BEAUMONT, S.L. & W. RY. CO. V. UNITED STATES, 282 U. S. 74 (1930)

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U.S. Supreme Court

Beaumont, S.L. & W. Ry. Co. v. United States, 282 U.S. 74 (1930)

Beaumont, Sour Lake & Western Railway Company v. United States

Nos. 44 and 45

Argued October 20, 1930

Decided November 24, 1930

282 U.S. 74


1. In fixing divisions of joint rates under § 15(6) of the Interstate Commerce Act, the facts specified in that section, and others necessarily or properly to be taken into account, are to be considered having regard to the duty of the Commission under § 15a(2) to establish and adjust rates so that the carriers as a whole, in each rate group or territory that the Commission may designate, will, under management and expenditures such as are there specified, earn as nearly as may be a fair return upon the aggregate value of their operating property. P. 282 U. S. 82.

2. Section 15(6) requires the Commission to consider the condition of each carrier and to determine whether the division of each joint rate is unreasonable, or otherwise repugnant to the specified standards, and what division will for the future be just, reasonable, and equitable; the Commission may not change an existing division unless it finds that division unjust or unreasonable. Id.

3. But the Commission need not under all circumstances take specific evidence as to each rate of every carrier. When considering divisions of numerous joint rates applicable to traffic passing through gateways between different territories, the Commission chanrobles.com-red

Page 282 U. S. 75

may make the required determinations and establish the bases for divisions between groups of carriers in the respective territories upon evidence which it reasonably may deem typical and to have sufficient probative weight to justify the necessary findings and the order in respect of each rate. That is to say, such typical evidence may sufficiently disclose the facts necessary to enable the Commission duly to consider the divisions of each joint rate to be received by every carrier. P. 282 U. S. 82.

4. Where the evidence before the Commission is sufficient to disclose, as to each carrier, all the facts specified in § 15(6) and to furnish an adequate and reasonable basis for the proper division of each of the joint rates applicable to the traffic involved, the mere fact that carriers and divisions were dealt with on an average or group basis does not indicate that the Commission did not properly consider each carrier and rate, or that it did not duly take into account the facts specified in § 15(6), or that it failed to obey the statute in any respect. P. 282 U. S. 83.

5. General statements in the reports of the Commission to the effect that, in reaching its conclusions, it considered all the pertinent evidence add nothing to the prima facie presumption that generally attends its determinations. P. 282 U. S. 86.

6. In support of an order dividing joint rates as between two territorial groups of carriers on the basis of the general mean of the conditions of the several carriers constituting each group, the reports of the Commission showed that its findings as to average group conditions taken as a whole were sustained by the evidence, but there was other evidence before it showing, as between individual carriers in each group, so wide a range of rates of return that, if approximate similarity in that respect was essential to the order, its basis could not be sustained.


(1) The failure of the Commission specifically to report the facts and give the reasons upon which it justified the use of the average or group basis is condemned. Complete statements by the Commission showing the grounds upon which it rests its determinations in cases like this are quite as necessary as opinions of lower courts setting forth the reasons for their decisions in analogous cases, and this Court has recently emphasized their duty fully to state the ground on which they act. P. 282 U. S. 86.

(2) Failure in this was not excused by the fact that the carriers presented evidence on a group basis or by omission of carriers, in their petition for rehearing, to object to the use of averages. P. 282 U. S. 87. chanrobles.com-red

Page 282 U. S. 76

(3) A sound basis for a rule or formula prescribing the divisions is essential to compliance with the Act, and carriers suing to set the order aside upon the ground that the divisions are unreasonable are not estopped from assailing the averages or groups adopted. P. 282 U. S. 87.

7. The evidence in this case leads to the opinion that, notwithstanding the wide differences in rates of return between carriers, the basis adopted will not, on that account, result in unjust and unreasonable divisions. Id.

8. In a suit to set aside an order of the Commission fixing divisions of joint rates, a contention that the prescribed divisions are confiscatory, in violation of the Fifth Amendment, has no foundation in the record if there is no allegation in the complaint, or evidence to show, that any division to any of the complaining carriers will not yield a sum equal to the operating expenses chargeable to the service covered by it plus a reasonable return on the property value fairly attributable to that service. P. 282 U. S. 88.

9. Joint rates between eastern and southwestern points were subject to an established primary division at points on the Mississippi River. In a proceeding under § 15(6), the Commission sought to make just subdivisions of revenues on transportation west of the river, assuming the validity of the joint rates and the primary divisions. Held that carriers which were parties to the joint rates but which participated only in the transportation and revenues east of the river, need not be made parties to the proceeding. P. 282 U. S. 89.

10. The district court, upon dismissing a bill by carriers to annul an order of the Interstate Commerce Commission fixing divisions of joint rates, has authority in its discretion to stay the enforcement of the prescribed divisions pending appeal, and discretion was not abused in this case. Pp. 282 U. S. 90-92.

36 F.2d 780 affirmed.

Appeals from a decree of a district court of three judges dismissing the bill in a suit brought by carriers to set aside an order of the Interstate Commerce Commission prescribing divisions of joint rates, and from an order staying enforcement of the divisions until determination here. chanrobles.com-red

Page 282 U. S. 77


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