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held that there was no evidence of service of the order upon the new company, nor of its refusal to neglect or obey it, and on that ground dismissed the bill as to the South Carolina and Georgia Railroad Company. But the circuit court of appeals took a different view, holding that there was sufficient evidence of service of the order upon
the new company, and that the latter was bound, although it was not mentioned by name in the order. The court further ruled that the successor corporation was in fact bound by the notice of complaint served upon and the answer filed by the receiver of the South Carolina Railway Company.
In Interstate Coinmerce Commission v. Western New York and Penn. sylvania Railroad Company (82 Fed. Rep., 192; July 3, 1897), before the circuit court for the western district of Pennsylvania, a similar question was raised. The order sought to be enforced was made against railroad companies to which the Western New York and Pennsylvania Railroad Company and the Erie Railroad Company had respectively since become successors, and the new companies, made defendants by the petition filed in court, demurred on the ground that they were not parties to the proceedings before the Commission, and no order or requirement against them had been made by the Commission. The question is,” said the court, “are these succeeding companies to be regarded as strangers to the order? We can not think so. It would indeed be lamentable if a lawful order against unjust discrimination by a railroad company, made by the Interstate Commerce Commission after a protracted investigation, could be nullified by the subsequent reorganization of the company, or transfer of its railroad and fran. chises to another corporation. It is a settled principle that the purchaser of property in litigation, pendente lite, is bound by the judgment or decree in the suit."
JURISDICTION OF CIRCUIT COURTS.
In the case last above mentioned, connecting companies operating coutinuous lines from Titusville and Oil City to New York Harbor points and Boston points were required by the Commission to cease and desist from unjust discrimination against shippers of oil in barrels in favor of shippers of oil in tank cars, and to the petition to enforce its order in the circuit court for the western district of Pennsylvania defendant carriers, operating lines outside of that district, demurred on the ground that the court was without jurisdiction as to them. The act provides that the proceedings shall be brought in the judicial district in which the carrier complained of has its principal office or "in which violation or disobedience of such order or requirement shall happen." The petition and exhibits attached thereto show that the defendants are engaged in the transportation of petroleum by railroad under common arrangeinents for continuous carriage between the points mentioned, and that by joint agreement and combination among
the defendants the alleged unlawful discriminations were committed. The court, in overruling the demurrer, observed that "if the allegations are true, it may well be said that the violation or disobedience within this judicial district of the order of the Commission by any one of the defendants is the violation or disobedience of all the defendants who are parties to and acting under the common arrangement."
ENFORCING REPARATION AWARDED TO INJURED SHIPPERS,
In the same case the Commission had awarded reparation to shippers of oil in barrels to a total amount of about $85,000, and this was sought to be enforced in the equity suit brought to compel obedience to the regulating part of an order, namely, the requirement to cease and desist” from the discriminations found unlawful. The sixteenth section provides for the enforcement of regulation prescribed in an order of the Commission by a suit in equity brought either by the Commission or any party interested. It also provides that when the order of the Commission involves “matters founded upon a controversy requiring a trial by jury” any company or person interested may apply to the court sitting as a court of law. The court held that these reparation orders constituted claims for damages for alleged wrongs already committed, that to each claimant a suit at law affords an adequate and complete remedy, and that they included matters not within the province of a court of equity. Neither would the court apply the recognized doctrine that when equity jurisdiction has once attached because of a wrong requiring its peculiar aid the court will take cognizance of the whole matter in controversy and administer full relief. The answer to that, said the court, is that in this case the court is not exercising its general equity powers, that its jurisdiction is auxiliary and limited, and that "in exercising this special statutory jurisdiction the court must be guided by the provisions of the interstate commerce act.” The court also pointed out that the act does not authorize the Commission to file a petition to enforce its awards of money reparation, and held that tho several claimants under such reparation orders must themselves proceed for enforcement thereof by petition to the court sitting as a court of law.
