Appendix — Brown Lumber Co. v. L. & NR Co.

56

APPENDIX A.

Paragraph (3) of Section 15 of the Interstate Commerce

Act reads as follows:

‘The Commission may, and it shall whenever

deemed by it to. be necessary or desirable in the public

interest, after full hearing upon complaint or upon its

Own initiative without a complaint, establish through

routes, joint classificatiqns, and joint rates, fares, or

charges, applicable > transportation of pas-

sengers or property, or maxima or minima, or

maxima and minima, to be charged (or, in the case of

a through route where one of the carriers is a water

line, the maximum rates, fares, and charges applicable

thereto), and the divisions of such rates, fares, -or

charges as hereinafter provided, and the terms and

conditions under which such through routes shall be

operated; and this provision, except as herein other-

wise pfovided, shall apply when one of the carriers

is a water line. The Commission shall not, however,

establish any through route, classification, or practice,

or any rate, fare, or charge, between street electric

passenger railways not engaged in the general busi-

ness of transporting freight in addition to their pas-

senger and express business, and railroads of a differ-

ent character; nor shall the Commission have the right

to establish any route, classification, or practice, or

any rate, fare, or charge when the transportation is

wholly by water, and any transportation by water af-

fected by this’ part ‘shall be subject to the laws and

regulations applicable to transportation by water.’’

' 56

APPENDIX B. J

Paragraph (7) of Section 6 of the Interstate Commerce .

Act reads as follows:

“‘No carrier; unless otherwise provided by this part,

shall engage or participate in the transportation of

passengers or property, as defined in this part, unless

the rates, fares, and charges upon which the same are

transported by said carrier have been filed and pub-

lished in accordance with the provisions of this part;

nor shall any carrier charge or demand or collect or

receive a greater or less or different 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 im the tariff filed and in

_ effect at the time; noy shall any carrier refund or

remit in any manner or by any device any portion

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.’’

4

SUPREME COURT OF THE UNITED STATES.

No. 100.—Ocrtoser Term, 1936.

W. P. Brown & Sons Lumber Co. et al.,) On Certiorari to the

Petitioners, United States Circuit

vs Court of Appeals for |

Louisville & Nashville Railroad Co. the Sixth Circuit.

[January 4, 1937.]

Mr. Justice Branpets delivered “the opinion of the Court.

W. P. Brown & Sons Lumber Co. and other shippers brought in

the Interstate Commerce Commission a complaint under Section 16

of the Interstate Commerce Act, seeking reparation for alleged

overcharges on shipments of lumber and other forest products

taking lumber rates. They were awarded damages in the pro-

ceedings known as Wausau Southern Lumber Co. . Alabama Great

Southern R. R. Co., 142 I. C. C. 521; 182 I. C. C. 731. The

Louisville & Nashville Railroad and some other carriers refused

to comply with the order. Then this suit was brought in the federal

court for western Kentucky to recover the amounts awarded

against them. The case was heard on demurrers to thé amended

petition and to certain paragraphs of the amended answer. The

demurrer to the petition was sustained, and that to the. answer

overruled, on the ground that the award was founded upon an erro-

neous construction of the so-called ‘‘Jones’’ or ‘Combination Rule’’

in the tariffs. The parties declining to plead further, judgment was

entered dismissing the petition, 7 Fed. Supp. 593. That judgment

was affirmed by the Cireuit Court of Appeals, 82 F. (2d) 94. We

granted certiorari (299 U. S. —) because of conflict with the deci-

sion of the Court of Appeals of the District of Columbia in Balti-

more & Ohio R. R. Co. v. Domestic H. ardwoods, Inc., 65 F. (2d) 488.

The shipments involved were from points in the South and South-

west to points North. For such shipments there have 1 g been

commonly available over connecting lines more than one, 4nd often

many, through routes from*each point of origin to destination.

The Interstate Commerce Act does not require that the rates on

all routes shall be the same. _Nor does it require that there be on

‘

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2 W. P. Brown & Sons Lumber Co. et al. vs. L.d& N. R. R. Co.

each route a joint through rate. Sometimes, none of the tariffs for

the several available routes specifies a joint through rate. Where

no joint rate is specified, the tariffs for the through routes

commonly provide that the through rate shall be the sum of the

local rates of the several carriers contributing to the movement.?

In 1918, thé Director General of. Railroads made, by General

Order No. 28, a percentage increase of lumber rates in southern

territory, limited to 5 cents per 100 pounds. Thus, a joint through

rate could not be increased more than 5 cents. But when the

lumber moved on a combination through rate, the 5-cent limit was

applied to each«factor in the combination. The result was that

on combination through routes the increase was often doubled, or

tripled. To avoid such a result, the so-called ‘‘Jones’’ or ‘‘Combi-

nation Rule’’ was devised in February, 1919. Ever since, it has

* been commonly incorporated in tariffs.”

