Section 8 of the Act to Regulate Commerce gives the shipper a
right of action against the carrier for damages occasioned by his
doing an act prohibited by the statute, and § 9 gives the shipper
the option to proceed either before the Interstate Commerce
Commission or in the federal courts.
Construing §§ 8 and 22, however, in connection with the statute
as a whole, the Act to Regulate Commerce is both declaratory and
creative, and while shippers are given new rights, existing causes
of action are preserved and the jurisdiction of state courts is not
superseded in cases in which the decision does not involve the
determination of matters calling for the exercise of administrative
power and discretion of the Commission or relate to subjects over
which exclusive jurisdiction is given to the federal courts.
While the federal courts may have exclusive jurisdiction of a
suit brought to declare that a rule of practice promulgated by the
carrier is unfair, a suit for damages occasioned by the violation
or discriminatory enforcement of the carrier's rule, fair on its
face and not attacked as unfair, does not involve administrative
questions, but only those of fact, and even though for damages
arising in interstate commerce, a suit is not within the exclusive
jurisdiction of the federal courts, but may be prosecuted either in
those courts or in the state courts.
The state courts have jurisdiction of an action of the shipper
against the carrier to furnish a reasonable number of cars, whether
the action be treated as one for breach of the common law duty to
furnish the cars or for unjust discrimination in allotting cars to
another shipper in violation of the carrier's own rule to furnish
all the shippers on an equal
pro rata basis. The
jurisdiction of the state court is not defeated because the breach
of common law duty is also an unjust discrimination.
Motive for breach of common law duty of the carrier to furnish a
reasonable number of cars is immaterial, and what was a proper
supply under the circumstances is a matter of fact.
Page 237 U. S. 122
While ordinarily a shipper on reasonable demand is entitled to
all the cars it can promptly load, that right is not absolute, and
a carrier is not liable for failure to supply cars as the result of
sudden and great demands which it had no reason to apprehend, but
in a case of car shortage, it is bound to treat shippers fairly, if
not identically.
Where there is a shortage and the shipper complains that the
carrier's rule of distribution is unfair, the question is for the
Commission,
Morrisdale Coal Co. v. Penna. R. Co.,
230 U. S. 312,
but where the shipper does not attack the rule itself but complains
that the carrier refused to furnish the number of cars it was
entitled to under the rule, while other shippers were furnished
more cars than they were entitled to under the same rule, a
preliminary finding of the Commission is unnecessary, and even if
the shipments were interstate, the state and federal courts have
jurisdiction.
An exception is properly disallowed by the state appellate
court, and will be disregarded by this Court, if no relevant
testimony was offered to support it and no point thereon raised in
the trial court.
237 Pa.St. 420 affirmed.
In March, 1908, the Puritan Coal Mining Company brought suit in
the Court of Common Pleas of Clearfield County, Pennsylvania,
against the Pennsylvania Railroad Company for damages caused by the
latter's failure to furnish cars needed for the transportation of
coal. On November 21, 1908, the plaintiff filed a "Statement of
Claim" in which it was alleged that the defendant was a common
carrier of freight between points within the State of Pennsylvania,
and as such bound to furnish shippers with adequate facilities for
the transportation of coal, but that the carrier did not, as
required by law, furnish the plaintiff with sufficient cars to
enable it to transport coal mined by it. By reason of such failure
to perform its duty and legal obligation, the defendant caused the
plaintiff damage to the extent of $260,777.
Other paragraphs in the statement alleged that the carrier
established and published the capacity of all coal mines in the
region reached by its railway; that, as a common carrier, it was
bound to furnish cars upon the
Page 237 U. S. 123
basis of equality in proportion to the rated capacity of
plaintiff's mines. But, disregarding its duty under the statute of
the state, the defendant did, unreasonably as well as unlawfully,
refuse to furnish the plaintiff with its
pro rata share of
coal cars held for daily distribution, and did subject the
plaintiff to unreasonable disadvantage in that it favored and did
unduly and unreasonably discriminate in favor of the Berwind-White
Coal Company by giving to the latter 500 cars before distributing
any to the plaintiff. By reason of the undue and unjust
discrimination against the plaintiff and the undue preference in
favor of the Berwind-White Company, the plaintiff was not furnished
with the cars to which it was entitled, and thereby lost the profit
of $260,777 which it could and would have made on coal which it
could and would have shipped had it received its due proportion of
cars.
