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    LOUISVILLE & N R CO v. BEHLMER, 175 U.S. 648 (1900)

    U.S. Supreme Court

    LOUISVILLE & N R CO v. BEHLMER, 175 U.S. 648 (1900)

    175 U.S. 648

    LOUISVILLE & NASHVILLE RAILROAD COMPANY et al., Appts.,
    v.
    HENRY W. BEHLMER.
    No. 46.

    Argued April 17, 18, 1899.
    Decided January 8, 1900.

    [175 U.S. 648, 649]   This controversy was commenced on December 29, 1892, when Henry W. Behlmer, a resident of Summerville, South Carolina, and a wholesale hay and grain dealer therein, began proceedings before the Interstate Commerce Commission, under the Act to Regulate Commerce, passed February 4, 1887, as amended, to restrain the continuance of acts asserted by him to be a violation of the statute referred to. The petition was filed by Behlmer on his own behalf, and that of other merchants, residents of Summerville, and the parties complained of were the Memphis & Charleston Railroad Company, the East Tennessee, Virginia, & Georgia Railroad Company, the Georgia Railroad & Banking Company (the owner of a railroad designated as the Georgia Railroad), the South Carolina Railway Company, and other companies and individuals, who were averred to be lessees or receivers of some of the above-named companies. All the lines of railroad mentioned were asserted to be members of a combination styled the Southern Railway & Steamship Association.

    It was averred that the defendants were carriers under a common control, management, or arrangement for continuous carriage, and were engaged in the transportation of passengers and property wholly by railroad between Memphis in the state of Tennessee and Summerville in the state of South Carolina and through Summerville to Charleston. The distance be- [175 U.S. 648, 650]   tween Memphis and Summerville was averred to be 748 miles, as follows: Between Memphis and Chattanooga, 310 miles over the Memphis & Charleston Railroad; between Chattanooga and Atlanta, Georgia, 152 miles over the East Tennessee, Virginia, & Georgia Railroad; from Atlanta to Augusta, Georgia, 171 miles over the Georgia Railroad; and from Augusta, Georgia, to Summerville, South Carolina, 115 miles over the South Carolina Railway. The principal subject of complaint was, that though Summerville was 22 miles west of Charleston and was that distance nearer to Memphis, where the hay and grain shipments originated, yet the defendants exacted from the petitioner and other merchants of Summerville a freight charge of 28 cents per 100 pounds for hay, carried from Memphis to Summerville, while only 19 cents per 100 pounds were charged for the same article when carried to Charleston, the longer distance. It was averred that the rate of 28 cents to Summerville was made up of the through rate to Charleston, with the addition of the local rate from Charleston to Summerville of 9 cents per 100 pounds. It was also alleged that the shipments of hay to Summerville were made over the same line, in the same direction as Charleston, and under substantially similar circumstances and conditions. The freight charges complained of were averred to be in violation of the 4th section of the Act to Regulate Commerce, commonly referred to as the long and short haul clause. Besides, it was alleged that the local rate between Summerville and Charleston of 9 cents per 100 pounds was excessive and unreasonable, and that such also was the case as regards the charge of 28 cents from Memphis to Summerville, and hence such charges were in violation of the 1st section of the Act to Regulate Commerce. It was also asserted that the discrimination and excessive rates against Summerville existed, not only on hay, 'but on all articles of interstate commerce coming to that place, much to the detriment and disadvantage of the town and the business of its merchants.'

