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[498] DIRECTOR GENERAL OF RAIL-| Argued December 8, 1920. Decided January

ROADS et al.

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1. The power to suspend classifications or regulations when issued by the President was taken away from the Interstate Commerce Commission by the Act of March 21, 1918, but the power over them after hearing remained, and the power to suspend was restored when the transportation Act of February 28, 1920, became effective.

[For other cases. see Interstate Commerce
Commission, in Digest Sup. Ct. 1908.]
Carriers
remedy for change in clas-
sification or regulation exclusion
of designated commodity · exclusive
initial jurisdiction of Interstate Com-
merce Commission.

2. The Interstate Commerce Commission must be deemed to have had initial jurisdiction, exclusive of the Federal district

courts, of a controversy presented by the contention of a shipper that an amendment or supplement to the appropriate freight tariff schedule, authorized by the Director General of Railroads, which became effective after the adoption of the Transportation Act of February 28, 1920, and by which the published classification and rates on silk were canceled and the freight classification rule amended so as to include silk among the articles that would not be accepted for shipment as freight, was invalid, in view of the provisions of the Act of February 4, 1887, §§ 1, 3, 6, 13, 15, as amended by the Acts of June 29, 1906, and June 18, 1910, which make it the duty of carriers to establish, observe, and enforce reasonable

3, 1921.

N A CERTIFICATE from the United

the Third Circuit presenting the question whether a Federal District Court had original jurisdiction without previous action by the Interstate Commerce Commission of a suit to enjoin the enforcement of an amendment or supplement to freight tariff schedules, authorized by the Director General of Railroads. Answered in the negative.

The facts are stated in the opinion.

Messrs. Henry Wolf Biklé and Theodore W. Reath argued the cause, and, with Messrs. F. Markoe Rivinus and Frederic D. McKenney, filed a brief for the Director General of Railroads et al.:

The subject-matter of this litigation is a classification or regulation within the meaning of the Interstate Commerce Act, or it is both.

55 L. ed. 219, 31 Sup. Ct. Rep. 238; Brodnax v. Missouri, 219 U. S. 285, Lake-and-Rail Butter & Egg Rates, 29 Inters. Com. Rep. 45; Consolidated Classification Case, 54 Inters. Com. Rep. 1; Western Classification Case, 25 Inters. Com. Rep. 442; Tilley v. Norfolk & W. R. Co. 162 N. C. 37, 77 S. E. 994; Interstate Commerce Commission v. Illinois C. R. Co. 215 U. S. 452, 54 L. ed 280, 30 Sup. Ct. Rep. 155; Baltimore & O. R. Co. v. United States, 215 U. S. 481, 54 L. ed. 292, 30 Sup. Ct. Rep. 164; Morrisdale Coal Co. v. Pennsylvania R. Co. 230 U. S. 304, 57 L. ed. 1494, 33 Sup. Ct. Rep. 938; Interstate Commerce Commission v. Delaware, L. & W. R. Co. 220 U. S. 235, 55 L. ed. 448, 31 Sup. Ct. Rep. 392.

Whether the subject-matter of this litigation be regarded as classification or as a regulation-in either aspect it is exclusively within the administrative jurisdiction of the Interstate Commerce Commission.

classifications of property, make it unlaw. ful for any carrier to subject any particular description of traffic to any undue and unreasonable prejudice or disadvantage, require carriers to print and file with the Interstate Commerce Commission schedules showing freight classifications, and rules or regulations changing, affecting, or determining the value of the service rendered to the shipper, give to any person or corporation the right to apply to the Commission for relief on account of anything done New York, N. H. & H. R. Co. v. Inor omitted to be done by a carrier in con- terstate Commerce Commission, 200 U. travention of the provisions of the act, and S. 361, 50 L. ed. 515, 26 Sup: Ct. Rep. declare that whenever a new classification 272; Texas & P. R. Co. v. Abilene Cotor regulation or practice is filed, the Com- ton Oil Co. 204 U. S. 426, 51 L. ed. 553, mission shall have power to suspend the operation of the same pending investigation, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; and, if found to be unreasonable or other Interstate Commerce Commission v. Ilwise in violation of the act, the Commission linois C. R. Co. 215 U. S. 452, 54 L. ed. may find what will be just and reasonable, 280, 30 Sup. Ct. Rep. 155; Baltimore & and require the carrier to conform to its O. R. Co. v. United States, 215 U. S. 481, finding. 54 L. ed. 292, 30 Sup. Ct. Rep. 164; Texas & P. R. Co. v. American Tie & Timber Co. 234 U. S. 138, 58 L. ed. 1255, 34 Sup. Ct. Rep. 885; Logan v. Davis,

[For other cases, see Carriers, III.; Interstate Commerce Commission; Courts, V. c, in Digest Sup. Ct. 1908.]

