December 31, 1924, respondent sued petitioner and the Pittsburgh, Cincinnati, Chicago & St. Louis Railroad Company, called the Panhandle, in the circuit court of Cook county, Ill., to recover reparation awarded by the Illinois Commerce Commission on the ground that they collected from respondent unreasonable and discriminatory charges for intrastate transportation of brick from Bernice, Ill., to places within the Chicago switching district. January 1, 1921, the Pennsylvania Railroad Company, through lease, obtained control of the Panhandle. The court gave judgment against the Pennsylvania for $44,428.09. That amount includes reparation, interest, and attorney's fee. The reparation adjudged is in respect of transportation on the Pennsylvania between October 28, 1920, and February 16, 1922, including that on the Panhandle after acquisition by the Pennsylvania. Petitioner appealed directly to the State Supreme Court, and there sought re ersal on the ground that, as later to be specified, the reparation order is repugnant to the Interstate Commerce Act (49 U.S.C.A. § 1 et seq.), an order of the Commission, and the Constitution of the United States. After hearing argument, that court, being of opinion that the case had been erroneously appealed to it, directed transfer to the Appellate Court. There the judgment was affirmed; the Supreme Court denied a writ of certiorari.
First for consideraton is a question raised by the answer and decided by the Appellate Court, the highest court of the state in which a decision could be had. 28 U.S.C. § 344(b), 28 U.S.C.A. § 344(b); Chicago, R.I. & P.R. Co. v. Perry, 259 U.S. 548, 551, 42 S.Ct. 524, 66 L.Ed. 1056; Home Ins. Co. v. Dick, 281 U.S. 397, 407, 50 S.Ct. 338, 74 L.Ed. 926, 74 A.L.R. 701; Minneapolis, etc., R. Co. v. Rock, 279 U.S. 410, 411, 412, 49 S.Ct. 363, 73 L.Ed. 766; Chesapeake & O.R. Co. v. Mihas, 280 U.S. 102, 104, 50 S.Ct. 42, 74 L.Ed. 207. That question is whether the Illinois statutes under which the state commission acted and its order awarding respondent reparation are repugnant to the Interstate Commerce Act and the order of the Interstate Commerce Commission providing for the intrastate rates that became effective February 19, 1921, and continued in force until February 16, 1922, in respect of which the state commission made its award.
The Chicago switching district is a large area in and near that city; it extends into Indiana, but by far the larger part is in Illinois. A number of railroads, including the Pennsylvania and the Panhandle, extend into the district, and conduct within it transportation of brick and other commodities in intrastate and interstate commerce. There are many brickyards in the district and elsewhere in Illinois. Re pondent has several in the district and two at Bernice in Illinois, outside, but close to, the district. One of them is located on the Pennsylvania, and the other on the Panhandle.
For a long time prior to federal control of railroads which commenced January 1, 1918, and up to June 25 of that year, the rate applicable to interstate and intrastate transportation of brick, by the Pennsylvania and Panhandle, respectively, from Bernice into the district and between points within the switching district, was 25 cents per ton.
June 25, 1918, the Federal Railroad Administration, by General Order No. 28, increased rates on brick by 2 cents per hundred pounds. November 8, 1918, Freight Rate Authority No. 1887 substituted an increase of 25 per cent. for transportation within the district. These changes operated to make the rate from Gernice into the district 70 cents and that between points within the district 30 cents per ton.
The Transportation Act (of February 28) 1920, § 208(a), 49 U.S.C.A. § 76(a), directed that existing rates should obtain until changed by federal or state authority or pursuant to authority of law.
March 10, 1920, respondent complained to the Interstate Commerce Commission that the 70-cent rate was unreasonable and discriminatory. The Commission made its report and order October 27, 1921, the pertinent substance of which is given below.
July 29, 1920, the Commission authorized increases applicable to interstate traffic of 40 per cent. and 35 per cent. respectively, in Eastern and Western groups and 33 1/3 per cent. on intergroup transportation. Exparte 74. August 10, the Illinois commission authorized a general increase of 33 1/3 per cent.
August 11, the Interstate Commerce Commission ordered that Illinois territory be treated as within the Eastern group for the purpose of applying the authorized increase of 40 per cent. in the rates on interstate traffic between points in that territory.