Source: https://www.law.cornell.edu/supremecourt/text/286/397
Timestamp: 2019-04-24 18:03:36+00:00

Document:
ADAMS et al. v. MILLS, Director General et al.
Mr. Franklin J. Stransky, of Chicago, Ill., for petitioner.
This action was brought, on December 10, 1928, in the federal court for Northern Illinois to enforce an order of the Interstate Commerce Commission for reparations in the sum of $140,001.25, and interest. The plaintiffs, 103 in number, 1 members of the Chicago Live Stock Exchange, are commission merchants engaged in the business of buying and selling live stock at the Union Stock Yards, Chicago. The defendants are the Union Stock Yard & Transit Company, owner of the yards, and the Director General of Railroads, as agent of the President, being the officer against whom suit may be brought, under section 206 of the Transportation Act 1920 (49 USCA § 74), 41 Stat. 461, on causes of action arising out of federal control. The award was made on account of an extra charge of 25 cents a car for unloading live stock received at the yards from about 174,000 different shippers, during the period of federal control, December 28, 1917 to February 29, 1920. The Commission held that the charge had been exacted under an unlawful practice; and awarded reparation to the plaintiffs, who as consignees had paid the charge found unlawful. See Chicago Live Stock Exchange v. Atchison, Topeka & Santa Fe Ry. Co., 52 I. C. C. 269; Id., 58 I. C. C. 164; Id., 100 I. C. C. 266; Id., 144 I. C. C. 175.
The case was tried in the District Court before a jury upon the evidence introduced before the Commission and additional evidence introduced by the parties at the trial. At the close of the evidence, each defendant moved, on many grounds, for a directed verdict. The District Judge granted the motions on the ground that the plaintiffs had no such interest in the claims for reparations as would entitle them to maintain an action under section 8 and section 16(2) of the Interstate Commerce Act, 49 USCA, §§ 8, 16(2). 39 F.(2d) 80. The Circuit Court of Appeals affirmed the judgment; but, not being entirely satisfied that the reason assigned by the District Court was correct, rested its decision on the ground that the exaction of the extra 25-cent charge was a lawful practice. 51 F.(2d) 620. This Court granted a writ of certiorari. 284 U. S. 614, 52 S. Ct. 208, 76 L. Ed. .
First. The defendants contend that, even if the exaction of the extra 25-cent charge was unlawful, the plaintiffs are not entitled to recover. The argument is that under section 8 of the Interstate Commerce Act the liability of the common carrier is 'to the person or persons injured thereby for the full amount of damages sustained in consequence of any such violation'; that before any party can recover under the act he must show, not merely the wrong of the carrier, but that the wrong has in fact operated to the plaintiff's injury; that here the award is to the plaintiffs individually, not as agents for the shippers; and that individually they suffered no pecuniary loss, since they paid the charges as commission merchants and reimbursed themselves for these, as for other, charges from the proceeds of the sale of live stock, remitting to their principals only the balance remaining. We think the argument unsound, for the reasons, among others, stated in Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 38 S. Ct. 186, 62 L. Ed. 451, and Louisville & Nashville R. Co. v. Sloss-Sheffield Steel & Iron Co., 269 U. S. 217, 234-238, 46 S. Ct. 73, 70 L. Ed. 242. See, also, Missouri Portland Cement Co. v. Director General, 88 I. C. C. 492, 495, 496; Doughty-McDonald Grocery Co. v. Atchison, Topeka & Santa Fe Ry. Co., 155 I. C. C. 47, 49; California Fruit Exchange v. American Railway Express Co., 155 I. C. C. 105, 107.
The plaintiffs were the consignees of the shipments, and entitled to possession of them upon payment of the lawful charges. If the defendants exacted from them an unlawful charge, the exaction was a tort, for which the plaintiffs were entitled, as for other torts, to compensation from the wrongdoer. Acceptance of the shipments would have rendered them personally liable to the carriers if the merchandise had been delivered without payment of the full amount lawfully due. New York Central & H. R. R. Co. v. York & Whitney Co., 256 U. S. 406, 407, 408, 41 S. Ct. 509, 65 L. Ed. 1016. Compare Union Pac. R. Co. v. American Smelting & Refining Co. (C. C. A.) 202 F. 720, 723. As they would have been liable for an undercharge, they may recover for an overcharge. In contemplation of law the claim for damages arose at the time the extra charge was paid. See Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 534, 38 S. Ct. 186, 62 L. Ed. 451. Neither the fact of subsequent reimbursement by the plaintiffs from funds of the shippers nor the disposition which may hereafter be made of the damages recovered is of any concern to the wrongdoers. This proceeding does not involve a controversy between the consignors and the consignees; and the carriers cannot be allowed to import one into it. Compare Louisville & Nashville R. Co. v. Sloss-Sheffield Steel & Iron Co., 269 U. S. 217, 238, 46 S. Ct. 73, 70 L. Ed. 242. The rights of the shippers in the proceeds of the action will not be affected by our decision. Compare Jennison Bros. & Co. v. Dixon, 133 Minn. 268, 158 N. W. 398. Those rights might have been asserted by intervention in the proceedings before the Commission. They may still be asserted independently in appro priate proceedings later. The plaintiffs have suffered injury within the meaning of section 8 of the Interstate Commerce Act (49 USCA § 8); and the purpose of that section would be defeated if the tort-feasors were permitted to escape reparation by a plea that the ultimate incidence of the injury was not upon those who were compelled in the first instance to pay the unlawful charge.
