Amicus Curiae Brief — Davis v. Portland Seed Co.

OF THE

United States

Ocroper Tero, 1922

———————_—

THE SAN FRancisco ann Porreaxnpn Srean-

SHIP COMPANY (a corporation),

VS Plaiut iff tn Error

J

POETS ORD AL NE DO pe ee

eat

wr

-_—-~

y

» > wf OU by y . . :

A. J. PARRINGTON, Defendant in Error.

No. 573

——

i

James C. Davis, Agent, United States Rail 4

. . . ra

road Administration, Plaintiff in Error, ;

VS. it

A. J. PARRINGTON, |

Defendant in Error.

—— —

CrON WRITS OF ERROR TO THE UNITED STATES CIRCUIT

COURT OF APPEALS FOR THE NINTH CIRCULT.

BRIEF OF AMICI CURIAE ON BEHALF OF

DEFENDANTS IN ERROR.

HENRY W. CLARK,

120 Broadwav. New York City,

ARTHUR C. SPENCER,

G E. COCHRAN.

JOHN F. REILLY,

Pittock Block. Portland, Oregon,

Attornens for Plaintiffs in Error.

JOHN F. FINERTY,

Assistant General Counsel, United States

tailroad Administration, Washington, D. C..

Attorney for Plaintiff in’ Error.

James C. Dar is,

JAMES G. WILSON,

Platt Building, Portland, Oregon,

Attorney for Defendant in Error.

MILES LORE P DELP STL AN I

FRANK R. WEHE.

ALFRED J. HARWOOD,

Kohl Building, San Francisco, California.

Amici Curiae.

Subject Index

Page

Reply to argument that Section 4 was not violated = 2

Reply to contention that the measure of damages

is not the difference between the rates........ 14

hb Fare, 5e wee

Table of Cases Cited

California Adjustment Company v. A. T. & oS. F.

et: i ape |. eee S Es

California Adjustment Co. v. S. PL Co., 226 Fed.

PPLE ccd Wa MORES RAR OES Ox CAA MRE RS ates

Central lron Works v. P. R. BR. 17 Pa. Ct. G52...

Chicago & Alton v. C. Vo d& W. Coal Co., 79 Til.

PEE WAALS CENCE RTOS SAFER A wo Ao ks

Great Western Ry. Co. v. Sutton, L. R. 4 H. L.

ee SER Lipa s cca ek nde bins ta kaart onan s

Heiserman v. Burlinglon, 1 No W. 908........

Hutchinson v. R. RR. Co., 57S. W. 25) Ky.)

Junod v. Chicago & N. W. Ry. Co., 47 Fed. 290.28,

Louisville & N. Ry. Co. v. Eubank, 184 UL 8

Louisville & N. Ry. Co. v. Walker, 110° Ky, 961

(63 S. W. 20) VOW eae th © ek 6k bk eee ere koe 6,

McGrew vu. Missouri P. R. Co., 230 Mo. 496......

Missouri P. R. Co. vu. McGrew Coal Co., 244 U.S.

REE CRG ORR RAAT MERE ERGO OCR T SALE ERD 26,

Mobile ». Steiner, 61 Al@, BTL... 6. ckcvccccesccs

Osborne v. C. & N. W. Ry. Co., 48 Fed. 49......

Parsons v. C. & N. W. Ry. Co., 167 U. 8. 447. .10, 12,

Penn. R. R. Co. ty International Coal Co... 230

Ee Cr Pay Fee Cay reer ye 19,

Penn. R. R. Co. v. International Coal Co., 173 Fed.

Rea CE vin xD Re eee A Be nla Listens we

Southern Pacific v. California Adjustment Com-

pany, Zot Wed. 960: (C. C. A.) .n35. cca ean 2, 12,

Twells v. Penn, R. R. Co., 2 Walker 450 (3 Am.

Law Reg. N. S. 728), (Penn. Supreme Court )

Union Pacific v. Goodridge, 149 U.S. 680......

LOS Mh MN PE REL ON AL IRL GLO AOL SORA AIRY NE BAPE A, T

4

:

OF THE

United States

OcToBER TERM, 1922

4

THe San Francisco AND Porrlanpd STEAM-

sHIPp COMPANY (a corporation),

Plaintiff in Error, |

Vs.

A. J. PARRINGTON,

Defendant in Error.

UPON WRIT OF ERROR TO THE UNITED STATES CIRCUIT

COURT OF APPEALS FOR THE NINTH CIRCULT,

No. 573

Seg gs RE RR PETE a

James C. Davis, Agent, United States Rail-

road Administration,

Plaintiff in Evvor,

VS. r

A. J. PARRINGTON,

Defendant tu Error.

(PON WRITS OF ERROR TO THE UNITED STATES CIRCUIT

COURT OF APPEALS FOR THE NINTH CIRCUIT,

BRIEF OF AMICI CURIAE ON BEHALF OF 5

DEFENDANTS IN ERROR. f

This brief is filed pursuant to permission granted

by the Court. We shall discuss only two points

made in the brief of plaintiffs in error, viz., the

points made at pages 59 and 68 respectively. These

points are as follows:

If section 4 applies to shipments wholly by

water, was it violated?

The measure of damages is not the differenc

between the rates. No other evidence of dam-

age was offered so there can be no recovery.

REPLY TO ARGUMENT THAT SECTION 4 WAS NOT VIOLATED,

The contention here is that section 4 was not

violated because no shipments of sugar were in faet

made to North Portland, the more distant point.

After quoting the language of the Fourth Section

counsel say “ta carrier cannot ‘receive’ more for

the short haul than the long, without actually col-

lecting charges for both.”

Obviously the seetion means that carriers: shall

not charge or receive more for the less distance

than they charge or receive for the greater distance.

In Southern Pacific Company v. California Ad-

justment Company, 27 Fed. 960 (C. CL. A.) the

Cireuit Court of Appeals for the Ninth Cireuit, in

construing the long and short haul clause of the

Constitution of California, said:

“The effect of the constitutional provision

is to fix a measure of charge and that measure

is the charge which is actually made for the

longer haul. Any charge in exeess of that for

a shorter haul is by the amount of the excess

illegal, and each violation of. that provision

furnishes the measure of the shipper’s damage

therefor.”

The provision of the California Constitution is

identical with the provision of the Fourth Section.

In the case of California Adjustment Company v.

A. T. d S. F. Ry. Co., 179 Cal. 140, 153, this same

contention was made and overruled. The decision

was by the Supreme Court in bank and all of the

Justices concurred. The Court said:

“Nor do we think it material whether, when

the shipments to intermediate points com-

plained of as excessively charged for were

made, no contemporaneous shipment to the

more distant point was made. Under the con-

stitutional provision the legitimate maximum

charge for the shorter haul is the charge the

carrier makes for the longer one. and it is only

necessary to show in proof of an illegal dis-

crimination that the shipper paid a larger sum

for the short haul than the defendant would

have charged for the longer one. Actual ship-

ment for the longer distance is not required to

he shown. All that is required is a showing

that the defendant held out and published to

the shipping world that it would charge certain

‘ates for the transportation of a certain class

of merchandise from San Franciseo te Tuos

Angeles. This was shown, and. when shown,

for the purpose of determining whether dis-

crimination was practiced or not. the rates so

held out to be charged are deemed in law to

have been charged.”’

|

&

If the construction contended for by defendant

in error were correct, chaos would result. The

uniformity and certainty of rates which is one of

the cardinal objects of the Interstate Commerce

Act would be destroved. Before a shipper to Port-

land, for example, could ascertain what he should

pay for a shipment of sugar, he would have to

make an investigation to see whether the carrier

ever actually transported a similar shipment to

North Portland. And it may be asked: Would it

be sufficient to show that such a shipment moved

two vears before or one vear before or would the

shipper be required to show that it moved at. the

same time?) Or would it be sufficient to show that

such a shipment moved subsequently to the plain

tiff’s shipment ?

And if proof of a subsequent shipment was suf-

ficient, would a shipper be obliged to wait. until

such subsequent shipment was made before his

cause of action accrued? In such event the charges,

lawful when paid, would be rendered unlawful by a

subsequent act of the carrier,

Assume that one merehant in Portland shipped

his sugar from Oakland and that another shipped

it from San Francisco. Assume further that the

merchant who shipped from Oakland could show an

aetual shipment of snear from Oakland to North

Portland, whereas the merchant who shipped from

San Franeisco was unable to show such a shipment

to North Portland. The result would be that the

SAAR IRN INY MRE NMR RNR! DROP BRI EN et

ramen

neelehelieasate linac ee ee =e

merchant shipping from Oakland would receive the

benefit of the lower North Portland rate, whereas

the San Francisco shipper would not. If such were

the law all that a shipper would have to do in order

to obtain the benefit of the lower rate to the more

distant point would be to ship a hundred pounds of

the same commodity to that point or procure some

friend to make such a shipment. By such a subter-

fuge he would obtain the benefit of the lower rate

on all his shipments of sugar while his competitor

who shipped his sugar from another point, but who

did not resort to the subterfuge, would be eom-

peked to pay the higher rate.

We do not think that ie ha hs wat in error would

have made this contention if its counsel had given

thes matter any serious thought or attempted to

follow the argument to its logical conclusion.

As stated above, one of the cardinal objeets of our

railroad legislation is to insure the certainty of

rates. Under our law there can be no uncertainty

or obscurity in such a matter. A tariff specifving a

lower rate to a more distant point is to be read as

specifving that rate to all intermediate points where

the rate to the intermediate pomts specified in the

tariff exceeds the rate specified to the more distant

pont. In precisely the same way a tariff specify-

ing two intermediate rates which total less than the

lng haul rate will he eonstrued to make the sum

of the intermediate rates the rate to the long haul

pont. It is simply a matter of. tariff construetion.

In Louisville & N. Ry. Co. v. Walker, 110 Ky, 961

(63 S. W. 20), supra, the Supreme Court of Ken.

tucky said:

“Cave City and Glasgow Junetion are: sta.

tions on appellant’s read between Bowling

Green and Louisville, and at the time of these

shipments appellent charged 20 cents a Iiw-

dred pounds for transporting tobacco from

Bowline Green to Louisville. Glasgow is 10

miles from Glasgow Junetion, and is on a

braneh road running out from the main line at

Glasgow Junction. Appellant charged 6 cents

a hundred pounds for transporting tobacco

from Glasgow to Glasgow Junction, and

cents for transporting it from Glasgow June

tion to Louisville. Appellee filed this action

in February 4 1899, fo recover for the ereess

charged him for the short haul over and abhor

the amount charged for the longer haul from

Bowling Green, and recovered Judgment for

£905.32. It is insisted for appellant that th

action does not lie, and that there can be no

recovery, beeause it does not —. ar = appel

lee has been damaged. Tn [Tutehinson v. Rail-

road Co... 57 S. W. 25, we held that =f ‘ecties

could be maintained, and, upon a reconsider:

ation of the anestion, adhere to the ruling in

that ease. If a carne r eharaces a shi ppe r pore

than the law allows him to charqe, the ercess so

paid may be recovered by the shipper. Tf then

had been a statute fixing the charge from Cav

City to Louisville at 20 cents, and annellant had

charged 29 cents. the excess so paid above the

legal rate might he recovered, on the eround

that it had heen iWegally exacted. Seetion 218

of the constitution is in these words: ‘Tt shall

be unlawful for anv person or eorporation.

owning or operating a railroad in this state, or

anv eommon earrier, to charee or receive any

ereater compensation in the aggregate, for the

transportation of passengers, or of property of

like kind, under substantially similar cireum-

stances and conditions, for a shorter than for a

longer distance over the same line, in the same

direction, the shorter being included within the

longer distance; but this shall not be construed

as authorizing any common carrer, or person,

or corporation, owning or operating a railroad

in this state, to receive as great compensation

for a shorter as for a longer distance; pro-

vided, that upon application to the railroad

commission, such common carrier, or person,

or corporation, owning or operating a_rail-

road in this state, may in special cases, after

investigation by the commission, be authorized

to charge less for longer than for shorter

distances for the transportation of passengers,

or property; and the commission may, from

time to time, preseribe the extent to which such

common earrier, or person, or corporation,

owning or operating a railroad im this state,

may be relieved from the operation of this

section.” When the constitution was formed

there was great complaint that local shippers,

who had no other means of getting their goods

to market, were sometimes made to pay more

than their just share of the cost of transpor-

tation, and thatsawhile at competitive points,

where competition rendered it necessary, the

rates were reasonable, at intermediate points

along the line, where there was no competition,

extortion was practiced. The section quoted

was designed to protect these people who were,

so to speak, in the power of the carrier, having

no other way to get to market. Tt was not

designed for the protection of the long haul.

Experience had shown that, by reason of c¢om-

petition and other circumstances, the shippers

over the long haul were not so much in need

of protection. As one means of protecting the

local shipper, this section fired a marimum

RO!

MEE SOLIDER LIA 2 iy

a Ne

Perkeos refine’?

limit, beyond which he should not be charged,

It was thus made unlawful for the carrier to

charge a greater compensation for the same

service for a shorter than for a longer distance

over the same line in the same direction, the

shorter being meluded within the longer dist-

ance. When the cg for the longer haul is

fired, to charge more for the shorter haul is

just as clearly illegal as it would be to charge

a greater sum than the law allowed where thi

law itself fired a sum certain as the limit of the

charge. The carrier is allowed by the coustitu-

tion to fir the rate for the longer haul, but when

he so fires it this rate is the limit, beyond whieh

he connot yo in charging for the same service

tn the shorter haul. And when appellant. ex-

acted of appellee more than it could legally

charge, his right to recover the excess so paid

is precisely similar te the right to reeover for

any other illegal exaction. He whose monev is

taken from him illegally is to that extent

damaged. It is not neeessarv for appellee to

show anything more than that he was compelled

to pay more than appellant had a right to

charge.”’

In Junod v. Chicago & N. W. Ry. Co., 47 Fed.

290, supra, Judge Shiras Heath: the jury as

follows:

“In the second count of the petition it is

substantially charged that between the 17th

of February, 1888, and the Ist of March, 1888,

inelusive, the defendant company had in force

a tariff rate for which it carried corn and oats

from Blair and other points in Nebraska, over

its line in Iowa, passing through Carroll, Towa,

to Chieago, Tll.. and thenee to New York, at

the rate of 3614 cents per 100 pounds; that the

plaintiffs, hetween the dates aforesaid, had at

Carroll, in the state of Towa, for shipment east,

64,250 pounds of grain; that the defendant

company demanded for shipping grain to New

York from Carroll, Lowa, the sum of 4614

cents, or 10 cents more per 100 pounds than it

was then charging for the like service to ship-

pers from Blair and other points in Nebraska:

that by reason of these facts the plaintiffs were

compelled to ship the grain aforesaid to Chi-

cago, TL, paving therefor at the rate of 19

cents per 100 pounds; and by reason of these

facts the plaintiffs are secking to recover the

damages alleged against the defendant eom-

pany. * * * Tf a party, under the law, is

entitled to have the same rate-—that is, if the

shipper at Carroll, Towa, was entitled to have

the same rate charged him for the forwarding

of his property from Carroll, Towa, to Chicago,

Ill., as the shipper at Nebraska, and he was

charged more,—the damage to him is the dif-

ference between the rates that he was thus

called upon to pay and the lesser rate charged

the Nebraska shipper. Tf the tariff rate from

Blair and other points in Nehraska was 11

cents, and the plaintiffs had to pay 19 cents;

if, under the law, as T have instructed vou, the

duty and obligation was on the railway com-

pany to give the benefit to the shippers at

Carroll, Towa, of the same rate—of an equal :

rate with that given to the shippers from Blair

and other points in Nebraska —vou see the

damage to the parties who have been compelled

to pay this higher rate is the difference be-

tween that and the lesser rate. If, for every :

100 pounds they were compelled to pay 8 cents

more, that is the damage per 100 pounds of

grain shipped that is eaused them.”

ee eee

The Court did not hold that it was ineumbent

upon the plaintiff to show that anv shipments had

moved from the Nebraska points, it being sufficient

| 10

that the defendant's tariff specified lower rates

from such points.

We might quote from other decisions to the same

effect, but we deem it unnecessary. In no decision

of any court, so far as we have been able to dis-

cover, involving a violation of a long and_ short

haul prohibition, was it even intimated that it was

necessary for the plaintiff to show an actual move-

ment of the same kind of freight for the longer

distance at a lower charge. [It bas always been held

sufficient for the plaintiff to show that the railroad

maintained the lower rate for the longer distance.

This is the simple ease of an overcharge; the

statute fixes the charge to the more distant pot as

the maximum charge to the less distant point. And

if a carrier charges more than such maximun

charge the shipper is overcharged to the extent

of the excess.

Counsel cite Parsons ve. Co dé NW. Ry. Co. Wi

U.S. 447, in support of their contention,

Instead of supporting the position of plaintiffs

in error that case is authority to the effect that the

assignors of defendants in error are entitled to

recover the difference between the higher charges

paid by them for the shorter distance and the lower

rate charged by the carrier for the longer haul.

