DIGEST OF FEDERAL COURT DECISIONS

A discussion of court decisions involving injunctions to restrain enforcement of orders of this commission and of decisions relative to criminal violatons of the law can be found in the text of this annual report. The decisions abstracted herein involve questions of railway regulation which are closely related to matters arising before commissions.

IN THE SUPREME COURT

RATE ON TRAFFIC FROM CANADA TO UNITED STATES

In News Syndicate Co. v. N. Y. C. R. R. Co., 275 U. S. 179 (November 21, 1927), it was held that where a railroad of the United States and a railroad of Canada unite in the publication of a joint through rate from a point in Canada to a point in the United States covering transportation both in Canada and in the United States, this commission has jurisdiction, on complaint of a shipper or consignee against the domestic railroad alone, to determine the reasonableness of such joint through rate.

REPARATION

In the above-cited case it was also held that where charges have been paid under the circumstances above named, which are found by this commission to be unreasonable, suit may be maintained against the domestic carrier alone to recover the resulting damages.

In St. L. & S. F. R. R. Co. v. Spiller, 275 U. S. 156 (November 21, 1927), it was held that a petition against a railroad to impress a lien upon property already sold is not a subsequent stage of the reparation proceeding for which petitioner shall not be liable for costs.

TOWBOAT CHARGES

In Washington v. Kuykendall, 275 U. S. 207 (November 21, 1927), it was held that the State may regulate the charges of the owner of a towboat who holds himself out as a common carrier.

INTERSTATE COMMERCE

In N. W. Mut. Life Ins. Co. v. Wis., 275 U. S. 136 (November 21, 1927), it was held that a State may exact from an interstate carrier as taxes a percentage of its gross earnings, if no more is exacted than the ordinary charge upon local property.

In A. C. L. R. R. Co. v. Standard Oil Co., 275 U. S. 257 (November 28, 1927), it was held that the question whether commerce is interstate or intrastate must be determined by its essential character, and not by mere billing or forms of contract, although that may be one of the group of circumstances tending to show such character.

In Gulf Fisheries Co. v. MacInerney (February 20, 1928) it was held that a license tax imposed by a State on a foreign corporation handling fish within the State, based upon the quantity sold, is not invalid as a burden on interstate commerce.

In Sprout v. South Bend (May 14, 1928) it was held that for the purpose of determining whether or not a local regulation of a carrier interferes with interstate commerce, the destination intended by a passenger when he begins his journey, and known to the carrier, determines the character of the commerce.

In St. L. & S. W. Ry. Co. v. Nattin (May 14, 1928) it was held that a local improvement district may lay general ad valorem taxes upon property of common carriers engaged in interstate commerce without violating the commerce clause of the Federal Constitution.

In Hemphill v. Orloff (June 4, 1928) it was held that the business of dealing in negotiable notes is not interstate commerce.

LIMITATION OF ACTIONS

In Mellon v. Ark. L. & L. Co. (January 3, 1928) it was held that the proper agent designated by the President for defending suits arising out of the Federal control of railroads can not, after the expiration of the limitation period prescribed for such suits, be substituted for a person erroneously named as such agent, against whom the suit was instituted within the prescribed time.

CONFISCATORY RATES

In Aetna Ins. Co. v. Hyde (January 3, 1928) it was held that State-made rates for insurance business can not be held to violate the Constitution merely because the aggregate collections are not sufficient to yield a reasonable profit or just compensation to all companies that happen to be engaged in such business.

TELEGRAPH AND TELEPHONE RATES

In U. S. Shipping Board v. W. U. T. Co. (January 3, 1928) it was held that the construction given by the Government to the act fixing the rates to be paid by governmental agencies for telegraph service and acquiesced in by a telegraph company contemporaneously and consistently for a long period of time, and widely applied, is decisive of the rights of the company in a controversy subsequently arising.

In W. U. T. Co. v. Priester (February 20, 1928) it was held that gross negligence of a telegraph company in the transmission of a message causing loss to the sender does not change its liability for merely the amount charged for transmission, as provided in the tariff approved by this commission, in case of unreported messages.

In Denney v. Pac. T. & T. Co. (February 20, 1928) it was held that the charging by the public service commission of a franchise rate for telephone service is not a mere substitution of contract rates which continues the franchise contract in effect so that under the Constitution it can not again be changed, except by the discretion of the department, so as to prevent the court from adjudging the prescribed rates to be confiscatory and allowing an increased schedule.

MOTOR VEHICLES

In D., L. & W. R. R. Co. v. Morristown (February 20, 1928) it was held that the concession by a railroad company to a particular person of the right to maintain taxicabs upon its station grounds does not require it to accord the same privilege to others plying the same trade.

In Black & White T. & T. Co. v. Brown & Yellow T. & T. Co. (April 9, 1928) it was held that a constitutional provision that no railway company shall make any exclusive or preferential arrangement for the conduct of any business as a common carrier does not prevent its granting exclusive privileges to a transfer company at its stations.