372

[No. 424.]

233 U. S. 613, 627, 58 L. ed. 1121, 1128,, merce, the Federal Control Act, and the 34 Sup. Ct. Rep. 685. common-law duty of carriers. Ibid.

The considerations which would operate to decide the issue are considerations properly cognizable only by the administrative tribunal.

Hart v. Pennsylvania R. Co. 112 U. S. 331, 28 L. ed. 717, 5 Sup. Ct. Rep. 151; Adams Exp. Co. v. Croninger, 226 U. S. 491, 57 L. ed. 314, 44 L.R.A. (N.S.) 357, 33 Sup. Ct. Rep. 148; Pennsylvania R. Co. v. Puritan Coal Min. Co. 237 U. S. 121, 59 L. ed. 867, 35 Sup. Ct. Rep. 484; Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Interstate Commerce Commission v. Illinois C. R. Co. 215 U. S. 452, 54 L. ed. 280, 30 Sup. Ct. Rep. 155; Baltimore & 0. R. Co. v. United States, 215 U. S. 481, 54 L. ed. 292, 30 Sup. Ct. Rep. 164; Robinson v. Baltimore & O. R. Co. 222 U. S. 506, 56 L. ed. 288, 32 Sup. Ct. Rep. 114; Morrisdale Coal Co. v. Pennsylvania R. Co. 230 U. S. 304, 57 L. ed. 1494, 33 Sup. Ct. Rep. 938; Mitchell Coal & Coke Co. v. Pennsylvania R. Co. 230 U. S. 247, 57 L. ed. 1472, 33 Sup. Ct. Rep. 916; Texas & P. R. Co. v. American Tie & Timber Co. 234 U. S. 138, 58 L. ed. 1255, 34 Sup. Ct. Rep. 885; Loomis v. Lehigh Valley R. Co. 240 U. S. 43, 60 L. ed. 517, 36 Sup. Ct. Rep. 228; Wickwire Steel Co. v. New York C. & H. R. R. Co. 104 C. C. A. 504, 181 Fed. 316; Texas & P. R. Co. v. American Tie & Timber Co. 234 U. S. 138, 58 L. ed. 1255, 34 Sup. Ct. Rep 885.

The same conclusions result from the fact that the actions of the carriers complained of constituted a classification or regulation initiated by the Director General of Railroads.

Marbury v. Madison, 1 Cranch, 137, 2 L. ed. 60; Wickwire Steel Co. v. New York C. & H. R. R. Co. 104 C. C. A. 504, 181 Fed. 316.

Mr. Harold S. Shertz argued the cause and filed a brief for the Viscose Company:

Is a shipper to be denied the jurisdiction of the courts where the act of the carrier would deprive him of his business and property?

Louisville & N. R. Co. v. F. W. Cook Brewing Co. 223 U. S. 70, 56 L. ed. 355, 32 Sup. Ct. Rep. 189. There was

The acts of the Director-General may be restrained by the courts.

American School v. McAnnulty, 187 U. S. 94, 47 L. ed. 90, 23 Sup. Ct. Rep. 33; Northern P. R. Co. v. United States, 251 U. S. 326, 64 L. ed. 290, 40 Sup. Ct. Rep. 162; Skinner & E. Corp. v. United States, 249 U. S. 557, 63 L. ed. 772, 39 Sup. Ct. Rep. 375.

Mr. Justice Clarke delivered the opinion of the court:

Silk, artificial and natural, had been accepted by the railway carriers of the country for transportation as [499] freight for many years prior to the action which gave rise to the question which the circuit court of appeals for the third circuit has certified herein to this court, and it had been classified in tariffs as first class. On January 21, 1920, Walker D. Hines, as Director General of Railroads, authorized an amendment or supplement to the appropriate freight tariff schedule so as to cancel the published classification and rates on such silk, and to so amend rule 3 of "Consolidated Freight Classification No. 1" as to include it among the articles "that will not be accepted for shipment."

On the 28th of January, 1920, the supplement thus authorized was filed with the Interstate Commerce Commission, to become effective on the 29th day of February following, and if no other action had been taken the result would have been to have excluded such silks from shipment as freight after the effective date, for after that date there would not have been any published rate applicable to them.

