Arkansas Fertilizer Co. v. United States (Interstate Commerce Commission)

KNAPP, Presiding Judge. This case involves the meaning and application of a provision in the sixteenth section of the act to regulate commerce, as amended in 1906, which reads as follows: “All complaints for the recovery of damages shall be hied with the Commission within two years from the time the cause of action accrues.” What is the “cause of action” here intended to be defined, and when does it “accrue”? The typical facts appearing in the record disclose the concrete form in which the question is now presented. In February, 1907, the petitioner shipped a car load of fertilizer from Little Rock, Ark., to. Ravanna, Ark., billed to one A. S. Stuckey. The shipment was routed over the St. Louis, Iron Mountain & Southern, and the Kansas City Southern, and moved for a short distance in the state of Texas, thereby making it interstate. On February 15, 1907, the petitioner prepaid charges at the rate of 15 ¿4 cents per 100 pounds, amounting to $85.05, and later the delivering carrier demanded the additional sum of $66.15, based, on a rate of 28 cents, which was the lawful tariff rate in force at the time the shipment moved, and this sum was paid by petitioner on March 30, 1910. In September, 1910, some three years and seven months after the transportation service was performed, the delivering carrier, in behalf of petitioner, applied to the Interstate Commerce Commission for authority to refund the sum of $59.40 (which would result in a charge of 17 cents on the shipment in question), making the express admission that the tariff rate of 28 cents, which petitioner had paid as above stated, was unjust and unreasonable, and agreeing to maintain for the required period a rate of 17 cents, which was established by a tariff filed with the Commission about that time. Following its ruling in Blinn Lumber Co. v. Southern Pacific Co., 18 Interst. Com. Corn'n 430, the Commission denied the application on the ground that it was without jurisdiction to allow the refund, because more than — 669 — two years had intervened between delivery of the shipment to the consignee and the filing of the claim for reparation. Thereafter and on June 5, 1911, the petition herein was filed to set aside and annul the order of the Commission. The United States filed an answer, and the Commission also intervened and answered. The petitioner thereupon filed motions to dismiss the answers as not stating a defense to the cause of action alleged in the petition. On this record, and the briefs of counsel, the case was submitted without oral argument. [1] The answer of the United States, which is in the nature of a special demurrer, alleges that the facts set forth in the petition do not constitute a cause of action, and also alleges that this court is without jurisdiction tó hear and determine the case. Jurisdiction is challenged on the grounds: (1) That the Commission has made no “order” respecting petitioner’s claim, and consequently there is no basis for the suit; and (2) that the refusal of the Commission to authorize the refund, if it be deemed in any sense an order, relates to' the payment of money only and is therefore not within our jurisdiction. The latter objection is disposed of by the decision just rendered in Southern Railway Co. et al. v. United States et al. (No. 44) 193 Fed. 664, and the reasons stated for the conclusion therein reached need not here be repeated. It is only necessary to add that if this court lias jurisdiction to set aside an order of the Commission which awards reparation, it has also jurisdiction to set aside an order which denies reparation. The form in which the Commission’s refusal was expressed in this instance is not shown by the record, nor does it seem to us at all important, since the petition alleges, and the answer of the Commission admits, that leave to refund was denied without consideration of the merits of the claim, and solely because its allowance was prevented by the statutory provision above quoted. While the sixth paragraph of the petition, and perhaps the prayer for relief, may he open to technical criticism, it appears plain to us that the pleadings taken together sufficiently define, and therefore require us to decide, the real matter in controversy between the parties, namely, whether the Commission was correct in its construction of the law in the Blinn Case and in applying that construction to petitioner’s claim. [2] What, then, is the true meaning of the so-called limitation? Did it deprive the Commission of authority to permit or require these carriers to repay the amount which they had collected in excess of a reasonable charge? If so, the Commission was right and the petition herein should be dismissed; if not, the order in question —for that which has all the effect of an order may be treated as an order — should be set. aside to the end that the Commission may be free to consider petitioner’s claim upon its merits. The contention of petitioner is easily comprehended and may be summarized as follows: There must be some injury for which redress is afforded by “the recovery of damages.” If an excessive rate is charged, the injury occurs when payment of that rate is enforced, and the measure of recoverable damage is the excess of such payment above a reasonable rate. But until the shipper is compelled — 670 — to pay the excessive amount no injury has been inflicted), and consequently no “complaint” can be made. Therefore a “cause of action” does not arise, because there is no damage, until the unreasonable rate has been actually collected. In this case the balance of the tariff rate, which was a concededly excessive rate, was paid in March, 1910, a little less than six months before the delivering- carrier applied for leave to refund; and we regard the application then made, since it was so regarded by the Commission, as the equivalent of filing a complaint. We recognize the force of this contention, which is undoubtedly sustained by the common-law rule andl numerous decisions in which that rule has been upheld. Indeed, it may be admitted that, if this case is governed by the principle which obtains in the fields of contract litigation, the ruling of the Commission involved an error of law which the courts may be invoked to correct. But we are of opinion that the question here presented is not controlled by the general