State v. Chicago, Burlington & Quincy Railway Co.

90 Iowa 594

• Court: Supreme Court of Iowa
• Decided: May 14, 1894
• Status: Published

Opinion

Kihne, J.

I. In February, 1891, 'separate petitions in equity were filed in the Pottawattamie district “court by the attorney general, at tbe instance of the board of railroad commissioners of the state, and in their name, as such commissioners, against each of the defendants, which said petition, as finally amended averred, in substance: That plaintiffs were railroad commissioners of the state of Iowa. That defendant was and is a railway corporation and common carrier owning and operating a railroad in this state. That its line of railway in Iowa is intersected or joined by the lines of other railways; and it is necessary, proper and convenient, in facilitating transportation, for freight to be shipped over both lines, for which purpose a transfer of freight from one line to the other at the place of intersection is necessary. That in conformity with chapter 28, Acts Twenty-second General Assembly, the said board, during the year 1888, made for the railway companies of this state, including the defendants, a schedule of reasonable maximum rates of charges for transportation of freight and cars. That before fixing said rates under section 17, chapter 28, Acts Twenty-second General Assembly, said commissioners published notice, as required, and fixed a time and place, when and where they would proceed to fix and determine said rates; the place being the office of the commissioners, at the capitol, in Des Moines, and the time being the-day of June, 1888, and less than sixty days before said act took effect. That at said time and place the commissioners afforded all firms, persons, corporations, and common carriers an opportunity to be heard. That after making such maximum rates they caused notice to be given as required by law. That on October 9, 1890, said original schedule of rates was so revised and modified that there was in force in Iowa, as the maximum rates adopted, fixed, and established by said commissioners, the rates adopted in June, 1888, and on October 9, 1890. That on making said revision they caused notice to be published for two consecutive weeks in a public newspaper in the city of Des Moines, in this state, stating the date of the taking effect of said rates. That, prior to the promulgation of the order hereafter referred to, persons interested demanded and requested of the railway companies doing business in this state, including the defendant, to establish reasonable joint through rates for the transportation of freight between points on their respective lines within the state, and to receive and transport freight and cars o ver such roads as the .shippers might direct. That said companies and defendant have failed and refused, on said demand, and before the promulgation of said order, to establish through joint rates, or to establish and charge reasonable rates for such through shipments. That persons interested did make application to the board of railroad commissioners to establish joint rates, and upon such application said board did on July 31, 1890, formulate and fix the following reasonable schedule, and give the following notification thereof: “July 31, 1890, the commissioners made the following ruling, to apply to all shipments of freight, of any kind whatsoever, originating and terminating within the state, under the commissioner’s schedule of reasonable maximum freight rates heretofore established, or that may be hereafter established: Iowa Freight Eates. Ee-vised Schedule of Eeasonable Maximum Eates for the Transportation of Freight within the state of Iowa. Notice is hereby given that in pursuance of the Acts of the Twenty-second General Assembly of the state of Iowa, and of the Acts of the Twenty-third General Assembly of the state of Iowa, the schedule of reasonable maximum rates of charges for the transportation of freight within the state- of Iowa now in effect on the respective lines of railway of said state have been revised and amended by the adoption of the following: From and after the fifteenth day of August, 1890, the following railroad companies engaged in the business of common carriers, and doing business within the state of Iowa (here follow names of all railroad companies in Iowa), shall be governed by the following rule in making rates for freight passing over two or more lines within the state: The maximum rate of freight to be charged by any railroad company receiving business from a shipper at a station on its line within the state of Iowa, destined to a point within the state of Iowa on another line of railroad, or receiving freight originating within the state of Iowa on the line of another railroad, and destined to a point within the state of Iowa on its' line, shall be eighty per cent, of the Iowa tariff rate, which becomes effective August 1, 