The appellee, the Viscose Company, is an extensive manufacturer of artificial silk, 80 per cent of which "it maintains" must be shipped as freight, and, claiming that it would suffer great and irreparable damage if the supplement to the tariff proposed by the appellants were allowed to become effective, on February 26th, three days before it would have taken effect, the company applied for and obtained a temporary, and later on a permanent, injunction from the district court of the United States for the eastern district of Pennsylvania, restraining the Director General of Railroads and the other appellants:

no. administrative question. The question involved only the lawfulness of the act of denying trans- (1) "From putting into effect and enportation to goods,-necessitating inter- forcing the provisions of the said suppretation of the Act to Regulate Com- plement No. 2 to 'Consolidated Freight

Classification No. 1, designed to cancel the existing classification of artificial silk as a commodity of freight,' and

[500] (2) "From refusing to accept from the Viscose Company artificial or fiber silk for transportation under classifications which existed prior to the effective date of said supplement, or under such other classification as may be put into effect thereafter."

An appeal from the district court carried the case to the circuit court of appeals, which certifies to this court the question:

"Did the district court have jurisdiction to decide the matter raised by the complainant's bill, and thereupon to annul the said action of the Director General of Railroads, and enjoin the carriers from complying therewith?"

Appellants contend that exclusive initial jurisdiction over the controversy here involved is in the Interstate Commerce Commission, and that the appellees should have applied to that tribunal for relief. It is argued that the proposed supplement, striking silks from the first class in the tariffs filed, was a change in classification, and that the change in rule 3, adding them to the list of commodities which would not be accepted for shipment as freight, was a change of regulation, and that over the reasonableness of both of these the Interstate Commerce Commission is given exclusive initial jurisdiction by §§ 1, 3, 6, 13, and 15 of the Interstate Commerce Act (June 29, 1906, 34 Stat. at L. 584, chap. 3591, as amended June 18, 1910, 36 Stat. at L. 539, chap. 309, Comp. Stat. § 8563, 4 Fed. Stat. Anno. 2d ed. p. 337).

On the other hand, it is argued by the appellees that for a common carrier to exclude a commodity from the tariffs and to refuse to accept it for shipment is neither classification nor regulation; and that an attempt to do such a thing presents a question of law for the courts, that exclusion is not classification nor regulation.

Section 1 of the Interstate Commerce Act makes it the duty of all carriers subject to its provisions to provide and furnish "transportation upon reasonable request therefor . . to establish, observe, and enforce just and reasonable classifications of property for transportation . . . [501] and just and reasonable regulations and practices affecting classifications, rates, or tariffs

chap. 309, Comp. Stat. § 8563, 3 Fed. Stat. Anno. 2d ed. pp. 351, 359.

..

Section 3 of the act makes it unlawful for any carrier to subject "any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever." February 4, 1887, 24 Stat. at L. 379, 380, chap. 104, Comp. Stat. § 8565, 4 Fed. Stat. Anno. 2d ed. p. 379.

Section 6 requires every carrier to print and file with the Commission schedules in form prescribed, showing the classification of freight in force and any rules or regulations which in any wise change, affect, or determine

the value of the service rendered to the shipper. 34 Stat. at L. 584, 586, chap. 3591, Comp. Stat. § 8569, 2 Fed. Stat. Anno. 2d ed. p. 406.

Section 13 gives to any person or corporation the right to apply to the Commission for relief on account of "anything done or omitted to be done" by any common carrier subject to the provisions of this act, "in contravention of the provisions thereof." 36 Stat. at L. 539, 550, chap. 309, Comp. Stat. § 8581, 4 Fed. Stat. Anno. 2d ed. p. 453.

And § 15 declares that whenever there is filed "a new individual or joint classification, or any new individual or joint regulation or practice," the Commission shall have power to suspend the operation of such schedule, classification, regulation, or practice until, upon complaint or upon its own initiative, an investigation shall be made, and if the proposed classification or regulation is found to be unreasonable or otherwise in violation of the act, the Commission may find what will be just and reasonable in the premises, and may require the carrier thereafter to conform to its finding. 36 Stat. at L. 539, 552, chap. 309, Comp. Stat. § 8583, 4 Fed. Stat. Anno. 2d ed. p. 458.