The question for}decision is whether the ‘‘Combination Rule’’

applies to the shipments here involved. If it does not, there is no

cause of action. If it does, the award was correct. The rule pro-

vides :

‘“Wheré no published through rates are in effect from point of

origin to destination on Lumber - + . , Carloads, and two or

more commodity rate factors . . . are used in arriving at the

through rate for a continuous rail shipment thereof, such threugh

rate will be arrived at in the following manner . . . ”? [Then

follows a formula. ]

*When applied to the combination rate specified in the tariff, the

formula effeets a reduction thereof. While the combination rate

itself is ordinarily, if not always, higher than the joint through

rate, the effect of applying to it the Combination Rule would not

2B. T. Jones’ Tariff 228, I. C. C/U. 8. 1, Section 4. In Wausau Southern

Lumber Co. v. Alabama Gieat Southern R. R. Co., 142 I. CC. 521, 524, the

Commission states: ‘‘The ce rule was originally published by the di-

rector gunated Tcad seven months &fter the issuance of General Order No. 28,

as an emergency tariff provision to avoid a double increase on certain com-

modities moving on combination rates, the separate factors of which had been

increased by specific amounts.- Shortly after the general increase of 1920 the

Tule was amended substantially to reflect the increases then authorized. It was

subsequently further amended to reflect the general reduction of 1922, and is

still in effect.’’

il Ot TAN Coa SAR Sn ELS tel BRIG i te atta hs Seti NSE AGODA SGOT LAC: eT OD lb RSIS: —

W. P. Brown & Sons Lumber Co. et al. vs. L.&N.R.R. Co. 3

necessarily produce equality in rates on the. several routes. It might

make the combination through rate lower than the published joint

through rate. This is true as to many of the shipments here in-

volved. The amended answer gave an example: Laurel, Missis-

sippi, is a typical lumber shipping point; and Columbus, Ohio,

a typical destination. The published through joint rate from

Eaurel to Columbus, applyipg via each of the several originating

carriers at that point, was ee per 100 pounds. A combina-

tion rate for the movement over other routes, unaffected by the i

Combination Rule, was-4314 cents. If the combination rate were

subjected to the Combination Rule, the rate over the combination

route would be 401% cents. Thus the combination rate would be

much less than the published joint through rate.

Each of these shipments here involved might have been made

over a route for which a joint through rate from point of origin to

destination had been published, Instead, the shipment was made | ¥

over a route for which the rate specifiéd in the tariff was a combina- 4

tion rate. In some instances the route had been designated by the :

shipper.* The carriers exacted the full combination rate. The &

_ Shippers made reclamation, on the ground that the Combination kia

Rule applies in every case where no joint through rate has been :

published over the route selected for the movement. The .Commis-

sion sustained the shippers’ claim.

First. The rule declares that the prescribed formula is to be i

applied ‘‘where no published through rates are in effect from point :

of origin to destination.’’ The language. used is not technical. i

The meaning of the words is clear. There is no ambiguity. The

construction of these railroad tariffs presents, therefore, a question

of law, not differing in character from those presented when the

construction of any other document is in dispute. Great Northern

Ry. Co. v. Merchants’Elevator Co., 259 U: 8. 285, 291. As, in each

instance, there was available some through route from point of origin

to destination for which joint through rates had been published,

the rule, by its terms, has no application. We so hold despite the

construction given tothe rule by the Commission.

) DERE Re sere ge:

8In some instances the claim rests upon a charge of misrouting. That is,

sthe route not having been designated by the shipper, it was the duty of the

initial carrier to select the route over which the rate was lowest. Compare

Northern Pacific Ry. Co. v. Solum, 247 U. S. 477, 482. The carrier did not

fail in that duty unless the Combination Rule applied. That is, there was no

misrouting if the Commission’s construction was erroneous.

SPER Gor.

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4 W. P. Brown & Sons Lumber Co. et al. vs. L. & N. R. R: Co.

