Southern Railway Co. v. Atlanta Stove Works

Evans, J.

(After stating the foregoing facts.)

1, 2. By demurrer the railroad company disputed the plaintiff’s right, under the allegations of the petition, to the remedy of mandamus. The writ of mandamus is of most ancient origin. It issued from a common-law court, to afford extraordinary legal relief in cases where the ordinary remedy at law was inadequate. Originally it was a prerogative writ, so called from the fact that it proceeded from the king himself, in his court of king’s bench, and was granted where one was-entitled to-an office or function, and there was no other remedy. High, Ex: Leg. Bern. §3. It still preserves many of its prerogative-features in England, but in this State it is a writ of right. When employed to.-enforce official duty, the writ of mandamus issues only where there is no other specific legal remedy for the legal rights. Civil Code, §4867. We are cited to many decisions and some text-books as maintaining the doctrine found expressed in Hutchinson on Carriers, §115 b, that "if the carrier refuses without lawful reason to accept and carry goods, the owner may maintain an action against the carrier for damages sustained by such wrongful refusal. This remedy by action is usually adequate to secure the plaintiff’s rights, and therefore, in accordance with well-settled principles, mandamus will not lie to enforce the performance of the duty.” It is contended that the quotation from Hutchinson on Carriers is sustained by our Civil Code, §4867, and that the act organizing the railroad commission furnishes the shipper a specific and exclusive remedy against a common carrier for refusal to obey a reasonable tariff regulation promulgated by the commission: viz. a right to recover actual damages in all cases, and exemplary damages where the violation of law is wilful. Civil Code, §2317. It is further contended that even if the remedy given by section 2317 is not exclusive, the plaintiff has an adequate remedy in the Civil Code, §3216, by paying the overcharge and suing for double the amount of the overpayment, if it is not refunded in thirty days. The conclusive reply to these contentions is the Civil Code, §4869, which provides: "A private person may by mandamus enforce the performance by a corporation of a public duty as to matters^in which he has a special interest.” The rule quoted from Hutchinson on Carriers is not applicable in this State, and if the applicant for mandamus brings his case within the provisions of the Civil Code, §4869, he is entitled to the writ, without making it appear that he has no adequate remedy by a suit for damages. Southern Express Co. v. Rose, 124 Ga. 585. As sustaining this view these cases may be cited: Habersham, v. Savannah Canal Co., 26 Ga. 665; Mitchell v. Hay, 37 Ga. 581; Sav. Canal Co. v. Shuman, 91 Ga. 400; Freeman v. Macon Gas Light Co., 126 Ga. 843.

There can be no question as to the authority of the railroad commission to prescribe reasonable maximum tariff rates, and the consequent duty of the common carrier to observe such regulations. Nothing appears on the face of the petition to impeach the fairness or reasonableness of the commission’s rate, and we are bound to- assume the legality of the commission’s action, until its illegality is made to appear. The common carrier’s duty to the public is to obey the reasonable regulations of the commission; and if the corporation fails to perform such duty, it may by mandamus be compelled to do so. Has the plaintiff such special interest in the performance of this public duty that he may invoke the remedy? The plaintiff is a corporation engaged in the business of manufacturing stoves, ranges, hollow-ware, and similar products. It tendered the carrier at 'Atlanta, Georgia, a shipment of three stoves, for transportation over its lines of railway, to Columbus, Georgia, offering to pajr the freight charges fixed in the tariff promulgated by the railroad commission. The carrier declined to receive the shipment at and for the rates prescribed by the commission. The plaintiff has a special interest in this particular shipment; its business is manufacturing and selling stoves, etc., which is controlled to a considerable extent by the railroad rates. We think that the allegations of the petition show that the plaintiff has such special interest, in the performance by the corporation of its public duty of obeying the reasonable regulations of the commission, that it may invoke the remedy of mandamus.

