LITTLE ROCK & M. R. CO. V. ST. LOUIS S. W. RY. CO.
LITTLE ROCK & M. R. CO. v. ST. LOUIS S.. W. RY. CO. (two cases. Nos. 394, 399). SAME v. ST. LOUIS, I. M. & S. RY. CO. (two cases. Nos. 395, 398). SAME v. LITTLE ROCK & FT. S. RY. CO. (two cases. Nos. 396, 397). (Circuit Court of Appeals, Eighth Circuit. September 24, 18tH.) 1.
CARRIERS-INTERSTATE ACT-CONNECTING LINES-DISCIUMINATION-PREPAYMEN1' OF CHAIWES.
An interstate carrier does not subject another canier to an "undue or unreasonable disadvantage" (Interstate Commerce Act, § 3, cl. 2) by exacting the prepa;rment of freight on all property received from it at a given station, although it does not require charges to be paid in advance on freight received from other indiViduals and competing carriers at such station. 59 Fed. 400, affirmed.
SAME-THROUGH Bn,LING, RATING. AND LOADING.
An interstate carrier which enters into an arrangement with a connecting caiTier for through b11ling, rating, and loading, and for ilie use of its tracks and terminals, is not obliged to make the same arrangement with other connecting carriers, though the physical facilities for an in. terchange of traffic are the same. 59 Fed. 400, affirmed.
Appeals from and Writs of Error to the Oircu.it Oourt of the United States for the Eastern District of Arkansas.
These were six suits which were brought by the Little Rock & Memphis Railroad Company against the St. Louis Southwestern Railway Company, the St. Louis, Iron Mountain & Southern Railway Company, and the Little Rock & IJ't. Smith Railway Company, for alleged violations of the third section of the interstate commerce law (24 Stat. 379, 380). A suit at law and a bill in equity were filed against each of the defendant companies above named, in which the Little Rock & Memphis Railroad Company counted UP(}ll the same violation of the law; asking in the one case for an injunction, and in the other for damages. 'Ihe six suits against the three companies involved similar questions. They have been argued as one case, and it is found most convenient to dispose of them in a single opinion. SUbjoined diagrams will serve to illustrate the relations which the several railroads concerned occupy to each other. It will be seen by a glance at diagram No.1 that the Little Rock & Memphis Railroad runs east and west from Little Rock, Ark., to Memphis, Tenn. Its total length is about 135 miles. Coming down from the north, the St. Louis Southwestern Railway crosses the Little Rock & Memphis Railroad at Brinkley, a point intermediate between Little Hock and Memphis. It also crosses a branch of the St. Louis, Iron Mountain -& Southern Railway, leading from the main line of that road into Memphis, at Fair Oaks, which is a point about 20 miles north of Brinkley. Diagram No.2 illustrates the situation further west, in and about Little Hock. It will be seen that the main line of the St. Louis, Iron Mountain & Southern Railway Company enters Little Hock from the north, and thence runs south' west through Arkansas into Texas, with a br[lllch leading from Little Roel. to the southeast. The Little Hock & Ft. Smith Railway runs west from Little Rock to Ft. Smith on the western border of the state of Arkansas, and to Ft. Gibson in the Indian TelTitory. Its length is said to be about 165 miles. Diagram No. 2 does not show the main line of the St. Louis Southwestern Hailway, which is disclosed by the first dia6'1'am; but it is sufficient to say that, after passing through Brinkley, it runs in It sQuthwesterly direction through Arkansas, and far into Texas. As against the St. Louis Southwestern Company, complaint was made that it refused to receive freight or passengers coming over the Little Roclt & Memphis RaJlroad except at local rates, and that it refused to honor through tickets or through bills of lading issued by the latter road, and that it required all freight to be rebilled and relo-aded, and all passengers to purchase new tick-
