Opinion · Supreme Court of the United States
Mitchell Coal & Coke Co. v. Pennsylvania Railroad
33 S. Ct. 916
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1913-06-09
- Topic
- general
reasonableness of carrier’s practice of paying certain shippers large rebates allegedly for their services in hauling freight cars from their mine sites to the stations | further action by district court should be "stayed" until the Commission rules on the issue of reasonableness
Citator
- Cited by
- 111 opinions
delivered the opinion of the court.
On November 20, 1905, the Mitchell Coal and Coke Company brought suit in the Circuit Court of the United States for the Eastern District of Pennsylvania against
The parties stipulated that the ease should be submitted to a Referee, who should have the powers of a special master. His findings were in favor of the plaintiff. His report, modified as to the measure of damages, was confirmed (181 Fed. Rep. 403), but before judgment was entered thereon the carrier moved to dismiss the case because the court, as a Federal court, had no jurisdiction of the cause of action until after the Interstate Commerce Commission had passed 'upon the legality of the allowances and the reasonableness of the amount paid to shippers for liauling cars between their mines and the'station. The motion was granted (183 Fed. Rep. 908), and the case was taken by writ of error to the Circuit Court of Appeals, which dismissed the case (192 Fed. Rep. 475) upon the ground that the question could only be reviewed by the Supreme Court of the United States. A writ of certiorari was denied (223 U. S. 733), and the plaintiff thereupon brought the case here by direct writ of error, the "judge certifying the following as the jurisdictional question: •
“Has the Circuit Court of the United States, in advance of any application to'the Interstate Commerce Commission and action thereon by that body, jurisdiction to entertain an action of trespass brought by a shipper of coal*250 and coke to recover damages because of alleged unlawful preferential rates accorded to other and competing shippers of coal and coke, when such alleged preferential rates are claimed to have resulted from payments-made'to such other shippers, which payments the plaintiff claimed were rebates from the published and filed freight rate, and the defendant claimed were made as compensation for services rendered by such shippers or for other accounts which justified it in making the same, and when it further appeared that such payments had been made pursuant to a practice of long standing, and that a number of shippers other 'than the plaintiff were interested in the question of the lawfulness thereof.”
1. The plaintiff’s cau.se of action for damages occasioned by the payment of illegal or unreasonable allowances was one which, under §§ 8 and 9 of the Commerce Act (24 Stat. 382), could only be brought in a District or Circuit Court of the United States. The motion to dismiss challenged the jurisdiction of the court, as a Federal court, and. its power “primarily to hear complaints concerning wrongs of the character of the one here complained of.” Texas &c. Ry. Co. v. Abilene Co., 204 U. S. 426, 442; B. & O. R. R. v. Pitcairn Coal Co., 215 U. S. 481, 495; Robinson v. B. & O., 222 U. S. 506. The order of dismissal was founded on the denial of jurisdiction, and this court has power to review that ruling. Ira M. Hedges, 218 U. S. 264, 270; The Steamship Jefferson, 215 U. S. 130. The case differs from Darnell v. Illinois R. R., 225 U. S. 243. There the Commission had found that the rate was unreasonable. The demurrer, based on the failure to allege that a reparation order had been made in favor of the plaintiff, did not attack the jurisdiction of the court, as a Federal court, since the cause of action sought to be enforced was one which, if properly brought could, under the-act of June 18, 1910 (36 Stat. 539, 554, c. 309), have been maintained either in a state or Federal court.
