A carrier may charge and receive compensation for service that
it may render or procure to be rendered off its own line or outside
of the mere transportation thereover.
Where the terminal charge is reasonable, it cannot be condemned,
or the carrier charging it required to change it, because prior
charges of connecting carriers make the total rate
unreasonable.
In determining whether the charge of a terminal company is or is
not reasonable, the fact that connecting carriers own the stock of
the terminal company is immaterial, nor does that fact make the
lines of the terminal company part of the lines or property of such
connecting carriers.
The inquiry authorized by § 15 of the Hepburn Act of June 29,
1906, c. 3591, 34 Stat. 584, relates to all charges made by the
carrier, and, on such an inquiry, the carrier is entitled to have a
finding that a particular charge is unreasonable before he is
required to change it.
Where the charge of a terminal company is, in itself, reasonable
the wrong of a shipper by excessive aggregate charges should be
corrected by proceedings against the connecting carrier guilty of
the wrong.
The convenience of the Commission or the court is not the
measure of justice, and will not justify striking down a terminal
charge when the real overcharge is the fault of a prior
carrier.
164 F. 63 affirmed.
On December 10, 1907, the Interstate Commerce Commission entered
an order requiring certain railroads running into Chicago to cease
and desist from making a terminal charge of two dollars per car for
the transportation of livestock beyond the tracks of said railroads
in Chicago, and for delivery thereof at the Union Stock Yards, and
requiring them to establish and put in force for said services a
charge of one dollar per car. Compliance with the order was
postponed by the Commission until May 15, 1908. On May 7, 1908, the
appellees filed this bill in the circuit court of the United States
for the District of Minnesota to restrain the enforcement of said
order, averring that the actual cost to them for such terminal
services exceeded in each instance the sum of two dollars per car
and that the companies were making delivery at a charge less than
such actual cost; that therefore the reduction of the charge by the
Commission to one dollar per car was unreasonable, oppressive, and
unlawful. A hearing was had before three judges of the Eighth
Circuit, and a restraining order entered as prayed for by the
railroad companies, from which order an appeal was taken to this
Court.
Page 215 U. S. 104
MR. JUSTICE BREWER delivered the opinion of the Court.
The controversy as to this terminal charge has been of long
duration. A history of it antecedent to the present litigation is
to be found in
Interstate Commerce Commission v. C., B. &
Q. R. Co., 186 U. S. 320.
It is well to understand the precise question which is presented
in this case. That question is the validity of the terminal charge
of two dollars per car. The report of the Commission opens with
this statement:
"The subject of this complaint is the so-called terminal charge
of $2 per car imposed by the defendants for the delivery of car
loads of livestock at the Union Stock Yards in Chicago,"
and its order was in terms that the railroad companies be
"required to cease and desist on or before the 1st day of
February, 1908, from exacting for the delivery of livestock at the
Union Stock Yards, in Chicago, Illinois, with respect to shipments
of livestock transported by them from points outside of that state,
their present terminal charge of $2 per car."
"It is further ordered that said defendants be, and they are
hereby, notified and required to establish and put in force on or
before the 1st day of February, 1908, and apply thereafter during a
period of not less than two years, for the delivery of livestock at
the Union Stock Yards, in said Chicago, with respect to shipments
of livestock transported by them from points outside the State of
Illinois, a terminal charge which shall not exceed $1 per car, if
any terminal charge is maintained by them."
The sixth section of the act known as the "Hepburn Act" (an act
to amend the Interstate Commerce Act, passed on June 29, 1906, 34
Stat. 584, c. 3591) requires carriers to file with the Commission,
and print and keep open to inspection,
Page 215 U. S. 105
schedules showing, among other things,
"separately all terminal charges . . . and any rules or
regulations which in any wise change, affect, or determine any part
or the aggregate of such aforesaid rates."
By § 4, the Commission is authorized and required, upon a
complaint, to inquire and determine what would be a just and
reasonable rate or rates, charge, or charges. This, of course,
includes all charges, and the carrier is entitled to have a finding
that any particular charge is unreasonable and unjust before it is
required to change such charge. For services that it may render or
procure to be rendered off its own line or outside the mere matter
of transportation over its line, it may charge and receive
compensation.