ets, at the town of Brinkley, while at the same time it accepted through tickets and through bills of cars loaded in car-load lots, that came OYer the line of the St. Louis, Iroll ,:td:01,1ntain & Southern Railway Company, an,d, thllt it qid this although the fatUities for an interchange of freight and passengers at Brinkley were in every respect equal to those existing at Fair Oaks., As against the Little Rock & Ft. Smith Railway Company, complaint was made that it refused to accept interstate freight at Little Rock under through bills of lading issued by the Little Rock & Memphis Railroad Company, whlle'it accepted freight under through bills of lading issued by all other lines, of railroad terminating lI-t the city of ,Little l,'tock, Ark., and that it likewise refused to accept freight ,from the Little Rock & Memphis Railroad yompliny except upon prepayment of all freight charges, while at the same' 'time', it accepted freight ,at U'ttle Rock from all other individuals ap.d'corpotations Without the prepayment of freight Charges. Complaint was alSo made agaInst the Little Rock & In. Smith RailwllS Company that it accepted from, the St. Louis, Iron Mountain & Southern Railway Company passengers on through tickets, alid with through checking of baggage, while it refused', ,to accept passengers coming over the Little Rock & Memphis Railroad on through tickets Issued by ,that road, and that it charged passengers coming from that road local rates from Little Rock westward, and reqUired ,them to recheck their baggage at Little Rock. Complaint was also made against the Little Rock & In. Smith Railway Company that it exchanged freight with the St. Louis, Iron Mountain & Southern Railway upon an arrangement for, through billing, and in the cars iii Which it was shipped. when shipped in car-lQad lots, anq,that it refused at the same time to exchange freight with the Little Rock' & Memphis Railroad Company, except upon loeaJrates, and that It refused to accept from or deliver to the latter road an,. loaded cars. As against the St. LouiS, Iron Mountain & Southern Railway Company. complaint was made that it refused to receive any freight from, the Little Rock & Memphis Railroad Company at Little Rock, except upon the prepayttlelit of all charges thereon, while it received freight at that point from all other persons and corporations without demanding the prepayment of freight charges. It was further alleged, as against that company. that the discrimInation in question was made, not because the defendant company was unWilling to extend credit to. the Little Rock & Memphis Railroad: Company, but from a desire to oppress that company and destroy its business. A demurrer having been filed to the several bills in eqllity and complaints at law, the same were sustained by the circuit court, whereupon the complainant company declined to plead further, and a final judgment dismissing the actlon was entered In each case. The opinion of the circuit court is reported in 59 Fed. 400. The followilig is the plat referred to in the statement:
LITTLE ROCK & M. R. CO. V. ST. LOUIS 8. W. RY. CO.
W. E. Hemingway (D. M. Rose and G. B. Rose, on the brief), for appellant and plaintiff in error. George E. Dodge (B. S. Johnson, on the brief), for appellees and defendants in error Little Rock & Ft. S. Ry. Co. and St. Louis, I. M. &S. Ry. Co. John M. Taylor (Samuel H. West and J. G. Taylor, on the brief), for appellee and defendant in error St. Louis S. W. Ry. Co. Before CALDWELL, SANBORN, and THAYER, Circuit Judges. THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. It will be observed that the sole question in the cases filed against the St. Louis, Iron Mountain & Southern Railway Company concerns the right of that company to require the prepayment of freight charges on all property tendered to it for transportation at Little Rock by the Little Rock & Memphis Railroad Company, while it pursues a different practice with respect to freight received from other shippers at that station. At common law a railroad corporation has an undoubted right to require the prepayment of freight charges by all its customers, or some of them, as it may think best. It has the same right as any other individual or corporation to exact payment for a service before it is rendered, or to extend credit. Oregon Short Line & U. N. Ry. Co. v. Northern Pac. R. Co., 51 Fed. 465,472. Usually, no doubt, railroad companies find it to their interest, and· most convenient, to collect charges from the consignee; but we cannot doubt their right to demand a reasonable compensation in advance for a proposed service, if they see fit to demand it. This common-law right of requiring payment in advance of some customers, and of extending credit to others, has not been taken away by the interstate commerce law, unless it is taken away indirectly by the inhibition contained in the third section of the act, which declares that an interstate