Court Opinion

ID: 8770232
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:41:37.420014+00
Date Added: 2024-06-11T17:02:10.092344
License: Public Domain

HOOK, Circuit Judge
(dissenting). The trial court held that a complaint which set forth the following facts did not state a cause of action. For 15 years the plaintiff and its predecessors had been engaged at Minneapolis, Minn., in buying and selling fruits, vegetables, and farm and dairy products, and in transacting a general commission business in those commodities. In carrying on its business plaintiff availed itself of the services of defendant and its connections as carriers of interstate commerce. It had been the uniform custom of defendant and other railroad companies for many years to accept and transport such products as plaintiff handled, and collect the freight charges at destination; and the existence and prosperity of the commission business largely depended upon its continuance. But on December 15, 1906, defendant, for the purpose of harassing the plaintiff and injuring its business, notified all its agents and connecting lines that:
“Until further advised the company will not accept freight from connecting lines, or at points on its own lines, consigned to the Gamble -Robinson Commission Company unless all charges are prepaid.”
This order was enforced against the plaintiff alone. All other commission houses, competitors of plaintiff and similarly circumstanced, continued to enjoy the benefits and advantages of the established custom. There was nothing in the financial condition of plaintiff or in its conduct which justified the discrimination against it.
The question which arises on these averments is whether the plaintiff has been subjected “to any undue or unreasonable prejudice or disadvantage in any respect whatever,” contrary to the first clause of section 3 of the interstate commerce act of February 4, 1887 (24 Stat. 379). It is no answer to the question to say that a railroad company is not required to lend money to a shipper, for ordinarily such a transaction could have no relation to or connection with transportation. Nor is it an answer to say that at common law a railroad company was not *172bound to credit a shipper, but had the option of demanding prepayment of transportation charges or of awaiting the arrival of the freight at destination before collecting them. The act of Congress was designed to do away with undue and unreasonable discriminations of every character against shippers, localities, and subjects of traffic, whether they pertained to the common-law duty of the carrier or not, and to that extent the right of a railroad company engaged in interstate commerce to conduct its business as it will has been modified. A discrimination within the statute may be in respect of a course of business conduct which the carrier is at liberty to adopt or not as it chooses. To hold otherwise is to read into the statute something it does not contain, to wit, “the discriminations hereby prohibited relate only to the performance of duties imposed by the common law.” So the narrow question -here is whether the discrimination against the plaintiff is an undue or unreasonable one. Upon such a question it would seem that regard should be had to its effect upon the business of the complaining party, assuming,. as we must here, that he is without fault and did not justly bring upon himself the discrimination complained of. If the direct and natural result is to hamper, seriously injure or destroy his business while the like business of others similarly situated is not affected, it would seem quite obvious that the discrimination was undue and unreasonable. If that would not be an unreasonable discrimination, I am at a loss to imagine one. It is averred in the complaint, and indeed it is a matter of common knowledge, that it has long been the custom among railroad companies to collect at destination the freight charges on consignments of produce to commission houses. The consignee deducts from the proceeds of sale the freight charge paid by him when he receives a consignment and also his commission, and then remits the balance to his consignor. This convenience or privilege of having the charges of the carrier paid at destination by the commission merchant is so important and valuable to those engaged in growing or buying and assembling such commodities for shipment to market centers that their selection of a consignee largely depends upon it. It is altogether clear that a discrimination like that complained of is well' calculated quickly to ruin an established commission business. An embargo against one of a number of competitors may well be equivalent to a sentence of commercial death. The act forbids the subjection of the shipper to an undue prejudice or disadvantage in any respect whatever, and, if we do not regard the effect upon his business in its relation to the like business of his competitors, what conceivable test or standard is available?
There are many facilities, privileges, and conveniences connected with the transportation of traffic, to which class the one before us belongs, not founded on a common-law duty nor relating to the reasonableness and uniformity of rates of carriage, yet an undue discrimination in the granting or withholding of which may make or unmake the fortunes of shippers and localities. It needs but a moment’s reflection to perceive that the doctrine of the foregoing opinion, logically applied, would uphold a persistent course of discrimination tending, for illustration, to drive the wholesale business of the city of St. Paul to its neighbor Minneapolis, or, on the other hand, to impair the well-*173known importance of the latter as a wheat market. The question, being one of power under the law, is not affected by the improbability of its exercise. In such a case it could as well be said, as it is here, that at common law the railroad companies were not required to grant to any shipper or locality the facilities, privileges, and conveniences in question, and the discrimination between cities similarly circumstanced and aggressively competing was not unreasonable, though its natural effect would be greatly to injure the commerce of one for the benefit of the other.
