PARSONS V. CHICAGO & N. W. RY. CO.
903
PARSONS v. CHICAGO & N. W. RY. CO. (Circuit Court of Appeals, Eighth Circuit. September 24, 1894.) No. 407.
1.
INTERSTATE COMMERCE ACT-REASONABI,E RATE-UNDUE PREFERENCE.
Two connecting carriers united in putting in force a joint through tariff between given points. Held, under sections 3 and 4 of the interstate commerce act, that such joint tariff was not the standard by which tlIe reasonableness of the local tariff on either line was to be determined, and that the fact that a railroad company charged a local shipper more for transporting property between two points on its. road than it charged for the same services when the property transported was received from aeonnecting railroad, and was carried under a joint tariff established by the con.necting carriers, did not establish the charge of an undue preference or discrimination. Railway Co. v. Osborne, 3 C. C. A. 347, 52 Fed. 912, 10 U. S. App. 430, and Tozer v. U. S., 52 Fed. 917, followed. The C. & N. W. Ry. Co. operated a line of railroad from Chicago to a point in Iowa at which it connected with two roads controlled by it, extending to points in Nebraska. Said company Issued a freight tariff headed "Joint Tariff on Corn and Oats ion Car Loads to R., Illinois, When Destined to New York, Boston, &c.," giving certain rates from points in Nebraskll., and referring, for rates from R. to New York, etc., to a preVious tariff. P. sued the railway company for damages. alleging that while this tariff was in force he was required to pll.y a higher rate for shipments over defendant's road from points in Iowa to Chicago than the rate given from Nebraska poi,nts to R., though for a shorter distance; that the fixing of Ras a terminus was a device to evade the law, R. not being a grain market, and the grain being in fact transported to Chicago; that a brother of defendant's freight agent was interested in the grain business in Nebraska; that the tariff for Nebraska points was not made known in Iowa, and the tariff sheet was not filed with the interstate commerce commission; and that the charge to plaintiff was unlawful because an undue preference was given to Nebraska shippers, and a larger charge made for a shorter than a longer haul; also, that defendant, in combination with other companies, had made a through rate from Nebraska points to eastern ports. less than plaintiff, paying local rates to Chicago, and tlIence to the East, was obliged to pay, no through rates from Iowa points being made; and that an unlawful discrimination was thereby made against Iowa shippers, and the long and short haul clause yiolated. Held, on demurrer, that nocauseof action was stated, since the freight tariff pleaded showed that it was part of a joint through rate, and such a rate is not the standard of reasonableness of a local rate, while the other allegations were eithE;l' immaterial. or insufficient to establish the unreasonableness of the rates or a violation of law.
2.
SAME-SUFFICIENCY OF COMPLAINT.
In Error to the Circuit Court of the United States for the Southern District of Iowa. This was an action for damages founded on the provisions of the act of congress of February 4, 1887, commonly called the "Interstate Commerce Act" (24 Stat. 379). Plaintiff in error, E. 1\1. Parsons, was the plaintiff in the trial court. 'rhere were fiye counts in the declaration. The first of these counts contained, in substance, the follOWing allegations: That the defendant corporation, the Chicago & Northwestern Railway Company, is a common carder of freight and passengers, and operates a line 0:' railroad extending from the city of Chicago, Ill., to Missouri Valley and Council Bluffs, in the state of Iowa; that it also owned the majority of the stock, and, by the same general officers and board of directors, controlled and operated two other railroads, to wit, the Fremont, Elkhorn & Missouri .. alley Railroad and the Sioux City & Pacific Railroad, which latter roads connected with the Chicago
904.
FEDERA.L REPORTER,
vol. f)3.