On November 23, 1908, and again in April, 1911, other statements
were filed which repeated and amplified the charge of unjust
discrimination in the distribution of cars whereby the plaintiff
received less and the Berwind-White Company more than was proper
under the rule of allotment established by the carrier.
The defendant moved to dismiss the case because the state court
was without jurisdiction. The court held that the motion was bad as
a demurrer, bad as a plea in abatement, and dismissed it as having
been prematurely made. The defendant filed no other defense except
a plea of the statute of limitations as to certain items of damage
claimed in an amendment to the original statement.
By consent, the case was heard by the judge without a jury. He
made a report of the facts from which it appears that ordinarily,
the carrier was able to furnish shippers with cars on demand, but,
in 1902, there was a strike in the anthracite region which cut off
the usual supply of anthracite coal to eastern cities and compelled
them to use bituminous coal mined along the lines of the
Pennsylvania
Page 237 U. S. 124
Railway. The new demand for soft coal was so great that the
railroad company was not able to supply the full number of cars
called for by the mining companies on its line. Its established
rule in such cases was that cars should be allotted to the several
coal districts in proportion to their output, the cars thus
allotted to the districts being then distributed to the mining
companies therein in proportion to their capacity. During the
anthracite coal strike, however, the carrier violated this rule and
made excessive allotments to the "scalp level region," in which the
Berwind mines were located, and made too small an allotment to the
"mountain region," in which the Puritan mines were situated.
There was evidence that the Puritan Company had orders for coal
at a price which would have netted it a large profit. The coal so
ordered was to be delivered "free on board" the cars at the Puritan
mines, the purchaser and consignee paying the freight to points of
destination within and without the state. There was evidence that
the Puritan Company was ready, willing, and able to make such sales
and deliveries, and constantly demanded cars in order to enable it
to fill these orders. Sometimes the carrier for days would fail to
furnish cars, with the result that the company's mining operations
were seriously interrupted. Sometimes the Puritan got cars, but not
the full number to which it was entitled on the basis of
distribution according to mine capacity, although the Berwind-White
Company during the same period received more than its
proportion.
The railroad company's elaborate and detailed distribution
sheets were introduced in evidence. They showed the number of cars
to be allotted to mines on the basis of capacity for each day of
the period during which the car shortage existed. From these sheets
and the other evidence in the case, it appeared that the Berwind
Company received many more cars than its share, and that the
Page 237 U. S. 125
Puritan received several thousand less than its proportion.
There was proof as to the number of tons these cars could have
hauled; that the Puritan had orders for coal which it would have
sold if these cars had been furnished; there was also evidence as
to the royalty and cost of production, with data on which to make
calculation of the damage resulting from the failure to receive
cars.
The trial judge held that the state court had jurisdiction, and
entered a judgment for the plaintiff, which, with interest,
amounted to $74,323.88. Exceptions to the report were overruled,
and the case was taken to the Supreme Court of Pennsylvania on
assignments in which complaint was made that the trial judge erred
--
"(1) in holding that the state court had jurisdiction;"
"(2) in failing to hold that, under the Commerce Act, the
federal court alone had jurisdiction;"
"(3) in holding that the business between the Puritan Company
and the railroad was intrastate business where coal was sold f.ob.
the cars at the mines;"
"(4) in holding that the plaintiff could recover damages for
failure to receive cars intended for use in shipping coal outside
the state;"
"(5) in adopting the method for distributing cars on which the
damages were collected;"
"(6) in failing"
"to take into account the private or individual cars, so-called,
which were delivered to the plaintiff during the period of the
action in determining the number which it would have been entitled
to receive of the additional cars which the court has found should
have been allotted to the region or district in which the
plaintiff's mines were located. "
Page 237 U. S. 126
MR. JUSTICE LAMAR, after making the foregoing statement,
delivered the opinion of the Court.
The Pennsylvania Railroad Company, an interstate carrier, was
sued in a state court for damages caused by its
Page 237 U. S. 127
failure to furnish the Puritan Company with cars in which to
load coal for shipment to points within and without the state. The
pleadings alleged not only that the carrier had failed to perform
its duty to furnish cars, but that, in violation of a state
statute, it had unjustly discriminated against the Puritan Company
by failing to distribute cars in accordance with the carrier's own
rule that, in time of shortage, they should be allotted to the coal
companies on the basis of mine capacity.
The trial court held that the plaintiff was entitled to recover
damages caused by the unjust discrimination in distribution of
cars. The Supreme Court of Pennsylvania did likewise, and affirmed
the judgment in favor of the plaintiff. 237 Pa. 420.
