# Opinion — Davis v. Portland Seed Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opinion
- **Published:** January 1, 1924
- **Citation:** 264 U.S. 403

## Text

Reversed.

DAVIS, AS AGENT, ETC. v. PORTLAND SEED
COMPANY.

CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE
NINTH CIRCUIT.

SAN FRANCISCO & PORTLAND STEAMSHIP COM-
PANY v. PARRINGTON.

DAVIS, AGENT UNITED STATES RATLROAD AD-
MINISTRATION, v. PARRINGTON.

ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE NINTH
CIRCUIT.

GREAT NORTHERN RAILWAY COMPANY v. Mc-
CAULL-DINSMORE COMPANY.

CERTIORARI TO THE SUPREME COURT OF THE STATE OF
MINNESOTA.

Nos. 114, 122, 123, 209. Argued February 20, 1924.—Decided April
7, 1924,

1. The long and short haul provision of the Interstate Commerce
Act (§ 4) is violated, and the carrier incurs, prima facie at least,
the penalties prescribed by § 10, by publishing, without authority
from the Commission, a rate for a longer haul lower than that
scheduled for a shorter haul of the same kind of property over
the same line or route in the same direction. P. 424.

2. In such case a shipper who is charged the higher rate for the
shorter haul is entitled, under § 8, to the full amount of his resulting
damages, with reasonable counsel fees, but not to collect from the

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404 OCTOBER TERM, 1923.
Statement of the Case. 264 U.S.

carrier the difference between the rate paid and the lower rate
published for the longer haul upon the theory that the latter was
the only legal rate and the difference an illegal exaction recoverable
without proof of damages or regard to the intrinsic reasonableness
of the rate. Pennsylvania R. R. Co. v. International Coal Co.,
230 U.S. 184. Pp. 415, 424.

3. The ruling in Kansas City Southern Ry. Co. v. Wolf, 261 U. 8.
133, that actions of this kind are subject to the two year limitation
(Act to Regulate Commerce, §§ 9 and 16,) is adhered to. P. 426.

281 Fed. 10; and 154 Minn. 28, reversed.

Review of four judgments recovered by shippers as
overcharges alleged to have been exacted by the respec-
tive defendant carriers in violation of the “long and short
haul clause” of the Interstate Commerce Act.

No. 114 was an action in the District Court for the
difference between the freight paid durirg federal control
on a shipment of alfalfa seed to Walla Walla, Washington,
from Roswell, New Mexico, and the amount that would
have been paid if a lower rate scheduled from a more
distant point over the same route had been applied.

Nos. 122 and 123 were like actions in the District Court,
upon claims assigned by various shippers, in respect of
sugar transported by the above-named steamship com-
pany, wholly by water, from San Francisco, California, to
Portland and Astoria, Oregon, partly while that company
and its northern rail connection, the Oregon-Washington
Railroad & Navigation Company, were under federal con-
trol, and at times when the joint rate of these carriers
from San Francisco to North Portland, a greater distance,
as it was claimed, was less than the local rate paid for
the water carriage to Portland and Astoria. In these
three cases the judgments for the plaintiffs were affirmed
by the Circuit Court of Appeals; and its judgments were
brought here by error and certiorari.

In No. 209, here by certiorari, the Supreme Court of
Minnesota affirmed a like judgment in favor of a shipper
whose shipments of wheat, from Benchland, Montana, to

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DAVIS v. PORTLAND SEED CO. 405
403 Argument for Petr. and Pitfis. in Error.

Minneapolis and Duluth, Minnesota, were charged for
by the carrier at a published tariff rate higher than the
published rate to the same destination from Billings, a
more distant point.

Mr. John F. Finerty and Mr. Arthur C. Spencer, with
whom Mr. Henry W. Clark, Mr. C. E. Cochran and Mr.
John F. Reilly were on the briefs, for petitioner in No. 114
and plaintiffs in error in Nos. 122 and 123. See post,p. 601.

The District Court was without jurisdiction, exclusive
original jurisdiction being lodged in the Interstate Com-
merce Commission. Texas & Pac. Ry. Co. v. Abilene Co.,
204 U. S. 426; Balt. & Ohio R. R. Co. v. Pitcairn Coal
Co., 215 U. S. 481; Robinson v. Balt. & Ohio R. R. Co.,
222 U. S. 506; Mitchell Coal Co. v. Pennsylvania R. R.
Co., 230 U. S. 247; Morrisdale Coal Co. v. Pennsylvania
R. R. Co., 230 U.S. 304; Texas & Pac. Ry. Co. v. Ameri-
can Tie Co., 234 U. S. 188; Northern Pac. Ry. Co. v.
Solum, 247 U. 8. 477; Director General v. Viscose Co.,
254 U. 8. 498; Pennsylvania R. R. Co. v. International
Coal Co., 230 U. S. 184; Same v. Puritan Coal Co., 237
U. S. 121; Same v. Sonman Coal Co., 242 U. S. 120;
St. Louis, etc., Ry. Co. v. Hasty & Sons, 255 U. 8. 252.

Section 4 of the Commerce Act (the long and short
haul clause), is a statute relating to a form of discrimina-
tion and not one merely declaring the intermediate rate
unlawful. Parsons v. Chicago & N. W. Ry. Co., 167
U. S. 447.