The Parsons case was an action to recover dam-

ages for a violation of the long and_ short haul

clause of the 4th Section of the Interstate Com-

11

meree Act before the amendment to that section

on June 18, 1910. The trial Court sustained a

demurrer to the complaint on the ground that the

complaint did not show a violation of the long and

short haul clause of the act, and this judgment was

affirmed by the Cireuit Court of Appeals. The

judgement of the Circuit Court of Appeals was af-

firmed by this Court upon the ground that the eom-

plaint stated no violation of the long and short haul

cause of the act. This Court said, however, that tf

there had been a violation of the long and short

haul clause the platutiff would have been entitled

to recover the differcnee between the rate which he

had paid and the lesser rate for the greater distance.

This Court said:

“Tf he had shipped to New York and been

charged Jocal rates he might have recovered

any excess thereon over through rates. He did

not ship to New York and vet sec ks to recover

the extra sum he might have been charged if

he had shipped.”

The plaintiff in the Parsous case shipped corn

from Towa points to Chieago. The complaint did

not show that the rates from Nebraska points to

Chieavo were lower than the rates paid by plain-

tiff; nor did it show that the rate charged plaintiff

from Towa points te Chicago was greater than the

through rate charged from Nebraska points to New

York and other places on the Atlantie seaboard.

This Court said:

“There is nothing, therefore, to show that

the loeal rate charged plaintiff from the Towa

en ud

ees

i2

place of shipment to Chicago was greater than

the through rate charged from Nebraska to the

four places on the seaboard, or greater than

that charged for like shipments from his place

of shipment to the same four places.”’

The decision of this Court in the Parsons case

shows that the Court deemed the measure of dam-

ages under the Interstate Commerce Act, in case of

a violation of the long and short haul clause, te be

the excess over the charge that would have been

colleeted had there been no vielation of the act,

Tn every case where the question has come before

the higher Courts has been held that for @ viola-

tion of the loug and short haul clause the shipper

to the less distant point is entitled to recover the

difference between the vate paid by him and the

lower rate charged to the more distant point,

It was so held in each of the following cases

where the matter was direetly involved:

Parsons ve C. & NL OW. Ry. Co. 167 UV. S,

147, Supra;

Southern Paeifie Co. v. California Adi. €o.,

237 Fed. 954 (°C. C. AL);

California Adjustment Co. ve ALT. aS. FP.

Ry. Co. V9 Cal. 140;

Louisville & N. Ry. Conv. Walker, 63 8S. W.

20 (110 Ky. 961);

Hutchinson v. RL R. Co., 57 S. W. 25 (Ky.);

Twells v. Penn, RoR. Co., 2 Walker 450 (3

Am. Law Reg. N.S. 728) (Penn. Supreme

Court).

LE OTN NDE ETL ANN? AN SI RN SIUC te a Sobol A, RS BL nae OLD rae Tete >

> MS Ot ay

It was so held in each of the following cases de-

eided ly the lower Courts:

Junod vo Cod NOW. Ry. Co., AT Fed. 290;

Osborne vo Coa NOW, Ry. Co., 48 Fed. 49;

California Adjustment Co. ve S. P. Co., 226

Fed. 349,

The long and short haul provision of the Consti-

tution of California as adopted in IST9 was taken

from the Constitution of Pennsylvania of 187:

(Sec. 38, Article NVED) and that provision of the

Pennsylvania Constitution was taken from an Aet

of the Legislature of Pennsylvania (March 7, 1861,

PL. 88) which provided that the local rates from

Pittsburg and Philadelphia to intermediate points

should at no time exceod the rate from Pittsburg

) Philadelphia or from Philadelphia to Pittsburg.

Central Tron Works ». PLR. RAT Pa. Cr. 652.)

In Central Tron Works v. PLR. RAT Pa. Ct.

2, supra, decided under the provisions of the Con-

titution of Pennsvivania, the Court held that a

yerson Who was charged more for the shorter haul

ould maintain conenrrently an action at law. to

recover the overcharge and a suit in equity to enjoin

the carrier from thereafter making a ereater charge

for the shorter haul,

odinad

<td RRA RAINS SANS

Sorte

justment Company, 227 Fed. 954, 959, the Cirenit

14

REPLY TO CONTENTION THAT THE MEASURE OF DAMAGES Js

NOT THE DIFFERENCE BETWEEN THE RATES,

This point also has been determined adversely to

the contention of plaintiffs in error by every Court

where sueh contention was made.

In Southern Pacife Company v. California Ad-

pany ‘

Court of Appeals for the Ninth Cireuit said:

“Tt is contended that the plaintiff had no

right of action for the recovery of the differ-

ence between the greater charge for the short

haul and the lesser charge for the long haul,

because no such right of action existed at eom-

mon law, and no sueh right of action has been

conferred by the Constitution or statutes of

California. The defendant cites the case of

Cowden v. Pacifie Coast S. S. Co., 94 Cal. 470,

29 Pac. 873, 18 L. R. A. 221, 28 Am. St. Rep.

142, a ease in which the plaintiff sought to re-

eover damages for diserimination in freight

rates by sea between San Franciseo and San

Diego, alleging that the steamship company

had favored a certain other shipper by charg-

ing him 1214 per eent. less than it did the

plaintiff for freight on the same character and

quantity of goods. The court, in view of the

fact that there was no statutory or constitu-

tional provision relating to the matter, and

that there was nothing in the common law to

hinder a carrier from earrvine for favored

individuals at an unreasonably low rate, or

even gratis, and the fact that the plaintiff had

not alleged that the charge made was unrea-

sonable, held that the plaintiff had no cause of

action. That conclusion was influenced largely

by the decision in Great Western R. R. Co. v.

Sutton, 4 Eng. & Tr. App. 238, a ease in which

Mr. Justice Blackburn had said that at common

15

law a person holding himself out as a common

earrier of goods was not under any obligation

to treat all eustomers equally, and that all that

the law required was that he should not charge

any more than was reasonable. But in that

case the court had under consideration the

effect upon the common law of an act of Parlia-

ment firing charges for railroad carriage and

requiring uniformity of freight rates for goods

of like description and quantity conveyed along

the railway under like circumstances, The

action was for money had and received to re-

cover charges alleged to have been improperly

made against the plaintiff. Mr. Justice Black-

burn said:

‘The defendants may, subject to the limita-

tions of their special acts, charge what they

think fit. but not more to one person than they,

during the same time, charge to others under

the same circumstances. And [think if fol-

lows from this that if the defendants do charge

more to one person than they, during the same

lime, charge to others, the charge is, by virtue

of the statute, ertortionate, And T think that

the rights and remedies of a nerson made to

pay a charge beyond the limit of equality

imposed by the statute on ratlivay companies

acting as carriers on their Vine must be pre-

cisely the same as those of a person inade to

pay a charae beyond the limit imposed by the

common law on ordinary carriers as bemg

more than was reasonable?

“This quotation from the opinion in that

case is directly in point in the present ease,

and it marks the vital distinction between

Cowden v. Pacific Coast S. S. Co. and the ease

at bar. In the case at bar the obligation to re-

fund is not based upon the common-law rule

agginst unreasonable charges, but 7s based upon

the common-law rule which requires the re-

PREAMP IE COL NE TM EE My e R I e

2 hd ee

16

payment of money which has been received in

violation of an express statutory obligation, as

in the ease of Great Western Railroad Co. v.

Sutton, In harmony with this view is Louis-

ville & N. RL R. Conv. Walker, 110 Ky. 961, 68

S. W. 20, in whieh the court held that a railroad

company which charges more for a short than

for a long haul, in violation of the constitu

tional provisions of that state, is liable to the

shipper for the excess charged, ‘as he whose

money is taken from him iHegally is to that

extent damaged.’ And in Louisville & Nash-

ville Ry. Co, v. Rubank, 4 UL S. 27, 22 Sup.

Ct. 277, 46 L. Ed. 416, the court assumed with-

out question the right of the plaintiff to sue for

and recover the excess of payments made under

like circumstances as in the ease last eited from

Kentucky,

“The difference between the case at bar and

Penna. R. R. Co. v. International Coal Co., 230

U.S. 184, 33 Sup. Ct. 893, 57 L. Ed. 1446, Ann.

Cas. 1915A, 315, and Knudsen & Co. ve MLC,

Ry., 148 Fed. 969, 79 C. C. A. 46, is that in

those cases the damage to the plaintiff did not

appear from the act of discrimination. itself;

the court holding that the fact that some other

shipper was charged less than the lawful rate

did not entitle the plaintiff to have its prop-

erty transported for the same unlawful rate,

and that the measure of damages did not ap-

pear upon proof alone of the diserimination.

In the case at bar the measure of damages does

distinctly appear. The effect of the constitu-

tional provision is to fir a measure of charge

and that measure ts the charge which is actually

made for the longer haul. Any charge in ev-

cess of that for a snorter haul is by the amount

of the excess illegal, and each violation of that

provision furnishes the measure of the ship-

per’s damage therefor.”

17

tp . . »

In California Adjustment Company v. A. T. & S.

F. Ry. Co., 179 Cal. 140, 153, the Supreme Court of

California said:

“Under the constitutional provision the

legitimate maximum charge for the shorter

haul is the charge the carrier makes for the

longer one, and it is only necessary to show in

proof of an illegal discrimination that. the

shipper paid a larger sum for the short haul

than the defendant would have charged for the

longer one,”’

Here again plaintiffs in error cite Parsons ve Co"

NW. R. RB. Co., 167 U.S. 447, supra. What has

been said in the foregoing part of this brief with

reference to that case is also applicable here. The

very quotation from the opinion of this Court whieh

appears in the brief of plaintiffs in error shows

that the case not only wholly fails to support their

contention but is direct authority against it.

In the Parsons case the plaintiff shipped eorn

from certain Towa points to Chicago. In holding

that his complaint did not show a violation of the

long and short haul claim this Court said:

“There is nothing, therefore, to show that

the local rate charged plaintiff from the Towa

place of shipment to Chicago was greater than

the through rate charged from Nebraska to the

four places on the seaboard, or greater than

that charged for like shipments from his place

of shipment to the same four places.”’

Sg AIO LIS *

SFE CI

SOG ELLL GSO SIE LOS LE

tai

In another count of his complaint the plaintiff

averred that he was entitled to damages beeause the

a

18

earrier did not publish its tariff. The theory of this

eause of action was that if the carrier had posted its

tariff at Iowa stations the plaintiff might have de-

termined to ship his corn to the eastern points

named in the tariff instead of to Chicago.

In describing this count of plaintiff's petition this

Court said:

‘‘His argument practically is that if the tariff

had been filed with the commission it might

have made an order, either general or special,

requiring that it be posted at the Towa stations;

that if it had been so posted he might have ex-

amined the rates and might have determined

to ship his corn, not to Chicago, but to one of

the four eastern points named in such tariff.”

It is with reference to this count of the petition

that this Court used the language quoted at page

68 of the brief of plaintiffs in error. This count

was not to recover an overcharge arising from a vio-

lation of the fourth section but was to recover

damages for the failure of the carrier to publish

and post the tariff in question,

If counsel had carefully read the opinion of

this Court in the Parsons ease they would not have

been cited in support of this contention. The last

portion of the excerpt from the opinion quoted in

the brief of plaintiffs in error is the following:

“So, before any party can recover under the

act he must show not merely the wrong of the

carrier, but that that wrong has in fact oper-

ated to his injury. If he had shipped to New

York and had been charged local rates he might

have recovered any excess thereon over through

—

19

‘ates. He did not ship to New York and yet

secks to recover the extra sum he might have

been charged if he had shipped. Penalties are

not recoverable on mere possibilities.”

Plaintiffs in error also cite Pennsylvania R. R.

Co. v. International Coal Co., 230 U.S. 184, in sup-

port of this contention. That case was also cited in

support of the same contention in the ease of South-

ern Pacific Company v. California Adjustment Com-

pany, 237 Fed. 954, 959 (C. C. A.), supra, where the

Cireuit Court of Appeals said:

“The difference between the ease at bar and

Penna. R. R. Co, v. International Coal Co., 230

U.S. 184, 33 Sup. Ct. 893, 57 L. Ed. 1446, Ann.

Cas. 1915A, 315, and Knudsen & Co. vo M. C.

Ry., 148 Fed. 969, 79 C. C. A. 46, is that in those

cases the damage to the plaintiff did not appear

from the act of discrimination itself: the court

holding that the facet that some other shipper

was charged less than the lawful rate did not

entitle the plaintiff to have its property trans-

ported for the same unlawful rate, and that the

measure of damages did not appear upon proof

alone of the discrimination. In the ease at bar

the measure of damages does distinctly appear.

The effect of the constitutional provision is to

- + fix a measure of charge,and that measure is the

charge which is actually made for the longer

haul. Any charge in excess of that for a

shorter haul is by the amount of the excess

illegal, and each violation of that provision fur-

nishes the measure of the shipper’s damage

therefor.”’

In Pennsylvania R. R. Co. v. International Coal

Co., 230 U.S. 184, which was an action to recover

ae hae

aT

20

ee

damages for rebating, this Court held that the plain-

tiff was entitled to damages, but that the measure of

the damages was not necessarily the differenée be-

tween the rate paid by plaintiff and the lower rate

obtained by other shippers through a rebate. Plain-

tiff obtained judgment in the trial Court and the

‘ailroad company brought the case to this Court on

writ of error. The plaintiff contended that as a

matter of law it was entitled to recover as damages

the difference between the rates which it paid and

the lower rate accorded to other shippers by reason

of rebates. The plaintiff was in effect suing to

obtain similar rebates,

It appears that in the original Bill to Regulate

Commerce, which passed the Senate May 12, 1886,

it was provided that the carrier ‘should be lable to

all persons who have been charged a higher rate

than was charged any other person or persons, for

the difference between such higher rate and the

lowest rate charged upon like shipments during the

} same period’. This provision was omitted from

the act as finally passed, and this Court held that the

fact of this omission was conclusive against the

plaintiff’s claim.

In its opinion this Court said:

Having paid only the lawful rate, the plain-

tiff was not overcharged, though the favored

shipper was illegally undercharged.”’

This Court further stated:

‘Making an illegal undercharge to one ship-

per did not license the carrier to make a

ee

y

21

similar undercharge to other shippers, and if

having paid a rebate of 25 cents per ton to one

customer, the carrier, in order to eseape the

suit, had made a similar undercharge or rebate

to the plaintiff, it would have been criminally

liable, even though it may have done so in

order to equalize the two companies.”

This Court further said:

“To adopt such a rule and arbitrarily meas-

ure damages by rebates would create a legal-

ized but endless chain of departures from the

tariff; would extend the effect of the original

crime, Would destroy the equality and cer-

tainty of rates, and, contrary to statute. would

| make the earrier liable for damages bevond

| those inflicted and to persons not injured.”

Let us contrast the section of the Interstate

Commerce Act (viz... Sec. 2) under consideration in

the case of Penn. R. R. Co. v. International Coal

Co., supra, With the Fourth Section,

The Fourth Section makes it unlawful to charge

more for the short haul than for the longer haul.

Section 2 of the act is as follows:

| Section 2. That if any common earrier

subject to the provisions of this aet shall,

directly or indirectly, by special rate, rebate,

drawback or other device, charge, demand,

collect or receive from any person or persons,

a greater or less compensation for any service

rendered, or to be rendered in the transporta-

tion of passengers or property, subject to the

provisions of this act, than it charges, de-

mands, collects or reecives from any other

person or persons for doing for him or them a

like and contemporaneous service in the trans-

portation of a like kind of traffie under sub-

i it bal

49 aad

BEN ROR NA rays

i

é

-g

3

*

P:

-

*

:

Riel

*

PURI shane hy NE ene

stantially similar circumstances and condi-

tions. such common earricr shall be deemed

guilty of unjust discrimination, which is here-

by prohibited and declared to be unlawful.”

The provision of the Fourth Section is for the

benefit of the shipper, and confers upon him the

right to have lis property transported at charges

not exceeding those made by the carrier to the more

distant point. The provisions of Section 2 of the

Interstate Commerce Act merely declares unlawful

the charging of one shipper a lower rate than is

charged another. Clearly, Section 4 was tntended

to fir as the legal rate to the intermediate point the

rate charged to the more distant potnt ; but Section

2 of the Interstate Commerce Act does not purport

to fir the legal rate for a particular service at the

rate charged a favored shipper for the same service.

Nevertheless this Court would probably have held

the plaintiff in the case of Penn. R. R. Co. v. Inter-

national Coal Co., supre, entitled to reeover the

difference between the charges paid by it and that

paid by the favored shippers, if it had not been for

certain considerations which the majority of the

Court held to be controlling.

One of these considerations, already adverted to,

was the fact that Section 2 of the bill as it originally

passed the Senate, contained a provision that the

earrier should be liable to all persons who have

been charged a higher rate than was eharged any

other person or persons, for the difference between

23

such higher rate and the lowest rate charged upon

like shipments during the same period; but that

such provision was omitted from the act as finally

passed by Congress.

The violation of the act complained of in Penn.

R. R. Co. v. International Coal Co., supra, was of

the same character as the violation complained of

in Great Western Ry. Co. v. Sutton, L. R. 4H. L. 226

(1869), supra, where the English Courts held that

the plaintiff was entitled to recover the difference

between what he paid and the lesser amount charged

to the favored shipper. But the English Act con-

tained no provision similar to Section & of the

Interstate Commerce Act.

