Standard Oil Co. v. Brown, 218 U.S. 78 (1910)

To entitle a plaintiff to go to the jury, the evidence [p. 79] 218 U. S. Argument for Plaintiff in Error.

“There was evidence adduced at the trial to show that plaintiff had never been advised by the defendant, or any of defendant’s employés, either of the existence of the opening in the ceiling or the purpose for which it was used. Plaintiff testified to this effect, and further, that during the period of his employment—less than two weeks—he was required to leave the barn with his wagon [p. 83] to deliver oil at 6 o’clock in the morning, and that he did not complete the delivery of the oil and return to the barn until 6 or 7 o’clock in the evening. At the time of year that he was employed—in January—he left the barn before daylight in the morning and returned after dark in the evening. It also appears that the barn was poorly lighted, there being but a small oil lamp at each end of the passageway between the stalls.

Mt became and was also the duty of the said defendant not to permit the said hay and feed to be thus passed through the said hole or opening without proper [p. 84] warning or timely notice to those employed in the stable below . . . and to give its employés engaged in handling or placing the hay and feed as aforesaid, as well as to those who were employed in the stable below, such proper and necessary instructions with respect to the dangers of passing the hay and feed through the said hole or opening, and the performance of their respective duties as to prevent injury and danger to the lives and limbs of the employés engaged in the stable below, yet the defendant . . . did not ... do any of the duties that it was called upon to discharge in the premises, but, wholly disregarding its said duties in the premises, did carelessly and negligently allow a bale of . . . hay to fall or pass, or be thrown through the said hole or opening, without any notice or warning or signal or instruction of any kind to plaintiff,” etc.

In the case at bar the company could not have been [p. 85] misled. It made no objection to the testimony of the plaintiff (defendant in error here). It replied to it by testimony of like kind. It did not indicate in what way

The company also asked another instruction, the sub- [p. 87] 218 U. S. Opinion of the Court.

Judgment affirmed. [p. 88] INTERSTATE COMMERCE COMMISSION v. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY COMPANY.

The question in the case is the validity of an order of the Interstate Commerce Commission reducing the class rates charged by the appellee railroad companies on through freight shipped from the Atlantic seaboard to [p. 90] Kansas City, and St. Joseph, Missouri, and Omaha, Nebraska, cities on the Missouri River and called throughout the record, and in this opinion, Missouri River cities.

The order of the Commission required the railroad [p. 91] companies to cease and desist on or before the twenty-fifth of August, 1908, from charging, demanding or collecting anything in excess of the rates last above set out, and the companies were required to put such rates in force before the twenty-fifth of August, 1908, and maintain them for a period of not less than two years.

A table showing the distance of the various roads from New York to St. Paul and Minneapolis, and the Missouri [p. 92] River cities is given, which shows that the distances are not materially different, and also shows distances west of Chicago.

The Chicago and Northwestern Railway Company filed an amended answer, in which it alleged that the complaint related to the through rates from the Atlantic seaboard to the Missouri River cities, and that they were alleged to [p. 93] be unfair and prejudicial compared to rates to St. Paul and Minneapolis, and 11 unreasonable and excessive in and of themselves.” And, further, that the rates had been fixed and established by the railroad companies by virtue of joint traffic agreements, and had been duly filed, posted and published by the companies, and that all the companies to such agreements were necessary parties. Fifty or more companies were named.

“That the rates from New York city to East St. Louis, Illinois, are computed at 116 per cent of the rates from New York to Chicago according to relative distances, that the rates from New York to East St. Louis are part of a general structure of rates whereby all rates from New York and other Eastern points to points in the States of Ohio, Indiana, Illinois, Michigan, Pennsylvania, Kentucky and Wisconsin, and the Province of Ontario are made [p. 94] upon the bases of percentages of the rates from the points of origin to Chicago; that the said rates for the first five classes governed by the official classification from New York to East St. Louis of 87c, 75c, 58c, 41c and 35c per hundred pounds, respectively, are applied as proportional rates to the various Mississippi River crossings north of East St. Louis, to and including East Dubuque, Illinois, and that from other Eastern points than New York city the rates to East St. Louis apply equally to said Mississippi River crossings, and all of such rates to said Mississippi River crossings apply uniformily upon all shipments destined to all points west of the Mississippi River and east of Pacific coast terminals and points taking the same rates. Respondents allege that all of the rates from Eastern points to said Mississippi River crossings are just and reasonable in and of themselves and as applied to shipments destined to any point west of the Mississippi River and east of Pacific coast terminals.”

