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Opinion of the Court.

234 U.S.

NEW YORK LIFE INSURANCE COMPANY v.

HEAD.

ERROR TO THE SUPREME COURT OF THE STATE OF MISSOURI.

No. 255. Argued March 10, 1914.-Decided June 8, 1914.

Decided on authority of the preceding case. 241 Missouri, 420, reversed.

The facts are stated in the opinion.

Mr. James H. McIntosh, with whom Mr. Gardiner Lathrop, Mr. Cyrus Crane, Mr. O. W. Pratt and Mr. S. W. Moore were on the brief, for plaintiff in error.

Mr. Buckner F. Deatherage, with whom Mr. Goodwin Creason, Mr. James S. Botsford, Mr. W. P. Borland and Mr. James A. Reed were on the brief, for defendant in error.

MR. CHIEF JUSTICE WHITE delivered the opinion of the court.

This case is governed by the opinion in No. 254 just decided. The policy sued on was one of the two issued to Richard G. Head in Kansas City, Missouri, in favor of his minor son. It was delivered at Kansas City and the first premium paid there, as in the previous case, and the subsequent premiums were paid in New Mexico. There was borrowed upon the policy by authority of the proper probate court in New Mexico the sum of $2,270.00 under a loan agreement and pledge; there was a default and an adjustment of the policy as in the other case. The case was tried in the court of first instance with the other case, was embraced in the Supreme Court of Missouri by the

234 U. S.

Counsel for Appellant.

same opinion by which the other case was disposed of, and there thus being no distinction between the two cases, for reasons given in the other case, No. 254,

The judgment is reversed.

FLORIDA EAST COAST RAILWAY COMPANY v.

UNITED STATES.

APPEAL FROM THE COMMERCE COURT.

No. 383. Argued January 15, 16, 1913.—Decided June 8, 1914.

The rule that a finding of fact made by the Interstate Commerce Com

mission concerning a matter within the scope of the authority delegated to it is binding and may not be reëxamined in the courts, does not apply where the finding was made without any evidence whatever to support it; the consideration of such a question involves not an issue of fact, but one of law which it is the duty of the courts

to examine and decide. The record does not disclose any evidence justifying the order of the

Commission directing a reduction of rates which had been held to be

reasonable by a prior order of the Commission. In a proceeding against several railroads, testimony as to the condition,

of traffic on certain railroads does not tend to establish conditions or another road in regard to which no testimony is given and where the record shows essential differences between it and those roads in

regard to which the testimony was given. 200 Fed. Rep. 797, reversed.

The facts, which involve the validity of an order of the Interstate Commerce Commission establishing rates on citrus fruits and vegetables from points of production in Florida to exterior points of consumption, are stated in the opinion.

Mr. Frederick C. Bryan and Mr. Alex. St. Clair-Abrams for appellant.

Argument for the United States.

234 U.S.

Mr. Blackburn Esterline, Special Assistant to the Attorney General, with whom Mr. Solicitor General Bullitt was on the brief, for the United States:

The investigations before the Interstate Commerce Commission into the rates on citrus fruits, vegetables, and pineapples from southern Florida to the north engaged the attention of the Commission for a number of years in several separate proceedings to which the appellant was a party. The Railroad Commissioners of Florida, in pursuance of their statutory duty and authority, instituted the present proceedings against all of the railroads in the State for the purpose of unifying throughout the State the gathering rates. The Interstate Commerce Commission, after bringing before it all the records in the previous investigations, gave notice of further hearings and took a vast amount of additional evidence. In all of those investigations the appellant was represented before the Commission by its present counsel, who was assisted by its officers, traffic officials and other agents, and the voluminous records before the Commission consist principally of matter which they offered.