Furthermore, the decision in Penn. R. R. Co. v.

International Coal Co., supra, was based upon the

law that the carrier was not lawfully entitled to

charge a lower rate than the rate published in its

tariff, By the Interstate Commerce Act the carrier

is forbidden to charge more or less than the rate

specified in its tariffs, whereas the Aet of Parlia-

ment contained no such provision. Therefore the

English Courts in Great Western Ry. Co. v. Sutton,

supra, held, in effect, that the lower rate accorded

to the favored shipper was the lawful rate. THav-

ing held that sueh lower rate was the lawful rate,

it followed that any charge in excess of such rate

was extortionate aud recoverable in an action for

money had and received. This is clearly pointed

out by this Court in Penn. R. R. Company v. Inter-

EATERS ES RI RL LN PAINE LIE HET LINER tet BER ORIN? Sg

oe

EST I Pe Se OS

cma

24

national Coal Co., supra, where the Court, at page

202, said:

“The Act of Parliament did not require the

carrier to maintain its published tariff but

made the lowest rate the lawful rate. Any-

thing in excess of such lowest rate was extor-

tion, and might be recovered in an action at

law as for an overcharge. Denaby v. Man-

chester Ry. L. R., UL App. Cases 97, 116. But

the English courts make a clear distinction be-

tween overcharge and damages, and the same

is true under the Commeree Act. For if the

plaintiff here had been required to pay more

than the tariff rate it could have recovered the

excess, not as damages but as overcharge, and

while one count of the complaint asserted a

elaim of this nature, the proof did not justify

a verdict thereon, for the plaintiff admitted

that it had only paid the lawful rates named

in the tariff. Of course, no part of such pay-

ment of lawful rates can be treated as an

overcharge or as an extortion.’

gaat

Bae

PT ee ee Pee ay

And herein lies the chief distinction between the

right of the shipper here and the right of the ship-

E per in the Jnternational Coal Company case, supra.

3 The tariff rate paid by the plaintiff in the Inter-

national Coal Company case was the lawful rate;

Pee ae

: but the rate charged the plaintiff in this case was

not the lawful rate, because erpressly made un-

lawful by the Constitution. In the International

Coal Co. case, supra, the plaintiff sought to reeover

the difference between the lawful rate which it paid

and the unlawful rate charged another shipper.

The plaintiff here was not seeking to recover the

Pari ee ed wt:

difference between a lawful rate which he paid

= of

Pitt r ¢ " Tos

25

and an unlawful rate ; ‘d by another person, but

was seeking to recover t. ¢ difference between the

unlawful rate which he paid and the lawful rate

which should have been charged.

In the case of the Pennsylvania R. R. Co. v. In-

ternational Coal Co., 230 U. S. 184, supra, this

Court held that the giving of an unlawful rebate to

one shipper did not fir the measure of the plain-

tiff’s damage at the difference between the unlaw-

fully low rate accorded the favored shipper and the

lawful vate paid by plaintiff.

But in the case at bar, the assignors of defend-

ants in error were charged an unlawful rate. The

damage to the assignors of defendants in error

resulted as a matter of law.

A shipper who is required to pay a higher charge

for the short haul than the carrier makes for the

longer haul can sue for damages under the Inter-

state Commerce Act or he can sue to recover the

overcharge. Section 8 of the act provides that if

any common carrier shall do any act prohibited by

the Interstate Commerce Act such common carrier

shall be liable to the person injured thereby to the

full amount of damages sustained in consequence

of the violation of the act, together with a reason-

able counsel’s fee. The charging of more for the

shorter haul is prohibited by the act. It is conceiv-

able that in some cases the measure of the shipper’s

damage might be more than the amount of the over-

vi condita

yi ina ii laine

Bedistennuvenin

SENT RIOTS UE FRAT es INES:

26

charge, but in every case such damage is at least

the amount of the overcharge.

The Interstate Commerce Act recognizes the dis-

tinction between an action for damages and an

action to recover an overcharge. This is pointed

out by the Court in Penn. R. R. Co. v. International

Coal Co., 230 U.S. 184 (see page 202), supra. If

the overcharge is prohibited by the very terms of

the act the shipper may elect to sue for damages or

pursue his common law remedy; if the overcharge

does not result from any direct violation of the

terms of the act the shipper is confined to his com-

mon law remedy.

Section 22 of the act contains the following pro-

vision:

‘Nothing in this Act contained shall in any

way abridge or alter the remedies now exist-

ing at common law, or by statute, but the pro-

visions of this Act are in addition to such rem-

edies.”’

The Supreme Court of Missouri in McGrew v.

Missouri P. R. Co., 220 Mo. 496 (cited and quoted

from by this Court in its decision in Missouri P. R.

Co. v. McGrew Coal Co., 244 U.S. 191) said:

(230 Mo. 546.) ‘**The Petition was framed

upon the Act of 1872, but in view of the fact

that the trial court denied the penalties asked,

and allowed only the difference between the

higher rates charged plaintiff and the lower

rates charged by defendant for the longer dis-

tances, the judgment could be sustained upon

paragraph 12 of article 12 of the Constitution.

REE IR INE ES BEELER SIE RS a

without the aid of the Act of 1872. provided that

said section of the Constitution is self-en-

forcing. Because if said section is self-en-

forcing, that is to say, if it, without the aid of

any statutory enactment, makes it unlawful for a

railroad company to charge more for a shorter

haul than a longer one of the same class of prop-

erty in any direction, the same or not. and

under any or all circumstances and conditions,

then clearly the measure of damages for doing

the unlawful thing, in the absence of any statute

upon the subject, is the amount of the excess

charged for the shorter distance over that

charged for the longer distance.”

(561) ‘Section 12 of article 12 of our Con-

stitution clearly establishes an uncenditional

short-haul rule, without reeard to direction or

to circumstances and conditions. Said section

declares that it shall be unlawful for any rail-

road company to charge for the transportation

of freight or passengers a greater amount for

a less distance than ‘the amount charged for anv

greater distanee’. That declaration establishes

a rule, and creates a right in everv passenger and

shipper to a compliance with, and an (199) ohe-

dience to, its terms. . . . Said section has

the same force and effect as if it read: ‘Tt shall

not be lawful in this state for any railroad

company to charge, under penalties which the

general assembly shall prescribe, for freight or

passengers, a greater amount for the transporta-

tion of the same for a less distance than the

amount charged for anv greater distance.’ Had

said section read that way, its effect as an opera-

tive law would have been too clear for contro-

versy. To my mind it is equally clear under the

present reading.” ;

REN aR AIO tas

:

a

A

ee

€

Ps

SSE ONE RIT? EE

Paitin. 1h pte wae

28

Referring to this decision of the Missouri Court,

this Court in Missowrt P. R. Co. ve McGrew Coal

Co., supra, said (page 199):

**As construed and applied in the present

cause, this section prohibits the carrier from

charging in respect of intrastate commerce

more for a shorter haul than for a longer one

over any portion of its line within the state,

without regard to direction, circumstance, or

condition; and if this inhibition is disoheyed

the shipper acquires an absolute right to recover

any overcharge paid by him” (italies ours).

The case of Pennsylvania R. R. Co. v. Tnterna-

tional Coal Co., 230 U.S. 184, supra, was a writ of

error to the Circuit Court of Appeals to the Third

Cireuit to review the judgment of that Court in

Penn. R. R. Co. v. International Coal Co., 173 Fed.

1,7 (€C. C. A.). This Court held that the Circuit

Court of Appeals erred in certain particulars and

remanded the case to the trial Court for a new trial.

This Court, however, did not criticize the portion of

the opinion of the Cireuit Court of Appeals which

reads as follows:

“Tt is now claimed that the absence of protest

accompanying pavment of freight is fatal to the

right of action. We are of opinion such is not

the case. This is not the ordinary case of a suit

to recover back a sum of money which has been

mistakenly paid and received, but is one where

a statute has stamped the receipt of the money

as unlawful. Thus Section 2 provides:

‘Such common carrier shall be deemed

guilty of unjust discrimination which is here-

by prohibited and declared to be unlawful’,

and creates a statutory right to recover, not of

the freight paid, but of damages, viz.:

‘Such common carrier shall be liable to the

person or persons injured thereby for the full

amount of damages sustained in consequence

of any such violation of the provisions of this

act.’

From this it is clear that, Congress having

conferred a statutory right of action, and hav-

ing imposed a liability to action by Section 8

on the carrier, who shall ‘do, or cause to be

done, or permit to be done anv act, matter or

thing in this act prohibited or declared to be

unlawful’, and we may add, having conferred

such right of action without imposing the prece-

dent condition of protest, it follows that the

courts cannot by construction impose on the

statutory right a condition which Congress has

not imposed. It follows, therefore, that this as-

signment cannot be sustained. This is in har-

mony with the holding of the Supreme Court

in United States v. Bank of Washington, 6 Pet.

17, 8 L. Ed. 299, where it was said:

“Where money is wrongfully and illegally

exacted, it is received without any legal right

or authority to receive it; and the law, at the

very time of payment, creates the obligation

to refund it. A notice of intention to recover

back the money does not, even in such eases,

create the right to recover it back. That re-

sults from the illegal exaction of it; and the

notice may serve to rebut the inference that

it was a voluntary payment or made through

mistake.’ ”’

It is unnecessary for a shipper to make protest

toa carrier at the time of the payment of an over-

Pee |

30

charge. The carrier is in the superior position and

the payment is in law deemed to be involuntary,

; See:

j S. P. Co. v. California Adjustment Co., 237

| Fed. 954 (C. C. A.) ;

3 Mobile v. Steiner, 61 Ala. 571;

: Chicago & Alton v. C. Ved W. Coal Co., 79

Ti. 121;

Penn. R. Co. v. International, 173 Fed. 1

(C. C. A.);

Heiserman v. Burlington, 18 N. W. 903.

To the effect that the charging of more for the

short than for the long haul is an overcharge, see:

Louisville & Nashville Ry. ve Eubanks, 184

1. ey Fe

Union Pacifie v. Goodridge, 149 U.S. 680,

Respectfully submitted,

Frank R. Wene,

Aurrep J. TTARwoop,

Amici Curiae.

pects ne

INDEX

Page

STATEMENT OF THE CASE.............. 1

EE aac cee eka hs babe ode eCTELenee 5

TE. a a 8

Rail Controlled Water Carrier is Subject to In-

terstate Commerce Act .................. 22

peeeneney OF TRADI 65 oo scans cncanncscess 26

United States Shipping Board Requisitioning

all defendant’s boats does not relieve defend-

Se CE van ccvdke snes cues seawe 29

Portland and North Portland on same Route,

Portland being intermediate from San Fran-

cisco to North Portland ................. 31

Actual shipment to further point not a condition

Co . 2 re 36

ge | We Ter TTT reer ee 39

The 4th Section Order made in connection with

the general rate advance did not legalize the

CN 5s kk Ku eEN OKs abd dae aeons 49

PPT eeT reece eT rere 56

i os bad eee etek hn Sawa e eR aas 60

Act to Regulate Commerce, Sec. 4.............. 8, 55

Act to Regulate Commerce, Sec. 6............... 32

Act to Regulate Commerce, Sec. 14, 25 Stat. 855.. 52

Act to Regulate Commerce, Sec. 16,............. 42

Beeghly vs. Pub. Util. Comm. 135 N. E. 641...... 39

INDEX—Continued

Page

Calif. Adj. Co. vs. A. T. & S. F., 179 Cal. 140, 175

UE UE ace bale kno’ Sad eN Ce EON oy eek 38

Calif. Adj. Co. vs. A. T. & S. F., 185 Pac. 282.. 57

Federal Control Act, Sec. 10.................. 27, 53

Great Nor. vs. Mer. Elev. Co., 259 U. S. 285-296.. 20

Intermountain Rate Cases, 234 U. S. 476...... 10, 37

Kans. City Southern vs. Wolf et al, 43 S. C. R-

“in ELLE OEE CETTE OEE Ea OT Rn 41, 42

L. & N. vs. Walker, 110 Ky. 961, 63 S. W. 20.... 57

Mitchell Coal Co. vs. Penn. R. R., 230 U. S. 247. 16, 18

Morrisdale Coal Co. vs. Penn. R. R. Co., 230 U. S.

Re ce rere Rey Weak kt Ok oe 16, 18, 46

oo he EC EPEC E PERT OR PTT POT renee 60

Penn. R. R. Co. vs. Puritan Coal, 237 U. S. 121

A ee Oe Tereteae Maghel eon 16, 18, 42, 45, 46

Penn. R. R. vs. Sonman, 242 U.S. 120.16, 19, 43, 45, 46

Parrington vs. Davis, 285 Fed. 751.............. 29

Panama Canal Act, 37 Stat. L. 566.............. 23

Phillips vs. Gr. Trunk Western, 236 U. S. 662, 667

INDEX—Continued

Page

Penn. R. R. vs. Steinman Coal, 242 U.S. 300.... 44

Robison vs. B. & O. R. R. Co., 222 U.S. 511...... 51

Skinner & Eddy Corp. vs. U. S., 249 U.S. 566.... 14

Spiller vs. A. T. & S. F., 258 U. S. 184............ 27

Seaboard Air Line vs. U. S., 256 U.S. 655........ 29

Southern Pacific vs. Calif. Adj. Co., 237 Fed.

NS a dk Ak ain ae Se iain en bk 04k a 56, 57

Southern Ry. vs. Tift, 206 U. S. 428, 434........ 47

St. L. I. M. & S. Ry. vs. J. F. Hasty & Sons, 255

oe rete ee ree 19

S. P. vs. Darnell Taenzer, 245 U. S. 584.......... 59

Tex. & Pac. R. R. Co. vs. Avilene Cot. Oil Co., 204

LS Se eee ere Tree eT TT rrr 15

Tex. & Pac. vs. Am. Tie Co., 234 U. S. 188, 146... 20

U.S. vs. L. & N. R. R., 285 U.S. 814...... 13, 37, 56

U.S. va. Mer. Asm., 948 U.S. 167... oe ccc cwncss 55

In the Supreme Court

of the United States

OCTOBER TERM, 1922

THE SAN FRANCISCO AND PORTLAND STEAM-

SHIP COMPANY,

Plaintiff in Error,

vs. No. 594

A. J. PARRINGTON,

’ Defendant in Error,

and

JAMES C. DAVIS,

Plaintiff in Error,

bis No. 595

A. J. PARRINGTON,

Defendant in Error.

BRIEF OF DEFENDANT IN ERROR

Upon Writs of Error to the U. S. Circuit Court of

Appeals for the Ninth Circuit

STATEMENT OF THE CASES

These cases were consolidated for hearing in both

courts below and application will be made for consolida-

tion for hearing in this Court. They involve the same

facts. The first covers the period prior to and subse-

quent to Federal Control, and the second covers the

period during Federal Control. Both cases are actions

for damages for violation of the long and short haul

clause of the 4th Section of the Act to Regulate Com-

merce. They involve rates on sugar in carload lots

from San Francisco, California, to Portland, Oregon.

2

The shipments in question here all moved via the line

of the San Francisco and Portland Steamship Company

from San Francisco to Portland. The vessels of this

company ply from San Francisco to Portland via Pa-

cifie Ocean, up the Columbia River to the mouth of the

Willamette, thence up the Willamette River to Port-

land. The station of North Portland is located on the

Columbia Slough about five miles above the junction

of the Willamette and Columbia Rivers. (Tr. No. 594,

p. 63.) The steamers of the San Francisco and Port-

land Steamship Company do not go to North Portland,

but turn into the Willamette River five miles short

thereof. Neither the San Francisco and Portland

Steamship Company nor the Director General pub-

lished any rates to North Portland. The regular land-

ing place at Portland of the steamers of the San Fran-

cisco and Portland Steamship Company is at the Ains-

worth Dock, where it connects with the line of railroad

of the Oregon-Washington Railroad & Navigation

Company. The line of railroad of said last named com-

pany extends from Portland to North Portland, and

this is the only route via which any rates were published

from San Francisco to North Portland in connection

with the steamship line of the San Francisco and Port-

land Steamship Company.

- On February 17th, 1916, the San Franciseo and

Portland Steamship Company, in connection with the

O-W. R. & N. Co., put into effect a rate on sugar in

carload lots of a minimum weight of 30,000 pounds, of

1214 per ewt. This rate applied via the line of the San

Francisco and Portland Steamship Company to Port-

land, thence via the O-W. R. & N. to North Portland.

3

This rate continued in effect until June 25th, 1918. Dur-

ing all of this time on all shipments of sugar in carload

lots of 30,000 lbs., from San Francisco to Portland and

Astoria, Oregon, a point at the mouth of the Columbia

River, the S. F. & P. S. S. Co. charged 15c per ewt.

On June 25th, 1918, the rate to North Portland was

raised to 1514c per ewt., which continued in effect until

August 26th, 1920. During this period the S. F. & P.

S. S. Co. charged on all shipments to Portland and

Astoria 19¢ per ewt.

From August 26th, 1920, during the balance of the

period covered by the complaints, the rate from San

Francisco to North Portland was 1914 per ewt. and

the charge during this period made by the Steamship

Company from San Francisco to Portland and Astoria

was 24c per cwt.

