Morrisdale Coal Co. v. Pennsylvania R. Co., 230 U.S. 304 (1913)

U.S. Supreme Court

Morrisdale Coal Co. v. Pennsylvania R. Co., 230 U.S. 304 (1913) Morrisdale Coal Company v.

Pennsylvania Railroad Company

No. 207

Argued April 15, 1913

Decided June 9, 1913

230 U.S. 304

APPEAL FROM THE CIRCUIT COURT OF APPEALS

FOR THE THIRD CIRCUIT

Syllabus

Without preliminary action by the Interstate Commerce Commission declaring that the carrier had, by the rule adopted in regard to distribution of cars, discriminated against a shipper in such distribution, the federal courts have no jurisdiction of suit by such shipper for damages alleged to be occasioned by undue discrimination against him and undue preference in favor of his competitor.

The question as to the reasonableness of a rule of car distribution is administrative in its character, and calls for the exercise of the powers and discretion conferred by Congress upon the Interstate Commerce Commission.

Where the alleged discriminations in distribution of cars occurred more than two years before its commencement, the action cannot be stayed to permit an application to the Interstate Commerce Commission, as, under the Act of June 29, 1906, all of such claims are barred after two years. Southern Railway v. Tift, 206 U. S. 434.

The facts are stated in the opinion.

Page 230 U. S. 308

MR. JUSTICE LAMAR delivered the opinion of the Court.

There are a large number of coal mines in the Clearfield District, Tyrone Division of the coal region, in the State

Page 230 U. S. 309

of Pennsylvania. Between January 1, 1900, and December 31, 1905, the total output of the mines in the Clearfield District averaged 18,500 tons per day. When there was a car shortage, the Pennsylvania Railroad allotted to each mine a percentage of cars assigned to the district, calculated according to the capacity of the mine.

On this basis, the Morrisdale Coal Company was entitled to about 4.8 percent and the Berwind-White Company to about 18 percent.

In 1908, the Morrisdale Company brought suit against the railroad for damages alleged to have been occasioned by an unfair distribution of cars to it and an undue allotment of cars to its competitor, the Berwind-White Company.

Alleging that, in violation of its duty to see that no undue preference was given to any other person or corporation in the district, the carrier failed to assign to the plaintiff its fair proportion of the entire number of coal cars of the railroad company, to which plaintiff was entitled, and that this failure continued from the beginning of 1900 to the close of 1905, the effect of which was to subject plaintiff to unreasonable prejudice with respect to the facilities for shipping coal, as contrasted with the facilities furnished other competitors in the Clearfield District, and as a result of the unfair discrimination and the failure to furnish a proper allotment of cars and equal facilities, plaintiff was obliged to buy coal at various times in the outside market at prices then prevailing, in order to fill its contracts previously entered into, to its damage, $250,000. The defendant entered a plea of not guilty and actio non accrevit infra sex annos. On the trial, the jury found that the exhibit showing damages of $67,156.07 was correct.

"If the court shall be of opinion that the questions of law involved in the case are in whole or in part with the plaintiff, we find for the plaintiff. If,

Page 230 U. S. 310

however, the court be of the opinion that the questions of law are with the defendant, then we find in favor of the defendant."

There was no conflict in the evidence, and in view of the admissions of the plaintiff, incorporated in the record, the facts can be briefly stated.

The capacity of plaintiff's mine was 4.8 percent of the output of the Clearfield region, and having been furnished access to the books of the carrier, it made up a statement showing that, during twenty-three months between March, 1902, and December 31, 1905, in which there was a car shortage, the Morrisdale Company received less than its 4.8 percent of all the coal cars in the Clearfield region, while the Berwind-White Company received more than its 18 percent of all the coal cars in the region. This was admitted by the railroad, which insisted that, during periods of car shortage, it divided the cars into four classes:

1. Private cars, belonging to persons or corporations operating mines in the district;

2. Cars of foreign railroads, consigned to designated mines, to be loaded with fuel for such foreign railroads;

3. Pennsylvania Railroad fuel cars, consigned to designated mines to be loaded with fuel for railroad use;

4. The balance, or System cars, available for general use, it distributed among the various mines in the proportion their capacity bore to the total output of the Clearfield region, the plaintiff being allotted its due proportion, or 4.8 percent thereof.

