Petition for Writ of Certiorari — United States v. Jones

SUPREME COURT. UF THE UNITED STATES

OCTOBER TERM, 1948

No..198

ALFRED W. JONES, Receiver ror Grorai & FLoKIDA. _

RAILROAD,

* Petitioner.

ie

THE UNITED STATES

| PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF CLAIMS OF THE UNITED STATES

Mow naonie Pere.

"he tppsed Poop Pe latacone >

INDEX ae as

Supstecr INpex

Page

Opinion below 1

Opinions In ptier proceedings _ -

—_' Jurisdietfon ie ais ae

(Juest tous presented | -

Statute invoived | - )

Statenjent , .

Spec ‘fic ‘at iann of errors to be urged --% : ‘

Reasons why writ should be allowe, > 8

~... . Appendix A:(Raifway Mail Pay Act) ; 12

Appendix B (Qpinions and Decrees of District ( ‘ourt) 17

iat or Cases Crrep

William V. Griffin and Huah Willian Purvis, Re-

ceivers for Georgia & Florida Railroad, U.S. Court

of Claims, 77 Fed. Supp. 197 2

Inthe Mattér of the Application of Georgia & Florida :

Railfoad for increased Rates of Pay, May 10, Sai

br Re ON Be ye Dae ?

WV. Griffin and H.W. Purvis, Receivers for Georgia

& Florida Railroad, Petitioners, vs. U nited States

of America, and Interstate Commerce Commission,

Federal District, Court, January 23, 1933 (Ap-

pend gs ®.: a

In the Matter of the “Applic ation of Georgia & Pp lorida

Railroad for increased pay, February 4,.1936, 214

I. C; 66 - ey

WV. Griffin and WW, Purvis: necstnnin tov Gawtaln

& Florida Railroad, Federal District Court, Feb-

puary 23, 1937 (Xppendix a. a;

United States v. Ciriffin, : 3058 v , && 22 26, 82 L, Kd. 764,

. 2,4, 7,8

__ $9 Goltea, 12, S. 203, 85 L. Ia}. 776 - “10

a S.v. New York Central BR, Co. '279. v, S. 73, 73

Ed. G19 5 + . ee Ae

Pe tet Air Line v0 nited State s, 26 a tt Ss. 302, 304,

67.L. Ed. 664 , sean eo

~7790 | a .

a See - INDEX

TAKLE OF Statues

Railway Mail Pay Act of Jrily 28, 1916, 39 Stat. 412

et seq. (Appendix A)

Review—-Section 3 of Act of Feb. 13, 15 as amended

Title 2a U. S.C. IRS

U rgent Deficiencies Act, Title 28 U. ‘Ss. (*, 41, 46

Section 177 of the Judicial Code, Title 28 U.S. Cl 284

Page

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1948

No. 196

AL PRED W. JONES, Rec EIVER FOR Georcia & Fonins

| RaiLroap, .

. Plaintiff,

vs, |

THE UNITED STATES

PETITION FOR WRIT OF CERTIORARI TO THE

COURT OF CLAIMS OF THE UNITED STATES

: 3 ._ @

To the Honorable the Chief Justice and the Associate Jus-

tices of the Supreme Court of the United States:

“~_, The petitioner, Alfred W. Jones, sole and successive re-

ceiver of Georgia & Florida Railroad, prays that a writ

: certiorari | be issutd to review the judgment of the C ourt

of Claims of United States entered April 5, 1948, in

favor of William VGriffin and Hugh W illiaamn Purvis,

_ Receivers for Georgia & Florida Railroad, plaintiffs, ‘Nof 3

45622, on the principal sum of their claim, but against them

on the award of interest on said claim (Ct-ChR. 42).

‘Opinion Below

The Opinion of the Court of Claims (R. 12) is-Reported

at 77 Fed. Supp. 197.

" le.

‘ot

:

‘cial District of eee. January-2 3, 4935 (Trans.

y- . ‘ . tar ed o%

o °

Opinions In Prior Proceedings

Previous opinion of the ‘Supreme Court of the United

States in U. S. v. Griffin, | No.. 63 Octolgr, Term 1937, is

reported at 303 U.S. 226, 82 L. Ed. 764... -

Opinions in prior proceedings are set out ‘in transcript of |

record in the Supreme Court of the United States, No. 63,

’ October Term, 1937 (303 U. S. 226),. United’ States’ of

-America and< Interstate Commerce Commission, appel-

tants ve W. V. Griffin and H. W. Purvis, Receivers for-

Georgia & Florida Railroad, appeal from the. District

Court of the United States for the Southern District of

Georgia ( Ap. Ex. 1, R. 37), vias

Opinion and Order of the Taterstate Commerce Commis-

sion May 10, 193: > (Trans. No. 63 (1986, R. 5)) G, ") is

reported at 192 L. C. C. 779.

Opinion and Order of Three Judge United States Dis-

(1937, R. 29) R.57)Q Laoag ae

Opinion atid Order of the Interstate Comanites pase

sion, Feb..4, 1936 (Traits. No. 63 (1987, R. 41) R. nk

‘ported at 214 L. ¢. C. 66.

Opinion and Order of Three Judge United States Dis-

trict Court for the Augusta Division of the Southern Judi-

cial District of Georgia Feb, 23, 1937 (Trans, No. 63 (1937,

R.55) R. 102). | ;

Jurisiiction !

