Opposition Brief — Baltimore & Ohio R. Co. v. Brady

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FIT ED

DEC 23 1932

FILE COPY a come of

CLOAK

Supreme Court of the United States

October Term, 1932.

Tour Barrimore & Ono Rattrosap Company, a Corpors-

rox, aND Western Marytanp Rattway Company, 4

Corporation, Petitioners,

A. Spares Bravy, Respoudeut.

BRIEF FOR RESPONDENT IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES CIRCUIT COURT OF

APPEALS FOR THE FOURTE CIRCUIT.

(ieorGE T. Bey,

Attorney for Respoude nt.

SaMven T. Srears,

(jt C'onmise ys

eed

Tre J. W. Srowerit PrRixtinc COMPANY, FEDERALSBURG, MD.

TABLE OF CONTENTS

Page

Preliminary Statement ........... ve saweee \GCSMENS AOE RD Ss Pr

Summary of the Argument ............. Pee eee vene Tere re 2

Argument . . ow. ee ee eee eeeeeees (MEGM CHEN SUS SRE SE DOS reer |

I. Respondent’s Right to Action and District Court’s jur-

isdiction not limited in maximum amount to Commission’s

a TRAE Ae ee ee eee eee ae ee eee 7

II. 1. Sufficiency of petition to support aeoupetie not open

to attack by petitioners ............. Te Perre Seer ee ee

2. Respondent’s petition complied with statute, sued

for greater amount than judgment, and required no de-

ductions from amount sued for ................ 0000. 14

3. Commission’s application of mitigation-of-loss rule

beyond its powers, erroneous as matter of law and void. .14

III. 1. Assailed acts and practices of railroads presented

questions administrative in character ..............000. 26

2. Petition shows Commission determined the ques-

tion. 2s BCLIGH I CORCIUSIVE: .so6ek sees cet ecccescws 26

3. Commission’s finding delayed with result respondent

was deprived of voluntary election of remedies. To

hold that in such cases, injured shipper is limited in

maximum recovery to Commission’s award would be

SPAS “UMGMIES 2D tsistnrs oy Os ae ow ia ties tine ind cet 26

IV. Questions whether Respondent had right of action for,

and District Court jurisdiction to grant recovery of, great-

er amount than Commission's award are res judicata ...... 32

CAIRN, 4 ors) he sk aes 5 are Se KES SOE eS soe ka ae 37

TABLE OF CASES

Page

Abilene Cotton Oil Co. v. T. & P. R. Co., 204 U. S. 426 ......... 23

American Smelting & R. Co. v Riverside Dairy, 236 Fed. 510...26

Arizona Grocery Co. v. A. T. & S. F. R. Co., 284 U. S. 370...... 22

Baltimore & O. R. Co. v United States, 215 U.S. 481 ........... 28

Bell & Zoller Coal Co. v B. & O. S. W. R. Co., 74 1. C. C. 433....31

morden v¥ Carolina Power Co.,.98 S.. BE. 44% .. 6 kok kk ok eae 26

Brady Vv Baltimore &@ 0: R.'Co., 66 Med: (2) 282 kc. os cea 19

Brady v Interstate Com. Com., 43 Fed. (2) 847 ...........<0% 6

praay ¥ TWuited States, bs Ui. SSO oes cc ko vax ween nek 6

Caminetti v United States, 242 1. 8-470 6666 boss cane ceecaa we 11

CIEE W SRNR ONG Fs ida Ac ek 8 aes 35

CagnpGeld: ¥ Gamer, 250 TOd> SIC. 5 oes eos wh Ck ok pe ees 25

Cardwell ¥ Mortoik, Ot. FR. Co: $8 8. 496 2 oe ov nk ck 26

Chicago, B. & Q. R. Co. v Fentuch, 191 Fed. 482 .............. 10

mirector Gomeral ¥ Viscoue: 254 1: 6: 408 6k 6. ook cn nk 27

Everett vy Emmons Coal M. Co., 289 Fed. 686 ...........006-. 25

ror ¥ Agee Miates: 273°. 8. S98 ol es os Sew cu eek 11

Hamilton v Rathbone, 175 U.S. 414

PENCE R ES a Cae ek e . eg

TABLE OF CASES

Page

Heaney v Heeney, 2 Don i th bes ened s002 rss cen, =

sesubuekio v Sialeré, 111 0.6. 369 ....................°°° 35

Interstate Com. Com. v L. & N. R. Co., 227 U.S. 88 ........._° 16

Kendall v United States, 107 U. 8.123 ...................77° 11

pees tn Bree 8 a8... .... 32

Koontz v Koontz, 47 W. Va. MN 6 rc te b ones nee, 15

preemie it a | | Creer ri aetd 1

Louisville & N. R. Co. Co. v Ohio Valley Tie Co., 242 U. gs. 288,

8, 9, 22

Meeker & Co. v L. V. R. Co., 236 U. §. oo Ee ae ae ¥

Mitchell Coal & C. Co. v P. R. Co., 230 U. S. 247..... 13, 22, 23, 28

New York, N. H. & H. R. Co. v Interstate Com. Com., 200 S. &.

PES LESLIE SD SELL anata 12

Pennsylvania R. Co. v .. . 3 § 3 eee 7, 19

Pennsylvania R. Co. v SS oS See nia 7. 49

Phillips Co. (A. J.) v Grand Trunk R. Co., 236 U.S. 662 ....... 13

power © Cher. 2 Wee 45) O08... kkk eee ete 10

Reeves Coal Co. v Chicago, M. & St. ¥. m. Co., 37 1. €.€. 767... . 25

Rules Governing Ratings of Coal Mines, 95 I.C.C. 309 ........ 17

Singer Sewing Mach. Co. v. Benedict, 229 U.S. 481 ....... oa

Spiller v. Atchison, T. & S. F. R. Co., 252 he ee 12

Standard Oil Co. v United States, 283 U. i le ees 10

State of New York v N. Y. C. R. Co., 95 I. xls BO oe sce rcs. 19

Swift & Co. v United States, 196 U. Ss. JER ae ee 16

Texas & P. R. Co. v Abilene Cotton Oil Co., 204 U.S. 426 ...... 14

Tubular Rivet & Stud Co. v Exeter Boot & Shoe Co., 159 Fed. 824 24

United States v Bitter Root Development Co.. 200 U. S. ee

United States v Missouri P. R. i ae Oe 11

| United States v Moser, 266 U.S. 236 .....................777' 35

3 United States v New River Co., 265 U.S. 523 _. en. a

2 Vicksburg, Shreveport & P. R. Co. y Anderson-Tully Co., 256

. Ae teen eee se ian nak dp dbedckerces....,, 15

z Virginia R. Co. v United States, 272 U.S. 658 ...........| 8, 30

4 Western N. Y. & P. R. Co. v Penn. Ref. Co. 37 Wed. 346 ......, 10

%, ee en OOO ines vcacss 26

a TABLE OF TEXT BOOKS

caesar, Wee. Bt, FOTOS... cee. 23

Corpus Juris, Vol. 17, pp. 774 AMR aN a ipei e Eh ia ati Slice od cae «0! odo

‘ Sedgwick on Damages (9th Ed.), Sec. nS AEE Se eee 24

= Sutherland on Damages (4th Ed.). Vol. fe St eee ee eee 26 ;

a sianineipettias

3 TABLE OF STATUTES

t Interstate Commerce Act (U.S. C. A., Tit. 49, Chap. 1):

5 PEER RT Be eae et pe cS BBs FS a ONS 17

& NM NE wet Niece ak ae eole' dn eed occ cs ace... a7

EM Aaa Oem ain sie i os ee ee veces o. .. EZ, 23

EN fattest nt. S, 12, 24, 22, 23, 26, 31. 36, 37

Section 16 ....2,5,6, 8,9, 10, 11, 12, 2S, 15, 22, 23, 26, 32, 36

West Virginia Code, 1931:

Chap. 56, Art. 4, Section 36

Supreme Court of the United States

October Term, 1932.

No. 526.

Tue Battrmore & Onto Rartroap Company, a Corpora-

TION, AND WESTERN Marytanp Rarmway Company, A

Corporation, Petitioners,

Vv.

A. Spates Brapy, Respondent.

BRIEF FOR RESPONDENT IN OPPOSITION TO

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES CIRCUIT COURT OF

APPEALS FOR THE FOURTH CIRCUIT.

May it please the Court:

The unanimous opinion of the Cireuit Court of Ap-

peals in this case (written by Judge Parker and concur-

red in by Judges Northcott and Soper) is such an excel-

lent statement of the questions involved and of the law

applicable thereto that respondent adopts it as his main

brief in opposition to the petition for certiorari filed

herein. The opinion also contains a comprehensive state-

ment of the facts which respondent refers to and adopts

as his statement deemed necessary to correct inaccura-

cies and omissions in petitioners’ statement. But noth-

ing stated in or deducible from the opinion plus this

adoption is to be taken as an admission that respondent

can ane

at Ea ee

Labay

a ee

ever received or rejected a 20-80 offer tendered or con-

curred in by both railroads, or that the Coal Company

was actually restricted to that basis in recewing cars,

The following argument will be confined for the most

part to running comments on petitioners’ contentions.