The railroad explained that apparent excess of cars furnished the Berwind-White Company during the twenty-three months referred to was due to the fact that that company owned a large number of private cars on which it appeared that wheelage was paid, and submitted the following table

Page 230 U. S. 311

showing the number and character of cars in the Clearfield region during those years:

Indi- Company Commercial

vidual coal System Foreign Box Total

1902 Cars placed 14,221 16,119 31,048 22,544 11 83,943

1903 Cars placed 20,483 15,614 20,947 24,222 13 81,279

1904 Cars placed 16,705 11,477 21,888 14,568 12 64,650

1905 Cars placed 26,716 22,812 24,769 5,542 374 80,213

------ ------ ------ ------ --- ------

Total 78,125 66,022 98,652 66,876 410 310,085

During the trial, plaintiff admitted that there had been no intentional discrimination against it, but contended that its statement was made up from the books on the basis of what it considered to be the law of the case, under which all cars available for shipment of coal should be counted in the distribution.

Plaintiff admitted that, if the Berwind-White Company was entitled to the use of their private cars without counting them against what it was entitled to under the percentage, then the Berwind-White Company did not get an excess of their percentage. It further admitted that if fuel cars of the Pennsylvania Railroad, and fuel cars of foreign railroads consigned to particular mines were not to be counted against such mines, then plaintiff had no cause of complaint, inasmuch as it had received its percentage of the balance or System cars.

The circuit court dismissed the case on the ground that, without preliminary action by the Commission, the court had no jurisdiction of a suit for damages alleged to be occasioned by undue discrimination against the plaintiff and undue preference in favor of its competitor.

The plaintiff took the case to the circuit court of appeals, complaining of this ruling, and further assigning error in that the court failed to enter judgment in its favor on the special verdict.

The circuit court of appeals held, one judge dissenting, that the plaintiff had the option of taking the question

Page 230 U. S. 312

of jurisdiction by direct writ of error to the Supreme Court of the United States, or it could take the whole case, including the matter of jurisdiction, to the circuit court of appeals. That court thereupon considered the whole record, and (one judge dissenting) affirmed the judgment of the circuit court on the ground that the circuit court had no jurisdiction as a federal court until after the Commission had passed on the reasonableness of the method of car distribution. The case was brought here, the only question presented by the record being whether the circuit court as a federal court had jurisdiction.

The prohibitions of § 3 of the Commerce Act require that cars shall be fairly allotted to shippers without unjust discrimination or unfair preference. But the statute does not define what is the proper method of distribution in case of car shortage, and, at the time of the transactions out of which this suit arose, no general rule had been adopted by the carriers or promulgated by the Commission. As late as 1910, it was said (19 I.C.C. 387) that the question was in a state of flux, and an examination of the decisions in the numerous cases brought about that time will show that it was a matter about which there was much difference of opinion. In some cases, it was held that private cars and fuel cars of foreign railroads, consigned to particular mines, should be counted in making the distribution. Others held that such cars should be counted, but that if the foreign cars or those owned by the private corporations exceeded their percentage, the excess might be retained by those coal companies. This view was adopted by the Commission, which also held that fuel cars belonging to the carrier should be counted except where the railroad purchased the entire output of the mine. Traer v. Chicago &c. R. Co., 13 I.C.C. 459; Hillsdale Coal Co. v. Pennsylvania R. Co., 19 I.C.C. 372; Jacoby v. Pennsylvania R. Co., 19 I.C.C. 392; Minds v. Pennsylvania R. Co., 20 I.C.C. 52.

