Southern Pac. Co. v. Van Hoosear

• Decision Date: 13 September 1934
• Docket Number: No. 7014.,7014.
• Citation: 72 F.2d 903
• Parties: SOUTHERN PAC. CO. v. VAN HOOSEAR.
• Court: U.S. Court of Appeals — Ninth Circuit

72 F.2d 903 (1934)

SOUTHERN PAC. CO. v. VAN HOOSEAR.^*

No. 7014.

Circuit Court of Appeals, Ninth Circuit.

September 13, 1934.

James E. Lyons and Harry H. McElroy, both of San Francisco, Cal., for appellant.

Carl R. Schulz, of San Francisco, Cal., for appellee.

Before WILBUR, SAWTELLE, and MACK, Circuit Judges.

MACK, Circuit Judge.

In an action for freight charges on shipments of commodities from the wharves at San Francisco to the appellee's mills in the same city, appellant sought to recover $1,195.96 with interest, on the theory that interstate and not intrastate rates were applicable. Appellee admitted an indebtedness of $593.70, based on the intrastate rate, and denied that he had ever refused to pay that sum. The court, after trial without a jury, first gave judgment for the plaintiff for $1,189.96 with interest and costs, but, on defendant's motion for a new trial, set it aside and, without special findings, entered judgment for defendant, overruling plaintiff's motion for judgment in its favor in the sum of $1,189.96 with interest. Whether the trial judge based his conclusion on the validity of the defense of res adjudicata, or on the view that plaintiff had failed to establish such facts as made interstate rates applicable, is not apparent. If the judgment was justifiable on either ground, it must, therefore, be affirmed.

1. The defense of res adjudicata is based on a prior decision of the California Railroad Commission, a review of which was denied by the California Supreme Court. Appellee for years had paid the interstate rate on similar shipments and, on discovering that the intrastate rate was lower, sued for a refund before the Railroad Commission. The Commission held the shipments to be intrastate, granted reparation, and ordered the carrier to abstain from collecting for the transportation of complainant's similar shipments other than the intrastate tariff charges. None of the shipments involved in this action could have been included in those for which reparation was awarded by the Commission. Only three of those mentioned in the exhibit attached to the complaint herein are among those mentioned in the case before the Commission, and as concededly no freight had been paid on them, no reparation could have been awarded.

But all of these shipments had been made about the same time or shortly after those involved in the Commission's order. Consequently the defense of res adjudicata rests upon the similarity in the character of the shipments as interstate or intrastate commerce and not upon their identity in the two cases.

It is not essential that the trial court must necessarily have found the facts before the Commission and before the court as to the character of the shipments to be substantially similar; it suffices, with jury waived, that he was justified in so finding them on a comparison of the facts as stated in the Commission's opinion with the evidence in the case before him. The denial of a review by the State Supreme Court, to which application had been made pursuant to Gen. Laws Cal. 1931, title 464, Act 6386, ? 67, is efficacious as an affirmance, to give finality to the Commission's order and to render it res adjudicata. Napa Valley Electric Co. v. Railroad Comm. of Calif., 251 U. S. 366, 40 S. Ct. 174, 64 L. Ed. 310 (1920). See, too, Adams v. Decoto, 21 F.(2d) 221 (1927 S. D. Cal., a three-judge case). Wallace Ranch Water Co. v. R. R. Comm. (C. C. A.) 47 F.(2d) 8.

This court has recently held that a reparation award made by the Department of Public Works of Washington under an analogous statute and affirmed by the Supreme Court of that state was not res adjudicata on the merits of the controversy as to whether the commerce was inter or intrastate. Chicago, M., St. P. & P. R. Co. v. Campbell River Mills Co. (C. C. A.) 53 F.(2d) 69 (1931). That decision, however, was based upon decisions of the Washington courts that the merits of the Department's award could not be considered on appeal therefrom but would be open for trial in a subsequent suit to enforce the award. In Stratton v. Railroad Commission, 186 Cal. 119, 198 P. 1051, 1054 (1921), the Commission had held in an earlier case that a certain water company was a public utility, but had denied the relief asked against it. As against the contention that this decision of the Commission was res adjudicata as to the character of the company, the court said: "There is more than one answer to this, but one alone need be given. It is that the Commission is not a judicial tribunal in the strict sense, although many of its functions are quasi judicial, so that its orders are not judgments, and in particular its findings of fact are not adjudications, and facts found by it are not res judicata and as such finally and conclusively established between the parties for all purposes." But as the court pointed out in Southern Pac. Co. v. Railroad Commission, 194 Cal. 737, 231 P. 28, 29 (1924), a reparation case: "Legislative and judicial powers were in some instances united in the same tribunal. * * * The Railroad Commission of California is such a body. * * * There is a distinction between the power to fix rates and the power to award reparation. The former is a legislative function, the latter is judicial in its nature."

