Although an action at law for damages to recover unreasonable
railroad rates which have been exacted in accordance with the
schedule of rates as filed is forbidden by the Interstate Commerce
Act (
Texas & Pacific Railway Co. v. Abilene Cotton
Co., 204 U. S. 426),
the Circuit Court may entertain jurisdiction of a bill in equity to
restrain the filing or enforcement of a schedule of unreasonable
rates or a change to unjust or unreasonable rates.
Where, as in this case, the Circuit Court granted no relief on
the original bill prejudicial to the railway company, but sent the
parties to the Interstate Commerce Commission, and afterwards
rendered a decree based upon the findings and conclusions of that
commission and testimony adduced before it, which was stipulated
into the case, this Court will not reverse the decree, as affirmed
by the circuit court of appeals, either because the circuit court
was without jurisdiction or because an order of reference in the
case was too broad in requiring the master to ascertain the amounts
paid by shippers in increased rates after the schedules sought to
be enjoined went into effect.
Although reparation for excess rates must be obtained in a
proceeding before the Interstate Commerce Commission, the parties
to an action brought under § 16 of the Interstate Commerce Act may
stipulate after the commission has declared the rate complained of
to be excessive that the court adjudge the amount of reparation,
and presumably, after the master has reported, the court will make
the reparation adequate for the injury and award only the advance
on the old rate and to those who are parties to the cause.
The facts are stated in the opinion.
Page 206 U. S. 433
MR. JUSTICE McKENNA delivered the opinion of the Court.
This is an appeal from a decree of the circuit court of appeals
affirming a decree of the Circuit Court for the Southern District
of Georgia, adjudging an advance in freight rates made by
appellants, to be effective June 22, 1903, upon yellow pine lumber
of two cents per one hundred pounds over rates previously in force
to be unjust and unreasonable, and enjoining
Page 206 U. S. 434
the appellants jointly and severally from maintaining the same,
"in so far as they apply to shipments of lumber from points in
Georgia to Ohio River destinations and points basing thereon."
The original bill was filed April 14, 1903, by appellees to
enjoin such advance in rates, and a temporary restraining order was
issued and notice to appellants to show cause why an injunction
should not issue. On May 8, the bill was amended. On May 12, the
appellants filed a demurrer to the amended bill for want of
jurisdiction in the court as a court of equity and as a court of
the United States, and the Southeastern Freight Association filed
an answer. Appellants also filed a response to the order to show
cause. On May 16 the demurrer was overruled. The temporary
injunction was, however, dissolved, but the following condition was
expressed:
"In case the respondents shall enforce the rates complained of,
and the complainants shall make proper application to the
Interstate Commerce Commission to redress their alleged grievances,
the court will entertain a renewed application on the record as
made, and such appropriate additions thereto as may be proposed by
either party, for enjoining the enforcement of such rates pending
the investigation of the Commission, unless otherwise dissolved,
and, on presentation to the court of the report of the Commission,
such other action be taken as will be conformable to law and the
principles of equity."
138 F. 756.
The appellants took the steps prescribed by the Interstate
Commerce Act to put the advanced rates into effect, and the
appellees, on June 23, 1903, filed a petition before the Interstate
Commerce Commission, charging that "in promulgating said tariff of
increased rates, and maintaining and enforcing the same," the
appellants were acting "in concert with each other and with other
lumber-carrying roads," who, with them, were "co-members of the
Southeastern Freight Association." The petition also charged that
the advance was "arbitrary, unreasonable, and unjust," and prayed
for an order commanding
Page 206 U. S. 435
appellants, and each of them, to desist from enforcing the
advance. All of the appellants except the Macon & Birmingham
Railway Company filed a joint and several answer, in which they
traversed the allegations of the petition and pleaded justification
by the conditions affecting the roads and the traffic. They also
alleged that the Georgia Saw Mill Association, to which appellees
belonged, was a combination in restraint of trade and commerce, and
that therefore appellees did not "come before the Commission with
clean hands." A great deal of testimony was taken on the issues
presented, and the Commission found and concluded that the advance
in rates "was not warranted by the testimony, and that the
increased rates put in force June 22, 1903, were unreasonable and
unjust." The specific findings and conclusions of the Commission
are reported in 10 I.C.C. 548. After the petition was filed before
the Interstate Commerce Commission, but before final action,
appellees filed an amended bill and again moved the circuit court
for an injunction. In the amended bill, it was alleged that
appellants, after the dissolution of the restraining order, filed
with the Interstate Commerce Commission and gave public notice
that, on June 22, 1903, the advance in sales on lumber would be
established and put in effect, and such advance became effective
June 22, 1903. The appellants, in a joint and several answer,
admitted the averments of the amended bill, but reserved the
benefit of their demurrer to the original bill. The motion for an
injunction was dismissed. 123 F. 789.