THE JOINT TRAFFIC ASSOCIATION AND TRANSMISSOURI FREIGHT ASSOCIATION CASES.
Our last annual report contains a statement of this case and the decision rendered against the Government by the United States circuit court for the southern district of New York. (United States v. Joint Traffic Association, 76 Fed. Rep., 895.) The case was brought by direction of the Attorney-General to enjoin the Eastern trunk lines from further acting under the Joint Traffic Association agreement, and the bill filed in court alleges, among other things, that the agreement is in violation of the antipooling section of the act to regulate commerce and of the antitrust law.
H. Doc. 157-27
The decision of the circuit court dismissing the petition was affirmed by the circuit court of appeals at the conclusion of the argument on March 19, 1897. Judges Wallace and LaCombe each stated their opinions orally as to different branches of the case, but declined to file a written opinion. On the Monday following (March 22, 1897) the United States Supreme Court handed down its decision in the case of United States v. Trans-Missouri Freight Association, holding a similar railroad agreement to be unlawful under the antitrust act.
This case presented no question under the act to regulate commerce, but counsel for the carriers insisted thai compliance by them with the provisions of that statute is opposed to the theory that the later antitrust act was intended to apply to railroads. The Supreme Court held that railroads are subject to the antitrust law; that the two acts do not conflict with each other, as the act to regulate commerce does not confer upon competing railroads power to make contracts in restraint of trade and commerce, which are forbidden by the antitrust law; and that a contract between railroads to maintain rates is in restraint of trade and commerce and obnoxious to the antitrust law. The court said:
What one company may do in the way of charging reasonable rates is radically different from entering into an agreement with other and competing roads to keep up the rates to that point. If there be any competition tho extent of the charge for the service will be seriously affected by that fact. Competition will itself bring charges down to what may be reasonable, while in the case of an agreement to keep prices up competition is allowed no play; it is shut out, and the rate is practically fixed by the companies themselves by virtue of the agreement, so long as they abide by it.
The decision of the Supreme Court as to the Trans-Missouri Associa: tion agreement, planted on the broad grounds above stated, is directly opposed to the rulings of the circuit court and circuit court of appeals on the Joint Traffic Association contract under the antitrust law. The Joint Traffic Association Case was pending on appeal in the Supreme Court at the spring term, but the argument was postponed until October and then again deferred until January. Notwithstanding the sweeping effect of the decision in the Trans-Missouri Association Case, which was followed by the immediate reorganization or dissolution of a number of railroad associations, the Eastern trunk lines, probably relying upon the favorable decision of the circuit court of appeals, have been and are continuing to operate under the joint traffic agreeinent.
CLAIMS FOR DAMAGES.
On April 21, 1897, it was decided by the United States circuit court for the northern district of Iowa, in Edmunds v. Illinois Central Railroad Company (80 Fed. Rep., 78), that claims for damages under sections 8 and 9 of the act to regulate commerce constitute property rights which may be assigned so as to convey the beneficial interest to the assignee; and that this suit, brought in the Federal court under
those sections, was maintainable in the name of the assignee under the provision of the Iowa court requiring all suits to be brought in the name of the real party in interest.
ORIGINAL SUITS IN COURT BASED ON ALLEGED UNREASONABLE TARIFF RATES.
A decision rendered by the United States circuit court, northern district of Iowa, in Van Patten v. Chicago, Milwaukee and Saint Paul Railway Company (81 Fed. Rep., 545), June 29, 1897, is to the effect that in suits at law to recover damages under the interstate-commerce act for extortionate and unreasonable freight charges it is a good and sufficient defense for the carrier to show that it has, in obedience to the act, adopted, printed, and posted a properly proportioned schedule of rates, and that the charges complained of aro in accordance with those set forth in the schedule. The court described the case as follows:
The proposition of the plaintiff is that, after the carrier, in obedience to the requirements of the act, has adopted, printed, and posted a schedule of rates, and for the past five years has received and transported grain, charging the schedule rates therefor, and the shipper, without protest or demur, has delivered his grain for shipment, knowing the schedule rate, and has paid the charges in conformity with the establishcd rate, he may now, and at any time within the period of the statute of limitations, bring an action at law for damages, not on the ground that more than the schedule rate was exacted, or that the schedulo itself provided for unequal, and therefore unjust rates, but solely upon the ground that the schedule rates, though uniform and properly proportioned, were greater than they should have been; and thus the question is presented whether the interstate-commerce act, considered as a whole, authorizes and provides for an action of this kind.
