Southern Pac. Co. v. Colorado Fuel & Iron Co.

THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. The first paragraph of the restraining order which is quoted above in the statement, namely, that part of the order which requires the defendant company to comply with the order of the interstate commerce commission of date November 25,1895, and in obedience thereto to transport steel and iron products from Pueblo, Colo., to San Francisco, Cal., for 45 cents and 37-J- cents per hundredweight, and in no -event to chárge more than 75 per cent, of the rate on similar products between Chicago and San Francisco, cannot be upheld consistently with the decisions of the supreme court of the United States in at least three cases, namely: Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Ry. Co., 167 U. S. 479, 17 Sup. Ct. 896, 42 L. Ed. 243; Cincinnati, N. O. & T. P. Ry. Co. v. Interstate Commerce Commission, 162 U. S. 184, 196, 16 Sup. Ct. 700, 40 L. Ed. 935; and Interstate Commerce Commission v. Alabama M. Ry. Co., 168 U. S. 144, 161, 18 Sup. Ct. 45, 42 L. Ed. 414. These decisions conclusively establish the proposition that the order of the interstate commerce commission which the defendant company was enjoined to obey was a void order, because the commission undertook to prescribe a maximum rate between Pueblo, Colo., and San Francisco, Cal., which it — 783 — liad no power under the interstate commerce act to prescribe directly, or indirectly by determining with reference to the past what was a reasonable rate and thereupon declaring that the rate should not be raised above that which it had adjudged to be reasonable. The order of the commission having been made without authority, it follows that so much of the restraining order is erroneous as seeks to put that order in force. The third clause of the restraining order, which is quoted above in substance, in our judgment is also erroneous. In this paragraph of the restraining order the lower court, acting, no doubt, upon the allegations contained in the second part of the bill, which were admitted by the demurrer, undertook to do that which the interstate commerce commission had previously done; that is to say, prescribe a maximum rate of 45 cents and 37|- cents per hundred on steel and iron products between Pueblo and certain cities on the Pacific Slope. This seems to have been done by the court on the same theory as by the commission; that is to say, by determining with reference to past rates what was a reasonable charge, and then enjoining the defendant from charging more in the future than it had found to be reasonable compensalion in the past. In the cases already cited the reasoning of the court by which it reached the conclusion that the interstate commerce commission has no power to fix maximum or minimum rates, either directly or indirectly, is founded upon the fundamental proposition that the fixing of rates for interstate carriers involves an exercise of legislative as distinguished from judicial power, and that the power does not belong to the commission, because it was not granted by the interstate commerce act. For much stronger reasons the power to fix a schedule of rates for interstate carriers does not belong to the federal courts, because congress has not attempted to delegate that authority to the courts, even if it could devest itself of that legislative function, and impose it upon the judicial branch of the government. It is urged, however, in behalf of the complainant below, that although the interstate commerce commission is not empowered to fix either a maximum or minimum rate upon an independent consideration of what is a reasonable charge, yet, when carriers have themselves established a rate between two points, the commission may fix a rate to or from an intermediate point by declaring that it shall be a certain proportion of the established through rate. Upon this ground it is said that so much of the order of the commission of November 25, 1895, as made the rate from Pueblo, Colo., to San Francisco 75 per cent, of the rate from Chicago to San Francisco was valid, and may be upheld, although that portion of the order fixing an absolute rate of 45 cents and 37-J cents per hundredweight was void and in excess of its power. The decisions of the supreme court in Cincinnati, N. O. & T. P. Ry. Co. v. Interstate Commerce Commission, 162 U. S. 184, 16 Sup. Ct. 700, 40 L. Ed. 935, and in Texas & P. Ry. Co. v. Interstate Commerce Commission, 162 U. S. 197, 16 Sup. Ct. 666, 40 L. Ed. 940, are principally relied upon in support of this contention. With reference to this point it may be said that both of the cases last cited dealt mainly with the long and short haul clause con — 784 — tained in section 4 of the interstate commerce act (1 Supp. Bev. St. p. 530). In that clause of the act, congress, in the exercise of its legislative power to fix: rates, has enacted “that it shall be unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or of like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance. * * *” In the first of the cases last cited several railroad companies, as the court found, had formed a joint