Court Opinion

ID: 9306630
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:17:34.026183+00
Date Added: 2024-06-11T17:13:56.361934
License: Public Domain

TAFT, Circuit Judge,
(after stating the facts.) The first objection made by defendant to granting the relief asked is that the complainants • before the commission, Stone & Carten, had no real grievance, but were instigated to their prosecution by a competitor of the defendant, the Michigan Central Railway, which is paying the expenses of the litigation. This objection is not ■founded on any finding of the commission, but on an admission of counsel for the complainants below before the commission, and is referred to in the dissenting opinion of Mr. Commissioner Bragg. Were this a mere private action by private litigants, the objection, if founded on anything in the record, (as this does not seem to be,) might have weight, but under the provisions of the interstate commerce law we are not permitted to entertain it. The act by section 13 provides for the lodging by any person of complaints with the commission of a common carrier’s violations of the law, and expressly enjoins upon the commission “that no complaint shall at any time be dismissed because of the absence of direct damage to the complainant.” Moreover, the same section provides that “said commission * * * may institute any inquiry on its own motion in the same manner and to the same effect as though complaint had been made.” By section 15 of the act the commission is required, in any case where investigation has been made by it, if the law has been violated, to notify the common carrier to cease from further violation, and by section 16, in case of the refusal of the common carrier to obey, it becomes the duty of the commission to apply by petition to a circuit court in equity to enforce its order and restrain the further violation of law by the carrier. It is obvious from these provisions that when the case reaches the circuit court on petition of the commission, it is the complaint of the commission which gives the court jurisdiction, and that the *1009bona lides of the complaint cannot be attacked by impeaching the good faith of those who, in the first instance, induced the commission to take action.
Although (he question was made in the original answer before the commission, it is not seriously disputed here that the defendant is a common carrier, subject to the provisions of the interstate commerce law. The question at issue is whether the practice of free cartage at Grand Rapids is, with reference to the shippers at Ionia, a violation of the following sections of the interstate commerce law:
“Sec. 2. That if any common carrier subject to the provisions of this act shall, directly or indirectly, by any special late, rebate, drawback, or other device, charge, demand, collect or receive from any person or persons a greater or less compensation for any service rendered, or to he 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 persons 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. 3. That it shall be unlawful for any common carrier subject to tiie provisions of this act to make or give any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, or locality, or any particular description of traffic, in any respect whatsoever, or io subject any particular person, company, firm, corporation or locality, or any particular description of traffic, lo any undue or unreasonable prejudice or disadvantage in any respect whatsoever.
“Sec. 4. That it shall he unlawful for any common carrier subject to the provisions of this act to charge or receive any greater compensation in the aggregate for the transportation of passengers or a like kind of property, under substantially similar circumstances and conditions, for a shorter than for a longer distance over the same fine, in the same direction, the shorter being included within the longer distance: hut this shall not he construed as authorizing any common carrier within the terms of this act to charge and receive as groat compensation for a shorter as for a longer distance: provided, however, 1ha t upon application to the commission appointed under the provisions of this act, such common carrier may, in special cases, after investigation by the commission, he authorized to charge less for longer than for shorter distances for the transportation of passengers or property: that the commission may from time to time prescribe the extent; to which such designated common carrier may be relieved from the operation of this section of this act”
It is conceded that the contract of carriage of a railway common carrier, as usually understood, is the transportation of the goods from the warehouse of the railway at the point of shipment to the railway warehouse at the point of destination. Generally the cartage from the railway warehouse to the storehouse of the consignee is paid by him. If the railway company pays it, the expense of transporting the goods to the place where he can use them is lessened by the cost of cartage. This is generally exactly equivalent to the railway company’s reducing the freight by as much as the cartage would cost the consignee. Now, it is admitted that this latter would be a violation of the long and short haul clause if the reduction were made at Grand Rapids, and not at Ionia. Why should not its exact equivalent — the furnishing of free cartage — be also a violation? It is said that it is not, because the *1010transportation to Ionia and that to Grand Bapids are not under substantially similar circumstances and conditions. In accordance with a practice which has been approved by the interstate commerce commission, (Imperial Coal Co. v. Pittsburgh & L. E. R. Co., 2 Inter St. Commerce Com. R. 618,) Ionia and Grand Bapids are grouped together by the defendant company as stations to which the freight rates from the far east, Boston, New York, and Philadelphia, may properly be made the same. This is a conclusive admission by the defendant that, so far as the transportation from the east to the warehouses of the company at the two places is concerned, it is under substantially similar circumstances and conditions. The question remains whether the conditions existing with reference to the delivery of goods from the warehouses to the storehouses of the consignees are such as to warrant a full charge for the same at Ionia, and no charge at all at Grand Bapids. If not, then the free cartage at Grand Bapids is, in fact, a reduction in the cost of transportation to Grand Bapids, and illegal. We do not see how this result can be escaped. The reasoning is said to be mathematical, but that is a term not ordinarily used to describe defective reasoning. Any benefit in relation to the shipment of goods, having a definite money value, conferred gratis by the carrier upon one shipper which is not conferred upon another, when the service to each is admittedly under substantially similar circumstances and conditions, is an undue reduction in the price of carriage to the former, and is illegal. If this were not true, then the provision against undue discrimination, of which the long and short haul inhibition is only one instance, would be a dead letter.