& Northwestern RaUwayat Missouri Valley, and e.,tended westwardly from
that point to points in the that in :B:ebruary, 1888, the plaintiff was ashipperof corn, residing in the'state onowa, and had accumulated a large amount pf corn, for to Chicago and eastern cities, at various stations in Iowa along the line of the defendant company's railroad. particularly at a place called Carroll in said,state, which was 395 miles west of Chicago; that previous to December 30, 1887, the freight rate on corn and shipJ.}edfrOIIl Nebraska points over the aforesaid railroads to Rochelle, IlL, andth '()hicago, Ill., had been higher than on shipments fl'om Iowa points to thesafrie places, because the distance was greater, and the cost of carriage greater;' 'that on December 30; 1887, the defendant company, acting In concert with one K.O. Morehouse, who was the general freight agent of the Siom:Oity & Pacifl,c RailroadllJlldof the Fremont, Elkhorn & Missouri Valley Haih'oad,' put in force from points in the state of Nebraska a certain freight tariff'llP<)l1corn and oats; lu,thewords and figures following, to wit: "'Chicago and Northwestertl";Itailway, Fremont,Elkhorn & Missouri Valley and'Si(>uxCity an4 PacifiCtt!Ulway.' Joint Tariff on ,Corn and Oats, in Car Loads.' TakIng effect December 30, 1887, to Hochelle, ;1l1., when destined to New York, Boston, Philadelphia, Baltimore." From Per ]00 Ibs. Blair. Neb ,' .', .. ·. .. ·· .. .. · .. .. . · . ··· ·· ·· ·. ·· .· .. 11 Kennard, Neb ····.·· , .·· '.:'··'.···.·... '. ..·....·....·· '" ·.··...... " 11 [Here follow rates from many other Nebraska points to Rochelle, TIL] "Prepaid. Waybill through to Rochelle, TIL, via Missouri Valley, at rates given above. For rates from Rochelle to Baltimore, Philadelphia, New York, and Boston, see C.& N. W. G. F. D. No. 2604, November 25, 1887, amendment1!orsubsequent issues. ' H. R. McCullough, "K. a.Morehouse, G. F. A., C. & N. W. R. "G. F. A.,S. C.& B,. and "F.jE.& M. V. Rs." The declaration further averred that said freight tarift' was r.ever printed in type;>6\' published at any of the defendant's railt'Oad ;;tations in Iowa; that no copy: thereof was filed with the intt'rstate commerce commission, and that knowledge thereof was concealed trom the plaintiff and other Iowa shippers; that said tariff remained inforM until February 1, 1888, and that in the meantime large quantities of corn and oats were shipped thereunder from Blair iwd Kennard, Neb., to Rochelle, Ill., and thence to Chicago, at the rate specified therein,. to wit, 11 cents pel' 100 pounds; that during the same period the plaintiff had a large amount of corn at Carroll, Iowa, for shipment to Chicago,' which he was, co!npelled to ship over the defendant's railroad, and did, so ship it to Chicago, paying therefor freight charges at the rate of 19 cents per hundredweight for carrying the same 395 miles, the distance from Carrcllto Chicago, which was somewhatless than the distance from Blair and Kennard, Neb., to Rochelle, Ill. The plaintiff further averred that the fixing of the point Rochelle' as the terminus of the route under the aforesaid special tarift' issued December 30. 1887, was a mere device to evade the law, as Rochelle was not a grain market, and had no elevators, and that said grain was intended to be, and was in fact, transported by the defendant to Chicago; TIl., and was there sold on the market, or delivered to connecting roads for eastern seaboard points;' that the charge of 19 cents per 100 pounds, which the plaiutiffw,l\S compelled, to pay for transporting corn fl'OlU Carroll, Iowa, to Chicago, was an unlawful Cb,arge, under the interstate commerce act, such as entitle(l plaintiff to recover damages, because an unlawful preference was thereby given to Nebraska shippers over Iowa shippers, and MSO because, a greater compensation was demanded for a shorter than a longer halli, the shorter haul being included in. the longer. The first count of plaintiff's declaration illsocontained an lHlegation that K. C. Morehouse, who was the general freight agent of the two roads extending into Nebraslm, had a brother, who, in January and February, 1888, was a copartner with persons who owned large quantities of corn at points in Nebraska on the line of Fremont, Elkhorn & Missouri Valley Railroad. The second, third, and fourth counts of the plaintiff's declaration were the same, in substance, as the first
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PARSONS V. CHICAGO &: N. W. RY. CO.
