Court Opinion

ID: 9418311
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:20:48.099429+00
Date Added: 2024-06-11T17:22:00.734509
License: Public Domain

Me. Justice Holmes'
delivered the opinion of the' court.
This is an appeal from a decree, made by three judges^ sitting in the District Court, which denied a preliminary injunction against the enforcement of an order of the Interstate Commerce Commission and dismissed the appellants’ petition. 227 Fed. Rep. 258, id. 273. See 33 I. C. C. 76, for the report of the Interstate Commerce Commission. The order complained of required the appellants, the Louisville & Nashville Railroad Company, the Nashville, Chattanooga & St. Louis Railway and the Louisville & Nashville Terminal Company to desist and abstain “from maintaining a practice whereby they refuse to switch interstate competitive traffic to and from the tracks of the Tennessee Central Railroad Company at Nashville, Tenn., on the same terms as interstate noncompetitive traffic, while interchanging both kinds of. said traffic on the same terms with each other, as said practice is found by the Commission in its said report to be unjustly discriminatory.” It was further ordered, that “The Louisville & Nashville Railroad Company, Nashville, Chattanooga & St. Louis Railway, and Louisville &. Nashville Terminal Company be, and they are hereby notified and required to establish, on or before May 1, 1915, fipon notice to the Interstate Commerce Commission and to the general public by not less than 30 days’ filing and posting in the manner prescribed in section 6 of the act to regulate commerce, and thereafter to maintain and apply to the switching of interstate traffic to and from the *70tracks of the Tennessee Central Railroad Company at said Nashville, rates and charges which shall not be different . than they contemporaneously maintain with respect to similar shipments to and from their respective tracks in said city, as said relation is found by the Commission in its said report to be nondiscriminatory.” The appellants contend as matter of law that the relations between them exclude any charge of discrimination that is based only upon a refusal to extend to the Tennessee Central road the advantages that they enjoy.
■The order is based upon discrimination and is limited by the duration of the interchange between the appellants found to be discriminatory,' and the question argued by the ■ appellants is the only question in the case. Therefore it is- necessary to consider relations between the appealing railroads that were left on one side in Louisville & Nashville R. R. Co. v. United States, 238 U. S. 1, 18.
The Louisville & Nashville traverses Nashville from-north to south, the Nashville & Chattanooga from west to southeast,. the Tennessee Central from porthwest to east. They all are competitors for Nashville traffic. In .1872, contemplating a possible Union Station, the Louisville •& Nashville acquired trackage rights from the Nashville & Chattanooga that connected its northern and southern terminals in the city (previously separate), and the terminal of the Nashville & Chattanooga. It now owns seventy-one per cent, of the stock of the latter. In, 1893 these two roads caused the appellant Terminal Company to be organized under the géneral laws of Ténnessee, with the right to let its prbperty. The Louisville & Nashville owns all the stock of this company. In 1896 the two roads respectively let to the Terminal Company their several properties in the neighborhood of the original depot grounds of the Nashville & Chattanooga for 999 years, and shortly afterwards the Terminal made what is termed *71a lease of the same and subsequently acquired property to the two roads jqintly for a like term. It covenanted to construct all necessary passenger and freight buildings, tracks and terminal facilities, the roads to pay annually as rental four per cent, of the actual cost, and to keep the properties in'repair. The Terminal Company then made a contract with the city for the construction of a¡'Union Station, the two roads guaranteeing the performance, and, the construction was completed in. 1900; the tracks connecting with those of the two roads but not with those, of the Tennessee Central. The Terminal Company as part of" the improvements purchased large ■ additional properties, the two roads advancing the funds, and the company executing a mortgage for three million dollars guaranteed by the roads. $2,535,000 of the bonds .were issued and the proceeds used to repay the roads. v
On August 15, 1900, the two roads, at that time being the only two roads entering Nashville, made the arrangement -under which they since have operated. They made an unincorporated organization called the Nashville Terminals which was to maintain and operate the ¡property let to the two roads jointly by the Nashville Terminal Company and also 8.10 miles of main track and 23.80 miles of side track contributed by the Louisville & Nashville and 12.15 miles of main and 26.37 miles of side track contributed by the Nashville & Chattanooga. The agreement between the roads provided a board of control consisting of. a superintendent and the general managers of the two roads, the superintendent having the immediate' control and appointing under officers, &c. The total expense of maintenance and operation is apportioned monthly between the two roads on the basis of the total number of cars and locomotives handled for each. There is no switching charge to or from locations on tracks’of the Nashville terminals within the switching limits on freight from or to Nashville over either road. The Ten*72nessee Central tracks now connect with those of the Nashville & Chattanooga at Shops Junction in ,the western section of the city, within the switching limits, and with those of the Louisville & Nashville at Vine Hill, outside' the switching limits and just outside the city on the south. '