Page 230 U. S. 313

It was, however, recognized that there could be no hard and fast rule, and that circumstances might arise which would otherwise warrant a departure so as to enable the carrier to meet emergencies arising from a strike on its own road, or embargoes by connecting lines which refused to haul certain articles of merchandise, in order to supply communities with necessaries of life. Parks v. Cincinnati &c. Ry., 10 I.C.C. 47; Thompson v. Pennsylvania R. Co., 10 I.C.C. 640.

These rulings as to the validity of a particular practice and the facts that would warrant a departure from a proper rule actually in force are sufficient to show that the question as to the reasonableness of a rule of car distribution is administrative in its character, and calls for the exercise of the powers and discretion conferred by Congress upon the Commission. It was distinctly so ruled in the Pitcairn case, 215 U. S. 481, and in I.C.C. v. Illinois Central, 215 U. S. 452. Those cases involved a consideration of the power of the Commission over the distribution of cars, and held that the courts could not by mandamus compel it to make a rule, nor by injunction restrain the enforcement of one it had promulgated. If in those direct proceedings the courts could not pass upon the question of reasonableness of a method of allotting cars, neither can they do so as an incident to an action for damages.

In view of the decision in the Abilene, Pitcairn, and Robinson cases, it is unnecessary again to discuss the statute, or do more than say that in this case the plaintiff was not entitled to maintain its action without producing an order of the Commission that the rule adopted by the Pennsylvania Railroad was unreasonable.

The plaintiff, however, seeks to take the case out of the principle of those decisions, insisting that this is a suit for damages occasioned by a violation of the rule, and that therefore, without any order of the Commission, it

Page 230 U. S. 314

is entitled to institute a suit for the recovery of damages resulting from the failure to distribute cars according to the method established by the railroad itself. The record, however, does not sustain this position, for the evidence does not show any breach of the rule or any failure to deliver to the Morrisdale Company all of the cars to which it was entitled under the method of allotment in force between 1900 and 1906. On the contrary, it was admitted at the hearing that there had been no discrimination against the plaintiff in the application of the rule, the complaint being that the basis of allotment was unreasonable, and that all cars in the district should be distributed according to the capacity of the mine, without deducting private cars, foreign fuel cars, or the carrier's own fuel cars. Whether this should be done as a general rule, or under the peculiar conditions prevailing on defendant's road at that time, was, as we have seen, an administrative question, and to be decided by the Commission as preliminary to the right to maintain this suit. The circuit court rightly held that, until this was done, it had no jurisdiction as a federal court of the cause of action sought to be enforced.

It is argued in the plaintiff's brief that, if this view of the law should be sustained, the case should not be dismissed, but stayed until the plaintiff could apply to the Commission and obtain a ruling on the question as to whether the method adopted by the Pennsylvania Railroad was not, during the years 1900 to 1906, unjustly discriminatory. Attention is called to Southern Ry. Co. v. Tift, 206 U. S. 434, which it is said would support such a provision in the mandate. In that case, the shippers filed, on April 14, 1903, a bill to enjoin an advance in rate. The injunction was refused, and the advance went into effect. The cause was stayed while the complainants were pressing their application for an order from the Commission that the rates were unreasonable. Its report was in their favor, and

Page 230 U. S. 315

on it, the circuit court made an order of restitution ( 206 U. S. 206 U.S. 436). But, in that case, the statute of limitations had not run when the bill was filed, when the stay order was granted, nor when the application was made to the Commission, while in the present case, the plaintiff was barred of the right to apply to the Commission at the date the suit was filed in the United States circuit court. The damages which were claimed arose from a failure to deliver cars prior to December 31, 1905. The suit was brought July 17, 1908, more than two and a half years later, and after the passage of the Act of June 29, 1906, 34 Stat. 590, c. 3591, that

"all complaints for the recovery of damages shall be filed with the Commission within two years from the time the cause of action accrues, and not after, and a petition for the enforcement of an order . . . shall be filed in the circuit court within one year from the date of the order, and not after: provided that claims accrued prior to the passage of this act may be presented within one year."

The provisions of this statute would prevent the modification asked for, and the judgment is

Affirmed.

MR. JUSTICE PITNEY dissents. See ante, p. 230 U. S. 267.