It is alleged that the reasonableness of the rates from Eastern points to Chicago and to the Mississippi River is [p. 95] not questioned by petitioners, and that the grievance of the latter, if they have any, lies in the rates applied by the original respondents from Chicago and the Mississippi River crossings to the Missouri River cities on shipments originating at Eastern points. They hence prayed to be dismissed. They were subsequently dismissed.

Even a summary of the pleadings would be very long and we shall, therefore, say but little more than that the allegations of the bill and those of the answer of the Commission and its denials are such as tend to the support of the respective contentions of the companies and the Commission, upon which we shall hereafter comment. We may, however, say further that emphasis is given to certain matters. The companies make prominent that two classifications of freight are in force upon which tariff rates [p. 96] are based, the Official classification from the Atlantic seaboard to the Mississippi River and the Western classification, between the river and the Missouri River cities; that the classifications materially differ and constrain different rates; that those between the rivers are just and reasonable and apply to all merchandise, whatever be its point of origin. That business -conditions have grown up and are dependent upon the rates established, which will be disturbed by their alteration; that their alteration as required by the order of the Commission will compel a discrimination between shippers and localities, to do which is in excess of the powers of the Commission.

It is further alleged that there was no evidence that the rates between the rivers are unjust or unreasonable, except by comparison with other rates; that no evidence was offered of cost of service or of the various elements proper to be considered in determining whether a rate is just and [p. 97] reasonable in and of itself, and that “the whole and only-reason and the whole and only conclusion” of the Commission upon which the reduction was ordered was because the Commission decided that merchandise shipped from the Atlantic seaboard should be transported by the companies at a lower charge than that exacted for the transportation of an equal amount of merchandise when the same was shipped from St. Louis, Chicago or other points west of the Atlantic seaboard. And this, it alleged, is in excess of the powers of the Commission, misapplies the law, and compels the companies to serve a certain class of shippers at an unreasonable rate, and to take a rate lower than is charged other shippers for a like service, which involves less expense to the companies.

We make these quotations from the opinion of the court because they put, in a clear and condensed way, the ultimate contention of the companies and the evil, as they see [p. 101] it, in the order of the Commission, and which is intended to be exhibited by their voluminous pleadings and arguments. And such, it is insisted, was the conscious purpose of the Commission, a view in which the Circuit Court concurred, deducing it from certain avowals of the Commission in its report.

A member of the court dissented from its judgment, and declared the grievance that the companies asserted [p. 102] against the order of the Commission was not sustained by the evidence.

Is it true that the Interstate Commerce Commission by its order exercised a power “artificially to apportion out the country into zones tributary to given trade centers,” and intentionally exercised it to protect the Missouri River cities against the competition of other cities? If that be the necessary conclusion the judgment of the Circuit Court it may be contended was right. Such conclusion we should certainly be reluctant to adopt. From whatever standpoint the powers of the Interstate Commerce Commission may be viewed, they touch many interests, they may have great consequences. They are expected to be exercised in the coldest neutrality. The Commission was instituted to prevent discrimination between persons and places. It would indeed be an abuse of its powers to exercise them so as to cause either. And the training that is required, the comprehensive knowledge which is possessed, guards or tends to guard against the accidental abuse of its powers, or, if such abuse occur, to correct it. The possession of such advantages is one of its defenses. It alleges that by § 12 of the Interstate Commerce Act it is given authority to inquire into the management of the business of all common carriers subject to the provisions of the act, and is required to keep itself informed as to the manner and method in which the same is conducted, and is “authorized and required to execute and enforce the provisions of the act.” Other sections are more specific in grants of power. Rates may not only be investigated and be pronounced unjust or unreasonable or discriminatory but other rates may be prescribed. These, we repeat, are great powers and means of their proper exercise are conferred. Investigation may be conducted, and as the Commission says in its answer, “that to enable it to perform its duties such information as shows the operations and operating results [p. 103] of each railway is ” required to be filed with it and the subject is under constant investigation.

