SWIFT & CO. ET AL. v. UNITED STATES ET AL.
No. 595
Supreme Court of the United States
Decided May 4, 1942
Argued March 6, 9, 1942
316 U.S. 216
Mr. Hugh B. Cox, with whom Solicitor General Fahy, Assistant Attorney General Arnold, and Messrs. James C. Wilson, Smith R. Brittingham, Jr., Robert L. Pierce, Daniel W. Knowlton, and E. M. Reidy were on the brief, for the United States et al.; and Mr. Douglas F. Smith, with whom Mr. Kenneth F. Burgess was on the brief, for the Alton Railroad Co. et al., appellees.
MR. JUSTICE JACKSON delivered the opinion of the Court.
Swift & Company and Omaha Packing Company, its wholly-owned subsidiary, filed with the Interstate Commerce Commission a complaint against the common carriers by railroad which served the Chicago Union Stock Yards, operated by the Union Stock Yard & Transit Company.1 They were later joined by Armour & Com-
The complaint charged that the packers shipped over lines of defendant carriers from various points of origin throughout the United States to Chicago, Illinois, what are known as “direct shipments” of livestock. “Direct shipments” refers to livestock consigned directly to a packer at the Union Stock Yards, as distinguished from a shipment consigned to а commission merchant at the Stock Yards for sale.2 Direct shipments are generally of livestock which has been purchased by the packer or its buyers at country points or at markets other than
The packers desire immediately to take their consignments from these unloading pens and insist that they desire no further services, and, of course, desire to incur no further charges.
The Yard Company, however, under tariffs filed with the Secretary of Agriculture pursuant tо the
The Commission, after hearings, denied the packers relief, for reasons later to be considered. It found that the delivery of stock consigned by the packers to themselves at the Stock Yards, into the Yard Company‘s pens without affording free egress for the shipments, is not an unreasonable practice on the part of the carriers, and that the yardage charges thereafter assessed by the Union Stockyards & Transit Company are not subject to the Commission‘s jurisdiction. 238 I. C. C. 179.
Appellants Swift and Omaha then brought suit in a District Court of three judges for a decree permanently suspending and annulling the order of the Commission and for a remand of the complaint for decision in accordance with principles of law to be determined by the court. Appellant Armour intervened, and participated in the trial. The railroads which had been named as defendants before the Commission also intervened, as defendants in the District Court. After hearing, the District Court held, without opinion, that the Commission‘s findings were properly supported by evidence; that the findings made by the Commission were adequate to support its conclusion; that the practices complained of were not unreasonable; and that the Commission did not have jurisdiction of the yardage charges. It dismissed the packers’ complaint, and appeal was taken to this Court.5
I
The packers’ contention that they are entitled as a matter of absolute right to delivery of their livestock from the unloading pens without payment of yardage charges, is based upon the decision of this Court in Covington Stock-Yards Co. v. Keith, 139 U. S. 128, and the subsequently enacted
In the Covington case, decided on facts antedating the Interstate Commerce Act, this Court said that “A carrier of live stock has no more right to make a special charge for merely receiving or merely delivering such stock, in and through stock yards provided by itself, in order that it may properly receive and load, or unload and deliver, such stock, than a carrier of passengers may make a special charge for the use of its passenger depot by passengers when proceeding to or coming from its trains, or than a carrier may charge the shipper for the use of its general freight depot in merely delivering his goods for shipment, or the consignee of such goods for its use in merely receiving them there within a reasonable time after they are unloaded from the cars. If the carrier may not make
After the decision in this case, there was enacted
After the enactment of
On February 28, 1920, prior to this decision and during the pendency of the controversy which led to it, there was enacted
In the subsequent case of Atchison, T. & S. F. Ry. Co. v. United States, 295 U. S. 193, it was pointed out that, in appropriate circumstances, the Commission might properly find that the carriers’ duty to deliver livestock ended with delivery into suitable pens at the Chicago Union
Our most recent decision bearing on the Commission‘s power to determine when transportation ends, with reference to shipments of livestock to the Chicago Union Stock Yards, is Armour & Co. v. Alton R. Co., 312 U. S. 195, rendered in the controversy over the propriety of yardage charges made in circumstances precisely similar to those of the present case, by virtue of which Armour & Co. intervened in the present litigation. There it was held by a unanimous Court that Armour‘s complaint in the federal District Court should be dismissed, since primary jurisdiction was lodged in the Interstate Commerce Commission; and it was said that the facts alleged in the complaint revealed that “there are many questions relating to complex transportation problems that must be solved as a prerequisite to a determination of whether the railroads, in violation of contracts or governing laws, have failed properly to deliver petitioner‘s livestock.” Id. at 200. By way of illustration, the opinion detailed several questions which would arise, and among them was the following: “At what point did the common carriers’ duty to transport come to an end? Neither the statute nor any applicable principle of governing law can be said to mark this boundary, under all circumstances and conditions and in all cases.” Ibid. The decision agreed with the view of the railroads and courts below that “adjudication of the issues presented relates to such complex transportation problems that determination of the legal questions must necessarily be preceded by the consideration of extensive evidence in a specialized field, and that decision of such questions is by statute vested exclusively in the Interstate Commerce Commission.” Id. at 197. Finally, it was said that “If use of the terminal facilities for egress to the street after unloading of livestock is a
