US SUPREME COURT DECISIONS

Section 218 of the Constitution of the Kentucky reads as follows:

"It shall be unlawful for any person or corporation owning or operating a railroad in this state, or any common carrier, to charge or receive any greater compensation in the aggregate for the transportation of passengers, or of property of like kind, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier or person or corporation owning or operating a railroad in this state to receive as great compensation for a shorter as for a longer distance: Provided, That, upon application to the Railroad Commission, such common carrier or person or corporation owning or operating a railroad in this state may in special cases, after investigation by the Commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property, and the Commission may, from time to time, prescribe the extent to which such common carrier, or person, or corporation owning or operating a railroad in this state, may be relieved from the operation of this section,"

As construed by the courts of that state, and so far as it is made applicable to or affects interstate commerce, it is invalid.

The railroad company has brought this case here by a writ of error to the Circuit Court of Simpson County, State of Kentucky, that being the highest court of the state in which a decision could be had, for the purpose of reviewing the judgment of that court in favor of the defendant in error (plaintiff below) based upon a violation of section 218 of the Constitution of Kentucky. That section reads as follows:

"It shall be unlawful for any person or corporation owning or operating a railroad in this state, or any common carrier, to charge or receive any greater compensation in the aggregate for the transportation of passengers, or of property of like kind,

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under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same line, in the same direction, the shorter being included within the longer distance; but this shall not be construed as authorizing any common carrier, or person, or corporation owning or operating a railroad in this state to receive as great compensation for a shorter as for a longer distance: Provided, That upon application to the railroad commission such common carrier, or person, or corporation owning or operating a railroad in this state may in special cases, after investigation by the commission, be authorized to charge less for longer than for shorter distances for the transportation of passengers or property, and the commission may from time to time prescribe the extent to which such common carrier, or person, or corporation owning or operating a railroad in this state may be relieved from the operations of this section."

This action involves the question of the validity of the above section, as construed by the court below with reference to interstate commerce.

The plaintiff, T. R. Eubank, on June 9, 1899, duly filed in the clerk's office of the Simpson County Circuit Court a petition in which he alleged, in substance, that he was doing business in Franklin, in the State of Kentucky; that the defendant was a corporation chartered under the laws of that state as a common carrier, and that it owned and operated a line of railway for the transportation of freight and passengers from Nashville, Tennessee, running north through Franklin, Kentucky, and continuing on to Louisville, Kentucky, a distance of 185 miles, and that the distance from Franklin, Kentucky, to Louisville, Kentucky, over the defendant's line, is 134 miles, and is included in and a part of the distance of 185 miles from Nashville to Louisville; that, during the years 1897 and 1898, the defendant transported tobacco for the complainant from Franklin, Kentucky, to Louisville, Kentucky at the rate of 25 cents per one hundred pounds, and that, during all this time, the plaintiff was shipping and did ship and transport tobacco from Nashville, Tennessee, to Louisville, Kentucky, over the same road at the sum of 12 cents for one hundred pounds, and the complainant averred in his petition chanrobles.com-red

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that the company had no right to charge him a greater freight rate for the transportation of tobacco from Franklin, Kentucky, to Louisville, Kentucky, than 12 cents per one hundred pounds, and he therefore brought suit to recover back from the defendant the difference between that sum and the sum paid by him, viz., 13 cents per one hundred pounds, the amount carried being 145,245 pounds.

The defendant tendered special and general demurrers to this petition on the ground, among others, that it sought to make a law of the State of Kentucky applicable to a rate charged by defendant from Nashville, Tennessee, to Louisville, Kentucky, and that, if the law were so construed it would become a regulation of interstate commerce and be invalid, because in conflict with and repugnant to subsection 3 of section 8 of article I of the Constitution of the United States, and also in violation of the Interstate Commerce Act.

These demurrers were overruled by the court, and thereupon the defendant tendered its answer, setting up its defenses in four separate paragraphs.

By paragraph 1, it substantially admitted the transportation of the tobacco at the rates stated in the plaintiff's petition. In the second paragraph, it averred that its rate of 12 cents per one hundred pounds for the transportation of tobacco from Nashville, Tennessee, to Louisville, Kentucky, was made under and in conformity with the act of Congress called the Interstate Commerce Act, above referred to, and that, in pursuance of the sixth section of that act, the rate was printed, posted, and kept open to public inspection, and duly filed with the Interstate Commerce Commission, and that, by virtue of that act, it would have been unlawful for the defendant to have charged either more or less than the rate of 12 cents per one hundred pounds from Nashville, Tennessee, to Louisville, Kentucky. The defendant further averred that section 218 of the Constitution of the State of Kentucky applied only to a railroad in that state, and had no application to that portion of any railroad that was without the State of Kentucky, and hence had no application to the railroad of the defendant between Nashville, Tennessee, and the state line between Tennessee and Kentucky, chanrobles.com-red

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and it was averred that the rates which the defendant might charge from Franklin, Kentucky, to Louisville, Kentucky, were not and could not become unlawful under the long- and-short-haul laws of Kentucky by reason of any rates that might be charged by the defendant on traffic transported from Nashville, Tennessee, to Louisville Kentucky, and that the long- and short-haul laws of Kentucky could apply only when both the long- and short-hauls were within Kentucky, and that the hauls from Nashville, Tennessee, to Louisville, Kentucky, were not within the jurisdiction of Kentucky.