    In their answers certain of the defendants conceded that they were subject to the Act to Regulate Commerce, while [175 U.S. 648, 651]   others, though admitting that they were common carriers and engaged in the transportation of passengers wholly by railroad between points in the states of Tennessee and South Carolina, averred that they had no joint through tariff from Memphis to Summerville, and therefore had no 'line' from Memphis to Summerville, in the sense of the Act to Regulate Commerce, and were in consequence not affected by the statute. All the defendants averred that the aggregate freight rate on hay carried from Memphis to Summerville, as well as the local rates from Charleston to Summerville, were just and reasonable. By some of the defendants it was alleged that the transportation of hay from Memphis to Summerville was not done under substantially similar circumstances and conditions as the transportation of like property from Memphis to Charleston, and hence the carriers were justified in making a lesser charge to Charleston than was made to Summerville, the shorter distance. The dissimilarity alleged was asserted to have been caused, first, by the existence between Memphis and Charleston of at least eight competing lines of railroad, and second, by the competition by sea on hay and grain and freight of that class, originating in Chicago, New York, and eastern points and destined to Charleston via the lakes, canal, and ocean, and by part water and part rial. The exact condition of the competition existing at Charleston because of its situation on the seaboard and consequent relations with many markets other than Memphis, was stated in the joint and several answers of the Louisville & Nashville Railroad Company and the Central Railroad & Banking Company as follows:

    On the foregoing issues testimony was taken before the Commission, which entered an order requiring the defendants to desist on or before a data named from charging any greater sum in the aggregate for the transportation from Memphis to Summerville of hay, or other commodities carried by them, [175 U.S. 648, 653]   under circumstances and conditions similar to those appearing in the case, than was being charged for such transportation for the longer distance to Charleston. This order, however, stated that it was made without prejudice to the right of the defendants to apply to the Commission for relief under the 4th section of the Act to Regulate Commerce. The order not having been obeyed, Behlmer, as authorized by 5 of the act of March 2, 1889 (25 Stat. at L. 855, chap. 382), amending 16 of the original act, filed his complaint in the circuit court of the United States for the fourth circuit, eastern district of South Carolina, against the defendants in the proceedings before the Commission and the purchasers, assignees, and successors of some of them, praying that the court might enforce compliance with the order of the Commission. By stipulation the testimony taken before the Commission was used at the hearing in the circuit court, and by consent certain documentary evidence (consisting of railway agreements, tariffs, reports, etc.) was filed as additional evidence on behalf of the defendants.

    The case was heard by the circuit court, and on January 22, 1896, the bill was ordered to be dismissed. 71 Fed. Rep. 835. The controversy was then taken by appeal to the circuit court of appeals for the fourth circuit, and that court reversed the judgment of the circuit court, and remanded the cause with instructions to render a decree substantially in accordance with the order made by the Commission. 42 U. S. App. 581, 83 Fed. Rep. 898, 28 C. C. A. 229. A motion for a rehearing having been denied, the case was then brought to this court.

    Messrs. Ed. Baxter and Joseph W. Barnwell for appellants.

    Mr. Claudian B. Northrop for appellee.

    Mr. Justice White, after making the foregoing statement, delivered the opinion of the court:

    The questions which arise on this record involve the consideration of several provisions of the Act to Regulate Commerce. 24 Stat. at L. 379. [175 U.S. 648, 654]   The particular questions at issue and the aspect in which they arise will be best shown by first considering the action of the Commission, then that of the circuit court in reviewing the order of that body, and, thirdly, that of the circuit court of appeals in reversing the decree of the circuit court. The Commission held, as a matter of fact, that the carriers so conducted their business as to constitute a through line within the meaning of the commerce act, and were therefore amenable to its provisions. It did not, however, consider whether the rates to Summerville and Charleston were just and reasonable, because it deemed it unnecessary to do so. The reason for this conclusion was stated as follows:

    When it approached the 4th section of the act, the Commission declined to weigh the evidence before it as to the existence of competition, except in so far as to enable it to determine that the evidence established that the competition relied upon by the carriers did not originate at the point of shipment, or if it did arise at such place it was alone engendered by the presence there of other carriers who were subject to the commerce law.