Summary of the Argument

Respondent’s Right of Action and the District Court’s

Jurisdiction were not limited in maximum amount to the

sum awarded by the Commission’s reparation order with

interest, and the District Court could grant recovery of «

larger amount.

1. This Court has sustained a greater recovery than

the Commission’s award (correctly computed) in one

case, and has clearly intimated in other cases that a Dis-

trict Court has jurisdiction so to do in a Section 16 suit.

2. The decision of the Cireuit Court of Appeals for

the Fourth Circuit herein is not in conflict with those of

the Cireuit Courts of Appeals for the Ninth and Third

Circuits in any way constituting a ground for certiorari.

The expressions in the opinions of the latter courts were

clearly obiter dicta.

3. Section 16 of the Act specifically provides that the

suit on a reparation order shall proceed in all respects

like other civil suits for damages with two, and only two,

exceptions, neither of which limits recovery to the Com-

mission’s award; and the Courts are not at liberty to in-

gratt any additional exceptions.

4. The Circuit Court of Appeals’ interpretation of

Section 16 herein is entirely consistent with the funda-

mental principles of equality and uniformity which un-

derlie the whole statute. A contrary interpretation would

produce inequality, inconsistency and discrimination.

EES OS OT Pe ae ee

II.

The sufficiency of the petition to support the judgment is

not open to attack by petitioners on the ground set forth

in their brief, pp. 20-21, 35-41.

The petition complied with the statute, sued for a greater

amount than the judgment, and nothing in the petition re-

quired any deduction from the amount sued for,

The action of the Commission in applying the mitigation-

of-loss rule was beyond its powers, erroneous as a mat-

ter of law, and void,

1. Petitioners, having failed in their demurrers to

raise any question regarding the sufficiency of the peti-

tion, are estopped from raising such a question after

judgment.

2. Ju setting forth the causes for which respondent

claimed damages and the order (including the reports

made parts thereof) of the Commission in the premises,

the petition comphed with a requirement of the statute.

But it did not thereby adopt the quoted findings or at-

tached reports, or incorporate them for the purpose of

cutting down the amount sued for.

o. The annexation of an exhibit to a pleading does not

amount to an allegation that the statements and recitals

therein are true and correct.

4. The petition put the railroads upon notice that re-

spondent intended to attack the prima facie correctness

of the Commission’s findings as to the amount of his

damages and to present additional evidence in support

of his claim at the trial.

The verdict and judgment were for an amount con-

siderably less than the amount sued for. There being no

bill of exceptions in the record, it must be assumed that

“the case was fairly and fully submitted in the charge of

the judge to the jury’? and that there was ‘‘testimony

tending to show damages in at least the sum’’ awarded

by the court.

RS SAR |

ee ae

6. While the same rules of law prevail in both Section

9 methods of procedure, the Commission has no more

authority to pass upon the ‘‘reasonableness”’ of a ship-

per’s acts as a basis for applying the mitigation-of-loss

rule than has a District Court to pass upon the reason-

ableness of a carrier’s practices as a basis for assessing

an injured shipper’s damages. The Commission’s actioy

in applying the mitigation-of-loss rule was beyond its

powers.

7. The Commission’s action in respect to the socalled

20-80 offer (assuming respondent received it and that it

was concurred in by both roads) constituted a misappli-

cation of the mitigation-of-loss rule and was erroneous as

a matter of law in numerous respects, towit: (a) the of-

fer was arbitrary, without regard to respondent’s busi-

ness and unlawful, hence respondent was not bound to

accept it; (b) it was equally within the power of the rail-

roads to make effective the expedient which the Commis-

sion found respondent should have adopted; (¢) respond-

ent did all the rule required by ordering cars from both

roads and accepting all cars furnished by both roads; (d)

respondent’s acceptance of the offer would have worked

an estoppel against him; (e) as there were no Western

Maryland rates in effect from respondent’s mine, that

road having refused to publish them, respondent was not

required to accept any 20-80 offer unless and until such

rates were published; and (f) as the railroads’ refusal to

accord respondent his rights in the premises was not ae-

cidental, unforeseen or mere negligence on their part,

but a continuous tort and violation of statutory duty, the

mitigation-of-loss rule was not applicable in any event.

Ill

The assailed acts and practices of the railroads pre-

sented questions administrative in character, couse-

quently the Commission’s finding that they were in viola-

tion of the Act and its prescription of the standard that

should have prevailed were necessary prerequisites tc

maintaining any action for damages.

rr Yes

The petition shows that the Commission decided these

questions and prescribed the standard. Its action there-

on is conclusive.

The promulgation of the Commission’s finding and stand-

ard was delayed beyond the two-year period of limita-

tion, thus making impossible any voluntary election of

Section 9 remedies. Respondent was compelled to pro-

cced before the Commission or not at all, A construction

of Section 16 that in such cases the injured shipper ts

limited in maximum recovery to the Commission’s aware

would be unjust and deprive the shipper of his statutory

and property rights.

1. The basic question before the Commission was one

of mine classification for purposes of car distribution and

was Within the exclusive jurisdiction of the Commission.

Respondent was therefore compelled to resort to that

tribunal in the first instance.

2. It was not necessary for the petition to state ‘Show

or why the Commission reached its conclusion’? that the

acts and practices of the railroads were unduly preju-

dicial. **This Court has no concern with the correctness

of the Commission’s reasoning’’ with respect to matters

within its administrative jurisdiction.

3. The Commission decided that the railroads should

have accorded respondent the rights and privileges of a

two-railroad or ‘‘joint’? mine. The fact that the Com-

mission decided the administrative question one way

rather than another, or prescribed one standard rather

than another, does not render the question presented any

the less administrative.

4. The Commission’s finding of undue prejudice and

its prescribed standard of service that should have pre-

vailed at respondent’s mine are conclusive on the courts.

2. Respondent, compelled to proceed before the Com-

mission, proceeded as the statute provides, secured a rep-

aration order which petitioner’s elected to refuse to pay,

and then filed suit thereon and secured judgment for an

amount which, although greater than the Commission's

Foy

—

award, was much less than that body’s computation of

his damages. To hold now, by a strained construction of

Section 16, that in such cases the maximum permissible

recovery is the Commission’s award would be flagrantly

unjust. The Court has held that it is bound to give heed

to the rule that where a particular construction of a

statute will occasion injustice, it is to be avoided if an.

other and more reasonable interpretation is present in

the statute. By the plain language of Section 16, the

more reasonable interpretation of the Circuit Court of

Appeals is abundantly present in this statute.

The questions whether Respondent had a right of action

for, and the District Court jurisdiction to grant recovery

of, a greater amount than the Commission’s award are

res judicata, having been determined by the decree in

Brady v Interstate Commerce Commission, 43 Fed.(2)

847, affirmed Brady v United States, 283 U.S. 804.

1. Every element necessary to and justifying the ap-

plication of res judicata is present in this case.

2. The question of irreparable injury was a distinct

issue in the equity proceeding, and the special court's

decision that it was without jurisdiction ‘‘for the reasons

stated’’, one of which was that no irreparable injury is

to be apprehended from reparation orders and that er-

rors therein may be corrected in the Section 16 suit, was

addressed to that issue, and was not obiter dicta.

3. The fact that, insofar as the present record shows,

res judicata was not pleaded is immaterial. The two ac-

tions were carried on simultaneously in the same District

Court.

4. The memorandum opinion of this Court affirmed

the decree of the special court and thereby sanctioned the

result and effect of that court’s determination of the

foregoing questions upon the present case, even though

the citations appended to the opinion may indicate that

sili

this Court travelled a different route part of the way in

reaching the common goal.

5. Even though the special court’s determination of

the foregoing questions was reached upon an erroneous

view of the law or by an erroneous application of the law,

nevertheless it may not be disputed in the instant case.

ARGUMENT

Respondent’s right of action and the District Court’s

jurisdiction were NOT limited in maximum amount to

the sum awarded by the Interstate Commerce Commis-

sion’s reparation order with interest, and the District

Court COULD grant recovery of a zreater amount.

1. While this Court has never directly and specifically

decided the precise question as above stated, it has sus-

tained a greater recovery than the Commission’s award

correctly computed. Pennsylvania R. Co. v. Weber, 257

U.S. 85, 91 (in connection with Same v W. F. Jacoby Co.

v P. R. Co., 242 U. S. 88, 91). In the latter case, the

plaintiff sued for, and recovered, the amount ot the Com-

mission’s award with interest. Upon appeal this court

was convinced (‘‘almost mathematically certain’’) that

the Commission had used a wrong basis in calculating

the amount of its award; the award would have been au-

tomatically smaller if the correct formula had been ap-

plied to the basie figures from which the award was com-

puted, 242 U.S. at pp. 94-7. For the trial court’s re-

fisal to charge the jury in respect to the matter, the judg-

ment was reversed and the case remanded. At the new

trial, the plaintiff introduced the record before the Com-

mission and a great deal of other evidence, and again

verdict and judgment were for the amount of the Com-

mission’s award with interest. 263 Fed. 945, 946, 948;

affirmed 269 Fed, 111, 114. The ease was again brought

to this Court (Weber Case, supra) where the judgment

Was affirmed notwithstanding the ‘‘inescapable conclu-

Sees £

a na

sion’’ that the commission had used a wrong basis in ar-

riving at the amount of its award. This is a clear case

where the recovery permitted was greater than the Com-

mission’s award would have been if computed on the cor-

rect basis. It is a clear case where the amount sued for

was greater than the Commission’s award correctly com.

puted, and this Court’s affirmance of the judgment for

the greater amount is therefore a persuasive precedent

for the Circuit Court of Appeals’ conclusion on that ques-

tion here.