Discrimination may be removed either by raising one
rate, lowering the other, or changing both, and the fact
that a rate discriminates against one locality in favor of
another one does not in itself entitle the first locality to the
same rate as the tariff provides for the second. American
Exp. Co. v. Caldwell, 244 U. 8. 617; St. Louis S. W. Ry.
Co. v. United States, 245 U.S. 144; Hillsborough Mills
v. Boston & Maine R. R., 269 Fed. 816.

DROLET EEL DEAE DDN be ah ae

406 OCTOBER TERM, 1923.

Argument for Petr. and Pitffs. in Error. 264 U.S.

Section 6 of the Commerce Act requires carriers to col-
lect the rates published in their tariffs and forbids trans-
portation except when an applicable rate is contained in
a published tariff. In view of this section the carriers
were compelled to collect their published rates or refuse
to accept the commodities for shipment. Commerce Act,
§§ 4, 6.

Under § 6 the carriers must collect their published
rates, even though they are violative of other sections of
the act. Armour Co. v. United States, 209 U. S. 56;
Pittsburgh, etc., Ry. Co. v. Fink, 250 U. S. 577; Keogh
v. Chicago & N. W. Ry. Co., 260 U. S. 156; Pennsylvania
R. R. Co. v. International Coal Co., 230 U. S. 184; Poor
Grain Co. v. C. B. & Q. Ry. Co., 12 I. C. C. 418; Inter-
state Remedy Co. v. American Exp. Co., 16 I. C. C. 436;
Crescent Coal Co. v. C. & E. I. Ry. Co., 24 1. C. C. 149.

Under plaintiff’s theory that the rate from Roswell was
not a legally published rate, there was no legally pub-
lished rate at all—the transportation must therefore have
been unlawful, and the courts will not aid shippers in col-
lecting any part of the charges which they paid. Payne
v. Bassett, 235 S. W. 917.

The mere fact that a rate is violative of the long and
short haul clause, does not entitle shippers to an inter-
mediate point to recover the excess over the rate to the
more distant point. Parsons v. Chicago & N. W. Ry. Co.,
167 U. S. 447; International Coal Co. v. Pennsylvania
R. R. Co., 230 U. S. 184; Iten Biscuit Co. v. C. B. &
Q. R. R. Co., 58 I. C. C. 729; Topeka Banana Dealers’
Assn. v. St. Louis, etc., R. R. Co., 13 I. C. C. 620.

The long line of decisions of the Interstate Commerce
Commission in Fourth Section violation cases holding
that mere proof of the difference in the rates is no evi-
dence of damage, should be followed by this Court, be-
cause not manifestly incorrect. Heath v. Wallace, 138
U.S. 573; United States v. Cerecedo, 209 U. S. 337.

PRA E R BNBE teEE AS SE BN A CIE NIT Ti ty IO RE POS BA A Oh hh NIMC L ALN is SON tate NN

DAVIS v. PORTLAND SEED CO. 407
403 Argument for Petr. and Pltfis. in Error.

The Federal Control Act, § 10, and Transportation
Act, 1920, § 206 (c), lodged exclusive original jurisdic-
tion of cases against the Director General involving viola-
tions of the Commerce Act in the Interstate Commerce
Commission. Northern Pac. Ry. Co. v. North Dakota,
250 U. 8. 135; Alabama, etc., Ry. Co. v. Journey, 257
U.S. 111; 25 R. C. L. 1010; Phillips Co. v. Grand Trunk
Ry. Co., 236 U. S. 662; Kansas City So. Ry. Co. v. Wolf,
261 U. 8S. 133; Missouri Pac. R. R. Co. v. Ault, 256 U.S.
554.

No violation of the Fourth Section was proved, be-
cause the evidence showed that there was no transporta-
tion from the more distant point, the rate being merely
a paper rate. Parsons v. Chicago & N. W. Ry. Co., 167
U. S. 447; Judson, Interstate Commerce, 3d ed., p. 529;
Topeka Banana Dealers’ Assn. v. St. Louis, etc., R. R. Co.,
13 I. C. C. 620; Anaconda Copper Co. v. Director General,
64 I. C. C. 1386; Lehigh Valley R. R. Co. v. Rainey, 112
Fed. 487.

During federal control rates were initiated and main-
tained under order of the President, and the Fourth
Section was therefore inapplicable to them. Federal
Control Act, § 10; Northern Pac. Ry. Co. v. North Dakota,
250 U.S. 135; Missouri Pac. R. R. Co. v. Ault, 256 U.S.
554; Alabama, etc., Ry. Co. v. Journey, 257 U.S. 111.

If there was a departure from the Fourth Section it
was covered by appropriate orders of the Commission.

The measure of damages in Fourth Section cases is not
the difference between rates. Parsons v. Chicago &
N. W. Ry. Co., 167 U.S. 447; Pennsylvania R. R. Co. v.
International Coal Co., 230 U.S. 184; Hillsborough Mills
v. Boston & Maine R. R., 269 Fed. 816; Homestead Co.
v. Des Moines Elec. Cc., 226 Fed. 49; Atchison, etc. Ry.
Co. v. Spiller, 246 Fed. 1; Clark Bros. Coal Co. v. Penn-
sylvania R. R. Co., 238 Fed. 642; Lehigh Valley R. R. Co.
v. American Hay Co., 219 Fed. 539.

