United States v. Clyde SS Co.
| Decision Date | 02 December 1929 |
| Docket Number | No. 34.,34. |
| Citation | 36 F.2d 691 |
| Parties | UNITED STATES v. CLYDE S. S. CO. |
| Court | U.S. Court of Appeals — Second Circuit |
Charles H. Tuttle, U. S. Atty., of New York City , for the United States.
Burlingham, Veeder, Fearey, Clark & Hupper, of New York City (Roscoe H. Hupper and Burton H. White, of New York City, of counsel), for appellee.
Before MANTON, AUGUSTUS N. HAND, and CHASE, Circuit Judges.
A shipper of rosin in Boston complained of the Clyde Line to the Interstate Commerce Commission because of what it termed "secret rating from Brunswick, Ga., to Boston, Mass., on rosin that was not intended for Boston." The Clyde Steamship Company had issued bills of lading from Brunswick to Boston, consigning rosin to Hurd & Connor, Inc. Some of these bills of lading had on them the notation "beyond Boston." There was no proof at the trial of a common arrangement between the Clyde Steamship Company and any railroad for continuous carriage of this rosin from Brunswick to points beyond Boston, though the notation on the bills of lading indicated a purpose on the part of the shipper to have the merchandise carried beyond that port, and if at the time the shipments were made there had been a common arrangement between the Clyde Steamship Company and a railroad for this carriage the transaction would have been subject to the jurisdiction of the Interstate Commerce Commission, because it would have involved an arrangement for a continuous carriage partly by water and partly by land. United States v. Munson (D. C.) 33 F.(2d) 211 (1929) A. M. C. at page 506. The steamship company delivered the merchandise at Boston to various railroads for inland shipment on the order of the consignor, but, so far as appears, without any arrangement between the steamship line and the railroads for through rates of carriage.
The Clyde Steamship Company apparently was not subject to the jurisdiction of the Commission, because of the shipments complained of, for the reason that no arrangement with any railroad for continuous transportation of these shipments was shown. But it was engaged in the transportation of commodities between Jacksonville, Fla., Charleston, S. C., Wilmington, N. G., and numerous inland points on the line of the Boston & Maine Railroad such as Holyoke, Mass., and Dover, N. H., under a common arrangement for continuous transportation. For this carriage it had filed tariffs with the Commission covering rates to be charged in connection with the rail carriers which participated in its tariffs. It accordingly came within the letter of section 20(5) of the Interstate Commerce Act as amended (49 USCA § 20(5), providing that:
"The Commission shall at all times have access to all accounts, records, and memoranda, including all documents, papers, and correspondence now or hereafter existing, and kept or required to be kept by carriers subject to this chapter * * * and it may employ special agents or examiners, who shall have authority under the order of the Commission to inspect and examine any and all accounts, records, and memoranda, including all documents, papers, and correspondence, now or hereafter existing, and kept or required to be kept by such carriers."
The notation on the bills of lading from Brunswick to Boston of the words "beyond Boston" gave the Commission some ground to suspect that the steamship company had an arrangement with a railroad for continuous carriage. It accordingly authorized its examiner to inspect the records of the Clyde Line for the purpose of ascertaining whether the latter was subject to its jurisdiction in respect to the shipments complained of. The Clyde Line had filed no tariffs relating to shipments of rosin from Brunswick to Boston and points beyond and refused access to its records relating "to the transportation of rosin from Brunswick Ga., via the Clyde Steamship Company to Boston, Mass., and there delivered on the piers of the several railroads for shipment to points outside of Boston Harbor."
By reason of this refusal the United States brought this action to recover forfeitures of $500 for each day during the continuance of the offense.
The special agent of the Commission demanded an examination of the "accounts, records and memoranda including all documents, papers and correspondence having any relation to the transportation of rosin from Brunswick, Ga., via the Clyde Steamship Company to Boston, Mass., and there delivered on the piers of the several railroads for shipment to points outside of Boston Harbor."
The Steamship Company declined to allow any examination stating that it had no common arrangement with any railroad with respect to traffic from Brunswick, Ga., via the port of Boston, and asked the examiner to take the matter up with the company's counsel who, at the time, were defending a proceeding instituted by the Attorney General to obtain a writ of mandamus commanding the company to submit the records in question to the inspection of the Commission. On advice of counsel, the company finally consented to the examination and the application for a writ of mandamus was dropped. Some three months later this action was brought to recover forfeitures arising out of the original refusal to grant an inspection which continued for 19 days.
The trial judge directed a verdict for the defendant on the ground that the demand of the Commission was unreasonable, and should not have been made at a time when a mandamus proceeding was pending in which the Clyde Steamship Company in good faith disputed the Commission's right to an inspection.
The defendant challenges the right of the United States to maintain this action because:
(1) The plaintiff did not prove the case set up in the complaint;
(2) The demand made by the examiner was unduly broad and subjected the defendant to an unlawful search;
(3) The proceeding for a writ of mandamus amounted to an election which barred the action for a penalty;
(4) The penalty of $500 per day imposed by the statute is so harsh as to negative due process of law, and is, therefore, repugnant to the Fifth Amendment of the Constitution.
The first objection cannot stand. The complaint alleges that the defendant is a common carrier engaged in transportation for hire in connection with various carriers by rail "under a common arrangement for continuous carriage * * * from ports on its route including Jacksonville * * * Brunswick, Charleston, * * * and Wilmington." It is true that the shipments here in question have not been shown to have been made under such a common arrangement. But the government amply proved that the Clyde Steamship Company was a common carrier and that it filed tariffs for through shipments in coastwise trade. It accordingly became...
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