The judgment of the Court of- Claims was entered April

>, 1948 (RL 50). The jurisdiction? of this Court is invoked

under the Act of February 13, 1925, -C’. 2° 229, Section 3, 43

* Page references to Trans. in\No, 63 (1937) are to the wide folio num-

3

Stat. 939, as amended May. 23,. 1939, ©, 140, 53 Stat. 752, ‘Beis

va ry S. C, A, 288. a

a” ae Questions Presented

1. Whether the Court of Claims, should have allowed ; _i...-+--

rele upon the claim for a compulsory taking of property

and services under statutory authority within the’ meaning

of the Fifth Amendment, gis’

. Whether the € seaiat of ¢€ ‘aims should not have deter.

alias compensation under the Fifth Amendment as well

as to give effect to an authorized order of the/ Interstate

Commerce Commission as properly construed. /

a

: a

ee * The Statute Involved Is

The Railway Mail Pay Act of July 28, 1916, 34 stat. 412

~> et seq., 39 U.S. C. A. 523 et seq., as set out in appenes A.

? Statement: =

The Special Findings of Fact-by the Court below constitute

an excellent comprehensive statement of thé case, but,

for the purpose of: this pe tition the matter: is staled more

succine tly thus:

e

(1) This are was brought in the Court of Claims pur-

suant to the express opinion of the Supreme Court of the

United States in a prior proceeding between the same par- \

ties and on the same cause of action, that, ¥ hile a three judge 22

Distriet Court did not have jurisdietion under ‘the Urgent

Deficiericies Act; (a) Af the Commission makes the appro-

| \er finding of reasonable cor Hpensation but fails because

of an error of law to-order payment of the full amount whieh:

the railroad believes is payable under the finding, the Court _

of € ‘laims has jurisdiction of an action for the: balance ; and

(b) since the taal vice is compulsory the ( ourt of Claims.

4 oP

would under the general provisions of the Tucker Act have

jurisdiction also of an action for additional compensation

if an order is confiseatory, U.S. v. Gfifin, 303 U.S. 226

(F inding 20, R. 26); and that <uadie the conipenss ioe fixed

in a railway. mail pay order is ordinarily measured hy a

rate, the ultimate question determined * * -*

the proper compensation to’be paid by the gov ernment to

the railroad ‘for-services: and the use of its property—the

ore meruit for carrying the mails (U.S. v. Griffin, 303

U.'S. 226; 237). |

is > 9 °

(2) The service seeiiatlioasl by the Post Office De-

partment was ordered din a ‘space vente, and consisted of

two minimum types ¢ or serviee, V1Z.: ay

(a) The R. P.O. service, the n¥a jor part of the total Serv;

ice so requisitioned, consisted of furnishing: the Post Office

Department with.the exclusive use of fifteen linear feet of

space in a passenger ‘car fitted and equipped, as specified

by the Post Office Department, for a travelling post office

(Pl. Ex, 19, R. 233), lighted, heated, cleaned and maintained

(all at the railroad’s : expense), with postal clerks in charge, |

to take on and sort in transit, and put off the mail at.

stations along the’ route, together with the transportation

thereof (Finding 4, R. 14) and (Finding 21, “R. 26). For

this service the rate of compensation previously fixed, by

force of arbitrary classification in an average with the

larger carriers (Finding 10, R218) and (Finding 13, R:.21),

was at the rate of only 1414 cents per mile (Finding 22,

R. 27). } |

(b) The eiose d pouch s service,.a minor part of the total,

service so requisitioned, consisted of having the railroad’s

_ passenger train employees take on, put off, and care for

in transit, mail. pouches and parcek-pest packages of any

quantity which would not.exceed a quantity which, if piled

six feet high (with a passaze between), would oceupy not

tt ad

5.

/ :

more than three linear feet of the length of a passenger far

(Finding 4, R. 14. land’; Finding “18, Ro“ 19). For this

‘closed pouch: serv jee: the rite of compensation pre ‘viously

aad by force of arbitrary classification i in an aver age with

_- larger: carriers (Finding.15, R. 21), was at the rate of only

442 cents per mile (I inding 22, R..27)-

(3) On April 1, 1931, the carriei to escape the evil of an

arbitrary classification with other lines, instituted a new

separate proceeding before the Interstate Commerce Com.

mission, as provided*for by the Railway, Mail Pay Act

-(R. 53). In. that new proceeding. that Commission made a

finding that the joint cost study after adjustmenfs to which

the carrier consented to satisfy the Post Office Department ;

that it would be entirely fair, indice ited that an increase of

87.4% would be necessary to overcome the deficiency in net

railway operating income under thie respective-rates of (a)

141% cents and (hk) 414 cents per mile, and te provinle respec-

tively, a return on that part of the carriers’ investment’

allocable to mail. service at the rdte of 5.75% per annum -

(Finding 23, R. 27) . $. ste fare :

(4) The Post Office Department admitted that the plain-

tiffs were underpaid (Trans. in No. 63 (1937) R. 144), but,

“nevertheless insisted, for administrative convenience, that.

the compensation for plaintiffs be held down te not more

than. the rate previously preseribed on an average basis

* for lines over 100 miles in length Chains. in No. 63, R. 142,-

143, 144, and Pl. Ex. l, R. 59, 60, 63).

(5) The © ommission, despite its own finding thatthe cost

study showed that‘an increase of 87.4% was necessary, and -

without genuine justifiedtion decided as the Post Master .

General desired, hy ordering that.the compensation for the.

applicant shoald continue at the same rates averag® which

had been prescribed ina prior case (144 1. C. C. 675) for all

9,

oe

*

a 4 : .\ a ; .

: . : ‘

= a / “%

6. -

¥ ‘ " . Me , ee ‘

raifmonds ever cae tiles In length (Finding ‘16; soe anal

| inding Is, I. ),

eas. Im OG rons

(6) For relief Trom the Commission's. arbitrary action’

“the claimant twice sought, hy procedures under the Urgent

o

Defictencies Act and after hearings, arguments and briefs,

obtained from a three judge United States. District Court

for the Augusta Division of the Southern District of

Georgia decrees for injusctions against the Commission's

orders as nof being ‘in‘compliance with the duty an the.

