Texas Steel Co. v. Fort Worth & D. C. Ry. Co.

• Decision Date: 10 June 1931
• Docket Number: No. 1453-5695.,1453-5695.
• Citation: 40 S.W.2d 78
• Parties: TEXAS STEEL CO. v. FORT WORTH & D. C. RY. CO. et al.
• Court: Texas Supreme Court

40 S.W.2d 78

TEXAS STEEL CO. v.FORT WORTH & D. C. RY. CO. et al.

No. 1453-5695.

Commission of Appeals of Texas, Section A.

June 10, 1931.

Certified Questions from Court of Civil Appeals of Second Supreme Judicial District.

Suit by the Texas Steel Company against the Fort Worth & Denver City Railway Company and another. From an adverse decision, the plaintiff appealed to the Court of Civil Appeals, which certifies certain questions.

Questions answered.

George W. Armstrong, of Fort Worth, for appellant.

Thompson & Barwise, Lee, Lomax & Wren, Goree, Odell & Allen, and Fred L. Wallace, all of Fort Worth, for appellees.

CRITZ, J.

This suit was brought by Texas Steel Company, hereinafter designated the steel company, against the Fort Worth & Denver City Railway Company and the Missouri, Kansas & Texas Railway Company, in the district court of Tarrant county, Tex., for overcharges and penalties.The certificate explains the suit.The pertinent part of the certificate reads as follows:

"Appellant alleges as its cause of action for overcharges and penalties for extortion that the Railroad Commission of Texas, on February 13, 1915, established—after notice and hearing to which appellant was a party—commodity rates for rolling mills, known as Commodity TariffNo. 48-A, and that said rates have never been canceled in the manner provided by law and are still in force and effect; and that the appellees have charged it rates grossly in excess of said rates in the shipment of said 112 cars, and it sues for the overcharges and the penalties provided for in article 6475, Vernons Ann. Stats.

"The appellees contend that these rates were lawfully cancelled by the Railroad Commission of Texas on April 26, 1922, by its CircularNo. 5548, which rates were subsequently reduced approximately 10 per cent by order of the Railroad Commission of Texas of June 15, 1922, as shown by its CircularNo. 5573, and that the rates thus established are the lawful rates.

"The circular of April 26, 1922, recites that:

"'Whereas it appearing to the Railroad Commission of Texas that in pursuance of orders dated July 7, 1916, * * * entered by the Interstate Commerce Commission in its docket No. 8418, Railroad Commission of Louisiana v. Aransas Harbor Ry. Co. et al., and associated cases, certain freight rates * * * as in said orders prescribed have been on and continuously since Nov. 1, 1916 * * * published and applied to the transportation of freight traffic between points within the State of Texas by railroad companies operating lines of railroad in this state, which said freight rates are carried in the following tariffs' etc. (describing various tariffs); and `Whereas, it further appearing to this Commission that said freight rates now published in the hereinbefore mentioned tariffs and classifications having been continuously since their publication and being now applied to such intrastate freight traffic and being recognized by this Commission as being so lawfully applied, the shipping interests and public welfare of this state require that they be adopted by this Commission.'The order therefore adopts the rates and is signed by two members of the Commission and attested by the Secretary.

"On May 4, 1922, the Interstate Commerce Commission entered an order in said cause No. 8518, stating, among other things, that it `further appearing that by order entered April 26, 1922, the Railroad Commission of Texas has adopted and prescribed for observance and application subsequent to May 15, 1922, between points within the State of Texas the intrastate rates heretofore entered by this Commission * * * (describing them), and it further appearing that said rates * * * will, if said order of this Commission be vacated, continue in effect as the lawfully established rates * * * it is ordered that said rates be vacated,' etc.

"It appears from the 31st Annual Report of the Railroad Commission of Texas that these orders were made in pursuance of an agreement or an arrangement between the two said commissions and at the same time an arrangement was made for joint hearings of future applications involving inter and intra state rates.

"It is urged that there was no docketing of a cause, no notice to the railroads or to appellant, and no evidence introduced, nor any character of hearing had as a predicate for this Circular.