The truth is, it seems to me, the purpose of the first clause of section 3 of the act of 1887 was, as its specific terms show, to declare unlawful discriminations of every character which result in undue or unreasonable prejudice or disadvantage. Whether the course of a railroad company is discriminatory involves a consideration of the similarity of conditions and circumstances surrounding those affected, and whether it is unduly or unreasonably so depends largely upon the result or effect of the discrimination, and, if directed against an individual shipper, whether justification may be found in his conduct. That is the rational construction of the law, and it is the one the Interstate Commerce Commission has consistently applied. Phelps & Co. v. Railway, 6 Interst. Com. R. 36; St. Louis Hay & Grain Co. v. Railroad, 11 Interst: Com. R. 90; Miner v. Railroad, 11 Interst. Com. R. 422; Walker v. Railroad, 12 Interst. Com. R. 196; Rogers & Co. v. Railroad, 12 Interst. Com. R. 308.
The first of these cases is quite like the one at bar. Phelps & Co., who were cotton commission merchants at New Orleans, complained that the railway company unjustly discriminated against them by refusing to deliver uncompressed or flat cotton consigned to them upon the same terms as it delivered such cotton of other consignees in that city. The general custom there was for cotton dealers or factors to have the uncompressed cotton consigned to them delivered direct to compress companies with whom they did business, and for the railroad companies to waive prepayment of their freight charges and their lien on the shipments, and to accept as security in lieu thereof the written guaranty of the compress companies previously executed. In the particular case the railway company, while continuing the custom as to others, refused to accept the guaranty of the compress company with which Phelps & Co. did business, though there was no question of its financial responsibility, and refused to deliver cotton consigned to Phelps & Co. without prepayment of the charges. The commission held the case to be one of undue discrimination, and ordered that as long as the railway company observed the custom in New Orleans it should desist from making Phelps & Co. an exception. In St. Louis Hay & Grain Co. v. Railroad, supra, it was held that stopping a commodity for treatment or reconsignment is in the nature of a special privilege which the carrier may concede but which the shipper cannot demand as of right, but in granting or denying it a uniform course must be pursued without unjust discrimination between markets or individuals. Of course the views of the commission in these cases are the views of an administrative body and are not binding on the courts, *174but it seems to me they are persuasive, comport with good reason, and reflect the clear intent of Congress in the enactment of- the law.
It is said the question is no longer open here because of the decision of this court in Little Rock & Memphis R. Co. v. St. Louis, etc., R. Co., 11 C. C. A. 417, 63 Fed. 775, 26 L. R. A. 192, affirming (C. C.) 59 Fed. 400; but it is clear that that case and those which follow it have no application whatever to the case at bar. It is true that the observations. of ..Judge Thayer, in speaking for this court, when disconnected from the matter before him for decision, would seem to be pertinent now, but he was then considering a liberty of contract left untouched by' the interstate commerce act of 1887, while here the right of the railroad company-is the subject of express restrictions in the act. In other words, the Little Rock & Memphis Case in this court, and, without exception, every case in which it is cited and followed, involved controversies between railroad companies themselves, not complaints made by shippers or on behalf of localities or subjects of traffic; and it was held in those cases that the first clause of section 3 of the act, declaring it unlawful for a carrier engaged in interstate commerce “to subject any particular person, company, firm, corporation or locality, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatever,” was not intended to affect the right of the carriers to select their connecting agencies for transportation upon such terms as were mutually satisfactory to them. The distinction was pointed out in Oregon Short Line, etc., Co. v. Northern Pacific, 9 C. C. A. 409, 61 Fed. 158, in which it. was held that the provision of the interstate commerce law forbidding discrimination against any locality or description of traffic was for the protection of the locality or traffic itself, and could not be invoked by a carrier against a connecting carrier which discriminated in the matter of requiring prepayment of freight and car mileage. Mr. Justice McKenna, then Circuit Judge, said, in delivering the opinion of the court in that case:
“But we do not think it is competent for a railroad company to appropriate the grievance of a traffic- or locality under section 3, and complain of it.”
The Little Rock & Memphis Case was also cited in Louisville, etc., R. Co. v. West Coast Co., 198 U. S. 483, 497, 25 Sup. Ct. 745, 49 L. Ed. 1135, as authority for the principle that a common carrier has a right to employ auxiliary or connecting agencies and to make contracts with them, and what it does with one it is not bound to do with another. But how obvious it is that such cases have no relevancy here.
I think the judgment of the trial court should be reversed.