57 F. 1005 | U.S. Circuit Court for the District of Western Michigan | 1893
Lead Opinion
(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
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
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
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
Eor the reasons given the prayer of the petition must be granted, and a decree entered accordingly.
Dissenting Opinion
(dissenting.) The finding of facts by the commission is adopted for the purposes of this opinion, together with some further facts not inconsistent therewith, proven by the testimony, or of which judicial notice is taken.
It is a legitimate rule in the construction of language employed in statutes that attention should be given to results which will follow from a proposed interpretation, and if those results are contrary to the general purpose and object of the act, and are plainly' seen to be such as were not intended, it should be rejected, unless the terms employed are too rigid to bear some other interpretation in harmony with the general policy of the law. The object sought to be attained is the guiding light always, and in the construction of this statute, couched as it is broad and general language, it should be kept constantly in sight. For reasons presently to be stated, it appears to me that the conclusions of the commission, and the order founded thereon, are productive of results quite different from those intended. The general purpose of the interstate commerce act was to prevent the practice of extortion by common carriers in the transportation of freight and passengers between the states by the imposition of unjust and unreasonable rates. This is well known as matter of history, and the courts take judicial notice of it. The law was passed for the protection of the public, and not for the benefit, or to redress any grievance, of common carriers. They were known to be able to take care of themselves. And the closing paragraph of the first section sounds the keynote to the whole act when it says that “every unjust and unreasonable charge for such service is prohibited and declared to be unlawful.”
And this suggests a question somewhat preliminary in its nature,
In this case the record indicates that the complaint was made by parties residing at Ionia. After setting forth the facts upon which it was based, it summarizes the grounds thereof by alleging that the respondent was by its practice violating the second, third, and fourth sections of the act, and prayed that the respondent should be ordered to discontinue free cartage of freight for the merchants of Grand Eapids, or to render like service to the merchants of Ionia, or for other appropriate relief. The commission, after finding the facts, and giving its reasons for its conclusion, held that it followed therefrom that the defendant was guilty of violating the long and short haul clause of the fourth section, and that consignees at Ionia were overcharged to the extent indicated. The complaint was sustained on that ground, and the commission declared its purpose to order accordingly, without passing on the other points. The inhibition of the long and short haul clause is against the charging “any greater compensation in the aggregate for the transportation of passengers or the like kind of property under substantially similar circumstances and conditions for a shorter than for a longer distance,” etc. The offense is made to consist in charging the greater compensation for the shorter distance, and this is what the commission concluded the respondent had done. It would seem that the due order for the correction of such offending -would be to require the carrier to desist from charging the merchants of Ionia the greater compensation, and to fix a rate to correspond with its Grand Eapids rate, or accord some equivalent advantage to them, such as free cartage. Such correction would result in advancing the interests of the public at Ionia, and in leaving the public at Grand Eapids in the enjoyment of the facilities which have been afforded them by a practice which the commission rightly declares was perfectly lawful in itself. The effect of such. an order might be somewhat disadvantageous to the competing railroad there, which is also one of its competitors at Grand Eapids, but it would furnish no lawful ground of com-’ plaint to such competitor. Instead of doing this, the commission made an order -which raises the compensation which the public at Grand Eapids must pay for the service they have enjoyed, and the benefit of their loss does not come to any other portion of the general public, but falls into the hands of the competing railroads, by crowding their, rival out. It seems to me the commission could not have sufficiently considered the results of their order. If they did, I am at a loss to understand how they could reconcile it with the spirit and policy of the law. If, as is claimed, (and I think it must be conceded, properly,) we cannot look back of the proceedings of the commission to inquire into the motive of the parties who set them in motion, we are yet bound to recognize the obvious consequences, and give their consideration due -weight, in determining whether as matter of law the order we are asked to enforce was such as was warranted by the assumed facts. I cannot but think
Hut I am also of the opinion that there was nothing in the facts which justified the conclusion that any provision of the statute had been violated. Having, in the closing paragraph of the first section, indicated the general purpose, the act proceeds in sections 2, ■>, 4, and 5 to lay down certain rules by which that object is to be attained. By the second section it prohibits all kinds of discrimination in the imposition of charges upon different person's for the like service rendered under similar conditions. By the third it prohibits all undue preference by the carrier to any person or locality or kind of traille, or the subjecting of any person or locality to any undue or unreasonable disadvantage, and then proceeds to «'quire the carrier t.o afford reasonable and equal facilities to connecting lines for the interchange- of iraffle, without discrimination of rail's between such connecting lines. The fourth section prohibits the charging a greater rate for transportation, under similar conditions, for a shorter than for a longer distance over the same line, in the same direction; the shorter being included within the longer distance. The fifth prohibits the pooling of freights between competing earners. Subsequent sections contain subordinate regulations designed to facilitate the operation of the provisions of the sections above enumerated, especially the second, third, and fourth.