An additional reason for permitting this action is that the relation between the parties to the shipments in question was that of principal and factor, not simply that of consignor and consignee. The Commission found that, as commission merchants, the plaintiffs were empowered, by well-established usage, to pay the freight and related charges; to file claims for overcharges; and to settle with the carriers therefor. Being factors for the shippers, it was not only their right, but their duty, to resist illegal exactions. This duty did not, as the District Court suggested, terminate upon remission of the proceeds of the sale of the live stock, less the charges in fact paid. It persists, with the assent of the principals, until the claim for reparation shall have been prosecuted to a successful conclusion. It is urged, on behalf of the defendants, that the order of the Commission ran in favor of the plaintiffs, not as factors, but as individuals. The contention is contrary to the fact. 2 But the form of the order is without importance. The Commission has recognized the right of a factor to maintain in his own name an action in the interest of his principal. See Memphis Freight Bureau v. St. Louis & San Francisco R. Co., 57 I. C. C. 212; Texas Livestock Shippers Protective League v. Director General, 139 I. C. C. 448. No useful and would be served by requiring the joining of 174,000 shippers in this proceeding; and section 8 of the Interstate Commerce Act is not to be so construed. Compare Spiller v. Atchison, Topeka & Santa Fe Ry. Co., 253 U. S. 117, 134, 135, 40 S. Ct. 466, 64 L. Ed. 810.
Second. The defendants challenge the Commission's holding that the extra charge of 25 cents made to the shippers was an unlawful practice. The conclusion rests upon the findings that the Stock Yards are, in effect, terminals of the line-haul carriers; and that the service of unloading the live stock there is a part of transportation. That the yards are, in effect, terminals of the railroads is clear. They are in fact used as terminals; and necessarily so. Whether the unloading in the yards was a part of transportation was not a pure question of law to be determined by merely reading the tariffs. Compare Great Northern Ry. Co. v. Merchants' Elevator Co., 259 U. S. 285, 294, 42 S. Ct. 477, 66 L. Ed. 943. The decision of the question was dependent upon the determination of certain facts, including the history of the stock yards and their relation to the line-haul carriers; the history of the unloading charge at these yards; and the action of the parties in relation thereto. If there was evidence to sustain the Commission's findings on these matters, its conclusion that the collection of the extra charge from the shippers was an unreasonable and unlawful practice must be sustained. Atchison, Topeka & Santa Fe R. Co. v. United States, 232 U. S. 199, 221, 34 S. Ct. 291, 58 L. Ed. 568; Los Angeles Switching Case, 234 U. S. 294, 310, 311, 34 S. Ct. 814, 58 L. Ed. 1319.
The line-haul railroads did not join in the yards company's tariff No. 2, or authorize it. They did not file new tariffs embodying the extra 25-cent charge. And they refused to absorb the extra charge. Upon such refusal, the yards company, in order to compel payment by the carriers, adopted the practice of withholding the sum demanded from the freight charges collected for them. In retaliation, the carriers threatened to collect those charges for themselves. The result of this controversy was an arrangement arrived at between the railroads and the yards company, whereby the former added the disputed charge to their freight bills, and the latter collected it from the shippers, despite their protest. These bills did not indicate that the extra charge imposed was one of the yards company to the shipper. 6 As theretofore, the whole amount collected was turned over by the company to the railroads.
3. Thus, by the unbroken usage of fifty years, the payment by shippers of live stock of the line-haul rate to Chicago, plus the terminal charge of $2, had covered all services performed in connection with the shipment up to and including the placing of the stock in the pens of the commissionmen. The Commission so found; and this court has heretofore so recognized. See Interstate Commerce Commission v. Chicago, Burlington & Quincy R. Co., 186 U. S. 320, 327, 329, 336, 22 S. Ct. 824, 46 L. Ed. 1182; Interstate Commerce Commission v. Stickney, 215 U. S. 98, 108, 30 S. Ct. 66, 54 L. Ed. 112. Beyond dispute, the yards company, in the services which it performed, regarded itself as the carriers' agent. This appears not only from the previous course of business, but from the terms of its second tariff, from its initial conduct with respect to collection of the additional charge and from its attempt to cancel all its tariffs. The carriers for years had paid the yards company all its charges; and there was testimony that both the $2 terminal charge and the line-haul rates were predicated upon such payment. The company's charges, moreover, which constituted its sole compensation, covered services other than the mere unloading of cars-services which were obviously performed for the benefit of the carriers rather than the shippers.
