1. Where a carrier, having been ordered by the Interstate
Commerce Commission to make reparation to a shipper for tariff
charges then found by the Commission to have been excessive, pays
the required amount upon demand of the shipper without waiting to
be sued under the disadvantages prescribed by § 16(2) of the
Interstate Commerce Act, the payment is not voluntary, and where,
afterwards, upon rehearing, the Commission sets aside the
reparation order because the finding of unreasonable rates upon
which it was based was erroneous, the carrier may maintain a suit
to recover the payment from the shipper. This accords with the
policy of the Act. P.
307 U. S.
481.
The fact that the shipper paid part of the money to an expert,
who acted for it before the Commission in procuring the
reparation,
Page 307 U. S. 479
recovery of which is barred by limitations, and has used the
remainder for its own purposes furnishes no equitable defense to
the suit for refund. P.
307 U. S.
485.
2. Equitable considerations cannot justify failure of a carrier
to collect, or of a shipper to pay, the tariff charges required by
the Interstate Commerce Act. P.
307 U. S.
485.
343 Mo. 915, 122 S.W.2d 890, reversed.
Certiorari, 306 U.S. 625, to review a judgment of the court
below which affirmed a Judgment of a circuit court of Missouri for
the defendant in an action brought by the trustees of the Missouri
Pacific Railway Company to recover an amount of money which the
company had paid to the defendant in pursuance of an order of
reparation made by the Interstate Commerce Commission.
MR. JUSTICE BUTLER, delivered the opinion of the Court.
The decision in this case depends on provisions of the
Interstate Commerce Act and orders of the commission.
In September, 1924, respondent and others complained to the
commission that the tariff charges they had been and were then
paying the Missouri Pacific and other carriers for the
transportation of coal from mines in southern Illinois and western
Kentucky to destinations in southeastern Missouri and northeastern
Arkansas were excessive. They asked the commission to establish
reasonable rates for the future, to ascertain the amount of damages
they had sustained, and to order the carriers to make reparation.
After hearings, the commission, by order of February 11, 1929, and
supplemental order of March 11
Page 307 U. S. 480
in the same year, found that the carriers' tariff rates had
been, were, and for the future would be, unreasonable to an extent
indicated, prescribed as reasonable lower rates to be established
for the future, and found that complainants, including respondent,
having paid excessive charges, had suffered damages and were
entitled to reparation to the extent of the difference between
amounts paid and what the charges would have been under the rates
that the commission then found reasonable.
On demand of the respondent, made in accordance with the
commission's rules of practice, [
Footnote 1] the Missouri Pacific, before April 20, 1929,
paid it $23,994.33, being the amounts directed to be paid by the
reparation order or account of shipments for which the Missouri
Pacific, delivering carrier, had collected the charges. After
denial of a number of petitions for rehearing filed by the Missouri
Pacific and other carriers, the commission, November 2, 1931,
reopened the case. July 3, 1933, after hearings and protracted
contest, it found the rates that it had theretofore condemned were
not unreasonable, and set aside all findings and orders that it had
made, including the reparation order on which respondent had
collected.
October 30, 1934, petitioners, who had been appointed trustees
of the Missouri Pacific, asked respondent to refund the amount it
had received; respondent refused. To recover with interest the
amount the Missouri Pacific paid, petitioners brought this suit in
a circuit court of Missouri; it gave judgment for respondent. The
supreme court affirmed. It held that, as the Missouri Pacific had
paid the amount of the reparation award with full knowledge of the
facts without denying liability or waiting to be sued, the payment
was a voluntary one, and that therefore petitioners were not
entitled to recover. The court
Page 307 U. S. 481
also held that, by the voluntary payment the Missouri Pacific
caused respondent to believe that the matter was a closed
transaction and that, in the circumstances, to which reference will
later be made, it would be inequitable to require respondent to
refund.
We think that petitioners are entitled to recover.
1. In absence of prior finding by the commission that the tariff
charges collected for interstate transportation are unreasonable,
there can be no enforceable claim for damages caused by exactions
according to the tariff.
Texas & Pacific Ry. Co. v. Abilene
Cotton Oil Co., 204 U. S. 426,
204 U. S. 444;
Robinson v. Baltimore & Ohio R. Co., 222 U.