Thus it is seen that, before the enactment of
II
In determining whether the Yard Company‘s unloading pens were suitable points at which to terminate the duties of carriers to consignees, and points where the consignees entered into a relationship with someone other than the carriers, the Commission was justifiеd in considering, as it did, all that would account for the evolution
The bulk of the movement of stock is received in the Yards during the first days of the week, and approximately three-fourths of the daily movement is unloaded between three and eight in the morning. In some instances, immediate removal of the animals from the unloading pens is necessary to preserve an even flow of livestock from the cars into the Yards. Apart from the direct shipments, much of this stock must be watered, fed, and weighed in the Yards. It is removed to holding pens, and one of the important functions of the Stock Yards is to furnish the facilities for marketing. Commission brokers or market agencies receive consignments of livestock and sell them for the account of the producer, sometimes to the packers and sometimes to purchasers who require re-shipment.
Shipments must be moved with great rapidity and order, and it may be that this can best be done by employees
The interests of the public and of the community are entitled to consideration. This transportation is of a special kind of property on the hoof, which calls for special handling in the interests of economy, safety, sanitation, and health. The Commission has found that “the evidence fails to disclose how, as a practical matter, an annual volume of 30,000 carloads of livestock could be discharged into and handled through the public streets of Chicago.”6
The existence and suitability of alternative facilities for delivery of livestock were considered by the Commission. Some stock is and can be delivered at team tracks and some at industrial sidings. These facilities are inadequate for handling the entire volume of direct shipments. It does not appear, however, that the existence or adequacy of alternative facilities for delivery at other points is particularly important in the case, because the shipments involved are consigned to the packers at the Union Stock Yards by their own choice. It does not appear that they are demanding an increase of other facilities, and the case has not been considered in that light.
The packers object to consideration of their own part in evolving the situation of which they complain. The Commission, however, considered it and made findings as to the history of the relation between the Yard Company and the packers.
The Commission found that, since the Yard Company began operation in 1865, there has been a line of demarcation between the services which shippers were
Having put themselves in this independent position and threatened to reduce the revenues of the Yard Company, the packers negotiated a contract which, in substance, involved the abandonment by the packing companies of this threatened move to Indiana and surrender of their own facilities for receiving direct shipments in return for a participation in the profits and capital of the Yard Company. In 1892, the packers conveyed to Stock Yard interests the Indiana site and the Central Stock Yards, and agreed by contract to dismiss the suit filed
The packers received income bonds of a new corporation, the security of which was the revenues of the Stock Yards, in the amount of $3,000,000. Swift received approximately one-third. These bonds were subsequently redeemed by the issuing corporation.
The railroad companies were not parties to this agreement, and the Commission found that the packers, at the time the agreement was entered into, did not consider the assessment of the yardage charges to be a matter of any concern to the railroads. During the existence of the agreement described, the packers paid the yardage charges, and participated in the receipts from such charges. This agreement expired in 1907, except for the covenant by the packers not to establish or become interested in any other stockyards for the receipt of their livestock so long as the Yard Company maintained its business in Chicago. It appears, however, that after the expiration of the contract the Yard interests were informed thаt the packers were still threatening to move their plant from Chicago, and it appears that Swift expected to receive a share of
Thus, for more than seventy years the responsibility of the railroads in respect of direct shipments consigned to the packers has ended with the unloading service. The packers, from that point on, have negotiated their own arrangement with the Yard Company. More recently, of course, the Stock Yards have passed under public regulation, and discrimination or rebating of the kind once practiced is no longer possible. The Commission finds that it was the attitude of the packers that their patronage was a thing of value to the Stock Yards, and they рroposed to sell that patronage to the Yard Company. The Packers and Stockyards Act having made private arrangements of this kind unlawful,7 the packers now contend that the carriers must protect them against yardage charges on their direct shipments.
