could fix such rate where the different “circumstances and conditions” authorized it and do this without first applying to the Commission for leave. The Commission, in the matter of Trammel v. Clyde Steamship Co., 4 Interst. Com. R. 122, held “The carrier has the right to judge, in the first instance, whether it is justified in making the greater charge for the shorter distance under the fourth section in all cases where the circumstances and conditions arise wholly upon its own line through competition for the same traffic with carriers not subject to regulation under the act to regulate commerce. In other cases
Justice Shiras speaking for the court in the case of Interstate Commerce Commission v. Alabama M. R. Co., supra, says: “As the third section of the act, which forbids the making or giving any undue or unreasonable preference or advantage to any particular person or locality, does not define what, under that section, shall constitute a preference or advantage to- be undue or unreasonable, and as the fourth section, which fox-bids the chax-ging
This phrase “under substantially similar circumstances and conditions” is found in section 2 of the same act which reads as follows: “Sec. 2. That if any common carrier subject to the 'provisions of this act shall, directly or indirectly, by any -special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or 1-ess compensation for any service rendered or to be rendered in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or persons for doing for them a like and contemporaneous service in the transportation of a like kind of traffic, under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby, prohibited and declared to be unlawful.” The right to
In conclusion we would state that in construing section 4 in connection with the whole law, it should be held that when, under the first part of said section, any carrier or carriers have fixed a rate for short haul greater than for long, without first obtaining authority from the Commission, such rate is left. open to attack by any party feeling aggrieved, which attack can be made, in a proper case, by direct action to recover unlawful charges paid, leaving to the jury, not the fixing of what is a reasonable rate, but solely the determination of the fact of the existence or nonexistence of “practically similar circumstances and conditions.” If the jury determine that the “circumstances and conditions” render the short -haul rate unlawful, the carrier shall only be entitled to recover or retain the long haul rate; that when the carrier has fixed his short haul rate by virtue of authority received from the Commission such rate can only be questioned by proceedings brought in the first place before such Commission. Such construction gives life to the whole of section 4, and is in harmony with the decisions of the federal- courts on analogous matters. Under this view the respondent -has a complete defense if he can ■prove the allegations of his answer, no- question being raised but the allegations of said answer are equivalent to alleging that the transportation to Jasper was “under practically similar circumstances and conditions” as it would be to Sioux Falls.
The order- of the trial court overruling the demurrer to the answer herein is affirmed.
Concurring Opinion
I concur in the views expressed by WHITING, P. J.
While my own conclusions in this case coincide with those of Judge WHITING, the reasoning is along
The question presented on this appeal is whether, upon the facts stated in the complaint and answer, which are admitted by the demurrer, the freight charge which plaintiff seeks to recover is illegal, because in violation of section 4 of the interstate commerce act. The trial court held the charge illegal as in violation of said act, and the plaintiff brings the action to this court for review, and assigns three grounds upon which it asks a reversal: “(i) The only lawful rate that can be received by the carrier and paid by the shipper is the” tariff rate filed, published and posted in accordance with the federal laws regulating interstate commerce. (2) The courts have no jurisdiction to grant relief to an individual shipper in advance of a change in the filed tariffs for an alleged unreasonableness in rates or violation of the long and short haul clause of the act. (3) An accord and satisfaction on the filed and published rate is unlawful, for it is prohibited and penalized by the act.” I shall consider only the matters presented in paragraphs 1 and 2 above.
