Turner Creamery Co. v. Chicago, Milwaukee & St. P. Ry. Co.

154 N.W. 819, 36 S.D. 310, 1915 S.D. LEXIS 163

• Court: South Dakota Supreme Court
• Decided: November 16, 1915
• Docket: File No. 3725
• Status: Published

Opinion

GATES, J.

The respondent, Turner Creamery Company, was, during the periods mentioned, engaged in the manufacture of - butter and ice cream, having its principal pl-ace of business at Mitchell, S. D. In the late winter of 1912 or early in the spring of 1913 it established agencies or receiving stations for the purchase of milk and cream- at Dupree, Firesteel, Isabel, Arrowhead, Timber Lake, Faith, Eagle Butte, Lantry, and Red Elm in this state. These towns are u-pon the lines of the Chicago, Milwaukee & St. Paul Railway Company lying west of Mobridge, S. D., which is a station on the Missouri river. Mitchell, S. D., is a station on said. lines of railway east of the Missouri river. Prior to January 1, 1913, the said lines of railway west of the Missouri river were a part of the Chicago-, Milwaukee & Puget Sound Railway Company (hereinafter designated as the Puget Sound Company). Mobridge was the meeting place of -the two lines.

On July 1, 1909, the Puget Sound Company promulgated local -and joint -distance tariff P. C. L. 141A, 'applying locally between stations on its lines and on joint traffic between stations on its lines and stations on -the lines of the Chicago, Milwaukee & St. Paul Railway Company (hereinafter called 'the -St. Paul Company). On May. 10, 1911, the St. Paul Company promulgated tariff G. F. D. 1161F, applying on -interstate traffic between all stations on its lines and on intrastate traffic between stations' in Illinois, Iowa, North and South Dakota, and Missouri. This tariff sheet recites:

“These rates originally established under order of Interstate Commerce Commission in cases 1162, 1292, and 1541, dated January 6, 1909.”

On. January 1, 1913, the St. Paul Company acquired the Puget Sound Company lines, and on that date refiled and adopted as its own all of the tariffs of the latter company, including 141A. Notwithstanding such adoption, the St. Paul Company began, and continued up to May 22, 1913, to Charge and collect from plaintiff for -the transportation of milk and cream from its receiving stations above named to Mitchell rates based upon its tariff 1161F. From May 22, 1913, to November 5, 1913, plaintiff was charged and paid rates based upon its tariff 141A. In August, 1913, the plaintiff filed its petition with the Board of Railroad Commissioners of South Dakota, alleging that the rates prescribed by tariff 141A were unreasonable, unjust, and excessive; that the rates prescribed by tariff 1161 F. were the reasonable rates, setting forth its shipments as above mentioned, and asking that the board require the .railway company to apply the latter .rate in the future, and that reparation for past shipments be awarded for the difference. On November 18, 1913, a hearing was had before said board upon said complaint, the answer of defendant, and the evidence introduced. In October, 1913, prior to said hearing, the St. Paul Company promulgated tariff 1161G, effective November 5, 1913, similar to tariff 1161F, except that by its terms it applied to the former Puget Sound lines in South Dakota. The following table shows the two rates from the stations named to Mitchell, on shipment of cream in ten-gallon cans:

141A 1161F

Timber Lake 64c. 42c.

Firesteel ... 68 43

Isabel ....... 68 43

Eagle Butte 74 45

Lantry ...... 76 46

Dupree 78-46

Red Elm. ... 79 47

Arrowhead 81 47

Faith ...... 83 •

About 90 per cent, of plaintiff’s shipments were in ten-gallon cans.

