Chicago, B. & Q.R. Co. v. Merriam & Millard Co.

• Decision Date: 28 March 1924
• Docket Number: 6281.
• Citation: 297 F. 1
• Parties: CHICAGO, B. & Q.R. CO. v. MERRIAM & MILLARD CO. [1]
• Court: U.S. Court of Appeals — Eighth Circuit

297 F. 1

CHICAGO, B. & Q.R. CO. v. MERRIAM & MILLARD CO. ^[1]

No. 6281.

United States Court of Appeals, Eighth Circuit.

March 28, 1924

Kenneth F. Burgess, of Chicago, Ill., and J. W. Weingarten, of Omaha Neb. (Byron Clark and Jesse L. Root, both of Omaha, Neb., on the brief), for plaintiff in error.

William A. Schall, of Omaha, Neb. (Edward P. Smith, Francis S Howell, Warren H. Howard, and Frank E. Sheehan, all of Omaha Neb., on the brief), for defendant in error.

E. R Morrison and Howard L. Hassler, both of Kansas City, Mo., amici curiae.

Before SANBORN, Circuit Judge, and TRIEBER and MUNGER, District Judges.

MUNGER District Judge.

This suit was brought to recover the difference between the tariff rate and what is alleged to have been a reasonable rate, on certain grains shipped from points in Nebraska and South Dakota to points in Idaho, Montana, and in the three states bordering on the Pacific Ocean.

Rates on these grains of 81 1/2 cents per hundred pounds had been duly made as authorized by the Interstate Commerce Commission in 1920. Ex parte No. 74, 58 Interst.Com.Comr.R. 220. These rates had been set forth in printed tariffs filed with the Interstate Commerce Commission and published and posted as required by law. Thereafter the Interstate Commerce Commission, hereafter called Commission, undertook an investigation of these rates and on October 20, 1921, it made and filed an extensive report (Rates on Grain, Grain Products and Hay, 64 Interst.Com.Comr.R. 85) dealing with many features of the situation. The material portions of that report are as follows:

'We find that the present rates on wheat and hay involved herein will be for the future unjust and unreasonable to the extent that they may individually include more than one-half of the increases authorized in Ex parte No. 74. We further find that the present rates on coarse grains will be for the future unjust and unreasonable to the extent that they may exceed rates 10 per cent. less than those herein prescribed as just and reasonable on wheat from and to the same points. * * *

'We further find that the rates on commodities recognized as products of the above commodities will be for the future unjust and unreasonable to the extent that they exceed rates that would be made by continuing the relationships that now exist, except that where differentials are observed and were subjected to the percentage increases the differentials should be reduced proportionately with the rates. * * *

'An order will be entered in accordance with our findings if that becomes necessary. We shall expect the reductions to be made as soon as practicable and not later than November 20, 1921.'

No order was made in that proceeding by the Commission until November 21, 1921, when one was made which recited that the Commission had entered upon an investigation by an order dated July 11, 1921, and had rendered its report on October 20, 1921. It referred to and made the report a part of the order and recited that the cause had then come on for further consideration and proceeded as follows:

'It is ordered, that the common carriers by railroad, parties to this proceeding, named in Appendix I, according as they respectively participate in the transportation, be, and they are hereby, notified and required to cease and desist, on or before December 27, 1921, and thereafter to abstain from publishing, demanding or collecting any rates for the interstate transportation of grain, grain products and hay, in carloads, within the territory described below, in excess of those hereinafter prescribed.'

By this order the applicable rate on these grains was reduced to 64 cents per hundred pounds. The shipments of grain involved in this suit are set forth in four causes of action. In the first, the plaintiff seeks as the shipper of the grain and in the others as the assignee of other shippers. The dates of delivery of the several cars to the carrier and of the billing by the carrier are alleged to be stated in exhibits attached to the petition and made a part of it. The exhibits show that some of these cars were delivered to the carrier before December 27, 1921, and that some were delivered in December, but after that date. The answer alleged that the plaintiff and his 'assignors made said shipments in December prior to December 27, 1921,' but otherwise denied the allegations of the petition. The reply denies the allegations in the answer except such as admitted the allegations of the petition. There was a trial to a jury. No evidence was offered to show the date of the delivery of any of these cars to the carrier. The allegation of the answer supplied that proof as to cars alleged to have been shipped before December 27, 1921, but its denials placed on the plaintiff the burden of proving shipments made on and after that date, and as no proof was offered, the only shipments now in question are those made in December, but prior to December 27, 1921.

The payment of a rate of 81 1/2 cents per hundred pounds to the carrier for the shipment of this grain was admitted. The petition sought a recovery for the difference between the amount of freight paid at the rate of 81 1/2 cents per hundred pounds and the rate of 64 cents per hundred pounds, alleging that the rate paid was unlawful. unjust, and unreasonable, to the extent that it exceeded 64 cents per hundred pounds. At the close of the testimony there was a motion for a directed verdict made on behalf of each of the parties, and the court directed a verdict for the plaintiff for the full amount of its claim. The chief questions presented by this proceeding in error are the giving of the peremptory instruction in favor of the plaintiff, and the refusal to direct a verdict for the defendant, and the determination of those questions in this case depends on the proper rate applicable to the shipments made before December 27, 1921.

The claim that the rate was unlawful cannot be sustained. The duly filed and published tariff rate, while it was in force, was the only lawful rate. Penna. R.R. Co. v. International Coal Co., 230 U.S. 184, 197, 33 Sup.Ct. 893, 57 L.Ed. 1446; Atchison, etc., Ry. Co. v. Robinson, 233 U.S. 173, 181, 34 Sup.Ct. 556, 58 L.Ed. 901; Keogh v. C. & N.W. Ry. Co., 260 U.S. 156, 163, 43 Sup.Ct. 47, 67 L.Ed. 183. It is not claimed that the carrier had made any change of these tariff rates at the time of these shipments. The report and opinion of the Commission filed on October 20, 1921, did not purport to and could not annul or change the existing tariff rate. American Sugar Refining Co. v. Delaware, L. & W.R. Co., 207 F. 733, 741, 743, 125 C.C.A. 251; North American Co. v. St. Louis & S.F.R. Co. (D.C.) 288 F. 612, 618. The rule is stated in Mitchell Coal Co. v. Penna. R.R. Co., 230 U.S. 247, 257, 33 Sup.Ct. 916, 921 (57 L.Ed. 1472): 'But since the Commission is charged with the duty of determining whether the practice was so unreasonable as to be a violation of the law, the plaintiff must, as a condition to his right to succeed, produce an order from the Commission that the practice or the rate was thus unreasonable and therefore illegal and prohibited.'

Section 15 of the Interstate Commerce Act (Comp St. Sec. 8583) required that any change of the rates made by the Commission should be made, not by a report, finding, or opinion, but by an order to the carrier to cease and desist from collection of the rate, to take effect not less than thirty days after the date of the order. The first order that was made directed the carrier to abstain from collecting the tariff rate of 81 1/2 cents per hundred pounds on and after December 27, 1921, a date which was subsequent to the shipments involved. Subsequent orders of the Commission are said to have been made extending the date of compliance with the order, reopening the case for rehearing, and vacating prior findings (Rates on Grain, Grain Products and Hay, 80 Interst.Com.Comr.R. 362), but are not deemed material in this controversy.

The defendant in error conceded that the 81 1/2 cent rate was the published rate, but makes the further claim that it is entitled to recover in this action because that rate was unreasonable, to the extent that it exceeded a...