Defendant further averred that, at the times named in the petition, it charged no rate on tobacco to Louisville, Kentucky, from any point in the State of Kentucky on the same line with Franklin and farther from Louisville than Franklin, less than the rate of 25 cents per one hundred pounds charged by it from Franklin to Louisville. It was further averred that, if the constitutional provision in question were so construed as to make this rate of 25 cents per one hundred pounds from Franklin, Kentucky, to Louisville, Kentucky, unlawful by reason of the less rate charged by it from Nashville, Tennessee, to Louisville, Kentucky, the result would be to regulate commerce among the states by the long- and short-haul laws of Kentucky, and to compel the defendant to, and it would, raise its rates of 12 cents per one hundred pounds from Nashville, Tennessee, to Louisville, Kentucky, unless it could obtain the authority from the railroad commission of Kentucky to charge the less rate from Nashville. Tennessee, to Louisville, Kentucky; that thereby the long- and short-haul laws of Kentucky would regulate commerce among the states, and would be in conflict with and repugnant to the Interstate Commerce Act, and also subsection 3 of section 8, Article I, Constitution of the United States, and would therefore be void, and there was contained in the paragraph the following averment: that

"the defendant hereby sets up, pleads, and relies on the right and privilege secured to it by the said act of Congress and by said provisions of the Constitution of the United States to have its interstate traffic and the commerce conducted among the states and between Kentucky and Tennessee regulated by the Constitution and the laws of the

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United States, and to be free from the regulation and interference of the Constitution and laws of the State of Kentucky."

By paragraph 3, the defendant set up the statute of limitations of the State of Kentucky.

By paragraph 4, the defendant averred that its rate on tobacco from Franklin to Louisville during the times mentioned was much less than the defendant's standard tariff rates for that distance, and that the less rate resulted from and was necessitated by the fact of competition existing at Franklin, Kentucky, which arose from the fact that tobacco could be and was hauled by wagon from Franklin, Kentucky, to Bowling Green, Kentucky, and then shipped to Louisville on boats plying the Green and Barren and Ohio Rivers at extremely low rates of transportation, and on account of competition, the defendant had to and did accept the rate of 25 cents per one hundred pounds; that, but for that competition, it would and could have charged a much higher rate, which higher rate would have been just and reasonable, and that the rate of 25 cents per one hundred pounds was just and reasonable in itself by reason of the competition.

It was further averred that Nashville, Tennessee, was situated on the Cumberland River, navigable by boats plying between Nashville and various points on the Ohio River, including Louisville, Kentucky, and that these boats transported tobacco from Nashville to Louisville at extremely low rates of transportation, and that, by reason of this water competition, Nashville enjoyed extremely low rates for the shipment of tobacco to Louisville and many other places, and if the defendant, at any of the times mentioned, had charged more for the transportation of tobacco from Nashville, Tennessee, to Louisville, Kentucky, than 12 cents per one hundred pounds, it would not have secured the transportation of any of said tobacco from Nashville to Louisville, but the same would have been shipped from Nashville to Louisville, or some other tobacco market, at rates less than 12 cents per one hundred pounds, and thereby the defendant would have wholly lost the transportation of any tobacco from Nashville to Louisville, and that the defendant succeeded in obtaining, even at the low rate of 12 cents per one hundred chanrobles.com-red

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pounds, the transportation of only twelve hogsheads of tobacco from Nashville to Louisville during the time named in the petition. It was averred that the tobacco transported by the defendant from Nashville to Louisville was transported under the circumstances and conditions thus stated, and that none of the same could have been transported at any higher rate than 12 cents per one hundred pounds, and that at none of the times mentioned in the petition was the transportation of tobacco from Franklin to Louisville affected by the circumstances or conditions set forth regarding the transportation of tobacco from Nashville to Louisville, and that the competition at Nashville differed substantially from the competition at Franklin, in that it was far more effective, and necessitated a much lower rate, and that, in making the difference in rates between Franklin and Nashville, the defendant simply recognized the substantial difference in the circumstances and conditions of the transportation from and to the two places.

It was also averred that it was to the advantage of the defendant to transport the tobacco that it might secure from Nashville to Louisville at the rate of 12 cents per one hundred pounds, rather than lose such transportation altogether, as it would have done if it had attempted to charge more than the rate of 12 cents per one hundred pounds; but the fact that the defendant did transport tobacco from Nashville to Louisville at 12 cents per one hundred pounds did not increase the rate that it charged from Franklin to Louisville, or make the rate from Franklin to Louisville any higher than it would otherwise have been, and that, if it had refused to transport tobacco from Nashville to Louisville for any less rate than the rate charged from Franklin to Louisville, the Nashville shippers of tobacco could and would have shipped it to Louisville or other tobacco markets over routes which this defendant could not control and at rates not exceeding 12 cents per one hundred pounds, and that the defendant could and did engage in the transportation of tobacco from Nashville to Louisville at the rate of 12 cents per one hundred pounds without in anywise injuring Franklin or any person or interest at Franklin.

Other defenses were set up not now material. chanrobles.com-red

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The plaintiff demurred to paragraphs 2, 3, and 4 of the defendant's answer, which demurrer was sustained by the court. The plaintiff then moved for judgment for the plaintiff upon the pleadings, which motion, under objection by the defendant, the court granted, and thereupon it was adjudged that the plaintiff recover of the defendant the sum of $188.81 and his costs.