In at least three other cases, this Court has clearly in-

timated that a District Court has jurisdiction to give a

greater recovery than the Commission’s award. Penn.

sylvania R. Co., v Clark Bros. C. M. Co., 238 U.S. 456,

472-3; Louisville € N. R. Co. v Ohio Valley Tie Co., 242

U.S. 288, 291; Meeker d Co. v L. V. R. R. Co., 236 U.S.

412, 430. In the first of these cases, the plaintiff went into

a state court while its claim was still pending before the

Commission and secured judgment for $41,181 trebled,

or a total of $124,443. Shortly thereafter, the Commis-

sion promulgated its report and, out of a claim for

$36,401.12, awarded only $31,127.96. See 23 I. ©. C. p.

191. This report was brought to the attention of this

Court (p. 463), and the quite large discrepancy between

the claim, judgment and award should be borne in mind

in considering this significant excerpt from the opinion—-

In the situation in which the plaintiff stood after

the Commission’s finding, that statute determined

the extent of the damages it was entitled to recover

with respect to interstate sales and shipments, * * *

This is not to say that the finding of the Commission

as to the amount of the damages has any other effect

than that prescribed in Section 16 of the Act. (See

note) *

*Unless otherwise stated, these and other italics in the brief have

been supplied.

ig ee

cilia

In the Ohio Valley Tie Case, supra, the plaintiff se-

cured an order from the Commission for $6,198 as repa-

ration for unreasonable rates, and then instituted suit

and secured judgment in a state court for over $50,000

for general damages arising out of the same transactions

but not, as alleged, included in the Commission’s award.

-ayment of the order had been offered to and accepted

by the plaintiff, consequently this Court held that all

damages attributable to the overcharges (unreasonable

rates) ‘‘must be taken to have been considered in the

award of the Commission and compensated when that

award was paid’’, and reversed the judgment. Of course

when a reparation order is complied with aud payment

accepted, as when the judgment order of a court is satis-

fied and payment acknowledged, no further proceeding in

respect to the transactions covered by it may be main-

tained in any tribunal. But the true significance of the

opinion insofar as the instant case is concerned lies in

the fact that this Court, after pointing out that Section

16 provides that if the carrier does not comply with a

reparation order in due time the complainant may sue in

a state court, then indicated that the trial court would

not be limited by the amount of the Commissicn’s award.

It said—

The decisions say that whatever the damages were

they could be recovered (citing cases); and that the

statute determines the extent of damages (citing the

Clark Bros, Case, supra).

The citation of the Clark Bros. Case in support of the

holding that the statute determines the extent of the dam-

ages recoverable in a Section 16 suit is particularly sig-

nificant, for there this Court followed a similar holding

with the observation that the reparation order pursuant

to which the suit is instituted has only the quality of

prima facie evidence.

2. Petitioners contend (brief p. 19, 27) that the deci-

sion of the Circuit Court of Appeals for the Fourth Cir-

~~ =

cuit is in conflict with decisions of the Circuit Courts of

Appeals for the Ninth and Third ‘Circuits. The cases

cited are Chicago, B. d Q. R. Co., v Fentuch, 191 Fed.

482, 486, and Western N. Y. é P. R. Co., v Penn Ref. Co.,

137 Fed. 343, 363. There are expressions in these opin-

ions to the effect that the maximum limit of recovery in a

Section 16 suit is the amount of the Commission’s award

with interest, but in both of them the Commission’s

award with interest was the amount sued for, hence the

expressions referred to were obiter dicta, and constitute

no basis for granting certiorari herein. Fentuch Case,

p. 483; Penn Ref. Case, p. 347.

LS;

ria

Nor is there any conflict between the decision of the

Circuit Court of Appeals in this case and those of the

other Federal Courts in the cases cited on page 33 and

elsewhere of petitioner’s brief. In each and all of those

cases (except Powers v Cady, 9 Fed. (2) 458, wherein

no order of the Commission was involved), including

; Standard Oil Co. v United States, 283 U.S. 235, 240, the

5 plaintiffs asked the courts to which they resorted after

the Commission had denied them relief to substitute

their judgment for that of the Commission upon purely

administrative questions of fact committed by law to the

¥ exclusive jurisdiction of the Commission. On the other

hand, the respondent here made no attack upon the Com-

mission’s finding of undue prejudice or upon the stand-

ard of service which it found should have prevailed; he

did not ask the District Court to exercise any adminis-

trative authority whatsoever.

Nor can petitioners get any comfort out of the alleged

‘‘implication’’ in the short excerpts from the opinions of

this Court in the cases cited on pages 31-2 of their brief.

The reason why this Court referred to the prima facie

clause in Section 16 as ‘‘eutting off no defense’’, leaving

every opportunity ‘‘to the defendant to contest the

claim’’, and being ‘‘open to contradiction by the car-

rier’’, ete., is obvious. The Court was there passing upon

contentions of carriers; it made specific reference to

‘‘earriers’? and ‘‘defendants’’ merely to emphasize its

conclusion that the contentions which they were address-

ing to the Court were without merit.

nee

Silage eae oy! Seth alec ase

BR ecesecn ene NG EY ES ETN HTT. EGE ERE RTO ——

— ;

3. Petitioners contend (brief p. 28) that ‘‘by the plain

language of Section 16 suit can be brought by the ship-

per only if the carrier refuses to pay’’. By like ‘‘plain

language’’ he may recover the FULL amount of his dam-

ages, whether more or less than the Commission’s com-

putation thereof, if the carrier does refused to pay. And

petitioners refused to pay in this case. If Congress had

intended to limit recovery to the Commission’s award,

its intention so to do would not have been left to infer-

ence and speculation, but would have been clearly ex-

pressed. It certainly would not have provided that the

suit shall proceed in all respects like other civil suits for

damages, if it had intended to limit recovery to the Com-

mission’s award. It certainly would not have limited its

sole exceptions to this general language to two, towit,

(a) that the findings and order of the Commission shall

be prima facie evidence only and (b) that the plaintiff

shall be relieved of court costs, etc., if it had intended to

add a third exception, towit, (c) that the maximum per-

: missible recovery shall be the amount of the Commis-

. sion’s award. When an exception is incorporated in a

statute, it excludes all others than the one expressed, and

‘ the courts are not at liberty to ingraft other exceptions.

Expressio unwus est exclusio alterius. Kendall v. United

States, 107 U. S. 123; Ford v. United States, 273 U. S.

593, 611.

The language of the statute defining the shipper’s

rights if the carrier refuses to pay is clear and plain,

hence the well established rule that the language must

be taken as the final expression @f the legislative intent

is applicable. Caminetti v United States, 242 U. S. 470,

485; Hamilton v Rathbone, 175 U. S. 414, 419; United

States v Missourt P. R. Co., 278 U. S. 269, 278. In the

last cited case, wherein an order of the Commission based

upon an erroneous construction of the Act was involved,

this Court said—

We are therefore bound by the words employed and

are not at liberty to conjure up conditions in order

that resort may be had to construction. It is ele-

Ayo gg

AY Ree TR.

mentary that where no ambiguity exists, there is no

room for construction.

Even if there were room for construction, this Court

would be faced with the fact that the Act is a remedial

statute and should therefore be broadly construed. New

York, N. H. dé H. R. Co. v Interstate Commerce Commis-

sion, 200 U. S. 361, 371. This is equally true of its repa-

rations provisions. ‘‘The provisions of the Act giving

redress, compensatory in its nature, to persons sustain-

ing pecuniary injury through violation of public duty by

the carrier, must receive a liberal and not a narrow in-

terpretation’’. A claim for damages under the Act is a

‘claim not for a penalty but for compensation, (and) is

a property right.’’ Spiller v Atchison, T. dS. F. R. Co.,

252 U.S. 117, 135.

4. Petitioners contend (brief p. 34) that to subject

the carrier refusing to pay a reparation order to the risk

of being compelled to pay a larger amount ‘would per-

mit the discrimination which the whole Act intends to

prevent, by discarding the limit in favor of the shipper

who sues and insisting on it by payment to the others.”

But the same result may be accomplished by paying the

order in favor of one shipper and successfully resisting

it in favor of a competitor; or of putting up a stronger

defense against one shipper than against his competitor

in the same or a different suit; or of satisfying the claim

of one shipper before hearing and successfully resisting

his competitor’s Section 16 suit on a reparation order.

