Source: https://supreme.justia.com/cases/federal/us/226/286/
Timestamp: 2019-04-26 05:42:08+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 226 › United States v. Union Stock Yard & Transit Co.
In view of continuity of operation, manner of compensation for, and performance of, services in connection with interstate transportation, the Union Stock Yard & Transit Company and the Chicago Junction Railway Company are subject to the terms of the Act to Regulate Commerce and must conform to its requirements in regard to filing tariff and also desist from unlawful discriminations to shippers.
The Interstate Commerce Act, as amended by the Elkins and Hepburn Acts, extends to all terminal facilities and instrumentalities.
Service that is performed wholly in one state is still subject to the Act to Regulate Commerce if it is a part of interstate commerce.
The duties of a common carrier in the transportation of livestock begin with their delivery to be loaded and end only after unloading and delivery, or offer of delivery, to the consignee. Covington Stock Yards Co. v. Keith, 139 U. S. 128.
The character of the service rendered in regard to carriage of interstate freight, and not the manner in which the goods are billed, determines whether the commerce is interstate or not, and so held that, although neither the Stock Yard Company nor the Junction Railway Company issues through bills of lading, still, as the goods handled are in transit from one state to another, both corporations are engaged in interstate commerce.
Where two corporations, the controlling stock of both of which is owned by one holding company, operate jointly, one handling only the stockyard business and the other the business of transferring and switching cars containing freight in interstate transit, both are to be deemed railroads within the terms of the Act to Regulate Commerce and are subject to its requirements.
While the Act to Regulate Commerce excludes transportation wholly within a state, a corporation owning a railroad and doing other business in connection with freight in interstate carriage cannot, by leasing the railroad to another company for a share of the profit, exempt itself from the operation of the law.
A contract by an interstate carrier by railroad to pay a part of the cost of the plant of one of its shippers who agrees only to handle goods moved by it held in this case to be an illegal discrimination and rebate under the Act to Regulate Commerce.
A shipper receiving a bonus from the carrier for erecting a plant on the line of the carrier has an undue advantage over a shipper not receiving any bonus or a smaller bonus.
It is the object of the Interstate Commerce Act and the Elkins Act to prevent favoritism by any means or device whatsoever, and to prohibit all practices running counter to the purpose of placing all shippers upon equal terms.
192 F. 330 affirmed in part and reversed in part.
The facts, which involve the application of §§ 2, 6 and 20, of the Interstate Commerce Act, and of § 1 of the Elkins Act, to the Union Stock Yard & Transit Company of Chicago and the Chicago Junction Railway Company, are stated in the opinion.
These are appeals from a decree entered by the Commerce Court in an action begun by the United States on the application of the Attorney General at the request of the Interstate Commerce Commission, against the Union Stock Yard & Transit Company of Chicago, an Illinois corporation (hereinafter called the "Stock Yard Company"), the Chicago Junction Railway Company, an Illinois corporation (hereinafter called the "Junction Company"), and the Chicago Junction Railways & Union Stock Yards Company, a New Jersey Corporation (hereinafter called the "Investment Company"), and David Pfaelzer, Abe Pfaelzer, and Jones L. Pfaelzer, a copartnership doing business under the firm name and style of Louis Pfaelzer & Sons. The bill sought to enjoin violations of §§ 2, 6, and 20 of the Interstate Commerce Act, as amended, 24 Stat. 379, c. 104; 34 Stat. 584, c. 3591; 36 Stat. 539, c. 309, and of § 1 of the Elkins Law, 34 Stat. 584, c. 3591. Its prayer was that an injunction should issue to restrain the Stock Yard Company and the Junction Company from further engaging in interstate commerce until they had filed tariffs, as required by § 6 of the act, and to restrain the performance of a certain contract with the Pfaelzers, and that the Stock Yard Company and the Junction Company be required to file the statements and reports provided by § 20 of the act.
The Commerce Court held that neither the Stock Yard Company nor the Investment Company was a common carrier, and that it had no jurisdiction to determine whether the contract would amount to an unlawful discrimination or advantage, or rebate, and dismissed the bill as to the Stock Yard Company and the Investment Company and as to the Pfaelzers. As to the Junction Company, it held that it was a common carrier subject to the Interstate Commerce Act, and obliged to file its tariffs as required by the statute. It further held that, since there was no allegation in the bill that the Interstate Commerce Commission had by general or special order required the Stock Yard Company or the Junction Company to File statements and reports under § 20, it could not issue mandamus to make such statements and reports. 192 F. 330.