The proposition that the reasonableness of a rate filed and published by a carrier must be inquired into and determined in a proper proceeding before the Commission in the first instance is so well settled that it need not be discussed here. The commerce act is based upon the broad proposition that all rates must be reasonable, and the underlying principle that the carrier shall not in any manner discriminate in favor of or against individual shippers, nor in favor of or against particular localities. The inhibition against discrimination in favor of or against individual shippers is found upon the proposition that a rate which is reasonable as to one shipper is likewise reasonable as to all others, under substantially similar conditions, and that all rates to every shipper shall be reasonable. A rate when filed and published applies to all shippers alike, and, to prevent discrimination in
The act contemplates that under certain specified conditions such lower rates may be justified as reasonable. -But it does not permit the carrier to determine the “circumstances and conditions,” nor “the particular instances” in which such rates may be established, in advance of any action by the Commission. To make its purpose entirely clear, the act declares that a less charge for the longer haul is deemed unlawful unless expressly authorized by
The clear and unequivocal language of the section itself answers both questions: “That it shall be unlawful for any comr mon carrier * * * to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance. * * *” The “operation of this section” is to render a rate illegal when it violates the statute. The carrier-cannot collect an illegal charge. The question of the legality of the rate might have been placed beyond the jurisdiction of the court in an action against the shipper, had the carrier chosen to present his application and obtain an order from the Commission authorizing the charge, and relieving him from the operation of section 4. Until such order is obtained such rate is illegal. If this conclusion be correct, it becomes the duty of appellant to point out some provision of the act or some decision of the courts permitting a carrier to collect a conceded illegal rate by an action in the courts. I have found none. It is conceded in this case that the
In the case of Interstate Com. Com. v. Atchison, T. & S. F. R. Co. (C. C.) 50 Fed. 300, that court holds that a rate made in violation of the express terms of section 4 can be held to be a legal rate, only when expressly authorized by order of the Commission. The court says: “And the power thus conferred is exclusive, and its exercise conclusive, in all cases that fall within the prohibition of the enacting clause of the section to which the proviso is appended; that is to say, to every case where the carrier charges or receives greater compensation in the aggregate for the transportation of passengers, or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance, over the same line, in the same direction, the shorter being included within the longer distance. In all cases, a greater charge for the shorter than for the longer haul is absolutely prohibited unless the Commission, for good cause, sees proper to relieve' a particular carrier from its operation.”
Upon the specific facts conceded in the record before us, it seems perfectly clear to my mind that the rate which appellant seeks to enforce is illegal and in violation of section 4, the record not disclosing- .that such rate has been authorized by the Commission. The establishment of a rate such as is admitted in this case is prohibited by the statute except upon order of the Commission, without regard to the question of its resonableness or unreasonableness, subject of course to the right and power of the Commission to make investigation as to its reasonableness at any time upon the question being presented to it in some proper manner, and subject to the power conferred upon the federal courts to review the action of the Commission. The federal
The carrier must be held to have filed and published such rate at his peril, since it was within his power to make application to the Commission for an order permitting it in the first instance. The question before us is not whether the court has jurisdiction to pass upon the reasonableness of a rate, at either competitive or noncompetitive points, but simply whether the carrier can collect a rate which is illegal upon the undisputed facts.
In my judgment, the ruling of the trial court is correct, and should be affirmed.
Concurring Opinion
I fully concur in the views expressed by SMITH, J.