On May 3, 1914, said board made its findings -of fact, which embraced the matters above recited and others, and finding that the rates prescribed by tariff 1161F were reasonable, and the rates prescribed by 141A were unreasonable, unjust, and excessive; that the St. Paul Company collected, from the plaintiff upon said shipments under tariff 141A the sum- of $2,235.19; that, if the rates named .in tariff 1161P had been applied, there would have been' collected only $1,296.56, a difference of $938.63; and that plaintiff was entitled to reparation in' said sum. Said board also- found:

“After January 1, 1913, the Chicago, Milwaukee & Puget Sound Railway Company went out of existence, and the line of railway formerly operated by it from the time of the construction of the Pacific Coast extension up to January 1, 1913, became a' part of the general system of the Chicago, Milwaukee & St. Paul Railway Company, and it is doubtful if there could be any ‘joint traffic between stations on Chicago-, Milwaukee ’ & St. Paul Railway and Chicago-, Milwaukee & Puget Sound Railway’ after January 1, 1913. As there was not, after January 1, 1913, any line of railway known as the Chicago, Milwaukee & Puget Sound Railway, -there could not be any joint traffic between -stations on such line and the lines -of the -Chicago, Milwaukee & St. Paul Railway Company, and- the baggage men of the Chicago, Milwaukee & St. Paul Railway Company up to May 21, 1913, properly applied on the shipments from the stations named in paragraph 4 of the complaint to Mitchell the only rates then in existence to apply on such traffic, which wer-e tho-se contained in the tariff known as 1161F.' While it is true that the -rates set down in G. F. D. n6xP -are to be used in connection with table of distances of the Chicago, Milwaukee & St. Paul Railway Company No. G. F. D. 4000A, and tho-se -set down -in tariff P. C. R. 141A are to be used in connection with table of distances of the Chicago, Milwaukee & Puget Sound Railway Company P. C. R. No. 30C, and- this last-named distance table applies west of Mo-bridge, and the former distance table applies east of Mobridge, yet there is no joint traffic between points west of Mobridge and Mitchell, and it is all local traffic from th-e stations named in paragraph 4 Of the complaint to Mitchell, and the rates named in G. F. D. 1161F should have 'been applied on all traffic after January 1, 1913.”

As conclusions of law the board decided:'

“I. That it has no jurisdiction whatever to enter a money judgment in favor of the complainant and against the defendant for the recovery of the reparation which this board believes the plaintiff is entitled to in the sum of $938.63.

“II. That notwithstanding the fact that this board has no jurisdiction to enter a money judgment against the defendant, Chicago, Milwaukee & St. Paul' Railway Company, it is its duty to enter an order in this proceeding requiring and commanding the defendant railway company to make reparation to the complainant for the sum of $938.63.

“III. That the rates named in the tariff 141A and exacted by the defendant from complainant from May 21, 1913, to November 5, 19x3, are in violation of the provisions of section 6 of ■chapter 207 of the Session Raws of South Dakota for the year 1911.”

Thereupon said board made its order requiring the defendant to make reparation to plaintiff in said sum. An appeal therefrom was duly perfected by the railway company to the circuit court of the county of Brown. A trial was had before the court without a jury upon the record made before the Board of Railroad Commissioners. Said court made its findings of fact and conclusions of law in all things upholding the decision of the hoard and entered judgment affirming its order of reparation. From such judgment the tail-way company has appealed to this court.

[1] Appellant first claims that the evidence is insufficient to show that the rates prescribed by tariff 141A are unreasonable, unjust, or excessive either in and of themselves or by comparison. No attempt was made by either party to demonstrate the reasonableness or unreasonableness of the rates per se along the approved lines .laid down by the courts, viz., to ascertain the percentage of the net return from’ the business upon the value of the property used in the performance of the service. Mr. D. R.' Kelley, traffic expert for the Board of Railroad Commissioners, testified- that tariff 141A was unreasonable in 'so far as it applied to traffic 'between stations west of the Missouri river and stations east of the Missouri river. Mr. O. F. Waller, division freight and passenger agent of defendant at Aberdeen, testified that the rates specified in tariff 141A were reasonable. All other evidence offered by either .party on the reasonableness of the rates was by way of comparison. It is proper to. here call attention to a provision of our statute -which authorizes the ascertainment of the reasonableness of rates 'by comparison and a provision which places the burden of proof upon the carrier to' show the reasonableness of its rates when they are attacked in a proceeding before the Board of Railway Commissioners. Section 22, c. 207, Laws 1911, -provides:

“Section 22. Reasonable Rates, How Determined. — Upon all hearings the said board shall receive whatever evidence, statements or agreements either party may offer or malte pertinent to the matter under investigation and the burden of proof shall be upon the -common carrier or carriers affected thereby, but the board ■shall add to the showing made at -such hearing whatever information they may have, or -can secure from any source whatsoever, and the -person or persons complaining shall be entitled to- introduce -any published schedule of rates and fares of any common carrier engaged in a similar -branch of carriage, or evidence of rates and fares actually charged by any common carrier, for substantially the same kind of service, whether in this state or any other state, and the lowest rates and fares published or charged by any railroad company for substantially the same kind of service, whether in this state or any -other state, shall, at the instance of the person or persons complaining, be accepted as prima facie evidence of a reasonable rate or fare for the service under investigation. * * *”

[2-5] As tending to sustáin the burden of proof placed u-po-n it (although it claims the burden is on the plaintiff), the defendant offered in evidence the South Dakota Railroad Commissioners’ merchandise- tariff No. 26, prescribing express company rates on intrastate traffic -and its own excess baggage rates based upon the passenger fares. If may here be stated that a ten-gallon can of cream weighs approximately 100 pounds, and that cream and milk shipments by the 'defendant were carried in the baggage cars on- passenger trains. The following fable shows the rates prescribed by tariff 141A and the said express rates upon a ten-gallon can of cream, and the excess baggage rates per 100 pounds from the stations named to Mitchell:

141A. Express. Excess Baggage per 100 lbs.

Timber Lake .............. 64c. 80c. $1.00

Fiiesteel .................. 68 80 1.05

Isabel .................... 68 85 1.05

E'agle Butte ............... 74 1.00 i-iS

Lantry ................... 76 1.00 1.20

Dupree ................... 78 1.00 1-25

Red Elm ................. 79 1.00 1.25

Arrowhead ................ 81 i.xo 1.30

Faith ..................... 83 1.10 1.30

Appellant further insists that the rates under tariff 141A are reasonable, because at the time that tariff’ was issued those rates were in force along- the lines of the Northern Pacific Railway Company in the similar territory of North Dakota. It is true that those rates were then in force in said territory, but it is also true that those rates were adjudged unreasonable by the Interstate Commerce Commission on January 13, 1911, in the case of Cobb v. N. P. Ry. Co. et al. (No. 3133), 20 Interst. Com. Com’n 100, and the rates prescribed by that commission in the Beatrice Creamery Case, hereinafter referred to, where ordered to be applied up to a distance’ of 510 miles from St. Paul. Reference is hereby by made to that opinion.

The defendant failed to sustain the burden cast upon it by the statute of showing the similarity of the service between shipments of cream' under tariff 141A, on the one hand, and shipments of cream by express and the .transportation of baggage, on the other hand; nor did it show that the liability of the carrier for loss or damage was the same in either case. It developed, on cross-examination of Mr. Waller that the express company maintained a free “pick-up” service and a free delivery service at Aberdeen. If such free “pick-up” service existed at the initial stations, and such free delivery service existed at Mitchell, a comparison of the express rates with the rates prescribed by tariff X4iA would scarcely be upon the same basis of service, inasmuch as under such tariff the shipper must deliver the milk cans upon the railway platform, and the consignee must take them from the railway platform, and the tariff recites that while on the platform they are at the owner’s risk. On the other hand, plaintiff offered proof tending to .show that the rates under tariff 1161F were the rates prescribed for the interstate shipment of milk and cream by the Interstate Commerce Commission January 6, 1909, in the following cases: No. 1162, Beatrice Creamery Co. v. Illinois Central R. Co.; No. 1292, Fairmont Creamery Co. v. Ill. Cent. R. Co.; No. 1541, Blue Valley Creamery Co. v. Mich. Cent. R. Co.— the consolidated opinion in which cases appears in 15'- Interst. Com. Com’n' R. 109, and that such rates applied to that part of the United States between Indiana and Colorado. Reference is hereby made to that opinion. The plaintiff also' offered evidence tending to show the unreasonableness of 'the rates under tariff 141A by a comparison with the defendant’s local rates either way ■from Mobridge. The following table shows the rates per ten-gallon can from the stations named to Mitchell under tariff 141A and under the locals to Mobridge, plus the local from Mobridge to Mitchell, and the excess of the former over a combination of the locals:

141A. Combination of Rocals. Excess,

Timber Rake ...................64c. 60c 4c.