The power to suspend classifications or regulations when issued by the President was taken away from the Interstate Commerce Commission by the "Act to Provide for the Operation of Transpor tation Systems While under Federal Ĉontrol," etc. (March 21, 1918, 40 Stat. at L. 451, 456, chap. 25, Comp. Stat. § 3115a, Fed. Stat. Anno. Supp. 1918, p. 757); but the [502] power over them after hearing remained, and the power to suspend was restored when "The Transportation Act, 1920," approved February 28, 1920, became ef. and all other matters relating to fective (41 Stat. at L. 456, 487). The or connected with the receiving, han- action of the Director General of Raildling, transporting, storing, and delivery roads, under consideration in this case, of property." 36 Stat. at L. 539, 545, 546, | may, therefore, be treated as if it had

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been taken by a carrier subject to the, fies it and sets it apart in a group subject to special treatment, as much as if it had been changed to the second class. We cannot doubt that the "exclusion" in this case was an attempted "classification," and that the proposed change in rule 3 was an attempted change of regulation, applicable to artificial silks, and that, when challenged by the shipper, the reasonableness of both presented a question for decision within the exclusive initial jurisdiction of the Interstate Commerce Commission.

Without more, these references to the Interstate Commerce Act are sufficient to show that if the proposed change in the tariffs and in the rule, which we are considering, constituted a change of classifieation or of regulation within the meaning of the Commerce Act, there was ample and specific provision made therein for dealing with the situation through the Commission, for suspending the supplement or rule, or annulling either or both if investigation proved the change to be unreasonable, and for providing for just treatment of shippers in the future. Strangely enough, it is a shipper, not a carrier, which here seeks to exclude the latter from this extensive jurisdiction of the Commission.

The certificate does not state what the purpose of the Director General of Railroads was in attempting to make the proposed change, but whether it was to permanently refuse to carry artificial silk as freight because of its value or of the risk involved, or for any other reason, or whether the action was taken to clear the way for putting into effect a commodity rate higher than the first-class rate (as might be done under appropriate conditions, Chamber of Commerce v. International & G. N. R. Co. 32 Inters. Com. Rep. 247, 255; Wheeling Corrugating Co. v. Baltimore & O. R. Co. 18 Inters. Com. Rep. 125, 126), in either case it was necessary that the published classification of rates should be withdrawn by change of the tariffs on file, and that notice should be given, through rule or regulation, that the silk would not be accepted for ship-| ment in the future. Thus the supplement [503] involved a change in the contents of previously filed classification lists, and in a rule or regulation of the carriers.

That "exclusion is not classification" is an arresting but illusory expression. Classification in carrier rate-making practice is grouping, the associating in a designated list, commodities which, because of their inherent quality or value, or of the risks involved in shipment, or because of the manner or volume in which they are shipped or loaded, and the like, may justly and conveniently be given similar rates. To exclude a commodity from all classes is classification of it in as real a sense and with as definite an effect as to include it in any one of the usual classes. To strike artificial silk from the first class and to include it in the "prohibited list" which, for any cause, the carrier refuses to accept as freight, classi

Confirmation of this conclusion may be found in Re Lake-and-Rail Butter & Egg Rates, 29 Inters. Com. Rep. 45. There carriers on the Great Lakes issued a supplement to their tariffs (as was done here), adding to the list of commodities which would not be accepted for shipment, among other articles, butter, poultry, and eggs. This was defended on the ground that such traffic required refrigeration at a cost greater than it would bear. Upon complaint by shippers to the Interstate Commerce Commission that the proposed action was unreasonable, the supplement was promptly suspended, and, upon full hearing, it was held [504] that the refusal to carry such commodities in the past, and the attempt to fortify such refusal for the future by filing tariffs declining in terms to receive them, were unduly prejudicial to the traffic involved, and, the request of shippers for such transportation being held reasonable, an order that it be furnished was authorized.

The contention of the carriers, faintly made, that the common law, and not the Interstate Commerce Act, furnished the measure of their obligation to the public, was promptly overruled by the Commission, informed, as it was, by wide experience in traffic affairs and in the administration of the act.

The importance to the commerce of the country of the exclusive initial jurisdiction which Congress has committed to the Interstate Commerce Commission need not be repeated and cannot be overstated (Texas & P. R. Co. v. Abilene Cotton Oil Co. 204 U. S. 426, 51 L. ed. 553, 27 Sup. Ct. Rep. 350, 9 Ann. Cas. 1075; Baltimore & O. R. Co. v. United States, 215 U. S. 481, 54 L. ed. 292, 30 Sup. Ct. Rep. 164; Morrisdale Coal Co. v. Pennsylvania R. Co. 230 U. S. 304, 57 L. ed. 1494, 33 Sup. Ct. Rep. 938; Minnesota Rate Cases (Simpson v. Shepard) 230 U. S. 352, 57 L. ed. 1511, 48 L.R.A. (N.S.) 1151, 33 Sup. Ct. Rep. 729, Ann. Cas. 1916A, 18; Texas & P. R. Co. v. American