What is there in these provisions which, justly interpreted, renders the respondent's course of business, otherwise lawful, obnoxious to the prohibitory order of the commission? Surely there is nothing in it which contravenes its general purpose. But it is attempted by argument to show that this course of business is in conflict with some of the provisions which are designed to accomplish that purpose. The argument appears to me to rest upon unsubstantial grounds which have been swept away by the rulings of the commission itself upon constructions of the law which have been acquiesced in as just and reasonable. When it was held that it was consistent with the spirit of the law for the common carrier to group stations which were 75 or 100 miles apart, and charge a common rate to each, the strict construction of the act was abandoned for what was thought to be a more rational one. And when it was further conceded that, for reasons founded on public necessity or convenience, ¡.he carrier might carry freight beyond its terminal sfation, and deliver it to its patrons along spur tracks and belt lines, another broad eons traction was adopted in the genuine spirit of the law. The differing conditions and circumstances in large cities and small villages are rightly held to justify it. The facts in the present case illustrate this. The average distance from the station at Ionia to the merchants there is short, the place being
It is found by the commission that similar cartage is practiced by other common carriers at exceptional stations in Michigan, and is more or less extensively practiced by companies in other states at exceptional stations. By “exceptional” it is presumed to be understood that the conditions are similar to those at Grand Rapids, or otherwise the fact is irrelevant. Thus it happens that at. one place, where the pub-lie necessity or convenience requires it, it is met by the projection of branches and belt lines beyond the terminal station of transportation at that locality, and from them delivering freight to their customers, and at another by rendering substantially the same service by cartage, at another by lighterage, a “business in which railroads are not usually employed.” The only difference is in the means employed by the carrier, using that term in its strict sense, to accomplish the same end. But of what real significance is that? It is the service, the actual benefit given, which makes such discrimination as there is, and not the particular instrumentality by which it is effected. It is transportation, and that by a common carrier, in the one case as much as the other. So far as the public are concerned, the particular way in which the thing is done is matter of indifference, and no- possible reason is perceived why that may not be left to be determined by the economy of the carrier. To say that it must be done on raüs, and by steam, instead of on wagons, and by horse power, is purely arbitrary. The law is leveled at the carrier , as such, and only at the railroad company in its character of a carrier. Conceding it to be permissible to build belt lines and spur tracks to reach many customers, and thereby obtain more business, it is yet said that this is so because it is a part of railroad business, and the means of delivery is by railroad; that cartage is not usual railroad business; that it is as foreign -to ordinary freight business as it would be to do the packing for
It is charged that the schedule rates are violated. Wha,t do those rates mean? In strictness, as already pointed out, they mean, transportation from and to the stations named. In fact; they mean that, together with the terminal facilities which are afforded by the carrier. The contract of transportation is entered into with those in view. These 'incidental facilities furnished at the locality of (lie station in one form or another are enjoyed by The consignees of a very large proportion of the freight traffic of the country. There is no violation of the schedule of rates in this practice, for the schedule is not, in the general business of The public, construed in so strict a way as the suggestion implies.
It is said that, the defraying the expense of cartage delivery is generally exactly equivalent to the railway company’s reducing the freight by as much as the cartage would cost the consignee, and That this latter would he a violation of the long and short; haul
It is also said that because the respondent has grouped Grand Rapids and Ionia together it conclusively admits that, so far as transportation from the east to the warehouse of the company at the two places is concerned, it is under substantially similar circumstances and conditions. I do not understand the admission to be as stated. The warehouse at Grand Rapids is not in fact the terminus of transportation which the respondent had in mind when it made the grouping, nor does the fact that places are grouped make it necessary to assume that they shall all have the same accommodations. It might as well be said that, having regard to the long and short haul clause, such grouping is a conclusive admission that the distance from the east to Grand Rapids is not greater than that to Ionia, whereas nobody supposes that to be admitted. So far as there is any admission, it is only that the distances are nearly the same, — practically the same in the large view of the subject. It seems to me that we are not to allow our vision to be suddenly and capriciously narrowed, but should continue to see the subject on the same wide field in all its relations.
Tied to this erroneous assumption is another proposition, which, standing by itself, may be quite true, namely, that 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 where the service is admittedly under similar conditions, is an undue reduction in the price of carriage to the former, and therefore illegal. But this proposition, and the conclusion, as applied to such facts as we have in the present case, depend upon the assumption that there is any money value conferred gratis. If the incidents of delivery at the terminus, whether by the usage there it be by one means or another, are included in the contract and price for carriage, the costs of those incidents cannot be scaled off and carried back upon the whole price in order to re
And even if the argument above quoted were sound, it would not justify the order made by the commission, which not only forbids the alleged mischief, but the remedy to the public for an acknowledged disadvantage. Upon the theory suggested, the real unlawfulness of the practice is in the excess referred to, and the order should have been appropriate to its correction, and stopped there, instead of utterly depriving the public of a remedy “justified by the dissimilar circumstances.” But, as already said, the court can make no new order. The order of the commission stands or falls as made. The theory last mentioned, and the argument in its support, proceed upon too nice distinctions. Such close balancing is impracticable, and is not attempted in the administration of the statute generally.
In answer to the claim that on account of its greatly larger size and business Grand Rapids is entitled to greater facilities than a
In this opinion the result is reached upon considerations which do not depend upon any supposed right of the respondent to be protected in the privilege of putting itself upon a footing of equality in competition for the business at Grand Eapids. The commission has, in many instances, recognized such a right, and incidentally, at least, sought to protect it. The circuit courts in the fifth and ninth circuits have held that the competition of other roads might produce such dissimilarity in conditions as the statute recognizes in permitting the rendition of greater service for the same compensation. To what extent this may be carried it has not been deemed necessary here to say. For the reasons given, and with great respect to the commission, I cannot bring myself to the conclusion that their order is right, and I feel bound to withhold my assent from it. My conviction is that it would establish a precedent, the principle of which, carried to its logical conclusion, would reach far into existing usages, and bev extremely injurious to the interests of the public in many localities, without any corresponding advantages to the public anywhere else.