Piedmont & Northern Ry. Co. v. Scott

• Decision Date: 10 February 1943
• Docket Number: 15502.
• Citation: 24 S.E.2d 353,202 S.C. 207
• Parties: PIEDMONT & NORTHERN RY. CO. v. SCOTT et al.
• Court: South Carolina Supreme Court

24 S.E.2d 353

202 S.C. 207

PIEDMONT & NORTHERN RY. CO. v. SCOTT et al.

No. 15502.

Supreme Court of South Carolina

February 10, 1943

Haynsworth & Haynsworth, of Greenville, J. C. McGowan, of Charlotte N. C., and R. S. Stewart, of Lancaster, for appellant.

Irvine F. Belser, of Columbia, and John M. Daniel, Atty. Gen., for respondents.

L. D LIDE, Acting Associate Justice.

In this case the appellant challenges the validity of an order of the Public Service Commission of South Carolina issued under date of March 8, 1939, known as Order No. 2279. The purpose of this order is to introduce in South Carolina, for the first time in the history of railroad operation in this State, a statewide official routing system for the handling of freight in intrastate commerce.

Prior to the adoption of this order there were no restrictions or limitations upon the shipper of freight governing the route over which his goods shall travel from the point of origin to the point of destination. For example, there may be one route over a trunk line, taking in not only trackage owned and operated by such line but also trackage controlled by it though owned by another railroad corporation; and there may be another route, longer or shorter, over the trackage of one of the other trunk lines and of connecting carriers under its control; and there may be a third route which takes in trackage of connecting carriers that are wholly independent of one another. Under the existing rate structure, in such a situation, the shipper could select any one of these three routes, regardless of any disparity in the miles to be covered, and without regard to whether connecting carriers are jointly owned or controlled or are independent railroad corporations; and whatever route he might select, he would be entitled to the established rate for transportation over the shortest of the several available routes.

It is obvious that various considerations might control a shipper in such a situation, perhaps leading him to select the longest rather than the shortest route. Among such considerations might be better service which the shipper thinks he gets from the road or roads making up the longest of the several available routes. Or he may have unloading or warehouse facilities on the tracks which constitute part of the longest route. Or there may be such differences in locations of the tracks or stations of the several carriers at the point of destination as to affect materially handling charges on the freight in question.

But in the Commission's order in question it is indicated that in its opinion the existing situation has undesirable features, described therein as follows: "After carefully considering the entire record the Commission finds therefrom that the routing situation in South Carolina is in a most unsatisfactory condition giving rise to constant irritation and controversy between shippers and carriers and between carriers themselves. There is much uncertainty on the part of both shippers and the carriers as to their rights, and there is such wasteful use of the facilities of the carriers, or at least such demand and opportunity for wasteful use, on account of the transportation of goods by unduly circuitous routes at short line rates, as probably to impair or endanger the ability of the carriers properly and efficiently to perform their public obligations. On account of these conditions the Commission finds that it is necessary in the interest of both the public and the carriers that some definite standard be laid down for the guidance of shippers and carriers, and that the existing situation be corrected in the particulars and in the manner hereinafter provided."

There are two broad classes of railroads in South Carolina affected by the Commission's order. First, there are the three trunk lines known as the Atlantic Coast Line, the Seaboard Air Line and the Southern. Each of these operates over trackage owned by it and over additional trackage owned by other railroad corporations, which through stock ownership or otherwise are controlled by it. These three trunk lines, through such ownership and control operate about 89.75% of all the trackage (considered on a single track basis) in the State. The other class of railroad corporations is composed of the independents of which there appear to be about fourteen in the State, operating a total of 381.80 miles of trackage. The appellant, Piedmont and Northern Railway Company, whose tracks are wholly within the bounds of the State, is one of these independents. It operates approximately 101.20 miles of trackage. It also operates as a carrier of interstate traffic through connections at various points with trunk lines.

The operation of the Commission's order was suspended by a preliminary injunction originally granted in the Circuit Court; the Piedmont and Northern Railway Company having attacked the order. Testimony was taken in the Circuit Court, and the decree of the Court sustains the order of the Commission and vacates the injunction. Although the decree of the Circuit Court undertakes to interpret the Commission's order and to clarify what seem to be ambiguities therein, and hence the Commission's order is thus made effective in its practical application only as construed by the Court, there is no appeal from the Circuit Court decree on the part of the Commission; and in the appeal to this Court none of the trunk line roads have taken any part in the proceedings by way of amici curiæ or otherwise.

But the appellant, Piedmont and Northern Railway Company, contends that the Commission is without power to make a general routing order and that the order made is in violation of a number of statutory provisions, particularly Sections 8295, 8297, 8312-8315, and 8327 of the Code 1942, and that the effect of the order would be to deprive the appellant of a considerable proportion of the traffic now moving over its lines.

This order is couched in technical terminology, and no useful purpose would be subserved in encumbering the opinion by setting it out in full herein, but a copy of the same will be subjoined to and reported with this opinion for the convenience of those who desire to go into the subject fully. ^[1] It is disclosed in the proceedings in the Circuit Court that there is considerable disagreement between the appellant and the Commission as to the meaning and effect of the Commission's order in respect to the resulting routing of intrastate freight from the viewpoint of appellant's interests, the showing and argument of appellant being largely directed to establishing that the Commission's order is so drawn as to extend advantages to the trunk line railroads and their connecting lines at the expense of the appellant, and to deprive shippers of their statutory right, Section 8327, Code 1942, to designate the route over which their shipments shall travel. It is also contended by the appellant that the order will result in discriminatory practices which will violate statutory prohibitions against discriminations as affecting connecting carriers. All of these contentions are denied by the Commission.

But it is clear that whatever other effect the Commission's order might have on the routing of freight in intrastate commerce within this State, shippers and railroads alike will be affected by that provision of the order which is to the effect that where there are two or more routes (whether involving connecting carriers or not) to a given point of destination, any of such routes which is more than a stated percentage of the distance represented by the shortest of the several routes is penalized by higher rates to such an extent as practically to eliminate it, in at least a number of instances, from competition for freight traffic between the two points in question.

This is definitely shown by the following excerpt from the order:

"Routing: (a) No route shall exceed 190% of the short single line or the short joint line distance between origin and destination for distances of 150 miles or less or 170% for distances over 150 miles; provided, however, that where the short line route exceeds 150 miles and the longer route does not exceed 285 miles the 190% circuity limitations shall be extended to the said longer route up to and including 285 miles. The circuity limitations contained in this paragraph shall apply to all intrastate traffic except as otherwise provided in sub-paragraph (b) below.

"(b) The circuity limitations named in sub-paragraph (a) above shall not be so construed as to abrogate any rate or rates that have been or may in the future be voluntarily established by carriers to meet truck or water competition, which rates have been or may in the future be restricted to specified routes by authority of the Commission."

If these limitations are not conformed to, then the shipper must pay the composite or higher rate, as specified in Section 5 of the order.

It is unnecessary for us to deal with the conflicts of view of the litigants respecting the precise effect of the Commission's order, or to deal with the interpretative deductions and reconciliations expressed in the decree of the Circuit Court, or primarily with the question whether the order, in its practical effect, violates specific statutory prohibitions or directions, because we have reached the definite conclusion that, independently of the question whether specific statutory provisions have been violated, the order is beyond the powers of the Commission.

Unlike the case of the Industrial Commission, for example, which is given complete jurisdiction over the subject matter committed to that Commission by the Workmen's Compensation Act Sections 7035-1 et seq., Code 1942, the Public Service Commission is a governmental...