The excess charge to Portland and Astoria, there-

fore, was 2U%e per ewt. up to June 25th, 1918; 314c per

ewt. between June 25th, 1918, and August 26th, 1920;

and 414¢ subsequent to August 26th, 1920.

The route over which the sugar here involved was

shipped from San Francisco to Portland and Astoria

was the same as that over which the lower rate was estab-

lished to North Portland, Portland and Astoria being

intermediate between San Francisco and North Port-

land.

Die ie ee i Ai 0b BO TEEN PIED

4

There is no dispute between the parties as to the

shipments moving, nor as to the amount that would

have been charged on the same shipments over the same

route had they moved on to North Portland—that js,

to the excess charges collected at Portland and Astoria

for the transportation of such shipments over the rate

established for the same commodity from San Francisco

to North Portland.

The District Court rendered judgment in the case

against the San Francisco and Portland Steamship

Company in favor of the defendant in error in the sum

of $11,380.69, with interest from dates of payment,

together with $2,000 attorney’s fees for services in the

District Court, and costs and disbursements, and in the

case against the Director General the lower court ren-

dered judgment in favor of the defendant in error in

the sum of $7,339.06, with interest from dates of pay-

ment, and $1,500 attorney’s fees for services in that

court, together with costs and disbursements. The Cir-

cuit Court of Appeals affirmed the judgment with

$1000 additional attorney’s fees in that Court in No.

594, and $600 additional attorney's fees in No. 595.

ARGUMENT

The basis upon which the plaintiff (defendant in

error), based his cause of action and upon which re-

covery was had herein, is that the San Francisco and

Portland Steamship Company, although a water carrier,

is controlled by the ownership of all its stock by the

Oregon-Washington Railroad & Navigation Company,

an interstate rail carrier. That said Railroad Company

had applied to the Interstate Commerce Commission,

under Section 5 of the Act to Regulate Commerce, as

amended by the Act of Congress of August 24, 1912,

entitled “An Act to Provide for the Opening, Main-

tenance, Protection and Operation of the Panama

Canal, and the Sanitation and Government of the Canal

Zone,” for permission to continue the ownership and

control of said steamship line, and to continue the op-

eration thereof, and that under said Act and the per-

mission granted by the Interstate Commerce Commis-

sion, said company became subject to all of the terms

of the Interstate Commerce Act with reference to filing

tariffs, maintaining its rates, and complying with the

long and short haul clause of said Act.

That said steamship line had charged rates to Port-

land, Oregon, on sugar in carload lots higher than its

joint rate established in connection with the Oregon-

Washington Railroad & Navigation Co. from San

Francisco to North Portland; that the route established

over which said rate applied was through Portland, and

hence said steamship line while operating the same had

charged more for the short haul over the same route in

the same direction than it charged over the longer haul,

the shorter being included within the longer.

6

The measure of damages sought and permitted to

be recovered was the difference in the rate established

to the longer point over that charged to the shorter

point. In addition, the plaintiff sought and was allowed

reasonable attorney's fees under Section 8 of the In-

terstate Commerce Act, which provides that the Court

in case of recovery shall allow a reasonable attorney's

fee as a part of the costs in any case where recovery

is had for violation of the Interstate Commerce Act.

The points of defense contended for here by the de-

fendants |( plaintiffs in error), are:

First: That the transportation being wholly by

water, the defendants were not subject to the provisions

of the Act to Regulate Commerce.

Second: As to the case against the Director Gen-

eral that the plaintiff, being the assignee of the claims

sued on was not entitled to recover, because the assign-

ments were void as not complying with Section 3477

of the revised statute, which provides against assign-

ment of claims against the government, except in cer-

tain cases and only in case the assignment is executed

with certain formalities.

Third: That the steamship line was handled during

a certain period for account of the United States Ship-

ping Board, and that no recovery during this period

could be had.

Fourth: That the question as to whether the long

rate was a reasonable rate, or the short rate a reasonable

7

rate involves an administrative question, and hence the

exclusive jurisdiction of such question under the Act

to Regulate Commerce was lodged in the Interstate

Commerce Commission, and that the courts had no jur-

isdiction to entertain the actions.

Fifth: That the 4th Section of the Act to Regulate

Commerce was not violated because there was another

physical connection over which the shipments could have

reached North Portland without being transported into

the regular landing place of the San Francisco and

Portland Steamship Company at Portland and there

transferred to the Oregon-Washington Railroad & Nay-

igation Company for further transportation to North

Portland.

Sixth: That the measure of damages is not the dif-

ference in the rates to the two points and that no dam-

ages could be allowed because there was no alleged

proof of actual damage, and

Seventh: That all claims for shipments moving

more than two years prior to the filing of the complaint

were barred by the Statute of Limitations.

We will first discuss the question which has been

the main bone of contention throughout all of the courts,

to-wit, whether or not the courts have jurisdiction there-

over, or whether the exclusive jurisdiction of such ques-

tion is lodged with the Interstate Commerce Commis-

sion.

I.

THE DISTRICT COURT HAD JURISDIC-

TION IN THESE CASES

At the outset we will state that the Interstate Com-

merce Commission has had before it a number of cases

of violation of the long and short haul clause of the 4th

Section of the Act to Regulate Commerce. It has held

in these cases that no recovery may be had against the

carrier for a violation of the statute unless the shipper

proves that he has been specially damaged by loss of

sales or injury to his business, and has refused to grant

damages in the amount the shipper has been charged

over and above the rate to the longer point. There

have been a number of dissenting opinions by lawyer

members of the Commission to this ruling, so that the

opinion of the Commission is not unanimous. The

courts, on the other hand, in all cases which we have

found have granted damages in the difference of the

two rates. The Commission justifies its holding under

the decision of this court in Pa. R. R. Co. vs. Inter-

national Coal Co., 230 U. S. 184, which we will discuss

in the later part of this brief.

The Fourth Section of the Act to Regulate Com-

merce, at the time these shipments moved, so far as is

applicable to this case, reads:

“That it shall be unlawful for any common

carrier subject to the provisions of this Act to charge

or receive any greater compensation in the aggre-

gate for the transportation of passengers, or of like

kind of property, for a shorter than for a longer

9

distance over the same line or route in the same

direction, the shorter being included within the

longer distance, or to charge any greater com-

pensation as a through route than the aggregate of

the intermediate rates, subject to the provisions of

this Act, but this shall not be construed as authoriz-

ing any common carrier within the terms of this Act

to charge or receive as great compensation for a

shorter as for a longer distance. Provided, however,

that upon application to the Interstate Commerce

Commission such common carrier may in special

cases after investigation be authorized by the Com-

mission to charge less for longer than for shorter

distances for the transportation of passengers or

property, and the Commission may from time to

time prescribe the extent to which such designated

common carrier may be relieved from the operation

of this Section.” 4 Fed. Stat. Ann. 2nd Ed. 396.

Prior to the amendment of 1910, Section 4 had in-

serted after the words “or of like kind of property” the

words “under substantially similar circumstances and

conditions.” This Act, as interpreted prior to the amend-

ment of 1910, gave the right to the carriers in the first

instance to determine whether or not dissimilarity of

circumstances and conditions existed which authorized

them to charge more for the shorter than for the longer

haul over the same line, and if on a hearing the carrier

was able to prove a dissimilarity of conditions warrant-

ing the higher charge to the intermediate point, it was

not subjected to any penalty. But by the amendment of

Loh es eee A TR |

10

1910 this right of determination by the carrier in the

first instance was taken away from it, and the prohibition

of the long and short haul clause made absolute until

a hearing before the Commission and an order permit-

ting the higher rate to the intermediate point. That this

amendment took away from the carriers the right in the

first instance to decide the relativity of such rates, and

establish a higher rate to the intermediate point, with

the right to justify such rate, when called in question

in a judicial proceeding is decided by the U. S. Supreme

Court in the Intermountain Rate Cases, 234 U. S. 476.

The changes made by the amendment of this section

in 1910 are set out in full on pages 480 and 481 of 234

U. S. On page 482 with reference to the practice be-

fore this amendment, the court said:

“Almost immediately after the adoption of the

Act to Regulate Commerce in 1887, the Interstate

Commerce Commission in considering the meaning

of the law and the scope of the duties imposed on the

Commission in enforcing it, reached the conclusion

that the words ‘under substantially similar cireum-

stances and conditions’ of the fourth section domi-

nated the long and short-haul clause and empowered

carriers to primarily determine the existence of the

required dissimilarity of circumstances and condi-

tions and consequently to exact in the event of such

difference a lesser charge for the longer than was

exacted for the shorter haul. * * * We say

primarily because of course it was further recognized

that the authority existing in carriers to the end

11

just stated was subject to the supervision and con-

trol of the Interstate Commerce Commission in the

exertion of the powers conferred upon it by the

statute and especially in view of the authority stated

in the fourth section. * * * These comprehen-

sive views announced at the inception as a matter of

administrative construction were subsequently sus-

tained by many decisions of this court, and to the

leading of such cases we refer in the margin.”

And again at page 484 the court says:

“With the light afforded by the statements just

made we come to consider the amendment. It is

certain that the fundamental change which it makes

is the omission of the substantially similar cireum-

stances and conditions clause, thereby leaving the.

long and short-haul clause in a sense unqualified

except in so far as the section gives the right to the

carrier to apply to the Commission for authority

‘to charge less for longer than for shorter distances

for the transportation of persons or property’ and

gives the Commission authority from time to time

‘to prescribe the extent to which such designated

common carrier may be relieved from the operation

> >>

of this section.

The court then points out that the change brought

about by the amendment was to shift from the carrier

to the Commission the determination of when the carrier

may be relieved from the strict prohibition of the statute

and says:

12

“That is, it takes from the carriers the deposit

of public power previously lodged in them and

vests it in the Commission as a primary instead of a

reviewing function. * * * This being true, as

we think it plainly is, the situation under the amend-

ment is this: Power in the carrier primarily to meet

competitive conditions in any point of view by

charging a lesser rate for a longer than for a shorter

haul has ceased to exist because to do so, in the

absence of some authority, would not only be in-

imical to the provision of the fourth section but

would be in conflict with the preference and dis-

crimination clauses of the second and third sections.

But while the public power, so to speak, previously

lodged in the carrier is thus withdrawn and reposed

in the Commission the right of carriers to seek and

obtain under authorized circumstances the sanction

of the Commission to charge a lower rate for a

longer than for a shorter haul because of competi-

tion or for other adequate reasons is expressly pre-

served and if not is in any event by necessary im-

plication granted. And as a correlative the author-

ity of the Commission to grant on request the right

sought is made by the statute to depend upon the

facts established and the judgment of that body in

the exercise of a sound legal discretion as to whether

the request should be granted compatibly with a due

consideration of the private and public interests con-

cerned and in view of the preference and discrimina-

tion clauses of the second and third sections.”

13

In the case of United States vs. Louisville & Nash-

ville Railroad Co., 285 U. S. 814, the court had before it

certain rebilling rates in the consideration of which the

question of the long and short-haul clause arose. The

Interstate Commerce Commission had passed an order

which had been enjoined by the Commerce Court and

in considering the rates the court said, page 322:

“We pass this subject by, however, because its

_ consideration is not essential to determine whether

the Commission was right in prohibiting a continu-

ance of the rebilling privilege since we are of the

opinion that even if the allowance of such rebilling

privilege when originally made was authorized by

the statute and was therefore not a preference, the

right to continue it had been expressly prohibited by

statute until, on application. made to the Commis-

sion, its consent to that end was given, The ex-

press or implied statutory recognition of the au-

thority on the part of carriers to primarily deter-

mine for themselves the existence of substantially

similar circumstances and conditions as a basis of

charging a higher rate for a shorter than for a lon ger

distance within the purview of Section 4 of the Act

to Regulate Commerce, and the right to make a

rate accordingly to continue in force until on com-

plaint it was corrected in the manner pointed out

by the statute ceased to exist after the adoption of

the amendment of Section 4 by the Act of June 18,

1910, * * * This results from the fact that by

the amendment in question the original power to

14

determine the existence of the conditions justifying

the greater charge for a shorter than was exacted

for a longer distance was taken from the carriers

and primarily vested in the Interstate Commerce

Commission, and for the purpose of making the

prohibition efficacious it was enacted that after a

time fixed no existing rate of the character pro-

vided for should continue in force unless the applica-

tion to sanction it had been made and granted.”

Again in the case of Skinner & Eddy Corp. vs. U. S.,

249 U.S. 566, in considering the amendment to the long

and short haul clause of the Act, the Supreme Court

said:

“A special group of cases in which the Com-

mission may indirectly prevent unduly low rates

through its power to prevent unjust discrimination

is that provided for by the long and short haul

clause. It was enacted to remedy one large class

of discriminations by creating a legislative pre-

sumption that the charge of more for a short haul

under substantially similar circumstances and con-

ditions than for a longer distance over the same line

in the same direction was unjust. As originally en-

acted, the provision was construed to authorize the

carrier to determine primarily whether the required

dissimilarity of circumstances and conditions existed

and also to authorize the acceptance of competitive

conditions as a justification of a lower rate for the

longer distance. So construed, the provisions proved

15

inefficacious, and the act was amended in 1910 by

striking out the ‘substantially similar circumstances

and conditions’ clause and making the prohibition

absolute except to ‘the extent to which such des-

ignated common carrier may be relieved from the

operation of this section’ by the Commission. In-

termountain Rate Cases, supra.”

It is, therefore, settled and determined that by the

amendment of the Fourth Section as interpreted by

this Court that the carrier has no right to charge more

for a shorter haul over the same line or route than

it charges for a longer, the shorter being included

within the longer distance, until it presents the matter

to the Interstate Commerce Commission and gets an

order of the Commission permitting such greater charge

to the shorter point. In the present cases no such per-

mission was obtained, and therefore the greater charge

to the shorter point was illegal, it being expressly pro-

hibited by the statute.

It is contended by the plaintiffs in error that the ques-

tion as to which rate is illegal, that is, the rate to the

shorter point or the one to the longer point, is an adminis-

trative question, and therefore must be submitted to the

Interstate Commerce Commission for its ruling prior to

any action in court. This contention is based upon the

principle announced by the U. S. Supreme Court in

Texas & Pacific Ry. Co. vs. Avilene Cotton Oil Co., 204

U. S. 426, and other cases following that principle.

But, as stated by the District Court, this principle

applies “where the legal quality of the practices com-

16

plained of is not definitely fixed by statute, but is

an administrative question depending upon the facts to

be ascertained from investigation, in which case the Com-

mission has original jurisdiction.” Where, however, the

practice is directly prohibited by statute, the person in-

jured thereby need not go originally to the Commission

but may sue directly in court.

Penn. Railroad Co. vs. International Coal Co.,

230 U.S. 184.

Penn. Railroad Co. vs. Puritan Coal Co., 2387

U. S. 391.

Penn. Railroad Co. vs. Somner, 242 U. S. 120.

The principle is well illustrated by the three cases

decided on the same day found in 230 U. S. The first

is that of Pennsylvania Railroad Company vs. Inter-

national Coal Company, 230 U. S. 184, the second that

of Mitchell Coal Co. vs. Pennsylvania Railroad Co., 230

U. S. 247, and the third that of Morrisdale Coal Co. vs.

Pennsylvania Railroad Co., 230 U.S. 304.

The first of these cases was one instituted by a shipper

to recover damages on account of rebates given to plain-

tiff’s competitor. The contention was made that the

court had no jurisdiction and that the case should be re-

manded with instructions to dismiss the complaint “upon

the ground that the court had no power to adjudicate

the administrative question as to whether a carrier could

make a difference in rate between shipments of free and

17

contract coal. It argued that this was a rate making

question and that it was for the Commission as the rate

regulating body to determine not only whether a dis-

similarity existed but whether the rates were properly

adjusted to meet that dissimilarity.” (280 U. S. 196.)

The court then points out that there are many acts of

the carriers which are lawful or unlawful according as

they are reasonable or unreasonable, just or unjust, and

that determination of such issues is an administrative

question and calls for the exercise of the discretion of the

administrative and rate-making body, and then says:

“None of these considerations, however, operates

to defeat the court’s jurisdiction in the present case,

for even if a difference in rates could be made be-

tween free and contract coal, none was made in the

only way in which it could have been lawfully done.

The published tariffs made no distinction between

contract coal and free coal but named one rate for

all alike. That being true, only that single rate

could be charged. When collected, it was unlawfui

under any pretense or for any cause, however equi-

table or liberal, to pay a part back to one shipper

or to every shipper. * * * The tariff, so long

as it was of force, was, in this respect, to be treated

as though it had been a statute, binding as such upon

railroad and shipper alike. If, as a fact, the rates

were unreasonable the shipper was nevertheless

bound to pay and the carrier to retain what had

been paid, leaving, however, to the former the right

to apply to the Commission for reparation.”

18

This Court in that case sustained the jurisdiction

of the court to recover any damages caused by the un-

lawful rebating to the competing Coal Company.

In the case of Mitchell Coal Co. vs. Pennsylvania

Railroad Co., immediately following this decision, the

court denied relief because under the tariff the Railroad

Company was paying certain allowances in connection

with certain services, and held that as the services were

provided for in the tariff, the reasonablesness of such

allowances was within the primary jurisdiction of the

Commission and the courts could not allow damages to

a competitor until he had established before the Com-

mission the unreasonableness of the rule under which

the allowances were made.

