Pennsylvania Railroad v. Illinois Brick Co.

delivered the. opinion of the Court.

December 31, 1924, respondent sued petitioner and the Pittsburgh, Cincinnati, Chicago & St. Louis Railroad Company, called the Panhandle, in the Circuit Court of Cook County, Illinois, to recover reparation awarded by the Illinois Commerce Commission on the ground that they collected from respondent unreasonable and discriminatory charges for intrastate transportation of brick from Bernice, Illinois, to places within the Chicago switching district.^[1] January 1, 1921, the Pennsylvania Railroad Company, through lease, obtained control of the Panhandle. The court gave judgment against the Pennsylvania for $44,428.09.^[1] That amount includes reparation, interest and attorney’s fee. The reparation aujudged is m respect of transportation on the Pennsyl

First for consideration is a question raised by the answer and decided by the appellate court, the highest- court of the State in which a decision could be had. 28 U. S. C., § 344 (b). Chicago, R. I. & P. Ry. v. Perry, 259 U. S. 548 , 551. Home Insurance Co. v. Dick, 281 U. S. 397 , 407. Minneapolis, St. P. & S. S. M. Ry. Co. v. Rock, 279 U. S. 410 , 411-412. Chesapeake & Ohio Ry. Co. v. Mihas, 280 U. S. 102 , 104. That question is whether the Illinois statutes under which thé state commission acted and its order awarding respondent reparation are repugnant to the Interstate Commerce Act^[2] and the order

The Chicago switching district is a large area in and near that city; it extends into Indiana but by far the larger part is in Illinois.^[4] A number of railroads including the Pennsylvania and the Panhandle extend ihto the district and conduct within it transportation of brick and other commodities in intrastate and interstate commerce.' There are many brickyards in the district and elsewhere in Illinois. Respondent has several in the district and two at Bernice in Illinois outside, but close to, the district. One of them is located on the Pennsylvania and the other on the Panhandle.

For a long time prior to federal control of railroads which commenced January 1, 1918, and up to June 25 of that year the rate applicable, to interstate and intrastate transportation of brick, by the Pennsylvania and Panhandle respectively, from Bernice into the district and

June 25, 1918, the federal railroad administration by General Order No. 28 increased rates on brick by two cents per hundred pounds.. November 8, 1918, Freight Rate Authority No. 1887 substituted an increase of 25 per cent, for transportation within the district. These changes operated to make the rate from Bernice into the district 70 cents^[5] and that between points within the district 30 cents per ton.

The Transportation Act (of February 28), 1920, § 208 (a), directed that existing rates should obtain until changed by federal or state authority or pursuant to authority of law.

March 10, 1920, respondent complained to the Interstate Commerce Commission that the 70-cent rate was unreasonable and discriminatory. The commission made its report and order October 27, 1921, the pertinent substance of which is given below.

July 29, 1920, the commission authorized increases applicable to interstate traffic of 40 per cent, and 35 per cent, respectively, in eastern and western groups and 33y3 per cent, on intergroup transportation. Ex parte 74.^[6] August 10, the Illinois commission authorized a general increase of 33% per cent.^[7] August 11, the Interstate Commerce Commission ordered that Illinois territory be treated as within the eastern group for the purpose of applying the authorized increase of 40 per cent, in the rates on interstate traffic between points in that territory.^[8]

August 26, rates on intrastate transportation of brick established by the carriers pursuant to authority of the Illi

January 11, 1921, the Interstate Commerce Commission dealing with intrastate rates within Illinois, notified and required carriers to cease and desist from practicing the undue prejudice, undue preference and advantage, and unjust discrimination which, as specified in the commission’s report it found to exist. The order also notified and required the carriers to “establish, put in force, and maintain rates and charges for freight services ... in intrastate commerce within the state of Illinois which shall exceed the rates and charges of the carriers now in force and applicable to such transportation in amounts corresponding to the increases heretofore made by the carriers, now in effect, under Ex Parte 74 ... in said carriers’ rates and charges for freight services ... in interstate commerce within the state of Illinois and between points in the state of Illinois and points in other states in the eastern group, including the Illinois district. It is further ordered, That this order shall become effective on or before the 7th day of March, 1921, upon notice ... by not less than five days’ filing and posting in the manner prescribed in section 6 of the Interstate Commerce Act, and remain in force until the further order of this Commission in the premises.”.