In Sprout v. South Bend (May 14, 1928) it was held that a State may impose on motor vehicles engaged exclusively in interstate commerce a reasonable charge as their fair contribution to the cost of constructing and maintaining the public highways, and it may require operators of motor vehicles on the public highway to file contracts providing adequate insurance for the payment of judgments recovered for certain injuries resulting from their operation.

In Quaker City Cab Co. v. Pa. (May 28, 1928) it was held that the imposition of a tax on the gross receipts of a taxicab corporation, when it is not imposed upon individuals and partnerships in the same business, is unconstitutional,

CERTIFICATE OF PUBLIC CONVENIENCE

In T. & N. O. R. R. Co. v. N. 8. B. R. R. Co. (April 9, 1928) it was held that an injunction to prevent a railroad, to extend from a private plant to a local road within the State, from exercising the right of eminent domain may be denied where it is not completed and there is no effort to use it in interstate commerce and there is no immediate danger that irreparable injury will result from its mere construction, although it has not obtained a certificate of public convenience from this commission.

FAILURE TO FURNISH CARS

In M. V. R. R. Co. v. Barkley (April 9, 1928) it was held that the right of a shipper to cars is not absolute, as the carrier is not liable if its failure to furnish cars was the result of sudden and great demands; that the question of the reasonableness of a rule as to the distribution of cars by an interstate carrier is a matter for the consideration of this commission; and that no action lies in favor of the owner of a wagon mine against a railroad company for distributing to him closed cars in time of sudden shortage, while furnishing open cars to tipple mines, where relief has not been sought by application to this commission.

SUFFICIENCY OF EVIDENCE IN REPARATION CASES

In Krauss Bros. Lumber Co. v. Mellon (April 9, 1928) it was held that to meet the rule requiring the evidence to be in the record to justify a review of a ruling on a motion to take the case from the jury or give judgment because only one verdict can be reached, the evidence need not be set forth in the records of the witnesses and of the writings and documents admitted, but it is sufficient if the purport and substance of it be included.

In Ribnick v. McBride (May 28, 1928) it was held that the business of an employment agent is not affected with a public interest so as to enable the State to fix the charges to be made for the services rendered.

IN THE CIRCUIT COURT OF APPEALS

REPARATION

In Mellon v. World Pub. Co., 20 F. (2d), 613 (June 10, 1927), the court for the eighth circuit held that the statements prepared, pursuant to this commission's rule, by complainants in proceeding to recover unreasonable rates are admissions sufficient to support recovery on reparation order.

In Backus-Brooks Co. v. N. P. Ry. Co., 21 F. (2d), 4 (June 15, 1927), the court for the eighth circuit held that the statute does not authorize this commission to award reparation on account of past divisions of joint rate voluntarily established.

In Famechon v. N. P. R. R. Co., 23 F (2d), 307 (December 5, 1927), the court for the eighth circuit held that action to recover from carrier extra charge for refrigerator car for potato shipment can not be brought without preliminary ruling by this commission.

In St. L.-S. F. Ry. Co. v. Montrose O. & R. Co., 25 F. (2d), 755 (March 14, 1928), the court for the fifth circuit affirmed the judgment in this case in the district court, granting reparation on the award of this commission.

In Partridge L. Co. v. M. C. R. R. Co., 26 F. (2d), 615 (May 16, 1928), the court for the eighth circuit held that a railroad's action on implied contract to refund money paid through error in refunding freight overcharge is not one arising under in the interstate commerce act.

REBATES

In Kellogg & Sons v. United States, 20 F. (2d), 459 (July 5, 1927), the court for the second circuit held that an elevator company collecting charges from railroad and refunding half thereof to shippers of grain is guilty of giving rebates. The Elkins Act was intended to eliminate every form of discrimination, favoritism, and inequality.

WHEN CONSIGNOR LIABLE FOR CHARGES

In Maryland C. Co. v. Ohio R. G. Co., 20 F. (2d), 514 July 5, 1927), the court for the fourth circuit held that the consigner, or failure of the consignees to make payment of freight charges, is liable therefor.

In Central R. R. Co. of N. J. v. Lineaweaver, 27 F. (2d), 25 (June 21, 1928), the court for the third circuit held that whether a seller of coal, directing a mining company's foreman to make a shipment, was the consigner is a question for the jury, in a railroad company's suit against him for freight charges.

INTERSTATE COMMERCE

In the Kellogg & Sons case, above cited, it was further held that Congress has power under the Constitution to regulate interstate commerce, and therefore the action of persons who are engaged in it.

In Hughes Bros. Mfg. Co. v. Cicero T. & S. Bank, 24 F. (2d), 199 (February 10, 1928), the court for the fifth circuit held that an interstate contract of sale can not be rendered invalid by a State statute.