Appellant contends that the Commission's order must be deemed to relate only to that class of commerce of which it has jurisdiction and not to commerce that this court finds to be interstate. But res adjudicata is none the less applicable when a jurisdictional question is at issue. Cf. American Surety Co. v. Baldwin, 287 U. S. 156, 53 S. Ct. 98, 77 L. Ed. 231, 86 A. L. R. 298 (1932); Baldwin v. Iowa State Traveling Men's Ass'n, 283 U. S. 522, 51 S. Ct. 517, 75 L. Ed. 1244 (1931); Grubb v. Public Utilities Commission of Ohio, 281 U. S. 470, 50 S. Ct. 374, 74 L. Ed. 972 (1930).

Appellant contends, however, that the doctrine is in any event inapplicable here because the shipments are not identical. This argument does not, however, meet the classic statement of the Supreme Court that a "right, question, or fact distinctly put in issue, and directly determined by a court of competent jurisdiction, as a ground of recovery, cannot be disputed in a subsequent suit between the same parties or their privies; and, even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified." Southern Pacific R. Co. v. United States, 168 U. S. 1, 48, 18 S. Ct. 18, 27, 42 L. Ed. 355 (1897).

"The estoppel of a judgment is not confined to matters purely of fact or of mixed law and fact, but extends to a decision of the legal rights of the parties on a state of facts common to both suits, although the causes of action are different." 2 Freeman on Judgments (5th Ed.) ? 708. But, as he states in section 709: "Decisions on mere questions of law do not operate as res judicata when divorced from the particular subject matter to which the law was applied, though they may be followed as precedents under the doctrine of stare decisis." See, too, Von Moschzisker, Res Judicata, 38 Yale L. J. 299, 302 (1929); United States v. Moser, 266 U. S. 236, 242, 45 S. Ct. 66, 69 L. Ed. 262 (1924). Here we are dealing, not with a mere question of law, but with a mixed one of law and fact, whether the commerce in each of the two sets of transactions, substantially similar, is interstate or intrastate.

Res adjudicata has often been applied in tax cases when an issue arises which has been already litigated in an action concerning taxes for previous years. In Deposit Bank v. Frankfort, 191 U. S. 499, 24 S. Ct. 154, 48 L. Ed. 276 (1903), an earlier decision, that there was an irrevocable contract granting the bank immunity from taxes, was held controlling. In Tait v. Western Md. R. Co., 289 U. S. 620, 53 S. Ct. 706, 77 L. Ed. 1405 (1933), the government was held estopped to question the ruling in an earlier case that a discount on the sales of bonds could be amortized against gross income. In both cases, however, there was an identical subject-matter, the same bonds and the same contract; the taxes were for different years. Similarly, in United States v. Moser, supra, although the suit was for different pay installments, the identical subject-matter concerning which the issue arose was the military service during the Civil War. But in Dennison v. United States, 168 U. S. 241, 18 S. Ct. 57, 42 L. Ed. 453 (1897), a similar rather than identical subject-matter was involved, when the claimant sued for services rendered the government and, to the defense that the services were unauthorized, pleaded res adjudicata on the basis of a previous recovery for like services. The plea was denied because the question of authorization had not been raised in the previous case. United States v. Stone & Downer Co., 274 U. S. 225, 47 S. Ct. 616, 71 L. Ed. 1013 (1927), was on certiorari to review a judgment of the Court of Customs Appeals in the classification for duty of various importations. The contention of res adjudicata rested upon a decision of the Court of Customs Appeals in "a similar case between the same parties, involving the same questions and importations of similar merchandise." This contention was denied; but, as pointed out in Tait v. Western Md. R. Co., supra, and by this court in George H. Lee Co. v. U. S., 41 F.(2d) 460 (1930), this was on grounds peculiar to tariff litigation.

While the transactions in the instant case are many and the evidence not absolutely identical with that before the Commission, and while shipments of this character may involve variations which, though factually slight, may be of legal significance, nevertheless, in our judgment, the trial judge would have been justified in finding such similarity in the facts as to estop appellant as against appell...