The government appealed from the dismissal of the bill as to the Stock Yard Company, the Investment Company, and the Pfaelzers, which is case No. 261. It, however, makes no contention against the holding of the Commerce Court as to the construction of § 20. The Junction Company appealed from the decision of the Commerce Court as to it, which appeal is case No. 622.
through or near the City of Chicago, and for the accommodation of the business of a general union stockyard for cattle and livestock, including the erection and establishment of one or more hotel buildings, and the right to use the same; . . . to make advances of money upon such cattle and livestock for freight or other purposes as may become expedient. . . ."
"That said company shall construct a railway, with one or more tracks, as may be expedient, from the grounds which may be selected for its said yards so as to connect, outside of the City of Chicago, the same with the tracks of all the railroads which terminate in Chicago, the lines of which enter the city on the south between the lakeshore and the southwest corner of said city, . . . and to make connections with such suitable sidetracks, switches, and connections as to enable all of the trains running upon said railroads easily and conveniently to approach the grounds selected for said yards, and may make such arrangements or contracts with such railroad companies, or either of them, for the use of any part or portion of the track or tracks of such company or companies which now is or hereafter may be constructed, for the purposes aforesaid, as may be agreed upon between the parties; . . . and to transport and allow to be transported thereon between said railroads and cattle yards, all cattle and livestock and persons accompanying the same to and from said yards, and may also transport and allow to be transported between the railroads entering said city, . . . freight and property of every kind as well as stock and cattle. . . ."
trunk lines entering Chicago, and a large number of switches to the various industries which had been established adjacent to such tracks.
Prior to December 15, 1897, the Stock Yard Company carried on the stockyards and railroad business, and, although it had regular charges for the services it performed, it filed no tariffs with the Interstate Commerce Commission and concurred in none. On December 15, 1897, the Stock Yard Company leased all of its railroad tracks and equipment for a term of fifty years to a corporation known as the Chicago & Indiana state Line Company (hereinafter called the "state Line Company"), retaining for itself the loading and unloading platforms and facilities used in connection with its stockyards business. This lease covered all its railroad and railroad tracks, switches, etc., roundhouse, repair shops, machine shops, coal chutes, etc., then in existence or theretofore used by the Stock Yard Company in connection with its railroad, and all and singular the equipment and the telegraph lines, instruments, and appurtenances owned or possessed by the Stock Yard Company and used by it in conducting its railroad business. By the terms of the lease, the state Line Company was given the right in the future to maintain and operate upon the lands of the Stock Yard Company additional side tracks and switch tracks and other appurtenances necessary to reach industrial plaints.
Company, consisting of locomotives and rolling stock, is owned by the Stock Yard Company, but the Junction Company employs its own engineers and crews.
& Ohio Railroad Company whereby it performs a like service for such company as to the less than carload lot freight brought by it to the Union Freight Station and destined to points beyond the state. Shipments of horses are transported by the trunk lines to the loading platforms of the Stock Yard Company, and there picked up by the Junction Company and hauled to the unloading chutes for horses, and the Junction Company receives, besides the trackage charge, a certain amount per car for this service. A large part of the service thus performed by the Junction Company is in connection with interstate shipments. The Junction Company does not issue any bills of lading with respect to any kind of freight.
After leasing its railroad property to the Junction Company, the Stock Yard Company continued to operate its stockyard facilities for loading and unloading cattle and other livestock bound for and coming from points outside the state, and to feed and water livestock in transit over the lines of trunk line carriers, and also to feed, bed, and water livestock shipped to consignees doing business in the stockyards district.
