This is a suit in equity1 brought by appellants against the United States to set aside and permanently to enjoin the enforcement of an order of the Interstate Commerce Commission based on its report made July 3, 1933, and modified in accordance with its report of January 8, 1934.2 The Commission July 10, 1928, had prescribed rates on citrus fruit3 from places of production in Florida to points in Official Classification Territory.4 The order here in controversy prescribes divisions as between southern carriers hauling from Florida to Richmond, Va, and other gateways and northern carriers hauling to destinations and prescribed adjustment to be made by the latter.5 The Boston & Maine and other northern carriers intervened as parties plaintiff. The Commission and the Atlantic Coast Line and other southern carriers intervened as parties defendant. The complaint assails the order upon the grounds that it is based on a misconstruction of the act and is confiscatory. The case was tried by three judges. In addition to the evidence given before the Commission there were offered and received at the trial the testimony of many witnesses and much documentary evidence. The court held plaintiffs not entitled to relief dismissed the case. They appealed.
The history and structure of the joint rates shed light on questions to be decided. June 25, 1908, the Commission found the rates, called 'gathering rates,' from places of shipment in Florida to junctions in the northern part of that state reasonable, but that the charges for transportation from the junctions to the north were unreasonable. It prescribed 'proportionals' which were added to the gathering rates to make joint rates applicable over through routes to destinations. Included in the proportionals were stated amounts, called 'specifics,' per box of estimated weight of 80 pounds to cover hauls beyond the gateways. These specifics went to the northern l nes and constituted their share of the joint rates.
In 1915 the Commission allowed the carriers in official territory a general rate increase of 5 per cent. and in 1917 granted an additional 15 per cent. These increases were applicable generally to interterritorial hauls. The specifics for northern lines were not advanced. In 1918, while the carriers were under federal control, the director general raised rates 25 per cent. The divisions to the southern and northern lines were increased by that ratio. In 1920, after the railroads were returned to their owners, the Commission grnated to carriers in the southern group a general rate increase of 25 per cent. and to those in the eastern group, which included the northern lines here involved, an advance of 40 per cent. It also authorized charges for interterritorial hauls to be raised by 33 1/3 per cent. While that was enough to increase the southern carriers' shares by 25 per cent. and those of the northern lines by 40 per cent. in harmony with the respective rate increases, each group of carriers received divisions raised by 33 1/3 per cent. The northern lines emphasize the fact that if their divisions had kept step with rates in that territory they would have been increased four times whereas in fact their divisions did not share at all in either of the first two advances and only partially in the fourth, i.e., 33 1/3 instead of 40 per cent.
The joint rates prescribed by the Commission's order of July 10, 1928, were specified amounts per 100 pounds. The assumed weight of 80 pounds per box to which were applied the specifics to cover hauls of the northern carriers was too low. While the Commission failed definitely to find actual average weight per box, its report distinctly indicates that it was about 90 pounds. After the taking effect of the new rates the northern lines in trunk line and New England territories took, out of the freight charges they collected, and retained as their divisions per 100 pounds 25 per cent. more than the specific per box. The northern lines in central territory adopted 90 pounds as the basis on which to make conversion of the rate per box to rate per 100 pounds. The increase was slightly over 11.1 per cent.