A railroad engaged in interstate commerce does not violate the
provisions of §§ 4 and 6 of the Interstate Commerce Act, by
furnishing cartage for delivery free of charge to the merchants of
one town on its line and not furnishing similar service to the
merchants of another town on its line thirty-three miles distant,
nor by failing to publish such free cartage in the schedule
published in the first town, when such privilege has been openly
and notoriously enjoyed for twenty-five years.
The fourth section of that act has in view only the
transportation of passengers and property by rail, and when
property transported as interstate commerce reaches its destination
by rail at lawful rates, having regard to rates charged upon
similar transportation to other points on the line, it does not
concern the Interstate Commerce Commission whether the goods, after
arrival, are carried to their place of deposit in vehicles
furnished by the railway company free of charge or in vehicles
furnished by the owners of goods, and the same rule applies to the
transportation of passengers.
In matters of this kind, much should be left to the judgment of
the Commission, and, should it direct by a general order that
railway companies should thereafter regard cartage, when furnished
free, as one of the terminal charges, and include it as such in
their schedules, such an order might be regarded as a reasonable
exercise of the Commission's powers.
The Detroit, Grand Haven and Milwaukee Railway Company, a
corporation of the State of Michigan, operates a railroad wholly
within that state, running westwardly from Detroit to Grand Haven.
In connection with Eastern roads, it is engaged in interstate
commerce. Upon its line are the Cities of Ionia and Grand Rapids,
distant 124 and 157 1/2 miles from Detroit, respectively. It has an
established tariff of freight rates to these points from New York,
Philadelphia, and other points east of Detroit.
On September 18, 1888, Stone & Carten, retail merchants at
Ionia, filed a petition before the Interstate Commerce
Commission
Page 167 U. S. 634
complaining that said railroad company was unduly discriminating
against Ionia and preferring Grand Rapids, in violation of certain
provisions of the Interstate Commerce Act. The company filed an
answer, and the case was heard upon a written stipulation of facts,
which constituted the sole evidence on which the case was submitted
to the Commission for decision.
The facts found by the Commission were as follows:
"1. The complainants are co-partners doing business under the
firm name of Stone & Carten, and are engaged in the sale at
retail of goods, wares, and merchandise in the City of Ionia,
County of Ionia, and State of Michigan, purchasing said goods,
wares, and merchandise at Philadelphia, Pa. New York, N.Y., Boston,
Mass., and points east of Detroit, Michigan."
"2. That the respondent railway company is a corporation
existing under and pursuant to the laws of the State of Michigan,
and is a common carrier of passengers and property for hire between
the City of Detroit and the City of Grand Haven, both of said
places and its entire line of railroad being in the State of
Michigan, but it does not own and control a line of steamboats
plying across Lake Michigan between Grand Haven and Milwaukee,
Wisconsin, but there is a line of steamboats engaged in the
transportation of persons and property across Lake Michigan between
Grand Haven and Milwaukee, from which the respondent receives
traffic consigned over its road from Milwaukee, and to which it
delivers traffic from its road destined to Milwaukee. That all of
said boats are under the control and direction of an independent
corporation, organized under the laws of the State of Michigan, by
the name of the Grand Haven and Milwaukee Transportation Company.
That the management of the business of the last-named company is
under the management and control of the same officers as those
which manage and control the road and business of the
respondent."
"3. The respondent, for its services as a common carrier for
continuous shipment, under a common arrangement, of property from
Detroit to its stations on its line of transportation, established
and published a schedule of rates and charges,
Page 167 U. S. 635
a tariff of freights which makes on all freights from
Philadelphia, New York, and Boston, and all other points east of
Detroit, consigned over the respondent's road, the same rates and
charges for the complainants which are made and charged for the
same class of freights to the merchants doing business at the City
of Grand Rapids; a copy of which schedule or tariff is hereto
annexed, and made and deemed a part of this stipulation."
"4. The shipments of freight from Philadelphia, New York,
Boston, and points east of Detroit, which are delivered to the
respondent's road at said City of Detroit and transported by it
over its line of railway, pass through the City of Ionia before
reaching the City of Grand Rapids. That it is a shorter distance
from Detroit to Ionia than from Detroit to Grand Rapids, and over
the same line, in the same direction, the shorter being included in
the longer distance."