905
count, except that the plaintilI therein claimed damages on account of shipments of corn from other Iowa points to Chicago, which he had made between the 30th of December, 1887, and February 1, 1888. The fifth count of the declaration char.ged, in substance, that the Chicago & Northwestern Railway Company, combining with said K. C. Morehouse and other railroad companies operating roads east of Chicago to give a preference to grain shippers in Nebraska, and to discriminate against grain shippers in Iowa, did put in force on February 17, 1888, at all stations on the Fremont, }t)jkhorn & Missouri Valley Railroad in Nebra.."lka, between Blair and Skull Creek, a freight tariff on corn and oats destined to New York and othE'r seaboard points, whereby it did between February 17 lind March, 1888, transport corn and oats from said Nebraska stations to New York for cents per hunareo.weight, and to Philadelphia for 34lh cents, and to Baltimore for 331,6 coots; that all of said Nebraska points were further from New York, Philadelphia, and Baltimore than the stations on the defendant's road in Iowa; that the through rate so established for said NebraSka points was not established for Iowa points on the line of the defendant's road, or made known to Iowa shippers; that the tarilI sheet in question was not filed with the interstate com· merce commission, or printed or published as required by law; that during the period in question, from February 17 to Marcil. 1888, the plaintiff was compelled to pay on corn by him shipped from Carroll, Iowa., to New York, via Chicago, a local rate to Chicago of 19 cents per hundredweight and from there to New York of 27% cents, making a total of 46% cents per hundred· weight, as against a rate of 36% cents per 100 allowed to shippers residing at the aforesaid points in Nebraska. The plaintiff averred, in substance, that the establishment of this' latter rate was an unlawful discrimination against Iowa shippers, as well as a violation of the long and short haul clause of the interstate commerce act, by virtue of which he had sustained damages in the sum of about $1,000. The defendant company demurred to the declaration, as a whole, on the ground that the several counts of the declaration each showed that the rate complained of therein from Nebraska points to the seaboard was a joint rate established by two or more connecting railroads, while the rate exacted of the plaintiff was a local rate for shipments wholly upon the defendant company's own line, and that the rate so exacted from the plaintilI, it being a purely local rate, was not rendered unlawful by the establishment or existence of the joint through rate. The trial court sustained the demurrer, and the plaintilI declined to plead further, whereupon final judgment was entereq. in favor of the defendant. To reverse that judgment the plaintiff sued out a writ of error.
C. C. Nourse (C. L. Nourse, on the brief), for plaintiff in error. Lloyd W. Bowers (N. M. Hubbard, on the brief), for defendant in error. Before CALDWELL, SANBORN, and THAYER, Circuit Judges. THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. This court held in the case of Railway Co. v. Osborne, 10 U. S. App. 430,3 C. C. A. 347, and 52 Fed. 912, which suit grew out of the establishment by the defendant company of the same freight rate that gave rise to the present action, that, where two connecting carriers unite in putting in force a joint through tariff between given points, such joint tariff is not the standard by which the reasonableness of the local tariff on either line is to be determined. It was decided that, where two connecting carriers unite in a joint tariff, they form practically a new and independent line, and that the joint rate established over such line may be made less than the sum of the local rates, or even less than the local rate of either company over that part of its road constituting a part of the joint
906
IJ'llDERAL. REPOMER,
vol. 63.
