Darnell-Taenzer Lumber Co. v. Southern Pac. Co.

• Decision Date: 06 April 1915
• Docket Number: 2541.
• Citation: 221 F. 890
• Parties: DARNELL-TAENZER LUMBER CO. et al. v. SOUTHERN PAC. CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

221 F. 890

DARNELL-TAENZER LUMBER CO. et al. v. SOUTHERN PAC. CO. et al.

No. 2541.

United States Court of Appeals, Sixth Circuit.

April 6, 1915

Allen Hughes, of Memphis, Tenn., for plaintiffs in error.

C. N Burch, of Memphis, Tenn., for defendants in error.

Before KNAPPEN and DENISON, Circuit Judges, and SATER, District Judge.

KNAPPEN Circuit Judge.

In the case of George D. Burgess et al. v. Transcontinental Freight Bureau et al., the Interstate Commerce Commission found that a freight rate of 85 cents per 100 pounds on lumber from certain Mississippi Valley territory, including Memphis Tenn., to Pacific Coast terminals was excessive, and ordered a rate not exceeding 75 cents, effective August 1, 1908. Reparation was awarded on account of shipments made from June 8, 1907, to August 1, 1908. 13 Interst.Com.R. 668-680.

This is a suit for such reparation, under section 16 of the Interstate Commerce Act, as amended June 29, 1906 (34 Stat 590, c. 3591, Sec. 5 (Comp. St. 1913, Sec. 8584)), brought by plaintiff in error and 7 other lumber companies against the Southern Pacific Railroad Company and 25 other railroads, the amount of reparation to which each plaintiff was entitled as against the respective defendants having been determined by a supplemental report and order of the Commission of October 10, 1910. Decision not reported; see memorandum in 19 Interst.Com. Com'n R. 611. Defendants pleaded, among other defenses: (a) That the 85-cent rate was not unreasonable; and (b) that plaintiffs had not been damaged. On a trial by jury, at the close of the testimony, verdict was directed for defendants; hence this writ of error. Upon the trial plaintiff put in evidence both reports and both orders of the Commission, original and supplemental. There was also oral testimony on plaintiffs' part on the subject of damages. There was testimony pro and con as to the reasonableness of the charges. The direction of verdict is here defended on the ground of utter lack of evidence that plaintiffs suffered damages. This contention involves the propositions: (1) That the reports and orders of the Commission are not prima facie evidence of damages or of the measure thereof; and (2) that both the facts found by the Commission and the oral evidence show that plaintiffs were not damaged.

Since this case was brought here the Supreme Court, in the cases of Meeker v. Lehigh Valley R.R. Co., 236 U.S. 412, 35 Sup.Ct.

328, 59 L.Ed. . . ., and Id., 236 U.S. 434, 35 Sup.Ct. 337, 59 L.Ed. . . ., has held that the prima facie evidential effect given by the statute to 'the findings and orders of the Commission' includes the findings upon the questions 'whether, if the rate was excessive and unreasonable, the shipper was injured thereby, and, if so, the amount of his damages. ' Under the decisions in the Meeker Cases, it is clear that the original and supplemental reports of the Commission, considered together, amount to a finding that the shippers were damaged by the excessive and unreasonable freight rates in question, and in the respective amounts stated in the reports and orders; in other words, that the amounts awarded represent the actual pecuniary loss of the respective plaintiffs. Unless, therefore, the facts found by the Commission, or the oral evidence presented at the trial, conclusively overcome the prima facie effect of the Commission's ultimate findings as to the fact and amount of damages, the direction of verdict was plainly erroneous.

The Commission's report states that the amount of lumber shipped West from the points of origin here concerned is insignificant in comparison with the total amount handled on the Coast, and that the price of lumber so shipped is little influenced by Coast prices; that shippers in Memphis have charged substantially the same price, whether 'sales were in the East, or for export, or for shipment to California;' and that thus 'the advance in the freight rate has been added to the price paid by the consumer. ' Defendants insist that this situation conclusively negatives the existence of pecuniary loss by the shippers. The Commission replied to this contention that it was impossible to say to what extent 'complainants may have been actually damaged by the advance in this rate, if the word 'damage' is to be interpreted and applied as claimed by the defendants. ' ^[1] The Commission, however, speaking through Commissioner Prouty, declined to accept defendant's interpretation of damage, saying:

'These complainants were shippers of hardwood lumber to this destination and they were entitled to a reasonable rate from the defendants for the service of transportation. An unreasonable rate was in fact exacted. They were thereby deprived of a legal right, and the measure of their damage is the difference between the rate to which they were entitled and the rate which they were compelled to pay.'

In Nicola, etc., Co. v. L. & N. Ry. Co., 14 Interst.Com. Com'n R. 199, 208, the Commission, speaking through Commissioner Clements, in reply to the carrier's contention that the consumer alone was damaged by the payment of the excessive freight charges, said:

'The suggestion * * * would, if followed, lead the Commission away from the direct results of the act of the carrier in the establishment and exaction of an unjust rate into the domain of indirect and remote consequences and perhaps into questions of equity between the vendor and vendee of the lumber. The vendor sells the lumber for the best price he can get, and the vendee buys at as low a figure as he can. The price which the one is able to get and the other must pay is of necessity fixed or controlled by many influences, including, of course, the transportation charges. * * * We do not understand that the act to regulate commerce contemplates or authorizes the application by the Commission of its provisions in respect to reparation on account of unreasonable rates in such manner. Whatever a court of equity might be able to do and be justified in doing in dealing with the relations between vendor and vendee of the lumber in reference to the rates or other considerations, the Commission is confined in the making of awards for reparation to the injury or damage sustained by those who are the real and substantial parties at interest in the transaction in which such transportation charges have been made. The reparation is due to the person who has been required to pay the excessive charge as the price of transportation. It follows that we must, in making

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