United St: ites to pay ‘‘fairand reasonable _comp@nsation”

and as not being ‘just and equitable’ (Finding 17, R..24;

and Finding. 19, R. 19). (See Appendix B hereto, from

Trans.in No. 63, R. 57, 102.

(47) The Commission prosecuted an appeal from thé said

second deer ee and this Court held thereon that the three .

judge District Court did not have jnrisdiction, but that

there Wasa proper reniedy through the Court of Claims |

(Finding. 20, CR, 26).

(8) In the Court of Claims the plaintiffs introduced evi-

dence to support their claim under both heads, viz. ;

Pe . i 4 .

(a) That the Comission had made an error of law; (b)

and that its order was bay oupoel (Findings 15 to 28, -R.

2leand Minding 24 to 3 t. 28). ee a

(9) ‘The, lower Court inde an award for. the principal

"sur of 98186,707.06 (R. 50); but denied interest on the

erdtnd that te do se was forbidden by Section 177 Judicial

Code as amended, because they. were giving ‘effect ‘to an

order of the Interstate. Cominerce Commission as properly

construed, and not determining compensation in an original

proceeding under the i th Amendment (R49).

(10) The - plaintit?. is satisfied with the. amount of the

7*prineipal sum of the Court’s award as being proper under

\

~

, -headsf(a)/

. z if i | :

- - aoa 3 4. Jd:

‘ ‘ee

re e. : .

either head, but it respectfully, sulynits that upider® both

‘teruiimation

“ifthi Amend-

or the taking of property: hy statutbry. authority,

of the jst compensation required by: the

ment

hence Mterest is necessary bo tnake just-comNensation fulf

and complete.

_ Specification of Etrors To Be Urged

“The ‘ourt of C faim erred in’ respect to the following:

(1)xdn failing to award interest to make just. ‘compensa-

‘tion full and complete since the claim wastor the compulsory

taking of property and services (U.S. v. Griffin, 303 U.S.

?

: 226, g2 L. Kd. T64).

(2) .In failing to hold that: it was determining a claim

for just compensation required hy the constitution, whether

it Was (a) giving effect to an order of the Inte ‘rstyite Com-

~ merce Commission as properly construed, or was (b) deter-

mining just compensation ‘hecause the order of the Com-

Inission was confiseatory (U. Sov. New Sage Central R. Co.,

297 U.S. 73, 73 L. Ed. 619); and (U’, Vv. Griffin, 303 UL S

226, a? L. Rd. 164). .

Summary

The statement of the case sd sets out the facts, and, like

wise, the specification of errors so sets out the issues—that a

any further summarization would’ be repetitious... If the.

judgment of the Court of Claims in the award of the prin

cipal sum.is sustained, the’substantial issue to the plaintiffs ;

is. the failure of the lower Court to award an. additional

“amount for interest so. as to make just compensation full

‘and complete. ,

cate ; .

_ Reasons for Granting the Writ

a ‘Specification of Error 1

(1) In failing to award interest to make Just compensa-

tion full and complete since the claim was for the compulsory

taking of property and services (UL Sey. Grifin, 303 U.S. .

296, 82 LB 4). @

* The plaintit? respectfully submits that this Court hae

already decided that the requisitioning of mail transporta--

tion under the Railway “Mail Pay Act is a taking for which j

just-compensation -is a constitutional right. In construing

Pea Act, this Court said in U.S. v. New York. Central R.

. 279 U.S. 77, 78, 73 L. Ed: 619, that ** the Government .

sacle as it must, that.reasonable compensation for ssuch -

_ ‘required sérvices is a constitutional right’’ (Italics sup-

plied). Again, in U.S. v. Griffin, 303 U.S. 226, 238, 82

L. Ed. 764, when this same cause of action between een same

. parties was before it, this Court reiterated the proposition

that railway mail service is compulsory.

The plaimtift further respectfully submits that for a-com- ,

pulsory taking by statutory authority the requirement of

the ‘Constitution that ‘just compensation’ shall be pvid is

_coinprehensive, and one of the essential elements of just -

compensation is that of interest when the taking precedes

the paymeygt; hence the general rnle that the United States

avill not Ke held liable for interest on unpaid accounts and

elaiims does not apply. “This Court’ said as much’ : the

ease of ‘‘Seaboard Air Line v. Unite d States, 261 U.S. 302,

405, 67 L. Ed. 664, 670, Wt se a va ;

“The Constitution safe quards the right and . 10 of

the Lever Aet directs panment (Ttalies supplied). The

rule above referred io that, in the absenee of agree

ment to’ pay or statute allowing it; the *Jnited States

will not be held liable for interest on unpaid accounts

and claims, does not apply -here. The requirement. that

. : ‘> . +]

“just compensation’? shall be jrtaiel $s comprehensive,

“and includes all elements, and no-Apecifie command to

‘inelude interest “is ‘necessary owhen. interest or its

equiv alent is a a of sel compgnsdfion.

x

r is true that in the siitd Seaboard Ais Lins case, the

property invelved was in the form of fanad, but it was not

-a.case of condemiation. In that ifistance there, as here,

there were statutory provisions tor payment, in which

nothing Was said about interest, and the C ourt fur ther sald:

»”

‘

‘Section 10. of the “Lever Net authorizes the tak-

ing of property for the public. USSG, on payment of just

compensation, There+is no’ provision in respect of

interest. Just compensation is provided for by the.