carrier shall not "subject any particular person, company, corporation or locality * * * to any undue or unreasonable * * * disadvantage in any respect whatever." This prohibition is very broad, it is true, but it is materially qualified and restricted by the words "undue or unreasonable." One person or corporation may be lawfully subjected to some disadvantage in comparison with others, provided it 'is not an undue or unreasonable disadvantage. In view of the fact that all persons and corporations are entitled at common law to determine for themselves, and on considerations that are satisfactory to themselves, for whom they will render services on credit, we are not prepared to hold that an interstate carrier subjects another carrier to an unreasonable or undue disadvantage because it exacts of that carrier the prepayment of freight on all property received from it at a given station, while it does not require charges to be paid in advance on freight received from other individuals and corporations at such station. So far as we are aware, no complaint had been made of abuses of this character at the time the interstate commerce law was enacted, and it may be inferred that the
particular'wrong complainetliOf was not within the special contemplation of congress. This being so, the general words of the not to be gilVena'scope which ,will deprive the defendantcompany of anundotbted· common-law right, which all other individuals and, corporations are still privileged to, exercise, and ordinarily do exercise. ,It is most probable that self-interestthe natural .desire of all carriers to secure as much. patronage as prevent this of discrimination from becoming a public grievance so faras Individual shippers are concerned; and it is desirable that th,e courts should interfere as little as possible with those business rivalries existing between railroad corporations themselves, which are not productive of any serious inconvenience to shippers. .We think, therefore, that nO error was committed in entering 'the judgment and decree in favor of the St Louis, Iron Mountain & Southern :Railway Company. The complaint preferl'e(H;tgainstthe other companies, to wit, the St. LOUis southwestern and the Little Rock & Ft. Smith Railway somewhat· different.' Tt consists in the alleged reo fusal bfthbsecompanies........F irst, to ponor through tickets and through bills of'lf!.ding issued by the complaihant company, or to enter into arrangefuentswith' it"for through 'billing or ,through rating; and, thea¥eged refusal of .these 'companies to accept loaded carsC()I'ning frolll'th,e Little Rock &iMemphis Railroad,and in their actidnin requiring' freight to rebilled and reloaded at the two connecting-points, to wit,Brinkley and Little Rock. discussing the preeise'lssue which arises upon this record, it will well to restate one or two propositions that, are supported by high authority as well as persuasive reasons, and which do not seem to be seriously controverted even by the complainant'seounseI. In the til';'Stj)lace, commerce law does not require an interstate carner to, treat alI other connecting carriers in precisely the same manner, without reference to its oWn interests. Some play is given by the act to self·interest. The inhibitions olthe third section of the law, ag-ainst giving preferences or advantages, are aimed at those which are "undue or unreasonable;" and even that clause which reqUires carriers "to afford all reasonable, proper and equal of traffic" does not require that such facilities "equal fa,cilitles" shall be afforded under dissimilar circumstances ,,' Moreover, the direction "to afford equal facilities and for an interchangErof traffic" is controlled and limited by the proviso that not be construed as requiring a carrier to give the use ot'ftstra,cksor terminal facmties to another carrier." KenCo. v. LouisTIlle & N. R. Co., 37 Fed. 571; Oregon tucky N. By. Co. v. Northern Pac. R. Co., 51 Fed. 465, 473. Short In it has been held that neither by the common law llOl'Bj';',th:e'interstate commerce law have the na,tional courts been to compel interstate carriers to enter into arra'n:g'emetlts or agreements with each other for the through billing 9f 'freight; for joint through rates. Agreements of this nature, it 1s stlid/p.nder existing laws, depend upon the voluntary action of the parties, and cannot be enforced by judicial proceed-
LITTLE ROCK & M. R. CO. V. ST. LOUIS S;·W. RY. CO.