The Cireuit Court of Appeals’ view of this jurisdic-

tional question is entirely consistent with the principles

of equality and uniformity which underlie the statute.

By giving the injured shipper the right to pursue only

one of two exclusive remedies for violations of the Act

which require the administrative ruling of the Commis-

sion to determine them, Congress certainly intended that

each of the two was to comprehend whatever measures

are necessary to secure recovery of the statutory stand-

ard of full compensation vouchsafed in Section 8, and

- a

further that each was to be as adequate and complete as

the other. This is so because the principles of equality

and uniformity permeate Section 9 no less than the other

provisions. Pursuant to this view, this Court has literal-

ly read into the Act that whether complaint is filed with

the Commission or suit is brought in court, the same pe-

riod of limitation applies (A. J. Phillips Co. v Grand

Trunk R. Co., 236 U. S. 662, 667), and the same starting

basis, a finding by the Commission on the administrative

question, is required (Mitchell Coal € C. Co., v P. R. Co.,

230 U.S. 247, 258).

But if both methods of procedure are to be controlled

by the same rules of law and hence to culminate in like

final results, they must be construed as subject also to

the same judicial machinery for correcting errors and

mistakes. Having erected a guide post directing ship-

pers to use either of two Federal-aid highways to reach

a common goal, Congress certainly did not intend to leave

one of them without a bridge over the ‘‘river of errors

and mistakes’’. Therefore, the Section 16 suit pursuant

to a reparation order must be regarded as merely a de

novo step in the Section 9 ‘‘method of procedure’’ before

the Commission and as part and parcel of that particu-

lar ‘‘remedy’’; and must be construed to furnish means

for correcting the errors of that body as effectively as do

the appeal and new trial in the District Court for cor-

recting the errors of that alternative tribunal. If two

competing shippers, having secured the same finding of

the Commission on the administrative question, seek re-

covery of damages, one by an action in the Federal Court

and the other by complaint to the Commission, the funda-

mental principles of equality and uniformity which this

Court has repeatedly held underlie the whole statute re-

quire that the errors of the two trial tribunals shall be

corrected by the same judicial machinery.

It is true that Section 16 does not expressly provide

that suit may be instituted in court where the injured

shipper is dissatisfied with the Commission’s order as

well where the carrier refuses to comply with it. But

neither does that section expressly provide that the two-

year period of limitation referred to therein shall apply

to initial actions for damages in the courts. Nor does

veep es

Ree e ly

Section 9 expressly require an administrative finding by

the Commission as a condition to pursuing the remedy in

a Federal Court. These things are only implied. As be-

fore indicated, they have been read into the statute in

order to make it a consistent whole and to insure equality

and uniformity. ‘‘In other words, the Act cannot be

held to destroy itself.’”’ Texas € P. R. Co. v Abilene Cot-

ton Owl Co., 204 U. S. 426, 436-7, 441-2. If not, then the

Circuit Court of Appeals’ opinion herein as to the scope

of the Section 16 suit must be upheld. The same funda-

mental reasons call for the corrective aid of the courts to

perfect the method of procedure before the Commission

as for the preliminary administrative power of the Com-

mission to initiate the alternative method of procedure in

a Federal Court. :

Il.

1. The sufficiency of the petition to support the judg.

ment is not open to attack by petitioners on the ground

presented on pages 20-21, 35-41, of their brief.

2. The petition complied with the statute, sued for a

greater amount than the judgment, and nothing contain.

ed in the petition required any deductions from the

amount sued for.

3. The Commission’s application of the mitigation-of-

loss rule was beyond its powers, erroneous as a matter of

law, and void.

1. The petition prayed judgment for the full amount

of respondent’s damages, or for a greater amount than

the judgment and a greater amount than the Commis.

sion’s award with interest. The West Virginia Code, 1931

(Chap. 56, Art. 4, See. 36)—provides that—

‘¢ All demurrers in civil eases shall be in writing and

shall state specifically the grounds of demurrer re-

lied on, and no grounds shall be considered than

those so stated, except by the court of its own ac-

cord, but the demurrant may, by leave of court,

amend his demurrer by stating additional grounds,

or otherwise, at any time before the trial at law or

final hearing in equity”’.

aby

ooh

= =

Furthermore, it had been held as long ago as 1899 by

the supreme court of that state that ‘‘a pleading when

presented is presumed to be sufficient and it is the duty

of a demurrant if he thinks it insufficient and desires to

take advantage of it, at least to call the attention of the

court to the defects or imperfections in such pleading’’.

Koontz v. Koontz, 47 W. Va. 31, 34; 34S. E. 752.

The only grounds ‘‘specifically’’ stated in petitioners’

demurrers in this case were that the demand or claim as-

serted in the petition was for an amount largely in ex-

cess of the Commission’s award and that the plaintiff

(respondent here) ‘‘had no right of action to cause the

court, and the court no jurisdiction, to consider, review,

revise or reverse’? the Commission’s award (33-4).*

These grounds challenged the jurisdiction of the court,

not the sufficiency of the petition. They contain no ref-

erence to the objection presented on pages 20-21, 35-41,

of petitioners brief herein, to wit, that the petition, while

in form praying recovery of a greater amount than the

Commission’s award and one sufficient to cover the judg-

ment, in substance and effect shows that respondent suf-

fered damages only to the extent of the Commission’s

award with interest. As petitioners did not raise this

objection before the trial, they are estopped from raising

it after judgment. Their failure to raise it specifically

in their demurrers was tantamount to a waiver of the

point.

2. In setting forth the causes for which respondent

claimed damages and the order of the Commission in the

premises (including the reports made parts of the order,

rec. 31), the petition complied with a requirement of the

statute. Section 16; Vicksburg, Shreveport & P. R. Co. v.

Anderson-Tully Co., 256 U. S. 408, 415. In quoting the

mitigation-of-loss and average loading findings and chal-

lenging their correctness, the petition put the railroads

upon notice that respondent intended to attack their

*Unless otherwise specified, figures in parentheses refer to pages

of the printed record.

br]

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prima facie validity and to present additional evidence in

support of his claim at the trial. The petition did not

adopt the quoted findings and attached reports in any re-

spect whatsoever ; it did not incorporate them in the peti-

tion for the purpose of cutting down the amount sued

for. The annexation of an exhibit to a pleading does not

amount to an allegation that the statements and recitals

contained therein are true and correct. Sweeney v John-

son, 130 Pac. 997, 998. In Lockhart v Leeds, 195 U.S. 427,

434, it was said—

‘*We entirely agree with the court below that the

facts constituting the cause of action * * * must

be distinctly alleged, so that the defendant may

know what he has to meet, and so that he may, if he

chooses, put them in the issue. The rule must re-

ceive a reasonable interpretation, and must be so

enforced as to further, and not obstruct, the admin-

istration of justice.’’

See also Swift & Co. v United States, 196 U. S. 375,

390.

(a) The petition prayed judgment for $57,735.11 with

interest from April 1, 1923, or a total of about $85,602.00

to the date of the judgment order; the judgment was for

$65.048.60 with interest, or a total of about $63,363.00 to

the date of the judgment order. There is nothing in the

petition which required any deductions from the amount

sued for.

Petitioners contend (brief p. 36) that the petition did

not attack the assailed findings ‘‘on the ground that they

were not established facts’’. It attacked them on the

ground, among others, that they were void and this Court

has held that a finding ‘‘contrary to the indisputable

character of the evidence’’ is void. Interstate Com.

v. Louisville d) N. R. Co., 227 U. S. 88, 91-92. The

mitigation-of-loss finding quoted and attacked in the pe-

tition shows that the socalled ‘*20-80 offer’? was the basis

for the finding (7), but the petition also shows that re-

spondent placed written orders for cars with the West-

— Br ct iia

NTE er a

ern Maryland which that road refused to honor on any

basis (4), and thereby shows that although these orders

were the legal equivalents of tenders of freight (Rules

Governing Ratings of Coal Mines, 95 I. C. C. 309, 311),

the Western Maryland made no ‘‘offer’’ to transport the

freight by placing cars for loading at respondent’s mine.

The petition further shows that the Western Maryland

rate schedules did not cover respondent’s mine (3), and

thereby shows that that road refused to put itself in a

position to make or join in a legal ‘‘offer’’ of transporta-

tion and cars, 20-80 or otherwise, to respondent. Sec-

tions 6 (7) and 1 (3) of the Act.*

Furthermore, the average loading finding quoted and

attacked in the petition shows that 50 tons was used in

the rules in determining the daily rating of a mine ex-

pressed in cars and in those governing the distribution

of cars to coal mines (7), but neither the petition proper

nor any Commission finding quoted or referred to there-

in shows th ‘ after the cars were distributed any rules

whatsoeve ,,ovided that 50 tons per car was the mavi-

mum /vading permitted therein. Indeed, the petition

proper shows that petitioners themselves urged respon-

dent to load all cars received ‘‘as heavily as possible’’,

the period involved having been one of coal-car short-

age, and that pursuant thereto respondent loaded the

cars he received to an average of 53.55 tons per 50-ton

par (5).