1890. * * * The rates fixed by the commissioners, June 18, 1890, are hereby revoked.” That printed copies of the above order and schedule were sent to and received by all railway companies doing business in this state upon August 4,1890. That the application and said notification were made after said joint rates were promulgated. August 22, 1890, the following notice was sent to all railroads doing business in Iowa: “On July 31,1890, a revised schedule of rates was issued from this office, applying to Iowa freight received from or delivered to another line of -railway. Such schedule became effective on the fifteenth instant; due notice of the same having been given as required by law, and a copy of which schedule, order, and notice is inclosed herewith. Up to this date, no information has been received at this office as to whether it is your intention to comply with the rates so established. Your attention is again directed to this matter, and you are called upon to obey said order of the commissioners, and to immediately put. in force said schedule. Will you advise the commissioners, within ten days from the date hereof, as to whether you are applying this schedule to the business of your line I” That said railroads did not agree upon a division of charges among themselves, nor did they put into effect said schedule. That, on October 9, 1890, the defendant and all other railroad companies in the state having failed to establish joint through rates, said board made and promulgated an order in the same form as is heretofore set out. That said order was published as required by law. That said companies, including defendant, refuse to comply therewith. That said order, and the rates provided therein, are just, reasonable and lawful. The second count sets out, largely, the same facts, and bases the order made on power claimed to have been given under Acts of the Twenty-second General Assembly, chapter 28, and section 1, chapter 17, Acts of the Twenty-third General Assembly. The prayer is that a decree be entered / declaring said order, the rates established thereby, and; the schedule of maximum rates, as modified thereby, ;¡ to be just and reasonable, and that a mandatory in-,' junction issue, compelling obedience to and compliance1, with said order. April, 1,1893, the state was substi-' tuted in each case as plaintiff. Each of the defendants demurred for many reasons, averring that the facts stated did not show that plaintiff was entitled to the relief prayed; that the state was not the proper party plaintiff; that there was a defect of parties defendant; that the court had no jurisdiction of the subject of the action; that no notice was given of the promulgation of the rates in question, as required by law; that said board did not fix joint rates for the several companies forming a through line; that no notice was given of the intention to make such order, nor any application made therefor; that reasonable time was not given defendant, after said rates were promulgated, to agree upon a division of charges, but in the first instance a division was made of a through rate, allotting to defendant a portion’ thereof, contrary to law; that there is no allegation that any demand was ever made upon defendant to put in rates for the transportation of freight- delivered to it at a station on its line, and destined to a station on the line of another road; that the exclusive remedy for the wrongs complained of is provided by chapter 17, Acts of the Twenty-third General Assembly, and the hoard did not proceed in conformity therewith; that the order made is not enforceable in equity; that the law and order impair “ the obligation of contracts, and are in violation of section j 10, article 1, of the constitution of the United States, \ and of section 21, article 1, of the constitution of the | state of Iowa; that said act and order are in violation j of sections 9 and 18, article 1, of the constitution of the 1 state of Iowa, and of article 14 of amendments to the constitution of the United States, in that they seek to compel defendant to enter into contractual obligations j with other companies against its will, without due ■process of law, and without just compensation, and inj other respects; that there is no allegation in the petition that the commissioners ever fixed a joint rate for shipment over defendant’s line, and any line connected therewith; that the schedule sought to be enforced fixes for defendant a lower rate for identically the same service than is fixed in the schedule claimed to be a schedule of reasonable rates; that the schedule is discriminative; that the act confers’judicial powers on the commissioners, contrary to law; that it is an attempt to regulate commerce between states, and is void. The court sustained the demurrers; and plaintiff electing to stand upon its pleadings, and, refusing to further plead, the petitions were dismissed at its cost.

