Louisville Nashville Railroad Company v. United States

• Decision Date: 01 June 1915
• Docket Number: No. 673,673
• Citation: 35 S.Ct. 696,59 L.Ed. 1177,238 U.S. 1
• Parties: LOUISVILLE & NASHVILLE RAILROAD COMPANY and Nashville, Chattanooga, & St. Louis Company, Appts., v. UNITED STATES, Interstate Commerce Commission, City of Nashville, et al
• Court: U.S. Supreme Court

238 U.S. 1

35 S.Ct. 696

59 L.Ed. 1177

LOUISVILLE & NASHVILLE RAILROAD COMPANY and Nashville, Chattanooga, & St. Louis Company, Appts.,

v UNITED STATES, Interstate Commerce Commission, City of Nashville, et al.

No. 673.

Argued March 1, 1915.

Decided June 1, 1915.

[Syllabus from pages 1-3 intentionally omitted] Messrs. William A. Colston, Henry L. Stone, Claude Waller, John B. Keeble, and William A. Northcutt for appellants.

Solicitor General Davis for the United States.

[Argument of Counsel from pages 3-7 intentionally omitted] Mr. Charles W. Needham for the Interstate Commerce Commission.

Messrs. A. G. Ewing, Jr., and T. J. McMorrough for the Traffic Bureau of Nashville.

[Argument of Counsel from page 8 intentionally omitted] Mr. Justice Lamar delivered the opinion of the court:

The Traffic Bureau of Nashville instituted proceedings before the Commerce Commission against the Louisville & Nashville, Nashville, Chattanooga, & St. Louis, Tennessee Central, Illinois Central R. R. Companies, and the Nashville Terminal Company, seeking (1) a reduction of the $1 rate on coal and (2) to require a discontinuance of what was alleged to be a discriminatory switching practice in the yard at Nashville. After an elaborate hearing, in which volumes of testimony were taken, the Commission found that the $1 coal rate was unreasonable, and established an 80 cent rate. It also passed an order requiring the railroad companies to discontinue the discrimination in furnishing switching facilities. Thereupon the two railroad companies, first named, appellants herein, filed a bill in the district court for the middle district of Tennessee against the United States, the Commerce Commission, and others, attacking the validity of these two orders. The application for a temporary injunction having been denied, the case was appealed to this court.

1. On the argument here the appellants insisted that under the decisions in Florida East Coast R. Co. v. United States, 234 U. S. 167, 58 L. ed. 1267, 34 Sup. Ct. Rep. 867; Interstate Commerce Commission v. Union P. R. Co. 222 U. S. 541, 56 L. ed. 308, 32 Sup. Ct. Rep. 108; Interstate Commerce Commission v. Louisville & N. R. Co. 227 U. S. 88, 57 L. ed. 431, 33 Sup. Ct. Rep. 185, this court will determine whether the facts found do, as a matter of law, support the order of the Commission. The government, on the other hand, contended that the case should be disposed of in conformity with the principle that an appellate court will not interfere with the decision of a chancellor, refusing to grant an interlocutory injunction, unless it clearly appears that there has been an abuse of discretion. There can, of course, be no doubt that such is the general rule. But where the order of the Commission operates to reduce revenue it is manifest that the chancellor's discretion should be influenced by the fact that, though the application is for an interlocutory injunction, the decision thereon may, in many respects, be the equivalent of a final decree. On such a hearing the court should, therefore, consider that fact with all others, and grant the injunction, grant it on terms, or refuse it, as the equity of the case may warrant.

It was no doubt because of the limited time in which orders of the Commission would be operative, and that there might be cases in which irreparable injury would result if an interlocutory injunction was not granted, that Congress, by the act of October 22, 1913 (38 Stat. at L. 220, chap. 32), provided that 'an appeal may be taken direct to the Supreme Court of the United States from the order granting or denying, after notice and hearing, an interlocutory injunction. . . .' This clause and the reasons above mentioned were evidently taken into consideration by the three judges who heard this case. For, in passing upon the application, the court made a full statement of the facts, delivered a carefully prepared opinion discussing the various contentions of the complainants, and then made a decision on the merits of the case as submitted.