"5. That the respondent provides at its own expense, drays,
carts, and trucks at the City of Grand Rapids, for the service of
transporting merchandise and freight generally, as well as
merchandise and freight consigned from Philadelphia, New York,
Boston, and points east of Detroit between its station at Grand
Rapids and the places of business of merchants, traders, and other
patrons of its road at that place, which service it performs
without additional charge to the owner or shipper of property on
account thereof. That this service is not furnished to
complainants, or other merchants, traders, and patrons of its road
at the City of Ionia. That this service at Grand Rapids has been
openly and notoriously rendered for a long period of time, to-wit,
for twenty-five years and upwards. That its station at the said
City of Grand Rapids is within the corporate limits thereof, and
is, on an average, one and a quarter miles from the business
sections of said city where the traffic of the places tributary to
respondent's road originates and terminates, while respondent's
station for receiving and discharging freight and property at the
City of Ionia is not to exceed an eighth of mile from the business
center of said city. That at the City of Grand Rapids, there are
two other railroads, the Michigan Central Railroad and
Page 167 U. S. 636
the Grand Rapids, Lansing and Detroit [Detroit, Lansing and
Northern?] Railroad, both of which are immediately and directly in
competition with respondent's road for the business of Grand
Rapids. That the stations of both of said roads for receiving and
discharging freight and property at Grand Rapids are near the
business center of said city, requiring only short haul to and from
their stations, on an average about one-quarter of a mile. That
respondent did the carting of freight to and from its station at
Grand Rapids substantially in the same manner as at present long
prior to the time when either said Michigan Central or Grand
Rapids, Lansing, and Detroit Railroads constructed to that
place."
"6. That the actual cost of carting or draying freight from
respondent's warehouse in the said City of Ionia to the several
places in said City of Ionia to and from which traffic has to be
hauled is two cents per hundredweight. That the cost of carting or
draying freight transported over respondent's line to and from the
places of business of the merchants, traders, and other patrons of
its road at Grand Rapids is two cents per hundredweight."
"7. That there is but slight competition encountered by the
complainants and other persons, firms, and corporations engaged in
business at the City of Ionia interested in shipping over
respondent's road, with similar business at the City of Grand
Rapids."
"9. That complainants have not brought any suit for the recovery
of money or damage for which the respondent is alleged to be liable
under the provisions of the Act to Regulate Commerce, but have
elected to adopt this procedure as the sole means of obtaining
relief."
"10. The City of Grand Rapids has a population of about 70,000.
The City of Ionia has a population of about 6,000. The freight
traffic to and from Grand Rapids by all roads in 1887 amounted to
985,685 tons. The freight traffic to and from Ionia by all roads
for the same time amounted to about 55,000 tons."
"11. Cartage by railway companies in similar manner to that at
Grand Rapids is conducted by other railway companies
Page 167 U. S. 637
at exceptional stations in the State of Michigan, and more or
less extensively practiced by companies in other states at
exceptional stations."
On April 26, 1890, the Commission decided the case, which is
reported in 3 I.C.C. 113, and made the following order:
"It is ordered and adjudged that the defendant, the Detroit,
Grand Haven and Milwaukee Railway Company, be and it is hereby
required, within thirty days from and after the service of a copy
of the report and opinion in this proceeding and of this order, to
wholly cease and desist from furnishing free cartage of freights at
Grand Rapids, in the State of Michigan, whereby rebates from its
lawfully published schedule of rates, fares, and charges at its
station or office in Grand Rapids are given to shippers and
consignees, and charges for the transportation over its line of
property shipped from Eastern points to Grand Rapids, aforesaid,
are made less than charges for the transportation over its line of
like kinds of property shipped from the same Eastern points to
Ionia, in the State of Michigan."
On November 2, 1891, the Commission, having been informed that
the company would not comply with the order until the judgment of
the Commission should be judicially confirmed, filed a petition in
the Circuit Court of the United States for the Western District of
Michigan seeking to enforce the order. To this an answer was filed
by the company, admitting the facts to be as found by the
Commission and alleging certain additional facts, to support which
testimony was adduced.
The circuit court on August 7, 1894, entered a decree in the
following terms:
"It is hereby ordered, adjudged, and decreed that the mandatory
writ of injunction of this court do issue to said respondent, the
Detroit, Grand Haven and Milwaukee Railway Company, commanding it
and its officers and agents to forthwith desist and refrain from
affording free cartage at said City of Grand Rapids unless a like
service, or its equivalent in value by reduced rates, be at the
same time afforded at said City of Ionia and unless the fact that
such free cartage, or such
Page 167 U. S. 638
equivalent reduced rate afforded at both points, shall be noted
on the established tariffs of freights and charges published as
required by law."
Interstate Commerce Commission v. Detroit &c.
Railway, 57 F. 1005.
From this decree an appeal was taken to the Circuit Court of
Appeals for the Sixth Circuit, and that court, on April 14, 1896,
entered a decree reversing the decree of the circuit court and
directing the dismissal of the Commission's petition. And from the
decree of the circuit court of appeals an appeal was taken and
allowed to this Court.