408 OCTOBER TERM, 1923.
Argument for Petr. and Pitffs. in Error. 264 U.S.

Under § 15 of the Commerce Act, as amended in 1910
and 1920, transportation wholly by water is not subject
to the act, notwithstanding the provisions of the Panama
Canal Act. Commerce Act, § 15, 36 Stat. 552; Transpor-
tation Act 1920, §§ 408, 412, 413, 418; 41 Stat. 482, 483,
485; Fed. Stats. Anno., 1920, Supp., pp. 104-106; Panama
Canal Act, 37 Stat. 560, 566; Knickerbocker Ice Co. v.
Stewart, 253 U. S. 149; 2 Lewis’ Sutherland Statutory
Constr., 2d ed., p. 667.

Assignments of claims against the Director General not
complying with § 3477, Rev. Stats., are void. Spoffard v.
Kirk, 97 U.S. 484; National Bank v. Downie, 218 U. 8.
345; Missouri Pac. R. R. Co. v. Ault, 256 U. S. 554;
Seaboard Air Line Ry. v. United States, 256 U.S. 655.

No liability can attach either to the Steamship Com-
pany or the Director General on shipments moving during
the time the Steamship Company’s vessels were being
operated by the Shipping Board. Missouri Pac. R. R.
Co. v. Ault, 256 U.S. 554; Davis v. Zirkle, 138 N. E. 266.

There was further no violation of the Fourth Section
because the rates to Portland and Astoria were local rates
and the paper rates to North Pertland were joint rates.
Chicago & N. W. Ry. Co. v. Osborne, 52 Fed. 912; United
States v. Mellen, 53 Fed. 229; Interstate Commerce
Comm. v. Cincinnati, etc., Ry. Co., 56 Fed. 925; 162 U.S.
184; Allen & Lewis Co. v. Oregon Ry. & Nav. Co., 98
Fed. 16; Parsons v. Chicago & N. W. Ry. Co., 167 U.S.
447,

The carriers were required during the first six months
after federal control to collect the rates which they found
in the Director General’s tariffs, whether they conformed
to the Fourth Section or not. “Transportation Act,
§ 208 (a); Wasatch Coal Co. v. Baldwin, 60 Utah, 397;
Public Service Comm. v. New York Cent R. R. Co., 185
N. Y. 8S. 267.

All claims antedating February 12, 1919, are barred
because not brought within two years. Commerce Act,

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OS: SEEMS LIE LOY AIS MO TR NR aie OER EEK POU aR Oe POUT CE 2 OEE

DAVIS v. PORTLAND SEED CO. 409

403 Argument for Respdt. and Deft. in Error.

$ 16; Phillips Co. v. Grand Trunk Ry. Co., 236 U.S. 662;
Kansas City So. Ry. Co. v. Wolf, 261 U. 8. 133; Trans-
portation Act, § 206 (f); Eberhart v. United States, 204
Fed. 884.

Mr. F. G. Dorety, with whom Mr. R. J. Hagman was
on the brief, for petitioner in No. 209.

Mr. James G. Wilson for respondent in No. 114 and
defendant in error in Nos, 122 and 123.

The District Court had jurisdiction.

Where the practice is directly prohibited by statute,
the person injured thereby need not go originally to the
Commission but may sue directly in court. Pennsylvania
Rr. R. Co. v. International Coal Co., 230 U. 8. 184; Same
v. Puritan Coal Co., 237 U. S. 121; Same v. Sonman
Coal Co., 242 U.S. 120; Mitchell Coal Co. v. Pennsylvania
R. R. Co., 230 U. 8. 247; Morrisdale Coal Co. v. Same,
230 U. S. 304; St. Louis, etc., Ry. Co. v. Hasty & Sons,
255 U. S. 252; Great Northern Ry. Co. v. Merchants
Elevator Co., 259 U. S. 285; Commerce Act, §§ 8, 9.

The transportation (in Nos. 122 and 123), though
wholly by water, was subject to the Interstate Commerce
Act.

The question whether the assignment of the claims
against the Director General to the defendant in error (in
No. 123) was void because not complying with § 3477,
Rev. Stats., is not before this Court, it not having been
raised in the lower court. Claims of this character may
be sued upon by an assignee. Spiller v. Atchison, etc.,
Ry. Co., 253 U. 8. 134; Missouri Pac. R. R. Co. v. Ault,
256 U. S. 559; Parrington v. Davis, 285 Fed. 741; Sea-
board Air Line Ry. v. United States, 256 U. S. 655.

Carriers (in Nos. 122 and 123) are liable notwithstand-
ing certain of the boats on which part of the sugar was
handled were under requisition of the United States
Shipping Board for a portion of the period.

ET PE SIE AE, INR OER NR AS re PAR EE Si he REN RRR AS IES

410 OCTOBER TERM, 1923.
Argument for Respdt. and Deft. in Error. 264 U.S.

North Portland and Portland are on the same route,
Portland being intermediate, on shipments from San
Francisco to North Portland.

The actual showing that shipments have been made to
North Portland as a condition to recovery is not neces-
sary. United States v. Louisville & Nashville R. R. Co.
235 U. S. 322; California Adjustment Co. v. Atchison,
etc. Ry. Co., 179 Cal. 140.