the long midishol't haul clause found in the ,(jfthe,interstate'commerce law. The court was carefultoUn;J:it the foregoing proposition by the proviso that, under the first section of the interstate commerce act, all rates, whether localotjoint,must be "reasonable and just.". But it distinctly overruled the a. local rate between two points on the road is necessl:l,J:ily lmlawful because it is higher than the rate charged under a joint tariff for a much longer haul over a line whichiscotnposed in part of that portion of the road to which the local rate applies. In the case of Tozer v. U. S., 52 Fed. 917, it was also decided, that the fact that a railroad company charges a local shipper more for' transporting property between two points on its road than it charges for the same services when the properj:y transported., is received. from a' connecting railroad, and is carcl.ed under ·jpint tariff ,established by the connecting carriers, is: insufticientevidence to establish the charge of an undue preference or discrimination under the third section of the interstate cotqmerce act. The court remarked, in substance, that it did not lind tbt a. jury was. not warranted in finding, that an undue preference or, advilntage ,bad been given, because the local I'atewas iIl excess of 'the carrier's share of the joint rate. While this S. was made by the circuit court, it is to be noted in ,that the case was bl'onghtto the circuit court .on 'writ of error from the United$tates district court, and that the 'case was heard and determined in the circuit court by Mr. Justic¢,Brewerat¥ Judge CaJdwelI, both of wliom had taken part in the decision of:tl,le case of. Railway 00. v. Osborne, above cited. Moreover, both cases were under advisement, and the opinions at about the same time. Accepting the views, thus expressed. as sound, .and without undertaking to reconsider questions which ,have already been qectlled by this c.ourt after full conliliqeration, we turn to consider the various points 0.1"g'Ued by counsel, bearing on the general questfon involved in the present suit, whether the petitio-Ii. filed therein stated a cause of action. The first,· and perhaps the most important, contention of the plaintiff in error, seems to ,be that the petition does not allege or otherwise show, as was assumed by the demurrer, that on December 30, 1887, the defendant company, acting in concert with other connecting railroad companies, had put in force a joint through tariff between certain Nebraska points and the city of New York and other eastern cities,and that it does not show that the rate of 11 cen,ts per .100 from Blair and Kennard, Neb., to Rochelle, TIl., was a pll:l"tQf$uch joint through rate to the seaboard. It is said that the;J?etition shows affirmatively that the tariff established on December'30, 1887, was a tariff to Rochelle, Ill., only, and that the only pa:Hiesto it werethe Chicago & Northwestern Railway Company, the Fremont, Elkhorn & Missouri Valley Railroad Company, and the Sioux City & Pacific Railroad Company.. With reference to this contention, it is to bEfQbsetved that the tariff sheet of December 30, 1887, set forth in the at bar, was
PARSONS
v.
CHICAGO &
W.RY,t:O.
907
before this court in the case of Railway Co. v. Osborne, supra, and that it was there found and determined that by an agreement between the defendant company, the Fremont, Elkhorn & MisSQuri Valley Railroad, the Sioux City & Pacific Railroad, and certain eastern companies, a joint through rate from certain Nebraska points to the seaboard was in fact established and put in force. It is true that in the case last cited we had before us other evidence than the tariff sheet of December 30, 1887, which may have somewhat in reaching the conclusion last stated; but we think that the tariff sheet itself, which is set out in the petition, sufficiently shows that an arrangement or agreement existed between the several companies last named, whereby corn and oats were to be carried through from the Nebraska points named in the tariff sheet, to the eastern cities therein named, at a certain specified rate, and that the rate of 11 cents per hundredweight from Blair and Kennard, Neb., to Rochelle, Ill., was a part of such joint through rate and not a local rate. The caption of the tariff sheet shows that the rate of 11 cents per 100 only applied when the grain was destined through to New York, Boston, Philadelphia, and Baltimore; and the memorandum at the foot of the sheet shows that the total through rate was to be ascertained by the company's agents by consulting the tariff sheet of No"ember 25, 1887, and subsequent issues, for the rate from Rochelle to the eastern cities specified in the schedule. The inference is dear and irresistible that a specific joint through rate from the Nebraska points named in the :tariff sheet to the seaboard had been established by the seve eral companies above mentioned on December 30, 1887; that shippers of corn and oats from said points to the seaboard points named had the right to avail themselves of the joibtthrough rate; and that the 11-cent rate from Blair and Kennard to Rochelle was only applicable to such through shipments. Nor are we able to hold that the inference above stated, arising from the language of the tariff sheet, is sufficiently rebutted by the allegation of the petition, above recited, that "the fixing of said point, Rochelle, as the terminus of the route under the special tariff sheet of December 30, 1887, was a mere device to evade the law," etc. No facts are averred, showing that the agreement for a joint through rate, indicated by the tariff sheet in question, was merely colorable; that no such agreement was ever made or acted under; and that the station agents along the line of the roads in Nebraska had received private instructions to disregard the direction to only allow the rate specified in the tariff sheet on through shipments to the seaboard. Without some such allegations as these, showing that no agreement was by the several carriers for a joint through rate, or that the directions contained in the tariff sheet were secretly recalled and were not observed, we can attach no importance to the charge that it was a mere device to evade the law. That alle· gation, ,standing by itself, and without the averment of facts to support it,· is a mere conclusion of the pleader. Nor do the facts stated in that connection-that Rochelle was not a grain market; that the grain was not transshipped at Rochelle, but was carried
908
REPORTER,
vpl. 63.