2. The facts involved have been so fully stated by the Commission (28 Inters. Com. Rep. 533) and by the court below (216 Fed. 672) that it is unnecessary here to repeat them. The railroad companies did not offer all of the evidence which was considered by the Commission; and on this appeal they do not include in the record all of the hundreds of pages of testimony which had been submitted to the Commission, but—conceding that the evidence was conflicting and tended to support the findings of the Commission they insist that the facts found were insufficient in law to sustain the orders which were made. This most commendable practice not only saved the expense of printing many volumes of testimony, but saved the substantial points in the case from being submerged in a flood of testimony—much of which was explanatory before the Commission and most of which was wholly immaterial in an appellate court which cannot reverse findings when supported by substantial—though conflicting—evidence. The practice is also in compliance with the spirit of the new equity rules (75-77) which call for just such a winnowing out of the useless; the presentation of only the relevant parts of exhibits, documents, tables, and reports, the elimination of all reduplications in written and oral testimony, and a condensation into narrative form of what is material to the then issue before the court.

3. By virtue of this conformity to the rules, we are in a position to consider the sharp-cut issue as to whether, as a matter of law, the Commission's findings of fact sustain its order, and shall discuss first the rate on coal, which, being treated as typical, was principally argued by counsel.

Where an existing freight rate is attacked, the burden is on the complainant to establish that it is unreasonable in fact. This is especially so where, as here, the rate has been in force for a long period during which time the traffic greatly increased in volume. In order to carry this burden in the present case, the Traffic Bureau, while alleging that the rate was unreasonable in itself and by comparison with other like rates, does not seem to have attempted to prove the cost or value of the carrier's service, but apparently relied largely on proof showing that the Nashville rate was higher than that charged for a similar haul to other points.

While some elements of value are fixed, the market price of property and work is affected by so many and such varying factors as to make it impossible to lay down a rule by which to determine what any article or service is worth. But one of the most common measures by which to value the property or service of A is to compare it with the amount charged for the same thing by B, C, and D. But this method, if made the sole basis for ascertaining values, may often lead to improper results. For B, C, and D may charge too much, or they may have been forced to charge too little. The same is true of determining, by comparison, the reasonableness of freight charges. Until some standard is adopted they may prove nothing—even where the two hauls are over the same mileage. For the rate attacked may tend to show that the others are too low while they in turn might be relied on to prove that the first is too high. Both may be unreasonably high, or too low, because compelled by conditions over which the carrier had no control. Water competition, rail competition, and competition of markets, enter so largely into the establishment of rates that mere distance is not necessarily a determining factor; indeed, the statute itself recognizes that there may be circumstances under which it is lawful to charge less for a long haul than for a short haul over the same road. But while all this be true, it is, nevertheless, a fact that a comparison of rates between two points on the same road, or with the charges on other roads, may furnish evidence of probative value.

In the present case the Commission pointed out that many facts had to be considered in applying the evidence offered for the purpose of showing that the $1 rate to Nashville was high by comparison with the charge made to other points. It found that coal was shipped over the Louisville & Nashville R. R. from Kentucky mines to Nashville, Memphis, and Louisville. It also found that there was no substantial dissimilarity in the conditions at those three points, and instituted a special comparison between the rates to those three cities. The result may be indicated by the following tabulation:

From mines——

To Nashville, via L. & N., 109 miles $1 per ton, or 9.2 mills per mile.

To Memphis, via L. & N., 276 miles, $1.10 per ton, or 4 mills per mile.

To Louisville, via L. & N. 142 miles, 65 cents per ton, or 4.5 miles per mile.

The defendants insisted that its $1.10 rate to Memphis did not furnish a fair criterion because it had been made low and reduced in order to meet competition. The Commission, however, found that the river rate to Memphis was $1.40 per ton, so that the appellant's 'not unreasonable' (26 Inters. Com. Rep. 402) rate of $1.10 was not compelled by water competition. It further found that the rail competition at Memphis was not compelling. On these facts, and after giving a history of the increase and decrease in that rate (26 Inters. Com. Rep. 402), the Commission seems to have treated the $1.10 rate, for 276 miles to Memphis, as in the nature of a voluntary charge, which would tend to indicate that the $1 rate for 109 miles to Nashville was too high. A similar view was taken of the situation at Louisville, where water competition existed and where the 60-cent rate from the mine to Louisville, 142 miles, was practically the same as that of the Illinois Central, which charged the same rate for a haul of 125 miles to Louisville.

Of course, competition by rail as well as by water may compel such a reduction in rates as altogether to destroy their value for purposes of...