The objection that certain of the claims sued on in
Nos. 122 and 123 are barred by the statute of limitations,
for the reason that the action was not commenced within
two years was not properly made in the lower court, ex-
cept as to those claims prior to January 1, 1918, in the
case against the Steamship Company.

Reliance is had on Kansas City So. Ry. v. Wolf, 261
U.S. 133. That case had not been decided 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 Commerce
Act itself does not specifically prescribe the limitation
period for actions commenced by shippers before the
court. The act does, by §§ 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.

This Court, in the Wolf Case, bases its decision en-
tirely upon its former decision in Phillips Co. v. Grand
Trunk Ry. Co., 236 U. S. 662; but that was a case on
a claim which admittedly had to be commenced originally
before the Commission. Such a case had been com-
menced before the Commission, not by the plaintiff in
the Phillips Case, but by another plaintiff on a similar
claim. The Commission had established the right to re-
cover and the plaintiff in the Phillips Case commenced
his action in court based upon the proceedings before the
Commission, and the Court properly held that the per-

ates sree PEE IESE IT PRE EIT” SH ENE IEA

DAVIS v. PORTLAND SEED CO. 411

403 Argument for Respdt. and Deft. in Error.

son commencing in the court could not have a different
veriod of limitation than that before the Commission.

In the Wolf Case this Court holds that the same prin-
ciple applies. We respectfully ask for a reconsideration
of this ruling. The Court in the Phillips Case says that
in those cases where the statute reads as does the Com-
merce Act, to-wit: that the proceeding shall be com-
menced 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 Commission,
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 since the Phillips Case per-
mitted recoveries in cases involving interstate traffic which
could have been submitted to the Commission, but were
commenced in the state courts, and recovery was per-
mitted for periods considerably in excess of two years.
Pennsylvania R. R. Co. v. Puritan Coal Co., 237 U. S.
121; Same v. Sonman Coal Co., 242 U. S. 120; Same v.
Stineman Coal Co., 242 U.S. 300.

This contention is further confirmed by consideration
of Morrisdale Coal Co. v. Pennsylvania R. R. Co., 230
U. S. 304; in connection with Pennsylvania R. R. Co. v.
Puritan Coal Co., supra; and Same v. Sonman Coal Co.,
supra.

We respectfully submit that the rule should only be
enforced as to those cases in which primary action must
be brought before the Commission.

The Fourth Section order of the Interstate Chinsinane
Commission, made in connection with the general advance
in rates, can have no bearing in these cases, for the reason
that it is not pleaded or relied on in the court below.
Robinson v. Balt. & Ohio R. R. Co., 222 U.S. 511. Fur-
thermore, the order had not the general carry-all effect
that opposing counsel contends for it.

ee ae

412 OCTOBER TERM, 1923.

Argument for Respdt. and Deft. in Error. 264 U.S.

As for the measure of damages, under the law the lower
rate is the only rate which can be applied, as the higher
rate did not exist. United States v. Louisville & Nash-
ville R. R. Co., 235 U. S. 314; California Adjustment
Co. v. Atchison, etc., Ry. Co., 179 Cal. 140; Louisville
& Nashville R. R. Co. v. Walker, 110 Ky. 961.

It is true that the Interstate Commerce Commission has
refused to follow this rule, basing its decisions upon Penn-
sylvania R. R. Co. v. International Coal Co., 230 U. S.
184. That case, however, was not one for recovery of
damages which were specifically provided by statute, but
was an action for damage by one person who had been
receiving a rebate on account of the fact that another
shipper had received a greater rebate than he, and it was
claimed that his measure of damages was the difference
in the two rebates; but the Court held that, 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. See Southern Pacific Co. v. California Adjust-
ment Co., 237 Fed. 965; Southern Pacific Co. v. Darnell-
Taenzer Co., 245 U. 8. 534.

In the present cases the plaintiffs 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.

The effect of § 10 of the Federal Control Act and an
order made in 1918 increasing then existing rates, was
not raised or relied on in the court below. Further-
more, the violations in question were not thus validated.
Missouri Pac. R. R. Co. v. Ault, 256 U. 8. 560; Johnston
v. Atchison, etc., Ry. Co., 511. C. C. 356; Rice Potato Co.
v. Balt. & Ohio R. R. Co., 51 I. C. C. 365.

Transportation Act of 1920, § 206, did not transfer the
jurisdiction of these matters from the court to the Com-
mission, but shows the intention of Congress that the

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DAVIS v. PORTLAND SEED CO. 413
403 Opinion of the Court.

jurisdiction of all controversies remain in the same courts
or tribunals as before or during federal control.

It is not necessary to prove actual shipments from
the more distant point. United States v. Louisville &
Nashville R. R. Co., 235 U. 8. 322; California Adjust-
ment Co. v. Atchison, etc., Ry. Co., 179 Cal. 140; Beeghly
v. Public Util. Comm., 104 Oh. St. 158.

Mr. Frederick M. Miner, Mr. John P. Devaney, Mr.
Dewitt Clinton Edwards and Mr. Walter W. Patterson
filed a brief on behalf of the respondent in No. 209, re-
sisting the petition for a writ of certiorari.

Mr. Frank R. Wehe and Mr. Alfred J. Harwood, by
leave of Court, filed a brief as amici curiae in Nos. 122
and 123.

Mr. John F. Finerty, by leave of Court, filed a brief as
amicus curiae, on behalf of the Director General of Rail-
roads, in No. 209.