ings without additional legislation. Little Rock & M. R. Co. v. East Tennessee, V. &; G. R. Co., 3 Interst. Commerce Com. R. 1, 16, 17; Little Rock & M. R. Co.v. St. Louis, ·T. & S. Ry. Co., 41 Fed. 559, and cases there cited by Judge CaldwelL Furthermore, it has been ruled by Mr. Justice Field in the case of the Oregon Short Line & U.N. Ry. Co. v. Northern Pac. R. Co., 51 Fed. 465,474, that the third section of the interstate commerce act does not require an biterstate carrier to receive freight in the cars in which it is tendered by a connecting carrier, and to transport it in such cars, paying a mileage rate thereon, when it has cars of its own that are available for the service, and the freight will not be injured by transfer. It should be remarked in this connection that the bills on file in the .present cases, as well as the petitions in the law cases, fail to disclose whether the offending companies have refused to receive freight in the cars in which it was tendered to them, even when it would injure the freight to transfer it, or when they had no cars of their own that were immediately available to forward it to its'destination. Neither do the bills or the petitions disclose whether, in tendering freight in .cars to be forwarded, the complainant company demanded the payment of the usual wheelage on the cars, or tendered the use of the same free, for the purpose of forwarding the freight to its destination. The allegations of a refusal to receive freight in cars are exceedingly general, and convey no information on either of the points last mentioned. As we have before remarked, the several propositions above stated do not seem to be seriously questioned. It is urged, however, in substance, that although the court may be powerless to make and en· force agreements. between carriers for through billing and through rating, and for the use of each other's cars, tracks, and terminal facilities, yet that when a carrier, of its own volition, enters into an agreement of that nature with another connecting carrier, the law commands it to extend "equal facilities" to all other connecting carriers, if the physical connection is made at or about the same place, and the physical facilities for an' interchange of traffic are the same, and that this latter duty the courts may and ·should enforce. It will be observed that the proposition contended for, if sound, will enable the courts to do indirectly what it is conceded they cannot do directly. It authorizes them to put in force between two carriers an arrangement for an interchange of traftic that may be of great financial importance to both, which could neither be established nor enforced by judicial decree, except for the fact that one of the par· ties had previously seen fit to make a similar arrangement with some other connecting carrier. It maybe, also, that the arrangement thus forced upon the carrier would be one in which the public at large have no particular concern, because the equal facilities demanded by the complainant carrier would be of no material advantage to the general public, and would only be a benefit to the complainant. Another necessary result of the doctrine contended for is that it deprives railway carriers, in a great measure, of the management and control of their own property, by destroying their right to
Into 8.lTangements. for the use of Its tracks or terminal facilities, with'one or more connecting'lines, without subjecting" itSelf to llie charge of giving or advantage!lto5ucb lines, or .of unlawundue fully :<!lscriIlllnll,ting, .qtp\lrcarriers., If . making for
termine what contracts and traffic arrangements with connecting carriers are desirable and what are undesirable. There ought 00 be a clear authority found in the statute for depriv· ing a carrier qf this important right, before the authority is ex· ercised, for, when questions of that nature .have to be solved, a great variety of complex considerations wilLpresent themselves, some of whioh can neither be foreseen nor stated. A railroad having equal facilities ata point for fOl"IIling a physical connection with a num.ber.of connecting carriers might find it exceedingly beneficial to enter into an with one of them., having a long line and important connections, for through billing 'and rating, and ·for the use of each others cars and terminal facilities, while it would find it exceedingly undesirable and unprofitable to enter into a similar ar· rangement' with, ,a shorter road, which-could offer nothing in reo tum. Or the. case might be exactly the reverse. The shorter, and at the time the less important, road, might be able to present sound business reasons which would make an arrangement with it, of the kind above indicated, more desirable than with the longer line. Furthermore, ifit be the law that an arrangement for through billing and rating with one carrier necessitates a like arrangement with others, this might be a controlling influence