Chicago Ry Co v. United States

• Decision Date: 11 April 1927
• Docket Number: No. 190,190
• Citation: 71 L.Ed. 911,47 S.Ct. 486,274 U.S. 29
• Parties: CHICAGO, R. I. & P. RY. CO. et al. v. UNITED STATES et al
• Court: U.S. Supreme Court

274 U.S. 29

47 S.Ct. 486

71 L.Ed. 911

CHICAGO, R. I. & P. RY. CO. et al.

v UNITED STATES et al.

No. 190.

Argued and Submitted March 4, 1927.

Decided April 11, 1927.

Messrs. A. B. Enoch, of Chicago, Ill., M. G. Roberts, of St. Louis, Mo., and Thomas P. Littlepage and M. L. Bell, both of Chicago, Ill., for appellants.

Mr. Blackburn Esterline, of Washington, D. C., for the United States.

Messrs. D. W. Knowlton and P. J. Farrell, both of Washington, D. C., for appellee Interstate Commerce Commission.

Mr. R. C. Fulbright, of Houston, Tex., for appellee Houston Cotton Exchange and Board of Trade and others.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

This is a suit to annul, and enjoin the enforcement of, an order of the Interstate Commerce Commission prescribing joint rail and water and rail water and rail rates (both hereinafter designated as rail and water rates) on cotton from points in Oklahoma, via Galveston and certain steamship lines, to New England destinations. The complaint before the Commission was brought by the Houston Cotton Exchange and Board of Trade and other similar organizations against appellants and a number of other carriers, to have prescribed and established just and reasonable joint through rates on cotton from Oklahoma points through Texas ports to various points of destination in the northeastern part of the United States and Canada, including New England territory. The modified final order of the Commission required appellants to establish and maintain for the transportation of cotton from Oklahoma points, via Galveston and the lines of the Mallory Steamship Company and the Southern Pacific Company-Atlantic Steamship Lines, to destinations in New England territory, joint rail and water rates not exceeding 'rates 4 cents per 100 pounds lower than the present all-rail rates from and to the same points,' not, however, lower than $1.50 per 100 pounds. Prior to the Commission's order, no joint rail and water rates on cotton were in effect between the points mentioned. The rate to New York consisted of the local rail rate to Galveston, plus the water rate therefrom and a loading charge. To New England points, the rate was made by adding the rail rate beyond New York. The all-rail routes from Oklahoma to the New England territory points are through St. Louis, Memphis, and other Mississippi crossing; and the joint all-rail rates were lower to New England destinations than the combination of local rail and water rates. On commodities other than cotton, joint rail and water rates were in effect, and these were lower than the all-rail rates. The Commission found that the establishment of joint rail and water rates on cotton between the points in question was desirable in the public interest, and that the existing rates for such transportation were unreasonable to the extent that they exceeded or may exceed rates constructed by the deduction of 4 cents from the present all-rail rates. 87 Interst. Com. Com'n R. 392; 93 Interst. Com. Com'n R. 268. The court below, consisting of three judges, after a hearing, entered a decree dismissing the bill for want of equity. (D. C.) 6 F.(2d) 888.

Appellants assign 21 specifications of error; but the objections to the Commission's order, so far as necessary to be considered here, may be summarized as follows: (1) The Commission undertook to equalize rail and water rates with the all-rail rates, a power which it does not possess; (2) if the order be treated as made under the power to fix reasonable rates, it is arbitrary and without supporting evidence; (3) the result of the order is to short-haul appellants' lines, contrary to paragraph 4, § 15, of the Interstate Commerce Act, as amended by section 418 of the Transportation Act 1920, c. 91, 41 Stat. 456, 485 (Comp. St. § 8583); and (4) the order is based upon paragraph 13 of section 6, added to the Interstate Commerce Act by the Panama Canal Act of August 24, 1912, c. 390, 37 Stat. 560, 568 (Comp. St. § 8569), and is therefore void because the authority of the Commission was not invoked under that paragraph.

First. Appellants' argument under this head seems to be predicated upon the contention that the order of the Commission established an exact relationship between the rail and water rates and the present all-rail rates; the differential of 4 cents being, it is said, the amount charged by insurance companies as a premium for insurance to cover the risk of water transportation, and that an analysis of the Commission's order and report shows that the Commission itself recognized that it was undertaking to make such an equalization. The complaint before the Commission plainly sought the establishment of reasonable rates, and the order of the Commission directed and carriers to discountinue the then existing rates made up of combinations of local rates and substitute the maximum joint rates which were prescribed in the words already stated. The Commission found that rates were and would be unreasonable to the extent they exceeded or might exceed those prescribed. In form, the action of the Commission was responsive to the case made by the complaint, and to hold that, in fact, its order was not one fixing reasonable rates, but an order equalizing rates, would be to put undue stress upon certain recitals contained in the report, to which our attention is called but which need not be detailed. If these recitals stood alone, they might give plausibility to the contention but, from a consideration of the entire record, we think it quite unfair to conclude that the Commission undertook to exercise an authority entirely different and distinct from that which the complaint specifically invoked.

There is nothing in Southern Pacific Co. v. Interstate Commerce Commission, 219 U. S. 433, 31 S. Ct. 288, 55 L. Ed. 283, that requires a different conclusion. In that case it appeared upon the face of the record that the Commission had not exerted its power to correct an unjust and unreasonable rate, but had made the order complained of upon the theory that it possessed the power to set aside a just and reasonable rate whenever the Commission deemed that it would be equitable to shippers in a particular district to put in force a reduced rate. In reaching that conclusion, the court thought that the complaint and answer presented the latter issue; that, while the opinion of the Commission might contain some sentences indicating the contrary, when considered as a whole, in the light of the record, it clearly appeared that the order was based upon that theory; and that this was borne out by the dissenting opinion, which proceeded upon the express ground that the order was an exertion of a power not possessed, with no language in the prevailing opinion to indicate the contrary. Here, it is true, the order fixes the rail and water rate by relating...