rule, and that the Commission correctly construed the limiting provision in the Blinn Case and therefore properly rejected petitioner’s claim. This provision in the sixteenth section, inserted in 1906, is only an incidental and relatively unimportant part of a comprehensive scheme of regulation which was inaugurated by the act of 1887 and has been expanded and strengthened by successive amendments. The pervading- purpose of that scheme is the prevention of unjust discriminations and the enforcement of equal treatment as between all shippers in like situation. Clearly, the provision in question should be so construed as to advance that purpose if such a construction be in any view permissible. But if the construction contended for by petitioner is sustained it follows that judicial sanction would be given to certain preferences of obvious injustice and the aim of the law as a whole thereby measurably defeated. In other words, the limitation under review would be held to impair the beneficial purposes of the act by creating an obnoxious and indefensible exception to its requirements. This provision, moreover, in common with other amendments adopted at the same time, was designed to make the law in its entirety more efficacious, and also designed to protect from depletion, after the lapse of two years, railway earnings resulting from the application of tariff charges. To hold that the ruling- of the Commission was erroneous would therefore not only legalize a device for offensive favoritism, but also to an extent subvert the special purpose for which this amendment was enacted. It is difficult to believe that such a result was ever intended. In construing remedial statutes, especially those .of a generic character, courts have not hesitated to restrict and modify the ordinary meaning of words and phrases, and even of entire paragraphs, in order to harmonize conflicting or inconsistent provisions and so enable all of them to contribute in proper degree to the object sought to be accomplished. Instances of this kind are too familiar to require citation. Indeed, the Supreme Court, in the Abilene Case, 204 U. S. 426, 27 Sup. Ct. 350, 51 L. Ed. 553, declared that a right o-f action — 671 — as old as the common law had been taken away by the act to regulate commerce, since otherwise full effect could not be given to the, purpose of that statute to prevent discriminations-. Bearing in mind how rarely suits were brought to recover damages for excessive railroad charges, and how easily collusive delay in the payment of freight bills could be utilized, as the Commission points out, to give preferences which are actual rebates, it seems well within precedent to reject petitioner’s contention and to uphold a construction under which, as Commissioner Lane observes: “The act becomes workable aiid enforceable from the standpoint of shipper, carrier, and the Commission itself.” Any serious doubt in this case should disappear, as we think, when once it is clearly perceived that the relations between shipper and carrier are no longer contract relations; that the rights and obligations of both are fixed, not by mutual agreement, but by the mandate of the statute; that tile duty of the shipper to pay and of the carrier to collect the tariff rate in force when the transportation takes place, even though that rate be grossly excessive, is a duty imposed by legislative enactment; and that it is beyond the power of the parties to evade or modify this duty by any consent or understanding. In other words, since the obligation to pay the tariff charge springs from a positive law, the extension of credit because such charge is claimed or admitted to be unreasonable cannot be granted by the carrier or accepted by the shipper. It follows that the reasons for the general rule above adverted to are altogether wanting in the case here presented, and therefore the rule itself should be denied application. Moreover, when all the provisions of the act and supporting laws are taken together, and the doctrine of the Abilene Case kept in mind, it becomes evident that the basis of a claim for reparation, which is the kind of “action” referred to in the limitation clause, is the existence at the time the claimant’s shipments moved of an unreasonable rate established by the carrier’s tariff andl imposed upon all shippers alike; and that there can be no “recovery of damages” except as incident to a determination by the Commission that such rate was unreasonable, including the extent to which it was unreasonable, and the fixing of a lawful rate for the future, unless the carrier has in the meantime voluntarily made the proper reduction. The real cause of action is the publication of a rate that is unlawful because excessive, and it “accrues” as to a particular shipper when his property is transported under that rate. As Commissioner Harlan says in his concurring report in the Blinn Case: “The unlawfulness of the rate is the shippers canse of action, and the amount aeüinlly paid by him in excess of a lawful rate is but, the measure of his damages. The wrong done to the shipper, with respect to shipments already made, arises out of the publication by the carrier of an unlawful rate and the obligation imposed upon the shipper by the publication to pay that rate. The bar of the statute therefore commences 1o run when the obligation of the shipper to pay the unlawful rate; has become a completed obligation, namely, upon the delivery of the shipment to him at destination, and manifestly cannot be postponed by the failure of the shipper to fulfill his obligation. It is true that there can be no recovery of damages — 672 — unless the unlawful rate has been paid; nevertheless, the inquiry in any such proceeding is whether the published rate was excessive, and, if so, to what extent. That is the issue, the cause of action, as well as the subject-matter of the controversy between the shipper and the carrier; and when resolved in favor of the- shipper the extent of his damages on a particular shipment is a mere matter of calculation, wholly incidental to the controversy.” At common law one who had! paid an excessive rate could ordinarily maintain a suit to recover the excess. His cause of action obviously arose when the damages were incurred; that is, when he was compelled to pay that rate. ■ Prior to such payment he had no common-law remedy because he had suffered no