From the Referee’s report, and the testimony returned therewith, it appears that Clearfield District is the name given to a large coal field reached by the lines of the Pennsylvania Railroad. In this district there were many mines — some near the railroad and others at considerable distances therefrom, but all reached by lateral lines or spur tracks, over which cars were carried to and from the
It further appeared that to these companies the carrier paid what is called a trackage or lateral allowance, claiming that it was compensation allowed them for hauling cars from their mines to the station. The defendant’s contention that there was no concealment of these' payments is controverted by the plaintiff, which insists that it had no knowledge of such payments until 189S, when its officers were informed that the railway was paying some companies 10 cents a ton for such services. The Mitchell Company, the plaintiff, thereupon bought an engine to be used for that purpose at its Gallitzin mine and with this engine hauled cars, loaded and empty, between that mine and the station. For this work it demanded that the defendant should pay the same lateral allowance of 10 cents a ton that the railroad paid other, companies for similar services. The carrier contended that it was itself prepared to do the switching at the Gallitzin mine, though, on account of dissimilarity of conditions, it could not economically do so at the Altoona and other mines referred to in the complaint. . It therefore declined to pay a lateral allowance to the plaintiff, but offered to continue to treat this haul as included in the rate and to do that work without extra charge to the Mitchell Company. The plaintiff then offered to do the hauling for less 'than 10 cents, the exact amount not appearing. The proposition having been declined in 1899, the plaintiff, on November 20, 1905, brought this suit, offering evidence to show that in.some
In addition to the Gallitzin mine, the plaintiff owned five others in the Clearfield District. They were located at points from 1,100 to 3,000 feet from the railroad and were reached by spur tracks belonging to the plaintiff, over which cars were hauled by the locomotives belonging to the Pennsylvania Railroad. For this service the carrier made no extra charge, treating it as included in the rate, though the tariff published the rate as from station- to destination.
The mines of the Altoona, Glen White and MillwoodCompanies were located in the Clearfield District, while those of the Latrobe and Bolivar Companies were-near by in the Latrobe District,
The Millwood was reached by a narrow, gauge track, over which cars were hauled by that coal company’s narrow gauge engines. For doing that work it was paid a lateral allowance of 15 cents a ton until April, 1899, and after that date 10 cents a ton.
The Glen White mine was about three miles from the main road and was reached-by a spur having light rails, steep grades and sharp curves, over which the evidence tended to show that the engines of the railroad could not be safely or economically operated. This company transported the coal cars with its own engine and for doing that work the defendant paid it a lateral allowance of 15 cents a ton. On December 28, 1901 (subsequent to the transactions involved in this,litigation), the carrier gave notice that it would discontinue lateral allowances on coke, but would allow 15 cents per ton on coal.
The Altoona mine was reached by a spur track., over which, with its own engines, the Altoona Company hauled cars and was paid a lateral allowance of 13 cents on coal and 10 cents on coke to points on the Hollidaysburg Branch, and 18 .cents on coal and 20 cents on coke tQ
Inasmuch as- the payments to the Altoona were larger than those to any other coal company, the plaintiff claimed that they were the legal measure by which, damages were to be assessed. The evidence was therefore-specially directed to the situation at this mine, which was a little over three miles in'an air line from the railroad and eight hundred feet above the station level. The grade was, not only very steep, but it was necessary to make use. of three switchbacks in order to reach the elevation of the mine. The line was thus lengthened so as to be about 5 miles in length. The curves on this track were very sharp; the rails were light,, and only specially constructed engines could be used. There was evidence that before the Pennsylvania’s locomotives could have been operated over this spur it would have been necessary to put in heavy rails, strengthen the,culverts and realign the track. Owing to the steep grade only four cars could be hauled at a time, and it required from three to six times as long to do the same amount of transportation work as at the Gallitzin mine.
