Railroad Commission of Ohio v. Worthington

• Citation: 187 F. 965
• Decision Date: 02 May 1911
• Docket Number: 2,090.
• Parties: RAILROAD COMMISSION OF OHIO v. WORTHINGTON.
• Court: United States Courts of Appeals. United States Court of Appeals (6th Circuit)

187 F. 965

RAILROAD COMMISSION OF OHIO v. WORTHINGTON.

No. 2,090.

United States Court of Appeals, Sixth Circuit.

May 2, 1911

W. D Turner and T. H. Hogsett (U. G. Denman and Timothy S. Hogan Attys. Gen., and Freeman I. Eagleson, on the brief), for appellant.

Squire Sanders & Dempsey (W. B. Sanders and W. M. Duncan, of counsel), for appellee.

Before SEVERENS and KNAPPEN, Circuit Judges, and McCALL, District judge.

SEVERENS Circuit Judge.

At the time when this bill was filed in the Circuit Court, there was pending therein a consolidated suit, constituted by the consolidation of a suit brought by the National Car Wheel Company of New York against the Wheeling & Lake Erie Railroad Company, a corporation of Ohio, and another suit brought by the Central Trust Company of New York, a corporation of New York, against the same defendant. The object of the bill in the latter case was the foreclosure of a mortgage of the properties of the railroad company wherein the trust company was mortgagee. From the allegations in the bill now before us, we gather that the object of the bill of the car wheel company was the winding up of the affairs of the railroad company on the ground of its insolvency, the marshaling of liens upon its property, and the protection of all parties interested. From the nature of these suits, no other ground being suggested, it is inferable that the jurisdiction of the court depended in both cases upon the diverse citizenship of the parties.

Pursuant to the prayer of the bill in each of these two consolidated cases, B. A. Worthington was appointed receiver of 'all and singular the property, assets, rights, and franchises of the Wheeling & Lake Erie Railroad Company, including all railroads and other property and assets, rights, and franchises of whatsoever kind and description and wheresoever situated, owned or operated by the said railroad company, authorizing and directing the said receiver to keep the railroads and other property of said the Wheeling & Lake Erie Railroad Company employed and used as the same were theretofore used, and to continue the operation of said railroads, and to institute and prosecute all such suits as might be necessary in the judgment of the receiver for the proper protection of the property and trusts thereby vested in him and of the business placed in his charge. ' And it is alleged that the receiver thereupon 'took possession of the said property, assets, and franchises of the Wheeling & Lake Erie Railroad Company, and ever since has been and is now in possession of and operating the said railroads and property under and pursuant to the orders of said court.'

Under the authority of the foregoing order, the receiver filed this bill against the Railroad Commission of Ohio, alleging that prior to a certain recent date the railroad company had fixed, and for a long time had maintained, a rate, called a 'lake cargo rate,' of 90 cents per ton for the transportation of coal from a locality known as 'No. 8 Mining District in Ohio' to Huron and Cleveland, ports in that state on Lake Erie, and unloading the coal from its cars into the holds of vessels, and distributing and 'trimming' the coal in the holds and preparing in all things the cargo for its further transportation to distant ports on the Upper Lakes. Other coal transported to Huron or Cleveland, not intended for lake transportation, but intended to be thence distributed to nearby points, was charged with a rate of $1 per ton for the original transportation to Huron or Cleveland, as the case might be. But, on the complaint of shippers from the mining district that the rate of 90 cents per ton for the transportation of the lake cargo coal to Huron and Cleveland was unreasonably high, and ought to be reduced as much as 20 cents per ton, the Railroad Commission of Ohio, on due notice to the railroad company and a hearing of all parties, held the complaint well founded, and on the 28th of February, 1910, ordered the rate to be reduced from 90 to 70 cents, and directed its order to be put in force by the railroad company from and after the 22d day of April following. The following paragraphs of the order show its substance and effect:

'It is therefore ordered that said defendants, the Wheeling & Lake Erie Railroad Company and B. A. Worthington as receiver thereof, be and each of them is hereby notified and required to cease and desist from charging, demanding, collecting, and receiving said excessive and unreasonable rate of 90 cents per ton f.o.b. vessel for the transportation of coal, car loads, from mines on the lines of said the Wheeling & Lake Erie Railroad Company in what is known as the No. 8 District in Ohio to the village of Huron, Ohio, and to the city of Cleveland, Ohio.

'It is further ordered that a rate of 70 cents per ton f.o.b. vessel, which the commission have found to be a just and reasonable rate to be charged for the transportation of coal, car loads, from said No. 8 District to the village of Huron, Ohio, and the city of Cleveland, Ohio, be substituted for said rate of 90 cents per ton f.o.b. vessel found by the commission to be unreasonable, which rate of 70 cents per ton f.o.b. vessel, as aforesaid, shall be charged, imposed, observed, and followed in the future by said the Wheeling & Lake Erie Railroad Company and said B. A. Worthington, receiver of said company, and by each of them, in lieu of and in substitution of said rate of 90 cents per ton f.o.b. vessel, found by the commission to be unreasonable.'

The purpose of the receiver's bill is to restrain the enforcement of this order of the commission and from instituting any suit or proceeding to compel obedience to it. To this end the receiver, after stating in his bill the conditions above stated, alleged a variety of facts and circumstances, including the cost of transportation as compared with the rate enjoined by the commission, as exhibited by the company's books and records, which are set forth in detail, all tending to show, as the receiver claims, that the order of the commission is confiscatory, and, when compared with other rates charged and enforced by other railroad companies for similar services in nearby localities, discriminatory. Upon these allegations of fact, of which the substance has been stated, the receiver charged as matter of law that the order of the commission was void for the following reasons:

First. Because it 'directly affects and interferes with this interstate commerce engaged in by your orator, over which the said Railroad Commission of Ohio has no authority or power inasmuch as the regulation of such...