In the Morrisdale Coal Co. case this Court denied

the jurisdiction of the courts to allow damages for

discrimination in distribution of cars under rules estab-

lished and filed with the Interstate Commerce Com-

mission until the Interstate Commerce Commission had

investigated the reasonableness of the rules and declared

them unreasonable.

This principle is further illustrated in Pennsylvania

Railroad Company vs. Puritan Coal Co., 237 U. S. 121,

and the primary jurisdiction of the court sustained on

the ground that the plaintiff was not attacking the rea-

sonablesness of the rule established for the distribution

of cars, but was attacking the manner in which the cars

were distributed under the rule, and sustained the right

of a shipper in the latter case to apply directly to the

19

court, and this principle is further amplified and clari-

fied in the case of Pennsylvania Railroad Co. ys. Son-

man Coal Co., 242 U. S. 120, which was also a car dis-

tribution case and where the shipper was attacking not

the reasonableness of the rule for distribution but the

manner in which the Railroad Company distributed its

cars under the rule established. In this latter case the

court says (242 U. S. 124);

“Thus we have heard * * * that the Act

does not supersede the jurisdiction of state courts

in any case, new or old, where the decision does not

involve the determination of matters calling for the

exercise of the administrative power and discretion

of the Interstate Commerce Commission, or relate

to a subject as to which the jurisdiction of the Fed-

eral Courts is otherwise made exclusive; that claims

for damages arising out of the application, in inter-

state commerce, of rules for distributing cars in

times of shortage, call for the exercise of the ad-

ministrative authority of the Commission where the

rule is assailed as unjustly discriminatory, but

where the assault is not against the rule but against

its unequal and discriminatory application, no ad-

ministrative question is presented and the claim may

be prosecuted in either a federal or a state court

without any precedent action by the Commission.”

A later expression of this Court is in the case of St.

Louis, Iron Mountain & Southern Railway Co. vs. J. F.

Hasty & Sons, 255 U. S. 252, in which the interpretation

of a tariff was involved, and in which the question of

20

whether or not material called rough heading for barrels

came within an item of the tariff providing a rate “on

rough lumber, staves, flitches, bolts, and logs.” This

Court decided that it did come within that provision of

the tariff, and with reference to its being an administra-

tive question, the court says:

“The matter is so free from doubt that there is

no occasion to apply to the Commission for a con-

struction, as insisted by appellant under Texas &

Pacific Ry. vs. American Tie Co., 284 U. S. 188,

146.”

The last expression of this court which we have found

on this matter is Great Nor. Ry. Co. vs. Merchants Ele-

vator Co., 259 U. S. 285-296, in which a question as to

the right of the court to interpret a tarif f on which there

was a doubt as to whether the general rule or an excep-

tion to the rule applied to the particular shipments in

question, and the court reviews at considerable length

its former decisions and reaffirms the principle holding

that in such cases the court had original jurisdiction.

The rule seems clearly established that if the cause

of action depends upon the requirements of a change in

the established rules or tariffs of the carrier, then the

matter of determining the reasonableness of such rules

or tariffs is an administrative question and must go

before the Commission before action may be brought

thereon in court. If, however, the party is simply seek-

ing a right under the established rules or tariffs or the

enforcement of a statute which prescribes the rule, the

injured party may apply directly to the court for the

enforcement thereof, there is no administrative question

21

involved. It is simply an application of the established

rule or statute.

In the present case the statute specifically declares

that the carrier shall not charge more for the long haul

than for the short haul. There is no dispute as to the

fact that the shipments moved, that the carriers charged

a higher rate to Portland and Astoria, the short points,

than its established rate to North Portland. There is no

dispute of the fact that it had not secured an order of

the Interstate Commerce Commission permitting a

higher charge to the shorter points, and we submit that

there is no administrative question involved, but simply

the enforcement of the rule laid down by the statute.

The rate so established violated the provisions of the long

and short haul clause.

Section 8 of the Interstate Commerce Act provides

that in case any common carrier subject to the provision

of this Act shall do, cause to be done, or permit to be

done, any act, matter, or thing in this Act prohibited

or declared to be unlawful, or shall omit to do any act,

matter, or thing in this Act required to be done, such

common carrier shall be liable to the person or persons

injured thereby to the full amount of damages sustained

in consequence in violation of the provision of this Act,

together with reasonable counsel’s or attorney’s fees, to

be fixed by the court in every case of recovery, which

attorney’s fees shall be taxed and collected as a part

of the costs in the case.

Section 9 of the Act give the right to any person

claiming to be damaged to make complaint either to the

22

Commission or to bring suit for damages in the District

Court of the United States.

Under the principle above announced as to the cases

which may be brought directly in the courts and those

which must be brought primarily before the Commission,

we are seeking damages for violation of the long and

short haul clause. The statute makes the prohibition, we

have proved the violation of it, there is no administrative

question involved, and we are entitled to sue directly in

the court.

Il.

THE TRANSPORTATION, THOUGTI

WHOLLY BY WATER, IS SUBJECT TO

THE INTERSTATE COMMERCE ACT

It is contended in plaintiff's brief that because the

transportation was wholly by water that it is not subject

to the Act, but we submit that this is absolutely unten-

able, and that the carrier has accepted the provisions of

the Interstate Commerce Act and made itself liable

thereto. The record shows that the Oregon-Washing-

ton Railroad & Navigation Company, as owner of all of

the stock of the San Francisco and Portland Steamship

Company had applied to the Interstate Commerce

Commission, under Section 5 of the Act to Regulate

Commerce as amended by the Panama Canal Act, to

be permitted to continue the operation of this line as a

public convenience, and permission was granted by the

Interstate Commerce Commission. (Tr. No. 594, P.

61, Tr. No. 595, P. 55—Plaintiff’s Exhibit 2 in both

cases. )

23

This application and the permit granted was in

direct compliance with the Panama Canal Act, and the

steamship company has complied therewith by filing its

tariffs. It should not now after invoking the provisions

of this act and holding itself out to the public as sub ject

thereto, be heard to say that it is not bound by the pro-

visions of the act. Section 11 of the Panama Canal Act

of August 24th, 1912, 37 Stat. L. Page 566, provides

that Section 5 of the Act to Regulate Commerce should

be amended as follows:

“From and after the first day of July, nineteen

hundred and fourteen, it shall be unlawful for any

railroad company or other common carrier subject

to the Act to Regulate Commerce to own, lease,

operate, control, or have any interest whatsoever

(by stock ownership or otherwise, either directly,

indirectly, through any holding company, or by

stockholders or directors in common, or in any

other manner) in any common carrier by water

operated through the Panama Canal or elsewhere

with which said railroad or other carrier aforesaid

does or may compete for traffic or any vessel carry-

ing freight or passengers upon said water route or

elsewhere with which said railroad or other carrier

aforesaid does or may compete for traffic; and in

case of the violation of this provision each day in

which such violation continues shall be deemed a

separate offense.”

It is contended by the plaintiffs in error that the pro-

visions of the Panama Canal Act immediately following

this amendment did not in fact amend the Interstate

Commerce Act. In any event, it was a solemn act of

Congress and provided as follows:

24

“Jurisdiction is hereby conferred on the Inter-

state Commerce Commission to determine questions

of fact as to the competition or possibility of com-

petition, after full hearing, on the application of

any railroad company or other carrier. Such appli-

cation may be filed for the purpose of determining

whether any existing service is in violation of this

section and pray for an order permitting the con-

tinuance of any vessel or vessels already in opera-

tion, or for the purpose of asking an order to install

new service not in conflict with the provisions of

this paragraph. The Commission may on its own

motion or the application of any shipper institute

proceedings to inquire into the operation of any ves-

sel in use by any railroad or other carrier which has

not applied to the Commission and had the question

of competition or the possibility of competition

determined as herein provided. In all such cases

the order of said Commission shall be final.

“If the Interstate Commerce Commission shall

be of the opinion that any such existing specified

service by water other than through the Panama

Canal is being operated in the interest of the public

and is of advantage to the convenience and com-

merce of the people, and that such extension will

neither exclude, prevent, nor reduce competition on

the route by water under consideration, the Inter-

state Commerce Commission may, by order, extend

the time during which such service by water may

continue to be operated beyond July first, nineteen

hundred and fourteen. In every case of such exten-

sion the rates, schedules, and practices of such water

carrier shall be filed with the Interstate Commerce

Commission and shall be subject to the Act to Reg-

25

ulate Commerce and all amendments thereto in the

same manner and to the same extent as is the rail-

road or other common carrier controlling such water

carrier or interested in any manner in its operation”

* * *

There is nothing inconsistent with the provisions of

this act and the other provisions of the Interstate Com-

merce Act as attempted to be maintained by plaintiffs

in error. It applies to those water carriers owned or

controlled by rail carriers sub Ject to the act. The evils

aimed at were the practices of rail carriers in maintain-

ing water lines so as to prevent any water competition

and for the purpose of protecting their rail traffic against

such water competition, and the act of Congress was

designed to bring any such water carriers under the pro-

visions of the act. The plaintiffs in error accepted the

law and complied with it, and it seems to us that the

language is so plain that it cannot possibly be construed

as to except the water carrier when the transportation is

wholly by water and subject to the Interstate Commerce

Act only when it enters into a joint rate with the rail

carrier. Such transportation is sub ject to the Act and

was made so subject to the act prior to the enactment

of the Panama Canal statute by the amendment of Sec-

tion 1 in 1906.

We submit that Congress had only in mind the sub-

Jecting of railroad owned water carriers to the full terms

of the Interstate Commerce Act as to all of its business.

Otherwise, the evil at which these provisions of the Pan-

ama Canal Act were aimed would have been permitted

to continue after the enactment of the statute as well as

before, for such carriers could he e been used wholly to

destroy competition. The railre company could have

26

run its vessels only when some other carrier came on to a

route and cut rates so as to kill off the competition, leavy-

ing the railroad carrier’s business unmolested. The

whole object and purpose of the provisions of the Act,

as shown by its wording was to preserve such water

competition and not to kill it and Congress took the

means to preserve it by subjecting such railroad owned

carrier to the full measure of the provisions of the Inter-

state Commerce Act.

We therefore submit that the transportation between

San Francisco, Astoria and Portland, while wholly by

water is when carried in the railroad controlled vessels,

in all respects subject to the Act.

IIT.

ASSIGNMENT OF CLAIMS

It is claimed in the brief of plaintiffs in error that

the assignment of all the claims of the shippers to the

defendant in error was void because not complying with

Section 3477 of the revised statute. This objection

refers only to the case against the Director General. We

submit, however, that this question is not before this

court for the reason that it was not raised in the lower

court. The only reference in the bill of exceptions

thereto is found in Tr. No. 595 at Page 54 and is as

follows:

“Mr. Wilson offered documentary evidence

that plaintiff was the owner by assignment of the

claims mentioned in the respective causes of action

of the complaint and supplemental complaint, and

it was established that plaintiff is the owner of such

causes of action.”

27

There was no objection made to the assignments

when offered and no exception taken with reference

thereto. The sufficiency of said assignments was con-

ceded. No question was likewise raised in the Circuit

Court of Appeals and neither of the lower courts were

called upon as to the validity of said assignments.

Notwithstanding the fact that this question is not

raised by the record, we submit that claims of this char-

acter may be brought by the assignee. In the case of

Spiller vs. A. T. & S. F., 253 U. S. 184, this court has

sustained the right of an assignee to maintain an action

against a carrier on such claims. The fact that the

Director General was operating the line we submit did

not prevent the assignment. Section 10 of the Federal

Control Act provides:

“That carriers while under federal control shall

be subject to all laws and liabilities as common

carriers whether arising under state or federal laws

or at common law, except insofar as may be incon-

sistent with the provisians of this Act or any other

act applicable to such federal control or with any

order of the president. Actions at law or suits in

equity may be brought by it against such carriers

and judgments rendered as now provided by law

and in actions at law or suits in equity against the

carrier no defense shall be made thereto upon the

ground that the carrier is an instrumentality or

agency of the Federal Government.”

The defense of the invalidity of the assignments is a

defense based purely and simply upon the ground that

the defendant is an instrumentality or agency of the

Federal Government.

28

This court has held in the Spiller case above shown

that such assignments are valid as against a carrier not

under federal control and if assigned claims may be

maintained against such carrier, then it was plainly the

intent that such assigned claims could be maintained

against the carrier when under federal control.

This court in Mo. Pacific R. R. Co. vs. Ault, 256

U. S. 559, in construing this section says:

“The plain purpose of the above provision was

to preserve to the general public the rights and

remedies against common carriers which it enjoyed

at the time the railroads were taken over by the

President except in so far as such rights or remedies

might interfere with the needs of federal operation.

The provision applies equally to cases where suits

against the carrier companies were pending in the

courts on December 28, 1917; to cases where the

cause of action arose before that date and the suit

against the company was filed after it; and to cases

where both cause of action and suit had arisen or

might arise during federal operation. The Govern-

ment was to operate the carriers, but the usual

immunity of the sovereign from legal liability was

not to prevent the enforcement of liabilities ordi-

narily incident to the operation of carriers * * *

Operation was to be continued as theretofore with

the old personnel, subject to change by executive

order. The courts were to go on entertaining suits

and entering judgments under existing law, but the

property in the hands of the President for war pur-

poses was not to be disturbed. With that exception

the substantial legal rights of persons having deal-

29

ings with the carriers were not to be affected by the

change of control.”

The court further amplifies this language.

In another action pending before the District Court

of the United States for the District of Oregon this

identical question was raised and Judge Wolverton held

the assignments valid. Parrington vs. Davis, 285 Fed.

751.

In Seaboard Air Line Railway ys. Jnited States,

256 U. S. 655, this court discussed the reason for the

provisions of Section 3744 of the revised statute and

We submit that the assignments were not void but

action could be maintained thereon against the carriers

while under federal control.

an.

CARRIERS ARE LIABLE NOTWITHSTAND-

ING CERTAIN OF THE BOATS ON

WHICH PART OF THE SUGAR WAS

HANDLED WERE UNDER REQUISI-

TION OF THE UNITED STATES SHIP-

PING BOARD FOR A PORTION OF THE

PERIOD.

It appears in the record \(Tr. No. 595, P. 84) (No.

594, P. 90), that on October 12th, 1917, the San Fran-

cisco and Portland Steamship Company was given

notice by Bainbridge Colby, Commissioner, that the

30

United States Shipping Board was requisitioning all

American steamers enumerated therein, and that the

“Rose City” and “Beaver” of the San Francisco and

Portland Steamship Company were of the class requi-

sitioned. ‘These steamers continued on their routes and

were continued to be operated by the San Francisco and

Portland Steamship Company and the United States

Railroad Administration. The tariffs under which ship-

ments were carried were the tariffs of the San Fran-

cisco and Portland Steamship Company and the Di-

rector General. The contracts of carriage as shown by

the evidence were the contracts of the San Francisco and

Portland Steamship Company and the Director Gen-

eral; the agents receiving the shipments were the em-

ployes of these concerns. No tariffs were filed by the

United States Shipping Board with the Interstate Com-

merce Commission, and no contracts of carriage were

issued by that Company. The shippers therefore had no

contractual relations with the United States Shipping

Board, were never advised in any way that they were

dealing with the United States Shipping Board. The

contracts which gave rise to these actions were by the

shippers and the plaintiffs in error in this case and no

other. It made no difference to the shipper what. boats

‘ts contractors used for the transportation of these ship-

ments, and if these plaintiffs in error saw fit to contract

with the public during this period they were liable to the

public on those contracts, notwithstanding two of their

boats had been requisitioned by the Government, and

notwithstanding they may have carried the articles on

the requisitioned boats. Their tariffs holding themselves

out to the public as carriers during this entire period

were on file and anyone having traffic to haul could rely

thereon.

31

We therefore submit they still remained liable durin g

this period to the plaintiff's assignors.

V.

NORTH PORTLAND AND PORTLAND ARE

ON THE SAME ROUTE, PORTLAND

BEING INTERMEDIATE, ON SHIP-

MENTS FROM SAN FRANCISCO TO

NORTH PORTLAND.

It is claimed by plaintiffs in error that because the

boats of the San Francisco and Portland Steamship

Company might have run beyond the mouth of the

Willamette River up to North Portland and delivered

the shipments, or could have transferred the same

through the terminal of the City of Portland without

bringing them up to the vessels’ regular landing place

at Portland and there transferring to the line of the

Oregon-Washington Railroad & Navigation Company

that Portland is not intermediate from San Francisco to

North Portland and therefore it was no violation of

the Act.

Neither one of these contentions is tenable for the

reason that the San Francisco and Portland Steamship

Company does not include North Portland in its tariffs

except via Portland and the Oregon-Washington Rail-

road & Navigation line.

