Court Opinion

ID: 8826475
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:49:02.71555+00
Date Added: 2024-06-11T17:04:47.403660
License: Public Domain

STONE, Circuit Judge
(dissenting). I am compelled to dissent for the following reasons:
The law is that an interstate common carrier, when acting as a common carrier, is not permitted, through contract or otherwise, to depart from its lawfully established tariffs. L. & N. R. Co. v. Maxwell, 237 U. S. 94, 35 Sup. Ct. 494, 59 L. Ed. 853,_ L. R. A. 1915E, 665, and citations therein. This rule is so strictly interpreted that the carrier cannot, as a common carrier, transport even its own property. As where a railway owning mines and selling coal undertook to ¿transport that coal and deliver it to a purchaser at less than the cost of the coal plus delivering and tariff transportation charges. New York, N. H. & H. R. Co. v. I. C. C., 200 U. S. 361, 26 Sup. Ct. 272, 50 L. Ed. 515. Nor can there be such a departure based on some benefit therein to the carrier, such as increased traffic. New York, N. H. & H. R. Co. v. I. C. C., supra, 200 U. S. at page 397, 26 Sup. Ct. 272, 50 L. Ed. 515.
The only instance in which such a, carrier is permitted to depart from its tariffs, and carry persons or freight for less than the tariffs, or even for nothing, is where the carriage is for the sole benefit of the carrier, with no resulting benefit or injury direct or incidental to another person. In such carriage the carrier is regarded as not acting as a “common carrier.” The definition-and confines of this departure rule-are stated in Santa Fe, P. & P. R. Co. v. Grant Bros., 228 U. S. 177, at page 186, 33 Sup. Ct. 474, at page 477 (57 L. Ed. 787), where the court says:
“In constructing, improving, or repairing its road, and in building its extensions and branches, the railroad company is providing facilities for its service as a common carrier, but, of course, is not acting as such. It may do. the work itself, if it chooses, or it may make it the subject of contract with another. In the latter case it simply employs an appropriate agency. The *137haulage by the railroad company of the. men, appliances, and supplies, required by the contractor for the purpose of the construction or improvement, to or from the point on its line where the work is to be done, is merely incidental to the work itself. The cost of such haulage is obviously an item of expense which must be taken into account in fixing the terms of the construction contract, and in providing for it over its own line the railroad company may adjust the matter with the contractor as it sees fit. If the railroad company did the work directly, it would have to take its employees and the necessary outfit to the place of work, and it may undertake to do the like for the contractor, either free of charge or at reduced rates, as they may agree.”
And at page 188 of 228 U. S. (33 Sup. Ct. 478, 57 L. Ed. 787):
“It is clear that in dealing with transportation of this character over Its own road, in connection with construction or 'improvement, a railroad company is not acting in the performance of its duty as a common carrier, and the arrangement for free or reduced rate carriage for the necessary materials and men used in the work, when it is a part of the contract, entered into in good faith and not as a subterfuge, is not obnoxious to the provisions of law prohibiting departures from the published tariffs, for the reason that such an agreement lies outside the policy of these provisions. See Matter of Railroad-Telegraph Contracts, 12 I. C. C. Rep. 10, 11.”
The same limitations are suggested in a case in this circuit (Montgomery v. C., B. & Q. R. Co., 228 Fed. 616, 143 C. C. A. 138) which involved the right of a railway company to maintain an eating house on its line, to which it carried, free of freight, the food'and other supplies. This court there said:
“It is conceded in the petition that it is lawful for defendant to ship, free of charge, such supplies, articles, or commodities as may be necessary and intended for its use in the conduct of its business as a common carrier.”
The facts show that the carrier was here selling mine products, chats, to the Belt, and delivering them to it, after an interstate carriage, for use in .ballasting the roadbed of the Belt. If these were all of the facts, there could be no question of the application of the tariff rate,, because the carriage would be as a common carrier for the benefit of the Belt. It would make no difference that the Belt was or was not obligated to so ballast its line under the original contract, or that the new contract was at the request of the receiver, because such circumstances would in no wise affect the character of the carriage, which is the test. But the agreed statement of facts contains statements that this ballast “inured to the benefit of the plaintiff [receiver] in reduced operating expense,” and that the ballast was put in “for the benefit of the plaintiff.” Since the receiver was obligated, under the lease, to maintain the line during the lease term, and was to operate over the line, it is clear that the above statements show a benefit accruing to the carrier, other than the freight charges, from the transportation. But the carrier does not lose its character as .a common carrier because it receives from the transportation benefits or gains in addition to the freight charge. It must receive the entire substantial benefit. In short, the transportation must be, in substance, entirely for its own .use, in the conduct of its business as a common carrier, before it can ignore the tariff rates. No part of the agreed statement of facts undertakes to allege that the receiver would receive the sole substantial benefit from this ballasting. In fact, such a statement seems to have *138been carefully avoided. The nearest approach thereto is a statement that the lease is for a term of ten years. This statement is insufficient for two reasons:
First, the lease (set forth in the evidence) is not for ten years and no agreed statement of the parties to the contrary can affect this court, because the issue here is one of concern, not only to the parties to this action, but to the public. The lease is for the duration of the receivership, which is entirely uncertain. The contract then provides that:
"Upon the expiration of this lease, the Missouri, Kansas & Texas Railway Company, or any successor company which may purchase or operate its lines of railway after the termination of the present receivership, shall have the right, at its option, to adopt' and continue this lease in effect for a period equaling, together with the period leased by the receiver, ten (10) years from the date of this contract, and thereafter subject to termination on one year’s written notice by either party thereafter given to the other of its desire and intention to terminate the same upon the expiration of such notice.”
Second, we are nowhere informed as to the life of such ballasting. So far as we are advised, it may be as good at the end of the lease as at any time during the lease. In short, the Belt may, at the end of the lease, receive back its line well ballasted with chats, which would be a distinct addition to the value of its property. Again, the requirement of the contract that the property, which consisted entirely of trackage, should be “maintained” by the lessee during the lease and turned back to the Belt “in as good condition as when received, ordinary wear and tear excepted,” requires that this ballasting, constituting a part of the leased property, should be kept up during the lease. I think the Belt has not only failed to sustain the burden of showing that the transportation of the chats was solely for the benefit of the receiver, but that the facts show clearly that a substantial benefit would accrue to the Belt.
I think the judgment should be affirmed.