road t9Chicago, and was there delivered to connecQng roads for eastel':Jl seaboard points-serve to' SUP" port it; .for conceding that it wal!! so c/Wried through to Chicago, and there to the other connecting carriers, it may never· theless have been carried on ,a joint thrOllgh rate gjven tothe Nebraska shippers., such as the tariff sheet indicates. In other words, the facts pleaded do not sUbstantiate! the charge that the pretended tariff agreement of December ·30, 1887, "was a mere device to evade the laW." We must accordingly conclude that the petition does shQW the establishlllent and existence of a joint through rate, such as is assumed by the demurrer, and that the H-cent rate accol,'ded to Nebraskl:!o shippers was not a local rate, such as was paid by the plaintiff in erroJ.', but was a portion of the joint through rate. If such was not the meaning of the pleader, the fault lies with him, in failing to make his complaint more defi· nite. Other allegations found in the petition, to which our attention has been particulary directed by counsel for the plaintiff in error, on the ground that they aid matel'ially in tbe!!ltatement of a cause of action, are these: That freight agent of the Nebraska roads, whose signature is to the rate sheet of December 30, 1887, had a brother, whq was a copartner of the owners of large quantities of grain in Neb,raslta, and that the rate sheet of December 30, 1887, was not filed<with the interstate commerce commission, and was not published at Iowa stations on the defendant's road. Of the first of these allegations little need be said. It is not averred that the special tariff was put in force merely to favor a brother of, the general freight agent in question; neither does it follow, as.aD;latter of law,that the rate sheet in question was purely fictitious and colorable,and that no joint through rate was in fact established, or, if it was ef'ltablislled, that Iowa shippers were discriminated agf,linst, merely because K. O. Morehouse, the general freight agent of the Nebraska roads, had a brother, who was interested in corn and oats in Nebraska. We can attach no importance to this, allegati()n, because it is wholly immaterial and irrelevant. Concerning the fact that the tariff sheet of December 30, 1887, ",as not at the Iowa stations, it will suffice to refer to what was, saJ.d on that. subject:Qy Mr. Justice13rewer in delivering the . opinion of this court in .Railway Co. v. Osborne, heretofore cited. The claim is. not made,. as we understand, that the ,defendant company can,not take advantage of the fact. that the ;iI-cent rate froin Blai,I; ap4 Kennard to Rochelle was in reality, and as shown by the petition, a partQf a joint through rate, merely because the tariff of Decelllber30, 1887, was not 'with the interstate commissi.Qn. The purpose of the whole allegation the and, of the rate sheet in toslrow,that there was an actual intlle defendant cOmp@yto discdminate against tent, on Io)Vf;l, PUit it matters not wb.at its ,intent may· 'Mve been, act:9ow.w.itted, was not an illegal discriminatiollj though
909
intended as such. As the law stood when the transaction took place, the interstate commerce commissioners undoubtedly had the right to determine whether they would make public such agreements between railroad companies, and such joint tariff sheets, as were filed with them pursuant to the provisions of the sixth sec· tion of the act. Its language is: "Such joint rates, fares and charges on such cOIIltinuous lines so filed as aforesaid shall be made public by such common carriers wben directed by said commission, in so far as may, in the judgment of the commission, be deemed practicable; and such commission shall from time to time prescribe the measure of publicity which sball be given to such rates, fares and charges. or to sucb part of them as it may deem practicable for such common carriers to publish."