Mr. Justice McReynoups delivered the opinion of the
Court.

The courts below affirmed judgments fer the plaintiffs
in four separate actions brought to recover alleged over-
charges on freight said to have been demanded by the
respective carriers in violation of the long and short haul
clause, Fourth Section, Interstate Commerce Act, c. 104,
24 Stat. 379, 380; c. 309, 36 Stat. 539, 547; c. 91, 41 Stat.
456, 480, which declares—

“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 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, or to charge any greater com-

414 OCTOBER TERM, 1923.

Opinion of the Court. 264 U.S.

pensation as a through rate than the aggregate of the
intermediate rates subject to the provisions of this Act,
but this shall not be construed as authorizing any com-
mon carrier within the terms of this Act to charge or
receive as great compensation for a shorter as for a longer
distance: Provided, That upon application to the Com-
mission such common carrier may in special cases, after
investigation, be authorized by the Commission to charge
less for longer than for shorter distances for the transpor-
tation 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; [The Transportation Act, 1920,
added] but in exercising the authority conferred upon it
in this proviso the Commission shall not permit the estab-
lishment of any charge to or from the more distant point
that is not reasonably compensatory for the service per-
formed. .. .”

All the cases involve the same fundamental question
of law. The essential charge is that the carrier demanded
and received greater compensation for transporting freight
for a shorter distance than its published rate for trans-
porting like property for a longer distance over the same
route and in the same direction.

It will suffice to state the salient facts and issues dis-
closed by record No. 114—Davis, Agent, v. Portland Seed
Company. They are typical.

Pecos is in Western Texas, 160 miles south of Roswell,
N. M. A line of the Atchison, Topeka & Santa Fe Rail-
way system joins these points and extends northward to
Denver, Colorado, where it connects with the Union
Pacific System which leads into the Northwest. January
4, 1919, the carrier received a car of alfalfa seed at Ros-
well for transportation to Walla Walla, Washington, by
way of Denver. Three weeks later respondent Portland
Seed Company received this car at destination and paid

AIPA RET TSG

DAVIS v. PORTLAND SEED CO. 415
403 Opinion of the Court.

freight charges reckoned at $2.44 per hundred pounds—-
the scheduled rate from Roswell. During all of January,
1919, the initial carrier’s published schedule specified
$1.515 per hundred pounds as the rate for transporting
alfalfa seed from Pecos to Walla Walla through Roswell
and Denver; and no application had been made to the
Interstate Commerce Commission for permission to
charge less for the longer than for the shorter haul. The
Seed Company demanded judgment for the excess above
the Pecos rate, as an overcharge illegally exacted and
recoverable as money had and received.

The insistence is that under the long and short haul
clause the lower published rate from Pecos became the
maximum which the carrier could charge for the ship-
ment from Roswell, notwithstanding the higher pub-
lished rate therefor; that the sum charged above the
Pecos rate amounted to an illegal exaction, recoverable
without other proof of actual damage and without regard
to the intrinsic reasonableness of either rate.

Relying on Pennsylvania R. R. Co. v. International
Coal Co., 230 U. S. 184, the Interstate Commerce Com-
mission has definitely rejected respondent’s theory by
many opinions, and holds that while a charge prohibited
by the long and short haul clause, § 4, may subject the
carrier to prosecution by the Government it does not
afford adequate basis for reparation where there is no
other proof of pecuniary damage. Nix & Co. v. Southern
Ry. Co. (1914), 31 I. C. C. 145; S. J. Greenbaum Co.
v. Southern Ry. Co., 38 I. C. C. 715; Chattanooga Imple-
ment & Mfg. Co. v. Louisville & Nashville R. R. Co., 40
I. C. C. 146; LaCrosse Shippers’ Assn. v. C. I. & L. Ry.
Co., 43 I. C. C. 520; Oregon Fruit Co. v. Southern Pa-
cific Co., 50 I. C. C. 719; Iten Biscuit Co. v. C. B. &
Q. R. R. Co., 53 I. C. C. 729; Illinois Brick Co. v. Direc-
tor General (1920), 57 I. C. C. 320, 323.

Counsel insist that under § 4 it was unlawful to charge
compensation above the published Pecos rate for the

416 OCTOBER TERM, 1923.
Opinion of the Court. 264 U.S.

transportation from Roswell to Walla Walla. Therefore,
the published Roswell rate being unlawful, non-existent
indeed, the Pecos rate became the only one in force.
United States v. Louisville & Nashville R. R. Co., 235
U. S. 314, 322, 323, is relied upon; and it is said that the
opinion there interprets the long and short haul clause
as “ absolutely prohibiting the existence ” of higher rates
for shorter hauls unless approved by the Commission.
Read with the real issue in mind, the opinion gives no
support to respondent’s argument. The Interstate Com-
merce Commission held that certain reshipping privileges
granted to Nashville but refused to Atlanta amounted
to unreasonable preference under § 3 and ordered the car-
rier to discontinue them. The Commerce Court re-
strained the enforcement of this order. This Court de-
clared that the challenged privileges were prohibited by
the long and short haul clause; that § 4 controlled the
right to grant them; that they had not been authorized
by the Commission; and therefore it would be unlawful
to continue them. Accordingly, the order to desist was
approved and the decree of the Commerce Court re-
versed. No disagreement with Pennsylvania R. R. Co.
v. International Coal Co. was suggested. The Court
said—

