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U.S. Supreme Court

Brimstone R. & Canal Co. v. United States, 276 U.S. 104 (1928)

Brimstone Railroad and Canal Company v. United States

No. 240

Argued October 10, 11, 1927

Decided February 20, 1928

276 U.S. 104


1. An order of the Interstate Commerce Commission reduced the divisions of joint rates accorded a short line railroad by an agreement with its connections, and thus increased theirs correspondingly, upon a finding that the share of the short line exceeded a fair return on its property over cost of service and was tantamount to a rebate to a mining company which owned its stock and contributed most of its traffic. The finding was based on a study of the short line's property and affairs; the service it performed; divisions established by the United States Railroad Administration; other divisions, past and present; volume and distribution of traffic; comparison between the questioned divisions and those received by other lines in the same territory, and testimony that competition controlled the agreed divisions; but there was no evidence that the connecting carriers were in need, or received, or would receive, more than or less than a fair return from the agreed divisions; that the joint rates themselves were unfair or unjust, or that the agreed divisions were "unjust, unreasonable, inequitable or unduly preferential or prejudicial as between the carriers." The order was made retroactive to the date when the investigation was instituted by the Commission.


(1) That, as items definitely specified by § 15(6) of the amended Act to Regulate Commerce were not considered, the order must be annulled. New England Divisions Case, 261 U. S. 184; United States v. Abilene & Southern Railway, 265 U. S. 274, distinguished. P. 276 U. S. 115.

(2) Section 15(6) grants no power to require readjustment between carriers of past receipts from agreed joint rates. P. 276 U. S. 117. chanroblesvirtualawlibrary

Page 276 U. S. 105

(3) Section 15(6) authorizes the Commission to readjust divisions already received only when the joint rate was established pursuant to a finding or order of the Commission made under § 15(1) or (3), after full hearing in respect of the specific rate. Mere permission granted by the Commission to increase or diminish all rates according to the needs of carriers throughout the country is not enough. P. 276 U. S. 125.

17 F.2d 165 reversed.

Appeal from a decree of the district court sustaining an order of the Interstate Commerce Commission in a suit brought by the appellant to annul it. The nature of the order is fully explained in the opinion. chanroblesvirtualawlibrary

Page 276 U. S. 108

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