No. 1024. McRae Terminal Ry. v. Southern Ry. Co. et al. No. 943. In re Consolidations and Combinations of Carriers. COURT DECISIONS. CASES INVOLVING ENFORCEMENT OF ORDERS OF THE COMMISSION. Five court decisions have been rendered since our last annual report in cases involving the enforcement of orders issued by the Commission. These are what are known as the Soap Classification case, relating to the classification of common soap adopted in Official Classification territory; the Tift case, involving the advance of 2 cents per 100 pounds on lumber from points in Georgia to Ohio River destinations; the Yellow Pine Association case, relating to a similar advance on lumber from points in Louisiana, Mississippi, and Alabama; the Hay and Grain case for reparation on reconsigned shipments at St. Louis; and the Preston & Davis case, involving discrimination in terminal facilities at Brooklyn, N. Y. The Soap Classification case.—On May 13 of this year the United States Supreme Court rendered a decision affirming the decree of the United States circuit court for the southern district of Ohio enforcing an order of this Commission directing the principal carriers in Official Classification territory to cease and desist from further charging the freight rate for common soap in less than carload lots promulgated in a classification adopted to govern in such territory. Cincinnati, Hamilton & Dayton Railway Company et al. v. Interstate Commerce Commission, 206 U. S., 142. At the time of the complaint before the Commission soap in less than carloads took third-class rates, and the complainant sought a reduction to fourth-class rates. Pending the hearing before the Commission the carriers reduced the classification of common soap in less than carloads to 20 per cent less than third class and not less than fourth class. The Commission sustained the complaint as to soap in less than carloads, and ordered the carriers to cease and desist from charging for the transportation of common or laundry soap in less than carload quantities rates per 100 pounds equal to 20 per cent less than the third-class rates. The carriers refusing to obey the order, suit was brought, and the circuit court sustained the order of the Commission. The Supreme Court, in its opinion, decided that the Commission in investigating this complaint had the power, in the public interests, unembarrassed by any supposed admissions contained in the complaint, to consider the whole subject, and the operation of the classifi cation in the entire territory, and also how far its going into effect would be just and reasonable, would create preferences, and would engender discrimination. The court said that any supposed admissions in a complaint filed by soap manufacturers with the Commission as to the freight rate for common soap adopted in Official Classification territory are ineffectual to deprive a Federal circuit court, in a proceeding to enforce the order of the Commission in the case, of the power to test the validity of such order by the scope of the act to regulate commerce. The Supreme Court further held that the disturbance in the relations between freight rates for soap in carload and less than carload lots created by advancing the former from class 6 to class 5 and the latter from class 4 to class 3 in a new classification adopted to govern in Official Classification territory was not cured by classifying soap in less than carload lots at 20 per cent in less than third class, but not less than fourth class, where the result of applying this modified percentage classification to the varying rates is to leave soap in less than carload lots in the fourth class in portions of a territory and in a higher class in other portions. Findings of the Commission, said the court, that a classification of freight rates adopted to govern in such territory produces preferences and discrimination will not be interfered with on appeal when concurred in by a Federal circuit court unless the record establishes that clear and unmistakable error has been committed. The court said that the Commission was authorized to grant relief in this case irrespective of the particular character of the complaint by which its power may have been previously invoked. Whatever might be the rule by which to determine whether an order of the Commission was too general where the case with which the order dealt involved simply a discrimination as against an individual, or a discrimination or preference in favor of or against an individual or a specific commodity or commodities or localities, or as applied to territory subject to different classification, the court thought it clear that the order made in this case was within the competency of the Commission, ⚫ in view of the nature and character of the wrongs found to have been committed and the redress which that wrong necessitated. The court concluded that the Commission was clearly within the authority conferred by the act in directing the carriers to cease and desist from further enforcing the classification. The Tift case.-The United States Supreme Court sustained during the present year the order issued by the Commission in the case of Southern Railway Company et al. v. Tift et al., 206 U. S., 428. In this case an advance of 2 cents per 100 pounds in the lumber rates from points in Georgia and Chattanooga, Tenn., to Cincinnati and other points on the Ohio River, East St. Louis, and St. Louis, and points beyond, was complained of. The Commission decided that such advance of 2 cents was unreasonable and unjust. The defendant carriers having failed to obey the order of the Commission, the United States circuit court for the southern district of Georgia decreed enforcement of the Commission's order.` In sustaining the circuit court the Supreme Court declared that the rule that an action at law to recover excessive interstate freight charges can not be maintained in advance of action by the Commission will not prevent a Federal circuit court which has suspended proceeding on a bill seeking relief from an advance in freight rate, pending action by the Commission, from granting relief in the exercise of its powers under section 16 of the act. Parties after action by the Commission declaring an increased freight rate to be unreasonable may make a valid stipulation in the Federal court that such court may adjudge the amount of the reparation; and the Federal circuit court may direct an order of reference to the master of the pleadings and evidence in the cause with the instructions to ascertain the sum of the increase in rates paid since the rate went into effect, where the defendant carriers stipulated in open court that in case complainants prevailed a decree of restitution might be made. The Yellow Pine Association case.