Dissenting Opinion
(dissenting). The appeal is from an order overruling plaintiff’s demurrer to defendant’s answer. The allegations of the complaint are as follows: “(1) That it is, and at all times herein mentioned has been, a corporation organized and existing under the laws of Minnesota, and has complied with all laws of South Dakota relative to foreign corporations doing business in this state, and is entitled because of said compliance with the corporation laws of this state to bring and maintain this action; that the plaintiff is lawfully engaged in the business of common carrier of freight and passengers between Minnesota Transfer in the state of Minnesota and the village of Jasper, in Minnesota, and the city of Sioux Falls, South Dakota; that at said Minnesota Transfer it connects with the Wisconsin Central
The answer (omitting merely formal parts) is as follows: “The defendant admits all the allegations of the complaint, excepting that it denies that there is now due and owing the plaintiff from the defendant the sum of $55.30.- (2) Defendant, further answering, alleges that Jasper, in the state of Minnesota, is a railroad station upon the lines of the plaintiff between Minnesota Transfer in the state oí Minnesota and Sioux Falls in the state of South Dakota, and that all freight carried by the plaintiff from Minnesota Transfer to Sioux Falls is necessarily carried through Jasper; that Jasper is situated about 30 miles northeast of the city of Sioux Falls, and that distance nearer -to Minnesota Transfer than is the city of Sioux Falls. (3) Defendant, further answering, alleges that there exists no reason, by way of the peculiar geographical position, competition of other transportation facilities or trade or other peculiar conditions, why a greater charge should be made for transporting coal from Minnesota Transfer or from Chicago via Minnesota Transfer to Jasper than is made for the transportation of such coal from Minnesota Transfer or from Chicago via Minnesota Transfer to Sioux Falls, and alleges that the regular tariff rate on coal from Chicago to Sioux Falls via Minnesota Transfer was a just, reasonable, and sufficient tariff on coal from Chicago -to Jasper via Minnesota Transfer., (4) De
None of its material allegations having- been denied the facts stated in the complaint are to be taken as true. Rev. Code Civ. Proc. § 145. All material allegations of fact in the answer are admitted by the demurrer. Hence, the question arises whether, upon the facts thus established for the purpose of this appeal, plaintiff would be entitled to any relief in this action.
These are, in effect, the pertinent facts stated in the complaint : A car load of coal was transported on two lines of railroad from Chicago, in Illinois, to Jasper in Minnesota, via Minnesota Transfer, for which service defendant agreed to pay regular published tariff rates which are, in the absence of a joint rate, the rates 'separately established and filed with the Interstate Commerce Commission. According to' -the rates so established the tariff on the car of coal was $134.30, of which defendant has paid $79, leaving a balance of $55.30, and which plaintiff is entitled to recover unless precluded by facts alleged in the answer. It rightly is conceded by the foregoing opinions that the facts so alleged regarding an accord and satisfaction and the reasonableness of the rate constitute no defense. What allegations remain ?. Only these: Jasper is 30 miles nearer Minnesota Transfer than is Sioux Falls, on the plaintiff’s line between that point and Sioux Falls, and no reason exists “by way of the peculiar geographical position, competition of other transportation facilities or trade or other peculiar conditions” why a greater charge should be made for transporting coal from Chicago via Minnesota Transfer to Jasper than is made for transporting- coal from Chicago to Sioux Falls via the same route, “the full tariff rate from Chicago to Sioux Falls via Minnesota Transfer and Jasper” on the car of coal
In other word's, if the joint rate to Sioux Falls in fact was established by authority of the Commission after the Jasper rate was filed, the latter would be lawful and collectible in this action. If this be so, the unlawfulness of the rate charged, under the circumstances disclosed by the record, results from the fact that a certain special rate was not established when it was filed, or the fact that the special rate, though subsequently established, was not established by authority of the commission. The complaint states a cause of action. Plaintiff seeks to recover the filed rate which defendant agreed to pay — a 'reasonable, collectible rate, unless rendered unlawful by reason of the special rate to Sioux Falls. . No rule of pleading with which I am familiar required the plaintiff to mention the Sioux Falls rate in its complaint. It was enough for it to disclose a presumptively lawful rate for the service rendered, and on the facts stated in its complaint it clearly would be entitled to a judgment for the amount claimed. Now comes the defendant denying its liability solely on the ground that the filed rate which it agreed to pay is unlawful under the provisions of section 4 of the act regulating- interstate commerce, and it seems to me its answer is insufficient because it is not therein alleged either that the Sioux Falls rate was established before the filing of the rate charged, or that it was established without authority of the Commission. So, without expressing any opinion as to the extent to which the lawfulness of a filed rate may be attacked in a state court, in advance of action by the Interstate Commerce Commission, I think the order appealed from should be reversed.
Reference
- Full Case Name
- GREAT NORTHERN RY. CO. v. LOONAN LUMBER CO.
- Status
- Published