(b) Now taking the Commission’s reports attached as

exhibits as incorporated in the petition, Exhibit A states

that ‘defendants contend(ed) that complainant was of-

fered the same arrangement but he declined and cannot

therefore be heard to complain’’, and that ‘whether or

not this is true and whether or not similar service was

in fact offered complainant depends upon surrounding

circumstances’? (15). Among other ‘‘surrounding cir-

cumstances”’ appearing on the face of the report are that

*These sections provide that no carrier may engage in transpor-

tation unless and until it has schedules of rates on file, and ‘‘trans-

portation” includes the furnishing of cars.

PENG Noite Pi tam ens staneycengrcny

miele f DEAE Ge 22okG Ae aa

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the trackage agreement covered the Coal Company

mines only (12-13); that in the latter part of October,

1922, (the period involved began October 14, 1922), re-

spondent applied to the president of the Western Mary-

land for service via that road and his application was

denied (17); that the paper 20-80 offer came from the

Baltimore & Ohio, not both roads (18 bottom of page) ;

and that the ultimate finding and conclusion of the Com-

mission was that ‘‘the acts and practices of defendants

whereby they accorded Maryland (Western Marvyiand)

service to the mines of the West Virginia Coal & Coke

Company * * * while failing to accord similar ser- f

Fy vice to complainant’s mine located intermediate thereto

e resulted in undue prejudice to complainant’’ (20),

; Exhibit B states that at the hearing on the amount of x

ey damages a witness for respondent denied that his mine :

3 was offered the 20-80 basis, and while it further states

Pt that the contrary is shown by testimony of the same wit-

; ness at the first hearing, ‘‘questions with regard thereto q

“ were thus raised to be passed upon by the jury in the

. light of the evidence’? (97).

: This exhibit B further shows that respondent accepted d

4 and loaded all cars furnished by both railroads and hence ¥

; shows that he accepted each and every real offer of trans- i

: portation made by either or both railroads (24).

j dict and judgment could not have been arrived at with- Ny

; out inclusion of at least the greater part of the damages |

é which could have been avoided by acceptance of the of-

g fered car supply; and that therefore the petition does

i not support the judgment and the judgment is errone-

ous’’. But they point to no allegation in the petition

proper or finding in the Commission’s reports attached

; thereto that respondent ever rejected any ‘‘offered CAR

2 SUPPLY” whatsoever. On the contrary, the petition

; proper shows that respondent accepted and loaded all the

cars he received from both railroads (5); the Commis-

sion’s report attached as Exhibit B to the petition shows

that respondent accepted and loaded all cars furnished

to him by both railroads (24); and the Cireuit Court of

GRIN cx en eveperss yoy URTEUNS mennresaumearne — ap Cor eANE GE

Appeals found that ‘‘he accepted all cars tendered him

by both railroads’’ (98).

’ Petitioners point (brief pp. 37-9) to delimited portions

of the opinions in Pennsylvania Kh. Co. v. Jacoby, 242

U. S. 89, 99, and (second appeal) Same v Weber, 257

U.S. 85, 86, 91, and argue therefrom that the amount of

the verdict and judgment in the instant case was ‘‘unat-

tainable except by inclusion of the amount which the

Commission had disallowed as resulting from refusal to

accept the offered car supply’’, and that this ‘‘renders

the conclusion inescapable that the judgment included

this amount’’. This was the case where the recovery

permitted was greater than the Commission’s award if

correctly computed, The judgement was affirmed because

if was supported by other evidence than the Commis-

sion’s award, this Court saying (257 U.S. at p. 91) —

‘*Under the circumstances here shown, when the case

is fairly and fully submitted, as it was in the charge

of the judge to the jury, giving a correct basis upon

which there might be a recovery of damages, and

there is testimony tending to show damages in at

least the sum awarded by the Commission, there is

ho prejudicial error because of the erroneous caleu-

lation of the Commission which was the basis of the

award,.”’

The record in the instant case contains no bill of ex-

ceptions, a fact for which petitioners themselves are re-

spousible, Brady v Baltimore & O. R. Co., 56 Fed. (2)

251, 254. Accordingly, it must be assumed here that the

trial proceeded in all respects as the statute requires, that

the trial judge correctly determined all questions pre-

sented to him, that he properly charged the jury, that the

verdict was fully justified by the evidence, and that the

trial judge was justified in using the verdict as the basis

for the judgment. In other words, it must be assumed

here that **the case was fairly and fully submitted * * *

in the charge of the judge to the jury’’, and that there

Was ‘testimony tending to show damages in at least the

—

sum’’ awarded by the jury, which was considerably less

than the amount sued for and also considerably less than

the Commission’s computation of respondent’s damages

plus interest.

3. At this point, it will be assumed (but not conced-

ed) that the reports were incorporated in the petition for

all purposes, that respondent actually received and re-

jected the ‘‘20-80 offer’’, and that it was concurred in by

both roads. Respondent contends that the Commission’s

quasi-judicial action in applying the mitigation-of-loss

rule was (a) beyond its powers and (b) erroneous as a

matter of law.

(a) Asa basis for applying that rule, the Commission

undertook to regulate respondent’s private business, to

pass judgment upon his conduct in respect to the 20-80

offer, and to determine whether his rejection of the offer

was ‘‘reasonable’’? (7, 28-9). The Commission has no

such power. It is a body of limited jurisdiction charged

with the enforcement of a statute which applies to car-

riers, not shippers. The Act sets up numerous standards

for the operations of carriers—their acts and practices

must be reasenable and not unduly discriminatory; it

sets up no standards whatsoever for the acts and prac-

tices of shippers. The Commission has no common law

or equity jurisdiction, and no power to enforce rules of

standards not found in the Act. As said by the Commnis-

sion itself in a leading case (State of New York vu N.Y.C.

R. R. Co., 95 I. C. C. 119, 141) —

JGA Tee

ead

‘Our jurisdiction differs in two important respects

from that of the courts. It is purely statutory, and

it is unilateral. Parties are not before us on equal

terms. We may entertain complaints by shippers

against carriers, but not by carriers against ship-

pers. We may not consider cross-complaints or

counter claims, or setoffs, by defendant carriers

against complaining shippers.’’

— ,

This is the first and only case in all the 45 years’ his-

tory of the Commission that it has applied the mitigation-

of-loss rule.

Consider the question from another standpoint. While

acting in its administrative capacity, the Commission

held that the acts and practices of petitioners were in

violation of the Act and laid down the lawful standard

that should have prevailed, towit, that respondent—

‘*should have been permitted to divide his orders for

cars to the respective carriers in such divisions of

100 percent of the rating of his mine as his judgment

dictated, and cars should have been accordingly

furnished in conformity with the supply of cars on

the respective roads.’’

Pursuant to the further hearing granted for the sole

purpose, not of reconsidering, revising or amending this

standard, but of determining the amount of respondent’s

damages based upon that standard (20, 6), the Commis-

sion now acting in its quasi-judicial capacity proceeded

to make a retroactive application of the very acts and

practices which, in its administrative capacity, it had

found unlawful. In its administrative capacity, it held

that carriers may not by withholding their equipment and

facilities dictate or control the markets which a particu-

lar shipper may seek or enjoy (19); but in its quasi-

judicial capacity, it held that they may do so to the extent

contemplated by the 20-80 offer. In its administrative

capacity it held that respondent should have been per-

mitted to divide his ears and shipments as his judgment

dictated (20); but in its quasi-judicial capacity, it held

that he should have submitted to the arbitrary dictation

of the railroads. In its administrative capacity it held

that the 20-80 offer was arbitrary, not on a basis of

equality between shippers, and unlawful (18, 20); in its

quasi-judicial capacity, it resorted to it as a basis for

applying the mitigation-of-loss rule. Its quasi-judicial

action was wholly inconsistent and incompatible with

Weineg Pan i ingle tare sy = a —

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ESE SPR AS ay VR Nene

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lies

its previously-presecribed administrative standard and

tantamount to a violation of that standard.

Once the Commission finds a rate, rule, regulation or

practice in violation of the Act and fixes the lawful stand-

ard, that standard is conclusive whether it relates to the

past, present or future. It is the same as though the

standard had been incorporated in the statute; having

been fixed pursuant thereto, it is to all intents and pur-

poses a part of it and therefore binding upon the ear-

riers and also the Commission. Mitchell Coal & C. Co,

v. P. R. Co., 230 U.S. 247, 258; Arizona Grocery Co, v

Atchison, R. d S. F. R. Co., 284 U.S. 370, 389.

But petitioners argue (brief, pp. 21, 39) that the meas-

ure of damages in a reparation proceeding in a court and

before the Commission are the same and, as a court may

apply the mitigation-of-loss rule, so may the Commission.

In support of this contention, they refer to Louisville &

N. R. Co. v Ohio Valley Tie Co., 242 U.S. 288, 290, and

quote therefrom partly as tollows —

‘*By section 9 any person so injured may make com-

plaint to the Commission or may sue in a court of the

United States to recover the damages for which the

carrier is liable under the Act, but must elect in each

ease which of the two methods of procedure he will

adopt. The rule of damages in one hardly can be

different from that proper for the other.’’