-At the same sitting the Supreme Court also sustained the Commission in the case of the Illinois Central Railroad Company v. Interstate Commerce Commission, 206 U. S., 441. The facts in this case were somewhat similar to those in the Tift case, as they involved the unreasonableness of the advance in the rates on lumber of 2 cents per 100 pounds, but the points of origin were different. The Supreme Court of the United States, in upholding the United States circuit court for the eastern district of Louisiana and this Commission, said that even if error could be attributed to the Commission in deciding that expenditures for permanent improvements and equipment should not be charged to the current or operating expenses of a single year for the purpose of testing the reasonableness of an increased freight rate, such error would not require the reversal of a decree enforcing an order of the Commission requiring carriers to desist from enforcing such rate, where the findings show that the old rates were profitable and that dividends were declared even when permanent improvements and equipment were charged to operating expenses. Expenditures for permanent improvements and equipment should not be charged to the current or operating expenses of a single year for the purpose of testing the reasonableness of an increased freight rate. The Supreme Court further held that no presumption of law that a freight rate upon a particular commodity is reasonably low exists because such rate has been duly published and filed by the carrier with the Commission. A con certed advance in a freight rate may be held unreasonable by the Commission, although such rate may be but a mere division of a through rate. The Hay and Grain case.-On April 16 last the United States circuit court of appeals for the seventh circuit affirmed the judgment of the United States circuit court for the eastern district of Illinois which enforced the order of the Commission allowing reparation. Southern Railway Company v. St. Louis Hay and Grain Company, 153 Fed. Rep., 728. It appeared in an investigation held by the Commission that the Southern Railway Company in transporting from East St. Louis to southeastern points hay in carloads, originating north and east of East St. Louis, exacted 4 cents per 100 pounds in addition to the rate to such destinations from Ohio River points when the hay was unloaded at warehouses in East St. Louis and afterwards reconsigned to southeastern points, but only 2 cents per 100 pounds in addition to such rates when not so unloaded. The Commission found such rate on unloaded and reconsigned shipments from East St. Louis unjust and unreasonable, and awarded reparation to the extent of 1 cent per 100 pounds upon shipments made by the St. Louis Hay & Grain Company. The circuit court held that the findings of fact of the Commission and its award of reparation were justified by the evidence. In affirming the judgment of the circuit court the circuit court of appeals, among other things, decided that where a proceeding to enforce the Commission's findings was tried by a Federal court without a jury it was not error for the court to receive the Commission's report in evidence without excluding matters of opinion stated therein, as distinguished from the Commission's findings of fact. This case is now pending before the Supreme Court of the United States. The Preston & Davis case.-The Delaware, Lackawanna & Western Railroad Company applied to the circuit court for the southern district of New York for a preliminary injunction against the Commission and Preston & Davis to restrain enforcement of the order of the Commission referred to in another part of this report. The injunction was applied for on the ground of risk from fire because of the mode of unloading oil by Preston & Davis at the Brooklyn terminal. The preliminary injunction was denied by the court, on August 10 last, on the ground that the Commission in its order expressly provided that the railroad company might take all needful precautions against a conflagration or other liability to accident by requiring a safer mode of unloading. 155 Fed. Rep., 512. This case was the only one in the past year in which the carriers attempted to prevent enforcement of an order of the Commission. INJUNCTION TO RESTRAIN PROCEEDINGS BEFORE THE COMMISSION. In a recent case, not yet reported, of the Fairmont Coal Company et al. v. Merchants Coal Company et al., in the circuit court of the United States for the district of Maryland, a bill was filed to restrain the Merchants Coal Company from prosecuting a complaint which it had filed before this Commission. The circuit court granted the injunction on the ground that the matters set up in the complaint before the Commission were res adjudicata, having been disposed of in a proceeding before that court. This was held by the court, although the Merchants Coal Company, the complainant before the Commission, was not made a party of record to the court proceeding, and the decree of the court in the proceeding before it was not final, because an appeal had been taken to the circuit court of appeals, where it was still pending. INJUNCTION TO RESTRAIN PROPOSED RATES. On September 27 last the United States circuit court for the district of South Dakota rendered decision on final hearing in the case of Jewett Brothers & Jewett v. Chicago, Milwaukee & St. Paul Railway Company, 156 Fed. Rep., 160. The court held that as a court of the United States it has jurisdiction of a suit by a shipper to enjoin a railroad company from putting into effect a proposed rate alleged to be unlawful, as in violation of the interstate commerce law, either as unreasonable and unjust in itself or discriminatory, when the jurisdictional amount is involved. But it declared that as court of equity it can not entertain a suit for a temporary injunction to restrain an interstate carrier from putting into effect an alleged unlawful rate, where such suit is merely in aid of a proceeding instituted before this Commission to have such rate declared unlawful, since the Commission is without power to pass on a rate which is merely proposed by a carrier, but which has not been put into effect. RELIEF FROM UNREASONABLE FREIGHT RATES ON INTERSTATE SHIPMENTS IS BY ACTION BEFORE THE COMMISSION ONLY. The United States Supreme Court in February last decided the important case of the Texas & Pacific Railway Company v. Abilene Cotton Oil Company, 204 U. S., 426, which was a suit to obtain relief in a State court from an alleged unreasonable interstate freight rate exacted by a common carrier from a shipper. The oil company alleged that the railway company had exacted from it on shipments of cotton seed from various points in Louisiana to Abilene, Tex., the payment of an unjust and unreasonable rate, and there were averments that such rate was discriminatory, constituted undue preference, and amounted to charging more for a shorter than for a longer |