in determining a railway company to refuse to entel' into such aD' arrangement with any con· necting carrier. In view of .these considerations, we are unable to adopt a construction of the interstate commerce act which will practically compel a carrier, when it enters into an arrangement with one carrier for through bUling and rating and for the use of its tracks and terminals, to make the same arrangement with all other connecting carriers, if the. physical facilities' for an interchange of traffic are the same, and to do this without reference to the question whether the enforced arrangement is or is not of any material advantage to the public. In two of the cases heretofore cited (Kentucky & I. Bridge Co. v. Louisville & N. R. Co., and Oregon Short Line & U. N. Ry. Co. v. Northern Pac. R. Co.), it Wm! held that the charge of undue or un· reasonable discrimination cannot be predicated on the fact that a railroad company allows one connecting carrier to make a certain use of its tracks or terminals, which it does not concede to another. This conclusion was reached as the necesSary result of the final clause of the third section of the interstate commerce law, above quoted, to the effect that the second paragraph of· the third section shall not be so construed as to require I;t carrier to give the use of itsl itl."acks or terminals to another company. Railroads are thus left· by the commerce act to exercise practically as tull control over their/tracks and. tel"IIlinalsWith reference to other carriers as they exercised' at common 'The language' of Mr. Justice Field ill th8itbehalf'wasas follows: . . . '''ttfolIO*s fr6m thts ;.. · i,.J. 'that a common carrier is left free to
LITTLE ROCK & M. R. CO. V. ST. LOUIS B. W. RY. CO.
such use by other companies, a common carrier will be governed byconsiderations of what is best for its own interests. The act does not purport to divest the railway carrier of its exclusive right to control its own affairs, except in the specific particulars indicated." 51 Fed. 474, 475.
Furthermore, it is the settled construction of the act, as we have before remarked, that it does not make it obligatory upon connecting carriers to enter into traffic arrangements for through billing and rating either as to passenger or freight traffic. This conclusion has been reached by all of the tribunals who have had occasion to consider the subject, and it is based on the fact that, in enacting the commerce act, congress did not see :fit to adopt that provision of the English railway and canal traffic act, passed in 1873, which expressly empowered the English commissioners to compel connecting carriers to put in force arrangements for through billing and through rating when they deemed it to the interest of the public that such arrangements should be made. Little Rock & :M:. R. Co. v. East Tennessee, V. & G. R. Co., 3 Interst. Commerce Com. R. 1, 9, 10; Kentucky & L Bridge Co. v. Louisville & N. R. Co., 37 Fed. 567, 630, 631. See, also, the second annual report of the interstate commerce commission (2 Interst. Commerce Com. R. 510, 511). In the light of these adjudications, we are compelled to conclude that if the charge of an unreasonable discrimination cannot be successfully predicated on the ground that a railway company makes an arrangement with one connecting carrier for the use of its tracks and terminals, which it refuses to make with another, although the physical facilities for an interchange of traffic are the same, then the charge of discrimination cannot be predicated on the ground that it makes an arrangement for through billing and rating with one carrier, and does not make it with another. The interstate commerce act does not, it seems, at present, make it obligatory on carriers to make arrangements of either sort, and does not give the commission power to compel such arrangements, but leaves connecting carriers, as at common law, to determine for themselves when such arrangements are desirable, and when undesirable. Moreover, arrangements for through billing and rating will, as a general rule, necessarily involve an agreement for the use, to some extent, of each other's terminals and tracks; and, by the express language of the statute, such use crunnot be enforced without the consent of the owner. We are un· willing, therefore, as the law now stands, to compel the defendant companies to afford the facilities which the complainant ·demands. As was Isaid by Mr. Justice Jackson, then circuit judge, in the case to which we have already referred:
"The law should be as liberally construed in favor of commerce among the states as its language will permit; but, when complaint is made or relief is sought solely or mainly in the interest of the common carriers engaged in the transportation of such commerce, the act complained of or the. right asserted should not rest upon any doubtful construction, but should clearly appear to have been forbidden or conferred."