It should be added that in December, 1902, a further agreement was made purporting to modify the lease to the railroads jointly by excluding from it the property that came from them respectively, and remitting the roads to their several titles as they stood before the lease, subject only to the mortgage, with some other changes that need not be mentioned. This partial change from joint tenancy back to several titles does not affect the substantial equality of the contribution of the two roads, and the joint tenure of the considerable property purchased by the Terminal Company was left unchanged.
Another matter that seems immaterial'to the case before us is that since the connection between the Tennessee Central and the appellant roads the latter have interchanged noncompetitive traffic with the former, but the Louisville & Nashville has refused to switch competitive traffic and'coal except at its local rates and the Nashville & Chattanooga has refused to switch it at all. The switching of coal was dealt with by this court in Louisville & Nashville R. R. Co. v. United States, 238 U. S. 1. But the case now before us is not concerned with the effect of the carriers having thrown the terminals open to many branches of traffic. 238 U. S. 18. It arises only upon the - question of the discrimination supposed to arise from the appellants’ relations to each other, as we have explained— a question grazed but not hit by the decision in 238 U. S. See p. 19.
If the intent of the parties or purpose of the arrangement was material in a case like this, obviously there was none to discriminate against the Tennessee Central road. That *73road did not enter Nashville when the plan was formed, and the two appellants had a common interest although competitors — an interest that also was public and in which the City of Nashville shared. By § 3 of the Act to Regulate Commerce as it now stands, the Act “shall not be construed as requiring any such common carrier to give the use of its tracks or terminal facilities to another carrier engaged in like business.” Therefore if either carrier owned and used this terminal alone it could not be found to discriminate against the Tennessee Central by merely refusing to switch for it, that is to move a car to or from a final or starting point from or to a point of interchange. We- conceive that what is true of one owner would be equally true of two joint owners, and if we are right the question is narrowed to whether that is not for all practical purposes the position in which the appellants stand. They do still hold jointly a considerable portion of the terminals, purchased with their funds. They manage the terminals as a whole and in short deal with them in the same way that they would if their title was joint in every part. Of course they do not own their respective original tracks jointly and it is matter for appreciation that perhaps defies more precise argument whether the change back to a several tenure of those tracks changed the rights of the parties. We cannot see in this modification of the paper title any change material to the point in -hand. Neither road is paid for the use of its tracks, but the severally owned and the jointly held are brought into a single whole by substantially equal contributions and are used by each as occasion requires.
The fact principally relied 'upon to uphold the order of the Commission is that instead of each road doing its own switching over the terminals used in common they switch jointly, and it is said that therefore each is doing for the • other a service that it cannot refuse to a third. We cannot believe that the rights to their own terminals reserved by *74the law are to be defeated by such a distinction. We take it that a several use by the roads for this purpose would \ open no door to a third road. If the title were strictly joint throughout in the two roads, we can see no ground for ' prejudice in the adoption of the more economical method of a single agency for both, each paying substantially as it would if it did its own work alone. But, as we have indicated, a large part of the terminals is joint property in substance and the whole is held and used as one concern. What is done .seems to us not reciprocal switching but the use of a joint terminal in the natural and practical way. It is objected that upon this view a. way is opened to get beyond the reach of the statute and the Commission. But the very meaning of a line in the law is- that right and wrong touch each other and that anyone may get as close to the line as he can if he keeps on. the right side. And further, the distinction seems pretty plain between a bona fide joint ownership or arrangement so nearly approaching joint ownership as this, and the grant of facilities for the interchange of traffic that should be extended to others on equal terms. The joint outlay of the two roads has produced much more than a switching arrangement, it has produced a common and peculiar interest in the station and tracks even when the latter are not jointly owned. In our opinion the order was not warranted by the law; but in overturning it upon the single point discussed we do so without prejudice to the Commission’s making orders to prevent the appellants from discriminating between competitive and noncompetitive goods, so long as they open their doors to the latter, the appellants being entitled, to, reasonable compensation, taking into account the expense of the terminal that they have built and paid for.. .

Decree reversed. Injunction to issue, without prejudice to further orders by the Interstate Commerce Commission as stated in the .opinion.