3. The demurrer challenges the constitutional power of the commission to fix rates between particular localities, and the answer reiterates the lack of constitutional power of the commission in this respect. The answer does not make any issue of fact as to the reasonableness of the exception of the named localities from the general tariff schedule; so that the question presented in the answer is included in the demurrer, and becomes a question purely of law. Circular 309 is but an amendment to the general body of rates, and should be so treated. We have then the question of the power of the railroad commission, after fixing a reasonable schedule of rates for all commodities, to make an exception of one of the commodities provided for in the general schedule, by fixing a different rate therefor between certain designated points. Of course, if this power inheres in the commission, its exercise will be deemed reasonable, until the contrary is shown. The practice of railroads of fixing a uniform rate to competitive points, and rates to other points ascertained, by adding, to the rate to the nearest competitive point, the local rate from that point to the particular station (where there is substantial reason for the carrier’s selection of the basing point, and the rate is reasonable), has the approval of the Supreme Court of the United States. Interstate Commerce Commission v. Louisville & Nashville R. Co., 190 U. S. 273. A carrier can not create artificial differences in market conditions, by arbitrary differential rates, whereby the products of different sections may be arbitrarily assigned to particular markets. When the carrier is forced to meet competition at a given point on its line, of necessity it must adjust its rates within the zone of the competitive point to the competitive rate to that point. . This condition may be artificially caused, and the adjustment by the carrier of its rates to such conditions can not be accepted, of itself, as a justification for making a schedule of rates based on the voluntary action of the carrier. We recognize the carrier’s right to manage its internal affairs by reducing its tariff below the commission rate, and that such low rate affords no basis for an arbitrary reduction of the commission’s maximum standard' to the voluntary low rate of the carrier. / But we do contend that the commission, in the discharge of its duty to fix reasonable rates, is not precluded from the consideration of economic conditions recognized by the carriers in the conduct of their business. The full purpose of the creation of the commission would be thwarted if it could not consider and act on every economic or industrial factor potentially influencing the operation of a railroad and the transportation of freight. It can not act arbitrarily, nor by edict produce abnormal conditions of trade; it can not display favoritism by capriciously giving preferential rates to one locality which are denied to another. It may, however, recognize the traffic conditions between given points, and adjust its schedule to meet these conditions. If this is done in good faith, and upon sufficient reason, the rate fixed for the special conditions would not be discriminatory, because not applied to other localities, where the special conditions do not exist./ Circular 309 does not discriminate against persons or classes of persons by charging one a greater or less rate for the same service than is charged for all other persons similarly situated. It is an adaptation of rates to meet certain economic and industrial conditions in certain localities.

The case of Lake Shore R. Co. v. Smith, 173 U. S. 684, is entirely dissimilar to the case at bar. There the statute of Michigan fixed the passenger fare at three cents per mile, with a proviso that the railroad company should sell a thousand-mile ticket at a given rate, less than three cents, good to be used by the purchaser and his family within two years. In the opinion Mr. Justice Peekham characterized this legislation as “a pure, bald, and unmixed power of discrimination in favor of a .few of the persons having occasion to travel on the road, and permitting them-to do so at a less expense than others, provided they buy a certain number of tickets at one time.” The Interstate Commerce Commission, in dealing with the reasonableness or unreasonableness of grouping several stations within the zone of a common point, recognized that each community is entitled to benefits arising from its location and natural conditions (Minneapolis, 5 I. C. C. Eep. 571), and was of the opinion that “the practice of making one rate on the same product over a very large district, and thus equalizing the burdens of transportation to the same market, is only justifiable under special and exceptional circumstances.” Newland v. Northern P. R. Co., 6 I. C. C. Rep. 131. The railroads entering New York were allowed to group stations which supplied the city with milk, and to charge a uniform rate from all stations in the group. Howell v. N. Y. R. R., 2 I. C. C. Rep. 272.

If the commission’s investigation of the traffic condition between the ten named cities and the several basing points justified making the exception as provided in circular 309, they were not restrained from so doing by article 4, section 2, paragraph 1, of the constitution. This clause reads: “The power and authority of regulating' railroad freights and passenger tariffs, preventing unjust discriminations, and requiring reasonable and just rates of freight and passenger tariffs, are hereby conferred upon the General Assembly, whose duty it .shall be to pass laws, from time to time, to regulate freight and passenger tariffs,, to prohibit unjust discriminations on the various railroads of this" State, and to prohibit said roads from charging other than just and reasonable rates, and enforce the same by adequate penalties.” The discrimination there referred to is unjust discrimination. The presumption is with the commission, that its action is within its constitutional powers; and until the rate complained of is proved to be unreasonably discriminatory, we must assume the rate to be lawful.

