Davis v. Krauss Bros. Lumber Co.

• Decision Date: 27 April 1928
• Docket Number: No. 17281.,17281.
• Citation: 25 F.2d 888
• Parties: DAVIS, Director General of Railroads, etc., v. KRAUSS BROS. LUMBER CO.
• Court: U.S. District Court — Eastern District of Louisiana

25 F.2d 888 (1928)

DAVIS, Director General of Railroads, etc., v. KRAUSS BROS. LUMBER CO.

No. 17281.

District Court, E. D. Louisiana.

April 27, 1928.

Milling, Godchaux, Saal & Milling and R. C. Milling, all of New Orleans, La., for plaintiff.

L. Palmer, of New Orleans, La., for defendant.

BURNS, District Judge.

The plaintiff Director General of Railroads sues the defendant lumber company for undercharges on two shipments of lumber — one made July 24, 1919, from Iuka, Miss., to Memphis, Tenn., and there reconsigned to Forest City, Ark.; the other made September 19, 1919, from Iuka, Miss., to Memphis, and there reconsigned to Clarendon, Ark.

Defendant admits the making of the shipments and the payments thereon as alleged in the petition, but denies the legality of the rate upon which the suit for undercharge is predicated. By stipulation trial by jury was waived, and by further stipulation it is agreed between the parties that the effect of reconsigning the two shipments at Memphis placed them in the category of through shipments to the several points in Arkansas, respectively, and, inter alia, that the tariffs filed by the plaintiff in this suit evidence that, subsequent to the filing of Supplement No. 20 to I. C. C. No. 1158, the through class rate on lumber from Iuka, Miss., to Forest City and Clarendon, Ark., respectively, was 31½ cents per 100 pounds. This agreement, however, is made purely for the purpose of fixing the amount of such rate named in the tariff, but not admitting the legality thereof.

A further stipulation is "that I. C. C. Conference Ruling No. 220-G provides in part: `The lawful rate or fare for through movement is the through rate or fare, wherever such through rate or fare exists, even though some lower combination makes a lower rate or fare.'"

At the time of the movements, freight charges in the amount of 18½ cents per 100 pounds were collected on each shipment, these charges being arrived at by adding to the local freight rate from Iuka to Memphis of 7½ cents per 100 pounds the local freight rate of 11 cents per 100 pounds from Memphis to Forest City, and Memphis to Clarendon, respectively; whereas, the undercharge subject of suit is for the difference between the said amount of freight collected, and the freight that would be due on each of the two shipments, based upon a through class rate of 31½ cents per 100 pounds.

It is this last 31½-cent through class rate sought to be collected which defendant resists as illegal, insisting that the rates collected, which were an aggregate of intermediates or a combination of locals on Memphis, were proper and legal. The sole question for decision is, therefore, the legality of the 31½cent through rate from Iuka. The contention of the defense is: (1) That the rate violates the fourth section of the Interstate Commerce Act (49 USCA § 4; Comp. St. § 8566); (2) and that it violates section 10 of the Railroad Control Act (Comp. St. § 3115¾j) which is essentially the same as the first section of the Interstate Commerce Act (49 USCA § 1; Comp. St. § 8563) — i. e., that the rate is unreasonable.

The plaintiff insists on its right to recover: (1) Because the shipments became, in fact, through shipments by the reconsignment at Memphis (this point is admitted as stated); (2) the lawful rates applicable on such through shipments were through rates, wherever such through rates exist, even though some combination makes a lower rate; (3) the carrier is bound to collect the legal tariff rate, irrespective of error; and (4) the 31½ cents per 100 pounds, being a through rate, legally on file with the Interstate Commerce Commission, on the date of movement, was the proper, applicable rate.

The contention of defendant cannot be sustained. The fourth and sixth sections (49 USCA §§ 4, 6; Comp. St. §§ 8566, 8569), considered together, intend that, if a carrier filed tariffs which contained a through rate exceeding the sum of the locals, such rate would be prima facie unlawful under section 4, unless protected under one of its provisions; but these were materially affected by section 10 of the Railroad Control Act (March 21, 1918). The purpose of that act was to turn the railroads over to the President, who was empowered to initiate tariffs by the mere filing of same with the Commission under that section. Under this authority the President issued General Order No. 28 (May 25, 1918), declaring a general advance in rates, including all charges heretofore published, but not made effective, and providing the effective dates; and thereafter the Interstate Commerce Commission issued Fourth Section No. 7316, granting relief to the Director General of Railroads, recognizing his initiated and prescribed rates under General Order No. 28, and granting him relief from the long-and-short-haul and aggregate-of-the-intermediates provision of section 4, exempting the carriers from the provisions of that section. This was followed by the President, through the Director General, filing with the Commission Supplement No. 20 to I. C. C. Tariff No. 1158, which shows that the schedules contain rates that are departures from the fourth section, under authority of the I. C. C. Fourth Section Order No. 7316 of May 27, 1918.

In the light of these statutes and orders, whereby, inter alia, class rates such as we are concerned with here were increased 25 per cent., the Commission, having received the President's certificate by General Order No. 28, certifying the necessity therefor, expressly authorized the departure from the fourth section, so that the rates so filed, when Supplement No. 20 to I. C. C. No. 1158 was filed, became legal. Plaintiff's Exhibit A shows that the rate of 31½ cents per 100 pounds was the legal rate, so created at the time the shipments moved; that therefore, prior to the date of Supplement No. 20, a through rate was in effect from Iuka to Forest City and Clarendon, which was increased, so as to amount to 31½ cents, by the filing of Supplement 20, and immediately thereafter that rate became legal, irrespective of whether or not it was originally so. Fourth Section Order I. C. C. No. 7601, adopted March 1, 1920, superseding I. C. C. No. 7316, confirms this conclusion. The question of...