Chicago, Milwaukee & St. Paul Railway Co. v. Public Utilities Commission of Idaho

• Decision Date: 25 March 1925
• Citation: 238 P. 970,41 Idaho 181
• Parties: CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, OREGON-WASHINGTON RAILROAD & NAVIGATION COMPANY, GREAT NORTHERN RAILWAY COMPANY, NORTHERN PACIFIC RAILWAY COMPANY, SPOKANE INTERNATIONAL RAILWAY COMPANY, Appellants, v. PUBLIC UTILITIES COMMISSION OF THE STATE OF IDAHO, Respondent
• Court: Idaho Supreme Court

238 P. 970

41 Idaho 181

CHICAGO, MILWAUKEE & ST. PAUL RAILWAY COMPANY, OREGON-WASHINGTON RAILROAD & NAVIGATION COMPANY, GREAT NORTHERN RAILWAY COMPANY, NORTHERN PACIFIC RAILWAY COMPANY, SPOKANE INTERNATIONAL RAILWAY COMPANY, Appellants, v. PUBLIC UTILITIES COMMISSION OF THE STATE OF IDAHO, Respondent

Supreme Court of Idaho

March 25, 1925

AUTHORITY OF FEDERAL GOVERNMENT TO ADVANCE INTRASTATE RAILROAD RATES AS WAR EMERGENCY MEASURE-TERMINATION OF AUTHORITY-AUTHORITY OF STATE PUBLIC UTILITIES COMMISSION TO REDUCE INTRASTATE WAR RATES-RATES VOLUNTARILY ESTABLISHED BY CARRIER PRESUMED REASONABLE-PRINCIPLES OF RATE ADJUSTMENT-WHAT MAY BE CONSIDERED ON APPEAL FROM ORDER OF STATE COMMISSION.

1. Authority to make and enforce intrastate rates without regard to state action was included in the powers given the President by the acts of August 29, 1916 (39 Stats. L. 645 chap. 418; Comp. Stats. 1916, sec. 1974a), and March 21, 1918 (40 Stats. L. 451, chap. 25; Comp. Stats. 1918, sec 3115-3/4a), to take over and operate the railroad transportation systems as a war emergency measure. After such railroads were restored to their owners this power given to the federal government, by these acts, over intrastate rates ceased, and the state Public Utilities Commission had authority to restore or make reductions in such intrastate rates without going into a hearing of the whole rate structure.

2. Where the federal government, in the exercise of its war-time power, advances intrastate rates under such emergency, when the same has passed the state is not required to treat the increased intrastate rates established in this manner as the fixing of a reasonable rate, under peace time conditions which the state Public Utilities Commission cannot reduce without first having a hearing and finding such advanced rate unreasonable and confiscatory.

3. Where a rate voluntarily established by the carrier has been in force for a long period, such rate may be presumed to be prima facie just and reasonable, and the burden is on anyone attacking the same to show that the rate so fixed is unreasonable.

4. The rule that before the Public Utilities Commission may lower an existing rate it must first find that it is unjust or unreasonable does not apply to rates that have been established by the federal government under its war-time power, where such rates were advanced to meet the increased cost of operation of the transportation systems and to secure the government from ultimate loss from the pecuniary obligations which it assumed in taking over such systems under its war-time power.

5. Commodity rates cannot generally be considered upon manufactured products with fairness to both shipper and carrier except in conjunction with the entire traffic and the completed process of collecting the raw material and subsequently distributing it as a finished product.

6. Under sec. 3, Sess. Laws 1921, p. 142, upon an appeal from an order of the Public Utilities Commission, the appeal must be heard upon the record of the commission as certified by it and the review cannot extend further than to determine whether the commission has regularly pursued its authority, including the determination of whether the order appealed from violates any right of the appellant under the constitution of the United States or of this state.

APPEAL from orders of the Public Utilities Commission. Affirmed.

Order affirmed, Petition for rehearing denied.