Southern Railway Co. v. St. Louis Hay Co.,
214 U. S. 297. If
the terminal charge be, in and of itself, just and reasonable, it
cannot be condemned or the carrier required to change it on the
ground that it, taken with prior charges of transportation over the
lines of the carrier or of connecting carriers, makes the total
charge to the shipper unreasonable. That which must be corrected
and condemned is not the just and reasonable terminal charge, but
those prior charges which must of themselves be unreasonable in
order to make the aggregate of the charge from the point of
shipment to that of delivery unreasonable and unjust. In order to
avail itself of the benefits of this rule, the carrier must
separately state its terminal or other special charge complained
of, for, if many matters are lumped in a single charge, it is
impossible for either shipper or Commission to determine how much
of the lump charge is for the terminal or special services. The
carrier is under no obligations to charge for terminal services.
Business interests may justify it in waiving any such charge, and
it will be considered to have waived it unless it makes plain to
both shipper and Commission that it is insisting upon it. In the
case in 186 U.S.
supra, we sustained the decree of the
lower court restraining the reduction of the terminal charge from
$2 to $1 as to all stock shipped to Chicago, although the
Commission had stated that there had been a reduction of the
through rate
Page 215 U. S. 106
from certain points by from $10 to $15, in reference to which
reduction and its effect upon the order of the Commission we said,
speaking by MR. JUSTICE WHITE, after quoting from the report of the
Commission (pp. 338, 339):
"In other words, it was held that the rate, which was unjust and
unreasonable solely because of the $1 excess, continued to be
unjust and unreasonable after this rate had been reduced by from
ten to fifteen dollars. This was based not upon a finding of fact
-- as, of course, it could not have been so based -- but rested
alone on the ruling by the Commission that it could not consider
the reduction in the through rate, but must confine its attention
to the $2 terminal rate, since that alone was the subject matter of
the complaint. But, as we have previously shown, the Commission, in
considering the terminal rate, had expressly found that it was less
than the cost of service, and was therefore intrinsically just and
reasonable, and could only be treated as unjust and unreasonable by
considering 'the circumstances of the case' -- that is, the through
rate and the fact that a terminal charge was included in it, which,
when added to the $2 charge, caused the terminal charge as a whole
to be unreasonable. Having therefore decided that the $2 terminal
charge could only be held to be unjust and unreasonable by
combining it with the charge embraced in the through rate,
necessarily the through rate was entitled to be taken into
consideration if the previous conclusions of the Commission were
well founded. It cannot be in reason said that the inherent
reasonableness of the terminal rate, separately considered, is
irrelevant because its reasonableness is to be determined by
considering the through rate and the terminal charge contained in
it, and yet, when the reasonableness of the rate is demonstrated,
by considering the through rate as reduced, it be then held that
the through rate should not be considered. In other words, two
absolutely conflicting propositions cannot at the same time be
adopted. As the finding was that both the terminal charge of $2 and
the through rate as reduced, when separately considered, were
Page 215 U. S. 107
just and reasonable, and as the further finding was that, as a
consequence of the reduction of from ten to fifteen dollars per
car, the rates, considered together, were just and reasonable, it
follows that there can be no possible view of the case by which the
conclusion that the rates were unjust and unreasonable can be
sustained."
The tariff schedules of the appellees make clear the separate
terminal charge for delivery from their own lines to the Union
Stock Yards. We quote the schedule of the Chicago &
Northwestern Railroad Company:
"The livestock station and stockyards of this company in Chicago
are located at Mayfair, and the rates named herein apply only to
livestock intended for delivery at or received and transported from
the stockyards of the company at Mayfair, in Chicago."
"Upon all livestock consigned to or from the Union Stock Yards
in Chicago or industries located on the Union Stock Yards Railway,
or the Indiana State Line Railway, and transported and delivered to
or received and transported from said Union Stock Yards or said
industries located on said Union Stock Yards Railway, or the
Indiana state Line Railway, aforesaid, a charge of two dollars
($2.00) per car will be made for the special and separate service
of transporting such cars to said Union Stock Yards or to said
industries on said Union Stock Yards Railway, or the Indiana state
Line Railway, from this company's own rails, or of transporting
such cars from said Union Stock Yards, or said industries on said
Union Stock Yards Railway, or the Indiana state Line Railway, to
this company's own rails."