Fourth. It is urged by the defendants that the Stock Yards Company had been found by this Court to be a common carrier, United States v. Union Stock Yard & Transit Co., 226 U. S. 286, 33 S. Ct. 83, 57 L. Ed. 226; that this finding was adhered to by the Commission in the present proceeding despite the claim of a change in conditions; that as a common carrier the company was compelled to publish its tariffs; that the tariff, as published, has not been found by the Commission to be unreasonable; and that its collection, therefore, was mandatory, and hence could not be unlawful. But the tariff, as published, authorized only the collection of the charge, as a carrier's agent. The question at issue is not the reasonableness of the charge, but the lawfulness of the practice, jointly pursued by the railroads and the company, of collecting the extra charge from the shipper. The reasonableness of the charge itself, and the complementary question whether the railroads should be required to absorb it, were in no way involved before the Commission; and that tribunal properly made no finding with respect thereto. Nor was the issue affected in any manner by the status of the yards company as a common carrier. It did not follow from such status that it could not act as an agent of the line-haul carriers, nor that it was entitled to collect a part of its charges from the shippers. Compare Missouri Pacific R. Co. v. Reynolds-Davis Grocery Co., 268 U. S. 366, 45 S. Ct. 516, 69 L. Ed. 1000; Union Stockyards Co. v. United States (C. C. A.) 169 F. 404, 406.
Fifth. Certain additional grounds of defense, not considered by either of the courts below, are pressed here. The Director General urges that the terms of congressional consent do not permit him to be proceeded against before the Commission for a tort, compare Missouri Pacific R. Co. v. Ault, 256 U. S. 554, 559, 41 S. Ct. 593, 65 L. Ed. 1087, but only for damage resulting from the 'collection or enforcement by or through the President during the period of Federal control of rates, fares, charges, classifications, regulations, or practices * * * which were unjust, unreasonable, unjustly discriminatory, or unduly or unreasonably prejudicial.' Transportation Act, 1920, 41 Stat. 462, c. 91, § 206(c), 49 USCA § 74(c). The contention that the acts of the Director General, found by the Commission did not in any view constitute an 'unjust or unreasonable practice' within the meaning of this provision, is manifestly untenable. The contention is really directed against the Commission's finding that the Director General participated in the practice. Ample support for this finding is furnished by the conceded fact that the extra charge was added by the railroads to their freight bills, and by the testimony that these bills were first collected by the yards company, that the entire proceeds were paid over to the railroads, and that the railroads subsequently compensated the company.
This is the figure stated in the opinions of both courts below, and in the briefs of counsel. The names of only 101 plaintiffs appear in the petition in the District Court and in the motion to amend the petition, as set out in the Transcript of Record.
The finding of the Commission in its report of June 2, 1925, was that the parties of record who 'paid the charges' on the shipments involved 'have been damaged in the amount of such charges and are severally entitled to reparation, as factors and agents for the shippers.' Chicago Live Stock Exchange v. Atchison, T. & S. F. Ry. Co., 100 I. C. C. 266, 270. The fact that 'the charge which was paid by the commission merchant was subsequently charged back and collected from the consignors,' the report said, 'would not affect the right of the complainant consignees to awards of reparation. There is a direct and well-established relation between the complaining members of the exchange and their shippers by which the former are fully authorized to present these claims and seek awards of reparation in their own names as factors and agents for such shippers. * * * The right of factors in their representative capacity to recover reparation in their own names for unlawful and unreasonable charges is settled.' Id., 100 I. C. C. at pages 269, 270.
The imposition of the $2 charge was the subject of much litigation before the Commission and the courts. Interstate Commerce Commission v. Chicago, Burlington & Quincy R. Co., 186 U. S. 320, 22 S. Ct. 824, 46 L. Ed. 1182; Interstate Commerce Commission v. Stickney, 215 U. S. 98, 30 S. Ct. 66, 54 L. Ed. 112. Compare Chicago Live Stock Exchange v. Chicago Great Western Ry. Co., 10 I. C. C. 428.
UNION STOCK YARD & TRANSIT CO. OF CHICAGO v. UNITED STATES et al.
SWIFT & CO. et al. v. UNITED STATES et al.
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