3. The plaintiff insists that these facts demonstrate that the payments to the Altoona and other companies were not measured by the value of the track or locomotive, or by the cost of the service rendered, but were unreasonable in amount, were arbitrarily fixed, lowered or withdrawn and constituted a mere cover for rebating. On the other hand, the defendant insisted that, though bound to haul the cars to and from the mines,-it could not economically do the work on account of the physical conditions at the Altoona, Millwood and Glen White mines and that it, therefore, employed those companies to perform that transportation service, paying them therefor an allowance
On this hearing, involving a matter of jurisdiction, we cannot pass upon these questions which go to the merits of the controversy But these claims of the parties emphasize the fact that there are two classes of acts which may form.the basis of a suit for damages. Ixi one the legal quality of the practice complained of may not be definitely fixed by the statute so that an allowance, otherwise permissible, is lawful or unlawful, according as it is reasonable or unreasonable. But to determine that question involves a consideration and comparison of many and various facts and calls for the exercise of the discretion of the rate-regulating tribunal. The courts have not been given jurisdiction to fix rates or practices in direct proceedings, nor can they do so collaterally during the progress of a lawsuit when the action is based on the claim that unreasonable allowances have been paid. If the decision of such questions; was cpmmitted to different courts with different juries the results would not only vary in degree, but might often be opposite in character — to the destruction of the uniformity in rate and practice which was the cardinal object of the statute.
4. The necessity under the statute of having such questions settled by a single tribunal in order to secure singleness of practice and uniformity of rate has been pointed out and settled in the Abilene, Pitcairn and Robinson Cases and is referred to here because this record and that in Pennsylvania R. R. v. International Co., ante, p. 184, just decided, furnish a striking illustration of the re-, suits which Would follow if the reasonableness of an allowance could be decided by different tribunals. Both eases involve the payment of 18 cents a ton to the Altoona Company during the same period and for identically the same reasons. In.both the plaintiff insisted that the payment
It is argued that this conclusion ignores §§ 9 and 22, which give the shipper t!,:., option of suing in the courts or applying to the Commission. The same argument was made and answered in the Abilene Case by showing that to permit suits based on the charge that a particular practice was unreasonable, without previous action by the Commission, would repeal the many provisions of the statute requiring ■ uniformity and equality. -For, manifestly, such uniformity and equality cannot be secured by separate suits before separate tribunals involving the reasonableness of a rate or practice. The evidence might vary and, of course, the verdicts would vary, with' the result that one shipper would succeed before one jury and another fail before a different jury, where the reason
There are several answers, to this proposition. In the first place, the plaintiff cannot claim under the act and against it. To say the least, it is .'extremely doubtful whether, at common law, one shipper had a cause of action because the carrier paid another shipper' more than the market value of'transportation services rendered to the carrier. I. C. C. v. B. & O. R. R., 145 U. S. 263, 275. But if any such' right existed it was abrogated or forbidden by the Commerce Act,-and one was given which, as a condition of the right to recover, required a finding by the Commission that the allowance was unreasonable: and operated as an unjust discrimination qr as an undue preference. Texas &c. Ry. v. Cisco Oil Mill, 204 U. S. 449; Texas &c. Ry. v. Abilene Co. 204, U. S. 426, 444; Southern Ry. v. Tift, 206 U. S. 428, 437; United States v. Pacific & Arctic R. R., 228 U. S. 87. Such orders, so far as they are administrative are conclusive, whether they relate to past or present rates, and can be given general and uniform operation, since all shippers, who have been or may be affected by the rate, can take advantage of the ruling and avail themselves of the reparation order. They are quasi-judicial and only prima facie correct in so far as they determine the fact and amount of damage — as to which, since it involves the payment óf money and taking of property, the carrier is by § 16 of the act given its day in court and the right to a judicial hearing (March 2, 1889,-25 Stat. 855, 859, c. 382).
In considering the administrative questions' as to reasonableness, the elements of the problem are the
As t*o past and present practices for allowances, the Commission has the same power and there is the same necessity to take preliminary action. This was recognized in Texas &c. Ry. v. Abilene Co., 204 U. S. 426, where, after considering §§ 8 and 22, relating to jurisdiction and the "statutory and common law remedy, it was said that
The plaintiff insists, however, that all'these reasons are answered by the decision in Wight v. United States, 167 U. S. 512, where the court, without preliminary action by the Commission, held that an allowance paid a consignee for hauling his freight in wagons from depot to warehouse was a rebate and thereupon inflicted the statutory punishment.
