Montana Horse Products Co. v. Great Northern Ry. Co.

• Decision Date: 04 January 1932
• Docket Number: 6845.
• Citation: 7 P.2d 919,91 Mont. 194
• Parties: MONTANA HORSE PRODUCTS CO. v. GREAT NORTHERN RY. CO.
• Court: Montana Supreme Court

7 P.2d 919

91 Mont. 194

MONTANA HORSE PRODUCTS CO. v. GREAT NORTHERN RY. CO.

No. 6845.

Supreme Court of Montana

January 4, 1932

Rehearing Denied Feb. 5, 1932.

Appeal from District Court, Silver Bow County; Wm. E. Carroll Judge.

Action by the Montana Horse Products Company against the Great Northern Railway Company. From judgment for plaintiff defendant appeals.

Affirmed.

W. L Clift, of Great Falls, and R. J. Hagman and J. P. Plunkett, both of St. Paul, Minn., for appellant.

Kremer, Sanders & Kremer, of Butte, for respondent.

Francis A. Silver, of Helena, amicus curiae

GALEN J.

This action was instituted by the plaintiff in the district court of Silver Bow county to recover damages from the defendant in the sum of $7,512.25, alleged to have been suffered by reason of unjust and unreasonable freight charges collected by the defendant in Silver Bow county for the transportation over its lines to Butte from various points in this state of 166 carloads of range horses suitable only for slaughter and canning purposes, between June 25 and September 26, 1927. Issue was joined by answer and reply, and the cause was submitted to the court for decision upon an agreed statement of facts. The court found in favor of the plaintiff in accordance with the prayer of its complaint and entered judgment accordingly, from which the defendant has appealed.

The only question presented by the defendant's assignments of error, necessary for consideration in disposition of this appeal, is whether under the laws of this state the board of railroad commissioners has power and authority to make a retroactive order finding that the rates charged and collected on the shipment of such horses (which rates had been previously approved by the board) were unjust and unreasonable, thus permitting the plaintiff to recover the difference between the amount charged and collected and the amount found by the commission to be a reasonable rate.

There is no dispute as to the facts, from which it appears that on April 8, 1926, the Great Northern Railway Company filed with the board of railroad commissioners its petition for authority to file and make effective upon one day's notice a freight tariff, prescribing new rates from various Montana points on its line to the city of Butte upon range horses suitable chiefly for slaughter; that on April 14, 1926, such petition was allowed, the authorization being designated "Montana R. C. No. 1828," and on April 14, 1926, the railroad company filed such tariff to become effective April 21, 1926, being known and designated as "G. N. Ry. G. F. O. No. 2508-A." Subsequently, during the period from June 25, 1927, to September 22, 1927, both inclusive, the plaintiff shipped from various points within the state over the defendant's lines to the city of Butte, 166 carloads of range horses chiefly valuable for slaughter, and made payment of freight charges thereon on the basis of the tariff designated "G. N. Ry. G. F. O. 2508-A, Montana R. C. Authorization No. 1828." In consequence, the railway company received and collected on such shipments the aggregate sum of $15,024.50, which amount so charged and imposed by the railway company and paid by the plaintiff was computed on the basis of the rates contained in tariff G. N. G. F. O. No. 2508-A, published by it under authorization of the board of railroad commissioners, which had not been canceled or superseded prior to September 24, 1927, and "was the only tariff in effect naming rates on horses suitable for slaughtering," from Montana points on the defendant's railroad to Butte, during the period from June 25 to September 22, 1927. By letter under date of June 12, 1927, the board of railroad commissioners requested the defendant Great Northern Railway Company, the Northern Pacific Railway Company, and the Chicago, Milwaukee & St. Paul Railway Company to reduce their then existing rates to Butte by 50 per cent. The Chicago, Milwaukee & St. Paul Railway Company responded to the board's suggestion, agreeing to a 50 per cent. reduction effective June 24, 1927; the Northern Pacific Railway Company did likewise, effective September 22, 1927. On July 14, 1927, the defendant Great Northern Railway Company declined to make such reduction, but later, on September 21, 1927, it communicated with the board and requested authority to make such half rates effective at once, and the necessary authority having been given, they became effective as to the Great Northern Railway Company September 24, 1927.