We return therefore to the question of the power of the Commission and its purpose. The complainant before that body presented two issues, the effect of the rates from the Atlantic seaboard as discriminating against the Missouri River cities in favor of St. Paul and Minneapolis, and their unreasonableness of and in themselves. The first we may immediately put out of view. It was decided adversely to the complainants before the Commission, and we may say at the outset that the contention of the railroad [p. 104] companies that it was the only issue presented to the Commission is not justified.

The second issue was decided in favor of the complainants, the Commission finding that the through rates were unreasonable of and in themselves, and was caused by the charge from the Mississippi River crossings to the Missouri River cities. The grounds of its decision and principles upon which it proceeded the Commission set forth in its report, and to some extent all of the factors upon which the decision is based and supported. Indeed, the pleadings in the case and the argument of counsel are but fuller explanations of the elements set out in the report. The controversy, therefore, is not so much as to what these factors are as what they establish as to the power of the Commission to make the order. The effect of the order, it is contended as we have seen, is to create artificial zones tributary to certain trade centers, or, as it is expressed by the railroad companies, the effect of the order is to destroy the system of rates which has existed ever since the railroads were constructed and to “overturn the equality of opportunity in competition” which certain commercial centers possessed under that system and to substitute an artificial system, the feature of which is special advantages in rates to special sections. And it is said the order was entered for such purpose. The appellee intervenors, who are merchants and jobbers of the territory known as the Central Freight Association territory, attack the order on the ground (a) that it violates § 2 of the Interstate Commerce Act, in that it compels a charge to them for like kind of traffic under substantially similar circumstances and conditions greater than is charged to their competitors in seaboard territory and on the Missouri River; (6) the order is in contravention of § 3, in that it gives an unreasonable preference to merchants and jobbers in the seaboard territory and on the Missouri River over merchants and jobbers in Central [p. 105] Freight Association territory; (c) that it arbitrarily attempts to change existing commercial conditions upon which the various distributing centers of the seaboard, Middle West and West have become established; (d) the power of the Commission is limited to the reduction of unreasonable rates, and that the rates reduced are not shown to be such in themselves; (e) the order is void, it being an attempt at legislation on the subject of general adjustment of rates.

These contentions present the full offending of the order, and the summary of them is that rates long established have been changed, commercial conditions are disturbed, and equal opportunities of competition of certain commercial centers which have grown up have been taken away, and undue protection given to others. This seems very formidable in the recitation. But it is met by counter charges of discrimination, and that the equal opportunities of competition contended for is a power which has grown up and is supported by the existence of unjust freight rates. It is certain that the subject has taken on more complexity than it had before the Interstate Commerce Commission, and the Commission has made this the basis of a motion to dismiss the suit as to the intervening railroads, and all the intervening merchants and manufacturers, on the ground as to the railroads, among others, that the order does not run against or operate upon them, and that no right of theirs can be determined by the decree. On the ground as to the intervenors, that oyer the matters herein the courts exercise only the jurisdiction conferred by the act to regulate commerce, and not general equity powers, and that the matter to be determined is not the respective rights of shippers or localities, but the validity of the order of the Commission, and that the intervenors have a complete remedy by application to the Commission. And we may say here, as adding to the complex effect and interest of the [p. 106] questions presented, that the chambers of commerce and boards of trade of certain Eastern cities have presented a brief in defense of the order, asserting a vital interest in its preservation, and exhibiting and illustrating the discrimination which, as they contend, exists against them by the breaking of rates at the Mississippi River crossings.