II. It is contended that the state is not the proper party plaintiff; that the action should be prosecuted in “"the name of the commissioners. In answer to this claim, it may be said tbat tbe ruling in tbe case of Smith v. Railway Co., 86 Iowa, 202, 53 N. W. Rep. 128, was intended to settle tbe practice in all cases instituted by tbe board of railroad commissioners to enforce orders and rulings made by them, and we see no good reason for making a distinction between tbat case and those at bar.

III. Some preliminary questions, which do not involve tbe validity of tbe law, are raised, which must be determined at tbe outset, and which, to our minds, are decisive of these cases:

" " First, it is conceded tbat no notice of an intention , to fix these rates was ever given by the railway commissioners to defendants. On tbe part of the state, it is” contended tbat tbe schedule of rates in controversy is but a revision of tbe schedule of reasonable maximum rates fixed and promulgated in 1888, so tbat no such notice was necessary. Tbe defendants contend that the schedule of 1890 is in no sense a revision of the schedule of 1888, but an independent and original schedule. If the latter claim is correct, it seems to be conceded, and is undoubtedly true, that the giving of notice of an intention to fix such rates, in advance of making them, was a requirement of the law absolutely necessary to be complied with, in order to confer jurisdiction on the board to fix the rates in controversy. It will be observed that one count of the petition is based on the thought that under the act of 1888, and the first section of the act of 1890, the commissioners had power to establish joint rates, and that the schedule in controversy was made without regard to, and not by virtue of, the subsequent provisions of the act of 1890. If a joint rate could be established under the' act of 1888, as seems to have been attempted, then the failure to give notice is justified by' the fact that that act only required such notice when tbe original schedule was made, not of a revision thereof; and if the schedule in controversy is merely a revision of that of 1888, made by virtue of the power given in said act, the objection that no notice of an intention to make it-was given would not be well taken. The determination / of the question, then, as to whether notice of an inten-1 tion to fix the rates and make the schedule in question j was an act essential to confer jurisdiction on the [ board to make it, involves a finding as to the power of the board to make a joint rate under the act of 1888. t The act of 1888 provides only for the fixing of single i, rates for each road, while the act of 1890 makes pro- j vision for the establishment of joint rates applicable to j two or moré lines of road. There is nothing in the act \ of 1888, chapter 28, touching joint rates, except the fol- j Towing provision in section 7 of that act: “And in cases where passengers and freight pass over continuous lines or routes in this state operated by more than one common carrier and the several common carriers operating such lines or routes, have established joint tariffs of rates or fares or charges for such continuous lines or routes, copies of such joint tariffs shall also in like manner be filed with said commissioners,” etc. This section contemplates that such joint rates may be agreed upon by the railway companies, and in such case provision is made for the commissioners to make publication thereof. Nowhere in that act is any power conferred to make joint rates. But.it is claimed that such power is conferred by the first section of the act of 1890, íiTconíaectión with the act of 1888. We are unable to see that the first section of the act of 1890 confers any new Vr additional powers upon the board of railway commissioners. That section reads: “That chapter 28 of the Acts of the Twenty-Second General Assembly be and the same hereby is amended as follows: That said chapter 28 of the Acts of the Twenty-Second Gren-eral Assembly shall not be construed to prohibit the making of rates by two or more railroad companies for the transportation of property over two or more of their respective lines of railroad within this state, and a less charge by each of said railroad companies for its portion of such joint shipment than it charges for a shipment for the same distance wholly over its own line within the state, shall not be considered a violation of «aid chapter 28 of the Act of the Twenty-Second G-eneral Assembly, and shall not render such railroad company liable to any of the penalties of said act, but the provisions of the section shall not be construed to permit railway companies, establishing joint rates, to make by such joint rates any unjust discrimination between the different shipping points or stations upon their respective lines between which joint rates are established, and any such unjust discrimination shall be punished in the manner and by the penalties provided by chapter 28 of the Acts of the Twenty-Second G-eneral Assembly.” Now, it will be seen that this section in no way relates1 or refers to the railway commissioners, nor does it in-i crease or diminish their powers. It simply provides 1 that the companies may by agreement make a joint through rate over two or more lines, and each charge therefor a less sum than is charged for a like shipment for the same distance wholly over its own line within the state. It follows, then, if the power to establish a joint rate exists at all outside of the provisions of the subsequent section of the act of 1890, it must be by virtue of the act of 1888 alone.; It is said by the attorney general, in his argument: “The latter sections of the act of 1890 give to the commissioners the power, perhaps, to make such a through, continuous rate. This power, if it exists, has, however, not been attempted to be exercised. * * * The first section only amends the law of 1888 in respect of discrimination. The latter sections confer the power to adopt a new method of procedure to obtain an object which can also be attained under the powers previously existing. ’ ’ The argument, then, is that the order is so made as that it does not prescribe a joint rate, but an independent rate for each road; hence, it was properly made, under the Acts of 1888, without notice, being a mere revision of the schedule made in 1888. We do not think this claim is well founded. A rate fixed to govern two or more roads, as To a shipment which passes over all of them, while in one sense a separate rate as to each, in that it fixes the rate at a certain per cent, of what each might charge for a like shipment for the same distance wholly over its own line, is nevertheless, in legal effect, a joint rate, and must be treated as such. It is said in 'Railway Co. v. Dey, 82 Iowa, 312, 48 N. W. Rep. 98: “And it is equally plain that the joint rates of charges cover all the charges for the transportation over two or more roads, as though they constituted one road, the rates fixed determining the whole charges. It is also plain that these joint rates consist of the separate rates of each separate road.”