As heretofore pointed out, North Portland is farther

Kast than the mouth of the Columbia River where the

boats of the San Francisco and Portland Steamship

Company turn South into the Willamette River to Port-

land. The tariffs of the San Francisco and Portland

82

Steamship Company not naming North Portland as one

of the stations on its boat line, cannot carry traffic

thereto. The very first provision of Section 6 of the

Act to Regulate Commerce provides:

“That every common carrier subject to the pro-

visions of this Act shall file with the Commission

created by this Act and print and keep open to

public inspection schedules showing all the rates,

fares, and charges for transportation between dif-

ferent points on its own route and between points

on its own route and points on the route of any

other carrier by railroad, by pipe line, or by water

when a through route and joint rate have been

established * * * The schedules printed as aforesaid

by any such common carrier shall plainly state the

places between which property and passengers will

be carried” * * *

Not having named North Portland as one of the

places to which it would carry freight by its own boats,

that was not an available route for such transportation

under the Interstate Commerce Act.

The route through the Munipical Terminal was like-

wise not an available route. The Municipal Terminal is

located on the Willamette River, partly within and partly

without the city limits of Portland. It is north of the reg-

ular landing place of the San Francisco and Portland

Steamship Company vessels at Portland and can be

reached on the route from San Francisco tothe steamship

company’s regular landing placeat Portland before reach-

ing that landing. At the Municipal Terminal, which is

owned and operated by the City of Portland, there are

slips for the accommodation of vessels, and tracks from

83

these slips to a connection with the O.-W. R. R. & N,

line. Over these tracks are operated switch engines of

the City of Portland, and the nearest slip from the

line of the O.-W. R. R. & N. Co. would involve a haul

over these tracks of the City of Portland of at least

2,000 feet. The tariff of the City of Portland for the

use of these terminal facilities is not filed with the Inter-

state Commerce Commission (Tr. No. 594, P. 83, and

No. 595, P. 80). As stated by the witness Mount, “The

tariffs of the City of Portland change oftener than the

moon does”, (Tr. No. 594, P. 85, and No. 595, P. 80.)

The route from San Francisco to North Portland

via the San Francisco and Portland Steamship line, the

Portland Municipal Terminal and the Oregon-Wash-

ington Railroad & Navigation Company was not an

available route because the tariffs over that route were

not filed with the Interstate Commerce Commission,

Subdivision 4 of Section 6 of the Interstate Commerce

Act provides:

“The names of the several carriers which are

parties to any joint tariff shall be specified therein,

and each of the parties thereto, other than the one

filing the same, shall file with the Commission such

evidence of concurrence therein or acceptance

thereof as may be required or approved by the Com-

mission,” ete, * * *

Subdivision 7 of Section 6 of the Act to Regulate

Commerce provides:

“No carrier, unless otherwise provided by this

Act, shall engage or participate in the transporta-

tion of passengers or property, as defined in this

34

Act, unless the rates, fares, and charges upon

which the same are transported by said carrier have

been filed and published in accordance with the

provisions of this Act.” * * *

The tariff involved in this case does not and no other

tariff shown by the record permits the carrying of prop-

erty through Municipal Terminal No. 4 of the City of

Portland from San Francisco to North Portland be-

cause the City of Portland over that route would be a

participating carrier, and the law requires it to join in

the tariff, and neither the San Francisco and Portland

Steamship Company nor the Oregon-Washington Rail-

road & Navigation Company could publish a tariff over

that route without the participation of the City of Port-

land in the tariff.

There is another reason against the consideration of

this route and that is that the Municipal Terminal of the

City of Portland was not in existence until the spring

of 1919, long after the rates and route to North Port-

land through Portland were established. The fact is,

the tariffs in question from San Francisco to North

Portland in this case definitely fix the route. These

tariffs specify that this rate applies “via Route No. 1 as

shown on Page 34”, and on that page under the cap-

tion of “Routing”, Route No. 1 is specified as “via the

San Francisco and Portland Steamship Company to

Portland, Oregon, and Oregon-Washington Railroad &

Navigation Company from Portland to North Port-

land”, (Tr. No. 594, P. 64, and No. 595, P. 58). This

route was established long before the Portland Munici-

pal Terminal was in existence. The claim that the

Municipal Terminal route is an available route is a

35

makeshift in an attempt to avoid the penalty of the 4th

Section.

Mr. J. W. Mount, Assistant General Freight Agent

of the Union Pacific, a witness on behalf of the plain-

tiffs in error, when on the stand on cross examination

on the subject of the City of Portland joining in the

tariffs, said:

“All sugar going on the Oregon-Washington

Railroad & Navigation Company’s lines coming

into the City of Portland by boat is ordinarily

transferred at Ainsworth Dock. I merely mean to

say that physically, sugar can transfer from water

to rail at Municipal Dock No. 4, and that it is just

as good, if not a better physical connection than the

Ainsworth Dock.” (Tr. No. 594, P. 88, No. 595,

P. 83.)

It requires something more than a physical connec-

tion to establish a route within the meaning of the

Interstate Commerce Act. Via the only established

route as shown by the tariffs on file with the Interstate

Commerce Commission, the route to North Portland is

through Portland, and Portland is therefore intermedi-

ate to North Portland and a charging via this route, as

was shown by the evidence in this case, of a lower rate to

North Portland than that charged to Portland is a vio-

lation of the 4th Section of the Interstate Commerce

Act.

36

VI.

THE ACTUAL SHOWING THAT SHIP-

MENTS HAVE BEEN MADE TO NORTI

PORTLAND AS A CONDITION TO RE-

COVERY IS NOT NECESSARY.

The question was raised by the plaintiffs in error

that because the defendant had not shown actual move-

ments to North Portland that no violation of the Act

was shown.

At North Portland is located a packing plant of

Swift & Company, in which quantities of sugar are used.

The San Francisco and Portland Steamship Company

joined with the Oregon-Washington Railroad & Navi-

gation Company in establishing a joint rate thereto.

The law requires, as pointed out in the foregoing section

of this brief, the carriers to “print and keep open to

public inspection, all rates, fares and charges for trans-

portation between different points” * * * It is claimed

that because Section 4 of the Act provides that it shall

be unlawful for any carrier “to charge or receive any

greater compensation in the aggregate for the trans-

portation of passengers or of like kind of property for

a shorter than for a longer distance over the same line

or route in the same direction, the shorter being included

within the longer distance”, before recovery can be had

that it must be proved that not only the carrier pub-

lishes rates to the further point, but that it must also be

proved that it has actually charged those rates. This

would in many cases be an impossibility. The law re-

quires the publication of the rates and charges to be

made. It requires the carriers to keep them open to

public inspection. They cannot be changed except by

37

special permission of the Interstate Commerce Com-

mission in emergency cases under thirty days’ notice.

The public is bound to take notice thereof. It has a

right to rely upon this publication of the carrier and

when it publishes the lower rate to the further point,

unless it gets special permission therefor from the

Interstate Commerce Commission the higher rate to the

intermediate point ceases to exist.

In United States vs. Louisville & Nashville, 235 U.

S. 322, this court says:

“The right to continue it” (That is, the greater

charge for the shorter distance), “had been ex-

pressly prohibited by statute until on application

made to the Commission its consent to that end was

given.”

And again, at Page 325, Mr. Chief Justice White

says with reference to the long and short haul clause * * *

“and for the purpose of making the provision efficacious

it was enacted that after a time fixed no existing rate of

the character provided for should continue in force un-

less the application to sanction it had been made and

granted. Int. Mountain Rate Cases, 234 U.S. 476. If

then it be that the rebilling privilege which is here in

question, disregarding immaterial considerations of

form and looking at the substance of things, was, when

originally established, an exertion of the authority con-

ferred or recognized by Section 4 of the Act, as there

is no pretense that permission for its continuance had

been applied for as required by the amendment and the

statutory period for which it could be lawfully con-

tinued without such permission had expired, it follows

that its continued operation was manifestly unlawful

38

and error was committed in permitting its continuance

under the shelter of the injunction awarded by the court

below.”

The above language was used with reference to rates

in effect at the time the amendment of 1910 of the 4th

Section of the Act went into effect. In the present case

the lower rate to the further point was established after

the amendment of 1910 went into effect. If a rate in

existence at the time of the amendment could not con-

tinue after a certain date without the authority of au

order of the Interstate Commerce Commission, then cer-

tainly a subsequently established higher rate to the inter-

mediate point, without first securing the Commission’s

order could not become effective. The only rate there-

fore which could have been legally charged in view of

this prohibition of the statute was the lower rate estab-

lished to the further point, because the other rate by the

establishment of this rate to the further point became

illegal, and therefore we submit it did not devolve upon

the shipper to prove an actual shipment to the further

point.

This question has been considered by the Supreme

Court of California with reference to the long and short

haul provision of the California law in California Ad-

justment Co. vs. A. T. & S. F., 179 Cal. 140, 175 Pac.

682. An examination of this case will show that the lan-

guage of the California law in this respect is identical

with that of the Interstate Commerce Act. With refer-

ence thereto that court says:

“Nor do we think it material, whether when the

shipments to intermediate points complained of as

excessively charged for were made no contempo-

39

raneous shipment to the more distant point was

made. Under the constitutional provision the legit-

imate maximum charge for the shorter haul is the

charge the carrier makes for the longer one, and it

is only necessary to show in proof of an illegal dis-

crimination that the shipper paid a larger sum for

the short haul than the defendant would have

charged for the longer one. Actual shipment for

the longer distance is not required to be shown. All

that is required is a showing that the defendant held

out and published to the shipping world that it

would charge certain rates for the transportation

of a certain class of merchandise from San Fran-

cisco to Los Angeles. This was shown, and when

shown, for the purpose of determining whether dis-

crimination was practised or not, the rates so held

out to be charged are deemed in law to have been

charged.”

The Supreme Court of Ohio likewise in Beeghly vs.

Public Utilities Commission (185 N. E. 641), passing

upon a similar long and short haul provision of the Ohio

law, arrives at the same conclusion.

WAM,

STATUTE OF LIMITATIONS

It is claimed that certain of the claims sued on in

Docket No. 594 are barred by the Statute of Limita-

tions, for the reason that the action was not commenced

within two years after movement thereof. In the brief

this same question is raised with reference to certain of

the claims in Docket No. 595, but the record in the

lower court in this Docket does not raise that question.

BiG iii hic tor essai tis Hie a RRL OL

40

In Docket No. 595 there was submitted a demurrer in

the following words:

“Comes now the above named defendant and

demurs to the complaint on file herein on the

ground that

I.

“This Court has no jurisdiction of the subject

matter of the action.

“Defendant will rely in presenting this demur-

rer on the proposition that the Interstate Com-

merce Commission has exclusive original jurisdic-

tion of controversies of this character.” (‘Tran-

script 595, Page 21.)

No general demurrer or demurrer on the ground

that the action had not been commenced as to any of

the claims within the time prescribed was filed. The

answer is simply one of general denial, except that by

special answer it is suggested that James C. Davis had

succeeded John Barton Payne. (Transcript 595, Pages

35 to 38.)

At the time of the trial no objection was made to

any of the claims, nor was any such question raised. In

fact, the claims had all been submitted to the defendant,

checked, and the amount agreed upon. The only reser-

vation made was that certain claims had been carried

during the time after the Shipping Board had wired

requisitioning certain steamers of the plaintiff in error

and prior to the date when the notice of release of said

vessels was sent, but no question as to any of said claims

not being within the Statute of Limitations was ever

raised.

41

As to Docket 594, the Demurrer did not raise the

question of the Statute of Limitations as to those claims

arising prior to January 1, 1918 (Transcript No. 594,

Page 22), so that the only question raised before the

lower court was as to those claims prior to January 1,

1918, in the case against the Steamship Company.

Reliance is had on case of Kansas City Southern,

plaintiff in error, vs. Wolf et al., 43 S. C. R., 259, de-

cided February 19, 1923. This case had not been de-

cided in this Court at the time the present cases were

decided. The decision in that case in the lower court

was to the contrary, as was the decision in the present

cases. The Interstate Commerce Act itself does not

specifically prescribe the limitation period for actions

commenced by shippers before the court. 'The Act does,

by Sections 8 and 9, give a choice of forum either before

the Commission or the District Court of the United

States, but the Act only specifically places a limitation

upon proceedings before the Commission.

The Court in the Wolf case bases its decision en-

tirely upon its former decision in the case of Phillips vs.

Grand Trunk Western Ry. Co., 236 U. S. 662, 667, but

that was a case on a claim which admittedly had to be

commenced originally before the Commission. Such a

case had been commenced before the C ommission, not

by the plaintiff in the Phillips case, but by another

plaintiff on a similar claim. The Commission had estab-

lished the right to recover and the plaintiff in the Phil-

lips case commenced his action in court based upon the

proceedings before the Commission, and the Court prop-

erly held that the person commencing in the Court could

not have a different period of limitation than that be-

fore the Commission.

42

In the Wolf case this Court holds that the same prin-

ciple applies. We respectfully ask for a reconsidera-

tion of this ruling. The Court in the Phillips case says

that in those cases where the statute reads as does the

Interstate Commerce Act, to-wit: that the proceeding

shall be commenced within two years from the time the

cause of action accrues and not after, the liability is

destroyed, If this is the case then we submit that the

same rule should apply to all questions of damages in

any case which might have been submitted to the Com-

mission, whether it may be sued upon in the state court,

the United States Court, or before the Commission, and

this Court has in several cases sinee the Phillips case

permitted recoveries in cases involving interstate traffic

which could have been submitted to the Commission, but

were commenced in the state courts and recovery was

permitted for periods considerably in excess of two

vears. Thus in the case of Pennsylvania Rid. Co. vs.

Puritan Coal Co., 287 U. S. 121, it appears that an

action for damages was commenced in the State Court

of Pennsylvania for damages for discrimination in dis-

tribution of cars under tariff rules prescribed by the

Railroad Company. It appeared that the cars desired

were for both destinations within and without the State

of Pennsylvania. (237 U. S. 124 and 127.) The ae-

tion was commenced in March, 1908, and it appears on

Pages 123 and 130 that claims as far back as 1902 were

involved. It likewise appears that the question of the

Statute of Limitations had been raised. (Page 123.)

The amendment of Section 16 of the Act to Regu-

late Commerce, approved June 29, 1906, reads as fol-

lows:

“All complaints for the recovery of damages

shall be filed with the Commission within two years

dpe

eee

43

from the time the cause of action accrues, and not

after. * * * Provided that claims accrued

prior to the passage of this Act may be presented

within one year,”

So that if the Act is to be construed, by reason of

the necessity for uniformity, so that this limitation ap-

plies to the Courts as well as the Commission, it should

likewise apply as well to actions in the State Courts as

those in the United States Courts, and would apply

to all of the interstate claims in the Puritan Coal case,

and hence, on the theory that the liability was destroyed,

all of said interstate claims in the Puritan Coal case

would have been barred, for they acerued prior to the

amendment of June 29, 1906, and they must necessarily

have been commenced within one year thereafter, but

the action was not commenced, as shown by the opinion,

until March, 1908, but this Court affirms the judgment

in that case permitting the recovery, and this opinion

was rendered subsequently to the opinion in the Phillips

case,

Again in the case of Pennsylvania Rld. Co. vs, Son-

man Coal Co., 242 U. S. 120, it appears that the Coal

Company had brought action to recover damages from

the Railroad C ompany for a period of four years, be-

ginning April 1, 1903. It does not appear from the

opinion just when the action was commenced, but it

covered a period of four years, and if the remedy was

destroyed by the Act of 1906, a part or all of these

claims should not have been allowed, but the recovery

allowed in the State Court was af firmed in this Court,

and that in an opinion subsequent to the Phillips case.

In the lower court these cases were attempted to be dis-

tinguished on the ground that they did not apply to

44

interstate shipments and could not apply if the damage

were one coming under the interstate commerce law, but

numerous cases of the same character have been brought

before and considered by this Court, and are of a char-

acter which could have been brought before the Inter-

state Commerce Commission on the identical claims.

This is plainly shown by the decision of this Court in

the case of Pennsylvania Rid. Co. vs. Steinman Coal

Co., 242 U. S. 300, in which this Court held that the

State Court had jurisdiction, but the case was reversed

on the ground that in another case the identical rule on

which the case was based had been declared unreason-

able by the Commission, and therefore the shipper could

not bring action in court and recover on it, but the prin-

ciple is clearly demonstrated that these cases are of a

character which can be tried either in the State Court,

the United States Court, or before the Commission. In

that regard we quote the following from this Court's

opinion in the Steinman Coal Company case: (Page

299)

“The coal company was engaged in coal mining

on the carrier’s line in Pennsylvania and was ship-

ping the coal to points in that and other States.

Other coal companies were engaged in like opera-

tions in the same district. A rule of the carrier pro-

vided for a pro rata distribution of the available

supply of coal cars in times of car shortage, but did

not require or contemplate that individual cars,

owned or controlled by the shipper, should be

charged against his distributive share. Without

questioning the reasonableness of this rule, but, on

the contrary, assuming that it was unobjectionable

45

and became the true measure of the shipper’s right

and the carrier's duty, the coal company claimed

that the carrier had unjustly discriminated against

it te its damage by furnishing it a smaller number

of cars, and some of its competitors a greater num-

ber, than the rule contemplated or permitted. In

other words, the claim was, not that the rule was

discriminatory, but that it was violated or unequally

enforced by the carrier. Of such a suit we said in

Penn. R. R. Co. v. Puritan Coal Mining Co., 237

U. S. 121, 131-132, where the provisions of the In-

terstate Commerce Act were extensively considered:

‘There is no administrative question involved, the

courts being called on to decide a mere question of

fact as to whether the carrier has violated the rule

to plaintiff's damage. Such suits, though against

an interstate carrier for damages arising in inter-

state commerce, may be prosecuted either in the

State or Federal courts.’ Adhering to this view, we

think the suit was properly brought in a state court.