We think the charge also puts out of view the disclaimers of such purpose in the answer of the Commission in its report to Congress, and its insistence that it is constrained by the law to act only on complaint to it and that it is open at all times to be appealed to to redress the grievances any shipper or locality may have. Nor did the Commission ignore or underestimate the manner in which the lines of railroads had been extended or the system of rates or ratemaking which had resulted. That is the sys-1 tern of making rates upon certain basing lines or points. Rates “break” at such points, it was proved as a'result [p. 107] of building independent lines westward. In other words, lines of railroads were built to certain cities from the East, seeking such cities, it may be, because of their natural situation and facilities, and other independent lines building westward, each line fixing its own rates or uniting according to circumstances in joint rates. It is the observance of such points that give and maintain, as we understand the contention of the railroads, to certain cities “the equal opportunity in the distribution of merchandise with the merchants in the East, and with the merchants to the West of said cities, so far as their business is affected by trade rates.” That this was carefully considered is manifest, for the Commission resisted the argument which was made against basing rates on such points, saying:

It was the sense of the Commission, however, that such [p. 108] points could not be immovable forever and fixed forever against power of changing, or that through rates based on such points must be exempt from regulation, no matter what their character, or be constituted at the will of the railroad of the sum of local rates or the sum of rates from one basing point to another, however unjust the rates might be. Indeed, as pointed out in the brief of the appellants in No. 664, the railway companies adhere to no such construction of rates. As there said, “the Pacific coast terminal rates, the Washington and Spokane common point rates, the Oklahoma rates and the El Paso and Texas common point rates are each and all a departure therefrom, and all are much less than the rates ordered by the Commission.”

“If the local class rates of defendants between the Mississippi and Missouri Rivers were reduced, it would give the same degree of advantage to all the producing and distributing centers on and east of the Missouri River, [p. 109] and their relative advantages or disadvantages would not be changed, while a very serious inroad upon the revenues of the carriers would inevitably result, and at a time of industrial depression when it could not well be borne. Such a change would necessitate corresponding changes in the rates to and from intermediate points, and would probably be reflected in changes in commodity rates as well. The local class rates between the rivers are high, but this is not the time to precipitate such a violent change as would follow an important reduction of them. The first class rate from Buffalo to Chicago, about 540 miles, and from Pittsburg to Chicago, about 465 miles, is 45 cents. From Cincinnati to Chicago, 306 miles, it is 40 cents.”

But, it may be said, such limitations upon the [p. 110] companies is not of consequence, for shippers and trade centers are here with complaints. It is doubtful if they are properly here, or rather were properly permitted to intervene. We have said that the act to regulate commerce was intended to be an effective means for redressing wrongs resulting from unjust discrimination and undue preference, and this must be so, whether persons or places be sufferers. T. & P. Railway Co. v. Abilene Oil Co., 204 U. S. 426. We have also said that the primary jurisdiction is with the Commission, the power of the courts being that of review and is confined in that review to questions of constitutional power and all pertinent questions as to whether the action of the Commission is within the scope of the delegated authority under which it purports to have been made. Interstate Commerce Commission v. Illinois Central R. R. Co., supra.

The court below enjoined the execution of the order of the Commission because it was of the opinion that that body had exceeded the powers conferred upon it by the act to regulate commerce, since it had based its order upon the assumption that it was its duty under the act to secure a relatively equal share of the volume of interstate commerce to communities and places, and therefore that it was its province to alter otherwise legal rates for the [p. 112] purpose of correcting the inequalities which otherwise would arise from the competitive rivalry between sections and places. As, in my opinion, the court below was correct in the view which it took of the order of the Commission, and was right in holding that the power which the order manifested was not conferred by law, I dissent from the judgment of reversal now announced. It does not, however, seem to me necessary that I should do more than state the fact of my dissent for the following reasons: The judgment of reversal is based, not upon the ruling that the Commission possessed the authority to make the order if it was based upon the assertion of power upon which the court below found the order must necessarily rest, but exclusively upon the theory that the court below, while rightly holding that the Commission had not the power which it assumed that body had exerted in making the order, had nevertheless mistakenly enjoined the order because it did not exert, or attempt to exert, the power which the court conceived had been called into play in making it. In other words, although the opinion now announced excludes the authority which the lower court deemed the Commission had exerted by the order in question, it nevertheless maintains the order because of the conclusion that the order was but an exertion by the Commission of its authority on complaint that a rate was unreasonable of itself, to correct such rate by substituting a reasonable rate therefor. Although I am unable to agree with the reasoning by which the court now gives to the order of the Commission the narrow basis thus stated, as the solution of that question depends upon the idiosyncrasies of this particular case and involves no principle of general importance, it seems to me I am called upon to do no more than simply to state my inability to agree.