The employees of trunk lines bringing livestock to the stockyards turn over the waybills accompanying such shipments, with what are called "livestock stubs" attached, to the employees of the Stock Yard Company, who use the waybills in unloading and counting the stock, and the waybills and stubs are then sent to the auditor of the Stock Yard Company (being also the auditor of the Junction Company), who retains the stubs and forwards the waybills to the local agents of the trunk lines. The Stock Yard Company advances the charges on such shipments to the trunk lines and collects from the consignees, usually commission men doing business at the stockyards, the moneys it has so advanced for their accommodation.
in general circulation in Chicago, especially about the stockyards district, but they were not filed with the Interstate Commerce Commission. Prior to 1907, the Junction Company, while owning railroad facilities in Indiana, had filed tariffs with the Interstate Commerce Commission, but, upon the sale of such properties, cancelled the tariffs. It was the belief of the government and of the Junction Company that all tariffs and concurrences had been cancelled, but it is shown by a stipulation which the parties have filed that, since the issues were made up, it has been discovered that one particular concurrence, through inadvertence, was not cancelled.
The Investment Company is a holding company, and owns over 90 percent of the shares of the Stock Yard Company and practically all of the shares of the Junction Company.
As to the contract with the Pfaelzers: they were members of a copartnership (since incorporated) engaged in the slaughtering business, their plant being located in the vicinity of the tracks operated by the Junction Company and the cattle pens of the Stock Yard Company. They purchased cattle from time to time outside the City of Chicago and in states other than Illinois, and shipped them to the partnership at the stockyards, where they were handled as hereinbefore stated for delivery to the consignee. The freight charges on such business averaged for the five years prior to the filing of the Pfaelzers' answer about $2,800 annually. The amount of freight consigned to the Pfaelzers tends to increase the business of the Stock Yard Company and the Junction Company, and therefore the revenue of each.
to locate in Kansas City, Missouri, but, upon negotiation with the Stock Yard Company, made the contract under consideration here. This contract provided that, upon the erection by the Pfaelzers of a modern slaughtering, packing, and canning plant adjacent to the stockyards in Chicago, costing a certain sum and having a required capacity, the Stock Yard Company would pay them $50,000, and the Pfaelzers agreed that all livestock slaughtered or canned by them within a radius of 200 miles would either be purchased at such stockyards or pass through and use them, the customary yardage, tolls, and charges to be paid thereon, or that the Pfaelzers would pay full tolls and charges on livestock the same as if it had been sent to the stockyards for sale and had there been bought by them, and that for fifteen years they would conduct all their slaughtering, packing, and canning business at such plant, and not interest themselves directly or indirectly in any other plant or in any other stockyards. The Investment Company guaranteed the performance of the contract by the Stock Yard Company.
It is stated in the answer of the Stock Yard Company and stands admitted in the case that there are other competitive stockyards in the United States which have built up their business in competition with it by offering and giving inducements, either in the shape of land or money, to packing houses and other industries to locate at or near their yards.
and its operation is concerned, is now performed by the Junction Company. The Stock Yard Company still continues to perform the customary stockyard operations, but by means of the lease to the Junction Company it has divested itself of the operation of the railroad system which it was authorized by its charter to construct and operate, and which for many years before the lease it did in fact operate. The Stock Yard Company, under the lease, still gets, however, two-thirds of the profits received by the Junction Company for performing the service in connection with the railroad transportation. This joint service now takes the place of the single service formerly rendered by the Stock Yard Company. The stock of both these companies is held in common ownership by the Investment Company, and it appears that the Investment Company guarantees the contracts, or at least some of them, of the Stock Yard Company.
In view of this continuity of operation, the manner of compensation, and the performance of services in connection with interstate transportation by railroads such as are described, are the Stock Yard Company and the Junction Company subject to the terms of the Act to Regulate Commerce, and bound to conform to its requirements?
"all switches, spurs, tracks, and terminal facilities of every kind, used or necessary in the transportation of the persons or property designated herein, and also all freight depots, yards, and grounds used or necessary in the transportation or delivery of any of said property,"
irrespective of ownership or of any contract, express or implied, for the use thereof, and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration, or icing, storage, and handling of property transported."
"begins with their delivery to the carrier to be loaded upon its cars, and ends only after the stock is unloaded and delivered, or offered to be delivered, to the consignee."
In this connection, see Coe v. Errol, 116 U. S. 517; Southern Pacific Terminal Co. v. Interstate Commerce Commission, 219 U. S. 498.