S. 506,
222 U. S. 510;
Mitchell Coal & Coke Co. v. Pennsylvania R. Co.,
230 U. S. 247,
230 U. S. 259.
And see Lewis-Simas-Jones Co. v. Southern Pacific R. Co.,
283 U. S. 654,
283 U. S. 661;
Baltimore & Ohio R. Co. v. Brady, 288 U.
S. 448,
288 U. S. 458.
Prior to the findings and orders of the commission, February 11 and
March 11, 1929, respondent was not permitted to collect, nor was
the Missouri Pacific or other carriers allowed to pay, the damages
claimed by respondent. But when the commission made the findings
and reparation orders, the carriers, in the absence of facts
constituting a defense, were in duty-bound to pay in accordance
with the order.
Section 16(1) [
Footnote 2]
provides that, if the commission shall determine complainant
entitled to an award of damages, it shall direct the carrier to pay
complainant the sum to which he is found entitled within a
specified time. Section 16(2) [
Footnote 3] declares that, if the carrier does not
comply
Page 307 U. S. 482
within the time limit, complainant may bring suit setting forth
the causes for which he claims damages. It also declares that, in
claimants' suits in federal courts, the findings and order of the
commission shall be
prima facie evidence of the facts
therein stated. It allows plaintiffs, if they prevail, to recover
reasonable attorneys' fees. By thus laying on the carriers the
burden of bringing forward evidence to overcome presumptions
created against them, and by compelling them, if defeated, to pay
plaintiffs' attorneys' fees in addition to the interest allowed by
law, the Act unmistakably evidences purpose directly to prevent
interposition of pleas lacking merit and so coercively to bring
about prompt payment of the commission's awards. In
Meeker v.
Lehigh Valley R. Co., 236 U. S. 412,
this Court, upholding the clause as to attorneys' fees, said (p.
236 U. S.
433):
"The provision is leveled against common carriers engaged in
interstate commerce, a
quasi-public business, and is
confined to cases wherein a recovery is had for damages resulting
from the carrier's violation of some duty imposed in the public
interest by the act to regulate commerce. . . . One of its purposes
is to promote a closer observance by carriers of the duties so
imposed, and that there is also a purpose to
Page 307 U. S. 483
encourage the payment, without suit, of just demands, does not
militate against its validity."
And in
St. Louis & S.F. R. Co. v. Spiller,
275 U. S. 156,
referring to the same provision, we said (p,
275 U. S.
159): "The purpose of Congress in making the provision
concerning costs was to discourage harassing resistance by a
carrier to a reparation order."
There is nothing in the record to indicate, nor is it suggested
by respondent or in the state court's opinion, that the Missouri
Pacific had any defense against respondent's claim under the
findings and reparation order. The liability so established
persisted until payment of the claim. It may not reasonably be held
that the Missouri Pacific was bound to await suit or delay
adjudication by false or frivolous answer while expenses of
litigation, interest, and fees for its adversary's counsel
accumulated. Sections 16(1) and 16(2) indicate legislative purpose
to penalize failure of carriers, having no defense, to pay damages
in accordance with the terms of the commission's findings and
reparation orders.
But by § 16a, [
Footnote 4]
the commission was empowered to set aside its orders. That section
was drafted by the commission
Page 307 U. S. 484
at the request of the Senate Committee on Interstate Commerce,
and was added by the Hepburn Act of 1906. It was "a new section . .
. which expressly authorizes the commission to review and modify
its own decisions." [
Footnote
5] It was expounded by the commission as "intended to give the
commission the right to rehear a matter for the purpose of
correcting any injustice in its previous order." Cattle Raisers'
Assn. of Texas v. Missouri, Kansas & Texas R. Co., 12 I.C.C. 1,
3. While careful to prevent applications for rehearing from being
used to avoid or delay compliance with the commission's orders, it
empowers the commission at any time to grant rehearings as to any
decision, order, or requirement and to reverse, change, or modify
the same. Respondent made its demand and collected the money
subject to the authority of the commission to set aside the order
which authorized payment of the same.
The clauses of § 16a that authorize the commission to consider
facts arising after the former hearing and that make its decisions
after rehearing subject to the same provisions as an original order
manifest the purpose of the Act to require carriers to serve for,
and the shippers to pay, the lawful tariff rates. The Act condemns
every deviation from lawful tariff rates. It declares that no
carrier may lawfully collect a greater or less or different
compensation for transportation than the rates specified in the
tariff filed, nor refund or remit any portion of the rates so
specified. § 6(7);
see also § 10(2). Similarly, it
condemns the obtaining of transportation for less than
Page 307 U. S. 485
the legally established rate.