4. The point is made that as there was no attack on the sufficiency of the answer by way of demurrer or motion to strike in the court below, the question that the answer set forth no defense is hot properly before us. The cases of Hollis v. Nelms, 115 Ga. 5,. Stromberg v. Bisbee, 115 Ga. 346, and Ray v. Anderson, 117 Ga. 136, are relied on to sustain the proposition. None of these cases were decided by a full bench, and we are not absolutely bound thereby. We think the reasoning on which they are based is fallacious. See Crew v. Hutcheson, 115 Ga. 533; Kelly v. Strouse, 116 Ga. 890. A motion to make a mandamus absolute necessarily involves a determination that the averments in the answer either afford or do not afford a sufficient reason in opposition to the issuance of the writ. If the answer avers matters which set forth no defense to making the rule absolute,- in this day of directness in formulating the substantial issues by means of the pleadings its sufficiency is tested by the motion to make the rule absolute. We would be retrograding to the old days of circumlocution and special pleading, holding fast to the form and letting go the substance of things, to say that in answer to a rule to show cause why a mandamus absolute should not issue, frivolous and wholly insufficient matters may be urged to defeat the rule, unless such frivolous answer was first stricken by motion or demurrer. The assignment of error that the court erred in making the mandamus absolute, because the allegations of the answer raised certain issues of fact which should first have been submitted to a jury, raises the question whether any issue of fact was made by the answer. We will now proceed to discuss this question.

5. Counsel for plaintiff in error argue with much force and plausibility that the averments of the answer, narrating what occurred between the agents of the Atlanta Stove Works and the Southern Ilailway Company, relative to the proposed shipment of three stoves to Columbus, Georgia, coupled with the positive denial of any actual tender of the stoves for transportation, raised an issue of fact, which should have been submitted to the jury before further action by the court. We will not repeat the defendant’s version of what occurred, as the pleadings containing it are set out in the statement of facts. In substance, the Atlanta Stove Works alleged, that it tendered to the railroad company, at its place of business at Atlanta, Georgia, three stoves for transportation, over its line of road, to the King Hardware Company, at Columbus, Georgia, and tendered the freight tariff, ninety cents, prescribed by circular 309, and that the railroad company refused to accept the stoves for shipment, because the amount of money tendered was insufficient to pay the freight charges. The prayer for mandamus is that “the defendant be required to transport the said articles of merchandise between said points at said rates, and otherwise to observe, respect, and obey the order of the railroad commission of Georgia in promulgating said circular No. 309, and accepting the rates therein prescribed with respect to other and future shipments of commodities therein mentioned.” In its answer the railroad denied an actual tender of the stoves, but admitted that an officer of the Atlanta Stove Works stated to its agent that he desired to make respondent the tender of a small shipment of stoves consigned to Columbus, upon the payment of freight charges based upon the reduced rates as contained in circular 309. There was no denial that the agent of the stove works tendered the agent of the railroad company ninety cents, the freight tariff on three stoves as per circular 309. The railroad company in its answer admits that it “declined to put into effect on its line said circular 309.” The wdiole tenor of the answer is that the rates fixed in circular 309 are unreasonable, discriminatory, and confiscatory. It solemnly admits that for these reasons it will not put these rates into effect. Does not this admission in judicio excuse the necessity of proving a tender under the circumstances P The railroad company says, in effect, that it will not transport this shipment or any other shipment ' according to the rates of circular 309. What need is there to prove a tender under the circumstances ? As is well said in Merrill on Mandamus, in language approved by this court: “The law never demands a vain thing, and when the conduct and action of the officer is equivalent to a refusal to -perform the duty desired, it is not necessary to go through the useless formality of demanding its performance. Anything showing that the defendant does not intend to perform the duty is sufficient to warrant the issue of a mandamus.” Coffee v. Ragsdale, 112 Ga. 710. We think, when the defendant’s admission is applied to the allegations of the petition, that (unless the other matters set un in the answer -present good cause) the plaintiff would be entitled to a mandamus compelling the defendant to accept from it not only this particular shipment, but any other, under the rates prescribed in circular 309. Looked at in this way, the answer, in this respect, did not make an issue of fact.

