200 U.S.

Argument for the Commission.

of the carriers in all future cases and controversies and is such an order as the Commission has no authority to make. Int. Com. Com. v. C., N. O. &c. R. R., 76 Fed. Rep. 184; Farmers' L. & T. Co. v. Nor. Pac. R. R., 83 Fed. Rep. 268; Int. Com. Com. v. Railway Co., 167 U. S. 501; Int. Com. Com. v. Alabama &c. R. R., 168 U. S. 161, 162; Texas & Pac. R. R. v. Int. Com. Com., 162 U. S. 216.

The order was invalid because the connecting carriers were not made parties to the proceedings before the Commission and the Commission had no power to adjudicate the provision in the joint tariff agreement to be invalid without having before it the connecting carriers who were parties to that agreement and giving them an opportunity to be heard thereon. A court of equity could not entertain jurisdiction in such a contingency, neither could the Commission make an adjudication or order declaring invalid the joint tariff agreement and thus affecting rights of parties who were not before the Commission. California v. So. Pac. Co., 157 U. S. 229, 249, 251; United States v. Nor. Pac. R. R. Co., 134 Fed. Rep. 715 (C. C. A., 8th Circuit); Minnesota v. Nor. Sec. Co., 184 U. S. 199; Cons. Water Co. v. City of San Diego, 93 Fed. Rep. 849, 852; Western N. Y. R. R. v. Penn. Refg. Co., 137 Fed. Rep. 358.

Mr. Joseph H. Call, Special Assistant to the Attorney General, and Mr. Llewellyn A. Shaver, Solicitor for the Interstate Commerce Commission, for the Commission:

This case is not within the rule of the common law.

The defendants base their alleged right to make this rule upon the right of routing as they claim it exists at common law, and contend that at common law the right was absolutely in the carrier to select his own route, his own instrument, his own agent, in shipping beyond his own line.

This is not true absolutely. It is only true where the initial carrier assumes the common law liability of a common carrier beyond its own line and on the lines of its connections. At

Argument for the Commission.

200 U.S.

common law a common carrier is in the nature of an insurer against damage or loss of goods during the carriage on its own line from any cause except the act of God or the public enemy. 2 Redfield, Law of Railways, 6; Chitty on Contracts, 6th Am. ed., 181. And the common law rule giving the initial carrier the right to route the traffic beyond its own line only applies where the initial carrier practically extends its own line and becomes a common carrier with common law liability over the entire route. The cases cited by counsel for defendants are of that character. See Atchison &c. R. R. Co. v. Denver & N. O. R. R. Co., 110 U. S. 667, 680.

A further distinction between the case at bar and the cases cited in behalf of the defendants is the fact that the case at bar is controlled by the provisions of the act to regulate com

merce.

In the opinion in Atchison, Topeka & Santa Fe R. R. Co. v. Denver & New Orleans R. R. Co., 110 U. S. 667, this court recognizes that even where a carrier has contracted to carry beyond his own line, and therefore has the right at common law to select the route, this right only exists in the "absence of statutory regulations to the contrary"-the language of this court being that "if he (the carrier) contracts to go beyond his own line, he may in the absence of statutory regulations to the contrary, determine for himself what agencies he will employ."

The routing rule of defendants is inconsistent with and contrary to the spirit, if not the letter, of section 6 of the Commerce Act.

The routing rule gives an undue preference and subjects to an undue prejudice in violation of section 3 of the act to regulate commerce.

Preferences or prejudices may be in respect to rates or routing or facilities or any other matter as to which a preference can be given or a prejudice inflicted, and therefore the statute, in order to cover every form of preference or prejudice, uses the all-embracing words "in any respect whatsoever."

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Argument for the Commission.

The connections of the defendants and the lines established by them beyond their own lines differ as to desirability. Some of these connections are better built, better managed and operated, and more reliable financially than others, and some of the lines are shorter and freer from risk than others and more desirable in other particulars. Hence, while the rate by all is the same, there is a choice between them, and the shippers of all traffic except citrus fruit are allowed to avail themselves of this choice. The citrus fruit traffic is the only kind of freight as to which the defendants deny to shippers the right of choice of route. This clearly gives to other traffic and the shippers thereof an undue preference, and subjects citrus fruit to an undue prejudice.