But that case did not involve any question of reasonableness of rate or allowance. Nor was the court there called on to indirectly exercise rate-regulating power, but only to pass upon the ..question of fact as to whether, as charged in the indictment, the defendant had paid a secret rebate to a-favored eonsignée. It appeared that the carrier’s published rate of 15 cents included the haul from Cincinnati to the yard in Pittsburg. Neither by its terms, nor by general practice, did that rate include delivery at warehouses in the. city and distant from the railroad tranks. Not having undertaken to furnish free cartage, it was unlawful for the carrier to perform that service for one patron and not for all others. Paying the
6. The plaintiff thereupon insists that even on this view of the case the judgment should be reversed, claiming that- the payments here were of that prohibited character, so that even if the allowance was reasonable in amount, its. payment was nevertheless unlawful because (a) given for a service not included in the rate and (b) not mentioned in the tariff.
Under the Elkins Act of February 19, 1903, 32 Stat. 847, c. 708 (United States v. Chicago & A. Ry., 148 Fed. Rep. 646; S. C., 156 Fed. Rep. 558, affirmed by a divided court, 212 U. S. 563), and under the Hepburn Act of June 29, 1906, 34 Stat. 584, c. 3591 (Victor Co. v. Atchison Ry., 14. I. C. C. 120) it has been held that the carrier must give notice in the tariff of free cartage, lighterage, ferriage, or any other- accessorial service that will be furnished, as well as' of any allowance that will be made to shippers who furnish transportation facilities or service. But the present case is not to be governed by those statutes, but by the law of force between 1897 and 1901, when the transactions complained of took place. At that time the Commerce Act1 required the carrier to give notice of
But although the statute then of force was not construed to require the publication of allowances, their pay
Such undoubtedly it would have , been if naming the rate from station to destination meant that the haul had to begin at the depot building. But neither the statute nor the tariff defines what are station limits, nor do they fix the exact point from which the transportation must begin, nor the territory within which the delivery must be made. These limits necessarily vary with the size of the communities, the extent of the yards, the practice of the carrier and the bounds within which it uniformly receives and delivers freight. This is particularly true in a case like the present, where the Clearfield District was treated as a single shipping point, and where the rate, though named and published as from the station, was universally applied from the mines of the Mitchell Company as well as the other companies named in the declaration and all others located in the Clearfield District.
Inasmuch as this rate included the haul the Railroad was bound to transport the coal from the mouth of the mines, and could use its own engines for that purpose or it could employ the Coal Companies to render that service, paying them proper compensation therefor. In case any question arose as to the reasonableness of the practice, the limits within which the station rates should
That station rates may be applied from mill or mine reáchéd by spur-tracks is recognized by the ruling of the Commission in the Tap Line Cases, 23 I. C. C. 277, where, in dealing with the practice of paying an ^allowance for hauling lumber from sawmills, the Commission said (p. 293):
“In all cases it is apparently the practice of the trunk lines, where no allowance is made, to set "the empty car at the mill and to receive the loaded car at the same point. Indeed, they do this in many cases even when an allowance is made to the tap line." But whenever this service is performed by the trunk line, it is included in the lumber rate and is done without additional charge. In some instances the switch or spur track connecting the mill with the trunk line is as much as three miles long. In other words, by their common practice the public carriers interpret the lumber rate as applying from mills in this territpry apparently as far as three miles from their own. lines.. So far as the ;manufactured lumber is concerned, it may therefore be. said that where a mill has a physical connection with a trunk line and is not more than three miles distant, the transportation offered by the trunk line*265 commences at the mill. If, therefore, a lumber company, having a mill within that distance of a trunk line, undertakes, by arrangement with the trunk line, to use its own power to set the empty car at the mill and to deliver it when loaded to the trunk.line it is doing for itself what the trunk line, under its tariffs, offers to do under the rate. In such a case the lumber company may therefore fairly be said to furnish a facility of transportation for which it may reasonably be compensated under section 15 whether its tap line is incorporated or unincorporated. In other words, the lumber company thus does for itself what the trunk line does with its own power at other mills without additional charge and what it must therefore do for the particular lumber company without, aclditional charge. Under such circumstances we think the lumber company, under, section 15, may have reasonable compensation when it relieves the trunk liné of the. duty. But an allowance under such circumstances is lawful only when the trunk line prefers, for reasons of its own and without discrimination, to have the lumber company perform the service. It is not lawful when the lumber company refuses to permit the trunk line to do the work.” 23 I. C. C. Rep. 277.