6. Many adjudications of courts of last resort have established the proposition that the presumption is that the rates fixed by the commission are reasonable, and the burden of proof is upon the railroad companies to show the contrary. Dow v. Beidelman, 125 U. S. 680; Chicago, etc. Ry. Co. v. Tompkins, 176 U. S. 167; Minn. & St. L. R. Co. v. Minnesota, 186 U. S. 257. The plaintiff; in error contends that circular 309 bears internal evidence of the unreasonableness of the rates. No factor appears in this circular which may not properly enter into the problem of rate making. The circular does not fix an isolated and independent rate apart from the whole body of rates, but amends the general schedule, to the extent of its provisions. It is a matter of common knowledge in the traffic world that apparently insignificant causes sometimes influence the moving of traffic. Freight heretofore passing over the road of one carrier is perceptibly diverted in another direction or transported by a different carrier. The carrier’s traffic agent is ever alert to discover the cause of the diversion of profitable business, and, when such cause is supposed to be discovered, to arrange or readjust his 'tariff schedules in such manner as to secure what may have been lost, as well as to increase the public patronage of his road. Eate fixing is impossible of being resolved into an exact science, because of the inharmony of basing criteria in different localities, and even in the same territory. Many factors must be considered in one instance which are wholly lacking in another case. Out of the dissimilarity of potential criteria in establishing rates grew the principle of classification. Classification has been extended to the character of the railroad, localities, commodities, anjount of traffic, and many other conditions which directly affect the moving of traffic. In the recent treatise of Beale and Wyman’on Eailroad Eate Eegulation, in chapter 18, the authors have grouped under topical heads some general bases of commodity classification, such as comparison of commodities, convenience in handling, válue of the goods, car-load rates, and difference in rate between classes. Classification of commodities into classes is there said to be allowable so long as it is not disproportionate. After discussing several decisions rendered by the Interstate Commence Commission (§607), it is said that “the principle to be deduced from the cases which have just been discussed is that the differences in rates between the classes in a classification should not be disproportionate.” From the necessity of the ease, where so many elements are obliged to be considered in fixing a commodity rate as part of the general schedule of rates, it is impracticable to fix a single commodity rate without reference to rates of other commodities, as well as other factors that properly may enter into the estimate. Chicago, etc. Ry. Co. v. Tompkins, 176 U. S. 167.

In the case of Minneapolis & St. Louis R. R. Co. v. Minnesota, 186 U. S. 257, the reasonableness of the rate on coal between two intra-state points was under review. The railroad company contended that this particular rate on a tonnage basis would render freight transportation receipts less than actual operating expenses. Testimony was submitted to sustain this contention. The court, speaking through Mr. Justice Brown, said: “The principal testimony, however, was intended to show that if the rate fixed by the •commission for coal in car-load lots were applied to all freight, the road would not pay its operating expenses, although in making this showing the interest upon the bonded debt and the dividends were included as part of the operating expenses. But it'so appears that if the old rate upon hard coal in car-load lots agreed upon by the roads were adopted as an average rate for all freights, the freight earnings of the road would have been largely increased. This would indicate that the rate fixed for coal must have been .above the average rate, although coal is classified as far below the .average. It is quite evident that this testimony has but a slight, if any, tendency to show that even at the rates fixed by the commission there would not still be a reasonable profit upon coal so carried.” And further on in the same opinion it was said: “We do not think it beyond the power of the State commission to reduce the freight upon a particular article, provided the companies are able to earn a fair profit upon their entire business, and that the burden is upon them to impeach the action of the commission in this particular.” As epigrammatically put in Smyth ¶. Ames, 169 TJ. S. 547: “What the company is entitled to ask is a fair return upon the value of that which it employs for the public convenience. On the other hand, what the public is entitled to demand is that no more be exacted from it for the use of a public highway than the services rendered by it are reasonably worth.” We do not see how this result can be obtained except from an application of the whole body of rates to the railroad’s entire business within this State.