Firesteel .......................68 61 7

Isabel .......................... 68 62 6

Eagle Butte .................... 74 67 7

Rantry ......................... 76 69 7

Dupree .......■................. 78 71 7

Red Elm ............•.......... 79 73 6

Arrowhead ..................... 81 74 7

Faith ...................•........83 76 7

Surely a through rate that exceeds the combination of the locals cannot be said to be a reasonable rate. Plaintiff further showed that the rates in effect on defendant’s lines between Mitchell and Rapid City via ’Chamberlain were those prescribed by tariff 1161F. While defendant’s evidence vaguely tended to show circumstances which might justify a higher rate on the Puget Sound lines west of the Missouri river than on the lines of defendant east of the river, no attempt was made by defendant to show any circumstances which would justify higher rates on the Puget Sound lines than on the line between -Chamberlain and Rapid City. Plaintiff offered further evidence showing the difference between rates on cream from the stations west of the Missouri river to the Twin Cities and rates to- Mitchell under ■tariff 141A. The following table shows the rates .per ten-gallon can and the mileage:

To Minneapolis. To Mitchell.

Miles Rate-. Miles. Rate.

Timber Lake ............... 440 57c. 270 64c.

Firesteel ................... 450 58 282 68

Isabel ...................... 458 58 290 68

Eagle Butte ................ 486 60 317 74

Lantry .....................496 61 327 76

Dupree ..................... 505 61 337 78

Red Elm ................... 514 62 345 79

Arrowhead ... ............... 520 62 352 81

Faith ...................... 52& 63 361 83

These shipments are carried on the same lines and presumably on the same trains as far as Aberdeen. The above rates to Minneapolis up to -the distance of 505 miles are 4 cents higher than the rates prescribed in the Cobb Case, su;pra. Even if the above Miinnea-p'oli-s rates are reasonable, why should it be considered reasonable for the carrier to charge 20 cents per can more from Faith to Mitchell than from Faith to Minneapolis, when the latter distance exceeds the former by 167 miles ? The 'defendant has attempted no explanation. -From- a thorough study and careful consideration of the evidence, we are of the opinion that not only did the defendant Jf-ail to sustain the burden upon it of proving that tariff rates 141A were reasonable, but also that the plaintiff -affirmatively proved that the rates prescribed by tariff 1161F were reasonable, and that the rates charged plaintiff under tariff 141A were unreasonable, unjust, and excessive.

[6] Appellant next claims that, even if plaintiff is entitled to reparation, the evidence is insufficient to -justify reparation in ex-of $290.90, viz., the -difference between the -amount charged and sum of the locals. Our determination that the rates were unreasonable, -unjust, and excessive, and that the rates prescribed by tariff 1161F were the reasonable rates that should have been charged, disposes of this claim.

[7] Appellant next contends that the evidence is insufficient to show that respondent has been damaged. It is urged that it is not shown that plaintiff paid more for cream, including cost of carriage, under tariff 141A than it paid for cream originating at other points, nor that plaintiff was embarrassed in its business by reason of that tariff, nor that it was unable toi procure all the cream it required at the regular price .paid by it at the markets for such commodity. A number of authorities are cited which clearly hold that a shipper is not entitled to reparation until he has shown damage, with which principle we entirely agree. But we think the plaintiff made a prima facie showing of damage. It showed that it established these forwarding .stations at the points named upon the strength of the rates then actually charged; that it paid for the cream at the stations, and that it paid the shipment charges; that it paid the rates then charged; that when tariff 141A was applied, it paid those rates; and that by reason thereof it paid to defendant.$938.Ó3 more than it would have paid if tariff 1161F had been applied. The argument of appellant implies that the price to the farmer must have been reduced because of the increase in the rate applied, and that therefore the plaintiff was not damaged. Of course, if the plaintiff .paid to. the farmer a correspondingly lower price for cream from the time that tariff 141A was applied, and if that tariff did not otherwise affect plaintiff, it was not .damaged. But there is no evidence as to -the amounts paid the farmer either before or after the application of that tariff. As above stated, we think the plaintiff made a prima facie showing-of damage in the amount specified.

