Morgan's Louisiana & T. R. & S. S. Co. v. Isaac Joseph Iron Co.

• Decision Date: 05 June 1917
• Docket Number: 2964.
• Citation: 243 F. 149
• Parties: MORGAN'S LOUISIANA & T.R. & S.S. CO. et al. v. ISAAC JOSEPH IRON CO.
• Court: U.S. Court of Appeals — Sixth Circuit

243 F. 149

MORGAN'S LOUISIANA & T.R. & S.S. CO. et al. v. ISAAC JOSEPH IRON CO.

No. 2964.

United States Court of Appeals, Sixth Circuit.

June 5, 1917

Fred H Wood, of New York City, Denegre, Leovy & Chaffe, of New Orleans, La., and Harmon, Colston, Goldsmith & Hoadly, of Cincinnati, Ohio, for plaintiffs in error.

Harry C. Barnes, of Cincinnati, Ohio, for defendant in error.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

WARRINGTON Circuit Judge.

This was an action to recover $682.34 with interest, as damages resulting from the exaction of an alleged unreasonable and unjustly discriminatory joint through rate for the transportation of certain shipments of scrap iron in carloads from Houston, Tex., to Chicago, Ill. An order of reparation for payment of this sum and interest had previously been made by the Interstate Commerce Commission on complaint of the present defendant in error, herein called the Iron Company against the plaintiffs in error, here called the Railroads. The complaint was filed with the Commission May 14, 1914, and the report and order of the Commission finding such through rate to be unreasonable were entered November 2, 1915. The ground of this finding was that the rate charged exceeded the sum of the intermediate rates concurrently charged over the same lines between Houston and Chicago. An application made to the Commission on behalf of the Railroads for authority to continue higher through rates on scrap iron between the points mentioned than the sum of the intermediate rates was heard with the complaint of the Iron Company and was denied at the time the finding and award of reparation were made. The amount embraced in the Commission's order of reparation was the difference between the through rate exacted and a combination rate based on the intermediate rates. The petition alleges that the Railroads did not comply with the order of the Commission and that they refuse to pay the sum awarded. The answer of the Railroads is confined to an allegation that on March 16, 1916, the Interstate Commerce Commission set aside the order mentioned in the petition, and to a prayer for dismissal, with costs. The Iron Company demurred to the answer on the ground that it does not constitute a defense; and, upon the familiar rule that a demurrer searches the record, the Railroads insisted that the petition fails to state a cause of action. The demurrer was in terms overruled as to the petition and sustained as to the answer; and, the Railroads not desiring to amend the answer judgment was entered for the Iron Company, with interest and costs, including an attorney's fee. The Railroads bring the questions here upon the writ of error.

The Railroads base their contention upon two grounds. One concerns a rate from Houston to New Orleans which was employed in making up the sum of the intermediate rates, and the other relates to the effect of the alleged setting aside of the reparation order. The contention in respect of the rate so employed grows out of this state of fact: A proportional rate of 9 1/2 cents per 100 pounds in carloads was at this time in effect from Houston to New Orleans, 'when destined to points beyond to which no through rates' were published; and since the through rate in question of 30 cents per 100 pounds, or $6 per ton, prevailed between Houston and Chicago, via New Orleans, it is urged that the application of the proportional rate mentioned was restricted to points beyond New Orleans, between which and Houston no through rates had been published. No rate other than 9 1/2 cents per 100 pounds from Houston to New Orleans is shown. As respects this rate and the through rate from Houston to Chicago the Commission said:

'We hold that the 9 1/2 cents proportional rate was not so restricted or limited as to make it inapplicable as a factor in constructing a through rate to Chicago had there been no joint rate in effect. We find upon consideration of all the facts that joint through rate of 30 cents per 100 pounds was unreasonable to the extent that it exceeded the combination of intermediate (rates) concurrently in effect, i.e., $5.21 per ton.'

This was in harmony with the holding of the Commission in Windsor Turned Goods Co. v. C. & O. Ry. Co. (1910) 18 Interst.Com.Com'nRep. 162, 164, where it was said:

' * * * The fair measure of the reasonableness of a joint through rate that exceeds the combination between the same points via the same route is, and will hereafter be held to be, the lowest combination that would lawfully apply if the joint rate were canceled.'

Whether the conclusion so reached by the Commission was intended to be one of law, rather than one of fact, touching the application of the proportional rate of 9 1/2 cents, is not entirely clear. Nor need we consider this feature of the case; for it is plain that the Commission's conclusion of fact that the 30-cent through rate was unreasonable, so far as it exceeded the sum of the proportional rate per 100 pounds from Houston to New Orleans and the existing local rate per 100 pounds from New Orleans to Chicago (26 1/20 cents), is not without support in the evidence and must be accepted by us. The fact that the Railroads were willing to accept 9 1/2 cents to New Orleans on traffic extending beyond New Orleans certainly had a tendency to show that this was a reasonable rate for all such traffic regardless of the destination; and there was no attempt to show a good reason for any distinction between Chicago and other points.

It remains to consider whether we are bound to conclude that the order of reparation was intended permanently to be set aside. It is true, as we have seen, that the answer alleges that on March 16, 1916, the Commission set aside the order, and that according to the transcript this was met simply by demurrer. We assume that if the Commission had intended to rescind its order permanently, for instance, as an improvident order, the demurrer to the answer...