through line between two points in different states over which merchandise was carried under through bills of lading. The rate charged to an intermediate point (Social Circle) on this joint line was 30 cents per hundred greater than the through rate for the longer distance, although the circumstances and conditions of the carriage were substantially the same. The action of the carriers in exacting a higher rate for the shorter distance was therefore in open violation of the rate prescribed by congress. The interstate commerce commission made an order commanding the carriers to desist from this violation of the law, .and the supreme court affirmed this part of the order. In the second case above cited the commission had made and sought to enforce an order that freight received from abroad by water, and destined to an inland point under a through bill of lading from abroad, should be carried from the port at which it was received to the inland point at the same rate charged from such port to the inland point for other like freight of a domestic character. The supreme court declined to enforce this order of the commission, holding that the conditions under which the two classes of traffic were carried were dissimilar; that the dissimilarity of the -conditions should have been considered by the commission, inasmuch as they might have been found to be of such a character as justified the carrier in transporting-merchandise received from abroad to the inland point at a less rate than it charged on domestic or local traffic. Considering the questions which were involved in these cases and the points adjudicated, we discover nothing therein which impairs the force of the-later decisions in Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Ry. Co., 167 U. S. 479, 17 Sup. Ct. 896, 42 L. Ed. 243, and in Interstate Commerce Commission v. Alabama M. Ry. Co., 168 U. S. 144, 161, 18 Sup. Ct. 45, 42 L. Ed. 414, holding that the interstate commerce commission has not been vested with the legislative power to prescribe rates, either directly or indirectly. Prescribing a rate from Pueblo, Colo., to San Francisco, Cal., by reference to a rate that had theretofore been established by carriers between Chicago and San Francisco, involved the exercise of legislative functions to the same extent as fixing the rate between the former points on an independent consideration of what would be a reasonable compensation for the service. In either event, far-reaching questions of public policy arise, and many circumstances and conditions affect the question to.be solved, so that it cannot be said that the problem of fixing a reasonable rate from 'Colorado points to the Pacific -Slope became a simple one involving no exercise of legislative discretion, when — 785 — it -appeared that the carriers had established a rate from Chicago to Pacific Coast points. It must also be borne in mind that in the case in hand we are not called upon to deal with a joint through line, and with a rate to- an Intermediate point on that line, which, by the express command of congress, cannot he made greater than the through rate, if the conditions of carriage are substantially the same. No joint through line under a common control and management is disclosed by the present record. Besides, the commission by its order of November 25, 1895, did not enjoin that the rate for the short haul from Pueblo to San Francisco should not exceed the rate for the long haul from Chicago, but it went beyond that limit, and undertook to declare that the rate for the shorter distance should not exceed three-fourths of the rate for the longer distance, thereby assuming to establish a rate by relation. We feel constrained to hold that the commission exceeded its authority in this part of the order, and that it had no more power to fix a rate from Pueblo to San Francisco by relation to the theretofore existing rate from Chicago to San Francisco than it had to fix the former rate upon an independent consideration of what would he a reasonable charge. It is further- insisted by the complainant below that in view of the allegations contained in the second count of its bil-1, wherein threatened violations of the interstate commerce act are averred, it was entitled to injunctive relief on general equitable grounds; that is to say, because the damage to be apprehended from the threatened wrongful acts was incapable of being adequately redressed at law. It will be observed that by the second clause of the restraining order, which is quoted above in substance, the defendants were restrained from demanding unreasonable rates, from giving undue and unreasonable preferences to persons or localities, or from subjecting the complainant to an unreasonable disadvantage, etc. This clause of the order might-possibly be upheld, but it is not apparent that any special advantage would result to the complainant from an order couched in such general terms, which merely repeats the general admonitions of the interstate commerce act.. Such an order does not give any additional sanction to the statute; neither does it forbid the doing of any specific acts. It simply leaves the