Phillips Company v. Grand Trunk Western Railway Company

• Decision Date: 15 March 1915
• Docket Number: No. 124,124
• Citation: 35 S.Ct. 444,59 L.Ed. 774,236 U.S. 662
• Parties: A. J. PHILLIPS COMPANY, Plff. in Err., v. GRAND TRUNK WESTERN RAILWAY COMPANY et al
• Court: U.S. Supreme Court

236 U.S. 662

35 S.Ct. 444

59 L.Ed. 774

A. J. PHILLIPS COMPANY, Plff. in Err.,

v GRAND TRUNK WESTERN RAILWAY COMPANY et al.

No. 124.

Argued January 15, 1915.

Decided March 15, 1915.

Messrs. Edward H. S. Martin and George M. Stephen for plaintiff in error.

Mr. L. C. Stanley for defendants in error.

Mr. Justice Lamar delivered the opinion of the court:

The A. J. Phillips Company is a manufacturer of doors at Fenton, Michigan. For use in its business it purchased large quantities of lumber, much of which was shipped from points in Alabama, over the lines of the Illinois Central, the Southern, the Grand Trunk Western, and the Detroit & Milwaukee Railway Companies. Prior to April, 1903, the rate to Fenton was 28 cents a hundred, of which 14 cents was the charge for the haul over the Southern and the Illinois Central, from Alabama points to the Ohio river. The remaining 14 cents represented the charge of the Grand Trunk and the Detroit Companies for the haul from the Ohio river to Fenton.

In April, 1903, the Illinois Central, the Southern Railway, and other carriers operating in the Gulf states, filed a tariff which made an advance of 2 cents per hundred on lumber shipped from Alabama mills to the Ohio river and beyond.

On July 24, 1903, the Yellow Pine Association filed a complaint with the Interstate Commerce Commission, seeking to have this increase declared to be unreasonable. After a hearing the Commission held (10 Inters. Com. Rep. 505-547) that 'the advance . . . of 2 cents . . . was not warranted under all the facts in evidence and that the resultant increased rate is unreasonable and unjust. An order will be issued in accordance with these views.' The carriers sought to have this order enjoined, but the action of the Commission was sustained by the circuit court, and on May 27, 1907, that ruling was affirmed by the Supreme Court of the United States (206 U. S. 441, 51 L. ed. 1128, 27 Sup. Ct. Rep. 700); after which, as appears from the official reports (Joice v. Illinois C. R. Co. 15 Inters. Com. Rep. 239), the Commission approved the settlement of a number of claims for reparation which had been previously filed. The Phillips Company was not a party to the proceedings before the Commission, and made no claim for reparation, but on May 11, 1909, it brought suit in the circuit court of the United States for the eastern district of Michigan, against the four carriers named above, for the recovery of the overcharge. The declaration—which by reference, made the report of the Commission in 10 Inters. Com. Rep. 505, a part of the pleading (Robinson v. Baltimore & O. R. Co. 222 U. S. 507, 56 L. ed. 289, 32 Sup. Ct. Rep. 114)—alleged that the four carriers had charged plaintiff 30 cents per hundred, though they well knew that 28 cents was the highest just and reasonable freight rate that could be charged on lumber, and that anything in excess of 28 cents was illegal, unjust, and excessive. It was also averred that the Commission, on the complaint of the Yellow Pine Association, had found the 2-cent advance to be unreasonable, and for that reason the plaintiff claimed that the defendant-carriers were each and all bound to return to it the 2-cent overcharge on 218 cars of lumber. There was a prayer for judgment for $5,000 damages and $2,000 attorneys' fees.

The Southern Railway was not served. The Illinois Central, having no office in the district, was ultimately dismissed from the case. The demurrer of the other two defendants was sustained. That judgment was affirmed by the circuit court of appeals, and the case brought here by writ of error.

1. The Phillips Company, relying on a finding by the Commission on the complaint of the Yellow Pine Association, that a 2-cents advance in a lumber rate was unreasonable, brought suit against four carriers to recover an overcharge collected on 90,432,500 pounds of lumber shipped to it over their connecting lines. But, as the plaintiff was not a party before the Commission, the defendants insist that it cannot take advantage of the order that the rate was unjust, so as to be able to maintain the present suit.

But the proceeding before the Commission, to determine the reasonableness of the 2-cents advance, was not in the nature of private litigation between a lumber association and the carriers, but was a matter of public concern in which the whole body of shippers was interested. The inquiry as to the reasonableness of the advance was general in its nature. The finding thereon was general in its operation, and inured to the benefit of every person that had been obliged to pay the unjust rate. Otherwise those who filed the complaint, or intervened during the hearing, would have secured an advantage over the general body of the public, with the result that the order of the Commission would have created a preference in favor of the parties to the record, and would have destroyed the very uniformity...