The court said: If the contention of the plantiff be sound, every schedule of raies posted by carriers under the provisions of the act should have attached thereto the memorandum: “Subject to change in accordance with the verdicts of juries which may hereafter be rendered." It is the intent of the interstate-commerce act to make the schedule of rates required to be adopted, printed, and posted by the carrier the basis for determining whether a given rate is or is not unreasonable under the provisions of the act.
It is noted that in no part of the decision is reference made to the power or authority of the Commission to find that tariff rates are unreasonable and order reparation; but that the court was careful to confine its observations to the remedy obtainable before courts and juries in suits at law. The same judge, writing the opinion in the Edmunds Case above mentioned, on the question whether a claim for damages under this law is assignable, said:
If the aid of the Commission is sought for the purpose of compelling a change of an established tariff of rates as affecting present or future shipments, it must appear that the party seeking action by the Commission is or will be affected by the rate sought to be changed. But where the aid of the Commission is sought solely to remedy a past wrong committed in overcharging a party for freight shipped, I see nothing in the act which limits the right of appeal to the Commission solely to the person originally injured.
MANDAMUS PROCEEDINGS TO COMPEL CARRIERS TO FILE ANNUAL REPORTS WITHI
Section 20 of the statute requires carriers subject to its provisions to file annual reports with the Commission. If a carrier operating a road wholly within a State is engaged in interstate transportation, it is believed that it must make such report. Some courts lave held that the liability of a State carrier to regulation under this act depends upon whether it is engaged in interstate transportation with some other carrier under a common control, management, or arrangement," as mentioned in the first section, the question usually turning on what constitutes “arrangement.” But it was supposed that the Supreme Court had settled the question in the Social Circle Case (162 U. S., 184), where a State railroad raised the question of jurisdiction by pleading its intrastate location; and in the Import Rate Case (162 U.S., 197), where the court in construing the first section said:
It would be difficult to use language more unmistakably signifying that Congress had in view the wholo field of commerce (excepting commerco wholly within a State), as well that between the States and Territories as that going to or coming from foreign countries.
And so it was held during the year by the United States circuit court, southern district of Alabama, that the Seaboard Railway Company of Alabama, lying wholly in that State, but participating in interstate transportation with another carrier, is subject to the regulating statute and must file its annual report with the Commission (82 Fed. Rep. 563).
But in a case in the United States circuit court for the southern district of Ohio, it was decided that the Bellaire, Zanesville & Cincinnati Railway, wholly in that State, is not subject to the act, although admittedly engaged in forwarding and receiving interstate freight. The decision seems to recognize that such a carrier may, by limiting bills of lading to its own line, evade the provisions of the act, notwithstanding the requirements of the seventh section that the carriage shall be treated as continuous and that no stoppage or interruption shall be made with "intent to evado any of the provisions of this act.” The case was brought by us under section 20 of the act to regulate commerce, and no specific penalties are provided for failure to file the report under that section, but the decision assumes that section 6 of the act of August 7, 1888, an entirely different statute relating to Governmentaided telegraph lines, is the one on which our petition was based; and the court said that section 6 of the act of August 7, 1888, is penal in its nature because of penalties therein provided, and is to be strictly construed. This application of the wrong statute constitutes a further ground for believing the decision to be erroneous.
The United States circuit court, western district of Michigan, sub. sequently decided in a similar case that the respondent State carrier need not make annual report to the Commission, citing the decision in