The defendants concede to shippers of citrus fruit the right to ship over the route of their choice, but if it happens not to be the route of the defendants' choice they require the shippers to pay for the right; in other words, to pay a rate which is the sum of the locals of the several carriers composing the through line, this sum of the locals being much higher than the regularly established and published rate filed with the Interstate Commerce Commission.

Under this regulation the shipper of citrus fruit who chooses a route other than that selected by the initial carrier pays a higher rate than the shipper of the same kind and quantity of citrus fruit between the same termini for whom the carrier has selected the route in question. In both cases the carrier's risk and service are precisely the same and the traffic of both shippers may be on the same train, but a higher rate is exacted from the one than from the other.

This results in violation of §§ 1, 2, 5 and 6 of the Interstate Commerce Act and also §§ 1 and 7 of the anti-trust act. Wight v. United States, 167 U. S. 512; King v. Railroad Company, 4 I. C. C. R. 262; Augusta Southern R. R. Co. v. Wrightsville & Tennville R. R. Co., 74 Fed. Rep. 527; Minneapolis & St. Louis R. R. Co. v. Minnesota, 186 U. S. 262; Chicago &c. R. R. Co. v. Tompkins, 176 U. S. 167; United States v. Trans

Missouri Freight Assn., 166 U. S. 290; Swift & Co. v. United States, 196 U. S. 375.

The routing rule is essential to and adopted and used for the purpose of carrying out a pooling or division of traffic arrangement between the defendants; it is therefore unlawful under section 5 of the act to regulate commerce.

It is no excuse for one violation of law that it incidentally puts a stop to another.

Without the power of routing the traffic could not be pooled. If shippers route the traffic it will necessarily render pooling by the carriers impracticable. Port v. Southern Railroad Co., 103 Tennessee, 220, distinguished.

Objection to want of other parties was waived by failure to plead their names and show necessity of joining. Carey v. Brown, 92 U. S. 171, 173; Florence Machine Co. v. Singer, 8 Blatch. 113; S. C., Fed. Cases No. 4,881; Sheffield v. Newman, 77 Fed. Rep. 787, 791 (C. C. A.); Equity Rules, 52, 53.

MR. JUSTICE PECKHAM, after making the foregoing statement, delivered the opinion of the court.

Although there are separate proceedings in these various cases, the question arising in all is identical and the cases will hereafter be spoken of as if there were but one proceeding before the court. The single question presented is, has the carrier that takes the fruit from the shipper in California the right, under the facts herein, to insist upon the rule permitting such carrier to route the freight at the time it is received from the shipper?

The Commission has decided that the carrier has not the right, and that the rule denies to shippers the use of their transportation facilities, which such shippers are entitled to, and that in its application, by the initial carriers to the fruit traffic, the shippers are subjected to undue, unjust and unreasonable prejudice and disadvantage, and the carriers are given an undue and unreasonable preference and advantage.

If this be the necessary effect of the rule, it may be assumed to be a violation of section 3 of the Interstate Commerce Act, and the Commission, therefore, rightly ordered the carriers to desist from observing it.

By section 16 of the act, the Circuit Court is given authority to enforce "any lawful order or requirement of the Commission." If the order be not a lawful one, the court is without power to enforce it. Whether or not such order was lawful is the matter to be determined.

The Commission does not find that any contract existed between the initial carrier and its eastern connections to bill the fruit according to certain proportions among the connecting railroads. The Commission said:

"The situation warrants the inference, however, that these two initial carriers or systems, connecting with other carriers at various points, and they in turn connecting with numerous other carriers, as shown by the tariff, are able by acting in concert, and routing as they see fit, to only send traffic over the roads of such carriers as fulfilled an agreement to refrain from making any rate concession to the shippers, and some influence of like character could doubtless be exerted by them upon the car lines which are also hereinafter referred to."

Such statement simply shows that if any castern railroad, with which an agreement for joint through rates existed, should give rebates on the joint through rate tariff, thus carrying freight below the rates agreed upon as the through rate tariff, that road would not get the freight.

We see nothing in the initial carrier endeavoring to maintain the rates agreed upon as a through rate tariff, and thereby preventing the payment of rebates, which in itself is a violation of the act. The act especially prohibits, in the sixth section, any alteration of the rates agreed upon, in favor of any person or persons. There is no finding that there has in fact, as a result of the rule, been any discrimination or unjust action as between the initial carriers and the shippers themselves, and there is no evidence that any was ever practiced.