Tie & Timber Co. 234 U. S. 138, 146, 58| ing the fact that the seller of such autoL. ed. 1255, 1258, 34 Sup. Ct. Rep. 885; mobile, who had reserved title to it as Pennsylvania R. Co. v. Clark Bros. Coal security for unpaid purchase money, did not Min. Co. 238 U. S. 456, 469, 59 L. ed. Participate in or have knowledge of the 1406, 1412, 35 Sup. Ct. Rep. 896; and such section invalid under U. S. Const., 14th illicit use by the purchaser, does not render Loomis v. Lehigh Valley R. Co. 240 U. Amend., as taking property without due S. 43, 49, 60 L. ed. 517, 519, 36 Sup. Ct. process of law. Rep. 228); and, concluding, as we do, that this case falls plainly within that jurisdiction, the question asked by the Circuit Court of Appeals must be answered in the negative.

Question answered, No.

Mr. Justice McKenna, Mr. Justice Van Devanter, Mr. Justice Pitney, and Mr. Justice McReynolds dissent.

[505] J. W. GOLDSMITH, JR.-GRANT COMPANY, Plff. in Err.,

V.

UNITED STATES OF AMERICA.

(See S. C. Reporter's ed. 505-513.)

Internal revenue - forfeiture erty of innocent owner.

For other cases, see Constitutional Law, IV. b, 4, in Digest Sup. Ct. Rep. 1908.] Internal revenue - forfeitures.

Rev. Stat. § 3450, in case of the removal 3. The forfeiture provisions of U. S. or deposit and concealment of goods or commodities upon which a tax has been imposed by the United States and has not been paid, are not modified by §§ 3460 and 3461, so as to prevent the forfeiture of interests for which those sections offer protection.

[For other cases, see Internal Revenue, VI. b. in Digest Sup. Ct. 1908.]

[No. 214.]

Argued December 8, 1920.

IN

uary 17, 1921.

Decided Jan

of distilled spirits upon which a tax was imposed by the United States and had not been paid. Affirmed.

The facts are stated in the opinion.

N ERROR to the District Court of the United States for the Northern Disprop-trict of Georgia to review a judgment for the forfeiture of an automobile used in 1. The fact that the seller of an auto- the removal and deposit and concealment mobile, who had reserved title to it as security for unpaid purchase money, did not participate in or have knowledge of its illicit use by the purchaser in the removal or deposit and concealment of distilled spirits upon which a tax was imposed by the United States and had not been paid, will not prevent the forfeiture of his title to such automobile, under U. S. Rev. Stat. § 3450, which provides for the forfeiture of the contraband goods, and of every vessel, boat, cart, carriage, or other conveyance whatsoever, and all things used in the removal or for the deposit and concealment of such goods.

[For other cases, see Internal Revenue, VI. b,

in Digest Sup. Ct. 1908.] Constitutional law

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due process of law

Mr. L. C. Hopkins argued the cause, and, with Messrs. C. T. Hopkins and J. L. Hopkins, filed a brief for plaintiff in error:

Forfeiture of the property of an innocent man for the wrong of another is violative of fundamental rights. The exact language of U. S. Rev. Stat. § 3450, if strictly taken, authorizes such a forfeiture. Therefore 3450 is unconstitutional, unless it can be so construed as not to authorize such a forfeiture. Such a construction is possi

2. Construing U. S. Rev. Stat. § 3450, as authorizing the forfeiture of an auto-ble. mobile used in the removal or the deposit and concealment of distilled spirits upon which a tax was imposed by the United States and had not been paid, notwithstand

Note. On forfeiture of rights or interests of innocent persons in property used in violation of law-see notes to Skinner v. Thomas, L.R.A.1916E, 343, and H. A. White Auto Co. v. Collins, 2 A.L.R. 1596.

As to constitutionality of statutes providing for confiscation or destruction, without notice, of intoxicating liquors, and vehicles or other property used in connection with same-see note to People v. Marquis, 8 A.L.R. 888.

86, 63 L. ed. 493, 39 Sup. Ct. Rep. 214; United States v. Doremus, 249 U. S. Trueman v. 403 Quarter Casks of Gunpowder, Thatcher, Crim. Cas. 14; 36 Cyc. 1107, 1108, 1110, 1111, 1114, 1130. 1144, 1187, 1189; Peisch v. Ware, 4 Cranch, 347, 2 L. ed. 643.

The theory that in these in rem proceedings the thing is the offender and forfeitable, irrespective of the guilt or innocence of its owner, is a worn-out fiction. The circuit courts of appeal still adhere to it in these forfeiture cases. This court should discard this fiction and refuse to regard it.

Boyd v. United States, 116 U. S. 616,

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