COAL REQUISITIONED BY DIRECTOR GENERAL

In Mellon v. West. D. & Co., 20 F. (2d), 549 (July 8, 1927), the court for the first circuit held that in a suit for the difference between market value and price paid for coal requisitioned for use of railroad is properly brought against the Director General of Railroads.

DIVISION OF RATES

In the Backus-Brooks Co. case, cited above, the court further held that the question of just, reasonable, and equitable divisions of joint rates for the future is a legislative question, which only this commission may determine.

EXPLOSIVES

In Lehigh Valley R. R. Co. v. State of Russia, 21 F. (2d), 396 (August 8, 1927), the court for the second circuit held that a carrier's common-law liability as insurer, when carrying explosives, is not changed by the Federal laws.

INTEREST

In the last-cited case the court also held that interest is allowable in imposing damages on carrier from time property should have been delivered.

LEASE OF RAILROAD

In C., C., C. & St. L. Ry. Co. v. Jackson, 22 F. (2d), 509 (November 17, 1927), the court for the sixth circuit held that this commission, in hearing an application for consolidation, should consider rights of minority stockholders, but the court should not interfere by injunction with proceedings before this commission for approval of lease.

LIMITATION OF ACTIONS

In United States v. S. A. L. Ry. Co., 22 F. (2d), 113 (October 22, 1927), the court for the fourth circuit held that a bill-of-lading provision requiring suits for loss to be brought within two years and one day bars recovery by the Government after that time.

In Knickerbocker Fuel Co. v. Mellon, 22 F. (2d), 500 (November 14, 1927), the court for the second circuit held that limitation of action against agent of President is not "statute of limitations," and is not tolled by mistake.

In the Partridge Lumber Co. case, cited above, the court further held that action to recover excessive refund for overcharge was one on implied contract to refund money, and is not barred by 3-year statute.

DEMURRAGE CHARGES

In the Knickerbocker Fuel Co. case, cited above, the court also held that claim for demurrage, collected by the Director General of Railroads and paid to him by claimant, is one against the United States.

In Main Island C. C. Co. v. C. & O. Ry. Co., 23 F. (2d), 248 (January 3, 1928), the court for the sixth circuit held that a railroad's acquiescence in theory that demurrage charge did not apply to loaded cars at place 100 miles from mines during emergency did not avail shipper after emergency passed.

TARIFFS

In the Famechon Co. case, cited above, the court also held that this commission has full jurisdiction over form and arrangement of tariffs for railroads, and can allow charge to be separated into factors.

In Pillsbury F. M. Co. v. G. N. Ry. Co., 25 F. (2d), 66 (March 12, 1928), the court for the eight circuit held that a shipper's rights against a carrier are determined through the provisions of the tariff embodied in applicable published rate.

In Nocatee C. Co. v. A. C. L. R. R. Co., 26 F. (2d), 670 (June 13, 1928), the court for the fifth circuit held that where a railroad's tariffs afforded one rate for logs under 6 feet in length and another cheaper rate for logs without qualification as to length, applying to movements for less than 170 miles, the higher rate was applicable to carload shipments of short logs, 51 to 57 inches in length, shipped for distance of 150 miles.

PRIOR ACTION BY COMMISSION

In the Famechon Co. case, cited above, it was further held that in a shipper's action to recover charges exacted by a carrier under interstate tariff, courts have jurisdiction without preliminary resort to this commission, in absence of question of fact or of administrative discretion.

REFRIGERATION

It was also held in the Famechon Co. case, above cited, that under the interstate commerce act a common carrier is required to furnish shipper with cars suitable and proper for transportation of particular commodity, and this includes refrigeration.

CONSOLIDATION OF RAILROADS

In General Inv. Co. v. N. Y. C. R. R. Co., 23 F. (2d), 822 (January 4, 1928), the court for the sixth circuit held that the Clayton Act does not authorize suit by stockholder to enjoin consolidation of railroads subject to the interstate commerce act, exclusive jurisdiction over the subject matter being vested by the transportation act in this commission, which excludes jurisdiction of the courts, though suit is based on alleged violation of laws of a State.

EXPORT TRAFFIC

In United States v. Gosho Co., 23 F. (2d), 675 (January 24, 1928), the court for the fifth circuit held that cotton stopped at seaport for recompression and sorting is moving in export shipment, and is not subject to internal-revenue tax.

PUBLISHED RATES CONTROL

In the Pillsbury F. M. Co. case, above cited, the court further held that on interstate shipments a carrier must collect and shipper pay the full charge named in the tariffs filed by the carrier with this commission.

In B., S. L. & W. Ry. Co. v. Magnolia P. Co., 26 F. (2d), 72 (May 10, 1928), the court for the fifth circuit held that the statute prohibiting a carrier from departing from its published rates must be strictly complied with.

COMBINATION RATES

In St. L.-S. F. Ry. Co. v. Montrose O. & R. Co., cited above, the court further held that failure of connecting carrier to participate in publication of " through rate" will not render it inapplicable over its lines.