(322-3) “ The express or implied statutory recognition
of the authority 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 longer distance within
the purview of § 4 of the Act to Regulate Commerce and
the right to make a rate accordingly to continue in force
until on complaint it was corrected in the manner pointed
out by statute, ceased to exist after the adoption of the
amendment to § 4 by the Act of June 18, 1910, ¢. 309,
36 Stat. 539, 547. This results from the fact that by the
amendment in question the original power to determine

oleh ain russe ine ARSE aan mea SP as Dan Tod bance eo. Satyret yee ea ens” doa toe bette eee ergy

DAVIS v. PORTLAND SEED CO. 417

403 Opinion of the Court.

the existence of the conditions justifying the greater
charge for a shorter than was exacted for a longer dis-
tance, was taken from the carriers and primarily vested
in the Interstate Commerce Commission, and for the pur-
pose of making the prohibition efficacious it was enacted
that after a time fixed no existing rate of the character
provided for should continue in force unless the appli-
cation to sanction it had been made and granted. J/nter-
mountain Rate Cases, 234 U. S. 476. If then it be that
the rebilling privilege which is here in question, disre-
garding immaterial considerations of form and looking
at the substance of things, was, when originally estab-
lished, an exertion of the authority conferred or recog-
nized by § 4 of the act, as there is no pretense that per-
mission for its continuance had been applied for as
required by the amendment and the statutory period for
which it could be lawfully continued without such per-
mission had expired, it follows that its continued opera-
tion was manifestly unlawful and error was committed
in permitting its continuance under the shelter of the
injunction awarded by the court below.”

The opinion does not discuss the carrier’s liability to
shippers who had paid higher rates for the shorter hauls.
No doubt similar relief would have been granted by the
Commission if the situation here revealed had been
brought before it.

Respondent has not asked an injunction against illegal
rates. It seeks to secure something for itself without
proof of pecuniary loss consequent upon the unlawful act.
A similar effort failed in Pennsylvania R. R. Co. v. Inter-
national Coal Co., supra. The International Company
shipped 40,000 tons of coal from the Clearfield district,
paying full schedule rates. The carrier had allowed
other shippers from and to the same places at the same
time rebates ranging from five to thirty-five cents per
ton. Without alleging or proving pecuniary injury re-

N7851°—24——- 27

Tract aR SARUM WAR ALT AT A a AARON ARS

418 OCTOBER TERM, 1923.
Opinion of the Court. 264 U.S.

sulting to itself from this unlawful action, the Company
sought to recover like concessions upon all its shipments.
Through Mr. Justice Lamar, this Court said—

(196-7) “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 unlawful, under any
pretense or for any cause, however equitable or liberal,
to pay a part back to one shipper or to every shipper.
The statute required the carrier to abide absolutely by
the tariff. It did not permit the Company to decide
that it had charged too much and then make a corre-
sponding rebate; nor could it claim that it had charged
too little and insist upon a larger sum being paid by the
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 repa-
ration.”

(200) “Thodgh the Act has been held to be in many
respects highly penal, yet there was no fixed measure
of damage in favor of the plaintiff. But, as said in
Parsons v. Chicago & N. W. Railway, 167 U.S. 447, 460,
construing this section (8), ‘ 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 operated to his
injury.’ Congress had not then and has not since given
any indication of an intent that persons not injured
might, nevertheless, recover what though called damages
would really be a penalty, in addition to the penalty
payable to the Government. On the contrary, and in an-
swer to the argument that damages might be a cover for
rebates, the Act of June 18, 1910 (36 Stat. 539, ¢. 309),

LIS SARIN LS IS fe BAD Na LER IS OS NS VN

DAVIS v. PORTLAND SEED CO. 419

403 Opinion of the Court.

provided that where a carrier misquotes a rate it should
pay a penalty of $250, not to the shipper, but to the
Government, recoverable by a civil action brought by
the United States. 35 Stat. 166. Congressional Record
(1910), 7569. The danger that payment of damages for
violations of the law might be used as a means of paying
rebates under the name of damages is also pointed out
by the Commission in 12 I. C. C. 418-421, 423; 14
I. C. C. 82.”

(200) “It is said, however, that it is impossible to
prove the damages occasioned one shipper by the payment
of rebates to another; and that if the plaintiff is not
entitled to recover as damages the same drawback that
was paid to its competitor, the statute not only gives no
remedy but deprives the plaintiff of a right it had at com-
mon law to recover this difference between the lawful
and the unlawful rate.”

(200-1) “ We are cited to no authority which shows
that there was any such ancient measure of damages,
and no case has been found in which damages were
awarded for such discrimination. Indeed, it is exceedingly
doubtful whether there was at common law any right
of action for any sort of damages in a case like this, while
this statute does give a clear, definite and positive right
to recover for unjust discrimination.”

(201-2) “Union Pacific R. R. v. Goodridge, 149 U. 8.
680, 709, involved the construction of the Colorado stat-
ute, which did not, as does the Commerce Act, compel
the carrier to adhere to published rates, but required the
railroad to make the same concessions and drawbacks to
all persons alike, and for a failure to do so made the car-
rier liable for three times the actual damage sustained or
overcharges paid by the party aggrieved. This distinction
is also to be noted in the English cases cited. The Act
of Parliament did not require the carrier to maintain its
published tariff but made the lowest rate the lawful rate.

