M. C. Kiser Co. v. Central of Georgia Ry. Co.

• Decision Date: 22 September 1916
• Citation: 236 F. 573
• Parties: M. C. KISER CO. et al. v. CENTRAL OF GEORGIA RY. CO. et al.
• Court: U.S. District Court — Southern District of Georgia

236 F. 573

M. C. KISER CO. et al. v. CENTRAL OF GEORGIA RY. CO. et al.

United States District Court, S.D. Georgia.

September 22, 1916

The M C. Kiser Company, the J. K. Orr Shoe Company, the Rice &amp Hutchins Atlanta Company, and the Gramling-Spalding Company all corporations of Atlanta, Ga., on September 12, 1916 presented their petition in equity against the Central of Georgia Railway Company and the Ocean Steamship Company, to the District Court of the United States for the Eastern Division of the Southern District of Georgia, in which they alleged, in brief, that they were wholesale dealers in boots and shoes, doing business in Atlanta, Ga., and that the defendants were common carriers engaged, among other things, in the transportation of boots and shoes from Boston, Providence, and New York to Atlanta by water and rail, and that the defendants, along with other interstate carriers, under date of August 1, 1916, had issued and filed certain supplements to existing tariffs, whereby the then existing commodity rate of 95 cents per 100 pounds on boots and shoes from said Eastern cities to Atlanta would be withdrawn, and the first-class rate of $1.19 from Boston and Providence, and $1.14 from New York to Atlanta, ocean and rail, would become effective on September 15, 1916; that complainants, upon receipt of notice of the proposed advance, promptly filed their protest with the Interstate Commerce Commission, and prayed the Commission to suspend the operation of the new schedule of advanced rates until the reasonableness of the proposed rates could be determined by the Commission, as provided by law; that complainants were given an informal hearing on their protest before the suspension board of the Interstate Commerce Commission at Washington on August 31, 1916, in which hearing counsel for the carriers also participated; that thereafter, on September 7, 1916, the secretary of the Commission gave notice that the Commission had declined to suspend the proposed new rates protested against, but that its refusal to suspend carried with it no expression of approval, and was without prejudice to the right of any one to challenge in a formal proceeding the reasonableness of the proposed new schedules.

Complainants further alleged that the existing rate of 95 cents per 100 pounds had previously been passed upon and approved by the Interstate Commerce Commission at two or three different hearings, and that said rate had been in existence from April 1, 1910, and that complainants, in reliance upon the continuance of the existing rates, had made extensive investments in Atlanta, and had made contracts for the purchase of shoes to be shipped to Atlanta over the lines of defendants from Boston, New York, and Providence, and had also made contracts for the sale of these goods during the coming season, and that the proposed increase in rates would impose an additional freight burden of approximately $15,000 upon complainants, and that they would thereby, as well as in other respects, suffer irreparable injury and damage. They alleged that the new rates were unreasonable, and that they had no adequate remedy at law, and they prayed that the defendants should be enjoined from putting in effect the proposed advanced rates, or altering the present status, until a full hearing and determination concerning the reasonableness of the rates should be had by the Interstate Commerce Commission.

A temporary restraining order was granted, and a rule was issued against the defendants to show cause on the 22d of September, 1916, why an interlocutory injunction should not issue against the defendants as prayed. At the hearing the defendants appeared and filed their response to the rule so served upon them, and also filed a motion to dismiss, and their answer to the petition.

Wm. A. Wimbish, of Atlanta, Ga., for complainants.

Lawton & Cunningham, of Savannah, Ga., and Charles D. Drayton, of Washington, D.C., for defendants.

LAMBDIN District Judge (after stating the facts as above).

The questions involved are of great importance, both to the complainants and to the common carriers. This is a petition brought by four wholesale boot and shoe dealers in the city of Atlanta against the Central of Georgia Railway Company and the Ocean Steamship Company, asking that the court shall enjoin the collection of the excess of the new rates which have recently been published by the defendants over the rates which have heretofore existed between Boston, New York, and other Eastern ports and Atlanta, pending a full hearing of the reasonableness or unreasonableness of the new rates by the Interstate Commerce Commission.

The Constitution of the United States vests the power to regulate interstate commerce in Congress. In 1887 Congress in pursuance of this power created the Interstate Commerce Commission, and the power to determine the reasonableness or unreasonableness of the rates of interstate carriers, and to decide whether they were discriminatory or not, is vested exclusively in this Commission. The particular rates involved here have been the subject-matter of litigation in court and of contests before the Interstate Commerce Commission for a period of something like ten years. The records in this and other similar controversies between the parties show that prior to 1905 the rail and water rate in force between the Eastern ports and Atlanta was $1.14 per 100 pounds, but that for a short time in the early part of 1905, on account of reasons which are in dispute, the carriers reduced their rates between the Eastern ports and Atlanta to 85 cents. In April, 1905, the carriers endeavored to increase this rate to 93 cents on carload lots, and $1.05 on less quantities, and thereupon a bill was brought by the M. C. Kiser Company and the J. K. Orr Shoe Company against the defendants and other common carriers in the United States Circuit Court for the Northern District of Georgia to enjoin the increase, and Judge Newman, on April 29, 1905, granted a temporary restraining order, and thereupon the affected carriers after due notice withdrew the notice of the advance, thereby leaving the 85-cent any-quantity rate in effect. This status continued for nearly three years, and until December 31, 1907, when Judge Newman after a hearing handed down an opinion in the case, to be found in 158 F. 193, directing that the existing rate should remain in force for a reasonable time thereafter, so that complainants might present the matter to the Interstate Commerce Commission, in order to obtain from that body a determination of the reasonableness of the proposed rates. The Interstate Commerce Commission, I understand, has passed on the matter twice, once in 1909, and again in 1914 (see 17 I.C.C.Rep. 43, and 31 I.C.C.Rep. 154), in both of which cases it held that a 95 cents per 100 pounds rate was a just and reasonable any-quantity rate between the points in question. A petition for a rehearing was filed in both instances, and the matter has been practically in the continuous view of the Interstate Commerce Commission for the last eight or ten years. The last application for a rehearing of the rates fixed in 1914, was not finally decided, I believe, until July of this year.

The reasonableness of the rates in question has, therefore, been practically under the view of the Interstate Commerce Commission for the last eight years. The Commission has kept in constant touch with the situation, and has been constantly advised, by reason of these hearings and rehearings and application for rehearings on the subject, up to the present time. The carriers gave notice on August 1, 1916, that the published new schedule of rates would become effective on September 15, 1916. At once the petitioners here filed a protest with the Interstate Commerce Commission, and in connection therewith made an application for the suspension of these...