MR. JUSTICE SHIRAS, after stating the facts in the foregoing
language, delivered the opinion of the Court.
The petition of Stone & Carten, retail merchants at Ionia,
addressed to the Interstate Commerce Commission, alleged violations
by the railway company of sections 2, 3, and 4 of the Interstate
Commerce Act.
The opinion of the Commission sustained the petition avowedly
under section 4 of the act, but their order or decree appears to
have been based upon both sections 4 and 6. The circuit court, as
we gather from the opinion of Circuit Judge Taft and the dissenting
opinion of district judge Severens, treated the case as arising
under alleged violations of sections 2, 3, and 4. 57 F. 1005.
The opinion of the circuit court of appeals discusses the case
at large. 74 F. 803.
But the Assistant Attorney General, who appears in this Court as
counsel of the interstate commerce Commission, dispenses, in his
elaborate brief, with any consideration of sections 2 and 3, and
confines his attention to sections 4 and 6. His language is as
follows:
"Section 2 of the statute is referred to in the petition of
Page 167 U. S. 639
Stone & Carten, but is not the basis of the decision of
either Commission or court. Section 3 also (the undue preference
clause) is immaterial at the present stage of the case. Undoubtedly
a preference is granted to Grand Rapids over Ionia, but whether the
preference is undue or unreasonable within the meaning of the
clause in question was not decided by the Commission. Their
decision was based upon other sections of the act. Nor did the
circuit court base its decision at all upon this provision. Hence
we shall submit no argument upon it."
"This leaves for consideration section 4 (the long- and
short-haul clause) and section 6 (the schedule clause). Under
section 4, we seek to protect the shippers of Ionia. Under section
6, we seek to protect the humbler and more ignorant shippers of
Grand Rapids, that they may not suffer through lack of publicity of
the privileges which their larger rivals enjoy."
In our disposition of the case, we shall therefore consider only
the contention now made on behalf of the Commission -- namely that
the conduct of the railway company in furnishing cartage free of
charge to the merchants of Grand Rapids and in not furnishing
similar service to the merchants of Ionia, a town thirty-three
miles distant, and in failing to publish such free cartage in the
schedule published at Grand Rapids, constituted a violation of the
provisions of section 4 and section 6 of the Interstate Commerce
Act.
One of the findings of the Commission is that the railroad
company, as a common carrier for continuous shipment, under a
common arrangement, of property from Detroit to its stations on its
line of transportation, established and published a schedule of
rates and charges, a tariff of freights which makes on all freights
from Philadelphia, New York, and Boston, and all other points east
of Detroit, consigned over the company's road, the same rates and
charges for the complainants which are made and charged for the
same class of freights to merchants doing business at the City of
Grand Rapids. But there is no complaint made of that fact. Indeed,
it is conceded by the Commission that so-called "group rates" are
not in violation of the long- and short-haul clause, and
Page 167 U. S. 640
therefore, if there were nothing else in the case except that
the company's charges were the same for like kinds of property
transported to and from Ionia as those charged to and from Grand
Rapids to and from points outside of the state, no complaint would
have been made or entertained.
The sole complaint urged is that the railway company carts goods
to and from its station or warehouse at Grand Rapids without
charging its customers for such service, while its customers at
Ionia are left themselves to bring their goods to and take them
from the company's warehouse, and that, in its schedules posted and
published at Grand Rapids, there is no notice or statement by the
company of the fact that it furnishes such cartage free of charge.
These acts are claimed to constitute violations of sections 4 and 6
of the Interstate Commerce Act, 24 Stat. 380, c. 104.
The language of section 4 is as follows:
"That it shall be 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 of like kind of property, under substantially similar
circumstances and 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, but this shall not be
construed as authorizing any common carrier within the terms of
this act to charge and receive as great compensation for a shorter
as for a longer distance,
provided, however, that, upon
application to the Commission appointed under the provisions of
this act, such common carrier may, in special cases, after
investigation by the Commission, be authorized to charge less for
longer than for shorter distances for the transportation of
passengers or property, and 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."
The Detroit, Grand Haven and Milwaukee Railway Company is a
corporation of the State of Michigan, and its road lies wholly
within that state. In addition to its local business, it is engaged
as a common carrier in interstate commerce, by
Page 167 U. S. 641
arrangements made with connecting railroads. For a period of
upward of twenty-five years before these proceedings, this company
has openly and notoriously, at its own expense, transferred goods
and merchandise to and from its warehouse to the places of business
of its patrons in the City of Grand Rapids. The station of the
company, though within the limits of the city, is distant, on an
average, one and a quarter miles from the business sections of the
city where the traffic of the places tributary to the company's
road originates and terminates.
