Tift v. Southern Ry. Co.

• Decision Date: 28 June 1905
• Citation: 138 F. 753
• Parties: TIFT et al. v. SOUTHERN RY. CO. et al.
• Court: U.S. District Court — Southern District of Georgia

138 F. 753

TIFT et al. v. SOUTHERN RY. CO. et al.

United States Circuit Court, S.D. Georgia, Western Division.

June 28, 1905

Syllabus by the court

The general rule is that, the greater the tonnage of the commodity transported, the lower should be the rate of freight charges for such transportation.

Explicit law, the settled policy of the government, the practical principles of reason and justice require that, save for controlling reasons of law or fact, the national courts should not discredit or disparage the conclusions of the interstate commerce commission.

The findings of fact set forth in the report of the commission are in all judicial proceedings deemed prima facie evidence as to each and every fact found.

Prima facie evidence of a fact is such as, in judgment of law, is sufficient to establish the fact, and, if not rebutted remains sufficient for the purpose. Mr. Justice Story, in Kelly v. Jackson, 6 Pet. 631, 8 L.Ed. 523.

The act to regulate commerce creates a rule of presumption in favor of the commission's report, which on its introduction in evidence changes the burden of proof, and casts it upon that party against whom the report is made.

The Legislature, subject only to the limitations of evidence expressly enshrined in the Constitution, has entire control over the rules of evidence, and by statutory enactments may alter, change, or create them anew.

The reasonableness of a rate of charge for transportation is eminently a question for judicial investigation. Justice Blatchford, in Chicago, M. & St. Paul R.R. v Minnesota, 10 Sup.Ct. 702, 134 U.S. 418, 33 L.Ed. 970.

It is no longer open to question that the interstate commerce commission is an expert tribunal empowered by law to determine in the first instance the reasonable or unreasonable character of the rate charged for transportation in interstate commerce.

The character of the Southeastern Freight Association, the effect of its concert of action and agreements as to freight rates in the territory to which it extends, considered and discussed.

When a number of railroads, acting under articles of organization by concert of agreement and action advance the rates upon shipments of a particular class throughout all the territory to which their organization and influence with similar organizations extend, and when they actually advance such rates and exact the same of shippers, it is of no consequence that they have a stipulation in such articles that each and all members can at will and at any time withdraw from the agreement.

Reasonable compensation for the service actually rendered is all that a common carrier is permitted to exact. Justice Brewer, for the Circuit Court of Appeals of the Eighth Circuit, in Chicago & N.W.R.R. Co. v. Osborne, 3 C.C.A. 347, 52 F. 914; Smyth v. Ames, 18 Sup.Ct. 418, 169 U.S. 466, 42 L.Ed. 819.

Where a vast increase of lumber traffic had resulted in large increase of net revenue to the carrier, the service was inexpensive, required neither rapidity of movement nor specially equipped cars, shippers were obliged to furnish and pay for equipment, railroads were neither to load nor unload, the commodity was neither fragile nor perishable, the risk of damage was inappreciable, the industry affords a tonnage second in magnitude to only one other transported by the carrier, an arbitrary increase to points of principal destination of two cents a hundred pounds is unreasonable and unlawful. This is especially clear where the particular traffic is practically destroyed immediately after the advance is made.

Railroads have no legal right to graduate their charges in proportion to the prosperity which attends industries whose products they transport.

In this case the conclusion of the court agree with the conclusions of the interstate commerce commission. The enforcement of the advance will be enjoined, and, general counsel for respondents having stipulated in judicio they would repay to the shippers the sum total of the increased exactions in case such increase should be held illegal, a reference will be had to ascertain he amount thus due the complainants respectively, and decree will be rendered therefor.

Ellis, Wimbish & Ellis, for complainants.

Ed. Baxter, for respondents.

John I. Hall, for Georgia Southern & F. Ry. Co.

Dorsey, Brewster & Howell, Dessau, Harris & Harris, C. B. Northrop, and Merrel P. Callaway, for Southern Ry. Co.

Lawton & Cunningham, for Central of Georgia Ry. Co.

Kay, Bennett & Conyers, for Atlantic Coast Line Ry. Co.

Louis F. Garrard, for Macon & Birmingham Ry. Co.

