Eagle Cotton Oil Co. v. Southern Ry. Co. , 51 F.2d 443 ( 1931 )

BRYAN, Circuit Judge.

This is an action by appellant on an order of the Interstate Commerce Commission awarding reparation on account of excessive freight rates collected by the appellee railroad carriers for. the transportation of coal from mines in Alabama to Meridian, Miss. The' published rate of $2.03 per ton was held by the Commission, in a proceeding begun before it by appellant in 1925, to have been excessive to the extent that it exceeded $1.85 per ton from certain mines and $1.95 from other mines, and these lower rates were prescribed as reasonable for the future. Appellant was' awarded reparation measured by the difference between the lower and higher rates on shipments received within two years prior to the filing of its claim up to March 8, 1928, the date of the order. Eagle Cotton Oil Co. v. Southern Railway Co., 140 I. C. C. 131. No attack is made upon the reasonableness of the new rates as applied to the period covered by the reparation award. But the "District Judge, before whom the case was tried without a jury pursuant to written stipulation, held that the Commission was without power to award reparation on account of shipments made-prior to the date of the order finding the-$2.03 rate to be unreasonable, because that rate had been fixed and prescribed by it, and, this being so, must be conclusively presumed to have been a reasonable and lawful one. He therefore entered judgment denying appellant’s claim for damages. 46 F.(2d). 1006.

On July 22, 1915, the Commission, in passing upon a proposed increase of rates on coal, authorized a rate not exceeding $1.-20 per ton from the Alabama mines to Meridian. Coal & Coke Rates in the Southeast, 35 I. C. C. 187, 202. An increase of 10 cents, per ton, effective July 1, 1917, was authorized in The Fifteen Per Cent. Case, 45 I. C. C. 303. On June 25, 1918, another general increase, but without reference to any particular rate, was made by the Director General, and thereupon appellees published a rate on coal of $1.80 per ton; but this was done without the order or approval of the Commission. On August 26, 1920, the Commission authorized a general increase of 25 per cent, of freight rates, but without approval of any particular rate, Ex parte 74, 58 I. C. C. 220; and appellees raised the rate here involved to $2.25 per ton. On July 1, 1922,, the Commission recommended a general reduction of 10 per cent, also without approval of any particular rate, Reduced Rates, 1922, 68 I. C. C. 676; and appellees thereupon reduced the rate in question, to $2.03 per ton, which they continued to collect up to March 9, 1928, when the $1.85 and $1.95 rates were established by the Commission as maximum rates from the Alabama mines to Meridian. Eagle Cotton Oil Co. v. Southern Railway Co. et al., supra.

These several decisions of the Commission and the order of the Director General are relied on to establish the conclusion that the $2.03 rate was fixed and prescribed by the Commission as a reasonable and lawful maximum rate. The rate of $1.20 per ton on shipments of coal from the Alabama mines to Meridian was the only one that was definitely and specifically authorized by order of the Commission. That rate became effective oq October 1, 1915, and, as thej law then was, expired by limitation at the end of two years. Act Feb. 4,1887, § 15, as amended by Act June 29,1906, § 4, Act June 18,1910, § 12, 36 Stat. 551. It was not until after the passage of the Transportation Act of 1920 that a rate established by the Commission. could continue in force without time limit until its further order. 49 USCA § 15 (2). The Commission’s order in the Fifteen Per Cent. Case, supra, effective July 1, 1917, authorized a general increase of 10 cents per ton throughout the country, but did not purport to grant permission to advance any particular rate. The order of the Director General‘in 1918 likewise was dealing with all rates, and had no particular reference to rates on coal; besides it was not the equivalent of an order of the Commission, and the Commission by section 10 of the Federal Control Act (40 Stat. 456) was given the power to suspend or set it aside. But with the aid of the Director General’s order the rate did not exceed $1.80 per ton, which was less than the rates approved by the Commission upon the basis of which it awarded reparation to appellant. The carriers rely on Ex parte 74, supra, which authorized an increase of 25 per cent, in the general level of all rates, but without approval of any particular rate, as their authority for increasing the rate on coal shipped from the Alabama mines to Meridian to $2.25 per ton; and then claim that the rate became $2.03 per ton in 1922 as a result of the Commission’s decision in Reduced Rates, 1922, supra. The most that can reasonably be contended for in support of the proposition adopted by the trial court that the $2.03 rate was Commission-made is that it resulted from adding to and building up the rate of $1.20 that was authorized by the Commission. Aside from the fact that the Commission’s order entered in 1915, establishing the $1.20 rate, had expired by limitation long prior to the decisions in Ex parte 74 and in Reduced Rates, 1922, the law, as we understand it, is that orders of the Commission authorizing a general upward x’evision or adjustment of rates are not to be construed as giving approval of or prescribing particular rates. In Brimstone R. & Canal Co. v. United States, 276 U. S. 104, at page 122, 48 S. Ct. 282, 287, 72 L. Ed. 487, the Supreme Court said: “The general findings and permission of Ex parte 74 and Matter of Reduced Rates did not approve or fix any particular rate. * * * In them the Commission was dealing with the whole body of rates throughout the country — was looking at the general level of all rates — and the propriety of the rates to which the Brimstone Company was party was not the subject of particular investiga^ tion or consideration.” It is true that case was dealing with a division of rates, but the principle involved is the same here as it was there. The Supreme Court in that case cited with approval, among other decisions of the Commission, Steel & Tube Co. v. Director General, 61 I. C. C. 526, in which the Commission said that its “sanction of a general adjustment does not carry with it the approval of any particular rate.” We are of opinion, therefore, that the trial court erred in holding that the $2.03 rate collected from appellant by appellees had been fixed and prescribed by the Commission, and in entering judgment rejecting appellant’s claim for reparation. Having reached this conclusion, it is not necessary in this ease to decide, and we do not decide, whether or not the power of the Commission to award reparation extends to rates of its own making. The decision of the Circuit Court of Appeals for the Ninth Circuit in Atchison, Topeka & Santa Fe R. Co. et al. v. Arizona Grocery Co., 49 F.(2d) 563, to the effect that the Commission was without jurisdiction to award reparation, proceeded on the theory that the rates there involved were Commission-made. The rate here involved in our opinion was made by the carriers, and if it was, of course, the Commission, upon a valid finding that it was excessive, had the power to award reparation. 49 USCA § 9.

The judgment is reversed, and the cause remanded for further proceedings not inconsistent with this opinion.-