    This determination of the Commission to restrict its examination of the evidence solely to the extent necessary to enable it to ascertain the source and inherent character, and not the materiality and substantiality, of the competition, and therefore to exclude wholly from view the latter considerations, was predicated on the conclusion that, as a matter of law, no competition, however great might be its influence on carriage and rate making, could be by the carrier taken into consideration, of his own motion, in determining whether a lesser sum would be charged for the longer than for the shorter haul, if such competition arose from the sources or was wholly of [175 U.S. 648, 655]   the character which it was found by the Commission the proof established the competition relied on to be. That is to say, the Commission concluded, as a matter of law, that it was unnecessary to weigh the facts for the purpose of determining the materiality and extent of the competition, because, however strongly the proof might demonstrate its potency upon traffic and rates, nevertheless it would be without efficacy to give rise to such substantial dissimilarity as would justify the carrier, of his own motion, to charge a lesser rate for the longer than for the shorter haul. Whilst this was held to be the law, at the same time it was decided that the character of competition, which from its very nature was decided to be inadequate to create such legal dissimilarity in the conditions as to justify the carrier, of his own motion, charging a lesser sum for the longer than that for the shorter haul, nevertheless might authorize the Commission to sanction the lesser charge if the facts were presented to the Commission and its previous sanction to making such charge was obtained. Therefore the right of the carrier to prefer to the Commission a request for authority to make the charge complained of, predicated upon the very grounds which were held insufficient to permit the carrier to do so, on his own motion, was fully reserved. The ruling was, then, this, that some kinds of competition, however material and substantial in their operation, were yet inadequate, for the purpose of creating dissimilarity in circumstance and condition, to justify the independent action of the carrier, although the identical conditions of competition might be sufficient to produce such dissimilarity as to justify the Commission, on application made to it for such purpose, to authorize the carrier to charge less for a longer than was exacted for a shorter distance. The Commission said in its report:

    The circuit court held that one of the defendants had not been served with process so as to cause any decree which might be rendered to be conclusive, and, moreover, decided that the proof did not establish that the carrier, in the matter complained of, were under a common control and management for continuous shipment, within the meaning of the act, and therefore they were not, as to such carriage, amenable to the provisions of the act. The court, however, proceeded as follows (71 Fed. Rep. 839):

    Subsequently the attention of the circuit court was called to the accerted fact that there had been a service on the defendant, as to whom it was stated, in the opinion of the court, there had been no service of process. In a memorandum opinion the court in substance said that, conceding, arguendo, the correctness of the fact called to its attention, as it would not change the result of the decision it was unnecessary to further consider it.

    The circuit court of appeals decided that the circuit court had mistakenly held that one of the parties essential to the cause had not been properly served, and that the circuit court had also fallen into error in deciding that the carriers in question were not, within the intendment of the commerce act, a continuous line for through transportation under a common management and control. When it came to consider the conflicting conclusions of the Commission and the circuit court as to the meaning of the 4th section of the act, the court held that the interpretation adopted by the Commission was right, and that upheld by the circuit court was wrong. In other words, the circuit court of appeals decided that no competition existing at the place of delivery, however far reaching or arising at the initial point from the action of other [175 U.S. 648, 659]   carriers who were subject to the control of the act, could justify a carrier in making a greater charge for a shorter than for a longer haul, although such competitive conditions might empower the Commission, on application of the carrier, to grant the right to make such charge. The reasons which impelled the circuit court of appeals to the conclusion by it reached are very clearly stated in its opinion, from which a member of the court (Morris, District Judge) dissented. The court said (42 U. S. App. 594, 83 Fed. Rep. 905, 28 C. C. A. 236):

    Again:

    Approaching, then, a solution of the questions which arise from the report of the Commission and the decisions below rendered, which substantially also embrace the essential matters covered by the assignments of error and the material issues which were urged in the argument at bar, it appears that the propositions involved are threefold. First. Was it correctly decided that the carriers as the result of the arrangements between them constituted, within the purview of the 1st section of the Act to Regulate Commerce, a continuous line, so far at least as regards the shipments between Memphis, Summerville, and Charleston? Second. Was it correctly held by the Commission and decided by the circuit court of appeals, that under the 4th section of the act no competition, however material, unless it arose from certain enumerated sources or was of the inherent character stated by the [175 U.S. 648, 661]   Commission and the circuit court of appeals, could create such dissimilarity of circumstance and condition as would authorize the carrier, of his own motion, to charge a greater rate for a lesser than for a longer distance? The provisions of the 4th section which are involved in the second proposition are as follows:

    Third. If it be concluded that the Commission and the circuit court of appeals erroneously interpreted the 4th section of the act, is the record in such a condition as to justify this court in deciding, as a question of first impression, whether the through rates complained of were just and reasonable, and whether, if yes, the proof offered by the carrier established such substantial and material competition as would support a charge by the carrier, on his own motion, of a lesser rate for the longer than is exacted for the shorter distance?

    The first two of the foregoing questions in effect solely involve propositions of law, for, although the essential predicate upon which they rest takes into consideration certain facts, they were not disputed below, and their existence was [175 U.S. 648, 662]   not denied in the argument at bar. They may be assumed, therefore, as being unchallenged for the purpose of the legal questions presented. We come, then, to the immediate consideration of the propositions above referred to in the order stated.

    1st. The conceded facts from which it was deduced as a matter of law that the carriers were operating 'under a common control, management, or arrangement for a continuous carriage or shipment' were as follows: The several carriers transported hay from Memphis under through bills of lading, by continuous carriage, to Summerville and Charleston. The several roads shared in an agreed rate on traffic to Charleston and in a precisely equal in amount rate on traffic to Summerville. On shipments to Summerville, however, there was added to the Charleston rate the amount of the local rate from Charleston to Summerville, the benefit of which additional exaction was solely received by the local road on which Summerville was situated. The contention that under this state of facts the carriers did not constitute a continuous line, bringing them within the control of the Act to Regulate Commerce, is no longer open to controversy in this court. In Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U.S. 184 , 40 L. ed. 935, 5 Inters. Com. Rep. 391, 16 Sup. Ct. Rep. 700, decided since the case in hand was before the Commission and the circuit court, it was held under a state of fact substantially similar to that here found that the carriers were thereby subject to the Act to Regulate Commerce.

    2d. It is, as we have said, uncontroverted that all the competition relied on by the carriers to establish that there was a dissimilarity of circumstance and condition arose solely from two sources: either that originating at Memphis, the initial point of the traffic, from the presence there of carriers who were subject to the provisions of the commerce act, or competition based on the fact that Charleston was connected with or accessible to lines of rail and water communication which brought it in relation with many other places and markets other than Memphis, thereby creating competition between Memphis and Charleston, the claim being that Memphis would have been deprived of the benefits of the Charleston traffic, and Charles- [175 U.S. 648, 663]   ton would be also cut off from the Memphis supply, if the rates from Memphis to Charleston had not been made lower to meet the competition at Charleston.

    The construction of the 4th section of the Act to Regulate Commerce and the question whether competition which materially operated on traffic and rates was a proper subject to be considered by a carrier in charging a greater rate for the shorter than was asked for the longer distance, on account of the dissimilarity of circumstance and condition produced by such competition, has recently, after elaborate argument and great consideration, been passed upon by this court. In Texas & P. R. Co. v. Interstate Commerce Commission, 162 U.S. 197 , 40 L. ed. 940, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666, the facts as stated by the court which are pertinent to the legal question now under consideration were briefly as follows (pp. 196-200, L. ed. pp. 940, 941, Inters. Com. Rep. pp. 406, 407, Sup. Ct. Rep. p. 668): The Interstate Commerce Commission entered an order directing the railway to 'forthwith cease and desist from carrying any article of imported traffic shipped from any foreign port through any port of entry of the United States, or any port of entry in a foreign country adjacent to the United States, upon through bills of lading destined to any place within the United States, at any other than upon the inland tariff covering other freight from such port of entry to such place of destination, or at any other than the same rates established in such inland tariff for the carriage of other like kind of freight, in the elements of bulk, weight, value, and expense of carriage.' The railway company refused to obey the order, and a proceeding was initiated by complaint filed in the circuit court to compel it to do so. The substance of the answer of the railroad, so far as material to the matter now under review, was thus recited by the court (pp. 205, 206, L. ed. pp. 942, 943, Inters. Com. Rep. p. 412, Sup. Ct. Rep. 670):