The Commission made its order hereinbefore referred to on the
seventh of February, 1905, and on March 7, 1905, the appellees
presented a petition to the circuit court stating the substance of
the findings of the Commission, and attaching a copy of its report
and opinion.
An order to show cause was issued. On June 3, 1905, appellants
filed a joint and several answer, which was verified. The
Southeastern Association answered separately. The appellees also
filed a supplemental bill, the purpose of which
Page 206 U. S. 436
was to obtain restitution of the excess of rates charged over
those which it was alleged were reasonable. To this bill a demurrer
was filed.
It was stipulated by counsel of the respective parties that the
testimony, including exhibits taken before the Interstate Commerce
Commission, should be filed in the case, subject only to objections
to its relevancy. In addition to such testimony other evidence was
submitted to the circuit court, and that court rendered a decree
July, 1905, that the advance in rates
"from lumber-shipping points within the State of Georgia to
Cincinnati, Louisville, Evansville, Cairo, and points on the Ohio
River or crossings was and is excessive, unreasonable, and unjust,
and in violation of the provisions of the act of Congress known as
the Act to Regulate Commerce, and the amendments thereto, and that
the rates and charges resulting from said advance are likewise
excessive, unreasonable, and unjust, and in violation of the Act to
Regulate Commerce."
The appellants were enjoined, as we have already said, from
enforcing the advance.
The decree also directed an order of reference to the standing
master of the pleadings and evidence in the cause, with
instructions to ascertain the sum total of the increase in rates
paid by each of the appellees and other members of the Georgia Saw
Mill Association to either or all of the appellants since the rate
went into effect. This was done, the decree recited, in pursuance
of a stipulation made by the respondents (appellants) in open court
that, in case the complainants (appellees) prevailed, decree of
restitution might be made. 138 F. 753. The decree was affirmed by
the circuit court of appeals without an opinion.
On the merits, as distinguished from the questions which concern
the jurisdiction and procedure in the circuit court, this case is,
though variant in some detail of facts, similar in principle and
depends upon the same legal considerations as
Illinois Central
Railroad Company v. Interstate Commerce Commission, just
decided. The advance here involved grew
Page 206 U. S. 437
out of the same action by the railroads there considered, and is
the advance there referred to as having been made west of the
Mississippi. This case was argued and submitted with that, and
depends on the same ultimate contentions. We need not repeat the
discussion of those contentions, nor trace out or dwell upon the
many subsidiary considerations which the assignments of error and
the elaborate briefs of counsel present.
In the case at bar, however, there are assignments of error
based on the objections to the jurisdiction of the circuit court.
These might present serious questions in view of our decision in
Texas & Pacific Railroad Company v. Abilene Cotton Oil
Co., 204 U. S. 426,
upon a different record than that before us. We are not required to
say, however, that because an action at law for damages to recover
unreasonable rates which have been exacted in accordance with the
schedule of rates as filed is forbidden by the Interstate Commerce
Act, a suit in equity is also forbidden to prevent a filing or
enforcement of a schedule of unreasonable rates or a change to
unjust or unreasonable rates. The circuit court granted no relief
prejudicial to appellants on the original bill. It sent the parties
to the Interstate Commerce Commission, where, upon sufficient
pleadings, identical with those before the court, and upon
testimony adduced upon the issues made, the decision was adverse to
the appellants. This action of the Commission, with its findings
and conclusions, was presented to the circuit court, and it was
upon these, in effect, the decree of the court was rendered. There
was no demurrer to that petition, and the testimony taken before
the Commission was stipulated into the case, and the opinion of the
court recites that, "with equal meritorious purpose, counsel for
the respective parties agreed that this would stand for and be the
hearing for final decree in equity."
It was certainly competent for the appellees to proceed in the
circuit court under § 16 of the Interstate Commerce Act (24 Stat.
379) and to apply by petition to the circuit court, "sitting in
equity," for the court to hear and determine
Page 206 U. S. 438
the matter "as a court of equity," and issue an injunction "or
other proper process, mandatory or otherwise," to enforce the order
of the Commission. We think that, under the broad powers conferred
upon the circuit court by § 16 and the direction there given to the
court to proceed with efficiency, but without the formality of
equity proceedings, "but in such manner as to do justice in the
premises," and in view of the stipulation of the parties recited in
the decree of the court, the appellants are precluded from making
the objection that the court did not have jurisdiction to entertain
the petition and grant the relief prayed for and decreed.