Again, if the railroad company be permitted to contest the reasonableness of an individual commodity rate apart from the whole body of rates, the courts would be called on to fix and establish independent rates for different commodities. The courts would be at' the beck and call of every carrier in the State to revise, change, or modify some particular rate. The courts have no such power. “The courts are not authorized to revise or change the body of rates imposed by a legislature or a commission; they do not determine whether one rate is preferable to another, or what, under all the circumstances, would be fair and reasonable as between the carriers and the shippers; they do not engage in any mere administrative work, but still there can be no doubt of their power and duty to inquire whether a body of rates prescribed by a legislature or a commission is unjust and unreasonable, and such as to work a practical destruction of rights of property, and if found so to be, to restrain its operation.” Reagan v. Farmers Loan & Trust Co., 154 U. S. 362. The commission fixes a schedule of rates; some commodity rates are higher than others, and necessarily so; the entire body of rates are prescribed with respect to their interrelation; the low rate is presumably fixed with reference to the higher rate, and conversely; and a particular rate can not be said to be unreasonable, without showing it to be such when taken in connection with the whole body of rates. We therefore reach the conclusion that the averment of the 15th paragraph of the amended answer, “that the rates prescribed by circular 309 are unreasonable, in that the amount earned by your petitioner in the transportation of the articles covered by 309, between the points therein prescribed, would be less than the cost of service,” fails to raise an issue of fact; since, conceding the truth of the averment, for the reasons given above, the rate therein prescribed is not alleged to be unreasonable as a part of the whole body of rates prescribed by the commission.

7. In the petition for mandamus, after alleging the facts upon which the plaintiff predicated its right to the writ of mandamus, it was alleged in paragraph 5 that “the action of the defendant in refusing to transport the articles offered for shipment, on the tender of the rates prescribed by law, is arbitrary, illegal, and greatly to the injury and damage of petitioner, its property and business.” The answer denied the fifth paragraph. This paragraph stated only a conclusion of law from the pleaded facts, and its denial in the answer did not raise an issue of fact.

8. It is clear that the pendency of the suit of the Palmer Hardware Company against the Bailroad Commission of Georgia, the Southern Railway, et al., in Chatham superior court, and the continuance of the restraining order granted therein, presents no sufficient answer to the allegations and prayers of the plaintiffs petition. In the first place, the court in that case was without jurisdiction. Railroad Commission v. Palmer Hardware Co., 124 Ga. 633. Secondly, the plaintiff was not a party to that suit. And lastly, the temporary restraining order operated against the commission putting into effect circulars 306 and 306, and could not affect the subsequent action of the commission in amending its schedule of rates. Reagan v. Farmers Loan & Trust Co., 154 U. S. 362.

9. The mandamus proceeding was instituted August 31, 1905. On January 24, 1906, on the application of the plaintiff in error, an order was issued by Judge Newman, presiding in the. United States circuit court for the northern district of Georgia, temporarily restraining the railroad commission of Georgia from enforcing the rates prescribed in circular 309. The defendant in error was not a party to that case. The pendency of that suit and the present operation of the temporary injunction are set up in resistance to the application for mandamus, on the ground of comity between Fulton superior court and the circuit court of the United States for northern district of Georgia, and on the further ground that, by reason of the restraining order, circular 309 is not in force against the plaintiff in error. It can not rightly be contended that the mandamus proceeding in the State court was directly enjoined by the United States court, since no writ of injunction shall be granted by a court of the United States, to stay proceedings in any court of a State, except in matters of bankruptcy. U. S. Rev. Stat. §720; United States v. Parkhurst Co., 176 U. S. 317. It is begging the question to insist that an indirect result may be obtained in the .same case where the prohibition of that result is expressly declared by law. Besides, at the time the plaintiff had its cause of action, there was no legal obstacle to its resort to the remedy of mandamus; and it would be a solecism to say that the plaintiff’s action should be aborted because subsequently the defendant in another forum may choose to litigate with other parties about the same subject-matter.

It is also urged that the temporary injunction issued by Judge Newman on a bill praying to vacate circular 309, as unreasonable, confiscatory, and void, would at least.cast some doubt on the right of the shipper to enforce by mandamus the rate prescribed by the circular. In such an event, it is urged that the court would not grant the writ of mandamus., Whatever may have been the conditions imposed by the common law, before the writ of mandamus should issue, they would not apply to the present case, because the plaintiff’s case is not founded on the common law, but is squarely planted on a statute. As explained in a preceding division of this opinion, the plaintiff was entitled to the remedy of mandamus, if it brought the case within the provisions of the Civil Code, §4869.

Finally, from the foregoing conclusions we hold that there was no error in making the rule absolute.

Judgment affirmed.

All the Justices concur.