Now, the rate fixed by the schedule in question was for a through shipment over two or more lines of road. That the form of the order provided that each road constituting the one line should only charge eighty per cent, of a certain other rate for the same kind of traffic did not make the rate any the less a joint rate, because the rate and schedule in question applied only to' through joint shipments; and a rate applicable only to a continuous shipment over two or more lines of road must, of necessity, be a joint rate, no matter what the form of phraseology of the order fixing it may be. Any other holding would result in authorizing the railroad commissioners to establish, promulgate, and have in effect, at the same time, and applicable to the same road, two different schedules of rates for the same identical service. Suppose two or more railroad companies mutually agreed that, for all through shipments over their respective lines, each company should have, as its proportion of the entire charge, eighty per cent, of what it might lawfully charge for a like shipment for the same distance wholly over its own line. Could there he any question that a shipment made over.such lines, and under such circumstances, would be a joint through shipment, and the rate a joint through rate, regardless of the plan by which division between the several roads of the entire sum to be charged should be made? The law expressly provides for just such • agreements. Then why is such a rate, if made by the commissioners, any the less a joint rate than it would have been if entered into voluntarily by the interested companies! The character of the rate in controversy, as to being a joint rate or a local rate, must be determined from the shipment it is applicable to; and, if to a shipment which is to be continuous over two or more lines of road — that is, a through shipment — that fact fixes its character as a joint rate. The law did not intend that the commissioners might fix in the first Í instance a rate for each road which should be prima ! facie evidence of a reasonable maximum rate, and thereafter, without setting aside such rate, fix another - less rate for the same service, and over the same road, which should also be prima facie evidence of a reasonable maximum rate therefor. The statute, as we have seen, authorizes the several companies to agree upon joint rates. The authority thus granted them is not to make rates independent of each other, and having no relation to another line of railway, and at a less rate than is charged over its own line of railway for the same service, but the rates are to be joint rates over two or more lines of road. Now, the eighty per cent, i which the commissioners’ order authorizes each road • to charge simply determines its proportion of a joint j rate, not a local rate; and the order itself is a joint rate' order, applicable, as we have seen, to continuous, \ through shipments over two or more lines of road. By ! the act of 1890 (section 3, ch. 17) it is provided that the board, in making joint rates, 1 ‘shall be governed, as near as may be, by all the provisions of chapter 28, Acts of the Twenty-second G-eneral Assembly.” In f section 17 of said chapter, it is provided ‘ ‘that, before! finally fixing and deciding what the original maximum j rates and classification shall be, it shall be the duty of i the railroad commissioners to publish ten days’ notice | in two daily papers published in Des Moines setting j forth in such notice that at a certain time and place they J will proceed to fix and determine such maximum rates J and classification; and they shall at such time and ' place as soon as practicable afford to any person, firm, | corporation or common carrier who may desire it, an | opportunity to make an explanation or showing or to 5 furnish information to said commissioners on the sub- Ü jeet of determining and fixing such maximum rates } and classification.” Now, clearly, the rate in contro- / versy, being, as we hold, a joint rate, and not a revis- ; ion of the schedule of 1888, is an original rate, ; independent of the rate fixed in 1888; and the board : have no power to fix and adopt the same without giving the notice provided by law, applicable to an original! rate. No such notice was given. The giving of the' notice is jurisdictional, and hence the rate fixed without it is not binding — is, in fact, of no validity whatever.

IY. Many other questions are elaborately discussed by counsel. As, however, for the reason heretofore given, the judgments below must be affirmed, and the same questions may not arise on another trial, we need not discuss them. Without determining whether there is a defect of parties defendant, it may be said that the question may not be free from doubt. Affirmed.

Deemer, J., took no part.