[8] Appellant further claims that, under the finding of the Board Of Railroad' Commissioners, approved by the trial court, to the effect that tariff 141A was inapplicable because there could be no joint rate between defendant and itself, the plaintiff had an adequate remedy at law for the recovery of the overcharge, and therefore that the board had no jurisdiction. As supporting that claim, appellant cited a number of wholly inapplicable authorities; for instance, Penn. Ry. Co. v International Coal Co., 230 U. S. 184, 33 Sup. Ct. 893, 57 L. Ed. 1446, Ann. Cas. 1915A, 315. That case decides that previous action by the Interstate Commerce Commission is not a prerequisite to an action at law ’to- recover damages for discrimination. Inasmuch as chapter 207, Laws 1911, especially authorized the present proceeding before the board, and authorized it to- make an order requiring reparation “for injury found to have been done,” we are of the opinion that there is no merit in this claim of appellant.

[9] It is further contended that -the Board of Railroad Commissioners has no jurisdiction to award a reparation in 'any case; that plaintiff has an adequate remedy at law. Section 13, c. 207, ■Law-s 1911, provides that the complaining person may invoke his remedy by application to the board or by 'an action in court, but he may not pursue both remedies at the same time. The succeeding sections of that chapter define the procedure before, and powers ■of, the board expressly providing that it -may order reparation. See, also, sections 4, 7, and 12 of said chapter. This point is apparently not seriously. urged, except in connection with the denial of the right of trial by jury hereinafter referred to. The mere fact that the board has no power to enforce its orders cannot be successfully urged as a denial of the power-to make the order, when the statute expressly gives it that power.

[10] Appellant further contends that, under the provisions of amendment 14 of the United States Constitution, and sections 2 and 6 of article 6 of the state Constitution, the enforcement of the order appealed from would deprive it of its property without due process of law. Appellant contends that due process of law has been violated: (a) Because section 8, c. 312, Laws 1913, makes the order of the board absolute unless appeáled from; (b)' because upon an appeal to the circuit court the trial must be had ■solely upon the record made before the board; (c)’ because upon appeal to the circuit court no trial by jury is provided for.

(a) It .is true that the statutes makes the order of the board absolute unless an appeal is taken; not, however, in the sense that it is a final money-judgment, but it is absolute in such case in the same sense that it is absolute when it has been finally affirmed after all methods for its review have been -exhausted or the time -therefor has elapsed. In view of the fact th-at -the statute provides for the enforcement of the order in another action, we do not -discover, nor has there been called to our attention, any reason for the assertion that due process of law has been violated by the provisions of the statute making the order absolute unless appealed from.

The next point, (b), viz., in relation to trial upon appeal solely on the record made before the board, we will hereinafter consider.

[11] But the point .(c), most strongly urged, is- that defendant has been deprived of its constitutional right of trial by jury. It might be a sufficient reply to this claim to say that this case came on for trial on appeal before the circuit court without a jury, with the apparent consent of the parties and of the trial court. The railway company acquiesced without objection in a trial by the to raise this constitutional question. C. C. § 2415. It has not placed itself in the position to raise it. Nevertheless we will later herein consider the proposition.

[12-13] Appellant further contends that due process of law is violated: (d) Because in the action in the circuit court to enforce- the order of the 'board the trial must be had solely upon the record made before the board; and (e) because in such action no trial by jury is provided. Considering points (b) and (d) together, we may observe that it is true that neither upon appeal from- the order nor in ‘an action to enforce the order may any evidence be received except that which was introduced before the Board of Railroad Commissioners. It would seem- to .us .that •these requirements of the -statute are reasonable and fair to both parties. It is .right and proper that 'the parties should make the full presentation of their case before the board in the first instance. In Cincinnati, N. O. & T. P. R. Co. v. I. C. C., 162 U. S. 184, 16 Sup. Ct. 700, 40 L. Ed. 935, the Supreme Court of the United Sfates said:

“We think this a proper occasion to express disapproval of such a method of procedure on the part of the railroad companies as should lead them to withhold the larger part of their-evidence from, the commission, and first adduce it in the circuit court. The ■commission is an administrative board, ‘and the courts are only to be .resorted to when the commission prefers to enforce -the provisions of the statute by a direct proceeding in the court, or when the orders of the .commission have -been disregarded. The theory of the act evidently is, as shown by the provision that the findings of the commission shall be regarded as- prima facie evidence, that the facts of the case are to be disclosed before the commission.”