The railway company then brought the case here, insisting in
effect that (1) the determination of the proper basis for the
distribution of cars was a matter calling for the exercise of the
power of the Interstate Commerce Commission; (2) that no court had
jurisdiction of a suit against it for discriminatory allotment
until after the Commission had determined that its rule for
distribution was improper, and (3) that no suit for damages against
an interstate carrier could be brought for damages occasioned by a
failure to deliver cars, or for an unjust discrimination in
distribution except in a United States court.
1. These contentions involve a consideration of the jurisdiction
of the Commission, of the state courts, and of the federal courts.
But fortunately it will not be necessary to enter into an elaborate
discussion of each of the questions.
Section 3 [
Footnote 1] of
the Commerce Act makes it unlawful for
Page 237 U. S. 128
the carrier to unduly prefer one shipper over another. Section 8
[
Footnote 2] gives a right of
action against the carrier for damages occasioned by his doing an
act prohibited by the statute, and § 9 provides:
"That any person or persons claiming to be damaged by any common
carrier subject to the provisions of this Act may either make
complaint to the Commission as hereinafter provided for, or may
bring suit in his or their own behalf for the recovery of the
damages for which such common carrier may be liable under the
provisions of this Act, in any district or circuit court of the
United States of competent jurisdiction, but such person or persons
shall not have the right to pursue both of said remedies, and must
in each case elect which one of the two methods of procedure herein
provided for he or they will adopt. . . ."
It will be seen that this section does more than create a right
and designate the court in which it is to be enforced. It gives the
shipper the option to proceed before the Commission or in the
federal courts. The express grant of the right of choice between
those two remedies was the exclusion of any other remedy in a state
court, and that the federal tribunals have exclusive jurisdiction
of a certain class of cases referred to in § 9 has been
recognized
Page 237 U. S. 129
in the few decisions dealing with the question.
See Copp v.
Railroad Co., 43 La.Ann. 511;
Carlisle v. Missouri
Pacific, 168 Mo. 656;
Western &c. R. Co. v.
White, 142 Ga. 246;
Gulf, C. & S.F. Ry. v. Moore,
98 Tex. 302;
Puritan v. Pennsylvania Co., 237 Pa. 448. In
Mitchell Company v. Pennsylvania Railroad, 230
U. S. 250, the same view of the statute was taken in
discussing another, but related, question. This construction is
also supported by the legislative history of the statute. For,
while the Hepburn Act, as a convenience to shippers, permitted
suits on reparation orders to be brought in the federal court of
the district where the plaintiff resided or the company had its
principal office, and while the Act of 1910 (36 Stat. 554), in
further aid of shippers, permitted suits on reparation orders to be
brought in state or federal courts, it made no change in §§ 8 and
9, which, as shown above, gave the shipper the option to make
complaints to the Commission or to bring suit in a United States
court.
2. But §§ 8 and 9, standing alone, might have been construed to
give the federal courts exclusive jurisdiction of all suits for
damages occasioned by the carrier violating any of the old duties
which were preserved and the new obligations which were imposed by
the Commerce Act. And, evidently, for the purpose of preventing
such a result, the proviso to § 22 declared that
"nothing in this act contained shall in any way abridge or alter
the remedies now existing at common law or by statute, but the
provisions of this act are in addition to such remedies."
That proviso was added at the end of the statute not to nullify
other parts of the act or to defeat rights or remedies given by
preceding sections, but to preserve all existing rights which were
not inconsistent with those created by the statute. It was also
intended to preserve existing remedies, such as those by which a
shipper could, in a state court, recover for damages to
Page 237 U. S. 130
property while in the hands of the interstate carrier -- damages
caused by delay in shipment; damages caused by failure to comply
with its common law duties, and the like. But for this proviso to §
22, it might have been claimed that, Congress having entered the
field, the whole subject of liability of carrier to shippers in
interstate commerce had been withdrawn from the jurisdiction of the
state courts, and this clause was added to indicate that the
Commerce Act, in giving rights of action in federal courts, was not
intended to deprive the state courts of their general and
concurrent jurisdiction.
Galveston &c. R. Co. v.
Wallace, 223 U. S. 481.
Construing, therefore, §§ 8, 9, and 22 in connection with the
statute as a whole, it appears that the act was both declaratory
and creative. It gave shippers new rights while at the same time
preserving existing causes of action. It did not supersede the
jurisdiction of state courts in any case, new or old, where the
decision did not involve the determination of matters calling for
the exercise of the administrative power and discretion of the
Commission or relate to a subject as to which the jurisdiction of
the federal courts had otherwise been made exclusive.