It was the packers themselves who suppressed the competitive yards and alternative facilities for unloading their stock. The Commission, however, has not held the packers to be estopped by their conduct. It has only considered the practice and usage of the packers as bearing on the suitability of the Yard Company‘s unloading pens as a point of termination of the carriers’ responsibility. The Commission has held it to be a reasonable practice that the railroads’ responsibility for transportation of such direct shipment consigned by the packers to themselves at the Union Stock Yards ends with unloading into the unloading pens, which it found to be suitable, and that the carriers’ failure to negotiate or purchase free egress for such shipments from the unloading pens has
III
Having properly decided that transportation ended when the livestock reached the unloading pens, was the Commission in error in concluding that it had no jurisdiction to inquire into the reasonableness of practices or charges of the Yard Company beyond that point?
The appellants contend that the fact that property of the Yard Company was involved in furnishing egress to the appellants’ shipments did not prevent the Commission from exercising such jurisdiction. The Yard Company, they say, was the agent of the railroads and acted in a dual capacity, as public stockyards subject to the Packers and Stockyards Act and also as a common carrier by railroad subject to the Interstate Commerce Act. In the latter capacity, it is said, the Yard Company, as the railroads’ agent, provides terminal facilities for livestock delivery, which is a part of the railroads’ obligation.
The Stock Yards are named in the railroads’ tariffs as a specific station to which the railroad rates to Chicago are applicable. The line-haul railroads publish an allowance to the Yard Company of $1.25 per single-deck car, and $1.50 per double-deck car, for unloading livestock. The Yard Company also files with the Interstate Commerce Commission its tariff which publishes the same amounts as charges for unloading the livestock “as carrier‘s agent.” Since unloading is required by statute as a part of the transportation service, the filing of the
If the Yard Company is in the dual position of being at once the agent of the carriers for the unloading of the stock and the principal in rendering any subsequent services, so is it under dual regulatory schemes and authorities. In so far as it is an agency in transportation, it is subject to the
The Union Stock Yards are a public utility. The decision of the Commission that the transportation ends with unloading leaves the stock in the hands of a public utility—the Union Stock Yards—for delivery to the consignee. Nеither the Interstate Commerce Commission nor this Court can assume that the charges or practices
It follows that the decree below should be and hereby is
Affirmed.
MR. JUSTICE DOUGLAS, dissenting:
The question in this case is not where the transportation ends but what the particular transportation service includes. I do not suppose that it would be contended that a railroad could lawfully exact from a passenger who had alighted on the station platform an extra charge for passing through the station to the street. The reason why it could not make that exaction is that, although the transportation ended at the platform, the transportation service included free egress from the station. I think that that principle is applicable and сontrolling here.
Covington Stock-Yards Co. v. Keith, 139 U. S. 128, which arose prior to the Interstate Commerce Act, applied that
So far as I am aware, the Covington case has never been overruled. As recently as 1939 we approved it. For we stated in Union Stock Yard Co. v. United States, 308 U. S. 213, 219, after reviewing
Atchison, T. & S. F. Ry. Co. v. United States, 295 U. S. 193, did not alter that rule. As stated by the majority in that case (295 U. S. p. 200): “The Hygrade Company did not seek and the Commission did not grant relief upon the ground that the carriers failed to provide egress from the unloading pens in the public stockyards to the city streets by means of which consignee‘s animals might be
Hence, I think we reach the question of the application of the rule of the Covington case to this situation unembarrassed by a prior holding.
I do not agree that Congress has left to the Commission the power to eliminate free egress from this particular transportation service. Whatever may have been the scope of the authority of the Commission prior to the Transportation Act of 1920 (Adams v. Mills, 286 U. S. 397), it should be noted that Mr. Justice Brandeis, the author of Adams v. Mills, joined in the dissenting opinion in the Atchison case, which repudiated the notion that the transportation service in this type of shipment was completed at the unloading pens. Furthermore, as stated in the dissenting opinion in the Atchison case, it is clear that Congress itself provided a rule, in
But it is said that the matter is subject to the
The Interstate Commerce Commission followed that rule in Hygrade Food Products Corp. v. Atchison, T. & S. F. Ry. Co., 195 I. C. C. 553. That case met with reversal here. Atchison, T. & S. F. Ry. Co. v. United States, supra. And the opinion of the Court contained a dictum that “Usage and physical conditions combined definitely to end transportation, at least in respect of these shipments, with unloading into suitable pens as is now required by
We should reaffirm once more the rule of the Covington case and reject the dictum in the Atchison case. We should hold that
The CHIEF JUSTICE and MR. JUSTICE MURPHY join in this dissent.