Section 3 of the Compiled Laws of the Michigan of 1871 is as
follows:
"Every railway company in this state is authorized to make
personal delivery of every parcel, package, or quality of goods or
property if the consignee of such property shall reside within two
miles of the terminus or railway station or other terminus of the
carriage of such property by the main line of such carrier, and
they are hereby authorized to employ or own all the means necessary
to perform such duty, and to place the men and vehicles therefor
under the government and sole regulation of the superintendent or
other principal officers of such companies. Such delivery shall be
at the house, shop, office, or other place of business of the
consignee, according to the nature of such property, and where the
owner or consignee desires to have the same."
The theory of this enactment evidently is that the duties and
powers of a railway company reached no further than the carriage of
goods and merchandise entrusted to it to its station or warehouse,
and that an additional grant of power was needed to enable the
company to act as a carrier between its station or warehouse and
the house or office of the owner or consignee. However this may be,
this record exhibits the case of a Michigan railroad company
engaged for quarter of a century in collecting and delivering goods
and merchandise at and to the houses and business places of its
customers without any charges beyond those made for the railway
service.
Page 167 U. S. 642
Undoubtedly, in the case of the Detroit, Grand Haven and
Milwaukee Railway Company, during all that period, no just
objection could have been made, and no objection was made, to this
mode of doing business in the City of Grand Rapids. Nor can it now
be pretended that it is unlawful for that company to continue to so
receive and deliver goods and merchandise in that city in all cases
in which the goods and merchandise are transported by its railway
between points within the state. Has the passage of the Interstate
Commerce Act rendered it no longer lawful for this company to
continue its long-time method of receiving and delivering at Grand
Rapids goods and merchandise which form that part of its business
which belongs to interstate traffic? Or, rather, is such mode of
business an infraction of the fourth section of that act?
It must be conceded that a state railroad corporation, when it
voluntarily engages as a common carrier in interstate commerce, by
making an arrangement for a continuous carriage or shipment of
goods and merchandise, is subjected, so far as such traffic is
concerned, to the regulations and provisions of the act of
Congress.
Cincinnati, N.O. & Texas Pacific Railway v.
Interstate Commerce Commission, 162 U.
S. 184. So likewise it is settled that when a state
statute and a federal statute operate upon the same subject matter
and prescribe different rules concerning it, and the federal
statute is one within the competency of Congress to enact, the
state statute must give way.
Gulf, Colorado &c. Railway v.
Hefley, 158 U. S. 98.
Accordingly, the Commission contends that while it may be lawful
for the railway company to collect and deliver articles of domestic
commerce without making a charge for cartage, and while it is
likewise lawful for the company to establish the same rates of
freight and charges for like kind of property carried to Ionia and
to Grand Rapids, yet it is unlawful for the company to collect and
deliver goods and merchandise free from charge for cartage in Grand
Rapids while it only receives and delivers like goods and
merchandise at Ionia at its station or warehouse. And the reason
given for this contention is that the fourth section of the
Interstate
Page 167 U. S. 643
Commerce Act provides that
"it shall be unlawful for any common carrier, subject to the
provisions of the act, to charge or receive any greater
compensation in the aggregate for the transportation of passengers
or of like kind of property under substantially similar
circumstances and conditions for a shorter than a longer distance
over the same line in the same direction, the shorter being
included within the longer distance."
Under the facts as found and the concessions as made, the
Commission's proposition may be thus stated: there is
conventionally no difference as to distance between Ionia and Grand
Rapids, and the same rates and charges for like kinds of property
are properly made in the case of both cities. But as there is an
average distance of one and one-quarter of a mile between the
station at Grand Rapids and the warehouses and offices of the
shippers and consignees, such average distance must be regarded as
part of the railway company's line if the company furnishes
transportation facilities for such distance, and if it refrains
from making any charge for such transportation facilities and fails
to furnish the same facilities at Ionia, this is equivalent to
charging and receiving a greater compensation in the aggregate for
the transportation of like kind of property 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 circuit court of appeals was of opinion that this
proposition is based on a false assumption -- namely that the
distance between the company's station and the warehouses of the
shippers and consignees is part of the company's railway line, or
is made such by the act of the company in furnishing vehicles and
men to transport the goods to points throughout the City of Grand
Rapids. The view of that court was that the railway transportation
ends when the goods reach the terminus or station and are there
unshipped, and that anything the company does afterwards, in the
way of land transportation, is a new and distinct service not
embraced in the contract for railway carriage. The court, in a
learned opinion by District Judge Hammond, enforced this view by a
reference to numerous English cases which hold that the collecting
and delivery
Page 167 U. S. 644
of goods is a separate and distinct business from that of
railway carriage, that when railroad companies undertake to do for
themselves this separate business, they thereby are subjected to
certain statutory regulations and restrictions in respect to such
separate business, and that they cannot avoid such restrictions by
making a consolidated charge for the railway and cartage service.