But objection is made to the extent of the decree. Indeed, the
objection may be said to go farther back, and is based on the bill
itself, on the ground that "pecuniary reparation was demanded" in
it, and "such payment necessarily involves a trial by jury,
guaranteed by the Constitution of the United States." And further,
that each complainant is separately interested in any amount which
may be recovered. The specific part of the decree which is objected
to is as follows:
"Third. That an order be taken referring to the standing master
of this Court, J. N. Talley, Esquire, the pleadings and evidence in
this cause, with instructions to ascertain the sum total of the
increase in rates paid by each of the complainants and other
members of the Georgia Saw Mill Association to either or all of the
defendant companies, since the rate went into effect, and to the
end of the litigation, and report such amount to the court in order
that, pursuant to the stipulation made by the respondents in open
court, in case the complainants prevailed, decree of restitution
may be made."
The errors assigned against this part of the decree are: (a)
that there is nothing in the pleadings or the evidence to justify
any reference; (b) the master should only have been ordered to
ascertain the sum total of the advance paid by each of the
appellees as is unreasonable and unjust; (c) that no members of the
Georgia Saw Mill Association except the complainants (appellees)
had themselves been made parties to the cause prior
Page 206 U. S. 439
to the rendition of the decree of July 8, 1905, and therefore no
reference should have been made to ascertain the amounts paid by
such other members; (d) the master should not have been ordered to
report any amount at all; (e) no stipulation was made by appellants
that a decree of restitution should be made except "in the event
that complainants (appellees) finally prevail, and whether they
finally prevail cannot be known until the determination of this
appeal."
In support of these contentions, appellants rely on
Texas
& Pacific Railway v. Abilene Cotton Oil Company, supra. In
that case, the Abilene Cotton Oil Company sued in one of the courts
in Texas to recover the excess of what it alleged to be an unjust
and unreasonable charge on shipments of carloads of cotton seed.
The defense was that the rates were charged according to the
schedule of rates filed under the Interstate Commerce Act, and that
the court had no jurisdiction to grant relief upon the basis that
the established rate was unreasonable when it had not been found to
be so by the Interstate Commerce Commission. The defense prevailed
in the trial court, but did not prevail in the court of civil
appeals, where judgment was rendered in favor of the cotton oil
company. The judgment was reversed by this Court on the ground that
the state courts had no jurisdiction to entertain a suit based on
the unreasonableness of a rate as published in advance of the
action of the Interstate Commerce Commission adjudging the rate
unreasonable. And it was in effect held that reparation after such
action for the excess above a reasonable rate must be by a
proceeding before the Commission,
"because of a wrong endured during the period when the
unreasonable schedule was enforced by the carrier and before its
change and the establishment of a new one."
There is nothing in that case, however, which precludes the
parties, after action by the Commission declaring rates
unreasonable, from stipulating in the proceedings prosecuted under
§ 16 that the court adjudge the amount of reparation. By the action
of the Commission, the foundation for reparation, as
Page 206 U. S. 440
provided in the Interstate Commerce Act, was established, and
the inquiry submitted to the court was but of its amount, and had
the natural and justifiable inducement to end all the controversies
between the parties without carrying part of them to another
tribunal. We do not understand that the assignment of errors
questions the truth of the recital in the decree that the reference
was made in pursuance of the stipulation in open court, and it is
upon the stipulation we rest our decision. It is said, however,
that it was stipulated that restitution should only be made in the
event the appellees prevailed. Necessarily it was so dependent. So
was every part of the relief prayed by the appellees. The decree
was the first judgment that they should prevail, and properly
provided for the satisfaction of all the relief dependent upon
their success. Of course, what was granted by the decree was
subject to review and change or defeat in the circuit court of
appeals and in this Court. But it equally was subject to
affirmance, and was put in such form and made such provision as
made it ready to be executed upon affirmance.
The objection that the reference is too broad is not of
substance. What the court may award upon the coming in of the
report of the master we cannot know. Presumably it will make the
reparation adequate for the injury, and award only the advance on
the old rate, and to those who are parties to the cause.
Decree affirmed.
MR. JUSTICE MOODY took no part in the decision of this case.
MR. JUSTICE BREWER dissented.