questions whether the threatened rate is reasonable, or whether it would operate as an undue preference or as an unreasonable discrimination, to be tried and determined in a proceeding for contempt before a chancellor, instead of being tried in the usual way before a court and jury, in an action for damages, after the rate has been exacted or actually demanded on a tender of property for shipment. Perceiving, apparently, that the general language of the order left all vital questions undetermined and open for consideration in supplementary proceedings, the trial court next addressed itself to the task of fixing a maximum rate to he thereafter observed, and in the third paragraph of the restraining order prescribed such a rate, and commanded the defendants to conform thereto. In so acting the trial court, in our opinion, exceeded its lawful powers. In the first instance interstate freight rates must he established and put in force by the carrier, or by the national legislature, or by some commission or administrative body on whom the authority to prescribe rates has been — 786 — duly conferred by the national legislature. When the carrier promulgates a schedule of rates without previous conference with its patrons, it acts under the mandate of the statute and the common law that all rates must be fair and reasonable, and under and subject to the rule that it may be called to account by the shipper in an action at law for damages, provided any unreasonable or unjust rate or charge is either exacted from the shipper or demanded. When a rate that has been exacted or demanded is challenged on the ground that it was unreasonable or unjust, it is within the province of a court and jury to determine the issue so raised, and to redress the wrong, if one has been committed; but, before an alleged unreasonable rate has been either paid or demanded on an actual tender of merchandise for shipment, it is not within the legitimate province of a court of 'equity to interpose and fix a maximum rate, and thereupon enjoin the carrier from demanding more than the rate so -established. Such an order effectually deprives an interstate carrier of its right to change and fix rates which is conceded to it by the interstate commerce act. It is tantamount both to making a contract between the shipper and the carrier, and to an exercise of the legislative power of prescribing rates, neither of which powers properly belongs to a court of equity. Interstate Commerce Commission v. Cincinnati, N. O. & T. P. Ry. Co., 167 U. S. 479, 493, 17 Sup. Ct. 896, 42 L. Ed. 243; Cincinnati, N. O. & T. P. Ry. Co. v. Interstate Commerce Commission, 162 U. S. 184, 196, 197, 16 Sup. Ct. 700, 10 L. Ed. 935; Express Cases, 117 U. S. 1, 29, 6 Sup. Ct. 512, 628, 29 L. Ed. 791; Atchison, T. & S. F. R. Co. v. Denver & N. O. R. Co., 110 U. S. 667, 685, 686, 4 Sup. Ct. 185, 28 L. Ed. 291; Pullman Palace-Car Co. v. Missouri Pac. Ry. Co., 115 U. S. 587, 598, 6 Sup. Ct. 194, 29 L. Ed. 499; Little Rock & M. R. Co. v. St. Louis S. W. Ry. Co., 27 U. S. App. 380, 387, 11 C. C. A. 417, 63 Fed. 775; Little Rock & M. R. Co. v. St. Louis, I. M. & S. Ry. Co. (C. C.) 41 Fed. 559, 563. Aside from the foregoing considerations, we perceive no reason why the remedy at law for the threatened wrong should be pronounced ineffectual or inadequate. The damages that the complainant will sustain if it is right in its contention as to the unreasonableness of the proposed rates can be ascertained by a court and jury, while it is not suggested that the defendant company is insolvent, or that it will be unable to respond for such damages as a jury may assess. Besides, a single verdict before a jury establishing the unreasonableness or discriminating character of the proposed rate would probably lead to a withdrawal of the rate, and avoid the necessity of further actions. But, be this as it may, we are of opinion that so much of the restraining order from which the appeal is taken as afforded any substantial relief to the complainant company, namely, that part thereof which prescribed a maximum rate, and enjoined the defendant company from demanding greater compensation, was in excess of the power of the court, and cannot be upheld. It may well be that the interstate commerce act would be 'much more effectual in accomplishing the objects which it was designed to accomplish if the commission provided for therein was empowered to prescribe a schedule of maximum rates in eases like the one in hand. But that power, it seems, has not been — 787 — conferred, and the courts cannot enlarge the authority of the commission by enforcing orders of that body which it has no power to make. Neither can the courts undertake to name a maximum rate in advance, and enjoin a carrier from violating it. There were some other questions of a jurisdictional nature discussed at the bar, but we have not deemed it expedient or necessary on the present occasion to examine them critically, and accordingly shall express no opinion thereon. In view of what has been said we conclude that the decree below should be reversed, with directions to dismiss the bill of complaint; and it is so ordered.