Compare
204 U. S.
204 U. S.
439-446; Robinson v. Balt. & Ohio,@
222 U. S. 506; 36
Stat. 551(15), c. 309; 38 Stat. 220.
In the light of these conclusions, and bearing in mind that the
damages sued for here are found to have been inflicted during the
anthracite strike of 1902 (before the passage of the Hepburn Act of
1906), it becomes necessary to determine whether the plaintiff's
suit was based on a right of action as against an interstate
carrier of which the state court had jurisdiction.
3. The difficulty in answering the question grows out of the
double character of the pleadings and the construction given the
facts by the state court.
The "statement" contains four counts -- one on the common law
liability for failure to furnish cars, and the
Page 237 U. S. 131
other three for damages occasioned by unjust discrimination. The
plaintiff seems to have ignored his common law cause of action, and
the trial court entered a judgment for plaintiff for damages as for
unjust discrimination. The Supreme Court of Pennsylvania affirmed
the judgment, but said that
"if the case was with the plaintiff on its facts, and it is so
found, there was an offense threefold in character: (1) the offense
against the common law, (2) an offense against the Pennsylvania
statute of June 3, 1883, making undue and unreasonable
discrimination unlawful, (3) an offense against § 3 of the federal
statute regulating interstate commerce."
There are several decisions, already cited, which hold that
suits against railroads for unjust discrimination in interstate
commerce can only be brought in the federal courts. But it must be
borne in mind that there are two forms of discrimination -- one in
the rule and the other in the manner of its enforcement; one in
promulgating a discriminatory rule, the other in the unfair
enforcement of a reasonable rule. In a suit where the rule of
practice itself is attacked as unfair or discriminatory, a question
is raised which calls for the exercise of the judgment and
discretion of the administrative power which has been vested by
Congress in the Commission. It is for that body to say whether such
a rule unjustly discriminates against one class of shippers in
favor of another. Until that body has declared the practice to be
discriminatory and unjust, no court has jurisdiction of a suit
against an interstate carrier for damages occasioned by its
enforcement. When the Commission has declared the rule to be
unjust, redress must be sought before the Commission or in the
United States courts of competent jurisdiction, as provided in §
9.
But if the carrier's rule, fair on its face, has been unequally
applied, and the suit is for damages occasioned by its violation or
discriminatory enforcement, there is
Page 237 U. S. 132
no administrative question involved, the courts being called on
to decide a mere question of fact as to whether the carrier has
violated the rule to plaintiff's damage. Such suits, though against
an interstate carrier for damages arising in interstate commerce,
may be prosecuted either in the state or federal courts.
4. It makes little difference what name is given the cause of
action sued on in the present case, or whether it is treated as a
suit for a breach of the carrier's common law duty to furnish cars,
or an action for damages for the carrier's unjust discrimination in
allotting cars to the Berwind-White Company while at the same time
refusing to follow its own rule and furnish them to the Puritan
Company on the basis of mine capacity. In either case, the
liability is the same. For where the carrier performs its duty to A
and at the same time fails to perform its duty to B, there has
been, in a sense, a discrimination against B. In those instances,
neither the cause of action nor the jurisdiction of the court is
defeated because the breach of duty is also called an unjust
discrimination.
In the present case, the pleadings contained no reference to the
Commerce Act. The damages grew solely out of the fact that the
Puritan Company failed to receive the number of cars to which it
was entitled. The plaintiff's right and measure of recovery would
have been exactly the same if the cars had been furnished to a
manufacturing plant, instead of to the Berwind-White Coal Company.
The plaintiff's cause of action and damages would have been the
same if the failure to receive the cars had been due to the fact
that the carriers negligently allowed empty cars to stand on side
tracks, or if, by reason of a negligent mistake, they had been sent
to the wrong point. The motive causing the short supply of cars was
therefore wholly immaterial except as corroboration of other
evidence showing an actual shortage of cars, so that, if we ignore
the plaintiff's characterization of the defendant's
Page 237 U. S. 133
conduct, and consider the nature of the case, alleged in the
first count and established by the evidence, it will appear that
the Puritan Company was entitled to recover because of the fact
that the carrier failed to comply with its common law liability to
furnish it with a proper number of cars. What was a proper supply
was a matter of fact.