"The rates adopted by the Railroad Commission of Texas in said OrderNo. 5548, were filed by A. C. Fonda as publishing agent of the railroads of Texas, with the Interstate Commerce Commission following the Shreveport decision and under the claim that said decision authorized the filing of such rates and the cancellation of corresponding intrastate rates in the State of Texas.The State contended that such rates were not in fact authorized by the Shreveport decision and that the same were without authority and void, and proceedings were pending in the courts to test the validity of said rates when the operation of the railroads was taken over by the Government pending the war, and such proceedings were suspended thereby.

"Federal control over the railroads was terminated by act of Congress on February 29, 1920, but the Interstate Commerce Commission continued to exercise jurisdiction over intrastate rates up to April 26, 1922, when the agreement or arrangement above mentioned was made, in pursuance of which the several law suits involving the validity of the Shreveport rates were dismissed.

"Question 1: Is the said CircularNo. 5548 adopting said rates, void and subject to collateral attack for any of the following reasons, towit:

"(1) Because no notice was given to the railroads as provided by article 6449 of the Statutes of 1925, prior to the issuance of said circular?

"(2) Because no notice was given to appellant, which appears to be the only rolling mill in Texas and the only one interested in the exception giving rolling mills preferential rates as provided in said TariffNo. 48-A adopted February 13, 1915?

"(3) Because there appears to have been no evidence of the docketing of the cause, or hearing, or evidence, as provided by the rules of the Railroad Commission of Texas?

"(4) Because the Railroad Commission of Texas was without authority to make the said arrangement or agreement with the Interstate Commerce Commission?

"(5) Because the Fonda rates which were adopted were established unlawfully as claimed to have been held by the Court of Civil Appeals in the case of Abilene & Southern Ry. Co. v. State, 199 S. W. 878; and the United States Supreme Court in the Minnesota Rate Cases, 230 U. S. 352, 33 S. Ct. 729, 57 L. Ed. 1511, 48 L. R. A. (N. S.) 1151, Ann. Cas. 1916A, 18, andWisconsin Ry. Com. v. C., B. & Q. Ry. Co., 257 U. S. 683, 42 S. Ct. 232, 66 L. Ed. 371, 22 A. L. R. 1086, and other cases.

"Question 2: If the order of the Railroad Commission of Texas of February 13, 1915, has not been canceled by the orders mentioned, are the appellees liable for overcharges and the penalties provided by art. 6475, for not observing the rates established in said order?

"Appellant sues for the penalties provided by statute for discrimination upon the ground that the fabrication in transit privilege granted to its competitors constitutes an unjust discrimination against it, and that this privilege applies to traffic and points wholly intrastate, and is null and void.The appellees contend that this transit privilege was filed by the Southwestern lines with the Interstate Commerce Commission and that it thereby becomes an interstate regulation and that it is not subject to attack in the state courts.

"This transit privilege allows to dealers and fabricators who have paid freight upon inbound shipments from other states and have preserved their freight bills and otherwise complied with the regulations, the privilege of forwarding from their warehouses outbound shipments of the same character of article or articles of kindred character, for a period of twelve months, at a lower charge than is made at the same time for a corresponding distance upon like traffic, against the appellant.Paragraph 8 of the said privilege provides as follows:

"`The identity of structural iron and steel, also iron and steel articles converted into tank iron, unloaded in a warehouse, storeroom, etc., cannot be preserved.* * * Substitution of structural iron or steel, also iron and steel articles converted in tank iron, originating in one line, for a like commodity originating on other lines, will be permitted.'

"While the regulations require daily reports and cancellations of billing for steel used locally, in practice it is claimed no daily reports are made, but the reports are made quarterly; and no daily cancellation of billing is made for steel used locally, but such billing is used upon outbound shipments of other steel; and in practice billing for structural steel, such as beams, girders, and channels, is used for forwarding merchant steel bars and reinforcing concrete bars, and vice versa.It is urged that prior to the cancellation of common point territory and during a part of the time when the shipments in controversy were being made, the competitors of appellant were permitted to make shipments to any place in common point territory at a flat charge of two cents per 100 pounds, whereas appellant was required to pay for corresponding distances for the same traffic, mileage rates up to 48 cents per 100 pounds.It is urged that since the cancellation of common point territory one of appellant's competitors, the Colorado Iron & Fuel Co., and its customers, are still permitted to make such intrastate shipments at the flat two cent charge, and appellant's other competitors are still allowed to make shipments at very much less than appellant is required to pay at the same time for corresponding distances.

"It is urged that this transit privilege operates very greatly to the disadvantage of appellant in marketing its product and in meeting...