injury. The contract obligation to pay the excessive charge did not damage him, because that obligation was unenforceable as to the excess above a reasonable charge. But such an action can no longer be maintained, as the Supreme Court decided in the Abilene Case, supra. The present obligation is statutory and not contractual. The shipper is now bound to pay the full tariff rate, even though it be unreasonable, and is therefore deprived of his former defense, if suit be brought to enforce payment of the tariff rate, unless the statute makes provision for his relief. It follows from this change in the law that, whether he actually pays the tariff rate or only incurs the obligation to do so, he can neither sue for damages in the one case nor on the other defend a suit for the tariff charge, unless the Commission shall have found that such tariff rate was unreasonable, and the extent to which it was unreasonable, when his property was transported. - The regulating statute gives the shipper a right to reparation, that is, a right to complain to the Commission and, if the facts justify, obtain its findings and order accordingly. The order in such case is not the real basis of his suit or defense at law, but rather a condition precedent thereto. In other words, the shipper may complain of a tariff rate not only to secure its reduction for the future, but also, if his traffic has moved under that rate, to have the Commission determine what would have been a reasonable rate thereon; and, as respects the authority of the Commission, it would not matter whether the rate had been paid or partly paid or remained wholly unpaid. If paid, the report and findings of the Commission would fix the portion he was entitled to have refunded; if not paid, his statutory obligation would be ascertained. ' The nature of the order awarding damages in connection • with the reduction of the rate might therefore vary according to the situation at the time the Commission made its report. If payment had been made, the order would require the carrier to refund the excessive amount, and the shipper could then sue at law for his damages, offering the order as prima facie proof of his case. If payment had not been made, the only reparation that the shipper could secure would be the finding of the Commission that the tariff rate was unreasonable, to such a degree as might be determined; and, for aught we can see, the Commission in such case could make an order which — 673 — would be available to the shipper as prima facie proof of liis defense to the carrier’s suit. The cause of action before the Commission, however, is the same in either case, viz., to secure a reduction of the tariff rate and a.finding as to the damages resulting from its exaction, whether in cash or in the obligation, otherwise binding, to pay the unreasonable tariff rate; and this cause of action accrues, in our judgment, not when the exaction is enforced, but when the obligation is incurred — that is, when the service is performed. Its nature remains unchanged by reason of subsequent payment, if payment was not made at the time, since such postponed payment affects only the form and not the substance of the Commission’s order. To interpret the statute as denying relief to a shipper who has not-yet paid an unreasonable charge, although the carrier admits his complaint of unreasonableness and offers to remit the excess if the Commission will give its permission, would require him to go through the meaningless form of paying a sum of money to which the carrier is not entitled and which the Commission would immediately require the carrier to refund. Nevertheless, such permission must be obtained, because otherwise the refund would be unlawful on the part of both shipper and carrier. While the statute in terms provides that the Commission may order the carrier to pay damages, we do not feel required to interpret the word “pay” in the narrow sense of a money transaction. It is equally a payment, within the contemplation of this provision, to he relieved from an obligation which the law imposes ; and an order to remit the excess above a reasonable charge, which the Commission has fixed, is in substance and effect an order for the “recovery of damages” within the meaning of the clause in question. The purposes of the act as a scheme of regulation and the language of the provision in question indicate clearly that this is a limitation which operates without the aid of pleading'. So far from being a defense which the carrier may or may not interpose, it is in effect a restriction upon the authority of the Commission itself, since its plain intent is to deprive that body of jurisdiction to allow reparation after the lapse of two years. A similar provision relating to claims against the United States reads as follows: “Tlmt every claim against the United States, cognizable by the Court of Claims, shall be forever barred, unless the petition setting forth a statement of the claim be filed in the court or transmitted to it under the provisions of this act within six years after the claim first accrues.” Rev. St. § 1069 (U. S. Comp. St. 1901, p. 710). Construing this provision, the Supreme Court held that it could not he waived and need not be pleaded. Finn v. United States, 123 U. S. 232, 233, 8 Sup. Ct. 82, 31 L. Ed. 128. The conclusion we have reached in this case is supported, in some measure at least, by a further consideration. The ruling of the Commission in the Blinn Case is more than the decision of a particular controversy; it is also the administrative construction of the law by the tribunal charged with its enforcement. It is now nearly 2y¿ years — 674 — since' this ruling was promulgated. During that time it has been applied in numerous instances and come to be widely known and generally accepted. Under such circumstances the ruling should not be set aside, except for the most convincing reasons, and such reasons-have not, in our judgment, been made to appear in this case. New York, N. H. & H. R. R. v. Interstate Com. Com'n, 200 U. S. 401, 26 Sup. Ct. 272, 50 L. Ed. 515. Believing that the Commission was right in rejecting petiHoner’s claim, and agreeing substantially with the views expressed by Commissioners Dane and! Harlan in the Blinn Case, we see no occasion for more extended discussion. It follows that the petition herein should be dismissed, with costs, and it will be so ordered.