5. Ordinarily a shipper, on reasonable demand, would be entitled
to all the cars which it could promptly load with freight to be
transported over the carrier's line. But that is not an absolute
right, and the carrier is not liable if its failure to furnish cars
was the result of sudden and great demands which it had no reason
to apprehend would be made, and which it could not reasonably have
been expected to meet in full. The common law of old, in requiring
the carrier to receive all goods and passengers, recognized that
"if his coach be full," he was not liable for failing to transport
more than he could carry. Hutchinson on Carriers 146;
Love v.
Hobbs, 2 Shower 127;
Riley v. Horne, 5 Bing. 217;
Peet v. Ry., 20 Wis. 594. The same principle is applicable
to those who transport freight in cars drawn by steam locomotives.
The law exacts only what is reasonable from such carriers, but at
the same time, requires that they should be equally reasonable in
the treatment of their patrons. In case of car shortage occasioned
by unexpected demands, they are bound to treat shippers fairly, if
not identically. In determining how the inadequate supply shall be
distributed, it might be necessary to consider the character of the
freight tendered -- whether perishable or staple, and whether a
necessity of life, needed in crowded cities, and the like. In the
distribution of cars to coal companies, it might be necessary to
determine whether account should be taken of system cars, foreign
cars, private cars, and the company's own coal cars. In many cases,
the determination of such an issue would call for the exercise of
the regulating function of the Commission. That was true
Page 237 U. S. 134
in
Morrisdale Coal Co. v. Pennsylvania Railroad,
230 U. S. 304,
230 U. S.
312-314,
6. The present suit, however, is not of that nature. It is not
based on the ground that the Pennsylvania Railroad's rule to
distribute in case of car shortage on the basis of mine capacity
was unfair, unreasonable, discriminatory, or preferential. But, as
shown above, the plaintiff alleged it was damaged by reason of the
carrier's failure to furnish it with cars to which it was entitled.
In support of that issue of fact, the plaintiff relied on the
carrier's own rule as evidence. That rule, and the carrier's
distribution sheets, showed the number of cars to which the
plaintiff, the Berwind-White Company, and other coal companies in
the district were each entitled. The evidence further showed that
the plaintiff did not receive that number of cars to which by rule
it was thus entitled. So that, on the trial, there was no
administrative question as to the reasonableness of the rule, but
only a claim for damages occasioned by its violation in failing to
furnish cars.
Penna. R. Co. v. International Coal Co.,
230 U. S. 197.
The state and federal courts had concurrent jurisdiction of such
claim against an interstate carrier without a preliminary finding
by the Commission.
7. It is, however, argued that such a question, calling for the
exercise of the administrative function of the Commission, did in
fact arise out of the defendant's claim and contention that the
court should have taken private cars into account in determining
whether the plaintiff received the number to which it was entitled.
But, probably because of the carrier's own rule of distribution,
there was
Page 237 U. S. 135
no pleading raising such an issue, and there was no sufficient
evidence as to the number of private cars received by the Puritan,
the Berwind-White, or other companies. The information on that
subject was peculiarly within the knowledge of the carrier, and
proof adequate to furnish a basis for the contention should have
been offered, if, indeed, the carrier could have been heard to
insist that private cars should have been counted when its own
rule, as well as the general practice in the United States, was to
exclude them in calculating the number of coal cars to which each
mine was entitled. Neither need we inquire whether the fact that
the Commission subsequently announced a rule, under which private
cars had to be taken into account in making the distribution, could
be given a retrospective effect. For, be that as it may be, the
exception was properly disallowed, because, as held by the Supreme
Court of Pennsylvania, no relevant evidence was offered to support
the contention, and no point was raised during the trial, that
private cars should be counted in the distribution.
Judgment affirmed.
[
Footnote 1]
"SEC. 3. It shall be unlawful for any common carrier subject to
the 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 to subject
any particular person, company, firm, corporation, or locality, or
any particular description of traffic, to any undue or unreasonable
prejudice or disadvantage in any respect whatsoever."
[
Footnote 2]
"SEC. 8. That in case any common carrier subject to the
provisions of this act shall do, cause to be done, or permit to be
done any act, matter, or thing in this act prohibited or declared
to be unlawful, or shall omit to do any act, matter, or thing in
this act required to be done, such common carrier shall be liable
to the person or persons injured thereby for the full amount of
damages sustained in consequence of any such violation of the
provisions of this act, together with a reasonable counsel or
attorney's fee, to be fixed by the court in every case of recovery,
which attorney's fee shall be taxed and collected as part of the
costs in the case."