Second. The shippers contend that the construction given to the

rule by the Commission is conclusive, because preliminary resort to -

the Commission was necessary.. J'exas & Pacific Ry. Co. v. American

Tie & Timber €o., Ltd., 234 U. 8. 138; Loomis v. Lehigh Valley

R. R. Co., 240 U. S. 48; Northern Pacific Ry Co. v. Solum, 247 U.S.

477. They argue that such preliminary resort was necessary, since

the interpretation and application of the rule involved (a) the ex-

ercise of sound administrative discretion as to technical and intri-

cate matters of tariff application and the relation of tariffs one to

another; (b) the reasonableness of a practice of routing as between

higher and lower-rated routes, and (c) uniformity in the applica-

tion of rates, which is the paramount purpose of the Interstate Com-

~ merce Act. But the argument is not sound. To determine whether

the rule was applicable to the several shipments does not call for, or

indeed permit, the consideration of any of these matters. The sim-

ple question for decision, as to each shipment, is whether there ex-

isted ‘‘published through rates’’ ‘‘in effect from point of origin to

destination.’’ The determination of that question requires ordi-

narily merely the examination of the tarifts.4 The enquiry would,

in all respects, be like that’ commonly made by courts when ealled

upon to construe and apply any other document. This is not a

case lik¢ Standard Oil Co., (Indiana) v. United States, 283 U. S.

235, 238, 239, where there was required ‘‘consideration of matters

of fact and the application of expert knowledge for the ascertain-

ment of the technical meaning of the words and a correct appre-

ciation of a variety of incidents affecting their use:’’ Here, the

shippers might have brought their action at law without resort to -

the Commission.

Third. The shippers urge that the carriers are ‘estopped from

contesting the interpretation given by the Commission to the Com-

bination Rule, because in Cancellation Rule for Constructing Com-

bination Rates on Lumber, etc., 81 1. C. C. 745, decided by Division

3 in August, 1923, and affirmed on reargument before the full Com-

mission December 2, 1924, in 93 I. C. C, 614, the carriers vainly

sought to have the rule modified so as to overcome the construction

given by the Commission. The denial of their application left them

remediless by administrative action; but that action in no way pre-

4 Compare Hohenberg v. Louisville & Nashville R. R. Co., 46°F. (2d) 952,

955; Wheelock v. Walsh Fire Clay Products Co., 60 F. (2d) 415, 418; Hy-

grade Food Products Corporation v, Chicago, Milwaukee, St. Paul & Pacific

R. R. Co., 85 F. (2d) 113, 116.

ge Re ino ae ne ik Ce dale Lead Ben i aN le eae Sie SURES

W. P. Brown & Sons Lumber Co. et al. vs. L..& N.R.R.Co. 5

judiced their right to insist in the courts upon the construction of

the rule for which they had contended. .

Fourth. The shippers urge that the interpretation given by the

Commission should be followed by the Court, because it embodies

the settled administrative construction acquiesced in by carriers

and shippers. It is true that the Commission has repeatedly de-

elared its adherence to the construction for which the shippers con-

tend. Many carriers acquiesced in that construction, in part pos-

‘sibly, because they preferred to take the lesser amount rather than

risk losing the traffic. But the cases cited show that other carriers

protested vigorously ; and their protests have been persistent.®

Fifth. The shippers urge, in support of the Commission’s con-.

struction, that if application of the Combination Rule is denied,

many existing routes, although remaining legally open, will be

commercially closed, (compare Virginian Ry. Co. v. United States,

272 U. S. 658, 661), because the combination rates, if not re-

duced -by the Combination Rulé would be prohibitively high.

Such considerations have no place here, where the sole question for

decision is whether there exists a joint through rate over some route

between the point of origin and destination. If the route to which

alone the joint through rate applies is deemed inadequate, there is

ample power in the Commission to establish by, proveedings under

Paragraph 3 of Section 15 "of the Act other through routes with

joint rates.° Likewise, if the rates on the combination routes are

deemed excessive, or discriminatory, there is ample power in the

Commission, under other provisions of the Act, to reduce the rates.

fo

Oe Affirmed.

5 Compare Cancellation Rule for Constructing Combination Rates on Lumber, ~

ete., 81 I. C. C. 745; 93 I. C. C. 614; MeGowin-Foshee Lumber Co. v. Pig Es

& G. Ry. Co., 95 I. C. C. 451; Moore-Marshall Lumber Co. v. New Orleans &

Northeastern R. R. Co., 112 I. C. C. 33; M. H. Gunther & Co. v. Louisville &

Nashville R. R. Co., 112 I. C. C. 387; Milne Lumber.Co. v. New York Central

R. R. Co., 152 I. C. C. 65; Held v. Cleveland, C. C. & St. L. Ry. Co., 161

I. C. C. 413; Edward Eiler Lumber Co. v. Missouri Pacific R. R. Co., 161

I. C, C. 415; Domestic Hardwoods, Inc. v. Baltimore & Ohio R. R. Co., 168

I. C. C. 753; Brabston v. Louisville & Nashville R. R. Co., 176 I. C. C. 421.

6 The rule had little application until 1920 when large rate increases were

authorized by Ex parte 74, 58 I. C. C. 220.