See Penn. R. R. Co. v. Sonman Shaft Coal Co.,

ante, 120.”

Therefore, under the contention made by counsel for

the railroads, if the two year limitation applied to all

cases which might come before the Commission or might

be sued on in court originally, as has been ruled in the

cases which are required to be brought in the first in-

stance before the Commission, then the decisions above

pointed out in the Puritan case and in the Sonman case

are inconsistent with the interpretation contended for,

46

for if this rule is based upon the necessity for uniformity

in all cases, then that limitation must apply to every case

which might have been brought before the Commission

even though it be brought in the State Court, but this is

not the fact, because the court has permitted and does

permit actions on claims more than two years old.

This contention is further confirmed by considera-

tion of the case of Morrisdale Coal Co. vs. Penn. Rail-

road Co., 230 U. S. 304, in connection with the cases of

Penn. Railroad Co. vs. Puritan Coal Co., 237 U. S. 121,

and Penn. Railroad Co. vs. Sonman Coal Co., 242 U.S.

120. In the Morrisdale case the plaintiff was attacking

not the method of distribution of cars under the car dis-

tribution rules, but was attacking the rules themselves.

In each of the other cases referred to the plaintiff was

attacking not the rules, but the method of distribution

under the rules. In the Morrisdale case the court held

that the Interstate Commerce Commission had primary,

original, exclusive jurisdiction. The proceedings were

commenced originally, however, in court and the request

of the court was made that the case be not dismissed

but held in abeyance while application could be made to

the Commission for an administrative ruling, but the

court denied this application on the ground that the

period of limitation for proceedings before the Commis-

sion had expired and the Commission would have no

jurisdiction to grant any relief on the particular ship-

ment sued on in that case, the court saying:

47

“It is argued in the plaintiff's brief that if this

view of the law should be sustained the case should

not be dismissed, but stayed until the plaintiff could

apply to the Commission and obtain a ruling on the

question as to whether the method adopted by the

Pennsylvania Railroad was not, during the years

1900 to 1906 unjustly discriminatory. aie

is called to Southern Ry. v. Tift, 206 U. S. 428, 434,

which it is said would support such a provision in

the mandate. In that case the shippers filed, on

April 14, 1903, a bill to enjoin an advance in rate.

The injunction was refused and the advance went

into effect. The cause was stayed while the com-

plainants were pressing their application for an

order from the Commission that the rates were un-

reasonable. Its report was in their favor and on it

the Circuit Court made an order of restitution (206

U.S. 436). But in that case the statute of limita-

tions had not run when the bill was filed, when the

stay order was granted, nor when the application

was made to the Commission; while in the present

case the plaintiff was barred of the right to apply to

the Commission at the date the suit was filed in the

United States Circuit Court. The damages which

were claimed arose from a failure to deliver cars

prior to Dec. 31, 1905. The suit was brought July

17, 1908, more than two and a half years later and

after the passage of the act of June 29, 1906, 34

Stat. 584, 590, that ‘all complaints for the recovery

of damages shall be filed with the C ommission

48

within two years from the time the cause of action

accrued and not after, and a petition for the en-

forcement of an order shall be filed in the Circuit

Court within one year from the date of the order

and not afterwards; provided, that claims accrued

prior to the passage of this act may be presented

within one year.’

“The provisions of this statute would prevent

the modification asked for, and the judgment is

affirmed.”

Irom this case, taken in conjunction with the Puri-

tan case and the Sonman case, which latter cases were

proceedings directly in court without prior application

to the Commission, it will be seen that the court per-

mitted recovery for more than the two-year period prior

to commencement of the actions, holding that no prior

proceedings before the Commission were necessary.

In the Morrisdale case, however, the Court says that

prior action by the Commission is necessary, and that

the claims are barred. The practical result of these

cases is therefore that the two year limitation has not

in fact been applied to actions in Court, except in those

cases where primary action of the Commission is neces-

sary, but in all cases where the original jurisdiction in

the Courts has been sustained, recovery for more than

a period of two years has been permitted, and such re-

covery has been affirmed in this Court in decisions sub-

sequently to the Phillips case in which the Court says

that after the two vears the liability is destroyed, and

upon which case the later decision in the Wolf case has

been rendered. We, therefore, submit that in the light

of this practical construction which has been given this

49

statute, and there has been no c

as far as this question is concerne

of 1906, that the question sh

The ordinary rule heretofore applied is that, where the

United States statute js silent, the state statute of limi-

tations shall govern. Is it the purpose that the state

statute shall govern in those cases like the Puritan Coal

Company and the Sonman Coal Company where the

Court holds that the action may be commenced in the

State Courts, and that the two year period shall apply

only to actions in the United States Court and |

the Commission? The statute is silent

tion before any Court, and it is

rule of uniformity that the period of limitation pre-

scribed before the Commission is made to apply in any

Court. If it had been the intent of the Congress to

prescribe this limitation in the Courts would it not have

specifically so provided, and certainly if the rule of unj-

formity is controlling it should apply to interstate ship-

ments in the State Court as well as in the United St

Court.

hange in the language

d since the amendment

ould be reconsidered.

vefore

as to the limita-

only by reason of the

ates

We respectfully submit that the rule should only

be enforced as to those cases in which primary action

must be brought before the Commission.

VIII.

THE INTERSTATE COMMERCE COMMIS-

SION 4TH SECTION ORDER MADE IN

CONNECTION WITH THE GENERAL

ADVANCE IN RATES.

In the argument of these cases in the Circuit Court

of Appeals there was presented a brief by Ben C, Dey

as amicus curiae in which he attempted to raise the ques-

50

tion that the Interstate Commerce Commission had

legalized all of the violations of the long and short haul

clause. The order in question was made by the Inter-

state Commerce Commission when the general advance

in rates in June, 1918, was permitted, and this order

was necessary to permit the advance because of the in-

crease in the measure of certain long and short haul

violations which had been permitted by the Commission,

and also because the rule adopted with reference to the

disposition of fractions created some small violations

which were necessary to be covered.

This question was not raised in the District Court

and the Circuit Court of Appeals refused to consider it.

(Tr. 594, Page 156.) But it has now been referred to

in the brief of plaintiffs in error. We think our brief

before the Circuit Court of Appeals covers the matter

and we will embody here what was said on this subject

‘nthe Circuit Court of Appeals in view of the haste with

which this brief is required to be prepared.

It is next contended that the increase in rates made

by General Order 28, and the order of the Commission

permitting these increases to go into effect, and per-

mitting them to violate the long and short haul clause

insofar as necessary to permit the increase to go into

effect, had the effect of legalizing all violations of the

Jong and short haul clause, irrespective of whether or

not the particular violation was caused by the increase

‘n rate or whether it had existed prior thereto and with-

out any order of the C ommission permitting the same.

In other words, that this order of the Commission was

a general carry-all legalization which had the effect of

doing away with the prohibition of the long and short

51

haul clause as far as the Railroad Administration was

concerned.

This question, we submit, can have no bearing in this

court in these cases for the reason that it is not raised

by the record. It does not appear on the face of the

complaint, was therefore not raised by the demurrer to

the complaint, and was not pleaded in the answer. Coun-

sel seems to be acting on a sort of general assumption

that without any pleading, this court will consider any

order of the Interstate Commerce Commission on the

basis that the court will take Judicial knowledge of the

orders and reports of the Interstate Commerce Commis-

sion. This is not the case. In order to justify their

actions under any such orders of the Commission, the

plaintiff in error must have pleaded the same. Having

failed to plead the same, he waived any right thereun-

der. The question of the effect of Judicial notice of

the acts of the Interstate Commerce Commission was

considered by the Supreme Coourt of the United States

in Robinson vs. B. & O. Railroad Company, 222 U. S.

p. 511, where the court says:

“The next question to be considered is, whether

Judicial notice should have been taken of the de-

cision of the Commission in Glade Coal Co. v. Balti-

more & Ohio Railroad Co., wherein, as it is said,

the rate here in question was found to be unjustly

discriminatory and the railroad company was di-

rected to desist from its enforcement. The decision

was rendered April 28th, 1904, and authoritatively

published in 10 I. C. C. No. 226, but was not men-

tioned in the pleading or in the agreed statement

of facts. In the Supreme Court of Appeals of the

52

State it was contended that the decision should have

been judicially noticed by the trial court, but the

contention was rejected, and that ruling is now

challenged as contravening the provision in See. 14

of the act (25 Stat. 855), which reads: “The Com-

mission may provide for the publication of its re-

ports and decisions in such form and manner as

may be best adapted for public information and

use, and such authorized publications shall be com-

petent evidence of the reports and decisions of the

Commission therein contained, in all courts of the

United States, and of the several States without any

further proof or authenti sation thereof.’

“Undoubtedly, this provision makes the de-

cisions of the Commission, as so published, admis-

sible in evidence without other proof of their genu-

ineness, but it does not require that they be ju

dicially noticed or relieve litigants from offering

them in evidence as they would any other com-

petent evidence intended to be relied upon. — Its

purpose is to relieve litigants from the inconven-

ience and expense of obtaining certified copies of

the decisions by authorizing the use of the published

copies, but it does not otherwise change the rules of

evidence. The ruling, therefore, was not in con-

travention of the statute.”

If counsel intended to rely upon any order of the

Interstate Commerce C ommission as a justification, he

should have pleaded the same, and proved it. The

judicial notice which the court takes is of the published

records of the Commission and his proof would not have

had to have been certified, but these orders of the Com-

53

mission do not have the force and effect of a public

statute which any court may take into consideration and

apply at any stage of the proceeding without being

pleaded or the proof incorporated in the record. This

isan appellate court, and counsel is attempting to inject

certain proof in this court not offered in the lower court.

But even aside from the question that the point was

not raised by the pleadings or proof, we submit that the

alleged relief from the Fourth Section has not the gen-

eral carry-all effect that counsel contends for it. The

Federal Control Act, Sec. 10, 40 Stat. at Large, 451,

provides: ,

“See. 10. That carriers while under Federal

control shall be subject to all laws and liabilities as

common carriers, whether arising under State or

Federal laws, or at common law, except insofar

as may be inconsistent with the provisions of this

Act or any other Act applicable to such Federal

control or with any order of the President. Actions

at law or suits in equity may be brought by and

against such carriers and judgments rendered as

now provided by law; and in any action at law or

suit in equity against the carrier, no defense shall

be made thereto upon the ground that the carrier

is an instrumentality or agency of the Federal Gov-

ernment. Nor shall any such carrier be entitled to

have transferred to a Federal Court any action

heretofore or hereafter instituted by or against it,

which action was not so transferable prior to the

Federal control of such carrier; and any action

which has heretofore been so transferred because

of such Federal control or of any Act of Congress

54

or official order or proclamation relating thereto

shall upon motion of either party be retransferred

to the court in which it was originally instituted,

But no process, mesne or final, shall be levied

against any propery under such Federal control.”

The only provision relieving the Railroad Adminis-

tration from the regular provisions of the Interstate

Commerce Act is that the Commission shall not suspend

any rates or fares pending final determination.

The Railroad Administration was subject to the

long and short haul clause the same as the carrier itself.

It could not violate the long and short haul clause ex-

cept after having first applied to the Commission and

obtained its order relieving it in special cases from the

operation of the long and short haul clause. There was

no pretense that any such application was made permit-

ting the Railroad Administration to charge less for

hauling sugar from San Francisco to North Portland

than to Portland. When the rates were increased by

General Order 28, it was a general increase of 25 per

cent on all rates, and where certain violations of the

long and short haul clause existed before, these viola-

tions were increased by the increase in rates.

Furthermore, certain violations of the long and short

haul clause were created by this order in the split of

fractions in figuring the rates, and the application to

the Commission was for the purpose of permitting this

increased rate to go into effect and to be relieved from

the Fourth Section of the Act to Regulate Commerce

insofar as was necessary to permit this increase to go

into effect. There were no other special circumstances

before the Commission, and no other special applications

55

were made to the Commission,

mission was granted to the car

Section. It was permission on

to permit the increased rate

was all that was granted by

and no other special per-

rier to violate the Fourth

ly to the extent necessary

S to go into effect, and that

the C ommission.

As the Railroad Administration was

Act to Regulate Commerce as shown by Section 10 of

the Federal Contro] Act, a general order of the Com-

mission without evidence and finding thereon would not

relieve or legalize a violation of the section theretofore

in existence not authorized. The court will note the read-

ing of the proviso of the Fourth Section:

subject to the

“Provided, that upon application to the Com-

mission, such common carrier may in Special cases

after investigation be authorized to charge less for

a longer than for a shorter distance for the trans-

portation of passengers or property, and the Com-

mission may from time to time prescribe the extent

to which such designated common carrier m

av be

relieved from the operation of this section,”

And this Court has stated in U. S. ys. Merchants

Association, 242 U. S. 187, that. this clause “was

designated to guard against the issue by the Commission

of general orders suspending the long and short haul

clause, and to insure action by it separately in respect to

particular carriers, and only after consideration of spe-

cial circumstances existing.”

The amicus curiae is seeking to have an order, which

had no relation to this particular violation of the long

and short haul clause but which did have relation to a

general advance in rates, considered as a carry-all and

ob

general order to legalize all violations of the long and

short haul clause, which is contrary to the interpreta-

tion placed thereon by the Supreme Court. Counsel

seems to take solace in the fact that in the case just

cited, there were a great many carriers involved, but the

characters of the violations which were under considera-

tion were all of a particular kind, evidence had been of-

fered before the Commission as to what they were, and

the order of the Commission, after considering the cir-

cumstances, laid down the basis on which, and the ex-

tent, to which, those carriers could charge more for the

long than for the short haul. It was a special case, spe-

cially and thoroughly investigated, and a_ particular

order entered therein. But amicus curiae is seeking to

have an order having no relation to this particular vio-

lation on which no evidence with reference to this vio-

lation was offered construed into legalizing and author-

izing this particular violation. It can’t be done.

IX.

MEASURE OF DAMAGES

The carriers are contending that the difference be-

tween the rate to North Portland and to Portland is

not the measure of damages but we submit that under

the law the North Portland rate is the only rate which

can be applied, as the higher rate to Portland did not

exist, as pointed out under the decision of Mr. Chief

Justice Brewer in the case of United States vs. Louis-

ville & Nashville, 235 U. S. 314, and hence any sum in

excess of said North Portland rate was illegally exacted,

The Circuit Court of Appeals for the 9th Circuit

has applied this rule in California Adjustment Co. vs.

S. P., 287 Fed., 954, and the Supreme Court of Cali-

o7

fornia has likewise adopted this as the measure of dam-

ages in California Adjustment Co, vs. A. T.& S. Py

185 Pac., 282,

The language of the Supreme Court of Kentucky in

the case of Louisville & Nashville ys, Walker, 110 Ky.

961, 63 S. W. 20, cited in S. P. Co. vs. Cal. Ad justment

Co., 237 Fed. 960, is very pertinent, to-wit:

“As one means of protecting the legal shipper

this section fixed a maximum limit beyond which he

should not be charged. It was thus made unlawful

for the carrier to charge a greater compensation

for the same service for a shorter than for a longer

distance over the same line in the same direction,

the shorter being included Within the longer dis-

tance. When the charge for the longer haul is

fixed, to charge more for the shorter haul is just as

clearly illegal as it would be to charge a greater

sum than the law allowed where the law itself fixed

a sum as the limit of charge. The carrier is allowed

ng for the same service

in the shorter haul, and when appellant exacted of

appellee more than it could legally charge, his right

to recover the excess sO paid is precisely similar to

the right to recover for any other illegal exaction,

He whose money is taken from him illegally is to

that extent damaged. It is not necessary for appel-

lee to show anything more than that he was com-

pelled to pay more than appellant had a right to

58

charge. To illustrate, if it had been provided by

statute that appellant should charge no more for

hauling tobacco than it charged for hauling other

like freight, and appellant while it charged 20 cents

per hundred for hauling like freight had charged

appellee 29 cents per hundred for hauling his

tobacco, it would be clear that 9 cents per hundred

had been taken from appellee in violation of law,

and it would be no defense for appellant to say that

appellee was being prejudiced by its giving lower

rates to other freight and it did not hurt him in any

way that other people were charged less than they

ought to have been charged, for in such a case the

excessive charge for carrying tobacco would be

illegal.”