F. M. Dudley, W. A. Robbins, Thomas Balmer and C. H. Hartson, for Appellants.

The establishment of rates which are noncompensatory is violative of the fourteenth amendment to the federal constitution and of sections 1, 14 and 18 of article 1 of the constitution of Idaho, and these constitutional provisions are applicable not only to the business of the carrier as a whole but also to the transportation of each separate class of traffic. (Northern P. Ry. Co. v. North Dakota, 236 U.S. 585, 35 S.Ct. 429, 59 L.Ed. 735; Norfolk & West. Ry. v. Conley, 236 U.S. 605, 35 S.Ct. 437, 59 L.Ed. 745; Brooks-Scanlon Co. v. Railroad Com., 251 U.S. 396, 40 S.Ct. 183, 64 L.Ed. 323; Vandalia R. R. Co. v. Schnull, 255 U.S. 113, 41 S.Ct. 324, 65 L.Ed. 539; Morgan's L. & T. R. & S. S. Co. v. Railway Com., 127 La. 636, 53 So. 890.)

The Public Utilities Commission is not authorized to reduce rates unless it first finds that such rates are unjust or unreasonable. (Murray v. Public Utilities Com., 27 Idaho 603, 150 P. 47, L. R. A. 1916F, 756.)

The Interstate Commerce Commission can require an increase in intrastate rates to prevent such rates operating as an undue burden upon or unjustly discriminating against interstate commerce. (Railroad Com. v. Chicago, B. & Q. R. Co., 257 U.S. 563, 42 S.Ct. 232, 66 L.Ed. 371; State of New York v. United States, 257 U.S. 591, 42 S.Ct. 239, 66 L.Ed. 385.)

But where a reduction of intrastate rates is required to protect such rates against interstate rates, the remedy is with the state authorities. (Railroad Com. v. Chicago, B. & Q. R. Co., supra.)

The Public Utilities Commission cannot lawfully reduce rates upon the theory that such reduction is an act of policy and beneficial to the carrier. (Interstate Commerce Com. v. Chicago & G. W. Ry. Co., 209 U.S. 108, 28 S.Ct. 493, 52 L.Ed. 705; Missouri ex rel. Southwestern Bell Tel. Co. v. Public Service Com., 262 U.S. 276, 43 S.Ct. 544, 67 L.Ed. 981; Chicago, M. & St. P. R. R. v. Wisconsin, 238 U.S. 491, 35 S.Ct. 869, 59 L.Ed. 1423; Cincinnati, N. O. & T. P. Ry. Co. v. Interstate Commerce Com., 162 U.S. 184, 16 S.Ct. 700, 40 L.Ed. 935; Atchison, T. & S. F. Ry. Co. v. Interstate Commerce Com., 190 F. 591; In re Wharfage Charges, 23 I. C. C. 535; In re Express Rates, 24 I. C. C. 380; Sioux City T. El. Co. v. C. M. & St. P. Ry. Co., 27 I. C. C. 457; Western Passenger Fares, 37 I. C. C. 1; People v. Stevens, 197 N.Y. 1, 90 N.E. 60; People v. Stevens, 203 N.Y. 7, 96 N.E. 114; Havre etc. Bridge Co. v. Towers, 132 Md. 16, 103 A. 319; Laird v. B. & O. R. Co., 121 Md. 179, Ann. Cas. 1915B, 728, 88 A. 347, 348, 47 L. R. A., N. S., 1167; State Pub. Util. Com. v. Springfield G. & E. Co., 291 Ill. 209, 125 N.E. 891.)

The burden of proof was upon the commission. (Interstate Commerce Com. v. Chicago G. W. Ry. Co., 209 U.S. 108, 28 S.Ct. 493, 52 L.Ed. 705; Cincinnati, N. O. & T. P. Ry. Co. v. Rankin, 241 U.S. 319, 36 S.Ct. 555, 60 L.Ed. 1022; Chamber of Commerce v. S. Ry. Co., 22 I. C. C. 233; National Wool Growers Assn. v. O. S. L. Ry. Co., 25 I. C. C. 675; Memphis Freight Bureau v. I. C. R. Co., 27 I. C. C. 507; Rosenblatt & Sons v. A. A. R. R. Co., 33 I. C. C. 324; Capital City Oil Co. v. Y. & M. V. R. R. Co., 39 I. C. C. 141; In re Coal Rates, 23 N.M. 704, 171 P. 506.)