    After stating that the foregoing facts were fully established by the proof and in effect conceded, and after remarking (p. 207, L. ed. p. 943, Inters. Com. Rep. p. 413, Sup. Ct. Rep. p. 670) that they 'would seem to constitute 'circumstances and conditions' worthy of consideration, when carriers are charged with being guilty of unjust discrimination or of giving unreasonable and undue preference or advantage to any person or locality,' the court observed (p. 217, L. ed. p. 947, Inters. Com. Rep. pp. 422, 423, Sup. Ct. Rep. p. 674):

    Later, in recurring to the subject of competition as creating dissimilarity of circumstance and condition, the court said (p. 233, L. ed. p. 952, Inters. Com. Rep. p. 437, Sup. Ct. Rep. pp. 680, 681):

    In Interstate Commerce Commission v. Alabama Midland R. Co. 168 U.S. 144 , 42 L. ed. 414, 18 Sup. Ct. Rep. 45, the controversy was this: A proceeding was commenced to compel a carrier to obey an order of the Commission forbidding the charge of a lesser rate for transportation to Montgomery, the longer distance, than was charged to Troy on the same line, the shorter distance. The nature of the competition relied on by the carriers is fully shown by a statement in the opinion, referring to one of the assignments of error made in the cause. The court said (Id. p. 162, L. ed. p. 421, Sup. Ct. Rep. p. 47):

    It will thus be observed that the facts presented were, in legal effect, the equivalent of those arising on this record. The competition which the carrier asserted had created such dissimilarity of circumstance and condition as justified, on its own motion, the lesser charge for the longer than was made for the shorter distance, was competition not only arising by water transportation, but alleged to spring from common carriers who were confessedly subject to the control of the Act to Regulate Commerce. The error which it was asserted the record contained was that such competition had been held, by the lower courts, sufficient to create dissimilar circumstances and conditions, and that the right of the carrier to avail himself of such dissimilarity without the previous assent of the Commission had been also sustained. This court said (pp. 162, 163, L. ed. p. 421, Sup. Ct. Rep. p. 47):

    Proceeding to the question of law, the construction of the fourth section, which was involved in supporting the interpretation of the Commission, it was stated, as follows: 'It is contended in the brief filed on behalf of the Interstate Commerce Commission that the existence of rival lines of transportation, and consequently, of competition for the traffic, are not facts to be considered . . . when determining whether property transported over the same line is carried 'under substantially similar circumstances and conditions' as that phrase is found in the 4th section of the act.' The court then examined this question, and after citing from an opinion of Judge Cooley in the matter of Re Southern R. & S. S. Asso. 1 Inters. Com. Rep. 278, 287, sub nom. Re Louisville & N. R. Co. 1 I. C. C. Rep. 31, 78, said (p. 164, L. ed. p. 422, Sup. Ct. Rep. p. 48):

    It is to be remarked that among the cases approvingly cited in the passage just quoted will be found the opinion of the circuit court in the very case now before us, which opinion was opposed to the construction of the law taken by the Commission and to that announced by the circuit court of appeals in this cause. Referring to the claim that under a correct interpretation of the proviso of the 4th section carriers were not allowed to avail themselves of dissimilar [175 U.S. 648, 668]   circumstances and conditions, arising from competition, without the previous assent of the Commission, the court again cited from an opinion of the Interstate Commerce Commission delivered by Judge Cooley, as follows (pp. 168, 169, L. ed. pp. 423, 424, Sup. Ct. Rep. pp. 49, 50):

