State ex rel. Railroad Commissioners v. Seaboard Air Line Railway ( 1904 )

Carter, J.

(after stating the facts). — Sections 3 and 4, Chapter 4700, act of 1899 (the Railroad Commission Law), prohibit any railroad, railroad company or common carrier from charging, collecting, demanding or receiving more than a fair or reasonable rate of toll or compensation for the transportation of passengers or freight, and from making unjust discrimination in its rates or charges of toll or compensation for transporting passengers or freight “upon its tracks or any of the branches thereof or upon any railroad within this State which it has thé right, license, or permission to use, operate or control.” Section 5 defines the term “railroad” as used in the act as including among other things, “all the road in use by any corporation, receiver, trustee or any other person operating a railroad whether operated under any contract, agreement, lease or otherwise.” By section 6 the Railroad Commissioners.are given power to “make reasonable and just rates of freight and passenger tariffs to be observed by all railroads, railroad companies and common carriers doing business in this State over their respective lines or connecting lines,” and by section 8 they are required to “make and furnish to each railroad corporatiodoing business in this State as soon as practicable, a printed or written schedule of just and reasonable rates and charges for transportation of freight, passengers and cars upon its railroad or railroads under its control or management.”

The returns do not deny, but specifically admit, that the defendant “did control and operate the main and branch lines of”, the West Shore under the first contract. It does not deny that it controls and operates the same road under the second agreement, but denies simply that it controls and operates same otherwise than under the terms of the second agreement. A careful reading of that agreement satisfies the court that under its terms the Seaboard has “the right, license or permission to operate” the West Shore Railway, and that such railway is “in use” by the Seaboard and “operated by” it under “a contract or agreement,” within the meaning of the Railroad Commission Law, and that under section 6 of that law the Commissioners are authorized to make reasonable and just rates of freight and passenger tariffs to be observed by the Seaboard in the operation of the West Shore. There is nothing in the language of the statute which justifies the construction contended for, vis: that the operation of the road must be under such a contract as that the operation is for the benefit of the operating company as by a lease or other contract under which the operating company will be entitled in its own right to the income or profits of the business. We entertained the same view of the first contract, in overruling the motion to quash the alternative writ, and see nothing in the substituted contract to cause us to change the opinion then entertained. The companies having entered into the relationship shown by the contract voluntarily after the passage of the Railroad Commission law have no ground to complain that their freight and passenger rates are to be fixed and regulated in view of that relation. It is contended, however, that the contract does not constitute the two roads, one road within the meaning of the Commission Rule No. 1 set up in the alternative writ. The regulation here sought to be enforced does not attempt merely to apply Rule No. 1 to the two companies, but sets forth and adopts a schedule of rates for all classes of freight transported to and from points on the Seaboard in Florida from and to points on the West Shore, and to and from points on the West Shore to and from other points on the same road. If, therefore, the language of the rule is not broad enough to embrace the present case, the special regulation here sought to be enforced is within the power conferred upon the Commissioners and can, therefore, be enforced notwithstanding the inapplicability of Rule No. 1, The court is, therefore, of opinion that the returns in so far as they rely upon the contract set up, furnish no answer to the writ.

The returns attempt to question the reasonableness of the rates established by the Railroad Commissioners. They contain general allegations that the rates are not just and reasonable, but these general allegations are qualified by other statements that the rates if enforced will not afford a reasonable income or in fact any net income over and above the reasonable cost of constructing and maintaining said railroads. The original return goes further and includes with the cost of construction and maintenance the payment of fixed charges, which counsel admitted in argument means taxes and interest on outstanding bonds. The vice in this method of pleading lies in the fact that the question of reasonableness is made to depend upon the capacity of the rates to yield a net income over and above the cost of constructing. and maintaining the road and the payment of fixed charges, whereas circumstances may exist under jvhich rates are reasonable which do not afford a net income above the cost of operation and taxes, or the cost of operation, taxes and fixed charges. The returns set forth a few elements entering into the question as to what constitutes a reasonable rate, and attempt to make those elements controlling, whereas the conditions surrounding the operation of the road may deprive them of controlling force. The use of the words “reasonable cost of constructing” renders the pleading very ambiguous. The reasonable cost of construction is to be considered in determining the fair value of the company’s property, which is an element entering into the question of reasonableness of the rate, but the cost of construction is not to be deducted from the earnings under the proposed rates in ascertaining if those rates are reasonable, for under such a rule the public would be compelled to pay for constructing the road without being entitled to its ownership.

The amended return seeks to test the reasonableness of the rates by taking into consideration as part of the income of the road a portion of the earnings from interstate and foreign commerce whereas under the decisions of the Supreme Court of the United States this can not be done. No doubt interstate and foreign business can and should be considered in determining the proportion of the value of the property assignable to domestic business, and for other purposes, but no part of the earnings or losses from such business can be charged to or against the income account of the company in ascertaining the reasonableness of domestic rates. See Smyth v. Ames, 169 U. S. 466, 18 Sup. Ct. Rep. 418; Chicago, M. & St. P. Ry. Co. v. Thompkins, 176 U. S. 167, 20 Sup. Ct. Rep. 336; Minneapolis & St. Louis R. R. Co. v. Minnesota, 186 N. S. 257. See, also, San Diego Land & Town Co. v. City of National City, 174 U. S. 739, 19 Sup. Ct. Rep. 804.

It is contended by relators that a return questioning the reasonableness of a rate sought to be enforced by mandamus must set up in detail the facts and figures from which the court can see that the rates are reasonable. There is force in the suggestion that as the law makes the rates prima facie reasonable, an attack upon such rates should be full and specific, showing facts from which the court can say affirmatively that they are not reasonable. No doubt some! such degree of particularity would be required in a bill in equity seeking to enjoin such rates. ' But we do not think this case stands in the attitude of a bill in equity. Here an attempt is made to enforce the rates, and the alternative writ necessarily by implication at least alleges that the rates are reasonable. The relators are not required to set out specially the facts showing that the rates are reasonable because the law makes the schedule of rates prescribed by the Commissioners prima facie reasonable. The allegations of the return attacking the reasonableness of the rates are of the nature of a denial of the implied allegations of reasonableness in the writ. If particulars were required in the return it would lead to great prolixity in pleading, and so many elements enter into the question which would be of greater or less force according to circumstances, that it would be almost impossible to frame a return upon such a theory. We think a return which alleges positively and unequivocally that the passenger and freight tariffs prescribed by the Commissioners are unreasonable, and that they do not give to the company fair and reasonable compensation for the services required to be performed by it, may be held to sufficiently set forth the ultimate fact in this class of cases without requiring a more detailed statement of particular facts which after all are mere evidentiary facts bearing upon the ultimate fact. This rule obtains in negligence cases where it is only necessary to allege that the act was negligently and carelessly done, without further particulars, and we hold that from necessity in this class of cases allegations of the nature suggested will be sufficient. See People ex rel. Pekin, Lincoln and Decatur Railroad Co. v. Board of Supervisors of Logan County, 63 Ill. 374.

The third plea which was held good on demurrer in the case of Pensacola & A. R. Co. v. State, 25 Fla. 310, 5 South. Rep. 833, was very general in its language, the court remarking that under it any legitimate evidence upon the question of reasonableness might be given.

From the views expressed it results that the motions to quash the returns must be granted, but as respondent asks leave to amend, leave is granted to file an amended return denying the reasonableness of the rates prescribed on or before the 26th instant, the State to plead thereto on or before the 29th instant.

Taylor, C. J., and Hooker, Shackleford and Cockrell, JJ., concur.

Whitfield, J., being disqualified, took no part in the consideration of this case.