See §§ 10(3) and (4).
Involuntary rebates, as well as those that are voluntary, are
prohibited.
Lowden v. Simonds-Shields-Lonsdale Grain Co.,
306 U. S. 516;
Pittsburgh, C., C. & St.L. Ry. Co. v. Fink,
250 U. S. 577,
250 U. S. 582;
New York Cent. & H. R. Co. v. York & Whitney Co.,
256 U. S. 406. By
accepting delivery of the coal, respondent became bound to pay the
tariff charges. As the commission has found them not unreasonable,
but lawful, respondent is without right to retain the amount it
collected upon the claim that they were excessive.
The retention by respondent of money collected under the
findings and order that the commission later set aside and vacated
clearly would be repugnant to the policy and provisions of the
Act.
2. The facts on which the state court held it would be
inequitable to require respondent to refund may be briefly stated.
Respondent employed an expert to represent it before the
commission, and promised to pay him one-half the amount covered as
reparation. Upon collection, it promptly paid as agreed. When
petitioners asked refund, more than five years had elapsed, and
suit to recover back the fee was barred by the statute of
limitations. Respondent used the other half to pay dividends and
for other corporate purposes. As above indicated, the court held
the payment to be voluntary, and rested its ruling on that fact.
But, as shown above, it was not voluntary; it was demanded by
respondent and compelled by the Act, findings, and reparation
order. Moreover, equitable considerations may not serve to justify
failure of carrier to collect, or retention by shipper of, any part
of lawful tariff charges.
Pittsburgh, C., C. & St.L. R. Co.
v. Fink, supra; New York Cent. & H. R. Co. v. York &
Whitney Co., supra.
Reversed.
[
Footnote 1]
The applicable rule is V: Reparation Statements -- Formal Claims
for Reparation Based Upon Findings of the Commission.
See
Rules of Practice Before the Commission, revised to April 1,
1936.
[
Footnote 2]
"If, after hearing on a complaint made as provided in section 13
of this chapter, the commission shall determine that any party
complainant is entitled to an award of damages under the provisions
of this chapter for a violation thereof, the commission shall make
an order directing the carrier to pay to the complainant the sum to
which he is entitled on or before a day named."
49 U.S.C. § 16(1).
[
Footnote 3]
"If a carrier does not comply with an order for the payment of
money within the time limit in such order, the complainant, or any
person for whose benefit such order was made, may file in the
district court of the United States for the district in which he
resides or in which is located the principal operating office of
the carrier, or through which the road of the carrier runs, or in
any State court of general jurisdiction having jurisdiction of the
parties, a petition setting forth briefly the causes for which he
claims damages, and the order of the commission in the premises.
Such suit in the district court of the United States shall proceed
in all respects like other civil suits for damages, except that, on
the trial of such suit, the findings and order of the commission
shall be
prima facie evidence of the facts therein stated,
and except that the petitioner shall not be liable for costs in the
district court nor for costs at any subsequent stage of the
proceedings unless they accrue upon his appeal. If the petitioner
shall finally prevail he shall be allowed a reasonable attorney's
fee, to be taxed and collected as a part of the costs of the
suit."
49 U.S.C. § 16(2).
[
Footnote 4]
"After a decision, order, or requirement has been made by the
commission in any proceeding, any party thereto may at any time
make application for rehearing of the same, or any matter
determined therein, and it shall be lawful for the commission in
its discretion to grant such a rehearing if sufficient reason
therefor be made to appear. Applications for rehearing shall be
governed by such general rules as the commission may establish. No
such application shall excuse any carrier from complying with or
obeying and decision, order, or requirement of the commission, or
operate in any manner to stay or postpone the enforcement thereof,
without the special order of the commission. In case a rehearing is
granted, the proceedings thereupon shall conform as nearly as may
be to the proceedings in an original hearing, except as the
commission may otherwise direct, and if, in its judgment, after
such rehearing and the consideration of all facts, including those
arising since the former hearing, it shall appear that the original
decision, order, or requirement is in any respect unjust or
unwarranted, the commission may reverse, change, or modify the same
accordingly. Any decision, order, or requirement made after such
rehearing, reversing, changing, or modifying the original
determination shall be subject to the same provisions as an
original order."
49 U.S.C. § 16a.
[
Footnote 5]
Nineteenth Annual Report of the Interstate Commerce Commission,
page 12.