The appellant has stipulated out of the record all of the evidence taken by the Commission in the previous proceedings. It has further stipulated that the court may refer to the reports of the Commission as correct statements of the issues and facts of those proceedings. The statements attributed to counsel and the Commissioner taking the evidence in December, 1909, that the appellant's rates were not involved in those proceedings are not in the present record. The alleged statements are of no consequence or counsel would not have stipulated them out. The absence from the opinion of the Commerce Court, which reviewed fully all of the evidence and the various proceedings before the Commission, of any reference to the alleged statements is conclusive that they were not seriously pressed at the hearing. It is now

234 U.S.

Argument for the United States.

beyond the power of the appellant to shake the presumptions in favor of the validity of the order. Chi., R. I. & Pac. Ry. Co. v. Int. Com. Comm., 218 U. S. 88, 110, 111.

The order is also effective against the Atlantic Coast Line and the Seaboard Air Line companies. During the season of 1910, the Atlantic Coast Line handled 2,901,936 boxes of citrus fruits and 1,500,000 miscellaneous crates; total, 4,401,936. The Florida East Coast handled 669,584 boxes of citrus fruits, 600,000 crates pineapples, and 1,890,000 miscellaneous crates; total, 3,159,584. The Seaboard Air Line handled 780,387 boxes of citrus fruits and 1,391,335 miscellaneous crates; total, 2,171,722. In the volume of traffic handled the appellant stands between the Atlantic Coast Line and the Seaboard Air Line. They appeared before the Commission with the appellant, occupied similar positions, had similar interests at stake, and were accorded the same treatment. Those companies forthwith published the reduced rates and have since maintained them without protest. Neither company joined in the petition before the Commerce Court and, while at all times cognizant of the litigation which would inure to their benefit if successful, neither has ever intervened.

The present order of the Interstate Commerce Commission unified the gathering charges on citrus fruits, vegetables and pineapples throughout the entire State of Florida. The rates from the west coast, traversed by the Atlantic Coast Line and the Seaboard Air Line, are not contested. If the court annuls the present order of the Commission and allows the appellant to restore its former rates, a drastic discrimination will result, and the shippers on the east coast will be at an advantage over the shippers on the west coast.

Appellant's railroad consists of two sections: (1) the line and branches from Jacksonville to Homestead, consisting of 506.47 miles, or the main line; (2) the line over

Argument for the United States.

234 U. S.

the Keys from Homestead to Key West, consisting of 122 miles, or the Over-Sea Extension; total, 628.47 miles. The capitalization of the entire mileage consists of $10,000,000 of first mortgage bonds, $21,000,000 of second mortgage bonds, and $5,000,000 of stock; total $36,000,000; of this, $15,000,000 applies to the main line and $21,000,000 to the Over-Sea Extension. The entire capital stock is and always has been owned by a single individual and no stockholders' meeting was ever necessary to determine his action. The cost of the Over-Sea Extension was approximately $175,000 per mile, or about $21,000,000. The Keys are undeveloped, vegetation will not grow because of blight resulting from the salt water, and there is little or no population. The act of the legislature of Florida authorizing its construction recites that it is desirable and important to the State to secure a fair proportion of the traffic passing through the Panama Canal. It is conceded that the handling of the cars from the north into southern Florida, the loading of the cars, the handling of the citrus fruits, vegetables and pineapples, and the shipping thereof from southern Florida to the north, were not even among the considerations which resulted in the construction to the south of the Over-Sea Extension.

For the year ending June 30, 1911, the net operating revenue from the main line was $1,272,908.19. According to the showing made by appellant that sum would more than pay a dividend of 8 per cent on the capitalization of $15,000,000 for the main line, and would more than pay a dividend of 4 per cent on the total bonded indebtedness of $31,000,000 for the entire system. The ordinary rate of interest on railroad stocks and bonds is less than 8 per cent, and runs from 4 to 5 and 6 per cent. The reasonableness of the rates paid by the growers and shippers of southern Florida, whose freight is transported northward, should not be tested by a return of 8 per cent, or by any per cent, on the fair value of 122 miles of railroad built

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