The others are equally specific. In some of them, as in the
Atchison, Topeka & Santa Fe Railway Company, it is
provided:
"The attention of the shipper must be and is called to the fact
that the transportation charge on livestock delivered at our own
yards at Corwith in Chicago will be two dollars ($2.00) per car
less than when delivered at the Union Stock Yards
Page 215 U. S. 108
at Chicago or at industries located on the Union Stock Yards
Railway or the Indiana state Line Railway, and the agent should
ascertain definitely at which point the shipper desires delivery to
be made. The livestock contract must then be filled out so as to
show the correct destination and rate as provided by the tariff and
amendments."
Further, is is shown by the affidavits that the amount of such
terminal charge is not entered upon the general freight charges of
the companies, but is kept as a separate item. The Union Stock
Yards Company is an independent corporation, and the fact, if it be
a fact, that most or even all of its stock is owned by the several
railroad companies entering into Chicago, does not make its lines
or property part of the lines or property of the separate railroad
companies.
With reference to the reasonableness of the terminal charge, it
was stipulated on the hearing before the Interstate Commerce
Commission that all the testimony taken in the former proceedings
might be considered. It also appears that additional testimony was
there offered. None of this testimony has been printed in the
record presented to us. We have, however, our former decision as
well as the report of the Commission on the recent hearing, and
also the affidavits filed on this application, and can consider
them. It appears from the former case that, after some discussion,
when testimony was being offered on the question of reasonableness,
the Commission suggested that it was probably unnecessary to offer
further evidence, and said (
186 U. S. 186
U.S. 327):
"'To remove all doubt upon that subject, however, if it is not
clearly found, we now find that, looking entirely to the cost of
service, and including as a part of that cost the trackage charge
paid the Union Stock Yards & Transit Company and the unloading
charge paid that same company, the amount of this terminal, if,
under the circumstances of this case, it is proper to impose, the
charge is reasonable. If any modification of the present findings
is necessary, they are hereby modified to that extent.' "
Page 215 U. S. 109
And in the excerpt put into the margin in the opinion of this
Court is a statement of the actual and estimated expense to the
different railroads for making such delivery, which makes it quite
clear that the charge was a reasonable one. This finding as to the
reasonableness of the charge was repeated again by the
Commission.
In its report in the present case it said:
"The original case did not show the cost of making delivery of
other kinds of carload freight at this market, but the present
record shows that the average cost to one defendant, the Atchison,
Topeka & Santa Fe Railway Company, of delivering all kinds of
car load freight, including livestock, is $5.40 per car, while the
cost of delivering livestock is not far from $2 per car. The
testimony further indicates that the average cost of delivering all
kinds of carload freight does not differ much in the case of the
Santa Fe from that in the case of the other defendants, although it
does appear that several of the defendants are at greater expense
than $2 per car in making delivery of livestock at the stockyards.
We think it fairly appears upon this record that the total cost to
these defendants of delivering livestock at the Union Stock Yards,
including the trackage charge, is not much, if any, above one-half
the average cost of handling all carload freight in the City of
Chicago."
Under those circumstances, it seems impossible to avoid the
conclusion that, considered of and by itself, the terminal charge
of $2 a car was reasonable. If any shipper is wronged by the
aggregate charge from the place of shipment to the Union Stock
Yards, it would seem necessarily to follow that the wrong was done
in the prior charges for transportation, and, as we have already
stated, should be corrected by proper proceedings against the
companies guilty of that wrong -- otherwise injustice will be done.
If this charge, reasonable in itself, be reduced, the Union Stock
Yards Company will suffer loss, while the real wrongdoers will
escape. It may be that it is more convenient for the Commission to
strike at the terminal
Page 215 U. S. 110
charge, but the convenience of Commission or court is not the
measure of justice.
We are unable to find any error in the conclusions of the trial
judges, and their order is therefore
Affirmed.