We are unable to say, therefore, that a complaint otherwise clearly insufficient is made good by a single allegation of the nonfiling of the rate sheet, which was evidently inserted for the purpose of developing the intent of the defendant company, and for no other purpose, so far as we are advised. The only other proposition advanced in the argument which we deem it necessary to notice is this: It is said that as the complaint made in the case of Ra:ilway Co. v. Osborne was for a violation of the long and short haul clause of the statute, whereas the petition in the case at bar also ('ounts upon a violation of the third section of the law, therefore the latter case is not ruled by the former. Of this contention it may be said that, while the present petition does charge an unlawful discrimination against persons and places, yet the only material fact averred to support the accusation is the fact that the defendant charged a local rate of 19 cents per 100 for hauling grain from Carroll to Chicago, while 11 cents per 100, being its proportion of a joint through rate to the seaboard, was the sum received by it for hauling grain a longer distance, from Blair and Kennard to Rochelle, which latter point was a station on its road intermediate between Carroll and Chicago. It is manifest that the alleged disparity between the local rate and the defendant's proportion of the joint through rate is not 'sufficient, as a matter of pleading, to establish the charge of an "undue or unreasonable preference or disadvantage," under the third section of the act, unless it follows, as a matter of law, that because of the alleged disparity in the two rates an undue or unreasonable preference was given to persons and places. Now, in the case last above cited it was ruled, as we have heretofore stated, that if "two companies make a joint tariff over their lines, or any parts of their lines, such joint tariff is not the basis by which the reasonableness of the local tariff of either line is determined." More pointedly it was said in Tozer v. U. S., where the sole question was one of undue preference and discrimination under sec· tion 3 of the act, that, "if the joint through tariff of the two con· necting roads is not a standard by which the local tariff of either can be declared in violation of section 4, neither can it be the standard by which. the question of undue preferences is determined under section 3," and that the principle announced in the case of
910.
"DEULREPORTEB,
vol.G3.
RaUWlJiyCQ. v. OsbornEt; control;the decision. the case tlien in both pf the cases last tll.:banch In. other wqr,qs, it was question of, ,ndue discrbnination Inust be determined by the disparity that may exist between. AI. b)cal,rate anQ a jointthro;ugh rate,and that it never follows, as a matter of law, that an undue; has been person or a disparity is shown to exgiven ist a local rateilnd a We J1lust overrule:the last-mentioned contentlQlu>f counsel, tllat the petition in the case at bar stated,' a cause of 'action, ,notwithstanding the previot1shtJings of thIs' in. the case. he'te'tofore cited. In 'corictusion, it is dnl{necessal1'to 'add: thai we have reviewed all of the points to which our attention has been invited by counsel for' plaiillMffin' elTOr, with a viewohho#ing,th:ati the petition stated a cause! ot'action, with 'the result;that'weare notable to say that the counerredinsustalning'the demurrer. Its judgment is,theiefGl'e'a:ftlrmed. I '
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27; 1866 (14 'Stitt. 292); gl'ltiitlng a raill'&t:d'rlght of way over 'publ14l land> as to which no pro-vision is made fOr Jissuing evidence of to t4l'l,raJll'oad various SeCdo,ll!l, f;lf l>ubllcland, f(jr, which ,s.lJ:ue,olt, does not carry the fee, to tb.e rlgb.t but on1y RaHway Co. v. 14 Sup. Ct. 49Gj 152 U. S. 114,explalned. Act COMPETING . . : . DXSCRIMINATING
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A which is a eoml1lon carrier, but, by the act ifi:corporating It. (Act July 27,1$66),.1s declared to be a post route and mUltary cannot make a vn,Ild contract with a telegraph company on .the rlight of way not to furnish facilities for the construction of a C9mpetiDgI.,llne; and it ,ca,qI/.ot, therefore, carry and distribute the construej;j.on of such Une.
InteI'Venti6n by the 'POstal Telegraph Cal:lleOompany in the suit' of the Mercantile Trust Company against thEVAtlantic & Pacific . Railroad Company. For former report, see 63 Fed. 513Lamme &."Wilde andF. J. Loesch,for intervening petitioner. L. M. Estl!prook B., Carpenter, for Western Union Tel. Co. ruling, uppQthe'demurrer to the inCompany adjudged' W line ,Rt and along the ,3ight of war Qt .the.f\.tlMlt1P 8{, PaclflQ Railroad Company tlieNeedlea.andMojafe" iq Hils' judicial district, if such :tl,C)ne with.out lqterference withtb,e.llse of the right of way: I"fLilroad company for ordinary ... The for were' state<} th.eopipioii fl,led by the c()llrt at Postal " " ,_ .' ," :. '. ' ", . , ". " "I '. .". ., : " '; ,