PROCTER & GAMBLE COMPANY v. UNITED STATES OF AMERICA, INTERSTATE COMMERCE COMMISSION, CINCINNATI, HAMILTON & DAYTON RAILWAY COMPANY, ET AL.

APPEAL FROM THE UNITED STATES COMMERCE COURT.

No. 780. Argued January 11, 12, 1912.—Decided June 7, 1912. Subdivision 2 of § 1 of the act creating the Commerce Court, now § 207 of the new Judicial Code, giving the Commerce Court jurisdiction of cases brought to enjoin, set aside, annul or suspend orders of the Interstate Commerce Commission, confers on that court jurisdiction only to entertain complaints as to affirmative orders of the Commission.

Under the act, the Commerce Court is not given jurisdiction to redress complaints based exclusively, as in this case, on the ground that the Commission has refused the relief asked on the ground that it could not award it.

To construe the act creating the Commerce Court so as to give it jurisdiction to originally interpret the administrative features of the Interstate Commerce Act and to construe a refusal of the Commission to grant relief as an affirmative order would frustrate the legislative policy which led to the adoption of the act and would multiply the evils which it was designed to prevent.

The act creating the Commerce Court was intended to be a part of the existing system for regulating interstate commerce. While originally the duty of determining whether an order of the Commission should be enforced carried with it the obligation to consider both the facts and the law, it had come to pass prior to the adoption of the act creating the Commerce Court that the jurisdiction of courts over orders of the Commission is confined to determining whether they were in violation of the Constitution or failed to conform to statutory authority, and to ascertaining whether power had been arbitrarily exercised beyond the power conferred.

Under the express reservation in the last paragraph of § 207, Judicial Code, a claim that a constitutional right asserted in a petition to the Interstate Commerce Commission has been denied by that body, if independent of all questions of rights and remedies under the Inter

225 U.S.

Argument for the United States.

state Commerce Act, is beyond the jurisdiction of the Commerce Court.

Where the constitutional question is dependent upon provisions of the Interstate Commerce Act, it is subject to the precedent action of the Commission, as to which the Commerce Court only has jurisdiction in case of a prior affirmative order of the Commission. The Commerce Court has no jurisdiction over a claim made by the owner of private cars to recover on a money demand based on the illegality of charges alleged to have been wrongfully exacted by the railroad companies and which the Commission had refused to allow. 188 Fed. Rep. 221, reversed.

THE facts, which involve the construction of the statute creating the Commerce Court and the determination of extent of jurisdiction of that court, are stated in the opinion.

Mr. George H. Warington for appellants.1

Mr. Francis B. James, for appellants in Nos. 773 and 774, argued simultaneously herewith. See p. 302, post..

Mr. Assistant Attorney General Denison, with whom Mr. Blackburn Esterline, Special Assistant to the Attorney General, was on the brief, for the United States:1

The Commerce Court was given no jurisdiction to set aside the order of the Commission which merely refused relief and dismissed the petition. The Commerce Court is given no jurisdiction not heretofore possessed by the Circuit Courts; and there is no precedent in the common law for a suit in equity to establish a future reasonable rate, or to enjoin the future operation of a rule of a railroad on the ground that it was unreasonable.

Nor has there been any instance in which, since the establishment of the Interstate Commerce Commission, any Federal court has undertaken that power, or has been asked to undertake it.

1 See also abstract of argument of appellant in Nos. 773 and 774, p. 303, post.

Even the Interstate Commerce Commission itself had no authority to establish reasonable rates for the future, prior to the express grant of that power by the Hepburn Act.

The legislation of Congress clearly shows that no such jurisdiction was intended to be given either to the Circuit Courts by the Hepburn Act, or to the Commerce Court by the Commerce Court Act.

The Hepburn Act shows in several sections that only affirmative orders of the Commission, that is to say, orders which required some change from existing conditions, were the subject of jurisdiction in the Circuit Courts.

Similarly, the Commerce Court Act in several sections indicates the same intention.