In view of this ruling it is apparent that lateral allowances might have been lawfully paid. They became unlawful only when unreasonable. Whether they were so or not was a rate-making question as to which parties' were directly at issue, and which the courts had no jurisdiction to determine so far as it concerned the allowances to the Altoona, Millwood and Glen White mines. Having no jurisdiction, the parties could not by consent give .it to the court, to the judge, nor to the Referee. And if, as claimed, the stipulation to submit the case to the Referee estops the defendant from insisting on the plea of thé statute of limitations, that, with all other relevant issues, can then be determined, if the Commission decides that
7. But the situation of the Bolivar and Latrobe Companies was very different -from that at the Altoona, Glen White and Millwood mines, and a different conclusion must, therefore, follow. The Latrobe’ and Bolivar Companies’ mines were located in the Latrobe District, where the rates to eastern points were about 20 cents higher than from the Clearfield District, except that for a part of the time they were the same, though the shipments were then small by comparison with those from the Clearfield District. During that period the plaintiff •shipped in. competition with the Latrobe and Bolivar Companies. These companies owned no engines, and they hauled no cars between mine and station. That' work was included in the rate, and the Pennsylvania did the hauling with its own- locomotives and crews. It therefore owed nothing to the Latrobe and Bolivar Companies fbr. the service which the carrier itself performed, and the so-called allowance, regardless of the amount, was ■a mere gift — a'-rebate, absolutely forbidden by the statute and ipso facto illegal. Being an act prohibited by law, it was not ■ necessary to have any preliminary decision to that effect by the Commission, but the courts could, as in any other case, apply the law to the facts proven and award damages to the person injured. The decision just rendered in International Coal Company v. Pennsylvania Railroad makes it unnecessary further to discuss this branch of the case. For the court undoubtedly had jurisdiction to proceed with this branch of the case.
The judgment, therefore, must be. reversed in so far as the action is based upon payments to the Latrobe and Bolivar Companies, and affirmed in so far as based upon payments to the Altoona, Glen White and Mill-wood Companies. But owing to the peculiar. facts of this case, the unsettled state of the law at the time The
Affirmed and 'modified in part, and in part reversed.
Sec. 6. . . . The schedules printed as aforesaid by any such common carrier shall plainly state the places upon its railroad between which property and passengers will be carried, and shall contain the classification of freight in force . . . , and shall also state separately the terminal charges and any rules or regulations which in
And when any such common carrier shall have established and published its rates, fares, and charges in compliance with the provisions of this section, it shall be unlawful for such common carrier to charge, demand, collect, or receive from any person or persons a greater or less compensation for the transportation of passengers or property, or for any services in connection therewith, than is specified in such published schedule of rates, fares, and charges as may at the time be in force.
Every common carrier subject to the provisions of this act shall file with the Commission hereinafter provided for copies of its schedules of rates, fares, and charges which have been established and published in compliance with the requirements of this section, and shall promptly notify said Commission of all changes made in the same. Every such common carrier shall also file with said Commission copies of all contracta, agreements, or arrangements with other common carriers in relation to any traffic affected by'the provisions of this act to which it may be a party.”' (Act of February 4, 1887, 24 Stat. 379, 380, 381.)