Constitution, and the right to it cannot be-taken aw ay

by statute. -Its aseerts: wegeng is © Judicial function,

Monongahahela Nav. Co. United yong 148 U. S. -

312, 327, 37-L. Ed. 463, 468, 13 Sup. Ct. Rep. 622"

(Italics supplied). ° See :

More recently in U.S. v..Goltra,*342 U.S S. 203, 208, 8d

L¢ Kd. 776, 781, this Cour explain the principle further

when it said: . ;

“Tr the Seabourd Air Line &: #0. case $10 of the

Lever Act’ (August 10, 1917, 40 Sat. at 1, 276, 279.

chap. 53) authorizing the taking-by eminént domain. e

property for the public use oi payme nt of ‘just com-

' pettsation was under éxaminatiow.:. dt contains np. spe

-cifie provision ‘fer interest. This ‘Court held that a

taking under the authority of S4@ re@iiired the just

compensation ‘‘pravided for by the Constitution’ and

that such compensation ts paval te ‘tas of the time

when the owners. were daprived of their property”?

This case, howexe rand the others cited in the preced-

. ig paragraph, involve the. Jroqnisit ronin ¢ or taking of

property by eminent domain tinder anthority of legis-

lation. | Thi distine fron between wrap. rfy taken-under

authorization of Conaress and b dics rey appropriated

Aer °

°

;

10 :

without such authority has long been vecognized-’

(Italics supplied). :

The Constitution sets up no rule for discrimination be. |

tween real property Ald) property of other kinds where

property is taken under authority of a statute, and there-

fore, the petitioner-plaintiff respeetfully submits that this

‘taking of. property, duly authorized hy a statute, is within

the protection of the constitutional requirement for just

compensation which must necessarily include interest from

the time of taking in order for it to be full and complete.

ee

Specification of Error 2

In failing to hold that it was determining,a claim for

just compensation required by the Constitution, whether

it. was (a) giving effect to an order of the Interstate Com-

merce Commission as propérly congtrued, or was (b) deter-

mining just eompensation because the order of the Com-

mission was confisoatory (U.S. vo New York Cegtral lf. Co.,

279 U.S. 73, 734. Ed. 619); and (U..S. v. Origin 303-ULS.

296, 85 L. Ed. 776).

Specification of Error 2 is intended both to supplement

specification of Hrror 1 sand also to preserve points of law

in ease the defendant, should make anyContention that the

decision in the ¢ ‘ourt below was not rested upon either of —

the ( (a)-and (b) hends of jurisdiction of = Court as ex-

pressly determined “by this Court in U.S. v. Griffin, 303°

U.S. 226, 85 L. Kd. 776. he :

1

Se fe

Witererone, it is respectfully prasid: that this petition

for a Writ-of Certiorari he wranted, . - Le

.

Respectfully submitted, 3 ;

Movuctrris Horr,

‘Alorney for Alfred W. Jones, Receiver

for Ge orgia & Florida Radewad, Petitioner:

* 601 Towe r Biiliding,

. . Se Washinaton, D.C.

Filed: August 5, 1948, ‘

.

ar

l2 :

APPENDIX A

» RAILWAY MAIL PAY ACT OF JULY 2s, 1916.

Sec. 0. That the Postmaster General is authorized and

directed to readjust the compensation to be paid to railroad

companies from and after the thirtieth day of June, nine-

teen hupdred and sixteen, or as soon thereafter as maybe

practicable, for the transportation “and handling: ‘of the

mails and furnishing facilities and services in connection

therewith — the conditions and at the rates hereinafter

provided. (28 U.S. C.°524) :

— The Postmaster General may state railroad mail routes

and authorize mail service thereon of: the following four

ciesses, namely: Fult railway post-office car service, apart-

thent railway post-office car service, storage-car service, and

closed-pouch serviee, (28 UL S. C. 525) :

Full railway post-office car mail service shall be service

by cars forty feet or more in length, constructed, fitted up,

and maintained for the distribution of mails on trains. The

adthorization of full railway post-office cars shall. be for

standard-size cars sixty feet in length, inside measurement,

except as hereinafter provided, (28 U.S. C. 526)

Apartment railway post-office car nrail service, shall be

service by apartments less than forty feet in length in ears

constructed, fitted up, and m: aintained: for the distribution

of matls on trains, Twe standard sizes of apartment ratl-

way post-office curs may be authorized’and paid fer, namely,

- apartments fifteen feet and thirts feet in length, inside

measurement, except as he reinafter prov ded. (28 U.S. ¢€.

920) ; ars

ee 7 . oo : . * : * ;

- a

Service by ‘full and apartment: railway post-office cars

and storage cars shall inehide the carriage therein of all

mail matter, oqulpme nt, and Supplies for the mail service

cand the ¢ inployees Witte: Postal Service or Post Offer De’

_ partment, as shall he dirested by the Postmaster General to

he so carried, (28 UL S.€. 529)

Closed-pouch mail service shall, he the transportation

“13

and handling by railroad employees of mails on trains ou

which full or apartment gaiiway post-oltice cars are not

authorized, except as hereinbefore provided. The authori-

zations for closed-pouch service shail be for units of seven

feet und three feet in length, both sides of ear, (25-U. S. C.