    And the approval of the construction given to the act in the passage from the opinion of Judge Cooley was not left to implication, since the court added (p. 169, L. ed. p. 424, Sup. Ct. Rep. p. 50):

    It is then settled that the construction given in this cause by the Interstate Commerce Commission and the circuit court of appeals to the 4th section of the Act to Regulate ulate Commerce was erroneous, and hence that both the Interstate Commerce Commission and the circuit court of appeals mistakenly considered, as a matter of law, that competition, however material, arising from carriers who were subject to the Act to Regulate Commerce could not be taken into consideration, and likewise that all competition, however substantial, not originating at the initial point of the traffic, was equally, as a matter of law, excluded from view. It follows that the decree of the circuit court must be reversed unless it be the duty of this court to examine the evidence, which was not passed on by the Commission or the circuit court of appeals, for the purpose of ascertaining whether the competition relied on was so substantial and so controlling on traffic and rates as to cause it to produce a dissimilarity of circumstance and condition within the meaning of the 4th section of the act. A consideration of this subject leads to a solution of the third question which we have previously stated was involved in the cause. In passing, however, it is well to say that both the opinions of this court, just referred to, were announced subsequently to the decision in this case by the Interstate Commerce Commission and of the circuit court, and moreover that the opinion of this court in the last cause (the Midland Case) was announced after the decision of the circuit court of appeals of the case now here. Indeed, since the decision last referred to, it is not denied that the Interstate Commerce Commission have recognized that the interpretation previously given by it to the 4th section had been decided to be unsound, hence in the practical application of the law, since [175 U.S. 648, 670]   the decision by this court in the Midland Case, the construction of the statute which was announced by the Commission in previous cases as well as in this has no longer been applied. 11 Ann. Rep. I. C. C. (1897), pp. 38, 43, 91; Savannah Bureau of Freight & Transportation v. Charleston & S. R. Co. 7 Inters. Com. Rep. 479, 480.

    Before determining the final question we notice certain contentions pressed in argument, whereby it is asserted that there is such a difference between the legal issues here arising and those which were presented in the cases referred to that this case should not be controlled by them. In any event, it is argued, the action of the Commission and the circuit court of appeals in this controversy was of such a nature as to render the previous rulings of this court inapposite, and hence it is unnecessary to apply them. Whilst it is not denied as regards competition arising from other carriers at the place of origin of the traffic, who were subject to the control of the Act to Regulate Commerce, that the decision here under review is not in accord with the rulings of this court, such it is claimed is not the case as to competition not originating at the initial point of carriage. From this premise it is argued that it was correctly decided below that substantial and material competition resulting from conditions existing at the point of delivery (such as accessibility of that place to other lines of transportation from other places by rail or water, or both, was, as a matter of law, correctly decided below to be without legal efficacy in producing dissimilarity of circumstances and conditions. In this regard, then, the decree below, it is insisted, was correct. But the facts which were presented in the records passed on by this court, in the cases to which we have referred, do not justify the premise from which this presumed difference is deduced. We do not stop, however, to analyze those facts, because, granting, arguendo, the assumption upon which the suggested distinction is based, we think it is without merit. What was decided in the previous cases was that under the 4th section of the act substantial competition which materially affected transportation and rates might, under the statute, be competent to produce dissimilarity [175 U.S. 648, 671]   of circumstances and conditions, to be taken into consideration by the carrier in charging a greater sum for a lesser than for a longer haul. The meaning of the law was not decided to be that one kind of competition could be considered and not another kind, but that all competition, provided it possessed the attributes of producing a substantial and material effect upon traffic and rate making, was proper under the statute to be taken into consideration. Indeed, if the distinction contended for were sound it would follow that the greater and more material competition would be without weight in determining whether a dissimilarity of circumstances and conditions existed, whilst the lesser competition would be potential for such purpose. Not only this, but if the distinction be applicable, only that competition which might deflect at the point of origin the traffic from one carrier to another would be within the purview of that portion of the 4th section now under consideration, and competition which was so great as to absolutely prevent the movement of the traffic, unless the lesser rate was exacted, would be outside of its operation. This would lead to the construction that the statute, in empowering a carrier, under certain competitive conditions, of his own volition, to exact a lesser rate for the longer haul, contemplated only the interest of some particular carrier and not at all the public interest. Whilst the unsoundness of the proposition is thus shown, from the contradiction which inheres in it, the erroneous conception upon which it rests is fully demonstrated in the following excerpt from the opinion in Texas & P. R. Co. v. Interstate Commerce Commission, 162 U.S. 211 , 40 L. ed. 945, 5 Inters. Com. Rep. 417, 16 Sup. Ct. Rep. 672:

    Indeed, in the cases by which the controversy here before [175 U.S. 648, 672]   us is controlled, attention was pointedly called to the fact that in considering the power of the carrier, of his own motion, to charge a lesser sum for the longer haul, not only was the interest of the carrier to be taken into account, but also the interest of the public,-especially at the place from which the traffic moved and the place to which it was to be delivered, and to these principles we shall before concluding again advert.

    The argument upon which it is claimed that even if the legal principles here involved are not to be distinguished from those established by the decisions of this court, nevertheless the decree of the circuit court of appeals should be affirmed, is as follows:

    The Commission and the circuit court of appeals, it is asserted, although they may have expressed erroneous opinions as to the construction of the statute, yet, ultimately, in substance, decided, as a matter of fact, that the competition was not of sufficient weight to bring about dissimilarity of circumstances and conditions. But this suggestion is without merit. We have shown, in our previous analysis of the action of the Commission and of the views expressed by the circuit court of appeals, that whilst the facts were considered in so far as was necessary to determine that the competition was due only to certain particular causes, the result of the competition was not examined in order to ascertain the substantial materiality of its operation on traffic and rates. And this, because both the Commission and the circuit court of appeals determined that competition of the particular character which they found that relied on to be, as a matter of law, however weighty in its operation on rates, was not legally entitled to be considered in reviewing the action of the carrier.

    This failure to consider the evidence points to the distinction between this cause and that of Cincinnati, N. O. & T. P. R. Co. v. Interstate Commerce Commission, 162 U.S. 184 , 40 L. ed. 935, 5 Inters. Com. Rep. 391, 16 Sup. Ct. Rep. 700, upon which reliance is placed. In that case the court, from an examination of the whole record, considered that the result of the action of the Commission and the circuit court of appeals had been substantially to decide, not that the character of competition relied on could not be taken [175 U.S. 648, 673]   into view, but that, fully weighing and considering it, sufficient proof did not result to show that it was so substantial and so material as to justify deciding that there were dissimilar circumstances and conditions. The judgment below was, because of this view as to such question, affirmed. The court said (p. 194, L. ed. p. 938, Inters. Com. Rep. p. 401, Sup. Ct. Rep. p. 704): 'But the question was one of fact peculiarly within the province of the Commission whose conclusions have been accepted and approved by the circuit court of appeals, and we find nothing in the record to make it our duty to draw a different conclusion.' If it be again, arguendo, conceded the state of the record in that case was such that an analysis of the action taken below might have well led the court to a different opinion; in other words, might have justified it in holding that both the Commission and the circuit court of appeals had rested their conclusions, not on the want of proof as to the claimed competition, but solely on the absence of legal power to assert competition of the character relied on, such concession could have no influence upon the decision of this cause. This follows because the only deduction possible from the proposition would be that the particular case had been decided on a question of fact, when it should have been controlled by a question of law, which would afford no reason for the failure to apply sound principles of law to the facts of this record. It involves a complete non sequitur to assert that because legal principles may not have been applied to a given case, on the assumption that the facts did not render their application necessary, therefore, in future cases, where it was found that the facts brought the controversy within the principles, they should not be applied.