Observe that the Court held that the rule of damages

in one method of procedure hardly can be different from

that proper for the other method of procedure. The

Section 16 suit pursuant to a reparation order is a step

in and part of the ‘‘method of procedure’’ before the

Commission referred to in Section 9. The recoverable

measure of damages in this combination method of pro-

cedure is the same as that in the alternative District

Court method, but this does not mean that each of the

two parts of the combination method does not have its

own peculiar function. The function of the Commission

eore e

—23—

part is to determine ‘‘the FULL (not the NET) amount

of damages sustained in consequence of any such viola-

tion of the provisions of this Act’’ (Section 8), and leave

to the Section 16 part the determination of any off-setting

amount resulting from the shipper’s failure to comply

with the rules or standards outside the Act.

There is a precedent for the foregoing concept of the

Commission method of procedure. Section 9 provides

for two alternative methods for the recovery of damages,

one of which is by suit in a District Court, but this Court

has held that with respect to what may be termed admin-

istrative causes of action no court has jurisdiction of a

suit against an interstate carrier for damages resulting

therefrom until the Commission has first declared the

rates, rules or practices complained of to have been in

violation of the Act. Abilene Cotton Oil Co. v T. & P.

Ry. Co., 204 U.S. 426, 486; Mitchell Coal &€ C. Co. v P. R.

Co., 230 U. 8. 247, 257. It follows that with respect to

such causes of action the District Court method of pro-

cedure also consists of two parts, each with its special

function to perform. The Commission has no more

authority to pass upon the ‘‘reasonableness’’ of a ship-

per’s acts and practices as a basis for applying the miti-

gation-of-loss rule or any other standard outside the Act,

than has a District Court to pass upon the ‘‘ reasonable-

ness’’ of a carrier’s acts and practices or any other

standard within the Act as a basis for assessing an in-

jured shipper’s damages.

(b) The Commission’s quasi-judicial action in re-

spect to the 20-80 offer constituted a misapplication of

the mitigation-of-loss rule and was erroneous as a matter

of law.

In the first place, while a party suffering loss from

breach of duty ought to do what a reasonable man would

do to mitigate his loss, ‘‘the duty of the injured party is

limited by the rules of common sense and fair dealing;

he is not required to take such action as might under the

circumstances be imprudent and impracticable.’? 17

Corpus Juris 767-770). ‘‘The amount of care required is

Soa ait .

SER sve fein as inves » 5 smsgetinaecs

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—

not to be measured by ex post facto wisdom, he is not

bound at his peril to know the best thing to do.’’ Sedg-

wick on Damages (9th Ed.) See. 221. Here, the Commis-

sion’s report (Exhibit B) shows on its face that respon-

dent sold his coal on the open market; he did not know

more than a day in advance where his coal was going

(16, 18-19). Indeed, the Commission specifically found

that the 20-80 offer was arbitrary and without regard for

the requirements of respondent’s business (20). In such

circumstances, no prudent shipper would have submitted

to the conditions fixed by the railroads after conference

with the shipper’s competitor, and agreed to order his

ears day after day, regardless of market or car supply

conditions, on a fixed and unchangeable percentage basis.

Assuming that the Western Maryland car supply and

markets were better than the Baltimore & Ohio car sup-

x ply and markets when respondent received this 20-80

‘‘offer’’, there could be no assurance at that time that

such would continue to be the fact for an indefinite time

in the future. Respondent’s rejection of the offer was

therefore entirely reasonable, while that which was de-

manded of him was unreasonable and unjust. Tubular

é Rivet & Stud Co. v Exeter Boot & Shoe Co., 159 Fed. (C.

5 C. A.) 824, 830-1; Northern Colorado Irr. Co. v Pouppert,

127 Pae. 125, 128.

Next, the Commission’s report (Exhibit B) shows that

respondent filed written orders for his rating of cars with

both railroads (22). There was nothing to prevent them

from complying with these orders on the 20-80 basis. It

was within their power to make effective the very ex-

pedient which the Commission found respondent should

have adopted. Where he whose duty it is primarily to

fulfill a contract and to prevent damages which may re-

sult from a failure has equal opportunity to fulfill the

obligation, he alone may be depended upon to perform

the duty, and it will not avail him to say the injured

party might have performed the duty for him and thus

lessened the damages. 17 Corpus Juris 774.

sete 20 9) ie Sethe

”

Biber nce seecserir SMa ML TySermiges pened onembeatete , “in —— —_—

~~ we

Next, the Commission’s report (Exhibit B) shows that

respondent did all that the mitigation-of-loss rule requir-

ed of him; he ordered a 100 percent supply of cars from

the Western Maryland, but since that carrier would not

honor his requisitions he also placed his orders with the

Baltimore & Ohio (22), and further that he accepted and

loaded all CARS actually furnished him by both railroads

(24).

Next, respondent contends that the plaintiff in an

action for damages is under no obligation to accept a

method of reducing his loss which might be construed as

an abandonment of his claim or be likely to work an

estoppel against him. Campfield v Sauer, 189 Fed. 576,

579; Everett v Emmons Coal Mining Co., 289 Fed. (C. ©.

A. 4) 686,691. If respondent had acceded to the so-called

20-80 offer and then appealed to the Commission for re-

lief, that body would very likely have dismissed his com-

plaint on the ground that no violation of the Act had

been shown. See Reeves Coal Co. v Chicago, M. & St. P.

R. Co., 37 1. C. C. 707, 708.

Next, respondent contends that as there were no West-

ern Maryland rate schedules in effect from his mine, that

road having refused to publish and file them, he was re-

quired by no rule of law to accept a so-called offer which

compelled him to sell 80 percent of his output for delivery

via that read, and the Commission was wholly unjustified

in using the rejection of such an offer as a basis for ap-

plying the mitigation-of-loss rule. Furthermore, the

20-80 offer itself, not having the backing of duly-pub-

lished rates or the authority of applicable rules, was

illegal and void.

Lastly, respondent shows that petitioners’ persistent

refusal to accord respondent’s mine a two-railroad status

and to permit it to divide its orders for cars to and ship

its coal via either or both roads as desired, while con-

temporaneously according these rights and privileges to

the similarly-located and competing Coal Company

mines, was not accidental, unforeseen or mere negligence

on petitioners’ part, but a continuous tort and violation

mW ETA Pe GPT se . * Ak oe bh

RIE Hl ? BSE:

_ =

of statutory duty. In such cases, the courts have held

that the mitigation-of-loss rule does not apply. Ameri-

can Smelting & R. Co. v Riverside Dairy & S. Farm. 236

Fed. 510, 514-15 (C. C. A. 8) ; Wilson v Scarboro, 88 8. RB.

872, 873; Borden v Carolina Power Co., 93 8. E. 442, 443;

Heaney v Heeney, 2 Denio (N. Y.) 625, 627; Cardwell »

Norfolk, etc. R. Co., 88 S. E. 495, 496; Sutherland on

Damages, (4th Ed.) Vol. 1, p. 479.

For the foregoing reasons and those stated by the

Circuit Court of Appeals (997-8), respondent contends

that the Commission’s action was erroneous as a matter

of law.

Commission found respondent would have produced if

he had accepted the 20-80 offer (28-29) by the profit per

ton (29) and totalling the results, a grand total of $34,-

310.67 is secured. If ths amount with interest is added

to the amount of the reparation order with interest, a

total of approximately $70,905.00 is secured, or more

than sufficient to cover the judgment.

53]

bia Snel TR RE IEE Lt tay

hs ual

Ill

1. The assailed Acts and Practices of the Railroads pre-

sented questions administrative in character, consequent-

ly the Commission’s finding that they were in violation of

the Act and its prescription of the standard that should

have prevailed were necessary prerequisites to maintain-

ing any action for damages.

2. The petition shows that the Commission decided these

questions and prescribed the standard. Its action there-

on is conclusive.

3. The promulgation of the Commission’s finding and

standard was delayed beyond the two-year period of limi-

tation, thus making impossible any voluntary election of

Section 9 remedies. Respondent was compelled to pro-

ceed before the Commission or not at all. A construction

of Section 16 (2) that in such cases the injured shipper is

limited in maximum recovery to the Commission’s award

would be unjust, and deprive the shipper of his statutory

and property rights.

Ol eee reerse rs eemecneees LETS OF 24 BS EROTIC —

‘ >

fer

—

1. The questions were clearly administrative; i. e.,

they were of a character not initially cognizable in a

court. The basic complaint was not that petitioners vio-

lated their rules applicable to one-road mines or their

rules applicable to two-road mines. The basic complaint

was against their discriminatory classification of respon-

dent’s mine as a one-road mine, contemporaneously with

their classification of the similarly-located and compet-

ing Coal Company mines as two-road mines, for pur-

poses of car distribution. Neither of the railroads could

have been mandamused to put respondent’s mine in their

category of two-road mines, nor could respondent have

successfully attacked the railroad’s discriminatory

classification of the respective mines or the discrimina-

tory ear distribution which resulted therefrom as an inei-

dent to an initial action for damages in court.