O30) | , esky

. . o . . . ee

Where authorizations are made for cars of the standard

lengths of sixty, thirty, and fifteen feet, as provided by this”

section, and the railroad company is unable to furnish such

cars of the length authorized, but furnishes cars of lesser.

length than those authorized, but which are determined by

the department to be sufficient for the service. the Fost.

inaster General may accept the same and pay only for the

actual space furnished and used, the compensation to be

nat exceeding pro rata of that pravided by this section for

r=)

the standard length so authorized : Provided. That thy Post-

aster General may accept cars and apartinents of greater

length than those of the standard requested, but tio com-

pensation shall be allowed. for such excess lengths. (28

U.S.C. 532)

. . . . . . *

In computing the car miles of the full railway post-office

ears nnd apartnient railway post-ofce cars, the ma <inum

space authorized in either direction -of a roundtrip éar

run shall be regarded ‘as the space to ge eaputed in both

directions, unless otherwise tnufually agreed upon. (28

U.S. (. 534) | ole

The Postmaster Genenal is authorized to make special

contracts with the railroad conipanies for the transporta-

tion of the mails where in his judgment the conditions Wwar-

raut the application of higher rates thanzhose kerein spect”

fied, and make report to Congress of all cases where such

speciid contracts are made ‘and the terms and. reasons

therefor, (28-0.-S. (. 565) :

Allears or parts of cars nsed for the Railway Mail Serv.

ice shatl be of. sich construction, stvle, length, and char.

acter, and°furnished in such manner as shall be required by

the Postmaster General, and shall be constructéd, fitted xp,

maintained, heated, lighted, and cleaned by and at the

=

44

experse of the railroad companies, No pay shall be al

lowed tor service by any’ railway post <ttice car whitch ts

not sound in mate rial Jand. const ractiin and Which is not

eqaupped with sanitary drinking Water containers and toilet

facilities, nor age such ear is regularly and: thoroughly

cleaned, (28 U. 7).°*.* 8

_ ». ‘ e s . eo .

Railroad conipansies carrying the mails shall furnish’ all

necessary, facilities for caring for and handling them while .

tn their custody. They shall furnish allecars or. parts of

cars used ini the transportation and distribution of ‘the’

“mails, except as herein otherwise provided, and place them

in stations before the departure. of traius at such times

and when reqnired to do so. They shall previde station

space and’ rooms for handling, storing, and,transfer of:

mails in transit, in¢luding the separition thereof, by pack

ages for connecting lines, and such distribution ,of regis-

tered mail Hi transit as may be necessary, and for offices

for the employees of- the Railway Mail Service engaged in.

such station: work when required by the Postmaster Gen. |

eral, in which mail from station hoxes may be distributed

if it dees not require ¢ additional space.

elf any railroad company carrying the, mails shall fail or

refuse to provide cars or apartments in vars for distribu

tion purposes when required by the Postmaster General, or

shall fail or refuse to construct, fit up, maintain, heat, light,

and ele HIN Sie ‘h cars and provide such appliatices for use in

ease’of accident ais may be required by the Postmaster Gen-

eral, it shall be fined such reasonable suni as mans in the

discretion of the Postmaster General, be deemed proper.

(28 U.S... 538) ee 3

The Postmaster General shail in all cases decide apon

what trains and in what manner the mails shall he con-

veyed, Every. railroad company carrying. the mails shalf

carry om any train it operates,-and with due speed, all

snailable matter, equipment, and supplies directed - to be

carried thereon. [f any such railroad company “shall fail

or refuse to transport the mails; equipment, and supplies.

when required by the Postmaster General. on any train or .

©

15

. ’ \

‘ ° e -

, ° 5 | e

‘trains it operates, such company shall be fined such rea-

sonable amount as may, in the discretion of the Postmaster

Giencral, be deemed proper. —(28-U. S.C. 589) °

: foo : -€. o » « ° ° . ‘

All railway common carriers are Hereby required to trans.

_ pert such mail matter as may be offered for transportation

by the United States in the manner, under the conditions,

and with the service preseribed. by the Postmaster Generat

aud shall be entitled to receive fair and reasonable eon’

_pensafion for suck transportation and for the serviee con-.

nected therewith. (281°. SsC. 541)” . 4

~The Interstate Commerce Commission is herebs ome <5

powered’ and directed, as soon as. practicable: to fix and

determine from, time to time the fair and reasonable raves

sree compensation for themtransportation of such mail-met

ter by railway common carriers tind.the service connected

therewith, prescribing the method or methods by weight, or

space, or both, or otherwise, ‘for ascertaining such rate

or compensation, and to fiublish the same; and orders so

Wiade and published shall continue in foree until changed

by the commission after due notice and hearing. |(2s°

y..S; C. 542) | :

c) . *- . <= ° a .

“The procedure for the ascertainment of said rates and

compensation shall be as fellows. _

Within threesmonths from and-after the approval of this

‘actor as.soon thereafter as may be practicable, the Post-

inaster. General shall file with the commission a statément

showing the-t ransportation required of all railway common

carriers, including the number, equipment, size, and con”

siruciton of ihe cars necessary for the transaction of the.

business; the character and speed of the trains which are

-4o carry the various kinds of thails, the service, both ter-

minal and en route, which the carriers are to render; and.all

ather information which may Ne material to, the inquiry, but—

such other information may be filed at any time in the

‘discretion of the commission. (28 U.S. (545)

.. s & . ie * e. ah .

ae 16 | |

All the provisions of the law for takin y testiniony, ise

curing evidence, penalties, and proc edure are hereby uryle

applicable. (28 [. S. CITARS-

kor the Murpose of determining and fixing rates or com:

pensation hereunder the commission is authorized to make -

such classitic ‘ation of carriers as may be just and reason-

able and, where just. and — fix general rates ap-

ge to all carriers in’ the same classifi ation, (28

U. . O49), ity

Fendi such esis: and the final determination of

the question, if” the Interstate Commerce Commission shall

determine that. it is necessary -or aflvisable, in ordtr to

‘arry out the provisions ef this section, to have additional

and more frequent weighing of the mails. for statistical pur-

poses, the Postmaster General, upon request of the Commis

sion, shall provide therefor in the manner now preseribed

by law; but such weighing need not be for more than thirty

days. (28 U.S. C. 550) -. "

At the conelusion of the hearing the C ommission shall '

establish by order a fair, reasonable rate or. compensa-

‘tion to be received, at such stated times as may be named >

in the order, for, the triinsportation of.mail matter and the-

service connected therewith and during the continuance of

the order the Postmaster Genera) shall pay-the cartier

from the appropriation herein made such rate or compensa-

tion. - (28 UL S.C. 551) ae ee .

ithe® the Postmaster General or any such carrier may

at any time. after the lapse of six months from .the entry

of the order assailed apply for a re-examination, and.