“Some readjustments may be appropriate in individual instances where substantial injury results . . . Such inequalities as call for readjustment may be brought to our attention in the appropriate way and dealt with as. occasion requires . . The record establishes that the present intrastate charges for freight services . . . lower than the just and reasonable corresponding interstate rates and charges authorized in and established in . the eastern group, including the Illinois district, pursuant to Ex Parte 74, afford intrastate' traffic and shippers and localities' within the state undue preference and subject interstate traffic and shippers and localities outside the state to undue prejudice, and unduly, unjustly, and unreasonably discriminate, against interstate commerce.”^[10] February 19, 1921, the carriers, in accordance with the commission’s order, put in effect and until February 16, 1922, maintained for intrastate transportation a rate of 98 cents on brick from Bernice into the switching district and a rate of 42 cents between points within the district.

October 27, 1921, the Interstate Commerce Commission, dealing with plaintiff’s complaint filed March 10, 1920, found' the 70-cent rate on brick in interstate commerce from Bernice into the district was not unreasonable but that it was and for the future would be unduly prejudicial to the extent that it exceeded the rates from points within the district to interstate. destinations therein by more than 10 cents per ton. It further found that respondent failed to show itself entitled to damages as the result of the undue prejudice.^[11] The commission ordered that the carriers “cease and desist, on or before February 16, 1922, , . . from . . . collecting for the. transportation of common brick in carloads, from Bernice . . . [and

To the extent, if at all, that there is conflict between state and federal regulation, the latter must prevail. Unquestionably the Interstate Commerce Commission was authorized directly to prescribe, or to require the carriers to establish and maintain, intrastate rates to prevent or remove discrimination against interstate commerce or to make intrastate transportation yield its just proportion of the carriers’ earnings. Florida v. United States, 282 U. S. 194 , 210. Public Service Comm’n v. Texas & N. O. R. Co., 284 U. S. 125 , 131. Florida v. United States, 292 U. S. 1 , 4. During the period between February 19, 1921, and February 16, 1922, the intrastate rates in force for transportation of brick by petitioner’s railroad from Bernice into the switching district were maintained by petitioner pursuant to and in accordance with the Interstate Commerce Commission’s order of January 11, 1921. By that order the commission “notified and required” carriers to cease the prejudice and discrimination against interstate commerce resulting from the application of their intrastate rates in force and also “notified and required” them to increase their intrastate rates and to make them correspond with the interstate rates theretofore increased in pursuance of its order in Ex parte 74. The commission’s direction to the carriers that they collect charges based on the intrastate rates required by its order was not less mandatory than was its direction to cease prejudice and discrimination. In order that the prescribed equality between intrastate and corresponding interstate rates should not be disturbed by state authority or-by action of the carriers, the commission declared that the order— and necessarily the rates directed — should continue in force until changed by it.

No such question was, by answer, motion or otherwise, expressly raised in the trial court. Petitioner makes no claim that the reparation order was specifically challenged in the trial court as repugnant to either of these clauses, asserts that it was not necessary so to do and maintains that, at the trial, there was by petitioner sufficiently drawn in question the validity of the order on the ground of its being repugnant to these provisions. The sole support for that claim is this: Respondent put in evidence the state commission’s reparation order and the record on which it was based. In defense petitioner introduced the same record and the state commission’s rate orders authorizing, respectively 93% cents and-94% cents per ton for transportation from Bernice into the switching district.

Plainly that was not enough. The Illinois statute requires that in cases involving construction of the Federal Constitution appeals from circuit courts shall be taken directly to the supreme court.^[13] And, as definitely shown by its decisions, that court will not take jurisdiction unless it appears from the record that the constitutional ques

Petitioner’s application for this writ suggests that, by a construction contrary to that theretofore put upon § 68 of the Illinois Public Utilities Act, it was denied an opportunity to be heard on the question whether the evidence before the Illinois commission was sufficient to sustain the reparation award. And upon that basis petitioner claims that there is here presented the question whether by denial of hearing it was deprived of property without due process oí law. But, as is shown by the opinion of the appellate court, it did hear petitioner and respondent on that question and decided it in favor of the latter.