The basic question here was somewhat akin to that

presented in Director General v Viscose, 254 U. S. 498,

903-4, where a shipper of silk secured an injunction re-

straining the Director General of Railroads from ex-

cluding silk from the category of commodities trans-

ported by railroads. He contended in this Court that

“there was no administrative question’? and that the

‘thing presents a question of law for the courts”’ (argu-

ments of counsel, 65 Law Ed. 373-4). But this Court held

that ‘‘exclusion in this case was an attempted classifica-

tion * * * within the exclusive initial jurisdiction of

the Commission. ”’

In its final analysis, the question here was one concern-

ing car distribution. It was somewhat similar to that

presented in United States v New River Co., 265 U. 8.

923, 541-2, where joint mines (made so by means of 4

trackage agreement, 62 I. C. (. 269, 272-3) attacked an

order of the Commission limiting such mines to 100 per-

cent of their ratings when ordering cars from both roads

serving them. They insisted before the Commission that

they had a legal right to order 100 percent of their rat-

ings from each road (62 1. C. C. p. 278); and in this

Court, that they had a ‘egal right to a fair share of the

PIE PAE ‘x ‘ . ednge Ma

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car supply of each carrier’’. But this Court held that

‘‘the Commission’s jurisdiction over the subject is ex-

clusive’’.

See also Baltimore & O. R. Co. v United States ex rel

Pitcairn Coal Co., 215 U. S. 481, 486-7, 493; Morrisdale

Coal Co. v. P. R. Co., 230 U. 8. 304, 313.

As the questions were administrative, the Commis-

sion’s finding thereon and its prescription of the stan-

dard that should have prevailed were necessary pre-

requisites to maintaining a suit for damages. Morris-

dale Coal Co. v P. R. Co., supra.

2. Respondent’s petition in the District Court shows

that he complied with the foregoing requirement, se-

cured the Commission’s finding that the acts and praec-

tices of the railroads were unduly prejudicial and the

prescription of its standard that respondent should have

been permitted to divide his orders for cars to the re-

spective carriers in such divisions of 100 percent of the

rating of his mine as his judgment dictated and that cars

should have been accordingly furnished in conformity

with the available supply on the respective roads. Both

finding and standard are conclusive on the Courts.

Mitchell Coal & C. Co. v P. R. Co., 230 U. S. 247, 258.

: But petitioners, first considering the reports attached

; as exhibits to the petiton as not parts thereof, attack the

: petition because it does not state ‘how or why the Com-

; mission reached that conclusion’’ (brief p. 42). It was

; not necessary. The statement of the causes for which

respondent claimed damages set out in the petition

clearly disclosed the administrative character of the

questions presented to the Commission. With respect

to such questions, ‘‘This Court has no concern with the

correctness of the Commission’s reasoning, or with the

soundness of its conclusions.’’ Virginian R. Co. v United

States, 272 U. S. 658, 665-6.

Then considering the reports as parts of the petition,

and conceding for the moment that the complaint to the

Commission raised an administrative question, petition-

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ers contend that the Commission ‘‘did not decide the case

on that basis’’ (brief p. 46). Reference is made to the

statement in the Commission’s report that ‘‘it is not

necessary * * * to determine whether or not the Coal

with existing car service rules for joint mines and as to

that we express no opinion’’ (15). The report discloses

the reason. During a portion of the period, one of the

rules permitted a mine served by two railroads to order

75 percent of its rating from each railroad, for 150 per-

cent from both. This rule was condemned by the Com-

mission in a case decided December 11, 1922, and a new

rule promulgated which permitted such a mine to order

a maximum of only 100 pereent of its rating from both

roads (14-15). The Commission decided to make this

new rule the basis of the standard that should have pre-

vailed at respondent’s mine and hence did not consider

it necessary to decide whether the Coal Company mines

were entitled to order their cars in conformity with the

old rule. But the fact that the Commission decides an

administrative question one way rather than another, or

prescribes one standard rather than another, does not

render the question presented any the less administra-

tive. ‘This Court has no concern with the correctness of

the Commission’s reasoning”’.

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Petitioners also urge that the Commission did not de-

cide that either the Coal Company or respondent was en-

titled to a joint mine status (brief p. 90). The service

Status enjoyed by the Coal Company mines and that pre-

scribed as the standard that should have prevailed at

respondent’s mine was a joint-mine or two railroad-mine

status. In United States v New River Co., 265 U. S. 523,

D42, it was said—

‘‘An operator of a joint mine is not confined to

any one carrier serving it. It may order from each

carrier; but the total number of cars ordered may

not exceed the gross daily rating of the mine. It

may select the carrier which, at the time, has the bet-

Company was entitled to order its cars in conformity,

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ter car supply, and receive its pro rata share of that

supply according to its gross daily rating, based

on its capacity to ship by all carriers. It may choose

between the carriers to secure the service, connee-

tions, and markets it desires to have.’’

Petitioners then urge that respondent suffered no

undue prejudice because the purpose of the trackage

agreement was the fuel contract between the Western

Maryland and the Coal Company and that respondent had

no such contract; and in fact that he suffered no preju-

dice at all because ‘‘an allotment of cars’’ of equal per-

centages, as made to the Coal Company was made to re-

spondent (brief pp. 24, 50-1). While the Commission’s

finding that respondent was subjected to undue preju-

dice is conclusive on this Court (Mitchell Coal & C. Co. v

P. R. Co., supra), the contentions are baseless as well as

untenable. The purpose of the trackage contract is ‘‘not

of legal significance’? (Virginian R. Co. v. United States,

272 U.S. 658, 664), but the fact is, and the Commission’s

report discloses, that the whole scheme was framed up

and put through by and for the benefit of the Coal Com-

pany, and that the Coal Company then used it to get the

Western Maryland fuel contract (16, 17, 18, 19-20) ; in-

deed, when respondent complained to the president of the

Western Maryland, he was told to see the president of

the Coal Company (17).

In regard to the statement that cars were allotted to

the Coal Company on the 20-80 basis, the report shows

that while the Commission found that those mines were

only permitted to ORDER ears on that basis, it did not

find that they were only permitted to RECEIVE ears on

that basis. On the contrary, its report states that ‘there

was much testimony that the mines of the Coal Compa-

ny were operating practically at capacity during this

period’’, i. e., practically at 100 percent (18). As the

period was one of ‘‘severe shortage of cars’’ (22), it fol-

lows that the Coal Company mines actually RECEIVED

a much larger supply of cars than they were entitled

—

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to receive on the 20-80 basis, or even on the basis of 100

percent orders to the Western Maryland, as the largest

supply which that road had available for general distri-

bution during any month of the period was 69 percent

(23). And neither report of the Commission contains any

finding or statement that respondent was offered CARS

on the 20-80 basis or rejected any CARS on that or any

other basis. As for the paper 20-80 offer, neither report

discloses whence it came or how it was presented, but the

first report indicates that it was not concurred in by the

Western Maryland, the road whose service respondent

was endeavoring to secure (17, 18, 20).

In any event the Coal Company mines, being reached

by both roads and having rates in effect therefrom via

both roads, had an enforceable legal right to order their

cars and ship their coal as they saw fit, and they exer-

cised the right throughout the period (17-18). In Bell

€ Zoller Coal Co. v B. € O. 8S. W. R. Co., 74 1. C. C. 433,

439, cited in the Commission’s report herein (14), the

Commission said—

‘*Whenever the joint mine orders cars from the dif-

ferent carriers serving it (rather than from the ecar-

rier with the larger supply), it is doubtless due to

other compensating advantages which outweigh

those of a temporary greater car supply and such

election is the voluntary choice of the shipper.”’

3. The petition shows that although respondent filed

his complaint with the Commission in October, 1923, or

only a few months after the close of the period involved,

the Commission did not finally decide the administra-

tive questions until May 10, 1926 (5,10). As the statute

fixes a limitation of two years within which to institute a

proceeding for damages, respondent was not able to

make a voluntary election of Section 9 remedies; he was

compelled by the Commission’s delay to proceed before

that bedy for damages, or not at all. He proceeded be-

fore the Commission, secured a reparation order which

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petitioners elected to refuse to pay, filed his Section 16

suit thereon, and recovered judgment for an amount

which, although greater than the Commission’s award,

was less than that body’s computation of his damages.

A construction of Section 16 that in such cases the in-

jured shipper is limited in maximum amount to the Com-

mission’s reparation order, even though the amount of

the order was arrived at by the use of an erroneous

formula or as the result of incorrect mathematical com-

putations, would be flagrantly unjust and unfair. If such

be the law the socalled election of remedies is a sham

and delusion for, by the Commission’s delays or the ear-

riers’ dilatory tactics in prolonging the case before the

Commission, the injured shipper can be easily deprived

of his supposed rights in that regard.