We are also forced to conclude that if the public interest reo quires that interstate carriers shan be compelled to put in force. arrangements for through billing and rating, and for the establish-
FEDERA,L " REPORT,ER·.voL "',, . ,',J ." ·
stat-p.te should be made more exthe commission. should be empo",ered to prescribe it View of the clrcUIDstanc'es' of each pa:ttlcular case. .. .was tile to a provision found of the /ilU1:W of (article 17, § 1), as having liIQW.e.]:)M-pngo;n the discUlilsed in these cases; but as the billfjl ,petiUons .1iled plalnly. founded on the interstate comaJ:j.d tb,uliI a question arising under that act, there. is no from diverse citizensh!p, we :l),()t felt to, cPnsiMr or decide the proposition In view of what has founded been said,.:t;heseverflI are hereby affirmed.
(Clrciult Court of
Ninth Circuit. ,
May 28, 1894:)
JOJNTVENTURlC IN PuRCHABlIll niDSALE,'oll'LANDS TO ,SEr.t.. . . ,. '
ACTION ll'OlfPROll'ITB ON
PIainti,¢ and, apother /lgreement with defendants in June, 1882, to purchase certaln timber lands for de(endants,·the former to re'ceive for theirserVlces a certain perc-entage of the profits arising out of the sale btthe llmds or timber.: after dedUcting taxes and interest on the indefe.p.llants the time ,a.pd terms9f the :sllJe. Lands ,were tbereuuq.6};,between lw>A, and 1883. In 1883, defendan.1:EI1.'efused tul, offer made by a respon.siJ)le person to purchase the lAnds at a·'prIce which iwouldhave yielded abput 300 per cent. profit.: ·HeW, by a d:tivided courtvthllt plaintiff could maintain an ac1awt9 his.lJhlu"e of the profits based upon such ofCer.
, El'ror to theCfrcuit
Court for the Northern District of California.
1'111s. was an action by J: T. Noyes and John S. Noyes. The complaint, sworn, to and filed .MllY 22, 1891, alleged that on June 5, 1882, deferitlants and Delevan F. Clark and M. P. FlImore entered into an agreement with plalhtiff .and one CharUs G. Noyes whereby the latter agreed to purchlj.$e for the f,ormer certain redw9Qd timber lands, and to reo therefor cent. of the net profits to be derived from the saleo! such lands or from'stumpage\ after addin'g to the. sum of money expended In the purchase thereof the annUal taxes and' 7 Ver cent. Interest per annum; "8tumpage" to mean the value of the timber scaled on the land If cut by defendants, or tlle amount received from the sales, defendants "to determine the times and terms of sal¢s' of either, the market value of stumpage there obtaining." That plaintiff and said Noyes, Imm,ediately after the execution of Bald contract, purchased at dlvers times from June 5, 1882, to February :l7., , 1883, 5,19$.f!4 acres .of, redwood timber: lands for defendants and theh' associates. the tota1C08tof.'which, under the, terms ot the 6, 1883, That, ·on such day, qefendll-Dts,anll their associates. were offere4 .1;Iy ,a Person, wiIIlng aJl.d. to"ptirc11\lse said laud!,!, the sum of. ,per .acre for alI of said lands, and that such person, If such offer had bee;n a9c.6pted, wouldbave paJd defendants therefor the sum of $129,063.25, but that defendants declIned such That. the net . Of tile purchase 0( such, lands 8oUlOQnted, on Auto $\lM16.61, .that plaintiff, In, 1883, demanded of commissions, of 7lh per cent,. sucl!. net profits, which
Rebearlng pend Ins-