No inference as to the unreasonableness of the log rates as advanced pursuant to the Interstate Commerce Commission's Order in Ex parte 74 and subsequently maintained by the carriers is to be drawn from the fact that for many years prior to 1918 they had maintained lower rates which they had voluntarily installed. (Interstate Commerce Com. v. Chicago G. W. Ry. Co., supra; Southern P. Co. v. Interstate Commerce Com., 219 U.S. 433, 31 S.Ct. 288, 55 L.Ed. 283; People ex rel. N.Y. C. & H. R. Co. v. Public Service Com., 215 N.Y. 241, 109 N.E. 252; Memphis Cotton Oil Co. v. I. C. R. R. Co., 17 I. C. C. 313; Morgan Grain Co. v. Atlantic A. C. Ry. Co., 19 I. C. C. 460; Excelsior from St. Paul, Minn., 36 I. C. C. 349; New England Plaster, 41 I. C. C. 687.)

Past practices of carriers in fixing log rates in expectation of receiving haul of manufactured product does not authorize commission to adopt such policy as a basis for prescribing rates. (Southern P. Co. v. Interstate Commerce Com., 219 U.S. 433, 31 S.Ct. 288, 55 L.Ed. 283; Excelsior from St. Paul, Minn., supra.)

Alfred A. Fraser, for Intervenor Western Pine Manufacturers' Assn.

The Public Utilities Commission was authorized to hold a hearing upon its order to show cause and to issue the order now in controversy. (C. S., secs. 2450-2452, 2478, 2494, 2495.)

On appeal the court should uphold the order unless it is shown that there was no evidence to support the finding of fact or that the commission acted arbitrarily or without authority of law. (Sess. Laws 1921, chap. 72, sec. 3.)

On appeal the court will not revise the commission's findings unless clearly erroneous. (Jacobson v. Wisconsin Cent. Ry. Co., 71 Minn. 519, 70 Am. St. 358, 74 N.W. 893, 40 L. R. A. 389; Interstate Commerce Com. v. Chicago, B. & Q. Ry. Co., 186 U.S. 320, 22 S.Ct. 824, 46 L.Ed. 1182; Louisville & Nashville Ry. Co. v. Behlmer, 175 U.S. 648, 20 S.Ct. 209, 44 L.Ed. 309; Louisville & N. Ry. v. United States, 238 U.S. 1, 35 S.Ct. 696; Elzaburu v. Chaves, 239 U.S. 283, 284, 36 S.Ct. 47, 60 L.Ed. 290; Great Northern Ry. Co. v. Merchants Elevator Co., 259 U.S. 285, 42 S.Ct. 477, 66 L.Ed. 943.)

The burden of proof rested upon the carriers to show that the existing log rates are just and reasonable, and they have failed to do so. (10 C. J., sec. 686, p. 438; Steenerson v. Great Northern Ry. Co., 69 Minn. 353, 72 N.W. 713; Washington Southern Ry. Co. v. Commission, 112 Va. 515, 71 S.E. 539; Southern Ry. Co. v. Commission, 42 Ind.App. 90, 83 N.E. 721; Chicago etc. Ry. Co. v. State, 35 Okla. 233, 128 P. 908.)

A. H. Conner, Attorney General, for Respondents.

WILLIAM A. LEE, C. J. Wm. E. Lee, Budge and Givens, JJ., concur. Taylor, J., took no part in the decision.

OPINION

WILLIAM A. LEE, C. J.

--This is an appeal from a decision of the Idaho Public Utilities Commission made August 20, 1923, which required appellants to file tariffs making reductions in intrastate log rates to conform to reductions authorized by the Interstate Commerce Commission in Reduced Rates, decided May 16, 1922 Order No. 13,293,...