420 OCTOBER TERM, 1923.
Opinion of the Court. 264 U.S.

Anything in excess of such lowest rate was extortion and
might be recovered in an action at law as for an over-
charge. Denaby v. Manchester Ry., L. R. 11 App. Cases,
97,116. But the English courts make a clear distinction
between overcharge and damages, and the same is true
under the Commerce 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 over-
charge, and while one count of the complaint asserted a
claim 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 payment of lawful rates can be treated as an
overcharge or as an extortion.”

(202-3) “Having paid only the lawful rate plaintiff
was not overcharged, though the favored shipper was
illegally undercharged. For that violation of law, the
carrier was subject to the payment of a fine to the Gov-
ernment and, in addition, was liable for all damages it
thereby occasioned, the plaintiff or any other shipper.
But, under § 8, it was only liable for damages. Making
an illegal undercharge to one shipper did not license the
carrier to make a similar undercharge to other shippers,
and if having paid a rebate of 25 cents a ton to one cus-
tomer, the carrier in order to escape this suit had made
a similar undercharge or rebate to the plaintiff, it would
have been criminally liable, even though it may have been
done in order to equalize the two companies. For, under
the statute, it was not liable to the plaintiff for the
amount of the rebate paid on contract coal, but only for
the damages such illegal payment caused the plaintiff.
The measure of damages was the pecuniary loss inflicted
on the plaintiff as the result of the rebate paid. Those
damages might be the same as the rebate, or less than
the rebate, or many times greater than the rebate; but
unless they were proved they could not be recovered.

ERLE LE AIEEE EEO PELL ET BT IIE PLEA LEM LOST LIS OME LURES BLE MATE I Ay ss

ee ee ee

DAVIS v. PORTLAND SEED CO. 421
403 Opinion of the Court.

Whatever they were they could be recovered, because
$ 8 expressly declares that wherever the carrier did an
act prohibited or failed to do any act required, it should
be ‘liable to the person injured thereby for the full amount
of damages sustained in consequence of such violation,
. . . together with reasonable attorney’s fee.’ ”

(206) “To adopt such a rule and arbitrarily measure
damages by rebates would create a legalized, but endless,
chain of departures from the tariff; would extend the
effect of the original crime, would destroy the equality
and certainty of rates, and, contrary to the statute, would
make the carrier liable for damages beyond those inflicted
and to persons not injured. The limitation of liability
to the persons damaged and to an amount equal to the
injury suffered is not out of consideration for the carrier
who has violated the statute. On the contrary, the act
imposes heavy penalties, independent of the amount of
rebate paid, and as each shipment constitutes a separate
offense, the law in its measure of fine and punishment is
a terror to evil doers. But for the public wrong and for
the interference with the equal current of commerce these
penalties or fines were made payable to the Government.
If by the same act a private injury was inflicted a private
right of action was given. But the public wrong did not
necessarily cause private damage, and when it did, the
pecuniary loss varied with the character of the property,
the circumstances of the shipment and the state of the
market, so that instead of giving the shipper the right to
recover a penalty fixed in amount or measure, the statute
made the guilty carrier liable for the full amount of dam-
ages sustained,—whatever they might be and whether
greater or less than the rate of rebate paid.”

Southern Pacific Co. v. Darnell-Taenzer Co., 245 U. 8S.
531, presents no conflict with Pennsylvania R. R. v. In-
ternational Coal Co. There the shipper paid a published
rate which the Commission afterwards found to be unrea-

We REE Fe ke ea

422 OCTOBER TERM, 1923.
Opinion of the Court. 264 U.S.

sonable. This Court held he could recover, as the proxi-
mate damage of the unlawful demand, the excess above
the rate which the Commission had declared to be reason-
able. The opinion went no further. Certainly it did not
suggest that the unreasonable rate was non-existent for
any purpose because forbidden by law.

Section 6 of the Commerce Act directs—

“(1) 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 different 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. . . . (3) No change shall be made in the
rates, fares, and charges or joint rates, fares and charges
which have been filed and published by any common
carrier in compliance with the requirements of this sec-
tion, except after thirty days’ notice to the Commission.
. . . Provided, That the Commission may, in its discre-
tion and for good cause shown, allow changes upon less
than the notice herein specified. ... (7) No carrier,
unless otherwise provided by this Act, shall engage or
participate in the transportation of passengers or prop-
erty, as defined in this 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; nor shall any carrier charge or
demand or collect or receive a greater or less or differ-
ent compensation for such transportation of passengers
or property, or for any service in connection therewith,
between the points named in such tariffs than the rates,
fares, and charges which are specified in the tariff filed
and in effect at the time; nor shall any carrier refund
or remit in any manner or by any device any portion

DAVIS v. PORTLAND SEED CO. 423

403 Opinion of the Court.

of the rates, fares, and charges so specified, nor extend
to any shipper or person any privileges or facilities in
the transportation of passengers or property, except such
as are specified in such tariffs.”

“Sec. 8. That in case any common carrier subject to
the provisions 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 for the full amount of dam-
ages sustained in consequence of any such violation of
the provisions of this Act, together with a reasonable
counsel or attorney’s fee, to be fixed by the court in every
case of recovery, which attorney’s fee shall be taxed and
collected as part of the costs in the case.”