74 F. 803.
We agree with the circuit court of appeals in thinking that the
fourth section of the Interstate Commerce Act has in view only the
transportation of passengers and property by rail, and that, when
the passengers and property reached and were discharged from the
cars at the company's warehouse or station at Grand Rapids for the
same charges as those received for similar service at Ionia, the
duties and obligations cast upon this company by the fourth section
were fulfilled and satisfied. The subsequent history of the
passengers and property, whether carried to their places of abode
and of business by their own vehicles or by those furnished by the
railway company, would not concern the interstate commerce
Commission.
It may be that it was open for the Commission to entertain a
complaint of the Ionia merchants that such a course of conduct was
in conflict with sections 2 and 3 of the act, but, as we have seen,
such questions, if they really arose in the proceedings before the
Commission and in the circuit court, have been withdrawn from our
consideration in this appeal from the decree of the circuit court
of appeals.
This disposition of the questions arising under section 4
renders it unnecessary to consider whether, upon the facts
disclosed, the services rendered by the railway company at Grand
Rapids and Ionia, respectively, were rendered under "substantially
similar circumstances and conditions," and whether that phrase,
when used in section 4, may not have a broader meaning and a wider
reach than when used in section 2, and also whether, if the
circumstances and conditions were substantially dissimilar, the
railway company could only avail itself of such a situation by an
application to the Commission under the terms of the proviso to
section 4.
Page 167 U. S. 645
The remaining question is whether, when a railway company
furnishes free cartage facilities, even lawfully -- that is, in
circumstances and conditions that would relieve the company from
charges of violating sections 2, 3, and 4 -- the provisions of
section 6 apply. That section is in the following terms:
"That every common carrier subject to the provisions of this act
shall print and keep open to public inspection schedules showing
the rates and fares and charges for the transportation of
passengers and property which any such common carrier has
established, and which are in force at the time upon its route. The
schedules printed as aforesaid by any such common carrier shall
plainly state the places upon its railroad between which property
and passengers will be carried, and shall contain the
classification of freight in force, and shall also state separately
the terminal charges, and any rules or regulations which in anywise
change, affect or determine any part or the aggregate of such
aforesaid rates and fares and charges."
It is not claimed that the railway company has not otherwise
complied with the provisions of this section, but the complaint is
that there was no statement in its schedules, printed and kept open
to public inspection at Grand Rapids, of the privilege of free
cartage. It is contended for the Commission that this failure to
publish the fact of free cartage in the schedules might result in
ignorance by some shippers of the existence of such a privilege,
and that thus the knowing ones would enjoy an advantage not
possessed by others.
In view of the finding that this privilege had been openly and
notoriously granted to the shippers and consignees at Grand Rapids
for a period of twenty-five years, it is difficult to suppose that
this practice was not well known to all who would have occasion to
rely upon it. It should also be noticed that no complaint is made
in the present case by any resident of Grand Rapids. It may well be
doubted whether cartage, when furnished without charge, comes
within the meaning of the phrase "terminal charges" or can be
regarded as "a rule or regulation" which in any wise "changes,
affects or determines"
Page 167 U. S. 646
any part or the aggregate of the rates, fares, and charges.
Judge Cooley, in expressing the opinion of the Commission, well
said:
"It must be conceded that cartage is not, in general, a terminal
expense, and is not, in general, assumed by the carrier. The
transportation, as between the carrier and its patrons, ends when
the freights are received at the warehouse and the charge is made
for a service which ends there."
3 I.C.C. 113.
We are informed by an extract from the annual report of the
Commission for 1889, 3 I.C.C. 309, that there are many railroad
companies throughout the country which furnish free cartage at some
of their stations, but that in no instance do the rate sheets or
schedules contain any statement to that effect.
However, in a matter of this kind, much should be left to the
judgment of the Commission, and should it direct, by a general
order, that railway companies should thereafter regard cartage,
when furnished free, as one of the terminal charges, and include it
as such in their schedules, such an order might be regarded as a
reasonable exercise of the Commission's powers.
But we are not persuaded by anything we see in this record that
the defendant company has acted in any intentional disregard of the
sixth section.
The decree of the circuit court of appeals is
affirmed.