King, Spalding & Little, for Louisville & Nashville R. Co.

Brown & Randolph, for Seaboard Air Line Ry.

Claude Walker, for Nashville, C. & St. L. Ry. Co.

Mason, Hill & McGill, for Southeastern Freight Ass'n.

SPEER District Judge.

An adequate statement of the issues in this case is given in the report of the interstate commerce commission which appears in the record. The Southeastern Freight Association is a combination of common carriers. In the preamble of its organic agreement it is stated that its purposes are set forth in the 'following articles.' A critical scrutiny of the articles will disclose its machinery, but we fail to discover any express statement of its purpose. It is, however, plainly enough to fix and control the rates to be charged by each and all of its members for the railway transportation of freight. Most of the railways constituting its membership are actively engaged in interstate commerce, and all of them may be. The territory to which this association extends its dominating control comprehends the states of Virginia, North Carolina, South Carolina, Georgia, Florida, and those portions of Tennessee and Alabama east of a line extending from Chattanooga via Birmingham, Selma and Montgomery to Pensacola. In that territory, with all of its varied products, with an area and population vaster than many empires of which we have an account, as regards every interest dependent upon the transportation of commodities, the action of the association is more authoritative than the firman of the Sultan or the ukase of the Czar. A most important industry of this association's dominion is the manufacture of lumber. The tonnage of this product is enormous. The cotton plant is indigenous to much of this territory, but while in the year 1903 the railroads whose rates are arranged through the Southeastern Freight Association transported 1,274,727 tons of cotton, in the same year, of lumber, they moved 9,808,463 tons, or nearly eight times as much. Indeed, in tonnage thus transported lumber was not approached by any other product, and was only exceeded by bituminous coal. This tonnage has been steadily increasing. In 1901 it had been little more than six and a half millions, and two years later, as we have seen, it was nearly ten millions of tons. The vast income from moving this tonnage, an immense proportion of which was the product of the forests and mills of Georgia, poured into the treasuries of the defendant companies. That it was remunerative is not in dispute. It is charged in the bill that it was very profitable. In the answer it is admitted that it was profitable. The remunerative rates for which this product was transported could scarcely have been denied in view of the fact that the rates themselves had been advanced pari passu with the increase of tonnage. For their convenience, the rate makers have divided their territory into what are termed 'groups.' From group 2 of the Southern Railway there has been an increase of 3 cents a hundred pounds on lumber since May, 1894, 2 cents since September, 1899. From May, 1894, to September, 1899, the rate to Cairo from that group was 13 cents. This was increased to 14 cents from September, 1899, to June, 1903. From other groups, generally speaking since 1894, the increase has amounted to four cents a hundred pounds. From all the groups the present rates to Cincinnati, Louisville, and Evansville are greater than they have been since 1891. The rate to Cincinnati from most of the groups is now four cents higher than it was in 1892, and from the Georgia group on the Southern Railway, to Cincinnati, Louisville, and Evansville and all Ohio rive points, the rates are three cents higher than they have been since 1891. This steady and marked increase of rates for the transportation of this freight, coincident with the phenomenal increase of the tonnage carried, seems abnormal. 'The general rule,' said the interstate commerce commission in its valuable report in this case, 'is this: The greater the tonnage of an article transported, the lower should be the rate. No rule is more firmly grounded in reason or more universally recognized by carriers. ' While these conditions were existing, while the respondent railroads were engaged in the transportation of the largest annual tonnage of lumber theretofore known, in April, 1903, the Southeastern Freight Association and other similar associations having conferred upon the subject, the defendant companies, acting in concert, announced that they would forthwith put into effect an increase of two cents a hundred pounds in the rate on lumber to points on the Ohio river and beyond. This announcement brought the intelligence of this additional levy upon their products to the owners of every mill in Georgia, in Florida, in Alabama, in Mississippi, in Louisiana, and in Arkansas. On the lumbermen at work in the immediate domain of the Southeastern Freight Association estimated on the tonnage of that year the assessment amounted to $132,000. It is perhaps not surprising that these men immediately sought protection through the courts.

On the 17th of April, 1903, the original bill was filed. The complainants are H. H. Tift,...