* thereupon, substantially similar proceedings shall be had

with respeet to th? rate or rates for service covered by

said application, provided said carrier or carriers have. an

interest therein. (28 U2 S.C: 553) «

-

For the purposes of this section the Interstate Commerce”

Commission is hereby vested with all the powers which it is

now anthorized by law to exercise in the investigation and

ascertainment of the justness and reasonahleness ot tre ight,

passenger, atid express rates to be paid by private shippers.

(28 ULS. C. 554)

» c . an i . °/ «a .

+

fae)

«sou

+

>

17 ’

That it shall be unlawful for any railroad company to

- refuse, to perform mail service at te rates or methods of

vompensation provided’. by law when -required by. the

Mistinaster General so to do, and for such offense. sheath

be fined $1,000. Each ‘day of refusal shall constitate

‘separate offense. (28 US. 0.563) |

>

APPENDIX B

- - . >. ©

Ovinions anp Decrees or THE Tureg Juuoe UNrtrep States

f AMistrict Court ror Tur Aveusra Division oF THE. Sov TH-

/ BERN District oF GEORGEA -

(Copied from Plaintiffs’ Exhibit 1, the aid Exhibit being

the transeript of record, Supreme Court of the United

States, OQetober Term, 1937 No. 638; the United States of

America and Interstate Commerce Commission vs: W. V.

Griff and IH. W. Purvis, Receivers for Georgia & Florida

Railroad, Appeal from the District Court of the United

States for the Southern District of Georgia.)

OPINION AND Decizt—Filed ‘January 23, 1935 (Trans. in

} No. 63 (1947) R. 29)

ts Unrrep/Srates District Court

‘In Equity, No. 207 : ear

W. V. Giueri and H. W. Purvis, Receivers for Georgia’ &

Florida Railroad, Petitioners .

v.

Tit Univep States or America anp Lx tTerstare .

ComMERCE COMMISSION

-Oprsion anv Decrer—Filed Jannary 22, 1935 °

? ‘ > " . : " Te ~—s

This is a suit by W. V. Griffin.and H; W. Purvis, Re- 7)

ceivers of the, Georgia & Florida Railroad, against the «,

United States of America and the Interstate Cemmerce

~~“

: Paste ts 18

* Commission to-enjoin, set aside, amend, and suspend an oy

der of such Commission of -May 10, 1933, denying an applix

cation for increased compensation for the ‘transportation

of mail. The suit is brought under U.S. C. A. Title 28, See

tions 41 (27 and 28) and 43-48, .

No other fagts were established or sought te be estab-

lished than those set forth in such ‘order of sald Commis-

sion, a copy of which is annexed to. petitioners’ complaint;

and it is therefore considered unnecessary and redunant to.

restate ‘*Findings of Fact’? as provided by - Equity Rule)

70%. Theechallenge is to the conclusion drawn from un-

‘disputed facts.

The facts developed in the ‘cost study”? fully set forth j in

such order of the Commission were ascertained by the

application of rules preseribed*by the Commission. — All

parties to this controversy agree that a ‘‘cost study”’ is not

and cannot be tnathematically correct. but is 4n approxima-:

tion. Such ‘‘cost study’’ discloses among other facts that

‘*There was (1)-a deficit in net railway operating income

from mail of $4,945.00 based upon 1931 operations’’. It’

further disclosed that as regards revenue: ‘‘The distribu-

tion of expense upon the space ratios shows that the ratio |

for mail service’was 102.79” or that for every dollar appli--

cants received for transporting mails they ‘expended one

dollars and 2.79 cents. . g.

The fact that this railroad lost more money on other

‘services rendered by it or that other railroads transported

7 under similar, if not identical conditions, at a profit,

hat this railroad belonged if a certain classifi¢: ition

pe blished by such Commission, known as Class 1 railroads

and that therefore it should be in aceord with other rail-

roads of such ¢‘lass’ as to compensation as to mail, do ‘not

refute or impair the fact that-the compensation.aiiowed this

railroad for the transportation of mail does not equal the

_cdst of so doing. ; :

< While it is true that ‘‘ For the purpose of determining and

fixing rates or compensition hereunder the Commission

is authorized to make such classification of carriérs as may

be just and reasonable and * * * fix general rates ap-

puentte to.all carriers in the same classification” , tt ean fix

4

, : 19

such rates only ** w here just and equitable’ "1 oe U. S.C: A.,

See tion ode. eer) :

T he transportation of mail by railroads § ds compulsory v but

they are ‘‘entitled to receive fair and/reasonable gompen

‘sation for sug ‘h transportation an for the service connec ‘ted

thetewith.’’ 39 U.S.C. A., Section D41. | ae

There is no attack upon the efficiency of the operation of

this railroad. There is no charge of extravagance. The

baie fact remains that this railroad is required in order to

escape severe punishment (39 U.S. C. A, 4» Section 633) to

transport mail at a compensation fixed by such C omission

and that such compensation does not pay the actual cost of

service.’ This- compensation is not in compliance with the

duty on the United States to pay ‘*fair and reasonable com-

pensation’’ aud is not ‘just and equitable’’

It is therefor e ordered and decreed:

e

(1) That said order of the Interstate C omimerce Tides:

mission of May 10, 1933, is and has at. all times -been un-

lawful and that. said ordex be set aside and annulled.