The fact that the performance of the service is distributed among different corporations having common ownership in a holding company which controls an interstate system was held in Southern Pacific Terminal Co. v. Interstate Commerce Commission, supra, to make no difference, where the service to be performed was a part of the carriage of freight by railroad in interstate commerce. Nor does it make any difference that neither the Junction Company nor the Stock Yard Company issues through bills of lading. It is the character of the service rendered, not the manner in which goods are billed, which determines the interstate character of the service. Ibid.; Railroad Commission v. Worthington, 225 U. S. 101.
"Its [the Stock Yards Company's] operations . . . include the maintenance and use of railroad tracks and locomotives, the employment of a corps of operatives in that connection, and the carriage for hire over its tracks of all livestock destined to or from the sheds or pens, which in effect, are the depot of the railroad companies for the delivery and receipt of shipments of livestock at South Omaha. The carriage of these shipments from the transfer track to the sheds or pens, and vice versa, is no less a part of their transit between their points of origin and destination than is their carriage over any other portion of the route. True, there is a temporary stoppage of the loaded cars at the transfer track, but that is merely incidental, and does not break the continuity of the transit any more than does the usual transfer of such cars from one carrier to another at a connecting point. And it is of little significance that the stockyards company does not hold itself out as ready or willing generally to carry livestock for the public, for all the railroad companies at South Omaha do so hold themselves out, and it stands ready and willing to conduct, and actually does conduct, for hire, a part of the transportation of every livestock shipment which they accept for carriage to or from that point, including such shipments as are interstate. "
We think that these companies, because of the character of the service rendered by them, their joint operation and division of profits, and their common ownership by a holding company, are to be deemed a railroad within the terms of the Act of Congress to regulate commerce, and the services which they perform are included in the definition of transportation as defined in that act. It is the manifest purpose of the act to include interstate railroad carriers, and, by its terms, the act excludes transportation wholly within a state. In view of this purpose, and so construing the act as to give it force and effect, we think the Stock Yard Company did not exempt itself from the operation of the law by leasing its railroad and equipment to the Junction Company, for it still receives two-thirds of the profits of that company, and both companies are under a common stock ownership, with its consequent control. We therefore think the Commerce Court was right in holding that the Junction Company should file its rates with the Interstate Commerce Commission, and that it should also have held the Stock Yard Company subject to the provisions of the Interstate Commerce Acts.
demand, collect, or receive from any person or persons a greater or less compensation for any service rendered, or to be rendered, in the transportation of passengers or property, subject to the provisions of this act, than it charges, demands, collects, or receives from any other person or person for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is hereby prohibited and declared to be unlawful."
"SEC. 1. . . . It shall be unlawful for any person, persons, or corporation to offer, grant, or give, or to solicit, accept, or receive any rebate, concession, or discrimination in respect to the transportation of any property in interstate or foreign commerce by any common carrier subject to said Act to Regulate Commerce and the acts amendatory thereof, whereby any such property shall, by any devise whatever, be transported at a less rate than that named in the tariffs published and filed by such carrier, as is required by said Act to Regulate Commerce and the acts amendatory thereof, or whereby any other advantage is given or discrimination is practiced. . . ."
This Court has had frequent occasion to comment upon the purpose of Congress in the passage of these laws to require equal treatment of all shippers and to prohibit unjust discrimination in favor of any of them. New York, New Haven & Hartford R. Co. v. Interstate Commerce Commission, 200 U. S. 361; Armour Packing Co. v. United States, 209 U. S. 56; Louisville & Nashville R. Co. v. Mottley, 219 U. S. 467; Chicago & Alton R. Co. v. Kirby, 225 U. S. 155.
been an undue advantage given to and an unlawful discrimination practiced in favor of Pfaelzer & Sons. If these companies had filed their tariffs, as we now hold they should have filed them, they would have been subject to the restrictions of the Elkins Act as to departures from published rates -- and we must consider the case in that light -- and this preferential treatment, as we have said, would have been in violation of that act. It is the object of the interstate commerce law and the Elkins Act to prevent favoritism by any means or device whatsoever, and to prohibit practices which run counter to the purpose of the act to place all shippers upon equal terms. We think the Commerce Court should have enjoined the carrying out of this contract.
It follows that, in case No. 621, the judgment of the Commerce Court should be reversed and the case remanded for the entry of a decree in conformity to this opinion. In No. 622, the judgment of the Commerce Court should be affirmed.

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