It may be admitted that the terminal facilities may be varied at different stations without causing undue discrimination, provided such a variation is not such a departure from the usual facilities as to make it an obvious reduction in the cost of transportation to the shipper. It is very clear that free cartage is exceptional, and that it is a departure from the usual terminal facilities furnished either at large or small cities and towns. Of course it would not be a discrimination that could be complained of, that one company puts its station at one town nearer the business center than another, and, if free cartage could be said to properly make up for the greater distance of defendant’s station from the business center of Grand Bapids, and in this respect to put Grand Bapids merchants on the same footing as Ionia merchants with their proximity to the station, then it would seem to be unobjectionable, because justified by the dissimilar circumstances. But can this be said? We think not. If at Grand Bapids the defendant’s station were moved into the business center, the consignees would still have to pay for the cartage, It may be that it would be for a less price, but still they would have to pay. The equalizing of the conditions between the two places in this respect would be complete by a charge for cartage by the railway company at the lower rate which would be charged for cartage were the station in the city. Free cartage from' defendant’s station at Grand Bapids con*1011fers on the shippers' a benefit of a definite money value over and above that usually included in a. transportation tariff, equal to the cost of cartage; from a station in the; center of the city.
What has be>en said with reference to the difference between the dislance; of the station at Grand liapids from the business center and that of the station at Ionia lias equal application to the contení ion of the defendant that the free cartage is justified by the fae-t: (hat the competitors erf the; defendant have their stations at Grand liapids in the business center, and that this iriaces defendant at a disadvantage, which creates a dissimilar («erudition. Even if competition under such circumstances can produce dissimilarity of conditions, the extent erf the discrimination ferunded thereon must be commensurate with and limited to the dissimilarity. It will fully e;qualize; the conditions if the defendant furnishes cartage for a mile; and a quarter at a price equal to that at which cartage; for a quarter erf a mile could he; furnished without loss. To do more is to bid for competition by reducing the cost of transportation, and this cannot he done except by prerportionately reducing the rates at Ionia also.
But it is said that. Grand liapids is a much Iarge;r place than Ionia, and thereferre a carrier may confer favors on a shipper at the; former place, in so far as the greater amerunt of business enables the railway company to do (’aiding at a cheaper rate at Grand liapids than at Ionia, by so much may the carrier reduce the cartage1 cost to the shipper at (lie former place, because this is a legitimate and actual dissimilarity in conditions betweem the two places; but cartage at Grand liapids must cost something, and free cartage;, therefore;, confers on the shipper a benefit which dissimilarity of conditions does not justify.
The chief argument for the defendant is based on the custom among railroads to furnish those of their custome;rs whose storehouses are convenient to the railway track with switch tracks, so that upon these trades consignments in car loads a,re; delivereel at the door of the consignee. If free cartage is to be prohibited, it is said that the same; principle must prevemt the use of switch tracks for such a purpose, because this is a benefit to certain customers of a similar character not enjoyed by others. We do not think the cases are parallel. The providing of a switch track depemds on two things: hirst, the proximity of the consignee's storehouse; and, second, business of a character to require or per mil consignmemls in car load lots. The first of these conditions, and perhaps (he se;cond, entitles the customer to a lawful discrimination in his favor. The favorable location of his storehouse; with re;spect to the track is an advantage which he may righf.lv improve, and it maybe that the wholesale character of his business is another element which may justify a discrimination in his favor oven? smaller shippers. Interstate Commerce Commission v. Baltimore & Ohio It. Co., 145 U. S. 263, 12 Sup. Ct. Rep. 844 If a case wewe presented where; a merchant at Ionia, with his storehouse convenieoit to the1 trade of the deffendanf, had been refused a switch track and delivery thereon of meu-ehandise; in car load lots, when *1012such a benefit was conferred on merchants at Grand Eapids, not differently situated, a question might then arise similar to that at the bar, but it is not presented by a discrimination between merchants with storehouses far from the railroad track, or who receive consignments of small bulk, and those who are near the track and receive car load lots. Even if it be conceded that a construction of the interstate commerce law which would prohibit so general a practice as the delivery of consignments on private switch tracks must be erroneous, the prohibition of free cartage does not involve any such result. In order that a railway may reach many •customers, it sometimes builds a belt railroad. This is a mere extension of its track, and, if the business to be obtained thereby will justify, there is no more objection to it as undue discrimination than there would be to the building of a branch road, or the delivery of goods from several warehouses. It is part of the railroad business, and the means of delivery is by railroad. Cartage is not usual railroad business, but is something not usually undertaken by them. The free cartage, as furnished at Grand Eapids by the respondent, is as foreign to ordinary freight business as it would be for the company to do the. packing for shippers free of cost.
Eor the reasons given the prayer of the petition must be granted, and a decree entered accordingly.