St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1894-05-08
RAILROAD POOLING VOID.
SUCH c0hTRscTS DECLARED AGAINST
PUBLIC POLICY
DIV THE COURT OF APPEALS.


tract Cannot Be Enforced
Railroads Are Quasi Public
Corporations-Obj of Pool.
ing Is to Raise Rates.
Judge Caldwell, of the United States
circuit court of appeals, yesterday hand
ed down decision. at the opening OF
the term of that court in st. Paul, that
gives severe setback to railroad pool
ing. The court holds that railroad-pool-
Ing contracts are void, as being against
public policy. The decision is here
given in full:
The Chicago, Milwaukee & st. Paul
Railway Company, appellant, VS.. The
Wabash, St. Louis Il Pacific Railway
Company. Appeal from the circuit
court of the United States for the East
ern district of Missouri. Affirmed.
Opinion by Caldwell. circuit judge.
In 1883 contracts providing, among
pther things. for a pooling and division
of competitive traffic were entered into
by aud between seven railroad CON-
panirs. to wit: The Union Pacific; the
Chicago, Rock Island IL Pacific; the
Chicago. Milwaukee u st. Paul; the
Wabash. ST. Louis u Pacific; the CHI
caHo x Northwestern; the Chicago, ST.
Paul, Minneapolis u Omaha, and the
Missouri Pacific.
1.-The pooling and division OF traffic
Intended by the contracts we're to be
Accomplished, SO far as might be, by
physical division of the traffic itself be
tween the companies i'll certain fixed
proportions, and where this was not or
could not be done. it was to be accom-
plished by pooling and division of the
gross earnings of such traffic between
the companies in such fixed proper
tions. The contract was to continue for
twenty-five years.
..ln the course OF business under the
contracts the traffic involved was not
actually divided between and carried by
the companies i'll the proportions fixed,
but the Wabash, st. Louis q Pacific
Railway company, smong others, actu-
ally carried more than the share allotted
TO il, and the Chicago, Milwaukee q st.
Paul railway. among others. actually
carried less. The pool commissioner
provided for by tue contracts aScer-
famed and made statement OF the dl1-
ferences, and in making an adjustment
of them directed that the Wabash re-
cevers should pay to the Chicago. Mil
waukee IL st. Paul company a sum
which, after deducling admitted credits,
amounted to SIS, 404. 40. and this suit
vas instituted to recover that amount.
The defense is that the contract
upon which the claim is based Is against
public policy and void. The court below
{1hayer, j J sustained this defense, and
intervenOr appealed"
Speaking of this contract, Judge
Caldwell says: "Its object was not to
avoid rulnouS competition by entering
into an arrangement to carry treights at
reasonable rates. but its evident pur-
pose was 10 siitie all competition for the
purpose of raising rates.
by the terms of the contract all OF
the roads are to be operated, as to
through traffic, as they should De II
operated by one corporation which
owned them ALL The seven corpora
sions were made one company so tar as
concerned their relations with each
other, with rival carriers and with the
public. Between them there could be
no competition or freedom of action. 10
the extent of the traffic covered by this
contract, and il covered no inconSider.
able portion of the traffic of the con
tinent, each company practically abdi-
Gated It's functions as common carrier
and conferred them on new creation
tor the sole purpose OF suppresslhg
competition.
Tile contract removed every incent-
i've to the companies to afford the public
the proper facilities and to carry at rea-
sonable rates, for, under its provisions.
company is entitled to its full per
centage OF gross earnings. even though
1t does not carry pound OF freight.
"A railroad company is quasi public
corporation and owes certain duties to
the public, among which are the duty
to afford reasonable facilities for the
transportation of persons and property,
and to charge only reasonable rates for
such service. Amy contract by which
it disablcs itself from performing these
duties, or which makes it to its interest
not to perform them, or removes all i'll
centive to their performance, is cOn-
trary to public policy and void.
1.-The Chicago, Milwaukee IL st. Paul
company claims that, conceding the
contract to be illegal. it has been per-
formed, and the Wabash company is
bound to account for moneys received
under it. The court holds that 1.-THE
contract contemplated two modes of
pooling, one by actual division and the
other by division of the gross earn-
ings.
1.-The traffic not having been divided,
this is suit to enforce the second
method of the pool-a division of the
gross earnings-or, in other words.
pooling of the earnings. The illegal
and void contract has not been execut-
ed, and the appellant inyokes the aid of
the court to compel the Wabash COM
pany to execute it on its part by pool
ingits earnings.
'sThe Wabash company performed
the service that earned tue money the
appellant is seeking to recover. The
appellant earned no part of it. There
is nothing in the record to show that the
appellant would have carried more, or
the Wabash company less freight. If
the contract had never been entered
into. The money demanded was re-
ceived by the Wabash company for
freight rendered to it by shippers them
selves and carried by it over its own
lines. 1t was legally bound to accept
the freight thus rendered, and was en-
titled TO receive the compensation for
the carriage, and cannot be compelled
to pay the money thus earned, or any
part of it, to tine appellant on this illegal
and void contract.
7 1.-The illegal contract is the founda-
ton of the plaintiffs action. Strike
this contract out and confessedly the
complaint states no cause of action;
leave 1t in, and it states an Illegal and
void cause of action. Courts will not
lend their aid to enforce the perform
,ance of a contract which is contrary to
public policy or the law of the land, but
will leave the parties in the plight their
own illegal action has placed them"
OTHER DECISIONS.