(2) Said Commission shall take such further action in

the premises as the law requires in view of fhe annulment

_ and setting aside of the said order of May 10, 1933. :

oe

‘Inasmuch as this court ha’ not the authority -to fix the

compensation we do not deal with the question of what per

cent of return on the investment) if any, would be required

to make the compensation fair and reasonable.

This 18th day of January, 1935.» .

Samveb. H. Srsiey,

United States Circuit Judge. ;

— Wm. H. Barrert, ae

, United-States District Judge.

, FE. Marvin Usbrerwson,

deat d States ease Judge.

File endorsement casiied. ]

4

of the mails, on and after said April 1, 19317?

20 :

OPINION AND Drcrer— Filed February 25, 1937 (Trans. in

No. 68 (1937) R. 55)

iN UNITED STATES DISTRICT COURT FOR THE

SOUTHERN RISTRICT. OF GEORGIA, AUGUSTA-

DIVISION’ : al ae

oy In Fquity, No, 228

W. VeoGrierix and H. W. Purvis, Reecivers for Georgia &

Florida Railroad

V. e*

THe Unit ED SraTes OE AMERICA and INTERSTATE COMMERCE

ai

j ComMMISSION

‘Opryion anv. Decgre—Filed February 23, 1937

Effective August 1, 1928, the Interstate Commerce Com-

mission (hereinafter called Commission), in Ratlway Mail

Pay, 144 I, C..C. 675, established rates for transportation

of mail hy railroads over 100 miles in length and these rates

werg applied - to the Georgia & Florida Railroad. There-

after the receivers of such railroad made application to the -

Commission for an alteration of such rates so that they.

would be fair and reasonable for such railroad. After a

test period, -investigation and hearing from counsel. for —

applicant and for the Posttuaster General. the Commission

—on May 10, 1933, geclined to change the rates.

The receivers of such railroad then brought their peti-

_ tion hefore a Three-Judge Court against the United States

of America and against said Commission, praying that

said order of May ,10, 1933, be declared unlawful and

wholly void and that such Commission reopen and recon:

sider the proceedings and ‘‘determine the fair and rea’son-

able rates to be received by petitioners for transportation

ie

‘‘No other faets were established or seydéht to he esta

lished than those.set. forth in, said order of said:Commis-

sion, a copy of which is annexed to petitioners’ complaint’’.

“The challenge is to the conclasion drawn from the undis-

puted facts.’’ .(Previous decision ‘af. this court.) .The

court therefore deemed it unnecessary -to state ‘*F indings

of Fact”’, but its judgment, did declare certain facts as

follows: =

“(1) The facts developed in the ‘cost study’ fully set

forth in such order: of the Commission were ascertained by

the application of rules prescribed by the Commission.

‘*(2) All parties to this controversy agree that a ‘cost

study’ ts not and cannot be mathematically correet but is

alt approximation.

‘* (39 ‘The distribution of expense upon the space ratios

shows that the ratio for mail service was, 102.79" or, that

for every .dollar applicants received for transporting

mails they expended ene dollar ahd 2.79 cents,

(4) The fact that this railroad lost more money on

other services rendered by it or that other railroads trans-

ported mail under similar, if not identical, conditions at:a

profit or that this railroad belonged in a certain classifica-

tion egtablished by such Commission, known as Class 1

railroads, and that therefore. it’ should be in accord with

other railroads of such class as to compensation as to mail,

‘do not refute or impair the fact that the compensation

tion of this railroad. There } is no charge of extravagance.

allowed this railroad for the transportation of mail does

not equal the cost of so doing. The Commission ‘ean fix

such rates only ‘Where just and equitable.’

‘“(5) The transportation of mail by railroads is eom-

pulsory but they: are ‘entitled to ‘receive fair and reason-

able compe sation. for such transportation and for the

service connected therewith.’

\

**(6) There is no attack upon the efficiency of the opera-

The said erder was annulled and the Commission was,

directed to take such further action as the law requires.

There was no appeal ‘from this decision.

' Thereafter the Commissien of its own motion reopened

such proceeding, which resulted in a report 0 on F ebruary 4,

e cs . a .

ee ae

.

~e-

ae

“1936, -again\ establishing, the: same rates which ‘this court

had deel lared unlawful.” ; . counts

» It-hecomes important ‘to ascertain what, if any, additiqnal

‘testimony, er what, if any, different rules of law warranted

such cone lysion:

For the reason that naithior report states definitely “OP ind-

ings of Fact’? as such it is net easy to ascertain: what

diterent facts existéd at tle different hearings. We will”

dor vur-best to ascertain-the differences in facts and in rulés

of law following the course of discussion in the last-repoM.

» The report, after quotingfrom brief of applicant, states:

/ .

‘‘There is implicit in the statement quoted, and in thie

j_cortesponding, portion of. the opinion referred to, the as-

./ sumption that if:the department discontinues mail service

on applicant’strains-the applieant wiil thereby be ‘saved

the expenditures of +1Re 79 for every dollar of revenue it

ses vance, tee nS Tate

Wi e do. Per coneur ins athis Lo a Tlie « opinion. defi-

“nitely: states that these figures. were derived by ‘thé distri-

bution of expense upon thé space ratios”’ and by thie employ:

‘iient-of methods-approved or-direeted by the Commission.

‘flowev eT, We deem’ this difference in interpretation | imma-

. ter ial. : “ ‘ ¢

- The argument of ‘ther onintission to destroy the effect of

its inethods previously used is. thus: stated : is, A

es Se .Relativecdsts deriy ed from a series of studies. |

Jat Saailtone for. operations’ common to a number of

Seryicds cannot be converted inte absolute costs by using.

i sinile: figure. relation derived f rom such. studies.