This Court has held that it is ‘‘bound to give heed io

the rule that where a particular construction of a statute

will occasion great inconvenience or produce inequality

and injustice, that view is to be avoided if another and

more reasonable interpretation is present in the stat-

ute’. Knowlton v Moore, 178 U.S. 42, 77. By the plain

language of the Act, the more reasonable interpretation

of the Cireuit Court of Appeals herein is abundantly

present in Section 16.

The questions whether respondent had a right of action

for, and the District Court jurisdiction to grant recovery

of, a greater amount than the Commission’s award are

res judicata, having been determined by the decree in

Brady v Interstate Commerce Commission, 43 Fed. (2)

847, affirmed Brady v United States, 283 U. 8. 804.

1. These questions were among those presented for

determination in the equity proceeding above cited,

which was instituted in the same District Court and at

about the same time as was the instant action at law (9,

8). The bill of complaint attacked the deductions made

by the Commission from the gross amonnt of respon-

dent’s damages. It was represented that vnless they

were set aside and annulled respondent would be sub-

“

Ae oe

PCR ERAGE ES —

=— =

jected to irreparable injury for which he had no plain,

adequate and complete remedy at law. The court was

asked to set aside and annul them, direct the Commis-

sion to make a supplemental order consistent with the

decree of the court, and to grant such further relief, ete.

The respondents moved to dismiss for lack of jurisdic-

tion. (8, 105, 106; also 43 Fed. (2) pp. 848, 849).

The Court (Circuit Judges Parker and Northeott and

District Judge Baker) decided the question or questions

as follows (43 Fed. (2) p. 852)—

‘If the party in whose favor it (reparation or-

der) is made is not satisfied with it, he may in insti-

tuting his suit set forth the cause of action for which

he claims damages, and the order of the Commis-

sion, and have his case proceeded with ‘‘In all re-

spects like other civil suits for damages’’ except that

on the trial the findings and order of the Commis-

sion shall be prima facie evidence of facts therein

contained. There is nothing in the Act, we think,

which limits his recovery to the amount awarded by

the Commission and there is no reason why the re-

covery should be so limited. The order and find-

ings of the Commission are prima facie evidence,

just as is the report of an auditor in an action at

law. Ex parte Peterson, 253 U.S. 300. * * * It

is apparent, therefore, that no irreparable injury is

to be apprehended from reparation orders of the

Commission, that any errors therein may be cor-

rected in the trial provided for by statute, and that

resort to injunction to set aside such orders is not

permissible,

“FOR THE REASONS STATED, we think that

the Court is without jurisdiction to entertain the

suit, and the bill will accordingly be dismissed.”’

The plaintiff (respondent here) in the law action was

the complainant in the equity proceeding. The two de-

fendants (petitioners here) in the law action were re-

spondents in the equity proceeding, having voluntarily

RF RIAN StF

oceilliiacs

intervened, submitted themselves to the jurisdiction of

the Court, and participated by counsel in the hearing

(43 Fed (2) p. 848).

2. Every element necessary to, and justifying the ap-

plication of, res judicata is present. There is an identity

of parties. There is an identity of questions, the ques-

tions common to both proceedings being whether respon-

dent had a right of action for, and the District Court jur-

isdiction to grant recovery of, a greater amount than the

Commission’s reparation order. Those questions were

actual issues in the equity proceeding. They were pre-

sented to a court of equity, so the initial questions which

that court had to determine were those inherent in the

proposition whether the first prerequisite to its jurisdic-

tion as a court of equity was disclosed by the bill. They

had to be settled in limine. As said by this Court in

Singer Sewing Mach. Co. v Benedict, 229 U.S. 481, 484—

In the courts of the United States it is a guiding

rule of law that a bill in equity does not lie in any

‘ase where a plain, adequate and complete remedy

may be had at law. The statute so declares (citing

statute), and the number of decisions enforcing it

are without number. If it be quite obvious that

there is such a remedy, it is the duty of the court to

interpose the objection sua sponte, and in other

cases it is treated as waived if not presented by the

defendant in limine.

See also United States v Bitter Root Development Co.,

200 U.S. 401, 472.

Any and every court of equity has inherent power to

prevent irreparable injury, and hence inherent power to

pass upon questions with respect thereto. Those ques-

tions were settled by the special court; it dismissed the

bill for lack of jurisdiction ‘‘for the reasons stated’? one

of which was that ‘‘no irreparable injury is to be appre-

hended from reparation orders of the Commission, that

ae es me ee et eee

any errors therein may be corrected in the trial provided

for by statute and that resort to injunction to set aside

such orders is not permissible’’. And petitioners, having

participated in the litigation, are bound by the decision,

especially as it was subsequently affirmed by this Court.

In United States v Moser, 266 U. S. 236, 242, it was

said—

‘Where, for example, a court in deciding a case has

enunciated a rule of law, the parties in a sebsequent

action upon a different demand are not estopped

from insisting that the law is otherwise, merely be-

cause the parties are the same in both cases. But

a fact, question, or right distinetly adjudged in the

original action cannot be disputed in a subsequent

action, even though the determination was reached

upon an erroneous view or by an erroneous applica-

tion of the law. That would be to affirm the principle

in respect of the thing adjudged, but, at the same

time, deny it all efficacy by sustaining a challenge to

the grounds upon which the judgment was based.’’

(Empasis by the Court).

3. Petitioners say (brief pp. 23, 48) res judicata was

never pleaded by respondent. The two actions were

carried on simultaneously in the same District court, the

petition in the law action referred to the pendency of the

equity proceeding, and the judgment in the first case

finally determined was automatically decisive of the fore-

going common questions in the ease left remaining.

Furthermore, for aught the present record shows, the

special court’s decree was presented at the trial. Camp-

bell v Rankin, 99 U. S. 261, 262; Hornbuckle v Stafford,

111 U.S. 389, 391.

Next they say (brief 23, 49) the stated conclusions of

the court in respect of the jurisdictional question now

being discussed were obiter dicta. They were not obiter

dicta. The questions involved therein were distinct is-

sues in the case, were within the general powers of the

court to determine, and had to be determined; indeed, it

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was the court’s duty to determine them sua sponte in

imine. And the court, ‘‘noticing the contention of plain-

tiff (respondent here) that he stood in danger of irrepar-

able injury’’ (105), actually and conclusively determined

them.

This Court gave no reasons for affirming the decree in

the equity proceeding, but petitioners attempt (brief pp.

24, 48) to supply them by what they term the ‘‘proper

interpretation’’ of the citations in the memorandum

opinion. Their first evolved reason, towit, that ‘‘the

Commission’s order minimizing the recovery was nega-

tive as to the amount disallowed’’ is self-contradictory,

and is in fact an admission of the perfectly-obvious truth

that the Commission first found the amount of respond-

ent’s damages according to its previously-prescribed ad-

ministrative standard and then by affirmative action in

applying a rule outside the act ‘‘minimized’’ the amount

to be awarded. Their second evolved reason, towit,

‘that there could be no review of the facts found by the

Commission in respect of the administrative question”

is immediately negatived by their subsequent statement

that ‘‘the memorandum opinion does not show that this

Court regarded an administrative question actually to

have been present or decided by the Commission’’. And

this Court’s ‘‘omission’’ to cite Meeker v Lehigh Valley

R. Co., 236 U. S. 412 is explained by the fact that *»e

special court twice referred to it and what it decided in

respect to the meaning of the prima facie clause in See-

tion 16 and hence this Court, in affirming the decree of

that court, did not consider it necessary to repeat the

citation a third time.

When it is remembered that the Section 16 phase of

respondent’s Section 9 suit praying judgment for

$57,735.11 with interest was pending in the District Court

at the time this Court affirmed the decree in the equity

proceeding, the proper interpretation of this Court’s

memorandum opinion and the citations appended there-

to seems clear. Respondent interpreted them as holding

that the decree of the lower court was affirmed on the

grounds stated by that court as the reasons for its deci-

i eee

sion and on the further grounds (a) that the suit in

equity challenging the Commission’s reparation order

and asking for complete relief was tantamount to an at-

tempt to start a second Section 9 suit and was therefore

not permissible, and (b) that the Commission’s order,

while only prima facie correct insofar as it determined

the fact and amount of respondent’s damages (as held

by the special court), must be regarded as conclusively

correct insofar as it determined the administrative ques-

tions.

But whether this Court travelled the same route all

the way or a different route part of the way is after all

immaterial in the light of the important fact that it ar-

rived at the same goal as did the special court. And when

this Court reached that goal, it did not criticise the route

which the special court had taken; it did not modify the

decree of the special court in any particular. This Court

affirmed the decree of the special court and thereby, it is

respectfully submitted, sanctioned the result and effect

of that court’s determination of the foregoing questions

upon the instant case.

When it is remembered that an entirely erroneous ad-

judication of a fact, question or right in one proceeding

may not be disputed in a subsequent action between the

same parties (Umted States v Moser, supra), there is

certainly a world of room for the propovition that the

special court’s determination of the foregoing questions

in the equity proceeding may not be disputed in the in-

stant case.

Conclusion

It is respectfully submitted that the petition for a writ

of certiorari should be denied.

Grorce T. BELL,

Attorney for Respondent.

SaMveu T. Spears,

Of Counsel.

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.