    It remains only to examine the last question-that is, whether this court, as a matter of first impression, should weigh the evidence for the purpose of ascertaining whether it established such substantial and material competition as justified the carrier in concluding that dissimilarity of circumstance and condition was brought about. If it were true, as asserted in the argument for the appellee, that where the inherent character of the competition was of a nature to be taken into consideration, any competition, however remote [175 U.S. 648, 674]   AND UNSUBSTANTIAL ITS INFLUENCE ON RATES and traffic, would be sufficient to bring about dissimilarity of circumstances and conditions, the question would be easy of solution, for then to weigh the testimony would involve no serious duty. But this suggestion rests on an entire misconception of the adjudications of this court. In considering the right of a carrier to act on competitive conditions, deemed by him to produce dissimilarity of circumstances and conditions, the court, in Interstate Commerce Commission v. Alabama Midland R. Co. 168 U.S. 173 , 42 L. ed. 425, 18 Sup. Ct. Rep. 51), said:

    Again (p. 167, L. ed. p. 423, Sup. Ct. Rep. p. 49), it was said:

    It follows that whilst the carrier may take into consideration the existence of competition as the producing cause of dissimilar circumstances and conditions, his right to do so is governed by the following principles: First. The absolute command of the statute that all rates shall be just and reasonable, and that no undue discrimination be brought about, though, in the nature of things, this latter consideration may [175 U.S. 648, 675]   in many cases be involved in the determination of whether competition was such as created a substantial dissimilarity of condition. Second. That the competition relied upon be, not artificial or merely conjectural, but material and substantial, thereby operating on the question of traffic and rate making, the right in every event to be only enjoyed with a due regard to the interest of the public, after giving full weight to the benefits to be conferred on the place from whence the traffic moved as well as those to be derived by the locality to which it is to be delivered. If, then, we were to undertake the duty of weighing the evidence in this record, we would be called upon, as a matter of original action, to investigate all these serious considerations which were shut out from view by the Commission, and were not weighed by the circuit court of appeals, because both the Commission and the court erroneously construed the statute. But the law attributes prima facie effect to the findings of fact made by the Commission, and that body, from the nature of its organization and the duties imposed upon it by the statute, is peculiarly competent to pass upon questions of fact of the character here arising. In Texas & P. R. Co. v. Interstate Commerce Commission, 162 U.S. 197 , 40 L. ed. 940, 5 Inters. Com. Rep. 405, 16 Sup. Ct. Rep. 666, the court found the fact to be that the Commission had failed to consider and give weight to the proof in the record, affecting the question before it, on a mistaken view taken by it of the law, and that on review of the action of the Commission the circuit court of appeals, whilst considering that the legal conclusion of the Commission was wrong, nevertheless proceeded as a matter of original investigation to weigh the testimony and determine the facts flowing from it. The court said (p. 238, L. ed. p. 954, Inters. Com. Rep. p. 441, Sup. Ct. Rep. p. 682).

    We think these views should be applied in the case now under review. In this case, however, the proceeding to enforce the order of the Commission was initiated by a private individual on behalf of himself and other interested parties not named, and the petitioner in the circuit court has died since the argument and submission of the cause in this court. We are of opinion, therefore, that the decree of the Circuit Court of Appeals should be reversed with costs, that the case be remanded to the Circuit Court with instructions to modify its decree adjudging that the order of the Commission be set aside with costs, by providing that the dismissal be without prejudice to the right of a party in interest to apply to the Commission to be substituted in the original proceeding before the Commission in the stead of the deceased petitioner, and that upon such substitution the Commission should proceed upon the evidence already introduced before it or upon such evidence and any additional evidence which it might allow to be introduced, to hear and determine the matter of controversy in conformity to law. A decree will be entered accordingly, such entry to be made nunc pro tunc as of the date of the submission of the cause in this court.

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