On April 9, 1928, the plaintiff filed with the board of railroad commissioners its complaint against the defendant railway company alleging that the rates charged and the freight charges collected from and paid by the plaintiff on such horse shipments were unjust and unreasonable to the extent that they exceeded 50 per cent. of the rates named in G. N. Ry. G. F. O. No. 2508-A. Due service of the complaint was made upon the defendant railway company, but it did not file any answer or make other appearance, or offer objections. The matter was noticed for public hearing and the defendant was duly notified of the time and place, but failed to make appearance at the hearing, or at any time, to raise objection to the proceedings or the relief sought by the plaintiff, and did not offer any evidence at the hearing. After the conclusion of the hearing, on November 4, 1929, the board of railroad commissioners found and adjudged that the rate charged on such shipments and collected by the railway company was unjust and unreasonable to the extent that it exceeded 50 per cent. of the published rates filed with the board. In the order, among other things, it is stated, so far as here pertinent, that: "If, then, the rates on range horses that became effective on September 24, 1927, were reasonable rates, and in the circumstances we are convinced that they were, we are likewise of the opinion that the rates paid on the shipments involved in this complaint were unreasonable and excessive to the extent that they exceeded fifty per cent. thereof, and it is so held. From this conclusion it should not be understood that the fact that a rate has been reduced, in and of itself, makes for findings of unreasonableness prior thereto. *** It is ordered, decreed and found, that the Montana Horse Products Company, a corporation, made the shipments described in the complaint herein and between the dates therein named; that said complainant paid and bore the charges thereon on the basis of the rates published in the tariffs of the defendant and on file with the board, in the amount of $15,024.50, and that the charges paid and bore as aforesaid were and are unreasonable to the extent that they exceeded or exceed the charges that would have accrued thereon on the basis of fifty per cent. of the rates published and imposed as aforesaid, to-wit: the sum of $7,512.25."

The powers of the board of railroad commissioners in the regulation of railroads are prescribed by chapter 257 of the Revised Codes of 1921. By section 3794 it is provided, so far as pertinent, that power and authority is by the act vested in the board of railroad commissioners, and it is thereby made its duty "to adopt, as soon as practicaable, *** all necessary rates, charges, and regulations to govern and regulate freight and passenger tariffs, to correct abuses, and prevent unjust discrimination and extortion in the rates of freight and passenger tariffs on the different railroads in this state, and to make the same effective by enforcing the penalties prescribed in this act. The said board shall have the power, and it shall be its duty, to fairly and justly classify and subdivide all freight and merchandise of whatsoever character that may be transported over railroads of this state, into such general and special classes or subdivisions as may be deemed necessary or expedient. The said board may fix different rates for different railroads and for different lines under the same management, or for different parts of the same lines, if found necessary to do justice, and may make rates for express companies different from the rates fixed for railroads."

Section 3803 provides that the determination of the board fixing any classification or rate may be reviewed by the district court. Section 3804 reads, in part: "If any railroad subject hereto, directly or indirectly or by any special rate, rebate, draw-back, or other device, shall charge, demand, or receive from any person, firm, or corporation, a greater or less compensation for any service rendered, or to be rendered, in the transportation of property subject to the provisions of this act, than that fixed by the said board of railroad commissioners for such service," shall be subject to the payment of heavy penalties prescribed. Section 3805 makes any railroad subject to the act guilty of extortion for charging or collecting from any shipper a greater rate than that established by the board of railroad commissioners, and prescribes penalties. Section 3806 provides that the district court shall have jurisdiction to enforce the rates, classifications, rulings, and orders made or established by the board, and section 3807 provides for appeals to this court from the judgment of any district court in any action arising under the provisions of the act.

Section 3796 provides that the board of railroad commissioners "shall have the power from time to time to change alter, amend, or abolish any classification or rate established by it when deemed necessary, and such amended, altered, or new classifications or rates shall be put into effect in the same manner as original classifications. *** The said board must, within forty days after the filing with such board of a complaint by a shipper, or other person...