In State ex rel. O. R. & N. Co. v. Fairchild, 224 U. S. 510, 32 Sup. Ct. 535, 56 L. Ed. 863, the same court, in considering a Washington statute, said:

“Having been given full opportunity to be heard on the issues made by the complaint and answer, and as to' the reasonableness of the proposed order, and having adopted the statutory method of review, this company cannot complain. It had the right to offer all competent testimony before the commission, which, in view of the form of proceeding’s authorized by the statute, acted in this respect somewhat like a master an chancery who has been required to take testimony and report his findings of fact and conclusions of law. The court would test its correctness by the evidence submitted to the master. Nor would there be any impairment of the right to a judicial review, because additional testimony could not be submitted to the chancellor.”

In 4 R. C. R. p. 625, § 97, we find the following:

“Wffiere it is provided that in a review of the finding of a commission by the court the court shall confine itself to evidence adduced before the commission, this does' not constitute a denial of due process, inasmuch as the court is not bound by the commission’s findings, and the party affected has the right, on the original hearing, to introduce evidence as to all material points. Moreover, notwithstanding 'the fact that additional evidence cannot be introduced before the court, the case may be remanded to the -commission for the purpose of taking further testimony, and where this procedure is provided with the further direction that the court determine upon the evidence the -reasonableness and lawfulness of die order made by the commission before enforcement, there is no such -denial of the right of trial by jury as will violate the federal or state Constitutions.”

It is provided by section 7, c. 312, Raws 1913, that:

“The said circuit court in its determination of said -cause may affirm, -reverse or modify .such order or determination -of said board, or substitute therefor any oi’der which in its opinion the hoard should 'have made at the time of entering the order or determination from which the 'appeal is taken, or remand the cause to -the board of railroad -commissioners with directions to make such order.”

Practically the same power is given to the Supreme Court upon appeal from the decision of the circuit court. Ample provision is therefore preserved to correct any errors that might have occurred in the preceding stages of the case We unhesitatingly conclude that the -due process of law guaranteed by article 6, § 2, of our Constitution and by the fourteenth amendment to the Constitution of the United States has not been violated or abridged by the requirements of the statute complained of.

[14] Finally we consider the question as to the right of trial by jury raised by points (c) and (e). It is true that no right of trial by jury is provided by statute upon an appeal to -the circuit court from the order of the board. It will be observed, however, that this order is not a judgment for the payment of money, and does not purport to be. It is only made prima facie evidence as to the -facts found. Section 17, -c. 207, Laws 1911. If the -carrier does not obey the order, it must be enforced by action in the circuit court. This court has held that the denial of the right of jury trial cannot be successfully asserted if upon appeal' a jury trial may be -had. In Twp. of Dell Rapids v. Irving, 7 S. D. 310, 64 N. W. 149, 29 L. R. A. 861, this court held, in a condemnation proceeding, that the right of trial by jury was preserved wdiere a provision was made therefor upon appeal. In the present case no provision is made for a trial by jury upon appeal from the order of the board, but it would seem that by analogy the principle laid down in the, Dell Rapids' Case would apply if in -some stage of the proceeding the carrier is given the right of trial by jury. If, in the action to enforce the order of the board, a trial by jury may be 'had, w-e are entirely clear that the right of trial by jury provided by Const, art. 6, § 6, is preserved. But appellant insists that by the terms of section 19, c. 207, Laws 1911, all orders of the board are to be enforced by action in the circuit court without a jury,,whether such -orders require the payment of money or otherwise. Such was the statute at the time of the decision by the board 'and the decision by the trial court in this -case. If the carrier had not appealed to this court, and proceedings had been been begun to enforce the order for reparation, then the question of the right of trial by jury might have become 'an important one. But by chapter 262, Laws 1915, the Legislature amended section 19, -c. 207, Laws 1911, by providing for a jury trial in cases where the order of the board requires the payment of money. If upon the filing of the remittitur in this case the carrier refuses to obey the order, it may then 'have its coveted trial by jury. Its constitutional right therefore has been preserved. 4 R. C. L. 624, § 97.

Rinding no error in the record, the judgment of the trial court is affirmed.