It is true that the Interstate Commerce Commission

in the cases pointed out by the brief of plaintiffs in error,

has refused to follow this rule, basing their decision upon

the decision of this Court in Pa. R. R. Co, vs. Inter-

national Coal Co., 280 U. S., 184. That case, however,

vas not one for recovery of damages which were specifi

cally provided by statute, but was an action for damage

by one person who had been receiving a rebate on ac:

count of the fact that another shipper had received a

greater rebate than he, and it was attempted to be

claimed that his measure of damages was the difference

‘n the two rebates but the Court held as neither person

was claiming under a legal rate he could only recover such

damages as he could prove by reason of the fact that

the other shipper had received a greater rebate. That,

we submit, is not proper authority to refuse to grant the

difference in the rate charged over that which the stat:

59

ute says shall not be exceeded. The measure of damages

is prescribed by the statute. In the present case the

carriers have taken a certain amount more than the stat-

ute says they could take. The measure of damages is

certainly the difference between this amount and the

amount which they did charge,

The distinguishing feature of the International Coal

case is pointed out by the Circuit Court of Appeals of

the 9th Circuit in California Adjustment Co. vs, S. |

237 Ied., 965, and in the later case in this Court of

Southern Pacific Company vs. Darnell Taenzer, 245

U. S., 584, this Court likewise distinguishes the Inter-

national Coal case in the following language;

“The cases like Pennsylvania Railroad Co. vs.

International Coal Mining Co., 230 U. S., 184,

where a party that has paid only the reasonable

rate sues upon a discrimination because some other

has paid less, are not like the present. There the

damage depends upon remoter considerations, But

here the plaintiffs have paid cash out of pocket that

should not have been required of them, and there

is no question as to the amount of the proximate

loss.”

So in the present case the plaintiffs’ assignors have

paid out of pocket an amount which the statute said

should not be exacted of them and their damages are

definitely fixed by the statute,

eS

pe oh a3

60

X.

ATTORNEY’S FEES IN THIS COURT

If the judgment of the lower court is sustained, we

respectfully submit that this Court should assess as part

of the costs, attorney’s fees in this Court. Section 8 of

the Act provides for the assessment of a reasonable

counsel’s or attorney’s fee to be fixed by the court in

every case of recovery, which fees shall be taxed and

collected as part of the costs in the case. The District

Court limited the attorney’s fees to the fees in that court,

The Circuit Court made an additional allowance for

fees in that court and we suggest that similar allowance

be made in this Court. This seems to be the practice

outlined in Mills vs. Lehigh Valley, 226 Fed., 812, and

N. Y. N. H. & H. vs. Ballou & Wright, 242 Fed., 862.

We therefore submit that the judgment of the Cir-

euit Court of Appeals should be affirmed with the addi-

tion of attorney’s fees in this Court.

Respectfully submitted,

JAMES G. WILSON,

Attorney for Defendants in Error.

N. B.—The foregoing brief has been very hastily

prepared. Our information was that these cases would

be reached about the last of November. At noon Thurs-

day, October 11th, we were advised the case would likely

be heard October 18th or 19th. We necessarily had to

have this brief complete in the printer's hands by noon

of the 12th. We offer this by way of explanation of

any errors or lack of full discussion

: » ee |

boy en 4 op Sig.

. MONTAVILLA

TABLE OF CONTENTS

Page

-secconspmpdiaae’ ipa RULE C CECT 1

Points and Authorities .................... 9

PO ane a when ecesnssirnvaccs,..., 18

Application of Commerce Act to Transporta-

tion Wholly by Water................._. 18

Validity of Assignments of Claims Against

Director General ....................._. 24

Liability during operation by Shipping Board 28

Jurisdiction of District Court............_. 29

If Section 4 Applicable was it violated’... ... 59

Measure of Sais, st ORC Rees 68

Statute of Limitations ................. | 75

STATUTES AND CASES CITED

Allen & Lewis vs. O. R. & N. Co., 98 Fed. 16... . 15-63

Alabama, ete. R. Co. vs, J ourney, 42 S.C.R. 6.14—-15-55

American Exp. Co. ys, Caldwell, 244 U. S. 617. .11-385

Anaconda Copper Mining Co, vs. Director Gen-

onal, 64 ECC. 186... 6.0... 14-62

AOR EWES RN Aw ken hgavdicdicclvccc. 16-73-74

Baltimore & Ohio R. Co. vs. Pitcairn Coal Co.,

oye ag ae se EE ee aaa 10-29

C.& N. W. R. Co. vs. Osborne, 52 Fed. 912... .. 15-638

Clark Bros. Coal Mining Co. vs. Pennsylvania R.

‘nd gta ijane ang, laa 16-74

Crescent Coal & Mining Co. vs. C. & E. I. R. Co.,

AS, eer vale 12-44

Davis, Dir. Gen. ys. Zirkle, 138 N. E. 266...... 10-28

Director General vs. Viscose Co., 254 U. S. 498. . 10-30

Eberhart vs. U. S. 204 | 17-77

RI Certo

PE OO ty ASRS OR Bene

OTC ee AT

RSET Be

TABLE OF CONTENTS—Continued

Federal Control Act, Section 10............... 13-50

Heath vs. Wallace, 188 U.S. 578.............. 13-37

Hillsborough Mills vs. Boston & Maine R. Co. 269

CRIES Sart, rt ee ee Ry ee 16-73

Homestead Coal Co. vs. Des Moines Elec. Co.

IE ee ee a he 16-73

Interstate Commerce Commission Fourth Section

Ropes Tee ONE FOE cca ccc ccassasencees 15-31

Interstate Commerce Act, Sec. 4.............. 11-14

Interstate Commerce Act, Sec. 6.............. 11-32

Interstate Commerce Act, Sec. 15.............. 9-18

Interstate Commerce Act, Sec. 16.............. 17-75

Interstate Commerce Commission vs. C. ete. R.

Co. 06 Ped. 065-108 U. &. 1664... .. 626.000. 15-63

Interstate Remedy Co. vs. American Express Co.

ee ee ee 12-43

Iten Biscuit Co. vs. C. B. & Q. R. Co., 53 1. C. C.

RA eae me oe ae eee ere 13-47

Judson on Interstate Commerce, 3rd Ed. p. 529. .14-61

Kansas City Sou. R. Co. vs. Wolf, 43 S.C. R.

MPT EE ERE UL ERE TE LOT TUTE CSTE eT 14-17-58

Keogh vs. C. & O. R. Co, 48 S. C. R. 47......... 12-39

Knickerbocker Ice Co, vs. Stewart, 253 U.S. 149,

Se Pere ee ee eee CR See Ce eee CTE TET Lee 9-22

Lewis’ Sutherland Statutory Construction, 2nd

as. We, ir ND ive ca sek ec need in vans 9-23

Lehigh Valley R. Co. vs. Rainey, 112 Fed. 487. . . 14-62

Lehigh Valley R. Co. vs. American Hay Co., 219

5 os 5 ks CGS a aes a ATA e Aaah eek uae’ 16-74

Mitchell Coal & Coke Co, vs. Pennsylvania R. Co.

EERE CAC NGSALERARARSALA CR CAEN SOK 10-30

Morrisdale Coal Co. vs. Pennsylvania R. Co. 230

REC Raabe biases ees kRh Caves sts eau s 10-30

Missouri Pacific R. Co. vs. Ault, 256 U. S.

cAckehntan cede eGheehen an whens 9-14-15-26-55

TABLE OF CONTENTS—Continued

National Bank vs. Downie, 218 U.S. 845....... 9-25

Northern Pacific Ry. vs. Solum, 247 U. S. 477. .10-30

Northern Pacific Ry. vs. North Dakota, 250

WOMAN wedineksonwkesee seuss (in ceccs 15-52-64

Panama Canal Act, 37 Stat. L. 560, 566........ 9-18

Payne vs. Bassett, 235 S.W.917.............. 12-33

Parsons vs. C.& N. W. R., 167 U.S. 447. .11-34-61-68

Pennsylvania R. Co. vs. International Coal Ca.,

PRPs TD nn een vinencciccs.c. 11-31-—40-70

Pennsylvania R. Co. vs. Puritan Coal Co., 237

SOME Clan dkadebg ha uncinneakvdscaucic 10-31

Pennsylvania R. Co. vs. Sonman Coal Co. 242

ie Ws WN ak Ch 0494 Vana Kevecan cnn ec. c. 11-31

Phillips vs, Grand Trunk Ry. 236 U. S. 662..... 14-75

P.C.C.& St. L. vs. Fink, 250 U.S.577........ 12-39

Poor Grain Co. vs. C. B. & Q. R. Co., 12 1.C. C.

oh CLeee LL eee ene 12-41

Public Service Commission vs. New York Central,

185 N. Y. Supplement, 268................. 16-67

Revised Statutes, Section 3477................ 9-24

Seaboard Air Line vs U. S. 256 ,. &. O88...... 9-26

Spoffard vs. Kirk, 97 U.S. 484............. 9-24-25

TABLE OF CONTENTS—Continued

Transportation Act, Section 208 (a)

2). By Ve, Bere, BO Fed, GOO... ae cee cceesces

U. S. vs. Cerecedo, 209 U.S. 887...............

Wasatch Coal Co. vs. Baldwin, 208 Pac. Utah,

1109

CREASE SPOR SSREASRAEAPHRAAAESEARAAHR ASE OH ER SOS

In the Supreme Court

ot the United States

OCTOBER TERM, 1922

Ye

s

a

8

:

»

THE SAN FRANCISCO AND PORT-

LAND STEAMSHIP COMPANY, a

corporation,

Plaintiff in Error }

Vs.

A. J. PARRINGTON,

Defendant in Error.’ .

UPON WRIT OF ERROR TO THE UNITED

STATES CIRCUIT COURT OF APPEALS _

FOR THE NINTH CIRCUIT.

No. 5738

JAMES C. DAVIS, Agent, United States

Railroad Administration,

Plaintiff in Error,

vs.

A. J. PARRINGTON,

Defendant in Error.

UPON WRIT OF ERROR TO THE UNITED

STATES CIRCUIT COURT OF APPEALS ;

FOR THE NINTH CIRCUIT. i

STATEMENT OF CASE

These two actions were tried together in the Dis-

trict Court of the United States for the District of

Oregon, consolidated for hearing in the Circuit Court

of Appeals, and application will be made for consoli-

27 ta eked? A a a Eat

ES ead

as a eh

ot ge

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a

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5

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2

dation in this Court. The same questions are involved

in both actions, and therefore it seems appropriate that

they be briefed jointly.

Both actions were brought in the District Court of

the United States for Oregon by Defendant in Error,

whom we shall hereafter refer to as “the plaintiff”, on

claims assigned to him by various shippers. No prior

application was made to the Interstate Commerce Com-

mission for relief. The actions involve alleged viola-

tions of the long and short haul clause (Section 4) of

the Act to Regulate Commerce, in respect of shipments

wholly by water from San Francisco, California, to

Portland and Astoria, Oregon, before, during and after

Federal control of railroads.

The water carrier involved is The San Francisco

and Portland Steamship Company, which for brevity

we shall hereafter call “The Steamship Company”. Its

stock is owned by Oregon-Washington Railroad &

Navigation Company, an interstate rail carrier. There-

fore, under the terms of the Act of Congress of August

24, 1912, entitled “An Act to provide for the opening,

maintenance, protection and operation of the Panama

Canal, and the sanitation and government of the Canal

Zone”, (87 Stat. L. 566), if the Steamship Company

did or might compete with the Railroad Company, it

was necessary for the rail carrier to secure permission

from the Interstate Commerce Commission to continue

ownership and operation of the Steamship Company

after July 1, 1914. Such an application was made and

granted, and, it is contended, thereby the Steamship

Company submitted to the requirements of the Panama

Canal Act, that “the rates, schedules and practices of

3

such water carrier shall be filed with the Interstate

Commerce Commission and shall be subject to the Act

to Regulate Commerce and all amendments thereto in

the same manner and to the same extent as is the railroad

or other common carrier controlling such water carrier.”

The period involved begins May 10, 1916, and ends

April 80, 1921. During that period the Steamship

Company’s vessels were under corporate control from

May 10, 1916, to October 15, 1917. On the latter date

all the Steamship Company’s vessels were requisitioned

by the United States Shipping Board and the Steam-

ship Company directed to continue to operate them “for

account of the Government”. A charter of the vessels

to the Shipping Board was later executed as of that

date. On May 24, 1918, the Shipping Board gave to

the Steamship Company “five days’ notice of the ean-

cellation of the requisition charter”, and “that on and

after May 29th the Shipping Board will be under no

responsibility whatsoever with respect to said vessels”.

On May 30, 1918, the Director General of Railroads

assumed control over the Steamship Company and its

vessels and continued in control until March 1, 1920,

the date of termination of Federal control of railroads.

The gravamen of plaintiff's suits is that the Steam-

ship Company and Oregon-Washington Railroad &

Navigation Company (and during Federal control the

Director General) had on file with the Interstate Com-

merce Commission certain joint water and rail tariffs

naming rates on sugar from San Francisco to North

Portland, Oregon, which were lower than the rates

charged plaintiff's assignors on similar shipments from

San Francisco to Portland and Astoria. The com-

4

plaints assert that Portland and Astoria are intermedi-

ate to North Portland and that therefore the long and

short haul clause of the Commerce Act (Section 4) was

violated. The defendants admit that Astoria is an

intermediate point between San Francisco and North

Portland, but deny that Portland is intermediate.

The particulars of the claims are as follows: Prior

to May 10, 1916, a rate of 124%c per hundred pounds

on sugar from San Francisco to Portland and Astoria

was carried in the Steamship Company’s local tariff and

a similar rate was named on sugar from San Francisco

to North Portland in a joint water and rail tariff pro-

mulgated by Oregon-Washington Railroad & Naviga-

tion Company and the Steamship Company. On May

10, 1916, the rates to Portland and Astoria named in

the Steamship Company’s local tariff were increased to

15e. Through oversight, or for some other reason not

disclosed, no corresponding increase was made in the

rates to North Portland named in the joint water and

rail tariff. On June 25, 1918, the Director General of

Railroads by his General Order No, 28 increased the

rates of all carriers throughout the United States by

twenty-five per cent. The rate to Portland and As-

toria carried in the Steamship Company’s local tariff

was thus increased to 19¢c and the rate to North Port-

land named in the joint water and rail tariff to 15.

No changes were made in these rates until August 26,

1920, (after Federal control), when the Commission

granted a second general increase of twenty-five per

cent. to all carriers in the Pacific territory. The rates

to Portland and Astoria were correspondingly increased

to 24c and the rate to North Portland to 191/c and these

—

2

rates were not again changed up to the time the com-

plaints were filed.

An inspection of the map attached to the fly leaf of

this brief is necessary to an understanding of the loca-

tion of Portland and North Portland. Portland is

located on the Willamette River, about twelve miles

above its confluence with the Columbia River. North

Portland is located on Oregon Slough, a navigable arm

of the Columbia River, and is about four miles above

the confluence of the Willamette and Columbia. To

reach Portland, vessels must pass the mouth of Oregon

Slough, thus passing the docks at North Portland at a

distance of about four miles. It is also necessary for

such vessels to pass Municipal Terminal No. 4, from

which shipments to North Portland may be transported

by rail over the lines of the Oregon-Washington Rail-

road & Navigation Company. The customary route

for the Steamship Company’s vessels is to land at Ains-

worth Dock, in the heart of the City of Portland, but

this is a matter of Company convenience and there is no

physical obstacle which would prevent the vessels from

landing first at North Portland or at Municipal Ter-

minal No. 4.

Plaintiff's assignors are wholesale grocers and sugar

merchants who transport sugar in large quantities to

Portland and there sell to the retail trade. They have

no competitors at North Portland, there being at that

point only one user of sugar—a meat packing plant

which uses a limited amount of sugar in its packing

process. The evidence discloses no shipments of sugar

from San Francisco to North Portland and the rates ©

named in the joint water and rail tariffs were merely

6

paper rates. Presumably the meat packing plant at

North Portland purchases its sugar from plaintiff's

assignors.

The assignments under which plaintiff claims are in

ordinary form and do not attempt to comply with the

provisions of Section 6383, U. S. Compiled Statutes of

1916, relating to assignments of claims against the

United States. Neither plaintiff nor his assignors

applied to the Interstate Commerce Commission for

any form of relief, but on February 12, 1921, plaintiff

began his two suits in the District Court of the United

States for the District of Oregon. His complaints

recite the history of the rates to Portland, Astoria and

North Portland, as heretofore set out; allege that the

Portland and Astoria rates violated Section 4 of the

Act to Regulate Commerce, and pray judgment for

the difference between the Portland and Astoria rates

and those to North Portland. The theory of the suits

is money had and received. The complaints do not

allege that the Portland and Astoria rates were unrea-

sonable nor that plaintiff's assignors were damaged in

any way except that they paid the tariff rates to Port-

land and Astoria, which were higher than the rates to

North Portland. No evidence of unreasonableness of

any of the rates was offered nor any evidence of dam-

age other than the payment of the rates.

Demurrers were interposed by defendants, chal-

lenging the jurisdiction of the District Court and, in

the Steamship Company’s case, challenging the suffi-

ciency of the complaint and setting up that action on

those claims arising prior to January 1, 1918, was not

commenced within the time limited by the Act to Regu-

7

late Commerce and the laws of the State of Oregon.

These demurrers were overruled and the defendants

answered. The Steamship Company denied it was in

control of its vessels between October 12, 1917, (this

should have been Octover 15, 1917, the date the Ship-

ping Board requisitioned the vessels) and the termina-

tion fo Federal control, or that it collected any sums

from plaintiff's assignors during that period. The

Director General denied that he operated the vessels

prior to May 30, 1918, (the

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