This particular petition asked as one element of relief that the Commerce Court should require the railroads to pay money to the petitioners. The court had no power to take jurisdiction of such a claim for money, because such claims are left by the Commerce Court Act to the Circuit Courts. The Commerce Court would have been given the aid of a jury system if it had been intended to have this jurisdiction.

Mr. P. J. Farrell for the Interstate Commerce Comnission.

Mr. Edward Barton for the Cincinnati, Hamilton & Dayton Railway Company, appellee.

MR. CHIEF JUSTICE WHITE delivered the opinion of the court.

Having three manufacturing plants, one at Ivorydale, Ohio, a second at Port Ivory, New York, and a third at Kansas City, Kansas, in which they carried on the business of refining cottonseed and other oils and of manufacturing soap and other products from grease and oil, the Procter &

Gamble Company, to facilitate the transportation to their factories of the substances required for their operation and of shipping out the finished products, became the owner of about five hundred railroad tank cars. The cars were exclusively devoted to the business of the company in the following manner: On the property of the company in the yards about their factories there were railroad tracks belonging to the company which served for holding empty or loaded cars, the cars thus situated being held for storage and for movement from place to place, as business required. At each of the factories there was also an interchange track connected with the tracks in the yards and with the tracks of the railroad company or companies through whom the business of shipping in interstate commerce to and from the factories was carried on. The movement of cars to the interchange tracks for outward shipment and from the interchange tracks when they were left there by railroad companies was at two of the factories carried on by the company through its own employés and motive power. At the other one this work was done by a railroad company, who made an independent and special charge for the service. The transportation of the private tank cars of the corporation by the railroad companies was governed by established rules, and the price paid to the railroads for transporting the commodities of the company in its private cars was the regular price fixed for such commodities in the established tariffs. The railroads, however, paid to the company for the use of its private cars a fixed sum per mile, this payment being also stated in the regular established tariffs in compliance with law. A portion of the carrier's rule (Rule 29), relating to the subject of compensation for hauling such private tank cars is in the margin.1

1 Rule 29. (Sec. 1.) In providing ratings in this classification for articles in tank cars, the carriers whose tariffs are governed by this classification do not assume any obligation to furnish tank cars in

In 1910 among others the railroads engaged in transporting tank cars from the plants of the Procter & Gamble Company adopted a system of rules governing the payment of demurrage by shippers. The provisions of these rules pertinent to this case are excerpted in the margin.1

The rules in question were prepared by a committee of the National Association of Railroad Commissioners composed of a representative from each State having a rail

cases where they do not own or have not made arrangements for supplying such equipment. When tank cars are furnished by shippers or owners, mileage at the rate of three-quarters (34) of one cent per mile will be allowed for the use of such tank cars, loaded or empty, provided the cars are properly equipped. No mileage will be allowed on cars switched at terminals nor for movement of cars under empty freight car tariffs.

1 Rule I.

Cars subject to Rules.

Cars held for or by consignors or consignees for loading, unloading, forwarding directions, or for any other purpose, are subject to these demurrage rules, except as follows:

(a) Cars loaded with live stock.

(b) Empty cars placed for loading coal at mines or mine sidings, or coke at coke ovens.

(c) Empty private cars stored on carrier's or private tracks, provided such cars have not been placed or tendered for loading on the order of a shipper.

NOTE.-Private cars while in railroad service, whether on carrier's or private tracks, are subject to these demurrage rules to the same extent as cars of railroad ownership.

(Empty private cars are in railroad service from the time they are placed by the carriers for loading or tendered for loading on the orders of a shipper. Private cars under lading are in railroad service until the lading is removed and cars are regularly released. Cars which belong to an industry performing its own switching service are in railroad service from the time they are placed by the industry upon designated interchange tracks and thereby tendered to the carrier for movement. If such cars are subsequently returned empty, they are out of service when withdrawn by the industry from the interchange; if returned under load, railroad service is not at an end until the lading is duly removed.)