~The cost computed ‘in the-manner.deseribed is a hypo-

fhetreal @ost ind not an actual cost, and is not necessarily

to bps the. space that should be chargedta mail in cést stidies

hilar fot! yet” here,. consideration: was wiven to otlier £ac-

tars as well, ‘sueh-as the athountand character of the unused

tbe ‘yeported as operated (Rattwry Mail Pay, 83 1.0.C.

137, 1 10; WLC, 33, 39) the actual apace. “oce upied I by.’

‘* — Y “.

; esi A A ce “2 . : ; ae ae J et ‘ A

. Bee, . : :

ae . . ‘% B ad - eX rds

, ‘ . - . .

.

cane hasive as applicant. eonténds. In other’ niail-pay pro- Ns

ope lings, in whith space ‘Authorized and paid for was found

4

“less and the Comn

5 ~ bein the absence of supporting testimony an

9

mail, as distinguished fram authorized space, determined

by the mail load carried, based upon a count of bays and ‘of

packages outside of bags, and, in some. ifistances, by the

weight (Railway Mail: Pay,.95, LC.C. 498, 500, 511; 120

LCC. 439, 446) ; comparisons with compensation received

from other services in passenger-train ‘cars (Railwat Mail

Pay, 144. L0.C. 675, 706); comparisons with freight rates

(Railway Mail Pay, 144 1.C.C..675, 705; 151 LC.C. 734, 742);

comparisons per car-mile and per car-foot miles of the com: _

puted cost of mail service and the revenue from authorized

maihservice with the computed cost of corresponding units

in passetiger-train service as a whole (Railway Mail Pay,

‘V4, 1.¢.C.’ 675, 699); and the character of the service per-

formed \n connection with transporting the mail (Railway

Mail Pay; 56 1.C.C. 1, 8; Electric. Railway, Mail Pay, 5S

LCC, 455, 464; 98. LCC. stm |

Neither applicant nor this Court entertains the view that

- the hypothetical cost is ns lashes aieiesa Ie: ‘It is

merely the fairest method that has heen devised. If ‘actual

sion would be reduced to guessing.

What elements may have been considered le

cost’? as to-each ite ae required applicants: would be help-

» and should

some. indi-

ation as te what weight was given each element) Farther,

‘there is ny testimony here as to ‘‘unused space reported as

operated.’* There is included payment for unrsed space not

operated, of which more later, There is nothing to justify

disregard of ‘the fact used in the first report that “spac e

~eauthor ized forNnail is regarded as space used.’”

The law as. established in this case by the previous de-

cision; anreve ersed, makes inapplicable ‘comparisons with

- compensation reé¢ived from other services in passenger °

tram cars’’; ‘*Comparisons with freight rates’’; and ‘com. -

‘parisons. per car-mile. and per car-foot mile of the com-

puted cost of:mail service and the revenue from authorized

nfiil service with the yompnted cost of corresponding units

in passenger- -train serviee as a whole.’

There ‘is no criticism of ‘‘the eharacter of the service

performed in connection with transporting the mail.”’

Further argument of the Commission, as we understand

\ ate ae °

.

*»

re

ak eC :

it, is that because 30 feet instead of 15 feet-is_partitioned .

off for iuai} this adds 15 feet ‘to. the unused spacefor which

the post office depa riment pyvs-a part. We do not so under.

~tond the testimeny.- Our-uderstanding is that the unused

space is the same wherever the partition be. placed.

There is however this further finding of fact’ imptied,

though not definitely stated, viz: that an unnécessarily large.

car is used and this adds to the portion paid by the mail for

unused space and that. if 15 feet were elimtn ated from the

cur the mail space ratio would be reduced to 10.79 per cent,

resulting in a profit to applicant from mail.of $1;711.

Lenghtily are theories and possfbilities advancedo estab-

lish. that a different result might be reached if different

methods were: employed ‘to ascertain and compute the oh

proportions of operating expensé and. the sepa rations into .

expenses for freight service and passenger service re-

spectively”’ , but there is no’ justification submitted for

abandoning the method employed in making the first report,

which was unchalleriged as to aceuracy and was admitted

to havé been apportioned ‘‘in accordance with the formulas

prescribed for Class 1 roads for the: separation of expenses’

between freight and passenger service.’ : :

The second port: not only. does not contradict this but

reaffirms it in this language: ‘The metliods. are the’ sanre

as those prescribed In our cules governing, separation of

such expenses on large steam railroads.’ |

Wefind nothing that warrants any change in our con-—

clasions as to the legality of the order now before us from

our previous conclusion as to the-same rates except - ea |

fact, stated by implication, that the use of-a mixed

shorter by 15 feet would result in a profit from mail reve-

hue of $1, 711 ‘annually. The repor disc! tO CS | ‘The total

mail service investment thus derived was $457, 682." This.

return is_approximatley 0037 per vent. This i is not. ‘fair :

aml reasonable.’ Nene

-Inasinuch as aif-ihe facts constityting the buses for the

order of the Commission are fully set out in the report, it fs.

_ deemed unnecessary to restate them in this opinion. as find oe

‘ings of fact, it is therfore ordered and deereed

* ©

9 . ME

) That spid orde roof the Inte Matate Commerce Cou

iiss 2 of February 4, 71956, is ant dows atall times -hees)

unlawful ane that “itd order be set deity and annulled

, €2) Satd Corti: jésion shall tike sacl, further action in

‘the premises as thedaw requiresin view of the annulment

and ‘setting aside of the said order: arr ebruary 4, 1926.

This 22nd dav of e ebriary, 193%. -4 ;

PS 4

e “+ CHG

at ee ; =: Samvin tk SIBLE¥:

ht | Lo nited. Skate sCoreut Judge,

Wor, H.: AKRETT,

, — a Neat Thistrict Judge; .

Minton NDERWOODR,

a ad. aes District dLudye.

“ae , mt] eae -

(File endorsement omitted. y y

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