“See. 10 (1). That any common carrier subject to the
provisions of this Act, or, whenever such common carrier
is a corporation, any director or officer thereof, or any
receiver, trustee, lessee, agent, or person acting for or
employed by such corporation, who, alone or with any
other corporation, company, person, or party, shall will-
fully do or cause to be done, or shall willingly suffer or
permit to be done, any act, matter, or thing in this Act
prohibited or declared to be unlawful, or who shall aid
or abet therein, or shall willfully omit or fail to do any act,
matter, or thing in this Act required to be done, or shall
cause or willingly suffer or permit any act, matter, or
thing so directed or required by this Act to be done or
not to be so done, or shall aid or abet any such omission
or failure, or shall be guilty of any infraction of this Act
for which no penalty is otherwise provided, or who shall
aid or abet therein, shall be deemed guilty of a misde-
meanor, and shall, upon conviction thereof in any district
court of the United States within the jurisdiction of which
such offense was committed, be subject to a fine of not to

ar MS aa

424 OCTOBER TERM, 1923.
Opinion of the Court. 264 U.S.

‘exceed five thousand dollars for each offense: Provided,
That if the offense for which any person shall be convicted
as aforesaid shall be an unlawful discrimination in rates,
fares, or charges for the transportation of passengers or
property, such person shall, in addition to the fine here-
inbefore provided for, be liable to imprisonment in the
penitentiary for a term of not exceeding two years, or
both such fine and imprisonment, in the discretion of
the court.”

What liability did the carrier incur by publishing a
rate from Pecos lower than the scheduled one from Ros-
well without the Commission’s permission, and thereafter
imposing and collecting the higher rate upon the ship-
ment to Walla Walla?

Construing the words of § 4 literally, it is argued that
unless some property moved over the longer distance af
the lower rate before greater compensation was charged
for transporting like property over a shorter one, there
was no violation of law. We cannot accept this view. It
does not accord proper weight to imperative require-
ments concerning publication of rates and subsequent
observance of them. The Commission holds, for ex-
ample, that although the schedule contains a plain cleri-
eal error, nevertheless no other charge may be demanded
and the shipper may recover any excess. Lamb-Fish
Lumber Co. v. Y. & M. V. R. R. Co., 42 I. C. C. 470.

The record shows, we think, that the carrier violated
the statute by publishing the lower rate for the longer
haul without permission and, prima facie at least, incurred
the penalties of § 10. Also, it became “ liable to the
person or persons injured thereby for the full amount of
damages sustained in consequence of . . . such
violation,” together with reasonable counsel fees, as pro-
vided by § 8. But mere publication of the forbidden
lower rate did not wholly efface the higher intermediate
one from the schedule and substitute for all purposes the

AE AERIAL ONAN AE PME OR EVENING TTF OTITIS NL ete Oe AWN Cr EAD OR

DAVIS v. PORTLAND SEED CO. 425

403 Opinion of the Court.

lower one, as a supplement might have done, without
regard to the reasonableness or unreasonableness of
either.

With special knowledge of rate schedules and relying
on Pennsylvania R. R. Co. v. International Coal Co., the
Interstate Commerce Commission for ten years has re-
quired proof of financial loss as a prerequisite to repara-
tion for infractions of the Fourth Section. The rule is
firmly established. Congress has not shown disapproval.
The Transportation Act, 1920, with evident purpose to
conserve the carriers’ revenues, added the following to
the proviso which gives power to exempt from the long
and short haul clause: “ But in exercising the authority
conferred upon it in this proviso the Commission shall
not permit the establishment of any charge to or from the
more distant point that is not reasonably compensatory
for the service performed.” The rule adopted by the
Commission follows the logic of the opinion relied upon
and can be readily applied. The contrary view would not
harmonize with other provisions of the act; and, put into
practice, would produce unfortunate consequences.

The statute requires rigid observance of the tariff, with-
out regard to the inherent lawfulness of the rates specified.
It commanded adherence to the published rate from Ros-
well; § 6 forbade any other charge. Observance of the
lower rate from Pecos, put in without authorization,
might have been forbidden, as pointed out in United
States v. Louisville & Nashville R. R. Co., supra; but it
would be going too far to hold, as respondent insists, that
the unauthorized publication established the lower rate
as the maximum permissible charge from the interme-
diate point—the only rate therefrom which could be de-
manded.

If a lower rate published without authority becomes
the maximum which may be charged from any inter-

426 OCTOBER TERM, 1923.
Syllabus. 264 U.S.

mediate point, mistakes in schedules (and they are in-
evitable) may become disastrous. Suppose the rate from
an obscure point in Maine to San Francisco via Boston,
New York and Chicago should be printed at $15.00, in-
stead of $150, and the error remain undiscovered for
many months, could all who had paid more than $15.00
for passage along that route recover the excess without
proof of pecuniary loss?

After the challenged judgments were entered, Kansas
City Southern Ry. Co. v. Wolf, 261 U.S. 133, was decided.
We adhere to the ruling there announced, and in view
of it defenses in these causes based upon prescribed limi-
tations must be determined.

The judgments below are reversed. The causes will be
remanded with appropriate instructions for further pro-
ceedings.

Reversed.
Mk. Justice BRANDEIS dissents.

REET ROTA BEL pe OW ain TO

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386005_0445%3A13. Public record. Not legal advice.